Octane English - Jan/Feb 2022

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EVENT DATE: SEPT. 13 - 14, 2022

THE INNOVATION ISSUE • 3 TRENDS TO WATCH IN C-GAS • DIGITAL APP SOLUTIONS • SELF-SERVE VAC SYSTEMS • CLIMATE DEFIES EASY SOLUTIONS

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CANADA’S PROTECTING THE ENVIRONMENT

C H E M I C A L

&

E Q U I P M E N T

S U P P L I E R

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SUPERIOR PRODUCT UNMATCHED SERVICE

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CONTENTS

5

JA N UA RY | F E BRUA RY 2 0 22 VOLU M E 27 | N U M BE R 1

15

SHELL PRODUCT FORECOURT - FUEL REMAINS A STRONG COMPONENT OF GROUPE Editor’s Message BEAUSÉJOUR SALES

Paradox of innovation

6 CIPMA

No simple fix for climate solutions

9 Three trends to watch in C-Gas The pandemic is rewiring the convenience/fuel/car wash channel 12 Vacuums Innovations in vac systems drive customer satisfaction

15 Tuned for innovation Best-in-class technology is the cornerstone of Beauséjour family business 21 Digital solutions Apps enhance both customer experience and operator capability Simply hover your phone's camera over this code:

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Paradox of innovation

I

f there is one constant in the fuel and car wash industries, it’s innovation. People ask, and industry delivers. Over the past 40 years, auto manufacturers have dramatically increased fuel efficiency in vehicles, and refiners have given us new lower emission products. It’s less expensive today to drive a kilometre than it was in 1975. On the car wash side, companies have come up with ways for operators to use less water and power to deliver value-laden state-of-the-art cleaning solutions. Despite innovations to help us use less fuel and reduce effluent in car washes, people burn more gas and use more car wash service than ever. Behind this contradiction is a principle called Jevons' Paradox. Back in the 1800s, British engineer William Jevons believed more efficient steam engines would result in less coal burned. What Jevons discovered was that greater efficiency in steam engines moved more companies to use them, and coal consumption increased. The same has happened with cars and car washes. Manufacturers listened to the public (and regulators) and worked to produce engines that use less fuel per kilometre driven. The public answered by buying bigger vehicles they could now afford because the cost of driving declined. Consider that Canada’s top-selling vehicle used to be the Honda Civic. Today the top six sellers are all trucks led by Ford F-150. At MIT, researchers were looking into this conundrum. What they found was that more efficiency led to more spending. As people became increasingly more wealthy, they did not diminish their environmental impact. In fact, they increased it. Industry will continue to innovate to answer the demands of the market. Expect goods and services like fuel and car washes to continue their drive to greater efficiencies as we move forward in this time of climate change. It’s up to the consuming public to take full advantage of the benefits that industry brings to the table. OCTANE

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Renewable fuels significantly reduce greenhouse gas emissions, and the potential to increase ethanol content in fuel is significant

BY JENNIFER S T E WA R T

No simple fix for climate solutions

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JANUARY / FEBRUARY 2022

solutions, none that alienate a specific industry or sector. Some recommendations from CIPMA include:

Refocus on renewables

Somewhere along the mix, renewable fuel mandates have been pushed to the wayside. The research is clear. Renewable fuels significantly reduce greenhouse gas emissions, and the potential to increase ethanol content in fuel is significant. For example, our gasoline typically has 8% ethanol in it, unless you are buying premium. Many vehicles have the potential to process 15% ethanol or higher. Flex-fuel vehicles can use 85% ethanol in gasoline. The future of renewables, in gasoline and diesel, needs to be prioritized and adopted as a means to reduce our emissions, and offer Canadians choices in how they do so.

Research, research, research

As we work toward our climate goals, it’s clear that we do objective research to inform industry decisions. This is why CIPMA is a proud founding member of the Canadian Transportation Alliance (www.ctalliance.ca). Through the alliance, industry will come together to commission research

on the sector at large, including a look at consumer expectations and needs as we make the climate transition. We are currently engaged in a significant research endeavour, focused on how we achieve net-zero with the resources and sectors we have today, including electricity and hydrogen. This will be the first piece of research that looks holistically at our targets, rather than focusing on a specific sector’s capability to reduce emissions without factoring in other sectors and the role they can play in a connected and integrated manner.

Collaboration is key

It’s abundantly clear that an energy transition is happening. CIPMA supports this, and in fact, considers itself a key player in how this evolves to support a better and brighter future, where our carbon outputs are greatly reduced. We must all align and act together. We cannot afford to keep reacting to natural disasters and weather events, without putting a proactive planning approach together. Canadians deserve that. OCTANE Jennifer Stewart is president and CEO of the Canadian Independent Petroleum Marketers Association (CIPMA)

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T

he unfortunate and catastrophic weather events that have happened in regions of British Columbia in November have highlighted two things succinctly: 1) that climate change will have devastating impacts on our country, and we must act to mitigate it, and 2) in the face of the floods, it has been made abundantly clear how important petroleum products and fuel supply are to our day-to-day functioning, and our economy. We saw industries and towns on the brink of collapse, and our supply chains tested like never before. We also saw communities and industry come together, and work faster and more efficiently to help the people of British Columbia. CIPMA, for example, engaged near daily with government officials provincially and federally to review supply chain impacts and worked to ensure products could be delivered to work toward recovery. So, with the obvious tension between our climate goals, and our current dependence on oil and gasoline, how do we alleviate the polarization of an industry that can help Canadians achieve target emissions? There isn’t one simple answer, but the key lies in being open to a myriad of

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THREE TRENDS TO WATCH

IN C- GAS

and a branded foodservice marquee drives more business. A&W has a winning formula that helps create solid profits. And, customers understand the brand and trust it to provide quality menu items. When you team a trusted brand such as Petro-Canada with a well-known foodservice brand, great things can happen. I think success in this area is about trust. Good brands that deliver this trust are working to create great partnerships,” he says, adding that 70% of his business occurs at his foodservice drive-thru window.

*In bay makes gains

The pandemic is rewiring the convenience/fuel/car wash channel BY K E L LY G R AY

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*More reasons to stop into neighbourhood fuelling and convenience centres

As COVID-19 took hold, people quickly discovered a valuable ally in the fight. Multifaceted neighbourhood convenience retailers were there with food items, fuel and a way to sanitize our cars. Convenience had never been so needed, and operators stepped up. According to Kendra Keller, VP, general manager, North America, Dover Fueling Solutions, “Customers

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recognize the margin on fuel varies, and that can’t be the only place to make money. “Site owners are trying to find creative ways to drive an increase in revenue. They realize technology can help to increase customer loyalty and foot traffic, drive more in-store sales, lower the cost of ownership, and drive efficiencies at the site,” she says, adding that new products such as their innovative Anthem UX™ user experience platform promises to revamp the forecourt with greater connectivity between c-store and dispenser positions. Petro-Canada operator Vinod Iddya agrees, suggesting that gas station operators have to think beyond fuel sales. “Times are changing, and customers need more reasons to stop in. Having a c-store with a strong food component

In-bay rollovers can squeeze into a 40-ft. commercial space for a lot less upfront cost than going the full tunnel route. Consider that a full-scale tunnel operation can run close to $1 million (without land costs), while a compact in-bay rollover might be $300,000. A smaller footprint, lower acquisition costs and acceptance by motorists are behind the shift. Circle K moved away from touchless operations last year looking at softouch friction systems at its sites, while 7-Eleven Canada offers both soft-touch technology and touchless options. This ability to provide choice has proven to be a good fit for 7-Eleven Canada as it expands its wash packages to more locations where in-bay is viewed as a perfect fit for the chain, given its typical placement in high population areas where space is at a premium. 7-Eleven locations utilize systems from Ryko and Mark VII. “The industry has seen a change in the in-bay area,” says Jamie Shaw, national car wash manager Canada, 7-Eleven Canada, Inc., “Customers used to seek out touchless systems because of concerns about paint scratches. Now, with new brush technology, there is no need for worry. One of our sites in an upscale Vancouver neighbourhood attracts a range of drivers using the soft-touch in-bay.”

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Kendra Keller points out that the bumpy business road caused by the pandemic continues to impact the fuelling sector. “We continue to see challenges in the business with extreme supply chain disruption and ongoing management of the impacts of the pandemic on our employees, customers and suppliers,” she says, adding that despite the challenges new technology is helping to keep operators on track. On the car wash side of the business, the message is the same. The pandemic has reduced cohorts and made hiring more difficult. “Like almost every business in Canada, the car wash industry is feeling the effects of the labour shortage,” says Karen Smith, president of the Canadian Carwash Association. “It has been a difficult time keeping the washes staffed appropriately. Managers, supervisors, maintenance and general workers are hot commodities in this market. “Although many people want to blame the Canadian Recovery Benefit (CRB) and enhanced unemployment programs, there are other factors. Immigration of potential workers has decreased and many people have decided not to return to work rather taking early retirement. Many women have had to stay home for childcare reasons. You also have to consider some workers have been off work for so long, collecting government funding, that they have learned how to live on less money, and might be reluctant to come back to the structured work life. Employers have to figure out this mindset and come up with ways to make their workplace more enticing,” she says. Smith is also compliance & training Manager at Valet Car Wash. From her vantage point, she sees that operators might have to sweeten the pot to attract workers. “Money always talks but is not the only thing workers are looking for. Benefits, flexible schedules and paid time off are all things to consider. Workers are also looking for job security, a safe and healthy environment to work in, and a company that fosters advancement, care for their well-being and appreciation. It can be as simple as recognizing birthdays and milestones, job titles, regular communication on health and safety issues, good training and regular feedback. “(At Valet) we have taken this concept of the employees come first, one step further and have implemented a program to help our employees achieve their goals and dreams. This is not a monetary program. We help the employees by recognizing their goals, dreams and ambitions and lead and assist them down a path to achievement they can call their own. Happy employees that feel respected and supported tend to stay with the company, and the word may get out," she says. OCTANE

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Innovations in vac systems drive customer satisfaction BY K E L LY G R AY

G

reat vacuum systems make for happy car wash customers. Poor suction, noisy machines, and payment challenges are just some of the complaints customers level at wash site management. Like a good cup of coffee after a delicious meal at a restaurant, the self-service vacuum system is often the last thing a customer remembers before they leave a site. If the system is poor, needs repair or is challenging with hoses that don’t reach, it doesn’t matter how good the tunnel or wand wash might be. The customer leaves disappointed and may never return. At Mississauga, Ont.-based Klassic Car Wash on Derry Road, its customers come in for the vacuums, but stay for the wash. The site offers a 13-position vacuum plaza that is free for customers to use. The site uses Vacutech, a well-known solution provider to the car wash industry. The central vacuum system on offer at Klassic delivers a range of options to enhance car wash capabilities. For example, configurations allow for multiple vacuum hose locations on each side of the vehicle, overhead piping and hose management, wet and dry solutions for cleaning floors and seats, and tools for cleaning all vehicle areas. It’s reasons such as these that earned Klassic Best Car Wash accolades from the media for the past 10 years.

Innovating to meet challenges

Vacuum equipment manufacturers have been innovating to help operators meet customer service challenges. One company that is offering a unique program is AIR-serv. One of the world’s largest suppliers of on-site vacuum and tire inflation equipment with more than 80,000 units globally (6,000 gas station locations in Canada), AIR-serv partners with local and national charities through its Air for Charity pro-

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JANUARY / FEBRUARY 2022

gram. Under the program, equipment site locations contribute up to 20% of vacuum and inflator revenue back to needy organizations. One example of vacs giving back is Petro-Canada where vacuum services have been paired with Canada’s Olympic and Paralympics teams under the AIR-serv Canada/Petro-Canada Tire Inflator Program. With more loyalty programs and app features now available, the industry will see more operators utilizing points for payment on vacuum systems and using digital payments as the way to go overall. For example, AIR-serv has been offering Flash Pay on its equipment as a nod to greater convenience. At my neighbourhood Petro-Canada car wash, I place the wash ticket bar code up to the Flash reader on the AIR-serv vacuum unit to obtain eight minutes of complimentary service. Vacuum manufacturers have worked to reduce cash-on-site issues, such as coin-box theft. For instance, KleenRite offers a high-security coin and bill collector that utilizes seven-gauge

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VACUUMS

reinforced steel to keep money away from thieves. AIR-serv has developed a concrete coin vault to help limit this expensive problem where criminals rip the coinbox off the wall or the machine. According to the Canadian Carwash Association (CCA), wear and tear on vacuum systems occurs most often when the system is on. A pay box protects the vacuum equipment and dramatically extends its lifespan, says the association, pointing out that free vacuums have high usage and stay running for longer periods. When usage is limited by a paybox and timer system, breakdowns become less frequent and vacuums become cheaper to maintain. On the flip side, the CCA points to the positives of free vacuum service. They note that car washes with free vacuums consistently attract more notice, draw in more traffic, and expose more customers to the car wash itself. Indeed, many wash owners report a 20% uptick in memberships and wash sales with the introduction of free vacuums. And, with a no-charge vacuum program, coin boxes and their challenges become a thing of the past. When it comes to new maintenance features, AVW deserves the spotlight with their new Dirtbag option. This option is a pre-filter attachment that grabs dirt and debris before they reach the vacuum filter. This system works to extend the life of motors and greatly reduces clogging. The company reports the product reduces maintenance time by half and extends the life of the entire system. NCS division Vacutech has come forward with innovations on its vacuum delivery arches. Vacutech’s Rival Arch accommodates continuous hard canopies for complete weather coverage and protection while customers vacuum. The Rival Arch also supports solar panels (not manufactured by Vacutech) to allow wash sites to collect power for things such as lighting. Vacutech's Sentinel Arch is designed to help operators stand out from their competitors with innovative styling. Sentinel Arch utilizes a fabric covering. Both models offer an above-head debris separator. This separator makes searches for items lost during vacuuming or a unit clean-up as easy as opening the access door and letting dirt and debris fall into trash receptacles. OCTANE

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TUNED FOR

INNOVATION Best in class technology is the cornerstone of the Beauséjour family business BY M A R K CA R DW ELL

I

f there’s one thing Quebec entrepreneur Erick Beauséjour has learned in the 35 years he’s been involved with his family’s group of gasoline stations, convenience stores and car washes, it’s that quality and innovation pay big dividends.

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Erick Beauséjour (L) and Caroline Blouin (R) stand in front of store team

“We always look for the best equipment and the latest technology,” says Beauséjour, who started out cleaning car tires and wiping rocker panels at his parents’ original car wash—an old rollover system with brushes—at age 13. Now 48, he is at the helm of a

burgeoning business that includes four gas/c-store locations (three with car washes), a fresh-food manufacturing facility and a new grocery store. The company employs more than 180 people in and around Val-d’Or, a gold mining and forestry town 500 km

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northwest of Montreal. According to Beauséjour, the acquisition and implementation of novel machines, systems and processes that provide top-quality services is a key to their success in a fast-paced retail environment. “Whether it’s a car wash, client service or cleanliness; innovation and quality help us stand out from the competition,” he says. “We use that same principle in everything we do.” It’s been that way since 1971 when Beauséjour’s parents, Raymond and Colette, bought and operated a Shell-bannered, self-serve gas station with a twobay garage (where Raymond worked as a mechanic) and a c-store under the Pinto brand just east of Val-d’Or’s downtown core. They quickly added the car wash where their son Erick would later work as a teenager. “Taking over the family business wasn’t the plan,” he recalls. “But sometimes the future holds surprises.” In 1994, the family added a second location—a Shell station just west of the downtown on 3rd Avenue, the same cross-town road as the original

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EV charging site in Val-d’Or - more reasons to stop in

store—where Beauséjour worked in every position, from cashier to manager. Over the next decade, the Beauséjours introduced several innovative products and services to the community. For example, a kitchen was built to supply bread and ready-to-eat sub sandwiches, muffins and pastries to their c-stores. In 1996 they opened their first touch-free car wash—a second-generation Mark VII system that was supplied by P. Sherman Quebec, which is now part of the car wash division of Fematics Canada, a Montreal maker of mechanical seals. According to Beauséjour, the system was a first in Val-d’Or. “It put us in a position of leadership in the local market," he says. Despite its avant-garde appeal, the second-generation Mark VII—a touch-free system that featured backlit icons for each cycle during the wash program that wowed customers—proved to be an operational challenge. “Like the old rollover machines, it had lots of moving parts and lots of gearboxes, chains and

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rotating arms,” says Beauséjour. “It required a lot of maintenance." In 2008, his family replaced the old Mark VII with a brand new PDQ G5 touchless car wash system supplied by Montreal-based De Castel, a leader in vehicle cleaning systems and equipment in Eastern Canada. The following year they bought and installed the same machine from the same supplier to their original store. “The G5 was the Cadillac of car washes at that time,” says Beauséjour. “We always look for the best, and at the time, the G5 was the best in the market." In 2014 the Beauséjours bought a third gas station on the outskirts of Val-d’Or, on a site they revamped into a welcoming roadside stop. They developed the site adding electric charging stations, swings and picnic tables. That same year they added a four-bay manual wash to their 3rd Avenue location. The system, supplied by De Castel, has proven to be ideal for heavy vehicles, and the dedicated dog wash has made the business a destination for pet owners. “We saw a need for those services, and we were right—they proved very popular,” says Beauséjour,

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who now runs the business with wife and partner, Caroline Blouin, who does the group’s marketing. “Our goals are to always satisfy the needs of the customer, offer convenience, and to stand out from the competition.” That same philosophy was the impetus for the decision this year to replace the PDQ G5 at their second store with a new Laser 360 from De Castel. “It’s important to remain competitive,” Beauséjour says about the new equipment, which cost north of $250,000 and went into operation in October. “It’s a long-term ROI, but it’s worth it because it helps us to continue raising the standards of our offer and services.” The family added a fourth gas station to the group in 2019. A Shell-branded operation located an hour west of Val-d’Or in Rouyn-Noranda, the non-car wash site offers a wide range of foods and innovative features; including what may be one of the first self-checkout machines in a c-store in Quebec. “The location of a site is critical,” says Beauséjour, who in December acquired an IGA in Val-d’Or. “But each market has its own reality. You have to make sure you’re in tune with whatever that reality is.” OCTANE

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DI D IG GI IT TA AL L SOLUTIONS

Apps enhance both customer experience and operator capability

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igital apps do a lot of heavy lifting. They create greater ease for customers who merely click on mobile devices to access payment tools, service selection and promotions. Operators look to apps to provide methods to control systems and reach out to customers. Both say apps save time and reduce costs. Small wonder that mobile apps for car

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washes are seeing strong gains in the marketplace. According to researchers McKinsey & Company, almost 50% of U.S.-based c-stores and fuel providers utilize an app to offer service and deliver marketing messages to customers. San Francisco-based Grand View Research has found in their latest examination of the sector, that these digital tools will show a compound

JANUARY / FEBRUARY 2022

21


annual growth rate of 4.6% in use between now and 2028 when they will account for 72.5% of revenues in U.S. locations. Canada closely mirrors this trend. In Canada, car wash apps have been creating market excitement for over a decade with majors such as Petro-Canada and Shell offering digital tools for years. On the independent side, operators, including Valet Car Wash and Hamilton-based Red Hill Car Wash, have been early adopters of this technology. Valet Car Wash opened in 1991 in Cambridge, Ont. "Around the late 90s, we had our first website. We were the first in Canada to have automated POS systems,” says Valet owner and President Mike Black. Valet turned to Mosaic for the development of its digital app that has made the multi-unit chain one of the most recognized names in Ontario’s car wash sector. Since adopting the cloud-based app, Valet's subscriptions have increased dramatically. Black mentions that following the launch of

Digital tools will show a compound annual growth rate of 4.6% in use between now and 2028

the app, the company recorded 600 subscriptions in one month at just one location. “At some of our sites, the revenue is 90% from subscriptions,” he says, adding that digital apps have helped them get away from coin use to the point where today they are almost cashless. The app has also helped Valet reduce the workload at locations. Black reports that they benefited from a reduction in RFID (Radio Frequency ID) tag installation. "When we use RFID tags, we have an application for the customer to fill out. Then, we have to enter the information into the computer. We have to take that RFID tag, go to the customer's car, clean the windshield, put it in the right spot, and make

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sure it works. The Mosaic app has reduced the time our staff has to spend with the customer.” Red Hill Car Wash is upping its convenience with Nayax, a global provider of payment solutions for the unattended market. Nayax systems work alongside digital apps, as well as bill readers, and coin mechanisms, to offer a complete turnkey approach to payment that allows customers to use all formats; so businesses don’t lose sales. “Our app gives us an edge and makes it easier for us to service customers,” says Red Hill operator JJ Woodley. “For example, the app allows us to offer rewards. These rewards might be an air freshener from the vending system or a complimentary vacuum,” he says, adding that customers select the vending machine on the app and then toggle to obtain a product that is charged to credit or debit cards. “It’s seamless and very easy. Digital payment means less cash on hand. We can also operate machines remotely and have them dispense

“At some of our sites, the revenue is 90% from subscriptions,” he says, adding that digital apps have helped them get away from coin use to the point where today they are almost cashless. goods to customers when asked.” Red Hill Car Wash also uses the CoinPay app from Tech1st Wash Systems. The system is 100% customizable to any car wash brand and is a stand-alone system. The CoinPay app is not associated with any payment hardware system that is typically the case for payment apps in the industry. Tech1st provides a small hardware panel that mounts at the car wash and integrates with all car wash bay systems, most automatic tellers, self-serve vacuums, drop-shelf vending machines, and more. “The beauty of the system is that once it integrates with equipment, the operator can actuate the equipment remotely using their mobile device,” says Woodley, mentioning that the


Tech1st system can monitor just about anything you care to get notification about in your facility. Some of the new features Tech1st has added to the CoinPay system are the Moneris Payment Gateway and Fleet Account Management. The Moneris Gateway asks a user to enter their payment information into a wallet within the user app one time. The app then makes instant payments of any amount without any further steps. “This makes our CoinPay app much faster and easier to use,” says Woodley. The Fleet Account Management feature is designed for easy operator use. Once a specific user is designated as a Fleet Account Manager, that user can add individual Fleet Users to the account and manage the payment. For operators that want to do away completely with coins and cash, Coinless Mobile offers an app where operators can use their existing payment stations and payment methods. According to Coinless Mobile

product development director Braden Hall, their system, easily downloaded from the Internet, allows operators to change pricing, launch and manage promotional campaigns and activate wash services remotely. The Coinless app offers next-day funding as well as real-time reporting features. Customers pay via the app, making coins a thing of the past. “This app really reduces labour needs at self-service sites where management can communicate with customers remotely and use the app to start equipment like an entryway or offer a refund,” he says, noting that they are working on an app for express tunnels. At Hamilton Manufacturing, an Ohio-based provider of pay station and digital app solutions for a variety of business sectors including car wash, they are developing custom approaches that include integrated loyalty features to help build community. According to Joe McEwan, marketing manager at Hamilton Manufacturing, their apps

offer innovations such as a referral program where loyalty points go to both the new customer and the customer making the referral. The app is also capable of delivering push notifications. “There is an expectation from the public that there is now an app for everything,” says McEwan. “Businesses such as car washes need to be ready to meet that expectation to drive revenues forward in today’s market.” Riding this digital trend, 7-Eleven Canada has stepped up its technology for customers with new apps that have earned them a leadership role in Canadian gas and convenience. "Our customers told us that they want more time to focus on the important things in their lives. We took that insight and developed 7-Eleven's proprietary technology to create a full contactless shopping experience," says Norman Hower, VP and GM of 7-Eleven Canada. Canada is the second market to introduce the app following a successful


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launch and expansion in the U.S. earlier this year. Since its launch, Mobile Checkout has been used by over 1 million 7-Eleven customers at all of their 3,000 participating U.S. stores. Simply scan, pay and go for purchases in-store, and at gas bars and car washes.

Is this the way of the future? Hower and his team think so. "We're reinventing convenience with the 7-Eleven Mobile Checkout, and this is yet another example of how we're developing digital innovation to actively exceed our customers' needs,” he says. OCTANE

Suppliers, what’s new in your product line? Contact Elijah Hoffman at 647.558.0103 or ehoffman@ensembleiq.com

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CANADIAN CANADIAN

CARWASH CARWASH ASSOCIATION ASSOCIATION DIRECTORS

Morgan Arnelien – FEDERATED CO-OPERATIVES LIMITED Jeff Beam

– MONDO PRODUCTS CO LTD

Cristina Caruso – SUNCOR ENERGY INC. Michael Destro

– TAMLANN INVESTMENTS

Michael Howe – BAYWATCH ENTERPRISES CANADA DIVISION Mike Jacques – WASHTECH VEHICLE WASH SYSTEMS Matthew Lapolice Jamie Shaw

– MARK VII

– 7-ELEVEN CANADA, INC.

Karen Smith

– VALET CAR WASH

Rudy van Woerkom – BIG CITY AUTO N TRUCK WASH Tim Walker

JANUARY 2022

CCA’S YEAR IN REVIEW - 2021 As we embark into the New Year, we would like to take a moment to look back and reflect on 2021, a year that our industry proved its perseverance. As uncertainty surrounding the pandemic and corresponding restrictions waged on, we found ways to continue our operations, providing value to our customers and keeping them and our colleagues safe.

– REVINMEDIA

NATIONAL OFFICE Director of Operations Elizabeth McCaw Accountant Ricky Nason

2021 continued to feel different for us at the Canadian Carwash Association, as we’re sure it did for all of you. Lockdowns and safety measures early in the year prevented us again from having our annual golf tournament and a spring CARWACS show. As we pushed through those taxing months, a federal election and a nationwide vaccine rollout, we began to feel the tides turn as we came out of the summer.

Event Coordinator Jennifer Hickey Membership Coordinator Juliano Sinopoli Canadian Carwash Association 411 Richmond Street East, Suite 200 Toronto, Ontario M5A3S5

COVID-19

RESOURCES Members have access to a library of resources through the CCA and CFIB partnership. Visit https://www.canadiancarwash. ca/COVID-19-and-the-Industry for more information.

We were finally able to have our CARWACS show in September, via a virtual conference platform. Over two days, we hosted our virtual booth alongside many other vendors, while also providing a panel discussion on “Chemistry 101: Get the Best Results from Your Carwash”, a virtual networking session, and an online video tour of Klassic Carwash. Though we were initially hoping for the show to be a hybrid of in-person and virtual, it was changed to a completely virtual show almost last-minute. So, thank you to the entire CCA team for being able to adapt quickly to these decisions out of our control, and to all those that took part in CARWACS this year. Even though it wasn’t what we were expecting, we’re glad it was still able to happen, and look forward to an in-person show in the future.


INDUSTRY FORUM INDUSTRY FORUM D E D I C A T E D T O S HA R I N G KN O W L E D G E AND BE ST PRACTI CES I N THE CARWASH I NDUS TRY

We would like to thank our sponsors that stood by our side through another challenging year: •

Platinum sponsor Ensemble IQ

Gold sponsors LMI Canada Insurance, Mark VII Clean Cars, Mondo Products Co. Ltd., and Zep Vehicle Care Inc.

Bronze sponsors Transchem Group, andPurClean-PurWater

We would also like to thank our hard-working Board of Directors who volunteer their time and energy to keep the CCA running on all cylinders: Morgan Arnelien, Jeff Beam, Cristina Caruso, Michael Destro, Michael Howe, Mike Jacques, Matthew Lapolice, Jamie Shaw, Rudy van Woerkom, and Tim Walker, who stepped up to the role of Vice-President this year. These individuals work tirelessly in the background developing the strategic direction of our association. And big thank you to Elizabeth McCaw, Ricky Nason, Jennifer Hickey, and Juliano Sinopoli for their continued support behind the scenes at the CCA office. As we look forward to this New Year, there is optimism and excitement! Excitement about returning to in-person CARWACS shows, excitement about bringing back our golf tournament, excitement about growing our CCA community and finding new ways to deliver value to our dedicated members. Here’s to being together in 2022! Karen L. Smith President, Canadian Carwash Association CANADIAN CARWASH ASSOCIATION CANADIAN CARWASH ASSOCIATION



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CONTENTS

JA N UA RY | F E BRUA RY 2 0 22 VOLU M E 5 | N U M BE R 1

5 Editor’s Message New year, new start

6 The Buzz People, places, news and events 8 Quick Bites

Getting the chills: Are you ready for the next big thing in snacking?

10 Top Ops

Inventory management: Why the convenience sector is saying goodbye to clipboards

12 Retailer Spotlight Built on beer: At Montreal’s new Dépanneur Bière Froide Cold

12

Beer, beer sales represent about 80% of c-store revenue

16 COVER: THE BEVERAGE ALCOHOL REPORT

Liquid gold: Everything you need to know (and prepare) for when c-stores are (finally) able to sell beverage alcohol

COVER ILLUSTRATION, TIM ZELTNER; THIS PAGE, TOP: CHANTALE LECOURS

22 What’s In Store?

Bitcoin ATMs and COVID-19 rapid testing kits: C-store operators try new ways to attract customers and boost revenues

24 Ask the Expert

What actions can convenience operators take to deter theft and boost overall safety and security? Advice from Sean Sportun of GardaWorld Protective Services

25 Snapshot

Kathy Perrotta of Ipsos Canada on how c-stores can win at snacking in 2022

26

26 Voices

From labour challenges to supply chains and plans for 2022, Canadian convenience operators weigh in on the big issues

28 Backtalk

‘Evolve or perish’: A conversation with Kenny Shim, the new president of the Ontario Korean Businessmen's Association

CSNC EDITORIAL ADVISORY BOARD

Comprised of leading retail executives and convenience operators, this volunteer group of industry champions offer advice, key insights and on-the-ground perspectives that serve as an invaluable resource to ensure content is relevant and meets the needs of the industry. Leslie Gordon, Circle K Norman Hower, 7-Eleven Canada Wendy Kadlovski, Nicholby’s Sean Lauria, Parkland

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Robbie Mulder, Little Short Stop Laurie & Randy Ure, Ure’s Country Kitchen Gino Vecia, Hasty Market

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CONVENIENCE NEWS & INSIGHTS Delivered to your in-box every week.

The latest industry news and information, plus resources, foodservice insights, store solutions, tobacco/vaping updates and more. Don’t miss the All Convenience e-newsletter!

Sign up today at www.CCentral.ca/signup

JANUARY / FEBRUARY 2022

3


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EDITOR’S MESSAGE 20 Eglinton Ave. West, Suite 1800, Toronto, ON M4R 1K8 (416) 256-9908 | (877) 687-7321 | Fax (888) 889-9522 www.CCentral.ca

New year, new start

SENIOR VICE PRESIDENT, CANADA | Donna Kerry

EDITORIAL EDITOR & ASSOCIATE PUBLISHER, CSNC

Michelle Warren | mwarren@ensembleiq.com

The last two years have been difficult on countless fronts, and the convenience industry has been dealt its share of struggle and triumph. Being declared an essential service in the early days of the pandemic solidified the channel’s value and place in Canadian society. It gave many operators an opportunity to forge deep relationships with their communities and serve in a meaningful way. At the same time, convenience changed at an unprecedented pace, introducing delivery, curbside pick-up, contactless payment and an array of new products and services—all the while, navigating government restrictions, working tirelessly to meet consumers’ evolving needs and keep people safe. This, in the wake of decreased revenues, as well as disruptions to supply chains, foodservice and fuel. I don’t know about you, but I am ready to move beyond pivot and resilience—so 2020/2021—and on to brighter days. As of press time, however, the Omicron variant is spreading, which means more change—at least in the short term. The good news is we've learned a lot in the last two years and the industry knows what it needs to prosper in 2022 and beyond.

EDITOR, OCTANE

Kelly Gray | kgray@ensembleiq.com

TRANSLATION | Danielle Hart

ADVERTISING SALES ASSOCIATE PUBLISHER

Elijah Hoffman | ehoffman@ensembleiq.com

VICE PRESIDENT, EVENT SALES

Michael Cronin | mcronin@ensembleiq.com

DESIGN AND PRODUCTION DIRECTOR OF PRODUCTION

Michael Kimpton | mkimpton@ensembleiq.com

ART DIRECTOR | Jackie Shipley DIRECTOR OF MARKETING, BRANDLAB

Alexandra Voulu | avoulu@ensembleiq.com

VICE PRESIDENT EVENTS & CONFERENCES Megan Judkins | mjudkins@ensembleiq.com

SENIOR DIRECTOR AUDIENCE STRATEGY

1. The ability to sell beer/wine/cider/coolers in provinces across the country to not only offer real convenience to customers, but also survive and thrive.

SENIOR DIRECTOR, DIGITAL CANADA & SPECIAL PROJECTS

2. Lower credit card interchange/transaction fees. The surge in contactless payments puts an added financial burden on operators, who pay among the highest fees in the world. In 2019, the Liberals promised to eliminate fees on the GST and HST portions of transactions and that’s a first step, but more needs to be done.

Lina Trunina | ltrunina@ensembleiq.com

Valerie White | vwhite@ensembleiq.com

CORPORATE OFFICERS CHIEF EXECUTIVE OFFICER | Jennifer Litterick CHIEF FINANCIAL OFFICER | Jane Volland CHIEF HUMAN RESOURCES OFFICER | Ann Jadown EXECUTIVE VICE PRESIDENT, OPERATIONS | Derek Estey EXECUTIVE VICE PRESIDENT, CONTENT | Joe Territo

3. A commitment to higher lottery commissions, which, in some provinces, haven’t increased in decades. 4. Laws to prevent gas-and-dash thefts, which have nearly tripled in the last 10 years. When passed, Bill 231 will mandate prepayment at the pumps, thereby reducing injury and loss in Ontario.

SUBSCRIPTION SERVICES

LICENSING AND REPRINTS Please contact Wright’s Media | ensembleiq@wrightsmedia.com 1-877-652-5295 CONVENIENCE STORE NEWS CANADA / OCTANE is published 6 times a year by EnsembleIQ. CONVENIENCE STORE NEWS CANADA / OCTANE is circulated to managers, buyers and professionals working in Canada’s convenience, gas and wash channel. Please direct inquiries to the editorial offices. Contributions of articles, photographs and industry information are welcome, but cannot be acknowledged or returned. ©2022 All rights reserved. No part of this publication may be reproduced in any form, including photocopying and electronic retrieval/ retransmission, without the permission of the publisher.

5. Governments to get serious about contraband tobacco and its financial toll on legal sellers in the convenience sector (not to mention lost tax revenue). MICHELLE’S PHOTO: JAIME HOGGE

Subscriptions: Print $65.00 per year, 2 year $120.00, Digital $45.00 per year, 2 year $84.00, Outside Canada $100.00 per year, Single copy $12.00, Groups $46.00, Outside Canada Single copy $16.00. Email: csnc@ccentral.ca Phone: 1-877-687-7321, between 9 a.m. to 5 p.m. EST weekdays Fax: 1-888-520-3608 / Online: www.ccentral.ca/subscribe

6. Regulations that consider and respect the convenience channel’s track record selling age-restricted products. 7. Fair consultation with the industry about new policies and taxes that impact convenience and gas, as well as appropriate supports and timelines for implementation. Our team is honoured to be your resource for the latest news and information regarding these important issues and more (Check out the Beverage Alcohol Report on p. 16). Here’s to good news—plus your health and prosperity—in 2022! CSNC

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JANUARY / FEBRUARY 2022

5


THE BUZZ

CROSS - CANADA ROUND - UP / PEOPLE / PL ACES / NE WS & E VENTS

Influencer status

Sweet pairing

Regal Confections, which distributes global candy and chocolate confectionery brands across Canada, acquired British Columbia-based Tosuta International Sales Ltd., an importer and distributor of gummies, sours, hard and soft candies, throat lozenges and chocolate. Founded 43 years ago, Tosuta is well established within the convenience channel and an ideal fit for Regal.

NATIONAL CARWASH SOLUTIONS ACQUIRES MONDO NCS is partnering with Ajax, Ont.-based Mondo Products Company to create "the largest direct car wash installation and service company in North America." Founded in 1970, Mondo manufactures and distributes a complete line of concentrated cleaning fluids for the car wash industry and is the largest car wash cleaning fluids, service, and equipment supplier in Canada. "This new strategic partnership will allow Mondo to continue to meet the expectations and requirements of our incredible customers and partners across North America,” says Robert Devlin, president of Mondo.

Congratulations Jack!

Jack Rabba, founder of Rabba Fine Foods, is Canadian Immigrant Magazine’s 2021 Entrepreneur of the Year, as well as one of the year's Top 25 Canadians. “I am deeply honoured to be recognized alongside so many Canadians who are working tirelessly to make our country a better place,” said Rabba, who operates 35 stores in the GTA. “We are blessed to play a role in strengthening the neighbourhoods and communities in which we live. We take our responsibility to heart—and I’m not alone in embracing this task. I wish to extend my congratulations and thanks to all of the people at Rabba Fine Foods and all its associated wholesale, food and real estate businesses.”

6

JANUARY / FEBRUARY 2022

FRONTLINE HEROES The CICC’s Frontline Heroes Awards celebrate individuals, who went beyond the regular call of convenience duty to make an extraordinary impact on their community during the pandemic. From more than 80 nominations, the judging committee selected seven to honour. Read full profiles at CCentral.ca. Distributor: Kevin Clarke, Core-Mark, British Columbia

Western Retailer: Anita Wilson, Petro-Canada, Abbotsford, B.C.

Ontario Large Retailer: Sam Singh, who operates 10 Petro-Canada locations in the GTA

Ontario Small Retailer: Kanan and Vanathy Thiraviam, Husky Energy, Vaghan Ontario Small Retailer: Tim Lamirante, MacEwen, Mattawa Quebec Retailer: Eric Labranche, Voisin, Shawinigan Atlantic Retailer: Kim Miers, Circle K, Oxford, N.S.

SAVE THE DATE The Convenience U CARWACS Show September 13 &14, 2022 Toronto Congress Centre

Live and in-person! ConvenienceU.ca

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Use of prebiotics in yogurt, beverages, and bakery items is expected to increase with rising consumer demand for fibrefortified products, according to Frost & Sullivan. The global prebiotic ingredients market for human nutrition is projected to reach $2,596.5 million in 2026 from $1,824.6 million in 2020 at a compound annual growth rate (CAGR) of 6.1%. "There is a rising demand from the millennial and Gen Z populations for functional beverages—from enhanced water to nutrient-enriched juices and other beverages," says analyst Smriti Sharma. "Creating functional beverages with benefits that resonate with consumer interests is a challenge, and ingredient manufacturers are striving to achieve it.”

CCentral.ca


MOVING ON UP

ONLINE E XCLU SIVE S

10 headlines you don’t want to miss! 1. 7-Eleven Canada opens the taps on serving beverage alcohol in Alberta 2. F lu season is coming: What can you do now to protect staff and customers 3. Cenovus sells Husky gas stations to Parkland, FCL 4. How to build a healthy cough & cold category 5. M acEwen acquires Quickie Convenience Stores 6. S kip the line: 7-Eleven debuts mobile checkout across Canada 7. Mars loves Earth: Chocolate bar to be carbon neutral 8. Your c-store’s guide to selling cannabis accessories 9. B in it to win it - A simple step for c-stores to boost sustainability 10. Court of Appeal upholds Quebec’s vape laws To stay up to date on the latest news and info, get the All Convenience e-newsletter delivered to your in-box every Wednesday: CCentral.ca/signup

24 SHUTTERSTOCK.COM

Expansion in Aisle 24

Cashierless, automated micro-market Aisle 24 operates 10 c-stores in Toronto and Montreal and, through its franchise model, is to open an additional 30 in British Columbia, Ontario and Quebec. Next up, adding locations in Alberta, Manitoba, Nova Scotia and New Brunswick over the next two years, and eventually operating more than 200 stores in Canada. Customers are members, who download and register with an app, which is used to unlock the door. They can shop, then check out at the in-store kiosk using their mobile wallet or debit or credit card for contactless payment.

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Dave Aeri joins Lactalis Canada as VP and head of information technology. Aeri has extensive experience in supply chain technology, software engineering, strategy and digital transformation across a range of sectors, according to the food company. Chris Jones joins EnsembleIQ as B2B account executive on the The Convenience U CARWACS and Convenience Store News Canada brands. The former Canadian Springs Water rep is based in Toronto. He will be reaching out to chat about opportunities at the upcoming show and more! Morgan Knowles joins Better Bears Foods as VP, investor relations. She has close to 10 years of experience in capital markets and investor relations, having worked for several large publicly traded companies, and will be an essential part of the team, as the plant-based healthier for you snack brand moves towards its goal of a successful public listing. David Rabu is promoted to VP, trade marketing and category management for Ferrero Canada. In this newly created position, Rabu will oversee sales strategy across trade and shopper marketing, revenue and category management, and e-commerce. Eric Wallace joins Parkland Corporation as food service operations manager, based out of Burlington, Ont. Previously, Wallace was with Suncor for more than 18 years, most recently as manager of strategic partnerships. *Announce your new hires and promotions. Email mwarren@ensembleiq.com

Wage boost

Effective January 1, 2022, the minimum wage in Ontario increased to $15 an hour. New Brunswick is bumping minimum wage by a whopping $2 in 2022—$1 on April 1 and $1 on Oct. 1—to $13.75. Visit CCentral.ca for the four-point action plan proposed by CICC and ACSA to help c-stores mitigate rising costs.

Real customers, augmented reality

Circle K’s partnership with Niantic, Inc. brings more than 9,000 Circle K stores to life this month in the augmented reality mobile game Pokémon GO. The Pokémon GO partnership connects players and Circle K customers alike to in-store experiences and special in-game rewards and offers. In addition to transforming Circle K locations worldwide into PokéStops and Gyms, the experience will be available at Couche-Tard branded stores in Quebec. JANUARY / FEBRUARY 2022

7


BY DARREN CLIMANS

Getting the chills

Are you ready for the next big thing in snacking?

I

t’s an understatement to say that life, such as it is, has become extra challenging. Small indulgences have played an outsized role in keeping us all going. Global snack manufacturer Mondelēz noted in its 2020 Annual Review that “snacking has increased sharply in developed markets since the outbreak of the coronavirus.” Mondelēz has seen increases in all segments, but sales of cookies have led the way. Production of Oreos in North America increased by 30% in 2020. According to Martin Parent, president of Mondelēz Canada, after an initial spike in snacking consumption of over 50% during COVID lockdown, consumption is “still 30% higher today than where it was in 2019.”

A better mousetrap

Paradoxically, these near-term gains may be masking a phase shift in snacking

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habits. The pandemic has confirmed two truths: change really is the only constant; and disruptions happen whether we’re prepared or not. Rather than following the crowd and trying to sell more of the same, now may be exactly the right time to reconsider your snack offerings. The zeitgeist on the cusp of upending the snacking market is a migration from ambient to refrigerated/chilled snacks. Mintel, a global market intelligence agency, picked up on ‘fresh’ snacking early. Fresh was defined as “clean label, free of additives/preservatives, and typically as either refrigerated products or those found in the produce section.” According to data cited by Mintel, emergence of the fresh-snacking market can be traced back over 15 years, but “began accelerating in 2008, with the percentage of new, fresh-snacking product launches in the U.S. increasing by about four times, between 2008 and 2017.”

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Research identified six packaged product segments to most clearly define the fresh snacking category: refrigerated protein bars, protein snack packs, drinkable soups, bottled smoothies, yogurts, and other products, such as hummus and guacamole.

Getting on board

Millennial and Gen Z consumers consider fresh snacks to be cooler because they marry indulgence, first and foremost, with perceived better-for-you (BFY) product attributes. Powerhouse snack-maker Nestlé has just launched its own line of refrigerated chocolate-covered nut butters to compete in this space. Nestlé introduced Rallies Nut Butter Bombs to target a segment they call “Slumpers”—consumers looking for BFY indulgent treats to “rally them from a dip in blood sugar, stress, overwork, (or) boredom.” This is not a small group. A recent study by The Hartman Group in the U.S. found that “74% of consumers surveyed (mentioned) ‘treating oneself’ as their main source of comfort to combat hitting the proverbial wall during the day.” Rallies will be launched at major retail grocers in 2022. Soon after, Nestlé anticipates entering the convenience channel, partnering with progressive c-store operators motivated to clear beverage cooler space to make room for on-trend chilled items designed to match desired eating occasions. There are already a myriad of new products on offer, both chilled and frozen (Exhibit 1). They are typically nutrient-dense, and have clean ingredient decks dominated by fruits, veggies, plant-based proteins and probiotics. Montreal-based start-up Mid-Day Squares’ functional chocolate protein bars jumped on board in 2018, with their initial product, Fudge Yah bar. All Mid-Day Squares products are vegan, gluten-free, soy-free, non-GMO, 100% organic and do not contain preservatives or artificial additives. Less than two years after launch, the company had sold more than 1 million bars and had product listings with Metro, Sobeys, IGA, and hundreds of independent retailers in Canada and the U.S.

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QUICK BITES

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confirms growth in premium refrigerated and fresh pet foods with over 20% expansion in 2020, on $80 million in sales. There is still a big market for conventional pet food, but fresh pet food offers growth and margin, which is why many retailers have installed stand-alone refrigerated cases dedicated to premium pet food.

Going to the dogs

Mintel research supports the suggestion that, increasingly, “the perimeter of the store is the place for discovery and variety—with a third of shoppers saying they are specifically looking for new foods on the perimeter, while a quarter say the perimeter is where they (are purchasing) impulse items.” Many large retailers have responded, expanding the number of refrigerated cases in-store, and even repositioning the placement of cooling cases into the centre of the store. Ironically, one of the clearest examples of this kind of fresh expansion is evident in the “humanification” of pet food offerings. Dana Brooks, of the Pet Food Institute, points to manufacturer Freshpet, which has leaned into consumer desire for ‘real fresh food’ by developing such offerings for their pets. Freshpet became a public company in 2014, with a NASDAQ share price of around $17/shr, and a market value worth $500 million. Today, the share is priced over $150/shr and has a value close to $7 billion. Retail data tracker NielsenIQ,

Put on a fresh face

There’s not yet a lot of chatter about the fresh segment in the convenience channel, but with face-to-face work set to ramp up again in 2022, there could be a growing number of “slumpers” craving premium chilled snacks from c-stores. Wondering if it’s worth the trouble to expand refrigeration capacity, or to clear cooler space in order to accommodate something new and unproven? Think back to a time when bottled water, 100% pure not-from-concentrate juice, isotonic beverages and energy drinks were the new kids on the block. As the old saying goes, from little acorns mighty oaks do grow. CSNC Darren Climans is a foodservice insights professional with close to 20 years’ experience partnering with broadline distributors, CPG suppliers, and foodservice operators. His practice is to understand issue-based decisions by taking a data-driven approach to strategic decision making.

EXHIBIT 1 M A K E R O O M F O R T H E S E O N E S T O WAT C H

PRODUCT

MANUFACTURER

Nakd Vegetable Snack Bars

PepsiCo

Rallies Nut Butter Bombs

Functional Protein Chocolate Bars Ohi Superfood Bar

Perfect Bites/Bars/Cups/Kids Good to Go Keto Bars

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Clio Frozen Bars

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Nestlé

Mid-Day Squares OHi Food Co.

Perfect Snacks Good to Go

Clio Snacks

Refrigerated snacks 101 Defined as those forms of snacks that require refrigeration to keep their food quality intact and expand their shelf life.

The global refrigerated snacks market was valued US$52 billion in 2021 and is projected to reach US$73.7 billion by 2028. The market is expected to grow at a compound annual growth rate of 5.1% from 2021 to 2028, driven by growing preference toward natural and fresh food. When choosing a snack, around 60% of consumers look for additional health benefits above and beyond simple nutrition. They seek snacks that contain vitamins and minerals. Fresh snacks have become an essential aspect of (this) new way of eating because freshness exudes a sense of healthfulness that shelfstable snacks often do not. In 2020, Europe contributed to the largest share of the fresh snacks market. (Source: The Insight Partners)

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TOP OPS

B Y R YA N Y O S T

Inventory management Why the convenience sector is saying goodbye to clipboards

Tackling expiration management

Labour shortages are affecting every corner of the convenience sector. However, there’s one important spot

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that may not have been sufficiently addressed: labour shortages are literally making customers sick. Right now, 60% of foodborne illnesses are being traced to venues that rely on providing fresh food to customers. The root causes of foodborne illness include expiry management, temperature control, over-prepping, and improper rotation. With a smaller staff, it’s become even more important to employ digital means to oversee these processes to ensure operations transparency and keep food safe. By keeping a digital “eye” on these functions, convenience store management can cut the amount of time needed to complete these tasks and help operators make smarter decisions about forecasting and food rotation. The result is savings not only in labour hours for reallocation to other critical tasks, but also increase margins by decreasing food waste. Importantly, by helping keep your food safe, digitizing these processes contributes to maintaining brand recognition that enterprises in the convenience sector work hard to establish.

Reducing food waste

Reducing food waste benefits the bottom line—and the planet. Most convenience store operations are understaffed, and monitoring food waste can put a strain on already-limited resources. Not having precise data on how much and what products are being thrown away adds significant operational costs. Studies have shown that by digitally tracking the quantity of food waste through cloud- based digital solutions, convenience stores can save more than seven labour hours per week and gain the ability to reduce food waste by over 46%. In fact, every 1%

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of food waste avoided can be realized in additional sales in excess of $20,000 per year.

Ensuring inventory accuracy

Taking inventory can be one of the most labour-intensive and error-prone elements of running a convenience food operation, especially if a pen and a clipboard are the sole means to take inventory and information must be manually input to the back of house system. Digitizing inventory offers a fully paperless experience, freeing associates from clipboards and saving management from costly mistakes. Additionally, studies have shown a reduction of 25% of unscheduled deliveries (or store-to-store transfers). Overall, results have shown an average $1,500 reduction of excess inventory sitting in the backroom. The numbers also showed more than four labour hours saved per week. With the technology that currently exists, 2022 should be the year that manual inventory-management processes become obsolete, and clipboards finally disappear from the convenience sector. Cloud-based inventory solutions will rescue convenience sector operators from their supply chain and labour miseries. CSNC Ryan Yost is vice-president/general manager of Identifications Solutions for Avery Dennison Corporation, including Freshmarx cloud-based solutions for the food sector. In his role, he is responsible for worldwide leadership of and strategy for the Identification Solutions Division, focused on building partnerships and solutions within the food, apparel and fulfillment industries. For more information, visit AD Explore.

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he pandemic accelerated the pace of automation and digitization of inventory in the convenience sector. Now, as convenience brands continue to assess their operations in the wake of a tumultuous 2021, the uncertainty of what the near and long-range future will hold is weighing heavily on the minds of operators and c-store executives. Across the board in food retail, the 2021 surprise was how quickly COVID accelerated the critical role and importance of technology. Indeed, what the industry thought was on the horizon for 2025 began implementation last year, and the pace of adoption will increase in 2022. The major stresses on the convenience sector right now are the dual threats of supply chain breakdown and labour shortages. The convenience sector is not immune from worldwide supply chain ills. As images of container ships stacked up on the coastline make headlines and flood recovery continues, convenience store owners and operators are experiencing their own unique supply chain pain, which has become especially dire in the face of labour shortages. The good news is that there are remedies to mitigate convenience sector suffering and offer real benefits to fresh-food purveyors. All along the food supply chain, labour and cost savings can be achieved by eliminating one historically manual process: inventory management. Cloud-based inventory solutions can address these ongoing food industry challenges.

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RETAILER SPOTLIGHT

n o BUILT BEER

At Montreal’s new Dépanneur Bière Froide Cold Beer, beer sales represent about 80% of c-store revenue BY M A R K CA R DW ELL PHOTOGR A PH Y BY CH A NTA LE LECOU RS

A TK

bar in a retail setting. That’s how Samuel Kirk describes Dépanneur Bière Froide Cold Beer, the new convenience store that he and a partner opened on a busy Montreal commercial street in April. “We wanted to differentiate by looking at a bar from a convenience store point of view,” says Kirk. “It’s really a modern version of a dépanneur with high-end products that are more curated.” Located in a former dog-wash shop in Pointe-SaintCharles, an old working-class neighbourhood that is quickly gentrifying through an influx of younger, more affluent people and businesses, the new store sells more than 500 SKUs of refrigerated Quebec craft beers, wines, ciders and seltzers. It also carries an expanding array of locally- and Canadian-made snack foods, including chips, salsas, charcuterie, crackers, cheeses and frozen pizzas. “We want to serve people who want something alcoholic with a variety of quality food products to accompany their drinks,” says Kirk. “We don’t sell toilet paper, bread or milk like a regular corner store, but we’re just as handy and convenient for our customers.”

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13


Bière Froide store manager Fred Masse

Kirk and partner Kevin Demers came up with their novel beer boutique concept during the pandemic, which resulted in closures and capacity restrictions for bars and restaurants as Quebec grappled with COVID-19. Demers notably owns two cocktail bars in Old Montreal—The Coldroom and El Pequeño—while Kirk, an Australian who has lived in Montreal the past five years, has worked for Demers as both a bartender and bar manager. According to Kirk, the passage last December of Bill 72, which amended Quebec’s regulations on alcohol permits to allow cash-starved restaurants to sell sealed containers of beer, wine and cider for takeout and delivery with food orders, provided the duo with both an opportunity and inspiration for their entrepreneurial venture. “It got us thinking, ‘Hey, this would be a great way for us to pivot our skills from the hospitality industry to retail,” said Kirk. “We’d use the same mentality of giving store customers an experience like we do in bars.” After applying for and receiving a grocery permit— something that enables them to stay open as an essential service and allows them to offer home delivery—the duo rented an empty 2,000-sq.-ft. store on rue Centre, a stone’s throw from the public parks and bike paths that line the Lachine Canal and close to big office and manufacturing businesses, such as Northern Electric. They spent north of $100,000 putting a large cold room in the backroom and remaking the 800-sq.-ft. storefront to resemble a bar. “We put a huge U-shaped counter in the middle to help greet and engage with customers when they come through the door,” explains Kirk. They also put mosaic tiles on the floor, vintage lighting around the store and installed “a whole bunch” of upright, glass-door display fridges along the walls. “If not, you can’t have a business named Cold Beer,” quips Kirk. In addition to in-store sales, which are handled by the store’s four staff, including Kirk, the business also offers same-day delivery services across the island of Montreal. Despite the absence of big-brewery products and a limited selection of snack food items when it opened, Kirk said the store proved popular from the get-go. “The clientele is mega local, particularly young people who appreciate and look for craft beers,” he says. Beer sales, Kirk adds, represent about 80% of the store’s revenues. “IPAs reign supreme, but blonds and pilsners are also popular,” he says. “And we’re seeing other categories develop too, especially wine. There are a lot of great tasting Quebec wines nowadays.” The store’s food offering—everything from potato chips from New Brunswick’s Covered Bridge; to organic PEI mussels; Ontario trout from Vancouver’s Scout Canning; cheeses and sausages from Quebec’s Charlevoix region; to frozen pizzas made in Montreal’s Little Italy neighbourhood (a recent addition that necessitated the purchase of a front-store freezer)—has also continued to grow in size and importance. “It really gives the store a dépanneur vibe,” says Kirk. “And we’re continuing to add more items as we see what people want and need.” Though new to retail, Kirk says he and Demers are enjoying the experience. “We’re already looking to expand and open a second location in another area of Montreal, and maybe even the South Shore,” said Kirk. “Hopefully we can one day start selling franchises. You gotta dream big.” CSNC

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OPER ATOR INSIGHTS

RETHINK DESIGN The founders did away with a traditional c-store format and designed a store that looks like a bar. “We put a huge U-shaped counter in the middle to help greet and engage with customers when they come through the door.”

FOCUS ON THE CUSTOMER Drawing on a background in hospitality, the duo decided to create a customer experience that pairs a curated selection of snacks with craft beers that appeal to a young, local clientele.

OFFER DELIVERY With the pandemic reshaping consumer expectations and habits, the founders knew that delivery would be a fundamental part of their success right out of the gate.

START SMALL , DREAM BIG The founders opened with a limited selection and expanded their offering over time. Now they’re talking about opening more locations.

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COVER STORY

E RAG L E V BE COHO AL

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d

Amid a Canada-wide industry push, beverage alcohol may finally be ready for its long-awaited breakthrough. Are you? BY CH R IS DA N I E LS

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|

I L L U S T R AT I O N S BY T I M Z E LT N E R

or years now, the convenience industry has

argued that beer and wine is the biggest untapped opportunity for the majority of Canadian corner stores. And the pandemic has starkly illustrated that selling beverage alcohol—beer, wine, cider and, more recently, coolers— is also the best bet for the industry to future-proof its economic health, amid changing consumer expectations and shifting core categories, such as tobacco, vaping (heavily regulated), lottery (increasingly digitized) and fuel. Quebec is one of only two provinces where beverage alcohol is sold in traditional c-stores. Taking into account only beer, sales are so good in Quebec that it ranks as the second-largest convenience category for all of Canada. And it continues to grow (see p. 20).

To survive and thrive

According to data from the Convenience Industry Council of Canada (CICC), between 2016 and 2019 stores in

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Ontario closed at twice the rate in Quebec—618 compared to 301. “There is also evidence that the declines have been much sharper in Ontario in rural populations,” says Anne Kothawala, CICC president and CEO. “This underscores that expansion of beverage alcohol could literally be one of the determining factors as to whether rural stores can survive.” The industry association has been running a campaign, Choose Convenience. Choose Ontario, urging the Ontario government to allow c-stores to sell Ontario-made wine and beer, which would help prop up the more than 350 wineries and 300 micro-breweries (although the big guys have factories here, as well).

Promises, promises

It’s the latest in a long line of industry initiatives, including the Convenience and Choice coalition (made up of CICC, Ontario Convenience Stores Association, Ontario Korean Businessmen’s Association and Free My

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E RAG L E V BE COHO AL

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Booze) advocating for the sale of beverage alcohol at convenience. In 2018, Premier Doug Ford promised to make beer available in corner stores (plans fell apart due, in part, to disagreements over the master framework agreement, which expires in 2025) and the CICC is reminding him of that promise ahead of June's election. “What we are really looking towards is getting something included in the Conservative government’s spring budget, as it will be their de facto platform leading into the election,” says Kothawala. MPP Stan Cho, who has strong industry ties and championed Convenience Store Week in Ontario, touched on the issue when speaking at a recent industry event: “I know there is more to be done… I will work tirelessly to make sure we get that done in this province sooner than later.”

Encouraging signs

The Ontario Convenience Stores Association (OCSA), meanwhile, is encouraging its members to get ready. It has partnered with a fintech company, Liquid Avatar Technologies, and the Ontario government to develop a digital age verification program for beer and wine purchases. “It could work like the lottery with a digital reader in every store or via a QR code,” says OCSA CEO Dave Bryans, who is an outspoken advocate in the quest to get beer and wine in corner stores. CJ Hélie, president at Beer Canada, which represents over 50 brewing companies across the country, says there are encouraging signs that Ontario might move on the promise. “The province has enjoyed some very significant alcohol liberalization initiatives over the past 20 months or so, many driven as a function of COVID,” says Hélie, noting restaurants can now deliver alcohol with take-out or delivery orders in many provinces. Saskatchewan and Alberta now allow this, too. Should it open up, the category isn’t without substantial challenges, however. For instance, in Ontario, “our analysis shows that 45% of the price of beer at retail are taxes, so there is very little operating margin there to play with,” cautions Hélie. Still, liquor would get more customers into convenience stores and more frequently, boosting overall revenues: Quebec retailers know this firsthand and have strategies that operators in other provinces can learn from (p. 19 “Secrets to success”).

The bottom line

The category and its potential are top of mind for independents, as well as regional and multinational chains. “Beverage alcohol is an important traffic builder for our Quebec market and is no doubt a promising opportunity for other Canadian markets to explore,” says Stéphane Trudel, SVP operations Canada, Alimentation Couche-Tard. Trudel was one of three panelists (including 7-Eleven VP & GM, Norm Hower, and Parkland SVP, strategic marketing and innovation, Ian White) who spoke passionately about the issue at the CICC Summit last fall. All agreed consumers' expectations are evolving in this on-demand world and the category is essential if c-stores are to offer real convenience to customers. The leaders emphasized this is also the channel’s best opportunity to grow. All are working aggressively to make it happen. 7-Eleven Canada filed an application with the Alcohol & Gaming Commission of Ontario for on-site liquor sales at 61 locations last year, though at press time had withdrawn some applications. 7-Eleven did, however, introduce beverage alcohol at an Edmonton store in December, capitalizing on new and relaxed consumption rules from the Alberta Gaming, Liquor & Cannabis Commission. More stores are likely to follow. MacEwen, which acquired Quickie Convenience Stores last fall, also hopes to carry beer and wine. “It would significant-

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ly improve traffic in our Ontario stores, support an overall increase in sales and help profitability, as these customers don’t buy only alcohol, but also snacks,” says Hélène Drolet, MacEwen’s SVP and GM of retail. What makes Drolet so sure? She can look at Quickie’s 12 stores in Gatineau, Que., and see the difference between their performance and the Quickie stores in Eastern Ontario. “It’s a very important category,” she stresses. CSNC

FIRST-MOVER

ADVANTAGE

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C-stores need to be ready to adapt quickly nce a province approves the sale of beer and wine in corner stores, it will be a race for their operators and owners to get ready for customers. The race won’t be a sprint, however; government is expected to include a long lead time before any coming-into-effect date. That doesn’t mean, though, c-stores shouldn’t move quickly, especially when it comes to ensuring they have refrigeration capacity. Due to supply chain issues, Jason Giuliani, VP of sales at Norbec, says its ETA on cooler orders right now is four months or longer. “Before the pandemic, you could get them in five or six weeks,” he notes. “Now you’re looking at 20 weeks.” Some c-store owners report getting quotes from manufacturers with a delivery date seven- to eightmonths out. An announcement from any province opening the opportunity for the convenience sector could create a further backlog, so c-stores don’t want to delay on cooling needs once an announcement is made. Some independent operators are looking to get ahead of this potential pitfall, knowing the national chains have more budget, infrastructure and manpower to ramp up quickly. Little Short Stop Stores in Ontario has proactively "retrofitted freezers into coolers,” says Robbie Mulder, district manager at the family-owned chain, which has 30 locations across Kitchener, Waterloo, Cambridge and Guelph. “We brought in smaller freezer capsules, and then took the large-capacity footprint that opened up and turned it into a cooler,” explains Mulder, noting Waterloo Brewing would be a natural partner as a local craft beer player. “We then expanded our beverage line so that it can be shrunk in the event beer and wine comes in.” “We have been working on this over the last year or so,” says Mulder. “If it happens, we will be ready.”

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SUCCESS SECRETS TO

The sale of beverage alcohol is an important traffic builder and driver for the Quebec convenience market. While big sellers by volume, the profit margin on beer and wine is modest. We asked three c-store operators to share how they maximize the popularity of the category.

I N DEPEN DENT OPER ATOR Provisions Ste-Odile, Quebec City

Sales: While not providing a dollar amount, Praful Manek, who opened Provisions Ste-Odile in 1983, says beer has become the biggest-selling category for his store. In 2021, the store moved between 40,000 to 50,000 cases. Store footprint: About 500 to 600 cases of beer are ready for purchase at any one time in a cold room that measures 54 ft. by 17 ft., features 13 self-serve doors, each 30 inches wide, and a double door so that customers can walk into it. Wine, meanwhile, is displayed on 20 linear ft. of shelving. Manek says an abundant supply of wine is always on display. “If a customer sees 60 bottles of a particular wine, they’ll think ‘That must be a big seller.’ It’s also more visually appealing than just seeing a few bottles of a brand, as they’ll look old or as if nobody wants them.” His store is 4,000 sq. ft. in total. Strategy: Manek ensures a good portion of the beer he sells is from the big guys, as they support large orders with a discount and in-store promotional materials, which they’ll set up, But Manek says it’s important to carry product from micro and craft breweries, both in support of local and to meet customer demand. “I make more profit when I sell a single can from a microbrewery than I do

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a case of 24,” he notes. Tip for success: Keep your beer prices low, and you’ll become a weekly destination for customers, says Manek. On Google Reviews, locals rave that Provisions Ste-Odile has the best prices on beer in all of Quebec City. “Alcohol brings people in, but with their case of beer or bottle of wine they might also pick up a can of beans or bread.”

helps to sell other categories with better margins, like chips and snacks.” MacEwen also keeps up on trends in the category, particularly ensuring they have craft beers for customers to discover. “We saw a lot of IPA beers in the market last year, and the customer was all into it,” she says. “Now, the market is trending towards ale, and we expect higher customer demand for these type of beers.” Tip for success: “You need to keep this category evolving to be successful,” says Drolet. “The customer is also looking for great value, so if you’re able to promote a variety pack, they will appreciate it.”

R EGIONA L OPER ATOR

Quickie Convenience Stores (owned by MacEwen), Gatineau Sales: At Quickie’s 12 stores in Gatineau, beer and wine accounts for up to 20% of annual revenue for each location, says Hélène Drolet, SVP and GM of retail at MacEwen, which operates c-stores in Ontario and Quebec. Strategy: “This is not the most profitable category in the store,” says Drolet, “but it brings in traffic and

NATIONA L OPER ATOR

Alimentation Couche-Tard, Laval Sales: Couche-Tard is recognized for its wide assortment, compelling offers, effective stocking and merchandising,

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as well as its commitment to being a responsible retailer. The market has evolved significantly in recent years, with customers seeking new products and more variety. In the past, 20% of products could represent 80% of sales, but that is shifting, as craft beer and alternative products gain in popularity. Strategy: Competition is heavy, therefore a lot of promotional space is dedicated to enticing and retaining customers. Pricing, assortment and merchandising are key. Trend-wise, the convenience giant notes a transition in consumer preference from bottles to cans, as well as higher demand for craft beer, seltzers and ready-to-drink (RTD) malt-based product (which used to be available only through the SAQ). A company spokesperson notes these “have been key developments in our offer in the past years, as customer demand increases steadily… This shift in our offering also allowed us to make very bold and visual changes in some of our store floor plans—integrating large, specialized fridges which promote local craft beer and display them in a very attractive way.” Tips for success: Planning is crucial and integrating detailed planograms will help both retailers and suppliers. “At Couche-Tard, our strength is working together with our partners, and they have been very supportive in ensuring we have the best customer experience possible and have the right tools in place,” said the spokesperson. “Next, it’s all about understanding your customers and promoting an offer that will delight and engage them and leveraging that on all channels available. We’ve been able to accomplish that by constantly evaluating our impact and tailoring our offer, promotions, cross-promotions, and ensuring beverage alcohol is very visible in the cooler and floor space, especially at key times in the year around peak traffic periods.” As with all age-restricted products, it’s important to maintain high standards and commit to being a responsible retailer, by ensuring the product is in the right

hands, no exceptions.

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O

On the RISE

nly two provinces in Canada permit the sale of beer and

wine at convenience stores without on-premises dining: Quebec and Newfoundland. Yet beer was the second-largest category nationwide in 2020, with sales of more than $470 million, a 25% increase over 2019, according to Nielsen MarketTrack. This is based entirely on the Quebec market because Newfoundland isn’t tracked in the report. “That is an impressive increase, and in of itself demonstrates the opportunity for Ontario,” says Anne Kothawala, president and CEO of the Convenience Industry Council of Canada (CICC), which recently released the data as part of its annual State of the Industry report. At some stores in Quebec, beer is now the top sales performer, overtaking cigarettes. Wine ranked as the sixth-largest category, with more than $68 million in sales. It registered a huge year-over-year increase of 40%. CSNC

25

2nd

40

%

$470,340,271 (2020) $377,548,391 (2019)

6th

$92,791,880

%

$68,755,187 (2020) $49,107,689 (2019) $19,647,498

Source: Nielsen MarketTrack

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BY CHRIS POWELL

Traffic drivers

A spotlight on initiatives, best practices, products or services that c-store operators are using to attract new customers and boost revenues Bitcoin ATMs

Earlier this year, Sydney, N.S.-based independent Mac’s Convenience became the first convenience store on Cape Breton Island to feature a Bitcoin ATM. “At first I was a little nervous because I wasn’t sure how it matched with our primary customer base,” says Mac’s co-owner Leanne Boutilier. Nearly one quarter (23.2%) of the city’s population is 65 and over, which didn’t exactly figure to be a group likely to care about Bitcoin or other cryptocurrencies. “I thought it might be a bit of a mismatch,” Boutilier admits. But Boutilier also prides herself on being a progressive operator, so when Localcoin—which bills itself as Canada’s largest Bitcoin ATM network—first approached her about installing the Bitcoin ATM, she was intrigued. “They felt it might be worth exploring that opportunity,” says Boutilier. “So, after a little bit of back-and-forth, we decided to go for it.” A Toronto-based company with more than 500 cryptocurrency terminals across eight provinces, Localcoin has been growing its presence in Atlantic Canada, installing ATMs in markets including Halifax, Dartmouth and Moncton, N.B. The machines dispense Bitcoin to a customers’ crypto wallet after cash is inserted, a process that takes only a minute or two to complete. Because the Bitcoin ATM accepts only cash, Boutilier strategically placed it next to the store’s traditional ATM at the back of the store. It turns out that her misgivings about having a Bitcoin ATM in her store were largely misplaced. It has proven to be a popular addition at Mac’s, with customers—including some of her older clientele—using the machine on a daily basis. Its users also often go on to purchase traditional c-store items, exactly the kind of behaviour Boutilier had hoped for when she installed the machine. “They might grab a lotto ticket, a beverage or a snack while they’re in,” she says. “It’s definitely a win-win for sure.” According to CoinATMRadar.com,

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an online resource that tracks ATMs that dispense Bitcoin and other forms of cryptocurrency, there are more than 2,100 Bitcoin ATMs/tellers in Canada, including more than 700 in Toronto alone. C-stores comprise a major part of the rollout. Major operators, including Canco Petroleum and Couche-Tard’s Circle K, are all installing Bitcoin ATMs in their stores. In July, Circle K announced an exclusive partnership with Bitcoin Depot that sees 700 Bitcoin ATMs installed in stores across 30 states and provinces, including British Columbia, Alberta, Ontario and New Brunswick. Denny Tewell, Circle K’s senior vice-president of global merchandise and procurement, says the company is committed to enhancing customers’ instore experience and making them their favourite stop for different needs and occasions. The Bitcoin Deport partnership, he says, gives the c-store brand an “important, early presence” in the cryptocurrency marketplace. More recently, Bitcoin Well announced that it is expanding its relationship with the traditional ATM operator RapidCash ATM to deploy more than 100 ATMs featuring its proprietary Bitcoin ATM software ghostATM in Canco Petroleum’s Canadian convenience stores.

JANUARY / FEBRUARY 2022

COVID-19 rapid tests

From the latest energy drink to the newest snack bar, c-stores can often find themselves at the forefront of demand for new products. Given the events of the past two years, then, it’s perhaps no surprise that some operators have started selling rapid test kits for COVID-19. One of the chief suppliers of these rapid test kits in the GTA is Masks Ontario, a company started by Toronto-area entrepreneur Brandon McAlister shortly after the pandemic began. It started with McAlister trying to find masks for his family and employees, and grew from there. “Tests are a big thing right now, and a great tool to have in order to keep cases down and stop the spread of COVID,” he says. “Making them affordable and easily accessible is just where we’re at right now.” Masks Ontario currently has partnerships in place with more than 20 convenience stores in the GTA, with operators stretching from Mississauga to Whitby and north to Richmond Hill. Sales currently number “in the thousands,” says McAlister. The organization is seeking locations on high-traffic streets and is working to produce some localized advertising to let people know the tests are available in their neighbourhood. McAlister and his team have also created some POP materials to promote the tests. Store partners include, Hasty Market locations in Mississauga, Toronto, and Ajax, as well as Dundas Variety Store in the Junction neighbourhood. At Lakeview Convenience on Queens Quay on the Toronto waterfront, owner Indra Tamang says he began stocking the tests in October and sold more than 60 in the first month. “Many people are looking for the rapid tests,” says Tamang. “There’s a lot of demand.” While it’s great to be a resource for the community, he hasn't noticed a carryover effect on overall store sales: “They just buy the kit and go; they don’t buy anything else.” CSNC

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WHAT’S IN STORE?

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ASK THE EXPERT

Q

BY SEAN SPORTUN

Expert: Sean Sportun, ICPS, SAS‑AP, is national director, strategic accounts, GardaWorld Protective Services

What actions can convenience and gas operators take to deter theft and boost overall safety and security?

Increase your security, increase your sales 5 steps for successful crime prevention

T

he gas-convenience store environment is a unique business model. Stores sell age-restricted products, which come with regulatory concerns. Stores sell gasoline, which creates environmental challenges. Stores sell grocery items, which involve food-safety requirements. Combined with the fact most stores operate 24/7, inviting a transient flow of customers at all hours, it’s easy to see how challenging it can be to promote safety and security day in, day out. Therefore, organizations and independent store operators need to make the safety of employees and customers their first priority. Having a comprehensive security plan, coupled with regular, mandated training, is imperative for employees. It will create a robust safety culture, while ensuring employees are well prepared to do the right thing when faced with a theft or robbery. If you can succeed in your security plan, the revenue (and profits) are likely to follow. Data has shown certain stores are more predisposed to crime issues, where they are more vulnerable—and more frequently targeted—than others. Research-based evidence exposes a causal connection between environmental influences and the prevalence of criminal activity, such as theft and robberies. Criminals’ top three factors when choosing to commit a robbery at a specific store location are: 1) K nowing the amount of money they can obtain. 2) Having an easy escape route. 3) M aintaining the offender’s anonymity. Keeping these factors in mind,

reducing crime at your store is simpler than you might think. Consider these five steps when devising your security plan.

Employee training

Great customer service is the biggest deterrent to criminal behaviour; honest customers love it, and dishonest customers hate it! Make it a practice to always greet customers as they enter the store, it removes anonymity and lets them know they have been seen. With the high turnover rate in the gas-convenience industry, it is imperative to have a regular training schedule in place. If your employees do not have the proper training, it could put their health and safety at risk!

Cash control

Embed a strict cash handling policy that limits the amount of cash on hand and post signage that reflects this, such as Store has less than $50, Time lock safe or Clerk cannot open safe. Consider the use of a Smart Safe system to further limit the access to cash for employees. If a robbery does occur and a large amount of money is taken, the offender will think they can get the same amount (or more) at another store, and it will encourage them to try again. Not having nor following a policy could put colleagues at risk, especially those at other locations who are following proper procedures. The offender won’t know who to believe, which increases the potential for violence and injury.

Maintain clear visibility

Criminals do not want to get caught; they want to get in and out quickly

without being seen and would prefer to work behind closed doors, or in the case of convenience and gas stores, behind cluttered windows where they can hide. While it’s important to ensure the store is stocked with merchandise and marketing advertisements, it is equally important not to block the view to the outside. If the potential offender can see the employee while outside and the employee has a clear view of the parking lot, it will make a would-be criminal less likely to approach the property.

Proper lighting

If your parking lot is not well lit, you’re giving the offender more opportunity to hide. A brightly lit parking lot area will make it more inviting for a normal user to visit your location, while removing the concealment darkness provides to the would-be offender. Incidentally, the same applies for interior lighting: the brighter, the safer.

DVR surveillance system

Invest in an adequate digital video surveillance system and strategically place cameras both inside and outside of your store. Not only will the picture quality assist law enforcement to identify the offender, it also will support you in defending any general liability claims that may result. If you need a security plan or would like your existing plan reviewed, have a qualified security professional conduct the review, which should also include a risk assessment of your store location. Remember, when you look at things differently, the things you look at change. And that’s crime prevention at its best. CSNC

With nearly three decades in the corporate security Industry, Sean Sportun is a true security aficionado and has been recognized globally for his industry achievements. Sportun recently joined GardaWorld as national director, strategic accounts for Canada. Previously, he spent 15 years leading Circle K’s Central Canada loss prevention department and three years overseeing the Ontario 7-Eleven security operations.

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JANUARY / FEBRUARY 2022

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SNAPSHOT

B Y K AT H Y P E R R O T TA

Snacking in 2022 Research shows consumers’ pandemic-related snacking habits continue to evolve, creating growth opportunities for c-stores and manufacturers

I

t has been widely documented that Canadians’ journey through the varying phases of the pandemic period has had a considerable impact on daily consumption choices. In Ipsos Canada CHATS 2022 Trends report (launched December 2021), we lay out the landscape of needs, habits and situational dynamics impacting daily food and beverage choices from the pre-pandemic period through the early stages of lockdown to the current period of easing restrictions. It is critical to evaluate the indelible impact that this experience has had and will have on the consumer psyche to create consumer-led plans and strategies. Throughout this period, snacking has proven to be more vulnerable to the pandemic lifestyle shifts and emotional changes than meals, which tend to be anchor occasions in our daily lives. However, robust snacking behaviour continues to grow.

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Size of pandemic snacking

In Ipsos’ latest release of FIVE (a daily consumption tracking study in place since 2013) per capita snacking rates have increased 8% when compared to the initial period of lockdown. Further, two-thirds of consumption occasions (66%) in an average day occur at snack (as defined by consumers as choices made in-between meals), with close to half of all food items (44%) consumed at snack. However, man (or woman) shall not snack on foods alone, beverages also play an important role in snacking, both as a paired partner or as the snack itself. Also, when evaluating the snacking landscape and who is winning in-be-

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tween meals, foods chosen to meet the ever-expanding needs are not necessarily constrained to a traditional universe of snack options, like potato chips, fruit, chocolate or nuts. Almost a third of all foods (32%) consumed at snack are non-traditional items, like sandwiches or pizza. The snacking rate on non-traditional snack food options has increased 7% since the initial phase of the pandemic, driven by leftover usage and daytime choices.

Shifting needs by daypart

Snacking needs, driven by daily triggers and tensions evolve throughout the day. In the pre-pandemic period, morning choices were often motivated by routine and health, while evening choices were highly influenced by a craving to treat and indulge. The afternoon daypart was often referred to as the battleground daypart, with both healthy and indulgence playing a role in choices. To a degree, that snacking framework is still in place. However, given that our habits are typically woven around our activities, outlook and mindsets, each phase of the pandemic has brought about change. In the current pandemic phase, healthy and indulgent snacking choices are evenly distributed on an average day. However, the easing of restrictions has prompted consumers to seek out options that meet rising needs around entertainment, flavour exploration, physical recovery, energy boost and options with fewer and simpler ingredients.

Winning at snacking in 2022

The good news for retailers, manufacturers and foodservice operators is that

Canadians are snacking more than ever, particularly younger millennials and Gen Z cohorts. However, winning at snacking will require targeted solutions that meet consumers’ needs where they are. Some consumers have returned to the office, while others are still at home. And a hybrid working model has emerged, with employees in the office a couple of days each week and at home the rest. This means businesses need to be flexible enough to provide both larger and smaller pack sizes to accommodate this variety of consumer needs. CHATS 2022 Trends report explores the at-home population, which still represents 67% of adults. Consideration must be given to snacking implications among those at home, as well as those leaving home on a near-daily basis. Also critical to future planning is identifying shifting needs. In the pre-pandemic days, permissible indulgence was winning. Subsequently, in the initial phases of the pandemic, comfort, nostalgia and emotional stress relief were increasingly driving choices. In the current pandemic phase, the 4Es— Energy, Exploration, Experience and Entertainment—are emerging as areas for investigation. The food and beverage industry has seen considerable snacking growth through the pandemic phases and capitalizing on some of these evolving trends could help propel further industry growth. CSNC Kathy Perrotta is a VP with Ipsos Canada Market Strategy and Understanding, working with Food & Beverage Group Syndicated Services.

JANUARY / FEBRUARY 2022

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Canada is experiencing a labour shortage across several sectors; however frontline retail and the service industry are struggling to find staff. What are you doing to attract and retain workers in this tight frontline retail labour market?

71% FLEXIBLE HOURS

57% PAYING ABOVE MINIMUM WAGE

43% EMPLOYEE-DRIVEN SCHEDULING

43% OFFERING FULL-TIME POSITIONS FOR THOSE WHO WANT THEM 29% SIGNING BONUSES

29% COMPLIMENTARY MEALS

29% COMMISSION-BASED PROMOTIONS 0%

Have you had to adjust your store hours and services due to staff shortages?

BONUSES PAID WHEN STAFF HAVING COMPLETED A MINIMUM OF THREE TO SIX MONTHS

50%

33%

25%

WE ALREADY PAY ABOVE MINIMUM WAGE, SO IT DOESN’T IMPACT OUR BUSINESS

17%

NO, I AM WORKING LONGER HOURS TO FILL IN THE GAPS

0% YES

75%

How will your business deal with the minimum wage increase?

RAISE PRICES TO OFFSET COSTS

HAVE YOUR SAY! Keep an eye on the weekly All Convenience e-newsletter, the CCentral.ca website and social media for more surveys, polls and quizzes. 26

JANUARY / FEBRUARY 2022

0%

NOTHING, BUSINESS AS USUAL

NEVER

ON OCCASION, BUT NOT REGULARLY

0%

HIRING FREEZE

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VOICES

CANADIAN CONVENIENCE O P E R AT O R S WEIGH IN ON THE BIG ISSUES

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TAKE

5

LOOKING FORWARD

Here’s a taste of what other operators had to say.

As we move into 2022, we asked convenience and gas operators what they’re thinking about for the year ahead. Vinod Iddya, a Petro-Canada (Suncor) associate and area retail licensee for the Hamilton/Halton, Ont. region, sat down to answer five questions.

1. What was your biggest win or learning in 2021? 2021 was like no other year, unique in its challenges and opportunities. Human behaviours changed drastically and the challenge was to quickly pivot to meet those changes. Delivery platforms like Uber, Skip and Doordash became ubiquitous, my drive-thru sales constituted 70% of the total sales, which had to be met with better speed and service. Tobacco, chips, chocolate, pop and lottery were flying off the shelf. The beginning of the year was eerie with [fear of] the unknown [and people being in} closed places, Towards the end, people exhaled, started going out, but then the inflation bug reared its ugly head, leading to slow down in spending. All in all, it was a very eventful year. 2. What do you anticipate will be your biggest challenges in 2022? 2022; a year of Great Recovery coupled with the Great Resignation, things are about to get very interesting. Of course, labour could be a challenge, compounded by inflation and government immigration laws. Supply chain issues could slow things down during the beginning of the year, but by the second quarter, things will improve drastically and we should grow by at least 15% across all categories of retail, fuel, car wash and hospitality. Technology will play a big part in the transformation. 3. What changes are you making to your business in the next 12 months? My focus is still on people, getting the right teams in place to prepare for the year. I am looking for novel opportunities to grow business, categories that were not existent before, newer offers. Technology will play a big part, namely platforms to disrupt the existing ones for delivery, mobile ordering and pick up or delivery. [It's important to] offer a cordial place and environment for people to interact, as people crave human touch or smiling faces without masks. These simple interactions [will be] key for the brick and mortar [side of the business]. 4. What do you like most about being an operator? High traffic, variety in business components, high transactions, cash flow, high margins, interacting with people, lack of mundane routine and working with a great team.

What will be your biggest challenge in 2022?

“Delays and shortages of supplies and inventory.” What changes are you making in 2022?

“We have been in business for over 24 years, our strength is our flexibility in finding new products, suppliers and making changes to our product lines to meet new demands.” “We are planning to reduce hours and employees due to less traffic downtown.” What do you like most about operating a c-store?

“Independence.”

“It has many perks... being an entrepreneur, being your own boss and doing what you like most.” What are you most looking forward to in 2022?

“Slowly getting more people back downtown and business to get back to how it was pre-COVID.” 21_2577_CN_Conv_Store_News_JAN_FEB Mod: November 17, 2021 11:05 AM Print: 11/30/21 12:23:09 PM page 1 v7

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5. What are you most looking forward to in 2022? The recovery and back to normalcy.

Iddya and his staff doing good work in their community

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BACKTALK

BY M I C H E L L E WA R R E N

‘Evolve or perish’

As president of the Ontario Korean Businessmen’s Association, Kenny Shim is embracing new tastes and technologies

K

enny Shim didn’t plan to get into the convenience business. After graduating from the University of Waterloo and launching a career in IT, he was asked to help manage a convenience store for a sick relative. In 1994, Shim took over the Busy Bee King Mart at 677 King St. W. in Toronto and has, over the years, juggled as many as five 24-hour stores in the downtown core. Now, things are coming full circle. Shim, who served as chief operating officer of the Ontario Korean Businessmen’s Association since 2019, recently became president. Shim spoke to Convenience Store News Canada about his vision and the OKBA’s plans to connect and empower independent operators through technology.

and there was a lot of support from the membership, so I told them I’d do it for a couple years and see how it goes. I also do Sincere Trading, which is a wholesale division of OKBA, and bringing these two roles together will make things work smoothly, both for members and distribution-wise, as well as purchasing and perhaps maybe making our own product here and there. I'm looking forward to expanding our business because it's tough nowadays competing with all the chain stores. We're going to try to work together with other groups, like OCSA and CICC, to make this business more prosperous.

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JANUARY / FEBRUARY 2022

JAIME HOGGE

Congratulations. What made you take on the new role and what are some of your plans? KS: I was doing a lot of work anyway

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It’s been a difficult two years. How have your members coped with pandemic-related changes to their businesses? KS: We were lucky that we were

declared essential service, but it’s still not back to normal. When it comes to the number of stores, I'd say we’re down about 10%. Some of the smaller ones couldn't survive and it’s been tough on the ones near the downtown core because offices were shut down. How did the role of the convenience store evolve during this period? KS: There was a demand for stores

to stock a lot of different items. For example, a lot of convenience stores stocked hardware, like screwdrivers, nails, and other items that we usually do not sell. So that helped us quite a bit and it helped the community, as well. A lot of customers, especially the seniors and ones without mobility, were asking, "Can you get this for me?" And a lot of our store owners helped, which made the relationship between the retailer and the final customer better. With sanitizers and things like that, we tried very hard to get products in so that the community stays safe. What are some of your observations around the current supply chain issue? Because you're seeing it from both ends, as an operator and on the wholesale side of the business. KS: Yes. On both ends. Let me give you

an example—when we order Gatorade, there's literally five different sizes and about eight, nine different flavours. In other words, you've got 40 SKUs. When we order 40 SKUs, 100 each, it's 4,000 actual deliveries, but we’re getting only a quarter of that so we're out of stock most of the time. The out-of-stock situation is almost an everyday issue and we’re not the only retailers—it's a manufacturing issue. What are your members doing to mitigate this? KS: Basically, we need to adjust prices,

so we don't lose the money. For example, everything has gone up a good 30 to 40% in pricing. Especially items coming from overseas, where the cost of labour is cheaper. The 40-ft. container you see a trailer carrying used to cost $3,000 to bring it over the Pacific Ocean. Now it costs $22,000—seven times as much. And then, there's a threemonth waiting period. Anything that's coming overseas, it's going to be 30 to 40% higher. We need to adjust prices, but you're also going to get complaints from the final consumer, so we've got to get ready for that too.

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What do you think 2022 is going to bring for the convenience industry? How do you think the business is going to change or evolve? KS: Mostly it'll continue as it is,

but convenience needs to evolve to accommodate the needs of the final consumer. We need to be more adaptive and get to know what customers want, instead of carrying the same old products. We do surveys, get feedback and we constantly talk to our consumers. What category and product insights are coming out of those conversations? KS: Previously, customers wanted non-

GMO, organic, gluten-free, zero-sugar products from the supermarket. Now the convenience stores are starting to carry this. For example, kombucha tea, I used to have only one or two kinds. Now I've got 40 to 50 different kinds and people are getting used to that. Instead of going to the supermarket to buy everything and anything, I find that they come to the convenience store more frequently to buy non-traditional products. They used to want cigarettes and Kit Kats, but now they're looking for more. From hardware to even medication and all that, these are areas where convenience stores can take advantage and increase their revenue. Incremental changes are valuable, but looking ahead, what is the biggest opportunity for the convenience industry? KS: As usual, we’re looking to get beer

and wine at our stores, even if it's a local craft—in many ways, we prefer to sell local beer and wine because it helps Ontarians and Canadians. Hopefully that breaks through because this is something I have been lobbying for 25 years. I know it's going to come eventually because in 2025, the contract with The Beer Store is going to end. And that's what they're waiting for because breaking the contract is too expensive. As a taxpayer, I don't want to pay that. If we get beer and wine that will increase traffic, along with the overall basket of goods, and that's what the convenience sector needs. Consumers' attitudes about the very idea of convenience has changed— they want everything at their fingertips. What are your members doing to stay competitive in an era when Uber or Amazon can deliver almost anything to your customers’ front doors? KS: Convenience has got to change as

well—you either evolve or perish. We’re investing a lot in technology to

“If we get

beer and wine

that will increase traffic, along with the overall basket of goods, and that’s what the convenience sector needs”

develop a POS system where (members) can track inventory and the pricing. You need a live inventory system, without that, delivery doesn't work. We have 60 stores on board. We implemented our system where we can monitor everything from our head office and implement pricing and communicate in real time. We want to expand to a couple of hundred in the next two years. That'll be great. The OKBA does this as a group and shares the technology resources? KS: Yes, part of this is sharing data with

the manufacturers and implementing programs to monitor and see how we are doing and how to improve. I think that's what we need to do as a business. It's a lot of work. It is a lot of work. How are you balancing your new role as president, while also operating your store? KS: I do my mornings at my store. I've

been there for 30 years. That store runs itself and I have good staff. Every day I try to spend a few hours at the OKBA office. It's a two-year term, but there’s a lot to accomplish. I want the older stores to have data and be able to work more efficiently with a computer and the POS system. I think that's vital. CSNC

JANUARY / FEBRUARY 2022

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