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SEPTEMBER/ OCTOBER 2020 Volume 25 | Number 5

CONTENTS

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8

STAY CURRENT

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Editor’s Message Troubled waters

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CIPMA’s president & ceo takes a look at the year so far

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A need for speed Five simple tips to improve tunnel through-put

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Pivoting with POS Greater convenience and better data make current POS essential tools to success

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COVER STORY Walking the talk New B.C. wash sites moving closer to net-zero

19

Safe and sound Advances in design define underground fuel storage systems

23

Featured Products New products, equipment and services

24

CCA Industry Forum

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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 SENIOR VICE PRESIDENT, CANADA | Donna Kerry EDITORIAL EDITOR, CSNC Michelle Warren | mwarren@ensembleiq.com EDITOR, OCTANE Kelly Gray | kgray@ensembleiq.com TRANSLATION | Danielle Hart ADVERTISING SALES ASSOCIATE PUBLISHER Elijah Hoffman | ehoffman@ensembleiq.com SENIOR ACCOUNT MANAGER Danny Monticelli | dmonticelli@ensembleiq.com VICE PRESIDENT, EVENTS Michael Cronin | mcronin@ensembleiq.com DESIGN AND PRODUCTION VICE PRESIDENT, PRODUCTION Derek Estey | destey@ensembleiq.com DIRECTOR OF PRODUCTION Michael Kimpton | mkimpton@ensembleiq.com ART DIRECTOR | Linda Rapini DIRECTOR OF MARKETING Alexandra Voulu | avoulu@ensembleiq.com SENIOR DIRECTOR AUDIENCE STRATEGY Lina Trunina | ltrunina@ensembleiq.com SENIOR DIRECTOR, DIGITAL CANADA & SPECIAL PROJECTS Valerie White | vwhite@ensembleiq.com CORPORATE OFFICERS CHIEF EXECUTIVE OFFICER | Jennifer Litterick CHIEF FINANCIAL OFFICER | Jane Volland

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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. ©2020 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.

Troubled waters Canada holds 20% of the world’s freshwater reserves. This is a lot of responsibility. Certainly, the car wash industry is paying attention. Water is expensive and car wash sites use lots of it. A typical tunnel wash uses about 70 gallons of water per car and systems usually run about 100 cars an hour. A rough estimate shows the wash industry in Canada using billions of gallons of water over the course of a year. In this issue, we feature a look at a company (NationWide Self Storage & AutoWash) that is working towards a net-zero approach to car washing. NationWide sites in B.C. will use rainwater and solar panels to help make a positive difference to their local ecology in an area with some of the toughest water use regulations in Canada. Hats off to NationWide and others that are investing in a cleaner environment and cleaner drinking water. If only the provinces and federal governments could see things so clearly. Canada has 25 major watersheds and to date, there is no consistent data or encompassing research on this resource to give policymakers direction. People like David Miller, ex-president of the World Wildlife Fund Canada and twoterm Toronto mayor, see our water regulations as spotty, uncoordinated and a recipe for inaction. I concur. My experience has been that requests for

even basic information are often met with stonewalls such as inaccessible data, uncooperative provincial bodies, and national organizations without direction. At these times I always think of Alberta car wash operator Sylvain Blouin, who fought with the City of Edmonton for more than a year to obtain a permit to recycle and reclaim water. The City felt it was perfectly natural to just flush all the wash residue into the sewer system. Blouin had to present studies and research to show the efficacy of reclaim to head-scratching city councillors who saw this key water-saving tool as nonsense and a way for Blouin to skirt sewer costs. In Canada, the federal government defers to the provinces when it comes to water guidelines. The result is a patchwork regulatory environment that does us no good as a country. Regulations in the foothills of Alberta make a difference to water quality on the Manitoba plains just as rainfall in Labrador brings freshwater to the Saguenay. Canada needs clarity and unity in its water regulations and it needs it now. Having firm water use regs that span the country would be both good for business and good for the environment.

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2020 – The year we realized the crystal ball was for naught By Jennifer Stewart, president and ceo, Canadian Independent Petroleum Marketers Association (CIPMA) government. Here’s a quick snapshot of what we did, and how we will continue to ensure the voice of Canada’s fuel retailers – those keeping our supply chain strong and first responders fueled – responded.

› Immediate engagement: emergencies act

For years, I have watched as leading experts and analysts have looked into a crystal ball to predict future trends and trajectories for North America’s petroleum and retail market. Sometimes, these analyses align, and often times, they do not. As we all do our best to inform businesses on the decisions of government as we transition to a lower emissions economy, I would put money on the fact that very few were predicting a global pandemic and the initially devastating impact it would have on our sector. In March, as an association, we were gearing up for two major events: Our annual Canadian Fuel Marketing Conference, and an event CIPMA was co-hosting with Natural Resources Canada, on the state of the sector and how we work with government. Within days, we made decisions to cancel both events. Shortly thereafter, travel bans were put in place and schools shut down. And then we hit the ground running to represent our industry, and advocate to

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CIPMA immediately engaged Minister Bill Blair and all provincial ministers advocating for convenience and retail outlets to be included as essential workers in the wake of COVID-19. With increased uncertainty about business impact and forced closures, we acted promptly to ensure our members remained operational without question.

› Government outreach: HST deferrals CIPMA was an early advocator for the deferral of HST instalments to the Federal Government, to provide our members with slightly increased cash flow during a very difficult time as volume sales decreased nationally.

› Delay of provincial and federal mandates that increase burden and compliance CIPMA advocated for the delay in compliance for the Clean Fuel Standard (CFS), which was achieved. While we have been active members of the CFS technical committee for many years and support the government’s endeavour to reduce emissions, placing additional burden on companies during an unprecedented pandemic was unnecessary.

› Navigating the Canadian Emergency Wage Subsidy Benefit CIPMA worked with several of its members, and members of the Canada Revenue Agency, to determine eligibility for the wage subsidy program, as many retailers are on a consignment model. Our ability to cut through the noise and help our members understand their entitlements was a relief to many and provided needed clarity. We also met with the Minister of Labour for Canada to review the needs and concerns of our sector.

› Custom research We engaged Abacus Data to provide custom research for us, on what Canadians were thinking in terms of their driving habits. The results showed that more Canadians would be hesitant to take public transit, would travel less by air, but would have similar road trip habits.

Looking Forward We know we’re not out of the woods yet. We have a lot of work ahead of us to ensure our sector continues to evolve and respond to the needs of Canadians, whatever that may look like as we march onwards toward 2021. To bring some attention to what our members are doing, we are launching a Podcast in September that will feature company stories of growth, perseverance, and resilience. We will also be hosting a virtual conference that, to the extent we can, will have our experts looking into that crystal ball – whether that be murky or clear, we will be here for our members to help guide them. OCTANE

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A NEED FOR SPEED

Five simple tips to improve tunnel through-put By Kelly Gray You’ve done everything right and you’ve listened to wash equipment installers, but you still feel there is room for improvement in your wash numbers. Tunnels run roughly one car per hour per foot of conveyor. Small tweaks can make big differences in volume. “Get your new wash equipment running and then trim up the speed and watch the quality. When quality starts to decline back off. You have just passed the sweet spot where your system is working at optimum speed,” says Bill Barber of Washlinks, an Ontario-based leader in car wash equipment and service. He mentions the quality of reporting systems that keep operators up to speed on how their wash site is performing. “Reporting systems that describe through-put, chemical, water and power usage and other things gives a business the best information that is a starting place on improvements like speeding the line. Good data upfront means fewer surprises and a better bottom line.” Once you have your speed set, here are some simple things to consider that will help increase volume and efficiency.

1 Stay on top of equipment maintenance and make sure your chemicals are the right fit for your operation.

Nothing harms volume like equipment breakdown. Regular inspections and repair are essential to keeping volume up. Check the integrity of the frame, bearings, motors, and plumbing. Check the condition of all cloth and foam materials. Make sure they are well lubricated. Rebuild or replace items as necessary. If you are using a standard cloth and not getting the results needed—look to some of the newer materials on the market.

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Closed-cell foam materials can increase the wash performance of an existing top brush. Plush or textured wash materials can dramatically improve the capability of mitters.

2 Train your staff to maximize customer service and give them the tools to do the job.

Having the right chemistry in your wash also means workers at the exit point will have fewer trouble areas to clean if chemical detergents inside didn’t do their job. Hangups at the exit slow the conveyor and decrease volume.

3 Wash customers can be leery of onboarding with chain conveyors.

Good staff can help speed loading onto rollers to maximize flow through. Consider the advantages of a belt conveyor. These systems offer faster loading thanks to less skill needed from motorists of whom some can be intimidated by roller and chain conveyors.

4 Decrease the space between cars on the line.

Most operators offer from 3.5 feet to 7-feet between cars. Removing just one roller can increase volumes by 20 cars an hour but at the risk of collision. The closer the cars the greater the chance of a problem if a vehicle slips ahead off a roller. Here, operators must weigh the risks of collision vs profits.

5 Having an up-to-date POS system will help speed the line before cars get to the front end.

The latest POS systems offer license plate recognition and can read RFID tags of those customers that have joined a wash company’s loyalty, pre-paid subscription, or other program. With no fumbling for cash or change required for purchases, cars can either TAP or have readers scan their vehicle for user information. These POS systems work without the presence of staff, so they save money on labour as well. OCTANE CCentral.ca


PIVOTING WITH POS

Greater convenience and better data make current POS essential tools to success By Kelly Gray

At Calgary’s new iWash, operator Kunal Patel sought simplicity and he found it with his Point-of-Sale (POS) system. Patel’s site offers both tunnel and self-service wand wash. He saw cash and coin transactions as being unnecessary and wanted to create a wash site where customers could easily pay with credit, debit or prepaid cards, as well as Google and Apple Pay systems. “With cashless payment its as simple as tap, wash and go. Commercial customers no longer have to worry about drivers having receipts for washes. We track usage and send a monthly invoice. Everything is handled via our software and menu board system that makes product selection and payment easy,” he says, noting that the overarching idea behind iWash has been to create a vehicle wash business that is simple, effective and efficient. POS systems help get them there. The days of taking only cash are over for many businesses such as car wash, suggests says Brad Metcalf with ICS/Innovative Control Systems, a tech company focused on process control, software management, and equipment automation with wellknown products such as Tunnel Master, Wash Connect, and Auto Sentry. He points

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out that employee theft and no-cash management has advanced POS to handle credit and debit cards with a pin pad. “The advent of TAP truly has had a positive impact on the customer’s payment method. It is simpler and faster not to dip or swipe a card. When customers pay by cash, they have what is referred to as “disposable income” in their pocket or purse. So, whatever is available is all that is spent. With cards and unlimited wash plans, purchases are easier and not as much thought on what can be afforded. So, average ticket sales are up. “Club memberships either thru Radio-Frequency Identification (RFID) tags or License Plate Recognition (LPR) also drive volume,” he says. “Many operators have thousands of club members, giving them a consistent, predictable revenue stream. This could not be accomplished without POS technology that auto bills customers on a monthly basis. To the customer, it is all about value. They will enroll and remain in a program if they feel they are receiving what they pay for. With the advent of COVID-19, customers are now seeking a contactless environment that is offered by touch screen POS pay stations and club plans. Club plans are most assuredly on the rise. “Car wash mobile apps and internet (ePOS) have the ability for customers to remotely purchase wash packages and use prepaid codes when they visit the wash. Other prepaid POS features include gift, fleet and VIP cards that help the operators with more upfront revenue,” says Metcalf.

According to Kevin Wang of Wiz-Tec, cashless payment is being driven by those under age 55 who appreciate the ease of contactless debit (TAP). The challenges of COVID-19 have also sped this move to cashless. “Certainly a big shift involves EMV [EMV stands for Europay, Mastercard, and Visa. It is a standard in the credit card industry for integrated circuit cards, point-of-sale (POS) terminals, and automated teller machines (ATMs)] where stringent protocols deliver security alongside convenience.” A complete POS package with reconciliation and reporting will add to the simplicity of a good payment system, adds Wang who notes that they approach car wash from a streamlined gas retail point of view. Calgary’s Wiz-Tec is a company focused on high-performance POS & payment systems for car wash and fueling. “We bring everything together in a scalable system that is like building with Lego blocks. Both customers and operators are looking for payment systems that enhance transaction convenience and speed. These tools better enable business owners to manage and enhance the customer experience and works to create a larger spend.” Richard Carpenter, director of customer solutions for DRB In-Bay Solutions, also sees a move away from cash as people seek greater convenience and safety

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during these challenging times. DRB In-Bay Solutions is a leading POS manufacturer that provides a range of Unitec unattended payment devices and tools to c-store and car wash operators. “While once staff would close stores and wash sites, now POS systems do all the heavy lifting especially in businesses that have gone cashless,” Carpenter says. “Management can access data at day’s end and receive real-time reports on sales, staffing, even inventory. It’s all on the cloud and easily accessed via any digital device.” Certainly one of the biggest game-changers in POS will be new fuel dispenser technology that is scalable and collegial with in-store point of sale systems as well as works as a platform that can be applied to car wash and payment kiosks. Wayne-Dover is just readying its Anthem dispenser for the U.S. market following a year-long trial at 30 sites across the country. Here in Canada product simulators are just now going into the laboratory phase with product roll-out expected in 2021. The new Wayne-Dover

Anthem dispenser features a 27” colour touch display, biometrics option, loyalty abilities, iP address to talk with new cars as well as a Microsoft Azure cloudbased platform. Using Windows 10 IoT Enterprise, Azure IoT Hub, and Stream Analytics, Wayne-Dover’s new Anthem system delivers personalized experiences in content and targeted advertising, right at the pump. Anthem also increases efficiency in pump and tank monitoring, allowing operators to fix small issues before they become costly repair problems. And, it talks to new cars and takes payment for gas purchases via Apple Pay and other digital wallet tools. With Anthem, returning customers are recognized and can be offered products for which they have indicated a past preference, purchase a wash or receive marketing and loyalty messages that drive in-store business. Operators can access the data remotely and they can utilize analytic tools to help increase profits and site efficiency. Need an edge? Look at your POS system and ask yourself if it is still up to the task. The world is changing and POS systems are making those changes easier to navigate. OCTANE

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G N I K L A W K L A T THE to net-zero r e s lo c g in v sh sites mo a w . .C B w y Ne By Kelly Gra NationWide Self Storage & AutoWash has a unique business model. The Vancouver-based company operates large institutional quality storage facilities primarily located in greater Vancouver, but also has developed facilities in the British Columbia interior that it is pairing with state-of-the-art car wash centres. NationWide has just opened its new Express Auto Spa and Self-Storage in Kamloops and plans for several more sites, with one opening late in 2021 in Vancouver on Boundary Road and another in South Surrey in 2022. As well, they have a site under contract for another Express Auto Wash in Coquitlam and are now targeting Langley and Surrey as key expansion municipalities. CCentral.ca

The idea at the outset was to marry high yielding businesses to create a strong income driver for investors. Projections showed car wash industry revenue increasing at an annualized rate of 1.4% over the next several years. Further research found that B.C. is under-serviced in terms of car-wash sites to population density. Population growth and residential space considerations in B.C. made the need for storage greater than ever. Together, storage and car wash have proven to be a match made in investment heaven.

The company also sought the latest in eco-friendly technology “The environment is very important to us and we drive business by marketing our eco advantages,” says NationWide Self Storage operations SEPTEMBER/OCTOBER 2020

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al Ayaaz Jam director Ayaaz Jamal. He mentions that coming to their new Vancouver location on Boundary Road will be a full net-zero approach where they will use rainwater alongside municipal water sources to clean cars and solar panels to heat the building. “Here in Vancouver it rains like London, England and we saw there was a real opportunity to harvest nature in the form of capturing rainwater for use in the wash process. This not only saves us money, but it allows us to help the environment as well. We like this aspect, but our customers will love it.” Plans will see NationWide start construction this September on a new 90,000-sq.-ft. five-storey facility that will house the net-zero facility on the ground floor and more than 1,000 storage lockers in the upper levels. Jamal reports that rainwater will be captured from the roof and moved to underground 30,000 gallon tanks. The system will team with SoBrite reclaim equipment that will process the rainwater through osmosis for the wash plant. According to Jamal the rainwater travels the system in a 96-hour cycle and will combine with municipal water as needed. Expectations are that at first, the wash site will use about 15% to 20% municipal water until everything gets up to speed. “A lot of people say they want to protect the environment. We want to be a company that actually does this. Our plan is one that brings old school service together with the latest technology to create a win/win for our customers.”

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New site opened this July NationWide opened its new Kamloops facility in July 2020. The location is ideal for a new car wash with the site bordering the Trans-Canada highway and neighbouring Costco and McDonalds. The B.C. interior city has a younger population, high median disposable income and no other established express tunnel style car wash chains as well as high-employment. The Express Auto Spa launched with a 165-ft. tunnel (Sonny’s 160EDT Hybrid) that was sourced and installed by Wash Pros, Sonny’s Alberta-based distributor. Inside, systems include full water reclaim and customers are treated to Diamond Shine chemicals to create what Jamal claims is the best clean in B.C. Cost for developing the 1.3-acre parcel of land into a 450+ storage locker site and car wash is approximately $15 million (the wash site alone is approximately $4 million). The total building envelope is about 50,000 sq. ft. with 4000 sq. ft. dedicated to the Express Auto Spa. The Kamloops’ tunnel system is capable of washing, waxing, sealing, tire shining and drying up to 160 cars per hour. The site offers a range of wash options purchased at automated touch-screen drive-through kiosks. Prices go from $8 to $19 for a three-minute wash with levels that include Bronze (complete wash and dry), Silver (Bronze plus triple foam polish and clear coat), Gold (Silver plus tire shine, undercarriage wash and rust guard protectant) and Platinum (Gold plus lava foam and waterfall rinse). Add-ons include Rain X and Armor All Extreme Shine for about $3 each.

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Monthly subscriptions are also available with Platinum Unlimited ($44.95/month) and Bronze ($29.95/month) services. The site also features eight vacuum stations. According to Jamal, an experienced industry pro who came over to NationWide Self Storage from Shine Auto Wash, once you have the package together and the equipment is up and running it’s all about the staff competencies and how they interact with customers. “You have to have the best training and staff must be empowered to complete the mission. Customer service and satisfaction are paramount. This is how we drive results,” he says, adding that they have been able to hire personnel with experience. “We are lucky to have industry veterans who enjoy the process and are good at what they do. It makes a difference when we are busy and have to quickly load cars onto the conveyor. Our guys know how to get this done fast and this improves volume. We are also committed to keeping our customers happy. If it’s not a great

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clean and shine we have a rewash policy that is targeted to create 100% customer satisfaction.” Community is also key to success NationWide. “To be a success in any market you must be more than the sum of your parts. You have to go the extra distance to show your support. This is why we used our Grand Opening period (July 20-31) to partner with Royal Inland Hospital. Over the first two weeks we raised over $25,000 and donated this to the hospital for use acquiring PPE for their staff,” says Jamal concluding that being part of the community through networking and being responsive to the environment is just part of doing good business. OCTANE

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SAFE AND SOUND Advances in design define underground fuel storage systems By Kelly Gray

CCentral.ca

For over 60 years fibreglass underground storage tanks (UST) have been the gold standard for the fuel industry. Before this time gas retailers were plagued by metal tanks that corroded, leaked and spilled leaving costly messes operators were obligated to clean up.

SEPTEMBER/OCTOBER 2020

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“There are about 530,000 underground storage tanks in the US. This is down from over 2 million. The reasons are that capacity has grown and tanks are compartmentalized to hold a variety of products such as multiple grades of fuel and diesel. Tanks today are better. There are fewer of them. They tend to be double-walled and they are better installed than at any time in the past”

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Owens Corning came to the rescue in 1963 with the first models of fibreglass reinforced plastic underground storage tanks. These new storage systems defied corrosive elements in fuel products. The first model offered a non-ribbed tank that had tapered ends for easy storage. Owens Corning discovered this model did not hold up well to the pressures from being buried and it developed buckling dimples in later models to help tanks stand up to the pressures of backfill. Next, footings were added to the ribs. This enhanced the strength and the design was largely complete. With a basic design in hand, Owens Corning sought to prove the efficacy of these new tanks to regulators. Testing organizations such as Underwriters Laboratories (UL) and Factory Mutual were brought in to demonstrate the tanks’ reliability. The testers advised using hemispherical end caps and they showed a need to revise surface loads, uneven supports, and external pressure resistance before accreditation could be given to the model. Owens Corning Model C was the first fibreglass tank with UL and Factory Mutual approval. Remarkably, the majority of these specifications created in the 1960s have remained relatively unchanged, an indication of the quality of the early work by engineers. Once the tanks were standardized, petroleum retailers began work to determine how these fibreglass storage systems would best work at their sales sites. It was discovered that pea gravel and properly sized crushed stone were the best backfills to work with the designs that offered rounded end caps. Owens Corning patented its Model C in 1979 and the industry got busy replacing and upgrading its underground storage capability with these safer and more robust products. Today, these designs have become the

Robert Renkes, executive director with the Fiberglass Tank and Pipe Institute

norm as the fueling sector looks for containment products that are safe, stable, and cost-effective. According to Robert Renkes, executive director with the Fiberglass Tank and Pipe Institute, a Tulsa-based trade association where the fibreglass reinforced thermoset plastic ("FRP") industry works together toward the common goal of advancing the use of members’ fibreglass products, tanks have become much larger than they were years ago. “There are about 530,000 underground storage tanks in the U.S. This is down from over 2 million. The reasons are that capacity has grown and tanks are compartmentalized to hold a variety of products such as multiple grades of fuel and diesel. Tanks today are better. There are fewer of them. They tend to be double-walled and they are better installed than at any time in the past,” he says mentioning that the vast majority of USTs are covered by a 30-year warranty. Renkes points out that back in 1988-1989  most underground tanks had been improved from single-walled steel versions. “A huge number of new fibreglass tanks went into the ground about 30 years ago. Our experience tells us they are continuing to do the job, but insurance companies and regulators now have concerns because of warranty issues. Warranties are based on the assumption that tanks have a ‘specified’ useful life expectancy. No-one really knows what this is. Tanks would have to be removed and analyzed to CCentral.ca


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determine this. Should 30-year old tanks be removed and replaced? We do not know at this time, and there is nothing that tells us fibreglass tanks are failing,” he says, adding that one of the challenges operators may now face is rising insurance rates due to uncertainty from underwriters. Currently, there are some 13 insurance companies in Canada and the U.S. that offer protection for fuel storage tanks, some of which are now offering a variety of rates depending on the age of the tank. What’s new in tanks? The Petroleum Equipment Institute (PEI), an organization that offers best practices on engineering for the installation of USTs, has just released a new series of advisements in a document titled Recommended Practices for Installation of Underground Liquid Storage Systems (RP100). Directed to oil company engineers, trade associations, environmental regulators, equipment manufacturers, and installation contractors, RP100 suggests the following:

Revision of Section 10.13 to remove the recommendation to use metallic risers.

A new recommendation that installers should confirm riser pipe is compatible with the product transferred/ stored and approved for use by the authority having jurisdiction. A warning to use proper grounding techniques to dissipate static charge accumulation if a nonconductive riser pipe is installed.

A note recommending the use of drop tubes to reduce turbulence and vapour buildup during fuel deliveries.

CCentral.ca

“Over the past ten years there has been concern about using non-metallic risers on tanks, “ says Renkes. “There was pushback years ago about using PVC and as a result, the industry became stalled on using non-metallic risers. With the UL listing of FRP risers demonstrating there is strength in thick gauge reinforced fibreglass plastic, the industry can now offer a complete non-corrosive tank and represents a great alternative and non-corrosive improvement for the trade.” Renkes advice is for operators is to work diligently to keep water out of USTs, especially those that hold ultra-low sulphur diesel. “Water keeps alive microorganisms that go after metal and even though there is very little in the way of metal in current models of USTs these ‘bugs’ will work to corrode any metallic UST components.”

Canada and UST While U.S. manufacturers such as Owens Corning (became Containment Solutions in 1995) and Xerxes/ZCL were behind early developments in product design for underground fuel storage, Canada developed its own regulatory environment that mirrored those in the US. “Certainly, we have our own regulations and codes and these include manufacturers’ recommendations,” says Michelle Rae, executive director Ontario Petroleum Contractors Association (OPCA). She mentions that it is the manufacturers that advise on the lifespan of tanks, but organizations such as Underwriters Laboratories of Canada (ULC) and the Technical Standards and Safety Authority (TSSA) [ the TSSA is an independent, not-forprofit organization responsible for the delivery of a range of safety services

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Michelle Rae, executive director Ontario Petroleum Contractors Association (OPCA)

in Ontario] are behind overall standards that govern codes, installation methods and maintenance best practices. For example, this January, TSSA advised that all double-wall underground pressure piping systems that were installed before January 1, 2006, be upgraded with Electronic Line Leak Detection (ELLD) by October 1, 2021. “There are two Federal codes in Canada that govern underground storage tanks. There are the National Fire Code and the CCME (Canadian Council of Ministers of the Environment) where their Contaminated Sites Working Group has developed an environmental code of best practices. Provinces also each have their own stipulations,” she says pointing to the Alberta Fire Code as an example where authority for permits to install, remove or alter a tank are granted by local fire departments, or the TSSA’s Liquid Fuels Handling Code in Ontario. Rae suggests its important to have a preventative maintenance program in place and operators should be prepared to keep accurate records that include installation date, monitoring data, and maintenance. “Insurance companies want good record keeping. Those without good records could expect higher rates or challenges with policies. And, this represents a small investment in time and labour costs that could end up saving big dollars down the road,” she says, concluding that petroleum contractors and UST manufacturers stand out as good sources of information on best practices. OCTANE

The TSSA advises: • New regulations require all underground tanks to be registered with the Technical Standards and Safety Authority (TSSA), or fuel oil will not be delivered to the tank (contact the TSSA for a registration form). • Old, underground tanks are very likely to leak. • Oil leaking from underground tanks will contaminate soil and groundwater and result in expensive environmental clean-up costs. • Underground tanks are required to be upgraded with specific leak and spill prevention equipment or removed. • Upgrading requirements for underground tanks depend on the age of the tank. • Underground tanks that are 25 years and older, or of unknown age, and not specially protected from corrosion are required to be removed. • Underground tanks with a storage capacity greater than 5,000 litres will need to be leak tested annually. • Unused underground tanks are required to be removed and any contamination cleaned and tanks must be removed by a Licensed Petroleum Contractor holding a PM2 license. • An environmental assessment must be performed once the tank is removed or if a tank owner is applying for a variance to leave the tank in place.


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

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NATIONAL OFFICE Director of Operations Nicole Cork Accountant Ricky Nason

SEPTEMBER 2020

COVID-19 AND THE INDUSTRY During this uncertain time, it is important that the CCA remains a vital source of information for our members and the carwash Industry. It is our priority to provide important and evolving information to our members.

WHERE CAN YOU FIND THIS INFORMATION? Members have access to a library of resources through the CCA and CFIB partnership. We’ll be gathering information from different sources and populating this page (https://www.canadiancarwash.ca/COVID-19-andthe-Industry) with direct links to information that will help you operate and stay informed. We have also created a Facebook Group, which you can join here (https://www.facebook.com/groups/canadiancarwashgroup) – this is a great place to share information, articles and helpful tips with other members of The CCA.

NAVIGATE THE COVID-19 CRISIS WITH CFIB To help small businesses cope with the COVID-19 pandemic, CFIB is hosting regular member exclusive webinars that all CCA members have access to, through their CCA membership. The most recent webinars, titled “COVID-19: FAQs and Government Support” and “CEWS Q&A with CRA”, are available to members to view at cfib.ca/covid19, alongside all other resources.

Event Coordinator Martha Feenstra

We encourage all members to visit their website regularly for access to resources that will help you in this time.

Canadian Carwash Association Please note our new address: 411 Richmond Street East, Suite 200 Toronto, Ontario M5A3S5

COVID-19

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

We’d like to also acknowledge and thank all workers who are on the front lines of this pandemic. Without them, our health and safety be compromised.


INDUSTRY FORUM DEDICATED TO SHARING KNOWLEDGE AND BEST PRACTICES IN THE CARWASH INDUSTRY

CCA EVENTS Due to the ongoing COVID-19 pandemic, we have decided not to hold our Annual Golf Tournament this year. We are working on a new Virtual Networking Event to take place this Fall! More information will be shared shortly, so make sure to get on our mailing list by clicking here or emailing office@canadiancarwash.ca!

CANADIAN CARWASH ASSOCIATION


40 Celebrating

years of innovation An interview with Alimentation Couche-Tard president and CEO Brian Hannasch

The ups and downs of tobacco Holiday socializing 2.0 Stocking up for cough and cold season PLUS Bobby Sahni of Ethnicity Matters on growth through diversity SEPTEMBER/OCTOBER 2020 CCentral.ca @CSNC_Octane PM42940023


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SEPTEMBER/ OCTOBER 2020 Volume 3 | Number 5

CONTENTS 05 Editor’s Message 2020: Navigating change through innovation 06 The Buzz People, places, news and events

16

08

Quick Bites Consumers crave immune-boosting functional foods and beverages

10

Top Ops Category management: A strategic approach to being more profitable

13

C-store IQ: National Shopper Study Loyalty Report

16

COVER STORY Celebrating 40 years of innovation An interview with Alimentation Couche- Tard president and CEO Brian Hannasch

22

Retailer Spotlight Going for it! At Dépanneur Maxi, change is always an opportunity to innovate

27 Feature After a spike in tobacco sales, how do c-stores keep smokers coming back for more? 29 C-store IQ: National Shopper Study Tobacco and Vaping Report

22

31

31

Retailer Spotlight Winnipeg’s Valour Convenience pairs cannabis culture with convenience

34

Category Check Good medicine: The temperature is rising on the sales of cough and cold remedies

36

Snapshot Holiday socializing 2.0 with Kathy Perrotta of Ipsos Canada

38 Backtalk Bobby Sahni of Ethnicity Matters asks: Who are the people in your neighbourhood?

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The latest industry news and information, plus resources, foodservice insights, store solutions, tobacco/vaping updates and more. Don’t miss our e-newsletter! Sign up today at www.CCentral.ca/signup

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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 SENIOR VICE PRESIDENT, CANADA | Donna Kerry EDITORIAL EDITOR, CSNC Michelle Warren | mwarren@ensembleiq.com EDITOR, OCTANE Kelly Gray | kgray@ensembleiq.com TRANSLATION | Danielle Hart ADVERTISING SALES SENIOR ACCOUNT MANAGER Danny Monticelli | dmonticelli@ensembleiq.com ASSOCIATE PUBLISHER Elijah Hoffman | ehoffman@ensembleiq.com VICE PRESIDENT, EVENTS Michael Cronin | mcronin@ensembleiq.com DESIGN AND PRODUCTION VICE PRESIDENT, PRODUCTION Derek Estey | destey@ensembleiq.com DIRECTOR OF PRODUCTION Michael Kimpton | mkimpton@ensembleiq.com ART DIRECTOR | Linda Rapini DIRECTOR OF MARKETING Alexandra Voulu | avoulu@ensembleiq.com SENIOR DIRECTOR AUDIENCE STRATEGY Lina Trunina | ltrunina@ensembleiq.com SENIOR DIRECTOR, DIGITAL CANADA & SPECIAL PROJECTS Valerie White | vwhite@ensembleiq.com CORPORATE OFFICERS CHIEF EXECUTIVE OFFICER | Jennifer Litterick CHIEF FINANCIAL OFFICER | Jane Volland

CHIEF INNOVATION OFFICER | Tanner Van Dusen CHIEF HUMAN RESOURCES OFFICER | Ann Jadown EXECUTIVE VICE PRESIDENT, EVENTS & CONFERENCES Ed Several

SENIOR VICE PRESIDENT, CONTENT | Joe Territo SUBSCRIPTION SERVICES Subscriptions: $65.00 per year, 2 year $120.00, 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 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. ©2020 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.

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CHANNEL ALLIANCES:

2020: Navigating change through innovation

It’s apt that the theme of our September/October issue is innovation. There’s always change in the air this time of year, a sense of optimism that opens us up to embracing fresh ideas and new opportunities. Of course 2020 is unique. If innovation is about responding to change in a new way, then this could well be defined as the year of innovation. In the face of a global pandemic, individuals and companies are being forced to adapt to a rapidly changing world that is consistently reshaping consumer behaviour and prompting businesses to pivot (and pivot, again). The pace at times feels relentless, but it’s also invigorating. Projects, ideas and goals that were once on the back burner are now front and centre. For c-stores, this includes exploring digital innovations for at-home delivery, in-store pick-up, frictionless payment and loyalty programs, as well as new planograms, merchandising for the ‘homebody economy’ and adjusting operations to protect the well-being of staff and customers. The saying ‘innovate or die’ has never been more relevant for business and the convenience industry is no exception. As consumer behaviours and expectations continue to evolve, the Convenience Store News Canada team is here, with ongoing editorial coverage and strategic ideas designed to help you manage change, connect with the right audiences and zero in on opportunities. Case in point, in this issue we examine the growing interest in functional foods (p. 8), stocking up for an unprecedented cough and cold season (p.

34) and how social distancing will reshape celebrations during the fall/winter holiday season (p. 36). Speaking of celebrations, like many marking milestone birthdays during the pandemic, Alimentation Couche-Tard was forced to nix the party in favour of focusing on the task at hand. That said, 40 is the perfect age for reflection and sharing wisdom. In an exclusive interview with Convenience Store News Canada, president and CEO Brian Hannasch charts how four decades of innovation helped propel the Quebec-based company from a single location to one of the biggest convenience players on the planet (p. 16). Also inside, Winnipeg’s Valour Convenience jumps on the cannabis trend (p. 31), while Quebec-based Dépanneur Maxi evolves from a traditional c-store to a destination for craft beer (p. 22). According to the experts, innovation is the key to unlocking post-crisis growth. In my interview with Bobby Sahni of Ethnicity Matters, we talk about new research into the important role multicultural communities play in strengthening Canada’s postCOVID-19 economic recovery and how c-stores are uniquely positioned to meet the needs of diverse shoppers (p. 38). Yes, change is in the air, but in truth, 2020 is the year everything changed. Here’s to an industry that continues to work diligently, navigating these challenges and opportunities through grit and innovation. standard

Michelle Warren | Editor

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SEPTEMBER/OCTOBER 2020

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|5


THE BUZZ

CROSS-CANADA ROUND-UP

7-ELEVEN BOOSTS NORTH AMERICAN FOOTPRINT

7‑Eleven Inc. is acquiring U.S.-based convenience store chain Speedway in a $21 billion cash deal that involves approximately 3,900 stores in 35 states. 7‑Eleven currently has more than 9,800 stores in the United States and Canada—this will boost its presence to 14,000 stores in North America. The company says Speedway and 7‑Eleven have complementary geographic footprints with little overlap. “This acquisition is the largest in our company’s history and will allow us to continue to grow and diversify our presence in the U.S., particularly in the Midwest and East Coast,” Joe DePinto, president and CEO of 7‑Eleven, said in a statement. “By adding these quality locations to our portfolio, 7‑Eleven will have the opportunity to bring convenience to more customers than ever before.”

JUUL RELEASES STUDY

A new study (conducted and presented by Dr. Shivaani Prakash, Juul Labs’ director of health economics and policy research) found that the Juul System’s market entry in Canada “likely decreased combustible cigarette sales, especially in urban markets.” Using city-level data on cigarette and Juul sales in Canada and variation in timing of Juul’s market entry in the study, the company says researchers ran econometric difference-indifference models. Juul concluded: “Within the first 12 months of market entry, market entry and availability of the Juul System likely led to a 1.5% decrease on average in store-level cigarette sales volume, within one large retailer chain. Overall, this could translate to over 400 million fewer cigarettes sold in Canada within the first year of the Juul System’s market entry.” In addition, the study found that the decline in cigarette sales magnified Juul’s market share increase in stores, suggesting that local tobacco market competition plays a strong role in uptake and purchase of vaping products. For every 1% increase in Juul’s market share at the store-level, there was an associated 0.5% reduction in cigarette sales.

6

|

| SEPTEMBER/OCTOBER 2020

PEOPLE, PLACES, NEWS AND EVENTS

SECOND CUP STEPS ON THE GAS

Second Cup is partnering Petro-Canada to open drive-thru locations at gas stations. “With an increasing number of Canadians working from home, we know that the daily coffee experience is changing,” says Steven Pelton, CEO of Second Cup and Aegis Brands Inc. The initial plan is to open three Ontario sites this year, with more to come. Behind the initiative is a desire to get ahead of the damage COVID-19 has inflicted on the foodservice sector.

VAPE UPDATE

The British Columbia government is moving ahead with regulations designed to making vaping less appealing for young people by restricting the availability of vaping products in convenience stores—the sale of flavoured nicotine vapour products will be restricted to adult-only shops. Other changes introduced by the B.C. government include, restricting the amount of nicotine in the pods and ensuring c-stores will only be allowed to sell vapour products in plain packaging with health warnings. Meanwhile, Nova Scotia moved ahead Sept. 1 with a new regulatory cap on e-liquids and cigarettes, making it the first province to adopt a maximum nicotine concentration of 20 milligrams per millilitre. The amendments to the province’s Tobacco Access Act regulations follow an amendment passed in March that banned flavoured vaping products. Now Alberta, the last province to tackle vaping, is introducing new legislation that includes banning anyone under 18 from using e-cigarettes. As of press time, Bill 19, the Tobacco and Smoking Reduction Amendment Act, was under review and if it passes the new rules are expected to take effect sometime this fall. For updates, visit www.ccentral.ca/ the-latest-vaping-news/

ALL CHARGED UP IN N.L

The federal government is giving a funding boost for a network of electric vehicle charging stations across Newfoundland and Labrador. Ottawa will add $770,000 to the $1 million set aside by the province for a network of 28 electric vehicle chargers. The province aims to build the stations along the TransCanada Highway between St. John’s and Port aux Basques, with a charging site included in Gros Morne National Park. Construction is to begin this month. Federal Natural Resources Minister Seamus O’Regan says electric cars are part of Canada’s plan to achieve net-zero greenhouse gas emissions by 2050.

CCentral.ca


ENSEMBLEIQ TO TAKE PRODUCT OF THE YEAR CANADA NEXT LEVEL

POY—the world’s largest consumer-voted award for product innovation—is teaming up with EnsembleIQ (CSNC’s parent company) to grow the Canadian operations. “EIQ is the preeminent media partner across the CPG and retail community not only in Canada but across North America,” Mike Nolan, global CEO of Product of the Year Management, said in a statement. “The amazing media brands, information resources and Path to Purchase Institute are exciting platforms and tools for POY to expand and to deliver even more value for our winners for years to come.” In Canada, EnsembleIQ’s integrated, total-market brands and resources include Canadian Grocer, Convenience Store News Canada, OCTANE, Pharmacy Practice + Business and Profession Santé among others. “Product of the Year is a remarkable, 30+ year international program that serves as the standard of consumer confidence and product innovation,” said EnsembleIQ CEO Jennifer Litterick. “We are looking forward to celebrating and supporting these brilliant new products that are on the horizon. Consumers are looking for what’s new and what’s next, and forward thinking manufacturers are eager to deliver.” POY is accepting entries for 2021 from consumer products and services that demonstrate innovation in design, function, or packaging.

ProductoftheYear.ca

WORLD PETROLEUM CONGRESS POSTPONED

The 23rd World Petroleum Organizing Committee is delaying the international gathering due to concerns about COVID-19. The event was to take place December 6-10, 2020 in Houston, but is now slated for December 5-9, 2021. Held once every three years, the event attracts industry and government leaders from around the world, including government heads of state and ministers of energy. Calgary is to host the World Petroleum Congress in 2023.

MOVING ON UP

Alfredo Rivera is the new president of Coca-Cola North America, replacing Jim Dinkins, who is retiring. Rivera is a 23-year veteran of the company, most recently serving as president of the Latin America group. “Alfredo has had a remarkable career in Latin America, which is made up of a large number of highly complex and diverse markets,” James Quincey, chairman and CEO of The CocaCola Company, said in a statement. “Alfredo has built a networked organization that is positioning our business to emerge stronger from the current pandemic. He is a strong successor for the top role in our flagship North America market, where he will build on the great progress we’ve seen under Jim’s leadership." Anna Petrova is the new vice-president, supply chain for Kraft Heinz Canada. Petrova’s career spans more than 25 years. Before joining Kraft Heinz Canada this summer, Petrova led Canadian supply chains for Conagra and Ferrero. She has also worked in Western and Eastern Europe, leading supply chain teams for Mondelēz, BAT, P&G and Mars. “We are truly excited to welcome Anna to our team,” said Kraft Heinz Canada president Bruno Keller. “She brings an impressive record of developing talent and building best-in-class supply chains as we focus on continuous improvement in the supply chain, logistics and operations part of our business.” Dean Banks will succeed Noel White as CEO of Tyson Foods, while maintaining the role of president, a role he took on in 2019, after joining the company in 2017. The move is effective October 3. “It’s clear to the board that Dean’s impressive background in entrepreneurship, technology, and the healthcare industry make him ideally suited to lead Tyson in its efforts to integrate advanced technologies into our operations and further our focus on team member health and safety,” said John Tyson, chairman of the board of Tyson Foods. Banks’ expanded role of CEO is part of the board’s deliberate, long-term succession planning. Nadia Theodore will become senior vice-president of global industry and government relations at Maple Leaf Foods on Oct. 13. Theodore joins the food giant from the Government of Canada where she has held various roles over the past 20 years, most recently as Consul General of Canada, posted to the Southeastern United States. She also spent three years in Geneva as Canada’s Counsellor to the World Trade Organization. Theodore succeeds Rory McAlpine who is retiring. “Nadia’s deep experience in global issues, her understanding of government and her diplomatic skills will be of tremendous value to Maple Leaf Foods,” said president and CEO Michael McCain. Todd Fisher is the new vice-president and general manager of Kimberly-Clark’s Canadian business, a position he has held on an interim basis since January. Fisher joined Kimberly-Clark as national account manager in 2011 and was later promoted to director of customer development.

SAVE THE DATE October 1, 2020 CICC Virtual Trade Exchange Convenienceindustry.ca October 20-22, 2020 Atlantic Convenience Expo: Virtual TheACEShow.ca November 4-5, 2020 The Convenience U CARWACS Show West Digital ConvenienceU.com November 4, 2020 Star Women in Convenience Awards StarWomenConvenience.ca

Do you have a staffing announcement to share? Email mwarren@ensembleiq.com CCentral.ca

SEPTEMBER/OCTOBER 2020

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QUICK BITES

BY DARREN CLIMANS

What’s your function? Consumers crave immune-boosting foods and beverages You may be surprised to learn that, until fairly recently, CocaCola was presented and sold to consumers as a functional food. Pharmacist John Pemberton’s prototype recipe, that evolved into Coca-Cola, originally included both alcohol and coca leaf (the source of cocaine). Prohibition in Atlanta in 1886 prompted the removal of alcohol from the formulation. Coca remained the main active nutraceutical in Coca-Cola until 1903, when it was replaced by caffeine. During the first 70 to 80 years of its existence, Coca-Cola, now universally viewed as an indulgence beverage, used nurses and doctors in its advertising to convince people of its wellness benefits.

and drank yesterday across all categories, brands, occasions and venues. The Ipsos FIVE database quantifies shifts in both behaviour and attitudes. In 2019 and the first two months of 2020, Ipsos Five was already tracking faster growth in consumption of functional foods compared to overall food consumption, roughly +8% to +9%, year-over-year. In the first month of lockdown, the rate of growth of functional foods consumption increased an additional 13% versus the pre-COVID timeframe. Kathy Perrotta, VP of market strategy and understanding with Ipsos, says: “The functional food choice is (generally) motivated by the need for specific benefits, like aiding with digestion. Beyond physical health and dietary requirements, consumers also opt for functional foods to meet personal emotional and lifestyle needs and beliefs (Exhibit 1). The rising focus on bolstering personal immunity is certainly a sign of the times and something we could expect to continue as a result our current health pandemic.”

and experience more than 200 billion ideas that have been saved. A review of global Pinterest searches for the last two weeks of March 2020, versus preCOVID-19, reveals that consumer searches for “healthy things to cook” increased 4X in the first weeks of the COVID-19 lockdown, when consumer interest in healthy eating spiked. Pinterest searches in the month of June for healthy eating in Canada were way up, year-over-year: • Canadian consumer searches for 'Healthy things to cook' increased 3.5X; • 'Healthy cooking' searches were up 2.9X, and; • 'Healthy snacks' searches were up 35%.

"The rising focus on bolstering personal immunity is certainly a sign of the times and something we could expect to continue as a result our current health pandemic"

The link to COVID-19 restrictions Human nature being what it is, we are hardwired to seek shelter in a storm. The initial shock of COVID-19 translated into panic buying of household staples, but the more profound and lasting impact may be a heightened consumer interest in functional foods. The Ipsos FIVE daily consumer diary panel tracks what 20,000 respondents ate

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Perrotta suggests that this recent bump in consumer purchases of functional foods was “driven by young adults now eating in a highly homebound environment, who seem to be more focused on overall wellness benefits."

Follow the crowd The online app Pinterest refers to itself as a visual discovery engine. It is a platform where people go to find inspiration for food, fashion, hobbies, crafting and more. Pinterest, which started only 10 years ago, currently welcomes nearly 400 million Pinners to the platform every month to explore

| SEPTEMBER/OCTOBER 2020

Form follows function Sophie Mir, associate editor at consumer and foodservice insights provider Technomic, confirms that Technomic research has been tracking growth in better-for-you “healthful” foods for the last several years. In Technomic’s 2018 Canadian Convenience Store Foodservice Consumer Trend Report, 41% of consumers reported that healthfulness of food/beverages is an important attribute in deciding to purchase prepared foods or beverages from a convenience store. CCentral.ca


EXHIBIT 1

41% of consumers reported that healthfulness of food/ beverages is an important attribute in deciding to purchase prepared foods or beverages from a convenience store

However, Mir also notes a “shift in consumers’ definition of health moving away from the emphasis on nutritional benefits (such as lower fat or lower cholesterol) to functionality, that is, ingredients that provide holistic gains… (Including physical, mental and emotional benefits).” Practically, there are a significant number of examples of products for c-store operators to consider (Exhibit 2). Technomic advises its clients that “offering food and beverages with functional ingredients (aligns) with what consumers are looking for.” At the same time, c-store operators have an opportunity to, in partnership with manufacturers, draw awareness and educate their consumers on functional benefits via signage, POP information, online advertising and social media channels.

Immunity is key Andrew Wardlaw, of MMR Research Worldwide Research, recently noted that “research findings published in December 2019 by Wellmune, part of the Kerry Group, spanning 11,000 consumers across 14 global markets, found that nearly two thirds (63%) placed immune health ahead of supporting healthy bones and joints, good digestive health, improve energy levels and heart health." This suggests that, even prior to COVID-19, consumers around the world were making food purchase decisions motivated by immune health. Further, “new research undertaken by MMR in association with TOLUNA in April 2020 found that immunity was now the number one health concern in China and CCentral.ca

South Africa, and only beaten by heart health in the UK and U.S.”

Don’t miss the functional foods train With “live and active cultures” promoting gut health, U.S. Greek Yogurt brand Chobani, from its origins in an abandoned yoghurt factory in New Berlin, New York in 2007, has risen to be a market maker and the dominant player in the U.S. premium Greek yoghurt category. Chobani took a dormant commodity category upscale, and went from zero share to being a multi-billion dollar CPG player in about 10 years. It’s currently investing heavily in plant-based dairy in general, and oat milk specifically. Consider the Canadian brand, Sapsucker, an Ontario-based new entrant to the wellness beverage market available across Canada. Sapsucker markets itself as a Maple Tree Water, a “tapped in Canada” naturally hydrating beverage that advocates for people to make healthy, mindful choices. The product is harvested sustainably from Canadian forests, and purports to be “plantbased and nutrient rich, powered by 46 naturally occurring minerals, vitamins and antioxidants.” Its lineup includes three lightly carbonated tree water beverages: The Original One, The Lime One, and The Lemon One. Like Coke, Sapsucker sells taste, lifestyle and feeling: its tagline is “Sip a Sapsucker, because there’s no time for regrets.” Clearly, life as we’ve known it changed. The path forward demands that operators remain relevant with customers. The gap between seeing and embracing new functional foods, and achieving a return on these investments, is a bridge worth crossing for operators. ◗ 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.

Top 8 reasons individuals say they consumed functional foods 1

Wanted something healthy/nutritious

2

It was fresh/less processed

3

Doesn’t make me feel guilty

4

Wanted something pure and natural made with real foods

5

Feel good about myself

6

Puts me in a positive state of mind

7

Meets my specific dietary needs

8

Feels like I am making an ethical choice

Source: Ipsos FIVE

EXHIBIT 2

Trending functional ingredients Collagen and aloe · Known for their skin-improving properties · Collagen, in particular, is said to help reduce wrinkles, while aloe is known for reducing inflammation Example: Jèn Collagen + Aloe Infused Water promotes beauty from within and improves skin quality by amplifying collagen retention. · Available in blood orange & lemon, apple & lychee and peach & plum flavors · Available at c-stores and supermarkets throughout the U.S.

CBD oil and hemp · Spotlighted for their mood elevation and self-care benefits · Linked to reducing anxiety symptoms and improving sleep quality Example: Anarchist Mountain is a zero-calorie, cannabis-infused sparkling botanical flavoured alkaline spring water is to launch in 2020 by Vancouver-based cannabis specialist BevCanna. · BevCanna expects wellness-oriented beverages to outperform growth in edibles and plans to include a range of RTD beverages, shots, and powdered drink mixes

Blue Majik Spirulina · Superfood known for its high protein content and energy-boosting qualities · This will especially appeal to consumers who are always on the go Example: Jajja Wellness is a natural wellness tonic beverage designed to promote immunity, digestive, energy and skin health. · Recipes based on traditional African and Chinese medicinal wellness tonics

Botanicals · Deliver unique and natural flavour and aroma profiles · Perceived location specific benefits and sophistication · Translates well to alcoholic and low/no alcohol beverages Example: Kanguru is a functional botanical infusion energy beverage from Australia that recently launched in Korea. · Purports to aid in wellbeing, cognition and recovery with a host of vitamins to boost immunity and improve endurance · Initial entry point will be the c-store channel (via 7-Eleven) Sources: Technomic, Business Wire, JenBeverages, FoodBev.com, BeverageDaily.com

SEPTEMBER/OCTOBER 2020

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TOP OPS

BY SUE NICHOLLS

Category management A strategic approach to making your c-store more profitable The convenience channel and our shoppers are changing every day, particularly as we continue to navigate through the pandemic. As competition heats up and larger retail chains increase their presence, the convenience landscape is evolving. For instance, foodservice has gone from being a “me too” to being a point of differentiation for many retailers, while delivery and even financial services are becoming the norm. Shoppers have different needs today than they did eight months ago— safety, quick frictionless shopping and value are all paramount. As a c-store retailer, are you creating your future or are you passively letting the future create you? In this context, the future is defined as your competitors, customers, market and industry trends. I’d like to share two steps that will help your c-store to become more strategic and competitive using a category management framework. These steps will help you to become more proactive when it comes to achieving targets and objectives for your business. STEP 1

fuel and less on foodservice, while larger stores have more offerings. Your store size and type—whether you are a neighbourhood, commuter, rural, urban or chain store—also have a significant effect on store layout, target consumer and the types of products and services that you offer.

YOUR STRATEGY SHOULD INCLUDE CONSIDERATIONS FOR: 1. Service: Convenience, store

location and customer service. What does service stand for in your stores?

2. Product assortment: The categories that you sell in your stores, as well as the items that you sell within each category. 3. Product placement: The way your store is laid out, category adjacencies and category layouts.

Define your retail strategy

4.Pricing: For both regular and promotional prices.

When taking a category management approach, you create different plans for each category in your store based on your overall store strategies, including: 1. Your c-store format(s), which helps determine your positioning in the market 2. Your target shopper 3. Your competition You need to make decisions across these three areas to develop your overall strategy. Let’s start formulating your overall retail strategy. Creating this will help to guide you and your staff on how to strategically make the right decisions for your store or chain of stores. It starts by considering the specifics of the c-store you own or manage. For instance, smaller stores often have higher reliance on

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5. Promotion: Types of marketing, advertising and loyalty programs.

Once you’ve defined these parts of your strategy, you need to define your target shopper. Work with your suppliers to determine the shopper groups you should target based on the most loyal and heaviest buyers in your store (the ones who spend the most money). Then, get to know them better and understand their changing needs. With a strong shopper understanding, you can create effective category definitions and assign category roles based on the importance of the category to your target audience. Realize that not all categories are created equal and some have a much bigger importance for your stores.

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STEP 2

Understand the category management process

The next step is to use category management as a basis to move to a more strategic and aligned approach. In category management, items are managed in a product category as a strategic business unit. Each category has its own strategies and goals and tactics, including product assortment, placement, pricing and promotion that feed into your total store strategies and goals. It’s like having a mini-business plan for each of your most important categories that all align to your overall store strategies.

Here are the four step s in the category manageme nt process:

1. Retailer strate gy Define the “rules : stores operate ” for the way your 2. Develop categ (covered in Step 1). Analyze your keory plans: and develop pla y categories that align to yo ns for them ur overall strategies. 3. Implement the Execute the pla plan: store (this includn in communicating es across the boardthe plan managers, staff to and suppliers). 4. Review cate gory performance: Regularly ensu that your targere and objectives ts are being met.

These steps should be followed as part of a continuous process, which will help you to make fact-based decisions in your categories, ultimately building sales and profit for your business. Ready to move to a more strategic approach for your c-store? It starts with the category management foundations to create a strategy for your organization that results in guidelines and principles from which you and your team can make your decisions for winning shopper solutions. ◗ Sue Nicholls is president of the Category Management Knowledge Group. www.cmkg.org CCentral.ca


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Loyalty Report

Reap the rewards

Give and take

BY MICHELLE WARREN The majority of Canadian c-store shoppers appreciate their favourite store’s loyalty program, with 63% of loyalty program members saying they are actively leveraging their membership and are satisfied with the program, according to proprietary data from Convenience Store News Canada’s C-store IQ: National Shopper Study. C-store IQ is the first convenience and gas specific study that delves into the wants, needs, perspectives and habits of Canadian convenience consumers. More than 1,000 Canadians 18+ participated in the C-store IQ study, which shows that 43% of shoppers visit chain convenience stores and 38% visit independently owned convenience stores at least once a week. In turn, 70% of convenience store shoppers typically shop the same store each time, presenting massive opportunities to drive engagement and sales through loyalty efforts.

Loyalty programs enable retailers to gather data about their customers’ wants and needs, but it has to be a reciprocal relationship with experiences, offers and incentives designed to make members feel valued (and, in the process, drive sales). Done right, it works. For instance, more than one-in-four shoppers who shop for both gasoline and in-store merchandise at least once a month report they were influenced by frequent buyer/loyalty programs (28%) to shop for in-store merchandise on a recent trip. Research shows loyalty programs are also an effective means to engage female shoppers. While males and females are comparably influenced by different marketing tactics, the one exception is loyalty programs where females (31%) are more likely to be influenced than males (25%).

Cultivating membership C-store loyalty programs prove popular, however there’s plenty of room for employing tactics to expand membership. While more than half of shoppers frequent a convenience store that has a

Ratings for Convenience Store Shopped Most Often Price of products

40%

Fun to shop

20%

40%

40%

Qaulity of prepared food

20%

38%

43% 51%

34%

26%

Loyalty/rewards program

19%

30%

Variety of products offered

17%

37%

47%

Helpfulness of employees

14%

28%

58%

28%

54%

Cleanliness of store

11%

Orgnaization of the store

11%

35%

54%

Friendliness of employees

9%

28%

62%

Speed of shopping trip

7%

28%

65%

General convenience

6%

29%

65%

• Excellent/very good • Good • Fair/Poor

CCentral.ca

loyalty program, only 42% of shoppers are enrolled in and actively use their store’s loyalty program (the proportion of loyalty members that do not use the program is relatively small at only 5% of shoppers). • Females (45%) are more likely than males (37%) to be enrolled and actively use. • Males (8%) are more likely than females (3%) to be enrolled but not use. • Millennials (45%) and Gen X (45%) are more likely than boomers (35%) to say they are enrolled in a loyalty program and actively use it. • Millennials (9%) are more likely to say their convenience store has a loyalty program but they are not enrolled compared to Gen X (7%) and boomers (7%). • Boomers (13%) are more likely than millennials (7%) to say they would not enroll in a loyalty program even if their convenience store had one. While 63% of loyalty program members that are actively leveraging their membership are satisfied with the program, there are some differences when it comes to generation and gender.

Loyalty Program Available at C-Store Shopped Most Often Not sure 15% I would not enroll if they did 10% I would enroll if they did 21%

I am not enrolled 7%

I am enrolled actively use 42%

54% Yes, convenience store shopped most often has a loyalty program

I am enrolled, do not use 5%

31% No, convenience store shopped most often does not have a loyalty program

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SEPTEMBER/OCTOBER 2020


• Boomers (70%) are more likely to be satisfied as compared to millennials (58%). • Females are slightly more likely to be satisfied (63%) compared to men (61%).

There’s an app for that For many shoppers, carrying around a wallet full of bulky loyalty cards can be a deterrent. With that in mind, about half (45%) of loyalty program active members use their store’s loyalty program mobile app. However, one in five (19%) are not using the app even though they are aware. This is a missed opportunity for retailers, as apps enable them to collect data and engage with shoppers on a new and more targeted level, such as time of day and location-based offers delivered in real time. • Males (24%) are more likely than females (15%) to be aware but not have used their convenience store loyalty program’s mobile app. • Females (29%) are more likely to be unsure if their loyalty program has a mobile app compared to males (23%). • Millennials (58%) and Gen X (51%) are more likely than boomers (30%) to have used their convenience store loyalty program’s mobile app. • Boomers (40%) are more likely to be unsure if their loyalty program has a mobile app compared to millennials (17%) and Gen X (25%).

What’s stopping them? While those who use loyalty programs tend to find value, there’s room to convert the doubters by addressing their primary

concerns. The top three reasons shoppers say they would not enroll in a loyalty program include: 1. They already belong to too many loyalty programs (35%); 2. Requires too many purchases to see benefits (34%); 3. Rewards/points/discounts are not valuable (31%). Broken down by generation and gender, it looks like this: • Millennials (43%) are more likely than Gen X (32%) and boomers (30%) to say that they already belong to too many loyalty programs. • Males (40%) are more likely than females (25%) to feel rewards/ points/discounts are not valuable. • Females (39%) are also more likely than males (28%) to be deterred from signing up, because they feel too many purchases are required to earn rewards/points. In addition, individuals are concerned with privacy issues: 14% of shoppers that have not enrolled in a loyalty program say it’s because they feel like they have to give away a lot of information. Males (20%) are more likely than females (9%) to feel that too much information is asked for at the time of registration.

Key takeaways Although a large proportion of shoppers use c-store loyalty programs, the market is far from saturated and c-stores have ample opportunity to capitalize on the benefits of a well conceived loyalty program.

Mobile App Available with C-Store Loyalty Program Not sure 28%

28% Not sure if loyalty program has a mobile app

If they did, I would not use it 3% If they did, I would use it 5% 8% No, loyalty program does not have a mobile app

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I have used it 45% I have not used it 19%

| SEPTEMBER/OCTOBER 2020

64% Yes, loyalty program has a mobile app

Simply having a program is not enough: Many people say they don’t get enough value from the membership. Since shoppers today look for instant gratification, many are deterred from joining loyalty programs because they feel reward points are not very valuable or they need to make a lot of purchases before gaining any benefit. C-stores that clearly communicate a program’s larger benefits and attainable rewards are most likely to entice new members. It’s worth noting that while traditionally younger shoppers have been the ones to use loyalty program mobile apps, in the era of COVID-19 these demographics are shifting, with more shoppers embracing digital technology as a means to reduce touchpoints and engage in frictionless experiences. For many operators, this calls for better optimization and integration of the c-store digital infrastructure in order to increase program satisfaction and meet customers’ evolving expectations.◗

BUILD LOYALTY THAT LASTS

As many as 57% of Canadians expect to receive special, or personalized treatment for being a loyal customer, according to KPMG International’s 2020 The Truth About Customer Loyalty report. An equal number agree that having a “strong personal connection with the company” helps to keep them loyal. To create lasting loyalty, the report advises three main steps: 1 Gather data to really understand your customer; 2 Build analytics capabilities that allow you to use that data quickly to generate insights; 3 Build an organization that acts on those insights.

CCentral.ca


VAPING PRODUCTS PROMOTION REGULATIONS INFORMATION FOR VAPING RETAILERS AND MANUFACTURERS On July 8, 2020, the Government of Canada introduced the Vaping Products Promotion Regulations (VPPR), which is available at https://laws.justice.gc.ca/PDF/SOR-2020-143.pdf. The VPPR prohibits: ›

vaping products promotion by means of advertising that may be seen or heard by young persons (effective August 7, 2020);

the display of vaping products, their packages and vaping product-related brand elements at points of sale, including online, if it can be seen by youth (effective September 6, 2020).

The above measures are aimed at limiting youth exposure to vaping product promotion. Exceptions are made for signs that display availability and price at points of sale, as well as for advertising provided in person or sent to an adult. The VPPR also: ›

requires all permitted vaping product advertisements, including those online, to convey a prescribed health warning (effective August 7, 2020).

Provincial and territorial requirements related to display of products, signs on availability and price, and health warnings on advertisements continue to apply and matching VPPR requirements will not apply.

For more information on the Tobacco and Vaping Products Act and these Regulations visit Canada.ca/vaping or call 1-866-318-1116 The information contained in this document is not intended to substitute for, supersede, or limit the requirements under the TVPA or its associated regulations. In case of any discrepancy between this notice and the TVPA or its associated regulations, the Act or its associated regulations will supersede the notice.


40innovation years of

As Alimentation Couche-Tard marks a milestone birthday, president and CEO Brian Hannasch discusses the Quebec-based company’s ascent to one of the biggest convenience store players on the planet BY CHRIS DANIELS

Alimentation Couche-Tard wouldn’t be the retail powerhouse it is today— growing from a single store in 1980 to more than 9,400 convenience stores in North America and 2,700 in Europe (most under the Circle K banner)— without innovation as a trajectory for growth. Take Couche-Tard’s on-demand beanto-cup coffee and grab-and-go “Fresh Food Fast” innovations. Both programs have helped to accelerate the convenience store’s credibility as a destination for quality sustenance. Since 2000, the Laval, Que.-based company has also kept the gas on store modernizations, and, more recently, an ear to the ground on learning opportunities with other companies, which has seen it expand into nascent categories, including cannabis. When it comes to new technology, the convenience sector isn’t exactly known as an early adopter. However, as Couche-Tard’s president and CEO Brian Hannasch shares in our exclusive interview, that is changing. For instance, Couche-Tard is making investments in AI, a digital-based loyalty and upsell program called LIFT and employee training

that uses gamification. Here, Hannasch, who has been president and CEO of Couche-Tard since 2014 and was COO from 2010 to 2014, talks innovation in various forms and Couche-Tard’s philosophy behind it.

Q

What does innovation in the convenience store industry look like to you?

With our vision to make our customers’ lives a little easier every day, innovation is one of our guiding stars. Historically, the convenience store industry has been less impacted by new technologies than other retail channels—our customers come to us for immediate consumption of products or services that require significant infrastructure, like fuel. However, with new digital possibilities and customer expectations, in addition to the ongoing COVID-19 pandemic, innovation is taking off in the convenience sector and at Couche-Tard.

Q

Can you give us a peek into the innovation pipeline?

We are working on exciting developments, including frictionless experiences in the stores, the use of AI for


pricing and personalization, and other new possibilities, such as home delivery, which make traditional convenience even easier.

Q

Given the pandemic, how important has home delivery innovation become?

Innovation was already a big focus before COVID-19 hit us, but the pandemic provided an opportunity to accelerate our innovation projects. We are just starting to learn more about home delivery and its role in our business. As of this date, we are piloting it in around 1,000 stores in all the regions in our network, although most are in the U.S., and across multiple banners. We have also implemented [curbside pick-up service] Click & Collect in 1,000 stores.

Q

Couche-Tard has continued to expand LIFT. How has the loyalty program been a game-changer? LIFT provides us with the ability to understand our customers’ purchase histories and to offer them personalized discounts and engagements based on their baskets. The LIFT digital platform is the anchor of our digital store network, delivering personalized value to our customers, increasing engagement and loyalty, and enabling our consumer-packaged goods partners and their media agencies to leverage the platform.

Q

How so?

Through LIFT, we are able to drive awareness of new brand launches with our business partners and develop brand relationships with customers, while delivering significant growth in a category at the time of purchase. We also use the LIFT platform to promote our private label, increasing loyalty to

CCentral.ca

these products. We are very pleased with the deployment of LIFT, which is now available in close to 7,600 corporate stores in North America. We intend to continue deploying LIFT in the year ahead with the former Flash Foods sites in the U.S. and our North America Circle K franchise network.

Q

How else are you innovating in the area of customer experience?

We have been introducing a new store format based on the Holiday model in North America [Couche-Tard acquired the popular convenience chain in 2017}, and a new store concept in Europe. This is a never-ending process of continuous improvement. These new store concepts not only enhance the look and feel of our locations, they highlight the development of our food program as we look to innovate and elevate prepared fresh food items at our stores. Escalating fresh food service is among our core strategic priorities for growth.

Q

Let’s talk about using innovation when it comes to the development and training of employees.

Digitization has been key to our growing-together efforts. This year, we fully implemented our digital HR platform to all our North American employees and set the stage to start it in Europe. We also launched gamified training in all our European divisions, focusing on sales techniques and food, that achieved a 90% employee completion rate and led to an increase in basket sizes. This is now being successfully piloted in designated U.S. business units and is a great training tool that we didn’t even imagine 15 years ago.

Q

Couche-Tard staked its ground in cannabis retail with Canopy Growth, together opening a store in May 2019 under the banner Tweed. How is that going?

The operational results have been strong, and we are happy with this ongoing relationship to open more Tweed stores in Ontario. In July 2019, we also announced a strategic investment in Fire & Flower, the largest cannabis retail operator in Canada. The legal framework doesn’t allow Circle K or Couche-Tard stores to sell cannabis products in Canada. We feel that partnering and investing in experts in the cannabis sector, while contributing our vast expertise as a responsible retailer of age-restricted products, is the best model to learn more about this space and become a leader in the legal cannabis industry.

Q

You often hear the advice “don’t innovate for innovation’s sake.” What philosophies does the company follow when it comes to innovation?

We don’t chase technology for the sake of it but rather to address actual pain points in the customer journey. We explore new ideas and innovation in a very structured way to ensure an alignment with our strategic objectives. We also make sure innovation is a repeatable process creating value for our customers and a source of learning for the future. It is important for us to have dedicated innovation capacity, to place multiple bets, to be willing to fail and move on, and to nurture a culture of experimentation. We achieve some of this by working closely with start-ups and academia, and sometimes with companies that might be seen as disruptors in our industry.

SEPTEMBER/OCTOBER 2020

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Making history A TIMELINE OF GROWTH AND INNOVATION

1980

1985

1987

Acquisition of 11 stores in the Quebec City region, which operate under the Couche-Tard brand.

1990s

With the acquisition of Sept-Jours Convenience Stores, the network grows to 115 locations.

A decade of growth that includes the acquisition of more than 1,400 stores, as well as market entry into Ontario and Western Canada.

Operations start with the opening of its first convenience store in Laval, Quebec.

2014

2015 Electric vehicle partnership begins in Europe, making Couche-Tard a global pioneer in electric vehiclecharging capabilities.

Elevates coffee program with bean-to-cup dispensers ensuring every cup is the freshest cup available.

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2017

Circle K brand launches globally, as the company continues acquisitions and expansion in North America, Europe and beyond.

2018

2019

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Simply Great Coffee launches globally.

2000 Couche-Tard introduces Store 2000, a plan to renovate and refurbish its 1,625 stores in North America by improving signage and store layout. New store enhancements have become a constant development for the company.

2012 Polar Pop rolls out to stores, allowing customers access to their favourite fountain drinks in an exclusive cup.

• With Canadian cannabis partner Canopy Growth, Couche-Tard supports the opening of a first cannabis retail store in Ontario under the brand, Tweed. • Summer 2019: Invests in cannabis retailer Fire & Flower. • Summer 2019: Publishes first sustainability report. • Summer 2019: New fresh food program launches in the U.S. • Autumn 2019: Gamification HR training starts in Europe, and is later piloted in the U.S.

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2001 First major breakthrough in the United States, with the acquisition of 225 Bigfoot stores in the Midwest.

2012 Acquisition of Statoil Fuel & Retail, a leading Scandinavian road transport fuel retailer with about 2,300 stores operating across Scandinavia (Norway, Sweden, Denmark), Poland, the Baltics (Estonia, Latvia, Lithuania) and Russia.

2020

2002 Acquisition of its first chain of non-traditional stores, Tabatout, in Quebec, marking a new strategy to develop a network of locations in high-traffic areas like shopping centres, airports and subway platforms.

2003 Acquisition of The Circle K Corporation from ConocoPhillips Company. The move secures its foothold in the U.S. and kicks off a decade of acquisitions and signing of master franchises across North America, as well as Mexico and Vietnam.

• In response to COVID-19 pandemic, touchless technology gets a big boost, including curbside delivery in North America and Europe and frictionless fuel payments via license plate recognition in Norway. • Summer 2020: Launches retail pilot colocating Fire & Flower with Circle K stores. • Summer 2020: Second sustainability report published, including the target areas of energy, fuel, packaging and waste, and safety protocols.


Our mission is to transition the millions of Canadian adult smokers away from combustible cigarettes, eliminate their use, and combat underage usage of our products. We value your partnership, appreciate your continued support for the JUUL brand, and hope you join us in embracing our new elevated mission.

This message is intended for members of the retail industry. ™ and Š 2020 Juul Labs. All rights reserved.


A DV E R TO R I A L

Vaping products category reset Q&A with Michael Nederhoff. What does it mean when Juul Labs says ‘resetting the vaping products category’? We have a lot of work to do to preserve this historic opportunity to transition adult smokers away from combustible cigarettes, while combating underage use. As combustible cigarettes remain the leading cause of preventable death in Canada and around the world, this goal is critical, and vaping products can play a pivotal role in achieving that goal. But we know it will only happen if we earn and preserve public trust by combating underage use. That is our chief objective. What actions are you taking? We understand that trust in our company and category has eroded with our stakeholders and it is our responsibility to earn back that trust through our actions. To earn a license to operate in society, we need to put trust at the center of what we do and make choices that are informed by the views of our stakeholders, especially our regulators. Since January 2020 we stopped the import of flavoured products, other than Tobacco and Mint. As well, several months before the federal regulations prohibiting vaping products promotion in the C&G retail channel came into effect, we voluntarily halted all public-facing marketing activity in Canada. We also partner with Amazon, eBay, and Kijiji to remove listings in non-age-gated online marketplaces.

Michael Nederhoff President Juul Labs Canada Ltd.

What do you want c-store operators and staff to know about your efforts and actions? We have had a lot of growth and seen a lot of changes since entering the market in 2018. We appreciate the continued trust and support of our c-store partners. As we strive to reset the vaping products category, we know we can’t do this without their help. Educating and working hand in hand with retail partners on compliance and access control is critical in our combined efforts to combat underage access and use. As part of our commitment to responsible retailing, the company continues to invest in our mystery shopping program and retailer training, while also enforcing bulk purchase restrictions and strict online age verification controls. With so much change and headwinds facing the industry, what do you think is the long-term viability of the vaping category? Our hopes for the future of our company and category remain bright. We have an impactful product, terrific c-store partners, and a worthy purpose. We believe Juul Labs offers the best technology available to transition adult smokers away from combustible cigarettes to potentially less harmful alternative nicotine products. But the harm-reduction potential and long-term success of the vaping products category will only happen if we earn and preserve public trust by combating underage access and use. We are committed to listening to and collaborating with all stakeholders on ways we can further enhance prevention and enforcement.

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Isabelle Chrétien

GOING FOR IT!

At Dépanneur Maxi, change is always an opportunity to evolve and innovate

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R E TA I L E R S P OT L I G H T

The store stocks more than

400

craft beers, plus wine, ciders and coolers

BY MARK CARDWELL PHOTOS CHANTALE LECOURS Quebec convenience store owner Isabelle Chrétien epitomizes the very essence of innovation. Even before she inherited the business from her late uncle, Roger Salvail, in 2018, Chrétien introduced several new products and services that boosted sales and sharpened the store’s competitive edge in Contrecoeur, an industrial town on the south shore of the St. Lawrence River, 45 kms northeast of Montreal. “My uncle was a little nervous because his approach was always, ‘Go slow, grow slow,’” recalls Chrétien, a 46-year-old single mom who first worked at the store part-time as a teenager, then fulltime a decade ago. “But me, I go for it.” According to Chrétien, her most meaningful innovation at the store has been the launch and development of what she calls the best retail line-up of craft beers in Contrecoeur. From the limited selection of big brewery products that were a mainstay of the Beau-Soir-affiliated Dépanneur Maxi that her uncle bought as a retirement project in the late 1980s, the store now boasts more than 400 craft beers—plus wine, ciders and coolers—from Quebec, Ontario and the United States.

Isabelle Chrétien’s top tips for success: ➦

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1 | Don’t be afraid of

change. “Accept changes

and move forward. You have to innovate and know and get what’s new and popular.”

Snapshot Location: Contrecoeur, Que. Craft beer: The store stocks more than 400 craft beers, plus wine, ciders and coolers. Foodservice: Family recipes are the foundation for sandwiches, salads, snacks and other ready-to-eat items made on site. COVID-19: During the temporary downtime, Chrétien renovated, upgraded freezers and introduced new services.

2 | Seek inspiration.

“Whenever I travel I take the time to visit other stores and see what they’re doing in regards to merchandising and products. Exploring and learning about what’s new gives me inspiration for my own business.”

3 | Know your

customers’ needs. “I always say, ‘New things will bring new clients and will help to better serve old ones.’ I like to invest to help make my clients happy.”

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Isabelle Chrétien with her son Xavier and staff members

“It takes a lot of work to get to know the products so we can advise customers, and good management to control inventory. But it’s worth the effort because it gives a big boost to in-store traffic and sales”

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“THEY’RE ALL MADE RIGHT HERE IN OUR KITCHEN FROM FAMILY RECIPES”

“It takes a lot of work to get to know the products so we can advise customers, and good management to control inventory,” says Chrétien. “But it’s worth the effort because it gives a big boost to in-store traffic and sales.” In addition to her craft beer offering, which she promotes on social media and as an official sponsor at local fundraising events, Chrétien also lauds the popularity of the homemade sandwiches, salads, snacks and other ready-toeat items she introduced to the business. “They’re all made right here in our kitchen from family recipes,” says Chrétien. “People love them. I often hear people say that our sandwiches and spaghetti sauce taste just like the ones their moms used to make.” That’s music to the ears of Chrétien, who was born and raised in a Contrecoeur family that boasted several small business owners. Among Chrétien’s earliest memories is playing store in her family’s garage, where she would use an old cash register to ring up pretend orders of toilet paper, toothpaste and other household items her parents stockpiled. “I have an innate sense of business,” says Chrétien. “And I’ve always wanted to be my own boss.” After finishing high school and a college-level accounting program (where one of her teachers was her uncle Roger), Chrétien worked at a lo-

| SEPTEMBER/OCTOBER 2020

cal chartered accountant’s office for four years. She also moonlighted at her uncle’s store, which was then one of three businesses operating out of the old general store he bought on rue Marie-Victorin, Contrecoeur’s main street, a stone’s throw from the town church. “It was a very small, traditional dépanneur that sold penny candies, pop and beer and rented videos,” says Chrétien, who at 18 moved with her future husband into an apartment above the store, next to her uncle and aunt’s unit. “But it was very busy because it was so well located.” After owning and operating a nearby bar with her husband for 10 years, the couple opened a video store in a vacant space in her uncle’s building, right next to his c-store. When that business folded, Chrétien convinced her uncle to expand his store into that space, which she subsequently filled with craft beer. “It took time for me to convince him,” says Chrétien. “But once he accepted the idea he was very supportive and made the necessary investments. I’ll always be very grateful to him. He was like a second father to me.” Around the same time, Chrétien and her then-husband rented a c-store and gas station in nearby Boucherville, setting up what Chrétien calls “a carbon copy” of the Contrecoeur store.

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Though Chrétien remains a partner in that business, she and her husband have separated and she no longer works there. “All my time now is devoted to Contrecoeur,” says Chrétien, who continues to live above the store with her teenage son, Xavier, who works part-time for his mom. Though COVID-19 briefly impacted her store, Chrétien used the downtime to do renovations and to improve and introduce new services. Those innovations include a large new freezer for M&M Express (a joint initiative with Beau-Soir) and two big open-deck refrigerator units—one for the ready-to-eat section and the other for craft beer. “I like to invest in things that I know will make my customers happy,” says Chrétien, a long time board member of local charities and merchant groups. “This is a small town. Everyone who walks in our store is a friend.” ◗

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Eyvind Dahl

After a surge in sales during the COVID-19 lockdown, how do c-stores keep smokers coming back for more? BY DONALEE MOULTON PHOTOS GEMMA ROBILLARD As Canada locked down in the wake of the COVID-19 pandemic, Eyvind Dahl noticed something at his Renfrew, Ont. c-store went up: tobacco sales. Dahl, the owner of Dahl’s Coin Laundry & Convenience, attributes the increase in tobacco purchases to the closure of First Nations’ borders in the province, a protective measure to fight the coronavirus. “When they closed the reserves, our tobacco sales more than doubled,” says Dahl. He notes that sales of Imperial Tobacco alone jumped from 50 to 100 cartons a week. Hand in hand with that increase in business came a surge in impulse purchases. “All my categories shot up,” says Dahl. “We were so busy it was crazy.”

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Surge then slide Dahl was not alone in seeing a surge in tobacco. According to a survey conducted by the Ontario Convenience Stores Association (OCSA), retailers throughout Ontario showed an increase in tobacco sales that ranged from 10% to more than 30%. The survey of the association’s 6,000 members also found that proximity to a First Nation community played little role in the booming business: Sales increased across the board, and almost half of the stores surveyed were more than 30 kilometres away. Dahl’s Coin Laundry & Convenience is an hour away from the nearest First Nation community. The boom has been temporary, however. “Now that the reserves are back open, sales are going down, down, down,” says Dahl. “It’s going back to normal, which shouldn’t be normal.” The issue of contraband tobacco has been a significant one for retailers, particularly in Ontario. “The illegal cigarette market has been left unchecked for far too long,” says OCSA CEO Dave Bryans, who is based in Oakville. “This can’t go on. In Ontario, 30 to 60% of butts swept are contraband.” The OCSA is calling on the provincial government to develop an integrated plan to address contraband concerns and other tobacco issues. “The survey demonstrates a need to work with the Ontario government to develop a tobacco strategy from pricing, formats, promotions and incentives to protect small businesses as well as government’s health policies,” says Bryans.

Competing with contraband Until then, c-stores are looking for ways

TO BUOY TOBACCO SALES Despite the many challenges of the tobacco business—plain packaging, declining volume, evolving regulations and more—it remains a key business and important traffic driver for c-stores. 1 Know what you’re selling: Understand brand attributes so if a customer is looking to make a switch, be it lighter, stronger or a different price point, you can lead them in the right direction.

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to enhance tobacco sales. In the current environment, productivity is paramount, says Anthony Ruffolo, vice president, McCowan Design & Manufacturing Limited in Toronto. “Plain packaging has definitely made it more difficult to vend the product quickly. You need to be more efficient and organized.” Products like McCowan’s secure undercounter tobacco cabinets can help. This may also free up the back wall for new opportunities, space often previously dedicated for tobacco products. “There is an ability to generate profits off the back wall. You may even be able to sell advertising,” says Ruffolo. Sara Clarkson, president of Storesupport Canada in Mississauga, Ont., points out that helping people work through the plain packaging maze will build customer loyalty. “There is still lots of confusion regarding cigarette brands with the start of plain packaging. Knowing what brands to recommend is key and ensuring stock is available of those brands for your regular customers is also of huge importance.” Bryans recommends c-stores promote the least expensive products they have in inventory as a way of competing with First Nations’ retailers at a basic level. While that will attract some new customers and keep others coming back, there is no way c-stores can compete head on with contraband sales, notes Dahl. A carton of cigarettes from a First Nation community is $20. His cheapest brand is $120. “It’s a huge difference. I can sympathize with the customer.” The focus on tobacco sales includes another harsh reality for c-stores: the category is declining.

2 Educate staff: Creating a positive customer experience requires reducing the likelihood of mix-ups or delays caused by plain packaging and employee uncertainty. 3 Be organized and efficient: Shoppers want a quick in and out experience so develop a system or invest in storage solution infrastructure that enables staff to quickly access the right products. 4 Know your customers: Stock the brands that your customers smoke and ensure they’re on the counter and ready the minute they walk in. 5 Maintain stock levels: Smokers are brand loyal and most will go elsewhere rather than settle for a different brand if you’re sold out.

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Tobacco Dollar Sales During COVID-19

0-10% 11-20% 21-30% 31% or more

Convenience stores throughout Ontario showed an increase in tobacco dollars sales between 10% to over 30% in 72% of all locations in Ontario

Tobacco Carton Sales During COVID-19

48% of all locations showed a unit increase of 10% in weekly sales with an additional 17% selling 11-20 cartons during this period. Source: Ontario Convenience Stores Association

Bryans notes that c-stores sell 99% of all legal cigarettes and sales are declining 1.5 to 2% a year. "That is a huge concern for the channel. The time has come for a task force to review the tobacco business in Canada.”

Filling the void One solution is to look for options that can replace tobacco. Vaping seemed a promising category and the profit margin is greater than tobacco. The product is also very popular, but there are recent concerns about safety and increasing regulations that are undoubtedly affecting retailers, particularly convenience operators. Many would like to see c-stores be able to sell alcohol, and the industry has been lobbying the government and raising public

6 Streamline selection: Carefully monitor sales and consider paring down less popular SKUs to reduce overhead costs and shelf space, while boosting efficiency. 7 Consider alternatives: With cigarette sales on the decline, entice shoppers with alternative products, such as cigars, snus and vapes. 8 Work with suppliers: Tobacco companies can be an important partner—in the face of plain packaging many stepped up to organize information sessions, create educational materials for c-store staff and suggest strategies to organize shelving.

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awareness for the last seven years to encourage a move to an open retailing market. Doug Ford’s Progressive Conservative government has promised that market will soon be a reality in Ontario, but the wait continues. Ruffolo also recommends retailers look for products and services that set them apart, such as foodservice or local products. “You need to draw in new customers. The more you know your customers, the more you will be able to retain them.” It’s also critical to remind customers—through signage, conversation, and any other means—that c-stores offer products and services that competitors, from larger stores to smoke shacks and vape shops, do not. That message resonates more clearly and convincingly in a COVID-19 world, notes Clarkson. “With access to grocery stores being more difficult with lineups and extra time needed to shop, quick convenience is more important than ever. Ensuring staples are in stock and healthy snacks will promote a quick stop at the convenience store.” ◗

Tobacco & Vaping Report BY MICHELLE WARREN Cigarettes are among the top 10 items purchased at convenience stores, with 22% of customers buying tobacco during their most recent visit, according to proprietary data from Convenience Store News Canada’s C-store IQ: National Shopper Study. Research showed 28% of c-store shoppers smoke cigarettes and the top reasons they turn to c-stores include: 1. Convenient store location (56%) 2. Always purchase the same brand (44%) 3. Good price/value (42%)

Report highlights • Gen X (61%) and boomers (65%) are more likely than millennials (38%) to be influenced by a convenient store location. • Millennials (21%) are more likely than boomers (5%) to be influenced by a special promotion. • 71% of shoppers that purchase cigarettes are aware of Health Canada’s Plain Packaging rules. • 73% of all convenience store shoppers have NOT tried e-cigarettes or vaping products. • Millennials (39%) are more likely to have tried e-cigarettes or vaping products than Gen X (24%) and boomers (21%). • 50% of shoppers who have tried vaping products were influenced by word of mouth on which products to purchase, while 33% made the purchase based on the retailer’s recommendation and 31% following online research. • Female (65%) shoppers are more likely to have made the decision to purchase vaping products by word of mouth than males (40%).

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R E TA I L E R S P OT L I G H T

AN EXPERIMENT IN SUCCESS Winnipeg’s Valour Convenience pairs cannabis culture with convenience

“You need to keep experimenting to keep growing”

BY DONALEE MOULTON PHOTOS STEVE SALNIKOWSKI

Keep Experimenting. That’s the philosophy on which Amandeep Singh Puri has built his convenience store business and the foundation for its success. “You need to keep experimenting to keep growing,” says Puri, who owns the Valour Convenience Store in Winnipeg. His first foray into experimenting in the c-store sector came roughly six years ago when he purchased Valour Convenience, which has been serving the city’s West End for almost 50 years. “I was looking to invest,” says Puri. “I found a convenience store on every corner. I thought that must be a good business.” What he discovered was running a c-store is a multifaceted and nuanced endeavour. Standing out from the crowd—and apart from bigger stores, particularly chains—is vital. “We must separate our store from others. We must innovate,” says Puri. He’s done that since day one. Over the last six years, Puri estimates he has invested $50,000 in renovations and upgrades to his 1,200-sq.-ft. store—everything from painting to lighting to signage has been improved. “The previous owners had not CCentral.ca

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done many changes. We changed everything,” notes Puri, adding that the ongoing enhancements required moving everything out of the store at one point. The Valour Convenience store looks different from many others inside and out. The exterior is a bright, friendly yellow and inside ease of access is accented. “[My store] is not out-of-a-box. I want people to see everything,” says Puri. In addition to ensuring aisles are effortlessly accessed and goods clearly visible, the c-store owner wants his customers to feel a difference when they shop at Valour Convenience. “I want customers to be comfortable and feel welcome.” That atmosphere is created with a warm hello and a smile when customers walk through the door, but Puri has also worked hard (and creatively) to become part of the diverse Winnipeg neighbourhood where his store is located. For example, for his first four years in business he held an annual barbecue for the community. “It makes people happy and it’s good for the reputation of the store. People know my name now.” They also know Valour Convenience can offer up what they need. Lottery tickets and tobacco remain top sellers and bring many customers through the door. But Puri likes to offer “a little bit of everything” to meet the diverse needs of his eclectic neighbourhood. This includes canned drinks for 89 cents, tasty pizza, samosas and fresh fruit, as well as an ATM. Most recently, Puri has offered customers something else: easy access to the cannabis culture. In a separate section of the building, which Puri owns, he has opened The Bong Shop. Puri estimates that roughly 10% of The Bong Shop customers will also stop and shop next door at Valour Convenience. “We have to do something new to keep the business fresh,” says Puri. ◗

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Snapshot Opened: Originally opened 50 years ago on Valour Road in Manitoba’s capital city Diversity: Everything from cookies to Slush Puppies to Western Union services Differentiation: Co-located with The Bong Shop

Valour Convenience Store’s tips for a successful store ➦ 1 | Reduce reliance on 2 | Be part of your groceries. Once a staple

for many c-stores, groceries, including bread, cat food and sugar, are no longer the products that draw customers to a store and keep them coming back. That business is gone,” says owner Amandeep Singh Puri. It is simply too difficult to compete with grocery stores and other chains on price, so c-stores should look for other offerings to make themselves must-stop shops, he says.

community. For Puri, running a successful c-store means being part of the fabric of the community where that store is located. It is about name recognition—and respect.

3 | Keep experimenting.

There is no recipe for success, and no template that works for every c-store. Owners and operators need to find what resonates with their community and customers. “Every c-store is different,” stresses Puri. “What works in one store doesn’t work in another.” CCentral.ca


Canada’s #1 Cough Drop

1

HALLS is the cough drop leader1 with the highest consumer awareness2

PPD HALLS SGL VARIETY FLR 240 ct. Item #: 57700 0140100 SCC #: 000 5770001401 1

Place your HALLS display near the cash! HALLS display can help generate up to +33% growth during cough & cold season 3.

HALLS is used year round1. 26% of all HALLS drops product sales are outside of the September to March cough & cold season1.

PPD HALLS SGL VARIETY CTR 120 ct. Item #: 57700 0139600 SCC #: 000 5770001396 0

CONTENTS: 40 HALLS ML Extra Strong 9 pcs 60 HALLS ML Honey Lemon 9 pcs 40 HALLS VIT C Assorted Citrus 9 pcs 20 HALLS ML Cherry 9 pcs

CONTENTS: 20 HALLS ML SF Black Cherry 9 pcs 20 HALLS ML Honey 9 pcs 20 HALLS ML Extra Strong 9 pcs 40 HALLS ML Cherry 9 pcs 0 HALLS ML Honey Lemon 9 pcs 20

Contact your Mondelez Canada representative or your wholesale representative for further information and details. 1 Nielsen MarketTrack, All Sales, Nat+NFLD GB+DR+MM + C&G, L52wks PE May 2020 2 Kantar Canada Refreshing Candy Brand Equity Deep Dive Dec 18, 2018 3 Nielsen MarketTrack, Display sales, NTL GDM+C&G, Sep-Mar 2020

ML: FOR THE TEMPORARY RELIEF IEF OF SORE THROAT, COUGH AND NASAL CONGESTION. VITAMIN C: A FACTOR IN THE MAINTENANCE OF GOOD HEALTH. ALWAYS READ AND FOLLOW THE LABEL


CATEGORY CHECK

BY MICHELE SPONAGLE

Good medicine

The temperature is rising on the sales of cough and cold remedies this season The sales potential for cough drops and cold remedies is nothing to sniff at in c-store channels, especially for the upcoming cold and flu season. The numbers paint an interesting picture of the potential. A study from Queen’s University shows one in three Canadian adults will have a sore throat, cold or flu in any given month. Then add the wild card, COVID-19, to the mix. By the end of February, sales of cough remedies in the U.S. had already increased by almost 17%, thanks in part to pantry-loading behaviour. Statista pegs the cough-cold-flu segment at almost US$658.2 million with an expected annual growth rate of 5%. Increasingly, Canadian convenience stores will be prime spots to pick up over-the-counter options to ease cold symptoms. “Convenience stores are critical to the success of Fisherman’s Friend,” says Voula Papadakos, marketing manager. “In these retail spaces, many purchases are made on impulse; therefore, they are a great place to make quick pick-ups since items are easy to find. When someone feels under the weather or wants to soothe their throat, they need to access remedies as quickly as possible.” During COVID, consumer habits continue to shift with social distancing and avoidance of public spaces unless necessary. “It’s possible consumers are more cautious about the number of trips they are making to stores and prioritizing grocery shopping,” she notes. “Convenience stores might be used by consumers to purchase necessities in between their big grocery store stock-ups.” Relief of cold and sore throats can be needed anytime, anywhere and c-stores allow accessibility for quick easy relief with thousands of convenient locations outlets, explains Alok Ummat, director of marketing, Ricola Canada. The company, which boasts products formulated with 10 natural herbs and menthol, has seen impressive growth over the last five years. Ri-

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cola reports it has contributed 40% of category growth—the largest of any brand. “We support our brand through multiple types of promotional activity, both in and out of store, including secondary displays, in-store POP, trade publications, flyer activity, etc.,” says Ummat. Ricola is also planning an extensive media campaign in the fall, including national TV ads with social and digital media. In addition, it is expanding its roster this year, introducing two new products—Menthol Centres with a strong mentholated liquid that features twice the amount of menthol as its original sore-throat drops, as well as an extension of its successful Extra Strength line, with drops featuring an icy lemon flavour and three times the menthol. Halls continues to be good medicine for convenience stores and gas stations. “They are key drivers of sales in the overall ‘cough relief’ category, which is worth $120 million in sales annually in Canada, and for the overall Halls brand,” says Julie Sirois, VP of sales, Mondelēz Canada. The convenience and gas sector has accounted for 13% of ‘cough relief’ category sales over the last 52 weeks, with Halls’ market share over 70% in that space, according to Nielsen Market Track (June 27, 2020). “Interestingly, 50% of cough drop usage occasions actually occur out-of-home,” Sirois points out, “as consumers look for solutions to cough, cold and sore throat symptoms during their busy lifestyles.” Just in time for the cold/flu season, Halls is introducing new larger pack sizes with easyopen pouches containing 14 individual pieces, featuring top-selling flavours, cherry and honey lemon. Parents will have more options in the Halls Kids Cough & Sore Throat Pops portfolio, with new Halls Kids Honey Apple Pops. This year, more than ever, consumers will be mindful of, and eager to alleviate, cough and cold symptoms. C-stores are positioned to provide relief. ◗

C-STORES DELIVERED

13% OF ‘COUGH RELIEF’

CATEGORY SALES OVER THE LAST 52 WEEKS

Source: Nielsen Market Track (June 27, 2020)

’TIS THE SEASON

to maximize sales of cold/cough remedies with these top tips ✔ Position items smartly next to top-sellers, like water, tea/coffee, facial tissue and other pharmacy-related items. ✔ High visibility is the key. Display products at eye level and place counter units at the front of the store. ✔ Mix it up. Make sure you’ve got the best assortment of products to appeal to a wide range of customers. ✔ Expand your options. Consider adding the latest products from trusted brands to those you already carry, including new sizes, flavours and package types. ✔ Keep the momentum going. Chances are, your clients will need cough drops and other cold soothers all year round.

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SNAPSHOT

BY KATHY PERROTTA

Holiday socializing 2.0 Eat, drink and be wary

With the constant uncertainty and change that is prominent in a COVID-19 environment, it is vital that we look towards the face of this new reality and consider how we might adapt upcoming fall and winter celebrations. Undoubtedly, foods and beverages will remain at the centre of these celebrations, particularly during the upcoming treat-focused Halloween 2020 season and into the myriad of winter social occasions. But, how might COVID-19 crisis-inspired habits impact treat choices? It’s challenging at the moment to forecast too far ahead. However, barring any dramatic progress, it is likely that far fewer kids will be heading out on the evening of October 31st to gather goodies throughout their neighbourhoods, particularly as public health officials continue to promote necessary social distancing and warn of probable infection resurgences. These notifications and warnings have led to a third (34%) of Canadian parents reporting (as seen in the Ipsos Path Forward Study) cautiousness towards permitting their children to participate in group activities of any kind, even after the pandemic restrictions ease. Notably, even before our lockdown confinement in mid-March, Ipsos FIVE data had revealed that trick-or-treating activities and consumption rates of seasonal favourites at Halloween were already on the decline in 2019—almost a 10% drop in eating rates from Halloween 2016. Distribution of eating occurrences of food treats on Halloween Total food Halloween packaged food treats Potato Chips Chocolate Salty Snacks Popcorn Cookies Granola/Snack Bars Candy Snack Cheese

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Change in eat rates vs. 2016 0.0% -8.7% -0.5% -4.1% -0.5% 0.5% 0.1% 0.7% -0.9% 1.1%

Given this trend, which has likely accelerated during COVID-19, perhaps there is opportunity to re-invent or modernize Halloween and other holiday rituals.

Online celebrations More than half of Canadian parents (54%) report that they intend to continue to meet with friends and family virtually even when COVID-19 related closures and restrictions end—Zoom socializing has been met with tremendous positivity. These virtual sharing events open up opportunities to prepare, decorate and engage with other family and friends within safe distancing protocols, while still enjoying activities, games, crafts and, of course, food. For instance, in order to elevate the fun factor, individual treat baskets could be assembled and shared for kid (and adult) participants.

Stock up on baking supplies Although increased baking rates that were front and centre during the early-lockdown days receded somewhat by summer, still more than a third of Canadians (37%) now report that they will continue to bake more often than they did during the pre-pandemic period, motivated by the following benefits: › More time to bake › Baking gives me a sense of accomplishment › I like the taste of home-baked goods › Baking makes me feel comforted › I like the smell of home-baked goods › Fun activity for my children

Given the discovery (or the re-discovery) of the joys of baking, there is a significant opportunity to capitalize on this renewed behaviour by creating Halloween-inspired baking fun through the establishment of programs and promotions that include great-tasting recipes, activities and fun kid-driven preparation and decorating ideas. These same strategies, with the right seasonal twist, can be applied also to the winter holiday celebrations, including Diwali, Christmas and into Valentine's Day.

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Small gatherings to centre on favourite foods Evening celebrations offer an opportunity to decorate the inside of the house and, in the case of Halloween, for instance, host a ‘dinner in the dark’ celebration with one bubble or circle of family and friends. Parents can have kids participate in the dinner preparation and ensure that it includes their favourite dishes. C-stores can help by stocking the right products for busy families.

Top kid-requested dinner dishes: Pizza Pasta Rice Hamburger Chicken nuggets Meatballs Sandwiches French fries

Undoubtedly, given the gravity of the current COVID-19 environment, it is inevitable that Canadians will be forced to re-think the many components, habits and traditions of our holiday rituals. Of course, we might also want to reflect on what parts of the old ways of celebrating did not necessarily work well, and use this as an opportunity to innovate and change. Our current forced societal limitations have not squashed our unending spirit and collective creativity, just the reverse. It is the challenges that we face that spark necessary change and often force us to think outside the box. It is precisely that mindset that both inspires us and keeps us moving forward.◗ Kathy Perrotta is a vice-president with Ipsos Market Strategy and Understanding, working with the Food & Beverage Group Syndicated Services. Data sources within this group include, Ipsos FIVE and Foodservice Monitor (FSM).

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BACKTALK

BY MICHELLE WARREN

Who are the people in your neighbourhood? New research from Ethnicity Matters shows how important it is to understand diverse, multicultural Canadians to strengthen the post-COVID-19 economic recovery. Convenience Store News Canada editor Michelle Warren spoke with Ethnicity Matters partner and co-founder Bobby Sahni about untapped opportunities and how the convenience industry is uniquely positioned to meet the needs of diverse shoppers.

Tell me a little bit about your research and the takeaways for convenience. BS: The research uncovered several

Bobby Sahni, partner and co-founder, Ehtnicity Matters

findings that are important to c-stores in particular. We saw a shift in e-commerce across the board. Many of our ethnic consumers are familiar with online shopping, but we found a lot of newbies as well. When you’ve got newbies that means there’s a lot of opportunity. A good number of the respondents said they would permanently change the way they shop, which really begs a question for c-stores: What’s your e-commerce strategy? And, also, how are you considering the specific needs of ethnic consumers?

What is the untapped opportunity? BS: Ethnic consumers typically make two shopping trips—one to the mainstream grocery store and the second to ethnic grocery stores for very specific products. Amid COVID though, we found that consumers were instead going out once. So for c-stores, if a consumer is looking to make one shopping trip, do you have the products that are going to be relevant in order for them to choose you?

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How are c-stores positioned to meet the needs of multicultural Canadians? BS: If consumers are looking to make one trip, where c-stores are uniquely positioned is their proximity or their position within the community. In a lot of cases new immigrants may not have access to a vehicle—being in the community means c-stores are accessible. Again, amid COVID, c-stores definitely had smaller crowds and few line-ups. The hours are generally more accommodating—they might be open later, or even 24 hours, and on holidays, as well. But none of that matters unless you have the products these ethnic consumers are looking for.

Obviously c-stores can’t be everything to everyone, how should operators decide where to focus? BS: When meeting the needs of diverse shoppers, it starts with data and really understanding your customer and their unique needs. The customer base in Surrey might be very different than customers in Winnipeg or Edmonton, or Mississauga and so on. Who are the customers within your trading area? What are their unique needs? After you have gleaned insights from the data, it is about having a strategy or game plan. It doesn’t stop at just having the appropriate products on the shelf; it’s also customer experience and communication. CCentral.ca


RESEARCH INSIGHT:

Any advice in terms of how operators can connect with target consumers in an authentic way? BS: The communication piece could be as simple as having exterior signage letting customers know that they’re welcome in your store, and they’re being recognized as important customers. If we want to get into specifics of communication and letting customers know you’ve got the right products on your shelves, the ethnic communities have really made it easy for us: They have strong online communities—digital media, social media, blogs, forums and influencers—and this extends offline, to community groups, clubs and organizations, as well as ethnic media. It’s really up to c-stores and the operators to examine, within their specific trading areas, how they become part of that community, or how do they welcome those diverse consumers.

Have you seen this in action? BS: I’ve seen some convenience stores that have really changed what’s on their shelf to be reflective of the local market. Now this may be driven from head office, or it could be just a very smart entrepreneur that understands that they need to reflect a local audience. This includes everything from makeshift exterior signage in different languages to let consumers know about what products might be on sale, to callouts within the store, as well as sections for ethnic grocery. I think a little bit more of an organized effort would involve certain c-stores actually working with ethnic media, as an example, to distribute free ethnic newspapers at their stores, which again becomes a driver for consumers to come to those stores on a regular basis to pick up the media. Operators definitely became a little more creative during COVID, I think they became a little more attentive to customer needs, and this is definitely a great time for any CCentral.ca

South Asian and Chinese Canadians are quite specific about what household and food items they prefer and plan to buy, in many cases more specific than the general population. However, they are also open to trying new brands and products. Understanding whether your brand is known or unknown to these communities is often a great starting point in multicultural marketing success.

c-store operator to rethink the way they’re servicing not only ethnic consumers, but also all consumers.

This can sound daunting for an independent operator: How do they fit in? BS: The real opportunity for independents is they can be a little more nimble, a little more entrepreneurial, so I would encourage, as a first step, they absolutely need to understand their local community and local trading area. Lots of data is available, whether its syndicated studies, as we’ve done in the past for c-stores, or even municipal and government census data that at least speaks to the makeup of a given community. But really, get out there, meet your customers—speak to the people that live and work and play within your community and you’ll find out a lot. It’ll definitely shape the way you run your business.

Is the industry doing enough to meet the needs of diverse shoppers? BS: For some organizations, both in manufacturing and retail, they’re making good strides, but others haven’t even joined the race. Immigration is a growth strategy for the country, so it’s got to be a strategy for every company, as well. If you haven’t joined the race you might be very quickly left behind and be irrelevant to these consumers..◗

22%

of Canada’s population is foreign born.

During the next 10 years,

ethnic immigrants will account for 70% of all consumer spending. The multicultural marketplace is worth

more than $100 billion.

Being able to source the right products is key—how are manufacturers and vendors stepping up?

BS: The manufacturers are really interesting in terms of reflecting diversity in their product offering. On the one end, it’s new product development based on particular data or insights, but it’s also been multinationals importing products from other parts of the globe to serve local customers. There’s also the opportunity to innovate around packaging and size and formats. Many immigrant communities have larger families, for instance, so larger pack sizes work, or in some cases, it makes sense to reskin the exterior packaging to be more relevant to a diverse audience. That could be different languages or festive packaging relevant to ethnic holidays, like Chinese New Year or Diwali. Also, a lot of innovation and opportunity can come from global benchmarking: What are the trends that are vibrant in other parts of the world? How can we execute those locally, but not only to service what I’ll call the low hanging fruit (the ethnic consumers), but also how do we bridge to the mainstream—from a manufacturer and c-store perspective that’s where the magic really happens.

Is your c-store doing something innovative or interesting to target diverse multicultural Canadians? We want to hear about it! Email editor Michelle Warren: mwarren@ensembleiq.com SEPTEMBER/OCTOBER 2020

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