NACS Magazine January 2022 by NACS Magazine

convenience.org | JANUARY 2022

THE CHERRY ON TOP It’s time to explore how artificial intelligence can optimize your store-level performance.

NACS CHAIRMAN INTERVIEW

The Hub’s Jared Scheeler

FOODSERVICE PACKAGING

Consider freshness and sustainability

• • •

JANUARY 2022

elcome to an 32 WIntelligent 2022

As AI moves mainstream, it’s time to lean in and embrace machine learning’s present-day uses.

40 Thinking Big

NACS Chairman Jared Scheeler aims to inspire smaller retailers to take their stores to the next level.

46 Package Deal

Convenience retailers turn to sustainable packaging to keep food and drinks fresh and warm.

Cover Art by Prostock-Studio/Getty Images

CONVENIENCE.ORG

JANUARY 2022 |

JANUARY 2022

We realized people wanted healthier options, so we brought in apples and bananas to the convenience store.

OTP is definitely a category where there are a lot of opportunities for the future of tobacco and nicotine products.

P.60

IDEAS 2 GO, P. 28

6 Convenience.org

54 Gas Station Gourmet

Stop by the Chit Chaat Café for butter chicken, chutneys, curries, samosa burritos and family.

From the Editor

10 NACS News 20 Good Work 22 Inside Washington Bipartisan Infrastructure Law funds new grant programs for alternative fueling; modernizing SNAP to allow hot foods.

28 Ideas 2 Go Iowa 80 Truckstop has built its business on making customers happy.

52 Cool New Products

56 Global Trends In Norway, Reitan’s 7-Eleven Market offers grocery items and food to go for people on the move.

60 Category Close-Up E-cigs rebound as smokeless continues to soar, and fluid milk has the potential to contribute positively to the bottom line.

72 Back Page PLEASE RECYCLE THIS MAGAZINE The presence of an article in our magazine should not be permitted to constitute an expression of the association’s view.

| JANUARY 2022

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VOLUME 21, ISSUE 1

JANUARY 2022

EDITORIAL Kim Stewart Editor-in-Chief (703) 518-4279 kstewart@convenience.org Lisa King Managing Editor (703) 518-4281 lking@convenience.org Lauren Brooks Digital Content Manager (703) 518-4283 lbrooks@convenience.org CONTRIBUTING WRITERS Sarah Hamaker, Al Hebert, Bruce Horovitz, Magnar Møkkelgård, Rene Pas, Pat Pape, Melissa Vonder Haar

What’s top of mind in convenience? We’ll tell you. Get the inside scoop on all things convenience by downloading our weekly podcast! Convenience Matters® is the only podcast in the convenience industry that brings together thought leaders and retailer superstars each week to discuss matters of convenience. Download the podcast today, and gain access to industry knowledge and trends — all in 24 minutes or less!

DESIGN Imagination www.imaginepub.com

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NACS BOARD OF DIRECTORS CHAIR: Jared Scheeler, The Hub Convenience Stores Inc. OFFICERS: Lisa Dell’Alba, Square One Markets Inc.; Brian Hannasch, Alimentation Couche-Tard Inc.; Andy Jones, Sprint Food Stores Inc.; Chuck Maggelet, Maverik Inc.; Ken Parent, Pilot Flying J LLC; Victor Paterno, Philippine Seven Corp. dba 7-Eleven Convenience Store; Don Rhoads, The Convenience Group LLC PAST CHAIRMEN: Julie Jackowski, Casey’s General Stores Inc.; Kevin Smartt, TXB MEMBERS: Chris Bambury, Bambury Inc.; Frederick Chaveyriat, MAPCO Express Inc.; Andrew Clyde, Murphy USA; Chris Coborn, Coborn’s Inc. Little Dukes; George Fournier, EG America LLC; Terry Gallagher, Gasamat Oil/Smoker Friendly; Anne Gauthier, St. Romain Oil Company LLC; Varish Goyal,

Stacey Dodge Advertising Director/Southeast (703) 518-4211 sdodge@convenience.org

NACS SUPPLIER BOARD

Jennifer Nichols Leidich National Advertising Manager/ Northeast (703) 518-4276 jleidich@convenience.org

CHAIRMAN-ELECT: Kevin Farley, GSP

Ted Asprooth National Sales Manager/ Midwest, West (703) 518-4277 tasprooth@convenience.org

PUBLISHING Erin Pressley Publisher and Vice President, Education & Media (703) 518-4208 epressley@convenience.org Rose Johnson Audience Development and Production Manager (703) 518-4218 rjohnson@convenience.org

CHAIRMAN: Brent Cotten, The Hershey Company

VICE CHAIRMEN: David Charles, Cash Depot; George Ubing, E&J Gallo Winery PAST CHAIRMEN: Rick Brindle, Mondelēz International; Drew Mize, PDI MEMBERS: Tony Battaglia, Juul Labs; Alicia Cleary, Anheuser-Busch InBev; Matt Domingo, Reynolds; Mike Gilroy, Mars Wrigley; Josh Halpern, FIFCO USA; Danielle Holloway, Altria Group Distribution Company; Jim Hughes, Molson Coors Beverage Company; David Jeffco, Krispy Krunchy Foods LLC; Kevin

Loop Neighborhood Markets; Douglas S. Haugh, Parkland Fuel Corp.; Raymond M. Huff, HJB Convenience Corp. dba Russell’s Convenience; Ina (Missy) Matthews, Childers Oil Co.; Charles McIlvaine, Coen Markets Inc.; Lonnie McQuirter, 36 Lyn Refuel Station; Jigar Patel, Hari 1 LLC, dba Fish River Food Mart; Glenn M. Plumby, 7-Eleven Inc.; Robert Razowsky, Rmarts LLC; Richard Wood III, Wawa Inc. SUPPLIER BOARD REPRESENTATIVES: Brent Cotten, The Hershey Company; Kevin Farley, GSP STAFF LIAISON: Henry Armour, NACS GENERAL COUNSEL: Doug Kantor, NACS

M. LeMoyne, Coca-Cola Company; TJ Lynch, Hospeco Brands Group; Bryan Morrow, PepsiCo Inc.; Lesley D. Saitta, Impact 21; John Thomas, iSEE Store Innovations LLC; Sarah Vilim, Keurig Dr Pepper; Dean Zurliene, Monster Energy Company RETAIL BOARD REPRESENTATIVES: Steve Loehr, Kwik Trip Inc.; Chuck Maggelet, Maverik Inc. STAFF LIAISON: Bob Hughes, NACS SUPPLIER BOARD NOMINATING CHAIRMAN: Brad McGuinness, PDI

NACS Magazine (ISSN 1939-4780) is published monthly by the National Association of Convenience Stores (NACS), Alexandria, Virginia, USA. Subscriptions are included in the dues paid by NACS member companies. Subscriptions are also available to employees of nonmember companies at a rate of $70 per year. Please add $15 for delivery outside the United States.

Available on:

Subscription requests: nacsmagazine@convenience.org POSTMASTER: Send address changes to NACS Magazine, 1600 Duke Street, Alexandria, VA, 22314-2792 USA. Contents © 2022 by the National Association of Convenience Stores. Periodicals postage paid at Alexandria VA and additional mailing offices.

1600 Duke Street, Alexandria, VA, 22314-2792

Tune in at conveniencematters.com

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WHAT’S ONLINE | JANUARY 2022

Learn from Leaders

In addition to information about how to join upcoming webinars, recordings of prior webinars are available for viewing on your schedule. General webinars examine hot topics in the industry—recently, the NACS government relations team discussed the OSHA vaccine mandate. Cool New Products webinars offer a look at the newest category trends and hot items, while supplier webcasts share insights and best practices from our supplier partners. Learn more about one of our latest webinars and many more at www.convenience.org/webinars.

EV Charging Costs

COME TOGETHER. DO MORE. Join us at conveniencecares.org

A new tool from NACS helps retailers assess the cost and profitability of offering EV chargers at their sites. The NACS EV Charging Calculator focuses on what retailer utility costs associated with EV recharging are and what the corresponding revenue must be to recover those costs. Access the calculator at www.convenience.org/EVcalculator.

CONVENIENCE.ORG

Top: vm/iStock; Bottom: UroshPetrovic/iStock

A unique quality of the c-store industry is the willingness to share ideas. Through NACS, you have complimentary webinars at your fingertips. By accessing a NACS webinar, you get instant online education and training hosted by industry experts to keep you up to date on legislative issues, category management, human resources, technology and other pivotal convenience industry topics. We bring the learning to you in an engaging format designed to allow you to learn at your own pace. Choose what and when you want to learn by visiting our library of topics.

T H E

A R T

O F

M E R C H A N D I S I N G

T M

FROM THE EDITOR

Authentic but ter chic ke n and palak p ane e r f r o m a g a s s t at ion—win!

Meet the Future

Kim Stewart Editor-In-Chief

What once was a Jetsons-like idea is now mainstream. 8

| JANUARY 2022

raveling across Ohio to Michigan on a holiday trip with my family, we stopped by a Panera Bread for a very late lunch to go. I ordered via the kiosk instead of by app, thinking somehow it would be quicker, then stood within view of the food prep area to watch the crew of mostly teens and twentysomethings work the line. The restaurant was slammed with orders, so it was a long wait. Taped to a nearby wall was a message for the food-prep team: “Associates: Make sure you are using the correct scoops & weighing out Smoked Chicken & Salad Chicken!!!! We are going through way too much food!! Management” If you have a foodservice operation, I suspect that you can relate. Eyeballing portions leaves supplies and your bottom line to chance. Machine learning can help. What once was a Jetsons-like idea is now mainstream. In our cover story, we interview thought leaders in the burgeoning field of artificial intelligence about the technology’s applications for foodservice and retail operations and share how Parker’s Kitchen is using AI-based predictive analytics to optimize store-level performance. A growth area for c-store foodservice operations is dinner, especially since the morning rush still isn’t back to

where it was in late 2019. Keeping to-go food—especially hot food—at the perfect temperature for transporting home or via delivery is a challenge that we explore in “Package Deal.” What’s more, many customers also expect sustainable packaging. Fortunately, there are options. Speaking of dinner, I had the pleasure of enjoying authentic Indian street food from a local gas station with an attached foodservice operation called Chit Chaat Café. The butter chicken was amazing! Be sure to read this month’s Gas Station Gourmet column for an introduction to this family-run gem in Vienna, Virginia. Don’t miss our interview with Jared Scheeler, CEO of The Hub stores, who is at the helm of the NACS Board of Directors this year as chairman. A true champion of convenience retailing, Scheeler shares his vision for the industry, especially when it comes to small operators. Are you excited about 2022? Call me cautiously optimistic. Happy New Year, my friends.

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NACS NEWS

Tap Into NACS Resources on Trending Topics

SUPPORTING OUR COMMUNITIES C-stores are champions for their communities. Together, our industry contributes more than $1 billion to charitable and community groups each year. • Community Relations: Retailers work hard to support those in need, whether it’s through food donations, roundup campaigns for local nonprofits and charities or helping communities recover from disasters and other emergencies. • Food Waste: Help fight hunger in your community by creating a food donation program. • Human Trafficking: C-stores can share important messages for employees and customers to use to raise awareness against trafficking and help victims.

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CRISIS AND DISASTER MANAGEMENT Helping you define the best course of action to keep employees and customers safe. • Coronavirus: Information about how to educate employees about the vaccines and other vaccine-related human resources advice. • Disaster and Emergency Preparedness: Your teams can provide much-needed food and fuel to first responders and residents before, during and after an emergency or disaster. • Security and Safety: Convenience retailers can help employees and customers feel safe by prioritizing security practices and implementing safety programs in their stores.

CONVENIENCE.ORG

cagkansayin/Getty Images

here’s a plethora of issues facing convenience stores each day, whether inside the store, on the forecourt, in the back office or in the boardroom. At www.convenience.org/topics, you can browse the topics that NACS tracks to spark discussions, provide insights and kick-start strategies for your business.

promotions can help retailers deliver excitement, build bigger baskets and increase trips. • Category Management: Drive sales, reduce outof-stocks and deliver new and exciting products to the millions of shoppers who shop c-stores each day. • CBD and Cannabis: The legality of selling CBD products and getting ready for cannabis.

FOODSERVICE Our industry specializes in all things food and beverage related, from safe food handling and fresh produce to the cold vault and the pizza oven. • Food & Beverage Trends: Captured each month here in NACS Magazine, read what’s hot in convenience stores to satisfy hangry, hunger and thirst cravings. • Food Safety: Resources that can help you enhance your safe food-handling practices and reduce the risk of foodborne illness. • Healthy Options: Ideas for increasing sales and meeting consumer demand for healthy food and beverage choices.

GROWING YOUR WORKFORCE Convenience stores provide 2.3 million jobs in the United States. We offer tools and resources to help you recruit, train and retain your best employees. • Human Resources: NACS has benchmarking metrics, resources and events that can help retailers stay on top of timely HR issues. • NACS State of the Industry Compensation Report: Access the latest industry data, trends and best practices on compensation, benefits, recruitment and turnover. • Good Jobs Institute: The Good Jobs Strategy is a combination of investment in people and smart operating choices that can increase employee productivity, motivation and contribution and promote operational excellence. FUTURE-PROOFING YOUR BUSINESS Through strategic sustainability programs and practices, you can position your business for future growth while enhancing your sustainability goals. • Sustainability: NACS resources and partnerships can help enhance your strategies.

FUELS AND ELECTRIFICATION As more fueling choices come to market, our industry can meet the fill-up and EV recharging needs for nearly 40 million daily drivers. • Electric Vehicles: Explore opportunities to offer charging services to customers and determine how to enable EV charging when the time is right. • Fuels Resource Center: An insider’s view of how fuel is produced, refined and ultimately sold, as well as issues that could affect an otherwise easy and convenient fill up.

TECHNOLOGY INNOVATIONS Retailers invest in new and data-driven technologies that create operational efficiencies and enhance the customer experience. • Conexxus: Learn how technology standards can improve business processes, reduce costs and increase productivity for c-store operations. • TruAge™: Enable faster, simpler and more secure digital ID verification with TruAge. • EMV: It’s an important security tool, but EMV only protects against one kind of fraud: the misuse of stolen card information. Much more needs to be done to enhance card security. • Skimming: Retailers can protect customers from criminals who use skimming devices to steal credit or debit card information.

MERCHANDISE INSIDE THE C-STORE Managing products, prices, placement and

Visit www.convenience.org/topics for a deep dive into all these topics.

CONVENIENCE.ORG

JANUARY 2022 |

NACS NEWS

NEW NACS MEMBERS NACS welcomes the following companies that joined the association between October 15–31, 2021. NACS membership is company-wide so we encourage employees of member companies to create a username by visiting www.convenience.org/ Create-Login. All members receive access to the NACS Online Membership directory, latest industry news, information and resources. For more information about NACS membership, call (703) 684-3600.

NEW SUPPLIER MEMBER — HUNTER CLUB SILVER R&J Almonds Inc. dba Jonny Almond Nut Company Flint, Michigan www.jonnyalmond.com

NEW SUPPLIER MEMBERS Burdette Beckmann Inc. Chesapeake, Virginia www.bbiteam.com EyKare Corporation dba EyKuver Steamboat Springs, Colorado www.eykuver.com

Fizz Dispense Cartersville, Georgia www.pureaiir.com

Toddy Inc. Katy, Texas www.toddyblends.com

Kodiak Cakes Park City, Utah www.kodiakcakes.com

Xtasy Energy Pleasant Grove, Utah www.xtasyenergy.com

Roofing Source Niles, Illinois www.roofingsource.com

Y-Not Design & Manufacturing Inc. Hialeah, Florida www.y-not.com

NACS Calendar of Events

2022

APRIL

JULY

OCTOBER

NACS State of the Industry Summit April 12-14 | Rosemont (Chicago), IL

NACS Financial Leadership Program at Wharton July 17-22 | The Wharton School University of Pennsylvania Philadelphia, PA

NACS Show October 1-4 | Las Vegas, NV

NACS Marketing Leadership Program at Kellogg July 24-29 | Kellogg School of Management, Northwestern University Evanston, IL

NACS Innovation Leadership Program at MIT November 6-11 | MIT Sloan School of Management Cambridge, MA

FEBRUARY NACS Leadership Forum February 09-11 | Miami Beach, FL

MAY NACS Leadership for Success May 15-20 | Glen Allen (Richmond), VA

MARCH NACS Day on the Hill March 08-09 | Virtual

NACS Convenience Summit Europe May 31-June 02 | Berlin, Germany

NACS Executive Leadership Program at Cornell July 31-August 4 | Dyson School, Cornell University Ithaca, NY

NOVEMBER

NACS Women’s Leadership Program at Yale November 13-18 | Yale School of Management New Haven, CT

For more information about these NACS events, visit www.convenience.org/events.

| JANUARY 2022

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NACS NEWS

MEMBER NEWS RETAILER Parker’s announced the appointment of Brittany Burcham as director of communications and community outreach. Burcham will focus on internal communications, supporting the entire Brittany Burcham workforce across 68 retail stores in coastal Georgia and South Carolina. Parker’s gives back to communities where stores are located through the company’s Fueling the Community program and the Parker’s Community Fund. Stewart’s Enterprises announced that Tony Gaines has been appointed chief executive officer. Gaines joins Stewart’s with over 25 years of experience as an executive in alcohol beverages. He Tony Gaines was an innovator with the E&J Gallo Wine Company, Anheuser Busch and Advantage Sales and Marketing, where he represented several spirits brands in the military channel worldwide. SUPPLIERS Impact 21, a retail consulting, analytics, and services company, announced Brian Roadarmel has joined the company as its newest senior principal consultant. Roadarmel will work closely with clients on strategic finance, accounting and other operational efforts.

Brian Roadarmel

Hormel Foods has promoted Wendy Watkins to the newly created position of SVP and chief communications officer for its global operations. Based at the company’s headquarters in Austin, Minnesota, she reports to Jim Snee, chairman of the board, president and CEO. She is responsible for the company’s corporate reputation, internal and external communications, corporate social responsibility and issues management Wendy Watkins and oversees its charitable trust, consumer engagement and creative studios. Just Born Inc. announced that Ross Born will retire as CEO of the company. Born will work with the board of

| JANUARY 2022

directors, which has established a search committee, to recruit a new CEO. David Yale will remain as president and COO, and David Shaffer will continue as chairman of the board. “This is my 44th year in the family business,” Born said. “Thanks to our Just Born associates, our brokers, customers, suppliers and community partners, it has been the experience of a lifetime.” Born is a 2009 inductee into NCSA/Candy Hall of Fame and has served as chairman of the NCA.

Ray Burke

Jim Deuschle

Kevin Spratt

David Faturos

Dave Cowperthwait

Lauren Lopez

Georgia Dachille

Kristin Alongi

Rich Products (Rich’s) has announced the retirement of Ray Burke, president and CEO, U.S.-Canada Region. Executive Vice President and CFO Jim Deuschle will depart March 31, 2022. Kevin Spratt has been promoted to president, U.S.-Canada region, and David Faturos has been promoted to executive vice president, CFO. Dave Cowperthwait will join the executive team as executive vice president, chief supply chain officer, a newly created role at Rich’s. Beyond the core executive team, Rich’s announced a number of additional leadership changes including Lauren Lopez, who has been promoted to senior vice president, foodservice division. Rich’s has created a new Transformation Office, which will be overseen by Georgia Dachille, executive vice president, chief innovation, strategy and transformation officer, and led by Kristin Alongi, who has been named vice president, business transformation. This office will be tasked with creating an organized, focused strategy and governance process around the 76-year-old family-owned organization’s portfolio, productivity and digital transformation initiatives.

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April 12-14, 2022

Hyatt Regency O’Hare Chicago, Rosemont, IL

DRIVE YOUR FUTURE. There is a big difference between data and insights. Data can help describe what’s going on. Insights inform the actions you should take. NACS SOI Summit provides insights to help you drive your future so you can get out ahead of current trends and challenges, and win in convenience. It’s all about moving from reactive to proactive—plus, making more confident decisions.

Make more confident decisions. /

convenience.org/SOIsummit

NACS NEWS

The HR Conference for C-stores NACS Human Resources Forum Dates: March 21-23, 2022, Location: Omni Orlando Resort at ChampionsGate | Orlando, Fla.

Join us as we welcome HR leaders from the convenience channel back together again. We’re bringing you exclusive knowledge from top-notch industry leaders at an exciting family-friendly destination. The NACS Human Resources Forum educates and connects HR professionals specifically working in the convenience retailing industry. Attendees benefit from engaging presentations on topics vital to their job, case studies that can generate new ideas and valuable opportunities to build relationships with peers. As an additional benefit, forum attendees will receive exclusive access to a series of digital content in 2022.

Here’s what you can expect when you attend: Exceptional Content: We provide custom-made, high-level content that fosters a fruitful dialogue among participants. Working Group Discussions: Engage in in-depth discussions on how HR can properly function in the age of COVID-19. Legal and Data-driven Insights: Sessions are delivered by legal counsel and focus on new laws and regulations that impact the convenience industry; exclusive NACS data on compensation and hiring is also presented. Lasting Relationships: Attendees build a strong peer network that can function as a personal board of advisers to help with work issues and opportunities throughout the year and in years to come. HR Solutions: Get a first-hand look at HR solutions and technologies via a curated list of partners who will help prepare you for the future of work. CEU credits: Participants will receive CEU credits from HRCI and SHRM. Attend the NACS HR Forum and leave with the toolkit you need to deliver next-level HR value. Visit www.convenience.org for more information or to register.

Get Key Insights at the NACS SOI Summit The NACS State of the Industry (SOI) Summit is the only convenience and fuel retailing industry event that delivers insights—not just data—on the latest financial, operational, categorical, market and consumer trends in convenience. Registration for the 2022 NACS SOI Summit is now open. The NACS SOI Summit will be held April 12-14 at the Hyatt Regency O’Hare in Chicago. The event will mark the first live NACS SOI Summit since 2019 and the first to be presented exclusively by NACS. Get a first look at 2021 consumer, financial and operational data months before the NACS State of the Industry Report is released. Benchmark your business against competitors in your region and across the country. Get ahead of trends before they get ahead of you with the latest economic, consumer, convenience and adjacent channel trends that impact your business. Retailers and industry experts will share insights that

| JANUARY 2022

will help you capitalize on trends, avoid pitfalls and optimize the performance of your business. The industry all-star speaker lineup includes Jared Scheeler, NACS chairman and CEO of The Hub Convenience Stores Inc.; Charlie McIlvaine, chairman and CEO of Coen Markets Inc.; Chuck Maggelet, CEO of Maverik Inc.; Lori Stillman, NACS vice president of research, and more. Plus hear category management insights directly from leading retailers including Casey’s, Loop Neighborhood Markets, Newcomb Oil, OnCue Express, Parkland, Sheetz, Square One Markets, St. Romain Oil Company, TXB and Yesway. Who should attend? Leading retailers and industry partners who want to make data driven decisions and appreciate the value of using insights and benchmarking to improve their businesses. Go to www.convenience.org/events/SOI to learn more and register. CONVENIENCE.ORG

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NACS NEWS

BY THE NUMBERS

The Evolution of Self-Checkout The growth of autonomous (or self) checkout continues to transform the retail landscape. The global market for self-checkout systems is projected to reach nearly $6 billion by 2026, growing at a CAGR of 11.5% over the 2021-26 time period. North America is projected to represent the largest share of the market, accounting for a 41.4% share in the global market and currently sized at $1.4 billion in 2021, according to research by Global Industry Analysts released in October 2021. Self-checkout technology is more beneficial to shoppers than traditional cashier checkout processes and provides greater customer satisfaction, in large part due to

perceived control, greater transactional speed and ease of operation. According to a global study by dunnhumby, more than 60% of retail baskets contain six items or less, driving an increased preference for do-it-yourself checkout capabilities. Consumer adoption of contactless payment forms and self-checkout solutions accelerated dramatically during COVID-19, heightening the demand for retailers to offer these services ubiquitously. As technology and software costs decrease and usability increases, retailers who lag in adoption not only fall short in the eyes of shoppers but also assume greater labor costs and queue times versus their competitors.

U.S. MARKET MATURITY EVIDENCED IN GLOBAL GROWTH RATES Self-Service Market—Growth Rate by Region (2019-24) High

Mid

41.4%

Low

U.S. share of total market Self-Checkout Improves Store Efficiency

Minimizes customer wait time ● Reduces labor requirements ● Eliminates cashier errors ● Improves overall service level at checkout

Source: Mordor Intelligence

85%

of consumers believe strongly that “self-service checkouts are faster than waiting in line.”

49.4%

of your customers will visit your competitor’s store if they have self-checkout and you do not.

Source: “2021 State of Self-Checkout Experiences” by Raydiant

| JANUARY 2022

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PytyCzech/Getty Images

●

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GOOD WORK

‘C’ Stands for Community

OnCue collected $301,500 during its annual St. Jude Halloween Promotion to benefit St. Jude Children’s Research Hospital.

BY THE NUMBERS

95%

of convenience retailers support charities

76%

of convenience retailers contribute to youth sports

| JANUARY 2022

onvenience stores are community stores. Each year our industry contributes more than $1 billion to charitable and community groups. Nearly every convenience retail company (95%) supports charitable causes, with 66% supporting five or more charities, according to a NACS member survey. Nearly all companies support local charities (91%), and about half of all retailers (47%) also support national charities. In addition, more than three in four retailers (76%) contribute to youth sports groups and more than two thirds (69%) contribute to local schools via PTAs and other fundraising activities.

In late 2021, numerous convenience retailers showed their support in various ways: Gulf Oil donated $25,000 to the Gerald and Darlene Jordan Boys & Girls Club in Chelsea, Massachusetts, to help the club expand its technology resources. In 2021, the company donated $75,000 to support youth organizations in the Boston community, including the Red Sox Foundation’s RBI program and programs through the American Cancer Society. “As a company, we are focused on giving back to the Chelsea community and the other communities in which we operate,” said Eric Johnson, president and CEO of Gulf. “Our partnership with the Patriots has allowed us to recognize and act upon a passion we share with the organization for creating and fostering opportunities for our local youth.” Rutter’s Children’s Charities, in conjunction with York, Pennsylvania-based Rutter’s, donated $20,000 to For the Love of a Veteran in honor of Veteran’s Day. “We’re very appreciative of all those who selflessly serve our country each and every day,” said Chris Hartman, president of Rutter’s Children’s Charities. “It was an easy decision to support For the Love of a Veteran because of the amazing work they do for any veteran in need of assistance, throughout our communities.” Pittsburgh-based GetGo Café + Market raised $10,000 for the U.S Marine Corps annual Toys for Tots holiday campaign through the sale of GetGo’s famous tater tots. For the second year in a row, GetGo donated a portion of the proceeds from any order of tots during November to the Marine Corps Toys for Tots. “Our customers responded so enthusiastically to last year’s Toys for Tots CONVENIENCE.ORG

Left: The GATE Foundation hosted a pink ribbon paper icon campaign to benefit the American Cancer Society. GATE Stores customers and employees raised $65,000. Above: The Spinx Co.’s Spinx Cluck Truck and staff served 355 meals to families in need on Thanksgiving day.

campaign that we knew we had to do it again this year,” said GetGo Chief of Staff Rug Phatak. “We’re proud to partner with our neighbors and the Marine Corps to provide toys and gifts to the children of our communities.” Love’s Travel Stops raised more than $2.8 million through its annual Children’s Miracle Network Hospitals campaign. Since 1999, the company has raised over $35 million for sick and injured children who live in the states where Love’s stores are located. “Donating to this organization is one of our favorite events each year, because we get to help children and their caregivers across the country,” said Jenny Love Meyer, chief culture officer and executive vice president for Love’s. Love’s Travel Stops also contributed $1,036,900 to the United Way of Central Oklahoma through its annual employee campaign in 2021. Since 1999, Love’s has donated more than $8.5 million to the organization. To celebrate the grand opening of a new store in Tumwater, Washington, Pilot Company donated $5,000 to benefit two area school districts. The Oakville School District and the Rochester School District each received $2,500 as part of Pilot’s commitment to supporting the communities it serves. Enmarket launched its company-wide initiative in September, across Georgia, South Carolina and North Carolina, to benefit the Georgia–South Carolina Region of The Leukemia & Lymphoma Society’s (LLS) Light The Night® campaign. The company raised more than $125,000 to help in the fight against blood cancers. CONVENIENCE.ORG

“Over the past nine years, Enmarket’s customers have joined with us in raising nearly $900,000 to benefit the Leukemia & Lymphoma Society during this campaign,” said Enmarket President Brett Giesick. “[W]hen we support Light the Night for the 10th year, our goal is to cross the milliondollar mark.” The GATE Foundation, the philanthropic arm of Jacksonville, Florida-based GATE Petroleum Company, donated $65,000 to the American Cancer Society to support breast cancer research and awareness. “GATE Stores have hosted the pink ribbon paper icon campaign for 11 years now,” said Kathy Brady, executive director of the GATE Foundation. “In that time, our customers have surpassed $1 million in donations to the American Cancer Society and the fight against breast cancer. There is so much enthusiasm and support for this campaign among our customers and employees,” she said. Oklahoma-baesd OnCue collected $301,500 during its annual St. Jude Halloween Promotion to benefit St. Jude Children’s Research Hospital. OnCue has raised $2,915,164 for St. Jude throughout its 15-year partnership, making it the largest regional partner for St. Jude Children’s Research Hospital. OnCue stores also sold co-branded plastic cups benefiting St. Jude for the third year in a row. For the second year in a row, The Spinx Co. partnered with Project Host, a local nonprofit in Greenville, South Carolina, to serve free meals to those in need on Thanksgiving Day. During the event, the Spinx Cluck Truck served 355 meals.

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INSIDE WASHINGTON

7.5 Billion Reasons to Read This Bipartisan infrastructure law funds new grant programs for alternative fueling. BY DOUG KANTOR

FACTS & FIGURES

$7.5 billion

Funds available in the alternative fueling infrastructure grants program

80%

The maximum federal share of the project cost

January 28, 2022

The deadline for submitting comments to the U.S. DOT on the grants program

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fter a long and circuitous route to passage, the U.S. now has a new bipartisan infrastructure law, and there is a lot in this law of interest to convenience and fuel retailers. It will fund traditional highway programs, including roads and bridges throughout the nation, as well as broadband deployment, clean water

programs, public transit, airports, ports, electricity transmission and grid updates, and clean-up funds for sites with pollution. For the convenience industry, one of the new programs in the law is the $7.5 billion alternative fueling infrastructure grants program, which includes funding for electric vehicle (EV) charging, hydrogen and natural gas. These are funds that CONVENIENCE.ORG

Scharfsinn86/Getty Images

retailers may be able to use to help fund their own investments in alternative fueling. But, how the Transportation and Energy departments design the programs will make a real difference in how helpful the funds are and how retailers might be able to access them. The U.S. Department of Transportation (DOT) is seeking input on how to administer these new programs and what criteria will be used to best distribute these funds. Comments are due by January 28, 2022, and background on information the department seeks can be found here: https://bit.ly/3rTMJO4. There are a few things we know already. The law includes an EV charging program whereby funds will be directed to the states to distribute for the following: • Acquisition and installation of EV charging infrastructure • Operation and maintenance of EV charging infrastructure • Data sharing about EV charging infrastructure to ensure success of investments under the program The EV charging program funds are slated to go to the private sector as long as the completed projects will be open to members of the general public as customers—or to commercial motor vehicle operators from more than one company. The federal share of a project can be up to 80% of the cost. Projects must also be located along designated alternative fueling corridors, and the DOT will further define how to make those determinations before releasing funding to the states. States will have to provide written plans to the DOT laying out how they plan to use the funds. Retailers should engage with their states now to ensure that collaborative projects with the private sector are a prominent part of their states’ plans. The bill also includes a Charging and Fueling Infrastructure Program. Under that program, the federal government CONVENIENCE.ORG

will award grants for infrastructure projects involving EV, hydrogen, propane or natural gas fueling. The grants will initially go to states, localities, state or local transportation authorities, Indian tribes or U.S. territories, but those entities must use the money to contract with the private sector to develop these alternative fueling projects. Half of the Charging and Fueling Infrastructure Program funds must also be used along designated alternative fueling corridors, and the other half is designated for projects in communities that need them. The program will prioritize projects in rural areas, low- and medium-income areas and areas with either a low ratio of private parking spaces to households or a high ratio of multiunit households to single-family homes. These grants will also look at how well they would enhance geographic diversity of alternative fueling options and how well they meet current and anticipated future needs for alternative fueling. The Charging and Fueling Infrastructure Program can also fund up to 80% of the cost of a project. Importantly, the law requires DOT to take into account the private sector and the presence of current fueling infrastructure, as well as current EV charging infrastructure when making grant decisions. These are key pieces of the instructions Congress gave to DOT and should help it guide the states and make decisions that foster robust private market investment and competition. While the public funds available are substantial, there is a risk that such funds would undercut private investment and ultimately result in less infrastructure than would be built without any public money. Hopefully, the direction that Congress provided will prevent that outcome and instead catalyze private investment. This is your chance. People in the

These are funds that retailers may be able to use to help fund their own investments in alternative fueling.

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INSIDE WASHINGTON

Doug Kantor is NACS general counsel. He can be reached at dkantor@convenience.org.

industry should take the opportunity to tell the DOT that facilitating the private sector is the most advantageous way to spend these funds and ensure that they are fully leveraged. And you should work with your states and localities to get ready to claim funds from these programs and build new infrastructure to serve your customers.

Remember, $7.5 billion won’t come knock on your door and jump in your pocket. Retailers who want access to the funds need to make plans and ask for them. The NACS government relations team is here to help you and will continue to provide you with the necessary information to help navigate this opportunity.

ONE VOICE This month, NACS talks to Aaron Littlefield, president, Littlefield Oil Company. What role in the community do you think convenience stores should play? Aaron LIttlefield Our convenience stores in rural Arkansas and Oklahoma play many roles in our communities. In many of our locations we may be the only source of fuel for the citizens of that community. They are also locations where people meet to socialize. Our convenience stores often provide food for dinner at night and can be the place someone goes to get medicine for a sick child after everything else is closed. In ways like these, our convenience stores are a very valuable part of the community. What does NACS political engagement mean to you, and what benefits have you experienced from being politically engaged? I think political engagement is so important to our industry and always has been. One simple proof is found when you look back over the last couple of years to all the things we went through during the pandemic. Political engagement was the crucial intermediary

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between the agencies making huge decisions and our industry, which was constantly trying to make things work on the street for real customers with immediate needs. With many politicians more hostile to our industry, political engagement is going to continue to be important in the future. What federal legislative or regulatory issues keep you up at night (with respect to the convenience store industry)? There are many worrisome legislative and regulatory issues that we must deal with. What keeps me up at night are issues where the government seeks to be involved in our labor. We all know our people are what makes our businesses great. But we’ve certainly seen over the last couple of years government trying to involve themselves more with our labor force and the negative effect it has had on us.

Your voice can save your business. Scan the QR code to tell us what’s keeping you up at night and where you’re willing to lend your voice to NACS’ advocacy efforts.

What c-store product could you not live without? This is a hard question with so many products so important to our business and our communities. We all must have the normal cokes and smokes, but for our company I think it would be gasoline. Gasoline is what drives more people to our stores every day where they buy all the other products we have for sale.

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#1863

CONSUMER 2012 Toyota Camry parked at the pump

#1747

CONSUMER Abandoned the line and left

#1988

CONSUMER Waiting in line for 2.5 minutes Leaving the store without purchasing

#1748

COMPANION Viewed 9 items Waited in line for 1.5 minutes

What if your biggest liability could become your best asset? The reality is that many businesses are facing a labor crisis - attracting, training, and retaining great employees has become a significant challenge. At RadiusAI, we want to empower every employee to be a superstar. We assist by providing rich ai-driven analytics through existing vision capturing devices. This type of information is not available through point of sale alone. We then help you identify the gaps, provide real-time notifications, and empower your employees to make profitable decisions in the moment. Imagine being able to give your staff measurable insights into consumer behavior, traffic patterns, line abandonment, product placement, sales, and store efficiency. What if your staff was empowered to make the right decisions at the right time? We believe that people are your greatest asset and we give them the information they need to succeed so that they can focus on serving the people who will ultimately keep coming back again and again. Learn more and set up an appointment at radiusai.com

INSIDE WASHINGTON

Common Sense in a SNAP MODERNIZING THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP) TO ALLOW HOT FOODS.

BY ANNA READY BLOM

Anna Ready Blom is the NACS director of government relations. She can be reached at ablom@convenience.org.

NACSPAC DONORS

Did you know that a person can purchase a cold sandwich with their SNAP benefits, but if that sandwich is heated it can no longer be purchased? You may be thinking that doesn’t make sense, and you would be right. The hot foods restriction is outdated and goes back to the creation of the Supplemental Nutrition Assistance Program (SNAP). The Food Stamp Act was passed in 1964 to establish the anti-hunger program for Americans that would evolve into modern day SNAP. When the program was first created, Congress restricted the purchase of hot, prepared foods. Americans at that time were making most of their meals at home and from scratch. However, shopping and eating habits have dramatically shifted in the past 50 years. Today, the majority of Americans rely on the flexibility of being able to buy hot, prepared foods, whether it be a rotisserie chicken, a cup of soup or a hot sandwich. Yet an elderly person or mom on SNAP do not have that same flexibility because of the hot foods restriction. Still, the hot foods restriction is not always in place. Several times a year, the U.S. Department of Agriculture grants waivers

SNAP recipients can buy cold prepared foods at c-stores but not hot, prepared foods. NACS is seeking to change that.

to allow the purchase of hot foods in areas that have been struck by a natural disaster such as a hurricane and wildfire. These waivers have been successful in giving SNAP participants in those areas critical access to food. There is no reason not to provide the same flexibility and convenience to SNAP families on every other day of the year. NACS is advocating for Congress to introduce commonsense legislation that would remove the hot foods restriction, giving SNAP participants the flexibility to purchase a hot meal when they need it from the same stores where they buy other food.

NACSPAC was created in 1979 by NACS as the entity through which the association can legally contribute funds to political candidates supportive of our industry’s issues. For more information about NACSPAC and how political action committees (PACs) work, go to www.convenience.org/nacspac. NACSPAC donors who made contributions November 1-30, 2021, are:

Daniel L. Alsaker Alsaker Corp.

Robert B. Dodge Dodge’s Stores

Ieva Grimm J.M. Davis Industries Inc.

Stephen G. Sheetz Sheetz Inc.

Chrissy Blasinsky NACS

Benjamin Englefield Englefield Inc.

Desiree Logsdon Bunn-O-Matic Corporation

Kevin Smartt TXB Stores

Kathleen Byrd Home Market Foods Inc.

Robert Forsyth FKG Oil Company

Matthew P. Morris NACS

Gray O. Taylor Conexxus

Robert Coughlin Eby-Brown Company LLC

D. Brian Griffith Golden Pantry Food Stores Inc.

Doug New Nouria Energy Corp.

Dean Zurliene Monster Energy Company

Henry Dodge Dodge’s Stores

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BEST

SELLER

GoPremier.com

IDEAS 2 GO

An Attitude of Service

Iowa 80 Truckstop has built its business on making customers happy. BY SARAH HAMAKER

or more than half a century, Iowa 80 Truckstop has been serving travelers and professional drivers off Interstate 80 near Walcott, Iowa. “We’re known as the world’s largest truck stop—our convenience store is 6,800 square feet, and the entire complex is more than 100,000 square feet,” said General Manager Mike Hutchison. “We’re continually looking for ways to better serve our core customer (the professional driver), travelers and locals.”

We’re continually looking for ways to better serve our core customer (the professional driver), travelers and locals. 28

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A BIG STORY Iowa 80 Truckstop began in a small building in 1964, well before Interstate 80 was finished. Bill Moon, who founded the store, scouted the prime location for Standard Oil. In 1965, Moon took over management of the station, and in 1984, purchased the property with his wife, Carolyn. Once the Moon family had the deed, they began expanding the facility and adding services. “Bill just loved everything about trucks and trucking,” his wife shared on the store’s webpage detailing its history. “He loved to sit at the counter in the restaurant and talk to drivers about what would make their life easier if Iowa 80 had it.” That attitude of service can be seen in the amenities offered at the complex

that includes 10 on-location restaurants and 42 fueling positions. Truckers and travelers can also get their canine clean at the dog wash, take a shower and get a haircut, exercise, do laundry, watch a movie in a 60-seat theater and visit a dentist or chiropractor. In July 2008, the facility added the Iowa 80 Trucking Museum, which houses many of the family’s transportation memorabilia and antique trucks. ALWAYS IMPROVING With such a rich history, it would be tempting to keep the status quo rather than innovating, but that’s not the way of Iowa 80. For example, in 2019, the company remodeled its convenience store to provide more grab-and-go items made daily on-site. “We started out with a restaurant and added new food options over the years,” Hutchison said. “But a few years ago, we realized people wanted healthier options, so we brought in apples and bananas to the convenience store.” CONVENIENCE.ORG

ABOUT

Name of company Iowa 80 Truckstop Date founded 1964 # of stores 1 Website www.iowa80truckstop.com

At left, a store overview. Above top, an employee at the DQ counter. Below, the DogOMat pet wash.

When sales of the fresh fruit took off, Iowa 80 expanded to more fresh fruit and vegetables, local meats and sausages, cheeses and yogurt, all under the Iowa 80 brand. “We wanted good quality and healthy options for people who don’t want to wait in line,” said Scott Heine, store manager. Housed in five, open air coolers, the grab-and-go section is now roughly a third of the store footprint. “The section complements our bakery cases and coffee and fountain bars. We’re continually expanding to provide other options for customers,” Heine said. The grab-and-go products are available 24/7 and are made daily by a dedicated staff to keep up with demand. “Frankly, I wish other categories turned over as quickly as our graband-go cases do,” Heine said. ALL IN THE FAMILY The management of Iowa 80 Truckstop believes in making sure each employee knows who they are. “We’re all working managers, and we work with every level CONVENIENCE.ORG

of staff every day in a hands-on way,” said Heine. “Our staff did an unbelievable job during the pandemic shutdowns amid traffic and sales increases, and our managers were right there with them on the front line, too.”

BRIGHT IDEAS Shoppers can take home branded Iowa 80 Truckstop merchandise to commemorate their visit to the world’s largest truck stop. “We have a graphics department to develop branded items for our professional drivers and other customers,” said Mike Hutchison, general manager. The company logo appears on hats, shirts, sweatshirts, bumper stickers, decals and magnets. “Because our core customer is the professional driver, we have two specialty items—children’s books, including a coloring book, that emphasize the professional truck driver and explain the different types of trucks, and toys made specifically for us,” he said. Those products in particular are very popular with customers.

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IDEAS 2 GO

Constant training and open communication between staff and management have forged strong relationships among employees. “Many of our managers have been here a very long time,” said Hutchison. “I’ve been here 42 years, and Scott’s been here 27 years.” That longevity contributes to a sense of family among the employees. “We need more than 500 employees to staff this facility, and the more we can create a good working environment, the more people will want to stick around,” Hutchison said. “That’s good for us as a company and good for our customers, too.” Whether it’s the professional driver needing a shower or hungry travelers in search of sustenance, those who visit Iowa 80 Truckstop should leave with

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the feeling that it’s “a home away from home,” Hutchison said. “Anything they’d want, we have. It’s difficult especially for our professional drivers to have access to many of the things locals take for granted, so we want to make sure we provide for them what they need to get back on the road.”

Sarah Hamaker is a freelance writer and NACS Daily and NACS Magazine contributor based in Fairfax, Virginia. Visit her online at www. sarahhamakerfiction.com.

SEE MORE! Ideas 2 Go showcases how retailers today are operating the convenience store of tomorrow. To see videos of the c-stores we profiled in 2020 and earlier, go to www.convenience.org/Ideas2Go.

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THE NATURAL CHOICE

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WELCOME TO AN INTELLIGENT 2022

As AI moves mainstream, it’s time to lean in and embrace machine learning’s present-day uses. BY RENEE PAS 32

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ant to move your company forward faster? Smarter? Consider the many ways to tap into the power of artificial intelligence. The technology has advanced to the point that business leaders need to take a hard look at how AI can benefit their companies, said Jim Lecinski, clinical associate professor of marketing at Northwestern University’s Kellogg School of Management. “Businesses big and small can take advantage of this machine learning to save money and be more profitable,” he said. Essentially, it’s time to get in the game. Parker’s convenience stores did just that. Both food and technology are seamlessly integrated into the DNA at Parker’s Kitchen, a fast-growing brand under the Parker’s umbrella. The 68-store chain based in Savannah, Georgia, operates 48 Parker’s Kitchens today, all of which utilize “smart kitchen” technology. A company-wide rollout took place in 2020. An early adopter of tech-based components, Parker’s relies on its in-house internal innovation

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and digital transformation team to build its tech systems from scratch with a focus on AI-based predictive analytics to optimize store-level performance. AI touches the company’s food offering, self-checkout lanes and rewards app, to name a few. “We have a phenomenal innovation team,” said Heather Davis, director of foodservice at Parker’s. “We dream it, they create it.” While the chain is likely leap years ahead of the norm in applying smart technology, Davis does remember when operations were far less tech sophisticated. “When we were first looking at the smart kitchen concept, everything functioned on a completely manual process, pulling historical sales and using averages,” she said. “I had a huge Excel document with a tab for every store that I manually updated. Then at the store level, hoped they printed the right sheets.” Deciding quantities to prepare for the food bar were basically guideposts from an individual, she said, largely determined by the store manager’s gut instinct. That all burst wide open when Parker’s initiated its AI-powered smart kitchen. “We now know that a certain location will need X number of potato logs Monday at noon. Stores can produce just-in-time food, and the store level doesn’t have to retain that information. The screen is their guide,” she said. The immense amount of data has allowed for a more precise mapping out of what staff will cook. “We have adjusted our daily flow and production schedules based on when stores are cooking the most food. We continue to make adjustments in expectations,” said Davis.

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AI is important and relevant to the c-store industry because it is a new way to apply practical computer science. CONVENIENCE.ORG

Previous page: ipopba/Getty Images

NOW IN SESSION While Parker’s fine-tunes its AI components, other convenience retailers still may be trying to grasp exactly how AI works. Understanding the path and pathway from the past to today’s version of AI can help business leaders unlock its potential for the future. Lecinski explores the past, present and future of AI in his new book “The AI Marketing Canvas.” He also shares his expertise each year as the program director of the NACS Marketing Leadership Program at Kellogg. AI’s origins date back to World War II, an important notation Lecinski said, because that is when people started to explore how machines could think beyond what humans exclusively told them to do. During that war, an early computer pioneer named Alan Turing created a device to unscramble Nazi codes and help the British Navy avoid submarines. His early work is credited with paving the way for what we now call artificial intelligence, a term that was coined in the 1950s. Fast forward to 2022 and AI is part of nearly every business conversation, from forecasting to marketing to finance. Why the long lag time in mainstreaming AI? The short answer is a common one in the technology field: “The problem was that it was really expensive and not enough people knew how to do it back then,” explained Lecinski. “Today, your cellphone is millions of times more powerful than the rocket NASA used to land on the moon.” AI is a broad subject matter, said Lecinski, much like retail itself. Many segments exist under that big umbrella of “retail,” he pointed out, from quick-serve restaurants to high-end clothing stores to c-stores and more. The same is true with AI, which he defines as the study or discipline of how computer systems can act in a humanlike way. Subsets he points to under that umbrella include robotics, fraud detection and marketing, among others. “AI is important and relevant to the c-store industry because it is a new way to apply practical computer science,” explained Lecinski. The prior approach was to tell computers what to do in a language the computer understood. For example, if the numbers in column X are less than 10, do this. Humans would program in every possible move. As an example, he points to IBM’s famous Deep Blue chess-playing supercomputer, which in 1985 became the first computer to win a chess match

AI IN ACTION

Here are three examples that show the broad ways convenience retailers are tapping AI today. • Personalization. Casey’s has started using segmented marketing campaigns with more personalization and daypart content. On the company’s earnings call in September 2021, President and CEO Darren Rebelez stated: “We believe we can effectively optimize guest behavior with this type of targeted promotional activity.” Casey’s partnered with Punchh, an AI tech solutions provider, in 2019 to push Casey’s customer engagement strategies. • Energy Savings. Sheetz started managing its energy use through an energy intelligence platform, Pear.ai, in April 2021. The goal of using the machine-learning platform is to reduce costs and effectively manage energy and water use through predictive behavior. • Autonomous Checkout. Circle K opened its first frictionless store in October 2021 in Arizona. The AI-powered store experience uses a network of cameras in the store to capture data as the customer shops. Customers leave without the need to scan items. Circle K is using Standard AI technology for the checkout-free store.

against a world champion player. It serves as a classic man vs. machine lesson that demonstrated to the public that computers could handle complex calculations. Deep Blue was programmed for every possible chess move on the board. AI today takes a more advanced approach. Instead of programming if/then scenarios for every eventuality, computers are given different sets of inputs and shown the outputs. “Essentially, with AI, what we are telling computers is ‘you figure it out,’” Lecinski said. EYES FORWARD Lecinski walked through an example of AI using credit card fraud. “Let’s say I show the computer a million credit card transactions that I know are fraudulent. Then I give the computer another million transactions and tell the computer to predict CONVENIENCE.ORG

which are fraudulent. There are no if/then components, I just say ‘you figure it out.’” That is AI in a nutshell, he said, and it “has unlocked a whole new way of using computers.” And the computer keeps learning. “What the machine predicts, I go back in and tell the machine what is right and what is wrong, and it continues to learn.” In essence, it’s about doing an increasingly better job of predicting. “The learning loop gets better each time.” AI continues to move forward with machine learning, said Gray Taylor, executive director of Conexxus, a nonprofit technology organization focused on tech standards and related advocacy in the convenience and fuel retailing industry. “It keeps building and building. It’s a self-perpetuating thing that keeps asking ‘why?’” he said. In the future, Taylor foresees AI playing a key role in refining forecasts in a lot of different areas,

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Visit www.NACSMagazine.com for more on how Parker’s helped its team understand the critical need for AI in its operations.

such as the supply chain. For example, he pointed to the aluminum can shortage that hit during the pandemic. “Manufacturers could not get enough aluminum. [As an industry], we were not forecasting out far enough for them,” he said. “Machine learning will change that. It will consolidate information and provide better inputs 90 days out.” The idea is to give the supply chain enough time to find alternative sources, Taylor noted, adding that while AI will make that happen, it’s not quite there yet. “We are working on adopting that; we are working on the deep learning.” WAYS TO JUMP IN Companies shy away from AI because of a perceived large financial investment. “It does not have to be a big investment early on,” Lecinski stressed. To overcome the hurdle, he steers companies to adopt more of a “crawl, walk, run”

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approach. His next piece of advice involves a lowcost approach to entry. “Go work with your existing partners,” he said. “Ask them, ‘What machine learning options do you have that we can try … for no money?’” Manufacturers like The Hershey Company and PepsiCo Inc. routinely make news in their use of AI. “While AI is getting applied at the manufacturer level first, we are increasingly seeing retailers work on machine learning,” said Taylor. Al Indig, senior engineer – project manager at New York-based PreciTaste, believes machine learning/AI “can be a huge help in convenience stores, just like it is helping QSRs—essentially allowing fewer or even just one person to manage food efficiently.” This higher level of technology is being applied at larger QSRs now, he said, noting that it’s not uncommon for bigger chains to lead with technology. PreciTaste’s platform centers CONVENIENCE.ORG

The forecasting pieces are a no-brainer in terms of what to add. There are levels of all this technology now. It’s about finding a good partner to work with you. CONVENIENCE.ORG

around AI and machine learning in professional kitchens. One conversation Indig often has with QSR chain leaders centers on the need to drive efficiency in a short-staffed environment—clearly a common scenario for food-focused c-stores. How the AI processing model helps, Indig explained, is by taking vision images and using an array of data points, which are then fed into the computer, to guide employees. In a practical sense, the AI agent makes decisions to assist the crew. For example, he said, it would tell employees when hot food was sitting out too long, eliminating both the need for an employee to set any kind of timer system and reducing any training hiccups with a new employee. “The computer knows all the rules; the staff just need to follow the computer prompts,” he said. “The technology doesn’t replace people, but it does help when short-staffed. One of the biggest

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While AI is getting applied at the manufacturer level first, we are increasingly seeing retailers work on machine learning. 38

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manufacturer’s tech team to gain access to their application programming interface. Essentially that would allow Parker’s to access all the raw data and build it into their system, whether reporting or smart kitchen forecasting. The end goal for Parker’s would be to tie everything together in a fully integrated ecosystem versus having different systems for different vendor components, for example ovens and printers. Davis described what this looks like at the store level: “We want people to hit the screen to show they cooked chicken tenders and just print from that screen, eliminating a step to have to go to the printer and do it there.” For anyone considering chasing AI and related technologies, Davis suggests examining what exists in the marketplace today if a company isn’t ready to build a proprietary system. “Identify existing partnerships and ask what they can offer to achieve some of these things. It’s out there now,” she said. “The forecasting pieces are a no-brainer in terms of what to add. There are levels of all this technology now. It’s about finding a good partner to work with you.” The Parker’s team continues to look for ways to maximize data, but Davis added that the first round was not perfect. “We had to beat it down before we rolled it out and continue to make adjustments. Now, people get excited about this.” Whatever stage a company’s learnings are around AI, note that 2022 marks the year that most experts consider it a mature enough field to jump into. According to the most recent findings from the McKinsey Global Survey on AI, published in November 2020, increasingly, organizations using AI as a tool for generating value are finding that value in the form of revenue. And, according to the report, those companies plan to accelerate their investment in AI.

Renee Pas’ writing draws from both her c-store background and her more than 20 years writing about various retail channels. She can be reached at reneepas4@gmail.com.

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FG Trade/Getty Images

wins is that it optimizes operations in the kitchen at that moment.” Parker’s looks everywhere it can to optimize kitchen operations and had just that in mind when the team attended the NACS Show in October 2021. They were specifically homing in on equipment partners with telemetry, Davis said, “to see what can push and pull data into another system.” The premise is for Parker’s innovation team to be able to “talk tech” with the equipment

BuzzBallz.com

THINKING

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BIG NACS Chairman Jared Scheeler aims to inspire smaller retailers to take their stores to the next level. BY BRUCE HOROVITZ

ACS Chairman Jared Scheeler first spotted the future of the U.S. convenience store industry where he least expected to see it: China. Scheeler was attending the NACS Convenience Summit Asia in Shanghai in 2019 and became increasingly fascinated observing how consumers there do just about everything via their mobile devices. He recalls strange looks from merchants whenever he used cash to make a purchase. Even more surprisingly, he says, he drew the same reaction when he’d pull out his credit card. Scheeler observed that most Chinese consumers don’t carry wallets because everything they need to make most transactions is on their mobile devices.

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“Our society will gravitate in that same direction,” said Scheeler, 41, who is founder and CEO of The Hub Convenience Stores, a chain of five c-stores headquartered in Dickinson, North Dakota. “Our industry used to rely on real estate to define convenience. That’s becoming less important. Now we need to rely on mobile devices to take convenience to another level.” As he settles in as chairman of the NACS Board of Directors, Scheeler is setting some sky-high goals for the c-store industry. With the pandemic as an unlikely tailwind, first and foremost, he says, is for c-stores of all sizes—including the smallest independent operators—to embrace digital on all levels. “The bigger players can do this on their own and that leaves us smaller retailers behind, and we need to find a way to catch up,” said Scheeler. NACS, he says, can play a major role. “It’s super important that we think beyond brick and mortar and think of our stores as digital locations.” Mobile ordering is a heavy lift for a small retailer. “The cost to do it may not seem realistic from an ROI standpoint, but there has to be a solution,” he said. Over time, it’s about getting everything connected within the same mobile app—from activating the gas pump, to the subscription services on his car washes, to integrating the loyalty program. “It’s about getting every service in a one-stop shop,” he said. Consider the next year to be a shift in gears for the nation’s 150,000-plus c-stores. Moving forward, it’s less about reacting to the challenges of the pandemic and more about riding the digital wave, while navigating growing competition not just from within the c-store industry but from

It’s important that we have modern buildings and businesses that people are proud of walking into—and working for. 42

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savvy competitors in the supermarket and QSR industries, as well. And central to this response, Scheeler says, will be the independent retailers (typically with just one or two stores) that account for more than 90,000 of U.S. c-stores. “Small retailers are the hub for the community,” said Scheeler. “I’d like to see smaller retailers utilize NACS as the hub for growing their businesses.” FRESH AND MODERN One key way that Scheeler keeps his own small chain, The Hub, at the very top of consumer consideration in North Dakota is by consistently placing fresh, healthy food front and center in all five of his stores. “When you walk in the door, fresh food is the very first thing you see,” said Scheeler. That includes a refrigerated grab-and-go section near the entrance that features fresh, healthy sandwiches, salads, wraps, fruit cups and to-go veggie offerings. Scheeler has marketed this concept of freshness and healthiness with The Hub Cafe. How about a hot breakfast sandwich served on a brioche bun? How about an assortment of flatbreads that include vegetarian options like Spinach Artichoke Veggie? And how about fresh soups (like Chicken Tortilla) and salads (like Summer Breeze Salad) that look as good as they taste? “This is the opposite of what c-stores were 20 years ago,” said Scheeler, hinting at the time when items like tobacco products and sugary sweets were among the first things shoppers saw when they walked in the front door. While these items are still critical, he said, “They don’t have to be the focus of what we define ourselves as.” CONVENIENCE.ORG

Join the other 14,728 Convenience stores that sell Ty

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Ty.com

How NACS Can Help You Each time Jared Scheeler attends a NACS event, he said, “I always take a major nugget back home.” For example, after attending one NACS State of the Industry Summit, he changed the way he did just about everything in his business—from marketing to buying to negotiating with vendors. “It literally brought hundreds of thousands of dollars into my small company just by attending a NACS event.” NACS also can help smaller retailers improve on their internet search results, says Scheeler, 2021-22 NACS chairman and CEO of The Hub Convenience Stores, based in Dickinson, North Dakota. He’s recently done some internet test searches for The Hub and hasn't always been so happy with the results. For example, when he searches online for the nearest coffee shop—and the nearest car wash—“my store doesn’t even pop up,” he said. “That’s a problem— and it’s something every retailer like me needs to stay on top of.” Not only can NACS help out smaller retailers in this arena, but improved internet search results could ultimately help to lift store sales. He also plans to continue to promote the role NACS can play in the creation of better technology for age verification. He’s eager to see TruAge™, the digital age-verification system that NACS helped to develop, become the industry standard for selling age-restricted products.

Small retailers are the hub for the community. I’d like to see smaller retailers utilize NACS as the hub for growing their businesses.

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Remember, this isn’t some giant chain presenting an array of better-for-you offerings—it’s a five-store operation. “Small operators really have the power to accelerate industry growth,” said Scheeler. “In many ways, we may be the ones who are holding back the industry growth.” That, he says, will not only require better food offerings but also more appealing stores. “It’s important that we have modern buildings and businesses that people are proud of walking into—and working for,” he said. “If I’m a younger worker, I don’t necessarily want to work for a place that looks like my grandfather’s gas station.” That’s the first thing he looks for at a c-store: It has to pass the eye test. “You need a wow factor from the exterior to encourage people to come walk inside,” he said. ENGAGEMENT MATTERS The very first step a small, independent operator who wants to improve the bottom line should take: Get engaged with NACS. It was Scheeler’s own engagement with NACS that began in 2001 when he attended his first NACS Show in Las Vegas. “That’s when I fell in love with the industry. I was blown away. It was sensory overload.” He started to attend educational sessions when he was director of retail operations at Bobby & Steve’s Auto World. (History note: Scheeler appeared on the cover of NACS Magazine for the October 2005 issue on service culture.) Scheeler started to regularly attend the NACS Show and the NACS State of the Industry Summit. “It’s not just the learnings, but the connections I made on the retailer side and the supplier side that have helped me to think bigger picture,” he said. “Just being able to have a conversation with a guy like Joe Sheetz, for example, changes your perspective on what you can do and provides inspiration on what your business can be.” In 2010, Scheeler attended his first NACS Day on the Hill in Washington, D.C. “It opened my eyes to the role retailers have in impacting issues on Capitol Hill,” he said. The excitement of walking the halls of Congress for the first time and meeting with state delegations “helped me to understand what role we as individuals have in making our voice heard.” He moved back home to rural North Dakota in 2015 to co-found The Hub, starting with a single location. The Hub’s name was intentionally chosen to reflect a community gathering spot, and that CONVENIENCE.ORG

extends to local involvement in things like Little League sports teams and selling co-branded water for local high schools and area colleges. IMAGE UPGRADE For a small retailer like Scheeler, serving as NACS chairman wasn’t on his radar. Even then, he insists, “Any retailer can do what I’ve done.” Key, he says, is getting involved with NACS and pursuing those issues that most impact your business. In advocating for his business—and the c-store industry—Scheeler says the most effective form of advocacy has simply been “telling our stories” to those who are able to listen and effect change. It’s a long way from his very first job as a teenager at a grocery store in Dickinson. Even before that, he developed a special affection for the c-store industry as a little boy when his dad would pick him up from daycare and, for a special treat on the way home, stop at the local c-store, where he’d typically pick out his two favorite candies: a box of Hot Tamales and a Hershey candy bar. Now married with four children, Scheeler’s own kids can pick special treats from his The Hub locations. Meanwhile, he continues to marvel at the success and growth of some of the industry’s first-class operators like Sheetz and Wawa, that combine beautiful locations, healthy food options and state-of-the-art technologies. “They are paving the way for what the industry needs to look like,” he said. Still, they could probably learn a thing or two from The Hub. “We are the hub for the community,” he said. It’s where folks like to gather to socialize, snack and feel a part of the community fabric. By the time the 2022 NACS Show opens in Las Vegas, which will mark the end of his term as board chairman, Scheeler says if he’s found a way to inspire even a handful of small c-store operators to take their stores to the next level, he’ll consider that a big success. “Store-by-store, we all play a role in improving our industry’s image,” he said. “We have work to do.”

Listen to Convenience Matters Episode No. 317, “A Conversation with NACS Chairman Jared Scheeler.”

Bruce Horovitz is a freelance journalist and national media training consultant. Contact him at brucehorovitz@gmail.com.

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Co tu nv pa rn en fo ck to ien an od ag su ce d an ing sta re w d i ar d to na tail m ri ke ble er s . B nk e s p Y PA fr e T PA sh

“A thick paper cup seems like a high-end product and has a better look.”

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PAPER? OR PLASTIC? No one likes trash cluttering streets, parks and playgrounds. And who doesn’t cringe to think that 11 million metric tons of plastic are dumped in the ocean annually, according to Pew Charitable Trusts.

The 2021 Global Buying Green Report, produced by metal-packaging company Trivium, found that 67% of consumers say it is important that products they purchase come in recyclable packages, and more than half (54%) consider sustainable packaging when selecting a product. Shoppers ages 44 and younger are driving this trend. Among that age group, 83% say they are willing to pay more for sustainably packaged products, compared with all consumers (70%). That call for sustainable packaging is being heard by manufacturers and retailers. The Coca-Cola Company is reducing its use of new plastic by 20% compared with 2018 and recently unveiled a prototype beverage bottle made from 100% plant-based plastic, excluding the cap and label, as part of its World Without Waste vision to make all of its packaging more sustainable. Nestlé says it will spend $2.1 billion to convert from virgin plastic packaging to foodgrade recycled products. Labatt USA has adopted photodegradable-plastic carrier rings for its sixpacks of beer that are designed to break down over time when exposed to UV light. Kraft Heinz spent $1.2 billion to develop a 100% recyclable cap for its ketchup and sauce bottles. The caps will be rolled out worldwide starting next year, which means about one billion plastic caps can be recycled instead of being dumped in landfills. Even state and municipal governments frown on single-use materials. Currently, eight states— California, Connecticut, Delaware, Hawaii, Maine, New York, Oregon and Vermont—have banned single-use plastic bags, and a New Jersey ban goes into effect in May. Several major cities have either banned plastic bags or require consumers to pay bag fees at the point of sale. But when it comes to packaging waste, businesses get the blame. Research by Mintel found that 48% of consumers worldwide believe companies are responsible for increasing the amount of packaging that must be recycled. Only a quarter believe that responsibility lies with consumers and just a fifth with governments. That may be because consumers have limited options when it comes to disposing of packaging in an environmentally friendly way. According to 2020 research by the Ellen MacArthur Foundation, companies report that just 65% of the CONVENIENCE.ORG

Previous page: lithiumcloud/iStock; This page: unalozman/Getty Images

hen Jared Scheeler, CEO of The Hub convenience chain, opened his first store, he had branded foam cups made for his fountain and coffee bar. “It’s uncommon for a single store to have their own branded cups,” he said. “We wanted to make our company look bigger than we were.” Today, the North Dakota-based chain includes five stores, and the cup supply is getting a makeover. “Consumers are demanding more sustainable products, and we’ve elected to convert to paper cups as our existing stock runs out,” Scheeler said. “Paper products can be more expensive than foam depending on the type and quality of cups you buy. But paper cups don’t affect the quality of products we serve.” The Hub chose the new cups because paper degrades much faster than foam, which can take decades to decompose. But the conversion took time. The Hub team examined many samples and insisted on having a single lid to fit every cup size. The final result was a thick paper cup with a java jacket. “We didn’t carry java jackets [in the past], but now that paper cups are being used, we had to order them. On the bright side, that offered us an opportunity for increased branding for our stores,” said Scheeler, who is the 2021-22 NACS chairman (see "Thinking Big" on page 40). He likes the feedback he’s gotten so far about the change. “A thick paper cup seems like a high-end product and has a better look,” he said.

SUSTAINABLE

PACKAGING

NEVER LOOKED SO

We’ve recycled over 1 billion PET bottles every year for over a decade. That’s how we make simply better packaging.

www.placon.com/sustainability

plastic packaging they produce is reusable, recyclable or compostable. KEEPING FOOD JUST RIGHT LK Packaging of Commerce, California, offers packaging with the convenience industry in mind. “Increased interest in sustainable packaging parallels the growth of foodservice among [c-store] retailers,” said Glen Adamik, director of strategic marketing, LK Packaging. “We provide packaging to 16 of the top 25 biggest c-store brands and two of the top three players that have publicly committed themselves to more-sustainable packaging, like compostable bags and boxes.” Most all food packaging offered by LK is sustainable, “which, for us, means it’s either recyclable, reusable or compostable,” said Matthew Banghart, director of food packaging, LK. “Our flexible packaging is most often the lesser carbon footprint choice over rigid options.” The company offers grab-and-go packaging designed to be a turnkey branded solution for meals prepared locally or to order. Another line features cook-in bags and boxes that allow meals to be cooked inside the packaging. “This gives operators a way to compete with foodservice establishments, deliveries or even

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grocery store meal kits,” said Banghart. “Both programs offer packaging that keeps the product fresh and warm during transport.” One way to be sustainable and more practical in-store is to offer foodservice packaging with handles. “You’ll have less items to put into other bags, and your merchandise case will be perceptively full of reusable packaging,” said Adamik. “And customers can carry more items to the register easily.” Multicompartment foodservice packaging options also are becoming prevalent, Banghart added. “Operators find that they enhance product appearance and keep food more secure during transport, and they allow the consumer to enjoy a meal nearly identical to the quality they’d enjoy on premise,” he said. “Many operators are gravitating toward a craft paper look that communicates something closer to nature.” At Placon, a Madison, Wisconsin, packaging manufacturer, “promoting sustainability is a big part of our business,” said Kali Kinziger, associate product manager. “Our manufacturing process has no waste. We use all the materials we buy.” While Placon can create customized packaging, most foodservice operators choose HomeFresh, the company’s stock packaging. “HomeFresh

CONVENIENCE.ORG

FabrikaCr/iStock

“Increased interest in sustainable packaging parallels the growth of foodservice among [c-store] retailers.”

products can be filled with hot food and are freezer and microwave friendly,” she said. A traditional white tub and clear lid are convenient, allow retailers to add a logo and let customers see the product inside. Plus, they store easily and can be reused. “And they are recyclable,” Kinziger added. “We only make things that are capable of being recycled unless otherwise specified by the customer.” NEW BRAND, NEW BOXES TXB Stores (Texas Born), based in Spicewood, Texas, recently began rebranding its stores, previously known as Kwik Chek. The change provided an opportunity to replace existing packaging with the kind of sustainable product consumers say they want. “We’ve gotten away from foam as much as possible,” said Ben Hoffmeyer, vice president of marketing and merchandising, TXB. “We’ve moved to paper boxes for our chicken and tacos. All the sandwiches in our deli case used plastic clam shells, but we’ve moved to paper window bags. They keep the product just as fresh, and the bags can be used for both hot and cold products. Plus, we get to brand everything TXB, and we help the environment by leaving less of a carbon footprint.”

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A few years ago, the c-store chain replaced its foam coffee cups with double-wall paper cups, and the retailer plans to tackle foam in the fountain area next. With current supply chain challenges, it may not be easy. It took TXB six months to receive the foodservice bags it had ordered. “It was not about the components needed to manufacturer them,” said Hoffmeyer. “The manufacturer had labor issues that delayed the launch.” But that doesn’t discourage TXB from planning more sustainable updates for its foodservice program. The company aims to move from plastic to paper bags at checkout, and “we’re looking at adding a TXB-branded aluminum drinking straw,” he said. “We want to help the planet out by using less straws, and we’re exploring paper straws for cold coffee where customers don’t need plastic since they’re going to consume the product quickly.”

Pat Pape worked in the convenience store industry for more than 20 years before becoming a full-time writer. See more of her articles at patpape.wordpress.com.

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COOL NEW PRODUCTS This advertorial-style guide of services and packaging appears monthly and is an information-packed tour of ideas and approaches that can change how consumers view your store or choose your brand. It spotlights the newest thinking in convenience and fuel retailing and gives you an advance look at ways of staying in front of industry trends. Products are categorized the same way we organize the Cool New Products Preview Room at the NACS Show each year in October— New Design, New to the Industry, New Flavors, Health & Wellness, Green (EcoFriendly), New Services and New Technology. Products are considered “new” this year if they’ve been introduced since October 2020. The products featured here also can be seen at www.convenience.org/coolnewproducts.

NEW FLAVORS

The Hershey Company

REESE’S Crunchy Snack Cake

REESE’S Snack Bar

Introducing Crunchy Snack Cakes

Introducing REESE’S Snack Bar

In 2020, Reese’s launched a new addition to the morning lineup with Reese’s Snack Cakes. This year the Reese’s brand is introducing a strong sequel…Reese’s Crunchy Snack Cakes. Reese’s Crunchy Snack Cakes are baked snacks that bring a delicious, easy-to-eat, and filling snack. It consists of a soft baked chocolate cake layer topped with salty Reese’s Peanut Butter Creme and crunchy peanuts covered in smooth, real milk chocolate. Reese’s Crunchy Snack Cakes are available at convenience stores nationwide. (SRP: $1.99)

The Reese’s brand is rolling out a snack bar for fans to enjoy…Reese’s Snack Bar. Reese’s Snack Bar is the perfect mixture of crispy, crunchy, salty and sweet. It starts with a layer of crisped whole grain rice mixed with bits of crunchy roasted peanuts, then topped with Reese’s peanut butter creme and bottomed in milk chocolate. Reese’s Snack Bars are available in convenience stores nationwide. (SRP: $1.59)

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CONVENIENCE.ORG

NEW TO THE INDUSTRY

NACS NACS State of the Industry Survey®

Now Accepting Submissions for NACS SOI 2021 Data

More than ever, convenience retailers must take advantage of every tool available to help drive profitable sales in their sites. With over 50 years of financial and operational benchmarks, NACS provides the ultimate tools for industry stakeholders in the State of the Industry Report and the State of the Industry Summit. The State of the Industry (SOI) Report contains over 200 pages of tables, charts, and analysis of the previous year’s operational data for convenience sites across every region of the United States. When you confidentially submit your data at www.convenience.org/SOISurvey, you’ll get two digital licenses to the report of 2021 data, one complimentary registration to the 2022 NACS SOI Summit, as well as a custom report of your company’s data compared to the SOI aggregate data. For more information, email Chris Rapanick, Director, Business Development, at crapanick@convenience.org.

INDEX NEW TO THE INDUSTRY

NEW FLAVORS

The Hershey Company............................................................ 52

NEW TO THE INDUSTRY

Bidi Vapor LLC........................................................................... 53 NACS State of the Industry Survey®.................................... 53

Bidi Vapor, LLC BIDI® Stick

PREMIUM VAPE DEVICE Premium, innovative, and sustainable. These are key qualities of the BIDI® Stick, a disposable e-cigarette designed and engineered to deliver adult consumers 21 and over a unique and premium vaping experience. It is available in 11 flavor variants containing its premium formulation. The components of the BIDI® Stick are 60%-95% recyclable, utilizing only high-grade, high-quality, sustainable components. For more information, visit http://wholesale.bidivapor.com. CONVENIENCE.ORG

JANUARY 2022 |

GAS STATION GOURMET

Indian Food Gem Stop by the Chit Chaat Café for butter chicken, chutneys, curries, samosa burritos and family. BY AL HEBERT

getting traffic. People were not driving as much. It gave us time to brainstorm and grow the business. It was just the gas station at first. The customers were pushing us to get food out there. Licensing took time, and building the kitchen took time.” When the kitchen was up and rolling, the community’s response to the Halal Indian food was overwhelming. “It brought customers to the c-store. Customers would get gas and come inside. The word got out and people came for our food.”

eople are talking about the food at the Chit Chaat Café in a Vienna, Virginia, gas station. This is the kind of c-store that makes customers feel good the moment they walk inside—from the smell of Indian food cooking to the modern and bright décor to the friendly greeting. “My mom does the cooking, my dad does some of the management and I handle the c-store and finances. My sister does social media. It’s a familyoriented business,” explains Neil Puri, manager, adding “the whole family works to grow the business. Everyone is chipping in. Other than the family we have two other employees. They’re like family.” The store opened in January 2021. “It was completely rebuilt from the ground up. It’s a modern contemporary design. In August, the kitchen was open,” said Puri. The family is not new to the restaurant business. “We have a restaurant in Chantilly that we’ve closed temporarily because of the huge labor shortage. It’s hard to find employees. Vienna is a busy location. We wanted to focus on the c-store,” he said. Opening in the middle of a pandemic wasn’t easy. Puri said, “The gas station was new; it was hard

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MOM’S COOKING Puri’s mother, Bindu Puri, cooks all of the items on this diverse menu and makes all of the spices she uses in the food. “We do not have a chef,” she shared. “I make all the chutneys and curries. Everything is fresh. Nothing is frozen. Every day I try to make new food,” she said, adding that she learned to cook from her mother. “My mom is very talented with cooking,” Puri said. “She can go out and try a food and go home and replicate it. She’s the centerpiece of everything we make.” Ordinarily, cooks taste, add something, cook a little more and taste a little more. Not Bindu. “My family is vegetarian, except for me,” Puri said, and until recently, his mother had never cooked meat, so he taste tests all of the nonvegetarian recipes. Bindu tries "different types of fusion and blends of cuisines," Puri said. “Butter chicken is the first thing that got us started. It’s served over rice with a side choice of a curry, and you get a small dessert. The curries are vegetarian, and [Bindu’s] been making them all her life. It’s our most ordered item.” All of the portions are filling, and the Puris can adjust the spiciness of the food to each customer’s tastes. The samosa burrito has gotten the attention of national media. “Samosa is Punjabi. It’s a classic side dish. We have our own twist. It’s a side CONVENIENCE.ORG

Butter chicken served with rice and a side of curry is the most popular menu item at the family-run Chit Chaat Café. From left, Neil, Raja, Bindu and Maggie Puri are all involved in the business.

pocket of potato peas and masala. We do those side things and put them in a burrito. Then, it’s paired with curry rice and sauces.” C-store foodservice programs have to stay competitive, and developing new menu items is important. A tandoori meatball sub has just been added. “The meatballs are fried, served with pepper jack cheese, onions and tandoori mayo sauce. We’re only doing them as a special once a month or twice month,” Puri said. Puri is proud of the store and the customer response. He credits the high quality of the food. “The taste sets the food apart—it’s authentic and it’s good. The c-store is set up well, and we keep it neat and clean. We treat our customers like family. It’s like you’re coming into our home to eat. That has a little bit to do with our customer retention. We know our customers’ names already, even though it’s been only a few months.” SOCIAL MEDIA STRATEGY The role of social media in a successful c-store food program cannot be underestimated. Puri and his sister Maggie make sure Chit Chaat Café is noticed. “We did Facebook first, getting our name into the community. There’s a Facebook CONVENIENCE.ORG

page called Vienna Foodies. Our introductory post was: We’re a new gas station serving good food. That got a few people in. People who loved the food posted reviews on the Vienna Foodies page. That really got attention.” Then they turned to Instagram. Then TikTok users picked up on the buzz. “A lot of people get food ideas on TikTok. All our food is Halal. I’d go into Halal accounts. A lot of my friends are Muslim. We got the word out. We’re a family business and finding time to promote is hard. “It’s huge and it’s free. You’re leaving money on the table when you’re not doing social media promotions,” Puri said. The challenge of getting customers to try gas station food can be daunting, even with a location like Chit Chaat Café on the main street of town. There is a stigma to overcome. “It’s a great corner location on a busy road. It’s nice to look at from the outside. It’s a good build. We’re right outside of D.C. The food has increased business,” Puri said. “We’re restauranteurs, we know what we’re doing. We show our customers how clean we keep our place. The service and taste are consistent,” he said. “Every time we serve someone, we’re building our family. We love spreading our culture and our food.”

You’re leaving money on the table when you’re not doing social media promotions.

Al Hebert is the Gas Station Gourmet, showcasing America’s hidden culinary treasures. Find him at www. GasStationGourmet.com.

JANUARY 2022 |

GLOBAL TRENDS

New in Norway Reitan’s 7-Eleven Market offers grocery items and food to go for people on the move. BY MAGNAR MØKKELGÅRD

raditionally, convenience stores in Norway have focused on typical convenience items like food and drinks to go and have only had a small range of grocery items typically sold at a significantly higher price than in grocery stores. For many years, made in-store and fresh food, along with hot drinks, have been the main growth sector within the Scandinavian convenience channel. There also is a growing demand for healthier and trendier food.

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In Norway, stores bigger than 100 square meters (about 1,000 square feet) must be closed on Sundays. During the rest of the week, grocery stores stay open from 7 a.m. to 10 or 11 p.m. During the past 5-10 years, grocery chains have opened smaller scale Sunday stores under 100 square meters. These tend to be just small grocery stores without traditional convenience items. About 50% of the convenience market in the country is gas station based, while the other half is dominated by stores located in public transport CONVENIENCE.ORG

Far left, street view of the 7-Eleven Market by Reitan. Left, customers can find the grocery section just inside the entrance. Above, the counter area features bakery, food to go and confectionary items.

hubs. Lately, the convenience sector has faced some new challenges: • Firstly, the COVID-19 pandemic has had severe consequences for the public transport sector and therefore also for the stores whose footfall mainly came from public transport. For the gas station segment, the impact has been slightly positive. • Secondly, electric vehicles now have a 60%-plus market share of new car sales in Norway. Electric cars now account for 15% of all cars on the road. Even though it is difficult to compare figures from year to year because of the pandemic, the growth of EVs will have a severe long-term impact on fuel sales and general traffic at gas stations. While many gas station players invest heavily in EV charging facilities, only 10% of all car charging takes place outside the owners’ homes or workplaces. The Reitan Group, which operates 7-Eleven in Norway, Sweden and Denmark, is a major player in the grocery sector in Norway and Denmark through its “soft discount” chain REMA 1000. In Norway, this chain has nearly a 25% share of the grocery market but has not been very active with regard to downsized Sunday stores. CONVENIENCE.ORG

A UNIQUE MARKET In October 2021, Reitan opened its new concept 7-Eleven Market in Oslo, which is a hybrid format combining grocery and convenience for urban customers. “I am proud to launch a brand new concept in the Reitan Retail family—low cost for people on the go,” Reitan Retail CEO Ole Robert Reitan said in a news release announcing the store’s opening. “7-Eleven Market is a great example of how we reinforce and renew our concepts to meet more customer needs and create even better customer experiences.” In this new store, 7-Eleven Market has managed to: • Combine downsized REMA 1000 grocery stores with a limited food and drinks on-the-go offer • Sell grocery items at the same low price as REMA 1000 • Offer a wide selection of groceries, along with a focus on trendy, healthy and specialty products targeted at the customer base in the store’s upmarket neighborhood • Include some interesting category signage underlining the combination of low price and specialty items

With 7-Eleven Market, we explore and challenge the convenience concept of the future in our own living lab.

JANUARY 2022 |

GLOBAL TRENDS

Signs indicate that the prices are the same as REMA 1000 stores, and there are sections for “free from” products and sustainable products.

Customers can skip the line and do self-checkout with mobile payment.

In addition to a traditional convenience-store counter service, the market also offers a self-checkout solution where customers can pay by mobile phone. Even though many convenience retailers have tested self-checkout in their stores,

customers still tend to prefer the traditional counter service, as opposed to the grocery sector, where self-checkout is frequently used. According to Kenneth Olsen, the CEO of Reitan Convenience in Norway, the store is a living lab. The key challenge seems to be to communicate the pricing strategy properly to the customer base. Olsen, however, sees this new format as an interesting way to develop and revitalize the existing network, as well as a base for the further development of new neighborhood locations. Mariette Kristenson, CEO of Reitan Convenience, said, “With 7-Eleven Market, we explore and challenge the convenience concept of the future in our own living lab. We will make our customers’ everyday lives a little easier and make it easy to make good choices in a busy everyday life, both in terms of price, sustainability and healthy options.” Tonje and Alvaro Hernandez Rivas are the merchants running the new store in Frognerveien. “We have built a nice and spacious shop, where you will find everything you need 24/7. Customers will smell the amazing smell of freshly baked baked goods, fresh fruit and coffee as soon as they get inside the door,” the couple said in a news release shared by Reitan Convenience.

NACS CONVENIENCE SUMMIT EUROPE 2022 The NACS Convenience Summit Europe takes place live in Berlin, Germany, from May 31 to June 2, 2022. Visit www.convenience.org/cse for more information.

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Magnar Møkkelgård is the NACS relationship partner based in Norway.

CONVENIENCE.ORG

CATEGORY CLOSE-UP / OTHER TOBACCO PRODUCTS

Up, Up and Away E-cigs rebound as smokeless continues to soar. BY MELISSA VONDER HAAR

Now that nicotine and tobacco have been effectively separated, it’s a whole new world for consumers.

| JANUARY 2022

nicotine offerings performed over the past year. SMOKELESS: NO SLOWDOWN Smokeless has long been the largest segment in the OTP category, and 2020 was no exception: Smokeless accounted for 36.9% of OTP sales. The subcategory had a great year, with sales up 9.3% and gross profit dollars up 19.3%, which Gough described as huge. “There was lot of uptick in smokeless last year,” she said. “Some of it was e-cigarettes: There was consumer confusion around legality and health effects, so it’s possible they reverted to their former nicotine consumption habits.” Nielsen data indicate an even more impressive showing for 2021: As of October 2021, total U.S. smokeless dollar sales were up 12.0% and unit sales were up 1.3% (Nielsen does not track gross profit dollars). “So far in 2021, smokeless is trending similar to the overall OTP category,” said Gough. “So, really good.” Though moist smokeless remains a top seller in the smokeless segment, modern oral nicotine has been credited with a lot of smokeless’ gains in recent years. In the past, NACS has not tracked modern oral nicotine as its own subcategory within OTP, and retailers could track them in either smokeless tobacco or “other” tobacco products. “NACS Category Definitions version 8.0 has designated ‘smokeless tobacco alternatives’ as a new subcategory to allow us to track these products moving forward,” Gough said. What can be tracked is the continued rapid growth for the largest modern oral CONVENIENCE.ORG

Emmanuelle Grimaud/iStockphoto

he year 2020 posed a unique question for tobacco products: Could cigarettes—a huge category that historically declines— and OTP—a slightly less large category that historically gains—thrive at the same time? NACS State of the Industry (SOI) Report data suggest they can. In 2020, cigarette sales (the top contributor to in-store sales at convenience stores at 27.79%) grew 3.6%, while OTP sales (the fourth-largest contributor to in-store sales) grew by 5.7%. “2020 was a good year for OTP, like many of the more indulgent categories in convenience,” said Jayme Gough, NACS research manager. “People were home, so they could smoke or vape as much as they wanted to.” Even as life returned to some form of normalcy, the three major OTP segments enjoyed double-digit growth: Nielsen data as of October 23, 2021, had total U.S. smokeless dollar sales up 12.5%, cigars up 12.3% and e-cigs up 21.6%. While cigarettes remain a key convenience category due to the sheer volume of sales, OTP has continued to be a space retailers and manufacturers look to for the future of the overall nicotine category, thanks to a larger variety of products and continued innovation. “Besides being one of the top five in-store sales contributors, OTP is definitely a category where there are a lot of opportunities for the future of tobacco and nicotine products,” Gough said. “There is a lot of innovation and myriad ways to consume nicotine and tobacco.” Here’s how some of those more diverse

Industry Sales

Avg. Sales/Store

% of In-Store Sales 2019

6.67%

2020

6.90%

2019

2020

$173,209 $183,082

% of Stores Selling 2019

2020

99.3% 99.8%

Top:bildfokus/Getty Images; bottom: taaree/iStockphoto

Source: NACS State of the Industry Report of 2020 Data

brands, even several years in. Per Nielsen, Swedish Match’s ZYN had sales of $689 million from October 2020 to October 2021, up 49.4% in dollar sales and 49.5% in unit sales. Altria’s on! had $81 million in sales, up 241.9% in dollar sales and 328.6% in unit sales. British American Tobacco’s Velo had $46 million in sales, up 43.4% in dollar sales and 92.7% in unit sales. “The modern nicotine consumer understands that there are viable, less risky ways to enjoy nicotine without the harmful effects that tobacco presents,” said Joe Ackerman, vice president of marketing for Swedish Match. “Many of these products provide a convenient experience for consumers (smoke free, spit free, etc.), which affords consumers the luxury of enjoying the product anywhere, anytime.” Ackerman said the best thing retailers can do to leverage the interest in modern oral is to create a highly visible modern oral section within their tobacco sets and educate consumers on the spit- and tobacco-free products. “For years, consumers have only been able to get nicotine via traditional tobacco products,” he said. “Now that nicotine and tobacco have been effectively separated, it’s a whole new world for consumers. The more that they learn about this transformation, the more growth the category will experience.” E-CIGS ON THE REBOUND If there was one dark spot in the 2020 OTP data, it was electronic cigarettes. CONVENIENCE.ORG

SOI data had e-cig sales down 8.9%, gross profit dollars down 17.0% and—for the first time ever—the segment’s percentage of OTP sales shrank, going from 33.9% of category sales in 2019 to 29.5% in 2020. A 2019 focus on a potential vapingrelated lung disorder (which turned out to be due to illegal THC vaping devices, not nicotine-based ones), immense political pressure to deal with underage vaping usage and a slew of regulations that (among other things) banned most e-cig flavors and online sales all likely played a part in 2020’s declines. “All of that compounded and hurt the subcategory’s sales for 2020,” Gough said. The tide, it seems, has turned. Significantly. Nielsen data through October 2021 showed total U.S. e-cig/vapor dollar sales increased 21.6% and unit sales rose 13.1% year over over. “I think the big thing for 2021 is e-cigarette growth. That’s what’s pushing the overall OTP category,” said Gough. “Right now, smokeless looks pretty good, but e-cigarettes really are strong. It looks like they’re going to bring back a lot of those lost sales from 2020.” Disposable e-cigarettes—which were the one product not subject to the federal flavor ban and therefore saw strong growth in 2020—continued to grow last year, with Nielsen showing dollar sales up 44.1% and units up 24.1% year over year as of October 2021. But Wells Fargo analyst Bonnie

JUST THE FACTS

OTP sales gre w 5.7% in 20 20, NAC S State of the Industr y data indicate .

JANUARY 2022 |

CATEGORY CLOSE-UP / OTHER TOBACCO PRODUCTS PER STORE, PER MONTH SALES

2018

2019

2020

2021

$14,257

$15,000

$12,000

$9,000

$6,000

$3,000

$0 JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

Herzog noted those trends are shifting: Disposable dollar sales were down 20.4% in October vs. September 2021. “Overall e-cig gains were broadly driven by the e-cig refill market, which is nearly 73% of the total category,” Herzog wrote in a research note. “While the refill market works to recover, the much smaller e-cig disposable market (24% of the category) has begun to contract as the FDA goes after non-compliant market participants.” One potential reason for growth in the refill market is that the U.S. Food and Drug Administration (FDA) has finally started

THE POWER OF CSX DATA CSX, the engine behind category metrics and NACS State of the Industry data, provides current and customizable tools for financial and operational reporting and analysis in the convenience industry. Retailers can measure their company by any of the myriad metrics generated via our live database. Contact Chris Rapanick at (703) 518-4253 or crapanick@ convenience.org for a complimentary executive walkthrough.

| JANUARY 2022

approving refillable e-cig and vaping products through the pre-market tobacco application (PMTA) process. While the agency has issued far more marketing denial orders (MDOs) than Marketing Granted Orders (MGOs)—and has yet to provide a list of which products for which it has issued MDOs—the fact that some products, including Reynold’s American Inc.’s VUSE Solo tobacco-flavored electronic cigarettes, have been officially approved could help ease consumers’ minds. “FDA’s orders confirm that permitting the marketing of Vuse Solo products is appropriate for the protection of the public health, underscoring years of scientific study and research dedicated to ensuring that adult tobacco consumers age 21+ have access to innovative alternatives to traditional tobacco products,” said Reynolds spokeperson Kaelan Hollan, noting that the PMTA approval is not a statement on modified risk. “The Marketing Granted Orders represent an important moment for Reynolds; FDA evaluates vapor product PMTAs against a rigorous, science-driven standard that sets a high regulatory bar for these transformational products.” CONVENIENCE.ORG

olm26250/Getty Images

Source: CSX; www.csxllc.com

Subcategory Performance OTHER TOBACCO PRODUCTS

Percent of Sales 2019

2020

2019

2020

2019

2020

2019

2020

Smokeless

35.2%

36.9%

$61,040

$66,708

$12,999

$15,510

21.30%

23.25%

E-Cigarettes

33.9%

29.5%

$58,687

$53,455

$22,598

$18,768

38.51%

35.11%

Cigars

17.9%

19.7%

$30,985

$35,703

$11,276

$12,254

36.39%

34.32%

Other Tobacco

10.7%

11.4%

$18,503

$20,585

$5,492

$5,092

29.68%

24.74%

Papers

0.7%

0.9%

$1,255

$1,554

$527

$622

41.99%

40.05%

Pipe/Cigarette Tobacco

0.8%

$1,427

$1,502

$494

$532

34.59%

35.42%

Pipes

0.8%

$1,311

$1,509

$451

$514

34.40%

34.07%

100.0%

$173,209

$183,082

$53,836

$53,296

31.08%

29.44%

TOTAL

Avg. Sales/Store

Avg. GP$/Store

Gross Margin %

For more information on NACS category definitions, visit www.convenience.org/categorydefinitions. Source: NACS State of the Industry Report of 2020 Data

Hollan added that Reynolds, like many other electronic cigarette manufacturers, hopes to see more MGOs issued by the FDA on PMTAs that were submitted later in the process, including Vuse Alto. “If more products get approved, that will have a positive effect on e-cigarette sales,” Gough said. CIGARS STAY SOLID Cigars, albeit a smaller percentage of OTP sales, did very well in 2020. NACS SOI data showed sales and gross profit dollars were both up: 15.2% and 8.7%, respectively. The subcategory also grew its percentage of OTP sales, going from 17.9% of the category in 2019 to 19.7% in 2020. “So far, monthly sales look similar to how they looked in 2020,” Gough said of 2021, noting that sales don’t “typically fluctuate all that much” for cigars. Nielsen data through October supported this consensus, with dollar sales up 12.3% year over year (units were essentially flat). In 2020, one of the stories of the cigar subcategory was early pandemic-related supply disruptions for several large cigar brands. Those issues were fully resolved in 2021, which, according to Karen Saber, Swisher’s vice president of business analytics and strategic sales innovation, has further benefited the segment. “The adult consumer is excited to once again engage with their preferred brands, and they are actively seeking them out CONVENIENCE.ORG

as the assortment of large cigars has returned to normal levels,” she said. Saber called out three product trends to watch within cigars for 2021 and beyond: • Natural Leaf Cigars: Natural leaf cigars account for 40% of large cigar sales, growing 18.4% year over year to 3.7 billion units, according to Swisher’s MSAi Database for the 52 weeks ended October 9, 2021. It “continues to be a breakaway segment,” Saber said. • Filter Tip Cigars: A smaller but growing product option, filter tip cigars account for 23% of large cigar sales and are up 3.1% year over year, MSA data indicate. “The segment offers a variety of choices and price points, be it plastic tipped, wood tipped or traditional filtered tip,” she said. • Mini Large Cigars: Saber described minis as “the newest segment to emerge within large cigars” and having “a wide berth of opportunity.” The segment has grown 13.1% in the past year, per MSA data. Though cigars have typically demonstrated solid growth for retailers, the sheer volume of product types and brands requires a close eye from convenience retailers and their supplier partners. “A diverse product mix is critical for success,” said Saber. “However, assortments must be optimized for maximum turns and profitability. Overall, there needs to be an open and honest partnership between retailers and manufacturers.”

If more products get approved, that will have a positive effect on e-cigarette sales.

Melissa Vonder Haar is the marketing director for iSEE Store Innovations. Follow her on Twitter at @iSeeMelissaV.

JANUARY 2022 |

CATEGORY CLOSE-UP / FLUID MILK

A Necessary Staple Fluid milk might not have high margins, but it has the potential to contribute. BY SARAH HAMAKER

JUST THE FACTS tegory

ca id milk an The flu .5% to 6 s rise le er a p s saw ,790 of $49 e g a r e . av 2020 store in

| JANUARY 2022

CONVENIENCE.ORG

somchaisom/Getty Images

onvenience stores introduced my children to the wonders of strawberry milk. Chocolate milk had long captured their attention through the school lunch line, but strawberry milk was something out of the ordinary at the most ubiquitous of retailers—the convenience store. My family isn’t the only one buying flavored milk, among other types of fluid milk, at convenience stores lately. “In 2020, many customers choose convenience stores as their primary shopping trip for staples, including fluid milk. Sales of fluid milk in 2020 were higher in nearly all months of the year compared with 2019,” said Jayme Gough, research manager, NACS. While fluid milk is one of the smallest categories in convenience retail, the category saw sales rise 6.5% to an average of $49,790 per store in 2020, according to the NACS State of the Industry (SOI) Report. “This bump was likely the result of increased store traffic for ‘necessary home staples’ during the first year of the pandemic,” Gough said.

Industry Sales % of In-Store Sales 2019

1.66%

2020

1.76%

Avg. Sales/Store 2019

2020

$46,734 $49,790

% of Stores Selling 2019

97.6%

2020

96.7%

jenifoto/Getty Images

Source: NACS State of the Industry Report of 2020 Data

Gross margins for milk also rose in 2020, from 23.23% to 23.82%, which helped boost gross profit per store 9.2% to a total of $11,859 yearly. “What the pandemic in 2020 did was remind shoppers that c-stores often stock pantry essentials, like fluid milk, and those shoppers will be more apt to think of c-stores for future fill-in grocery trips,” Gough said. “Despite shoppers feeling comfortable returning to grocery stores for their staples, NACS CSX data show monthly fluid milk sales are higher than 2020 in all but one month so far in 2021.” At the Adkins Store in Charles City, Virginia, sales of fluid milk have stayed about the same over the past year. “We haven’t adjusted our inventory because of the pandemic at all,” said cashier Holly Owens. In 2020, the pandemic pushed sales of fluid milk up at Byrne Dairy and Deli’s 62 stores. “In 2021, we were able to retain those sales and even improve on them in the category,” said Peter Elliott, director of marketing for the Syracuse, New York-based chain. “With our dairy history, our core customers expect an extensive milk selection at our CONVENIENCE.ORG

stores. But during the pandemic, we were able to introduce new customers to our milk, and we’ve been able to turn many of those into repeat customers.” A FLUID OPPORTUNITY Milk has long been a staple in convenience stores, although some retailers, like The Station in Kiawah Island, South Carolina, have dropped the category entirely. “Our customers weren’t buying fluid milk, so we stopped carrying milk,” a manager said. While Adkins Store has a tiny section, Owens said the retailer doesn’t plan to discontinue fluid milk. “Everyone needs milk sometimes,” she said. “We’re always going to carry it because it’s a main grocery staple.” Like its name suggests, Byrne Dairy and Deli is all-in on fluid milk. Each location has six cooler doors of branded milk, including gallons and glass half gallons of whole, skim, 1% and 2% white milk, plus creamer products. “These are the sizes and types of milk our customers want,” Elliott said. “Our customers

JANUARY 2022 |

CATEGORY CLOSE-UP / FLUID MILK

The milk category is growing through innovations, such as flavors, high protein, lactose-free and cold brew with milk products. expect choices of fluid milk, and we want to deliver that to them.” For years, the outlook for fluid milk sales and consumption hasn’t been rosy. “However, per capita consumption of dairy in the United States has been steadily rising lately,” said Paul Ziemnisky, executive vice president of global innovation partnerships for Dairy Management Inc. (DMI). According to the U.S. Department of Agriculture, in

PER STORE, PER MONTH SALES

2018

$2,500

2020, dairy consumption reached 655 pounds per person in the United States, the highest level since 1960. With signs pointing to continued growth, fluid milk presents “a lot of opportunity for convenience store operators,” he said. Nearly all households purchase dairy, with milk part of the largest number of trips. “Milk builds shopper baskets,” Ziemnisky said. “Having new, innovative milk items, such as grab-and-go and single-serve items that deliver valueadded benefits can reinvigorate this category at convenience.” DMI research has found that focusing on dairy’s benefits can attract Gen Z customers to the category. For example, highlighting dairy’s contributions to immunity, calmness, energy and digestive health can draw younger consumers to fluid milk and other dairy products. “The milk category

2019

2020

2021

$2,410

$2,000

$1,500 JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

Source: CSX; www.csxllc.com

| JANUARY 2022

CONVENIENCE.ORG

A new year, offering tremendous opportunities. With a full line-up of programming in 2022, NACS has something for everyone.

convenience.org/events

Signature Event

Leadership

NACS Show

NACS Leadership Forum February 9-11, 2022 Miami Beach, FL

November 6-11, 2022 MIT Sloan School of Management Cambridge, MA Supported by: Gilbarco, Mondelez, Shell

Global

NACS Leadership for Success

NACS Women’s Leadership Program*

NACS Financial Leadership Program*

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October 1-4, 2022 Las Vegas, NV

NACS Convenience Summit Europe May 31-June 20, 2022 Berlin, Germany

NACS Convenience Summit Asia Summer 2022 Singapore

Government Relations NACS Day on the Hill March 8-9, 2022 Live Virtual

NACS In Store

Throughout 2022

May 15-20, 2022 Richmond, VA

July 17-22, 2022 The Wharton School University of Pennsylvania Philadelphia, PA Endowed by: Cash Depot

NACS Marketing Leadership Program* July 24-29, 2022 Kellogg School of Management Northwestern University Evanston, IL Endowed by: Keurig Dr Pepper, Nielsen

NACS Executive Leadership Program*

NACS Innovation Leadership Program*

November 13-18, 2022 Yale School of Management

Staff | Operations NACS Human Resources Forum March 21-23, 2022 ChampionsGate, FL

Industry Insights & Data NACS State of the Industry Summit April 12-14, 2022 Rosemont, IL

July 31-August 4, 2022 Dyson School Cornell University Ithaca, NY Endowed by: Reynolds

*PLAN NOW! Achieve the Master of Convenience designation by completing 3 of the 5 Executive Education programs.

CATEGORY CLOSE-UP / FLUID MILK

Subcategory Performance Percent of Sales

Avg. Sales/Store

2019

2020

2019

2020

Flavored Milk

21.8%

20.8%

$10,210

2% Milk

20.8%

20.3%

$9,729

Whole Milk

19.3%

20.1%

Other Milk/Milk Alternative Products

15.7%

Skim/Nonfat & 1/2% Milk

FLUID MILK PRODUCTS

Avg. GP$/Store

Gross Margin %

2019

2020

2019

2020

$10,373

$3,661

$3,784

35.86%

36.48%

$10,115

$1,590

$1,701

16.34%

16.82%

$9,009

$10,013

$1,624

$1,916

18.02%

19.14%

16.5%

$7,338

$8,198

$1,800

$2,063

24.53%

25.17%

13.7%

13.9%

$6,382

$6,924

$1,213

$1,383

19.00%

19.98%

1% Milk

5.2%

4.9%

$2,409

$2,419

$435

$443

18.07%

18.30%

Cream/Creamer Products

3.5%

$1,658

$1,749

$532

$567

32.11%

32.40%

100.0%

$46,734

$49,790

$10,856

$11,859

23.23%

23.82%

TOTAL

is growing through innovations, such as flavors, high protein, lactose-free and cold brew with milk products,” Ziemnisky noted.

Despite shoppers feeling comfortable returning to grocery for their staples, NACS CSX data shows monthly fluid milk sales higher than 2020 in all but one month so far in 2021. 68

| JANUARY 2022

MILKY FLAVORS Kids flock to fluid milk with flavors, which has proven to be a sales booster at convenience stores. Flavored milk captured 20.8% of category sales in 2020, according to 2021 NACS SOI data. “Flavored milk has done especially well at convenience stores the past two years. Of the top three subcategories of milk, only flavored milk monthly sales have been greater so far in 2021 than they were in 2020, according to CSX data,” Gough pointed out. “This represents an area where convenience stores can focus on to drive fluid milk growth.” The flavored milk category grew 3.1% through October 2021, which translates into more than 5.6 million gallons in 2021, according to Retail-IRI data. The Adkins Store sees the value in having flavored milk alternatives in its small fluid milk section. “We have chocolate and strawberry milk in addition to our whole milk gallons,” Owens said, “and we do sell quite a bit of the flavored milk.”

Byrne Dairy and Deli offers its own branded flavored milk, including chocolate milk in half gallon glass bottles and other seasonal varieties throughout the year. “For example, we have mint milk around St. Patrick’s Day and strawberry milk in June,” Elliott said. Other flavors have included Christmas cookie milk in December. “We used to have only chocolate as an alternative to white,” he said. “My grandfather debuted mint milk around St. Patrick’s Day in the 1970s, and that was such a hit, we’ve brought it back every year, plus added other seasonal flavors, too.” Plant-based milks have grown considerably more popular in recent years and are showing up in more convenience stores. For example, Oatly Original and Chocolate flavors in single-serve packages are stocked alongside regular milk beverages. “At select convenience locations, including at 3,500 7-Eleven locations nationwide, we also offer Oatly Original in 64-ounce cartons,” said Stephen Dean, vice president, foodservice/small format North America at Oatly. “It’s a brand-new option in most convenience retailers, so it’s still too early to measure sales across the channel. We’re excited that retailers are bringing the CONVENIENCE.ORG

SomeMeans/Getty Images

For more information on NACS category definitions, visit www.convenience.org/categorydefinitions. Source: NACS State of the Industry Report of 2020 Data

March 21-23, 2022 ChampionsGate, FL

Creating Connections The NACS HR Forum is a must-attend event for the people in our industry who recognize people are the number-one asset of successful businesses. Over three content-filled days, the NACS HR Forum connects you with peers from around the country. With engaging, interactive presentations and case studies, the forum offers fresh solutions to the issues you face daily—hiring challenges, delivering on DEI, and legislative issues, among other topics.

Reserve your seat today! /

convenience.org/hrforum

Attendees earn an average of 10 professional development credits from HRCI and SHRM.

CATEGORY CLOSE-UP / FLUID MILK

product on shelves and that their interest in alternative milks, like Oatly, is strong.” Dean pointed to growth for alternative milks like Oatly in U.S. grocery stores as exploding once consumers knew they could count on supermarkets to carry it. “Once consumers know they can find alternative milks in the convenience channel, the growth could be tremendous, especially in the next few years. The plant-based movement continues to grow, and we see tremendous upside in the convenience channel for us in the future,” he said. SELLING A STAPLE Most fluid milk sales at c-stores are because of necessity. That’s the main reason why Adkins Store carries gallon whole milk. “We’re always going to keep our gallon whole milk because it’s a kitchen staple—our customers want the convenience of picking up a gallon

on their way home from work or when they’re filling the gas tank,” Owen said. To keep the category fresh, Byrne Dairy and Deli runs biweekly sales on milk, rotating throughout the gallon or half-gallon options, such as 1% milk on sale one week, then 2% on sale the next. “People don’t switch from 2% to whole milk because of a sale,” Elliott said, “but we do find it can move a little more product with these regular sales.” With customers returning to their pre-pandemic shopping habits, fluid milk sales may not return to the highs the category experienced in 2020, but that doesn’t mean the category doesn’t have room to grow at convenience stores. “We feel having our branded, fresh milk sets us apart from the competition,” Elliott said. “Our customers have trusted our milk for years, and we continue to keep that trust by offering the best milk possible.”

ADVERTISER INDEX Contact Information

Page

Altria Group Distribution Company.............Inside Front Cover AGDCTradeRelations@Altria.com www.altria.com www.tobaccoissues.com Cash Depot......................................................................... 3 (800) 776-8834 sales@cdlatm.com www.cdlatm.com

Contact Information

Sarah Hamaker is a freelance writer and NACS Magazine contributor based in Fairfax, Virginia. Visit her online at sarahhamakerfiction.com.

Thank you to these advertisers who have demonstrated their support of the convenience and fuel retailing industry by investing in NACS Magazine.

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Liggett Vector Brands Inc...................................................13 (877) 415-4100 www.liggettvectorbrands.com LK Packaging...............................................................................51 (800) 809-8393 NACS 2022 Events........................................................................ 67 www.convenience.org/events

Contact Information

Page

Premier Manufacturing Inc..................................................... 5 & 27 www.gopremier.com RadiusAI Inc............................................................................... 25 www.radiusai.com Southern Champion (Buzzballz LLC)............................................. 39 www.buzzballz.com

Charleys Philly Steaks................................................................. 30 www.charleys.com

NACS Convenience Matters............................................................4 www.conveniencematters.com

Swedish Match North America (General Snus)......................17 (800) 367-3677 www.smna.com

Cheyenne International LLC......................................................... 59 www.cheyenneintl.com

NACS Foundation..........................................................................6 www.conveniencecares.org

Swedish Match North America (Natural Leaf)......................31 (800) 367-3677 www.smna.com

Cool New Products Guide..................52-53 www.convenience.org/coolnewproducts

NACS HR Forum........................................................................... 69 www.convenience.org/hrforum NACS State of the Industry Summit...............................................15 www.convenience.org/SOIsummit

f’real...................................................................Inside Back Cover www.freal.com

NACS TruAge................................................................................71 www.convenience.org/TruAge

The Hershey Company...........................................Back Cover www.hersheysolutions.com

Placon........................................................................................ 49 www.placon.com

Swedish Match North America (White Owl).........................19 (800) 367-3677 www.smna.com Swedish Match North America (Zyn)....................................9 (800) 367-3677 www.smna.com Trion Industries Inc....................................................................... 7 (800) 444-4665 www.triononline.com TY Inc......................................................................................... 43 www.ty.com

| JANUARY 2022

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Curated Convenience

One small c-store lived up to its name when a Massachusetts woman who accidentally tossed out a $1 million lottery ticket eventually collected her winnings. Lea Rose Fiega bought the $30 Diamond Millions scratch-off ticket at the Lucky Stop convenience store in Southwick, Massachusetts, but ended up discarding it, thinking it wasn’t a winner. Turns out, it was. The halfway-scratched-off ticket had been sitting in the discarded pile at the store for days when Abhi Shah, whose family owns the store, checked the ticket and discovered the winning number. Fiega is a regular customer, so the family pinpointed who had discarded it and contacted her. The store gets a $10,000 bonus from the state lottery commission for selling the winner, and Fiega gave the family an additional reward for their kindness and honesty. She’s saving the rest for retirement. 72

| JANUARY 2022

The Future Is Now Japanese convenience store FamilyMart has introduced a robot with artificial intelligence that automatically restocks drinks at one of its stores in Tokyo. The robot was developed by Tokyobased startup Telexistence Inc. The device, which consists of an arm, body, rail and other parts, is set between the shelves and uses an image sensor to detect when the products need to be refilled. The robot can carry a plastic bottle or an aluminum can weighing up to two kilograms for about 30 seconds. It’s capable of operating 24 hours a day. The chain plans to install similar robots in more stores in the future. CONVENIENCE.ORG

leminuit/Getty Images

Lucky Stop Indeed

Vancouver, British Columbia, is taking the traditional convenience store to the next level with The Drive Canteen, which opened in November. Snack lovers can purchase locally made treats, tricked-out hot dogs, loaded nachos and housemade beverages. Shoppers can also revel in the c-store’s custom sneaker collection, curated streetwear and urban art hub focused on local artists. A hot bar features made-to-order nachos and hot dogs of all kinds, such as regional classics Chicago-style and Quebec steamie, Japanese-inspired with wasabi mayo and bulldog tonkatsu sauce and an Italian variation with pepperoni jam, tomato sauce and mozzarella. The cool zone has milkshakes and a variety of small-batch adult-style nonalcoholic beverages.