NACS Magazine January 2024 by NACS Magazine

Advancing Convenience & Fuel Retailing

JANUARY 2024 NICOTINE NOW Understanding today's consumer PREDICTING PIZZA What's in store for the slice?

WHAT'S

NEXT? The Conexxus Roadmap offers a vision of evolving c-store technology.

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ONTENTS NACS / JANUARY 2024 FEATURES

26 Fueling the Future The Conexxus Roadmap is a vision of how technology will continue to reshape the c-store landscape.

34 Food Safety Is a

Shared Responsibility Prioritizing food safety is how we elevate the entire convenience industry.

42 Breaking Down

Today’s Nicotine Consumer

On the cover: anttoniart/Shutterstock. This page: Bezruk/Shutterstock

The modern user is younger and savvier—and critical to convenience.

50 Predicting Pizza What does the future look like for this beloved dish, and how can c-stores keep grabbing a slice of the action?

STAY CONNECTED WITH NACS @nacsonline facebook.com/nacsonline instragram.com/nacs_online

Subscribe to NACS Daily—an indispensable “quick read” of industry headlines and legislative and regulatory news, along with knowledge and resources from NACS, delivered to your inbox every weekday. Subscribe at www.convenience.org/NACSdaily.

linkedin.com/company/nacs NACS JANUARY 2024 1

ONTENTS NACS / JANUARY 2024

DEPARTMENTS 6 From the Editor 8 The Big Question 10 NACS News 18 Convenience Cares 20 Inside Washington

Retailers can prepare now for “Advertising and Labeling” inspections.

24 Ideas 2 Go

C Express keeps things simple and friendly.

58 Cool New Products 60 Gas Station Gourmet The Lazy Caveman offers awardwinning boudin.

62 Category Close-Up OTP

64 By the Numbers IT’S A FACT

$17,436

CATEGORY CLOSE-UP PAGE 62

PLEASE RECYCLE THIS MAGAZINE 2 JANUARY 2024 convenience.org

The presence of an article in our magazine should not be permitted to constitute an expression of the association’s view.

FabrikaCr/Getty Images

The average per store, per month sales of OTP in 2022.

/ JANUARY 2024 EDITORIAL

NACS BOARD OF DIRECTORS

Jeff Lenard V.P. Strategic Industry Initiatives (703)518-4272 jlenard@convenience.org

CHAIR: Victor Paterno, Philippine Seven Corp. dba 7-Eleven Convenience Store

Ben Nussbaum Editor-in-Chief (703) 518-4248 bnussbaum@convenience.org Lisa King Managing Editor lking@convenience.org Batya Levy Editor blevy@convenience.org Leah Ash Assistant Editor lash@convenience.org

DESIGN Imagination www.imaginepub.com

ADVERTISING

NACS SUPPLIER BOARD

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

CHAIR: David Charles, Cash Depot

Jennifer Nichols Leidich National Advertising Manager/Northeast (703) 518-4276 jleidich@convenience.org Ted Asprooth National Sales Manager/ Midwest, West (703) 518-4277 tasprooth@convenience.org

PUBLISHING Stephanie Sikorski Vice President, Marketing (703) 518-4231 ssikorski@convenience.org Nancy Pappas Marketing Director (703) 518-4290 npappas@convenience.org

Join us at conveniencecares.org

PAST CHAIRS: Don Rhoads, The Convenience Group LLC; Jared Scheeler, The Hub Convenience Stores Inc. MEMBERS: Chris Bambury, Bambury Inc.; Tom Brennan, Casey’s; Frederic Chaveyriat, MAPCO Express Inc.; Andrew Clyde, Murphy USA; George Fournier, EG America LLC Terry Gallagher, Gasamat Oil/Smoker Friendly;

CONTRIBUTING WRITERS Shannon Carroll, Sara Counihan, Sarah Hamaker, Al Hebert, Melissa Vonder Haar

COME TOGETHER. DO MORE.

OFFICERS: Lisa Dell’Alba, Square One Markets Inc.; Annie Gauthier, St. Romain Oil Company LLC; Chuck Maggelet, Maverik Inc.; Don Rhoads, The Convenience Group LLC; Brian Hannasch, Alimentation Couche-Tard Inc.; Varish Goyal, Loop Neighborhood Markets; Lonnie McQuirter, 36 Lyn Refuel Station; Charlie McIlvaine, Coen Markets Inc.

Logan Dion Digital Media and Ad Trafficker (703) 864-3600 ldion@convenience.org

CHAIR-ELECT: Vito Maurici, McLane Company Inc. VICE CHAIRS: Josh Halpern, JRS Hospitality/BCIP dba Big Chicken; Bryan Morrow, PepsiCo Inc.; Kevin LeMoyne, Coca-Cola Company PAST CHAIRS: Kevin Farley, Impact 21; Brent Cotten, The Hershey Company; Drew Mize, PDI MEMBERS: Tony Battaglia, Tropicana Brands Group; Patricia Coe, Advantage Solutions; Jerry Cutler, InComm Payments; Jack Dickinson, Dover Corporation; Matt Domingo, Reynolds; Mark Falconi,

Raymond M. Huff, HJB Convenience Corp. dba Russell’s Convenience; John Jackson, Jackson Food Stores Inc.; Ina (Missy) Matthews, Childers Oil Co.; Brian McCarthy, Blarney Castle Oil Co.; Tony Miller, Delek US; Natalie Morhous, RaceTrac Inc.; Jigar Patel, FASTIME; Robert Razowsky, Rmarts LLC; Kristin Seabrook, Pilot Travel Centers LLC; Babir Sultan, FavTrip; Richard Wood III, Wawa Inc. SUPPLIER BOARD REPRESENTATIVES: David Charles Sr., Cash Depot; Kevin Farley, Impact 21 STAFF LIAISON: Henry Armour, NACS GENERAL COUNSEL: Doug Kantor, NACS

Oberto Snacks Inc.; Ramona Giderof; Mike Gilroy, Mars Wrigley; Danielle Holloway, Altria Group Distribution Company; Jim Hughes, Krispy Krunchy Foods LLC; Kevin Kraft, Q Mixers; Jay Nelson, Excel Tire Gauge; Nick Paich, GSTV; Sarah Vilim, Keurig Dr Pepper RETAIL BOARD REPRESENTATIVES: Scott E. Hartman, Rutter’s; Chuck Maggelet, Maverik Inc.; Tom Brennan, Casey’s STAFF LIAISON: Bob Hughes, NACS SUPPLIER BOARD NOMINATING CHAIR: Kevin Martello, Keurig Dr Pepper

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 qualified recipients. The publisher reserves the right to limit the number of free subscriptions and to set related qualifications criteria. Subscription requests: nacsmagazine@convenience.org POSTMASTER: Send address changes to NACS Magazine, 1600 Duke Street, Alexandria, VA, 22314-2792 USA. Contents © 2023 by the National Association of Convenience Stores. Periodicals postage paid at Alexandria VA and additional mailing offices.

1600 Duke Street, Alexandria, VA 22314-2792

ameriCan grown • manufactured • owned

ThaT’s The Premier advanTage Premier Manufacturing, Inc. is owned by U.S. Tobacco Cooperative, a cooperative of proud American farmers who grow the finest flue-cured tobacco in the U.S. to make high-quality, value-priced cigarette brands for adult consumers.

www.gopremier.com/contact w.gopremier com/contact

UP FRONT FROM THE EDITOR

As foodservice grows in importance, food safety can’t be left behind.

T Doing a great job at food safety literally can save lives.

6 JANUARY 2024 convenience.org

his October, I spent some time at the NACS Food Safety Forum, a day-long gathering that was co-located with the 2023 NACS Show. I watched for the first hour or so, and then headed off to make the most of everything else happening at the Show. I dropped by the Food Safety Forum again towards the end of the event. I was beat. I expected the same from the foodservice professionals in attendance. That wasn’t the case. No one seemed tired or zoned out. It felt like everyone there would have been happy to keep going late into the evening. This is impressive. Have you ever sat in the same conference room all day? For me, no amount of coffee can fight off a few yawns. But the food safety and foodservice professionals in attendance were, if anything, even more engaged than they had been at 8:30 a.m.

Ben Nussbaum Editor-in-Chief

Juanmonino/Getty Images

‘Sell More Food Safely’

That’s a tribute to how great the people in this industry are, and how dedicated they are to bettering their organizations on behalf of the customer. It’s also a sign, I think, of how vast food safety and protecting public health is as a topic. After a full day, participants could have kept going for many hours more. There’s so much to cover. And it’s urgent. Doing a great job at food safety literally can save lives. We cover food safety from a couple of angles in this issue. Be sure to read The Big Question on page 8. Evan Powell, food protection manager-retail at Kwik Trip, gives his thoughts on what food safety means, including that the mission of foodservice leaders is to “sell more food safely.” We also have a feature story on food safety, “Food Safety Is a Shared Responsibility.” Another highlight: We explore tech trends in this issue with “Fueling the Future.” The evolution of c-store technology is a huge topic. We’ll be returning to it in future issues. Hope your 2024 is off to a great start. I’m looking forward to a new year full of great content in the pages of NACS Magazine and at convenience.org. Got any story ideas? Feedback? Drop me a note at bnussbaum@convenience.org.

UP FRONT THE BIG QUESTION

Why should retailers put food safety at the forefront of their foodservice efforts?

We have a big foodservice program here at Kwik Trip. Food Safety has to be a really integral part of that. When we started preparing and serving food over 20 years ago, before my time here, there were some big national foodborne-illness outbreaks that made our leadership realize we needed to begin building up our food safety programs as we got more into foodservice. For some people there’s a stigma with gas station food still today, and we and a lot of other convenience stores are fighting back on that pretty hard to become a food destination for our guests. Not only is it not acceptable to get people sick from the food that you’re serving, but it’s going to reflect poorly on your convenience store and the convenience store industry as a whole. When we talk about this, we often say food safety isn’t a competitive advantage in our industry. Everyone should be putting it at the forefront if they’re involved in the procurement, sale and preparation of food. 8 JANUARY 2024 convenience.org

 Evan Powell, retail food protection manager, Kwik Trip We always say that hand in hand with the sale of the food has to be the safety and quality of the food. Another phrase that we often use is “Sell more food safely.” We have Food Service District Leaders who are responsible for stores in a specific area of our footprint. Their focus is the foodservice teams in those stores and training these coworkers. They also focus on food safety. Essentially half of their job is food safety—training, audits, corrective action plans and emergency response.

One in six people in the United States gets a foodborne illness every year. Three thousand people, unfortunately, die from that every year. Our goal is to protect public health as well as the brand. If people understand the why behind it, food safety stops being just another task that they have to do and becomes more of your culture. We want food safety culture developed to where food safety practices just become the norm every day. Kwik Trip is vertically integrated. We have multiple food production facilities here on our campus. We make a lot of food ourselves, and we’ve seen that food is our future. It makes up a lot of our sales, a lot of our gross profit, and it’s growing. Convenience stores can take more and more market share. As we continue to try and grow that and focus more on that, the food safety aspect just has to be there. For a smaller operator, the best advice is to try and develop relationships with regulators, even if you’re just talking to your local inspector and understanding what their expectations are and what they see coming down the pipeline as far as future food code changes. Having those relationships makes life a lot easier. Communicating with regulators and having a partnership with them is important. Also, try to identify someone in the industry who you can bounce ideas off of. We can learn a lot from talking to each other.

WARNING: This product contains nicotine. Nicotine is an addictive chemical.

THERE’S MORE TO ZYN THAN MEETS THE EYE When you stock ZYN, you do more than just sell ZYN. A portion of every purchase goes back to helping communities in need — and it all starts at your store.

UP FRONT NACS NEWS

Register for the 2024 NACS HR Forum The NACS Human Resources Forum educates and connects HR professionals working in the convenience and fuel retailing industry. HR leaders can meet other HR leaders within the industry to develop new ideas and exchange insights into top-of-mind issues. Attendees will benefit from engaging presentations on topics vital to their job, valuable opportunities to build relationships with peers and case studies

that can generate new ideas. This event will also enable attendees to forge lasting connections and share innovative solutions to stay on top of current challenges. By attending the NACS HR Forum, HR professionals will build the toolkit needed to deliver next-level HR value. Register today to save a seat among HR leaders within the convenience and fuel retailing industry.

March 18-20, 2024 Jacksonville, FL

Preparing

for What’s Next

10 JANUARY 2024 convenience.org

What attendees can expect: • Exceptional content: Custom-made, high-level content that fosters a fruitful dialogue among participants. • Working group discussions: Indepth discussions on how HR professionals can innovate within recruiting, retention and development. • Legal and data-driven insights: Sessions delivered by legal counsel focusing on new laws and regulations that impact the convenience industry; exclusive NACS data on compensation and hiring is also presented. • Lasting relationships: Attendees can build a strong peer network that also can function as a personal board of advisors to help with work issues and opportunities throughout the year and in years to come. • HR solutions: A firsthand look at HR solutions and technologies via a curated list of HR partners who will help prepare attendees for the future of work. • CEU credits: Participants will receive CEU credits from HRCI and SHRM. To request more information, please contact Brandi Mauro, NACS education program manager, at bmauro@convenience.org.

LaylaBird/Getty Images

NACS Media: Your Connection to Convenience NACS Media brings you meaningful and actionable content on the platform most accessible to you. Check out all the ways you can keep up with the industry’s story, giving you knowledge to take on the biggest issues head-on. The award-winning monthly NACS Magazine features thought-provoking and insightful articles that focus on category trends, business best practices, metrics and advocacy for the convenience and fuel retailing industry. Since 1994, NACS Ideas 2 Go has featured hundreds of video and print interviews, store tours and stories that

showcase convenience retail innovation. Learn more at www.convenience.org/ Ideas2Go. The NACS Daily e-newsletter offers an indispensable quick read of daily industry headlines and category trends, legislative and regulatory news from Washington, and knowledge and resources from NACS delivered to your inbox every weekday. Subscribe today at www.convenience.org/NACSdaily. Convenience Matters is our industry’s longest running and most popular podcast. The weekly podcast provides insights from top leaders within the

industry, as well as breaking news about important industry initiatives. Listen at www.conveniencematters.com. Fuels Market News, published by NACS, is the downstream petroleum industry’s trusted source for fuels-related news and information, covering the fuels of today and tomorrow. FMN explores topics from refinery supply to terminal and bulk plant storage to transportation via pipeline, barge, rail and truck, to wholesale distribution and retail marketing. Subscribe to the quarterly Fuels Market News Magazine and the weekly e-newsletter at www.fuelsmarketnews. com/subscribe-fmn. The NACS website, convenience.org, is your one-stop shop for all things related to the convenience industry. Whether you need to know the latest regulatory information on tobacco, information about EV charging, dates for upcoming NACS and industry events or fact sheets about key categories, www.convenience. org delivers. NACS JANUARY 2024 11

UP FRONT NACS NEWS

Max Your NACS in 2024! Renew your NACS membership— it’s how convenience connects, innovates and wins together. NACS membership is the best way for convenience retailers and industry suppliers to thrive today and solve for tomorrow’s challenges. Don’t be left behind! Whether you want to launch your membership or learn about NACS’ offers for your entire company, NACS is here for you. When your company is a NACS member, your team will have access to exclusive benefits that they can’t find anywhere else. Learn more about your NACS membership benefits at www.convenience. org/membership/max-your-NACS.

Calendar of Events FEBRUARY NACS Leadership Forum February 13-15 | The Ritz-Carlton Amelia Island, Florida MARCH NACS Convenience Summit Asia March 05-07 | Signiel Seoul Hotel Seoul, Korea NACS Day on the Hill March 11-13 Washington, D.C. NACS Human Resources Forum March 18-20 | Hyatt Regency Jackson Riverfront | Jacksonville, Florida APRIL NACS State of the Industry Summit April 03-05 | Hyatt Regency O’Hare Chicago Rosemont, Illinois

Conexxus Annual Conference April 28-May 02 | Live! By Loews Arlington Texas Arlington, Texas JUNE NACS Convenience Summit Europe June 04-06 | Intercontinental Barcelona Barcelona, Spain JULY NACS Financial Leadership Program at Wharton July 14-19 | The Wharton School University of Pennsylvania Philadelphia, Pennsylvania

OCTOBER NACS Show October 07-10 | Las Vegas Convention Center Las Vegas, Nevada NOVEMBER NACS Innovation Leadership Program at MIT November 03-08 | MIT Sloan School of Management Cambridge, Massachusetts

NACS Executive Leadership Program at Cornell July 28-August 01 | Dyson School, Cornell University Ithaca, New York

For a full listing of events and information, visit www.convenience.org/events. 12 JANUARY 2024 convenience.org

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2024

NACS JANUARY 2024 13

UP FRONT NACS NEWS

Member News RETAILERS

Giant Eagle appointed Bill Artman as chief executive officer. Artman has nearly 40 years of experience Bill Artman at the company, including past executive leadership roles such as president of supermarkets, executive vice president and senior vice president retail operations. Jim Tsipakis now serves as Giant Eagle executive vice president, president of supermarkets and pharmacy. Jim Tsipakis Tsipakis most recently served as executive vice president and president of Giant Eagle pharmacy. Tsipakis now oversees both the supermarket and pharmacy businesses for Giant Eagle. Giant Eagle appointed Dave Burnworth as executive vice president, chief financial officer. In his new position, Dave Burnworth Burnworth will play a pivotal part in driving financial performance and supporting strategic decisionmaking across the organization.

Graham Watkins was promoted to executive vice president, chief information and supply chain officer at Giant Graham Watkins Eagle. Watkins recently served as executive vice president, supply chain transformation and operations. Watkins will lead numerous IT and technology transformation initiatives, supply chain, business development, innovation and ecommerce functions. Justin Weinstein new serves as executive vice president, chief strategy and marketing officer at Giant Eagle. Justin Weinstein Weinstein most recently served as senior vice president and chief strategy officer. In his latest role, Weinstein oversees the organization’s strategic planning, analytics, digital, payment and partnerships functions, enterprise marketing, LEAP Retail Media Network and eCommerce strategy teams. SUPPLIERS

Tim Goldsmid

14 JANUARY 2024 convenience.org

California-based Olli Salumeria appointed Tim Goldsmid as the company’s first chief executive officer.

A veteran of the CPG food industry for over 20 years, Goldsmid assumes day-to-day leadership. Goldsmid will bring a focus to elevating the company’s commercial business, including sales, marketing and innovation. Okanagan Specialty Fruits (OSF) announced John Freitas joined the company as vice presiJohn Freitas dent of sales and business development. Freitas brings a wealth of experience and expertise to OSF and will be pivotal in driving OSF’s sales and business development strategies and fostering new partnerships. KUDOS

Casey’s General Stores Inc. was recognized by the Women’s Forum of New York at its “Breakfast of Corporate Champions” event for achieving at least 40% female representation on its board of directors. Fortune Magazine included The Spinx Company on its list of 100 Best Large Workplaces for Women, with the retailer coming in at No. 7. Rankings are determined by Fortune research partner Great Place to Work. The award is based on what current employees say about their personal experience at work.

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UP FRONT NACS NEWS

New Members NACS welcomes the following companies that joined the Association in October 2023. NACS membership is companywide, so we encourage employees of member companies to create a username by visiting www.convenience.org/createlogin. All members receive access to the NACS Online Membership directory and the latest industry news, information and resources. For more information about NACS membership, visit convenience.org/membership. HUNTER CLUB MEMBERS Beam Suntory Chicago, IL www.beamsuntory.com Flexeserve Southlake, TX www.flexeserve.com/en-us/ We are the Chompions LLC, dba Chomps Naples, FL www.chomps.com RETAILERS Center Square Oxford, MI More 4 Less Lafayette, LA Raje Inc. Jefferson, GA Tip Top Inc. Watertown, SD Priya Impex Inc. Alpharetta, GA

Case FMS North Attleboro, MA www.casefms.com Convoy of Hope Springfield, MO www.convoyofhope.org CordialsaUSA Spring, TX www.cordialsausa.com Derby City Jerky Louisville, KY www.derbycityjerky.com Drive Int. USA Marblehill, GA www.drive-int.ch Eagle Distribution Tulsa, OK www.eagle-distribution.com Filtrex ServiceGroup Inc. Las Vegas, NV www.filtrexsg.com Fintech Tampa, FL www.fintech.com

Rusue Ltd. Montego Bay, Jamaica

J.T.M. Food Group Harrison, OH www.jtmfoodgroup.com

SUPPLIERS

JB&B Capital LLC Franklin, TN

Airgas USA, LLC dba Airgas National Carbonation Charlotte, NC www.airgasnationalcarbonation. com Arpalus Tenafly, NJ www.arpalus.com B&D Group – PoolCandy Doral, FL www.poolcandy.net Beanhut Seattle, WA www.beanhut.com BioRite Nutritionals LLC Lexington, OK 16 JANUARY 2024 convenience.org

L&K Distribution Anaheim, CA LA Vapor Wholesale City of Industry, CA www.lavaporwholesale.com LK Distribution La Mirada, CA www.lkdistro.com Lucky Beverage Co. Austin, TX www.luckybevco.com Mark VII Equipment Inc. Arvada, CO www.markvii.net

MNG Brands Saint Louis, MO Muse Organics LLC Long Beach, CA Palram 4U Nof HaGalil, Israel www.palram4u.com Paper Products Corp. Middlesex, NJ www.paperproductscorp.com PIMSA Monterrey, Nuevo León, Mexico Polymeric Film & Bags Inc. Naples, FL www.toasteewrap.com Poppi Prebiotic Soda Austin, TX www.drinkpoppi.com Rabobank New York, NY www.rabobankwholesale bankingna.com Sal’s Pizza Lawrence, MA www.sals.com The Good Patch Jasper, GA www.thegoodpatch.com The Puff Brands Corona, CA www.thepuffbrands.com Thermoplan USA Cleveland, OH Uncanny Brands LLC Blue Bell, PA www.uncannybrands.com Wilcox Farms Oracle, AZ

CONVENIENCE CARES

Wawa Honors Service Members and Their Families With $1 Million Donation

n honor of Veterans Day, the Wawa Foundation presented a $1 million check to the USO along with 10,000 care packages for deployed military service members. In addition, Wawa offered free any-size hot coffee to veterans, active military service members and their families, all day, with no military ID required, at all 1,000+ Wawa stores on Veterans Day. “It’s our annual tradition to salute service members on Veterans Day with a hot cup of coffee to thank them for everything they do to serve our country and our communities,” said Chris Gheysens, Wawa CEO. “Also for the past 13 years, we’ve been providing service members abroad with a taste of home 18 JANUARY 2024 convenience.org

through our coffee care packages, and we are thrilled to continue this tradition once again in 2023 and for years to come.” Throughout November, Wawa associates, the USO, and Pennsylvania National Guard members assembled more than 10,000 care packages at assembling events. These care packages were sent to military service members abroad. Operation Taste of Home is an annual tradition organized by Wawa associates and supported by the USO of Pennsylvania and Southern New Jersey and USO Central Florida. The Wawa Foundation presented a check to the USO for $1,020,174.62 raised through in-store coin and scan

campaigns held at every Wawa store during the summer of 2023. The funds go to programs supporting military service members and their families and are distributed to the local USO chapters throughout Wawa’s operating area. Since 2012, the Wawa Foundation has raised over $10.8 million to support USO programs and services that help to keep service members connected to family, home and country.

In The Community Every year, the convenience retail industry dedicates billions of dollars to advancing the futures of individuals and families in our communities. The NACS Foundation unifies and builds on NACS members’ charitable efforts to amplify their work in communities across America and to share these powerful stories. Learn more at www.conveniencecares.org.

EG AMERICA RAISES $520,000 FOR UNITED WAY 1 In recognition of Hunger Action Month, guests donated $1, $5 or an amount of their choosing during checkout. All in-store guest donations support United Way and its mission to provide meals to families in need across the country.

RUTTER’S CHILDREN’S CHARITIES DONATES $100,000 TO WOUNDED WARRIORS 2 Rutter’s Children’s Charities showed appreciation for America’s veterans and active-duty military with a $100,000 donation to Pennsylvania Wounded Warriors, an organization dedicated to providing emergency financial assistance to veterans and their families to help pay for housing,

utilities, transportation, medical and other expenses that are critical to those who have served when they return home.

ENMARKET DONATES TO CANCER RESEARCH 3 Enmarket raised $142,350 for the Leukemia & Lymphoma Society (LLS) Light the Night campaign. The initiative launched in September across Georgia, South Carolina and North Carolina and encouraged customers to donate at checkout. Over the past 11 years, Enmarket has donated more than $1.1 million to the program.

CEFCO RAISES $450,000 FOR FIKES FOUNDATION 4 CEFCO Convenience Stores and its parent company, the Fikes Companies, hosted its annual Hackers R Us charity golf tournament, raising a record-breaking $450,000. The funds will go directly to the Fikes Foundation to support various charitable organizations that strengthen local communities and support youth. Beneficiaries include institutions like Children’s Miracle Network Hospitals and the McLane Children’s Hospital in Temple, Texas.

THE KENT COMPANIES RAISES $85,000 5 The Kent Companies recently presented Buckner of Midland, a program supporting single

parents, with a check for $85,000. This donation represents the proceeds from The Kent Companies charity golf tournament, held this past June at Odessa Country Club.

PARKER’S KITCHEN RAISES $328,000 FOR EDUCATION 6 Parker’s Kitchen held its 11th annual Fueling the Community charity golf tournament in Savannah, Georgia. More than 270 golfers raised a record $328,000 to support public and private schools in the communities the company serves. In 2022, Parker’s Kitchen expanded the tournament across two courses due to the popularity of the charity event.

MFA OIL FOUNDATION AWARDED OVER $300,000 IN 2023 7 Throughout the 2023 fiscal year, the MFA Oil Foundation, awarded over $300,000 in nonprofit support to 118 organizations in communities where the MFA Oil Company operates. Grants awarded in 2023 include more than $152,000 for education (schools), over $59,000 for civic endeavors (fire and police departments, historical societies, etc.), more than $47,000 for human services (food banks, senior centers, etc.) and nearly $41,000 for youth (playgrounds, youth sports, etc.). 3

2 4

NACS JANUARY 2024 19

INSIDE WASHINGTON

FDA to Intensify New Series of Tobacco Enforcement Inspections W

hile retailers have long been accustomed to inspections checking on compliance with tobacco and nicotine product age restrictions, the Food and Drug Administration’s (FDA) Center for Tobacco Products (CTP) has announced a new emphasis on a second type of inspection … “Advertising and Labeling” inspections.” These are conducted in a very different manner than what retailers are used to and have caused some alarm and many questions from NACS members. “Are these legitimate?” “What are they looking for?” “Do I need to comply?” This article hopes to answer these and other questions. WHO IS DOING THESE INSPECTIONS? The FDA contracts with states, territories and Tribes to inspect retail establishments within their jurisdiction (when feasible). FDA-commissioned inspectors complete FDA training and conduct the inspections on behalf of the FDA. The inspector’s role is to gather information. Their observations are sent back to the FDA for review.

20 JANUARY 2024 convenience.org

WHAT HAPPENS DURING AN INSPECTION? The inspections are unannounced. Upon entering the store, the inspector will introduce themselves by name, title and organization, and provide credentials. They will then ask to speak with the most responsible employee within the store and will present them with FDA Form 482—“Notice of Inspection.” The employee will then be asked to give: • Their name • The establishment’s name, physical address and phone number • Ownership information The inspector will then sign the Form FDA 482, present it to the employee and commence with the inspection. WHAT ARE THEY LOOKING FOR? According to FDA, “The inspector will observe the method and manner that

ablokhin/Getty Images

Retailers can prepare now for “Advertising and Labeling” inspections.

While most of these restrictions are common knowledge to retailers, the area of particular concern is products lacking premarket authorization.

the retail establishment is selling regulated tobacco products.” This includes: • Not giving away free samples • Not breaking open cigarette or smokeless tobacco packages to sell products in smaller amounts • Not selling cigarettes, cigarette tobacco or roll-your-own tobacco that contains a characterizing flavor (except menthol or tobacco) • Not selling products that lack the required premarket authorization • Ensuring that required warning statements are on all tobacco products While most of these restrictions are common knowledge to retailers, the area of particular concern is products lacking premarket authorization. This is mainly focused on vaping products. For years, NACS has urged the FDA and CTP to produce a definitive list of what may and may not be legally sold.

It appears that CTP is currently using “enforcement discretion” regarding the products currently under premarket review (and will not provide a list of those products), but they have not confirmed whether that will continue and there is currently great confusion within the marketplace as to which products are legal to sell. They have even gone so far as to refuse to answer questions from NACS about which products are subject to court challenges. WHAT HAPPENS AFTER THE INSPECTION? The inspector will not share any findings with the store. Rather, they will forward the inspection results to the FDA. Once the FDA has reviewed the inspection evidence, if violations are found, generally the FDA sends Advisory Actions (i.e. warning letters) the first NACS JANUARY 2024 21

INSIDE WASHINGTON

The inspector will observe the method and manner that the retail establishment is selling regulated tobacco products.” time an inspection reveals a violation of federal tobacco laws and regulations. Failure to promptly and adequately correct all violations and ensure compliance with all applicable laws and regulations may lead to: • Administrative actions (e.g., civil money penalties or no-tobacco-sale orders) • Judicial actions (e.g. seizure, injunction or criminal prosecution) • In its announcement of the heightened Advertising and Labeling inspections, the FDA concluded with: “We hope retailers will partner with the FDA to help protect their communities by knowing the law and making use of tools to prevent underage sales.” To that end, NACS encourages retailers to utilize resources at your disposal such as We Card (www.wecard.org) for training and up-to-date information about local, state and federal laws and TruAge (MyTruAge.org) for state-of-the-art age verification. 22 JANUARY 2024 convenience.org

ONE VOICE This month, NACS talks to

Steve Brady,

global head of sales, Techniche What does NACS political engagement mean to you and what benefits have you experienced from being politically engaged? NACS political engagement to me is proactively participating in legislation that directly affects our industry. Without NACS engagement with our industry leaders, legislation with potentially negative effects on our businesses would otherwise pass into law unopposed. My involvement with the NACS government relations team has helped me gain meaningful insight into the many challenges facing the convenience and fuel retailing industry. It has also been very gratifying to see the process work and positively affect outcomes favorable to our industry. What federal legislative or regulatory issues keep you up at night (with respect to the convenience store industry)? Electric vehicles. I believe policymakers are prematurely racing to a single-technology solution (i.e., EVs) without considering the complexity in creating a competitive market for EV charging. EV adoption cannot evolve properly before ensuring adequate generation and transmission capacity and removing barriers to private sector investment and competition in charging infrastructure, such as modernizing the antiquated electricity market, ratepayers subsidizing utility EV operations, demand charges and the loss of highway infrastructure taxes. What c-store product could you not live without? Diesel fuel and a fountain Coke.

NACSPAC DONORS 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 in November 2023 are: Jason Bassett Sheetz Inc.

David Charles, Sr. Cash Depot

Edward Holmes Holmes Oil Company Inc.

George Bennett Imperial Trading Company S. Abraham & Sons Inc.

Henry Dodge Dodge’s Stores

Sam James Casey’s General Stores Inc.

Chad Frazell Casey’s General Stores Inc.

Brian Johnson Casey’s General Stores Inc.

Erin Graziosi Robinson Oil Corporation

Dave Johnson Casey’s General Stores Inc.

D. Brian Griffith Golden Pantry Food Stores Inc.

Jeff Kahler Ready Training Online – RTO

Leva Grimm J.M. Davis Industries Inc.

Katrina Lindsey Casey’s General Stores Inc.

Sherri Hart Casey’s General Stores Inc.

Donald R. Rhoads The Convenience Group LLC

Shawn Bhagat American Energy Power Products LLC Ben Boyd Tyson Foods Inc. Kim Broome NACS Robert Buhler Open Pantry Food Marts of Wisconsin Inc. Kathleen Byrd Home Market Foods

Mike Rud North Dakota Petroleum Marketers Association Steve Spinks The Spinx Company Inc. Carrie Stojack Casey’s General Stores Inc. Nan Thomae Casey’s General Stores Inc. Robert Woodward Tactiq Brian Wright Executive Leadership Solutions Inc.

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IDEAS 2 GO

According to Richie Kaneria, the owner of C Express, offering grab-and-go hot food aligns with his customers’ preference for speedy service.

A Focus on the Basics

Name of company: C Express

C Express keeps things simple and friendly.

Year founded: 2013

BY SARAH HAMAKER

# of stores:

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Like many c-store owners, Richie Kaneria, owner of C Express, fell into the industry because he wanted to be his own boss. “I’m by profession an engineer, but I lost interest in that after completing my master’s program,” he said. “I’d worked for convenience stores and liked the simplicity of the business model.” Eventually, he bought into one store, then bought another one. The two locations are in Norman, Oklahoma, and Oklahoma City. “Convenience stores are simpler operations than restaurants, and with more than one revenue stream, a safer bet too,” Kaneria said. “The hours might be longer, but the store generates revenue 18 hours a day.”

A SIMPLE STORE Kaneria decided early on with C Express to not compete with local chains but rather figure out what his customers wanted and deliver it as quickly and efficiently as possible. At the Oklahoma City location, “We offer only two types of gas at the pump because that’s what our customers want,” he said, adding he would consider putting in electric vehicle chargers if the demand was there. The Norman location does not offer fuel. Foodservice is one example of how he caters to his clientele while not trying to one-up the competition. “I can’t compare with chain stores in made-toorder food, so I decided to use an a la carte model with hot food available in a hot case rather than filling individual orders,” Kaneria said. “My customers don’t want to wait for their food to be made—they’d rather grab it and go.” The kitchen makes fresh chicken tenders, burritos, sandwiches, toasters and other fried foods on-site from scratch. “Our food program is a little bit different from other c-stores, but our customers love it,” he said. Fresh, hot food is available from 5 a.m. to 8 p.m. daily. The rest of the store has typical c-store items, including wine, beer, candy, snacks and packaged beverages. While C Express has a Facebook page, social media engagement isn’t something Kaneria is prioritizing right now. “We’re a very localized business, and most of our customers live within a fivemile radius of the store, so social media isn’t something that generates much interaction for us. We feel our efforts would be better spent talking with our customers in the store than online.” A FRIENDLY PLACE For Kaneria, his employees top the list of what he’s most proud. “A lot of my employees know many customers

by name,” he said. “People are more comfortable coming into the store with friendly workers.” Like many retail establishments, finding and keeping employees has been challenging in the last few years, but Kaneria has developed an onboarding process to ensure his workers have the proper training. “We make sure all of our employees keep up-to-date on their required trainings, such as for selling alcohol, and also know how to take care of the store,” he said. “If we don’t have stocked shelves and clean bathrooms, customers won’t return.” Kaneria keeps an eye out for community needs. For example, when local schools were closed during Covid, he gave free meals of a half order of potato wedges and a fountain drink with a choice of a corndog or a bean and beef burrito to children who might otherwise have gone hungry. “Many of these kids get their meals at school, so with the schools closed, we decided to step into the breach and give the meals every day to kids under 18,” he said. At the end of the day, Kaneria says his attention to the basics has built his business. “It’s simple, really, because a customer has to be able to find parking, walk into a well-lit store with clean bathrooms and find what he wants fast,” he said. “We focus on making sure we give that to our customers.” He also wants his customers to leave C Express happy and satisfied. “I don’t want them to think they should have gone to another convenience store,” he said. “I want them to be glad they stopped because of our quick service and friendly staff.”

BRIGHT IDEAS Richie Kaneria believes much of the success of C Express comes down to two things—his customers and his employees. “I always tell people the customer is number one—but our employees are also number one,” he said. “Obviously, you need a clean store and clean bathrooms, easy parking and good merchandise, too.” He works hard to train his employees to care about the business and to keep it clean and orderly for customers. “It’s a hand-in-hand situation—good employees bring in good customers, who keep coming back because of the staff,” he said.

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

Ideas 2 Go showcases how retailers today are operating the convenience store of tomorrow. To see videos of the c-stores we profiled in 2023 and earlier, go to www.convenience.org/Ideas2Go. NACS JANUARY 2024 25

FUELING THE FUTURE The Conexxus Roadmap is a vision of how technology will continue to reshape the c-store landscape.

BY SHANNON CARROLL

he adage says if you’re not first, you’re last. But when it comes to innovation, that’s not always the case. According to Gray Taylor, the executive director of Conexxus, a nonprofit, member-driven organization focused on the development of technology in the c-store and fuel industries, you don’t even have to be third or fifth or 10th. But you do have to be willing to be innovative. “The old sailor thing is: I can’t change the wind, but I can adjust my sails,” Taylor said. Conexxus introduced its Roadmap in 2017. Taylor was researching some core technologies that were coming online, and he wondered about their applications for retail.

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NACS JANUARY 2024 27

anttoniart/Shutterstock

“The whole idea was to not sit there and could affect retail and petroleum,” Toth said. say, ‘Look at this tech, it’s really, really cool.’ “It looks at what’s here now and what’s comThe idea was: How do you put it in the coning. It’s split up into various timeframes so text of applicability to what we do?” that people can understand, ‘This is around The Roadmap has grown since its incepthe corner, and this is five to 10 years out.’” tion. The first version fit on just a page. At the Taylor said he sees the Roadmap as a “great 2023 NACS Show, Conexxus’ presentation— discussion.” the most recent version of the Roadmap—had “I don’t think anybody takes it as the word six highly detailed slides full of arrows tracof God—I hope that’s not what happens,” ing connections, and the presentation barely he said. “As I like to say, we get to stay up fit inside its allotted two-hour-and-fifteenall night thinking about this stuff so [other minute timeslot. people] don’t have to. … The other thing [the The Roadmap highlights existing and comRoadmap] is really trying to do is to get peoing technologies to help organizations make ple to start thinking.” informed decisions and stay on the front lines Doug New, who is the chair of the Conexxus of innovation. It’s available for download on Innovation Research Committee (IRC) and the Conexxus website and is updated yearly. the chief information officer at Nouria Energy According to Linda Toth, Conexxus’ manCorporation, said the drivers of the Roadmap aging director, the Roadmap is a collaboraare conversations about what will benefit tive effort that focuses on the “wisdom of member organizations and store operations. the crowd” using subject matter experts The current version of the within the Conexxus community to Roadmap focuses on five ensure the Roadmap’s accuracy different areas—supand relevance. porting technologies; The Roadmap “It’s an outlook of all the consumer journey; is updated at the technology that’s coming store operations/ Conexxus Annual Strategy into play in the world that marketing; moConference meeting. This bility and energy; year, the event is August 19-22 and food service— in Idaho. Limited attendance with a timeline is available, with priority along the bottom given to Conexxus for when those gold members. technologies will come into play (now, one to three years, three to Supporting Technologies 2023 five years, five-plus years). In creating the Roadmap, New said that the IRC “really tries to put ourselves in the merchants’ space and understand what is important to them or what is going to be important to them.” Edge Software He added, “[The Roadmap is] a way to try Server RPA Defined Store to give merchants—specifically members of NACS and Connexus—an understanding Now 1 to 3 years 3 to 5 years 5 years + of what’s out there and what they might be looking to pay attention to right now.” The Roadmap itself is straightforward, “but it’s the conversations around it and what these The Conexxus Roadmap aims to give an overview of what technologies things mean and how they interrelate that may be coming online for c-stores over the next five-plus years. really vary.” The Roadmap is available at conexxus.org/resources. 5G

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BEING READY FOR TECH Taylor said, “We keep telling people, ‘Think of what your business is going to be like, what the customer, especially, is going to be like 10 years from now. And what tools do you need to have in place to serve that customer—and what is the road map that’s going to get you there, because it’s not going to happen overnight.’” Successful c-stores will look at what their customers want that their store doesn’t offer, Taylor said. So companies need to think: How do I experiment and put that together? The Roadmap can help by pointing out areas for potential development and the changing technology in those areas. Taylor cautioned, “If you’re 10 years ahead of time, that can be just as bad as being wrong.” Taylor suggests being a fast follower, while noting that being a fast follower is not possible “if your feet are stuck in cement. And that’s why we really focus on a 10-year architectural Roadmap,” because if you’re thinking ahead about technologies, you can react nimbly when that technology becomes relevant for your organization. 30 JANUARY 2024 convenience.org

ON THE HORIZON Taylor is most proud of the Roadmap’s predictions on AI—even if the speed of adoption was even more rapid than he and the rest of the IRC predicted. People are still learning how to best adopt it and which version of it to use (generative versus predictive versus conversational). At the 2023 NACS Show, Taylor joked, “Everyone wakes up if you say ‘AI.’” Conexxus sees the technology being used to increase operational efficiency (inventory management, supply chain optimization, predictive maintenance); to provide personalized and seamless customer experiences (through virtual assistants and customization); to enhance data analytics and predictive analytics; to expand visual recognition (shelf monitoring, cashierless checkout, security surveillance) and to prevent fraud. Beyond AI, the panel at the 2023 NACS Show—made up of Taylor, New, Don Emery and Ed Collupy—pointed out a number of other key technology developments that include: • Sunrise 2027 • Virtual checkout and unattended stores • Continued implementation of the Internet of Things (IoT) at the store level • Autonomous vehicles, autonomous delivery and fleet sharing • The omnichannel experience • Personalized pricing • Cloud-based POS systems • A mobile super app A lot of things that were on the Roadmap in 2017 or 2019 or 2021 are still relevant in 2023. The big ideas don’t change too much over the years—5G … and then 6G; autonomous vehicles; implementation of the IoT; batteries and solar power; cloud-based POS; dynamic pricing; in-store robot technology; and AI—but new technologies develop that allow retailers to implement them in better, more personalized ways. The four on the NACS Show panel said that there should be a push, too, to make employees part of the customer experience (maybe through a marketing message) and that everyone should be building standards for connectivity. Along the same lines, the Roadmap highlighted the omnichannel expe-

anttoniart/Shutterstock

If you’re 10 years ahead of time, that can be just as bad as being wrong.”

We’re back to a mode where people are saying, ‘Oh, we better test things.’” rience, personalized pricing and cloud-based POS systems as areas for further development down the road. New said he sees the omnichannel experience and frictionless payments as big areas for innovation and thinks c-stores can get better at partnering with CPGs because, unlike big box stores, c-stores “have more interaction with customers on a daily basis.” Meanwhile, Taylor said he sees massive room for improvement in the supply chain, an area that’s “vastly ignored because it’s not sexy.” “How do we optimize our supply chains, bullwhip our supply chains?” Taylor said. “We’re ordering too much at one point, and then people are frustrated that they don’t have enough. How do we help our vendors know what our demand flow is going to be?” Another topic touched upon in the Roadmap is the mobile super app, which can theoretically bring employees and consumers together by combining multiple services on one platform. For example, the app could be a central hub for digital coupons, payments, loyalty programs, etc. Taylor thinks there’s still a way to go on the super app. Taylor thinks that, instead, there could be a virtual super app that uses the best of breed for each component and links seamlessly to all the other ones. Regardless, there’s always room for innovation—no matter how crazy or out there it might seem. “We can put the most outrageous thing up there [on the Roadmap] and somebody will come in and tell me, ‘Yeah, we’ve played with that,’” Taylor said. “There are pockets of brilliance out there.” According to New, if you’re just looking at the technology for where you should go next, “That’s the wrong direction.” Instead, you should look at the business problems you’re facing and ask yourself: “What are the options for resolving, solving or addressing those business issues? And then there’s going to be technology around that.” 32 JANUARY 2024 convenience.org

A SLOWER PACE OF ADOPTION? Collupy, a consultant who spent about 20 years in the retail industry before founding his firm, said the Covid pandemic was an interesting time for innovation because it changed the speed at which technology was implemented. “You had people saying, ‘Let’s take a risk, even if it may not be 100% tested and ready and pristine with all the bells and whistles we ultimately want,’” he said. But now, a few years out from the heart of the pandemic, c-stores have slowed adoption. “We’re back to a mode where people are saying, ‘Oh, we better test things. We better spend more time making sure it’s right,’” Collupy said. “We’ve got to get back into that level of risk-taking a little bit and take an approach that says: We survived, we got through it, we can continue to do that.” Emery, the vice chair of the IRC and a senior manager for payment products at CHS, said the pace of innovation during the pandemic showed that organizations still “have to be able to adapt to the things that are coming or that may be coming.” Emery said he hopes companies see the value of moving quickly and pushing the envelope. “You have to at least be willing to adapt,” he said, “because if you’re not willing to adapt, then those are things you’re going to live without eventually.” Taylor added: “It’s like a long-distance runner. … [With Covid,] we had to run a really fast sprint in the middle of the race, and then, all of a sudden, we’re like, oh, OK, well, we’re now No. 1. I’m just going to hold back. And the urgency is gone. … I wouldn’t call it caution, I would call it complacency.” “We’re not just selling cokes and smokes anymore,” Emery said. “We’re not just selling petroleum anymore. We’re not just providing pizza and hot dogs on rollers. … We need to start progressing more toward thinking: Well, what could be next? Let’s think outside the box.” Shannon Carroll is a contract writer/editor for NACS.

Food

34 JANUARY 2024 convenience.org

Safety Is a Shared

Responsibility F

Tuned_In/Getty Images

BY CHRISSY BLASINSKY

ood safety and protecting public health is not a competitive advantage.” I’ve heard those words from Dr. Jay Ellingson, chief scientific officer at La Crosse, Wisconsin-based Kwik Trip, for several years. Before, I would have thought that if a convenience retailer isn’t investing in food safety—and thus failing to protect its customers and employees—and the competitor down the street is, the retailer doing the right thing is “winning.” Yes, but also no. Making sure food safety behaviors are prioritized throughout an organization is how we elevate our entire industry—and that’s the reason why NACS created the Food Safety Forum in 2022 and had its second Food Safety Forum in 2023. “We all have a responsibility to move our industry in the right direction by working together and helping our peers get better at reducing their risk and protecting their brands,” said Ellingson, who moderated the 2022 and 2023 Forums. So why such an emphasis on food safety? Why a full-day event that focuses on this topic? First, follow the data: Foodservice is one of the fastest growing c-store segments, with foodservice representing 25.6% of inside sales and 36.1% of inside gross margin in 2022, according to the NACS State of the Industry Report® of 2022 data.

NACS JANUARY 2024 35

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MANAGING RISK “An ounce of prevention is worth a pound of cure,” said Ellingson, noting that this Benjamin Franklin quotation is a good reminder that preventing food safety disasters is better than dealing with them after they happen. You don’t have to be a large retail chain to establish and maintain a food safety plan, which should include goals that are well communicated throughout the organization. For Kwik Trip, goal No. 1 is Protect Public Health. Goal No. 2 is Protect Our Brand. Combined, those two goals help the company manage and mitigate risk.

A foodborne illness outbreak can have significant, and even deadly, consequences. Dr. Ben Chapman, professor and food safety extension specialist at North Carolina State University, shared an example of how improper cleaning of a milkshake machine at a Frugals restaurant in Tacoma, Washington, caused a foodborne listeriosis outbreak linked to six hospitalizations and three deaths. “Listeria is one of those pathogens that convenience stores need to be worried about,” said Chapman, noting that Listeria is extremely dangerous to individuals who are immunocompromised or pregnant. Going back to labor and training, foodservice equipment like a milkshake machine can have a user manual with 50-plus pages dedicated to cleaning and sanitizing. “If it takes five different brushes to clean and sanitize this machine correctly, and the manufacturer says that should be done every night, it’s probably not happening on the correct frequency as the manufacturer’s directions,” Chapman said. “If I think about an individual unit with so many different food safety details going on, and with labor concerns, there are steps that get missed, and this is the consequence,” he added.

paci77/Getty Images

If you’re training people for knowledge, stop. Train people to impact their behaviors.”

Second, consider the evolution of the foodservice profession. Today’s foodservice programs are more sophisticated—prepared food being 67% of all foodservice sales in 2022—and more labor intensive than ever, making employee training a non-negotiable. Third is public perception. “Gas station food” may not get the bad rap it used to, but a foodborne illness outbreak that was mishandled or preventable, whether it came from a single c-store or a larger chain, would exacerbate any remaining stigma across the entire industry.

AdShooter/Getty Images

have not spent hours with staff watching what they do, I suggest you do. Spend time in kitchens,” he said. Ask questions. Figure out the challenges these workers face. And finally, “Everyone within your system has to know the why. It’s not just how we do food safety or the knowledge of hand-washing—it’s the whys. … And if you’re training people for knowledge, stop. Train people to impact their behaviors. Train people to make them wash their hands more. Train people to make sure that they wear gloves. Train people to make sure that they use a thermometer at the right times,” said Chapman.

ANOTHER RISK: SICK EMPLOYEES. A 2022 norovirus outbreak linked to a pizza restaurant in Illinois found that 317 people were infected. According to the CDC, “the suspected food vehicle was salad” prepared by a food handler who did not wear gloves, who had vomited on November 22 and who worked November 21-23. Pizza and salad, two main menu items at the restaurant linked to the outbreak, are also common hot and pre-packaged foods sold in convenience stores. “This is the kind of stuff that happens all too often—it’s about keeping [sick] staff out of the kitchen and it’s certainly about hand-washing and using gloves,” Chapman said. “If I looked at your [convenience store] sector, norovirus would be the thing I’d worry about the most,” advised Chapman, adding that about 22 million cases of norovirus a year are linked to food in the United States. “So of the 48 million cases of foodborne illness a year, norovirus has a big chunk of that.” What can retailers do to help manage risk within their workforce? “My challenge to you is get to know your employees—understand their motivations and what they do,” suggested Chapman. “Many of you do this, but for those who

We want the store employees and the frontline employees to understand what the risks are and to create a dialogue.”

DECENTRALIZATION: HQ TO STORES EG America has more than 1,600 stores. Casey’s has 2,500-plus stores. Wawa has 1,050 stores. All three companies manage sophisticated foodservice programs in multiple states that require complying with food safety regulations in multiple jurisdictions and adhering to a multitude of state and local health code regulations. Food safety professionals within decentralized retail chains must ensure that what begins at corporate carries throughout the entire operation: from supply chain to production, to storage, distribution, and ultimately to retail and customers. “We have a corporate office, but then we have stores everywhere. What we have to do as food safety professionals is translate what we’re doing in a corporate sense to each location when we’re not actively in that location,” said Jeremy Zenlea, director and head of health and safety at Westborough, Massachusetts-based EG America. Zenlea explained that EG America’s food safety system is a three-step process: prediction, prevention and reaction. “We want to make sure that every policy and program we have, and anything we build, includes provisions for each of those steps. Reaction is not a good one, but sometimes we do have to react. Prediction is where you get the best bang for your buck because you lessen the reaction.” Casey’s, which operates stores in 18 states (the chain recently acquired W. Douglass Distributing’s 22 Lone Star Food Stores in Texas), NACS JANUARY 2024 37

38 JANUARY 2024 convenience.org

and team achievements. Lastly is measuring and evaluating performance to understand what is and is not working. “We have daily deliveries to stores through our fresh channels and food safety has to play a significant role in all of it,” said Nancy Wilson, director of quality assurance, risk management and safety at Media, Pennsylvania-based Wawa Inc. FOOD SAFETY CULTURE “Food safety culture is the idea that everybody practices, believes and wholeheartedly understands what makes food safe and how to keep food safe,” said Zenlea in the May issue of NACS Magazine, adding that it’s also a philosophy: “It’s saying that I am going to do things that are not necessarily more efficient, and not necessarily more cost effective. … A culture of food safety is not just the health and safety team understanding where the risks are; we want the store employees and the frontline employees to understand what the risks are and to create a dialogue and reach back out so that they’re practicing food safety.” Not every company will embrace food safety culture in the same manner, and some will find themselves more mature in their journeys than others. The goal, however, is shared: protect public health. (Read “Modeling a Food Safety Culture” in the July 2021 issue of NACS Magazine.) Wawa is on a food safety culture journey of “embedding the behaviors we want to see on a day-to-day basis in what our associates are doing,” said Wilson, noting that it’s not about preparing for an audit when a regulatory agency walks through the door. It’s about making sure everyone is empowered to do the right things for the right reasons at all times, that they know what they need to do—and want to do it. “It starts with Wawa’s values,” Wison said. “We link [food safety] behaviors and what we’re looking for to some of the key values within our company.” Wawa’s food safety culture journey is top down, she continued,

Alexander Hoffmann/Getty Images

has three pillars within its Food Safety & Quality Assurance Department: retail, distribution and transportation, and supply chain. “Everything we do from the supply chain side across our transportation distribution network impacts our retail stores. If we don’t get it right in one of those other pillars, it’s going to impact retail,” said Amy Costello, director of food safety and quality assurance at Casey’s. “It’s our team members on the front lines who are executing on food safety every day— food safety is all of our responsibility and everyone plays an important role, from frontline team members in the stores to the distribution centers and to all of our leaders,” she said. Wawa operates stores in six states and has a four-part food safety framework designed to keep its food safety programs efficient and effective. First in the framework is standards, which are designed to meet regulatory compliance and reduce and mitigate risk. Next is education and behaviors, which includes Wawa’s food safety culture journey to ensure that food safety is constantly top of mind. Recognition celebrates and recognizes individuals

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noting that what happens at the leadership level must make its way to the store level. “I present to our board on an annual basis how we’re doing from a food safety standpoint. I get asked tough questions that I encourage them to ask because I want them to challenge us,” Wilson said. At Casey’s, food safety culture starts with establishing priorities. “It’s easy to say we’re making [food safety culture] a priority, but what we’re really looking at is the behavior, the attitude, and tying it back to our company’s values,” said Costello, who, like Wilson, reports to the board with regular cadence. “Where I’ve seen the growth and the support is at the leadership level across the business units we support,” said Costello, noting that food safety is not about checking a box. “The business leaders are asking the food safety questions today, and we’re there to support them and provide guidance.” FOOD SAFETY IS AN INVESTMENT IN PEOPLE From the aftershocks of a global pandemic to record-high inflation, hiring, training and retaining employees continues to keep retailers up at night. Overall convenience industry turnover was 130% for full-time and 152.3% for parttime employees in 2022, according to the NACS State of the Industry Compensation Report® of 2022 Data, and the average cost to

What keeps me up at night is the idea of an opportunity that I missed to have an impact.” hire was $1,196 for full-time and $1,022 for part-time employees. “Food safety is an investment in your colleagues, your team members and your customers,” said Zenlea. “And that investment is significant when you’re talking about thousands of team members. We want to be sure that by investing in training and procedures, that investment translates into safe food sold to consumers.” Costello noted turnover has “a direct correlation on how well things are executed at the store level or in the distribution centers.” She echoed Chapman’s suggestion that one way to keep turnover at bay is to get to know your teams. “A big piece is understanding who your team members are, what they want, what makes them happy in their role and what keeps them engaged,” she said, adding that store leaders set the tone for their stores. “Then there’s a huge focus on making the right choice the easy choice, so building the food safety aspects of our program into our processes and into our policies in a way that is accessible to the team members,” said Costello. “If we’re not making it simple to execute, it’s not going to happen.” Similar to Casey’s, Wawa has embedded food safety into all of its standard operating NACS JANUARY 2024 39

procedures in its stores. “Whether we want to blame it on Covid or not, turnover and talent in general has been a big challenge. We’re taking a step back and reevaluating the skill sets of our teams to see where they need additional training, additional support,” said Wilson. Wilson said that Wawa’s data shows that stores with a strong management team perform better. “From a food safety standpoint, we’re making a lot of investments at the management level,” she said, noting that the company has a current standard of having at least two people in the store complete food safety manager certification training, unless the store is in a jurisdiction that requires even more. Going forward, the top four managers in every store across the entire chain will be certified in food safety manager training. “And that’s a training we do in-house. We follow standard testing for that certification and doing the training in-house allows us to customize the training to be Wawa specific. … It is a significant investment but an investment that is absolutely worth making because of the impact that it has on food safety,” said Wilson. At Wawa, Wilson noted that every associate in the company gets food safety basic training. Then, depending on their role, some may receive more customized training. “If 40 JANUARY 2024 convenience.org

NO STONE LEFT UNTURNED The stark reality is that it would be nearly impossible to claim an organization could be 100% risk-free. But that doesn’t mean the food safety professionals who participated in the NACS Food Safety Forum ever strive for less than perfection—not when public health is at stake. “What keeps me up at night is the idea of an opportunity that I missed to have an impact,” said Costello. “Our team is all about taking every opportunity to share our message—if we talk to the accounting team, we’re going to talk about food safety. If we talk to the transportation team or the drivers, we are sharing our message and talking about the why behind what we do,” she said. Wilson echoed that what motivates her is making sure that the company is doing all the right things to try and mitigate risk as best as it can. “I want to protect our brand, and I also don’t want to see anyone become ill from the food that we’re serving,” she said. Food safety and protecting public health is a shared responsibility. NACS and the retailers quoted in this article welcome the opportunity to bring together convenience retail food safety and foodservice professionals. Reach out to Dr. Jay Ellingson at jellingson@kwiktrip.com for food safety questions and operational guidance in your stores, and Chrissy Blasinsky at cblasinsky@ convenience.org to find out how you can engage in conversations with your food safety peers. To participate in the 2024 NACS Food Safety Forum, request to be notified at www.convenience.org/2024FSF. Chrissy Blasinsky is the digital and content strategist at NACS; she can be reached at cblasinsky@convenience.org.

robertsre/Getty Images

you work in foodservice, you’re going to get a lot more food safety training than someone who’s working at the register.” The hope is also that investing in training will help stores see a drop in turnover.

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ifty years ago, you wouldn’t have talked about the nicotine consumer or even the tobacco consumer—the category was pretty much about cigarettes and cigarettes alone. Management Science Associates Inc. (MSA) has been tracking the nicotine category since the company started in the late 1960s. Said MSA’s senior vice president Don Burke, “Back in the ’60s and ’70s, almost all tobacco sales went to cigarettes.” Those cigarette consumers were incredibly brand loyal, with few regulatory or tax incentives to change their behaviors. This made the category easy to track ... and easy for retailers to manage. Bonnie Herzog, managing director and senior consumer analyst at Goldman Sachs, has covered nicotine since the late 1990s. Since then, she said, “a lot has changed.” There are smoking bans. Increasingly high cigarette excise taxes. Stigma around smoking. All of this has resulted in a decline in cigarette sales. In 2012, NACS State of the Industry Report® (SOI) data showed cigarettes accounted for 36.3% of in-store sales; by 2022, that dropped to 22.8%.

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AaronAmat/Getty Images; gbrundin/Getty Images;

BY MELISSA VONDER HAAR

Aleksandr Zubkov/Getty Images; Chillim/Getty Images;

otine

Consumer

NACS JANUARY 2024 43

sumer unit sales), and data from Altria shows that of the 47 million adult tobacco consumers in the United States, 28 million use cigarettes. “Adult smokers remain a sizeable consumer audience in the United States,” said Davien Anderson, a spokesperson for Altria. But sales are stagnant. Ten-year, samefirm NACS SOI data reported an average of $49,645 monthly cigarette sales per store in 2013; in 2019 that raised slightly to $50,593, due to price increases rather than volume, and 2022 saw a minor increase to $51,157. “The volume decline [in cigarettes] is critical, but it’s not the whole story of the category,” Herzog said, pointing to the entrance and growing popularity of newer non-combustible products. “There’s a greater percentage of [nicotine consumers who] are using other nicotine products.” “The category has really splintered,” Burke added. “It’s far harder to track and control.” While Burke agreed that more consumers are using other nicotine products, he pointed to regulatory limitations such as taxes and flavor bans fueling the black market as a particular challenge to truly measuring or tracking the category.

The good news? Today’s nicotine consumer is decisively not just a cigarette smoker, as evidenced by the growth in OTP. SOI data shows OTP’s percentage of in-store sales grew from 4.4% in 2012 to 7.5% in 2022. The shift away from exclusive cigarette use has also resulted in different demographics for today’s nicotine consumers, especially those who purchase reduced-risk or non-combustible products. Goldman Sachs data suggests these consumers are younger than the historical demographics for cigarette smokers (Herzog estimates the 21-35 age range, pending tobacco purchase age rules) and skews more female than consumers of traditional moist smokeless products. Herzog said of today’s nicotine consumers, “They are more open to trying some of these newer products than the older, traditional tobacco demographics.” TODAY’S NICOTINE CONSUMER IS … LESS LIKELY TO SMOKE CIGARETTES AND HARDER TO TRACK First, let’s be clear: There are still a lot of cigarette smokers. MSA estimates 60% of nicotine purchases today are cigarettes (based on con-

13-Year Same Store CSX Data, Per Store, Per Month $60,000 $50,000 $40,000 $30,000 $20,000

2009

2014 Cigarettes

Source: NACS CSX Convenience Benchmarking Database

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2019 OTP

2022

master1305/Getty Images

$10,000

It’s possible that the consumption of nicotine is down only slightly or even close to being flat.” A decade ago, MSA data showed OTP sales were largely offsetting cigarette volume declines and keeping total nicotine sales flat or slightly down, while today’s data suggests total nicotine sales are down four to five percentage points. “I don’t believe that is the true story,” Burke said. “With many consumers today going to the black or gray market due to increasing levels of regulations on the sales of their nicotine product of choice, it’s possible that the consumption of nicotine is down only slightly or even close to being flat.”

TODAY’S NICOTINE CONSUMER IS … USING MULTIPLE PRODUCTS BASED ON OCCASION The terms “dual-usage” and “poly-usage” are thrown around a lot when talking about today’s nicotine consumer. While using more than one kind of tobacco or nicotine product is hardly a new phenomenon, it’s become increasingly popular as non-combustible options have come onto the market. “The introduction of these newer products or technologies did encourage consumers to try other nicotine products,” Herzog said. So did regulations and stigmas around smoking. “Today, many adult smokers experience social friction, which drives motivation and interest in smoke-free alternatives,” Anderson said. Burke described poly-usage less as a result of nicotine consumers being more interested in new nicotine product forms but instead it becoming “almost a necessity” for those who still use combustibles such as cigarettes or cigars. Gone are the smoking sections in restaurants and smoking lounges in airports. Today, smokers find themselves banned from smoking in even some outdoor spaces. “Those consumers are almost forced into being a little bit more creative in what they purchase and where they use it,” Burke said. The Covid lockdowns highlighted this phenomenon. When people were almost exclusively at home and could (mostly) smoke freely, cigarette declines not only decelerated, they grew for the first time in years. As people went back into the world, poly-usage increased again. That same smoker might still purchase a pack of cigarettes for the weekend—and also a vapor or oral tobacco product for when they’re at the office. “It really is their circumstances that drive that poly-usage,” Burke said. NACS JANUARY 2024 45

About half of all adult smokers are interested in switching to smoke-free products.”

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Price sensitivity is being seen across the entire nicotine category. However, newer alternative nicotine products are offering a lot of promotions to attract that pricestretched shopper. “It’s no different than any other new consumer product,” Herzog said. “To draw trial, [manufacturers] sometimes use pricing and sophisticated promos as levers.” “In general, we’re seeing that the tobacco consumer today is a lot savvier about what they use and how they use it,” Burke said. Additionally, “they’re becoming far more price conscious.” TODAY’S NICOTINE CONSUMER IS … OPEN TO INNOVATION Besides pricing, new innovations and new nicotine delivery systems are driving trials for today’s nicotine consumer. “We know that about half of all adult smokers are interested in switching to smoke-free products,” Anderson said. “Their motivations to switch have increased over time.” The e-cigarette/e-vapor category clearly demonstrates this interest in innovation. In 2012, the NACS research team estimated e-cigarettes accounted for 2.6% of OTP sales. By 2022, it was the second-largest contributor at 32.5%. That happened despite the FDA effectively banning flavors and severely restricting category growth. Herzog was so certain about the demand for nicotine innovation that she once predicted consumption of reduced-risk products could outpace cigarette consumption as early

AaronAmat/Getty Images

TODAY’S NICOTINE CONSUMER IS … LESS BRAND LOYAL, MORE PRICE SAVVY Historically, cigarette smokers have been one of the most predictable shoppers due to their extreme brand loyalty. A study published by the Journal of Drug Delivery and Therapeutics in 2019 estimated that fewer than 10% of global cigarette smokers switch from one product to another. The authors described brand loyalty for cigarettes as “the highest among all existing consumer products.” But that brand loyalty has been tested as inflation and economic uncertainties have pressured today’s nicotine consumer. Goldman Sachs’ quarterly “Nicotine Nuggets” survey of retailers has found that downtrading is getting more and more prevalent as consumers seek out cheaper alternatives in the form of both fourth-tier or deep-discount cigarettes and lower-priced alternatives such as e-vapor. Burke noted that, specifically in cigarettes and smokeless, only the deep-discount segments are growing. Herzog said price is “absolutely critical” to purchasing decisions, adding that “this consumer is pretty stretched.” It’s not just that the consumer is stretched. Herzog said the difference between the price of premium cigarettes and the lowest-priced, deep-discount cigarettes has widened substantially. “No question that in this environment, the pricing power [for manufacturers] is there but not as strong as it was a year or two ago,” she said.

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as 2023. “I’m not quite right yet,” she said, “but I think I will be.” Burke pointed to the success of the modern oral tobacco segment as proof that today’s nicotine consumers are willing to do more than just try a new product—they’ll actually change their consumption patterns when the right product comes along. MSA data shows that even though modern oral products have achieved near-100% distribution for the convenience channel, same-store sales are still growing by double digits. “This not only suggests that there were new consumers who want to try modern oral products, but that many of those consumers are becoming repeat purchasers,” Burke said. Herzog cautioned that the nicotine consumer’s interest in innovation can only succeed if regulatory agencies allow innovation to continue. The current cost, high rejection rate and slow turnaround time for the FDA’s premarket tobacco product application (PMTA) process—the only legal way to get a new tobacco or nicotine product on the market—could be slowing down that ability to innovate. “I do think it’s critical that there’s an opportunity for more reduced-risk products to be on the market legally,” she said. “The FDA plays an important role in this.” 48 JANUARY 2024 convenience.org

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

Ian Ross Pettigrew/Getty Images

The diversity of today’s nicotine category has undoubtedly made it more difficult to manage.

TODAY’S NICOTINE CONSUMER IS … STILL VERY IMPORTANT FOR CONVENIENCE RETAILERS Just as the convenience channel is no longer limited to just “gas, Cokes and smokes,” the nicotine shopper is no longer just looking for “smokes.” But they remain an invaluable shopper to the channel. Data from the Technomic Q3 2023 C-store Consumer Market Brief showed that 100% of c-store tobacco/nicotine consumers visit stores at least once a month and that 86% came in once a week or more. “What’s more, they have the highest incidence of visiting daily,” said Donna Hood Crecca, a principle at Technomic. “About 35% of nicotine consumers are daily c-store visitors, versus 15% for consumers overall.” The diversity of today’s nicotine category has undoubtedly made it more difficult to manage—but has also made it more profitable for a retailer’s bottom line. As of 2022, samefirm, 10-year NACS SOI data showed OTP products averaged a 29.44% gross profit margin (nearly twice that of cigarettes, at 13.97%). “Cigarettes are still the No. 1 driver of inside sales, but not in profitability—so retailers are allocating more space to what’s growing faster with higher margins,” Herzog said, pointing to oral tobacco, e-vapor and other OTP segments. “The retailer does earn more on these products.” The value of today’s nicotine consumer doesn’t just lie with the category products they purchase but also the other profitable items in their baskets. “Tobacco users are more likely to enter the c-store when they visit for fuel and are more likely to purchase prepared foods and prepared beverages than consumers overall,” Hood Crecca said. “The nicotine consumer is a very valuable customer for convenience.” And that is something that hasn’t changed— and probably won’t any time soon.

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50 JANUARY 2024 convenience.org

What does the future look like for this beloved dish, and how can the convenience industry keep grabbing a slice of the action?

Africa Studio/Shutterstock

BY SARA COUNIHAN

the time it takes you to read this sentence, 1,400 slices of pizza will be sold in the U.S. (350 slices of pizza are sold every second, according to the National Association of Pizzeria Operators.) Three billion pizzas are sold in the U.S. each year, and 93% of Americans eat pizza at least once a month, according to the association. It’s clear. Pizza is one of America’s favorite meals, and it seems like almost everyone is getting in on the pizza game, including convenience stores. Pennsylvania-based Wawa launched Wawa Pizza this summer in more than 900 of its locations. The Midwest c-store chain Casey’s sells over 28 million pizza pies each year. McLane recently unveiled Prendisimo, a proprietary pizza program made for c-stores. Robots are even making pizza now. (We’ll get to that later.) So what’s in store for pizza, and how can the convenience industry continue to win in this crowded category?

NACS JANUARY 2024 51

Michelle Weckstein, director of food and beverage brands, SunStop, says pizza wraps—pizza folded in half and pressed—are an emerging trend. She also sees nontraditional toppings gaining in popularity, like hot honey pepperoni and chicken bacon ranch. Flatbreads are also a consumer favorite, and SunStop is testing its own proprietary flatbread program in a few of its prototype stores. “Our strategy is to differentiate ourselves with quality ingredients and unique toppings. We want to wow our customers’ tastebuds versus competing with the national pizza chain on cost,” Weckstein said. The flatbreads come in four flavors: pepperoni, chicken pesto, chicken alfredo and hot Buffalo chicken. The pepperoni does “OK” at SunStop but the other flavors are “wildly successful,” according to Weckstein. “We have found pizza with traditional red sauce and meats do well in our rural markets, whereas flatbreads with trendy toppings thrive in more populated areas,” she said. Cooking speed is also a trend among pizza sellers, especially convenience stores and QSRs. Manufacturers are creating unique crusts that can bake in minutes. McLane’s Prendisimo pizza program allows c-stores to bake a pizza from frozen in as little as six minutes. “The beauty of this brand is it goes from freezer to oven to the warmer in minutes and into the hands of the consumer,” said Farley Kaiser, senior director of culinary innovation, McLane. “We really did develop this with a convenience store in mind.”

Dee Cleveland, director of marketing, Hunt Brothers Pizza believes that what’s happening in the chip aisle is a sign of what’s to come for pizza. 52 JANUARY 2024 convenience.org

Olga Nayashkova/Shutterstock; xamtiw/Getty Images

TOPPING THE CHARTS Before talking about the future of pizza, let’s look at the present. Pizza sellers are constantly experimenting with the dish to keep up with consumers and their taste preferences. Dee Cleveland, director of marketing, Hunt Brothers Pizza, explains that pizza lets restaurants introduce new flavors to consumers in an approachable way. She also believes that what’s happening in the chip aisle is a sign of what’s to come for pizza. “What you see with chips has been extremely at the forefront, like how they’ve been combining flavors and co-branding. I think we’ll continue to see a lot more of that.” Cleveland says spicy flavors are still widely popular, and crust is becoming just as important as the toppings. Hunt Brothers recently introduced an Italian spice-infused crust on its Italian trio pizza, which has been well-received by consumers. “It used to be that crust was stuffed with just cheese. Now you can find cheese and pepperoni in your stuffed crust, and then there’s deep-dish, Detroit-style, there’s all sorts of crust coming out. You now can put the butter and garlic and everything else on your crust,” she said.

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Pizza for Breakfast? Yes, it is happening, and no, it’s not cold, leftover pizza from the night before. Casey’s has been in the breakfast pizza game for decades. In 2001, the Ankeny, Iowa-based c-store chain introduced “bizza,” and it’s one of its best-selling pizzas with more than 2.5 million orders each year. Michelle Weckstein, director of food and beverage brands, SunStop, said after multiple customer requests, the retailer is creating a breakfast flatbread. “It’s just like a breakfast pizza only we’ll switch it up with the base and the different toppings that we have. I think it’s a trend,” she said. Pizza Forno, a self-serving pizza kiosk company, has also heard the demand for a breakfast option from its consumers. “[A breakfast pizza] creates a whole new daypart for breakfast in the pizza category because no pizza chains are really open for breakfast,” said Les Tomlin, co-founder, Pizza Forno.

If you can have products sitting out ready in your warmer, ready to grab and go, I think you’ll stay a step ahead.”

With the promotions, “It feels like more of a fast-food option in a town where that isn’t available,” she said. “We also have a large demographic of customers that we can serve with having different payment methods available, such as EBT. There are rules and regulations that we have to follow to be able to serve those customers, but it is worth it for us to do that so that it is available for all of our customers.” PIZZA-MAKING MACHINES Pizza vending machines and robot-made pizza may seem sci-fi, but they already exist. Pizza Forno is an automated pizza kiosk that serves warm pizza in under three minutes, 24 hours a day, seven days a week. The machine takes up 65 square feet and holds 70 12-inch pizzas. Once customers place their order through a digital screen, a robotic arm takes their pizza from the refrigerated section of the kiosk and places it into a convec-

bhofack2/Getty Images

CRUSHING THE COMPETITION If convenience stores want to stay ahead of their competitors in the pizza arena, they need to “play to their strengths,” according to Cleveland. “Convenience stores have to remember why people are coming in, and it’s really all about that convenience,” she said. “If you can have products sitting out ready in your warmer, ready to grab and go, I think you’ll stay a step ahead.” According to Kaiser, because pizza is such a universally loved dish, it should be in different points of foodservice, including convenience. “From a convenience standpoint, it makes a lot of sense for it to be at your fingertips as you’re getting gas and then needing to head down the road,” she said. SunStop includes a pizza club in its loyalty program. Whenever customers buy six individual pizzas, they get their seventh pizza free. “I feel when people think, ‘I’m going to feed my family with pizza,’ they’re going to go to a pizza chain or a QSR still,” said Weckstein. “I think that’s where convenience stores could step it up and meet that need, perhaps train their customers a little bit more.” Like Cleveland, Weckstein suggests that c-stores up their hot grab-and-go pizza offer because the dish holds well and maintains its quality longer than most other grab-and-go options. However, for some rural c-stores, there isn’t much competition around. In this case, offering a convenient, affordable meal like pizza is even more important. Brittany Jones, owner of Wilkerson’s Food Mart in Clio, Alabama, says her location has a wide range of customers because it’s the only locally owned business in a small town that has no other fast-food options available. Wilkerson’s offers Hunt Brothers Pizza and sells around 500 pizzas a week. “Not only are we the only option for fast food with our hard-working, blue-collar customers, but we are also only one of two convenience stores within about 10 miles,” she said, adding that Wilkerson’s offers promotions in conjunction with its pizza, such as a chips-anda-drink deal and a free two-liter of soda with the purchase of two one-topping pizzas.

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tion oven where it’s baked. Once it’s ready, the pizza emerges from a slot at the front of the machine. Pizza Forno was co-founded by Les Tomlin, who saw an 85-year-old woman purchase pizza from a similar device in France. “I had this total ‘aha’ marketing moment,” he said. “I thought, ‘Wow, if we could bring this technology to North America, attach a brand to it, we could really disrupt the pizza market.’” Pizza Forno is available in several Petro Canada locations, as well as other locations in the country. There are also kiosks in Alabama, Georgia, Louisiana, Michigan and Texas. One of its Canadian locations is in an area where there are limited foodservice options, and it’s one of the company’s top-performing licensees. “We’re bringing pizza as an automated hot food solution to markets that wouldn’t really be able to sustain a traditional QSR or brickand-mortar restaurant,” he said. If vending machine pizza doesn’t tickle your taste buds, how about a pizza made by a robot? Pizza Jukebox, located inside a Walmart in Frisco, Texas, features a proprietary robot model that makes pizza right before customers’ eyes. The robot arm takes pizza dough from a holding rack and places it in a “pizza bot.” The pizza bot spins the dough, adds sauce, cheese and toppings, and places it in a TurboChef conveyor oven, which “gives you a fantastic pizza product because the oven is perfectly calibrated and timed to cook the pizza to our exact recipe specification,” said Kimberly Otte, vice president, franchise support services, BRIX Holdings. “The idea behind it is not to replace a team member but to have consistency and execution,” she said. “[The robot] is calibrated to dispense the exact amount of sauce that we require, the exact amount of cheese, the exact amount of meats consistently every time.” Customers can order their pizza through a digital screen

56 JANUARY 2024 convenience.org

Expect to see whole grains, more glutenfree and plant-based crusts, and more veggiebased sauces like hummus.”

for the robot to make, or they can speak to an employee to place their order. Once the order is ready, an employee cuts the pizza, boxes it and calls out the customer’s name. “[Customers] can get a meal and have an experience—something that is going to be memorable, and that’s fun,” she said. “It’s not just someone delivering a pizza to me. I think that lends to opportunities for growth in the pizza sector.” WHAT’S NEXT There’s no question about it: Pizza isn’t going anywhere. However, there is always the question of where it’s going next. According to Weckstein, the future of pizza includes healthier options for crusts, bases and toppings. “Expect to see whole grains, more gluten-free and plant-based crusts, and more veggie-based sauces like hummus,” she said. “We will see meat alternatives and more vegetables and fruit toppings. There will still be consumers who will want meat on their pizza, but meat may be more of a special treat versus an everyday choice.” Cleveland believes internationally inspired flavors, including Asian and Middle Eastern, are next for the dish, as well as co-branding, such as drizzling Mike’s Hot Honey over the pie. “We’re just beginning to touch the importance of what’s going to happen with pizza over the next 10-15 years. I think it’s going to continue to grow exponentially ... and we’re going to continue to find different ways to serve and excite guests,” said Cleveland. However, don’t expect pizza to turn its back on tradition. “We’re not going to lose our bread and butter. Chances are pepperoni is still going to be strong 10 years from now,” Cleveland said. Sara Counihan is contributing editor of NACS Magazine and NACS Daily. She can be reached at scounihan@ convenience.org.

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Cool New Products Guide 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 2022. The products featured here also can be seen in the Cool New Products Discovery Center at www.convenience.org/coolnewproducts.

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GAS STATION GOURMET

Small Batch Boudin and More A winning boudin recipe led to the Lazy Caveman. BY AL HEBERT

wo lifelong friends with a passion for cooking great food decided to see if others would develop a passion for their food. Julius Flugence and Jonathan Linzer have been cooking together since college. “We’d barbecue at Julius’ mom’s house. We only focused on cooking meat. His mom, Carolyn, did the sides. We didn’t think about food as a business,” recalled Jonathan, adding, “Julius is from a family of foodies. I just love cooking.” When Covid hit, the pair decided to make boudin. “Boudin was a way to get out of the house during the pandemic,” said Jonathan. At this point, we need to explain boudin. Boudin is a mixture of rice, pork, onions and bell peppers that is highly seasoned and stuffed into sausage casing. It is as ubiquitous in southwest Louisiana as cheese curds are in Wisconsin or pizza in New York. When the pair won the Boudin CookOff and Bacon Festival in 2022, people asked where they could find more. There was no location. When they won the competition in 2023, the pressure was on. Julius was slow to warm up to starting a business. He works as a project coordinator in oilfields. “Jonathan is the businessman. He pushed me off the cliff. I didn’t leap,” he said. They found a location in the Food-NFun c-store in Broussard, Louisiana. The plan didn’t include being in a gas station. “Jonathan saw the space. He’d come 60 JANUARY 2024 convenience.org

Friends Jonathan Linzer (left) and Julius Flugence opened their eatery after winning a local boudin contest—twice.

in the morning, noon and afternoon to watch the traffic,” recalled Julius. “I saw a lot of traffic. I knew traffic flow would be the key to success,” said Jonathan. The lease was signed in January and Lazy Caveman opened on March 22, 2023. Originally, despite the pair’s award-winning recipe, boudin was not going to be the star of the show. “In the beginning we were going to do smoked meats. Lazy Caveman is about drinking bourbon and eating smoked meat. That’s why my mom said we’re like cavemen: We only cook meat, no sides,” said Jonathan.

We were here day and night making boudin. We didn’t sleep for 48 hours.”

Julius said, “It’s our process that makes the difference. I do it the way my grandfather did. My seasoning is different. It’s just for boudin.” He feels the small batch strategy is the key. “A lot of places do big batches. We do it like bourbon, small batches. There’s a lot of attention to detail. There’s a lot of love in each batch.”

Carolyn Flugence, Julius’ mom, lends a hand and has helped stretch the menu beyond just meat and boudin.

Carolyn came in to do some cooking. They added a few boudin products and plate lunches, which are popular. The shrimp stew and seafood pasta are popular, too. So is the meatball stew. Ground beef is seasoned with Cajun seasoning and formed into meatballs. The meatballs are browned and cooked in a brown gravy and served over rice. The sausage is another popular item. It is chicken with spinach, feta cheese and sun-dried tomatoes. Jonathan said, “We can’t keep it on the shelf. It sells fast. People feel it’s healthy. It’s a Mediterranean sausage. It has cheese in it. Who doesn’t love cheese?” OVERNIGHT SUCCESS Still, boudin is the draw. Word got around, and Lazy Caveman began to gather a following.

Then a popular local social influencer named Uncle Luck posted about the boudin. “The next day, at 9:00 in the morning people started coming. Some drove over an hour,” said Jonathan, adding, “We were producing 800 pounds of boudin during the evening and selling 1,000 pounds during the day.” “The morning shift was coming in, the night shift was getting off. We were chasing 800 pounds of boudin with another pot of boudin. We didn’t think it would be that big,” said Jonathan. People came in for two months because of these posts. “We were here day and night making boudin. We didn’t sleep for 48 hours,” recalled Julius. There is something different about Lazy Caveman’s boudin.

THE SCENT STRATEGY Jonathan had a strategy. If customers at the pump could smell the food, they would come inside. “Our game plan included cracking the door to the gas station in the morning so customers can smell the bacon cooking.” The proved unnecessary. The ventilation system was installed in such a way that it sends the smell straight out to the pumps. “You don’t know who your food will impact. New people come in and say they smelled the food while pumping gas. It looks good. If the taste matches the smell, it’s going to be good. The c-store numbers have increased as well. People come to us and then go to the gas station. The plan is working. The duo are adding a second location in Duson, Louisiana. “We want to build longevity, a legacy,” Julius said. Al Hebert is the Gas Station Gourmet, showcasing America’s hidden culinary treasures. Find him at www.GasStationGourmet.com. NACS JANUARY 2024 61

CATEGORY CLOSE-UP OTHER TOBACCO PRODUCTS

In a tough regulatory environment, modern oral remains a category bright spot. BY MELISSA VONDER HAAR

he OTP category has been a solid contributor for convenience retailers in the modern era: According to the NACS State of the Industry Report® of 2022 Data (SOI Report), 99.8% of all convenience stores sold OTP, with the category accounting for 7.51% of in-store sales. “It’s just like a steadily climbing ladder going up year over year,” said Emma Tainter, a research analyst and writer for NACS. The OTP average sales per store, per month and gross profit dollars per store both grew by 10% or more in 2022—and CSX data through August 2023 showed sales were outpacing 2022’s during the same period. “That’s actually very impressive,” Tainter said. “It’s very important,” Rick Staley, merchandising manager for Tri Star Energy, said of the category. “That’s where my focus is: the back bar.” Here’s a snapshot of how the various segments within the OTP category are performing and what trends and challenges the category faces in 2024.

62 JANUARY 2024 convenience.org

The average gross margin % for OTP in 2022 Source: NACS State of the Industry Report® of 2022 Data

SMOKELESS: MODERN MOMENTUM Smokeless has long been the largest segment of the OTP category, and 2022 was no exception: NACS SOI Report data showed smokeless accounted for 40.7% of OTP sales in 2022, with a gross profit margin of 22.65% (both of which were comparable to 2021’s figures). CSX data for the first half of 2023 also showed positive sales growth. “If we look at the CSX data for smokeless through August 2023, it’s trending up,” Tainter said. “Smokeless’ moment is not over yet.” That growth is especially impressive given what’s not included in the NACS SOI and CSX smokeless data: perhaps the hottest product on the back bar, modern oral nicotine pouches. Those products are currently part of the “other tobacco” segment. In 2022, the other tobacco subcategory accounted for 8.0% of OTP sales (up from 5.8% in 2021) with a gross margin of 36.22%. Even more impressive, the average other tobacco sales per store, per month grew by 52.0% year over year. When retailers are asked about smokeless trends, OTP trends or even overall back bar trends, it’s all about modern oral. “Nicotine pouches, modern oral, everyone says they love them,” Staley said, adding that the products are especially popular with current or former smokers looking for an alternative. That’s also an area of focus for major manufacturers.

Irina Piskova/Getty Images

OTP Stays Modern

28.99%

Industry Sales

FabrikaCr/Getty Images. 31moonlight31/Getty Images

I’m still seeing huge growth, even on a brand level.” “The modern oral nicotine category has been expanding from the West to East Coast,” said David Cawton, Swisher’s manager of corporate communications. Cawton noted that states in the northwest have experienced “explosive growth.” Given that modern oral nicotine pouches have been around for as long as a decade, it’s fair to question if the products can really continue to see that kind of impressive growth. But both retailers and manufacturers aren’t seeing a slowdown happening any time soon. “I’m still seeing huge growth, even on a brand level,” Staley said, noting that brands that started strong are still going strong—and new brands are having strong debuts. Cawton pointed to retail shipment data from Management Science Associated Inc. that showed growth is actually increasing: Modern oral volumes grew 34% in 2022 and were on track to increase by 47% in 2023. As such, retailers such as Staley are adjusting their planograms to put the products front and center.

“I’m putting [modern oral] more or less on the top shelf for visibility,” he said. “There’s a lot of adjustment going on right now to give modern oral more of a presence.” E-CIGARETTES: PROCEED WITH CAUTION Electronic cigarettes remained the second-largest contributor to OTP sales, accounting for 32.5% of the category in 2022, according to NACS SOI Report data. More importantly, the subcategory continues to boast a higher gross margin than smokeless (33.22%). And despite a continuous slew of regulatory challenges, average sales per store, per month grew by 15.6% between 2021 and 2022. “The category is really holding its own,” Staley said, crediting the strength of major brands such as VUSE as well as flavored disposables. The major challenge retailers face is that many disposable flavored products are considered illegal by the U.S. Food and Drug Administration (FDA). According to the FDA, retailers can only sell e-cigarettes that have been approved through the premarket tobacco application (PMTA) process or that have submitted a PMTA that has been accepted by the FDA for review. But there are many products on the market that the PMTA rejected … or that were never submitted in the first place. “The uncertainty of our current regulatory system presents immense challenges [because] retailers are not certain what can legally be sold,” said Matt Domingo, senior director

% of In-Store Sales

7.29% 7.51% 2021

2022

Avg. Sales/Store

$15,852 $17,436 2021

2022

% of Stores Selling

99.5% 99.8% 2021

2022

Source: State of the Industry Report® of 2022 Data

NACS JANUARY 2024 63

CATEGORY CLOSE-UP OTHER TOBACCO PRODUCTS

NACS CSX Benchmarking Database, Per Store, Per Month Sales

n 2020

n 2021

n 2022

n 2023

$17,901

$20,000 $18,000 $16,000 $14,000 $12,000 $10,000 JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

Source: NACS CSX Convenience Benchmarking Database

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.

64 JANUARY 2024 convenience.org

“No one wants to be selling products that are not compliant with the agency holding authority,” said Niraj Patel, founder and CEO of Bidi Vapor, LLC. “They wouldn’t do it with lighters or energy drinks or any other product. They want to ensure the well-being of their customers.” So what’s a responsible retailer to do? Staley said he’s still offering a limited number of flavor options but he is also making sure the brands he’s partnering with have submitted PMTAs that are being reviewed—or, in the case of a very limited number of brands, including Bidi, that were granted a judicial stay of a marketing denial order from the FDA. “You have to be careful there,” he said. “I’m not bringing in any wild stuff.” CIGARS: BRACING FOR A BAN The cigar subcategory has remained a consistent performer for the OTP category according to NACS SOI Report data: It accounted for 15.9% of category sales in 2022 and offered retailers a healthy gross margin of 32.90%. Those figures were basically flat year over year, which is no small feat because, like

Eduard Lysenko/Getty Images

The Power of CSX Data

of external relations for Reynolds American Inc. The popularity of these illegal brands is showing up in scan data. The September 2023 NIQ (formerly Nielsen) numbers for e-cigarettes included several disposable brands whose PMTAs were rejected (or never received) by the FDA. NIQ showed Elf Bar to be the second-highest selling brand in September 2023, accounting for nearly 5% of disposable e-cigarette sales; Elf Bar is the same brand that the FDA fined retailers nearly $20,000 per location for continuing to sell.

Subcategory Data Same-Firm Sample, Per Store, Per Month Other Tobacco Products

Percent of Sales

Avg. Sales/Store

Avg. GP$/Store

Gross Margin %

2021

2022

2021

2022

2021

2022

2021

2022

Smokeless

43.7%

40.7%

$6,925

$7,094

$1,607

23.20%

22.65%

E-Cigarettes

30.9%

32.5%

$4,896

$5,659

$1,701

$1,880

34.75%

33.22%

Cigars

16.9%

15.9%

$2,682

$2,769

$884

$911

32.96%

32.90%

Other Tobacco

5.8%

8.0%

$925

$1,406

$254

$509

27.43%

36.22%

Pipes

1.4%

1.7%

$226

$304

$62

$70

27.51%

22.94%

Papers

0.8%

$119

$131

$52

$56

43.28%

42.85%

Pipe/Cigarette Tobacco

0.5%

0.4%

$78

$73

$22

$21

28.73%

28.97%

Total

100.0%

$15,852

$17,436

$4,582

$5,054

28.91%

28.99%

AlexBrylov/Getty Images

Source: NACS State of the Industry Report® of 2022 Data

e-cigarettes, cigars have faced their own slew of state and local flavor bans. That uncertainty is only poised to grow in 2024 thanks to a possible national flavor ban. Though the final regulations had not been announced at the time this article went to print, FDA sent the final rule to ban both menthol cigarettes and flavored cigars to the White House in October, marking the last step for sign off before the bans are finalized and published. This could be a huge blow to the segment: Swisher estimated that characterizing flavors represent 45% of the current large cigar market—and that states that have banned flavors have seen a greater decline in cigar sales than the national average. “Adult consumers want options that align with the occasion, their mood or even just with the latest trends,” Cawton said. “That’s why offering different blends is very important.” “We believe existing science and evidence are inadequate to support restrictions on the use of flavors in cigars,” added Davien J. Anderson, a spokesperson for Altria.

Those unintended consequences have played out many times before as banned products move from responsible retailers to an unregulated black market. NACS JANUARY 2024 65

CATEGORY CLOSE-UP OTHER TOBACCO PRODUCTS

Anderson pointed to the government’s surveys that show little youth usage of cigars (flavored and non-flavored) and no evidence that cigars play a role in dependence or tobacco cessation. “Criminalizing flavored cigars may lead to serious unintended consequences,” he said. Those unintended consequences have played out many times before as banned products move from responsible retailers to an unregulated black market. “The FDA’s proposals failed to consider the undue economic burden placed on legal sellers who lose sales to the illicit market,” said Anna Ready Blom, NACS’ director of government relations. “These regulations do not seem to account for those losses, in particular the losses of sales of non-tobacco items that

They’ve all said they’ll handle it if there is a ban.”

ADVERTISER INDEX Contact Information

Page

ADD Systems......................................................................................23 www.addsys.com Altria Group Distribution Company.......... Inside Front Cover AGDCTradeRelations@Altria.com w ww.altria.com www.tobaccoissues.com Black Buffalo Inc...................................................................33 www.Blackbuffalo.com Cash Depot...............................................................................3 (800) 776-8834 w ww.sales@cdlatm.com www.cdlatm.com

Contact Information

Page

International Dairy Deli Bakery Association...................................49 www.iddba.org ITG Brands.............................................................................. 41 (866) 328-2485 Domestic US toll free ( 336) 335-6669 North Carolina www.itgbrands.com Liggett Vector Brands Inc.......................... Inside Back Cover (919) 990-3500 www.liggettvectorbrands.com Monster Energy Company.....................................................17 www.monsterenergy.com NACS Convenience Matters...............................................................58 Conveniencematters.com

Cool New Products Guide..................................................................58 www.convenience.org/Media/NACS-Magazine/Cool-New-Products

NACS Membership.............................................................................55 Convenience.org/membership

NACS Day On The Hill.........................................................................59 Convenience.org/events/Day-On-the-Hill

NACS SOI Summit 2024......................................................................57 Convenience.org/events/SOI

The Hershey Compan............................................. Back Cover www.thehersheycompany.com 66 JANUARY 2024 convenience.org

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

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

Cheyenne International LL...............................................................53 (704) 937-7200 www.cheyenneintl.com

E-Machines........................................................................................58 www.atmb2b.com

are purchased when people buy menthol cigarettes or flavored cigars.” Retailers and manufacturers are understandably concerned. While the ban, if enacted, would not go into effect for some time, manufacturers are preparing to up their non-flavored options to try and capture the cigar consumer’s desire for variety. “It’ll take a hit. There’s a black market out there that I’m concerned about,” Staley said. “But talking to major cigar manufacturers, they’ve all said they’ll handle it if there is a ban. They’ve got a plan.”

NACS THRIVR & TruAge......................................................................67 Convenience.org/THRIVR www.mytruage.org

Contact Information

Page

Pace-O-Matic...........................................................................7 (770) 441-9500 ( 877) 448-4263 www.paceomatic.com Polar King International Inc..............................................................13 (866) 576-7645 www.polarking.com www.polarleasing.com www.polarkingmobile.com Premier Manufacturing................................................................5, 47 www.gopremier.com Swedish Match North America LLC (Game Leaf)................. 15 (800) 367-3677 www.Gamecigars.com Swedish Match North America LLC (General Snus).............29 (800) 367-3677 www.smna.com Swedish Match North America LLC (ZYN)..............................9 (800) 367-3677 www.smna.com Xcaliber International........................................................... 31 www.xcaliberinternational.com

Driving the industry forward, together Convenience is always evolving, but NACS delivers the insights and innovative tools to help retailers win. Our latest initiatives improve how you serve your customers and communities and keep your business one step ahead.

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BY THE NUMBERS

What Are Customers Looking For? A single c-store visit can create a loyal customer—if the customer finds what they’re looking for. And your customers are looking for much Location, location, location: About twothirds of customers (66.5%) said they are most likely to stop at a c-store in a convenient location for them. The second-mostimportant factor is price (27.4%).

more than their favorite salty snack or energy drink. According to 2023 NACS Convenience Voices data, here are some of the most important things that customers are keeping an eye out for:

Keep it clean: One of the most important elements that catches a potential customer’s eye is cleanliness—74.5% of customers who selected a site based on a wellmaintained facility said a clean inside and outside of the store is paramount. And keep those bathrooms clean—49.3% of people who stopped to use a store service indicated the restroom is their top priority.

The download on loyalty apps: Most customers (43.1%) would like to stay updated on loyalty program information, while people are least likely (17.8%) to want to receive notifications about sweepstakes and prize opportunities. A third of respondents (33.3%) use their loyalty app to gain rewards or loyalty points.

WHAT’S MORE IMPORTANT, DISCOUNTS INSIDE OR ON THE FORECOURT? Customers look for either, with a slight preference for inside perks:

63.8%

61.9% chose a location for its low gas prices.

PCH-VectorGetty Images

of customers driven by pricing selected a store based on its sales, discounts and promotions.

68 JANUARY 2024 convenience.org