convenience.org | MAY 2021
THE SERVICE ISSUE CRAFT BEER BOOM Tapping Into Microbrews
NACS STATE OF THE INDUSTRY Foodservice Performance
Leaning Into Growth
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30 38 42 44 50 56 58 Cover Art by Beyond Definition STAY CONNECTED WITH NACS
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ack on the Menu B The pandemic upended foodservice in 2020, but innovation points toward recovery. hicken Sandwich Wars C C-stores join the battle for glory and more foodservice sales. rowth Partner G A Q&A with Hathway. asey’s Leans Into Growth C The Midwestern chain has loaded its plate with everything from its largest acquisition to a third distribution center to digital engagement. apping In T Convenience retailers increasingly emphasize craft brews. Faster
Checkout With Fewer Staff A Q&A with Mashgin.
lant-Based Food Takes Root P New options in meat, dairy and snack products attract health-focused customers. ace Lift F Cenex launches LIFT, a store transformation initiative, shifting the way customers view c-stores. niting to Learn U Human resources professionals gathered virtually— for the 30th NACS HR Forum—to learn how to navigate this year’s toughest workplace challenges. ultivating Connections C A Q&A with Farmer Brothers. ow-Key Affair L How convenience stores handle grand openings in the time of COVID-19.
MAY 2021 |
There is a misconception that a c-store needs a full kitchen to implement a foodservice program.
When people come in the door, we try to make them feel as welcome as we can.
IDEAS 2 GO, P. 26
08 From the Editor 12 NACS News 20 Good Work 22 Inside Washington
Industry advocates find new ways to tell their story to lawmakers during NACS Virtual Day on the Hill; understanding the Biden-Harris Administration’s climate-related goals.
26 Ideas 2 Go
Rush Point Store has been reeling in customers for more than 140 years.
80 Cool New Products 2
| MAY 2021
84 Gas Station Gourmet
Flory’s Gas, Convenience & Deli customizes menus to local tastes across its four Hudson Valley locations.
86 Global Trends
Convenience stores in Brazil are focusing on foodservice and new formats as the market grows.
90 Category Close-Up
Despite COVID-19, c-store food made on-site still satisfies America’s cravings and dietary needs.
96 Back Page PLEASE RECYCLE THIS MAGAZINE The presence of an article in our magazine should not be permitted to constitute an expression of the association’s view. CONVENIENCE.ORG
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VOLUME 20, ISSUE 5
EDITORIAL Kim Stewart Editor-in-Chief (703) 518-4279 firstname.lastname@example.org
NACS BOARD OF DIRECTORS CHAIR: Kevin Smartt, Kwik Chek Food Stores
Lauren Brooks Digital Content Manager (703) 518-4283 email@example.com
OFFICERS: Lisa Dell’Alba, Square One Markets Inc.; Brian Hannasch, Alimentation Couche-Tard Inc.; Andy Jones, Sprint Food Stores Inc.; Ken Parent, Pilot Flying J LLC; Victor Paterno, Philippine Seven Corp. dba 7-Eleven Convenience Store; Don Rhoads, The Convenience Group LLC; Jared Scheeler, The Hub Convenience Stores Inc.
CONTRIBUTING WRITERS Terri Allan, Sarah Hamaker, Al Hebert, Pat Pape, Renee Pas, Jerry Soverinsky
PAST CHAIRMEN: Frank Gleeson, Aramark Northern Europe; Julie Jackowski, Casey’s General Stores Inc.
DESIGN Beyond Definition www.beyond-definition.com
MEMBERS: Chris Bambury, Bambury Inc.; Chris Coborn, Coborn’s Inc. Little Dukes; Joseph M. DePinto, 7-Eleven Inc.; Bhagdeep S. Dhaliwal, Dhaliwal & Associates Inc.; George Fournier, EG America LLC; Anne Gauthier, St. Romain Oil
Sara Counihan Managing Editor (703) 518-4278 firstname.lastname@example.org
ADVERTISING Stacey Dodge Advertising Director/Southeast (703) 518-4211 email@example.com Jennifer Nichols National Advertising Manager/ Northeast (703) 518-4276 firstname.lastname@example.org Ted Asprooth National Sales Manager/ Midwest, West (703) 518-4277 email@example.com
PUBLISHING Erin Pressley Publisher and Vice President, Education & Media (703) 518-4208 firstname.lastname@example.org Rose Johnson Audience Development and Production Manager (703) 518-4218 email@example.com
Company LLC; Varish Goyal, Loop Neighborhood Markets; Christine Hogan, Wheels Convenience Stores; William B. Kent, The Kent Companies dba Kent Kwik Convenience Stores; Sydney Kimball, Shell International Petroleum Company Limited; Chuck Maggelet, Maverik Inc.; Ina (Missy) Matthews, Childers Oil Co.; Charles McIlvaine, Coen Markets Inc.; Lonnie McQuirter, 36 Lyn Refuel Station; Glenn M. Plumby, Speedway LLC; Robert Razowsky, Rmarts LLC; Richard Wood, Wawa Inc. SUPPLIER BOARD REPRESENTATIVES: Rick Brindle, Mondelēz International; Brent Cotten, The Hershey Company STAFF LIAISON: Henry Armour, NACS GENERAL COUNSEL: Scott Sinder, Steptoe & Johnson LLP
NACS SUPPLIER BOARD CHAIRMAN: Rick Brindle, Mondelēz International
VICE CHAIRMEN: David Charles, Cash Depot; Kevin Farley, GSP; George Ubing, E&J Gallo Winery
Coca-Cola Company; TJ Lynch; Vito Maurici, McLane Company Inc.; Bryan Morrow, PepsiCo Inc.; Sharon Porter, Saputo USA LLC, dba Saputo Convenience; Lesley D. Saitta, Impact 21; John Thomas, iSEE Store Innovations LLC; Dean Zurliene, Monster Beverage Company
PAST CHAIRMEN: Kevin Martello, Keurig Dr Pepper; Brad McGuinness, Qopper Inc.; Drew Mize, PDI
RETAIL BOARD REPRESENTATIVES: Steve Loehr, Kwik Trip Inc.; Chuck Maggelet, Maverik Inc.
MEMBERS: Blake Benefiel, Altria Group Distribution Company; Alicia Cleary, Anheuser-Busch InBev; Tony Gaines, NVIP LLC; Mike Gilroy, Mars Wrigley; Josh Halpern, FIFCO USA; David Jeffco, Krispy Krunchy Foods LLC; Tim Knight; Kevin M. LeMoyne,
STAFF LIAISON: Bob Hughes, NACS
CHAIRMAN-ELECT: Brent Cotten, The Hershey Company
SUPPLIER BOARD NOMINATING CHAIRMAN: Joseph Vonder Haar, iSEE Store Innovations LLC
NACS Magazine (ISSN 1939-4780) is published monthly by the National Association of Convenience Stores (NACS), Alexandria, Virginia, USA. Subscriptions are included in the dues paid by NACS member companies. Subscriptions are also available to employees of nonmember companies at a rate of $70 per year. Please add $15 for delivery outside the United States. Subscription requests: firstname.lastname@example.org POSTMASTER: Send address changes to NACS Magazine, 1600 Duke Street, Alexandria, VA, 22314-2792 USA. Contents © 2021 by the National Association of Convenience Stores. Periodicals postage paid at Alexandria VA and additional mailing offices.
1600 Duke Street, Alexandria, VA, 22314-2792
HAVE YOU SEEN THE NEW WILDHORSE? SAME GREAT FLAVOR. BOLD NEW LOOK.
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WHAT’S ONLINE | MAY 2021
Be Safe Out There
Call for entries. Deadline 14 May.
This is your chance to be recognized by peers for your progressive thinking, grit and effectiveness.
Start Your Submission at convenience.org/awards
Convenience retailers strive to operate a business where employees and customers feel safe from potential crimes by implementing a thoughtful security and safety program in their stores, which begins with store layout and design. NACS offers resources that can help retailers define the best course of action for keeping their employees and customers safe. Resources include Crime Prevention Through Environmental Design, which is a multidisciplinary approach of crime prevention that uses urban and architectural design and the management of built and natural environments. NACS also offers robbery deterrence training materials that focus on three validated security practices. Learn the basic rules in designing for safety and security and access training materials at www.convenience.org/topics/ operations/security-safety.
A Digital Don’t Miss
Don’t forget that NACS Magazine offers its issues in a flippable PDF version. The digital issue boasts the look and page-turning feel of the print version and includes links to websites, video and more. You can find the most recent digital issue at www.NACSMagazine.com. While you’re there, be sure to catch up on articles from past issues. You can browse by topic, popularity or by month. NACSMagazine.com allows you to stay connected with the latest industry news during these critical times. CONVENIENCE.ORG
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FROM THE EDITOR
A Case of Spam Kim Stewart Editor-In-Chief
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The past year hasn’t been entirely kind to c-store foodservice. 8
| MAY 2021
ne of the unexpected benefits of changing the way we’ve held meetings over the past year because of the pandemic has been the opportunity to have engaging conversations via video with people we might not get to chat with in a bustling physical venue. During NACS Day on the Hill in March (see our Inside Washington coverage this month), I had the pleasure of talking with legislative staff members of the Hawaii congressional delegation, and in one meeting, the conversation turned to Spam—the food, not the email variety. As it turned out, I’d just returned from a trip to Oahu and got to experience a Hawaiian-style breakfast: white rice, eggs over easy and fried Spam from convenience retailer ABC Stores’ Duke’s Lane Market & Eatery. Now, this Virginia native grew up eating the canned pork staple, just never with rice as a side dish. Although I didn’t try another local staple—Spam musubi—I did enjoy açaí bowls with chia pudding and fresh mango, poke bowls and Kalua pork tacos. That’s not to mention malasadas from Leonard’s Bakery, a Honolulu landmark since 1952. I’d fly six hours cross-country, take a COVID-19 test and another five-hour plane ride to Oahu to sample a sugarsprinkled, custard-filled Portuguese doughnut any day. The past year hasn’t been entirely kind to c-store foodservice as we share
asa Fab sign a nd mal
in “Back on the Menu,” which covers the category’s metrics at the NACS State of the Industry Summit. (Look for exclusive coverage of the entire SOI Summit in June.) As Heather Davis, director of foodservice, Parker’s, says, “The reality is that we’re still climbing a mountain with foodservice in some ways to where people don’t realize the amount of work and effort that we are truly putting into the quality of our food, and I think one of the benefits of the pandemic is that we became that trusted place that you could get a hot meal from.” Part of the turnaround hinges on innovation. “Food is really going to be the champion that we can lean on to drive us into the future,” Davis said. Whether that’s chicken sandwiches (see page 38) or a pizza program like Casey’s (see page 44) or housemade tortilla chips and queso (see our Q&A with TXB’s vice president of foodservice operations at www.nacsmagazine.com), the convenience retail sector is embracing a culture of high-quality, great-tasting food. Back to virtual meetings. Although Zoom has brought us all closer, I can’t wait to rub elbows with you all in Chicago at the 2021 NACS Show, October 5–8. Did you hear? It’s on!
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24/7 Day: Heroes Don’t Take a Break
his July 24 (24/7 Day), the NACS Foundation is uniting convenience stores across America in recognizing first responders, medical personnel and American Red Cross volunteers who work around the clock, 24/7, serving our communities to ensure people don’t face emergencies alone. Now in its third year, the annual event helps raise awareness and donations for the urgent humanitarian needs of the American Red Cross and spotlights our industry’s important role in supporting local heroes and the communities we serve. HOW CAN YOU PARTICIPATE? Get involved. Now more than ever, we must come together to support those who work around the clock to take care of our
| MAY 2021
communities. Learn how you can get involved and partner with the NACS Foundation’s 24/7 Day at www.conveniencecares.org. Donate. Our annual 24/7 Day is just one part of NACS Foundation’s Response Relief program. If you’re interested in getting involved in additional ways, consider funding our Response Relief program to support disaster relief efforts in communities across the country. To learn more, contact our team today at www.conveniencecares.org/contact. The American Red Cross name, emblem and copyrighted materials are being used with its permission, which in no way constitutes an endorsement, express or implied, of any product, service, company, opinion or political position. The American Red Cross logo is a registered trademark owned by The American National Red Cross. Should you require a receipt, please donate by calling 1-800-RED CROSS (1-800-733-2767), or give online at redcross.org. CONVENIENCE.ORG
Remembering Hugh Howton Hugh Howton, 1965 NACS president and a convenience store pioneer, died on March 9, 2021, at the age of 92. Howton founded the Pik-a-Pak Grocery Corp. in New Orleans, Louisiana, which quickly grew into 16 stores throughout the state and expanded into Mississippi, including the first convenience store in the French Quarter. Howton was one of 33 attendees at the first NACS annual meeting in 1961, an event that later became the NACS Show. He was instrumental in defining the course of the industry during its early years, especially related to advocacy. “I think from the time we left the first NACS meeting [in 1961], we knew that we had done something special. All of a sudden we were meeting people that we could ask a question to that could answer the question or find someone in the group that could answer the question. I don’t think that we ever looked back,” said Howton While the president of NACS, Howton was the first NACS member to testify on Capitol Hill. He appeared before the U.S. Senate’s Labor Committee, … Continued on page 14
which was chaired by the late Sen. Robert F. Kennedy, on behalf of NACS to oppose certain amendments to the Fair Labor Standards Amendments of 1965. “One of the main reasons we formed NACS was also to get a political arm in Hugh Howton, 1965 NACS president Washington, D.C., because we realized that the legislative part of NACS was going to be a vital part of our industry,” Howton said in a 2008 NACS interview. Howton also was instrumental in creating a visual “idea share” program called “Ideas, Ideas, Ideas,” which eventually evolved into the popular Ideas 2 Go video series. “We were all interested in new store designs and in new advertising programs, or anything of that nature. The idea was a way for us to keep up with what was going on across the country. So, it
NACS Seeks Nominees for European Retail Awards Now in its 13th year, the NACS European Convenience Retailing Awards program recognizes outstanding achievements in the European retail community. The program is a high point for retailers, industry experts and suppliers who convene each June at NACS Convenience Summit Europe to recognize and celebrate industry success and innovation. This year, the event is being held virtually. Each year, entrants from European countries and diverse convenience retail formats submit inspiring videos that capture their innovations and achievements in hopes of being honored. The awards provide one of the greatest benchmarks of global convenience retailing excellence. Over the years, entrants from multiple countries and diverse types of convenience formats and company sizes have participated. Detailed information about the awards program can be found at www.conveniencesummit.com/award. CONVENIENCE.ORG
This year, convenience and fuel retailers from European countries may submit entries in these four categories: • “ Best of the Best” Store Award (best virtual store tour submission as voted on by program attendees) •E uropean Community Engagement and Support Award •E uropean Convenience Retail Sustainability Award •E uropean Convenience Retail Technology Award Entries for all awards must be submitted to NACS at bit.ly/CSEAwards. All awards submissions will be treated confidentially. The deadline for submissions is May 14. Join us at NACS Convenience Summit Europe on June 1-3. The Summit’s agenda is quickly developing; for more information on the virtual event visit www.convenience.org/CSE.
MAY 2021 |
… Continued from page 13 was just a method of us being able to keep up with transitions in the marketplace,” he told NACS. As the c-store business continued to grow, Howton sold his interest in Pik-a-Pak to Li’l General and served as its vice president and on the board of directors. He helped grow Li’l General to 360-plus stores and gain a place on the American Stock Exchange. Howton retired from Li’l General at age 40, although that didn’t last for long. After moving to Jacksonville, Florida, Howton co-founded Bell Wholesale Tire Company in 1971. He actively supported military groups, including the Jax Navy League and USO, and served as president for both organizations. Howton’s civic military involvement led him to become civilian aide to the Secretary of the Army of Florida, where he received a courtesy rank of three-star general. Howton was
also appointed to Governor Bob Graham’s military advisory committee, where he served for 20 years. Missing his convenience store involvement, Howton founded the National Advisory Group (NAG) in 1983 to provide education, networking and relationship-building for convenience store executives. During the next 20 years, NAG grew to 200 supplier members and 350 retail members, representing 13,000 stores in 45 states. Howton eventually sold NAG to Penton Media (Convenience Store Decisions) on the NYSE and retired again. Howton is survived by his wife of 65 years, Jane Baker Howton; daughter Leigh Philips (Mike); son, Joe Howton (Robin); daughter Hope Eller (John) and six grandchildren: Ashley, Peyton, Anderson, Harper, Baker and Harlee.
MEMBER NEWS RETAILER David Ring, community and government relations manager at Kwik Trip Inc., has been elected chair of the Minnesota Retailers Association. Ring was selected to lead the organization representing 1,200 retail stores across Minnesota. SUPPLIER The National Confectioners Association announced that Paul Chibe, president and CEO of Ferrero North America, has assumed the role of chairman of the NCA Board of Trustees for a two-year term. Paul Chibe Hussmann Corporation announced the appointment of Dan Sullentrup as a company vice president. In this new role, Sullentrup will have responsibility for Hussmann’s eGrocery solutions strategy.
| MAY 2021
Michael J. Tucker, CFA
James P. Mickelinc Dan Sullentrup
Blanc Display Group announced the addition of manufacturing executive Mark Chenoweth as business development manager.
John T. Mickelinc
Techniche announced the appointment of Steve Brady as head of sales, Americas.
Koupon announced that Gregg Augustine has joined the company as EVP strategic partnerships and business development. Matrix Capital Markets Group Inc. announced two promotions and
welcomed a new member to the Downstream Energy & Convenience Retail Investment Banking Group. John T. Mickelinc has been promoted to associate. Michael J. Tucker, CFA, has been promoted to senior analyst. Matrix welcomed James P. Mickelinc, analyst, as a member of the Downstream Energy & Convenience Retail Investment Banking Group.
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NEW NACS MEMBERS NACS welcomes the following companies that joined the association between February 16, 2021, and March 15, 2021. NACS membership is company-wide so we encourage employees of member companies to create a username by visiting www.convenience.org/Create-Login. All members receive access to the NACS Online Membership directory, latest industry news, information and resources. For more information about NACS membership, call (703) 684-3600.
NEW RETAILER MEMBERS Affton BP Saint Louis, MO
North Grand Mobil Saint Louis, MO Tremont BP Tremont, IL Penn Minnoco/ Crosstown BP Minneapolis, MN
CB’s Mini Mart Saint Robert, MO
NEW SUPPLIER MEMBERS
D Mart Jackson, MO DMT Management Port-au-Prince, Haiti Hanley Mobil Berkeley, MO
ADT Commercial Romeoville, IL
AvoLov LLC dba BranchOut Bend, OR www.branchoutfood.com Coinflip Chicago, IL www.coinflip.tech Collinson dba Collinson Valuedynamx Boston, MA www.collinsongroup.com ECS Limited Chantilly, VA www.ecslimited.com
Atomic Brands Fort Wayne, IN www.drinkmonaco.com
Ennis-Flint Inc. Greensboro, NC www.ennisflint.com
Naz64inc Santee, CA www.truorganixusa.com
Trileaf Corporation Des Peres, MO www.trileaf.com
Faegre Drinker Biddle & Reath LLP Washington, D.C. www.faegredrinker.com
One World LED USA LLC Houston, TX www.oneworldledusa.com
HUNTER CLUB MEMBERS
Genius Gourmet Inc. Fairfax, VT www.geniusgourmet.com
Prisma Holding Inc. dba Prisma Retail Wilmington, DE www.prismaretail.ai
Max Nutrition Products Herriman, UT www.maxenergyshot.com
SunLife Medical Inc. Norcross, GA www.sunlifemed.com
Hathway San Luis Obispo, CA www.wearehathway.com
Nationwide Tank and Pipe New Braunfels, TX
Trigo Vision LTD Tel-Aviv, Israel www.trigo.tech
Defiance Fuel LLC Nashville, TN www.defiancefuel.com
NACS Calendar of Events SIGNATURE EVENT
FUELS 2021 December 14-16, 2021 | Dallas, TX
NACS Leadership Forum May 12-14, 2021 | Kansas City, MO
NACS Executive Leadership Program at Cornell University July 25-29, 2021 | Ithaca, NY
NACS Show October 5-8, 2021 | Chicago, IL
NACS Convenience Summit Europe June 1-3, 2021 | Virtual NACS Convenience Summit Asia August 16-20, 2021 | Virtual
NACS Leadership for Success May 2-7, 2021 | Richmond, VA
NACS Financial Leadership Program at the Wharton School of the University of Pennsylvania August 1-6, 2021 | Philadelphia, PA
NACS Women’s Leadership Program at Yale School of Management October 26-29, 2021, and November 2–5, 2021 Live Virtual NACS Innovation Leadership Program at MIT Sloan School of Management October 31-November 5, 2021 | Cambridge, MA NACS Marketing Leadership Program at Kellogg School of Management, Northwestern University November 14-19, 2021 | Evanston, IL For more information about these NACS events, visit www.convenience.org/events.
NACS In Store Throughout 2021 | Stay tuned …
| MAY 2021
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BY THE NUMBERS
Memorial Day Sales As the weather warms and consumers become more comfortable leaving home, the upcoming summer season will be ripe with sales opportunities for convenience retailers, particularly during the week of Memorial Day. Products such as beer, ice, edible and nonedible grocery items and ice cream are staples for backyard BBQs and family gatherings. By Memorial Day weekend, retailers should be prepared for an influx of sales and stocked up. According to NielsenIQ, total U.S. convenience saw beer sales average 17.8% higher than the total weekly average for beer sales in 2020. Despite decreased convenience trips in 2020 because of COVID-19, the flavored malt category, which includes alcoholic seltzer, saw 24.6% more sales during the week of Memorial Day last year than the average weekly sales for the subcategory in 2020, and imported beer was up 21.6% last year. Bottled water and sports drinks also saw a sales spike during the week of Memorial Day 2020, averaging 16.6% and 23.1%, respectively, more than a typical sales week in 2020. Last year’s Memorial Day week also saw grocery grow as more customers celebrated at home. Grocery (edible and nonedible) sales increased 26.6% for condiments, 35.8% for water/beverage enhancers, 20.7% for dish care and 8.1% for paper products, compared with the same week in 2019. Ice cream remains highly popular during the summer months, specifically holiday weekends. Packaged ice cream sales increased 17.5% over the prior year and 27.2% more than the average packaged ice cream weekly sales in 2020.
CATEGORY SALES 2020 Beer Edible Grocery Ice Nonedible Grocery Packaged Beverages Packaged Ice Cream Novelties
Week of Memorial Day 2020 527,718,918 27,365,602 22,122,692 11,437,785
Average Weekly Sales in 2020 447,952,475 28,096,954 15,888,257 11,337,393
Don’t forget the ice! According to NielsenIQ, ice sales start to spike beginning Memorial Day weekend and peak the week of July 4. Although COVID-19 did result in decreased c-store traffic in 2020, ice sales in 2020 averaged 39.2% more during the week of Memorial Day than average sales for the entire year. In 2017, 2018 and 2019, Memorial Day week averaged over 50% more sales than the entire year’s weekly average.
| MAY 2021
frazil.co m info@fre • 801-838-7147 ezingpo intllc.co m
*Source: Sales data from 1,100+ stores that switched to Frazil from other FUB programs during 1/1/2019 – 12/31/2020
N BY THE NUMBERS
of NACS retail members are incentivizing employees to get vaccinations
of c-store companies offered medical coverage to store hourly employees in 2020
| MAY 2021
ACS is supporting the Veterans Coalition for Vaccination (VCV)—formed earlier this year with seven leading veteran organizations—to help promote a nationwide public service announcement campaign to encourage full vaccination and help end the COVID-19 crisis. The “Call to Arms” campaign messaging blends iconic imagery with a humorous twist to enlist “the tatted, the toned and the sun-deprived” arms and encourage Americans to get vaccinated because “better times are within arm’s reach.” The ads end with a simple and direct call to action: “Don’t wait. Vaccinate.” NACS is sharing some of the images and messages on its social media platforms. NACS members can also post the assets with #ThisIsOurShot, a play on the popular song from the Broadway musical Hamilton. The campaign is one deliverable from VCV, which is aiding local and state officials with COVID-19 vaccine distribution
in the United States. The participating veteran organizations are working toward the common goal of ensuring each American who wants the vaccine has equitable access to it. “Our industry supports everyday heroes like veterans, and this campaign moves forward important logistical issues and messaging that can help us fight the pandemic,” said NACS Vice President of Strategic Industry Initiatives Jeff Lenard, adding that 65% of NACS retail members are incentivizing employees to get vaccinations. VCV’s members include Team Rubicon; Wounded Warrior Project; Iraq and Afghanistan Veterans of America; Student Veterans of America; Team Red, White & Blue; The Mission Continues; and the Travis Manion Foundation. NACS retailer and supplier members interested in reaching out to one of these groups to discuss strategic partnerships can contact Jeff Lenard at firstname.lastname@example.org. CONVENIENCE.ORG
Speedway Donations Change Kids’ Futures Speedway LLC raised $11 million for kids treated at Children’s Miracle Network Hospitals across the United States in 2020. Donations made by daily contributions from customers, business partners and employees throughout the year helped meet the unique needs of 81 children’s hospitals. In addition to monetary contributions, Speedway donated 7,000 N95 masks and 3,000 surgical masks to 11 children’s hospitals located in initial COVID-19 hotspot areas to help protect medical professionals on the front lines treating the youngest members of the community. “Speedway really fueled miracles for our member children’s hospitals in 2020,” said Teri Nestel, president and CEO of Children’s Miracle Network Hospitals. “The 30-year partnership that stores, employees and member hospitals have developed together is reflective of Speedway’s culture to help kids in the communities where they operate, and their critical support was appreciated more than ever during the pandemic.” Speedway’s partnership with Children’s Miracle Network Hospitals began in 1991 and has since raised more than $133 million. In 2020, Speedway’s annual Speedway Miracle Tournament in Dayton, Ohio, raised more than $2 million. This event is one of the largest golf events in the United States benefiting CMN Hospitals. Each year, Speedway organizes the Miracle Children Program, where patient families share their stories to raise awareness of the need for children’s hospitals and how changing kids’ health can positively change the future of their communities. “I am extremely proud of what our team was able to accomplish with CMN Hospitals fundraising in 2020, despite the challenges we faced with the pandemic. The level of support from our customers, vendor partners and employees was remarkable,” said Tim Griffith, president of Speedway. Glenn Plumby, executive vice president and chief operating officer at Speedway, talked about how deeply the company is committed to community involvement as the largest CMN Hospitals contributor within the convenience store industry in Convenience Matters podcast episode 74, “Miracles by Speedway.” Listen at www.conveniencematters.com. CONVENIENCE.ORG
IN THE COMMUNITY OnCue Helps Fight Hunger Oklahoma-based OnCue donated $40,000 of nonperishable food and personal care products to several local food banks in conjunction with a limitededition cup that will raise funds for The Regional Food Bank of Oklahoma’s Food for Kids Programs. The Regional Food Bank and its partner agencies have witnessed a 30% increase in need among Oklahomans facing food insecurity during COVID-19. “We have all been deeply impacted this past year, but when one in four kids in Oklahoma were hungry before the pandemic, it makes sense why we are witnessing a whole new level of need,” said Laura Aufleger, president of OnCue. “Food is essential, and we are grateful we can come together to support The Regional Food Bank and their partner agencies, and specifically, programs like Food For Kids.” Enmarket Raises $160,000 for Local Charities Georgia-based Enmarket raised $160,000 for local charities through its charity golf tournament on March 23. “Our involvement with this fundraiser reflects the spirit of our mission statement to enrich life,” said Brett Giesick, president of Enmarket. “This event and others such as our store fundraiser for Leukemia-Lymphoma Society, the Enmarket Savannah Bridge Run and the Savannah Hockey Classic also demonstrate our interest in promoting a healthy lifestyle and our dedication to the betterment of our community. We are grateful to the many vendor partners that helped make these donations possible.”
MAY 2021 |
Mr. Smith (Doesn’t) Go to Washington
Industry advocates find new ways to tell their story to lawmakers during NACS Virtual Day on the Hill. BY MARGARET HARDIN
FACTS & FIGURES
Industry members gathered virtually for NACS Day on the Hill
Number of congressional offices visited virtually by 46 retailer teams
| MAY 2021
hroughout the years, NACS Day on the Hill has changed with the times and provided members of the convenience and fuel retailing industry different avenues to tell their stories to lawmakers in Washington, D.C. This year, however, Day on the Hill wasn’t on Capitol Hill at all—or even in Washington. From March 23-24, NACS hosted its first-ever virtual Day on the Hill. In the midst of the COVID-19 pandemic and security concerns, Capitol Hill has remained relatively quiet for over a year. Instead of flying to D.C., 178 retailers, suppliers and NACS staff gathered virtually from the comfort of their homes or offices to advocate on behalf of the
c-store industry. Although the world has fundamentally changed during the past year, convenience remains an essential business in every community across the United States. Our story is one that will always need to be told. Attendees met virtually with their legislators to discuss three issues that are currently top of mind to the industry: electric vehicle charging infrastructure, credit card swipe fees and liability protections for essential businesses. ELECTRIC VEHICLE CHARGING INFRASTRUCTURE The new Biden-Harris Administration has set a clear priority to accelerate our country’s transition to electric vehicles. CONVENIENCE.ORG
One of the administration’s goals is to install at least 500,000 EV chargers across the nation. Our industry must be part of this conversation as Congress prepares to take up President Joe Biden’s $2.3 trillion infrastructure plan. Convenience and fuel retailers want to provide drivers with whatever fuel powers their vehicles. We sell over 80% of the motor fuels in the U.S., across nearly 122,000 locations. Our industry is well-positioned to be part of the solution in moving transportation energy toward electrification. Allowing the private sector to compete on a level playing field is the best way to spur the development of electric charging infrastructure. It’s also the best way to ensure that vehicle owners get the best prices and experience over the long-term. Virtual Day on the Hill teams asked House and Senate members to ensure that any EV charging policies that come from an infrastructure package promote a competitive market and remove hurdles to private sector investment. CREDIT CARD SWIPE FEES U.S. credit card fees are the highest in the industrialized world. On Visa and Mastercard credit transactions, the average rate paid in the United States is 2.25% of the transaction amount, more than seven times what merchants pay in Europe. Retailers have no say either—only Visa and Mastercard set the swipe fee rates that major banks charge retailers to accept credit cards. For many convenience retailers, swipe fees are their second-highest operating cost, right behind the cost of labor. Our industry has more than 150,000 convenience stores nationwide, 63% of which are single-store operators. These small businesses cannot thrive with the constant pressure created by increases in swipe fees. In their meetings, Virtual Day on the Hill attendees shared their personal experiences with lawmakers and asked them to support any legislation that would help retailers and bring competition to credit card swipe fees. CONVENIENCE.ORG
LIABILITY PROTECTIONS FOR ESSENTIAL BUSINESSES At the beginning of the COVID-19 pandemic, the convenience and fuel retailing industry was designated as essential critical infrastructure by the Department of Homeland Security. Our industry committed to remaining open to meet the needs of communities across the United States. However, staying open has presented challenges. C-stores must comply with ever-changing guidance from the local, state and federal government.
ONE VOICE This month, NACS talks to Matt Danzig, national account manager, good2grow Inc. What role in the community do you think convenience stores should play? Convenience stores are a place to refuel and get a bite to eat quickly at all hours of the day. They create jobs in the community, support and sponsor countless community charities, serve as a critical community resource in times of emergency, and lastly, many Matt Danzig convenience stores provide communities in rural areas access to essential items between trips to the grocery store. What does NACS political engagement mean to you, and what benefits have you experienced from being politically engaged? It means supporting the industry that supports me and my family. It’s in any manufacturer’s best interest to understand the legislative landscape impacting our retail customers. Supporting NACSPAC allows me to hear firsthand from retailers on how any one particular issue impacts their business, good or bad. As a result of engaging with NACSPAC, I not only better understand my customers’ businesses, but I also have been able to develop relationships with individuals from different areas of their organizations. What c-store product could you not live without? There are many items I love, like a quality turkey, cheese, bacon and banana pepper sub with spicy mustard, but the one item I have consistently bought since I was a child would be Hershey’s Reese’s Peanut Butter Cups!
MAY 2021 |
Our industry is well-positioned to be part of the solution in moving transportation energy toward electrification.
Margaret Hardin is the NACS grassroots manager. She can be reached at email@example.com.
During Virtual Day on the Hill, retailers shared with lawmakers the extraordinary measures they took to protect employees and guests, including plexiglass shields, social distancing markers and increased cleaning and sanitation. However, they also explained that there is a threat that their stores could be targeted by unfounded lawsuits related to COVID-19 simply because they remained open. Such lawsuits would cost tens of thousands of dollars and could be devastating to our industry. Teams asked lawmakers not to give up on pursuing liability protections for essential businesses in future legislation. PROBLEM SOLVERS Often in D.C., it’s tough to find members of Congress on opposite sides of the aisle who agree on any issue. The Problem Solvers Caucus was formed to bridge that gap. The 56-member caucus is evenly split between Democrats and Republicans and united in the idea that there are common sense solutions to many of our country’s toughest challenges. After the general session, Virtual Day on the Hill attendees had the opportunity to log on to the Friends of NACS Bipartisan Happy Hour and hear from Rep. Josh Gottheimer (D-NJ-05), co-chair of the Problem Solvers Caucus, and Rep. Brian Fitzpatrick (R-PA-01), vice chair. They took attendee questions and
even revealed their favorite c-store snacks. It was refreshing to hear both members provide honest answers about how they plan to work together to advance their priorities for the new Congress. OUR NEW NORMAL Wednesday, March 24, was a rainy day in D.C. Virtual Day on the Hill attendees remarked that they appreciated avoiding the rain and giving their feet a rest this year from the usual running from office to office all over Capitol Hill. And, while there were a few growing pains at the start of the day, attendees became digital pros by the time they wrapped up their final meetings. NACS is incredibly thankful that our members recognize that the industry’s story still needs to be told. Forty-six teams of retailers met with nearly 240 congressional offices. Freshman members were introduced to our industry, and veteran members stepped up to be our champions on the Hill. Whether Day on the Hill will be virtual or in-person in 2022, we encourage you to join us and add your voice to effect positive changes for the industry. Day on the Hill isn’t the only way you can tell your story; if you’d like to get involved in our grassroots efforts, please contact Margaret Hardin at firstname.lastname@example.org.
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 March 1-31, 2021, are: Chet Cadieux QuikTrip Corporation
Matt Danzig good2grow
Natalie Morhous RaceTrac Petroleum Inc.
Ron Rutherford Apter Industries Inc.
Melissa Vonder Haar iSEE Store Innovations LLC
Karla Ahlert RaceTrac Petroleum Inc.
Brandon Duckett RaceTrac Petroleum Inc.
Carl Motter VAN Oriental Food Inc.
Stanton Sheetz Sheetz Inc.
Doug Yawberry Weigel's Stores Inc.
Lisa Biggs Impact 21
Jimmy Alexander Frangis PDI
Nick Paich GSTV
Richard Spresser Pester Marketing Company
| MAY 2021
Climate Corner UNDERSTANDING THE BIDEN-HARRIS ADMINISTRATION’S CLIMATE-RELATED GOALS AND HOW THEY AFFECT THE CONVENIENCE RETAILING INDUSTRY.
BY PAIGE ANDERSON In addition to the blooming cherry blossoms in Washington, D.C., a flurry of climate-related goals and proposals have emerged from the White House and Congress with the overall ambition of reducing greenhouse gas emissions and reducing the carbon footprint of the federal government and transportation sector. When looking at these proposals, you may hear the phrases “tailpipe emissions,” or “life-cycle analysis” or “well-to-wheel.” What do they mean? Are they different? Does it really matter? In looking at environmental and air quality standards and benchmarks, it is necessary to measure and quantify the emissions that are being regulated. The transportation sector is the primary focus of much of these proposals. Vehicle emissions can be divided into two general categories: air pollutants, which contribute to smog and haze, and greenhouse gases, such as carbon dioxide and methane. Both categories of emissions can be evaluated on a direct basis (i.e., tailpipe emissions standard) or with a life-cycle analysis (i.e., well-to-wheel basis). Tailpipe emissions standards measure certain pollutants that are emitted from an internal combustion engine. This standard was first introduced in California in 1959 to control carbon monoxide and hydrocarbon emissions from gasoline engines. Well-to-wheel emissions standards look at all the emissions and environmental impact related to fuel production, processing, distribution and use—not just from the tailpipe of a vehicle. In the case of gasoline, emissions produced while extracting the petroleum from the earth, refining it, transporting the fuel to gas stations and then the burning of the fuel in the vehicle would be included in the analysis. CONVENIENCE.ORG
Understanding the difference between tailpipe emissions standards and life-cycle analysis is important when comparing the environmental impact between a vehicle powered by an internal combustion engine or a zero-emission vehicle powered by electricity. If you made a comparison between the two cars and used a tailpipe emissions standard, a conventional vehicle with an internal combustion engine produces direct emissions though the tailpipe, as well as through evaporation from the car’s fuel system and during the fueling process. Conversely, an electric vehicle would produce zero direct emissions. However, life-cycle or well-to-wheel analysis would include all emissions related to fuel production, processing, distribution and use. In the case of an electric vehicle, it would look at the power source generating the electricity (e.g., coal, natural gas, hydro, nuclear, solar, wind, etc.) and how it is extracted, processed and distributed for the use of electric generation. Thus, an electric vehicle that uses electricity generated by coal would have a very different emissions impact from an electric vehicle powered by electricity generated from solar or wind. As policymakers look at the future of how the cars we drive are going to be powered, it is important to understand what standard is going to be used to compare the environmental impact of different fuels and vehicles. In looking at environmental policy, NACS believes science should be the foundation for transportation climate and environmental policies, and any effort to improve the transportation industry s greenhouse gas emissions requires an accurate accounting of the life-cycle carbon intensity associated with particular fuels and technologies.
Paige Anderson is the NACS director of government relations. She can be reached at email@example.com.
MAY 2021 |
IDEAS 2 GO
Fishing for Customers
Rush Point Store has been reeling in customers for more than 140 years. BY SARAH HAMAKER
Our customers know we’re an authentic general store when they walk in the doors.
L to R: Rush Point Store owner Larry McDonough chats with regular customers Kody Harper and Joseph Hermanson.
ush Lake near Stanchfield, Minnesota, boasts some of the best year-round fishing in the area—something that Rush Point Store has capitalized on for more than a century. “We have a lot of fishing tackle, plus a back room with bait tanks to meet demand,” said Manager Alyssa Oldenburg. “The store stays busy with fishers looking
SEE MORE! Ideas 2 Go showcases how retailers today are operating the convenience store of tomorrow. To see videos of the c-stores we profiled in 2020 and earlier, go to www.convenience.org/Ideas2Go.
| MAY 2021
to do ice and open water fishing, and we only have a month or two between those two seasons where traffic slows down.” For 142 years, Rush Point has greeted fishing aficionados, along with locals and tourists, with fishing tackle, bait, groceries and snacks. The original store was established in 1879. While a fire destroyed the first structure, today’s building dates to 1899. Larry McDonough has owned the store since 1996. “Our floors are original to the 1899 building,” Oldenburg said. “We’ve tried to keep everything as original as possible.” Old scales and decoys decorate the walls and sit atop coolers to carry the old-fashioned feel throughout the building. “Our customers know we’re an authentic general store when they walk in the doors,” she said. CONVENIENCE.ORG
Rush Point Store knows its customer base and caters to it by offering a variety of live bait and other fishing gear, such as custom-painted lures. The c-store is also the only retailer with groceries in the Minnesota small town, so staples such as canned soups and baking supplies are always stocked.
LURING CUSTOMERS From its inception, Rush Point has been the place to pick up fishing equipment and licenses. Customers can stock up on a wide variety of fresh, seasonal live bait, including crappie minnows, fatheads, golden shiners, angleworms, nightcrawlers and leeches. The store also carries a full line of tackle for summer and winter fishing, including hooks, custom-painted lures, spearing decoys, bait buckets, scoops, weights and bobbers. “If you need it for fishing, we’ve got it in stock,” Oldenburg said. “We’re the closest store to Rush Lake, which is a very popular fishing spot for Northern pike, walleye, largemouth bass, black crappie and bluegill fish.” Over the years, Rush Point diversified its services beyond fishing and snacks to include propane tank refills, grilling pellets, Minnesota Lottery tickets, an ATM and gasoline pumps, which McDonough moved from the front of the building to the side to make way for a handicap ramp into the store. While the coronavirus pandemic has decreased foot traffic at many retail locations, Rush Point has seen an influx of new customers over the past year. “I hate to say it but COVID-19 has been a huge benefit to us,” Oldenburg said. “Lots of people took up fishing as a new sport, and we’ve seen a ton of new faces plus our regulars. Our sales and traffic have been up compared with previous years.” CONVENIENCE.ORG
Name of company Rush Point Store
BEYOND FISHING Rush Point also caters to the local community, given it’s the only store with groceries in the small town. The store has four cooler doors for soft drinks, milk and beer and a freezer section for frozen pizzas and frozen entrees. Grocery staples include canned soups, baking essentials and “anything you might run out of at home,” Oldenburg said. The store also has off-sale liquor. The store offered curbside pickup in the early days of the pandemic, but not many customers utilized the service. “We’ll still do it if a customer asks, but it hasn’t been something our folks want,” she said. “We also found that when the big box stores
Date founded 1879 # of stores 1 Website www.rushpointstore.com
BRIGHT IDEAS Rush Point Store might not seem like a place to buy branded clothing, but it has become a popular apparel destination. “We’ve really expanded our clothing line over the past year or so,” said Manager Alyssa Oldenburg. The store stocks t-shirts and hoodies in a variety of styles. All feature Rush Point Store and the year it was established. Some have the store’s tagline: “Life’s Better on the Lake.” “We started out small with our clothing line and added to it gradually as sales increased,” she said. “Now the shirts and hoodies sell very well.”
MAY 2021 |
Conference / October 5-8, 2021 Expo / October 6-8, 2021 McCormick Place | Chicago
CHANGE IS CONSTANT, BUT SO ARE WE.
NACS Show Registration is Now Open! Join the industry this Fall where you’ll find ideas and products by tapping into our industry community as we work together to solve problems, and navigate the future of convenience.
Learn more at nacsshow.com/2021
Register by June 11 to save $300 with Early-Bird savings!
ran out of items, we had more luck keeping items like toilet paper in stock, so our customers shopped us more.” One thing customers won’t find in this one-stop shop is fresh foodservice. “We don’t have any plans to offer that because we’d have to install a public restroom if we did,” Oldenburg said. “Frankly, we have way too many people coming through here during our busy seasons to keep up with an in-store restroom, since the store only has two employees.” Overall, the atmosphere at Rush Point is welcoming. “We have so much fun in here,” she said. “When people come in the door, we try to make them feel as welcome as we can.” That welcome spills over to social media, with the store’s active Facebook and Instagram pages. “We use social
Half Horz.indd 1 CONVENIENCE.ORG
Owner Larry McDonough grabs some live bait. The store is the closest retailer to Rush Lake, a popular fishing hole.
media to talk about what’s new in our store and to highlight catches from our customers,” Oldenburg said. Her advice for other retailers looking to provide customers with a similar experience is to listen. “Everybody has a different story to tell,” she said. “If you take the time to listen, you’ll learn a ton. I’ve learned a lot about fishing and life from my customers.”
Sarah Hamaker is a freelance writer and NACS Daily and NACS Magazine contributor based in Fairfax, Virginia. Visit her online at www. sarahhamakerfiction.com.
4/13/2021 4:06:01 PM MAY 2021 |
MENU The pandemic upended foodservice in 2020, but innovation points toward recovery. BY KIM STEWART
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oodservice has been a double-digit contributor to inside sales at convenience stores for two decades as retailers enhanced their food and dispensed beverage offerings to woo forecourt customers in a highly competitive market. Although the COVID-19 pandemic took a bite out of the category in 2020, there are clear signs ahead that the category is poised for more growth. Guidelines and regulations at the federal, state and local levels— plus consumer wariness about sanitation and food safety—forced closures or modifications of many c-store food and self-serve beverage operations. Foodservice managers shut down roller grills and hot cases and turned off self-serve soda fountains, cappuccino and espresso machines and coffee stations. Refillable club mugs and tumblers were turned away. Many operators decided to pare down menus to simplify food prep and speed up customer orders, whether for takeout, curbside pickup or delivery. “Day by day, hour by hour, we were trying to manage what was happening in our stores and satisfy not only compliance but consumer expectations,” said Heather Davis, director of foodservice, Parker’s, based in Savannah, Georgia. Davis presented the foodservice category deep dive at the 2021 NACS State of the Industry (SOI) CONVENIENCE.ORG
iStock.com/Boarding1Now; Floortje; baibaz; klenova; Say-Cheese;
Summit on April 14. (Look for comprehensive and exclusive coverage of the SOI Summit and 2020 SOI category performance data in the June issue.) With schools and offices shuttered starting in March 2020, traditional commuting patterns were upended. “Prepared food business declined because consumers weren’t out and about,” Davis said. Shoppers consolidated trips whenever possible and sought to maximize every retail interaction, so the majority of trips became short, local occasions for essentials and staples for consuming later instead of immediately. “Our drive times became very inconsistent,” Davis said. Dayparts compressed—the key grab-a-coffee morning rush hour was especially hard hit and has yet to fully recover. C-stores saw some of those trips shift to the midday and evening dayparts, representing an opportunity to meet needs for meal items for dinner. “Consumers were figuring out how to get through their workweek, teach their kids and prepare for the unknown,” Davis said. Preliminary data from the NACS 2020 State of the Industry survey indicate that foodservice generated 22.6% of total in-store sales and 35.4% of in-store gross profits last year. This compares to 25.4% of in-store sales and 38.9% of inside gross profits in 2019. On an annual basis, foodservice sales fell by 9.6%, from $651,934 in 2019 to $589,241 in 2020, and represented 8.7% of total sales last year. Gross profit dollars declined by 11.8%, from $356,496 in 2019 to $314,377 in 2020, and represented 19% of total gross profits. The foodservice segment of in-store sales in convenience includes the five categories of prepared food, commissary, hot dispensed beverages, cold dispensed beverages and frozen dispensed beverages. Prepared food typically is the largest sales and gross profit driver within the foodservice category, accounting for nearly 65% of sales in 2020. Commissary was the bright spot in an otherwise challenging year for foodservice. Commissary traditionally accounts for the smallest percent of sales within foodservice but in 2020 accounted for 8.3% of sales, better than cold dispensed beverages (7.4%) and frozen dispensed beverages (7.7%). CONVENIENCE.ORG
FOODSERVICE enerated 22.6% of total in-store sales and 35.4% of G in-store gross profits in 2020 vs. 25.4% of in-store sales and 38.9% of inside gross profits in 2019. Sales fell 9.6%, from $651,934 in 2019 to $589,241 in 2020, and represented 8.7% of total 2020 convenience store sales. ross profit dollars fell 11.8%, from $356,496 in 2019 G to $314,377 in 2020, and represented 19% of total gross profits.
There was some built-in confidence with prepackaged items at the onset of the pandemic, so people bought more prepackaged than normal. During the bulk of the stay-at-home period in the second quarter of 2020, commissary generated the only foodservice category sales growth. For the year, average commissary sales per store were up 13.3% in 2020 over 2019. The subcategory includes sandwiches and wraps, sides and salads, heat-and-eat foods like burritos and ready-to-eat meals like soup. “There was some built-in confidence with prepackaged items at the onset of the pandemic, so people bought more prepackaged than normal. They felt like these items were safe; they weren’t handled a lot,” Davis said. “At Parker’s Kitchen, we expedited the expansion of our fresh-made sandwiches and salads in our kitchens, resulting in double-digit growth for this subcategory.”
MAY 2021 |
In the sector as a whole, prepared food gathered speed in the third quarter as consumer trust returned regarding store-made food items, and states reopened. For the year, the subcategory saw average sales per store fall -7.4% compared with 2019, NACS SOI data indicate. “Early on, when personal travel was really restrictive, I think c-stores were a bit of an oasis in more ways than one,” said Leroy Kelsey, NACS director of research and head of the NACS Convenience Voices™ shopper intercepts program. “We had the extended hours; we were close, and we had some of those items in the center of the store that people needed,” he said. “Shopping a smaller box became an attractive way to reduce friction and limit chances of exposure compared with braving a supermarket or big box store.” Davis agrees. “As the pandemic continued and restaurants remained closed or were operating at reduced capacity, customers tried food from convenience stores for the first time—or the first time in a long time,” she said. “This allowed us to showcase our food quality which, paired with our aggressive focus on sanitation, made us a comfortable choice for a hot meal away from home.” DISPENSED BEVERAGES Hot dispensed beverages, which are typically the second-biggest contributor to foodservice, have the most ground to recover to return to pre-pandemic levels. Average sales per store for hot dispensed beverages tumbled -33.4% compared with 2019 as commuters opted to make their own coffee at
Among retailers in the top quartile for foodservice based on 2020 sales, prepared food sales slipped 4.8% year over year, while retailers in the bottom quartile saw prepared food sales tumble 43.7%. 32
| MAY 2021
As consumer behavior continues to change, food is where we are going to make money.
home. In contrast, the subcategory recorded 20.6% growth in average sales per store in 2019. Cold dispensed beverages were able to regain some lost ground by mid-year as people ventured out more. The subcategory, which already had been trending downward for the past several years, finished 2020 down -7.9% in terms of average sales per store. In 2019, cold dispensed beverages saw average sales per store increase 11.9%. Dispensed beverages “are not on the same path to recovery as prepared food has been, so we’re going to have to be innovative in this area and identify opportunities to draw our customers back in,” Davis said. Retailers need to build trust among customers that the fountain and coffee areas are clean and sanitized, she said, and also evaluate the fountain beverage lineup and look for new flavors in things like teas and lemonade to create excitement. She points to the success of Parker’s Fancy Lemonade. “It has a cult following where people rave about it,” Davis said. “A couple of years ago we only had it in two locations because we were making it in-house, and we were able through one of our partners to replicate the recipe and roll it out to all of our locations. It has taken off and become one of our top dispensed beverage items.” Frozen dispensed beverages finished in the black for the year, notching an increase in average sales per store of 2.3% over 2019. The subcategory in 2019 saw average sales per store grow 7.7%. Travel picked up during the summer months into the fall, coinciding with the traditional prime season for frozen slushies and other frosty drinks. The top-performing foodservice retailers maintained sales multiples better than the bottomperforming foodservice retailers. Among retailers in the top quartile for foodservice based on 2020 sales, prepared food sales slipped 4.8% year over year, while retailers in the bottom quartile saw prepared food sales tumble 43.7%. Looking at performance in the commissary subcategory, however, the bottom-quartile retailers saw a 11.7% rise in sales, while the top-quartile retailers experienced a 18.7% decline in commissary sales. The top-quartile retailers also took a big hit in the hot dispensed beverages subcategory, with sales down 40.1% vs. 24.1% for the bottomquartile retailers. Davis points to regulations
PREPARED FOOD ACCOUNTED FOR THE BIGGEST SHARE OF 2020 FOODSERVICE SALES, WHILE THE PANDEMIC TOOK A TOLL ON SELF-SERVE BEVERAGES
64.7% PREPARED FOOD
HOT DISPENSED BEVERAGES
FROZEN DISPENSED BEVERAGES
COLD DISPENSED BEVERAGES
Source: NACS State of the Industry Report of 2020 Data and CSX
| MAY 2021
Retailers with foodservice operations leaned into that offer as fuel sales declined on the forecourt. “As consumer behavior continues to change, food is where we are going to make money,” Davis said. “That’s what’s going to drive people into our stores. They’re not going to be filling up as much. They’re not going to be buying as many tobacco products, so food is really going to be the champion that we can lean on to drive us into the future.” COMPETING WITH QSRs Moving into the future includes capturing sales lost to QSRs. In general, food locations with drive-thrus during the pandemic were in high demand as in-store dining rooms went dark. Long before COVID-19 struck, though, quick-serve restaurants were siphoning away foodservice customers from c-stores. In the 2020 NACS Convenience Voices survey, 35% of convenience shoppers said they planned to buy fast-food somewhere else within 30 minutes of visiting a c-store, compared with 15% of shoppers surveyed in 2019. Kelsey notes that the majority of people who went to QSRs after visiting a c-store were women with children. People are still price conscious, so look to have deals in place that encourage customers to pick your food and beverages over a competitor. “With foodservice, we have the opportunity to identify ways to incorporate dispensed beverages into deals and meals to drive traffic, so find ways that we can tie dispensed beverages into what they’re getting from our prepared food offering,” Davis said. Besides QSRs, c-stores are facing a new foodservice threat: ghost kitchens. “These guys are not only coming into our area but they’re offering a lot of the same items that we’re offering within our establishments, and they’re making it incredibly convenient for consumers to get it, so we have to be a part of that,” Davis said. “We have to make sure our name is in the mix when somebody picks up their phone to order food.” LAST-MILE CONSIDERATIONS Preparing and packaging hot food for delivery brought new challenges for Parker’s, Davis said. With the explosion of meal takeout and delivery services, there was tremendous demand for CONVENIENCE.ORG
that constrained many retailers’ ability to offer dispensed beverages. “There was only so much that certain concepts and locations could do to continue to offer those things,” she said.
SEIZE THE OPPORTUNITY Heather Davis, director of foodservice, Parker’s, based in Savannah, Georgia, shared advice for convenience foodservice category managers during the 2021 NACS State of the Industry Summit on April 14. Here are her key takeaways. • Assess your menu. Your menu is your foodservice brand, so you have to ask yourself, what do you want to be known for? If you try to do everything every restaurant around you is doing, you’re not going to be able to do it all well. Find that thing you can do great, and that’s what’s going to set you apart. • Determine how far you can take it. Figure out what you can consistently execute and focus on that item. You have to take into account manpower, equipment and what your building can actually support. For Parker’s, we have a chicken tender. It is our core and our hero, and so we focus on things that complement that core offering. And you should be doing the same, whether that’s sandwiches, tacos or burgers. Find that key item that’s going to be your core, and then find things that are going to complement that without taking away your ability to cook that item consistently great every single time. • Digital experience is key. You want your customers to have your app downloaded so when they decide they want to eat, you’re top of mind. Give them a reason to pick you. People want to be rewarded if they’re choosing you as their meal destination. Building a loyalty program that delivers on that is essential. Frictionless and contactless experiences are in high demand now more than ever before. The customer experience is being redefined, and what satisfies a customer is very different today than it was a year ago. We have to shift to be able to capture that. We need to adjust to where we can still deliver on the level of service that makes us great, that makes people want to come see us, but then also gives them the frictionless and contactless experience that they so want. • Taking it the last mile. Delivery and curbside options are a necessity if you want to remain on top. If delivery is not in your wheelhouse, then find ways to incorporate curbside into your business. It could be a sign in designated parking spots outside of your store with your phone number listed that says, ‘Call us when you get here, and we will bring the food CONVENIENCE.ORG
out.’ If you can build more into it from your app to where they can hit the button that says, ‘Hey, I’m here’ and tell you what spot they’re in, that’s amazing, too. We have to find ways to extend the reach of our store and take those things to them. Another benefit when people are ordering mobile is that basket size increases substantially. We’ve seen in some situations with delivery services that basket sizes double compared with the in-store basket sizes, so there’s a real opportunity here because customers will add that upgraded side; they’ll add that bigger drink. Where does the industry go from here? Davis shared how to seize the opportunities ahead: • Continue to focus on sanitation and food safety. Keep it clean and educate your teams on not only food but also the food safety aspect of the business. • Develop your internal teams to embrace food. This has to start at the top. At Parker’s, the passion for food starts at the very top and goes all the way down within our company. Everybody knows that food is the priority, and we’re extremely passionate about it. • Have a quality offering, and focus on your core. The reality is convenience stores have really high quality food. Let your customers know the work that you’re doing. Tell them if you’re hand-breading fresh not frozen chicken. Tell them that you’re cutting whole potatoes and making fries. Tell them about the things that make your offering elevated against the guy next door. There’s a real gap in what we’re doing and what the consumer knows that we’re actually doing. • Ensure relevancy by dayparts to grow sales throughout the day. Make sure that you’re offering the right thing at the right time of day. Assess your offering and make sure you’re hitting the things between lunch and dinner that are going to capture foodservice sales during the time that is historically been defined as the snacking period. People are eating meals during the snacking time.
MAY 2021 |
FOODSERVICE SALES FELL 9.6%, BUT GROSS MARGINS HELD AT 53.35%, OFF -1.33 POINTS YEAR OVER YEAR GM% Prepared Food -7.4%
Hot Dispensed Beverages -33.4%
Frozen Dispensed Beverages 2.3%
Size of Bubble = Avg. Sales/Store
Cold Dispensed Beverages
Avg. Sales/Store Change vs. 2019 Indicates Category Average
10.0% 0.0% -30.0%
Source: NACS State of the Industry Report of 2020 Data and CSX
packaging that maintains food quality and temperature, plus quality seals to signal food safety. Davis described A R EXT frustrations in consistently E N I ONL d how TXB ) is sourcing appropriate—and k a e e R Ch ture Kwik preferred—packaging. p y a l r c e to (form enus s at Not only that, foodservice m g n i at trip om innov dservice managers had to re-evaluate c . e n i foo gaz how they prepared some csma a n . www types of food. “You had to figure out how to sell your product so that it wasn’t just made and handed to somebody that was going to eat it right now,” Davis said. “You had to prepare that so it could sit in your store for five or 10 minutes waiting on a delivery service to pick it up, and then make it another 15-20 minutes down the road to the customer that actually
| MAY 2021
AVG. SALES/STORE CHANGE VS. 2019
got the food to be able to consume it and still have an enjoyable meal,” she said. “The relationship you have with your packaging supplier needs to be as strong as the relationship you have with your foodservice supplier,” she said. “Packaging is so critical to everything that we do. We’re a business built on takeout, and so having that packaging that satisfies the needs of your food so that it ensures a great experience has to be at the forefront—top of mind—for everything that we’re doing.” Kim Stewart is editorial director of NACS and editor-in-chief of NACS Magazine. This was her third NACS State of the Industry Summit.
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CHICK SAND C-stores join the battle for glory and more foodservice sales. BY PAT PAPE
he chicken sandwich wars commenced in the summer of 2019 after Popeyes Louisiana Kitchen launched a New Orleans-style fried chicken sandwich and began taunting Chick-fil-A on Twitter. Not to be outdone, Chick-fil-A tweeted back and retaliated with a new grilled spicy chicken sandwich. Soon the gloves were off with McDonald’s,
| MAY 2021
EN WICH WARS Burger King and Taco Bell touting their own hot, crispy—and often spicy—chicken on a bun. The battle generated nationwide publicity and boosted consumer cravings for fried chicken on a bun. It was about that time that Kwik Trip, the LaCrosse, Wisconsin, retailer, added a fried chicken sandwich to its menu in more than 500 of its 700 stores.
“No doubt that Popeyes and McDonald’s brought good attention to this sandwich nationally,” said Paul Servais, director, retail foodservice, Kwik Trip. The chain already had a fresh, hand-breaded fried chicken program featuring bone-in pieces and tenders, so “it seemed that the next logical item was a quality fried chicken sandwich.”
MAY 2021 |
PLAYING CHICKEN The appeal of chicken is nothing new. In 1992, chicken overtook beef as the most-consumed meat per capita in America, reports the U.S. Department of Agriculture, and in 2020, consumers bought 1.4 billion more units of chicken than beef in grocery stores, according to NielsenIQ. Last year, chicken sandwiches (both breaded and grilled) were included in 6.7% of all U.S. restaurant orders for roughly 3.5 billion servings, according to the NPD Group. Sales of breaded chicken sandwiches jumped 8% last year versus 2019. That’s an impressive figure considering the double-digit decline in total restaurant visits during the pandemic, and the trend continues. According to NPD, about 65% of the U.S. population ordered a breaded chicken sandwich from a QSR in the past six months As a bonus to foodservice operators, chicken sandwiches are typically more profitable than beef sandwiches because they draw on a cheaper commodity, reports industry research firm Revenue Management Solutions. Plus, they’re usually priced below burgers on a menu, which helps attract budget-minded shoppers. GPM Investments, a subsidiary of Richmond, Virginia-based ARKO Corp., in April added a fried chicken filet sandwich to its value menu at 150 stores. “We’re always looking for new ways to meet the needs of our customers,” said Ray Zeiher, senior category manager, foodservice. “We’re looking forward to this new chicken sandwich offering and continuing to grow and evolve our value menu,” which launched last summer.
Just the Facts The chicken sandwich conversation that Popeyes started on Twitter in 2019 generated $23.25 million in free advertising for the QSR, according to Apex Marketing Group, an advertising consulting service in Michigan. The chain’s entertaining tweets clustered around the hashtags #ChickenWars and #ChickenSandwichWars.
| MAY 2021
The Market, the gourmet-to-go convenience chain owned by Tiger Fuel of Charlottesville, Virginia, has offered rotisserie chicken and other upscale foods since 1991. “We have our own niche in Charlottesville for quality deli products and foods, and in 2019, we wanted our own rendition of the chicken sandwich, but with local flair,” said Pat Pitts, foodservice manager, Tiger Fuel. “We felt that the fried chicken program was something that we could add to our markets to diversify our brand and to give loyal customers another layer of food options to choose from.” So, the chain created the Chicken Fried Cville: “Spicy fried chicken tenders, cheddar cheese, lettuce, tomato, red onions with locally made Bone Doctors Sweet n’ Spicy Barbeque Sauce on a brioche bun,” said Pitts. “Our customers love our chicken program—hot, right out of the fryer, fresh chicken tender sandwiches and meals,” Pitts said. “We plan to add new creations for a variety of fried chicken sandwiches to give customers even more options.” Considering a chicken sandwich offering? Pitts advises retailers to “do your homework. There are many options to consider: batters, washes, equipment and menu. And map out your program based on kitchen size, equipment and menu.” TURNKEY Retailers who don’t care to create their own chicken offering from scratch can call on one of the turnkey programs available. That strategy has worked well for Love’s Travel Stops, based in Oklahoma City. Love’s is the largest franchisee of Chester’s Chicken, a QSR concept found inside convenience stores, truck stops and supermarkets nationwide. The program is currently in 130 Love’s locations. “Our standard program is bone-in chicken and tenders, but our sandwich has been a permanent menu item since 2019,” said William Culpepper, vice president of marketing for Chester’s. “By accident, we launched our sandwich the same week as Popeyes. It was great for us because the awareness of chicken sandwiches went through the roof.” The Chester’s kitchen requires a minimum of 500 square feet and necessary equipment, including warming cases, commercial fryers, a refrigerator and freezer. An oven is required for cooking biscuits and a rethermalizer for heating side dishes. A bread-and-batter table is used to CONVENIENCE.ORG
Today, the sandwich and its accessories— mashed potatoes with gravy, potato wedges, macaroni and cheese—are a big hit with Kwik Trip customers, and fried wings will be available soon. “It was one of the easier things we’ve done,” he said of the program.
Spinx uses a substantial weapon in the chicken wars with its Cluk Truk, a food truck that doubles as a mobile advertisement for the c-store’s chicken program and a rolling kitchen that attends local events on request.
bread the chicken pieces twice before they go in the fryer. “These days, consumers expect a lot more out of c-store foodservice,” Culpepper said. “Our sandwich is a good product and can stand up next to McDonald’s or Popeyes.” Another branded concept is Krispy Krunchy Chicken, which was launched in 1989 when founder Neal Onebane began cooking chicken in his Lafayette, Louisiana, convenience store. Today, the fried fowl is found in more than 2,400 locations. The company provides everything needed for a complete program, from ingredients and signage to tailored graphics and on-site training but doesn’t charge franchise or royalty fees. TAKE MY CHICKEN, PLEASE The Popeyes tweet-a-thon was great for business, but there are other ways to get a chicken sandwich in front of potential customers. When Spinx, the Greenville, South Carolina, retailer with 80-plus stores, was growing its foodservice program, management “envisioned using a food truck as a mobile advertisement for our fresh and legendary chicken tender program,” said Jim Weber, chief marketing officer and executive vice president of merchandising. The result was the Cluk Truk, a rolling kitchen created eight months ago to attend business, community and school and fundraising events on request. “These types of events have been very productive during a social distancing environment CONVENIENCE.ORG
as we can safely deliver a hot, fresh and portable meal right to the customer,” said Weber. “It’s been a great addition to the marketing efforts. The Truk goes out five or six days a week, and we typically serve 50 to 100 meals per event.” The Cluk Truk sells a scaled-down version of the same chicken tender products prepared in Spinx stores. Customers can order a la carte sandwiches, tender baskets or combo meals with hot fries and a drink. “Our tenders on the Truk are available in original recipe, spicy or buffalo style,” said Weber. “We think this will be a good venue for us to test market new items to the public.” Weber admits the Cluk Truk is an expensive weapon in the chicken sandwich wars, but “as for ROI, we think that it is working well toward our expectations,” he said. “We viewed this project as a marketing initiative from the start and budgeted for the Truk in the marketing expense arena. This approach has led us to find a consistency in operations, as well as the flexibility to tackle the many varied requests, like charitable events and private functions.”
Pat Pape worked in the convenience store industry for more than 20 years before becoming a full-time writer. See more of her articles at patpape.wordpress.com.
MAY 2021 |
GROWTH PARTNER Digital transformation can feel like a daunting task, but the trick is knowing where to begin.
their smartphone—providing retailers with the unique opportunity to offer a far more compelling digital experience.
Matt Carinio VP, Strategy & Consulting, Hathway www.wearehathway.com
| MAY 2021
WHY IS IT IMPORTANT FOR RETAILERS TO OFFER A DIGITAL EXPERIENCE TO CUSTOMERS? The modern consumer is motivated by convenience and value more than ever before. Traditionally, c-stores have benefitted from a concentrated market presence with a store on every corner and a small format that made it easy for customers to shop, while also having enough variety to ensure they didn’t have to shop elsewhere. While this is still true today, the definition of convenience and value has evolved. Digital allows c-stores to extend into convenience areas of digital payments that streamline purchases across multiple business categories, order-ahead food and beverage solutions and value-focused loyalty engagement models of rewards, offers and branded communications. These solutions are viewed as table stakes by today’s consumers. These consumers are not comparing convenience loyalty programs in a silo but to all of the other programs they participate in. They are evaluating the functionality of convenience store apps to the other apps on
YET MANY RETAILERS STRUGGLE TO TIE TOGETHER THEIR LOYALTY PROGRAM WITH MOBILE FOOD ORDERING, FUEL AND SO ON. HOW CAN YOU HELP? Digital transformation can feel like a daunting task. Designating an appropriate range to invest, defining initiatives, establishing what will resonate with customers, prioritizing the sequence of solutions, creating an experience that reflects your brand, mitigating fraud risks, while figuring out how to use all the data that is available—the list is endless and can feel paralyzing. In most cases, failure in digital isn’t due to a lack of motivation but is a result of not knowing where to begin. Hathway’s digital transformation playbook integrates Consulting (the path to progress), Digital Experiences (best-in-class commerce web/app) and Growth Marketing (maximization of customer loyalty and engagement) solutions allowing c-store decision makers and stakeholders to do what they do best: manage their core business. We bring together category and tech expertise via our e-commerce CONVENIENCE.ORG
accelerator, NomNom, to help retailers go to market with custom solutions that deliver business results.
SHOULD CONVENIENCE RETAILERS LOOK TO OTHER CHANNELS WHEN CONSIDERING THE BEST GO-TO-MARKET STRATEGIES THAT DRIVE LOYALTY, ESPECIALLY THOSE OFFERING FOODSERVICE, MOBILE ORDERING OR CURBSIDE PICKUP? Most customers do not choose where to shop by channel but rather by the purpose of the shopping trip. Understanding the shopping mission and how other retailers, such as QSRs, leverage loyalty programs and the digital experience can enable convenience retailers to replicate that experience. This applies especially to mobile ordering, curbside pickup and delivery, where the ability to deliver a digital experience that customers expect of QSRs will allow them to blur channel lines and drive growth of their own foodservice offers. WHY IS A CUSTOMIZED DIGITAL EXPERIENCE SO CRITICAL? Your brand is unique, and the digital experience you offer customers should be just as distinctive. Customers should experience more of your brand than just customized logos, colors and images. Templated solutions can be attractive for a host of reasons, but unfortunately CONVENIENCE.ORG
they don’t offer differentiation, and we’ve learned this from our extensive work in the restaurant industry. With dozens of loyalty and commerce solutions in-market, Hathway provides you the benefit of an accelerated time to market with investment savings (similar to a white label solution), while providing a custom feel that highlights your brand (dissimilar to a white label solution).
This article was brought to you by Hathway, a NACS Hunter Club member.
AND CONTINUED ENGAGEMENT WITH CUSTOMERS IS CRITICAL TO DRIVE CONTINUED CUSTOMER LIFETIME VALUE, IS THAT RIGHT? Many convenience retailers have invested in loyalty programs that gained significant early adoption only to have them grow stale due to lack of ongoing engagement with customers. One of the main reasons for this decline is a lack of dedicated internal resources to support customer engagement beyond the initial launch. Loyalty isn’t attained through a single interaction between customer and brand—it requires cultivation and nurturing. Hathway’s Growth Marketing solution begins by looking at what, how and why your customers interact with and purchase from your brand. Our team of loyalty and marketing experts act as an extension of retailer marketing teams to identify your highest valued customers to create and execute strategies, programs and communications to increase brand affinity over time. By monitoring and adjusting programs to maximize your investment, we ensure that your business is always meeting your customers’ needs at the moments that matter most to them.
Loyalty isn’t attained through a single interaction between customer and brand—it requires cultivation and nurturing.
MAY 2021 |
Casey’s leans into growth
The Midwestern chain has loaded its plate with everything from its largest acquisition to opening a third distribution center to digital engagement.
utting edge is not the best description for Casey’s. It never really was. The Ankeny, Iowa-based company has historically taken a conservative approach to growth with steady expansion in rural areas serving as a core tenet. The past year, however, has brought substantial change to both how consumers conduct business with Casey’s and how the chain presents itself to those customers. The chain revamped its digital ordering platform last year, modernized its brand image and reset stores in an effort to improve store merchandising. The next six months may set a whole new pace of growth in motion. Two big milestones on the horizon for Casey’s include closing on the acquisition of Omaha,
| MAY 2021
By Renee Pas
Nebraska-based Buchanan Energy and opening a third distribution center. The Buchanan acquisition—an allcash transaction to the tune of $580 million—will add 94 Bucky’s Convenience Stores to the Casey’s mix, all of which will eventually be rebranded as Casey’s. It will also add 79 dealer locations; Casey’s will take over the related fuel-supply agreements. The deal remains in regulatory review but when complete will expand Casey’s presence in Midwest markets, adding dominance in the greater Chicagoland area and enlarging Casey’s comparatively smaller presence in Omaha, Nebraska. Once it all comes together, it will also mark the largest single acquisition in Casey’s 53-year history.
MAY 2021 |
Casey’s hopes its rewards program will help retain customers who started using its digital platforms during the pandemic. More than half—59%—of orders at Casey’s are digital. Starting last November, the chain shifted store layouts to improve traffic flow. The curbside pickup program implemented last spring was accelerated when the pandemic struck.
“One great example of our continued pursuit of the initiatives in our strategic plan is the acquisition of Buchanan Energy Group and its Bucky’s Convenience Stores. This acquisition is a perfect strategic fit for Casey’s,” said Darren Rebelez, Casey’s president and CEO. In addition to geographic expansion, another advantage of the integration of Bucky’s may be the chain’s car wash operations. Almost all Bucky’s stores include a car wash, and the chain has advanced programs around the offering beyond what Casey’s currently offers, for example, an unlimited wash subscription program. Fewer than 10% of Casey’s 2,200+ stores include a car wash currently. Also in the works: the acquisition of 49 Circle K stores in Oklahoma. In late March, Casey’s announced it agreed to acquire 46 leased properties and three owned properties from Circle K for $39 million in cash. The deal is expected to close by July 31. Another 2021 milestone—this one organically driven—comes by way of a new distribution center in Joplin, Missouri, which opened in April. “The new distribution center sets the stage for more growth,” said Julie Jackowski, chief legal officer for Casey’s and former NACS chair (2019–20). Casey’s looks to have distribution centers strategically located less than 500 miles from stores, she noted. Casey’s other distribution centers are in Ankeny and Terre Haute, Indiana. Casey’s said the Joplin distribution center will serve 400 to 600 of the company’s stores. The self-distributed aspect of the chain is something COO Ena Williams views as a huge
| MAY 2021
advantage. “We rely on ourselves to distribute goods to the store. We are not restricted by case sizes or pack sizes, and we can distribute anything, even equipment.” PIZZA PRECISION Looking back through Casey’s history, the biggest mile marker of all would have to be the decision to incorporate a pizza program in the early 1980s. Pizza is unequivocally the crown jewel of the chain’s overall prepared foods program. Sales justify pizza as a prized possession. Same-store unit sales of whole pizza pies were up 17% over the three-month period ended January 31, 2021, compared with the third quarter of 2020, noted Rebelez on Casey’s March 8 review of thirdquarter fiscal 2021 results. Pizza’s strong sales offset weakened sales in other in-store categories harder hit by pandemic shifts, such as bakery and dispensed beverages. The offset from pizza, however, was not quite enough for Casey’s to avoid a dip in total prepared food and fountain same-store sales (which include pizza), which decreased 5% during the quarter, compared with the year-ago quarter. Expect some new pizza-related and prepared food innovations to come down the pipeline this fall, said head chef Farrokh Larijani. With less than a year under his belt at Casey’s, Larijani is intensely working on ways to leverage pizza’s success. For example, he’s been pondering how to use the chain’s made-from-scratch dough in new ways. “What else can I do with this dough aside from make pizza?” Larijani wonders. CONVENIENCE.ORG
PRIVATE-LABEL PUSH Casey’s started filling the pipeline with a new assortment of private brands launched in January and has realized early success with its private-label program. “The level of adoption has exceeded our expectations,” President and CEO Darren Rebelez said during a March 8 review of thirdquarter fiscal 2021 results. The updated private-label assortment includes packaged beverage and bakery items, along with snack category items, such as beef jerky and nuts. Rebelez credits the strength of the Casey’s brand with regard to prepared foods as key to consumers embracing the new private-label items. Consumers’ favorable view of Casey’s food items, he said, likely gave the chain outside credibility that transferred over to the private-label items. “It’s given us confidence to accelerate in this path,” he added.
Contemporized yet classic, Casey’s revamped logo modernizes the recognizable barn shape and maintains the rooster on the weather vane.
“The dough is the foundation,” Larijani noted. “Casey’s makes a huge commitment around it.” He points to a March seminar held in the food and beverage lab at Casey’s headquarters as one example of the chain’s loyalty to its dough. Roughly 40 field leaders attended the session to learn more about Casey’s pizza dough with the intent to take that education out to the store level. The hands-on session provided an education of what the perfect pizza dough looks and feels like, Larijani said. Each store makes the dough fresh every morning. Kitchen sizes and layouts vary. At some stores, customers can watch staff cooking; at other stores all the action remains in the back of the house. Larijani’s dream store would allow customers to watch staff kneading dough and ladling sauce onto pizzas. “I would want to showcase it all to guests,” he said. Regardless of the kitchen placement, Larijani contends every store “produces a lot of food in a small area.” Convection ovens serve as the primary piece of equipment. “We run a fairly hot oven to get the caramelization we want on the crust and cheese,” he said. While pizza holds a high equity stake in the chain’s food program, the menu also includes items such as sub sandwiches, chicken sandwiches, burgers and more. Grab-and-go offerings are commonplace at Casey’s now, noted Andrew Kintigh, prepared food category manager for Casey’s. “The pandemic shifted guest patterns a bit and reduced that in-person service element.” CONVENIENCE.ORG
STAKING OUT A DIGITAL FOOTPRINT When the pandemic took hold last year and changed consumer shopping patterns, it quickly became clear that convenience stores with a digital platform in place would benefit. The timing was good for Casey’s, which had relaunched a new website and app the year prior, along with a digitalbased rewards program. When the pandemic hit, Casey’s amped up third-party delivery and added curbside pickup. “We moved very quickly with third-party delivery,” said Chris Jones, chief marketing officer for Casey’s. “We went from 30 stores in a test with DoorDash to hundreds offering delivery.” Roughly 700 Casey’s stores now use DoorDash, and the chain also has a pilot program with Uber Eats under way. As customers hunkered down at home, Casey’s saw its digital orders for pizza grow. More than half—59%—of all Casey’s orders are now placed digitally, either on the app, website or via DoorDash. “We’re optimistic that those ordering patterns will continue,” said Jones. “It’s tough to imagine customers will go back to calling orders in by phone.” While pizza dominates in digital orders, customers can also choose from 200 grocery and snack SKUs. KEEPING COUNTRY Culture is hard to translate, but it remains an integral part of Casey’s story, particularly considering the size of the company—a network of more than 2,200 stores and annual revenue that surpassed $9 billion in 2020—and the fact
MAY 2021 |
Casey’s MILESTONES Founder: Don Lamberti President and CEO: Darren Rebelez Headquarters: Ankeny, Iowa Startup Story: After leasing a general store and gas station from his father in 1959, Don Lamberti spent the next nine years developing the location. The turning point from one to more came by way of encouragement from Kurvin Fish, a gasoline salesman at the time. The two officially started Casey’s General Store in 1967 with a focus on developing stores in small towns. Casey’s is literally a play off of Kurvin’s initials, K.C.
1968 1981 1982 1983 1996 1998 2006 2017 2021 48
First Casey’s General Store opens in Boone, Iowa. The company’s first president, Kurvin Fish, retires. The chain now has 304 stores. This is also the year the chain launches its pizza program. First distribution center opens. Company goes public. Store No. 1,000 opens. Lamberti passes the CEO torch to Casey’s veteran Rob Lamb. First significant acquisition happens with the purchase of the 49-store Gas ‘N Shop chain. Store No. 2,000 opens. Store count sits at 2,230 as of February 28. Plans for the year include closing on the acquisition of Buchanan Energy, owner of Bucky’s Convenience Stores, and opening a third distribution center. | MAY 2021
that as a public company it answers to Wall Street. The executive team navigates the balance of ambitious-yet-genuine smoothly, a testament that the family-centric culture that set things in motion in the early days still exists. “It still feels like a family environment,” said Jackowski. She’s witnessed a lot of change during her 26-year tenure with Casey’s but not when it comes to the tightknit, down-home, no-nonsense environment. For Jackowski, the culture was instilled early on with the understanding that “the donut maker at the store is more important than me.” Maintaining that culture may get harder as the chain expands, but Casey’s has a plan to keep it alive. One way is to ensure there is at least one person at the supervisory level who has lived the Casey’s culture if there are several new stores added at one time, explained Jackowsi. What Don Lamberti and Kurvin Fish started in 1968 continues to grow in much the same way the founders approached development: steady, focused and community-centric. Lamberti continues to maintain ties with the organization and remains a shareholder. Fish died in 2003. New leaders take the helm of any lasting company over time. Make no mistake: Casey’s intends to be around for the long haul. The new tagline is “Here For Good,” which means that Casey’s is “here for our communities,” but also taken literally, means it plans to stick around. Acquisitions will happen “as long as it makes good economic sense,” said Jones. “The industry will continue to be ripe for consolidation,” he said. “There are some who build new stores and some that acquire. Casey’s strikes a balance between growing organically and finding great acquisitions when that’s the right opportunity.” Adds Rebelez, “We kept up a pretty swift pace and even accelerated items in our strategic plan this past year, despite the pandemic. We are positioned well for the future, and I look forward to seeing what our team can do.” enee Pas’ writing draws from R both her c-store background and her more than 20 years writing about various retail channels. She gravitates toward the intersection of ideas and execution, where the rubber meets the road. She can be reached at firstname.lastname@example.org.
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GOVERNMENT WARNING: (1) According to the Surgeon General, women should not drink alcoholic beverages during pregnancy because of the risk of birth defects. (2) Consumption of alcoholic beverages impairs your ability to drive a car or operate machinery, and may cause health problems.
| MAY 2021
Convenience retailers increasingly emphasize cra brews.
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ales of craft beer at The Convenience Group stores posted incredible growth last year, driven not only by pandemicinduced pantry loading but also due to the outlets’ locations in the Pacific Northwest—a hotbed for microbrews—and management’s commitment to the products. With dozens of cooler doors and beer caves devoted to craft beer, sales surged 26% in 2020, according to Don Rhoads, president and CEO of the company, which operates Washington’s Minit Mart stores. “We want our customers to find value in a three-minute visit,” Rhoads said of the stores’ vast selection and competitive prices. To get out in front of emerging trends, “we lean on our distributors by holding regular meetings,” he noted, “and my staff and I visit local breweries.” In Oklahoma, Kim Cuellar, category manager for beer and wine at OnCue c-stores, is equally committed to craft beer. OnCue has partnered in recent months with Sooner State breweries on exclusive beer collaborations as part of the chain’s emphasis on local brews, a move that resulted in a near 20% lift in microbeer sales last year, with the large majority of those sales coming from Oklahoma-brewed labels. Indeed, in just one year, craft’s share of OnCue’s beer sales jumped from 6% to 9%, Cuellar reported. Oklahoma craft brewers are particularly impressed with the results. “Craft beer consumers now head to OnCue, rather than the liquor store, for local craft beers,” said Sean Mossman, president of Oklahoma City’s COOP Ale Works. Convenience retailers around the country are tapping in to increased demand for craft beer, and 2020 was a banner year for sales of the product. “As with the total beer category, craft beer in c-stores during the pandemic has seen positive growth, moving from single-digit growth in 2019 to double-digit growth in 2020,” remarked Joy Young, senior director, category development, at Anheuser-Busch InBev.
MAY 2021 |
NACS’s CSX monthly retail sales data bear that out. According to Jayme Gough, NACS research manager, the growth in craft beer in c-stores last summer outperformed the overall beer category. Among c-stores, Oregon’s FastBreak chain has seen a jump in sales of the high-end brews for the past year. “Craft beer has been performing better during the pandemic than in the past,” said Oliver Herting, category manager and buyer. With limited service from bars and restaurants, “consumers are at home more and are looking for higher-ABV beers,” he explained. DIVING IN India pale ales (IPAs), including the super-hot hazy variant, dominate the craft beer segment. According to Mark Hegedus, chief sales officer at Michigan’s Founders Brewing Co., IPAs accounted for about 53% of craft beer sales in c-stores last year. Cans are also coming on strong. “We’ve seen the shift from bottles to cans, and we’re diving in head first,” remarked Eric Patterson, merchandising manager at the Beacon & Bridge Market chain in the Wolverine State. “Cans are more portable for transient customers, such as those going to the lakes and out on boats,” the retailer noted. A-B’s Young added that cans already account for more than half of craft beer sales in convenience stores and are “growing at nearly three times the total craft category in c-stores, significantly outpacing bottle growth.” With beer singles playing such a vital role in c-store cold boxes, it’s no surprise that craft singles are generating a lot of attention. Earlier this year, Pennsylvania’s D.G. Yuengling & Son premiered Raging Eagle Mango beer in 22-ounce cans in c-stores in 22 states. “Single-serve beer accounts for 20-25% of c-store beer dollar sales,” said Charlie Trepcos, executive sales director,
| MAY 2021
noting that the package is the brewery’s first dedicated single-serve product for the channel. Yuengling and other brewers point to the opportunity two-for merchandising of craft singles provides c-store retailers. “The c-store consumer wants a good deal, hence the emergence of twofors,” said Eric Clark, national account manager, convenience, at New Belgium Brewing, whose Voodoo Ranger IPA, Imperial IPA and Juicy Haze IPA are thriving in c-store singles doors. With the craft brewery count in the thousands, retailers like Rhoads, Cuellar and Patterson are increasingly leaning in to local brews. Both OnCue and Beacon & Bridge have reduced facings of national craft beers in favor of those produced nearby. At a number of OnCue stores, “nine-foot open-air coolers dedicated to Oklahoma crafts” were added last year, according to Cuellar, but the space soon doubled to 18-foot coolers. Rhoads reported that 70% of his stores’ craft beer sales come from Northwestern breweries, including “new-to-market breweries.” In fact, the stores even receive deliveries direct from local breweries that aren’t yet partnered with distributors. COVETED CONSUMER The typical c-store craft beer shopper is a coveted one. Retailers and brewers describe them as typically millennial and disproportionately male. “They’re looking for a package that’s new or trendy,” remarked Rhoads. “It’s a higher ring, but they have more money in their pockets.” Young agreed that the craft consumer is an affluent one. “This craft beer shopper is very important to the channel as they drive more traffic and larger basket spend in-store than the general beer shopper,” Rhoads noted. That’s the case at OnCue, where Cuellar said craft beer customers often tack on another purchase, such as a hard seltzer multipack.
The typical c-store craft beer shopper is a coveted one— typically millennial and disproportionately male. Despite the upside craft beer provides convenience retailers, there are challenges. Space is the biggest concern, retailers and brewers concede. Pointing to the endless array of craft options in Oregon, Herting said, “with limited space, the biggest challenge is picking the right ones.” Colin Callahan, vice president, sales and marketing at Yuengling, offered that “it’s important for c-stores to find the right balance between core and innovative beers,” and that their distributors can provide insights. A-B’s Young added, “With thousands of craft brands in the country to choose from, c-store retailers have to select the brands that make the most sense for their customers and their markets.” High costs and attaining margins can also be issues. According to Michael Corrigan, vice president of sales at New Belgium, hitting the right price point can be challenging for c-stores. “Working on slim margins is difficult when competing with much larger players in the beer business today,” he noted. Rhoads, meanwhile, pointed to inventory costs. “The carrying cost is high. We want to keep as much inventory cold as possible, yet eliminate as much labor as we can,” he said. Distributor assistance with merchandising, therefore, is an asset, the retailer noted. ENORMOUS OPPORTUNITY While microbrews in c-stores may face challenges, there’s no mistaking that retailers and craft brewers see enormous opportunity for the products. Yuengling’s Trepcos acknowledged that while the products may require an investment, “the return
| MAY 2021
is worth it. Craft consumers are higher income than regular domestic beer consumers. They’ll spend more time and money in store. Don’t be afraid of the segment.” Hegedus and Young urge convenience retailers to carry the right assortment for their craft beer customers. “It’s important to have the right brands and styles,” said Young. The Founders executive, meanwhile, points to the space opportunity beer caves provide, as well as the benefit of promoting an expanded assortment to shoppers, including at the fuel pump. Craft brewers and c-store operators alike agree that the future for craft beer in the channel is bright. Due to today’s low share, “convenience will be the fastest growing channel for the next 10 years,” predicted COOP Ale Works’ Mossman. “Consumers are looking to convenience for more things. If convenience leans in, it’s a great thing.” Washington’s Convenience Group stores are a testament to what’s achievable in the space. “Our stores aren’t an anomaly when it comes to craft beer,” said Rhoads. “There’s a huge opportunity for the c-store industry to take advantage and also see double-digit growth.” Terri Allan is a New Jerseybased freelance writer, specializing in the beverage industry. She can be reached at email@example.com and on Twitter at @terriallan.
The Ultimate Convenience Toolkit 2
STORE EMPLOYEES BY JOB STATUS
STORE EMPLOYEES BY JOB STATUS
STORE EMPLOYEES BY JOB STATUS
2017 2017 2016
● Full-Time ● Full-Time ● Full-Time
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NACS State of the Industry Report®
● Part-Time ● Part-Time ● Part-Time
PER STORE 3EMPLOYEES EMPLOYEES PER STORE
EMPLOYEES PER STORE
2015 2015 2016 2016 20172017 2018 2018 2015
2016 6.3 6.3
Full-Time Part-Time Part-Time
10.4 6.1 10.4 7.5 6.3 7.5
2017 6.4 6.4
2018 6.5 6.5
6.4 8.0 8.0
6.5 7.9 7.9
7.5 14.4 14.4 8.0 TotalEmployees Store Employees 16.5 10.4 16.5 13.8 13.8 TotalPart-Time Store
9.6 16.2 16.2
Non-Store Total Store Employees Non-Store TOTAL EMPLOYEES Non-Store TOTAL EMPLOYEES
1.5 1.5 16.5
0.9 0.9 13.8
1.0 1.0 14.4
14.4 1.1 1.1
18.0 14.7 14.7 0.9 15.4 15.4 1.0 18.0 1.5
2019 17.3 17.3
17.3 1.1 17.3
employees employees per store store employees per per store
1.1 1.1 Non-Store
Source: CSX Full-Time Store Part-Time Store Note: Values are averaged from firms reporting each line. Where applicable, columns will not sum evenly.
Source: CSX Note: Values are averaged from firms reporting each line. Where applicable, columns will not sum evenly. Source: CSX Note: Values are averaged from firms reporting each line. Where applicable, columns will not sum evenly.
NACS State of the Industry Report® of 2020 Data
NACS State of the Industry Report® of 2020 Data NACS State of the Industry Report® of 2020 Data
Tapping into unmet customer needs and delivering compelling shopper experiences time and again is critical for success in today’s environment. It’s no longer enough to know what is happening in the industry, we have to understand WHY consumers do what they do. Convenience Voices™ has revolutionized the traditional voice of the customer study to leverage the power of mobile technology, adding powerful multi-media capabilities, enabling more precise targeting, expanding geographic reporting and so much more. Packed with valuable, proprietary insights captured in the shoppers’ moment of truth, Convenience Voices™ brings new capabilities for understanding, acquiring and activating convenience shoppers more than ever before!
STORE EMPLOYEES BY JOB STATUS
STORE EMPLOYEES BY JOB STATUS
STORE EMPLOYEES BY JOB STATUS
60% ● Part-Time60% ● Part-Time
40% ● Full-Time 40% ● Full-Time
EMPLOYEES PER STORE
EMPLOYEES PER STORE
EMPLOYEES PER STORE 2015 2016 2017 2015
Full-Time TotalPart-Time Store Employees
16.5 10.4 6.1 13.8 7.5 6.3 14.4 8.0 6.4 14.4 7.9 6.5 16.2 9.6 6.6
TotalPart-Time Store Employees Non-Store
2015 2016 2017 2018 2019 7.5 6.3 8.0 6.4 7.9 6.5 9.6 6.6
2019 2019 2019 employees employees per store employees per store per store
17.3 17.3 17.3
1.5 16.5 10.4 0.9 13.8 7.5 1.0 14.4 8.0 1.1 14.4 7.9 1.1 16.2 9.6
Total Store Employees Non-Store TOTAL EMPLOYEES 18.0 1.5 16.5 14.7 0.9 13.8 15.4 1.0 14.4 15.5 1.1 14.4 17.3 1.1 16.2 Non-Store TOTAL EMPLOYEES TOTAL EMPLOYEES
6.6 6.6 Full-Time Store 6.6
9.6 9.6 Part-Time Store 9.6
1.1 1.1 Non-Store 1.1 Non-Store
Source: CSX Note: Values are averaged from firms Store reporting each line. Where applicable, columns will not sum evenly. Full-Time Part-Time Store Source: CSX Note: Values are averaged from firms reporting each line. Where applicable, columns will not sum evenly. Source: CSX Note: Values are averaged from firms reporting each line. Where applicable, columns will not sum evenly.
NACS State of the Industry Report® of 2020 Data NACS State of the Industry Report® of 2020 Data NACS State of the Industry Report® of 2020 Data
NACS State of the Industry Compensation Report® Today’s dynamic labor market positions convenience retailers against quick service restaurants and other retail channels in the race to attract, hire and retain the best talent. To compete effectively, organizations must keep up with the rapid pace of change by developing and implementing competitive compensation strategies. At the foundation of success is a data-driven strategy that informs decision making and execution. Order your digital copy now at convenience.org/CompReport.
143 143 143
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Learn more at convenience.org/research
with Fewer Staff Offer customers instant self-checkout without scanning barcodes.
Jack Hogan Vice President of Strategic Partnerships Mashgin www.mashgin.com
TODAY, CUSTOMERS NEED TO BE MOVED QUICKLY AND SAFELY THROUGH A PURCHASE TRANSACTION. HOW CAN MASHGIN HELP? By using computer vision, we can quickly ring up every item in a transaction at once—no need for customers to fuss around with barcodes. They just place their items down and in half a second, they are ready to pay. The longest part of a transaction is waiting for people to get their credit card out of their wallet! Our average transaction time for convenience stores is about 22 seconds— nearly twice as quick as the average cashier, and four times faster than traditional self-checkout. So, adding Mashgin is like having two extra team members who are always ready to help customers. That means you can serve more customers at once and quickly work through lines during busy periods. And faster moving lines and fewer face-to-face interactions means a safer store for your customers and your staff. AND FASTER LINES MEANS MORE REVENUE FOR RETAILERS, RIGHT? Absolutely. We have clients who see massive revenue impacts from shortening their lines. My favorite example is
| MAY 2021
with the Denver Broncos at Mile High Stadium. In concession areas where they put Mashgin, lines moved 96% faster, and as a result they saw 34% more sales than before. That’s why Mashgin is now in over 20 stadiums across the U.S., with even more coming soon as they move toward touchless options for re-opening. As for convenience stores, increasing transactions by even 1% can mean more than $30,000 in extra annual merchandise revenue per store. And speeding up lines in-store also clears up parking lots, which means more fuel sales during busy hours. If you can claim just three additional fuel sales a day by having more pumps open, that’s another $30,000 in annual revenue. HOW DO YOU DIFFERENTIATE BETWEEN SKUS, OR EVEN FOODSERVICE THAT DOESN’T ALWAYS LOOK THE SAME EACH TIME IT’S RUNG UP? We use computer vision as well as other patented technologies that let us understand items the same way the human eye does. So Mashgin can tell the difference between items with very similar packaging, as well as those with the same packaging but different sizes. CONVENIENCE.ORG
This deeper understanding also means we can easily identify quick-service foods and other items that are roughly the same but come out slightly different every time they are made. That’s a big deal in self-checkout since customers can just drop their hot dog or taquitos down on the tray rather than navigate a series of menus to choose their item. We work with the largest foodservice operators in the world (such as Aramark) and are still able to stay 99.9% accurate, despite constantly changing menus.
instead focus on redeploying employees to revenue centers like foodservice and timely restocking, or to competitive differentiators like additional cleaning and customer service. At the end of the day, c-store staffing is difficult. NACS data points out average turnover rates over 150% among part-time staff. By providing a faster, less labor-intensive checkout experience we hope to make happier customers and less stressed-out staff who churn less often.
HOW DO YOU HANDLE AGE-RESTRICTED PRODUCTS? Mashgin is fairly compact for a self-checkout system (~36” x 25”), so for most of our clients it sits on the counter near other cash registers. That allows us to work both as a self-checkout and as a hybrid-checkout where employees can deal with age verification and getting behind-the-counter items while Mashgin rings up everything else instantly. The system also includes a regular barcode scanner—allowing staff to scan in behindthe-counter items without having to reach around the unit.
HOW CAN YOU HELP RETAILERS ENCOURAGE THEIR CUSTOMERS TO ADOPT SELF-CHECKOUT? Once you get a customer to use Mashgin once, they’re almost always converted. We ran a survey across 400 first-time Mashgin users, and 80% of them said they preferred it to traditional checkout, 100% of them agreed it was faster and 99% said it was easy to use. In our experience across several major chains we’ve seen a few best practices: • Place Mashgin on the same counter where normal checkout happens. Having it be a part of the habitual flow of a customer is helpful in giving them context on what it is. • Clear signage lets customers know that self-checkout is available and that all they have to do is place their items down. • Have your staff act as technology ambassadors. We encourage retailers to post a staff member next to Mashgin to teach best practices to customers for the first few weeks until the regulars get up to speed. From there, other customers observe the regulars using it and figure it out for themselves.
WHAT STAFF SAVINGS COME WITH THIS SELF-CHECKOUT SYSTEM? We definitely make it easier to handle a lot of customers at once with fewer staff. Companies who make labor savings a priority tend to save between 60-100 hours a week ($800 - $1,200 in overhead). As adoption of self-checkout grows, managers notice teams being less stressed during busy times and start to ratchet down scheduled hours to better fit the new workload. Other organizations may choose to save fewer hours and CONVENIENCE.ORG
This article is brought to you by Mashgin.
Adding Mashgin is like having two extra team members who are always ready to help customers.
MAY 2021 |
| MAY 2021
New options in meat, dairy and snack products attract health-focused customers.
BY PAT PAPE
he recent growth in plant-based specialty food stores and eateries like Vegan Fine Foods, the all-vegan grocery in Fort Lauderdale, Florida, or Besties Vegan Paradise, the Los Angeles c-store selling 100% vegan merchandise, would have been inconceivable a generation ago. Vegan dining has gone mainstream with the growth of vegan chains such as Veggie Grill on the West Coast and in the Midwest, Plant Power Fast Food in California, Copper Branch on the East Coast and Cinnaholic in the U.S. and Canada. These retailers have gained a following by offering plant-based foods made primarily from fruits, vegetables, nuts, seeds, oils, whole grains, legumes and beans. Their customers aren’t necessarily vegan or vegetarian. Today, consumers
may choose a primarily plant-based diet while still consuming meat or animal byproducts. The highly touted Mediterranean diet is an example of plantbased eating that also includes fish, poultry, eggs and milk products. AlixPartners, a multi-industry consulting firm, conducted a global survey about COVID-19-era eating habits and found “that about 20% [of consumers] have increased plant-based product consumption since COVID began,” said Abigail Masory, a director at AlixPartners. “People are concerned about health in the middle of a pandemic. They want to ensure they’re as healthy as possible.” The fact was echoed in a recent survey by research organization Mintel in which 56% of respondents said they eat plant-based meat “to be healthier.”
MAY 2021 |
The demand for plant-based milks, including oat milk, soy milk, coconut milk and almond milk, also has intensified, with many consumers pouring these options in their coffee or on their cereal every morning. “The Plant Based Foods Association reports that milk has the largest growth of all plant-based alternatives, at $2 billion in 2019,” said Jayme Gough, research manager, NACS. “That’s probably because an estimated 30 million to 50 million Americans are lactose intolerant.” TXB Stores, with 45 locations in Texas and Oklahoma, sells cartons of almond milk in markets “where the customer base is looking for this type of dairy alternative,” said Russia Abdelbary, senior category manager, TXB Stores. “We’re data driven and always use market and consumer insights, combined with our internal data, to make changes to our assortments.” Rutter’s, the Altoona, Pennsylvania-chain with 78 outlets, keeps Silk Almond Creamer on store coffee bars because customers want it. “While last year was challenging, we are looking to continue to provide new and innovative items for our customers in 2021,” said Chad White, foodservice category manager, Rutter’s.
| MAY 2021
MEATLESS MEAT Plant-based meat has been a hot topic for the past few years, although the concept is nothing new. Tofu, a meat substitute made from soybeans, was consumed in China as early as 200 B.C. In 1896, a member of the vegetarian Seventh-Day Adventists created a peanut-butter-based “meatless meat,” and in the 1960s, Japan’s macrobiotic food trend inspired British hippies to invent the veggie burger. But the idea didn’t captivate the American food culture until 2012 when Beyond Meat came on the scene with a hamburger patty that could pass the real beef taste test and even oozed beet juice to mimic blood. What followed were offerings from other new companies, such as Impossible Burger and unMEAT, plus plant-based meats from established brands like Conagra, Kellogg, Kraft Heinz, Kroger, Nestlé, SYSCO and Tyson. Fast-casual chains—Dunkin’, Red Robin and Tim Hortons—were early adopters of faux meat, followed by QSRs, such as Burger King, Carl’s Jr., Hardee’s and White Castle. After Del Taco rolled out Beyond Meat tacos, management announced that the product was one of the best-selling introductions in the chain’s history. McDonald’s tested the Nestlé meatless burger in Germany but eventually teamed with Beyond Meat, announcing that the two companies would co-develop plant-based menu items as substitutes for real chicken, pork and eggs under McDonald’s new McPlant brand. The chain recently began selling the McPlant burger in Denmark and Sweden to gauge customer interest before rolling it out to more locations. The patty is reportedly made of pea-based and rice proteins. Beyond Meat and Yum! Brands have teamed up to develop new plant-based offerings for KFC, Pizza Hut and Taco Bell over the next several years to appeal to flexitarians, the companies said in February. KFC was already testing Beyond Fried Chicken in several U.S. cities, and Pizza Hut last year rolled out the Beyond Italian Sausage Pizza and the Great Beyond Pizza nationwide. “We’re excited about the long-term potential plant-based protein menu items have to attract more customers to our brands, especially younger consumers,” said Chris Turner, Yum! Brands CFO, CONVENIENCE.ORG
in a news release. Consumers are demanding “more diverse protein options,” he said. Convenience retailers, meanwhile, are adding plant-based meats to their menus. In late 2019, Pennsylvania-based Sheetz with 600 stores became the first c-store chain to serve Beyond Burgers. Last year, 900-store Wawa, also based in Pennsylvania, launched a line of Sizzli Breakfast Sandwiches, including one featuring a Beyond Meat sausage made from peas and brown rice. Early this year, 7-Eleven Hong Kong launched a range of ready-to-go, plant-based meals and dim sum in more than 700 stores, along with 30 plant-based snacks and drinks in 150 locations. In Tokyo, the chain sells a vegetarian version of niku man or “steamed meat bun.” The updated option replaces traditional diced pork inside the bun with a soybean-meat substitute. Since last summer, 7-Eleven Australia has carried sandwiches with fillings of plant-based eggs, beef, chicken or sausage. Thanks to the increased interest in plantbased proteins, the category is predicted to grow nearly 35% on menus by the end of 2022, reports Technomic. Retailers should expect to see alternatives to all types of meats—even fish, lamb and possibly frog legs—available in the marketplace. Plant-based meats gained more consumer acceptance during the pandemic. In August 2020, foodservice consultancy Revenue Management Solutions polled 800 U.S consumers and found that 39% of them like the taste of plant-based meat, up from 29% from a similar survey in January. In addition, 30% of respondents said they’d switch restaurant brands to satisfy their taste for plant-based meat alternatives, up 7% from the January survey. According to NielsenIQ, the pandemic has been good for the plant-based meat category. Sales of meat alternatives were up 16.7% for the 52-week period ended December 26, 2020, compared with the previous year, and 40.1% for the fourth quarter of 2020. “I truly believe that plant-based meat has reached a tipping point in terms of its cultural relevance,” Beyond Meat President and CEO Ethan Brown said in reporting full-year and fourth-quarter results in February. CONVENIENCE.ORG
“ About [of consumers] have increased plant-based product consumption since COVID began.” MORE THAN MEAT Plant-based snacks continue to be perceived as better-for-you options, and ingredients in the newest offerings go beyond traditional soy and nut proteins. Different types of plant protein—mung bean, pea, watermelon seed, hempseed—are expanding consumer options. “Alternative salty snacks, such as veggie chips, are being made from materials like kale or chickpeas that have more health benefits than potatoes,” said Masory. “People are still interested in indulgence. They still want to have the hamburger and eat the ice cream. They still want snacks, and if you can provide a healthy option, they’re interested.” There is one catch. Plant-based foods tend to be pricier than traditional versions of the same products. Masory admits that expense is the No. 1 barrier to consumers when it comes to purchasing plant-based products, but she predicts prices will decline as demand for the products grows. “As we’ve seen with almond milk, if consumers like it, they’ll buy it,” she said. Pat Pape worked in the convenience store industry for more than 20 years before becoming a full-time writer. See more of her articles at patpape.wordpress.com.
MAY 2021 |
Face LIFT Cenex launches LIFT, a store transformation initiative, shifting the way customers view c-stores. BY JERRY SOVERINSKY
hile the consumer shift to e-commerce shopping preceded COVID-19 lockdowns, the pandemic accelerated the trend, with even the most techno-challenged shoppers opting for home delivery, when available. That was ominous business news for convenience store retailers, who already faced increased competition and operational challenges: dollar stores, grocery stores, big box retailers, declining traffic, shrinking margins, regulations … the list goes on. And now come reports that work-from-home scenarios will outlast COVID-19, causing a permanent change in commuting patterns. Of course, you’ve known for some time that your industry is in the midst of fundamental change. “We’ve got to break out of the mentality of Cokes, smokes and gas,” warned Gray Taylor, executive director of Conexxus, in a 2017 NACS Magazine article. “Otherwise, what’s the differentiator? Most convenience stores sell the same stuff with the only difference coming from location. We must do something that makes us totally unique." That need for differentiation is more important than ever for convenience stores, as brick-andmortar retailers collectively bleed market share to the internet. Adhering to the fundamentals are a given: Ensuring that your bathrooms are clean, your employees are friendly, and your shelves are stocked are essential for meeting your customers’ basic needs. But equally important is refreshing your public perception, which you can achieve by enhancing your store’s physical presence and functionality.
| MAY 2021
Recognizing this growing retailer need, the Cenex brand has introduced its LIFT initiative, a lighting, image and facility transformation designed to revamp Cenex-branded c-stores through a series of exterior and interior updates, along with optional loan funding for in-store improvements. It’s a holistic approach to addressing a store’s internal and external layout and design, all with a goal of building trip frequency and customer loyalties. A PORTFOLIO OF SOLUTIONS LIFT is comprised of two main focuses: refreshing store forecourts with the all-new Halo Image, which elevates the appearance of Cenex-branded locations from the street; and In-Store Loan Program, which provides 0% loan financing for qualifying in-store improvements aimed at enhancing customer experience and safety. Additionally, the Cenex brand provides preferred vendor partners who are vetted for their expertise and quality offerings. The Halo Image program includes improvements made to the canopy, forecourt and main ID sign, including a 360-degree LED light band, a new Cenex logo and a three-dimensional backlit blue arch. For the in-store loan program and its qualifying in-store improvements, eligible remodel categories include: single- or multi-use bathroom, checkout counter, LED lighting, coolers, foodservice counters, interior painting and category signage. The interior solutions are all optional, and retailers are free to choose those that are the most relevant and appropriate for achieving their goals. “Because all Cenex-branded locations are independently owned and operated, they truly can CONVENIENCE.ORG
The article is brought to you by Cenex, a NACS member.
choose every aspect of the interior that they want to,” said Akhtar Hussain, director of refined fuels marketing. “That flexibility is the biggest reason for its success.” SATISFYING CRAVINGS IN MINNESOTA It was renovation flexibility that was key for Kelly Christianson, general manager of Roseau, Minnesota-based Northern Resources Cooperative, which owns and operates the Roseau Cenex, when he set out to rebuild his store. It has always been important for Christianson that his store serves as a focal point for the area—a place where locals could gather and that would serve its evolving needs. After 15 years at the store’s helm, Christianson saw that Roseau began to show its age, and he decided to pursue a renovation and expansion through the Cenex-branded LIFT initiative. A dedicated Cenex representative worked with Christianson to choose the LIFT elements that were appropriate for his store and helped guide him through every phase of the renovation process. Christianson chose to work with the Cenex brand’s interior and exterior renovation experts, incorporating elements from the grocery and bar industries to give his store a fresh, contemporary feel. “What I really like about grocery stores are the nice, open layout most have,” said Christianson. “The stores aren’t crowded and have plenty of floor space. So, we emulated that with our high ceiling and open, industrial look.”
In addition to the aesthetic changes, Christianson addressed the evolving needs of his customer base. That included implementing elements that appeal to his millennial shoppers, like self-checkout, a walk-in cooler, craft soda options in his fountain dispensers and a bean-to-cup coffee machine. In response to COVID-19, he added touch-free functionality at his checkouts and even bathrooms. “For the men’s and women’s bathrooms, we decided on a walk-in layout without doors,” he said. “By eliminating the doors, there’s less need to touch surfaces, leading to less contact that can be made person-to-person.” Christianson also wanted to create an easily navigable environment, allowing his customers to get in and out quickly and easily, both convenience and safety benefits. In the forecourt, the Cenex-branded Halo Image upgrades were implemented with a 360-degree LED light band on the canopy, along with more prominent Cenex branding. Additionally, he redesigned his diesel island to make it easier for area semis and cars pulling trailers to access. “We went with a single row of pumps so there was no wait time, and we put them at an angle to make the traffic flow easier,” he said. With the rebuild complete, Christianson said the store will draw people in from around the area, achieving his vision of a modern destination that reflects its community. “I just couldn’t let this opportunity slip by, especially with the chance to continue to partner with Cenex throughout the
Northern Resources Cooperative General Manager Kelly Christianson addressed the evolving needs of his customer base, like self-checkout, a walk-in cooler, craft soda options in his fountain dispensers and a bean-to-cup coffee machine. CONVENIENCE.ORG
MAY 2021 |
renovation,” Christianson said. “For me, Cenex was the right brand and this renovation was happening at the right time.”
Industry veteran Tony Bernhardt, CEO of Enerbase Cooperatives in North Dakota, turned to the Cenex brand to understand trend data and apply that to store improvements at his Cenex-branded location in Minot, North Dakota.
WHY NOT IN MINOT? Industry veteran Tony Bernhardt, CEO of Enerbase Cooperatives in North Dakota, has been concerned with changing consumer preferences for some time and the impact that could play on his several stores. It’s not just gas or candy that his customers are seeking; rather, they want a dynamic shopping experience, whether that’s through new product offerings or warm, employee interactions. Recognizing that he needed to refresh his brand to remain competitive, he turned to the Cenex brand to understand trend data and apply that to store improvements at his Cenex-branded location in Minot, North Dakota. Bernhardt knew firsthand that renovations come at a premium; indeed, he had tackled myriad upgrades over the years—everything from new pumps to POS systems. As a result, the primary reason he committed to working with the Cenex brand was the company’s 0% financing option for qualified in-store upgrades, as well as its hands-on involvement in connecting Bernhardt with quality vendors. “Committing to a store remodel of this magnitude, going over budget is simply not an option,” he said. “[Cenex] helped ease the financial burden of the renovations and connected us with trustworthy vendors who helped us stay within budget and got the job done right.” The renovations were extensive and included a 2,500-square-foot addition, an expanded kitchen, new coolers, a new grab-and-go section, refreshed restrooms, upgraded countertops, new LED lighting and a revamped coffee station. Safety was a primary consideration for Bernhardt, too, and he worked with Cenex to | MAY 2021
install completely automated bathrooms, eliminating the need for customers to touch anything. Since completing the renovation, Bernhardt has seen a steady increase in traffic, which he attributes to the store’s new look and functionality, like his expanded coffee offerings. “Our research showed that coffee consumption wasn’t limited to mornings, especially in hardworking communities like Minot,” said a Cenex spokesperson who worked with Bernhardt on the renovation. “That’s why we worked with Tony and his team to install a bean-to-cup coffee area with more flavors and options that’s always fresh, 24-7. There was such excitement with the customers, just with there being something new, and the employees were excited to be able to help the customers try it out.” FIGHTING BACK When viewed in the context of COVID-19, the Cenex-branded LIFT initiative may appear to be reactive, but its roots predate the pandemic and are instead proactive. The past few years of NACS State of the Industry data have revealed that customer trip frequency is on the wane, so taking steps to create a store that is modern, clean and safe is a strategic way to bring back some of those trips. At the same time, shopping behaviors have changed, and many will remain after COVID-19. “No one is going to be dealing with dirty bathrooms anymore. Cleanliness will be a top priority,” Hussain said. “And the forecourt and store flow and how things function—like touch-free and grab-and-go—will be lasting,” he said. “It’s critical to create a space that addresses these changing consumer preferences, elevating and sustaining your store as a community destination.” Jerry Soverinsky is a Chicago-based freelance writer and NACS Magazine contributing writer.
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Human resources professionals gathered virtually—for the 30th NACS HR Forum—to learn how to navigate this year’s toughest workplace challenges. By Sara Counihan and Pat Pape
| MAY 2021
UNITING TOLEARN M
ore than 200 attendees gathered virtually at the NACS Human Resources Forum March 9-11 to learn and connect from fellow HR professionals in the convenience retailing industry. Industry leaders presented engaging presentations on topics vital to the HR field, such as COVID-19 and the pressure it’s placed on essential workers, compensation and labor data from 2020 and how to build a more inclusive workplace. Kicking off the event, Joanne Loce, president of Virginia-based Loce Consulting and event moderator, set the stage with an overview of the current landscape and led small group discussions, allowing attendees to align on expectations and build relationships with fellow HR professionals.
IT’S IN THE DATA Following Loce, Jayme Gough, research manager for NACS, shared insights on the latest economic, consumer, convenience and adjacent channel trends that are influencing the convenience marketplace. The employment landscape changed dramatically in 2020, and COVID-19 impacted businesses in unprecedented ways, including human resources and labor, according to Gough. Gough shared that new questions regarding the mitigation of COVID-19 were included in the newly-released NACS State of the Industry Compensation Report of 2020 Data, available now for purchase. According to the report, convenience retail companies spent an average of $45,006 on pandemic-related safety
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protocols and training, or about $482 per store. Additionally, companies that participated in the survey spent $259,583 on personal protective equipment, plexiglass shields, cleaning products and supplies, averaging $1,571 per store. If you projected the average company’s per-store reported spend across the industry of over 150,000 retail locations, the industry would have spent about $308,494,307 to mitigate the spread of COVID-19 in 2020. Employee turnover continues to have a huge impact on the convenience industry. In 2020, turnover rates remained in the triple digits at 123% for store associates, according to the NACS Compensation Report. The average turnover rate was 91.8% for full-time hourly store associates and 153.9% for part-time hourly store associates. The turnover rate for managers dipped slightly to 20% in 2020 from 22% in 2019. So how do c-stores prevent turnover? It’s important to understand why employees are not happy enough to stay in their positions. Gough pointed to a 2018 Work Institute study, which found that the No. 1 reason people quit their job is because they did not feel their position gave them enough career development. “One thing is to look to your recruiting and hiring process. Try to make the right decision first,” advised Gough. She also specified four segments that can be helpful in the hiring process. 1. S et clear expectations: The primary way to do this is through job descriptions. 2. H ire for the person: Hire for culture first and skills second. Data from the 2020 NACS
Compensation Report shows that the full-time store associate turnover rate was 92% in 2020, and there was a 40% termination rate and a 59% resignation rate. Among the companies that implemented reference tests, personality tests, values tests and situational judgement tests, there was a 70% turnover rate, 21% termination rate and 17% resignation rate. “If you conduct these values tests, they are going to lead to longevity in your hiring,” said Gough. 3. P ut your best foot forward: More time during the interview process showed higher rates of acceptance and lower turnover between positions. 4. Lead by example: Per the graphic below, Gough encouraged employers to provide an extraordinary employee experience. Gough also stressed the importance of engaging and retaining employees, noting that disengaged employees cost U.S. organizations around $500 billion a year. “Disengaged employees do not provide anything for you,” she said, adding that convenience retailers, “have a great opportunity to engage employees when they’re least engaged—to reenergize them when they think maybe their feedback is not being listened to or maybe they’re not being trained enough. We need to find ways to intervene at these points where they are at their most disengaged.” Additionally, 85% of HR leaders say employee experience is the most valuable HR capability. NACS data show that 28% of companies conduct employee engagement programs, up 24% from 2019. There is an average of 7.6 months in between programs.
PROVIDING EXTRAORDINARY EMPLOYEE EXPERIENCE COACH. Provide recognition when appropriate and constructive and direct feedback when necessary. ONBOARD. Make expectations clear and provide connection between the role and the organization’s long-term goals. Overcommunication is always better.
GROW. Allow for growth opportunities or role diversifications. Empower employees to seek to learn more. The enemy of growth is boredom.
HIRE. Hire for quality and alignment on values.
ENGAGE. Conduct employee engagement surveys or programs to constantly improve on employee experience.
Source: NACS Research
| MAY 2021
“You cannot overeducate employees during a pandemic.” Finally, Gough outlined the baseline benefits that c-stores should consider offering to remain competitive. To learn what these benefits are and how many companies offer them, visit www.nacsmagazine. com to read the full article.
COVID-19, LEGALLY SPEAKING Top of mind for employers are the legal impacts of COVID-19. In his presentation, partner Travis W. Vance of Fisher & Phillips reviewed issues surrounding COVID-19 and the pressures it has placed on employers of essential workers. Vance said to consider two guideposts when making every decision relating to the pandemic: 1. H ow it will impact employee relations: “If I fire someone because of safety violations, how will that affect their fellow employees?” 2. H ow it will be viewed by the public: “You could do something that is perfectly legal, but it ends up on social media, and that could cost you a lot more in public perception and employee morale.” According to Vance, there are four pillars that have worked in helping employers navigate the legal waters of the COVID-19 pandemic. The first is to communicate. “Communication is crucial,” said Vance. Employees should know what their company is doing regarding COVID-19, the company’s vaccination program and COVID-19 housekeeping and sanitation procedures. If you keep your employees engaged and informed, “those are the employees that are more likely to come to work, more likely to be loyal, less likely to file a claim against you,” said Vance. He emphasized how important it is for companies to have a written COVID-19 response plan. “You’ll help put employees at ease that you’re keeping them safe.” There should be continuous training for managers/supervisors but also for employees, and everyone should be educated on the company’s COVID-19 policies. “You cannot overeducate employees during a pandemic,” he said, adding that the most effective employers go out of their way on a weekly and CONVENIENCE.ORG
sometimes daily basis to remind their employees about what they’re doing to mitigate the spread of COVID-19. The second pillar is to listen. “Every time someone brings up a concern, you should listen to them, engage with them, take it seriously. If it’s something that you should fix to promote safety, you should be doing that,” said Vance. He recommends performing a 360-degree analysis to get feedback on supervisors and managers from employees so you can make sure those in charge know the COVID-19 policies and procedures. Vance says to listen to suggestions and utilize surveys to figure out if employees are happy and engaged. The third pillar is servant leadership. According to Vance, when a person is in a leadership position, instead of showing how great they’ve been doing, servant leadership is casting the light on the team around them. “You engage with them, you listen and implement their ideas and when their ideas are successful, you give them all the praise,” he said. The last pillar is empathy. It’s crucial for employers to empathize with workers, says Vance. They should engage with employees and be transparent. Vance continued the presentation by discussing the legal risks of COVID-19 and compliance with COVID-19 guidelines. To read about COVID-19 legalities and what to do when your employee tests positive for COVID-19, visit www.nacsmagazine.com to read the full article.
CHOOSE TO BE DIFFERENT When it comes to employee compensation and benefits, one size does not fit all, agreed members of the “Differentiating Yourself Through Total Rewards” panel, which featured human resources professionals Matt Spackman of Kum & Go and Ashley Ray of Maverik, who discussed ways that convenience retailers can reward employees and encourage retention. One important first step is surveying employees about their desires and needs to discover “we don’t always know what we don’t know,” Ray said.
Listen to our Spotify playlist! Scan for some HR-related tunes.
MAY 2021 |
“Corporations are revisiting their strategies when it comes to diversity and inclusion.” Both Maverik and Kum & Go conduct employee surveys to find out what employees think about the organization, including compensation and benefits. Those surveys have revealed that “not every benefit we offer is right for everyone,” Ray said. Kum & Go recently wanted to update its total rewards strategy to ensure the company was competitive in the market and that the strategy reflected the values of the organization, said Spackman. “Our survey used a trade-off analysis methodology, which showed two different benefits, and the associate had to choose between them.” What did the surveys reveal to Kum & Go and Maverick? The answer may surprise you. Find out in the full article at www.nacsmagazine.com.
INCLUSIVITY IS VITAL Following Black Lives Matter demonstrations last summer, inclusion and diversity “have been a critical top-of-mind topic for corporations and organizations,” said Stephanie Piimauna, senior vice president and chief diversity and inclusion officer at Seminole Hard Rock Support Services, in her session “Building a More Inclusive Workplace.” “ Diversity’ and ‘inclusion’ [are] actually one word. It means possibilities,” she said. Today, the public is asking businesses to “show us what that means,” she said. “What are you doing to minimize bias? What are your hiring practices? What do your directors look like? And corporations are revisiting their strategies when it comes to diversity and inclusion.” There are five reasons inclusion is important, she said. 1. It’s the Right Thing to Do: That attitude should inspire businesses to identify what gets in the way of an inclusive environment and determine what shapes the culture of the organization. 2. C hanging Demographics: The world is changing both demographically and
| MAY 2021
generationally. Today, many people identify as two or more races. Gen Z will soon be coming into the workplace and will have different needs and attitudes than past generations. 3. P roviding a Safe and Productive Environment: When people are distracted by their environment, they can’t produce quality work. Bullying doesn’t promote a safe, productive environment that builds trust and produces growth and productivity. 4. R isk Management: Inclusivity helps maintain the company’s image and reputation. 5. Strategic Advantage: Inclusivity allows companies to position their organization as an employer of choice. It improves organizational performance and reduces lawsuits and complaints. Going forward, Piimauna sees 10 trends that human resources professionals and company leadership should consider when strategically looking at diversity and inclusion in the organization. Find out what these 10 trends are and what benefits organizations receive by promoting diversity and inclusion in the full article at www.nacsmagazine.com.
Sara Counihan is managing editor of NACS Magazine and content project manager at NACS.
Pat Pape worked in the convenience store industry for more than 20 years before becoming a full-time writer. See more of her articles at patpape.wordpress.com.
CU LT I VAT I NG CON N EC T IONS A strong coffee program begins with good coffee and a great partnership.
Maurice “Mo” Moragne Chief Sales Officer Farmer Brothers www.farmerbros.com
Pictured above is Colombian farmer Alexander Castaño in the Valle del Cauca region, municipality of El Aguila, checking on a recently planted coffee tree on his farm “La Alcancia”.
| MAY 2021
“CULTIVATING CONNECTIONS THROUGH COFFEE” IS PART OF THE NEW NARRATIVE AT FARMER BROTHERS. CAN YOU EXPLAIN MORE WHAT THAT MEANS? Farmer Brothers started way back in 1912 when Roy E. Farmer thought it should be a priority for every restaurant to serve a great cup of coffee. That focus propelled the company’s growth over the next century, even as we expanded into teas, culinary products and other ways to serve our customers. In the last year, the company brought in a new leadership team—including me. It was clear the company was suffering from some inertia and could benefit from some fresh eyes and new ways of thinking to drive its next evolution to meet the moment. Those fresh eyes brought expertise from a variety of categories, all grounded in leading positive change, and that’s what called me to this company. With the new team in place, we knew there was a lot to do, and we also knew we needed a rallying cry. So, we invested some time in mission, vision, values and purpose work to guide how we show up in the world. After a lot of discussion and consideration as we really looked into the soul of who we are as a company, we distilled our purpose, which is to cultivate connections through the love of coffee. At its core are the moments we come together at the kitchen table or the coffee shop, cup in
hand. Coffee serves as a vehicle for human connection, whether you’re just getting to know someone, sharing a laugh with your family or confiding something deeply personal with a dear friend. This helps every team member and every customer understand that while we are a commercial venture, we do not have a merely transactional relationship with our customers. Cultivating connections with our customers and helping them cultivate connections with their customers is truly the foundation for our success and a guiding principle. PART OF WHAT MAKES FARMER BROTHERS UNIQUE IS THE STRENGTH OF YOUR DSD NETWORK, IS THAT RIGHT? Yes, that’s one of our greatest advantages. Consistency in DSD service can be difficult for our customers. Our 50,000 touchpoint network is deep, and our DSD team has strong and often lengthy relationships with our customers. We go far beyond simply keeping our customers in stock: We partner with them to help grow their businesses by bringing them true coffee expertise. That includes a quarterly Cup Quality Check to monitor quality of the beverages they’re serving, keeping their equipment functioning properly with a quarterly preventive maintenance program and bringing them the new products that today’s evolving coffee consumer wants. CONVENIENCE.ORG
HOW DOES YOUR COFFEE SERVICE SET YOU APART? We are proud to offer a remarkable selection of coffee and all that goes with it. But let me take you back to our purpose—cultivating connections through the love of coffee—to illustrate that we are not just about moving product, no matter how good it is. We are deeply committed to the experience of enjoying coffee, and we understand how important that is to our customers, whether that’s a mom and pop café, a major national hotel chain or a small regional convenience chain. With our understanding of the end customer and their love of coffee, we have the marketing and innovation horsepower to help any of our customers re-envision their offerings to take advantage of more omnichannel options and become a true coffee destination. For example, we’re investing in some of our brands that consumers are accustomed to seeing in convenience stores—Boyd’s Coffee and foodservice operations and China Mist Tea—and developing their retail presence from supermarket shelves to our owned direct-to-consumer e-commerce platforms. That expansion is supported by targeted digital marketing. This is all designed to build the equity these products bring to our customers where they’re served, increasing sell-through and enhancing the consumer experience. Beyond product quality, we will always differentiate with our service, which comes from our outstanding team members. If we continue to have high quality products and plus it all up with high quality service, we have something that we believe can’t be beat. WITH SUCH A FOCUS ON SAFETY AND CLEANLINESS THESE DAYS, WHAT OPTIONS DO YOU PROVIDE FOR SAFE PRODUCT HANDLING? It’s important to point out that coffee, tea and other hot beverage equipment is designed to be very easily and thoroughly cleaned and sanitized, regardless of its touchlessness. We do offer some designs that minimize touch, such as soda-dispenser-style faucets that let customers “pour” coffee by pressing a CONVENIENCE.ORG
cup against the lever, which eliminates one touchpoint. Pull-style dispenser levers can easily be replaced with these touchless dispenser faucets with no tools at all. We offer these for a variety of existing machines. Equipment manufacturers are beginning to develop digital, internet of things applications that will initiate beverage selection and recipes. As with most things, initially these will require significant investment, but it’s out there on the horizon.
This article is brought to you by Farmer Brothers, a NACS member.
SUSTAINABILITY IS ALSO A CRITICAL ELEMENT FOR MANY CONSUMERS. HOW IS FARMER BROTHERS EMBRACING THIS? Sustainability for us is a three-part equation: social, environmental and economic development. We call that SEED—which is not a “program” but a framework for how we approach our business. Each of these parts is inextricably intertwined with the other two. If we falter at one, we cannot be champions of the others. We have been a sustainability focused company for many years. In fact, sustainability is one of our core values, and we have kept true to it in many ways by reporting sustainability metrics through our sustainability report for nine consecutive years, by sourcing coffee from the same growing communities for more than a decade through our Direct Trade program and by establishing science-based targets to reduce our carbon footprint to align with the Paris accord, to mention a few. Our inclusion in Newsweek’s list of America’s Most Responsible Companies, or being among the top 7% out of 9,600 companies worldwide on the 2020 CDP (Carbon Disclosure Project) Supplier Engagement Leaderboard, sends a strong message to the community about the work we’re doing in sustainability. Because we have elevated SEED in our work, demonstrated by how we show up in the world at large, we’ve earned recognition within our industry. If we have high quality people who do high quality work to produce high quality products while protecting the planet, we will produce healthy profits. It’s a virtuous circle when we all do the right thing.
Helping our customers cultivate connections with their customers through the love of coffee is truly the foundation for our success and a guiding principle.
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| MAY 2021
Y E K W R I A AFF
le grand d n a h s re to s e c n ie n How conve VID-19. O C f o e m ti e th in s opening PAPE
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he real-estate and construction teams at Tulsa, Oklahoma-based QuikTrip have been busy. Since the pandemic began in March last year, QuikTrip opened 45 new stores for a total of 860 locations across Arizona, Colorado, Georgia, Illinois, Iowa, Kansas, Missouri, Nebraska, Oklahoma, South Carolina and Texas. That’s a lot of growth to celebrate in a short time, and to keep customers and employees safe during the pandemic, QuikTrip chose to forego grand opening events at the new locations. “We don’t typically host store grand openings each time we build unless we’ve hit a milestone or move to a new market,” said Aisha JeffersonSmith, corporate communications manager, QuikTrip. “However, our store teams are always ready with smiles behind their masks at each new store opening. We are good neighbors in the communities in which we build, and we communicate opening dates.” For decades, celebrating a new store with a formal grand opening has been the traditional way to recognize the hard work of team members while inviting community residents to come inside and get acquainted. Convenience-store openings have typically included some combination of a ribbon-cutting, speeches, games, giveaways, prizes, bounce houses and free food, plus visits from local officials and even celebrities. Those festivities came to a screeching halt with COVID-19, and c-store operators have been forced to rethink safe, yet effective ways to showcase a shiny new store and get the word out to the neighborhood.
The CDC’s readiness and planning tool for managing large events during the pandemic is available online at www.cdc.gov/coronavirus/2019-ncov/community/ large-events/ considerations-for-events-gatherings.html.
| MAY 2021
WELCOME IN Between April and December 2020, Thorntons, with headquarters in Louisville, Kentucky, opened seven new stores, bringing the total store count to 207. The company’s slogan—Thorntons Cares—is demonstrated by the chain’s ongoing commitment to safety by asking guests to wear face coverings and practice social distancing inside the stores, and those precautions have carried over to new store festivities. “We’re celebrating a little differently right now,” said Kelly Leonardo, marketing manager, Thorntons. “The most noticeable changes in our grand opening celebrations are the elimination of activities that draw large gatherings and the removal of trinkets or small gifts that would encourage close personal contact between our team members and our guests.” In the past, new stores have been celebrated with a donation to a local food partner and a commitment to supply the organization with surplus food items on a regular basis. That practice has continued. “Additionally, Thorntons engages guests in raising funds for hunger relief through a ‘Round Up’ program,” Leonardo said. “At the register, they’re invited to round up their purchases to the nearest dollar for a donation to the store’s local hunger relief partner. All funds raised in a community stay in that community to help feed the hungry.” But the symbolic ribbon-cutting ceremony remains, and “our team members, along with local Thorntons leadership, give air high-fives from a safe social distance,” she said. “We continue to notify the local community of our new locations via direct mail, press release and social media. We also engage the local chamber to help identify partnership opportunities with local businesses.” Last year, Love’s Travel Stops, based in Oklahoma City, Oklahoma, added 38 new outlets, and the chain plans to add 50 more in 2021. “2020 was difficult, but our teams worked together to open new locations, add parking spaces and serve customers despite the pandemic,” said Shane Wharton, president of Love’s. “In 2021, we’ll grow our travel stop network where our customers have asked us to, add new products and services and open new truck care centers to get professional truck drivers back on the road quickly and safely.” CONVENIENCE.ORG
As an essential business, “We’ve implemented additional cleaning and sanitizing processes, and we were the first major travel stop to announce a mask mandate to help keep customers and team members safe while visiting Love’s,” said Caitlin Campbell, media relations specialist, Love’s. “Typically, when Love’s opens a new location, a donation is made to a local organization and a ribbon-cutting ceremony is held. While we’re continuing the donations, we’ve temporarily postponed ribbon-cutting ceremonies until it’s safe for large groups to gather.” Last July in Vienna, Virginia, Wawa opened its first-ever location with no fuel pumps, just EV chargers, and the chain hosted an official ribbon-cutting outdoors with attendees standing six feet apart. To get the word out, Wawa produced a welcome video that included an appearance by Vienna Mayor Linda Colbert, who built the store’s first ceremonial hoagie. (Watch the video at www.youtube. com/watch?v=2c_FtKrlPyA.) And to commemorate the opening, the company announced it was launching the Lending a Helping Hoagie initiative in the community and donating $1,000 from the new store’s first week of sales to Capital Area Food Bank to help battle hunger.
SAFETY FIRST The U.S. Centers for Disease Control guiding principles for public gatherings include mandatory masks, social distancing and limiting attendance to individuals from the same town or community. Here are some tips for cautiously commemorating a new store: Announce your grand opening on social media, including Facebook, Twitter and Instagram. You can stream video of store employees putting the finishing touches on the soon-to-open outlet or even livestream the actual opening. Facebook reported last year that live videos get three times more viewership than videos that are pre-recorded and then uploaded. Provide an Instagramable moment to help get the word out. In today’s selfie era, customers are happy to snap a photo with the store’s costumed mascot or pose under a balloon-arch entrance to the store—and then share those pictures with friends online. Offer coupons or discounts. According to the U.S. Labor Department, as of February 2021, at least 10 million Americans were unemployed, compared with 5.7 million who were out of work in February 2020. That means many consumers have limited disposable income and would welcome discount prices and good deals. Determine a maximum capacity for the grand opening and make it an “invitation only” event. Insist on social distancing and follow CDC mask guidelines, and then, keep it brief. Offer and promote curbside delivery. While that doesn’t bring customers inside the store, it lets locals know that the store is new, is open and is ready to meet their needs. When planning customer giveaways, scratch those self-serve buffets. Instead, give a practical gift that will promote your brand, such as a face mask or reusable shopping bag with the store’s logo. Even during a pandemic, retailers can still make a charitable donation to a popular community cause. Distribute a news release to local media outlets to get the word out about the donation from the new store.
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Scenes from the July 2020 grand opening of Wawa’s Vienna, Virginia, location, its first without fuel pumps.
In January, Wawa opened its first drive-thru-only location in Morrisville, Pennsylvania, and much of the focus was on Wally Goose, the chain’s costumed mascot, who worked the window, serving up special offers to car-bound customers. As part of the celebration, Wawa and The Wawa Foundation presented checks to Check Out Hunger and Feeding America Food Bank affiliates to support hunger relief in local communities. “At Wawa, our core purpose is to go beyond filling orders to fulfilling lives,” said Chris Gheysens, president and CEO, Wawa. “We are committed to providing comfort and a sense of normalcy in the safest way possible.” Although Casey’s, the Ankeny, Iowa-based retailer, discontinued traditional new store grand openings in March 2020, the chain has scheduled a few brief, outdoor gatherings for photos and ribbon-cuttings. “At Casey’s, the safety of our team members and guests is a top priority,” said Katie Petru, director of communications and community, Casey’s. “New store openings have typically involved a few company representatives, the local chamber of commerce and our store teams, with everyone wearing masks. Safety comes first as we
| MAY 2021
evaluate any events in our stores. And local guidance on gatherings also must be factored in.” It’s not just grand openings that have been scaled-back or nixed during the pandemic. Last summer, 7-Eleven canceled 7-Eleven Day (July 11), an annual tradition that has been toasted with free Slurpee drinks for customers for 20 years. “At 7 Eleven, our top priority is the safety of customers, franchisees and employees,” said Marissa Jarratt, senior vice president and chief marketing officer, 7-Eleven. “Gathering nine million of our closest friends in stores on one day just didn’t feel right.” As always, a little creativity can go a long way. When Lidl unveiled a new grocery in Alexandria, Virginia, in September, the company’s grand opening featured a pop-up farmers market. Pat Pape worked in the convenience store industry for more than 20 years before becoming a full-time writer. A new QuikTrip has just opened a mile from her house.
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COOL NEW PRODUCTS This advertorial-style guide of services and packaging appears monthly and is an information-packed tour of ideas and approaches that can change how consumers view your store or choose your brand. It spotlights the newest thinking in convenience and fuel retailing and gives you an advance look at ways of staying in front of industry trends. Products are categorized the same way we organize the Cool New Products Preview Room at the NACS Show each year in October— New Design, New to the Industry, New Flavors, Health & Wellness, Green (EcoFriendly), New Services and New Technology. Products are considered “new” this year if they’ve been introduced since October 2020. The products featured here also can be seen at www.convenience.org/coolnewproducts.
The Donut Hole® Individually Wrapped Donuts
Fully Finished, Retail-Ready Individually Wrapped Donuts
The COVID-19 pandemic has shined a light on the importance of food safety. More than ever, operators are under scrutiny to provide fresh products in safe, user-friendly packaging. Baker Boy’s The Donut Hole-branded Individually Wrapped Donuts are ideally suited for multiple foodservice segments — especially convenience stores. These donuts arrive frozen, and ready to thaw and serve in convenient retail-ready packaging. There’s something for everyone with 8 unique flavors, including Baker Boy’s signature Magic Ring® Filled Donuts — ring donuts featuring delicious filling in every bite — and popular classics like the Glazed Donut and Maple Long John. The Donut Hole donuts are the same high-quality foodservice donuts customers have come to expect from Baker Boy. These donuts have a wonderful fresh taste, are sealed for safety, require minimal labor, and lead to little product waste. Visit bakerboy.com and contact Baker Boy at firstname.lastname@example.org to learn more.
| MAY 2021
Monster Energy Company PRODUCT
Rehab Monster Strawberry Lemonade
Rehab Monster Strawberry Lemonade & Refreshed Look
Get ready to REFRESH + RECOVER + REVIVE. Introducing the newest Rehab Monster flavor, Strawberry Lemonade, available in a 15.5oz size, that joins the refreshed Rehab Monster lineup including Tea + Lemonade, Peach Tea, Raspberry Tea, and Orangeade. The addition of Strawberry Lemonade kicks off the new look of the entire Rehab Monster family that gets new can designs and a refreshed formula stacked with Electrolytes, Vitamins, & Botanicals that help provide Advanced Hydration, Reduced Fatigue, and Increased Concentration. Strawberry Lemonade is nationally available beginning in March with updated Rehab Monster cans available in April. For more information, call (800) 426-7367 and visit www.monsterenergy.com
Gold Medal Products Co. PRODUCT
Popcorn at the push of a button!
It is easier than ever to serve up fresh popcorn! ReadyPop® Jr. combines the power of an 8-oz popper and the convenience of a self-serve dispenser in one compact unit. Operators can pop multiple batches then hold the popcorn in the cabinet until it is dispensed. Customers will enjoy filling their cups or bags with just the push of a button. Convenience stores will benefit by offering a grab-and-go snack plus a fresh in-store experience that engages the senses. ReadyPop Jr. includes a stainless-steel E-Z Kleen kettle, PowerOff Control that automatically turns off kettle heat after 15 minutes of idle time, and a heated corn deck to keep the popcorn warm and fresh. CONVENIENCE.ORG
MAY 2021 |
Haliburton International Foods Breakfast Scrambles
Introducing Grab+Heat+Eat Breakfast Scrambles
NEW innovative and classically inspired frozen breakfast cups available in microwaveable sealed, self-venting cups with 6.5 ounces per portion, 8 to a case. Easy to use, just heat and eat in 1 step with no additional mixing required. Our chefs are ready to support your culinary teams with creating custom inspirational flavors and combinations that are available for private label and work best for your target customers. Our Breakfast Scrambles are designed for operators looking for scratch, high-quality and Ready-to-Eat ease. Current flavors available: Classic American Scramble, Ranchero Breakfast Scramble, Egg White Veggie Scramble and Meat Lover’s Ultimate Scramble. For more information about creating your Breakfast Scrambles and our capabilities, please contact us at email@example.com.
Mashgin Inc. PRODUCT
The Touchless Checkout System
Self-Checkout That’s 2x Faster Than Cashiers
Give customers a faster and safer checkout experience with Mashgin’s Touchless Checkout System. Mashgin uses computer vision to instantly identify multiple items at once without looking for a barcode - just place items down on the tray then pay. Convenience stores using Mashgin improve profit margins by over $800/week. Mashgin is already operating in over 200 cafeterias, sports stadiums, and convenience stores across the US and has run over 12 million transactions and counting. To see if Mashgin is right for you, reach out to our VP of Partnerships Jack Hogan at firstname.lastname@example.org. Learn more at www.mashgin.com
| MAY 2021
Spectrum Industrial Products PRODUCT
Transform Your Floorcare
Did you know the mop was invented in the 1400’s? If you’re still mopping it’s time to bring your floor care into the 21st century. The Mopit 5 floor scrubber makes cleaning your floor simple and easy by laying down clean soapy water, scrubbing the floor, then vacuuming up the dirty water into a separate tank. The Mopit reduces slip and fall accidents by leaving the floor dry. Got people tracking all sorts of stuff into your store? Pick it up in seconds with the Mopit. The Mopit is small and maneuverable making it easy to store. Our month-to-month lease is the least expensive in the industry. For more information, please visit www.mopit.com or call us at 1-800-290-2833.
INDEX NEW FLAVORS
Baker Boy, Inc............................................................................80 Monster Beverage Company.................................................. 81 NEW TO THE INDUSTRY
Gold Medal Products Company............................................. 81 Haliburton International Foods............................................ 82 NEW TECHNOLOGY
Mashgin Inc. ............................................................................... 82 Spectrum Industrial Products............................................... 83 EdgePetrol.................................................................................. 83
Fuel pricing software EdgePetrol provides fuel pricing software that offers fuel retailers never-seen-before data insight that helps optimize profitability. As the fuel market continues to change with market consolidation and fluctuating volumes and margins, having a better handle of real-time weighted and blended fuel costs, volumes, margins, and profits at the click of a button is allowing fuel retailers to make better and quicker decisions around their stations. Visit edgepetrol.com to book your free fuel pricing consultation. CONVENIENCE.ORG
MAY 2021 |
GAS STATION GOURMET
Know Your Market
Flory’s Gas, Convenience & Deli customizes menus to local tastes across its four Hudson Valley locations. BY AL HEBERT
Family-owned Flory’s Gas, Convenience & Deli has four locations in New York’s Hudson Valley. On a recent day, the East Fishkill c-store menu featured seafood scampi.
riving through New York’s Hudson Valley, one cannot help but run across a location of Flory’s Gas, Convenience & Deli. They share a name, but each store is unique.
GOOD NEIGHBORS Flory’s Gas, Convenience & Deli stores are not only invested in growing business but also in giving back to their Hudson Valley communities. Jamy Flory, vice president of operations, said the company supports local schools through fundraisers and also through direct food donations. The company has also taken a stand against cyberbullying by supporting iPredator. “I had young kids, and I heard about it [cyberbullying],” Flory shared. “It became very serious to me.” The strategy is to offer customers internet safety education about cyberstalking, online child predators and cyberbullying. Information is available at www.florycorp.com.
| MAY 2021
The Flory family has been in the gas station business for decades. Today, brothers Jamy and Jerry oversee Flory Corp. Jamy is vice president in charge of operations, and Jerry is the director of development and senior office manager. They were raised in the family gas stations. “I grew up pumping gas and driving a tow truck,” Jamy Flory said. In 2000 the business transitioned to convenience stores. Today there are four stores located in Fishkill, East Fishkill, Mahopac and Hopewell Junction. The stores are about an hour outside of New York City and located 45 minutes apart from each other. They have similar deli menus, with made-to-order subs and wraps, but hot food is based on what customers are looking for in each market—everything from breakfast burritos to lasagna to burgers and fried chicken. LOCAL MENUS “In Fishkill, our steam tables have fried chicken at 9 a.m. because landscapers come in and want it that early,” Flory said adding, “We’re off the main highway, and truck drivers come in and they want it that early as well.” The Fishkill location CONVENIENCE.ORG
We’ve worked really hard to make people know they can get great food in a gas station.
The four c-stores have similar deli menus, including made-to-order subs and wraps, but the hot food offer varies by what the local customers want in each market, and daily menus are posted on Facebook. The Fishkill location includes drive-thru service.
also offers something the other stores do not—empanadas and other Mexican-style food—because that’s what customers want. “You have to know your market and know your clientele,” he said. The Mahopac location offers Italian food such as baked ziti, lasagna and more. “We have waffles, English muffins—any breakfast food—and lunch is out at 10:30 a.m.,” he said. When the stores launched foodservice operations, Flory knew it would take some effort to get customers inside to try it, so he hit the concrete—or in this case, the forecourt. “We’d walk around with trays and give free samples. We did samples of soup, cut sandwiches, maybe some of the hot specials. We brought them to the pumps. They’d say, ‘You have food here?’,” Flory said of the sampling strategy. “We’ve worked really hard to make people know they can get great food in a gas station. It took forever to get people to understand that. We had to break down people’s mindsets.” The same customers often stop in multiple stores—sometimes on the same day. “Construction guys stop in at the Route 52 store [East Fishkill], and then drive a half-hour north and buy a lunch sandwich at the next store [Hopewell Junction]. You can pick up lunch at 4 a.m.” For Flory, personal contact with customers is important. That’s why he visits each store every day. “I’m shaking CONVENIENCE.ORG
people’s hands, asking what they want. I want people to know when they come into the store that someone is there who is the face of the company,” he said. PANDEMIC PIVOTS Flory’s c-stores were not immune to the economic impact of the pandemic. “My Fishkill store has a drive-thru window. Our deli business during the pandemic has gone up. It took a little bit, but delivery got popular. People got tired of pizza and started ordering chicken dinners,” Flory said. Takeout orders grew. Customers used Uber Eats for delivery, and Flory saw a negative impact on his bottom line at first. “We figured one sale is better than no sale, so we really started pushing it. People came back again. They’re looking for food, and it’s a way for us to sell ourselves.” Delivery can impact the flavor of some menu items. “Instead of downsizing our menu, we expanded the menu to include foods that were better for delivery.” Promotions like “5 for 5” helped improve business. “Five dollars and you get two sandwiches after 5 p.m. and get it delivered,” Flory said. A new store is under construction with the goal of building a store every two or three years. And as always, taking care of customers and employees is a priority. Says Flory: “We’re a very family-oriented company. Employees are like extended family to me.”
Al Hebert is the Gas Station Gourmet and showcases America’s culinary treasure— gas station cuisine. He shares these stories and on occasion, a recipe or two at www. GasStationGourmet.com. He is a NACS Magazine contributor, bringing foodservice ideas to readers.
MAY 2021 |
Brazilian Ride Convenience stores are focusing on foodservice and new formats as the market grows. BY GISELLE INNECCO VALDEVEZ CASTRO
Petrobras Distribuidora stations and BR Mania stores launched a new, modern and dynamic design shortly before the pandemic. BR has about 1,200 BR Mania franchise c-stores in Brazil.
lthough the COVID-19 pandemic brought adversities never imagined, the Brazilian convenience store market continues to expand and evolve. New consumer habits and needs made the channel rush to adapt and come up with creative solutions. As essential businesses, c-stores quickly adjusted to the new reality, ready to serve an even more demanding customer. In addition, COVID-19 has drawn consumers’ attention to convenience stores, which became more relevant than ever—from both the retailer and the consumer points of view. There are about 8,100 c-stores operating at service stations in Brazil. The channel has consistently grown in stores and in revenue over the past 10 years. Since the opening of the first convenience store 34 years ago, the channel has always adjusted to the market. About 60% of c-stores are franchises of major fuel brands—Ipiranga (AmPm), Petrobras (BR Mania) and Shell (Select). There are networks of
| MAY 2021
licensed operators (e.g., EntrePosto and Aghora brands), owned c-store chains (e.g., Mime and Sim), as well as independent stores. There remains a lot of space and potential for expansion in the Brazilian convenience store market. According to data from the sector’s last Yearbook, c-stores are present in only 20% of the country’s service stations. PROXIMITY STORES Proximity retailing is a trend in Brazil, and in response to consumer demand, savvy hypermarkets and supermarkets have launched. In recent years, smaller versions called “proximity stores” offer not only products for small purchases, replenishment and emergency purchases but also foodservice items. Chains such as Carrefour Express, Minuto Pão de Açúcar, Hirota Food Express, Minimercado Extra, among others, are experiencing a fast-paced expansion, and competition is fierce. According CONVENIENCE.ORG
to NielsenIQ, in 2019, there were already more than 3,100 markets of this format in Brazil, which represented a growth of 35% in three years—a movement driven mainly by large retail chains. During this period, the share of households that shop at neighborhood markets went from 19% to 26.4%. This growth trend is expected to continue, following ambitious development plans. And new brands will try to capture pieces of the market. Although proximity stores feature some c-store attributes, Brazilian consumers still associate “convenience” with the stores inside gas stations, which is a competitive advantage for operators—and an important incentive to increase the presence of convenience in sites that have not yet entered this thriving business. The increased need for more convenience resulted in petroleum brands also launching stand-alone stores as proximity markets. AUTOMATED STORES A creative innovation that emerged during the pandemic was the new convenience format—automated stores within residential or corporate condominiums. Before COVID-19, the Brazilian market had a few stores inspired by Amazon Go (e.g., ZAITT chain High Street stores). The virus prompted drastic routine changes and habit shifts for consumers—from working from home to social distancing, it forced people to concentrate most activities at (and around) home, which made this business format increasingly compelling. The promise of “hyperproximity” and convenience coupled with artificial intelligence allowed the expansion of such stores launched by multiple technology startups. Omnibox, Onii, Zuper and QiSar Home are some of the companies that specialize in autonomous retail—they’ve established their businesses inside containers or rooms in condominiums. The Hirota supermarket chain and its proximity retail format Hirota Food CONVENIENCE.ORG
Express launched Hirota em Casa, and it is booming. There are already more than 20 stores in condominiums in São Paulo, fully automated with self-checkout and digital wallet, selling beverages, beer, snacks, candy, ready-to-eat meals, edible and non-edible groceries, health and beauty products, among other categories. Euromonitor International has highlighted Hirota em Casa as a worldwide example of retail innovation during the COVID-19 pandemic.
NACS GLOBAL CALENDAR JUNE 1-3, 2021 NACS Convenience Summit Europe www.convenience.org/cse
AUGUST 16-20, 2021 NACS Convenience Summit Asia www.convenience.org/asia
OCTOBER 5-8, 2021
IT’S RIGHT THERE “It is right there” is the new positioning of AmPm, operated by Ipiranga, part of the holding company Ultrapar. AmPm also promises: “everything you need close to your home.” AmPm is the largest convenience store chain in the country, with more than 2,000 points of sale. With a well-formatted bread offering, AmPm has the largest bakery chain in Brazil, with more than 900 units.
NACS Show Chicago, Illinois, United States www.nacsshow.com
Brazilian consumers still associate ‘convenience’ with the stores inside gas stations, which is a competitive advantage for operators.
(Top) AmPm, operated in Brazil by Ipiranga, is the largest convenience store chain in the country. (Bottom) Automated stores like Hirota em Casa are booming.
MAY 2021 |
BR Mania has implemented several digital innovations, and in 2020, the chain accelerated technologies like digital touchless payment methods, cashback, online ordering and delivery.
‘Room Service’ is another innovation that emerged with the pandemic in stores close to business centers. 88
| MAY 2021
Before COVID-19, Ipiranga was already developing the “new AmPm” project, based on different consumer journeys and demands, and launched it at the beginning of 2020. The innovations— from contemporary design to technological disruptions—are a perfect fit to meet the needs of today’s reality. The new concept has a wider assortment, especially in the foodservice category, including items such as pizza, sandwiches and pastries. Ipiranga is focusing on the omnichannel customer shopping journey and has introduced digital solutions for a fast and fluid experience, whether at the point of sale or using an online marketplace. The digital drive-thru, for example, allows customers to scan a QR code at the forecourt to access the menu and make their purchases without leaving their vehicle. “Room Service” is another innovation that emerged with the pandemic in stores close to business centers. Accessing the menu by QR code, consumers pay via mobile and then opt for delivery at the office or curbside pickup. Also, in December 2020, AmPm opened its first street store, initiating operation tests outside the service station. The goal is to bring convenience to the customer, wherever he is, playing the role of a “good neighbor.” STRATEGIC PARTNERSHIP The Brazilian convenience store market will be further enhanced by a just-announced partnership between Petrobras Distribuidora (BR) and Lojas Americanas. The new company will operate inside and outside service
stations. BR has about 1,200 BR Mania franchise c-stores, and Americanas operates 55 Local stores (Americanas’ c-stores). The BR Mania brand will remain in the service stations, and stand-alone units will have the Local brand. The alliance is expected to foster the expansion and strengthening of the convenience channel. Shortly before the start of the pandemic, Petrobras Distribuidora stations and BR Mania stores launched a new, modern and dynamic design. Over the last few years, BR Mania had been implementing several digital innovations, and in 2020 the chain accelerated the adoption of newer technologies and ways to facilitate consumers’ routines—digital touchless payment methods, cashback, online ordering offering delivery through third-party apps, along with safety measures to protect both customers and staff. OXXO IN BRAZIL In August 2019, an announcement created a buzz among players in the Brazilian convenience market—the formation of the joint venture Raízen between the Brazilian sugar and ethanol company Cosan and Shell and Femsa Comercio. The latter is a leading Mexican multinational company in the convenience and proximity store segment in Latin America, with more than 19,000 stores in that region. A year later, the partnership resulted in a new company—Grupo Nós. Operations comprise around 1,200 convenience stores under the Shell Select brand at service stations and OXXO proximity stores. The company opened its first OXXO store in December 2020 in Campinas, São Paulo. Less than three months after inception, there were already nine units in the city. Bringing the concept of convenience to a mini-market and practicing competitive prices and promotions, the stores have a broad product range—bakery items, fruits and vegetables, edible and nonedible grocery items, meat, beverages, snacks, CONVENIENCE.ORG
among other categories. Fresh-baked bread is one of the highlights of the new store. There is an important focus on foodservice, too, with a wide variety of sandwiches, pizzas, pastries, ready-to-eat meals, desserts and hot and cold beverages. Another differentiator of OXXO stores, when compared to similar proximity stores, is the offer of cold non-alcoholic beverages and beer in a walk-in cooler. The Shell Select chain, whose vast majority of stores are franchised, is a key player in the growth strategy. Its new generation of stores launched in 2018 present a more modern layout and a simpler and more profitable operation for the franchisee, with lower operating costs. The average sales of the stores in the new format increased by 20% versus the previous year. As it happened with the channel in general, the COVID-19 pandemic rushed implementation of processes to meet the new habits and needs of consumers. The delivery service, in partnership with marketplace companies, was put in place. Home delivery and the offers of bakery items, foodservice and nonperishable products have helped stores secure sales in times of lockdown and mobility restrictions. Over the next three years, Grupo Nós plans to open 500 additional stores in the southeastern region of Brazil—Shell Select at service stations and stand-alone OXXO proximity stores. OPPORTUNITIES New trends and technologies triggered by COVID-19 are here to stay. The idea of omnichannel is now stronger. Brazilian consumers who engage with the integrated physical and digital shopping experiences want them to be frictionless, faster and practical. Convenience stores must strive to keep up with solutions for those demands. Brazilian convenience continues to focus, now with more intensity, on foodservice, and the pandemic CONVENIENCE.ORG
OXXO proximity stores bring the concept of convenience to a mini-market. Stores have a broad product range, from bakery items to beverages.
has driven a shift to healthier foods. Delivery and drive-thru options will continue to grow. Loyalty and cashback programs are likely to be more relevant. The concept of convenience has been amplified in the eyes of the consumer and, as paradoxical as it may sound, the pandemic has brought this “advantage” to the channel. Gas stations without a c-store are rethinking their businesses and considering entering the segment that is likely to stand out going forward. In addition, large retail chains are also contributing to bringing convenience closer to the customer, extending their reach in proximity markets, so competition will grow.
Giselle Innecco Valdevez Castro is co-founder and executive director of Valsa and NACS regional representative for Brazil.
This article is excerpted with permission from Global Convenience Store Focus, a newsletter from Insight Research. To subscribe, visit www.globalconveniencestorefocus.co.uk.
MAY 2021 |
CATEGORY CLOSE-UP / PREPARED FOOD
Fresh From the Kitchen
Despite COVID-19, c-store food made on-site still satisfies America’s cravings and dietary needs.
bout 3:30 a.m. each day, foodservice professionals begin work in Casey’s, preparing to make donuts, followed by pizzas, sandwiches, appetizers, salads and fried chicken for busy customers. “The teams start early to create an amazing display of pastries to start everyone’s day. Almost all pastries are baked in-store, and we must start early because you can’t bake pizza and pastries at the same temperature,” said Farrokh Larijani, senior manager of culinary innovation, Casey’s. Most Casey’s kitchens have between 550 and 600 square feet of space. “That makes us think hard about what goes in
JUST THE FACTS According to 2020 NACS State of the Industry data, prepared food made up 64.7% of foodservice sales in 2020.
that small square footage because we have to be as efficient as possible,” he added. One early morning product is Casey’s popular breakfast pizza, made with Casey s fresh daily dough, cheddar cheese sauce, bacon, breakfast sausage, ham, green peppers, onions, real whole milk mozzarella and cheddar cheeses. “It’s a delicious indulgent slice of breakfast heaven,” said Andrew Kintigh, category manager, prepared foods, pizza and pizza plus, Casey’s. “Our breakfast pizzas have all the flavors you’d see in a delicious omelet.” Whether paninis or pizza, prepared food remains an important part of the c-store industry, despite the recent challenges of COVID-19. According to NACS 2020 State of the Industry data, prepared food made up 66.6% of all foodservice sales in 2020, compared with 64.8% the year before. The category saw average sales per store fall -7.4% in 2020 compared with 2019. According to a Lightspeed/Mintel study, 36% of convenience shoppers said that fresh prepared food influenced their loyalty to a specific c-store, and 15% linked prepared food to their overall convenience-store choice. PERFECT PIZZA Pizza has helped Americans endure the pandemic. According to Datassential, pizza sales skyrocketed in 2020, with traffic up 125% compared to pre-pandemic
| MAY 2021
BY PAT PAPE
Industry Sales % of Foodservice Sales 2019
Gross Margin %
Avg. Sales/Store 2019
iStock.com/robertsre; clubfoto; Creative_Improv
Source: NACS State of the Industry Report of 2020 Data
levels, probably because of its convenience, comfort and customizability. Casey’s is the nation’s fifth-largest pizza chain. Although Casey’s menu includes a variety of foods, “pizza is the breadand-butter program of our stores,” said Kintigh. “Casey’s has a proprietary pizza dough recipe that we’ve used for years. Our fresh dough is really incredible.” Each pie is baked in an oven and from start to finish takes about 10 minutes to make and bake. According to Deloitte, 48% of people surveyed say they’re willing to wait longer to receive a customized product or service over one that is not, a figure that showcases the value of customization.
and a freshly baked thin crust. Each is pre-topped with sauce and cheese to simplify the program and aid in portion control. The program offers customers all toppings at no extra charge, and Hunt’s “pizza professionals” work with convenience retailers to ensure the right amount of product is ordered to minimize food waste. “Hunt Brothers program provides a variety of benefits, including the equipment needed to execute the program and the purchasing power of 7,800 stores,” Cleveland said. “We enable stores to leverage the presence and likeness of a known and trusted brand and with no additional labor required.”
TURNKEY PIE PROGRAM It’s not difficult to launch a made-in-store pizza program, but if you don’t care to start from scratch, call on one of the turnkey pizza programs available to c-stores. “There is a misconception that a c-store needs a full kitchen to implement a foodservice program,” said Dee Cleveland, director of marketing, Hunt Brothers Pizza, a national pizza program in more than 7,800 locations. “All that’s needed is a three-compartment sink to get started. Our pizza shoppe can fit in a space as little as 59 square feet, and we have a more compact line that is used to outfit existing counter space.” Hunt Brothers offers two types of pizza crusts: the original self-rising crust
DIVERSE DIETS Consumers want and need different things from the foods they eat. According to Boston Medical Center, approximately 45 million Americans go on a diet each
36% of convenience shoppers said that fresh prepared food contributed to their loyalty to a specific c-store.
THE POWER OF CSX DATA CSX, the engine behind category metrics and NACS State of the Industry data, provides current and customizable tools for financial and operational reporting and analysis in the convenience industry. Retailers can measure their company by any of the myriad metrics generated via our live database. Contact Chris Rapanick at (703) 518–4253 or email@example.com for a complimentary executive walkthrough.
MAY 2021 |
CATEGORY CLOSE-UP / PREPARED FOOD
PER STORE, PER MONTH SALES
$20,000 $17,500 $15,000 0 JAN
year. Mintel research found that 35% of carnivores, 61% of flexitarians and 71% of vegetarians and vegans agree that “plantbased foods can provide all the protein a person needs.” And 18 million Americans suffer from gluten sensitivity. Wawa, famous for its hoagie sandwiches, is aware of this, and in February, the Pennsylvania-based chain announced Wawa Your Way, a new menu designed to meet different dietary requirements.
NEW CATEGORY DEFINITIONS RELEASED! NACS Category Definitions & Number Guide Version 8.0 was released in early 2021. Developed by the NACS Research & Technology Committee, this new version reflects significant updates to the last broad iteration (version 7.0 released in 2010). To view the latest updates, visit www.convenience.org/categorydefinitions.
| MAY 2021
The Balanced Fare menu offers items such as an egg white omelet sandwich on marble rye bread, turkey bacon ranch salad or chicken steak on wheat Shorti. The Gluten Conscious menu includes a scrambled egg breakfast bowl, Southwest chicken salad and quinoa. Customers monitoring their salt intake can order from the Lower Sodium menu, featuring cinnamon brown sugar oatmeal, chicken salad garden salad, junior beef steak hoagie, tuna wrap and yogurt parfaits. The meatless menu includes vegan items, such as a roasted vegetable breakfast bowl or a seasoned black bean and rice bowl and hot soups, while the Power menu—high in protein and low in carbs—offers an egg omelet breakfast bowl with turkey sausage or an Italian antipasto salad. A selection of lower sugar drinks includes coffee and specialty beverages, such as an CONVENIENCE.ORG
Source: CSX; csxllc.com
GRAB+HEAT+GO BREAKFAST SCRAMBLES Breakfast has never been so easy! Single-serve grab and go breakfast cups are convenient, easy, fast and they are delicious. Easy to use, just heat & eat! Classic American Breakfast made with scrambled whole egg or egg white, bacon, ham, sausage or chorizo and fresh roasted vegetables all seasoned to perfection. Choose from The Classic American Scramble, The Ranchero Breakfast Scramble, The Meat Lover’s Ultimate Scramble or The Egg White Veggie Scramble or have our team of talented chefs create your unique Signature Breakfast Scramble.
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Our Grab+Heat+Go Breakfast Scrambles are new to the market place. The pack size comes in 8 cups per case and is available for private label. Haliburton’s culinary creations are designed specifically for operators looking for scratch high quality with Ready-to-Eat ease. For more information about our winning recipes, please contact us at firstname.lastname@example.org.
CATEGORY CLOSE-UP / PREPARED FOOD
Category Performance FOODSERVICE Prepared Food
Percent of Sales
Gross Margin %
For more information on NACS category definitions, visit www.convenience.org/categorydefinitions. Source: NACS State of the Industry Report of 2020 Data
iced latte with almond milk. Thanks to more than 1,000 fresh ingredients in Wawa kitchens, customers can use touchscreen ordering to customize their meals at 900 stores. (To see all the new better-for-you offerings, view Wawa’s YouTube channel.)
A ltria Group Distribution Company................ Inside Front Cover AGDCTradeRelations@Altria.com www.altria.com www.tobaccoissues.com
DMF Bait Company...................................................................................17 (800) 332-2248 email@example.com www.dmfbait.com
C ash Depot....................................................................................15 (800) 776-8834 firstname.lastname@example.org www.cdlatm.com
Freezing Point LLC (Frazil)...................................................................... 19 www.frazil.com
Charleys Philly Steaks............................................................................. 33 www.charleys.com Chester’s International LLC............................... Inside Back Cover www.chesterschicken.com CHS Inc. (Cenex)......................................................................................65 www.cenex.com/businessopportunities
Cool New Products Guide.................80-83 www.convenience.org/coolnewproducts
Diaego Beer Company USA ....................................................................29 (Guinness Nitro Cold Brew Coffee) www.guinness.com Diaego Beer Company USA (Smash)......................................................53 www.smirnoff.com
Thank you to these advertisers who have demonstrated their support of the convenience and fuel retailing industry by investing in NACS Magazine.
| MAY 2021
Haliburton International Foods Corp.....................................................93 www.haliburton.net Hunt Brothers Pizza....................................................................49 www.huntbrotherspizza.com Invenco Group Limited.............................................................................3 www.invenco.com Johnsonville Sausage LLC....................................................................... 37 www.johnsonville.com L iving Essentials LLC (5-hour ENERGY)........................................7 (866) 960-1700 www.5HErewards.com M cLane Company Inc................................................... Back Cover www.mclaneco.com/edge NACS Comp Report..................................................................................55 www.convenience.org
NACS Convenience Summit Europe..........................................................6 www.convenience.org/CSE NACS Convenience Voices.......................................................................79 www.convenience.org/voices NACS Education.......................................................................................95 www.convenience.org/series NACS Foundation.......................................................................................4 www.conveniencecares.org/Future-Fund NACS Show...............................................................................................28 www.nacsshow.com/2021 Premier Manufacturing Inc......................................................................5 www.gopremier.com Ready Training Online (RTO)...................................................................71 www.NACS-RTO.com Refrigeration Design Technologies Inc.................................................95 www.rdtonline.com S wedish Match North America (Zyn)...........................................9 (800) 367-3677 www.smna.com Vitamin Energy LLC.............................................................................10-11 www.vitaminenergy.com
“At Wawa, we always listen and strive to accommodate the everchanging needs of our customers, and now we have curated Wawa Your Way menus to help you eat the way that makes you feel your best,” said Mike Sherlock, chief marketing product officer, Wawa.
POST-PANDEMIC As more people are vaccinated and businesses re-open, consumer behaviors and needs will determine much of what foodservice operators do next. “Consumers are starting to be out and about, driving and traveling. To whatever extent c-stores are seeing an increase in traffic, they may want to stick to the basics right now because people have missed that,” said Mark DiDomenico, director of customer success for research organization Datassential. But he added that it’s not too early for convenience operators to think about the future and new opportunities in the kitchen.
“Consider new, interesting [foodservice] items. I’m talking about ethnic foods and fusion-type items, like Korean barbecue tacos,” DiDomenico said. “Think ahead to things that could spark interest and create excitement. Until then, the basics still hold. Food must travel well, be grab and go and be filling and tasty. And convenience stores have always done a good job at that.”
Pat Pape worked in the convenience store industry for more than 20 years before becoming a full-time writer. See more of her articles at patpape.wordpress.com.
Lessons in Leadership
Sit down with six visionary retail leaders who have their eye on the future.
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3/11/21 1:32 PM
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MAY 2021 |
4/15/2021 7:30:55 AM
A Horse Is a Horse, Of Course, Of Course Surveillance video captured a man trotting into a Montana convenience store on horseback. The Town Pump gas station in Bozeman decided to post the video of the man and his horse on Facebook, asking him to kindly dismount next time he fancies a trip inside the convenience store. Town Pump posted: “Now while we understand that you might have a codependent relationship with ol’ Paint, we do ask that you dismount, ask your bronco to wait outside, and enter our stores solo in the future. We will be glad to welcome YOU back, sir—but next time no horsin’ around please…” 96
| MAY 2021
Atmos, a popular sneaker store in Tokyo, released its exclusive Nike Air Max collection in March and created a pop-up shop that looks like a convenience store to feature the products. The new collection features sneakers and clothing and uses designs inspired by common items found at a Japanese convenience store, such as motifs of onigiri rice balls, instant cup noodles and chicken snacks.
Bootleg Bargain What would you do if you were a hip-hop artist and found bootleg copies of your album at a convenience store? If you’re rapper 2 Chainz, you chuckle and buy two of them. The rapper posted a video on Instagram that showed him rifling through bootlegged CDs on the counter of a convenience store, selecting a rip-off of his “So Help Me God!” album and asking the clerk how much for the albums. “$3.99?” he asks. “Let me buy two.”
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