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ONTENTS NACS / FEBRUARY 2022 FEATURES
24 Search Me When customers ask Google or Siri—where is the nearest coffee shop/ bakery/ATM?—will your c-store show up?
30
U.S. Convenience Store Count 2021 marked the fourth-straight yearly decline as single-store operators continue to exit the industry.
40 Learning to Lead
On the cover: masterzphotois and lasagnaforone/Getty Images. This page: Lotus_Studio/Shutterstock
District and store-level managers look within and to each other to learn what it takes to be a better leader.
44 What’s New With CBD?
Five key questions for 2022 and beyond.
50 Ring the Dinner Bell The evening daypart offers opportunities to enhance your foodservice business.
34
High and Dry Convenience retailers are adapting to the beverage supply-chain disruption.
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Subscribe to NACS Daily—an indispensable “quick read” of industry headlines and legislative and regulatory news, along with knowledge and resources from NACS, delivered to your inbox every weekday. Subscribe at www.convenience.org/NACSdaily.
linkedin.com/company/nacs NACS FEBRUARY 2022 1
ONTENTS NACS / FEBRUARY 2022
DEPARTMENTS 6 From the Editor 8 The Big Question 10 NACS News 16 Convenience Cares 18 Inside Washington
How NACS worked to make the industry’s voice heard in Congress in 2021.
22 Ideas 2 Go
Mellen Street Market has groceries, fresh foodservice and a full bar.
54 Cool New Products 56 Gas Station Gourmet
Deep-fried pickles and chicken tenders are a winning combination at Chip’s To Go Market.
58 Category Close-Up
Salty snacks are recovering from their pandemic decline.
64 By the Numbers IT’S A FACT
Average sales of salty snacks per store in 2020 CATEGORY CLOSE-UP PAGE 58 PLEASE RECYCLE THIS MAGAZINE 2 FEBRUARY 2022 convenience.org
The presence of an article in our magazine should not be permitted to constitute an expression of the association’s view.
Floortje/Getty Images
$123,751
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CONSUMER 2012 Toyota Camry parked at the pump
#1747
CONSUMER Abandoned the line and left
#1988
CONSUMER Waiting in line for 2.5 minutes Leaving the store without purchasing
#1748
COMPANION Viewed 9 items Waited in line for 1.5 minutes
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/ FEBRUARY 2022 EDITORIAL
NACS BOARD OF DIRECTORS
Kim Stewart Editor-in-Chief (703) 518-4279 kstewart@convenience.org
CHAIR: Jared Scheeler, The Hub Convenience Stores Inc.
Lisa King Managing Editor (703) 518-4281 lking@convenience.org Lauren Brooks Digital Content Manager (703) 518-4283 lbrooks@convenience.org
What’s top of mind in convenience? We’ll tell you. Get the inside scoop on all things convenience by downloading our weekly podcast! Convenience Matters® is the only podcast in the convenience industry that brings together thought leaders and retailer superstars each week to discuss matters of convenience. Download the podcast today, and gain access to industry knowledge and trends — all in 24 minutes or less!
CONTRIBUTING WRITERS Terri Allan, Sara Counihan, Sarah Hamaker, Al Hebert, Pat Pape, Melissa Vonder Haar DESIGN Imagination www.imaginepub.com
ADVERTISING Stacey Dodge Advertising Director/ Southeast (703) 518-4211 sdodge@convenience.org Jennifer Nichols Leidich National Advertising Manager/Northeast (703) 518-4276 jleidich@convenience.org Ted Asprooth National Sales Manager/ Midwest, West (703) 518-4277 tasprooth@convenience.org
PUBLISHING Erin Pressley Publisher and Vice President, Education & Media (703) 518-4208 epressley@convenience.org Rose Johnson Audience Development and Production Manager (703) 518-4218 rjohnson@convenience.org
OFFICERS: Lisa Dell’Alba, Square One Markets Inc.; Varish Goyal, Loop Neighborhood Markets; Brian Hannasch, Alimentation Couche-Tard Inc.; Chuck Maggelet, Maverik Inc.; Ken Parent, Pilot Flying J LLC; Victor Paterno, Philippine Seven Corp. dba 7-Eleven Convenience Store; Don Rhoads, The Convenience Group LLC PAST CHAIRMEN: Julie Jackowski, formerly Casey’s General Stores Inc.; Kevin Smartt, TXB MEMBERS: Chris Bambury, Bambury Inc.; Frederick Chaveyriat, MAPCO Express Inc.; Andrew Clyde, Murphy USA; Chris Coborn, Coborn’s Inc. Little Dukes; George Fournier, EG America LLC;
Terry Gallagher, Gasamat Oil/Smoker Friendly; Anne Gauthier, St. Romain Oil Company LLC; Douglas S. Haugh, Parkland Fuel Corp.; Raymond M. Huff, HJB Convenience Corp. dba Russell’s Convenience; Ina (Missy) Matthews, Childers Oil Co.; Charles McIlvaine, Coen Markets Inc.; Lonnie McQuirter, 36 Lyn Refuel Station; Jigar Patel, Hari 1 LLC, dba Fish River Food Mart; Glenn M. Plumby, 7-Eleven Inc.; Robert Razowsky, Rmarts LLC; Richard Wood III, Wawa Inc. SUPPLIER BOARD REPRESENTATIVES: Brent Cotten, The Hershey Company; Kevin Farley, GSP STAFF LIAISON: Henry Armour, NACS GENERAL COUNSEL: Doug Kantor, NACS
NACS SUPPLIER BOARD CHAIRMAN: Brent Cotten, The Hershey Company CHAIRMAN-ELECT: Kevin Farley, GSP VICE CHAIRMEN: David Charles, Cash Depot; George Ubing, E&J Gallo Winery PAST CHAIRMEN: Rick Brindle, Mondele-z International; Drew Mize, PDI MEMBERS: Tony Battaglia, Juul Labs; Alicia Cleary, AnheuserBusch InBev; Matt Domingo, Reynolds; Mike Gilroy, Mars Wrigley; Josh Halpern, FIFCO USA; Danielle Holloway, Altria Group Distribution Company; Jim Hughes, Molson Coors
Beverage Company; David Jeffco, Krispy Krunchy Foods LLC; Kevin M. LeMoyne, Coca-Cola Company; TJ Lynch, Hospeco Brands Group; Bryan Morrow, PepsiCo Inc.; Lesley D. Saitta, Impact 21; John Thomas, iSEE Store Innovations LLC; Sarah Vilim, Keurig Dr Pepper; Dean Zurliene, Monster Energy Company RETAIL BOARD REPRESENTATIVES: Steve Loehr, Kwik Trip Inc.; Chuck Maggelet, Maverik Inc. STAFF LIAISON: Bob Hughes, NACS SUPPLIER BOARD NOMINATING CHAIRMAN: Brad McGuinness, PDI
NACS Magazine (ISSN 1939-4780) is published monthly by the National Association of Convenience Stores (NACS), Alexandria, Virginia, USA.
Available on:
Subscriptions are included in the dues paid by NACS member companies. Subscriptions are also available to qualified recipients. The publisher reserves the right to limit the number of free subscriptions and to set related qualifications criteria. Subscription requests: nacsmagazine@convenience.org POSTMASTER: Send address changes to NACS Magazine, 1600 Duke Street, Alexandria, VA, 22314-2792 USA. Contents © 2022 by the National Association of Convenience Stores. Periodicals postage paid at Alexandria VA and additional mailing offices.
Tune in at conveniencematters.com
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UP FRONT FROM THE EDITOR A “food near me” search on a trip through Ohio offered up Sheetz and Speedway. Note the describers for both c-stores.
Seek and Find?
E
6 FEBRUARY 2022 convenience.org
Be upfront about outof-stocks.
retailer, I was gobsmacked to find cold cases nearly empty of beverages, dairy and deli items. As Terri Allan reports in “High and Dry,” convenience retailers are managing with workarounds for beverage out-of-stocks. If you are reading the print magazine or digital pdf edition, I hope you like our new look! Imagination, our design partner based in Chicago, crafted a more journalistic look for our nearly 20-year-old publication. We’ve recast some long-standing departments and added a new one called “The Big Question.” Each month, a leading retailer will share what’s on his or her mind when it comes to business. In the near future, look for deeper coverage of technology and category management, plus stories showing how convenience retailers are caring for their communities. Here’s to fresh starts!
Kim Stewart, Editor-In-Chief
‘Near me’ searches are skyrocketing as consumers turn to their smartphones first when looking for recommendations.” mikimad/Getty Images
ach year, Google publishes its Year in Search list, sharing the top search terms that saw the biggest spike during the year compared with the prior one. What was the top searched for meal on Google in 2021? BTS. As in the South Korean boy band’s collaboration with McDonald’s (10-piece Chicken McNuggets, medium fries, medium Coke and sweet chili and Cajun dipping sauces). Google, via its blog The Keyword, says that every month it “connects people with more than 120 million businesses that don’t have websites, by enabling phone calls, driving directions and local foot traffic.” What’s more, “near me” searches are skyrocketing as consumers turn to their smartphones first when looking for recommendations for what to eat for dinner to where to find a full-service car wash. There are 148,026 convenience stores operating in the United States, according to the 2022 NACS/NielsenIQ Convenience Industry Store Count, and now more than ever, a robust digital presence is an absolute must for your business. In “Search Me,” our cover story, Maverik and Pilot Company share why it’s important to make sure your stores show up when and where consumers are searching—and how to make it happen. Andrew Pawlik, digital marketing manager at Maverik, says, “When someone asks, ‘Hey, Siri, where’s the closest gas station?’ they are going to find us because we’ve gone through our listings and provide local, relevant information.” Making sure your c-store has everything customers want and expect when they arrive is another matter altogether. To say that the supply chain is stressed is an understatement. On a recent Saturday visit to a big box
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UP FRONT THE BIG QUESTION This month we introduce a new column that explores what’s on the minds of NACS members. Mario Spina kicks us off. Spina is owner and CEO of St. Charles, Illinois-based Parent Petroleum Co., a wholesale supplier of fuel and lubricants. He also owns and operates 15 The PRIDE Stores, which feature three foodservice concepts—PRIDE Cafe, Urban Counter and Taco Urbano—plus a wine & spirits store, along with 93 Octane, a brewery.
What is the biggest challenge facing your business today?
Our biggest challenge is uncertainty. Uncertainty about COVID-19, government regulations, labor shortages, product outages, customer expectations, plus many more. Our industry is always evolving and changing, but over the past few years we have seen an acceleration of the pace of change in all these areas vastly beyond what I ever envisioned. One issue that concerns me is the majors getting back into direct operations of retail stores (for instance, bp purchasing sole rights to Thorntons, plus Shell purchasing 248 sites from Landmark group) and competing more with independents for retail gallons and jobber gallons. It’s a hard dynamic. The majors have the price advantage, and they have a huge buying advantage over a lot of local operators. How will this affect the future landscape of the gasoline and convenience store business? Also, with the numerous mergers occurring in the marketplace, how will this affect small to midsize operators? Both of these issues concern me greatly. Labor’s been hard. We’re starting to see some bright spots, but we’ve cut down the hours in our restaurants quite a bit due to the uncertainty of sales and labor. As business has been coming back, we’ve wanted to open some of our Urban Counter locations for dinner and on Sundays, but we can’t because we are unable to find the staff. 8 FEBRUARY 2022 convenience.org
Mario Spina, owner & CEO, Parent Petroleum and The PRIDE Stores, St. Charles, Illinois
On the fuel and lubricants side of the business, there’s a drag on finding drivers for the trucks. Getting food product is not as easy as it used to be. We’ve had to tweak the menus at Urban Counter and Taco Urbano. There’s a shortage of chicken wings… all of the big guys are snapping them up. We stopped carrying wings at all the Urban Counters except for the location that services the 93 Octane taproom. Corned beef prices are going up, so we are going to take the Reuben off the menu [at Urban Counter] and hopefully bring it back as a special. We are tweaking commissary items now as well for our grab-and-go selection. It hasn’t been the easiest time the past few years.”
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UP FRONT NACS NEWS
Industry Update Luncheons 2022 DATES February 17 Dallas, TX March 8 Alexandria, VA March 22 Atlanta, GA May 5 Des Moines, IA May 12 Madison, WI
Every year, NACS President and CEO Henry Armour shares and discusses insights, issues and opportunities relevant to the convenience and fuel industry at several Industry Update Luncheons around the United States. These luncheons bring together regional convenience and fuel retail and supplier leaders for a unique experience where they connect, exchange ideas and hear industry performance trends and metrics in a casual setting. Retailers and fuel jobbers regardless of their NACS membership status are invited to attend. NACS Hunter Club member companies can send up to two individuals per event as space allows. At each Industry Update Luncheon, guests will enjoy casual networking time, followed by a seated lunch including a 60-75-minute interactive presentation and discussion delivered by Armour. Be sure to bring your questions! Register at www.convenience.org/IUL. If you have questions or are interested in NACS having an Industry Update Luncheon in your city, please contact Eboni Russell, NACS state association manager, at erussell@convenience.org.
10 FEBRUARY 2022 convenience.org
NACS welcomes two new team members to key positions on our meetings and events teams—Christy Hicks and Laura Miller. Hicks is our new meetings and events manager. In this role, she will manage planning and logistics related to several signature NACS events including the NACS Leadership Forum, the NACS North American CEO Strategic Issues Summit and the NACS European CEO Strategic Issues Summit, in addition to meetings for The Fuels Institute. Hicks comes to NACS Christy Hicks with extensive domestic and international experience producing live, hybrid and virtual events. Her work experiLaura Miller ence includes the American College of Cardiology, Sundance Film Institute, the eHealth Initiative and Spargo Inc. Miller has joined us as exhibit sales and services manager. She will support the NACS expo team coordinating exhibits at events including the NACS Show and the NACS State of the Industry Summit. Miller has extensive tradeshow sales and service experience with organizations such as the Biotechnology Innovation Organization, ASIS International, the Association of the United States Army and Sponsorship Boost.
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UP FRONT NACS NEWS
New Members NACS welcomes the following companies that joined the association in November 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 HUNTER CLUB MEMBERS SILVER Pabst Brewing Company San Antonio, TX www.pabst.com BRONZE f’real foods Emeryville, CA www.freal.com
NEW SUPPLIER MEMBERS Qualitas Manufacturing Inc. dba QMI Security Solutions Itasca, IL www.qmiusa.com BH Coffee Co. Yonkers, NY www.barriehouse.com Naaj LLC dba Emobii Chatsworth, CA www.emobii.com
Broaster Company Beloit, WI www.broaster.com
Ellis Isle Inc. Detroit, MI ellisislandtea.com
Zevia Encino, CA www.zevia.com
Bonded Filter Co. dba BFC Solutions Nashville, TN www.bondedfilter.com
Calendar of Events
NACS Leadership for Success May 15-20 | Glen Allen (Richmond), VA
FEBRUARY NACS Leadership Forum February 09-11 | Miami Beach, FL
NACS Convenience Summit Europe May 31-June 02 | Berlin, Germany
MARCH NACS Day on the Hill March 08-09 | Virtual
JULY NACS Financial Leadership Program at Wharton July 17-22 | The Wharton School, University of Pennsylvania Philadelphia, PA
NACS HR Forum March 21-23 | Orlando, FL APRIL NACS State of the Industry Summit April 12-14 | Rosemont (Chicago), IL
NACS Marketing Leadership Program at Kellogg July 24-29 | Kellogg School of Management, Northwestern University Evanston, IL NACS Executive Leadership Program at Cornell July 31-August 04 | Dyson School, Cornell University Ithaca, NY
OCTOBER NACS Show October 01-04 | Las Vegas, NV NOVEMBER NACS Innovation Leadership Program at MIT November 06-11 | MIT Sloan School of Management Cambridge, MA NACS Women’s Leadership Program at Yale November 13-18 | Yale School of Management New Haven, CT
For a full listing of events and information visit www.convenience.org/events.
12 FEBRUARY 2022 convenience.org
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UP FRONT NACS NEWS
Member News RETAILERS Travis Sheetz, nephew of Sheetz founder Bob Sheetz, has advanced into the role of president and chief execTravis Sheetz utive officer of Sheetz. Travis started at Sheetz as a real-estate site selector before spending time as a director in the company’s marketing department. Travis continued to work his way up in the company, before being promoted to president and COO in 2018.
Vintners Distributors announced the promotion of Pervez Pir to serve as president of retail. Since 2011, Pir Pervez Pir has served as chief operations officer at Vintners where he streamlined business processes, implemented cost control measures, enhanced operational efficiency and drove profits. Vintners Distributors operates 135 Shell Stations and 48 Loop Neighborhood Marketplace locations.
Richard Poye has Casey’s General joined RaceTrac Stores Inc. has as vice president hired Katrina of merchandisLindsey as chief ing. Poye brings legal officer and an extensive corporate secbackground in retary. Lindsey Richard Poye Katrina Lindsey food and retail to will lead Casey’s RaceTrac, where he will lead the legal, risk management, complidevelopment of RaceTrac’s signaance, food safety, government ture product assortment, which affairs and corporate reporting includes limited-time offerings to functions. Lindsey has more than drive sales, improve inside mar20 years of legal leadership at gins, ease operational efficiency FORTUNE 500 companies in the Promoted To Chief HR Of cer Of The and maximize profitability. retail, restaurant and entertain- Croff Raley’s Companies ment industries. Raley’s has promoted ARKO Corp. Laura Croff to announced that chief human Ross Parman has resources officer been appointed of The Raley’s vice president of Companies, a investor relations Laura Croff newly formed and government Ross Parman enterprise that will oversee the affairs. Parman organization’s independent also will manage and direct ARoperating divisions. Raley’s is a KO’s investor and corporate comprivately-owned and family-opermunications, including relationated customer experience grocery ships with investors and sell-side company operating 124 stores analysts. Prior to joining ARKO, under six banners: Raley’s, Bel Air Parman was director of communiMarkets, Nob Hill Foods, Raley’s cations for Altria. O-N-E Market, Food Source and Market 5-ONE-5. 12/17/21, 1:14 PM
Croff Promoted To Chief HR Officer Of The Raley’s Companies
Parker’s has hired Ted Sadowski III as vice president of operations. Sadowski will oversee all aspects of Parker’s retail Ted Sadowski III store operations, lead and motivate team members, optimize operational processes and systems, serve as a brand ambassador and enhance productivity as well as customer service. SUPPLIERS PIM Brands Inc. has appointed Norman Ross as vice president, government affairs. Ross will lead legislative Norman Ross and public affairs efforts at the local, state and federal levels and areas of corporate communications. He also will work with trade associations, including NACS, to support the legislative agenda of the confections and snack industries.
Home » Cro. Promoted To Chief HR O/cer Of The Raley’s Companies
EXECUTIVE NEWS•HOME PAGE LATEST NEWS•INDEPENDENT STORE NEWS•WEST
December 6, 2021 2 Min Read
Laura Cro
In anticipation of the acquisition of Bashas’ Family of Stores later this month, West Sacramento, California-based Raley’s has promoted Laura Cro= to chief human resources o?cer of The Raley’s Companies, a newly formed enterprise that will oversee the organization’s independent operating divisions.
Cro= has served in various leadership capacities at Raley’s over the past 20 years, most recently as SVP of human resources.
“Laura is a proven leader with deep expertise and strategic vision,” said Keith Knopf, president and CEO of The Raley’s Companies. “We are fortunate to have such a talented and purpose driven leader who
https://www.theshelbyreport.com/2021/12/06/croff-promoted-to-chief-hr-officer-of-the-raleys-companies/?static=true
14 FEBRUARY 2022 convenience.org
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CONVENIENCE CARES
Huck’s Convenience Stores donated more than $50,000 to Kentucky storm victims.
Tornado Relief O
n December 10, 2021, at least 40 tornadoes were reported across nine states, leaving at least 90 people confirmed dead. Communities in Western Kentucky and other affected states are still trying to pick up the pieces following the devastating storms. Convenience retailers are practiced at helping their communities recover following natural disasters, and many stepped up to donate funds, goods and manpower.
16 FEBRUARY 2022 convenience.org
“Our hearts go out to the individuals affected by the horrific tornadoes and storms,” said Michael Davis, NACS vice president, member services. “Convenience stores are inextricably linked to their communities and help to strengthen the areas and people that they serve. We applaud their efforts to support those in need during this time of crisis.” Here are some of the many convenience retailers who jumped in to support the affected communities: Casey’s, based in Ankeny, Iowa, collected donations for the American Red Cross Disaster Relief at the register via the “round up” function in all of its stores in Arkansas, Illinois, Indiana, Kentucky, Missouri and Tennessee through December 31. Casey’s also donated $10,000 to the American Red Cross and sent a truckload of water to the impacted area. Double Kwik collected donations for its neighbors in Western Kentucky affected by the deadly tornadoes and storms. All funds raised will be sent to the Christian Appalachian Project (CAP), which worked on-site in Western Kentucky assisting with relief efforts. Through the Mountain Heart Campaign, Double Kwik collected monetary donations via paper hearts purchased at any dollar amount at all 40 locations. Double Kwik also donated $10,000 and delivered a tractor-trailer full of drinking water. West Des Moines, Iowa-based Hy-Vee sent 37 employees to Kentucky and Tennessee to help with recovery efforts from the tornadoes. The company also sent 10 semitrucks filled with snacks and water, six disaster recovery
SOCIAL SHARES NACS encourages retailers to share their giving-back news on social media using #ConvenienceCares.
pickup trucks and three SUVS, along with a command center. Huck’s Convenience Stores donated over $50,000 to storm victims in Kentucky. Donations were accepted at store registers, and 100% of all proceeds went directly to the United Way and local Kentucky organizations in the stormaffected areas. Thortons, based in Louisville, Kentucky, announced a $20,000 contribution from an in-store fundraising initiative in December 2021 to aid in tornado recovery efforts. The company selected the Team Western Kentucky Tornado Relief Fund as the recipient of this donation to assist Kentuckians who were impacted by the tornadoes and the severe weather system overnight on December 10, 2021. Thorntons committed up to $100,000 to support disaster recovery efforts in some of the hardest hit communities. Tri Star Energy, the parent company of Twice Daily and White Bison Coffee, strengthened its existing partnership with the Red Cross to help those in need in Kentucky after the tornadoes. The company donated $5,000 to relief efforts, with the team raising additional funds as a holiday fundraiser through the end of 2021, and also delivered cases of water. The NACS Foundation Response Relief program partners with the American Red Cross to support 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. Learn more at www.conveniencecares.org/ourprograms/response-relief.
In The Community Every year, the convenience and fuel retailing industry dedicates billions of dollars to advancing the futures of individuals and families in our communities. The NACS Foundation unifies and builds on NACS members’ charitable efforts to amplify their work in communities across America, and to share these powerful stories. Learn more at www.conveniencecares.org.
1 Tiger Fuel Company, based in Charlottesville, Virginia, made a $20,000 contribution to JackFest, a family-friendly festival that supports families battling childhood cancer in Central Virginia. This year’s festival takes place on March 27 at Foxfield in Albemarle County, Virginia.
2 Weigels Inc., based in Powell, Tennessee, contributed $45,000 to Smoky Mountain Service Dogs, a nonprofit whose mission is to enhance the physical and psychological quality of life for wounded veterans and their families with a mobility assistance service dog. 3 OnCue, a Stillwater, Oklahomabased convenience store chain, sold thousands of “Support Local Schools” fundraiser cups, giving 50 cents from every cup to each store’s local school district for a total of over $15,000. The cup campaign ran from July to the end of September 2021. OnCue operates stores in 24 Oklahoma school districts, each of which was a recipient of the $15,000 gift. 4 Rutter’s Children’s Charities, the nonprofit arm of York, Pennsylvaniabased Rutter’s, donated $75,000 during the 2021 Secret Santa Program to support charities picked by select employees to support children, education and local community efforts.
1
3
4 2
NACS FEBRUARY 2022 17
INSIDE WASHINGTON Key Figures
2021 Legislative Wins
2,700 The number of industry calls to action that retailers and suppliers sent to Capitol Hill on EV charging infrastructure, EV charging at rest areas, tax increases in the reconciliation package and the federal excise tax
234
The number of meetings NACS Day on the Hill attendees participated in 2021
How NACS worked to make the industry’s voice heard in Congress.
A
s the COVID-19 pandemic continued to dominate the landscape, a new president took office and Democrats took control of both chambers of Congress, NACS was hard at work representing the industry in Washington, D.C. Democrats pushed a new progressive agenda, using the reconciliation process to pass the American Rescue Plan, and attempted to pass another multitrillion social spending package known as Build Back Better that fell short in December. After months of negotiations, Congress passed the bipartisan infrastructure bill, which President Joe Biden signed into law. NACS advocated for the industry’s policy priorities on a number of fronts in 2021 and continues to identify ways to
18 FEBRUARY 2022 convenience.org
achieve success for our members. Here are some of the accomplishments NACS delivered for the industry in 2021. BIPARTISAN INFRASTRUCTURE BILL • Defeated several attempts by the White House and Democratic leaders to include EV charging at rest areas in the Bipartisan Infrastructure Bill. NACS also stopped an attempt to include language in the Senate Energy Committee’s markup that would have bolstered electric utilities and disadvantaged our industry. • Achieved language in the final bill to ensure that retailers are eligible to participate in the alternative fuels corridor grant program and that the program would be structured to en-
courage private sector investment and a competitive market for EV charging. • Organized a member of Congress sign-on letter to leadership raising concerns over investor-owned utilities passing along the costs of EV charging stations to all rate payers— even if they don’t own an EV. The letter was signed by 17 Democratic House members. • Ensured that the current ban on rest area commercialization remained in place and that allowing tolling on existing interstates remained a pilot program and not expanded. • Worked to include a pilot program for appropriately trained and certified truck drivers between the ages of 18 and 20 to be allowed to participate in interstate commerce.
PhonlamaiPhoto/Getty Images
BY ANNA READY BLOM
FUELS • Successfully worked with the White House and Biden Administration during the Colonial Pipeline shutdown to secure critical fuel, hoursof-service and weight restriction waivers. Additionally, NACS was able to secure a Jones Act waiver and dyed diesel penalty waiver. • Assisted the Idaho state association with fuel pricing data, research and message testing to successfully push back on a price gouging effort targeting convenience stores in the state. • Filed an amicus brief with the U.S. Supreme Court, which ruled that oil industry defendants should have the opportunity to try to move cases against them on climate change to federal court, as NACS advocated. • Helped stop an amendment to the defense authorization bill that would have moved the RFS point of obligation from refiners, importers and manufacturers to fuel marketers and blenders. • Successfully worked with the Army Corps of Engineers to lift the halt on Sec. 404 Nationwide Permits under the Clean Water Act. There had been a temporary pause on granting these stormwater permits due to a court case in California. NACS met with the Army Corps to share concerns that a halt on approving these applications would delay many construction, renovation and development projects for the industry all over the U.S. HOURS-OF-SERVICE WAIVERS • Won multiple extensions of the hoursof-service waiver for truck drivers hauling goods to c-stores and ensured the waiver included fuel haulers due to COVID-19. • Achieved other regional hours-ofservice waivers for c-stores affected by the fires in the West and refinery shutdowns in the Midwest.
TOBACCO AND VAPE PRODUCTS • Successfully stopped legislation that would have substantially raised the federal excise tax on tobacco and nicotine products. OSHA VACCINE MANDATE • Led a coalition letter with other fuel retailing associations to OSHA outlining industry concerns with the pending rule and also met with administration staff via teleconference to express these concerns. • Filed a lawsuit in the U.S. Court of Appeals for the 5th Circuit to block the OSHA mandate from moving forward. The U.S. Supreme Court heard the case in January 2022 and blocked enforcement of the rule for private employers. The stay will remain in place until the 6th Circuit dispenses with the full legal challenge. HOUSE RECONCILIATION – BUILD BACK BETTER ACT • Advocated for the industry’s tax priorities, and the House’s final reconciliation package did not include a cap of the 199(A) deduction, changes to the estate tax, a repeal of LIFO Accounting, an increase on the top individual tax rate or an increase in the corporate tax rate. • Led a coalition of retail groups in opposition to the House’s proposed increase of the federal excise tax (FET) on tobacco and nicotine products. House Democrats removed the FET increase on cigarettes, cigars and smokeless products. However, the bill includes a tax on vapor products. PAYMENTS • Advocated against Visa and Mastercard regarding swipe-fee increases that were slated to take effect in April 2021, and they were delayed a year. • Urged the Federal Trade Commission, Department of Justice and Con-
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 December 1-31, 2021, are: Nicholas St. Romain St. Romain Oil Company LLC Darlene Stanley Johnson Junction Inc. Arthur Stawski Ragin’ Cajun Food and Fuel William Stein Core-Mark & Eby-Brown Marc Strauch Cameron Park Petroleum Chad Taylor Sagac Public Affairs LLC John Tippery Sheetz Inc. De Lone Wilson Cubby’s Inc. Richard Wood Wawa Inc. Doug Yawberry Weigel’s Stores Inc.
NACS FEBRUARY 2022 19
INSIDE WASHINGTON
ONE VOICE
Chris Hartman, director of fuels, forecourt, advertising and construction, Rutter’s
What role in the community do you think convenience stores should play? As a convenience store owner and operator, I’ve seen firsthand the impact we have on a community. Each year, our industry serves 99% of the American public, so we truly have our fingers on the pulse of the areas in which we operate. On top of that, our team members at the store level live in these communities, and we care deeply about things that affect them. I believe that our role, as stewards of these areas, is to help provide a safe and convenient space for community members to visit and shop, along with finding ways to support them. Finding local charities that connect to the values of your organization and employees is a great way to further ingrain ourselves with the people we serve.
What does NACS political engagement mean to you, and what benefits have you experienced from being politically engaged? NACS political engagement means elevating above our individual organizations and advocating for industrywide issues. I’ve benefited from this because it helps me better understand what the politicians are thinking and how to best communicate our issues to them. I’ve been able to take this experience back to the state level, too. What federal legislative or regulatory issues keep you up at night? Currently, the impact that agencies like OSHA have on our business is my biggest concern. If the current regulations on vaccination are allowed to stand, it’s hard to tell what will be mandated next and when. The entire supply chain could be thrown into flux, depending on the outcome. What c-store product could you not live without? Rutter’s Chocolate Milk.
sumer Financial Protection Bureau to investigate the anti-competitive practices of the card brands. These agencies filed comment letters raising these issues in the Federal Reserve’s rulemaking on the debit regulations. Additionally, DOJ announced it is investigating Visa for offering incentive payments to PayPal, Square and Stripe. SNAP • Championed legislation to allow Supplemental Nutrition Assistance Program (SNAP) recipients the flexibility of using their benefits to purchase hot foods. NACS GRASSROOTS • Held the first-ever Virtual Day on the Hill with 133 retailers and state association executives and 20 suppliers in attendance, with 42 first-time attendees. Attendees participated in a total of 234 congressional meetings by video or phone conference. • Hosted nine Virtual Townhalls with convenience retailers and freshmen members of Congress and hosted two NACS In Store events. • Organized industry calls to action with retailers and suppliers, sending nearly 2,700 messages to Capitol Hill on EV charging infrastructure, EV charging at rest areas, tax increases in the reconciliation package and the federal excise tax. NACSPAC • Raised $701,546 with 474 contributors in 2021 compared to $607,390 with 301 contributors in 2020 and $718,600 with 443 contributors in 2019. • Helped ensure that the voice of the convenience and fuel retailing industry was heard on Capitol Hill. NACSPAC contributed $657,000 by supporting 137 candidates and 51 leadership PACs in 2021. Since 2022 is a mid-term election year, there is no doubt that Congress and the Biden Administration will continue to push their progressive agenda
20 FEBRUARY 2022 convenience.org
in the coming months. NACS, with your help, will continue to work to build on 2021’s success and push back on proposals that may harm our industry. One of our industry’s greatest strengths is our grassroots engagement. Our industry employs more than two million Americans, and when we are able to speak with a unified voice it is nearly impossible for lawmakers to ignore. NACS continues to encourage NACS members to remain engaged and to continue to respond to the grassroots alerts and engage with your lawmakers not just at the federal level but also at the state and local level. All levels of political engagement benefit the industry.
U.S. senators and representatives work on legislation every day that impacts NACS members’ businesses. The annual NACS Day on the Hill teaches you how to effectively advocate for your business and brings you face to face— virtually—with policymakers. The 2022 conference is set for March 8-9 and will be virtual for the second year due to the ongoing COVID-19 pandemic. Take advantage of this opportunity to explain your business and share how policies will directly affect your operations and the convenience and fuel retailing industry. Before you meet with lawmakers, NACS will prepare you with a training video and briefing materials for each issue. During the General Session webinar, you’ll learn more about the issues that you’ll be discussing with members of Congress and their staff. The webinar also will allow you to get to know the industry peers you’ll be teamed with for each virtual Hill meeting. The NACS government relations team is dedicated to training you to be a strong advocate both in your Hill meetings the next day and beyond. Register for NACS Day on the Hill at www.convenience.org/dayontheHill. Contact Margaret Hardin, grassroots manager, at (703) 518-4292 or mhardin@convenience.org with questions.
oatawa/Getty Images
Anna Ready Blom is NACS director of government relations. She can be reached at ablom@convenience.org.
Talk to Congress
NACS FEBRUARY 2022 21
IDEAS 2 GO
Date founded: 1973 # of stores: 1 Website: www.mellenstreetmarket.com
22 FEBRUARY 2022 convenience.org
Mellen Street Market has groceries, fresh foodservice and a full bar. BY SARAH HAMAKER For more than half a century, Mellen Street Market has been serving Portland, Maine’s Parkside neighborhood. In 1973, the Nappi family purchased it and turned it into a community corner store with a friendly atmosphere. Then four years ago, the store changed hands. “Tim Ly bought the store in 2018 with the idea of taking it to the next level,” said Chantal Do, a consultant helping Ly with the transformation. “While we kept much of the things our customers enjoyed, we also brought in new items and new amenities to reach an even wider audience.”
The Good Brigade/Getty Images
Name of company: Mellen Street Market
Raising the Bar
rebeccafondren/Getty Images
A FOOD FOUNDATION Like many convenience stores, Ly focused on food as a point of differentiation for Mellen Street Market. “He put in a full kitchen so we could offer fresh food,” Do said. Chef Dan Mase crafted the menu with daily specials and pizza, as well as a wide variety of sandwiches, including Pork Banh Mi and Vacationlander, billed as a “classic Maine-style Italian.” The kitchen also supplies the grab-and-go coolers with sandwiches and other prepared meals. “Everybody loved it when we opened the full kitchen,” she said. While prior owners offered sandwiches and pizza, none had the full menu now at Mellen Street Market. “Driven by takeout orders, our sales went up when the kitchen came online,” Do said. The store has a busy breakfast and lunchtime rush for kitchen orders, but dinnertime can get hectic as well. Ly also upped the number of local products in the store. “Tim is all about local and has brought in many interesting items,” Do said. “If we can source something local, we will. It’s easier in the summertime than the winter, of course, but we still have a lot more local items than before.” The store stocks 60-plus local craft beers, a large increase from the previous owners. “We also have relationships with more than 10 local farms to carry their products in our store,” she said. For example, the store sells fresh duck and turkey eggs, and local sausages, cheeses, milk, yogurts and ice cream. Even the coffee is supplied by more than five local companies. A BAR ABOVE While Mellen Street Market has many of the typical convenience store items, it does boast an unusual feature—a full bar tucked into the back of the store. “Ly’s idea from the beginning was to open a
bar inside the convenience store,” Do said. “Of course, COVID pushed things back a bit, but the bar has been open for business for several months now.” Called Quinn’s Bardega, the bar has a counter and stools, plus a couple of tables to encourage patrons to linger over a glass of one of the craft beers on tap or a mixed drink. “The menu is a little bit truncated from a stand-alone bar, but we have the usual beer, wine and mixed drinks,” Do said. “People have seemed surprisingly open to having a bar inside a convenience store.” The bar has a daily happy hour with regular drink specials, which has been a hit with customers. “It has worked well with the convenience store side,” Do said. “The bar has been a successful addition since it opened, and we hope it will only grow in the future.” A FRIENDLY PLACE While the coronavirus pandemic has made operating a retail business difficult at times, Do believes better days are ahead for the store. “We want to continue to offer the same service and products, but we struggle with supply-chain issues like the big box stores,” she said. “We hope our customers understand and stick with us.” Overall, what has kept Mellen Street Market afloat since Ly took over is its friendliness. “We listen to customers and treat them like family,” Do said. “We see the same people almost every day, and we ask them about their lives like you would someone in your family. That shows customers they matter to you.”
Sarah Hamaker is a freelance writer and NACS Magazine contributor based in Fairfax, Virginia. Visit her online at sarahhamakerfiction.com.
BRIGHT IDEAS Mellen Street Market’s kitchen hadn’t been open long when the 2020 pandemic shutdowns started. “PreCOVID, we had partnered with third-party delivery companies, which was helpful during the shutdowns,” said Chantal Do, a consultant working with the store’s owner. “But the high cost of having a different delivery company wasn’t feasible in the long run.” The store severed its contracts with the delivery companies, switching to takeout only. However, Do does see the value in finding the right partner for future deliveries. “Our goal this year is to partner with someone for delivery because our customers have been asking for it, but we want to make sure the arrangement is financially viable for us and them before moving forward,” she said.
Ideas 2 Go showcases how retailers today are operating the convenience store of tomorrow. To see videos of the c-stores we profiled in 2021 and earlier, go to www.convenience.org/Ideas2Go. NACS FEBRUARY 2022 23
Search Me 24 FEBRUARY 2022 convenience.org
BY KIM STEWART
C
onvenience is local, and increasingly, so is digital search. When it comes to customers searching for “coffee near me” or “ATM near me” on Google or via a “Hey Siri” voice search with location services activated, the resulting options are likely driven by search engine algorithms that assess relevance and prominence rather than on physical proximity to a brick-and-mortar store or a digital storefront. A convenience store may not have “handcrafted coffee” or “flatbread pizza” in its name, but increasingly, those offers are on the menu—and when it comes to digital search, those offers need to be on the map, too.
C-STORES DON’T SHOW UP Whether it’s a made-to-order foodservice program, cold cases stocked with locally sourced craft beers, CBD health and wellness products, bitcoin ATMs, on-site package lockers or electric vehicle charging, convenience stores pack in a deep selection of what consumers seek, and all in an easily shoppable footprint that makes for a quick trip. Ninety percent of consumers surveyed by Accenture said they use search at every stage of their purchase journey. “Your digital presence is as foundational as your business’s signage,” Christian J. Ward, executive vice president and chief data officer at AI search firm Yext, said during a 2021 NACS Show education session about winning the convenience shopper via search. “You need a better way to ensure that anyone anywhere will find you, he advised.”
Klaus Vedfelt, Fourleaflover and Gearstd/Getty Images
h
When customers ask Google or Siri—where is the nearest coffee shop, bakery or ATM?—will your c-store show up?
NACS FEBRUARY 2022 25
consumers are looking.” Helping consumers find great convenience stores via search is the cornerstone. Next is standardizing data. “We want to make sure the industry is smarter about how they are organizing their data to make sure people can find our stores.” THE BASICS Google My Business (google.com/business, or GMB) is a starting point. Businesses can create free GMB profiles with key information, images, logos and describers for products and services. Merchants can also take advantage of free listings on Google’s Shopping tab. (Rio SEO, a local marketing platform for enterprise agencies, brands and retailers, has a useful infographic with tips for optimizing your GMB listing at bit.ly/3zxWljc.) Stillman stresses that accurate and upto-date information is crucial. “If you have inaccurate data, for instance, if your website says you are open 24/7 and a customer goes to your store and it’s closed, that’s a turnoff. It’s not just about entering your information once and then letting it sit. Keep your listing information current. Locations, hours, restrooms, car wash, EV charging, foodservice—be specific.” That includes consistency in how you present your business name, address and phone number across your business listings and website. Make sure your address is on every page footer and contact page to optimize it for “near me” searches. In Rio SEO’s 2021 Local Search Consumer Behavior Study, 84% of respondents said they expect the information on a brand’s website and GMB listing to be up to date and accurate. And nearly three-quarters of respondents agreed that reviews influence their purchasing decisions. “People make local purchasing decisions quickly and base their decisions in large part on the accuracy of a brand’s online presence,” Mick Wilson, vice president of customer success, Rio SEO, said in announcing the survey results in September 2021. “Brands must become better attuned to ever-evolving behavior shifts and optimize their marketing strategies accordingly to make it easier to do business with them.”
“People make local purchasing decisions quickly and base their decisions in large part on the accuracy of a brand’s online presence.” 26 FEBRUARY 2022 convenience.org
mphillips007/Getty Images
Convenience store shoppers count among those digital savvy consumers. The NACS Convenience Voices Annual Shopper Study 2021 indicates that 21% of convenience store shoppers use digital product search, while 3 in 4 shoppers use their smartphone to find the product or service they seek (see page 64). Voice search is becoming more important to consumers, too, with 58% of consumers surveyed indicating they use it, according to PwC. Lori Stillman, NACS vice president of research, did some field research on voice search ahead of the 2021 NACS Show. Stillman visited a 7-Eleven Evolution Store in Manassas, Virginia, and with phone in hand, asked Google, “Where is the nearest ATM?” Not one of the results served up included the ATM she was leaning against in the c-store, which is among the newest in 7-Eleven’s lineup. Stillman tried the same test inside a Sheetz location with a substantial coffee program asking, “Where can I get a cup of coffee?” This result, along with more than a dozen other tests Stillman conducted during the field trip, returned results that did not include a single convenience retail offering. The point of the experiment was to strawman a new NACS initiative to help convenience stores stand out by defining their offer in the digital space. Through Project Search, NACS seeks to build an industrywide local search solution with store-specific attributes to enable convenience retailers to improve the accuracy, relevancy and prominence of their listings at every touchpoint along the digital path to purchase. The project is in the fact-finding stage, and Stillman hopes that early efforts will raise awareness about the importance of winning digital search and how to keep up with the evolving landscape. “As an industry, we’ve done an amazing job of evolving our store offer but not necessarily making sure that customers know what’s available in our stores,” Stillman said. “We are great destinations for bean-to-cup coffee, to buy stamps, to refill propane tanks, and we want the industry to show up in search results more often when and where
MarenCaruso/Getty Images
MAVERIK’S SEO JOURNEY The COVID-19 pandemic awakened many businesses to the importance of having a digital marketing strategy that includes showing up in local search listings and digging into search data to better understand and market to customers who find c-stores through those listings. Maverik Inc., based in Salt Lake City, Utah, counts among the convenience retailers that are paying attention. Maverik has about 380 locations and growing across 12 Western states, making it the largest independent fuel marketer in the Intermountain West. Andrew Pawlik is digital marketing manager at Maverik. “We’ve been passively managing our listings for the past few years, and we’ve always known that there was even greater potential there,” he said. “COVID-19 turned our attention to really drilling down on our digital strategy, as we realized that this is a huge area of opportunity.” Maverik started with updating its search listings about once a quarter with information on new stores, hours and the like. “Now we spend a little more time inputting localized information such as what landmarks our stores are next to. That could include, ‘Where’s the nearest gas station to the National Park on I-19?’ and mentioning the names of not just our brands but also some of the vendors we work with,” Pawlik explained. “We are really trying to provide as many entry terms as possible.” Making sure Maverik’s listings are accurate and relevant is the linchpin of its digital search strategy, and it’s paying off. “Because we’ve done the work, we’re getting prominent placement in voice searches,” Pawlik said. “When someone asks, ‘Hey, Siri, where’s the closest gas station?’ they are going to find us because we’ve gone through our listings and provide local, relevant information.” PILOT COMPANY Patrick Kelly, senior manager of digital marketing for Pilot Company, reiterates the importance of showing up when and where customers are searching. The Knoxville, Tennessee-based retailer operates Pilot Flying J, with more than 750 locations in 44 U.S. states and six Canadian provinces. “It’s important to have location listings that are discoverable and accurate, especially given the long list of apps and websites consumers are using to determine their next stop,” Kelly said. “When drivers are looking
“As an industry, we’ve done an amazing job of evolving our store offer but not necessarily making sure customers know what’s available in our stores.” for food, fuel or places to rest nearby, we want them to be able to easily find a Pilot or Flying J Travel Center.” Delivering what customers are seeking goes hand in hand with finding their way to your location. “It’s also imperative to know your consumer and what they will be searching for to improve search results,” Kelly said. GO LOCAL Timothy Carter, CFO of DEV.co and SEO.co, writes in Forbes that local search is going to become hyper-specific and hyperpersonalized, so companies need to differentiate their content to appeal to specific audiences. “Gone will be the days of Google sending you to a generic Wikipedia page for whatever topic closely relates to your query,” Carter writes. “Instead, you’ll get superspecific recommendations, like detailed, niche pieces of content, products you can purchase or opportunities to interact with brands and websites directly.” For 2022, one of the things that Pawlik of Maverick plans to tackle is incorporating into its SEO strategy more search terms that people don’t typically associate with convenience stores. “We are expanding search terms outside the norm and testing terms that would appeal to all consumers’ buying behaviors,” Pawlik said. “We are looking for crossover between some fast-feeders and ourselves. Maverik has lots of food items—like tacos, for instance—that people might not normally associate with a convenience store.” So, if someone wants to find the best food in Elko, Nevada, chances are good that a digital search will be involved. “You do what most of us do when you don’t know where to go,” Pawlik said. “Google it. Then I see that Maverik has great food, and I have a loyalty card there, and they are right down the street, and they have everything I need, right? You want to narrow search right down to your store has this specific product.” And that opens the door to give your customers “a surprise and delight type of experience,” he said. NACS FEBRUARY 2022 27
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business showed up in the search results and then the next step, see if the consumer took action,” Stillman of NACS said. Click-streamed actions and geofenced searches give retailers the ability to measure and track their performance. “The benefit is finding out how many people searched and if your store was served up and if the consumer took action,” Stillman said. The cost, she says, isn’t a big investment. “Generating one extra dollar a day would pay for the service.” Pilot uses a third-party service to help with listings. “We’ve learned it’s really challenging to individually update hundreds of location listings across a variety of systems and tools,” Kelly shared. “By consolidating our information and processes, we are able to more efficiently manage our location data, ratings and reviews all in one place.” That in turn provides customers with a more consistent brand experience, Kelly says. Maverik partners with several digital solution providers to increase its SEO engagement, streamlining and centralizing everything from listing updates to creating individual web pages for each store to reporting out search metrics. One of the things Maverik watches closely is Google impressions. “We have more than 380 stores, and if you consider everyone who is using Google Maps and searching in your area footprint it really adds up,” Pawlik said. “We also measure metrics like how many customers are clicking through to get directions, and how many users are clicking through to our website and how many users are clicking ‘tap to call.’” Seeing those numbers helps understand return on investment. “We want to continue to reach the customer where they are and offer valuable search optimization to meet their needs and drive traffic to the stores, making even more Maverik fanatics,” Pawlik said. “In the convenience space, there’s no better use case for optimizing digital listings and local search.”
Kim Stewart is editor-in-chief of NACS Magazine and editorial director of NACS. During the dot-com boom she covered technology news for The Wall Street Journal. She can be reached at kstewart@convenience.org.
3alexd/Getty Images
HELPING HAND Keeping up with the pace of change in digital search is challenging, especially as Google makes algorithm updates that can affect how a business ranks in search results pages. In November 2021, Google updated how it generates local search results, with an emphasis on three key factors: relevance, distance and prominence. In Google’s standard help document, the search giant says, “There’s no way to request or pay for a better local ranking on Google. We do our best to keep the search algorithm details confidential, to make the ranking system as fair as possible for everyone.” That means staying on top of best practices, including search engine optimization, having detailed business information and responding to customer reviews and ratings. “One thing Google puts a lot of weight in is your listings across other platforms,” Pawlik points out. Those include Facebook, Yahoo! and Bing, among others. Listings need to be consistent across all of these platforms to improve page rank. Think of these as “thousands and thousands of little internet billboards,” Pawlik said. “Our job as a marketer is to make sure all of those billboards have the correct information, but Google is evaluating all of those billboards to make sure those listings have good information, too, and that’s driving how we rate across the internet.” Sounds like a huge time commitment that requires an army of SEO experts. Not necessarily. “SEO-dedicated resources can come in many forms, and as this need has grown at Maverik, more and more resources are being dedicated to digital strategies across the board,” Pawlik said. “Taking For a list of free resources to help the time to be intentional about digiyou develop a stronger tal strategy is crucial,” he stressed. local search presence, One of the goals behind NACS’ view the February issue on Project Search is removing barriers www.NACSMagazine.com. for retailers, no matter their size, Stillman said. A potential outcome is partnering with a digital solutions platform provider like Rio SEO, SoCi or Yext that can help drive online visibility, optimize SEO and manage local search listings for multistore locations. “Retailers can use these two-way platforms to interact with consumers, manage reviews, understand what people are searching for and if their
April 12-14, 2022
Hyatt Regency O’Hare Chicago, Rosemont, IL
DRIVE YOUR FUTURE. There is a big difference between data and insights. Data can help describe what’s going on. Insights inform the actions you should take. NACS SOI Summit provides insights to help you drive your future so you can get out ahead of current trends and challenges, and win in convenience. It’s all about moving from reactive to proactive—plus, making more confident decisions.
Make more confident decisions. /
convenience.org/SOIsummit
U.S. Convenience Store Count Stands at 148,026 Stores This marks the fourth-straight yearly decline as single-store operators continue to exit the industry.
There are 148,026 convenience stores operating in the United States, according to the 2022 NACS/ NielsenIQ Convenience Industry Store Count. That’s one c-store per every 2,246 people. The total store count as of December 31, 2021, fell 1.5% (-2,862 stores) from 2020’s 150,274 convenience stores. The decline was expected, as industry consolidation continues and the COVID-19 pandemic takes its toll on small operators.
116,641 convenience
The single-store operator count fell 3.1% to 89,336 in 2021 vs. 92,196 in 2020.
stores sell motor fuels (77.6%) vs. 121,538 stores (80.9%) that sold fuels at the end of 2020. There were 4,897 fewer stores selling motor fuels at the end of 2021, compared with year-end 2020.*
Convenience stores sell an
A-size companies (1-10 stores) account for 63.5% of all convenience stores, and among them, singlestore operators make up 60.4% of the convenience store count. E-size companies (501+ stores) make up the next-largest share with 20.9%.
The number of c-stores that did not sell fuel increased by 2,649 to 31,385.
estimated 80%
of the fuel purchased in the United States.
*(Note: The 2022 store count reflects a slight methodology change for c-stores that sell motor fuels, so a direct comparison with 2021’s count of stores selling fuels is imprecise.)
Company Size by Store Count
2022
2021
Unit Change
% Change
93,994
96,963
(2,969)
(3.1%)
B (11-50)
9,296
9,704
(408)
(4.2%)
C (51-200)
8,051
8,063
(12)
(0.14%)
D (201-500)
5,795
5,257
538
10.2%
30,890
30,287
603
19.9%
A (1-10)
E (501+)
Source: 2022 NACS/NielsenIQ Convenience Industry Store Count
30 FEBRUARY 2022 convenience.org
Colleen Michaels/iStock
Change in Store Count, 2022 vs. 2021
Top 10 States by Store Count as of December 31, 2021 TX
15,742
CA
12,053
FL
These 3 states lost the most stores:
9,400
NY
7,848
GA
6,448
NC
5,690
OH
5,537
MI
4,819
PA
4,629
IL
4,623
Texas,
the state with the most c-stores, continued to grow its store count. The Lone Star State added in 2021.
47 stores
New York (-248)
Source: 2022 NACS/NielsenIQ Convenience Industry Store Count
Florida (-219)
North Carolina (-200)
NACS FEBRUARY 2022 31
The Central U.S.,
U.S. Convenience Store Count
(region 5) had the fewest stores at
12,981.
Midwest (region 3)
23,165 stores
Northeast (region 1)
30,569 stores West (region 6)
22,665 stores
The Southeast, (region 2) had the most stores at
South Central
34,935.
(region 4)
23,711 stores
Source: 2022 NACS/NielsenIQ Convenience Industry Store Count
Channel
2022
2021
Change
148,026
150,274
(1.5%)
Grocery
45,687
47,066
(2.9%)
Drug
40,402
41,000
(1.5%)
Dollar
35,501
34,215
3.8%
Cigarette Outlet
10,374
10,180
1.9%
45,684
45,473
0.5%
Convenience
Liquor/Beer/Wine Specialty
32 FEBRUARY 2022 convenience.org
Sundry Photography/iStock
Store Count by Retail Channel
BEST
SELLER
GoPremier.com
Convenience retailers are adapting to beverage supply disruption.
34 FEBRUARY 2022 convenience.org
Lotus_Studio/Shutterstock
BY TERRI ALLAN
High &Dry L ynette Stoudt longs for the old days. “We took for granted in the past when we placed an order and, low and behold, it showed up,” the owner of Tramway Market in Stateline, Nevada, lamented. Indeed, today, convenience retailers like Stoudt place orders with vendors, and there’s little guarantee they will be fulfilled. “One of my distributors has taken to calling my orders more of a wish list than an order,” she said. “It’s been a big challenge for the last year—ordering products and not receiving.” Convenience store operators haven’t been immune to the supply-chain disruption that has wreaked havoc on the retail industry amid the COVID-19 pandemic. Virtually all in-store categories have been impacted in some way, but the beverage sector—one of the channel’s most lucrative offerings—has been particularly hard hit. “It’s everything—soda, energy drinks, juice, beer,” remarked Vince Segura, general manager and retail director at Fuel City, with seven locations in Texas. “It’s hit or miss. One week it may be a certain package of beer; the next week, it’s something different.” Unfortunately, for Segura and other c-store operators, the situation isn’t expected to abate any time soon.
NACS FEBRUARY 2022 35
ONE OF MY DISTRIBUTORS HAS TAKEN TO CALLING MY ORDERS MORE OF A WISH LIST THAN AN ORDER.”
tine protocols, family conflicts or enhanced unemployment benefits. According to Segura, “Coca-Cola has told us they can’t get enough people to work in their warehouse or enough drivers, and as a result, can’t send the deliveries.” Similarly, Greg Hill, owner of two Minit Mart stores in Holland, Michigan, reported, “My biggest distributor told me that due to staffing constraints, orders have to be cut.” Dan Hennessy, chief sales officer at beer marketer FIFCO USA, said that while his company hasn’t experienced troubles with production, “we’re facing the same challenges as everyone else for freight and trucking, resulting in issues moving inventory from the breweries to beer wholesalers.” Labor issues at beer distributorships have resulted in reduced service to some stores, he noted, such as from twice-weekly delivery to once a week. Labor challenges have also dramatically impacted ports, where containers carrying products ranging from imported beer and wine to glass bottles and aluminum cans arrive. A veteran truck driver wrote of adverse working conditions in the shipping industry in Medium last fall, detailing hours-long waits for container pickups and low pay, conditions that have shown little signs of improvement despite the spotlight placed on the clogged ports in the past year. Aluminum can procurement has been difficult for numerous beverage suppliers, coming at a time when demand for the packaging has surged, driven by the popularity of craft brews and ready-todrink beverages. The consulting firm RSM LP has even pointed to “just-in-time” inventory and manufacturing practices—which it calls “a cornerstone of industrial efficiency for decades”—as failing companies when COVID-19 struck because they quickly exhausted their lean inventories and had a hard time restocking. ‘CRISIS MODE’ Leading beverage suppliers declined to comment for this article, but company executives have referred to the impact of supply challenges on their businesses during recent financial presentations. In late October, Anheuser-Busch InBev said of its third-quarter performance in the U.S.: “Sales to retailers declined 4.7%, driven by a lower industry, segment shift and supply-chain disruptions
36 FEBRUARY 2022 convenience.org
sergeyryzhov/Getty Images
LABOR PAINS Retailers, vendors and supply-chain experts point to numerous factors contributing to merchandise outages. Labor shortages have been a major influencer, whether at the supply, transportation or warehouse level. Last fall, the American Trucking Associations said the trucking industry is short by a record 80,000 drivers, and that figure could double by the end of the decade. Bump Williams, president and CEO of Bump Williams Consulting, which advises all tiers of the beverage industry, pointed to a lack of CDL drivers to transport finished product from docks to warehouses, from warehouses to stores, or to move containers of cans and glass off of cargo ships. Beverage producers and distributors have also had to contend with labor shortages of their own for the past couple of years, whether due to virus outbreaks, quaran-
resulting in out-of-stocks.” And during Molson Coors Beverage Co.’s third-quarter investor and analyst presentation, CEO Gavin Hattersley conceded, “Fuel prices are up. Truckers are in short supply around the world, and freight costs are up, too.” During a supply-chain webinar in November hosted by the Distilled Spirits Council of the United States, Peter Friedmann, executive director of the Agriculture Transportation Coalition—which focuses on issues pertaining to U.S. agricultural exports—said, “The supply chain is in crisis mode,” a situation that has been exacerbated by COVID-19. The packaged beverage category, a key in-store segment for c-stores, has been hampered by supply-chain troubles. Retailers report that regardless of the marketer, many carbonated soft drinks and energy drinks are on allocation, and that plastic bottles have been the worst hit. “The outages are sporadic,” remarked Hill. “One day a product is available; the next day it isn’t.” Rick Rubino, co-owner of the threeunit Filling Co. Gas & Grub chain in Virginia, echoed Hill’s comments. “Every week, it’s something else,” he said of beverage shortages, noting that in late October, Diet Mountain Dew couldn’t be had. At Fuel City, meanwhile, it’s Coca-Cola Beverages’ Powerade Blue Mountain Blast that’s been hard to come by. “It’s one of our top sellers, and we haven’t had it for months,” Segura reported. State and local regulations pertaining to alcoholic beverages have made supply troubles for those products even more intricate. Retailers reported that as with packaged beverages, beer shortages are across the board. “It’s the major brands—Miller Lite, Corona Extra, Stella Artois,” said Rubino of beer out-ofstocks at his stores. “I can order 20 cases and only receive five. With the specialty beers, you don’t notice out-of-stocks because there are so many of them.” Hill and Stoudt both pointed to difficulties sourcing major Mexican brews. “I haven’t been able to get six-packs of Pacifico for two months,” the Nevada retailer said in November. At The Convenience Group stores in the Northwest, where craft brews have a big presence, “We’re seeing pressure with cans,” said Don Rhoads, president, adding that some small brewers have also had problems
MY BIGGEST DISTRIBUTOR TOLD ME THAT DUE TO STAFFING CONSTRAINTS, ORDERS HAVE TO BE CUT.” sourcing hops. And for wine and liquor, glass bottle shortages were emerging late last year, a situation that was leading to price hikes, according to Stoudt. LIMITED SUPPORT Beverage suppliers and distributors have only offered limited support and advice to help merchants navigate through the supply outages, retailers said. “They tell us to order big in case an order doesn’t come in the following week,” remarked Fuel City’s Segura. He’s done that at the small shop he manages, but it’s brought its own set of problems. “I just received a delivery of 400 cases of Coke, much more than normal,” he explained. “So now we’re stuffing it in every nook and cranny.” In Michigan, Hill is able to move packaged beverages from one store to the other when needed, as the shops have different delivery days. But that’s a practice he can’t apply to the beer category. Nevertheless, he expressed gratitude that “some distributors will provide special delivery when a needed item is available.” FIFCO’s Hennessy recommends that c-stores focus more on future needs than ever before. “Find out from suppliers which products are likely to be in stock for the next five to six months,” he advised. “Find out which brewers and wholesalers have large supplies. You may have to make some shifts.” And when larger-than-normal deliveries do arrive, he suggests that retailers build small displays with the backstock. Williams added that now is a good time for retailers to scrutinize their assortment. “Retailers need to do a much better job of properly allocating shelf space to brands and packages that are winning,” and eliminating those that are no longer performing, he said. He also advised retailers to meet with distributors and manufacturers frequently to be sure growth strategies are aligned. NACS FEBRUARY 2022 37
Tips for Managing Out-of-Stocks
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• Order big and order ahead. • Build small displays with the backstock when large orders do arrive. • Scrutinize assortment and allocate shelf space to brands and packages that are winning. • Find out which brewers and wholesalers have large supplies, and work with them. • Utilize distributors that are able to source more supply. • Meet with distributors and manufacturers frequently to align growth strategies. • Switch to locally produced brands. • Consider creating your own private-label beverages. • Shop big box retailers, which often receive regular shipments.
by the big summer selling season, labor and trucking challenges will continue. After all, he said, “the trucking shortage has been bad for the last four years.” Rhoads, meanwhile, said that a best-case scenario would see the disruption easing by mid-year. “Worst case, it could continue all year,” he remarked. However long the shortages endure, Rhoads speaks for c-store operators around the country. “We’ll just do our best,” he said.
Terri Allan is a New Jerseybased freelance writer, specializing in the beverage industry. She can be reached at terri4beer@aol.com and on Twitter at @terriallan.
FIND OUT FROM SUPPLIERS WHICH PRODUCTS ARE LIKELY TO BE IN STOCK FOR THE NEXT FIVE TO SIX MONTHS.”
Lotus_Studio/Shutterstock
SEEKING SOLUTIONS Savvy convenience retailers are taking matters into their own hands by seeking out alternative products and vendors. Stoudt, for example, hasn’t been able to access Starbucks Frappuccino for a few months. “So, we switched to Peets, which is more of a local brand, and it’s selling well,” she remarked. Other retailers like Segura and Rhoads are utilizing distributors they haven’t worked with in the past. And several report turning to grocery and big box stores to fulfill their beverage needs. “When there was an out of stock on Gatorade, I was able to load up at Sam’s Club,” Rubino remarked. Likewise, Rhoads points to utilizing Costco and WinCo Foods for his beverage needs. “I don’t like to do it because it’s labor intensive, but we need to have our shelves looking manageable,” he noted. On the beer side, Rhoads’ stores are being proactive in the midst of product shortages. “We’ve launched our own private-label craft beer, Gorilla Juice,” he revealed. Produced by Barlow Brewing, the value hazy IPA is priced $2 below a fourpack of a comparable name brand. Indeed, the trips to big box stores, which are often loaded with coveted beverages, are increasingly frustrating c-store operators about marketplace imbalances. “There seems to be a distribution prioritization,” in that big box and e-commerce retailers are able to access product that smaller retailers can’t, said Rhoads. “It puts us in a tough position. There should be more equal access.” This inequity was addressed in a recent letter from NACS to federal lawmakers reviewing current supply-chain challenges. With the supply-chain disruption now stretching into its second year, it’s unlikely the situation will dramatically improve anytime soon. “I think this could last into the summer,” said Segura. Hennessy believes that while packaging constraints should clear up
March 21-23, 2022 ChampionsGate, FL
Creating Connections The NACS HR Forum is a must-attend event for the people in our industry who recognize people are the number-one asset of successful businesses. Over three content-filled days, the NACS HR Forum connects you with peers from around the country. With engaging, interactive presentations and case studies, the forum offers fresh solutions to the issues you face daily—hiring challenges, delivering on DEI, and legislative issues, among other topics.
Reserve your seat today! /
convenience.org/hrforum
Attendees earn an average of 10 professional development credits from HRCI and SHRM.
LEARNING TO
metamorworks/Getty Images
District and store-level managers look within and to each other to learn what it takes to be a better leader.
BY SARA COUNIHAN
T
he COVID-19 pandemic disrupted many convenience retailers and forced leaders to rewrite the rulebook on how they serve their customers, hire employees and lead their teams. According to attendees at the NACS Leadership for Success 2021 program last May, it’s now more important than ever to develop leadership skills and uncover personal strengths. “Especially with COVID and the hiring opportunities going on right now, if we don’t change and grow, we can’t succeed. I will tell you that going through [the program] has helped me change who I am,” said Jeff Gamm, district manager, Love’s Travel Stops. The NACS Leadership for Success (LFS) program is an immersive, six-day course, where convenience store district managers, supervisors and other leaders come together to learn leadership skills they can use immediately when they get back into stores. Not only do participants learn using a variety of engaging instructional methods, they also actively engage with each other to learn from their peers. The program is graciously endowed by The Hershey Company. The 2021 LFS program took place May 2-7 at the Virginia Crossings Hotel and Conference Center in Richmond, Virginia, after not being able to meet in 2020 due to the pandemic. Joanne Loce, lead facilitator for the Leadership for Success program, felt a collective comraderie from the 2021 group of attendees having gone through the pandemic. NACS FEBRUARY 2022 41
Along with traditional coaching methods to self-reflect, attendees take reflection walks through the grounds of the venue with other participants. The walks allow each person to think about and discuss their personal challenges in their businesses. Walking with different attendees allows everyone to obtain a variety of insights and perspectives on their particular challenges back at their workplace.
Spending a week interacting with peers who face the same challenges is a huge benefit of the program.
“This group walked in, and immediately, it felt like we had all been together before, and I think that’s because we all had a shared experience,” said Loce. “There have been times where people have dealt with floods and hurricanes, but we walked in and felt like colleagues knowing we’ve all been through COVID.” LOOKING WITHIN According to Loce, one of the most beneficial aspects of the program is the opportunity for c-store employees to take a step back and self-reflect on who they are as a leader. “[Self-reflection] is not something people get to do in most industries and certainly not in the c-store industry where we’re in a fast-paced environment,” said Loce. “One of the big benefits is to pause and reflect so that [attendees] can be intentional about what they’re doing.” Gamm agrees. “A takeaway I had was learning who I am as a leader and my communication style,” he said. “There are a lot of things that [leaders] do that we don’t know, and you find out when you’re in [the program].”
LOOKING OUTWARD Learning and understanding their communication style is one of the first lessons. Before attendees arrive on site, they are required to take a DISC assessment, which identifies their personal strengths and leadership skills. “One of the biggest impacts from the program was looking at how my communication style differs from other styles and really learning how to communicate with different people,” said Gamm. “It’s helped me with my team. Now I try to assess their style and then learn how to communicate with them. Do I need to communicate with more numbers? Do I need to communicate with them in a more positive manner, or do I need to just get straight to the point? “It’s helped me drive two different metrics within my district based off of just learning how to communicate better,” said Gamm. Attendees also take an emotional intelligence assessment and look at the 360-degree feedback given ahead of time by their own colleagues before they head to the program. “Most of the people coming to [the program] are in district manager or general manager types of roles, so they clearly are competent, capable leaders, so [the program] is really
NACS Leadership for Success is designed for district managers, supervisors and other convenience store retailers to improve their leadership and operational performance. Participants work on skills they can immediately use on the job, including: • Increasing their understanding of how their actions affect their personal effectiveness • Discovering how they work with others as well as how they are perceived by colleagues • Defining a vision of their ideal leader-self • Mastering tools to improve their leadership effectiveness and build better relationships • Charting a course of action to apply what they have learned The NACS Leadership for Success program is graciously endowed by The Hershey Company. For information on the program or to register, visit www.convenience.org/leadershipforsuccess.
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about their ability to increase self-awareness about what they’re good at and what they need to learn, and then it’s about focusing on and targeting the skill areas,” said Loce. LOOKING TO GROW Once attendees learn about themselves as leaders and in their businesses, it’s time for application. At the beginning of the program, attendees list areas of opportunities at their workplace and end each day with an actionplanning activity. They reflect on what they learned and write down goals and actions. “It’s really about taking a real business issue, using what they’ve learned through the week and learning how to apply some of those concepts,” said Loce. “They’re taking what feels conceptual and putting it into action, and the purpose is to take those leadership skills and learnings and apply them in a practical way to make a business difference.” After attendees leave the program, the work doesn’t stop. They leave with an action plan to attack a specific issue—and they’re not alone. Attendees are divided into teams of three to five, and the teammates help each other with projects over the summer. Teams have at least three meetings and are assigned a coach who checks in on them to make sure they apply the skills they learned during the program. Then at the NACS Show, each team reports out on their projects and results—and for many, presenting for the first time ever. Gamm’s group’s theme was leadership and retention. “We looked at the teaching and training of our store teams, how we set expectations and the soft skills that it takes to retain people,” said Gamm. “Our group wanted to look at how we communicate on the right level, at the right time, with the right people to make sure that we drive either a culture change, status quo of the culture or whether or not we were even in the right ballpark of how we communicated.” Gamm’s business opportunity was to accomplish better mystery shop results, specifically improving bathroom survey results and having employees give genuine greetings more often. “I looked at how can I teach my team to think of themselves as a customer instead of a team member. It really helped our metrics because they started asking themselves, ‘Would I use this bathroom?’ ‘Would
“One of the big benefits is just to pause and reflect so that [attendees] can be intentional about what they’re doing.” I eat here?’,” said Gamm. “It helped my team drive better results, and we saw a 50% improvement over my timeline.” Gamm says he still keeps in touch with his team members, as well as other people he met at the program. “The relationships you build are priceless. I met directors and other district managers. We were able to bounce ideas off each other. And I met people who are the opposite of me in their styles, so I can bounce ideas off them on how to communicate with my own team,” he said. “A key purpose of the program is for attendees to build their network and build relationships with colleagues at other organizations and use that as an opportunity to continue the learning,” said Loce. Sara Counihan is contributing editor of NACS Magazine and NACS Daily. She can be reached at scounihan@convenience.org.
Attendees set high-level goals, which can be anything from business performance to providing feedback and coaching employees.
NACS FEBRUARY 2022 43
WHAT’S NEW WITH
CBD? FIVE KEY QUESTIONS
FOR 2022 AND BEYOND.
44 FEBRUARY 2022 convenience.org
BY MELISSA VONDER HAAR
F
IRA_EVVA/Getty Images
ive years ago, the notion of cannabis as a convenience category seemed improbable. At that point, cannabis was almost exclusively defined as marijuana: a substance illegal on the federal level and limited to marijuana-only dispensaries in the few states that had passed adult-usage laws. Then came the 2018 Farm Bill. Paving the way for hempbased cannabis options and leading to a slew of investment, innovation and consumer interest in cannabidiol (CBD) and other hemp-derived products, the Farm Bill put us in a very different situation than five years ago. A situation where convenience retailers can—and increasingly are—participating in the national cannabis market.
NACS FEBRUARY 2022 45
“The big thing for 2022 is going to be where synthetic and semi-synthetic cannabinoids fall in general acceptance and legality.”
As evidenced by the nearly 40 hemp or CBD-related booths at the 2021 NACS Show. “We saw a large number of CBD products at the NACS Show last year in Chicago, as well as 2019 in Atlanta, when they were featured together in a CBD specific pavilion,” said Jayme Gough, NACS research manager. “I think retailers have plenty of opportunities to talk with suppliers, ask about the products, and ask about the customers as they do their research,” she said. “Over the past years, we’ve seen a growing acceptance of CBD products by both retailers and consumers,” said Daniel Yepes, senior marketing director for CBD maker Reliva. “For convenience retailers, CBD is an important revenue stream.” The U.S. CBD market hit $2.2 billion in 2020 and an estimated $3.5 billion in 2021, according to Nielsen. By 2025, U.S. CBD sales will reach $6.9 billion, Nielsen projects. For context, the current hard seltzer market is $4.1 billion. Promising, yes, but CBD’s place in convenience is far from clear, thanks in large part to the U.S. Food and Drug Administration (FDA), which hasn’t approved ingestible CBD products for sale in the United States. That stance is the reason NACS does not yet gather data on CBD sales. “As a national association, NACS can’t track items that are not federally legal for sale,” said Gough. “We will be able to provide category data when that happens—if that happens—and we’re planning for it.” That leaves retailers with a slew of questions as CBD—and other hemp-based products—remain in regulatory limbo. Here are five of the most pressing questions facing the category as we enter 2022.
IS CBD A REAL CATEGORY… OR JUST A PLACEHOLDER FOR MARIJUANA? If retailers were skeptical of CBD’s staying power before the COVID-19 pandemic, 2020’s brick and mortar sales data offered little reassurance. “The market actually saw a large decline in 2020,” Gough said. “Some sources had the market down as much as 6% from the previous year. Prior to that we were seeing triple-digit growth.”
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IRA_EVVA/Getty Images
1
“Consumers now understand that CBD does not have a psychoactive effect, especially compared to THC or marijuana.” One explanation posed by those skeptical of CBD’s staying power is that CBD consumers might also be looking at THC. And as more and more states legalize THC for adult recreational use, those consumers lost interest in CBD. For context, BDSA data showed marijuana sales in legal markets grew 46% in 2020. Even prior to 2020, many retailers expressed concern about CBD’s staying power, wondering if consumers were really interested in the hemp-derived option or just looking for a legal alternative to marijuana. Data in states where marijuana is legal suggest that’s not the case. According to BDSA, a provider of market research solutions for the global cannabinoid industry, studies of U.S. cannabis consumers show that 20% use only CBD and 64% use both CBD and THC. Just 16% use only THC. What’s more: 22% of dispensary edible sales are CBD-only products. “The concept of CBD being a placeholder may have been an accurate statement early on,” said Zach Bader, director at MMS Distribution LLC. But “consumers now understand that CBD does not have a psychoactive effect, especially compared to THC or marijuana. CBD is thought to have other benefits, more akin to a supplement than an effect-driven product like marijuana.” “There’s a demographic that’s looking for CBD; they’re not looking for the high,” said Don Rhoads, president and CEO of The Convenience Group LLC. “CBD has a purpose and, in many minds, a benefit. It’s real, and it’s going to remain a viable category for us.”
2
WILL WE EVER GET REGULATORY CLARITY? The quick answer? Yes…but probably not this year. “I continue to think that if we want a consistent federal ingestibles policy, it’s going to come from Congress forcing FDA’s hand, not FDA issuing regulations of its own volition,” said Jonathan Havens, a partner at Saul Ewing Arnstein & Lehr LLP and a former FDA regulatory counsel. Since the passage of the Farm Bill, the FDA
has maintained that ingestible CBD products cannot be marketed without FDA approval, arguing that the agency needs more data to determine how—or if—it will grant such approvals. Historically, the agency has taken a largely hands-off approach to CBD products, absent such products bearing aggressive therapeutic claims. And even then, FDA has sent warning letters to brands, rather than retailers. In 2021, the agency rejected two applications to market CBD under the New Dietary Ingredient pathway; and it has issued numerous official calls for data, most recently the October 2021 Cannabis-Derived Products Data Acceleration Plan. The name, according to Havens, suggests more urgency than the plan itself. “Unfortunately, it strikes me as more of the same,” he said. “I’m not seeing anything that suggests FDA is going to tackle CBD rulemaking anytime soon. If the industry wants a fix, it needs to rely on Congress.” There are several bills, or anticipated bills, in both the U.S. House and Senate that strive to solve the CBD issue, most notably the Cannabis Administration and Opportunity Act (which includes provisions on CBD in addition to the broader legalization of marijuana). But the likelihood of that—or any stand-alone bill—passing right now is unlikely. “Given the current makeup of the Senate and the needed 60 votes to pass cannabis reform, I’m not seeing a path forward in the near term,” Havens said. He added that while ending the federal prohibition on cannabis is unlikely anytime soon, aspects of various legislative proposals in and around the cannabis space could become law. While Sen. Chuck Schumer and Sen. Cory Booker have said that piecemeal cannabis reform would not come before comprehensive reform that addresses, among other things, social equity, they might be starting to realize that it’s either incremental reform or nothing at all. “Perhaps CBD gets added to a must-pass measure,” Havens said. “But if that were a possibility, why hasn’t it happened yet?” NACS FEBRUARY 2022 47
WHAT FORMATS WILL GROW IN 2022? The limbo happening on the federal level has led to limbo in terms of the availability—and therefore sales—of many ingestible products. “Customers are still sorting out how they want to consume this product,” Gough at NACS said. “There are a lot of moving pieces right now. As a retailer, it’s really tricky to navigate.” But, perhaps, getting less tricky as we learn more about that CBD shopper. “We’re seeing growing consumer acceptance of CBD as a lifestyle product and demand for new formats to suit consumers’ needs,” said Yepes, citing Reliva’s addition of an on-the-go beverage mix as an example of a new format designed to meet consumer demands. The key to unlocking which formats CBD consumers will purchase, according to Bader of MMS Distribution, is looking at which formats are most accessible and easy to use for new shoppers. “What are people more comfortable consuming?” he said. “That’s where edibles have grown.” Data from The Brightfield Group show that edible, drinkable and ingestible forms of CBD experienced some of the most growth in 2021. In its 2021 Mid-Year U.S. CBD Report, the cannabis research firm projected CBD beverages would grow 71% in 2021 (the most of any subsegment), CBD gummies 41% (the second most) and tinctures would remain the most-purchased format (18% of all CBD sales). As a retailer, Rhoads is seeing CBD beverage growth firsthand at his stores, describing the category as “on fire.” Rhoads noted that he has offered CBD beverages for a little over a year, playing around with different regional offerings and keeping about 12 SKUs, primarily still, sparkling and flavored waters, in a dedicated cold merchandiser. “Beverages seem to work well in the convenience model,” he said. “It’s a grab-and-go item, and it doesn’t take a lot of explaining. “The way convenience is going to remain relevant in this category is to provide consumers with what they want,” continued Rhoads. “I think the beverage category is that kind of category for us. We’ve had outstanding growth in my stores: If we have it, it sells.”
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4
WHAT’S THE DEAL WITH DELTA-8? During the past year, delta-8 has come into prominence as, at least theoretically, a way for mainstream retailers to sell THC-like products. What exactly is delta-8? Cannabis site Leafly describes it as “a cannabis compound that has become popular because of its similarity to delta-9 THC, the main compound in cannabis that gets you high, causing euphoria, happiness, sedation, symptom relief, and much more.” Unlike THC, delta-8 is derived from hemp. Unlike CBD, it’s a synthetic cannabinoid: Most delta-8 products are made by extracting CBD from the hemp plant, refining that into CBD isolate, then synthesizing that CBD isolate into delta-8. This is important because of how the Drug Enforcement Agency (DEA) classifies different parts of the hemp and cannabis plant. CBD and other hemp-derived compounds may be legal under the DEA’s stance, but synthetic cannabinoids—like delta-8—are not. “As a trade association, our position is that the DEA believes that this is a synthetic version of marijuana,” Jon Taets, NACS director of government relations, said at the 2021 NACS Show. “It’s different than CBD, where you’re dealing with the FDA and potential
CANNABIS FAQ: WHAT’S LEGAL, WHAT’S NOT Visit www.convenience.org/CBD for news and legal information to help you navigate the gray areas around the sale of CBD and CBD-related products. NACS stays on top of changes in both federal and FDA policy that could modify the current information.
Everyday better to do everything you love/Getty Images
3
U.S. CANNABIS CONSUMERS fines. The DEA, if they choose to enforce, they have the authority to do so. NACS advises caution.” To date, the DEA has not yet chosen to take enforcement action against retailers or manufacturers of delta-8. “Lack of enforcement doesn’t mean legality,” warned Havens. “It just means lack of enforcement. But as people are selling products that arguably have a similar chemical structure to delta-9 THC and are marketed to have a similar effect as delta-9, I think DEA could take enforcement action under the Federal Analog Act.” Havens added that there is an unanswered question in his mind about what DEA means when it says that “synthetic” delta-8 is illegal, whereas delta-8 extracted from hemp (as long as it doesn’t have more than 0.3% delta-9 THC) is legal. “My understanding is that much of the delta-8 on the market today is made by taking hemp-derived CBD and synthesizing it into delta-8. Would that qualify as ‘synthetic’? I don’t think we have a good answer from DEA.” On the state level, more and more are passing outright bans or restrictions on delta-8 sales. At the time of publication, Havens knew of over a dozen states that had enacted some form of delta-8 limitations, and four more states were considering it. “Unless a state says it allows delta-8, it could be risky to sell it,” he said.
5
WHAT’S NEXT? When looking at the future of the hemp and CBD category, experts suggest looking at the entire cannabis plant—not just CBD or THC. “CBD companies currently offer a pretty wide range of products,” Mike Sill, the CEO of CBD company Sunday Scaries, wrote in an op-ed for Forbes. “Nevertheless, this diversity will increase as more companies introduce products that hyper-concentrate on each of the over 100 minor cannabinoids found in the hemp plant.” Bader agreed. “CBD is one compound,” he said. “The big thing for 2022 is going to be where synthetic and semi-synthetic cannabinoids fall in general acceptance and legality.” Delta-8 is perhaps the most well-known synthetically produced cannabinoid. But Bader said the technology behind delta-8 allows cannabis companies like his to explore options of combining other cannabinoids like CBN (which is thought to have nonintoxicating pain relief properties), CBG (an anti-inflammatory) and more for products that offer a more tangible effect than CBD (which behaves more like a vitamin or nutritional supplement). “CBD came out into the market and the whole world expected effects,” Bader said. “If hemp products could deliver those effects in a legal and safe way, it could be really big.” Rhoads said the regulatory uncertainty and newness of the category make it difficult to predict what’s next, but he agreed that it’s likely to grow beyond just one cannabinoid like CBD. “I see a day where hemp, CBD, THC and more move into our craft beer category, our wine category, providing new products that serve different needs than what we’ve historically offered folks,” he said. “It’s really exciting.”
20% use only CBD
64% use both CBD and THC
16% use only THC
22%
of dispensary edible sales are CBD-only products
Melissa Vonder Haar is the marketing director for iSEE Store Innovations. Follow her on Twitter at @iSeeMelissaV. Source: BDSA
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s.
ecome an alternative to restaurants and QSRs” was one tip convenience retailers received last year when executives from IRI and Crossmark presented a webinar on reviving business post-COVID lockdown. Besides adopting new technologies and offering contactless service, the panel recommended enhancing the dinner daypart to attract more shoppers. “Everybody is trying to build back their foodservice business,” said Kennith Fries, vice president of c-store for Crossmark. “Commuting traffic has dropped off, particularly in the morning, and retailers are looking at different menus and ways to expand. We encourage them to do some in and outs—be a little creative with the menu and find different ways to get consumers to
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Ring the Dinner Bell
es
ypart offers o a d pp ing or n e tu v e ni e ti h T
try your food. For customers worried about health and safety, a c-store can get them in and out quickly.” During the 2020 lockdown, c-store traffic declined just over 19% compared with 2019, and during weekday evenings (6 to 10 p.m.), trips were down nearly 16%, according to Dafna Gabel, vice president of strategic insights at PDI Software. “The evening daypart gained back some of the trips after the shelter-at-home mandates were lifted, but they were still down about 10% versus the second half of 2019,” she said. “And evening trips year-to-date are still down today—about 4% versus 2020, unlike the morning rush that is by now doing better versus 2020. However, trips during all key weekday dayparts, including the evening, are still behind pre-pandemic levels.”
TanyaJoy/Getty Images
NACS FEBRUARY 2022 51
5 TIPS FOR BOOSTING EVENING DAYPART SALES
Trips during all key weekday dayparts, including the evening, are still behind pre-pandemic levels.”
52 FEBRUARY 2022 convenience.org
3 4 5
Remerchandise your foodservice by daypart. Change out hot grab-and-go displays. Offer different heat-andeat meals to warm up and serve at home. Give customers a reason to stop and try your food. Introduce new items to keep menu options fresh and meet customers’ need for variety.
lemonade are available in half-gallon jugs to complete the meal. Our sales results have been satisfactory with 10% to 15% increases per month since last May.” Several of The Market convenience stores owned by Tiger Fuel Co. of Charlottesville, Virginia, have full operating kitchens with two or three ovens, stove tops with griddles, deli sandwich units and plenty of walk-in space. Several stores are equipped with fryers for the chain’s fried chicken menu. According to Pat Pitts, foodservice manager for Tiger Fuel, “during COVID, we haven’t pushed a dinner menu per se. We offer takeout foods throughout the day with an assortment of freshly prepared gourmet sandwiches, soups, chili, rotisserie chickens and specialty salads. At our fried chicken stores, we sell chicken meals all day and for a quick dinner pickup.” For the past two decades, The Market kitchens have offered pre-order holiday meals for Thanksgiving and Christmas. In addition to roast turkeys with all the sides, customers can pick up ham biscuits, fruit and cheese
TanyaJoy/Getty Images
RETAIL RESPONSE When commuters nationwide began working from home and morning traffic declined in 2020, some retailers turned their attention to the dinner daypart. Despite the challenges of foodservice during COVID-19, management at Rutter’s, the York, Pennsylvania-based chain, recognized an opportunity. “We put a focus on dinner with large frozen meal options—mac and cheese, lasagna items and bulk chicken strips that customers could take home and cook,” said Chad White, category manager for foodservice at Rutter’s. “We’ve tried to take what we have on our menu and expand that during dinner. We want to increase our menu; however, we haven’t brought in a ton of new items because of the way the supply chain is right now. It’s been a challenge to even get the products that we already use, so we’ve tried to utilize what we have.” The frozen family meals sold well at stores near residential areas before Rutter’s discontinued the offer in late 2020. But the emphasis on providing quality comfort food continues. “Comfort food is a staple of our business,” White said. “We have plant-based items on our menu, but customers have gone back to those comfort foods—pizza, eggrolls, mac and cheese and fried sides. We’ve upgraded our mac and cheese to shells instead of macaroni noodles, and we’re using white cheddar. We’ve seen good sales from that.” Fresh bone-in chicken and chicken tenders—either hot or cold—are customer favorites at Spinx stores based in Greenville, South Carolina, and to attract evening shoppers, the chain offers value-priced family-size meals to go. “Customers can choose from family-size chicken packs, both fried and oven roasted, along with sides like macaroni and cheese, green beans or our homemade banana pudding,” said Chris Faneuf, director of foodservice at Spinx. “Fresh-brewed tea and
1 2
Subjug/Getty Images
trays, assorted pies and desserts to round out their celebratory dinners. “Customers start ordering around the first week of November for the holidays,” Pitts said. In August 2021, Pennsylvania-based Wawa began testing a new dinner menu at hundreds of stores throughout the chain. The selection ranges from an all-natural Angus burger on a lighter bun, pasta with a choice of toppings and braised chicken to pork roast, pot roast and rotisserie-style chicken. Special kid’s meals feature Junior Hoagies and “small fry” sides, such as mac and cheese, and time-crunched commuters can grab six different heat-and-eat meals to warm and serve at home. The menu aims to meet diners’ need for variety. “We always strive to listen to our customers, so we’ve spent time testing menu items in select stores, gathering feedback and perfecting our recipes with the goal of providing a family, group of friends, etc. the ability to select their preferred dinner while still enjoying a meal together,” said Mike Sherlock, chief product marketing officer, Wawa. JUGGLING DAYPARTS Giving each daypart individual attention has paid off. “We remerchandise three times during the day,” said Pitts of Tiger Fuel. “We start with breakfast—breakfast tacos and biscuits. Our lunch specials are chosen daily by our cooks at each location, and we offer our chicken menu in our hot cases for dinner.” At Spinx, the hot grab-and-go displays change with each daypart. The new cold chicken meals take up about 40% of each store’s refrigerated case space and are available around the clock, providing shoppers with a quick, easy meal. “Our cold chicken offer has impacted sales all day, including the early morning daypart when we’re not fresh frying chicken,” said Faneuf. “About 10% of grab-and-go cold chicken units are sold during the morning daypart and for consumption at lunch. The quality of the chicken is maintained when reheated at home, and the cold chicken provides a great picnic-style meal. Dinner sales have increased 15% versus the previous year, and late-night sales are up 30% due to these programs. And all of it is incremental to the food
business. Cold grab-and-go meal replacement is a flexible offer that can be expanded for future growth to include a variety of familysized entrées, side dishes and desserts.” Rutter’s has the benefit of in-store restaurant seating and wants customers to stop in and stay a while during after-work hours. “We now have beer in a lot of locations, and we’re doing gaming and slot machines,” said White. “If customers stop at the stores after work, they can sit and play slots and get dinner. The dinner daypart is a challenge, but at Rutter’s, we strive to give customers a reason to stop and try our food.” Unfortunately, current supply chain issues challenge foodservice operators to meet customers’ needs. “Forecasting is a bit of a struggle,” said Pitts. “We don’t have adequate help in the stores and are dealing with the uncertain availability of everyday products. But we continue to give our customers the fresh, wonderful food they are accustomed to. We are always working on introducing new ideas to keep our menu options fresh, and we hope to implement more in the coming months.” Attracting the dinner-daypart diner is the goal, but retailers shouldn’t let them eat and then leave empty-handed. Keep in mind the items that evening shoppers most often purchase, says Gabel. “Evening customers are seeking beverages and snacks,” she said. “Nonalcoholic packaged beverages, beer and both sweet and savory snacks are the most heavily trafficked categories, and if evening-relevant foodservice items are offered, surely the combination can help lift the evening daypart.”
If customers stop at the stores after work, they can sit and play slots and get dinner.”
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. NACS FEBRUARY 2022 53
Cool New Products Guide This advertorial-style guide of services and packaging appears monthly and is an information-packed tour of ideas and approaches that can change how consumers view your store or choose your brand. It spotlights the newest thinking in convenience and fuel retailing and gives you an advance look at ways of staying in front of industry trends. Products are categorized the same way we organize the Cool New Products Preview Room at the NACS Show each year in October— New Design, New to the Industry, New Flavors, Health & Wellness, Green (EcoFriendly), New Services and New Technology. Products are considered “new” this year if they’ve been introduced since October 2021. The products featured here also can be seen in the Cool New Products Discovery Center at www.convenience.org/coolnewproducts.
NEW TO THE INDUSTRY
Ty Inc. Beanie Bellies
Want to carry our product? Please contact Peter Olbrys at 630.432.3329 or polbrys@tymail.com about bringing Ty into your locations.
54 FEBRUARY 2022 convenience.org
NEW TO THE INDUSTRY
NEW TO THE INDUSTRY
True North Beverage
Trion
True North Pure Energy Seltzer
ZipTrack®
True North Pure Energy Seltzer
ZipTrack®
True North Pure Energy Seltzer fuels you with a blend of plant based organic energy blend, enhanced immunity support and zero sugar, calories or artificial sweeteners or colors. It’s not about the destination, it’s about the journey — and how you get there matters. TRUE NORTH IS ENERGY FOR THE JOURNEY! For more information, call (844) 538-7742 and visit www.truenorthenergy.com
ZipTrack® is an adjustable pusher system that keeps grab-n-go beverages and items storewide attractively presented at the shelf-front for easy consumer choices. Deploy ZipTrack® in endless runs on any shelf depth and on all shelf types. The multiadaptable system accurately fits deep rear-load coolers (optional locking paddle available) just as easily as short display coolers, all while allowing you to keep your shelves level. ZipTrack® is durably manufactured by Trion® in Wilkes-Barre, Pennsylvania, USA. For more information, visit www.triononline.com/ziptrack.
NEW FLAVORS
INDEX NEW FLAVORS
Monster Energy Company......................................... 55
NEW TO THE INDUSTRY
Ty Inc.................................................................................. 54 True North Beverage................................................... 55 Trion.................................................................................... 55
Monster Energy Company Ultra Peachy Keen
Ultra Peachy Keen The summer of love was about hope, peace and connecting to something bigger than yourself. A time of carefree fun, limitless possibilities and believing anyone but the man. So don’t take our word for it, check it out for yourself ‘cause it’s all good when you’re sippin’ Ultra Peachy Keen. Zero sugar, juicy peach flavor and the Monster Energy blend from our secret stash. Everyone from boomers to zoomers is down with that. Unleash the Ultra Beast! For more information, call (800) 426-7367 and visit www. monsterenergy.com NACS FEBRUARY 2022 55
GAS STATION GOURMET
Fresh Flavor on a Stick
Deep-fried pickles and chicken tenders are a winning combination at Chip’s To Go Market. By Al Hebert
A
t Chip’s To Go Market in Baton Rouge, Louisiana, the friendly employees know the names of regular customers and often what they are going to order—whether it’s Chip’s Famous Chicken on a Stick or Butter Biscuit Brisket or barbecue ribs—and the service and food bring the customers back again and again. “We have a high level of quality customer service, quality food and quality people. We make it a family
Leyton Lavigne, vice president and owner, shows off Chip’s Famous Chicken on a Stick—breaded tenders layered with pickles and deep fried. 56 FEBRUARY 2022 convenience.org
store with an environment that people want to go to,” said Leyton Lavigne, vice president and owner of Chip’s To Go Market, which has three locations in Baton Rouge (Airline Highway, Coursey Boulevard and Highland Road). The markets, which are named for Lavigne’s father, Chip, are part of the convenience store arm of Lavigne Oil Co., a wholesale fuel distributor of Shell and Chevron gasoline, diesel and jet fuels based in Baton Rouge. On the foodservice side of Chip’s To Go, everything is made fresh daily. “Our slogan is, ‘fresh, friendly, fast.’ Fresh is first. We do everything fresh,” Lavigne said. CHICKEN ON A STICK Chicken tenders are ubiquitous in convenience stores and fast-food restaurants, but Chips To Go stands out for the unique flavor and presentation of its chicken tenders. “My CFO read an article in NACS Magazine that said if you put something on a stick it sells 40% better,” Lavigne explained. “We were 30 days out from opening [the Highland Road c-store]. We took our chicken tender recipe. We said it’s good, but it’s missing something. We decided to layer in pickles, put it on a stick and fry the whole thing.”
The result was a winning menu item, albeit one that took customers a little time to catch on. “The Highland Road store opened on April 1, 2020. It took six months for [Chicken on a Stick] to grasp. We were pushing the chicken sandwich first, and customers just gravitated to Chicken on a Stick. We stand the sticks up. Customers noticed, and naturally and by itself it took off—no advertising,” Lavigne said. What’s the secret? “I soak my chicken in pickle juice. Now we sell a couple hundred a day and three hundred on a busy day. If you’re going to serve food in a gas station in South Louisiana it’s got to be flavorful.” The pickle juice marinade was recommended by an R&D chef from Diversified Foods & Seasonings who helped get the foodservice program off the ground by developing menus, teaching the team about waste management, quality control and other basics. “He worked with us to us develop our own flavor profiles. That helped the food become what it is today. We hired Matt Sieh to be our director of retail operations. He was the category manager over all the foodservice at SuperAmerica Convenience Stores. He knew deli, numbers and waste. They did the hard work of making it all come to life.”
Executive chef Amar Patel (left) displays barbecue ribs, chicken quarters and sausage, plus the Butter Biscuit Brisket sandwich. Store managers (top, left to right) include Sonja Bell, Quincy McKinney and Jazzye Smith. Paragon Solutions designed the Highland Road c-store’s open interior.
THE BBB “The Butter Biscuit Brisket is the other part of our deli story,” Lavigne shared. “Each day, we smoke our own brisket, ribs, chicken quarters and sausage.” The idea for the Butter Biscuit Brisket came from Lavigne’s dad. “He is a brisket lover. He said, ‘Y’all got to put some honey, butter it up and drizzle a little bit of barbecue sauce and that’s it.’ I have to say, they do well in the morning. No one else has anything like it.” There’s always a bit of trial and error when it comes to developing menu items. “We tried turkey wings and lasagna. That didn’t do well. We had red beans and rice as a main entrée but moved it to a side dish and that has worked well,” Lavigne said. “Our biggest bust is rotisserie chicken,” Lavigne said. “We sell maybe two or three a day. What we have left over we use for chicken salad, chicken Caesar salad and chicken breakfast burritos.”
MODERN DESIGN The Chip’s To Go concept made its debut in 2019 as Lavigne Oil took over leases on the three c-stores in Baton Rouge. The 18- to 20-year-old stores needed complete makeovers, so the company turned to Mike Lawshe, owner and president, Paragon Solutions. “Paragon Solutions came up with the floor layouts. We moved a few walls, counters and fixtures in two stores. We completely gutted and redid the entire flow of the Highland Road location,” Lavigne said. “Mike got creative and maximized the space and kept them customer friendly.” Highland Road is the flagship. Opening the kitchen up to the interior allowed it to be used not only for cooking but as part of the marketing plan. A huge Southern Pride smoker takes center stage. Lavigne notes that he was intentional about involving his store managers
in the construction process and figured that if they stuck with the company through all of the dust and upheaval, they were on board for the long term. Lavigne gives credit for much of the overall success of Chip’s To Go to Sieh and his team, who keep the stores running smoothly. “He has a great sense of how to deal with employees and customers,” Lavigne said. “It’s inevitable that customers have bad days, but it’s our job to try and put a smile on their face. So, we always thank them and welcome them back with open arms.”
Al Hebert is the Gas Station Gourmet, showcasing America’s hidden culinary treasures. Find him at www.GasStationGourmet.com. NACS FEBRUARY 2022 57
CATEGORY CLOSE-UP SALTY SNACKS
Bounce Back Salty snacks are recovering from their pandemic decline.
F
ollowing disappointing pandemic-induced trends in 2020, the salty snacks category in convenience stores appears to have rebounded. And retailers and salty snack suppliers are hopeful that with store traffic normalizing, and with new flavors and packaging options emerging, the category is well positioned for a successful 2022 and beyond. Mike Jackson, category manager at High’s convenience stores, with more than 50 locations in the mid-Atlantic, said late last year that sales of salty snacks were “bouncing back,” with volume sales up at double-digit rates in both the second and third quarters of 2021. He projected that 2021 volume would easily surpass that of the year prior and would “slightly beat out” 2019 sales. Bob Clark, vice president, marketing, at Herr Foods Inc., cited strong growth in c-stores last year, especially during the summer and fall. In fact, Clark said that according to IRI data, Herr’s performance in c-stores last year outpaced trends in other channels. “This growth is being driven by increased consumption of snacks as foot traffic returns,” he explained. “Consumers are back to school and back to work, which is helping drive impulse snack sales.” As with some other in-store categories, salty snacks sales struggled during the 58 FEBRUARY 2022 convenience.org
first year of the COVID-19 pandemic. According to the NACS State of the Industry Report of 2020 Data, average annual sales per store of salty snacks dropped 3.2% to $123,751 during the period, and the category’s contribution to total in-store sales dipped slightly. Jayme Gough, NACS research manager, noted that in addition to slowed store traffic, the category was adversely impacted by consumer bulk buying in larger format stores. For the calendar year through August 2021, however, the picture appeared to be much improved. CSX data showed that beginning in April, monthly salty snack sales were higher than in each of the previous three years, and that pertained to all leading subcategories. “We’re seeing a relatively strong return of awayfrom-home occasions, which is increasing foot traffic in c-stores,” remarked Mark Chu, director of marketing for Amplify Snack Brands, which produces the SkinnyPop and Pirate’s Booty labels. But for some retailers, recent supply chain disruption is leading to uneven sales trends for salty snacks. Steve Morris, director of merchandising and
marketing at Oklahoma’s Jiffy Trip, called monthly sales for the category last year “up and down.” While May was strong, a Frito-Lay labor strike during the summer resulted in supply challenges for Jiffy Trip. “Between manufacturing and transportation issues, 2021 has been a bit of a hot mess,” the retailer said late in the year.
Floortje/Getty Images
BY TERRI ALLAN
JUST THE FACTS Average annual sales per store of salty snacks dropped 3.2% to
$123,751 in 2020
Roman Samokhin/Getty Images
Source: NACS State of the Industry Report of 2020 Data
GROWTH ALL AROUND While in 2020, tortilla chips and “other” salty snacks—including puffed vegetables, pork rinds and plantain chips—were the only major subcategories to post gains, all leading subcategories were up through August 2021, according to CSX data. Other salty snacks comprise the biggest share of the category (30.5% in 2020), and its strong performance for the first eight months of 2021 is “helping boost the overall positive sales outlook for the category,” Gough said late last year. Among other subcategories, potato chips—which saw sales and gross profit declines in 2020— outperformed the prior three years from April through August last year.
And according to Gough, “Pretzels have seen some interesting growth through August, perhaps driven by more customers back on the road, plus many new flavors and size innovations.” Like pretzels, nuts and seeds saw sales and gross profit declines in 2020, but last year marked an improvement. “We’ve seen a nice increase in traffic back to the c-store, and that has translated into growth for both the nuts category and the Planters brand,” remarked Tim Bortner, brand manager, Hormel Foods, which acquired the Planters brand last year. Mixed salty snacks, meanwhile, which posted positive sales and gross profit growth in 2020, remains healthy. “It’s an exciting subcategory, with big and bold flavors and a multitude of options to suit a variety of tastes,” said Stefanie Nobly, consumer and market intelligence manager at General Mills Convenience, marketer of the Chex Mix and Gardetto’s brands. One remnant of the pandemic peak— large package sizes—continues to gain traction in c-stores, marketers and retailers said. Amplify Brands’ Chu reported that 4.4-ounce bags of SkinnyPop experienced strong growth during the pandemic, and “we anticipate it will continue as consumers have reframed c-stores as selling instant consumables.” General Mills’ Nobly agreed, saying take-home packages are expected to drive some of the future growth for the category. High’s even tweaked its planogram to accommodate big bags from the likes of Frito-Lay and Utz, Jackson noted. The chain also added the On the Border line of salty snacks, which is known for its take-home packs, he said. Innovative flavors remain the lifeline of salty snacks, and according to retailers, bold and spicy variants continue to please consumers. “Hot is still hot,” remarked Morris from Jiffy Trip, where jalapeño and chili flavored salty snacks are popular. At High’s, meanwhile, products
Industry Sales % of In-Store Sales
4.46% 4.27% 2019
2020
Avg. Sales/Store
$127,859 $123,751 2019
2020
% of Stores Selling
99.8% 99.7% 2019
2020
Source: NACS State of the Industry Report of 2020 Data
NACS FEBRUARY 2021 59
CATEGORY CLOSE-UP SALTY SNACKS Per Store, Per Month Sales
n 2018
n 2019
n 2020
n 2021
$6,051
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$ JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
Source: CSX LLC; csxllc.com
The Power of CSX Data CSX, the engine behind category metrics and NACS State of the Industry data, provides current and customizable tools for financial and operational reporting and analysis in the convenience industry. Retailers can measure their company by any of the myriad metrics generated via our live database. Contact Chris Rapanick at (703) 518-4253 or crapanick@convenience. org for a complimentary executive walkthrough.
such as Flamin’ Hot Cheetos, Pringles Scorchin’ Cheddar and Zapp’s Voodoo Heat perform well, Jackson said. As for new and emerging flavors, Morris pointed to opportunity for dill and dill pickle flavored offerings. Better-for-you (BFY) products continue to make inroads in the salty snacks category. “We’re seeing BFY products, including SkinnyPop, driving growth through velocities and distribution,” remarked Chu. “We believe the BFY trend will bring additional higher value, incremental consumers into c-stores.” Planters’ nuts marketing efforts now focus on the products’ “substance”— namely protein—as compared to other salty snacks. Indeed, Bortner believes that nuts can further capitalize on their plant-based-protein characteristic in appealing to health-conscious consumers. TRIED-AND-TRUE MERCHANDISING C-store operators and salty snacks marketers agree that tried-and-true
60 FEBRUARY 2022 convenience.org
merchandising practices are the most effective for the category. “End caps, display shippers and merchandising deals all work well,” said Renee Walter, marketing manager for General Mills Convenience. “Running deals and getting premium placement gets attention in a crowded space.” Off-shelf displays were effective in helping to introduce Herr’s seasonal limited-time-only flavors in the past year, Clark reported. Jackson noted that High’s designs its promotions around shippers, such as those for combo deals like a sandwich and a bag of chips. Jiffy Trip, meanwhile, relies on permanent cardboard racks to serve as second end caps or floor displays when store labor is tight, according to Morris, as they “help with backstock.” Beyond merchandising, salty snacks vendors recommend that c-stores keep a close eye on category selection. “Carrying new items captures consumer interest, and c-store shoppers
Subcategory Performance Percent of Sales
Avg. Sales/Store
Avg. GP$/Store
Gross Margin %
2019
2020
2019
2020
2019
2020
2019
2020
26.2%
30.5%
$33,458
$37,727
$16,117
$18,682
48.17%
49.52%
Potato Chips
27.1%
26.9%
$34,635
$33,274
$12,777
$11,912
36.89%
35.80%
Tortilla/Corn Chips
13.5%
14.5%
$17,263
$17,926
$5,507
$5,718
31.90%
31.90%
Pretzels
14.4%
9.4%
$18,423
$11,621
$9,003
$5,169
48.87%
44.48%
Nuts/Seeds
9.1%
8.5%
$11,666
$10,502
$5,831
$5,022
49.98%
47.82%
Ready-to-Eat Popcorn
3.1%
3.2%
$3,963
$3,938
$1,604
$1,494
40.48%
37.93%
Crackers
3.0%
3.0%
$3,888
$3,741
$1,937
$1,905
49.83%
50.93%
Puffed Cheese
2.0%
2.3%
$2,586
$2,893
$793
$877
30.67%
30.33%
1.5%
1.7%
$1,976
$2,130
$856
$932
43.30%
43.74%
100.0%
100.0%
$127,859
$123,751
$54,414
42.56%
41.78%
Other Salty Snacks
Mixed Total
$51,703
pjohnson1/Getty Images
For information on NACS category definitions, visit www.convenience.org/categorydefinitions. Source: NACS State of the Industry Report of 2020 Data
are more open to trying new products,” remarked Walter, noting that General Mills recently introduced Chex Mix White Cheddar into c-stores. Amplify Snack’s Chu advised that stores “not only have a diversified portfolio of brands, but also the right balance of pack sizes.” If possible, he added, “find key manufacturers to partner with to create test-and-learn opportunities to drive news for your shoppers.” Retailers and vendors expect a continued return to normality this year and are cautiously optimistic that salty
snacks will post another gain. The only blips on the radar, they said, are possible supply challenges and price hikes. Clark cautioned that significant cost pressures are forcing manufacturers to pass along price increases. That’s a development that’s troubling Jackson a bit. “I’m concerned that single serves could reach more than $2,” he said, a price the chain has not had to broach yet. Overall, retailers and marketers are feeling upbeat about the category’s prospects. “As consumers return to pre-pandemic routines, our expectations are that c-store salty snacks sales will return to more traditional growth in unit sales,” Clark said.
Running deals and getting premium placement gets attention in a crowded space.”
Terri Allan is a New Jersey-based freelance writer. She can be reached at terri4beer@ aol.com, and on Twitter at @terriallan. NACS FEBRUARY 2022 61
BY THE NUMBERS
Benchmark Your Data
For the second year, NACS Convenience Voices consumer insights data will round out the financial and operational benchmarks found in the report and at the summit. Expanded regional benchmarks will also appear in the SOI report in addition to the summaries that are presented on the SOI Summit stage. Survey participants will receive: • Two digital access licenses to the NACS State of the Industry Report® of 2021 Data • One complimentary registration to the 2022 NACS State of the Industry Summit, April 12-14, 2022, Chicago, Illinois • A custom report of your compa-
ADVERTISER INDEX Contact Information
Page
Altria Group Distribution Company................. Inside Front Cover AGDCTradeRelations@Altria.com www.altria.com www.tobaccoissues.com Cash Depot.....................................................................................11 (800) 776-8834 sales@cdlatm.com www.cdlatm.com Charleys Philly Steak s............................................................................. 21 www.charleys.com
Cool New Products Guide.............................................................54-55 www.convenience.org/Media/NACS-Magazine/Cool-New-Products
Contact Information
Thank you to these advertisers who have demonstrated their support of the convenience and fuel retailing industry by investing in NACS Magazine. Page
Liggett Vector Brands Inc.............................................................. 9 (877) 415-4100 www.liggettvectorbrands.com Living Essentials LLC (5-hour ENERGY)..........................................7 (866) 960-1700 www.5HErewards.com PepsiCo. Inc. (Lay’s)......................................................................63 www.lays.com NACS Convenience Matters....................................................................... 4 www.conveniencematters.com NACS HR Forum........................................................................................39 www.convenience.org/hrforum NACS Membership........................................................................... Cover 3 www.convenience.org/membership
62 FEBRUARY 2022 convenience.org
ny’s data in comparison to the SOI aggregate data metrics to assist your internal analysis of your performance • A complimentary regional cut of the 2021 NACS Convenience Voices Data for the region your company is based in As with all sensitive company data, NACS SOI Survey data are kept completely confidential and will only be used in aggregate for analysis with data from other participating retail companies. Be a part of the industry’s most valuable data set by confidentially submitting your company data. Download the firm-level data submission form provided at www.convenience.org/SOIsurvey.
Contact Information
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NACS State of the Industry Summit....................................................... 29 www.convenience.org/SOISummit Premier Manufacturing Inc...............................................................5 & 33 www.gopremier.com RadiusAI Inc................................................................................................3 www.radiusai.com Southern Champion (Buzzballz LLC).............................................. Cover 4 www.buzzballz.com Swedish Match North America (Zyn).......................................... 15 (800) 367-3677 www.smna.com Trion Industries Inc.................................................................................. 13 (800) 444-4665 www.triononline.com
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Data submission is now open for the NACS State of the Industry Report of 2021 Data survey. More than ever, convenience retailers must take advantage of every tool available to help drive profitable sales. With over 50 years of financial and operational benchmarks, NACS provides the ultimate tools for industry stakeholders in the NACS State of the Industry Report and the NACS State of the Industry Summit. The NACS State of the Industry (SOI) Report contains over 200 pages of tables, charts, and analysis of the previous year’s operational data for convenience sites across every region of the United States. The NACS State of the Industry Summit is a numbers-focused gathering that takes place each spring where attendees are given a preview of the not-yet released SOI data and provided opportunities to engage with forward-thinking industry experts and network with other data-driven strategists. The SOI enterprise is an invaluable resource for both retailers and suppliers to the convenience retailing industry.
BY THE NUMBERS
Don’t Leave Home Without It Consumers increasingly rely on their smartphones to transact everything from shopping to researching goods and services to paying for purchases. In the U.S., 85% of the adult population owns a smartphone, according to Statista, and there are more than 294 million smartphone users in the nation. With a 74% audience reach, YouTube dominates Statista’s list of the most popular smartphone apps, followed by Facebook at 65%, Google Maps at 57%, Gmail at 56% and Google Search at 54%. When it comes to searching for things like the nearest gasoline station, Google Maps and Google Search are U.S. consumers’ go-to utility apps that power their need for information on-demand. Results from the 2021 NACS Convenience Voices survey conducted July 16 to August 1, 2021, indicate that convenience store shoppers overwhelmingly use their mobile phones when looking up information on the go.
NACS asked consumers in its syndicated mobile shopper insights program to indicate what digital device they used to search for products, services and locations. Of the 852 consumers surveyed, 76.2% said they used a mobile phone, while 9.2% said they used a car navigation system and 3.6% said they used a voice-activated onboard car navigation system. When fuel-only purchasers were surveyed, the percentages were similar (74.4%, 9.3% and 3.4%, respectively). What’s interesting to note is that of the shoppers surveyed while they were on the premises of a convenience store or gas station, 1 out of 5 said they ended up at that particular site as a result of a digital product search. For fuel-only customers, 1 out of 4 said a digital search led them to the location. In the NACS Time to Shop study, 93% of consumers surveyed reported that they live within 10 minutes of a convenience store, but 21% of customers are still selecting sites based on digital search.
WHAT DIGITAL DEVICE DID YOU USE TO SEARCH FOR PRODUCTS/SERVICES/LOCATIONS? n
76.2%
Mobile phone
74.4%
n
3.4%
Tablet
4.8%
Laptop
2.1%
Desktop
3.0%
n
4.5%
n
ALL CUSTOMERS
4.7%
n
0.8%
Other
3.6%
Voice activated onboard car navigation system
9.2%
Car navigation system
n
0.6%
FUEL-ONLY CUSTOMERS
3.4%
n
9.3%
NACS Convenience Voices is packed with valuable, proprietary insights you can only get from NACS. Leveraging the ubiquity of mobile technology enables more precise targeting, expanded geographic reporting, powerful multimedia feedback and more. Visit www.convenience.org/voices to learn how to participate. Source: NACS Convenience Voices 2021 64 FEBRUARY 2022 convenience.org
Why are the convenience industry’s most successful companies
NACS members? NACS is more than an association. It’s an alliance. It’s a movement dedicated to advancing the convenience industry here and globally. NACS is single-store operators. It’s multi-billion dollar companies and everything in between. It’s a network where sharing intel, insights, and innovations is the rule, not the exception. Isn’t it time to plug in? They say you can size up a person by their friends. You can size up a leader by their network. Join the tribe. Join the movement.
Plug in. Power up. And profit. B convenience.org/renew
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