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CStoreDecisions

Solutions for Convenience Retailers

Colonial Group

Celebrates 100 Years With the fourth generation at the helm, Enmarket’s parent company reaches the century milestone and sets its sights on future growth.

INSIDE Foodservice Moves Forward OTPs Brace for More Change What Do C-Stores Need to Know About Cryptocurrency?

38 48 62 August 2021

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CStoreDecisions

Solutions for Convenience Retailers

August 2021

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EDITORIAL

EVENTS

VICE PRESIDENT, EDITOR-IN-CHIEF John Lofstock jlofstock@wtwhmedia.com

EVENTS MANAGER Jen Osborne josborne@wtwhmedia.com

EXECUTIVE EDITOR Erin Del Conte edelconte@wtwhmedia.com

EVENTS MARKETING SPECIALIST Olivia Zemanek ozemanek@wtwhmedia.com

SENIOR EDITOR Thomas Mulloy tmulloy@wtwhmedia.com

CREATIVE SERVICES

ASSOCIATE EDITOR Isabelle Gustafson igustafson@wtwhmedia.com

CREATIVE DIRECTOR Erin Canetta ecanetta@wtwhmedia.com

CONTRIBUTING EDITORS Howard Riell Anne Baye Ericksen

ART DIRECTOR Matthew Claney mclaney@wtwhmedia.com

COLUMNISTS Thomas Briant Mike Kostyo John Matthews Mark Radosevich

DIRECTOR, AUDIENCE DEVELOPMENT Bruce Sprague bsprague@wtwhmedia.com

ADVERTISING VICE PRESIDENT, GROUP PUBLISHER Tom McIntyre tmcintyre@wtwhmedia.com

(216) 533-9186

PUBLISHER John Petersen jpetersen@wtwhmedia.com

(216) 346-8790

VICE PRESIDENT, SALES Tony Bolla tbolla@wtwhmedia.com

(773) 859-1107

REGIONAL SALES MANAGER Ashley Burk aburk@wtwhmedia.com

(737) 615-8452

REGIONAL SALES MANAGER Patrick McIntyre pmcintyre@wtwhmedia.com (216) 372-8112 REGIONAL SALES MANAGER Jake Bechtel jbechtel@wtwhmedia.com (216) 299-2281

Chain of the Year Award

DIGITAL MARKETING COORDINATOR Josh Breuler jbreuler@wtwhmedia.com SENIOR MANAGER WEBINARS/ VIRTUAL EVENTS IN MARKETING Lisa Rosen lrosen@wtwhmedia.com DEVELOPMENT MANAGER Dave Miyares dmiyares@wtwhmedia.com

VICE PRESIDENT, CREATIVE SERVICES Mark Rook mrook@wtwhmedia.com

ASSOCIATE EDITOR Marilyn Odesser-Torpey

SENIOR DIGITAL MEDIA MANAGER Pat Curran pcurran@wtwhmedia.com DIGITAL PRODUCTION MANAGER Reggie Hall rhall@wtwhmedia.com DIGITAL PRODUCTION SPECIALIST Nicole Lender nlender@wtwhmedia.com DIGITAL PRODUCTION SPECIALIST Nicole Johnson njohnson@wtwhmedia.com DEVELOPMENT ACCOUNT SUPERVISOR Taylor Meade tmeade@wtwhmedia.com

SAFE SHOP AND SPECIAL PROJECTS DIRECTOR OF SAFE SHOP/ DIRECTOR OF SPECIAL PROJECTS Frank Beard fbeard@wtwhmedia.com

DIGITAL PRODUCTION/ MARKETING DESIGNER Samantha King sking@wtwhmedia.com

CUSTOMER SERVICE

JUNIOR GRAPHIC DESIGNER Hannah Bragg hbragg@wtwhmedia.com

CUSTOMER SERVICE MANAGER Stephanie Hulett shulett@wtwhmedia.com

VICE PRESIDENT, STRATEGIC INITIATIVES Jay Hopper jhopper@wtwhmedia.com

CUSTOMER SERVICE REPRESENTATIVE Jane Cooper jcooper@wtwhmedia.com

WEBINAR COORDINATOR Halle Kirsh hkirsh@wtwhmedia.com

VIDEO SERVICES

WEBINAR COORDINATOR Kim Dorsey kdorsey@wtwhmedia.com

VIDEOGRAPHER Bradley Voyten bvoyten@wtwhmedia.com VIDEOGRAPHER Garrett McCafferty gmccafferty@wtwhmedia.com

DIGITAL MEDIA/WEB DEVELOPMENT

CStore Decisions is a three-time winner of the Neal Award, the American Business Press’ highest recognition of editorial excellence.

EDITORIAL ADVISORY BOARD Robert Buhler, President and CEO Open Pantry Food Marts • Pleasant Prairie, Wis. Lisa Dell’Alba, President and CEO Square One Markets • Bethlehem, Pa. Raymond Huff, President HJB Convenience Corp. • Lakewood, Colo. Bill Kent, President and CEO The Kent Cos. Inc. • Midland, Texas Patrick Lewis, Managing Partner Oasis Stop ‘N Go • Twin Falls, Idaho Reilly Robinson Musser, VP, Marketing & Merchandising Robinson Oil Corp. • Santa Clara, Calif. Bill Weigel, CEO Weigel’s Inc. • Knoxville, Tenn.

NATIONAL ADVISORY GROUP (NAG) BOARD Doug Galli (Board Chairman), Vice President/General Manager Reid Stores Inc./Crosby’s • Brockport, N.Y. Mary Banmiller, Director of Retail Operations Warrenton Oil Inc. • Truesdale, Mo. Greg Ehrlich, President Beck Suppliers Inc. • Fremont, Ohio Derek Gaskins, Senior VP, Merchandising/Procurement Yesway • Des Moines, Iowa Joe Hamza, Chief Operating Ofﬁcer Nouria Energy Corp. • Worcester, Mass. Brent Mouton, President and CEO Hit-N-Run Food Stores • Lafayette, La.

FINANCE

Peter Tamburro, General Manager Clifford Fuel Co. • Marcy, N.Y.

CONTROLLER Brian Korsberg bkorsberg@wtwhmedia.com

Vernon Young, President and CEO Young Oil Co. • Piedmont, Ala.

ACCOUNTS RECEIVABLE SPECIALIST Jamila Milton jmilton@wtwhmedia.com

VICE PRESIDENT, DIGITAL MARKETING Virginia Goulding vgoulding@wtwhmedia.com

Leading Through Innovation

YOUNG EXECUTIVES ORGANIZATION (YEO) BOARD Jeremie Myhren (Board Chairman), Chief Information Ofﬁcer Road Ranger • Rockford, Ill. Garet Bishop, Chief Financial Ofﬁcer BFS Cos. • Morgantown, W.Va.

WTWH MEDIA, LLC 1111 Superior Ave., 26th Floor, Cleveland, OH 44114 • Ph: (888) 543-2447

Ryan Faville, Director of Purchasing Stewart’s Shops Corp. • Saratoga Springs, N.Y.

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2011 - 2020

SUBSCRIPTION INQUIRIES To enter, change or cancel a subscription, please go to: http://d3data.net/csd/indexnew.htm or email requests to: bsprague@wtwhmedia.com

Caroline Filchak, Director, Wholesale Operations Clipper Petroleum • Flowery Branch, Ga. Cole Fountain, Director of Merchandise Gate Petroleum Co. • Jacksonville, Fla. Kalen Frese, Food Service Director Warrenton Oil Inc. • Warrenton, Mo.

Copyright 2021, WTWH Media, LLC CStore Decisions (ISSN 1054-7797) is published monthly by WTWH Media, LLC., 1111 Superior Ave., Suite 2600, Cleveland, OH 44114, for petroleum company and convenience store operators, owners, managers. Qualified U.S. subscribers receive CStore Decisions at no charge. For others, the cost is $80 a year in the U.S. and Possessions, $95 in Canada, and $150 in all other countries. Single copies are available at $9 each in the U.S. and Possessions, $10 each in Canada and $13 in all other countries. Periodicals postage paid at Cleveland, OH, and additional mailing offices. POSTMASTER: Send address changes to CStore Decisions, 1111 Superior Avenue, 26th Floor, Cleveland, OH 44114. GST #R126431964, Canadian Publication Sales Agreement No: #40026880.

Alex Garoutte, Director of Marketing The Kent Cos. Inc. • Midland, Texas Sharif Jamal, Corporate Brand Manager Chestnut Petroleum Inc. • New Paltz, N.Y.

CSTORE DECISIONS does not endorse any products, programs or services of advertisers or editorial contributors. Copyright 2021 by WTWH Media, LLC. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, or by recording, or by any information storage or retrieval system, without written permission from the publisher. Circulation audited by Business Publications Audit of Circulation, Inc. ©

CSTORE DECISIONS •

August 2021

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CONTENTS August 2021

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Number 8

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Volume 32

CStoreDecisions

EDITOR’S MEMO

10 NAG Scholarships Awarded to Member Companies FRONT END

14 Las Vegas 7-Eleven Franchisee Looks to Inspire Others 20 Quick Bites: Untangling Consumer Confidence 22 Industry News 24 PMTA Progress Update FOODSERVICE

38 Foodservice Moves Forward 42 Chef’s Corner: TXB Is Putting Foodservice First CATEGORY MANAGEMENT

48 OTPs Brace for More Change 54 Top Tips for Boosting Summer Beverage Sales TECHNOLOGY

58 What the Ransomware Attacks Mean for Convenience Retailers 62 What Do C-Stores Need to Know About Cryptocurrency? OPERATIONS

68 Retailers Must Fight Against UST Regulatory Headwinds 70 How Independent C-Stores Can Find Hidden Dollars in the P&L

COVER STORY 28 Cover Story:

Colonial Group Celebrates 100 Years With the fourth generation at the helm, Enmarket’s parent company reaches the century milestone and sets its sights on future growth. Cover photo courtesy of Atlantic Archives Photography

BACK END 72 Product Showcase 77 Ad Index 78 Industry Perspective: Five Foodservice Opportunities for C-Stores

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August 2021

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STAND OUT FOOD INNOVATION AHEAD OF ITS TIME There’s a reason the restaurant industry depends on us. We help drive traffic and loyalty with custom-built solutions.

Editor’s Memo

For any questions about this issue or suggestions for future issues, please contact me at jlofstock@wtwhmedia.com.

NAG Scholarships Awarded to Member Companies The financial gap in paying for college is still apparent. In keeping with that theme, the National Advisory Group (NAG) and the Young Executives Organization (YEO) created a scholarship fund for employees and children of NAG member companies. The 2021 NAG Scholarship is named after John MacDougall, who was a longtime supporter of the association and the founder of Nice N Easy Grocery Shoppes in New York. To remember John’s legacy in the convenience store industry, I’m proud to offer the John MacDougall/NAG Memorial Scholarship to NAG member companies. This year, four winners representing Cliff’s Local Market, Kwik Trip, Sheetz and Toot’n Totum were awarded $1,000 scholarships. Scholarships help students have more time to focus on their studies. Research shows that work can take up more than 15 hours per week and becomes an obstacle to academic success. For many students, the stresses of working make it difficult for them to graduate on time, or graduate with the high grades they have the potential to achieve. For other students, the work/study life is unsustainable, and they discontinue their studies altogether. Students often work several jobs over the course of their college and graduate school years in order to pay for their classes, books and lodging. While this is part of the rite of passage to the workforce, it detracts from the time most students need to study and learn. Academic performance can suffer greatly when a student is overworked. Furthermore, roughly two-thirds of all college graduates are saddled with student loans upon leaving school. Due to constantly rising tuition prices, these loans average $30,000. Compared to the debt experienced by students in the early 1990s, this is a 50% increase. In a country where a college degree is beneficial during a job search, scholarships lessen the financial strain on many students. Thanks to the generous contributions of NAG’s duespaying members, we have a healthy scholarship fund to ensure the college-aged children of NAG member companies will receive financial assistance to pursue their goals of becoming the leaders of tomorrow. This program 10

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was started in the late 1990s and has distributed more than 125 scholarships totaling more than $144,000 to deserving students. The program utilizes standard Scholarship America recipient selection procedures, including past academic performance and future potential, leadership and participation in school and community activities, work experience and an outside appraisal. THIS YEAR’S WINNERS ARE:

• Harley Edwards, of Amarillo, Texas. Harley’s dad, Dwayne Edwards, is the general manager of Toot’n Totum, which operates more than 80 stores in The Lone Star State. Harley is an incoming freshman at West Texas A&M University with a major in nursing. • MaKenna Konkol, of Oconomowoc, Wis. MaKenna is the only employee to win a scholarship this year. She works at NAG member company Kwik Trip in Lacrosse, Wis. MaKenna will be a junior this upcoming school year and is a psychology major at Marquette University in Milwaukee. Kwik Trip operates nearly 800 stores in four states. • MacKenzie Miller of Mohawk, N.Y. MacKenzie’s father is Richard Miller, the director of operations for Cliff’s Local Market in Marcy, N.Y., which operates 20 stores in upstate New York. She is a junior at St. John Fisher College in Rochester, N.Y., and is a nursing major with a scheduled 2024 graduation date. • Delia Morchesky, of Carrolltown, Pa. Delia is an incoming freshman at the Savannah College of Art and Design (SCAD) in Savannah, Ga. Her stepfather is Paul Crozier, the category manager for cigarettes and tobacco for Sheetz. Delia is an animation major who is scheduled to graduate in 2025. Sheetz operates approximately 650 stores in six states. On behalf of the NAG Board, I would like to congratulate all of this year’s winners.

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FRONT END Leadership Spotlight

Las Vegas 7-Eleven Franchisee

Looks to Inspire Others With his 7-Eleven franchise up and running, 30-year-old entrepreneur Johnathan Lacy is eyeing future growth while encouraging others to go for their dreams. Howard Riell • Contributing Editor

Entrepreneur Johnathan Lacy went about becoming a 7-Eleven franchisee the old-fashioned way: hard work, followed by more hard work — no outside investors. Thirty-year-old Lacy, who studied ﬁnance at Cal Poly Pomona, a university in Pomona, Calif., chose the convenience store industry because he liked the business model. “I have a little bit of experience in the restaurant and bar business, and this just seemed like a bit nicer of an opportunity, so I went ahead and took it,” he said. Lacy opened his 7-Eleven store on Tropicana Ave. in Las Vegas on April 29, 2021. 14

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FRONT END Leadership Spotlight

Johnathan Lacy opened his Las Vegas 7-Eleven store in April and has a goal of owning four units by the time he turns 40.

He has been hailed by a number of news websites, including the Las Vegas Sun, as being the ﬁrst Black owner of a 7-Eleven franchise in Las Vegas as well as Nevada. However, a spokesperson for the 7-Eleven Franchise Owners Association of Southern Nevada told CStore Decisions they do not believe that Lacy is the ﬁrst, but they do believe he is the only Black owner of a 7-Eleven franchise in the region at the present time, which is a distinction nonetheless. With his c-store now up and running, Lacy is setting his sights on growth, with a goal of owning four

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August 2021

7-Eleven units by the time he turns 40. He plans to open his second location in 2022. And he’s looking to inspire others along the journey. DRIVEN TO SUCCEED

While the path from inspiration to grand opening had hurdles along the way, Lacy never lost sight of his goal. The first roadblock came when he learned that financing would be an issue, after several lenders turned him down for a loan. “They always tell you that if you are able to use financing, use it to your advantage,” he explained. “However, it was a little bit more difficult because SBA (the Small Business Administration) wouldn’t finance the convenience store I was looking at. It was difficult to find traditional financing for purchases such as mine.” Despite that, Lacy was committed to making his dream a reality. He began saving the capital necessary to fund the venture on his own. “It took about five years of savings from my previous positions, plus money earned through investments (stocks), which I invested in while in college,” Lacy said. Eventually he was able to secure loans to help carry him across the finish line. “I used the services from Revenue Capital Financing to help navigate through and find loans that were available to my special needs,” he said. cstoredecisions.com

One thing Lacy had in abundance was drive. “Honestly, I have always had that passion in me, that chip on my shoulder,” he said. “It has definitely always been something that I have had to overcome, to always be better and better and better. It took me time to figure out what I wanted to do, but ultimately it worked out.” Having to learn the c-store business from the ground up was another hurdle he overcame with determination. “Going through training definitely prepared me,” he recalled. “My location is open 24 hours, so it’s a little bit more difficult; a 24-hour c-store is definitely more challenging.” The 2,000-square-foot location in east Las Vegas has also had to contend with the labor shortages and supply-chain issues that have plagued the industry since the COVID-19 pandemic began. But today, business is looking up. “Customer counts are up, and sales are improving quickly, but truly the best days are those that I share with the employees,” he said. “A good team truly makes a night-and-day difference.”

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PAVING THE WAY

Lacy is intent on helping pave the way for other aspiring business owners in the community, especially minorities and women. His primary message is not to let lack of investors, prior experience or expertise stand in the way. And he is determined to help others overcome the obstacles he faced when he embarked on his business. “It was really difficult for me because I did not have the resources in terms of people around me that I could ask, say, how to purchase a business like this,” he noted. “What are the steps? How can I do it? That’s why I hope to be a resource for others.” His message to other young entrepreneurs interested in the c-store industry is to keep going after your goal. “Don’t be scared because of lack of knowledge,” Lacy said. “You should be able to put your best foot forward, and if you want it, the information is there. You’ve just got to go for it.”

cstoredecisions.com

quickBites UNTANGLING CONSUMER CONFIDENCE SNAPSHOT OF ECONOMIC SENTIMENT

CivicScience reported that job market confidence and optimism for the overall U.S. economy were down at the beginning of July, while confidence in major purchases, new homes and personal finances had risen slightly compared to two weeks prior.

FOOD PURCHASES AT C-STORES ON THE RISE Throughout the pandemic, customers have turned to convenience stores to meet their prepared food needs.

Source: CivicScience, July 14, 2021

CONSUMER COMFORT LEVEL

Comfort level for various activities continues to shift as U.S. customers emerge from the pandemic and amid Delta variant questions and concerns. Source: Datassential’s “C-Store Foodservice Keynote Report”

TOP 6 CUSTOMER ENGAGEMENT PRIORITIES IN 2021

Retailers noted the following initiatives as their biggest priorities for engaging their customers in 2021.

52% Additional customer

Source: CivicScience, July 14, 2021

RESTAURANT REBOUND

Total restaurant visits were down 6% in May 2021 compared to May 2019, but up 23% compared to May 2020, when sales fell a whopping 23%. Source: NPD Group, “U.S. Restaurant Industry Recovery Will Depend on Strength of Key Dayparts,” July 12, 2021

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August 2021

delivery/pickup 41% Customer identiﬁcation/ personalization 41% Customer mobile experience alignment 33% Real-time retail 33% Empowering associates with mobile tools 22% Self-service options Source: Retail Consulting Partners, “2021 POS & Customer Engagement Report”

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FRONT END Industry News

Correction From July Issue In one of the more bizarre experiences of my 25-year career covering the convenience store industry, CStore Decisions has learned that the images sent to us for the Mountain Express Oil (MEX) article in our July issue featured CEO Turjo Wadud posing at a convenience store in Atlanta that was not his own or affiliated with MEX in any way. CStore Decisions would never have published these images if we knew the store featured in the photos sent to us had no connection to Wadud or MEX. Upon learning this information, CStore Decisions pulled the article in its entirety from our digital issue and website and replaced the front cover image online in the digital issue. The story will remain removed from our website. This is an unprecedented situation. The true owners and operators of the store in question, Buckhead Shell (The Shoppe @ Buckhead), were disappointed to see their flagship store, which took over seven years to design and build, featured in a story highlighting someone else’s brand. We have been assured by Wadud’s public relations team at M-Squared PR — who randomly picked the

store to do the photo shoot — that the move was not intended to take credit for another retail brand. Unfortunately, that was the perception from Buckhead Shell, and how the story may have appeared to readers. Buckhead Shell commented, “We believe we were misled by Wadud and his team, who stated that they were doing an article 'for the industry.' Had they told any of us that they were planning to use our pictures on the cover page of CStore Decisions July 2021 issue, we would have stopped it immediately. We have spent a lot of time and energy building this store along with Clipper Petroleum, and we are deeply hurt with this turn of events.” As editor-in chief, I know how hard it is to build a store that stands out in a competitive market, and I apologize for the misperception. I have expressed my apologies to the owners of Buckhead Shell and Clipper Petroleum. We have instituted safeguards to ensure this doesn't happen again. Buckhead Shell has graciously agreed to a profile feature in a future issue of CStore Decisions. — John Lofstock, editor-in-chief, CStore Decisions

Foxtrot Set for 50-Store National Expansion

Chicago-based Foxtrot is growing, with plans for 50 new stores across the country within the next two years. The brand, which already operates in Chicago, Dallas and Washington D.C., is expanding into New York City, Austin, Boston, Miami, Los Angeles and Houston, among other locations. New store formats will be twice as large as Foxtrot’s earliest models and feature expansive on-premises dining, enhanced cafe menus and in-store merchandising that anticipates trends within the consumer packaged goods landscape.

BP to Fully Acquire thorntons BP announced an agreement to acquire full ownership of its Thorntons convenience stores joint venture. BP has agreed to purchase the majority share it does not already own in the business from ArcLight Capital Partners LLC. The deal is expected to close later this year following regulatory approvals. Following the transaction, BP will become a leading convenience operator in the Midwest, with 208 owned and operated locations across six states, including Kentucky, Illinois, Indiana, Ohio, Tennessee and Florida. BP plans to retain and build on the Thorntons brand. 22

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FRONT END PMTA Update

PMTA Progress Update As the PMTA authorization deadline approaches, some 15,000 applications are still pending. Thomas Briant • NATO

The Food and Drug Administration (FDA) is under a court order to review and either authorize or decline to authorize — by Sept. 9, 2021 — the marketing of new tobacco products for which manufacturers submitted Pre-Market Tobacco Applications (PMTAs). But with numerous applications waiting for review, FDA is unlikely to meet the deadline. BACKGROUND The federal law known as the Tobacco Control Act requires that before a tobacco product may be introduced into the U.S. market, the new product must undergo pre-market review by the FDA and receive marketing authorization from the agency. If a product was already on the market as of Feb. 15, 2007, the product is grandfathered and does not need a pre-market application nor is FDA authorization required. For every tobacco product that entered the market after Feb. 15, 2007, one of two applications will be required. Either a Substantial Equivalence (SE) application that compares a new tobacco product to a similar one that is grandfathered or already has an SE approval order from the FDA, or a PMTA application is required for a new tobacco product that is not similar to a grandfathered product and was introduced into the market after Feb. 15, 2007. The deadline for filing these applications with the FDA 24

CSTORE DECISIONS • August 2021

was Sept. 9, 2020. Once a manufacturer files a SE or PMTA with the FDA, the agency follows a four-step review process. First, the FDA conducts a preliminary review of an application to see if everything is complete. Next, the agency files the application if all the scientific studies, evidence and other data accompany the application. Third, the FDA undertakes its substantive review of the application, which can take up to one year or through the deadline of Sept. 9, 2021. Fourth, the FDA issues an order authorizing or not authorizing the application. To authorize an application, the FDA needs to determine that the product “is appropriate for the protection of the public health.”

FDA PROGRESS On June 11, the FDA’s Office of Science held a live webinar titled “Deemed Product Review: A Conversation With the Center for Tobacco Products Office of Science.” The purpose of the webinar was to provide an

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FRONT END PMTA Update

update on, and information about, the agency’s scientific review of pre-market tobacco applications for “deemed products,” which include cigars, pipe tobacco, hookah tobacco and electronic cigarette/ nicotine vapor products. The main focus of the webinar was on the application intake process, application review progress and allocation of agency review resources. With the FDA required to finalize the review of all PMTAs by Sept. 9, 2021, and given the significant number of applications filed, the Office of Science stated that it is “striving to review as many applications as possible during this one-year period described in the court order that set the Sept. 9, (2020) application deadline” date, and that the FDA has the “discretion to defer enforcement action against particular products on a case-by-case basis.” According to the FDA website, there were 269 PMTAs filed between October 2019 and July 2020. Then, in August of 2020, one month before the Sept. 9, 2020, filing deadline, some 10,184 PMTAs were filed. During the first nine days of September last year, another 4,567 PMTAs were filed. This means that almost 15,000 PMTAs have been filed and are pending with the agency. The FDA has now published a list of filed and accepted PMTAs so that industry members know which products have had applications filed. The complete set of PMTA metrics is available here: https://www.fda.gov/media/150179/download. The FDA staff also said that “the likelihood of FDA reviewing all of the applications received by Sept. 9, 2021, is extremely low.” This means that if the application review process has not been concluded by Sept. 9, 2021, the FDA may use its discretion and extend the time to review PMTA applications on a case-by-case basis by deciding not to take enforcement action against manufacturers who timely filed PMTAs. The following graphic is from the FDA website, which reports that for the “acceptance” stage in the four-step application review process, applications covering the listed number of products by category have been “accepted” by the agency: 26

CSTORE DECISIONS • August 2021

In addition, the FDA reported on its website that it has issued “Refuse to Accept” letters to manufacturers for applications covering 59,229 electronic nicotine delivery system (ENDS) products (i.e., electronic cigarette/vapor products), five cigar products and 25 other kinds of tobacco products. Moreover, the FDA website shows that the agency issued “Refuse to File” letters to manufacturers for applications covering 3,628 ENDS products because necessary information was not included with the applications. Finally, “Filing” letters have been sent to manufacturers for applications covering 138,377 ENDS products, informing the manufacturers that their applications will be entering the third or “substantive review” stage of the review process. If a SE or PMTA application was not filed for a product and an application needed to be filed by Sept. 9, 2020, then the product is illegally on the market and must be removed from the market. The FDA continues to work through the large number of submitted applications; however, the agency will unlikely review all of the 15,000-plus applications by the Sept. 9, 2021, deadline. The agency may, however, at its discretion, extend the review time on a case-by-case basis and opt not to take any enforcement action. Industry members should regularly check the FDA website for additional information on the status of PMTA applications. Thomas Briant is the executive director for the National Association of Tobacco Outlets (NATO). NATO’s mission is to enhance the business interests of retailers that sell tobacco products, support the legislative and regulatory interests of members, and encourage the expansion of the retail tobacco segment in a responsible manner.

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For more than 20 years, NATO has been the leading trade organization working to protect all retailers that sell tobacco products from unfair taxation and overly restrictive legislation and regulations.

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 National network of trade associations

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COLONIAL GROUP CELEBRATES 100 YEARS With the fourth generation at the helm, Enmarket’s parent company reaches the century milestone and sets its sights on future growth. Erin Del Conte • Executive Editor

Colonial Group, the parent company of Savannah, Ga.-based Enmarket convenience stores, is celebrating its 100th anniversary. The company’s longevity is a testament to its ability to recognize and adapt to industry shifts across a century that has seen dynamic evolution in the convenience and petroleum industry. Today, Enmarket is growing through new builds and acquisitions, while remodeling existing locations. It currently operates 129 locations in Georgia, South Carolina and North Carolina, sells Enmarket-branded fuel and features 23 in-bay automatic car washes and one express tunnel wash. The chain is ﬁnalizing the latest iteration of its prototype store design, expanding its The Eatery proprietary foodservice program across its ﬂeet of stores and investing in technology — from a loyalty program that launched in 2020 to frictionless checkout and electric vehicle (EV) charging. Brett Giesick, president of Enmarket, pointed to entrepreneurial vision and spirit as the keys behind the long-term success of Colonial Group and its Enmarket convenience store division.

To Colonial Group President and CEO Christian Demere, the company’s “real magic” has always been its people, which includes generations of other families that have worked for the company over the years. He takes seriously the mission of sustaining the company culture.

“I believe our retail division is aligned with the culture of our parent company in that we take calculated risks, understand the need for ongoing investments of time and capital in our people and business,” Giesick said. “But most importantly, our mantra of ‘enriching life’ encourages us to do the right things for our team members and communities. What we do is for the longer-term betterment of all, not just shortterm results.” That entrepreneurial vision is led by Colonial Group President and CEO Christian Demere, who represents the fourth generation of the family business. “I feel humbled to have the privilege to be a part of such an incredible legacy,” said Christian Demere. When reflecting on the last 100 years, he noted his first thought is a deep sense of gratitude for the sacrifice and effort by not only the family, but also the dedicated employees that helped bring the company to where it stands today, which inspires in him a desire to put his all into growing the business and making it stronger. “While I think I am naturally a very driven person, I think the 100-year legacy that I am now a part of, and ultimately responsible for, is a huge factor in my drive and passion,” he said.

HISTORY IN THE MAKING

Colonial Group’s roots date back to 1921. Founder Raymond Demere had returned from World War I and saw an opportunity to supply fuel for vehicles that were now powered by internal combustion engines as opposed to horses. He purchased a 55-gallon barrel of oil and founded Savannah’s Raymond Demere first independent wholesale petroleum company, American Oil Co., on July 21, 1921. Two years later, he debuted his first American Oil Co. service station located on the corner of Drayton and Charlton in Savannah. Ten years after that, in

The company rebranded its convenience stores to “Enmark” in 1990, which stood for “energy marketing.” At the time, the existing stores featured a 200-square-foot kiosk model. 30

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Colonial Group

The third and fourth generations of family-owned Colonial Group leadership include Houstoun Demere, Savannah Yacht Center vice president; Robert Demere Jr., Colonial Group chairman of the board; and Christian Demere, Colonial Group president & CEO.

His son, the third generation of the family business, Robert Demere Jr., became president in 1986. The c-store chain, which at the time featured a 200-squarefoot kiosk model, was rebranded as Enmark in 1990, which stood 1933, Raymond Demere sold the name American for “energy marketing.” The Oil Co. to Standard Oil Co. of Indiana. He renamed rebrand included a prototype dethe company Colonial Oil and moved it to a 21-acre sign that measured 3,500-4,000 Robert Demere Sr. parcel of land on the Savannah River, which remains square feet, featuring a new look the company headquarters today. and colors, in an effort to grow In 1926, he hired Charles Jarrell, who had been an customer loyalty and position the chain as a leader in office manager with the National Cash Register Co. the gasoline retail market. Jarrell served as an officer and director of American From the 1990s to the 2000s, the brand changed Oil and Colonial Oil. When Raymond Demere passed with the times, transitioning away from a store model away in 1953, Jarrell took the helm as president, with based on fuel and tobacco sales, to one that centered a goal of providing a sense of continuity, while carfresh food, healthy snacks and beverage offerings. rying the company forward until the second generaWith this new in-store strategy in place, the tion of the family business obtained the experience company’s leadership decided the time was right needed to steer the company. That day came five to update the brand to better align with its modern years later in 1958, when the founder’s son, Robert product offering. In 2015, the company rebranded its Demere Sr., stepped into the role of president. Jarrell convenience stores to Enmarket, strategically keepcontinued to serve the company, including as chairing the word “Enmark” within the name to maintain man of the board, until he retired in 1974. brand awareness through the transition. Under Robert Demere Sr.’s leadership, the con“With the simple addition of two letters, we’ve venience store division, ‘Interstate Stations,’ was included the word ‘market’ within our name, and that founded in 1964. is more indicative of the type of stores we operate,” fourth-generation executive Houstoun Demere said at the time. Robert Demere Jr. also led the expansion of the Colonial Group beyond the c-stores, developing the business into one of America’s largest privately held companies with nine subsidiaries, which include Colonial Oil Industries Inc., Colonial Terminals Inc., Enmarket, Colonial Compliance Systems Inc., Colonial Energy Inc., Colonial Chemical Solutions Inc., Colonial Towing Inc., and Savannah Yacht Center and Aqua Smart Inc. Today, both of his sons, Christian and Houstoun, are continuing the company’s legacy as fourth-generation leaders. Robert In 2015, the company rebranded its convenience stores to Enmarket, Demere Jr. remains involved with the comstrategically keeping the word “Enmark” within the name to maintain pany as chairman of the board of directors. brand awareness through the transition. 32

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August 2021

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Colonial Group opened the Savannah Yacht Center, a superyacht facility, which was incorporated as an entity of Colonial Group in 2016. Houstoun Demere became vice president of business development for the new startup, which opened in 2017. And in 2018, Christian Demere took the helm of Colonial Group as president and CEO. EXPANDING ENMARKET

Industry veteran Brett Giesick joined Enmarket as president of the c-store division in 2017, after serving as chief retail officer of CEFCO convenience stores. As Enmarket looks toward the future, it is growing through new-to-industry (NTI) builds as well as acquisitions, with a goal to build between five to 10 NTI stores per year. To accommodate its growth, in 2019, Enmarket relocated the c-store division headquarters to the corner of Chatham Parkway and Highway 17 in Savannah, Ga., which includes two 23,000-square-foot buildings. The chain’s latest prototype design measures just under 6,000 square feet and debuted in March 2020 at 4318 Ogeechee Road in Savannah, next door to the chain’s headquarters. The new site featured the company’s first Marketwash+ — an 80-foot tunnel wash. At the time, Giesick noted, “We wanted a clean, modern design that accommodates the multiple roles of an Enmarket store — a fueling station, a deep convenience inventory, appealing and healthy prepared food options, and a modern, state-of-the-art car wash.” The chain debuted two additional new-to-industry sites in 2020, around Chatham County, Ga. — a

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Colonial Group

With the shift to the Enmarket branding, the chain announced its ‘The Eatery’ proprietary food program featuring fresh prepared foods, such as burritos, sandwiches, salads, rotisserie chicken and more, made to order and available via touchscreen ordering.

growing commercial area around U.S. Highway 17 and Chatham Parkway. In early 2021 it introduced its 128th location — a travel center in Pooler, Ga. — marking its fourth site in the west Chatham municipality. And in April, it introduced its 129th site in Jesup, Ga. All four locations are iterations of the modern prototype. Under Giesick’s leadership, Enmarket has more than doubled its store count and number of team members over the past four years. “Our top and bottom lines have dramatically improved, as have our internal processes,” Giesick said. “We have also re-imaged all of our stores into the awesome look we enjoy today and have improved our food and other product offerings. Our team has worked tirelessly to drive improvements in how we ap34

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August 2021

peal to our customers, and this continues today. “From a leadership perspective, most of the key leaders that predate me are still here, and I continue to be impressed with their talent and commitment,” he added. “Because of growth, we have augmented our leadership team with several new team members that support the company in various capacities.” For example, Enmarket has added “multiple layers” to its operations team to support the stores it has added through new builds and acquisitions over the past three to four years. “Our foodservice team has grown with new director-level positions and several operations and quality assurance roles. We’ve also added positions within the marketing, finance and IT departments,” Giesick said. Currently, Enmarket is finishing plans for a smaller version of the current prototype store. “The look of the store is consistent with the existing prototype, as are the store offerings inside,” Giesick said. “But we’ve trimmed out over 1,000 square feet, which helps take some cost out of the build, saves

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As Enmarket looks toward the future, it is growing through new-to-industry (NTI) builds as well as acquisitions, with a goal to build between five and 10 NTI stores per year.

construction time and yields a store that is more efficient to operate. These smaller and larger versions will be used site specifically, and we have several other modified designs for future needs.” FOODSERVICE EVOLUTION

In the early 2000s, the chain — then called Enmark — took its first steps into foodservice, adding the American sub sandwich quick-service restaurant (QSR) Blimpie to its Port Wentworth, Ga., location. In 2011, the company shifted to a focus on fried chicken and hot foods through the Krispy Krunchy Chicken brand. With the shift to the Enmarket branding, the chain announced its ‘The Eatery’ proprietary food program featuring fresh prepared foods, such as burritos, sandwiches, salads, rotisserie chicken and more, made to order and available via touchscreen ordering. Enmarket hired c-store foodservice veteran Ryan Krebs as its director of food and beverage at the start of 2020 to continue to grow its foodservice operation to the next level. Today, The Eatery features breakfast, lunch and dinner options, as well as Mooz frozen yogurt and Enmarket’s beanto-cup coffee. Grab-and-go items are prepared fresh daily in the stores and include items such as breakfast biscuit sandwiches, salads, hot and cold sandwiches, and fruit cups. Enmarket also operates 14 QSRs, including Subway, Larry’s Giant Subs and Baldinos Giant Jersey Subs, as well as fast-casual brand Fuzzy’s Taco Shop. “We are also focused on expanding our foodservice program to as many stores as possible via an ongoing current rollout,” Giesick said. 36

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August 2021

TECH SAVVY

The chain is also doubling down on technology. Enmarket launched a new loyalty program, Enjoy Rewards, in early 2020, through which customers can earn fuel discounts by purchasing gasoline, diesel or food and merchandise in-store. The loyalty program also includes club programs, such as for coffee and frozen beverages, where customers can get an item free after six purchases. Enmarket also relaunched its new-and-improved mobile app earlier this year. “Within the mobile app you’ll find technologies such as Skip Checkout, which allows customers to scan and pay for merchandise right from their phone,” Giesick noted. “Another new integration in the mobile app is cardless payment, both at the fuel dispenser and inside the store.” Today, all new builds feature self-checkout registers, and the chain plans to roll out self-checkout kiosks to existing legacy locations as well.

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Enmarket operates 129 locations in Georgia, South Carolina and North Carolina. Entrepreneurial vision and spirit have been the keys to the long-term success of Colonial Group and its Enmarket c-stores, according to Brett Giesick, president of Enmarket.

Enmarket is also delving into electricvehicle (EV) charging. Its first EV charging station was installed at a NTI Enmarket location in Pooler, Ga., a few years ago, and since then, EV chargers have been added to three other stores. “Each new site is evaluated as a potential site for EV,” Giesick said. “We are also assessing existing sites with Georgia Power to determine immediate and future viability at stores we currently operate.” Overall, Enmaket remains focused on servicing its customers and getting them in and out of the stores as quickly as possible with help from technology, Giesick said. “Time is the most precious resource any of us have, and that’s the value proposition we offer our customers,” he said. “So technology is a huge focus for us today as the primary source of time-saving solutions. This includes current initiatives like self-checkout, mobile checkout and mobile pay-at-the-pump. We are working on curbside pickup and delivery.” “Additionally, we are focused on how to continue to evolve how we serve our communities and team members in the best way possible as the business and culture change,” Giesick added. FUTURE VISION

As Colonial Group looks ahead to the next 100 years, it’s continuing to evaluate and adapt its operating practices for a new tomorrow. “While continued growth of (NTI stores) and smart acquisitions are important, continuing to develop a better box to operate within is just as critical,” Giesick said. “This encompasses everything from training to products, marketing, foodservice, technology, customer-facing initiatives, standards and many other internal processes that are ongoing, in an attempt to strengthen our operations within said box.” From a macro viewpoint, Christian Demere sees that the world is changing for the petroleum industry. “How quickly that change will occur, what it will look like and how exactly it impacts us are all still unknowns,” he said. When the company was founded, petroleum was

being introduced as “the lifeblood of our economy,” he said. “As a result, for most of Colonial’s history, petroleum was seen as a force of stability for the company.” But today, petroleum is no longer the defining element of Colonial’s business. “It’s just a big part of what we handle. Our core competencies today are really intermodal logistics and distribution — and being extremely nimble.” Eight of the nine subsidiaries that make up Colonial today involve logistics and distribution, while only three are solely dependent on logistics and distribution of petroleum products. “So we are not as petroleum-dependent as many people might think,” he said. “I see us continuing to leverage these competencies in other industries as we move forward as well as continue to develop new competencies where it makes sense.” Looking forward, Christian Demere expects the rate of change impacting the industry to accelerate, and he’s continuing to craft a dynamic culture that embraces transformation. To him, the “real magic” at Colonial has always been its people, which includes generations of other families that have worked for the company over the years. As a result, he takes the mission of sustaining the company culture seriously, even if that means prioritizing it over rapid growth at times. “The bottom line in all of this is that we’ve got to stay nimble. That quality is what has allowed us to endure and pivot for the first 100 years, and it will be critical if we want to be around for another 100 years,” Christian Demere said. He pointed to the shifts in the c-store industry over the last century, particularly the transition from being predominantly fuel-driven to foodservice-centric. “We’re in the midst of another potential paradigm shift towards EVs. So hopefully we’ll be able to adapt yet again,” Christian Demere said. “And that’s really business in general — constant destruction of equilibriums and being able to foresee and/or react quickly as needed.” CSD

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August 2021 • CSTORE DECISIONS

Foodservice | Dayparts

FOODSERVICE MOVES FORWARD As the economy reopens, c-stores are focusing on menu innovation across breakfast, lunch and dinner, while keeping operational challenges top of mind. Isabelle Gustafson • Associate Editor

The pandemic has impacted each daypart differently, and while c-stores remained open, visits dipped as consumers stayed home. As the country reopens, visits are up, but further recovery will depend on consumers returning to workplaces and schools this fall. 38

CSTORE DECISIONS •

August 2021

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Foodservice | Dayparts

GetGo Café+Market is promoting its barbecue offers throughout the summer, including its new Uncle Jammy’s BBQ Chicken sandwich (left). Come fall, its focus will shift to LTO subs like its Thanksgiving-themed sub, The Pilgrim (above).

CSTORE DECISIONS •

August 2021

“

Guest behavior’s really hard to isolate right now because there are so many moving variables. Even by city, or even part of a city, we’re seeing sporadic normalization.

“

“Guest behavior’s really hard to isolate right now because there are so many moving variables,” said Brian Scantland, vice president, fresh food operations and business planning & analysis for Thorntons. “Even by city, or even part of a city, we’re seeing sporadic normalization.” The Louisville, Ky.-based chain, which owns and operates 208 locations across six states, added 60 kitchens to stores mid-pandemic. The morning daypart in particular, Scantland noted, is recovering differently at almost every site. At Pittsburgh-based GetGo Café+Market, “breakfast has slowly started to come back,” said GetGo Vice President & Chief Merchant Jon Cox, “and we are hopeful that in September, when kids go back to school, we will start to get some of the commuter business back.” For now, lunch continues to be the busiest daypart, he said, and the evening daypart holds the most growth potential. “We have seen business shift more to the afternoon and early evening,” Cox said, “and with

consumers wanting to make fewer trips, we believe there is potential to grow that daypart through offering larger sizes for dinner, meal deals and combos, ready-to-heat meals and different items for customers to either eat in-store or take home and heat.” In the c-store space, GetGo was an early adopter of third-party delivery through its partnership with DoorDash, which helps contribute to dinner daypart sales. “We usually see larger basket sizes through customers that order on the app, and most of it is later in the day when we may traditionally be slower in-store,” Cox said. “Most major restaurant chains use at least one delivery app, and I believe that this business will continue to grow as customers are looking for new ways to save time.”

— Thorntons Vice President of Fresh Food Operations and Business Planning & Analysis Brian Scantland

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30 YEARS OF PARTNERSHIPS & 8,000 STORES CONVERSATIONS WITH HUNT BROTHERS® PIZZA C-STORE OWNERS

Hunt Brothers® Pizza began as a family business founded by four brothers. Today, under the leadership of CEO Scott Hunt, the second Hunt family generation (Bryan Meng and Britt, Erin, Adam and Frank Hunt) keeps the original values going strong. This year, the company is celebrating thirty years of growth in the convenience store industry and reflecting on how the four Hunt brothers laid the foundation for a simple branded pizza program built on serving c-store owners well.

“The Hunt brothers—Don, Jim, Lonnie and Charlie—set out with a focus to help others be successful,” Hunt Brothers Pizza CEO Scott Hunt says. “With trial and error they ended up in rural convenience stores, starting very humbly without much money.” Designing their pizza programs with c-stores in mind, Hunt Brothers Pizza approaches their program with the goal of making c-stores more valuable. “We help the stores understand their profitability. If they are successful, we are successful,” adds Bryan Meng, Hunt Brothers Pizza COO. Having grown to 8,000 stores nationwide, Hunt Brothers Pizza recognizes that any larger growth is a result of strong c-store partnerships. C-store owners across the country have seen results from the way Hunt Brothers Pizza works to be a blessing to them, including financial profits, community relationships and much more. Let’s explore what sets Hunt Brothers Pizza apart by connecting with the true heroes of the business—the c-store owners themselves.

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C-Store: Drop-In Food Stores Owner: Lee Harrill Location: Forest City, North Carolina

Ali’s family began working in the c-store industry in Texas and grew to love the community-centered nature of the business. “Standing there as a cashier in the store, you will very soon know half of the community and they’ll know you by name,” he says.

Working on the wholesale side of the convenience store business since 1981, Harrill and his son now own six c-stores with four that serve Hunt Brothers Pizza. It was the pizza itself that first drew Harrill in.

“I was looking for a pizza program, and I wanted something all-American,” he reflects. After connecting with a Hunt Brothers Pizza team member by happenstance, “he came back and baked us some pizza, and I knew that was it. If you liked hamburgers and hot dogs in America, you’d like this pizza.” The consistent All Toppings No Extra Charge® promotion stands out to Harrill as a key to success. “If you go to the pizza place down the road, every item you add will be an extra dollar,” he says. “The ability to make the pizzas special— whatever anyone wants—for one price is great.” Harrill also enjoys the way Hunt Brothers Pizza spices up their offerings with Limited Time Offers (LTOs). These offerings in addition to topping flexibility for one price brings in customers and keeps them as repeat business. “People are looking for something quick,” he says, “and with Hunt Brothers Pizza’s quality, they know it’s going to be good.” From the beginning keeping it simple was the name of the game, which continues to help c-store owners like Harrill drive success.

C-store owner Ali collaborates with a Hunt Brothers Pizza representative. Courtesy: Ramsey Ali

After partnering with Hunt Brothers Pizza in 2007, Ali found the branded pizza program’s design to be crucial to his company’s success. “You don’t need to include more employees or extra hours to make the pizzas,” he says. “And it’s very cost effective; when cashiers have down time, they can prep and put out the pizza.” This efficiency helps keep Ali’s business running smoothly while turning a profit. “As a convenience store we don’t have many people behind the register, so we want to make sure we have programs that do not overwhelm our cashiers,” he says. “Hunt Brothers Pizza is one of the best food programs for convenience stores,” Ali adds. “With minimum labor involvement and a small footprint, we can provide hot fresh pizza and wings to our customers in a few minutes.” By including a branded pizza program with proven success in his store Ali can be a one-stop shop for his consumers, serving the community he loves and making them part of the family. C-store owner Harrill enjoys relationships built over time working with Hunt Brothers Pizza. Courtesy: Lee Harrill

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has been a pillar for Hunt Brothers Pizza for years. “We get to know our community, support the local schools and first responder organizations, and we offer many locally made items,” Gunter says. “Our managers and cashiers know the regular customers by name.” “We have removed nearly all other food options from our stores because none are as easy to manage or as profitable as Hunt Brothers Pizza,” Gunter recalls. This reliability, combined with a true value placed on supporting each store’s community engagement efforts, makes the Hunt Brothers Pizza branded program a great fit.

ADAPTABILITY DURING TOUGH TIMES A small footprint makes it easy to incorporate a pizza shoppe into almost any c-store. Courtesy: Mike Gunter

RELIABLE FOODSERVICE MAKES LOCAL IMPACT C-Store: Gunter Oil Owner: Mike Gunter Location: Birmingham, Alabama and Surrounding Areas Gunter has been in the convenience store business since 1991, beginning with one location in downtown Birmingham and now operating throughout the greater Birmingham area. Hunt Brothers Pizza has been a critical component of his success for most of that time with locations in ten stores (with plans to add another by the end of the year). Uniquely, Hunt Brothers Pizza began in rural areas that could be considered food deserts and that trend continues today. “In a few of our locations, Hunt Brothers Pizza is the only real foodservice in the area,” Gunter says. “This helps us build strong ties as we have customers who come in weekly and even daily to grab breakfast, lunch or dinner. We build the relationships that are important for a locally owned and operated store.” In addition to providing hot food options in areas where those are few and far between, involvement in the community

C-Store: Jet Food Stores Director of Food Operations: Matthew Turner Location: 54 Locations Across Georgia Purchased as a new business venture, Jet Food Stores began as a 19-store chain and now operates at over 50 locations. “Drawing customers to our quality foodservice experience has been key to growing existing locations and entering new markets,” Turner says. For Turner, the COVID-19 pandemic proved to be a unique time in which the company’s care for its customers shone through, from keeping operations as consistent as possible to continuing as a reliable source for a great meal.

“Offering quality foodservice in towns that do not have much available to them has been great,” he says. “Our customers had a fresh, local option any time of day, especially during the COVID-19 pandemic.” “The growth of the take-home business during COVID-19 was tremendous, and Hunt Brothers Pizza is one of the best programs to have in place for takeout,” he adds. “We had the chance to grow the evening daypart in stores that do not typically offer evening foodservice.” Hunt Brothers Pizza also partnered with Jet to thank local law enforcement and healthcare workers in several communities. “We gave away free Hunk A Pizza® and whole pizzas as a thank you to those who served our communities tirelessly during the pandemic,” Turner recalls. “We look forward to impacting more communities in the future in the same way.”

Director of Food Operations Turner with his team. Courtesy: Matthew Turner

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PROGRESSING WITH THE INDUSTRY WHILE MAINTAINING GUIDING PRINCIPLES C-Store: Friendly Express Owner: Gary Sellers Location: 35 Locations Across South Georgia Celebrating its 32nd year in business, Friendly Express has partnered with Hunt Brothers Pizza since 1999 with its program in place in 19 locations. Sellers takes pride in maintaining a family-friendly atmosphere in his stores, which makes Hunt Brothers Pizza an ideal fit based on their dedication to family values and guiding principles. With a focus on on-site foodservice, “we strive to say ahead of the industry and focus on technology,” Sellers says. Partnering with a unique branded pizza program that continually adapts to the industry is key for Sellers, who believes that “foodservice will not only become a staple category in our industry, but it’ll be difficult to exist without it very soon.” This belief makes partnering with the industry’s leading program critical for keeping up with the latest trends and concerns. For example, “Hunt Brothers Pizza is the perfect complement to a full-scale hot and cold deli because it focuses on the evening daypart and can also be the main program in smaller-scale foodservice programs,” Sellers says. This flexibility represents an innovative approach to c-store foodservice founded in making the program easy to implement so it makes an impact fast.

UNPARALLELED SERVICE AND SUPPORT Guided by their values and principles, Hunt Brothers Pizza has grown by focusing on being a blessing to each store. One main way this comes to life is through Account Managers who provide direct store delivery.

“Besides being great support on a daily basis, our Account Managers have always risen to the occasion,” says Ali, “even if they had to drive down to deliver some extra pizzas or come on Sunday to ﬁx equipment.” “The Hunt Brothers team in our area runs a great, consistent operation and has been dedicated to growing our program,” adds Turner. “They assist with promotions, community engagement and problem solving when we run into issues.”

C-stores feature Hunk A Pizza® options as well as create-your-own whole pizzas. Courtesy: Gary Sellers

LOOKING AHEAD TO YEARS OF BUILDING PARTNERSHIPS Without strong partnerships with customers, Hunt Brothers Pizza couldn’t have enjoyed the 30 years of growth we celebrate today. The company puts their customers first because without customer dedication, growth would be hard to come by. “Something we’ve learned is to keep it simple,” Hunt says. “We understand convenience stores, and our products haven’t changed over time.” From the moment the original Hunt brothers wanted to do things differently, an exciting new opportunity for c-store owners came to life. With 8,000 stores actively benefiting from Hunt Brothers Pizza’s leadership in the industry many more are sure to follow, promoting the Hunt brothers’ original vision of being a blessing for years to come.

“Their support and help has certainly aided in the success we have enjoyed,” Sellers echoes. “They have been a real blessing to work with.” For Harrill, it’s simple: “They look after us,” he says. “They’ll do anything for you.”

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Louisiana-based Complete Stop 12’s rural stores see a lot of Hunt Brothers Pizza whole pie orders, especially in the evenings.

Down south, Lafayette, La.-based Complete Stop 12, which operates about 40 stores in Louisiana, offers a range of foodservice options, including Cajun Chicken Express and Zeus, a Greek and Lebanese program, as well as Hunt Brothers, a pizza brand celebrating its 30th year in business this month. Hunt Brothers’ limited-time offers (LTOs) are super successful at Complete Stop 12 stores — both slices and whole pies — said Complete Stop 12 Owner Ramsey Ali. But it also depends on where the stores are located. “The slices will do good in a city area, and in a rural area, we do get a lot of whole pizza orders,” Ali said. “With the stores that (sell more) slices, lunch is busier, but in rural areas, where (we sell a lot of) whole pizzas, evening and dinnertime gets busy.” UNCHARTED TERRITORY

Complete Stop 12’s partnership with Hunt Brothers is a “win-win,” said Ali. It complements the chain’s other foodservice offers but also acts as a great standalone program because of the minimal amount of labor needed. This is proving more important now than ever, as the economy opening back up has led to staffing and supply challenges for retailers nationwide. “The spring and summer season has been challenging for developing new foodservice offerings,” said GetGo’s Cox. “Supplier issues as well as staffing have presented us with a challenge of just running our base business effectively.” For now, GetGo’s focusing on being creative with new sauces and seasonings to add excitement to the existing menu. And it’s promoting its “Summer of BBQ” offers, which includes pulled pork, chicken and brisket. Come fall, GetGo’s focus will shift to LTO subs — some new and some repeats based on past successes. “In grab and go,” Cox said, “we are working on our expanded market concept that we will begin to pilot in the fall with enhanced grab-and-go items, including ready-to-eat meals, snacks and cooked proteins.” Thorntons, too, is focused on tightening its product offering so it’s simple on operations and guests can depend on it, Scantland said.

Following the success of its BurgerRito LTO last year, Thorntons launched a new breakfast item at the start of the summer season — the Sunrise Sampler — a breakfast sandwich on a french toast carrier with egg, sausage, ham, four slices of bacon and cheese. Within two days, Scantland said, it was the No. 1 performing item out of the kitchen. “It was expected to be an LTO. But we will serve it until the guests tell us not to,” he said, “With the momentum and the uniqueness of that item to our lineup, it has a very good chance of becoming a permanent item.” Ultimately, though, it’s difficult to predict the future, Scantland said. After all, we’re in uncharted territory. “We’re going to control what we can control,” he said, “and that’s our ability to serve great-tasting food and to make it easy on our operators and our supply partners.” CSD

fast facts: • As the economy reopens, c-stores report staffing and supply chain challenges. • Creativity when it comes to new menu items or limited-time offers enables c-stores to balance innovation with simplifying operations.

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August 2021 • CSTORE DECISIONS

Foodservice | Chef’s Corner

TXB

Is Putting Foodservice First

The company formerly known as Kwik Chek is working to transition all of its sites to the TXB brand while actively fighting the “gas station food” stigma by focusing on fresh, made-from-scratch foodservice offers that go well beyond traditional c-store fare.

Brandon Frampton, TXB VP of Foodservice Operations

Isabelle Gustafson • Associate Editor Spicewood, Texas-based Texas Born (TXB), about the new brand and why foodservice is its with more than 47 stores in Texas and Oklahoma, “primary focus.” began its transition from the Kwik Chek brand CStore Decisions (CSD): In what ways has TXB’s mid-pandemic and is working to update each of foodservice offer changed since converting from its sites, while also building new-to-industry stores. the Kwik Chek brand? What really sets this company apart is its deep Brandon Frampton (BF): We have many excellent commitment to quality foodservice, with a focus new food offerings, including our Texas Scorpion on freshness and local products. Bites made with spicy jalapeños, perfectly fried TXB Vice President of Foodservice Operations shrimp tacos and TXB Habanero Queso. While Brandon Frampton spoke with CStore Decisions standout food offerings have always been a priority, 42

CSTORE DECISIONS •

August 2021

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Foodservice | Chef’s Corner

with the TXB brand we are stepping it up from traditional cstore foods and focusing on fresh, made-from-scratch offerings that are restaurant-quality. For example, our steak strips are grilled fresh throughout the day, and we offer other fresh items like jumbo marinated tenders, blanched vegetables and our signature handmade salsa, to name a few. We are even offering artisan products like fine chocolates, gourmet cheeses, salamis and wine. Our products and ingredients are locally sourced in Texas when possible, and all our foods are non-GMO. In terms of overall quality, I like to say Kwik Chek was 2.0, but TXB is 5.0. CSD: What are today’s consumers looking for from convenience foodservice? BF: These days, consumers are not only looking for convenience — they want quality, fresh ingredients in a clean, sanitary environment. That’s why TXB is installing hand-washing stations near the foodservice area for our guests in all of our new locations, allowing them to wash their hands before they shop without making a trip to the restroom, which works to decrease the spread of germs. We see more consumers looking to c-stores for regular meals, not just snacks while on a road trip, and they’re not willing to sacrifice their fresh, healthy options they’re used to at home. We’ve all heard the negative expression “gas station food.” At TXB, we are actively fighting this stereotype by having foodservice as our primary focus. We are constantly working to enhance the quality of our offerings for our guests, and that’s why we proudly offer a wide variety of healthy options, including takehome salad kits, veggies and fresh fruit, including blueberries, raspberries, grapes, oranges and many more. By not offering traditional gas station foods, we are catering to consumers’ wants. We also call our stores “markets” now to really drill the idea that we aren’t a typical gas station. CSD: Which daypart is TXB’s busiest, and which holds the most growth potential? BF: Breakfast has always been strong for the convenience channel, and (that) rings true for TXB. We will continue to grow breakfast at a solid clip but feel the growth potential around the lunch daypart will yield the most gains. First, with our menu-consolidation strategy centering on 44

CSTORE DECISIONS •

August 2021

combos and ‘two-fers,’ this allows us to grow guest-check while providing value to our guests. Second, our packaging and portability now allows our guests to comfortably eat in their car, home, job site or office. Our open-faced taco combo meals have become a favorite with our guests based on the great taste and the portability. CSD: What are some must-have pieces or types of equipment to make c-store foodservice successful in your opinion, and why? BF: Great question! We feel people make foodservice-buying decisions with their eyes. Therefore, the theater is a crucial piece of the experience, and we feel the food-line display case is the centerpiece. This is where we display our fresh fajitas, jumbo chicken tenders and scorpion bites. Second, the proper flat-top grill is another must-have piece. This allows cooking conditions to be optimal, providing a quality product, all while in the line-of-sight of our guest — again, the theater. Lastly, but certainly not least, always purchase quality refrigeration/freezer equipment. This equipment provides the safety component and holds very expensive product that will be lost with a catastrophic failure. CSD: What’s ahead for TXB’s foodservice? BF: We’re exploring mobile ordering and contactless payment as tools for improved foodservice. We are also looking into curbside, home delivery, ordering online and other forms of contactless payment, so guests can enjoy our fresh food offerings however they choose. We are excited to explore these payment options further, as it makes the guest’s experience easy and simple. I believe the future looks bright for foodservice in the convenience field. I think companies are finally starting to take it seriously, and I cannot wait to see what the future brings! CSD

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Category Management | Vape & Cigars

OTPs Brace

More Change

for

C-store retailers face an unpredictable regulatory landscape for vape and cigars as they await PMTA decisions and flavor ban regulations.

Anne Baye Ericksen • Contributing Editor

Tobacco category managers have gotten used to recalculating vape and e-cigarette planograms with each new regulation issued, be it city ordinance or federal mandate. Now, the other tobacco product (OTP) segment could undergo yet another makeover when the Food and Drug Administration (FDA) releases its decisions on pre-market tobacco applications (PMTAs). 48

CSTORE DECISIONS •

August 2021

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Category Management | Vape & Cigars

OTP Gains and Losses Price differences give electronic smoking devices (ESDs) a financial advantage over cigars; however, cigars outpace ESDs in unit sales. Total U.S. Convenience Stores

Cigars

Electronic Smoking Devices

52-Week Dollar Sales (ending June 13, 2021)

$3.91 B

$5.36 B

6.4%

12.4%

2.38 B

410 M

1-Year % Change

-1.0%

18.0%

Price Per Unit

$1.64

$13.08

1-Year % Change 52-Week Unit Sales

Source: IRI Market Advantage, Total US Conv. Ending June 13, 2021; received July 7, 2021

More than 6 million PMTAs were accepted, and the agency’s 12-month deadline to decide whether a product can remain available for retail sale or must be pulled from shelves once and for all is fast approaching. “At a recent House hearing, Acting FDA Commissioner Janet Woodcock pledged the FDA would make every effort to conclude review of the PMTAs from the top five vaping companies by the fall deadline,” said Gregory Conley, president of the American Vaping Association. “The FDA does not exactly have the best track record on keeping to their pledges, but it seems likely that decisions will be made on, at minimum, the tobacco and menthol varieties of Juul, Vuse, NJOY, etc., by September.” In the meantime, vape sales keep generating encouraging numbers. IRI data for U.S. convenience stores shows dollar and unit sales for electronic smoking devices each climbed approximately 14% for the four weeks ending June 13. A 12-week review revealed a gain of 16.3% in dollar sales and 18.6% in unit sales. “From where we were a year ago to now, I would guess we’re selling at least 10 times 50

CSTORE DECISIONS •

August 2021

more in vape products, with brands like Vuse, Posh and Excel,” said John Archer, owner of Shell Food Mart in Hinsdale, Ill. MIXED MESSAGES FOR CIGARS

Overall, cigars started the year on a strong footing, too. According to the National Association of Convenience Stores (NACS) State of the Industry report, the cigar market share of OTPs grew by nearly two points between 2019 and 2020. “In our market, cigars are a bigger seller than vape or e-cigarettes. While there seems to be more advertising dedicated to the vape category, and we have seen an increase in these sales over the past few years, cigars still are a better seller,” said Nathan Arnold, director of marketing for Englefield Inc. The familyowned company runs 119 Duchess c-stores throughout Ohio and West Virginia. “Cigars are growing because manufacturers seem to slowly be catching up on the production side, so we actually have product to sell,” added Jesse Dix, category manager for Dandy, which operates 67 locations in New York and Pennsylvania.

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Category Management | Vape & Cigars

CSTORE DECISIONS •

August 2021

fast facts: • Twelve-week review of electronic smoking devices reveals gains of 16.3% in dollar sales and 18.6% in unit sales, per IRI. • Cigars boosted market share by nearly two points between 2019 and 2020, per the NACS State of the Industry report.

However, enthusiasm may be waning. IRI data indicates cigar dollar sales dropped 6.9% for the four weeks ending June 13, 2021, and lost 13.4% in unit sales. And the 12-week review showed a loss of 3.4% in dollar sales and 10.8% in unit sales. Another concern for the industry is the FDA’s intent to institute a national ban on all flavors of mass-produced cigars as well as menthol cigarettes. FDA’s Woodcock publicly stated the regulatory process, including a period for public comments, would begin “within the next year.” “It would definitely hurt our sales since we do sell quite a bit of flavored cigars; customers like their options,” said Dix. “I guess it depends how far the final ruling goes, especially if they even ban flavors similar to the original Swisher Sweet, which does have a sweet flavor profile.” Could the looming regulation prompt tobacco category managers to buff up the premium cigar section of back bars because typically they’re exempt from tobacco restrictions, including PMTA and substantial equivalence mandates? “We’d have to test it because a number of our stores are in rural communities, and I’m not sure how much people would be willing to spend on premiums,” said Doug Galli, vice president and general manager for Reid Stores and Crosby’s, which operates more than 80 sites in New York and Pennsylvania.

“Over the years, we have tested the premium cigar category. Most recently, in late 2020, we introduced this at our new prototype store to test the market. While it’s early in the test, we do see that few customers are trading up from their original purchase to the more premium,” Arnold said. At the same time, he noted that consumers for other OTPs are adjusting to the shifting product offerings as a result of legislative restrictions. “It appears customers flex with these rulings, too,” said Arnold. “Instead of purchasing their normal item, their behavior changes, and they start purchasing something new.” CSD

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Category Management | Beverage

for Boosting Summer

Beverage Sales With new products continually hitting the market, cooler and storage space at a premium and supply disruptions limiting shipment sizes, c-stores need to satisfy the wide-ranging palates of thirsty customers. Thomas Mulloy • Senior Editor

Summer means hot weather and thirsty customers looking to cool down and enjoy the season. It’s prime time to move non-alcoholic beverages while those seasonal customers are in the c-store. These are our top tips for boosting summer beverage sales. 1. STOCK VARIETY

Today’s customers want options. To position your store as a destination for non-alcoholic beverages, ensuring a strong variety of beverages is key. “The biggest thing we’ve been doing in the stores is basically expanding our variety,” said Brent Mouton, president of Louisiana-based Hit-n-Run’s seven store chain. “Whether that’s extending the walk-in cooler or bringing in additional coolers, just to get a better variety of product out there, that’s worked well for us.” 54

CSTORE DECISIONS •

August 2021

2. USE DISCOUNTS & PROMOTIONS

Discounts have always been a proven way to accelerate sales, whether introducing your own discounts or partnering with beverage makers on promotions. Afterall, vendors want to move product as much as you do. “They’re doing two-fers mostly,” Mouton said of the beverage vendors he works with. “And then a mix of hot prices, where (the vendors) lower the cost a little, and we lower the retail. Each of us makes a little less, but it’s a reward for the customer.” Joseph Bickham, president of Fuel City, with seven stores in the Dallas-Ft. Worth Metroplex, is taking a similar approach at his locations. “The most effective, and the things that we’ve done most consistently, are running promotions for energy drinks and other beverages, doing two-fer and three-fer deals,” Bickham said. Fuel City will cross-promote beverages with food and other items to give the consumer a nudge toward increasing their basket ring.

cstoredecisions.com

Category Management | Beverage

Beverage Sales Flowing Upward in Q2

Overall, all non-alcoholic packaged beverage Q2 dollar sales are up 24% vs. Q2 2020, with good news across the board. Soft drinks continue to garner the highest share, though other beverage segments are gaining. All categories are growing double digits, led by energy beverages, sport drinks and value-add water. The most purchased categories that piggyback on one or more beverage items are cigarettes, candy and potato chips. (Note: ‘% of times purchased only within category’ metric identifies the amount of transaction that only contained items within the segment.)

Category

$ % Chg

$ Shr of Category

Chg

Unit % Chg

Units Per Store Per Week Chg

% of Times Purchased Only Within Category

Top Purchase #1

Top Purchase #2

Top Purchase #3

Soft Drinks

11.5%

29.6

-3.3

7.8%

9.9

32.7%

Cigarettes

Fruit Drinks

Confection

Energy Beverages

26.8%

19.0

0.4

22.5%

11.4

36.6%

Cigarettes

Soft Drinks

Fruit Drinks

22.7%

14.0

-0.2

18.3%

10.6

27.0%

Soft Drinks

Confection

Potato Chip

Sport Drinks

43.0%

8.2

1.1

36.8%

10.6

25.7%

Soft Drinks

Confection

Energy Beverages

Water

43.6%

5.9

0.8

42.3%

9.6

31.0%

Soft Drinks

Fruit Drinks

Sport Drinks

Fruit Juice

23.2%

4.5

0.0

25.3%

3.4

26.9%

Soft Drinks

Fruit Drinks

Confection

Value-Add Water

62.4%

4.3

1.0

53.8%

7.9

26.9%

Soft Drinks

Fruit Drinks

Confection

Liquid Tea

26.5%

4.2

0.1

21.5%

5.1

26.3%

Soft Drinks

Fruit Drinks

Cigarettes

RTD Coffee

42.1%

2.7

0.3

36.4%

2.7

26.5%

Cigarettes

Soft Drinks

Energy Beverages

A/O

20.5%

7.6

-0.2

19.6%

0.5

28.0%

Total Non-Alcoholic Packaged Beverages

24.1%

Cigarettes

Confection

Potato Chip

19.7%

Source: National Retail Solutions (NRS) scan data of 10,250 stores selling non-alcoholic beverages. All change mesasures are same store sales (6,120 stores) 4/1/21 - 7/1/21 vs 4/1/20 - 7/1/20.

3. ENCOURAGE SAMPLING

Sampling products is another way to entice customers to buy. When a vendor is looking to promote a new product, Mouton asks for a couple of extra cases to use for samples so customers can try the product and hopefully like it enough to buy it. “That also seems to work because a lot of times some people are just set in their ways,” Mouton explained. “They’re not going to try anything new. They know what they like. It gives that customer an opportunity, if you will, without having to pay anything, to try new things.” Hit-n-Run will maximize the opportunity by combining the free product with customer appreciation days and even arrange to have a vendor representative set up a tasting table and give product away. 4. MAKE SIGNAGE STRATEGIC

Signage is an essential tool in marketing to customers. Don’t hesitate to ask beverage reps to provide promotional signs and displays. Vendors are usually eager to provide materials to help move product. “At least, the vendors that we deal with here locally, any support that we need, whether its indoor signage, outdoor signage, whatever, they don’t tell us no,” Mouton said. 56

CSTORE DECISIONS •

August 2021

5. VALUE YOUR SPACE

The most important space in the store for summer sales is the cooler. But with so many varieties of beverages and new products continually hitting the market, the challenge is finding the right mix. “Typically, when you bring in something new, something’s got to go,” Mouton said. “You can’t just keep ploughing new stuff into the cooler.” Many new products are made by the same companies who supply the tried-and-true movers. When something that isn’t moving is taking space from those solid sellers, the vendor is losing sales, too. Re-evaluating the product mix regularly is crucial. Fuel City has had to get creative in finding storage for backstock, especially in light of supply disruptions, Bickham said. One solution has been to rent a trailer for use as a temporary stock room. Fuel City put it at a central location and used it to supply stores running out of fast-moving product. “Right now, during this summer and with everything going on,” Bickham said, “I think that’s one of the biggest challenges — making sure that we keep product on the shelf.” CSD

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Technology Column | Data Security

WHAT THE RANSOMWARE ATTACKS MEAN FOR CONVENIENCE RETAILERS With ransomware attacks on the rise, c-store retailers need to stay vigilant and improve data security. Frank Beard • Director of Safe Shop and Special Projects

There’s no denying it: Ransomware is a growing industry. Ransomware attacks have increased 41% since the beginning of 2021, and 93% year over year since last June per cybersecurity firm Check Point. The list of victims includes not only the Colonial Pipeline, but also prominent local businesses such as a community college in my hometown, Des Moines, Iowa. In a recent and particularly notable attack, a Russian ransomware group reportedly exploited vulnerabilities in IT management software company Kaseya’s VSA remote management platform and used it to propagate ransomware to their customers. The attack raised questions about what happens when a company’s trusted vendors are compromised. More than 1,000 businesses and more than 1 million computers were affected, The Verge reported. “This is the new form of modern warfare,” said Gray Taylor, executive director of Conexxus, the member-driven technology organization dedicated to the development and implementation of stan58

CSTORE DECISIONS •

August 2021

dards, technologies innovation and advocacy for the c-store and petroleum market. “The takeaway is we as an industry, we as an economy, have a poor understanding of the risk assessment — the nuts and bolts — of data security.” HISTORY OF RANSOMWARE

If you grew up on the internet like me in the 1990s and early 2000s, then you’re no stranger to the concept of ransomware. I remember a fear that lax security or a visit to a sketchy website might lead to a locked computer and demands for payment — or at least the threats of such actions. The AIDS Trojan is generally credited as the first ransomware attack. It was released back in 1989 through floppy disks, and targets were directed to send $189 dollars to a P.O. box in Panama to restore access to their systems. Ransomware has, of course, evolved considerably since then. The early 2000s witnessed the growth of ransomware with notable examples such as GPCoder and Trojan.Cryzip — the former using weak encryption and being spread by email attachments claiming

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Technology Column | Data Security

to be job applications. Even in those days, much of the ransomware was developed in Russia, by Russian organized criminals and aimed at Russian victims in nearby countries. Everything began to change in the early 2010s with the emergence of cryptocurrencies. This opened the doors for quick, convenient, and in some cases, untraceable methods of payments — all outside the structure of traditional finance. The real inflection point for growth was the CryptoLocker attack in 2013, according to cybersecurity firm CrowdStrike. It not only used Bitcoin transactions, but also stronger encryption. Even if CryptoLocker was removed, affected files remained encrypted in a way that was considered unfeasible to break. But while CryptoLocker was a “spray and pray” attack aimed at securing low sums of around $300 from individual victims, the ransomware industry began to shift its attention to larger organizations including small businesses. It just made economic sense. On average, companies can afford to pay more than individuals. WHAT’S AN ORGANIZATION TO DO?

While prescriptive recommendations on how retailers can protect themselves would require more than a few subsequent articles, Matt Beale was quick to offer a few tips. As the cybersecurity partner at W. Capra, he’s no stranger to this topic. Consider email security. Nearly every email system supports putting headers on messages sent from outside the company, and that can help employees identify if they’re receiving a spoofing message from someone pretending to be a colleague or boss. Beale also recommended deploying internal phishing exercises. For example, a company might direct their IT teams to use phishing products and see who falls for them. Those employees can then be targeted for retraining. 60

CSTORE DECISIONS •

August 2021

However, Beale is quick to caution that sometimes senior leadership may be ones who need additional training or curtailed access. “Leaders often think they need more access than the average individual, but they actually need less,” explained Beale. “If you’re a malicious actor targeting a specific password, you’re going for the most senior people in the organization. Sometimes they’re not as protective as the up-and-comers are.” THE TROLL PLAYBOOK

Nearly 10 years ago, I received a frantic call from a family member. A firm called Prenda Law had sent an aggressive letter demanding an out-of-court settlement for supposedly downloading copyrighted pornography. This was of course nonsense since they never downloaded anything. I told them it was a scam. Fortunately, the entire debacle resulted in prison for the law firm’s founder, John Steele, in 2017. But many other victims did send checks. From 2010 to 2013, Prenda Law netted more than $6 million from these tactics. Meanwhile, industry experts note that malicious actors are now using the fear of ransomware to deploy similar tactics. This only serves to reinforce the importance of making data security a top organizational priority. Even with fake threats, the emotional and financial costs can be just as bad.

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Technology | Cryptocurrency

What Do C-Stores Need to Know About

Cryptocurrency? While the cryptocurrency market is still immature, c-store retailers should have it on their radar. Erin Del Conte • Executive Editor

Cryptocurrency has been making headlines this year due to volatile swings in stock prices, moves and comments by big-name investors, particularly Elon Musk, and news in July that the Federal Reserve is “exploring the implications of fastevolving technology for digital payments” and plans to issue a report later this year. Visa reported that more than $1 billion was spent on crypto-linked Visa cards in the first half of 2021. In May, Altoona, Pa.-based Sheetz, which operates more than 600 stores in six states, announced it was set to allow digital currency payments using the Flexa network, meaning that customers would be able to purchase items in-store or fill up at the pump using cryptocurrencies, such as Bitcoin, Ethereum, Litecoin, Dogecoin and more. Sheetz plans to begin accepting cryptocurrency first at select Sheetz Café stores this summer, extending it to fuel pumps later in the year. 62

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Technology | Cryptocurrency

CStore Decisions caught up with Perry Kramer, managing partner at Retail Consulting Partners (RCP), to learn more about the opportunity around cryptocurrency for convenience store retailers. “I give Sheetz credit for its foresight and innovative mentality in pursuing this payment technology,” Kramer said. “Even though cryptocurrency is still in the ‘try and learn’ phase of its life cycle, it’s important to note that alternate payment types have been in the growth phase in retail for the past several years.” He compared the slow adoption of cryptocurrency to that of Apple Pay, noting that Apple Pay had a similar adoption curve when it was first introduced to the market. The Flexa solution that Sheetz is using can act as a bridge between merchants and multiple cryptocurrency platforms and could offer a potential avenue for reducing interchange fees, he noted. “To settle the payments in real time using its own network will give merchants the ability to process payments in either cryptocurrency or traditional currency,” Kramer explained. “There are tens of millions of dollars in potential annual savings for these payment types to reduce the interchange fees that retailers pay in the store and eventually at the pump.” “This is similar to the early days of Apple Pay where the list of retailers that accept cryptocurrency is actually longer than most people know and includes, in some form, over a dozen major retailers including Lowe’s, Regal Cinemas, Whole Foods, Petco and others,” he added. RCP anticipates that we’ll see a trend toward retailers accepting cryptocurrency payments at the point of sale, as well as in-app transactions. “The trend is being driven on multiple fronts: The pandemic has significantly accelerated the use of contactless payments, millennials and Gen Z shoppers are looking to take advantage of cryptocurrencies 64

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and, in the future once merchants it, showing customers’ perception have matured the implementamay be rapidly changing. tion, we expect to see merchants experimenting with promotions and RETAILER CONSIDERATIONS membership benefits that encourage “The important things for convethe use of cryptocurrencies.” nience stores to know is that the As outlined in the graph above, a acceptance of cryptocurrency is still CivicScience survey found that from immature and will likely experience January 2021 to July 2021, the number some continued market volatility in of people who said they had had NOT the coming years,” Kramer noted. invested in the digital currency fell from “Currently, there are limited options 84% to 72%, while the number of who and competitors to the Flexa Netclaimed they had invested rose from work, and RCP expects to see other 9% to 17%, with those intending to payment networks offering similar invest rising from 7% to 10%. services in the near future.” CivicScience also noted that the It’s also important to understand majority of those who reported havthe different models that exist. “One ing invested or planning to invest of the least risky models is to take an in cryptocurrency skewed largely approach similar to Starbucks, where younger — between 18-34 — and Bitcoin is not accepted directly at the slightly more male than female. register, it is only used to load the As of the week of July 4, customer’s prepaid account that is CivicScience data showed that of then accessed at the register,” he said. those who reported that they had “In other words, you can add Bitcoin to not invested in cryptocurrency, the the Starbucks app and pay that way.” most frequent reason was “I don’t Kramer advised c-store retailers to understand it” (36%) followed by “I keep cryptocurrency on their radar. don’t think it’s legitimate” (20%). “Start budgeting time to stay close Those numbers have changed to this payment trend,” he said, “as since the week of May 9, when 34% the long-term potential to reduce reported “I don’t think it’s legitimate,” interchange rates may have significant and 26% said they didn’t understand potential in the future. “CSD

August 2021

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Operations Column | Underground Storage Tanks

RETAILERS MUST F

UST REGULATOR A push to outlaw single-walled and old underground storage tanks could prove disastrous for retailers. Mark Radosevich • PetroActive Services

As I pen this column, the dog days of summer are beginning, and 2021 is already half over. Given these past six months, it seems safe to say that the early days of the Obama administration were a cakewalk versus the political headwinds our industry now faces. The latest challenge involves underground storage tanks (USTs) and a push to outlaw single-walled and other tanks over 30 years old. This is being promoted by avowed antifossil fuels zealots positioning themselves as pragmatic neutral “experts” on the subject. They know, as we do, that compelling owners of older retail petroleum properties to conduct blanket UST upgrades will exacerbate store closures. Fifteen years ago, the state of Florida required that all tanks be converted to doublewalled design by 2009/2010. Once underway, a surprising number of these tanks were found to still be in good serviceable condition. Back then, the replacement cost at an average site was around $150,000, while the cost today is more than double that amount. 68

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August 2021

One marketer recently commented to me that removing serviceable tanks could cause more environmental harm than leaving them in place. This makes one wonder if their end game is to truly protect the environment or to simply accelerate the demise of petroleum by creating needless economic hardship. The long-term solvency of state tank funds and their ability to adequately address future cleanups, due to projected declines in fuel demand, has also been cited as another reason to target older tanks. This illogically assumes that older tanks will suddenly become a major source of problems, while in reality, the lack of funding issue ignores the fact that,

cstoredecisions.com

T FIGHT AGAINST

ORY HEADWINDS for years, many states have raided their tank funds for uses beyond the intended purpose. Thus, the future solvency of tank funds may not be as dire as they would have folks believe. Fuel marketer associations can proactively confront this anti-petro assault by promoting practical approaches, including a risk-based analysis of tank fees based upon age and configuration, with incentives built in to promote higher levels of maintenance and leak detection than current regulations require. Older systems could be given regulatory and insurance life extensions that will mitigate the necessity of yanking them all out of the ground wholesale. This includes supporting enhanced electronic-line leak detection and Continuous Statistical Leak Detection (CSLD) that continuously monitors fuel height and temperature to detect quiet periods in the underground storage tank and collect leak-detection data during idle times. This type of sophisticated technology can catch minor leaks at a much lower cost versus full-blown upgrades that will put the economic viability of thousands of retail sites in jeopardy. NEGATIVE IMPACT

Allowing this UST assault to go unchallenged may dampen large buyer appetite toward our industry, while decreasing deal values. Some of the negative consequences include: • Increased lender deal scrutiny that may reduce loanto-value (LTV) financing leverage and increase buyer equity requirements • Extended due diligence timing and hurdles • Heightened environmental risk and expense • Diminished long-term relevance of marginal sites due to previously unnecessary expense cstoredecisions.com

For branded marketers supplying third-party retail customers, the unanticipated risks include possible dealer store closures and supply contract defaults, resulting in brand recapture penalties and repayment of unamortized monies to be borne by the marketer. This issue is clearly not an isolated one, but another layer of the multifaceted existential threat that our industry faces from anti-petroleum activists. A concerted industry effort is essential to mitigate the intended harm and steer the dialogue in a logical direction. As I’ve written many times before, if you own, operate or supply retail petroleum sites, you need to be an active member in your state petroleum marketer and convenience store association to help protect and preserve the well-being of your business, family and, ultimately, the American way of life that we all hold so dear. Mark Radosevich is a strong industry advocate, recognized petroleum veteran and president of PetroActive Services (www.petroactive.net). He can be reached by email at mark@petroactive.net and by phone at (423) 442-1327.

August 2021

•

CSTORE DECISIONS

Operations Column | P&L Analysis

HOW INDEPENDENT C-STORES CAN FIND HIDDEN

DOLLARS IN THE P&L Even small and independent retailers can improve their bottom line with a profit and loss analysis. John Matthews • Gray Cat Enterprises

Few operators take the time to better understand both revenue projections as well as variable and fixed expenses so they can see what contributes to or detracts from store profitability. A profit and loss (P&L) analysis provides a simple yet effective way of managing both revenue and expenses. This step is especially key for small and independent convenience store operators, who need to make every dollar count to compete against larger chains. It’s important to know that, when conducting a P&L analysis, small tweaks can bring big rewards. Here’s how to get started: Set Goal-Setting Target Scenarios: Most operators have little sense how a sales increase or decrease of 30% impacts their bottom line. By looking at a variety of revenue scenarios and their corresponding expenses, an operator is better armed to manage their store. Know the Key Drivers: Identify the key drivers in your operation, and manage these with a finetoothed comb. In the foodservice industry, those three drivers are food, paper and labor. Failure to manage those three makes the remaining expenses immaterial. Make sure these drivers are routinely reviewed. 70

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August 2021

Understand Variable vs. Fixed: Under different revenue scenarios, expenses will either be fixed in nature (i.e. rent) or variable based on the volume of the store (i.e. utilities increasing with added hours/equipment). Lowering your fixed expenses, combined with managing the growth of the variable expenses, is critical to improving profitability. Overcome Barriers to Growth: Sometimes, employees will resist growth because they are neither motivated by incentives nor have the desire to work harder servicing more customers. “War-gaming” different scenarios will provide the operator with ways to motivate their staff to embrace growth, not resist it. Manage Line by Line: Each line item should be “scrubbed” to look for opportunities. One of my favorites is trash removal. This expense item is determined by a.) size of the container and b.) the frequency of the pickup. If you want to reduce your expense in this line item, train your employees to break down every box, can, etc. and reduce either the size of the container or the frequency of pickup. John Matthews is the president and CEO of Gray Cat Enterprises and is responsible for the management of all consulting activities for the firm, which include retail consulting for multiunit operations, interim executive management and project management. He can be reached at john.matthews@ graycatenterprises.com.

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PRODUCTShowcase

CBD Product Line Happy Lane is the latest offering from CV Sciences, makers of PlusCBD. Happy Lane 0.00% THC products provide fun, effective CBD at affordable retail prices — perfect for young, highly mobile consumers. The brand features CBD in its Cherry Jubilee Gummies, Berry Extraordinary Chews and Peppermint Magic Liquid, plus easy-toswallow softgels and hands-free topical roll-on. Happy Lane formulas support a greater sense of calm, help maintain a regular sleep cycle, manage signs of common daily stress, enhance exercise recovery and complement everyday wellness.

Happy Lane

www.cvsciences.com

Carryout and Delivery Locker Systems Hatco Corp. announced its license and product supply agreement with Minnow Technologies Inc., which gives Hatco the ability to build the new MMP-8I Minnow Pods for Minnow and license the design technology to add to its alreadysuccessful line of Hatco heated and ambient Flav-R 2-Go Locker Systems. The Minnow Pods hold multiple food orders with quick and secure access. Customers and delivery drivers can arrive, access their speciﬁc Pod and leave without waiting in line or disturbing the ﬂow of business. These systems can integrate into foodservice operations in various ways, standalone or fully integrated into point-of-sale systems.

Special-Edition Lighters This BIC Lighters series allows consumers to escape as they immerse themselves in the countryside aesthetic that has taken over the mainstream. The lighters in this series are made in the U.S., with a suggested retail price of $2.09 per lighter.

BIC USA Inc.

www.shopbic.com/newinquiry

Foodservice Surface Sanitizing Wipes GOJO Industries announced the launch of its latest surface hygiene innovation — PURELL Professional Surface Disinfecting Wipes and PURELL Foodservice Surface Sanitizing Wipes. PURELL Surface Wipes quickly eliminate 99.9% of bacteria and viruses of concern, including cold and ﬂu, norovirus, strep, Salmonella, Listeria, E. coli, whooping cough, MRSA and VRE. They also kill the virus that causes COVID-19 in only 30 seconds. Additionally, they have earned the Environmental Protection Agency’s lowest allowable toxicity rating (Category IV), meaning they don’t require gloves, hand-washing, or rinsing after use — even on food-contact surfaces.

GOJO Industries

Hatco Corp.

www.gojo.com/purellsurfacewipes

www.hatcocorp.com 72

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PRODUCTShowcase

Direct Tea Source Harris Tea has launched a new website, www.teamarketplace.com. The site offers restaurant-quality tea direct, fast and fresh to foodservice operators, retailers and consumers. It provides direct access to on-trend products: hot and iced teas for bulk foodservice brewing, ready-todrink kombucha and iced tea, as well as an array of tea products under the Tea India line. Wholesale buyers get access to multi-case pricing and direct-to-door shipping. No membership or minimum case purchase is required. Blog content changes weekly and features topics such as tea and dessert pairing, iced tea clouding fixes and more.

Harris Tea

www.teamarketplace.com

Delta 8 CBD Gummies Flora Delta 8 Gummies have been formulated to stimulate the mind and provide a deep sense of calm without the anxiousness often experienced with other edible products. Each gummy is infused with 10 milligrams of Delta 8, a powerful cannabinoid found in hemp, known for its strong anxiolytic properties. For consumers looking to elevate their minds and senses, Flora Delta-8 gummies may provide an all-natural solution. Available in a 30-count jar and in assorted flavors including mango, blueberry and watermelon, with a suggested retail price of $34.99.

Candy Corn Innovation Available in six different flavor mashups, Nerds Candy Corn became available nationwide on July 15. Each piece has a Nerds candy flavored shell surrounding a soft and chewy Nerds fruity center. Each Candy Corn piece contains a center with two flavors and two colors, a hallmark of the Nerds brand. Announced during the National Confectioners Association’s (NCA) 2021 Sweets & Snacks Expo awards ceremony on June 22, Nerds Candy Corn received the top accolades in “Seasonal – Candy & Snacks.”

Ferrara

www.ferrarausa.com

Flora CBD

www.gotflora.com

Fruit-Infused Wines Sutter Home Family Vineyards announced the growth of its portfolio with Fruit Infusions — a line of sweet wines that are infused with real fruit juice and natural fruit flavors. Available in Sweet Peach, Wild Berry and Tropical Pineapple, these premium California wines are sweet, juicy and refreshing with a hint of effervescence. The 7.5% ABV lineup is now available nationwide in 187-milliliter four-packs and 750-milliliter bottles for a suggested retail price (SRP) of $8, and 1.5-liter bottles for a SRP of $13.

Sutter Home Family Vineyards

www.sutterhome.com

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August 2021 • CSTORE DECISIONS

PRODUCTShowcase

Newly Redesigned Website Calico Brands Inc. announced the launch of its newly redesigned corporate website at www.calicobrands.com. The website features a streamlined, modern design, improved functionality and navigation, and easy access to product information. The site showcases all product lines available under the Scripto and King brand names and features updated product descriptions and details. It also includes a detailed product listing for Calico Brands’ private label program. The website was designed to feature lifestyle imagery surrounding the “For the Lighter Moments” campaign, which highlights everyday “lighter” moments where Scripto and King multi-purpose and pocket lighters can be used.

Calico Brands Inc.

(800) 544-4837 • marketing@calicobrands.com

www.calicobrands.com

Bourbon Barrel Smoked Jerky Crafted in Louisville, Ky., Derby City Jerky’s new Bourbon Smoked Bacon Jerky starts with premium cuts of bacon, slowly smoked in small batches over a ﬁre of aged Kentucky bourbon barrel staves. The process makes for a bacon jerky with just the right hint of distinctive Kentucky bourbon ﬂavor. Also available in Bourbon Barrel Smoked Beef, Pork and Turkey.

Derby City Jerky

Crispy Chicken Fillets Brakebush is helping retailers in the crispy chicken sandwich wars with new Brakebush Signature Crispy Chicken Fillets, available in Classic and Spicy. These new 5.7-ounce fillets are designed to simulate scratch-made, back-of-house quality: First, tender breast meat is cut about 20% thicker than other fillets. Then it’s tumblemarinated, driving juiciness and flavor throughout the muscle. Finally, each fillet is breaded in flour seasoned with salt, pepper, buttermilk and a hint of savory spices. The Spicy version has added cayenne pepper. Each fillet can be prepared from frozen in just 6.5 minutes.

(812) 620-1715 • derbycityjerky@gmail.com

www.derbycityjerky.com

To-Go Packaging Products Widely recyclable in paper streams, each ProAmpac product strives to remove avoidable plastics and use the least amount of materials possible. In addition to the sustainability benefits, ProAmpac’s fresh-foodto-go packaging offers modified-atmosphere options in a sleek and unified design with various customization options.

ProAmpac

www.proampac.com

Brakebush Brothers Inc.

www.brakebushchicken.com/crispy

CSTORE DECISIONS •

August 2021

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PRODUCTShowcase

Plant-Based Pizza and Flatbread Portfolio Rich Products recently added nine new options to its plant-based pizza and flatbread portfolio, each comprised of more than 20% cauliflower, broccoli, zucchini and sweet potato. These new options are high-quality, clean-label products that satisfy consumers’ desire to incorporate more vegetables into their diets. These crusts are ideal not only for pizza, but also for sandwiches, wraps and dips. The additions build on the success of two plant-based crusts Rich’s introduced in 2018, including the 10” Seasoned Gluten-Free Cauliflower Crust, one of the most successful product launches in Rich’s history.

Rich’s Foodservice

www.richsconvenience.com

Single-Use Dipping Sauces and Salad Dressings Perfect for takeout and delivery, Duke’s is supplying solutions with inspiring flavors in portion-control sizes. The brand rolled out a line of single-use dipping sauce cups and salad dressing pouches. Available in nine flavor varieties, the Duke’s Salad Dressing Pouches feature consumer-friendly packaging with a pourable spout for easy usage. Flavors include Creamy Caesar, Raspberry Vinaigrette and Golden Italian. The Duke’s Dipping Sauce Cups come in a 1.5-ounce serving size and are available in seven flavor varieties including Duke’s Signature Sauce, a mayo-based dipping sauce with zesty tomato and black pepper notes.

Sauer Brands Inc.

Antioxidant Super Tea Each bottle of POM Antioxidant Super Tea is powered by the antioxidant goodness of pomegranate juice and a bright blend of gently brewed teas. Pomegranate Elderberry Boost Tea is a bold trio of flavors that combines the antioxidant power of pomegranate and elderberry with a boost of black tea, while Pomegranate Orange Blossom White Tea is a harmonious combination of crisp white tea, orange blossom and pomegranate. The entire POM Antioxidant Super Tea lineup is available nationwide.

The Wonderful Co. www.wonderful.com

www.sauerbrands.com

Recyclable Paperboard Gum Bottle Mentos Pure Fresh Gum will soon be available in the U.S. in an innovative new bottle that’s 90% paperboard and certified recyclable. This new bottle uses technology designed to ensure Mentos’ high standards for product safety and freshness. Mentos Pure Fresh Gum in a new paperboard bottle is set to launch and is expected to first become available on U.S. retail shelves in the first half of 2022. Available in two flavors, Fresh Mint and Spearmint, it comes in an 80-piece paperboard bottle with a suggested retail price of $4.99.

Perfetti Van Melle

www.perfettivanmelle.com cstoredecisions.com

August 2021 • CSTORE DECISIONS

Classifieds/Ad Index 5-Hour Energy

Hunt Brothers Pizza

ADD Systems

Hussmann

Brakebush Brothers, Inc.

Kooler Ice Vending Machines

Krispy Krunchy Chicken

Liggett Vector Brands

Loomis Armored US, LLC

M-PACT

www.5hourEnergyRetailer.com 800.922.0972 / www.addsys.com www.ChickenChampions.com

CB Distributors

888.824.3256 www.cbprices.com / www.hempbombs.com www.naturesscript.com

CFORCE Natural Artisan Water www.cforce.com

6-7

25 49

Essentia Water

877.293.2239 / www.essentiawater.com

Fiji Water

www.fijiwater.com

GSK C-Store

Scott.F.Breisinger@gsk.com

Gulfcoast

727.449.2296 / www.gulfcoast.com

Hoshizaki America

www.hoshizakiamerica.com

5 15 3 55

Philip Morris USA

39, 40-41

800.592.2060 insidesales@hussmann.com / Hussmann.com

877.415.4100

www.loomis.us/SafePoint www.m-pact.org

Newly Wed Foods

www.newlywedsfoods.com

North American Bancard

866.481.4604 / www.nynab.com

www.masonways.com | 800-837-2881 cstoredecisions.com

Premier Manufacturing, Inc.

www.gopremier.com/contact

Safe Shop Assured

66-67

www.safeshopassured.com

Swedish Match

800.367.3677 www.zyn.com www.whiteowlcigars.com www.gamecigars.com

Swisher International

11 31 46-47 Cover, 79, 80

800.874.9720 / www.swisher.com

Trion Industries, Inc.

Vaporlax

800.444.4665 info@triononline.com / TrionOnline.com

800.837.2881 / www.masonways.com

NATO

Prairie City Bakery

www.pcbakery.com

MasonWays Indestructible Plastics, LLC 77 952.683.9270 / www.natocentral.org

insightsc3m.com

800.858.3025 / www.kookerice.com/fixmyice

800.290.6097 / www.krispykrunchy.com

E-Alternative Solutions

EalternativeSolutions.com/Leap

www.gulfcoast.com

800.775.8970 / mipodwholesale.com

Vitamin Energy

12-13

800.420.3106 / Sales@VitaminEnergyLLC.com

BOOTH #609 August 2021 • CSTORE DECISIONS

IndustryPerspective

Five Foodservice

Opportunities for C-Stores Hand-scooped ice cream and locally sourced produce are among top items customers wish to see at their convenience stores. Mike Kostyo • Datassential

Convenience stores have certainly upped their foodservice game over the past decade, and consumers have taken notice. According to Datassential’s recent “C-Store Foodservice Keynote Report,” a third of consumers reported that they have increased their food purchases at c-stores in the past two years, while nearly 40% said the same thing about beverages. Overall, 62% of consumers said they are satisfied or extremely satisfied with c-store foodservice, a 12% increase from 2019. So, where are the opportunities when it comes to c-store foodservice? We also asked consumers which foods or trends they wanted to see at their local c-store and then compared that data to the number of c-stores that offer the option. Here were the biggest gaps:

them. Consumers love customization, even if it’s only having the option of customization, and they choose the pre-built menu options anyway. Why? For the c-store consumer, customization signals that the food is fresh and handcrafted. Customizable in-store sub shops and pizzas also scored well with consumers. STORE-MADE BARBECUE & SMOKED MEATS

While it’s certainly more labor intensive, consumers love store-made or store-smoked barbecue, with 45% saying they would like to see it at c-stores, while only 10% of c-stores offer it. Luckily, these options can also do double duty on other platforms, such as sandwiches, wraps, flatbreads and salads. COLD-PRESSED JUICES / JUICE BARS

FROZEN YOGURT & HAND-SCOOPED ICE CREAM

Over half, or 51%, of consumers said they want to see c-stores offer frozen yogurt or hand-scooped ice cream at their local operator, but only 6% of c-stores offer the option — a 45% gap. In fact, ice cream is America’s second-favorite food after fruit, with 91% of consumers saying they love or like it — it’s a no-brainer on menus. LOCALLY SOURCED PRODUCE & MEAT

Locally sourced produce and meat options are similarly rare at c-stores, with only 6% offering them, but 46% of consumers interested in seeing them at c-stores. If you have locally sourced ingredients on the menu, call them out as often as possible: in menu descriptions, signage, digital ordering platforms, etc. CUSTOMIZABLE BURRITOS & TACOS

Customizable burritos and tacos score highly with consumers, with over half of consumers wanting to see them at c-stores, but only 14% of operators offering 78

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August 2021

When it comes to drinks, health-driven cold-pressed juices and juice bars showcased the biggest gap between consumer wants and what c-stores offer, with 40% of consumers wanting them, but only 4% of c-stores offering them. A large percentage of consumers also said they want to see cold-brew coffee at c-stores, which is more commonly found in the segment but can be an area of opportunity, if you don’t already have it on the menu. With nearly half of c-store operators reporting they will either expand or greatly expand their prepared food and beverage offerings in the future, competition is only going to get more intense. As you consider your own menu offerings and expansions, incorporate these data-backed options that score highly with consumers. Mike Kostyo is the resident trendologist and senior managing editor at Datassential, a market research company that helps food & beverage companies of all sizes and segments innovate, sell and plan for the future, backed by the best data in the industry. He can be reached at mike@datassential.com

cstoredecisions.com

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