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VIEWPOINT

By Don Longo, Editorial Director

Some Trends Come & Some Trends Go A look back, and ahead, at key trends shaping the c-store industry

A

year ago, for the cover story of our January 2014 issue, our editors presented 14 key trends we believed would define and shape the convenience store industry in the year ahead. Let’s see which trends materialized, which ones stalled and which ones are continuing into 2015.

1. Driving in Decline. We pointed to several factors — more fuel efficient vehicles, stagnant economic recovery, people moving into urban areas, and Millennials’ less dependence on cars. Despite lower gas prices, I think most of these factors still apply.

2. The C-store Image Tipping Point. The old “smokes and Cokes” model convenience store appears headed for the dustbin of history as retailers continue to modernize, and consumers finally appear to be noticing.

3. The Living Wage Movement. We were right that unions put a lot of effort into raising the minimum wage — both on the federal level and locally.

4. New Hotspots for Growth. As predicted, c-store chains clashed in such key markets as Florida, North Carolina, Tennessee and Arkansas. In 2015, we’ll see a lot of chains spread their turf outward.

5. The Upscaling of C-stores. As seen in Convenience Store News’ annual Store Design Contest, c-stores continue to get bigger and prettier.

6. It’s Obamacare Decision Time. Hopefully, retailers began their planning last year for the full impacts of this large, government-mandated health care program.

7. Alternative Fuels Come Into Focus. We saw expansion of ethanol, natural gas and even early testing of electric vehicle chargers at c-stores last year.

CSNews has been recognized with more editorial awards, including the prestigious Jesse H. Neal Award for business journalism, in the past six years than any other industry publication.

2013 Jesse H. Neal National Business Journalism Award Best Single Issue, October 2012 2013 Jesse H. Neal National Business Journalism Award Finalist, Best Profile, August 2012 2008 Jesse H. Neal National Business Journalism Award Best Single Issue, October 2007

8. The Mobile Consumer. The introduction of Apple Pay late last year raised the stakes in the mobile payment game.

9. The “Age” of Tobacco.

Several efforts to raise the minimum smoking age to 21 were successful last year.

10. Energy Saturation.

For comments, please contact Energy drink sales continued Don Longo, Editorial Director, to outpace the overall growth at (201) 855-7606 or rate of packaged beverages. dlongo@stagnitomail.com.

11. Grazing. Rather than waiting for breakfast, lunch or dinnertime, large numbers of Americans grazed their way through the day, eating multiple meals at unconventional times.

12. Segmenting the Customer Segments. Many c-stores have moved past a focus on blue-collar males, and even past women shoppers. They are narrowing their sights on such customer niches as Millennial Hispanics, the Multitasking Mom, etc.

13. Just the Tip of Tobacco Innovation. When we predicted that electronic cigarettes were just the tip of the iceberg in regards to innovation in the nicotine delivery segment, we had no idea that vaping would take off the way it has.

14. Coming Soon: The Convenience Restaurant Industry? Many chains have upped their game in the foodservice arena. Are they restaurants yet? Maybe, but not quite. They might be something better: The Convenience Restaurant. CSN

2014 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2013 2014 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Single Article, February 2013 2013 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2012 2011 Silver Eddie Award, Folio: magazine Business to Business, Retail, Full Issue, October 2010 2011 Silver Eddie Award, Folio: magazine Business to Business, Retail, Best Single Article, October 2010 2009 Gold Ozzie Award, Folio: magazine Best Use of Illustration, October 2008 2009 Silver Eddie Award, Folio: magazine Business to Business, Retail, Full Issue, October 2008 2009 Bronze Eddie Award, Folio: magazine Business to Business, Retail, Website

2013 American Society of Business Publication Editors, Midwest Regional Bronze Azbee Award Best Editorial/Commentary, July 2012 2010 American Society of Business Publication Editors, Northeast Regional Silver Azbee Award Feature Article Design, November 2010 2010 Trade Association Business Publications Intl.

Tabbie Awards Honorable Mention, Front Cover Illustration, October 2009 2009 Trade Association Business Publications Intl.

Tabbie Awards Gold, Front Cover Illustration, February 2008 Honorable Mention, Best Single Issue, October 2008

WWW.CSNEWS.COM | JANUARY 2015 | Convenience Store News 3

CONTENTS January 2015

VOLUME 51/NUMBER 1

28 | COVER STORY Forecast 2015

Convenience retailers are optimistic about the year ahead, but there are still hurdles to overcome.

30 | Slow & Steady Improvement Business should be good as consumers get a $230-billion windfall from lower gas prices.

48 | Feeling Optimistic More than eight in 10 c-store retailers expect better sales in 2015.

54 | An Active Year Ahead Presidential election posturing and logjam in Congress will make for lively narrative.

62 | The Year of Retail Fragmentation C-stores have a unique opportunity in today’s fragmented retail world.

HOW TO DO WORLD-CLASS FOODSERVICE

INDUSTRY ROUNDUP

72 | Foodservice Training Programs That Reduce Risk & Enhance Quality

14 | Couche-Tard & The Pantry to Merge

74 | Call to Action

16 | Duskiewicz Bids Adieu After 30 Years at Nice N Easy 18 | Eye on Growth 18 | Retailer Tidbits 22 | Supplier Tidbits 25 | People on the Move 25 | Legislative Corner

Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by Stagnito Business Information, 570 Lake Cook Rd. Deerfield, IL 60015. Copyright © 2015 by Stagnito Business Information. All rights reserved. Subscriptions: One year, $93; two years, $152. One year, Canada, $110; two years, Canada, $175. One year, foreign, $150. Payable in advance with a bank draft drawn on a U.S. bank in U.S. funds. Single copies, $10, except foreign, where postage will be added. Printed in U.S.A. Periodicals postage paid at Deerfield, IL, and at additional mailing offices. POSTMASTER: Send address changes to Convenience Store News, P.O. Box 1842, Lowell, MA 01853.

4 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

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LOOK WHAT’S NEW FOR BREAKFAST!

CONTENTS 111 Town Square Place, Suite 400, Jersey City, NJ 07310 (201) 855-7600 Fax: (201) 855-7373 www.csnews.com

BRAND MANAGEMENT Chief Brand Officer (224) 632-8171

Korry Stagnito korrystagnito@stagnitomail.com

EDITORIAL

66 CATEGORY MANAGEMENT MOTOR FUELS

66 | Does CNG Have Staying Power?

Fleets are expected to drive growth, with consumer adoption slow.

IN-STORE MERCHANDISING

83 | The Health of Convenience Will 2015 be the year of widespread better-for-you products in c-stores?

Editorial Director (201) 855-7606 Editor-in-Chief (201) 855-7608 Managing Editor (201) 855-7614 Senior Editor (201) 855-7618 Field Editor (201) 855-7619 Assistant Editor (201) 855-7604 Contributing Editor (303) 741-3377 Contributing Editor (201) 280-2614 Art Director (224) 632-8245 Director of Market Research (201) 855-7605

Don Longo dlongo@stagnitomail.com Linda Lisanti llisanti@stagnitomail.com Brian Berk bberk@stagnitomail.com Melissa Kress mkress@stagnitomail.com Angela Hanson ahanson@stagnitomail.com Danielle Romano dromano@stagnitomail.com Renée M. Covino reneek@aol.com Tammy Mastroberte tmastroberte@gmail.com Michael Escobedo mescobedo@stagnitomail.com Debra Chanil dchanil@stagnitomail.com

MARKETING & PROMOTION Audience Development Manager Shelly Patton (646) 217-1045 spatton@stagnitomail.com List Rental The Information Refinery (800) 529-9020 Brian Clotworthy Reprints and Licensing Wright’s Media (877) 652-5295 sales@wrightsmedia.com Subscriber Services/Single-Copy Purchases (978) 671-0449 Stagnito@e-circ.net

DEPARTMENTS VIEWPOINT

3 | Some Trends Come & Some Trends Go A look back, and ahead, at key trends shaping the c-store industry.

12 | CSNews Online 26 | New Products OUT & ABOUT

90 | A Balancing Act Anheuser-Busch’s trade media open house reveals five key elements to win the beer category.

President & CEO Harry Stagnito Chief Information Officer Kollin Stagnito Vice President & CFO Kyle Stagnito Senior Vice President, Partner Ned Bardic Chief Brand Officer Korry Stagnito Vice President/Custom Media Division Pierce Hollingsworth (224) 632-8229 phollingsworth@stagnitomail.com Production Manager Anngail Norris Human Resources Manager Sandy Berndt Strategic Marketing Director Bruce Hendrickson (224) 632-8214 bhendrickson@stagnitomail.com Vice President, Events John Failla (914) 574-5709 jfailla@stagnitomail.com Director of Digital Media John Callanan (203) 295-7058 jcallanan@stagnitomail.com

CONVENIENCE STORE NEWS AFFILIATIONS Premier Trade Press Exhibitor

EDITORIAL ADVISORY BOARD Edward Davidson ER Davidson & Associates (7-Eleven Inc., retired) Kyle McKeen Alon Brands Inc.

26 8 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

Richard Mione GPM Southeast Rick Crawford Green Valley Grocery

Ian Johnstone Cenex Zip Trip

Matt Paduano Nice N Easy Grocery Shoppes

Jon Urbanik CST Brands Inc.

Jonathan Polonsky Plaid Pantries Inc.

Roy Strasburger Convenience Management Services Inc. Joe Hamza Tedeschi Food Shops Jack Lewis Village Pantry LLC

The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations.

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C-Store Channel - e-Cigs Category, Unit Share by Company between 09/01/12 – 11/23/13 40.0 35.0

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CSNEWS.COM TOP 5 Daily News Headlines

ONLINE EXCLUSIVE

The most viewed articles online.

1 | Speedway Discusses Benefits of Hess Acquisition Speedway LLC’s acquisition of the former retail arm of Hess Corp. will have benefits beyond boosting its store count, according to Speedway President Tony Kenney. Fuel sold at the 1,245 locations will primarily be supplied through parent company Marathon Petroleum Corp.’s system, adding more than 3 billion gallons in sales annually.

2 | C-store Retailers Lose Menu Labeling Battle The Food and Drug Administration released its finalized rules on menu labeling that, much to the dismay of convenience industry insiders, include c-stores under the regulations. The regulations require caloric information to be listed on menus and menu boards in chain restaurants, similar retail food establishments and vending machines with 20 or more locations.

3 | Sunoco LP Touts ‘Dominant’ National Footprint Sunoco LP has a “dominant national footprint” with more than 6,500 convenience stores and gas stations, the company said during parent company Energy Transfer Partners LP’s recent analyst meeting. With its acquisition of Aloha Petroleum Ltd. now completed, Sunoco LP has 6,595 locations across 30 states from Maine to Hawaii — 1,237 of which are company owned and 5,358 of which are dealer and distributor operated.

4 | Opening Day Arrives for Sheetz N.C. Distribution Center Sheetz Inc. has taken the wraps off its new distribution center in North Carolina. Executives with the convenience store chain were on hand Nov. 12 to cut the ribbon on the 250,000-squarefoot distribution and kitchen facility in Burlington.

POLL

5 | Ricker’s Debuts New Flagship Design Ricker Oil Co. is looking toward the future with its latest convenience store in Carmel, Ind. “This store will serve as the flagship for the Ricker’s brand,” said President and CEO Quinn Ricker.

In-store sales at U.S. convenience stores were up 2.3 percent for the first six months of 2014. How do your sales compare?

52% Our sales are tracking above the industry average

12 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

Parker’s Finds Advantage With Fuel Software

Fuel pricing has made tremendous strides in the past several years. Years ago, driving around looking at what other area convenience stores sold fuel for was the main way to determine the proper asking price. But today, there are products like PriceAdvantage’s 2014.2 fuel pricing software, which The Parker Cos. implemented at its 36 stores quickly after the Aug. 26 release date. “It builds a function to give you a projected [fuel] price based on historic data and how you want to allocate a margin vs. volume ratio,” said Jeff Bush, director of fuel management at Parker’s. “It builds economic models.”

For more exclusive stories, visit the Special Features section of www.csnews.com.

PRODUCT HIGHLIGHT The most viewed New Product online.

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INDUSTRYROUNDUP FAST FACT

Couche-Tard & The Pantry to Merge The $1.7-billion deal is expected to close in the first half of the year More than eight out of 10 convenience store retailers expect their average sales per store to increase this year vs.

2014. Only 8 percent expect a decline, and 6 percent feel their sales will be flat.

Source: Convenience Store News Retailer Forecast Study (page 48)

QUOTABLES

“The bottom line is this: Elections have consequences — both in who we actually elect for an office and then who they put in charge of regulatory agencies and who they appoint as judges.”

— NACS Chairman Steve Loehr, Kwik Trip Inc. (page 54)

A

limentation Couche-Tard Inc. will acquire The Pantry Inc. The deal was announced in mid-December after the operator of Kangaroo Express quietly put itself on the auction block.

Under the terms of the deal, Couche-Tard will acquire The Pantry in an all-cash transaction valued at $36.75 per share, with a total enterprise value of approximately $1.7 billion including debt assumed.

“We look forward to welcoming The Pantry Inc. to the Couche-Tard family,” said Brian P. Hannasch, Couche-Tard’s president and CEO. “The Pantry is an excellent company and is well positioned in the Southeastern and Gulf Coast regions of the U.S., two of the fastest-growing areas of the U.S. With this transaction, we will add more than 1,500 stores to our network, which will position us as the definitive leader in this region and will reinforce our position as one of the largest convenience store operators in North America.”

The transaction is expected to close in the first half of this year, subject to approval by The Pantry’s shareholders and customary regulatory approvals. The transaction includes customary breakup fees. This all-cash transaction is expected to be financed by Couche-Tard’s available cash, existing credit facilities and a new term loan.

“I am very proud of The Pantry employees and what they have accomplished. The company’s current performance is a direct result of the employees’ hard work and effort. Their work has clearly been recog-

14 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

nized by the marketplace and by CoucheTard, culminating in this transaction,” said Dennis G. Hatchell, president and CEO of The Pantry.

“This is an exciting combination of two strong companies that complement each other extremely well,” he added. “Unlocking the strategic value of these combined firms will benefit the current Pantry shareholders and provide ongoing opportunities for most of our employees. I sincerely thank and appreciate each of the employees for their contributions to the success of this organization.”

Laval, Quebec-based Alimentation CoucheTard’s network currently comprises approximately 6,303 convenience stores throughout North America. As of Dec. 18, Cary, N.C.based The Pantry operated 1,512 stores in 13 states under select banners.

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INDUSTRYROUNDUP

Duskiewicz Bids Adieu After 30 Years at Nice N Easy CEO retires after year of transition

By Melissa Kress

F

ran Duskiewicz, who has called Nice N Easy Grocery Shoppes home for 30 years, retired as CEO of the upstate New York convenience store chain on Jan. 11.

His retirement comes after “a rough year” and a time of transition at the company. In late June, founder and CEO John MacDougall — a longtime friend and colleague — passed away. Three months later, Nice N Easy was sold to San Antonio-based CST Brands Inc. “I turned 62 a couple of weeks back and after everything that has gone on this year, and the fact that the company has leadership now and is going in a different direction, I’ve done my duty and now is the perfect time for me to step back and take some time,” Duskiewicz told Convenience Store News.

Looking back over the years, he said there are almost too many memories to pick just one favorite.

“The truth is, I looked forward to getting up every day, going in and doing whatever we were doing,” he said. “I always looked forward to seeing John. It seems like all we did was make good memories over 30 years.”

He did point out that one of his favorite memories came just a few years ago with the fall 2011 opening of a 6,750-square-foot Nice N Easy store in Brewerton, N.Y. The mini-grocery store was not only the largest at the time for the chain, but it also served as a prototype for future stores in select markets. The store was something MacDougall had wanted to build

16 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

for 30 years, and his pride was evident come opening day.

According to Duskiewicz, MacDougall had been ill and the last year was “topsy turvy.”

“He was like a father, he was like a big brother. He was a best friend and a great boss. You Fran Duskiewicz put all those things together, you lose any one of those people in your life [and] you’re going to have a problem. To lose somebody who has been all those things is just emotionally wrecking,” he acknowledged.

His decision to step away from Nice N Easy is not a reflection on CST Brands or the recent acquisition, Duskiewicz stressed to CSNews. CST is giving Nice N Easy the opportunity that MacDougall always wanted: to grow.

For now, Duskiewicz is going to take some time to enjoy the luxury of doing nothing for awhile — something he hasn’t done in 30 years.

Even as he leaves Nice N Easy, Duskiewicz’s influence remains. “People talk about the fact that there is so much of John MacDougall in the company and I think over 30 years, I can honestly look at what we have and realize there is a lot of me in it, too,” he said.

“It might not be as upfront and noticeable as the stores and the things John designed. I think the way we have done things and the way we’ve operated, there is a lot of me in that particular area of our culture,” he concluded. “I’m proud of that.”

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INDUSTRYROUNDUP

eye on growth n GPM Investments LLC ended 2014 by ramping up

acquisition activity. The company entered the Midwest in a deal with Road Ranger LLC to acquire 43 convenience stores. GPM Southeast also agreed to acquire eight One Stop Food Stores from Arey Oil Co. n CST Brands Inc. and CrossAmerica Partners LP

agreed to purchase 22 Texas convenience stores from Landmark Industries. The stores operate under the Timewise brand. CrossAmerica is also in the process of purchasing all the outstanding shares of Erickson Oil Products Inc., operator of Freedom Valu convenience stores, and certain related assets for $85 million.

The total purchase price was approximately $240 million. Aloha Petroleum will retain its brand name. n Empire Petroleum Partners LLC closed on an

acquisition of 17 more convenience stores from CST Brands Inc. This latest deal closely follows Empire’s acquisition of 11 former Corner Store sites from CST in November. n Flyers Energy LLC added the assets and business oper-

ations of Poma Distributing Co. Inc. and Redwood Coast Petroleum, as well as related entities from Poma Holding Co. Inc. n Boyett Petroleum pur-

chased the fuel distribution contracts for 90 branded 76 and Valero sites from MCW Fuels. The majority of the sites are in southern California.

n Sunoco LP com-

pleted its previously announced acquisition of Aloha Petroleum Ltd.

n Wawa Inc. will break ground on its first convenience

store in Palm Beach County, Fla., in 2016. The chain also opened its first site in Bradenton, Fla., in December.

retailer tidbits n JM Cos., owner and opera-

tor of SpeedStop convenience stores, is converting most of its BP-supplied gas stations in the St. Cloud, Minn., area to the SuperAmerica brand.

downtown Des Moines. The $92-million building is expected to be completed in 2017. n Kangaroo Express invited consumers to “take back

summer” by bringing their 2014 Roo Cup to any of its stores for unlimited 25-cent refills from Monday, Dec. 15 through Sunday, Dec. 21.

n U.S. Venture Inc. is stepping back as owner of the

Express Convenience Centers chain to concentrate on fuel distribution. About 34 Express locations will continue to operate as the retailer switches from a franchise operating model to a license model. n Wawa Inc. will become the first retailer in

the convenience channel to offer the CocaCola Freestyle fountain machine chainwide.

The rollout will be completed by May.

n TravelCenters of America LLC, operator of the TA and

Petro Stopping Centers travel center brands, is partnering with the U.S. Department of Homeland Security Blue Campaign to combat human trafficking. n Pak-A-Sak completed a companywide rollout of PDI/

Labor Scheduler, a new web-based schedule management software released in 2014. n Stewart’s Shops Corp. dropped the price of milk at its

n Kum & Go LC hired Italian architect The Renzo Piano

Building Workshop to design its new headquarters in

18 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

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INDUSTRYROUNDUP

supplier tidbits n Shareholders of Reynolds American Inc. and Lorillard

Inc. will vote on the proposed $27.4-billion merger of the companies on Jan. 28. A closing date is expected in the first half of this year.

week leading up to Super Bowl XLIX in Arizona. n The Hershey Co.’s Reese’s brand signed on as the offi-

cial sponsor of the new College Football Playoff, ESPN College GameDay and ESPN College Football.

n Farmer Bros. Co. signed a definitive agreement to pur-

chase Rae’ Launo Corp.’s assets related to its directstore-delivery business for $1.5 million. n The Coca-Cola Co. launched its “Make Someone

Happy” advertising campaign during the holiday season. The campaign’s TV spot marked the return of Santa Claus as imagined by artist Haddon Sundblom, originally commissioned for use in Coca-Cola’s ads more than 80 years ago. n Bud Light will host three days of parties, activities and

concerts at the “Bud Light House of Whatever” in the

n Mistic launched a #VapeDay2015 awareness campaign

to educate family, friends and colleagues about the benefits of electronic cigarettes and personal vaporizers. The e-cigarette and vaporizer maker also declared Jan. 1 as #VapeDay2015. n The American Wholesale Marketers

Association tapped adventurer Erik Weihenmayer, the first blind person in history to summit Mount Everest, as the keynote speaker for its 2015 AWMA Marketplace & Solutions Expo, being held in February.

ph: 800-776-8834 | fax: 920-432-1918 | www.cdlatm.com 22 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

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INDUSTRYROUNDUP

people on the move n RaceTrac Petroleum Inc.’s Chief

Operating Officer Billy Milam took over the role of president Jan. 1. He took the reins from Max Lenker, who retired after 40 years.

President of Global Marketing Andy Viens was elected treasurer, while Fuels Institute Executive Director John Eichberger was reelected as secretary. n The Kentucky Entrepreneur Hall

n At Par Petroleum Corp., Joseph

Israel became president and CEO effective in January. William Monteleone, the company’s former CEO, moved on to be Par’s senior vice president of mergers and acquisitions, and remains a member of the board of directors. n Ricker Oil Co. Chairman Jay

Ricker was elected chairman of the Fuels Institute. Phillips 66 Co.

of Fame inducted James Booth, owner of 19 Fast Lane convenience stores and chief executive of Booth Energy Group, as part of its 2014 class. n MFA Oil Co. hired Curtis

Chaney as senior vice president of retail. He is responsible for Break Time convenience stores and the company’s Jiffy Lube franchise locations.

legislative corner n Twenty states saw an increase in

their minimum wages on Jan. 1, while New York State hiked its wage Dec. 31. More than half the states now have minimum wages higher than the federal standard of $7.25 per hour. n The U.S.

Environmental Protection Agency decided to delay issuing the Renewable Volume Obligations for the 2014 Renewable Fuel Standard until this year. n U.S. Reps. John Boehner, Kevin

McCarthy and Fred Upton asked the Food and Drug

Administration to reconsider the Feb. 15, 2007 grandfather date included in its proposed deeming regulations for tobacco products. n The San

Francisco Board of Supervisors unanimously approved the Tobacco Sales Reduction Act, capping the number of tobacco-selling permits at 45 for each of the city’s 11 supervisor districts. n The Petroleum

Marketers and Convenience Stores of Iowa asked state lawmakers to create a grant program to replace underground storage tanks for both gas and diesel.

WWW.CSNEWS.COM | JANUARY 2015 | Convenience Store News 25

NEWPRODUCTS Fairlife Ultra-Filtered Milk Through a venture with fairlife, The CocaCola Co. is accelerating national availability of this new line of real milk that tastes great and provides natural nutrition, the company said. Fairlife is ultra-filtered in order to provide 50 percent more natural protein and 30 percent more calcium than regular milk.

The Coca-Cola Co. Atlanta (800) 438-2653 www.thecoca-colacompany.com

Oculto Tequila-Flavored Beer Anheuser-Busch InBev will introduce Oculto, a tequila-flavored beer, in the United States in the spring.

Oculto will be made with blue agave and blended with beer-aged wood from tequila barrels. The new lager will have an alcohol content of 6 percent. It will be the second beer with a Mexican profile in A-B InBev’s U.S. portfolio.

Anheuser-Busch St. Louis (314) 577-2000 www.anheuser-busch.com

Stouffer’s Side Dishes Known for its made-from-scratch entrées, Stouffer’s now offers a full line of side dishes to help operators satisfy customer demand for authentic flavors across the menu. Crafted with high-quality ingredients and no preservatives, Stouffer’s sides are the ultimate convenience — simply heat and serve, the company noted.

Operators can choose from more than 15 options, such as creamed spinach, scalloped potatoes, green bean mushroom casserole, whipped sweet potatoes or broccoli au gratin. Operators can also ladle creamed spinach over a twice-baked potato for a classic side dish that will bring patrons back.

Nestlé Professional Rogers, Minn.

(800) 288-8682 www.nestleprofessional.com

M360 Countertop Speed Cooking Oven Ovention Inc. introduced the M360 countertop speed cooking oven that requires no hood. Like its predecessor Ovention Matchbox products, the M360 oven uses no texture-damaging microwaves, instead employing an advanced Precision Impingement form of convection.

This results in the ability to offer a large menu of foodservice items, from breakfast sandwiches and pizza, to chicken breast, calamari and cookies, according to the manufacturer.

Ovention Inc. Milwaukee (855) 298-6836 connect@OventionOvens.com www.oventionovens.com

Kettle Brand Thick + Bold Chips Kettle Brand added Dill Pickle and Carolina BBQ flavors to its line of Thick + Bold potato chips, developed exclusively for the convenience channel in graband-go, 2-ounce bags. Dill Pickle is an extra crunchy, thick-ridge-cut chip that offers the perfect balance of tang, dill onion and garlic, according to the company. Carolina BBQ is a smoky-sweet chip with a hearty crunch that features rich and tangy flavors such as mustard, vinegar, brown sugar and spices. Kettle Brand is a division of Diamond Foods Inc. Kettle Brand Salem, Ore. (503) 364-0399 www.kettlebrand.com

26 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

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FORECAST

2015 A Convenience Store News Staff Report

W

hat will 2015 hold for the convenience store industry? Will the overall U.S. economic climate be a boost or a burden for c-store operators? Which product categories will be the standouts in sales and profitability, and which will fall flat? Are c-store retailers optimistic or pessimistic about the new year? How will legislative and regulatory issues impact business?

These are just some of the questions Convenience Store News set out to answer with

For the first time, CSNews conducted a survey among convenience retailers to get their forecast for 2015. The survey, fielded in November, asked retailers to predict results for their average store sales this year in major categories and to provide reasons for their answers. They were also asked to rate issues that are expected to have a major impact on the industry, and share initiatives they intend to implement during the year to increase sales and profitability.

A total of 102 retailers participated in the survey. By company size, 26.3 percent were singlestore operators; 25.2 percent represent chains with two to 10 stores; 16.2 percent have 11 to 50 stores; 10.1 percent have 51 to 200 stores; and 22.2 percent are from chains with more than 200 stores.

By region, 32.4 percent are headquartered in the South, 30.4 percent are from the Midwest, 23.5 percent are in the Northeast and 13.7 percent hail from the West.

Taking the retailer survey a step further, CSNews also interviewed the CEOs of two of the top retailer companies in the c-store industry — Chris Gheysens of Pennsylvania-based Wawa Inc. and Sonja Hubbard of Texas-based E-Z Mart Stores Inc. — to get their views on the coming year, from sales and profits to trends and the economy. The chief executives revealed some of their business strategies for the new year as well.

Finally, this year’s CSNews Forecast Study concludes with an outlook on what convenience retailers should expect in regards to the federal legislative landscape in 2015, as well as the regulatory environment. Not surprisingly, the retailers responding to CSNews’ survey put both these entities at the top of their list of issues expected to have a major impact.

Read on to find out what 2015 has in store for you. It’s going to be an exciting year!

Convenience retailers are optimistic about the year ahead, but there are still hurdles to overcome its 13th annual Industry Forecast Study, which has been significantly expanded this year to deliver more forward-looking insights than ever before to help c-store players mobilize for 2015.

As in past years, the exclusive CSNews Industry Forecast Study provides dollar and unit volume projections in key c-store product categories based on data from various sources, including Nielsen for category sales history; TDLinx for store counts; and government sources for motor fuel volume and pricing data. The data is then run through a sophisticated projection model and presented here in summary form. CSNews’ consulting economist Maureen Maguire, founder and CEO of New York-based ThinkResearch, oversees the Forecast Study process.

Along with the individual forecasts for the product categories of most importance to c-store retailers, the CSNews Forecast Study also provides an overall U.S. economic outlook.

This year, however, the study doesn’t stop there.

28 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

WWW.CSNEWS.COM | JANUARY 2015 | Convenience Store News 29

Business Forecast

Slow & Steady Improvement Business should be good as consumers get a $230-billion windfall from lower gas prices

W

ith the unemployment rate dropping, real wages rising slightly and oil prices plummeting to their lowest levels in years, business conditions in 2015 are expected to improve for both the national economy and convenience store retailers.

“There are a lot of positives going forward,” said Maureen Maguire, founder and CEO of ThinkResearch and chief analyst for Convenience Store News’ annual Industry Forecast Study. “The price of gas is dropping significantly and that amounts to an enormous tax break for the American consumer.”

However, Maguire cautioned that although the drop in the unemployment rate to 5.8 percent in November 2014 is a significant decline from the previous year, the nation hasn’t seen the kind of robust job growth that usually accompanies a drop in the unemployment rate.

“Unlike past recessions where the aftermath rebound is usually stronger, this recovery feels like a long, slow uphill march,” said Maguire.

Various sources suggest American motorists were saving $630 million a day on gasoline in late 2014 compared to what they paid at June 2014 prices, and that the annual savings would put $230 billion of disposable income into consumers’ pockets if prices were to stay this low for an entire year.

Still, the drop in oil prices also carries a potential negative impact: the fear that producers will no longer have an incentive to produce as much oil, running the risk of stalling what has been the great energy boom in the United States.

A report last month by the U.S. Energy Information Administration (EIA) downplayed that risk. The report noted that despite lower crude oil prices, U.S. oil production is expected to increase in 2015. “Based on the most recent data released

by North Dakota’s DMR (Department of Mineral Resources), drilling and production activities in the state have not slowed, despite the significant decline

Lower Unemployment & Slowly Rising Wages Portend Better Economic Times Ahead

Source: Convenience Store News Industry Forecast Study, 2015

30 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

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Business Forecast Retailer Forecast: Motor Fuels Sales will increase Sales will decrease Sales will stay the same

Industry Forecast: Motor Fuels 2013 Actual

2014 Estimated

2015 Forecast

$3.68 $3.57 $3.92 180.1 146.1

$3.56* $3.45* $3.82* 182.5* 148.0

$2.80* $2.67* $3.07* 183.1* 148.5

$662.4

$649.3

$512.0

$537.2

$526.6

$415.3

Average retail price per gallon 1 Gasoline (all grades) Diesel National billions of gallons C-store billions of gallons National sales of gasoline ($ billions) C-store sales of gasoline ($ billions)

Industry Forecast: Cigarettes (% change) 2013

Unit volume per store Industry unit volume

2014

-0.9% 0.0%

-3.6% -2.3%

35%

37%

Net change: -0.3%

1 Weighted average price of all grades and diesel fuel *Prediction from EIA/Department of Energy, Short-Term Outlook, December 2014 Source: EIA/Department of Energy; Convenience Store News Industry Forecast Study, 2015

in domestic crude oil prices since July 2014. Oil production in September 2014 — the latest data available — rose 5 percent from the prior month.”

Other risks and uncertainties that could adversely impact Maguire’s generally positive forecast for 2015 are: • Lackluster growth in Europe. “There’s fear of a recession in the European Union,” she noted.

• A slowdown in China’s economy, which would put more downward pressure on world prices.

• Housing prices and starts fade under potential

28%

Source: Convenience Store News Retailer Forecast Study, 2015

interest rate increases by the Federal Reserve, which appears to have finished with its program of pumping additional dollars into the economy.

• Geopolitical concerns such as ISIS and unrest/wars in Iran, North Korea, Syria and Ukraine.

• Pandemic concerns such as a resurgence of Ebola, particularly domestically with global travel during the holiday season.

On the positive side, overseas capital continues to flow into the U.S., consumer confidence is trending up and the latest retail sales figures are looking solid. In November, the National Retail Federation (NRF) reported retail sales increased a better2015 than-expected 0.6 percent seasonally -1.1% adjusted over October, and 3.2 per0.2% cent unadjusted over November 2013.

Source: Convenience Store News Industry Forecast Study, 2015 2013 figures are actual; 2014 are estimated based on nine months; 2015 are forecast.

Industry Forecast: Other Tobacco Products (% change) -0.2%

Forecast Unit Volume Per Store

3.5%

2015

4.9%

Forecast $ Sales Per Store

1.9%

5.7% 8.1%

2013

9.0% 0%

17.0%

5%

9%

Source: Convenience Store News Industry Forecast Study, 2015 2013 figures are actual; 2014 are estimated based on nine months; 2015 are forecast.

32 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

23.4%

Actual Unit Volume Per Store

5.1%

-1%

Sales will increase Sales will decrease Sales will stay the same

Forecast Industry $ Sales

3.8%

2014

Retailer Forecast: Cigarettes

Actual $ Sales Per Store

59.6%

Actual Industry $ Sales Net change: -0.9% Source: Convenience Store News Retailer Forecast Study, 2015

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Business Forecast

The gain was consistent with NRF’s holiday sales forecast of 4.1 percent over the prior holiday season.

Convenience store retailers also appear to be feeling pretty good about their business prospects for 2015. More than eight out of 10 retailers (86 percent) surveyed in CSNews’ first-ever Retailer Forecast Study said they expect their average sales per store to increase this year over 2014. Only 8 percent expect a decline, and 6 percent feel their business will be flat this year. Overall, retailers in the survey are forecasting an average net change of plus 3.7 percent in sales per store this year (see story on page 48).

Maguire noted that it is a good sign the country continues to add jobs, even though job creation is still running below that of a “normal” recovery. However, as unemployment continues to decline, she said the

Industry Forecast: Cigars (% change) 3.1% -4.1%

2015

-2.9% 5.6% -1.2%

2014

0.1% 5.9% -0.1%

2013

-0.2% -5%

0%

7%

demand for workers will increase and wages will go up.

The bottom line: “I expect 2015 to be better than 2014 — a little bit better,” she said.

MOTOR FUELS

The lower prices seen recently at the pump are expected to last throughout 2015. The average retail price per gallon is forecast to be $2.80 in 2015, a massive 21-percent decline compared to the estimated $3.56 average retail price per gallon in 2014. Likewise, diesel fuel will join the party, forecast to average $3.07 per gallon in 2015 vs. an estimated $3.82 last year.

These price projections assume a status-quo oil environment. An OPEC pledge to cut oil production, any sort of geopolitical turmoil or a domestic natural disaster disrupting refinery production would certainly cause gas prices to rise, perhaps significantly so.

Convenience store fuel volume in Forecast Unit terms of billions of gallons is expected Volume Per Store to remain flat. C-stores are forecast Forecast $ Sales to sell 148.5 billion gallons of fuel Per Store in 2015, just a fraction of a percent Forecast Industry increase compared to 2014’s projected $ Sales figure of 148 billion gallons sold.

Actual Unit Due to the large decline in motor Volume Per Store fuel prices, c-store fuel sales in terms Actual $ Sales of dollars are forecast to drop more Per Store than 20 percent. C-stores are expectActual Industry ed to sell $512 billion worth of fuel $ Sales in 2015, compared to the estimated

Source: Convenience Store News Industry Forecast Study, 2015 2013 figures are actual; 2014 are estimated based on nine months; 2015 are forecast.

Industry Forecast: Electronic Cigarettes (% change) 0.0%

Forecast Unit Volume Per Store

17.5%

2015

19.0%

Forecast $ Sales Per Store

42.9%

Actual Unit Volume Per Store

7.1% 169% 130%

2013

50%

21.7%

100%

125%

175%

Source: Convenience Store News Industry Forecast Study, 2015 2013 figures are actual; 2014 are estimated based on nine months; 2015 are forecast.

34 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

Actual $ Sales Per Store

8.7% 69.6%

Actual Industry $ Sales

132% 0%

Sales will increase Sales will decrease Sales will stay the same

Forecast Industry $ Sales

5.7%

2014

Retailer Forecast: Other Tobacco Products

Net change: +5.5% Source: Convenience Store News Retailer Forecast Study, 2015

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Business Forecast

Industry Forecast: Beer/Malt Beverages (% change) 3.7%

Forecast Unit Volume Per Store

4.0%

2015

5.3% 3.1%

Forecast Industry $ Sales

3.8%

2014

Actual Unit Volume Per Store

5.1% 1.9%

Actual $ Sales Per Store

1.3%

2013

Actual Industry $ Sales

2.2% 0%

Forecast $ Sales Per Store

3%

6%

Retailer Forecast: Beer/Malt Beverages

Source: Convenience Store News Industry Forecast Study, 2015 2013 figures are actual; 2014 are estimated based on nine months; 2015 are forecast.

Industry Forecast: Craft Beer (% change) 21.5% 18.7% 25.4% 22.5%

2014

Forecast $ Sales Per Store

22.5%

Actual $ Sales Per Store

19.5%

Actual Industry $ Sales

20.5% 15%

31.0%

Forecast Industry $ Sales Actual Unit Volume Per Store

24.2%

2013

Sales will increase Sales will decrease Sales will stay the same Forecast Unit Volume Per Store

17.1%

2015

0%

$649.3 billion in 2014.

Despite projections for lofty fuel price declines in 2015, convenience store retailers are not as convinced the downward trend will last.

Overall, respondents in CSNews’ inaugural Retailer Forecast Study predict fuel sales will decline just 0.3 percent in 2015, significantly below the predictions rendered by the CSNews Industry Forecast Study.

Among the chain and single-store

30%

52.3% 16.7%

Net change: +3.0% Source: Convenience Store News Retailer Forecast Study, 2015

Source: Convenience Store News Industry Forecast Study, 2015 2013 figures are actual; 2014 are estimated based on nine months; 2015 are forecast.

Industry Forecast: Packaged Beverages (% change)

Retailer Forecast: Packaged Beverages

(includes carbonated soft drinks, bottled water, sports drinks, energy and other beverages) 6.7%

Forecast Unit Volume Per Store

7.8%

2015

9.2% 5.1%

Forecast Industry $ Sales

6.8%

2014

Actual Unit Volume Per Store

8.2% 2.6%

Actual $ Sales Per Store

3.5%

2013

5%

10%

Source: Convenience Store News Industry Forecast Study, 2015 2013 figures are actual; 2014 are estimated based on nine months; 2015 are forecast.

36 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

26.5%

12.3%

61.2%

Actual Industry $ Sales

4.4% 0%

Forecast $ Sales Per Store

Sales will increase Sales will decrease Sales will stay the same

Net change: +4.9% Source: Convenience Store News Retailer Forecast Study, 2015

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Business Forecast

operators surveyed in November, 37 percent expect fuel sales to decrease in 2015, while 35 percent expect an increase and 28 percent believe sales will stay the same vs. 2014.

As for the trends c-store operators expect to be prominent in 2015, a majority of the Retailer Forecast Study respondents expect low gas prices to dominate talk. Some cited the fact that lower gas prices could pad consumers’ wallets, leading to increased in-store merchandise sales. Others wonder how long fuel prices will remain at depressed levels.

Growth in compressed natural gas sales; the possibility of a national gas tax increase; and potential approval of the Keystone XL Pipeline, a 1,179-mile crude oil

Industry

2015

2014

2013

pipeline connecting Canada and the United States, were also cited as noteworthy topics by respondents.

FOODSERVICE

Retailers expect foodservice sales in the convenience channel to stay relatively hot in 2015. A majority of the respondents (81.3 percent) to CSNews’ retailer survey predict that their per-store sales in the foodservice category, which encompasses prepared food as well as hot, cold and frozen dispensed beverages, will increase in 2015 compared to the prior year.

Among the remaining respondents, 14.6 percent expect their foodservice sales to stay the same, while the rest (4.2 percent) anticipate a decrease in the category.

Overall, the net foodservice sales change forecasted by retailers for Forecast: Carbonated Beverages (% change) the new year is an increase of 6.2 percent. As one retailer put it, this category will continue to be a “solid 1.8% Forecast Unit growth engine.”

3.7% Volume Per Store Healthy eating tops the list of 5.0% Forecast $ Sales trends retailers believe will have the Per Store biggest impact on their foodservice 1.5% Forecast Industry business in 2015. Increased competi$ Sales 3.2% tion, customer demand for higherActual Unit 4.5% quality food from c-stores, and more Volume Per Store awareness of c-stores as a foodser-0.1% Actual $ Sales vice option also made the list.

Per Store 0.4% Actual Industry $ Sales

1.3% -5%

0%

6%

Source: Convenience Store News Industry Forecast Study, 2015 2013 figures are actual; 2014 are estimated based on nine months; 2015 are forecast.

Industry Forecast: Alternative Beverages (% change) 12.9% 12.1%

2015

13.6% 10.0%

Actual Unit Volume Per Store

10.9% 8.6%

Actual $ Sales Per Store

6.9%

2013

Actual Industry $ Sales

7.8% 0%

5%

10%

15%

Source: Convenience Store News Industry Forecast Study, 2015 2013 figures are actual; 2014 are estimated based on nine months; 2015 are forecast.

38 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

Forecast $ Sales Per Store Forecast Industry $ Sales

9.4%

2014

Forecast Unit Volume Per Store

TOBACCO

Despite making up the lion’s share of the tobacco category, cigarettes continue to hang over retailers’ heads like a black cloud. In CSNews’ survey of c-store operators who sell tobacco, the majority cited cost and pricing when asked what will have the biggest impact on the segment in 2015. One retailer even went so far as to say “this is a dying category.”

However, the numbers don’t paint such a stark picture.

According to the CSNews Industry Forecast Study, the segment is expected to fare better this year. The data indicates cigarette unit volume per store is projected to dip just 1.1 percent in 2015. This is compared to the estimated 3.6-percent decrease in 2014 and 0.9-percent

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Business Forecast

decrease in 2013.

Also on the brighter side, retailers have higher expectations for other tobacco products (OTP) and see continued growth specifically in electronic cigarettes and vapor products. One retailer noted that “e-cigarettes could be very popular in 2015,” while another added that “e-cigarettes are important, but staying on top of the quick-moving trends is more important.”

Potential regulation does raise some concern. The Food and Drug Administration has proposed deeming regulations, which take aim at e-cigarettes and cigars among other segments of OTP, but there is no timeline for final implementation (see story on page 54).

In the meantime, CSNews Industry Forecast Study

Industry Forecast: Candy (% change) 1.3% 3.3%

2015

4.7% 0.7% 4.6% 0.2%

Actual Unit Volume Per Store Actual $ Sales Per Store

2.7%

2013

Forecast $ Sales Per Store

Forecast Industry $ Sales

3.2%

2014

data projects OTP unit volume per store to remain flat with a 0.2-percent decline in 2015, compared to an estimated 1.9-percent increase in 2014 and 5.7-percent jump in 2013. The forecast also calls for a 3.5-percent rise in sales per store for 2015.

The real head scratcher for 2015 may be electronic cigarettes. Growth in this segment skyrocketed in 2013 — with actual unit-volume-per-store growth at 169 percent. The original forecast numbers for 2014 indicated much of the same, with unit volume growth pinned at 130 percent. However, with new data coming in, the CSNews study now estimates the final 2014 growth number to be closer to 42.9 percent and 2015 volume is anticipated to flatline.

Whether these surprising numbers point to a reasonable leveling off of electronic cigarettes — previous growth came off a relatively small base — or if e-cigarettes are falling Forecast Unit victim to innovation in the vapor catVolume Per Store egory, remains to be seen.

Actual Industry $ Sales

3.5% 0%

5%

Source: Convenience Store News Industry Forecast Study, 2015 2013 figures are actual; 2014 are estimated based on nine months; 2015 are forecast.

Forecast Unit Volume Per Store

-0.4%

2015

0.9%

Forecast $ Sales Per Store

-4.9%

Forecast Industry $ Sales

-2.5%

2014

Actual Unit Volume Per Store

-1.3% 0.2%

Actual $ Sales Per Store

2.5%

2013

0%

5%

Source: Convenience Store News Industry Forecast Study, 2015 2013 figures are actual; 2014 are estimated based on nine months; 2015 are forecast.

40 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

Sales will increase Sales will decrease Sales will stay the same

26%

14%

60%

Actual Industry $ Sales

3.3% -5%

C-store operators hold a largely optimistic view on their cold vault prospects for 2015, particularly regarding alcohol. More than half of surveyed retailers expect average sales per store of beer and malt beverages to increase, while 61 percent expect per-store sales of packaged beverages to increase.

Retailer Forecast: Candy

Industry Forecast: Chocolate (% change) -3.8%

COLD VAULT

Net change: +3.2% Source: Convenience Store News Retailer Forecast Study, 2015

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Business Forecast

Retailers’ estimations of the net change for each segment of the cold vault are more cautious than what the CSNews Industry Forecast Study projects, particularly regarding packaged beverages. Interestingly, while more retailers expect beer sales to increase than expect packaged beverage sales to increase, the estimated net change is higher for packaged beverages.

Positive expectations for malt beverages may be due to the category growing a higher-than-expected estimated 3.1 percent by volume per store in 2014, with 3.7 percent forecast for 2015. Dollar sales per store increased even more, growing by an estimated 3.8 percent with growth of 4 percent expected for 2015.

“Solid but unspectacular growth is likely,” commented one retailer.

Numerous c-store operators mentioned the continued importance of craft beer, whose rate of growth is slowing even as the segment sees strong expansion. Unit volume per store grew an estimated 25.4 percent in 2014 and is expected to increase 21.5 percent in 2015, while dollar sales per store grew 22.5 percent in 2014 and are expected to increase 17.1 percent this year.

While retailers predict positive results from craft beer and growler sales, some expressed concern about the decline in premium brews and low margins in the premium segment.

Packaged beverage sales are also likely to grow in 2015, with some segments facing more challenges than others. Overall, packaged beverages performed slightly better than expected in 2014, growing an estimated 5.1 percent in unit volume per store and 6.8 percent in dollar sales per Industry Forecast: Non-Chocolate (% change) store. In 2015, unit volume per store is forecast to increase 6.7 per8.4% Forecast Unit cent, while dollar sales per store are 11.3% 2015 Volume Per Store expected to increase 7.8 percent.

12.8% Forecast $ Sales “The days of explosive growth Per Store are over, but [packaged beverages 9.8% Forecast Industry are] big business,” said one retailer. $ Sales 14.2% 2014 The biggest packaged beverage segActual Unit 15.7% ment, carbonated soft drinks, strugVolume Per Store gled again in 2014, increasing an esti5.4% Actual $ Sales mated 1.5 percent in unit volume per Per Store 9.4% 2013 store and 3.2 percent in dollar sales Actual Industry 10.4% per store. 2015 is likely to see only $ Sales slight improvement of 1.8-percent 0% 5% 10% 15% growth in unit volume per store and Source: Convenience Store News Industry Forecast Study, 2015 2013 figures are actual; 2014 are estimated based on nine months; 2015 are forecast.

3.7 percent in dollar sales per store.

Bottled water slightly underperIndustry Forecast: Mints (% change) formed vs. expectations in 2014, but was mentioned by numerous -2.0% retailers as a notable beverage trend Forecast Unit and is expected to see stronger 0.5% 2015 Volume Per Store growth in 2015.

1.8% Forecast $ Sales Alternative drinks were the catPer Store -5.5% egory standout in 2014, with an Forecast Industry $ Sales estimated 7 percentage points more in -2.0% 2014 unit volume per store than what was Actual Unit -0.8% Volume Per Store originally predicted and 5 percent-0.7% age points more in dollar sales per Actual $ Sales Per Store store. Double-digit growth is likely to 2013 9.6% Actual Industry continue in 2015, with an expected 10.6% $ Sales 12.9-percent increase in unit volume -5% -4% -3% -2% -1% 0% 2% 4% 6% 8% 10% per store and 12.1 percent in dollar Source: Convenience Store News Industry Forecast Study, 2015 sales per store.

2013 figures are actual; 2014 are estimated based on nine months; 2015 are forecast.

42 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

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Business Forecast

Retailer Forecast: Salty Snacks

Industry Forecast: Salty Snacks (% change) 2.3%

Forecast Unit Volume Per Store

5.7%

2015

7.1%

Forecast $ Sales Per Store

4.0%

Forecast Industry $ Sales

7.4%

2014

8.8% 1.5%

5%

19.6% 5.9% 74.5%

Actual Industry $ Sales

6.3% 0%

Actual Unit Volume Per Store Actual $ Sales Per Store

5.4%

2013

Sales will increase Sales will decrease Sales will stay the same

10%

Net change: +4.3%

Source: Convenience Store News Industry Forecast Study, 2015 2013 figures are actual; 2014 are estimated based on nine months; 2015 are forecast.

Source: Convenience Store News Retailer Forecast Study, 2015

Energy drinks are also among the most frequently cited as likely to have an impact in 2015. Some retailers expect sales to continue growing as the energy segment itself grows, while others expressed concern over the potential effect of government regulation.

egory this year. Other such trends are healthy eating; promotional growth; the need for more upscale candy; and packaging/format innovation including bites/minis and resealeable pouches. Retailers also anticipate more new product and new flavor introductions.

CANDY

SNACKS

The majority of c-store retailers have a sweet outlook on the candy category for 2015. Six in 10 said they expect per-store candy sales to increase in the year ahead.

Meanwhile, 26 percent expect their sales to stay the same as 2014, and just 14 percent anticipate a decrease.

More so than with any other category, what retailers are predicting in terms of a net sales change for next year — an increase of 3.2 percent — closely mirrors what the CSNews Industry Forecast Study projects — a 3.3-percent increase per store. This would be in line with 2014’s 3.2-percent gain.

According to the CSNews forecast numbers, nonchocolate will once again be the standout segment of the candy category in 2015. Per-store sales are projected to increase 11.3 percent, coming off estimated gains of 14.2 percent in 2014 and 9.4 percent in 2013. Perstore unit volume is projected to increase 8.4 percent, vs. 9.8 percent last year and 5.4 percent in 2013.

As for the other candy segments, chocolate, which saw sales and volume declines last year, is forecasted to stay down in 2015. Gum, too, is not expected to have a good year — a trend that’s been ongoing for several years now. Mints, on the other hand, are forecasted to see a volume decline accompanied by a slight sales gain, indicating higher product prices.

“More price increases” is among the trends retailers expect to have the biggest impact on the candy cat-

Salty snacks will continue to outperform most other product categories in a c-store this year. The category, which includes potato chips, tortilla chips, pretzels, ready-to-eat popcorn, nuts and seeds, grew at a high single-digit pace last year and is forecasted to nearly match that performance in 2015.

According to the CSNews Industry Forecast Study, salty snack sales in the industry grew by an estimated 8.8 percent in 2014, after a solid 6.3-percent actual gain in 2013. For 2015, CSNews is forecasting a 7.1-percent increase in total industry dollar sales.

On a sales-per-store basis, salty snack sales will increase by 5.7 percent in 2015, just a tab below the 7.4-percent estimated increase generated in 2014. Unit volume per store will increase 2.3 percent, following a 4-percent unit volume gain in 2014.

Retailers remain bullish on their salty snack prospects. Nearly three-quarters of respondents to CSNews’ Retailer Forecast Study said they expect an increase in their average sales per store in the salty snacks category in the coming year.

About one in five respondents said their salty snack sales are likely to remain the same as in 2014, while only about 6 percent are expecting a decline.

Retailers are a little more conservative than the CSNews forecast, predicting a mean net increase of 4.3 percent in salty snack sales per store for the coming year.

46 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

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Retailer Forecast

Feeling Optimistic More than eight in 10 c-store retailers expect better sales in 2015

I

f convenience store retailers are right in their predictions, sales will increase by 3.7 percent this year (motor fuels and in-store combined) for the average convenience store.

Based on the results of Convenience Store News’ first-ever Retailer Forecast Study, c-store operators are entering the new year with a good deal of optimism.

More than eight in 10 of those surveyed (86 percent) expect their average sales per store to increase this year vs. 2014, whereas only 8 percent expect a decline and 6 percent foresee their business being flat.

Despite this optimism, there are several issues top of mind for c-store operators that could have a big impact on their sales and profitability in 2015. Motor fuel prices, which had been on the decline for many months as of press time, ranks No. 1 on retailers’ list.

Nearly three-quarters of the survey respondents cited this as one of the top three issues they’ll be watching.

“Fuel margins are usually tight, but fuel is still the key driver for our industry,” said one retailer. Another commented: “The less fuel costs, the more the customers spend in the store.”

Other top-of-mind issues are competition (cited by 60.8 percent), health care costs and regulation (51 percent), labor issues (37.3 percent), tobacco and electronic

Retailer forecast for 2015 store count change Increase Stay the same

45.2%

Decrease

52.4%

2.4% Source: Convenience Store News Retailer Forecast Study, 2015

What will have the biggest impact on sales and profitability in 2015? % of retailer respondents* Motor fuel prices 72.5% Competition 60.8 Health care costs/regulations 51.0 Labor issues 37.3 Tobacco and e-cigarette regulations 35.3 Healthy eating trends 21.6 Demographic changes 13.7 Housing costs 5.9 *Respondents were asked to choose their top three issues Source: Convenience Store News Retailer Forecast Study, 2015

cigarette regulation (35.3 percent), healthy eating trends (21.6 percent) and demographic changes (13.7 percent).

“Channel lines are blurring and customers are finding it just as easy to go to drug, mass or grocery stores for immediate-consumption items that are typically offered at a better price [there],” one retailer said of the increasingly competitive retail marketplace.

The CSNews Retailer Forecast Study also asked participants what major initiatives they plan to implement in 2015 to increase sales and profitability.

Responses included: • Update food offer to be more fresh and appealing; • Increase the penetration of healthy snacks in all stores; Retailer forecast for 2015 • Be the best at vape and craft beer in total store sales my market; Increase Decrease • Focus on customer service; Stay the same • Remodel older stores; • Improve store branding and image; • Increase marketing; 6% • Loyalty/mobile/iBeacon initiative; and 8% • Grow store base to help leverage administrative costs.

In fact, more than half of the retailers surveyed (52.4 percent) said they plan to increase their total store count this year.

86% Less than 3 percent said they intend to decrease store count.

According to the Industry Forecast Study, store counts are projected to Source: Convenience Store News Retailer Forecast Study, 2015 increase by a total of 1.3 percent in 2015.

48 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

Q&A

Retailer Forecast

Chris Gheysens, Wawa Inc. He sees improved consumer confidence and low fuel prices jumpstarting spending

C

hris Gheysens, CEO of Wawa Inc., headquartered in Wawa, Pa., shared his predictions for 2015, including upcoming plans for his company that operates more than 645 c-stores in Pennsylvania, New Jersey, Delaware, Maryland, Virginia and central Florida.

Do you believe the overall economy in 2015 will be better, worse or the same as in 2014?

I believe the overall economy will continue to improve in 2015 at a similar pace as 2014, with possible upside. Job growth is generally improving in many areas where Wawa operates, and with unemployment sub 6 percent, pressure should begin to mount on wages, leading to more disposable income. Upside exists if low fuel prices sustain and housing starts to improve at a faster pace.

Do you believe the c-store industry (sales and profits) will perform better, worse or the same in 2015 compared to 2014?

Better! Consumer confidence is growing and low fuel prices have the ability to jumpstart 2015 spending. The industry is also delivering better stores, offers and customer experience, which will help continue to grow sales and take share. Our business, and as I’ve heard from others in the industry, has experienced a “tick-up” in growth rates since the late summer, which looks sustainable into early 2015.

Do you believe your company (sales and profits) will perform better, worse or the same in 2015 compared to 2014?

We are planning for continued growth in profits and sales, led by fresh food and beverage sales. Contributions from recently opened new stores and new markets, along with mid-single-digit, same-store sales growth, support our 2015 expectations. Optimism for better

50 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

winter weather and increased consumer spending, along with the launching of new products with emphasis on more advertising, will also aid 2015 growth.

Chris Gheysens, CEO of Wawa Inc.

What do you foresee as the three major factors/ trends that will impact the overall economy in 2015?

The greatest sustained economic impacts will be from changes to consumer confidence, real wage growth and housing starts. However, I believe these will continue on their nominal-to-slow pace of improvement. Sustained low fuel prices, changes to interest rates (late in the year), and more volatility in the equity markets are top of mind for me as economic headlines in 2015.

What do you foresee as the three major factors/ trends that will impact the c-store business in 2015?

I expect the consolidation story to continue to prevail in 2015, along with continued innovation in fresh food and beverages driving further acceptance of our channel from consumers for these offers. I also expect the passing of even more aggressive local regulations, like minimum wage increases.

What are your company’s most important initiatives for 2015?

We have several initiatives planned for 2015 that will connect us with our customers, communities and associates; help perfect our offer and experience; and enhance our stores. Our mobile app will launch, new food and beverage products will be introduced and along with continued new store openings, we will begin a more robust remodel program for our existing stores.

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Q&A

Retailer Forecast

Sonja Hubbard, E-Z Mart Stores Inc. She’s looking forward to a better economy, and higher industry sales and profits

S

onja Hubbard, CEO of E-Z Mart Stores Inc., headquartered in Texarkana, Texas, shared her predictions for 2015, including upcoming plans for her company that operates more than 295 c-stores in Arkansas, Louisiana, Oklahoma and Texas.

Do you believe the overall economy in 2015 will be better, worse or the same as in 2014?

I believe the economy will continue to improve in 2015 as it has been, even if slowly. This will be accelerated in pace if fuel prices continue to remain low as they are expected to [this] year. At a price of $2 per gallon, gasoline is an immediate [income] raise for millions of Americans, and it also instantly frees up funds for discretionary purchases. Those factors benefit the convenience store industry.

Do you believe the c-store industry (sales and profits) will perform better, worse or the same in 2015 compared to 2014?

I do believe we will perform better simply because when fuel prices are lower, consumers tend to take more road trips. They travel more and have more discretionary income for immediate-consumption purchases. In the convenience store industry, we are positioned to fill those consuming needs.

Do you believe your company (sales and profits) will perform better, worse or the same in 2015 compared to 2014?

I do believe our company will benefit for the same reasons of a generally improved economy. We have also built new locations that can better serve consum-

52 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

ers. These stores will improve and benefit exponentially more. Now, some locations we Sonja Hubbard, CEO of E-Z Mart have in areas that were experiencing a huge oil boom will decline because of lower oil prices and less activity in the oil field.

What do you foresee as the three major factors/ trends that will impact the overall economy in 2015?

Fuel prices have an enormous impact on the general economy, especially in the flyover states in which our company operates because everyone drives. I also believe we will see job creation reduce unemployment, and we will also see consumer confidence improving — all of which will have an impact on the overall economy.

What do you foresee as the three major factors/ trends that will impact the c-store business in 2015?

Three major factors or trends that will impact the c-store business in 2015 include fuel prices, improved employment, and a more favorable regulatory environment that encourages business expansion.

What are your company’s most important initiatives for 2015?

E-Z Mart will continue the remodeling, rebuilding and construction of its locations. We will also implement new software that improves operational efficiency and customer service, and plan to establish a regional commissary to expand our freshfood offerings.

Legislative & Regulatory Forecast

An Active Year Ahead Presidential election posturing and logjam in congress will make for lively narrative

W

ith the presidential election approaching in 2016, the federal legislative environment this year will be much more active, especially on those issues that are politically charged.

“Remember, the presidential campaign has already begun so the Republicans are going to pass a bunch of legislation — budgets, war-related — that they know [President Obama] will have to veto so they can force their narrative on those issues and use it against Hillary [Clinton] in the campaign,” said Joe Kefauver, managing partner of Parquet Public Affairs, a national issue management, communications, government relations and reputation assurance firm specializing in service-sector industries. “Most will come from the social-agenda side of things.”

This year’s federal regulatory environment will likewise be more active because of the continued logjam in Congress, as Obama has demonstrated his willingness to forcefully use his executive and regulatory powers to bypass Congress, Kefauver noted.

“Look at his announcements on immigration, minimum wage and Cuba, and how his NLRB [National Labor Relations Board] is singlehandedly revitalizing the union movement in this country,” he observed. In fact, Kefauver puts the NLRB at the top of his list of the federal regulatory issues convenience store retailers should watch out for in 2015, particularly in regards to ambush elections, micro-unions and joint employer/franchisee rulings.

Still, the biggest hazards to the convenience

54 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

store industry may not be at the federal level at all, but rather at the local level. “The biggest threats to the business model — wages, paid leave and potential organizing — are all happening in city halls and county commissions, not a gridlocked Congress,” according to the government affairs expert.

Minimum-wage battles are happening on the state and federal levels, and local districts have the potential to use their authority in ways that could have a disproportionate effect on c-stores, such as the proposed ban on tobacco sales that was narrowly quashed in Westminster, Mass., last year. Even a local city council election in Richmond, Calif., recently received major attention from Chevron Corp. due to the presence of its refinery there.

Thus, getting involved in government relations at all levels is a must, stressed Steve Loehr, vice president of operations support at La Crosse, Wis.-based Kwik Trip Inc. and current chairman of NACS, the Association for Convenience & Fuel Retailing.

“The bottom line is this: Elections have consequences — both in who we actually elect for an office and then who they put in charge of regulatory agencies and who they appoint as judges,” Loehr said. “We must get to know our legislators, at both the state and national levels, so we educate them about our industry and about the consequences of the laws they pass.

Visit them at their office and invite them to your business when they are back in their home districts.”

The Issues To WaTch

As part of this year’s expanded Industry Forecast Study, Convenience Store News spoke with industry experts, government relations specialists, c-store retailers and association heads to find out which legislative and regulatory issues are of most importance for 2015.

The list is a long and varied one, including: • Corporate tax reform • Interchange fees • Banking industry pushback on credit and debit card successes • Immigration

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Legislative & Regulatory Forecast

• Minimum wage • Food and Drug Administration (FDA) activism in the obesity space • Menu labeling • Health care and the Affordable Care Act • Union activity • Data security • Tobacco deeming regulations • Menthol tobacco regulation • Renewable Fuel Standard • Underground storage tank rules • Natural gas standards Convenience store retailers with foodservice programs across the nation were dealt a blow late in 2014, when the FDA released its finalized rules for menu labeling that require menus to display caloric information. Now treated as though they are restaurants, c-store operators can’t help but wonder what further legislative and regulatory changes lie ahead for them.

Tom Robinson, president of Santa Clara, Calif.based Robinson Oil Corp., believes additional regulations or changes to existing regulations are more likely to happen this year than substantial legislative changes, mainly due to the gridlock between Congress and the Obama administration.

“They don’t seem to be able to get out of their own way,” the retailer said.

There is potential relief from the FDA’s menulabeling requirements in the form of H.R. 1249, the Common Sense Nutrition Disclosure Act, and S. 1756. According to Kwik Trip’s Loehr, this legislation “would codify a less burdensome approach to menu labeling” by limiting the provision to establishments that derive 50 percent or more of their revenue from food intended for immediate consumption, or prepared and processed onsite. Both bills remain in limbo.

C-store retailers also face uncertain ground in the area of health care as they work to comply with the Affordable Care Act (ACA). Industry insiders cite concerns about adequate coverage, restrictions on work hours and rising costs. Although the Supreme Court upheld the ACA in 2012, there is the potential to change certain aspects through legislation.

“I tend to believe health care is here to stay, but certainly see opportunities to improve pieces of it,” Robinson said. “It would be nice if legislators could figure out ways to make it less of a burden.”

Also speaking of burdens, interchange fees are an ongoing issue that will certainly extend into 2015 as

56 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

the c-store industry keeps fighting back against rising credit card costs. “At stake here is, do we as an industry want to control our future, or are we going to let the credit card companies continue to make more total profit from our industry than we do?” said Loehr.

Tobacco Feels The heaT

The tobacco category is no stranger to legislative and regulatory attention, and that is expected to stay the case in 2015. Several tobacco-related issues weigh heavily on the minds of c-store players.

The FDA caused quite a stir in late April when it finally released its long-awaited proposed deeming regulations, which would allow the agency to regulate electronic cigarettes, cigars, pipe tobacco, nicotine gels, water pipe (or hookah) tobacco and certain dissolvables not already under its authority. Now, three years after waiting for the proposal, the tobacco industry — retailers and manufacturers alike — will have to wait even longer for final guidance.

“The likelihood of getting clarification on what the potential regulations would be for e-cigarettes and cigars in 2015 is somewhat low,” said David Bishop, managing partner of Barrington, Ill.-based Balvor LLC, a sales and marketing firm.

As he explained, there were a number of events that occurred in 2014 that indicated it’s not going to be a quick process. First, in July, U.S. District Court Judge Richard Leon in Washington, D.C., ruled that the FDA Center for Tobacco Products’ (CTP) Tobacco Scientific Product Advisory Committee (TPSAC) had substantial conflicts of interest.

In his ruling, Leon indicated the agency could not rely on its 2011 Menthol Report, which recommended the consideration of removing menthol cigarettes from the market. In addition, as a result of Leon’s decision, the FDA had to reconstitute the composition of

Legislative & Regulatory Forecast

the TPSAC panel to remove those members that had conflicts of interest (the doctors or scientists had been expert witnesses against the tobacco industry or in support of the pharmaceutical industry).

“In one way, it was a reshuffling of the members of TPSAC to be more objective and fair. At the same time, all the work that TPSAC had done up until that time was basically discarded and it had to start over,” according to Bishop.

The August 2014 deadline set for the public comment period on the FDA’s proposed deeming regulations also plays into the unlikelihood of any final rule in 2015. By the deadline, the Center for Tobacco Products had received nearly 80,000 comments and, under the law, the agency has to review all those comments — which takes time.

What’s more, the deeming regulations center around two main areas, electronic cigarettes and cigars. The main sticking point with cigars is whether or not to include premium cigars in the final rule. The more complicated factor in the proposed regulations is that the tobacco industry — and Bishop believes the FDA — recognize that e-cigarettes are something different, albeit still tobacco, and could potentially advance the public interest by reducing the risk or costs associated with the consumption of traditional tobacco products.

“I think the FDA, or specifically the CTP, recognizes they really do have to pursue an objective, evidencebased approach, especially with e-cigarettes,” Bishop said. “The FDA is in the middle. There are the real staunch anti-tobacco advocates out

there that want nothing short of absolute prohibition, which we know legally the FDA doesn’t have the authority to impose. On the other side, you have the industry — or primarily the product manufacturers — who want to ensure they can operate in more of a freemarket economy and not be restricted in terms of how they innovate or go to market with unfair or overly burdensome regulations.”

Whatever form the final regulations take, there is the potential for litigation from both sides, Bishop added. While the agency is not interested in litigation, the industry has its own vested interest and it was very vocal in the overturning of the TPSAC report.

Circling back, the TPSAC report also leads Bishop to believe a final determination on menthol cigarettes is somewhere down the road. Not only does the CTP have to reconstitute TPSAC, but it also has to start the exploration process over.

The questions in front of the panel include: Are people more or less likely to start smoking if menthol is available vs. not? Does the presence or absence of menthol cigarettes increase or decrease the likelihood people will quit smoking? Is the risk with using menthol cigarettes more likely to lead to disease vs. those who smoke non-menthol cigarettes?

The 2011 TPSAC report, which has essentially been put on the shelf, did not find any evidence to support that menthol is more likely to lead to disease, Bishop explained. From the manufacturers’ position, that should almost single-handedly be the determining factor: if menthol products do not increase the risk of disease, then initiation and cessation are really secondary because it doesn’t necessarily increase the harm to the overall population.

What that doesn’t necessarily speak to, though, and what TPSAC has to evaluate is the impact on the population. “This is really going to be watched for a couple of reasons,” Bishop said. “The magnitude of this is extremely large. If 90 percent of tobacco use is in cigarettes, one quarter of it is in menthol.” It is a significant portion of the overall market in the United States and has the potential to create an illicit trade if menthol is prohibited, he added.

FuelIng MaTTers

Like tobacco, the motor fuels category is another legislative and regulatory landmine.

Multiple retailers interviewed by CSNews expressed concern about the Renewable Fuel

58 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

Legislative & Regulatory Forecast

Standard, which mandates how much renewable fuel has to be produced and blended each year. In November, the Environmental Protection Agency (EPA) announced it would not finalize standards until 2015.

“We’re going into 2015 not knowing what the requirement was for 2014, so 2015 becomes obviously problematic, too,” Robinson commented.

The Renewable Fuel Standard is one of five key legislative and regulatory issues that the Petroleum Marketers Association of America (PMAA) intends to focus on this year. “The ethanol mandate has reached the point where we can’t reach the statutory mandate blending to an E10 level,” relayed PMAA President Dan Gilligan. “So, we’ve asked the EPA to hold the line for the foreseeable future because out of 700,000 gasoline dispensers in the country, fewer than 5,000 have been approved for anything higher than E10.”

SIGMA: America’s Leading Fuel Marketers also has the Renewable Fuel Standard on its hit list of issues to tackle in 2015. For the most part, the association was happy with the EPA’s proposed 2014 rule and is advocating the agency issue a final rule as quickly as possible.

“With respect to alternative fuels, SIGMA is fuel agnostic, provided the fuel can be sold in a lawful manner to customers that want to purchase it. As more and more new fuels enter the market, SIGMA looks to be a thought leader and active participant in that discussion,” said Tom Gresham, president of the association.

Both SIGMA and PMAA have the EPA’s proposed revisions to underground storage tank regulations in their sights as well. SIGMA continues to advocate that any new requirements not unfairly burden tank owners and operators.

PMAA has asked the EPA to conduct a small business study to determine the costs of underground storage tanks for gas station operators. If necessary, the trade organization is willing to go to court to compel the EPA to conduct such a study, Gilligan said.

“We’ve been working with the EPA for five years on this. We are hoping the new requirements are reasonable,” he noted. “The EPA originally projected the costs of underground storage tanks would be $900 a year per gas station, but we project the cost would be

60 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

closer to $7,000 per gas station.”

The other issues on PMAA’s 2015 agenda are: • Restoring the 40-hour workweek as defined under the Affordable Care Act. As of press time, the House of Representative had voted to restore the 40-hour workweek definition, with Obama still vowing to veto the move and keep it at 30 hours.

• President’s Obama recent statement that c-store managers should make $50,000 a year or more to be exempt from overtime; the current standard is approximately $24,000. “We are going to request [to the Department of Labor] that if an increase is necessary, do so gradually over multiple years so convenience store owners can budget it in,” said PMAA’s president.

• The tightening of ground-level ozone standards. Price differences at the pump when comparing areas that require reformulated gasoline to those that don’t can be significant, even within the same state.

The other issues on SIGMA’s 2015 agenda are: • Data security. “No one wants to suffer a breach, but it is clear that all merchants are vulnerable,” Gresham said. “I think this could be one of the most serious challenges our industry has faced in a long time.”

• The Keystone XL Pipeline. SIGMA supports the Keystone XL Pipeline because infrastructure is needed to deliver product to the markets where it is needed.

• The development of standards for the sale of compressed natural gas (CNG) and liquefied natural gas (LNG). SIGMA has worked closely with Congress in support of a gallon-equivalent position, so consumers can easily compare the price of a gallon of gasoline or diesel fuel to an equivalent gallon of CNG or LNG. • Support for legislative efforts to lift the ban on crude oil exports. This is a new issue for SIGMA, voted upon during its annual meeting in November. “While we are certainly cognizant of the potential effect on prices that lifting the ban could have, SIGMA’s support for a free market and open access to supply make it necessary to side with those that want to eliminate the export ban,” Gresham explained. CSN

Expert’s View

The Year of Retail Fragmentation C-stores have a unique opportunity in today’s fragmented retail world

By Shilpa Rosenberry

A

s we look to 2015, it is evident that retail has never been more fragmented. Today’s consumer has many options and is shopping at more places than ever before.

The notion of a “primary store,” for most, has gone away as consumers now shop multiple formats for their everyday needs — from supercenters to traditional grocery stores, hard discounters, dollar, convenience, specialty stores, online and more.

The supply chain is also highly fragmented, enabled by digital, with more ways to get product — from physical stores to online delivery to a range of new direct-to-consumer models.

The role of primary shopper is fragmented, too, with several members of the household now doing the shopping.

Yet, in this fragmented retail world, convenience stores have a unique opportunity that is driven by consumers’ hectic lifestyle and demand for easy in-and-out, “on the go” retail.

When you add urbanization, a growing aging population with a preference for smaller formats, and the rise of single and smaller households, it’s no wonder that even big-box retailers are working hard to get more “convenient” by focusing on smaller and express formats.

With more smaller, convenient competition than ever, we will see convenience retailers working even harder for their share of shoppers.

Here are five predictions for the convenience channel in 2015 and beyond:

62 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

1.

While we will see most of retail getting micro-sized (smaller formats), we will see traditional convenience stores buck the trend and get bigger. These stores will be larger and evolve to become more like convenient “superstores” with more space devoted to fresh prepared foods and made-toorder options, quick-service restaurants (QSRs) and expansion of in-store experiences and services for key consumer segments.

With a sea of new, small-box competition, convenience stores will look to capture share and drive trips through hyper-focused strategies. This will play out in several ways. For example, some convenience stores will become hyperlocalized (focus on local community/local products).

Others will become hyper-specialized in specific areas like a specialty branded coffee bar experience to capture the coffee trip. Still others will become hyper-focused on specific consumer segments, such as products and services tailored to Millennials or the growing aging population.

Convenience stores will go head to head with QSRs with innovative fresh-food options.

Convenience stores will answer the consumer’s call for healthy “fast” food by expanding their “fresh” proposition with more freshly prepared meals and snacks, and made-to-order options. Some will look into daypart strategies. Others will look to leap far beyond traditional QSR operators with differentiating menus and experiences. With that, we will see the rise of unexpected food products at convenience stores such as innovative handheld snacks (e.g. fresh fruit on a stick, meat and vegetable kebabs) and

2.

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Expert’s View

urban-inspired street food for on-the-go consumption (e.g. Belgian waffle breakfast sandwiches) and even handheld desserts.

Convenience stores will look to get even more convenient — innovating checkout lines with new queues designed to encourage impulse shopping, adding drive-thrus and even in-store services designed to drive trips. Digital will further enable convenience with more digital integration into merchandising (sodas, milkshakes), and digital kiosks for made-to-order coffee and food. In the age of anytime retailing where shoppers are expecting retail any time of day or night, convenience stores have a unique

4.

With more smaller, convenient competition than ever, we will see convenience retailers working even harder for their share of shoppers.

64 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

opportunity to capture a new shopper base with very different work hours than we’ve seen in the past.

Convenience stores will make it “for me.”

Consumers are looking to express their individuality through the products they buy and driving the desire for customization. Convenience stores will answer the call with more “make your own” and customizable solutions. We will see make-your-own juice/smoothie bars, build-your-own snack bars (trail mixes, candy solutions), and more made-to-order foods for on-the-go consumption across all dayparts.

5.

Shilpa Rosenberry is senior director, Global Consumer Strategy, at Daymon Worldwide. Known for its industry expertise in private brand building, experiential consumer marketing and innovative retail-driven services, Daymon Worldwide currently collaborates with more than 100 major retailers and nearly 6,000 manufacturers in 50 countries.

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MOTOR FUELS Gasoline + Diesel + Ethanol + LNG/CNG + Electric

Does CNG Have Staying Power?

Fleets are expected to drive growth, with consumer adoption slow

By Brian Berk

C

ompressed natural gas (CNG) is truly a chicken-and-the-egg story. Some say there needs to be more refueling centers for the alternative fuel. Others take the opposite view by saying demand from fleets and consumers must be present to open more CNG locations.

Whether or not the proverbial egg cracks could very well determine if CNG becomes a preeminent alternative to traditional petroleum or just a bit player with a small, specific niche.

The purported benefits of CNG vs. traditional petroleum are many: an abundant, locally produced resource with a 100-year reported reserve; a more environmentally friendly product; and cheaper prices at the pump than E10 (considered traditional petroleum today as defined under the blend wall).

As of October, there were 751 public and 669 private CNG fueling centers in the United States, according to Dr. Paulina Jaramillo, assistant professor at Pittsburgh’s Carnegie Mellon University.

Kwik Trip is considered a veteran when it comes to selling CNG.

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Clean Energy Fuels operates approximately 30 percent of the public CNG stations in the country.

Convenience store retailers are beginning to get on board in increasing number. Kwik Trip Inc., Love’s Travel Stops & Country Stores and OnCue Marketing LLC are all considered CNG veterans.

Meanwhile, Speedway LLC, Duchess Shoppes, Holiday Stationstores, CHS Inc. and Wawa Inc. are just a few of the c-store retailers to recently announce they will soon sell the alternative fuel or put forth efforts to make it easier for their franchisees to do so.

The biggest benefit for consumers purchasing CNG, whether they are regional truckers, municipalities or other entities, has been price. Scott Minton, manager of CNG business development for Stillwater, Okla.based OnCue, reported in October that his company was selling CNG for $1.69 per gallon at 16 locations, about $1 cheaper than the national average price for a regular gallon of gasoline at the time.

Similar prices can also be seen at the pump at La Crosse, Wis.-based Kwik Trip’s 30 locations offering CNG. Steve Loehr, the retailer’s vice president of operations support and NACS chairman, lauded the stability of CNG — price swings rarely, if ever, occur.

“We have changed the price of CNG twice in two years. I think we can paint the price on the sign instead of purchasing an electronic sign,” joked Loehr.

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MOTOR FUELS Gasoline + Diesel + Ethanol + LNG/CNG + Electric

Minton echoed the sentiment, saying OnCue last changed the price of CNG on Jan. 2, 2014 by 50 cents, but not due to any price fluctuation. Instead, the c-store chain raised the price due to the expiration of a 50-cent federal excise credit. Minton hopes Congress will reinstate the credit this year, allowing the retailer to again lower its CNG pump prices.

HANDICAPPING CNG

As mentioned, CNG does have a lot going for it. But there are some downsides. While the cost of converting a petroleum vehicle to CNG can vary somewhat, it averages approximately $10,000 per vehicle. In addition, the only two CNG consumer vehicles on the market, the Honda Civic NG and the hybrid Chevy Impala, cost an equal $10,000 more at the pointof-purchase compared to petroleum-fueled models.

Hence, it would take consumers a few years of purchasing cheaper fuel to make up for the increased cost of the vehicle itself.

Experts interviewed by Convenience Store News for this story all agree that fleets represent the present and future success for CNG. Although a small number of consumers will switch to the alternative fuel, they believe the number will not be enough to move the needle.

Demand from fleets, though, is definitely enough to drive a strong CNG market, said Jared Hightower, vice president of North American sales for Janesville, Wis.-based ANGI Energy Systems LLC, the largest supplier of CNG fueling equipment on this continent. The company was acquired

by Gilbarco VeederThere were 669 private CNG fueling centers Root last year. in the U.S. as of October.

“CNG is growing,” said Hightower. “We are still a pretty small market, so the addition of just one [fleet] program can be pretty big news. Growth has been continued and sustainable beginning in 2011, and we expect that to continue.”

Clean Energy Fuels Corp., operator of approximately 200 public alternative fuel stations in 40 states, likewise reports that CNG sales have been strong. Some of its

68 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

ANGI Energy Systems is the largest supplier of CNG fueling equipment in North America.

stations are standalone locations, while others are incorporated into existing c-stores, noted Peter Grace, senior vice president of sales. Based on Dr. Jaramillo’s figures, Clean Energy operates approximately 30 percent of all the public CNG stations in the country. The Newport Beach, Calif.-based publicly traded company operates many private CNG locations as well.

“We are doing well selling this fuel to both the refuse and transit industries,” Grace said. “More than 60 percent of new refuse trucks built [in 2014] run on natural gas. In the public transit industry, about 35 percent of the vehicles today run on natural gas. And then, of course, there’s heavy-duty trucking, which is seeing plenty of CNG conversions.”

From a supplier perspective, interest on the part of both convenience stores and truck stops to implement CNG stations has been strong in recent months, added Hightower.

“Convenience stores have become a lot larger and therefore more economically viable,” he said. “A store that is double the size can pump significantly more fuel, so your ROI [return of investment] can be justified more quickly as long as you have the vehicles there to consume it.”

CONTEMPLATING CNG

Should more c-store retailers take the plunge and sell CNG? There are several factors to consider before selling the alternative fuel, as outlined by OnCue’s Minton.

First, retailers must know what the demand is in

®

MOTOR FUELS Gasoline + Diesel + Ethanol + LNG/CNG + Electric

Oklahoma-based OnCue Marketing expected to have 20 CNG locations operational by the end of 2014.

their area. If they open a CNG station, will local businesses fuel up there and/or convert more vehicles to run on CNG? Retailers must have enough fleets refueling at a location for it to be successful.

“I need about 100 pickup trucks filling up at each station every month in order to make that station viable,” explained Minton. “If I already know that a store would have 20 to 30 CNG trucks coming by, it could be worth it if I feel I can get another 50 or 60 trucks to convert [to CNG]. Getting the first 50 or so is tough, but then it becomes easier because people want to save money.”

C-store retailers should make sure to do their research and work with an experienced CNG provider, relayed Hightower. The potential ROI is better than ever, but c-store operators must do plenty of homework first. “Reference information from retailers that are already in the business,” he advised.

“You can’t decide [to offer CNG] on Monday and forget about it on Tuesday. There’s a level of commitment you have to make.”

If an operator is unsure about whether they will draw enough CNG vehicles to their site early on, Minton recommends the c-store or truck stop be located near a major highway or throughput area where placing a CNG sign at the location will lead to traffic in the future.

“If you determine there is enough demand for CNG, the next thing you must have is a gas pipeline nearby,” the OnCue executive said. “Is a pipe

70 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

adequately sized that can deliver fuel to the store? It’s not like diesel, where a truck can come and dump a load of diesel underground every morning. You need to have a pipe that is not only available, but has excess supply on it that you can take from the gas company.”

Once a c-store retailer has successfully placed a check mark next to the previous two items, another decision must be made. Should the operator handle the entire CNG installation process itself, or should it team up with an established gas provider?

This is a tough call. Retailers have gone different routes. OnCue decided to handle the task on its own because when it first opened CNG locations in 2009, it had a volume fueling commitment from Chesapeake Energy Corp., a local Oklahoma City natural gas provider. On the other hand, Wawa decided to partner with South Jersey Gas, a company well established in the CNG field, for its two CNG sites that are expected to open soon.

Financial wherewithal is another huge factor.

Although not impossible, smaller operators of five stores or less may want to sit it out regarding opening CNG locations, said Minton.

“If you maintain one [CNG] station, it can be very costly if something goes wrong. It could be a $50,000 part that you need to have in play tomorrow or next week at the latest,” he stressed. “But if you have a chain of CNG stations, you can spread out the cost of that part to all of them.”

In fact, OnCue, which expected to have 20 operational CNG locations by the end of 2014, has full-time employees that are on call to maintain these locations as need arises.

“If you are four or five stores, for example, it’s very difficult to come up with the [approximate] $1.6 million it costs to open the location, as well as the potential maintenance costs that may come up,” said Minton.

Clearly, the decision whether to offer CNG is difficult for c-store and truck stop operators. Less cloudy is the future of the alternative fuel when it comes to fleets. The potential for profits on the part of the c-store retailer or truck stop is certainly there, industry players maintain.

“We are very bullish about the future,” concluded Clean Energy’s Grace. “We look at [annual] growth rates of more than 20 percent in our industry. We have a very strong long-range economic story. There is so much gas being discovered in the United States, which creates more jobs and an increased tax base. Better yet, we are keeping all of the money at home.” CSN

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FOODSERVICE Prepared Food + Hot, Cold, Frozen Dispensed Beverages

HOW TO

Foodservice Training Programs That Reduce Risk & Enhance Quality

By Maureen Azzato

W

hen you listen to convenience store operators discuss foodservice training, they predominately focus on food safety training. While food safety and sanitation is certainly paramount, other types of training are also important, such as proper menu item preparation, food station setup and breakdown, packaging and presentation, proper equipment operation and maintenance, and customer service, to name a few. All are essential to reducing risk, and enhancing foodservice quality and the customers’ overall experience.

“Foodservice training is a must for operators of any size and level — from the smallest food operations to the largest quick-service restaurants,” said one retailer member of the Convenience Store News How To Crew. “Even the smallest items, such as training on how to clean fountain nozzles, can enhance the quality of the product.”

Without question, operators can suffer major harm

72 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

to their business if there is a food safety and sanitation breach –– as we discussed in the November 2014 issue of Convenience Store News –– and best practices are critical to embrace and perfect. The commitment to food safety and sanitation begins at the top, at the CEO level, and must trickle down to every employee in the field and in the stores where food is served.

In addition to food safety and sanitation, foodservice training should include classroom and hands-on training about every facet of an operator’s foodservice program, and the skills required to execute the program consistently and with the highest quality possible.

“Teaching proper foodservice skills –– such as equipment operation and maintenance, inventory control and quality checks –– can result in better and more consistent foodservice quality as your staff becomes knowledgeable in the necessary fundamentals,” said Mathew Mandeltort, corporate foodservice manager for distributor Eby-Brown Co. and an expert on the

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FOODSERVICE Prepared Food + Hot, Cold, Frozen Dispensed Beverages

CSNews How To Crew. “For example, we always stress the importance of using checklists during station setup to ensure that the various elements of a station (such as disposables and condiments, etc.) are in place and fully stocked so that guests are not inconvenienced in any way due to out-of-stocks.”

Foodservice training should take place at all levels of the organization. Most of our How To Crew experts agree that everyone from top executives down to store level should be required to take food safety and sanitation training because executives and upper-level management will then more readily lead by example; instill a culture of foodservice in their organizations; and ensure there are resources for continuing education and training, monitoring and continuous improvement.

At the store level and district level, training is much more focused on the nuts and bolts of foodservice execution, such as how to properly make all sandwiches on the menu, how to read and calibrate thermometers to ensure food is held at the proper temperatures, or how to clean the cappuccino and other beverage machines. Store-level training should also focus on service to ensure foodservice customers are hospitably greeted and expediently served.

TRaInIng METhODS

Given the broad spectrum of topic areas that foodservice employees must be trained on, what are the best methods to train them? Are internal programs superior to external programs? When is classroom training more appropriate than hands-on training or video/ internet training?

All told, the average foodservice employee’s initial training consists of about 20 hours for both informational classroom training and practical (hands-on) training, according to How To Crew panelists. And for the most part, the experts recommend internal training as opposed to using outside

74 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

Call TO aCTIOn • Balance informational classroom training with practical on-the-job, hands-on training.

• Regularly invest in training and training materials to support the consistent execution of high-quality foodservice programs.

• Food safety and sanitation training should be the top priority, but skills training is also vital to executing a quality foodservice program.

• Make food safety the responsibility of everyone that interacts with the food.

• Develop comprehensive compliance programs for all vendors, suppliers and manufacturers to ensure all products coming into the store are safe.

• Use strong images/pictures for in-store manuals, recipe books and training guides so directions can be quickly understood at a glance.

• As foodservice sales increase and resources grow, invest in field trainers and a corporate training team to ensure programs are current and execution is consistent.

resources because employees tend to participate at a higher level and respond better to internal programs.

Some experts only recommend video training or computer-based training if it is used in combination with live classroom and hands-on training.

For passive educational and informational training (i.e., the principles of food preparation, food safety and sanitation, inventory management and customer service), most experts recommend live classroom training. Active training on the job with their supervisors, however, takes place in the store and is where employees can combine their passive training with hands-on learning, supported by visual training aids. At the store level, most employees learn best by doing, according to the experts.

“Computer-based training is fine, but not as critical as consistent on-the-job training from location to location,” noted one expert on the CSNews How To Crew. “On-the-job training is a must and needs structure with a bible for all recipes.”

It’s also critical for trainers to “keep their hands in their pockets” and allow employees to learn by doing because they will better retain skills this way. The trainer’s voice should become the “conscience of the listener/trainee,” who executes the skill while tapping their memory for the trainer’s directions and

FOODSERVICE Prepared Food + Hot, Cold, Frozen Dispensed Beverages

expertise, as one retailer explained.

Several experts cite the importance of using good images on visuals in food-station manuals and recipe books, making it easy for employees in training to understand what a product should look like at every stage or preparation, for example. Strong support materials for employees to take home after training also provide them with reference information to support their learning.

During training, companies should explain why things are done a certain way “so employees further understand the importance of their actions [regarding] serving safe food,” advised Ed Burcher of Burcher Consulting, also a member of the CSNews How To Crew.

“With the multitude of training methods, there may not be one best way to do it,” Burcher said. “At the end of any training, however, it is essential to verify learning and understanding by the employee” with quantitative and practical testing.

Meanwhile, managers, supervisors and district managers should be trained so they can become the teachers to continuously reinforce training.

76 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

Our How To Crew David Bishop — Balvor LLC Ed Burcher — Burcher Consulting Joseph Chiovera — XS Foodservice & Marketing Jack W. Cushman — Nice N Easy Grocery Shoppes Dean Dirks — b2b Solutions Eric Giandelone — Mintel Foodservice Kane Kulas — CSM Bakery Products Michael Lawshe — Paragon Solutions Mathew Mandeltort — Eby-Brown Co. Larry Miller — Miller Management & Consulting Services Maurice Minno — MPM Group Paul Pierce — Pure Plates Tim Powell — THINK Marketing Chad Prast — Murphy USA Inc. Bonnie Riggs — The NPD Group Jennifer Vespole — QuickChek Corp.

Jerry Weiner — Rutter’s Farm Stores

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KEEpIng IT CuRREnT

It’s ideal, for chains with the resources, to have a corporate training team/person that is responsible for updating training materials

multiple times per year, scheduling training, and staying on top of new rules and guidelines that emerge from states and local municipalities.

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78 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

never done, especially in a dynamic organization that is continuously updating its menu and expanding its offering. Training programs and manuals must be updated any time new products, new equipment or new programs are introduced.

“In some cases, a subject matter expert (SME) for the program is the appropriate person for this review,” said Burcher. “I have found that assigning SMEs that responsibility –– making it a part of their yearly deliverable and evaluation –– puts the added emphasis on the need to have programs up-to-date.”

Training programs also should be tweaked or updated whenever there is a gap or inconsistency found during store audits, employee evaluations or poor customer reviews and complaints that arise, according to one How To Crew expert. “This is even more critical if there is a food safety issue,” he added.

Even if programs or menus don’t change for a year, training programs should still be updated annually.

Finally, how much should operators budget for employee training annually? While firm dollar figures are difficult to ascertain and can vary widely based on a company’s size and the scope of its foodservice program, top organizations across many industries budget approximately 4.5 percent of their payroll on training and employee development, according to Training magazine.

To become best-in-class and instill a foodservice culture, convenience store operators must develop a training culture. This will help them keep the best and brightest employees who will stay with the company to hopefully become the next product and program developers, and executive leaders. CSn

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Nutella & GO! products Consumers continue to reach for snacks throughout their busy days: Snacking now accounts for 50 percent of all eating occasions, according to Hartman Group’s December 2013 report, “Modern Eating: Cultural Roots, Daily Behaviors.” In fact, on-the-go snacking is up 5 percent since 2009, with 45 percent of consumers looking for convenient portable snacks, reports “State of the Snack Industry— April 2013” from Information Resources, Inc. Terefore it’s crucial for retailers to stock the front end with high-appeal, easy, on-the-go snack products that satisfy shoppers’ snacking needs, such as Nutella & GO! Nutella & GO! is a convenient snack with creamy Nutella® hazelnut spread and crispy breadsticks for dipping. Nutella & GO! made the Top 20 of all U.S. food and beverage new item launches in 2013, according to the “2013 IRI New Product Pacesetters” report.

Among top front-end SKUs, Nutella & GO! is ranked No. 2 on

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Snacks that combine sweet and salty are driving sales Chocolate/salt confections experienced 112% compound annual growth rate (CAGR) from 2010 through mid-July 2014 CALENDAR YEAR

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2010 2011 2012 2013 Jan.-July 13, 2014

$630,431 $4,356,055 $6,204,561 $12,730,667 $16,311,026

Source: IRI Total US MULO +Convenience, custom favor group (salt, chocolate)

the front end, according to IRI’s weekly front-end dollars/distribution in total U.S. multi-outlets for the 52 weeks ending April 20, 2014.

Nutella & GO! has been a major contributor to retail front-end growth since it was introduced in 2012, accounting for 18 percent of overall front-end dollars, according to IRI May 2014 data for total U.S. multi-outlet front-end dollar growth for the past four years. At one multi-outlet retailer, for example, front-end growth increased more than 30 percent for dollars and unit sales afer the store introduced Nutella & GO!, based on IRI data for the 52 weeks ending May 18, 2014.

Nutella & GO! also rivals the No. 1 front-end item in repeat rates despite having only onethird of the household penetration. With 6 percent penetration, Nutella & GO! has a 54 percent repeat rate. Tis rate is comparable to a top-selling single-serve chocolate bar with 18.6 percent household penetration, according to IRI national consumer panel data for all outlets for the week ending Aug. 10, 2014.

Adding pretzels to the mix Building on the success of Nutella & GO!, new Nutella & GO! with pretzel sticks caters to consumers’ growing appetite for mixing up both sweet and salty tastes: Chocolate/salt confections saw 112 percent compound annual growth rate (CAGR) from 2010 through mid-July 2014, reports IRI. In addition, Nutella & GO! Pretzel scored 80 percent in overall purchase intent in initial Ipsos taste tests.

Pretzels is a valuable, growing segment of a highly penetrated salty snacks category Household penetration In-basket ring with Out-basket ring with

SALTY SNACKS

PRETZELS

98.5%

53.4%

$68.64 $37.10

$77.90 $41.27

+$9.26 higher in-basket ring with pretzels Source: IRI national consumer panel total U.S. all-outlet for 52 weeks ending Aug. 10, 2014

Priced competitively with other items on the front end, Nutella & GO! Pretzel is projected to be a Top 10 front-end item, according to data from IRI based on weekly front-end dollars/distribution for total U.S. multi-outlet sales for the 52 weeks ending April 20, 2014.

Because the Nutella & GO! shopper is diferent from the shopper of key front-end snacks, adding Nutella & GO! Pretzel is not likely to signifcantly cannibalize the front end, according to IRI ShopperSights data for the 52 weeks ending June 15, 2014. Basket ring of the Nutella & GO! shopper ($88.80) is twice that of basket ring without Nutella & GO! ($46.84), and studies about the pretzel shopper suggest that Nutella & GO! Pretzel will be a basket success, according to IRI consumer panel data for the 52 weeks ending Aug. 10, 2014. In addition, cracker (breadstick) shoppers skew slightly higher income compared with pretzel shoppers, so Nutella & GO! Pretzel ofers appeal to a new subset of shoppers. In fact, the new pretzel product is projected to bring in another 2.5 million households incrementally.

Nutella & GO! spreads the word The frst-ever television and digital ad campaign for Nutella & GO! kicked off last year and runs through August 2015, focusing on the delicious taste of Nutella & GO! and extending the halo from the core Spread the HappyÂŽ promotional campaign for Nutella. The Nutella & GO! advertising, which will reach 85 percent of adults ages 18 to 49 approximately fve times, includes a 15-second television spot that can be seen on national cable as well as primetime network television.

Nutella & GO! Pretzel is being launched in January 2015, with recommended front-end placement adjacent to Nutella & GO! Breadstick.

Merchandising opportunities for Nutella & GO! Pretzel include a 12-count, pretzel-only front-end tray and a 24-count tray.

ADVERTORIAL

The Nutella timeline 1946: The original version of Nutella® spread, pasta gianduja (“gianduja” was the name of a local carnival character), is created

by Pietro Ferrero, pastry maker and founder of the Ferrero company in Italy. He uses hazelnuts to extend the limited supply of cocoa available during World War II rationing. The product is produced in loaves, wrapped in aluminum foil and cut into slices.

1951: The original recipe is changed, and the name of the product becomes Supercrema.

1964: Michele Ferrero changes the name of the hazelnut spread to Nutella, combining the English word “nut” with “ella,” a feminine Italian end-syllable.

1983: Nutella is frst imported to the United States from Italy, initially distributed only in the Northeastern part of the country.

2009: Nutella is launched into the U.S. market on a large scale with national media support and improved distribution and instore visibility.

August 2011: Nutella & GO! single-serve snack pack hits U.S. test market store shelves.

May 2012: Nutella & GO! wins the most innovative new product award in the Sweet Snacks category at the National Confectioners Association’s 2012 Sweets & Snacks Expo.

September 2012: Nutella & GO! rolls out a full national U.S. launch.

2014: The Nutella brand celebrates its 50th anniversary.

January 2015: Nutella & GO! with pretzel sticks is introduced.

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The Nutella snacking advantage Nutella® hazelnut spread has already proven to be a favorite with snack-loving consumers.

Almost 20 percent of Nutella consumption is for snacking, compared with only 4 percent for sweet spreads and 10 percent for peanut butter, suggest The NPD Group data and Nutella data. In addition, research suggests that Nutella & GO! can be an excellent trial gateway to the purchase of jars of Nutella spreads: IRI household panel data show that in the 52 weeks ending March 23, 2014, 27 percent of consumers who bought Nutella & GO! purchased jars of Nutella spread afterward.

About Our Company: Nutella® was originally imported from Italy to the United States more than 25 years ago by Ferrero U.S.A., Inc. The Ferrero Company, which was established in 1946 in Alba, Italy, is one of the world’s largest confectionery companies with a vast global portfolio that includes high-quality products such as Ferrero Rocher® fne hazelnut chocolates, Raffaello® confections and Tic Tac® mints. Ferrero products are distributed globally throughout Europe, North America, South America, Australia and Asia.

Contact: Marc Nissinger Director of Customer Marketing Ferrero USA, Inc. 600 Cottontail Lane Somerset, NJ 08873-1233 (732) 584-4770 Marc.NISSINGER@ferrero.com

IN-STORE MERCHANDISING Grocery + General Merchandise + HBC + Periodicals

The Health of Convenience Will 2015 be the year of widespread better-for-you products in c-stores?

By Renée M. Covino

H

ealthy snacks and convenience stores are no longer mutually exclusive. The concept of healthy snacking became increasingly prevalent in the convenience channel within the last couple of years, but retailers are now more aggressively searching for ways to best capitalize on this growing trend.

Recent online media attention from Cooking Light and Delish highlights the channel’s “healthy road trip snacks” in slideshow form. Readers are encouraged to take their next road trip with better-for-you (BFY) c-store snacks such as whole-grain cereal cups, energy bars, low-fat yogurt, 100-percent vegetable juice, trail mix, fruit cups, part-skim string cheese, single-serve bags of baby carrots, bananas, baked chips and peanuts in the shell.

Articles like this, along with the overall industry focus on health-conscious food and fitness trends, are contributing to the increased awareness and acceptance of a growing assortment of convenience snacks with better nutritional value than the typical (hot dog, chips) fare. And distributors and manufacturers with BFY options are all over it.

“Since the ‘healthy’ or ‘better-for-you’ trend is happening across many categories, it is important that distributors work with all their manufacturers to support the new product introductions that support the trend,” advised a top merchandising executive at EbyBrown Co., a national convenience wholesaler based in Naperville, Ill. The distributor exec observed that manufacturers are doing a lot of research and listening to consumers. “They are putting a great deal of focus on the convenience channel and use several buzzwords that resonate with retailers and consumers: natural, organic, fresh, protein, gluten-free,” he said. “These words are meaningful when communicating to our retail customers and to the consumers. We also have an opportunity to combine better-for-you and on-thego messages, which is where it really comes together

for convenience stores.”

One observation from the manufacturer side is that “consumers are looking to simplify their diets by choosing foods made with natural and fewer ingredients,” according to Portia Young, public relations manager for Sargento Foods Inc., best known for its cheese products.

“More convenience stores are heeding the call by offering more wholesome choices people on the go can feel good about. Consumers are looking for fresher, higher quality choices in their snacks,” Young said.

“They want to be able to understand and identify with simple, more wholesome ingredients.”

HEAlTHy PRODuCTS

There was a lot of buzz at the 2014 NACS Show, held in October, about “fresh” products and the popular perception that fresh and healthy go hand in hand.

From a fresh perspective, McLane Co. Inc. has worked with logistics provider C.H. Robinson to “establish a consistent, national supply chain to provide whole produce to the industry,” reported Tom Sicola, vice president of marketing for the Temple, Texas-based convenience distributor. “Currently, McLane distributes produce in 12

Yogurt represents a “big growth opportunity” for c-stores, according to The Dannon Co.

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IN-STORE MERCHANDISING Grocery + General Merchandise + HBC + Periodicals

of its 20 divisions, with efforts being made to establish critical mass in the remaining facilities.” The wholesaler’s ultimate goal is to offer fresh whole produce to all McLane customers.

“Real food snacks,” such as cheese, dairy and meat snacks, are outpacing traditional snack categories, according to the Eby-Brown executive. He cited Kraft Foods’ introduction of several new items in recent months that support the BFY trend, including Oscar Mayer P3, a combination of real meat, cheese and nuts in a convenient on-the-go package, as well as its Stacked Cheese & Meat Snacks, which are made with real cheese and “deli-quality” meats.

On the foodservice side, Eby-Brown also makes sure it offers fruit, yogurt, flatbreads and wraps.

Sandwiches are thought to be a BFY option, too, and are growing in sales year over year.

The way McLane sees it, popular snacks catering to the “healthier snacker” include attributes such as high protein and high fiber, with low fat and low calories —

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Meat snacks, which are naturally high in protein and low in fat, fit the better-for-you trend.

but of course, still delivering a good taste. “Clean and transparent packaging that calls out these details is very appealing and represents good quality,” Sicola stated.

He mentioned the Kind bar as “a good example of a product that encompasses all of these specifications.”

The Eby-Brown spokesperson, too, cited Kind bar, along with Clif, Lara Bar and Luna as those showing the largest percent growth from its perspective. Protein bars, such as Builder’s and PowerBar Protein, are seeing double-digit growth, according to Eby-Brown.

General Mills Inc. offers a variety of healthy graband-go products, including Nature Valley granola bars and yogurt. “Specific to the growing bars space, we are focused on offering benefits across multiple consumer need states, including healthy grains with our Nature Valley Crunchy bars, and protein with our Nature Valley Energy bars and Nature Valley Protein bars,” said Michelle DeLamielleure, global consumer insights senior manager. “As we look to the future, we are focused on expanding our portfolio of bars with simple, recognizable ingredients.”

In the cheese arena, Sargento recently rolled out 1.5-ounce mini bars, which are sized and shaped like chocolate bars but made with natural cheese and available in sharp cheddar, Colby jack and pepper jack varieties. The new mini bars are being touted as a great fit for convenience stores. Sargento also recently introduced Tastings, hand-crafted natural cheeses that come in eight varieties from the familiar (Wisconsin Aged Cheddar) to the more adventurous (Bruschetta Jack). These specialty cheeses are now available in convenience stores.

In the meat snacks category, the growth of alternative proteins continues to increase the variety of BFY options, according to Jack Link’s. “Our studies show that turkey has the most growing power in the category,” said Kevin Papacek, director of marketing. “It has the largest share of all alternative proteins and

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has increased double-digits for the past three years.”

The company sees room for growth both in new flavors of turkey products and new innovation around chicken and pork.

Yogurt is another product segment being recognized as a healthy snack growth opportunity and given the c-store channel’s emphasis on convenience, it is a perfect fit, according to The Dannon Co. “Yogurt is definitely a big growth opportunity now for c-store operators,” stated Michael J. Neuwirth, Dannon’s senior director of public relations.

“Shoppers express desire [for] freshly made yogurt parfaits, a yogurt parfait bar, high-protein yogurt shakes and fresh- or frozen-based yogurt smoothies, so we are working on bringing these concepts to life with our c-store partners.”

New product development will continue to support the BFY trend moving forward, the Eby-Brown spokesperson believes. “The trend does not appear to be regional or short-lived, but rather a long-term national trend,” he said.

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HEAlTHy MERCHANDISING

Achieving a healthier balance of snack options and foodservice choices is fast becoming a popular approach among c-stores. Many healthier choices that only used to be found at stores like Whole Foods can now be found in the convenience channel. But it’s important for operators to think realistically, as well as openly, when adding such items.

“Adding new [BFY] items does not need to come at the expense of top-ranked items,” according to the Eby-Brown exec. The top-ranking items in all categories should always be the first priority, he stressed.

“However, there are normally slow-moving items that can be identified during a SKU rationalization process and removed to make room for new items.”

Regional considerations can be tantamount to success in the healthy arena for c-stores. “When recommending new and healthy snacks, we rely heavily on the regional demographics of the store’s location and do not encourage over-allocation of item innovation of any kinds,” McLane’s Sicola said. “A reasonable

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balance needs to exist between core and new items in order to support total category growth.”

Consumers searching for BFY snacks are looking for an easy-to-spot location in the convenience store, Sicola explained. “They want an assortment that contains variety, and items within that assortment to contain simplistic ingredients.” Dedicating a standalone three-foot endcap to healthy snacks for at

Better-for-You by the Numbers • The overall healthy/better-for-you (BFY) segment grew 44 percent in average unit sales in 2014, according to McLane Co. Inc. data.

• Consumption of fresh foods (including fruits) grew 20 percent from 2003 to 2013, reported The NPD Group.

• Six in 10 shoppers would like c-stores to carry more healthy foods, according to Mintel.

• 20 percent of consumers “strongly agree” they would shop at a c-store more often if it carried more BFY products, General Mills BFY Research cited.

least the first few months of its launch is McLane’s suggested merchandising method for c-stores in many urban areas. If space is too limited for that, the distributor recommends carving out a six- to nine-itemcount block in a top corner of an inline salty snack set.

“Deciding whether to add or decrease space for these items will come with time and depend on consumers’ reaction and take rates,” he said.

Sargento encourages convenience retailers to take its natural cheese out of the dairy case and display it in multiple parts of the fresh-foods open cooler. “Doing so encourages cross sales, having close proximity to other grab-and-go purchases such as prepared sandwiches and yogurt,” stated Young. The company also recently began promoting a “Convenience Cheese Brand Block” designed to create a Sargento section of natural cheese choices in an open-air cooler. This merchandising section includes snack cheese options such as sticks, string, mini bars and its new Tastings products.

From a whole produce standpoint, McLane recommends high-traffic-area displays, such as baskets on

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Good C-store Food Is… the coffee bar or checkout counter, or rolling stands that can be positioned by the fountain or as a point of interruption in other high-traffic areas of the store.

HEAlTHy MARkETING

Getting the message across to consumers is an important part of a healthier offering, especially for c-stores, which are still not recognized by many as the channel of choice for such items.

“It is important to call out to consumers that you are a player in the healthy snack category,” Sicola told Convenience Store News. “Prominent signage advertising healthy options should be displayed both in and outside of the store. Appetizing photography, as well as calling out an immediate consumption need and value, are key.”

The responsibility of educating their shoppers also falls on the c-store operator’s shoulders. “For example, you may want to have shelf tags that distinguish the difference between a high protein bar and an energy bar,” Sicola offered.

Manufacturers are doing their part where they can.

Naturally high in protein and low in fat, calories and carbs, Jack Link’s Jerky offers special displays in-store to help promote these healthy attributes of jerky.

“One of our recent promotions was called Snack Smarter, whereby we had callouts on the displays to bring attention to the great nutritional profile of jerky,” explained Papacek.

Jack Link’s also has a “smart snack” designation on its bags to highlight the positive nutritional profile of jerky. Specific to the c-store channel, “we know impulse and shopability are critical to consumer awareness, so we continue to invest in shopper marketing vehicles, including power wings, shippers, point-of-sale, in-store coupons and on-pack messaging,” relayed Michael Burris, channel marketing director. “Our direct sales teams work closely with retailers to develop growth-driving plans locally based on their specific needs.”

General Mills Inc. asked shoppers what better-for-you (BFY) means as it relates to food and beverages sold in convenience stores, and here’s what they discovered.

BFY is: Fresh Heart healthy Reduced/low/no fat Baked, not fried Made with whole grains Less processing Reduced/low/no calorie Reduced/low/no sugar

BFY is not: Athletic performance Gluten-free Helps me focus Vegetarian or vegan Fits a diet plan Fills me up Helps me lose/manage weight Pre-portioned package

High in fiber High in protein

High in calcium Gives me energy

Source: General Mills Inc., BFY Research

HEAlTHy DAyPARTS

Do consumers feel like eating healthier in the morning? Or are they ready to correct their earlier food mistakes by the afternoon?

There is some evidence that time of day contributes to the likelihood of consumers making healthier food choices, yet that “health time” varies depending on which research you listen to.

McLane sees evidence that BFY items are more popular in the morning when shoppers are trying to get a healthy start to their days. As the day goes on, consumers turn to more indulgent snacks, according to Sicola.

“That is why it is important to merchandise your sets by dayparts, such as having breakfast items toward the very top of a cookie/cracker/alternative set.”

People’s healthy snacking motivations are strongest and “most pure” in the morning, General Mills’ DeLamielleure agreed. “The morning is all about wanting healthy snacks that replace a traditional breakfast,” she said. “As the day goes on, people’s motivations tend to shift to more enjoyment/comfort snacks to satisfy cravings or to tide one over until the next meal.”

Dannon research reveals that yogurt consumption, though, is actually highest in the afternoon when consumers are in c-stores looking for BFY options, according to Neuwirth.

Still, there are those who say the overall BFY trend is not specific to any daypart. “Consumers are snacking more throughout the day, replacing what had been the standard three meals per day of breakfast, lunch and dinner,” the Eby-Brown exec said. Therefore, healthier snack options such as fresh fruit and yogurt fit into this new lifestyle at any time. CSN

Sargento Foods advises c-store operators to merchandise natural cheese in their open-air cooler.

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OUTABOUT &

Spotlighting major industry events

A Balancing Act Anheuser-Busch’s trade media open house reveals five key elements to win the beer category

By Melissa Kress

C

onvenience store retailers hold the keys to success in their hand — one hand, five fingers.

Since Anheuser-Busch rolled out its Your Balanced Portfolio Approach (YBPA) in 2014, the beer giant has not only helped retailers narrow down their individual plans of action for the beer category, but also has gained valuable insights — five key points in particular — that can apply to convenience store Anheuser-Busch operators across the board.

Trade Media Open Citing IRI research, CJ House Watson, vice president of smallNov. 19-20 format sales at Anheuser-Busch, St. Louis noted that beer is one of the fastest-growing product categories. To capitalize on this growth, he said retailers need to leverage the entire beer portfolio, which is the concept behind YBPA. Speaking at Anheuser-Busch’s trade media open house Nov. 19-20 at its U.S. headquarters in St. Louis, Watson pointed out that two-thirds of all trips into a convenience store are for beverages. In addition, premium beer is the largest beverage segment for a c-store operator when it comes to revenue mix. However, some retailers are still struggling to win the beer category.

YBPA data has found that all quartiles, from the best-in-class to the bottom, have roughly the same percentage of sales in each beer segment, proving retailers “can’t just bet on one segment to grow,” Watson said.

Anheuser-Busch also found that the top performers have five key points in common: Single-serve beers — Deliver higher margins, offer increased assortment and encourage incremental sales.

Two-fer promotion strategies — Encourage plus-one purchases, with an industry take rate of 70 percent on the buy-two option.

1.

2.

90 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

3.

4.

5.

Three displays at all times — Best-in-class retailers have, on average, three displays with 100 cases on display.

Four days of supply on hand — Retailers sell 2.5 days of beer in 15 hours over the weekend (Thursday, Friday and Saturday from 4 p.m. to 9 p.m.).

Five doors allotted for beer — Top-quartile retailers have 36 percent more beer space.

Two out of these five doors are dedicated to premium beer and in total, the five doors carry 110 SKUs. What’s notable about YBPA and its insights, according to Watson, is that the data does not pinpoint AnheuserBusch products specifically, but beer overall.

“YBPA helps retailers sell more beer, not more Budweiser,” he explained. “If the retailers sell more beer, it’s good for Budweiser.”

That doesn’t mean Anheuser-Busch isn’t taking steps to grow its brands. The key is renovation of core brands and innovation, said Pat McGauley, vice president of innovation.

In 2014, the beer giant took a different approach to innovation, with a focus less on new products and more on new packaging for its core brands. “The best thing we could do for our core brands is elevate their image,” McGauley explained.

Notably, the company rolled out the 25-ounce can (an extra ounce as a reward to consumers), and the aluminum bottle with twist-off cap that can be used to reclose the beer. CSN

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McLane Co. Inc. . . . . . . . . . . . . . . . . www.mclaneco.com . . . . . . . . . . . . . . . . . 20-21 MillerCoors . . . . . . . . . . . . . . . . . . . www.millercoors.com. . . . . . . . . . . . . . . . . . . . 5 NAFEM . . . . . . . . . . . . . . . . . . . . . . . #TheNAFEMShow.com . . . . . . . . . . . . . . . . . . 84 National Restaurant Association . . . www.restaurant.org/Show. . . . . . . . . . . . . . . 77 NCA . . . . . . . . . . . . . . . . . . . . . . . . . www.sweetandsnacks.com . . . . . . . . . . . . . . 91 NJOY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CV1,23 Papa Johns . . . . . . . . . . . . . . . . . . . www.papajohns.com . . . . . . . . . . . . . . . . . . . 78

Christina Bear Associate Brand Director 224-632-8182 cbear@stagnitomail.com

Paramount Citrus . . . . . . . . . . . . . . . www.halosfun.com . . . . . . . . . . . . . . . . . . . . 19 Perfetti van Melle . . . . . . . . . . . . . . www.airheads.com . . . . . . . . . . . . . . . . . . . . 63 Procter & Gamble Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 R.J Reynolds Tobacco Company . . . www.engagetradepartners.com . . . . . . . . . . . 9

Roz Gilman Ad Manager 224-632-8243 rgilman@stagnitomail.com

R.J Reynolds Tobacco Co/ Santa Fe Tobacco. . . . . . . . . . . . . . . www.engagetradepartners.com . . . . . . . . . 67 Rubbermaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24-25,43 Sara Lee. . . . . . . . . . . . . . . . . . . . . . www.saraleefoodservice.com . . . . . . . . . . . . 51 Technomic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

Stagnito Business Information brands also produces:

Tillamook . . . . . . . . . . . . . . . . . . . . . www.tcsjerky.com . . . . . . . . . . . . . . . . . . . . . 85 Tyson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Vapor4Life . . . . . . . . . . . . . . . . . . . . www.wowvapor.com . . . . . . . . . . . .Supplement

106 Convenience Store News | JANUARY 2015 | WWW.CSNEWS.COM

More great brands to serve you better.

®

©/® 2014 Tyson Foods, Inc. Registered trademarks are owned by Tyson Foods, Inc. or its subsidiaries or used under license.

Category Spotlights: A SkyMall ® for C-store Retailers

Welcome to Convenience Store News’ new Category Spotlights

A

mid a myriad outside factors, such as gasoline prices, consumer confidence and competitive pressures, nothing is more important than selling the right products and services that will generate higher gross profit dollars and sales volume for your company.

Convenience Store News’ Category Spotlights is totally product- and services-oriented and organized by the major categories that drive c-store revenue and profits.

If you’ve ever been on an airplane and seen the magazine of cool consumer products and gadgets that’s

in the seat pocket in front of you, you’ll quickly grasp what Category Spotlights is all about. With limited traditional advertising and no feature content, Category Spotlights is immediately intuitive and easy for you to find the products, services and promotions that will enhance your category sales. In addition, it provides contact information to make it even simpler for retailers to order or get more information about innovative offerings.

We encourage c-store industry suppliers to submit their best product offerings to us. (Please send them to our Chief Brand Officer

Korry Stagnito at korrystagnito@ stagnitomail.com.)

Category Spotlights goes to the entire print circulation of both Convenience Store News and Convenience Store News for the Single Store Owner, giving it the highest distribution of any product and services publication in the industry.

At a time when suppliers are introducing more unique solutions than ever before, we hope that Category Spotlights will help you sort through the swirl of items, features and promotions and make better decisions to grow your sales and profits in 2015. n

JANUARY 2015 Category Spotlights

3

Candy & Snacks

HersHeY’s CArAMeLs

iCe breAKers CooL bLAsts CHeWs New Ice Breakers Cool Blasts Chews provide an icy cool blast of freshness in a rapidly dissolving chew. Available in a 0.8-ounce innovative slide pack, Ice Breakers Cool Blasts Chews come in Spearmint and Peppermint flavors.

Suggested retail price is $1.99.

The Hershey Co. Hershey, Pa. www.hersheysconvenience.com

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Category Spotlights JANUARY 2015

The newest addition to the Hershey’s brand, Hershey’s Caramels are gourmet quality, chocolate-covered caramels that combine delicious Hershey’s milk chocolate with smooth, creamy caramel. Available in a 1.1-ounce package, with a suggested retail price of $1.29.

The Hershey Co. Hershey, Pa. www.hersheysconvenience.com

LittLe Debbie FrosteD Donuts Little Debbie Frosted Donuts are the No. 1 selling doughnut in c-stores.

These tasty, bite-sized doughnuts are covered in a rich chocolaty frosting your customers will love.

And our powdered, glazed and crunch varieties round out Nos. 2, 3 and 4, helping to drive your sales around the clock.

Little Debbie Collegedale, Tenn. littledebbiecstore.com

Cheez-it CrunCh’d New Cheez-It Crunch’d are puffed snacks made with 100-percent real cheese inside and out. Available in two flavors, Cheddar Cheese and Hot & Spicy, Cheez-It Crunch’d offers a new way to satisfy cheese lovers. Both are available in 2-ounce bags in six-count cases.

Kellogg Co. Battle Creek, Mich. kelloggsconvenience.com

tWiX brAnd miXed singLes Counter

AirheAds Xtremes

The TWIX Brand Mixed Singles Counter Unit (72-count total) features 54-count of TWIX Caramel Cookie Bars and 18-count of TWIX Creamy Peanut Butter Cookie Bars. First delivery will be April 20, 2015 and the last delivery will be May 15, 2015, with a last order date of May 8, 2015.

Mars Chocolate North America Hackettstown, N.J. www.mars24seven.com

Airheads Xtremes is one of the fasting-growing brands in non-chocolate candy. Following the successful launch of Xtremes Bites in peg bags, this top-selling convenience store item is now available in a 2-ounce count good and 4-ounce king size!

Perfetti Van Melle USA Erlanger, Ky. www.perfettivanmelleusa.us

LittLe debbie ChoCoLAte CupCAkes These moist, delicious cakes are filled with cream and topped with a rich, chocolaty icing and a white squiggle stripe.

Little Debbie Collegedale, Tenn. littledebbiecstore.com

tWiX brAnd miXed singLes FLoor stAnd The TWIX Brand Mixed Singles Floor Stand (144-count total) features 120-count of TWIX Caramel Cookie Bars and 24-count of TWIX Creamy Peanut Butter Cookie Bars.

First delivery will be April 20, 2015 and last delivery will be May 15, 2015, with a last order date of May 8, 2015.

Mars Chocolate North America Hackettstown, N.J. www.mars24seven.com

JANUARY 2015 Category Spotlights

5

CANDY & SNACKS JJ’s Bakery Pies Since 1986, JTM Foods LLC has been producing America’s favorite snack pies in our nut-free bakery in Erie, Pa. Our Kosher Parve pies are offered throughout North America under the JJ’s Bakery brand name in seven delicious flavors. JJ’s Bakery Apple Pie was ranked No. 1 in unit sales by IRI (Total U.S. MULO+C, 52 weeks ending Nov. 2, 2014). Call us today and make sure you are getting your piece of the pie.

JTM Foods LLC Erie, Pa. www.jjsbakery.net

single-serve Peanut Butter crème Pie When it comes to cookies, it only makes sense to stock Little Debbie cookies in your c-store. Our classic Oatmeal Creme Pies, Fudge Rounds and Nutty Bars have been winners for generations.

The addition of Peanut Butter Creme Pies make our cookie offerings even stronger.

Little Debbie Collegedale, Tenn. littledebbiecstore.com

slim Jim Bacon Jerky Bacon is everywhere, and the trend has proven its staying power. In jerky, alternatives to beef meats have also proven successful in growing the meat snacks category. Slim Jim offers the perfect combination of these two trends with its Bacon Jerky line, available in maple and hickory flavors. Slim Jim Bacon Jerky is made in the U.S. from 100-percent real bacon.

ConAgra Foods Omaha, Neb. conagrafoods.com

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Category Spotlights JANUARY 2015

Halos two-Pack Higher profits are in the bag with Halos’ new twopack. Our California-grown mandarins are sweet, seedless, easy to peel and even easier to grab on the go. NonGMO Project verified, these little angels are backed by a $20-million ad campaign. Netnet, the Halos two-pack is going to be a huge seller.

Paramount Citrus Delano, Calif.

HalosFun.com

CANDY & SNACKS slim Jim monster Flavors

JJ’s Bakery new Banana Cream Pie boasts an elegant creaminess reminiscent of classic restaurant dessert pies.

Like all 4-ounce JJ’s Bakery pies, Banana Cream comes in our pie-in-a-box package for superior merchandising and product quality. This provides greater footprint efficiency and reduces leaks and crushed pies. Available in four 12-count tray pack cases or 48-count display cases, be sure to get your piece of the pie!

Take advantage of Slim Jim Monster-sized sticks (1.94 ounces) as we bring new flavors to the segment — Salsa and Chili! These flavors are growing in the broader salty snacks category. Slim Jim is the leader in meat sticks, and Slim Jim Monster size generates strong incremental sales in the sticks segment.

Slim Jim Savage Salsa and Slim Jim Roadhouse Chili are the perfect way to drive growth in the meat snacks category.

JTM Foods LLC Erie, Pa. www.jjsbakery.net

ConAgra Foods Omaha, Neb. conagrafoods.com

JJ’s Banana Cream Pie

2015 sweets & snaCks exPo The Sweets & Snacks Expo will take place May 19-21, 2015 at Chicago’s McCormick Place. Sponsored by the National Confectioners Association, the Expo is the industry’s most successful, world-class event. It attracts 16,000-plus confectionery and snack professionals and offers 3.5 acres of candy and snacks from 600-plus companies showcasing their latest releases (40 percent of exhibitors showcase snack products). Experience the Sweet Insights Theater featuring 20-minute learning labs on the show floor. With 18 years of solid growth, the Expo provides more access to the people, products, insights and innovations you need to grow your business. Come hear what the industry is talking about!

Bear naked layered Granola Bars Bear Naked Layered Granola Bars offer an ever-growing variety of products for health-aware consumers to enjoy.

New Bear Naked Layered Granola Bars feature granola on the bottom. Nuts and/or fruit and chocolaty chunks are layered on. Then, the bar is dipped in chocolate for an epic taste. Available in two delicious flavors: Nutty Double Chocolate and Fruit and Nutty.

Kellogg Co. Battle Creek, Mich. kelloggsconvenience.com

Sweets & Snacks Expo Chicago www.sweetsandsnacks.com

JANUARY 2015 Category Spotlights

7

Foodservice

Cheesy hash Browns & sausage rollerBites Inspired by combining breakfast favorites, Cheesy Hash Browns & Sausage RollerBites (2.9-ounce/24 per case pack) are a blend of real hash brown potato shred, spicy sage sausage and cheddar cheese, creating a delicious, anytime treat. This fun, unique, grab-and-go comfort food is definitely a great way to start the day. Stays fresh on the roller grill up to four hours.

Home Market Foods Norwood, Mass. www.rollerbites.com

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Category Spotlights JANUARY 2015

Jimmy Dean roller Grill Breakfast links New Jimmy Dean Breakfast Sausage Roller Grill Links are perfectly sized to create a delicious breakfast sandwich on a bun. Available in three great-tasting flavors — Original, Maple and Blazin’ Hot — these links add variety to your roller grill to help build breakfast sales. Fully cooked for easy preparation, these 6-inch links are packed 36 to a case and shipped frozen.

Hillshire Brands Chicago cstore.hillshirebrands.com

Jimmy Dean Blazin’ Hot Breakfast sanDwicHes

Jimmy Dean Pancake & sausaGe on a stick

Heat up grab-and-go sales with three new Jimmy Dean Blazin’ Hot Breakfast Sandwiches: Hot & Spicy Sausage on a Biscuit; Hot & Spicy Sausage, Egg & Pepperjack Cheese on a Biscuit; and Spicy Split Smoked Sausage on a Croissant. The sausages are packed 12 per case and individually wrapped in butcher paper to ensure safe handling and maintain a four-hour hold time in the warmer.

These sandwiches are the answer to on-trend, hot, spicy flavors for consumers on the go.

The new Pancake & Sausage on a Stick features the famous Jimmy Dean breakfast sausage link wrapped in delicious, soft pancake batter.

Branded single-serve bags are packed in the case, making it easy to merchandise out of your warmer. Available in 2.5-ounce Original or Blueberry flavors.

Hillshire Brands Chicago cstore.hillshirebrands.com

Hillshire Brands Chicago cstore.hillshirebrands.com

JANUARY 2015 Category Spotlights

9

FOODSERVICE

OREO ChuRROs

LittLE DEbbiE PREmium muffins These single-serve premium muffins are available in the two most popular flavors among convenience store shoppers: Banana Nut and Blueberry. The new muffins are made specifically for the needs of the convenience store shopper looking for an on-the-go snack.

Little Debbie Collegedale, Tenn. littledebbiecstore.com

J&J Snack Foods Corp. proudly announces a partnership with Mondelez International to introduce OREO Churros.

With a crispy exterior, warm soft interior and real OREO cookie pieces in every bite, OREO Churros have a “justbaked� OREO cookie taste. Available in traditional sticks, double-twisted Churros and bite-size Churros, these delicious treats can be served with OREO cookie creme dip, rolled in sugar or topped with ice cream. OREO is a registered trademark of Mondelez International Group.

J&J Snack Foods Corp.

Pennsauken, N.J. www.jjsnackfoodservice.com

intERnatiOnaL DELight PORtiOn-COntROL singLEs

saRa LEE inDiviDuaLLy WRaPPED PiE sLiCEs

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Perfect for grab-and-go, new Sara Lee Individually Wrapped Pie Slices are available in three delicious flavors: Lemon Meringue, Apple and Southern Pecan. Made from real ingredients like fresh Michigan apples and premium pecan halves, they offer the taste and appearance of a fresh-baked pie. All pie slices are shipped frozen and packaged 24 slices per case, with a refrigerated shelf life of five days (Lemon Meringue) and 10 days (Apple and Southern Pecan).

Next to their coffee, nothing matters more to your customers than creamer. With more flavors in portion-control creamer singles than any other brand, International Delight is the leading creamer brand in foodservice (Datassentials Creamer Preference CLT, 2010). Our broad selection includes non-dairy flavored creamers and coffeehouseinspired creations, as well as a coffee-based caffeine booster. Offer the core four flavors to satisfy over 80 percent of patrons. Call The Coffee Bar Experts to learn more.

Hillshire Brands Chicago cstore.hillshirebrands.com

WhiteWave Foods Bridgeton, N.J. whitewavefoodservice.com

Category Spotlights JANUARY 2015

Beverages

Dos-A-RitA Dos Equis, one of the fastest-growing Mexican import beers, launched Dos Equis Dos-A-Rita, the first imported, authentically Mexican ready-to-serve lager margarita available. Modeled after the popular cocktail recipe originally created on-premise in Texas, DosA-Rita is a blend of Dos Equis Lager and classic margarita flavors and is sweetened with 100-percent premium agave nectar. Dos-A-Rita capitalizes on the explosive growth of the flavored/ beer mixes segment with a more premium, authentic lager margarita that leverages the momentum of the Dos Equis brand.

Heineken USA White Plains, N.Y. heinekenusa.com

JANUARY 2015 Category Spotlights

11

BEVERAGES DoS equiS

TecaTe Diablo

One of the fastest-growing Mexican beers and the preferred choice of The Most Interesting Man in the World, Dos Equis Lager is a crisp, refreshing, light-bodied, malt-favored beer made from pure spring water and the choicest hops. The resulting lager provides a smooth, wellbalanced fnish that drinks like a pilsner. For more than six years, Dos Equis has enjoyed double-digit growth fueled by the award-winning “Most Interesting Man,” a campaign that has grown beyond advertising and become part of pop culture.

Tecate, the one and only authentic Cerveza con Caracter, announces the introduction of Tecate Diablo, a bold Mexican beer mix based on the authentic Michelada recipe of beer, tomato juice, lime and spices. Diablo leverages the growing popularity of tomatobased beer mixes along with Tecate’s position as the authentic Mexican beer brand with a bolder, more authentic taste.

Heineken USA White Plains, N.Y. heinekenusa.com

STrongbow golD apple Strongbow Hard Cider, the No. 1 global cider brand, launched Strongbow Gold Apple Hard Cider in March 2014. Best served over ice, Strongbow Gold Apple Hard Cider delivers a perfectly balanced, crisp apple taste that hits the favor bull’s-eye by capturing the sweet and tart notes of the Golden Delicious apple, along with hints of Honeycrisp apple and pear. With over 125 years of cider-making heritage, Strongbow Gold Apple offers a distinct, crisp refreshment that sets it apart.

Heineken USA White Plains, N.Y. heinekenusa.com

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Category Spotlights JANUARY 2015

Heineken USA White Plains, N.Y. heinekenusa.com

newcaSTle brown ale Newcastle Brown Ale was frst created by Colonel Jim Porter to satisfy the thirst of hardworking Englishmen.

It has a distinct golden brown color and lightly hopped taste. Best served cold, Newcastle Brown Ale has become a favorite around the world as a dark beer that’s easy to drink.

Heineken USA White Plains, N.Y. heinekenusa.com

BEVERAGES

DeSperaDOS Desperados is a one-ofa-kind beer. Blended with tequila barrel-aged lager, it delivers a uniquely refreshing and smooth taste. Crafted at the crossroads of beer and spirits expertise, Desperados is a game changer in the beer category — it combines the refreshing taste profile of beer with the high-energy nightlife image associated with spirits.

This distinct Latin-inspired European import beer is available at retail and in on-premise outlets in select markets.

Heineken USA White Plains, N.Y. heinekenusa.com

TecaTe ligHT Tecate Light, the Mexican light beer with bold cerveza favor, is the fastest-growing mainstream light beer in key U.S. markets. Since its launch in 2007, consumers have recognized that Tecate Light is a light beer con sabor y carácter that is perfect for any occasion.

Its distinctive favor has helped establish the brand as a powerhouse choice for consumers of legal drinking age in both Mexico and the U.S. Heineken USA White Plains, N.Y. heinekenusa.com

Heineken 8.5-Ounce Slim can Heineken USA, the nation’s leading upscale beer importer, has once again taken the lead by introducing the frst 8.5-ounce slim can format in the premium price segment. The smaller 8.5-ounce can keeps the liquid colder longer and has strong appeal among multicultural consumers looking to unwind after work or enhance their casual social gatherings. This is the frst premium small-can format to cater to this growing and increasingly infuential demographic who prefers upscale beer and Heineken.

Heineken USA White Plains, N.Y. heinekenusa.com

JANUARY 2015 Category Spotlights

13

BEVERAGES V8 proteIn shakes Currently available in Chocolate and Vanilla, V8 Protein Shakes offer a blend of proteins from ingredients you know. With as much fiber as one cup of kale, 12 grams of protein and no high-fructose corn syrup, V8 is raising the bar for what a protein shake has to offer.

Campbell’s Camden, N.J. www.v8juice.com

V8 Vegetable blends JuIce drInk The V8 brand is embracing vegetables one more time.

Its new line of vegetable-forward juices has a touch of fruit for a refreshing taste — available in Healthy Greens, Carrot Mango and Purple Power varieties. Containing 75 percent juice, these beverages have a smoother texture and 80 calories per bottle — and of course, there is a serving and a half of vegetables in every bottle.

Campbell’s Camden, N.J. www.v8juice.com

spIcy Mango Vegetable JuIce cocktaIl V8 Spicy Mango takes the best of V8 100-percent vegetable juice flavor and adds a twist. Lightly flavored with mango and a kick of spice, it is perfect as a mixer or standalone beverage.

With 75 percent juice and two servings of vegetables per bottle, you can indulge and get your veggies.

Campbell’s Camden, N.J. www.v8juice.com

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Category Spotlights JANUARY 2015

V8 Infused Water V8 Infused Water is a line of waters infused with vegetable juices and natural flavors to create a refreshing, spa-like beverage with added benefits. Incorporating one serving of vegetables per 16-ounce serving, these new beverages are crisp-tasting like water and are the perfect balance of tasty hydration and simplicity. Each contains 25 percent juice and five ingredients or less. Available in three flavors: Cucumber Lime, Black Cherry Pomegranate and Mandarin Orange Ginger.

Campbell’s Camden, N.J. www.v8juice.com

Tobacco

BIC SpeCIal edItIon BlaCk & WhIte MInItronIC SerIeS lIghterS The new BIC Black & White MiniTronic electronic lighters are the perfect accessory for the fashion-forward consumer. These products use push-button ignition and come in eight chic, monochrome designs inspired by the runway. This mini lighter may be compact and convenient, but its bold patterns make a big statement! Lighters in this series have a suggested retail price of $1.79 per lighter.

BIC USA Inc. Shelton, Conn. biclighter.com

BIC SpeCIal edItIon “the WalkIng dead” SerIeS lIghterS AMC’s “The Walking Dead” is a pop culture phenomenon! It’s the No. 1 show on U.S. television among adults aged 18 to 49. The lighters in this series appeal to the show’s dedicated fans, featuring zombie images and the show logo. Lighters in this series are made in the U.S. and have a suggested retail price of $1.89 per lighter.

BIC USA Inc. Shelton, Conn. biclighter.com

JANUARY 2015 Category Spotlights

15

Tobacco

X2o KronoS genX

X2o Xtreme e-lIquIdS

The next generation in vaping, the Kronos GenX is a powerful, heavy-duty vape kit equipped with a 26650 battery charger and specialty Kronos Premium Tank.

The Kronos GenX electrical mod includes an LCD screen that displays the current wattage, resistance, voltage and battery usage. The buttons below the screen provide ease in adjusting the voltage. The kit’s stainlesssteel Kronos Tank has a patented Drip Tip and dual chamber tank, designed to keep the liquid fresh before you vape!

What distinguishes these liquids from the rest is the incorporation of Swiss nicotine, the highest grade of nicotine produced. Depending on the flavor, the amount of nicotine can range from 12 to 18 milligrams. All the e-liquids are developed and manufactured in the United States, signifying their quality. Rest assured, they do not include harmful ingredients like diacetyl and acetyl propionyl.

Each of our 19 distinctive flavors comes in a 10-milliliter bottle or a 30-milliliter bottle.

Global Tobacco LLC Dallas www.x2o-usa.com

Global Tobacco LLC Dallas www.x2o-usa.com

BIC SpeCIal edItIon HISpanIC Culture SerIeS lIgHterS The new BIC Special Edition Hispanic Culture Series Lighters are designed to appeal to the growing Latino population in the U.S. The eight designs include fun sayings, designs inspired by Día de los Muertos, and hip patterns influenced by papel picado (paper art). The lighters are made in the U.S. and have a suggested retail price of $1.79 per lighter.

BIC USA Inc. Shelton, Conn. biclighter.com

16

Category Spotlights JANUARY 2015

Blu pluS XpreSS KIt blu eCigs’ latest product, the blu PLUS Xpress Kit, combines the vapor delivery of blu PLUS Rechargeable Kits with the convenience of disposables, providing the best of both to adult smokers. For more information, contact your Lorillard representative. Not for sale to minors.

WARNING: This product contains nicotine derived from tobacco.

Nicotine is an addictive chemical. blu, blueCigs, the blu logo and blu PLUS are trademarks of Lorillard Technologies Inc. Lorillard Charlotte, N.C. www.blucigs.com

Tobacco

hauS perSonal VaporIzer By MIStIC

BaCkwoodS honey BourBon CIgarS Golden honey. Smooth bourbon. All-natural tobacco. Offered for a limited time only, the new Backwoods Honey Bourbon Cigar is infused with a unique blend of smooth Kentucky bourbon and golden honey flavors. This makes the all-natural tobacco cigar an authentic, everyday adventure.

Commonwealth-Altadis Inc. Ft. Lauderdale, Fla. www.commonwealthaltadis.com

The Haus Personal Vaporizer by Mistic is a complete starter system.

It is equipped with a specially designed unit and tank, as well as a high-powered lithium-ion battery, USB charger and lanyard. A sleek, soft handle provides added comfort and style. Available in 10-milliliter tamper- and child-proof, slow-drip bottles, 12 distinct e-liquid blends are offered: American Blend, Cool Ice, Washington Red, Pineapple, Green Apple, Watermelon, Vanilla, Berry, Grape, Mango, Java and Ocean Mist.

Ballantyne Brands Charlotte, N.C. www.misticecigs.com

BIC SpeCIal edItIon FantaSy SerIeS lIghterS The new BIC Special Edition Fantasy Series Lighters feature six provocative fantasy designs for the adventurous adult consumer.

Tapping into the growing popularity of erotica novels, these lighters are certain to entice and enchant. Lighters in this series are made in the U.S. and have a suggested retail price of $1.79 per lighter.

BIC USA Inc. Shelton, Conn. biclighter.com

JANUARY 2015 Category Spotlights

17

Tobacco Atmos E-Liquids Atmos E-Liquids are made in the U.S. Refill your vaporizers with tasty and stimulating e-liquid juices.

Atmos E-Liquids are especially chosen for their flavor and aroma.

Choose from 30 rich, exotic flavors! Available in five nicotine strengths: zero, 0.6 percent, 1.2 percent, 1.8 percent and 2.4 percent. E-liquids are offered in a 12-milliliter or 30-milliliter bottle. Atmos E-Liquids are compatible with all e-liquid vaporizing devices.

BiC spECiAL Edition Country musiC sEriEs LightErs The new BIC Special Edition Country Music Series Lighters are proudly made in the USA and celebrate one of America’s favorite musical genres! These lighters appeal to fans of the top country artists of today and yesterday, featuring photos and logos of popular artists such as Zac Brown Band, Brantley Gilbert, Jason Aldean, Florida Georgia Line and Johnny Cash.

Lighters in the BIC Special Edition Country Music Series have a suggested retail price of $1.89.

BIC USA Inc. Shelton, Conn. biclighter.com

18

Category Spotlights JANUARY 2015

Atmos Nation Davie, Fla. www.Atmosrx.com

Atmos CompLEtE The Atmos Complete is a three-in-one vaporizer package that is perfect for dry herbs, waxy oils and e-liquids. The Atmos Complete vaporizer is ideal for those on the go. This portable device is discreet, stylish and engineered for maximum results. It is lightweight, wind-proof for outdoor use and charges conveniently through a USB port.

Atmos Nation Davie, Fla. www.Atmosrx.com

Tobacco thE Mistic BridgE with haus tEchnology With a suggested retail price of $14.99, the Mistic Bridge Starter Kit includes a battery, clear refillable tank powered by HAUS technology, and a USB charger. With a suggested retail price of $9.99, Mistic Bridge refillable tanks can be used with all of Mistic’s rechargeable batteries. Tanks are available to use with batteries of other leading e-cig brands, too. Equipped with HAUS open vapor system technology, each tank is cottonfree, providing a bigger plume and a more consistent vaping experience.

Ballantyne Brands Charlotte, N.C. www.misticecigs.com

usa gold glidE tEc pack Launched in select markets, USA Gold’s new “Glide Tec” pack symbolizes American ingenuity at its best and functionality that is as simple as “slide up, light up.” Glide Tec packaging’s unique sliding mechanism allows packs to be opened with one hand. The Glide Tec pack contains our same great USA Gold product. Emblazed with American colors, it embodies the American spirit and highlights USA Gold’s American heritage and pride in a contemporary and relevant manner.

Bodyshot Vapor liquid Looking for straight up flavor? Bodyshot Vapor Liquid provides adult consumers with a USA-made, premium product crafted by experts with decades of experience. Offered in three nicotine variations, Bodyshot Vapor is making clouds above the horizon of competitors. With cocktail-inspired flavors, Bodyshot Vapor provides the perfect blend of unmatched taste for every adult vapor consumer. Create vaping decadence, satisfaction and STRAIGHT UP FLAVOR with Bodyshot Vapor Liquids.

Cheyenne International Grover, N.C. www.cheyenneintl.com

EaglE 20’s Eagle 20’s is one of the fastest-growing brands and is aggressively priced to move! Available in 11 popular box styles with USA-made quality, this “budget-friendly” smoke provides adult customers with all the quality of pricier brands. Supported by Liggett Vector Brands’ national sales force, Eagle 20’s sales and distribution continue to grow every month. Our 100-percent sales guarantee, combined with great quality and low pricing, make Eagle 20’s one brand every retailer should carry.

Liggett Vector Brands Morrisville, N.C. www.liggettvectorbrands.com

Commonwealth-Altadis Inc. Ft. Lauderdale, Fla. www.commonwealthaltadis.com

JANUARY 2015 Category Spotlights

19

Tobacco bic sPecial edition nba series liGhters

KlondiKe Premium moist tobacco 6-PacK tub

The BIC Special Edition NBA Series Lighters are certain to score points with any loyal NBA fan!

Designs utilize iconic basketball imagery and logos from teams across the country, including the Chicago Bulls, Miami Heat, New York Knicks and Los Angeles Lakers. Now, fans can represent their favorite NBA team whenever they flick their BIC! Lighters in this series are made in the U.S. and have a suggested retail price of $1.89 per lighter.

BIC USA Inc. Shelton, Conn. biclighter.com

Muscle up with new Klondike Smokeless Tubs! The Klondike 6-Pack Tub is redefining what a tub should be by eliminating the mess and hassle of traditional tubs. Adult tobacco consumers are saying “no” to the time-consuming, messy process of filling cans with loose tobacco and saying “yes” to the convenience of six pre-packed, always fresh cans. Available in Wintergreen Long Cut, the Klondike 6-Pack Tub perfectly fits the needs of adult smokeless consumers.

Cheyenne International Grover, N.C. www.cheyenneintl.com

WoW VaPor disPosable VaPe How many times have you and your customers been let down by disposables? All that is going to change with the WOW VAPOR Disposable Vape. If you can’t get the right vapor hit from your e-cig, you won’t stay with it. The WOW VAPOR industry-leading battery delivers a consistent amount of vapor from first puff to last.

SpinFuel magazine called the WOW Disposable the “best disposable on the market.” The WOW VAPOR Disposable Vape comes in both tobacco and menthol.

WOW VAPOR Northbrook, Ill. www.wowvapor.com

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Category Spotlights JANUARY 2015

bic sPecial edition Gentlemen’s club electronic series liGhters The new BIC Gentlemen’s Club Electronic Series Lighters with push-button ignition incorporate six luxurious, textured designs in rich gold, black and white patterns. Ideal for the sophisticated man with discerning taste, the premium lighters in this series are the perfect accessory for any cigar aficionado.

The lighters in this series have a suggested retail price of $2.49 per lighter.

BIC USA Inc. Shelton, Conn. biclighter.com

Tobacco ZOOM E-Cigs Zoom E-Cigs are available in Tobacco and Menthol flavors, with Bold and Smooth versions offered in both single and convenient three-packs. All styles are disposable/non-rechargeable.

Zoom E-Cigs contain U.S.-made e-liquid and nicotine that meets the U.S. Pharmacopeia quality standards. This allows Zoom E-Cigs to deliver the consistent flavors preferred by adult smokers. Smokers also find that Zoom E-Cigs’ 100-millimeter length, real paper construction and soft filter tip provide a more realistic smoking experience.

Liggett Vector Brands Morrisville, N.C. www.liggettvectorbrands.com

WOW VaPOr V-FlaVOr WOW VAPOR V-Flavors for the V-Kit were designed by smokers for smokers to help defeat cravings and deliver satisfaction.

Tobacco and Menthol will soothe the cravings of those looking to quit smoking, while Coffee, Peppermint, Cinnamon and Watermelon will keep your customers coming back. All flavors are available in 1.8 percent nicotine. Tobacco and Menthol are also available with zero nicotine.

WOW VAPOR Northbrook, Ill. www.wowvapor.com

PyraMid FiltEr rEd Kings BOx WOW VaPOr V-Cart Designed by smokers for smokers, the patentpending WOW VAPOR V-Cart is the game changer that the vaping category has demanded. The V-Cart’s unique design holds e-liquid in a spill-proof container. Unlike a closed system, the container is amazingly easy to refill. Your customers will love V-Cart’s intuitive design that delivers great vapor flavor. V-Carts come in Tobacco, Menthol, Coffee, Peppermint, Cinnamon and Watermelon in 1.8 percent nicotine. Tobacco and Menthol are also available in zero nicotine.

WOW VAPOR Northbrook, Ill. www.wowvapor.com

The third national discount brand, Pyramid provides adult smokers with significant value while enhancing overall tobacco profits for our partners.

Available in 11 popular box styles and made with topquality tobaccos, Pyramid is a must-carry brand for retailers everywhere.

Supported nationally by Liggett Vector Brands’ sales force, Pyramid is made in the U.S. and is 100 percent guaranteed. If you aren’t stocking Pyramid yet, please contact your Liggett Vector Brands representative.

Liggett Vector Brands Morrisville, N.C. www.liggettvectorbrands.com

JANUARY 2015 Category Spotlights

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Equipment & Technology

SureStack Dunnage rack

caSh Depot Mobile app

A multipurpose, durable, visually appealing unit that fits a host of environments, the SureStack is made of strong plastic to sustain significant weight. It can be exposed to extreme temperatures and functions as a storage unit in backrooms, coolers and foodservice areas to promote safety and prevent food contamination. Available in myriad sizes and colors, the SureStack is an attractive in-store or outdoor merchandiser that increases product visibility and makes items easily accessible to sell more. It is NSF approved and recyclable.

Cash Depot’s free mobile app provides quick access to ATM information by store location.

Fully PCI compliant, it safely and securely monitors and manages ATMs, including cash loads, surcharges collected, day close, on-screen reports, location, make/model and more. The app’s push notifications and alerts of low cash or ATM errors help to minimize downtime. The app is available for Apple and Android products. There is also a web version.

Forte Product Solutions Kansas City, Mo. www.forteproductsolutions.com

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Category Spotlights JANUARY 2015

Cash Depot Green Bay, Wis. www.cdlatm.com

McLane SMart handheLd Lottery appLication

The McLane Smart Handheld Lottery Application allows you to quickly activate lottery books from any state with an easy-to-use, automated interface. What’s more, activations are immediately communicated to your back-office system so you know what’s going on at your store in real-time. Reduce errors and liabilities while saving time and improving cash flow with a simple scan and push of a button.

McLane Co. Inc. Temple, Texas www.mclaneco.com/goto/lotto

McLane Strategic MerchandiSing portaL Outsmart your competition and connect to McLane’s Strategic Merchandising Portal, a web-based system that features new items and current promotions, up-todate planograms and easy online ordering. It’s designed for businesses of all sizes and is available at no cost to McLane customers, helping them buy better, sell smarter and profit more.

McLane Co. Inc. Temple, Texas www.mclaneco.com/goto/smsportal

McLane direct Store deLiVery appLication

Dial into McLane’s Virtual Trade Show, an Internetbased trade show where McLane customers can view new products and promotions in seconds from anywhere, at any time. Place orders online and take advantage of special pricing, bundle deals and volume discounts around the clock without the expense, time and hassle of attending a traditional trade show.

The McLane Smart Handheld DSD Application allows any product from any distributor to be checked in and accounted for in real-time, all from one device. Plus, you can easily place orders, take inventory and create shelf labels for all of your McLane and DSD products. The McLane Smart Handheld DSD Application eliminates inconsistencies, streamlines processes, reduces errors, saves time and money and empowers you to order the products that you need to run your business.

McLane Co. Inc. Temple, Texas www.mclaneco.com/goto/top5vts

McLane Co. Inc. Temple, Texas www.mclaneco.com/goto/dsd

McLane VirtuaL trade Show

JANUARY 2015 Category Spotlights

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M A D E

F O R

S M O K E R S

Tired of the “latest” e-cigarette products collecting dust on your shelves? Tired of products that your employees can’t explain to confused customers?

Tired of invisible returns on your investment? Then you are ready for the WOW VAPOR® V-Kit. The V-Kit was designed by smokers for smokers. The V-Kit comes ready to vape out of the box with an intuitive design, industry leading battery power, a stylish metallic case and is available in Tobacco and Menthol. The V-Kit from WOW VAPOR® is the vaping product that your customers, your employees and your bottom line have demanded.

V

THE

KIT

CALL YOUR HACKNEY REPRESENTATIVE TO PLACE ORDERS TODAY. FOR NEW ACCOUNTS PLEASE CALL WOW VAPOR® DIRECTLY: (847) 944-8200 ext. 313

www.wowvapor.com