Some Rules Are Not Meant to Be Broken

C STORE RESCUE

We must keep the welfare of others in mind when we are making our daily decisions

By Roy Strasburger, CEO, StrasGlobal

AS WE CONTINUE to take the gift wrap off 2022, I hope that your new year is still shiny and bright and that you have not lost the instruction manual.

Like many, my family ended up experiencing a COVID Christmas at the end of 2021. Three of my four daughters traveled to Austin, Texas, to join us for the holiday celebrations. One came from the UK, one from Washington, D.C., and one, with her boyfriend, drove down from Denver. My fourth daughter and her boyfriend were already with us. We planned, and were looking forward to, a family Christmas — all gathered around the table sharing stories and experiences.

Because of the spike in the omicron variant during the runup to Christmas, our kids had decided to quarantine, separately, for three days before they arrived at our house. Throughout the pandemic, our household has done its best to observe the rules and guidelines issued by the CDC to avoid being infected with COVID — and so far, we have been fortunate not to have had it.

We’ve been careful because we don’t want to get sick, we don’t know how having COVID will affect us, and frankly from a work point of view, we can’t afford to be out of commission for two or more weeks. In addition, we don’t want to spread it to our friends, family or any strangers we have been around. Our concern is not just about us, but the impact on others that we might unknowingly affect.

At the end of the Christmas quarantine periods, each of my kids took a PCR or home test to make sure they did not have COVID. My wife and I took one, too. Three of the four visitors tested negative. My daughter’s boyfriend — the one coming from Colorado — tested positive. That meant the two of them would not be able to spend Christmas with us. Obviously, this was very disappointing and put our family plans into disarray.

The positive test also set off several rounds of discussion amongst the rest of us as to what we were going to do. Did we really need to enforce the isolation, especially considering the boyfriend’s symptoms were negligible and omicron is not as dangerous as other variants? Would it be OK for us to get together if we were socially distanced and wearing

cigars

The$80 Billion Combustible Tobacco Cigarette Categoryis About to be Disrupted

FDA Gives Green Light for VLN as the First Combustible Modified Risk Tobacco Product

Tobacco is a major traffic generator for C-Stores that builds incremental sales across the entire store. But the category faces impending FDA regulations that will impact the $80 billion market such as regulation around Menthol products, or capped Nicotine content.

However, opportunities to maintain the category drivers at convenience stores are coming through the development of “MRTP’s;” products that have secured a Modified Risk Tobacco Product or Modified Exposure status from the FDA. The FDA reviews the product science and considers:

› The relative health risks to individuals.

› The likelihood that existing users of tobacco products would switch to the product.

› Whether users who do not currently use tobacco products would use the product. › The potential benefits and risks from the use of the product in comparison to products existing on the market. › Comments, data and information submitted by the product creator and general public. At the forefront of innovation in the cigarette category is 22nd Century Group, Inc. (NASDAQ: XXII), a leading plant biotechnology company that is focused on technologies that alter the level of nicotine in tobacco plants and the level of cannabinoids in hemp/cannabis plants through genetic engineering, gene editing, and modern plant breeding. Supported by over $100 Million in rigorous science-based research conducted by major universities and public health agencies, the evidence validates that XXII’s reduced nicotine content cigarettes indeed “Help You Smoke Less.” In December of last year, the VLN product became the first combustible tobacco product to receive an exposure modification order for its MRTP from the FDA, a huge achievement for any company. The landmark decision by the FDA allows the company’s VLN King, and VLN Menthol King to add the claim “Helps You Smoke Less” on every pack and carton of cigarettes to help educate adult smokers about the products benefit. The first pre-launch cartons just rolled off the line at the company’s North Carolina manufacturing factory as part of its build toward the pilot launch program. CSNews talked with 22nd Century’s president and chief operating officer Michael J. Zercher to learn what c-store operators need to know to benefit from this emerging category as C- Stores prepare to shift from Cigarettes, OTP (Other Tobacco Products) and ITP (Innovative Tobacco Products) to a new shelf space exclusively for Modified Risk Tobacco Products.

CSNews: What should c-store operators know about the potential of reduced nicotine products, specifically your brands VLN King and VLN Menthol King? Michael Zercher: About 70% of adult smokers want to quit smoking for a variety of reasons from their health to the costs. VLN is a cigarette with 95% less nicotine than conventional cigarettes and has been proven to help smokers smoke less, increase quit attempts and increase the number of days they go without smoking. MRTP products fulfill a need not addressed by options such as OTP or ITP, because the products in the market today are based upon continuing to deliver nicotine, usually at highly addictive levels. VLN cigarettes smoke, taste and smell like a conventional cigarette. Unlike “light” cigarettes, these products don’t result in compensatory smoking, and are not designed to create or sustain addiction.

More than 60% of adult smokers in our research have told us they are likely to buy VLN. We believe Modified Risk Tobacco Products are the next frontier because they enhance margin opportunity and provide a benefit to the C-Store’s adult tobacco customers.

CSNews: From a business standpoint, why would C-Store operators want to help smokers smoke less?

M.Z.: First, it is the right thing to do. Second, the FDA has clearly laid out their intentions to reduce the harm from tobacco consumption. And third, financially it’s an opportunity to improve the profit margins of the category, while also providing a pathway for retailers willing to pioneer the premium priced MRTP product set with the ability to continue earning profits from consumption of tobacco and tobacco related products. The FDA is moving forward with tobacco regulations. The agency plans to reduce the nicotine of all cigarettes sold in the U.S. which means at that point our VLN would likely be the only cigarette product on the market. Also, as the FDA looks to ban menthol in highly addictive cigarettes, we expect the FDA will allow our VLN Menthol cigarettes to remain on the market. Retailers who get out ahead of the regulations and introduce the MRTP product set as a strategic partner of 22nd Century Group will be positioned well to be able to continue to deliver products to their customers in the category. The C-Store operator that we have selected for our impending Pilot Market launch wants to take ownership of the MRTP product category at retail. We believe this is because Big Tobacco has literally owned the shelves for years that their tobacco products are sold on, dictating unfair trade terms, preventing retailers from helping their customers to reduce their consumption, and increasing their profitability of the segment overall. If you can help your customers, and benefit your bottom line at the same time, the only entity that stands to lose is Big Tobacco.

For more information on 22nd Century visit www.xxiicentury.com and for more information about its VLN brand visit www.tryvln.com.

masks? Could we take the risk of being around them for a short period of time just so that we could be together? Since my daughter was not positive, only her boyfriend, could we have her test daily, wear a mask, and keep socially distanced from us?

It was emotionally difficult, and ultimately very tough coming to a decision. We decided, however, that we needed to follow the CDC rules to keep everyone safe, so my daughter and her boyfriend remained in isolation throughout the Christmas holiday. We did go by to visit them, with us standing masked outside 30 or more feet away from their second-story balcony so that we could exchange Christmas greetings and have a toast.

Frankly, I was very disappointed and in a bit of a funk throughout the holiday. Being together with my wife and children is very important to me and I look forward to all of our gatherings. I will have to admit that it was very tempting to try to come up with a shortcut or rationalize a workaround to make life easier and get what we wanted. But in doing so, we could have become infected with COVID, passed it on to other people, and have become sick ourselves with the possibility of dying or killing someone else.

The reason I share the story is to acknowledge that, sometimes, hard decisions have to be made. It is important that you consider the big picture when it’s time to make any difficult choice. Of course, we knew one of our kids being infected was a possibility when we planned our gathering — they all live and work in areas where they interact with other people. But when faced with the facts, we had to accommodate the reality, even though it was a difficult and sad decision to make.

Now, I do not know what the COVID status is at the time you’re reading this. Cases are rising across the globe as I am writing this in late December 2021. None of us have a crystal ball, but I think it is safe to assume that 2022 will be very similar to 2021. We will have many of the same issues that we have dealt with during 2021.

My fervent hope is that COVID is no longer an issue. But even if COVID no longer exists, we need to remember that we have to keep the welfare of others in mind when we are making our daily decisions. And this applies to your business.

Allowing an employee to work, even when they’re not feeling well, could have ramifications in making the rest of your team sick or infecting your customers. If more of your team becomes sick, that’s fewer people you will have to work at your store, which will make life even more difficult. The more customers who become sick, the less business you will have.

Life is complicated. The real world is often a choice

Having clear rules and guidelines removes the stress of your team members having to decide what they should do or what they can do.

between taking the path of least resistance or making an informed decision and biting the bullet despite the difficulties. For example, with COVID, the decision of letting someone work who is not feeling well or has been exposed to the virus is much easier to make than the hard decision of making them stay at home and you being shorthanded or having to put in extra hours.

But in my experience, the easiest decision is most often not the right decision. You have to keep the big picture in mind. How does your decision affect the people who depend on you — your family, your team and your customers? You could literally be putting someone’s life in danger.

Making the hard choice, and sticking to it, has benefits, though.

Anyone with children knows that if you set rules, you must be consistent in following and enforcing them. Once you start breaking the rules you have established for your team, why should your team abide by them? Keep in mind that you originally created the rules for a good reason based upon some type of fact, research or guidance. Did the underlying basis for the rules change? If the requirements you put into place no longer make sense or if the facts have changed and the rules should no longer be followed, then they should be abolished; not circumvented.

Whatever you are doing, you should create a framework of rules and guidelines that abides by the law, follows any applicable science or research, makes sense, and is easy to implement. Putting requirements into place that your team aren’t going to follow doesn’t make sense and is only setting you up for failure.

Ultimately, the objective is to have everyone know what is expected of them so that they can do their job to the best of their ability. Having clear rules and guidelines removes the stress of your team members having to decide what they should do or what they can do. Clear rules give everyone a solid foundation for them to perform their duties, and it removes the stress of having to make decisions about implementing them.

Remember, the hard choice is often the right decision — for everyone involved. CSN

Roy Strasburger is CEO of StrasGlobal, a privately held retail consulting, operations and management provider serving the small-format retail industry nationwide. StrasGlobal operates retail locations for companies that don’t have the desire, expertise or infrastructure to operate them. Learn more at strasglobal.com. Editor’s note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News.