CSN - August 2019 by ensembleiq

W H AT â&#x20AC;&#x2122; S N E X T I N C O N V E N I E N C E A N D F U E L R E TA I L I N G

AUGUST 2019 | CSNEWS.COM

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W H AT â&#x20AC;&#x2122; S N E X T I N C O N V E N I E N C E A N D F U E L R E TA I L I N G

CHAMPIONS

ALL

The sixth-annual Top Women in Convenience awards celebrate the passion and achievements of women in the convenience store industry

OUR EXCLUSIVE FOODSERVICE STUDY & MIDYEAR INDUSTRY REPORT CARD

AUGUST 2019 CSNEWS.COM

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GO WITH WHAT YOUr customers KNOW

14 Hands is one of the most established and trusted wine brands. Our new premium wine cans give consumers a familiar grab & go choice in a fast-growing category. ÂŠ2019-14 Hands Winery

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VIEWPOINT

The Heat Is On With more favorable weather, the c-store industry preps for a better second half — a 110-degree heat index is predicted here in New York City as I write this — convenience store retailers should be swimming in a wave of robust sales of everything from ice-cold beer and soft drinks, to frozen beverages, bulk ice, bottled water and sports drinks.

AS THE WEATHER HEATS UP

After a difficult winter and AWOL spring across most of the country, the hot summer sun is the perfect tonic to revitalize what has been a sluggish first half of the year for many retailers. According to the 2019 Convenience Store News Midyear Report Card, most of the major Nielsen/NACS defined c-store product categories experienced flat to negative sales growth over the first six months of 2019 (see our full report on page 80). There were some notable exceptions in subcategories, such as imported and super premium beer, novelty and seasonal candy, subgeneric/private label cigarettes, e-cigarettes and vapor products, energy drinks, enhanced bottled water and tortilla chips. However, overall sales and volume growth based on figures from Nielsen’s C-store Track for the period ended June 30 were lackluster at best. (Foodservice sales are excluded because Nielsen doesn’t track the prepared food and hot, cold and frozen dispensed beverages categories.) In conversations we’ve had with retailers, though, it appears business is picking up across the board as

more consumers are hitting the road, enjoying outdoor activities and stopping at their favorite convenience store to fill up and refresh. This is an important time for c-store retailers to regain the momentum and aggressively grow their sales across the store. It’s also an important time for the entire industry, as retailers, suppliers and distributors get ready to travel to Atlanta for the 2019 NACS Show. As you set your agenda for this year’s show, take note of two important CSNews events happening there. On Monday evening, Oct. 1, we are hosting our fourth-annual Technology Leadership Dinner and Roundtable. This year’s guest speaker is Greg Parker, CEO of Savannah, Ga.-based Parker’s, who was recently named by CSNews as one of the 50 Most Influential People in C-store History. And on Tuesday evening, Oct. 2, we will proudly host the sixth-annual Top Women in Convenience Awards Gala at the Omni Hotel. Please join us to honor our 2019 Women of the Year — Sarah Bibbs of Eby-Brown, Deb Hall Lefevre of Alimentation Couche-Tard/Circle K, Jayne Rice of Yesway, JoAnn Saverino of Saverino & Associates, and Rebecca Troutman of 7-Eleven — as well as 37 other top women at this year’s event (see winner profiles on page 26). For comments, please contact Don Longo, Editorial Director, at (201) 855-7606 or dlongo@ensembleiq.com.

EDITORIAL EXCELLENCE AWARDS (2013-2018)

2018 Jesse H. Neal National Business Journalism Award Finalist, Best Editorial Use of Data, June 2017

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

EDITORIAL ADVISORY BOARD

2018 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Website Business to Business, Retail, Full Issue, October 2017 Business to Business, Editorial Use of Data, June 2017 2017 Eddie Awards, Folio: magazine Winner, Business to Business, Retail, Single/Series of Articles, May 2017 Honorable Mention, Business to Business, Retail, Single/Series of Articles, June 2016 2016 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2015 Business to Business, Retail, Single/Series of Articles, August 2015 2015 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Single Article, February 2014

2016 American Society of Business Press Editors, National Azbee Awards Gold, Best How-To Article, March 2015 Bronze, Best Original Research, June 2015

2014 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2013 Business to Business, Retail, Single Article, February 2013

2016 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best How-To Article, March 2015 Silver, Best Original Research, June 2015

2013 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2012

Brett Atherton Bolla Management

Danielle Mattiussi Maverik Inc.

Rick Crawford Green Valley Grocery

Vito Maurici McLane Co. Inc.

Edward Davidson ER Davidson & Associates (7-Eleven Inc., retired) Jim Hachtel Eby-Brown Co. Ray Johnson Speedee Mart

Richard Mione GPM Southeast Jonathan Polonsky Plaid Pantries Inc. Greg Scriver Kwik Trip Inc. Roy Strasburger Strasburger Retail

Jack Lewis GPM Midwest

2015 American Society of Business Press Editors, National Azbee Awards Silver, Best Profile (long form), February 2014 2015 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best Special Supplement, November 2014 Silver, Best Profile (long form), February 2014 2013 American Society of Business Press Editors, Midwest Regional Azbee Awards Bronze, Best Editorial/Commentary, July 2012

2016 Trade Association Business Publications Intl. Tabbie Awards Silver, Front Cover Illustration, June 2015

AUG

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Convenience Store News

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CONTENTS AUG 19

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26 82 91 FEATURES

DEPARTMENTS

COVER STORY

VIEWPOINT

STORE SPOTLIGHT

26 Champions All The sixth-annual Top Women in Convenience awards celebrate the passion and achievements of women in the convenience store industry.

3 The Heat Is On With more favorable weather, the c-store industry preps for a better second half.

94 It’s All Relative Garrett’s Family Market focuses on delivering fresh food with a New England market feel.

8 CSNews Online

INSIDE THE CONSUMER MIND

FEATURE

80 A Slow Start for 2019 C-store Sales The Convenience Store News Midyear Report Card reflects a soft first half of the year. FEATURE

82 Merchandising With ‘Wow’ Two design experts weigh in on the nuts and bolts of creating a more engaging in-store experience. FEATURE

88 The Loyalty Perspective Our exclusive consumer research explores the whys and why-nots of loyalty program membership.

18 New Products SMALL OPERATOR

114 When Hunger or Thirst Strikes Exclusive research investigates consumers’ thoughts on prepared foods and beverages.

22 Is Your Business in Trouble? Take notice of red flags so that you can do something about them before it is too late.

FEATURE

91 The Can-Do Attitude of Convenience The 2019 NACS Show will highlight what the c-store and fuel retailing industry is capable of in the present and future. 4 Convenience Store News C S N E W S . c o m

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WARNING: This product contains nicotine. Nicotine is an addictive chemical. UNDERAGE SALE PROHIBITED

NICOTINE POUCHES

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8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631 (773) 992-4450 Fax: (773) 992-4455 www.csnews.com Direct Mailing Address for Convenience Store News: 11-43 Raymond Plaza West, 16th floor, Newark, NJ 07102 BRAND MANAGEMENT Vice President/Group Brand Director Paula Lashinsky (917) 446-4117 plashinsky@ensembleiq.com EDITORIAL Editorial Director (201) 855-7606

Don Longo dlongo@ensembleiq.com

Editor-in-Chief (201) 855-7608

Linda Lisanti llisanti@ensembleiq.com

Senior News Editor (201) 855-7618

Melissa Kress mkress@ensembleiq.com

Associate Editor (201) 855-7619

Angela Hanson ahanson@ensembleiq.com

Associate Managing Editor (201) 855-7604

INDUSTRY ROUNDUP

HOW TO

10 Speedway Sees Change in Leadership 12 Cumberland Farms Challenges Flavored Tobacco Bans

54 Make CBD Products an In-Store Destination Experts weigh in on the best ways to merchandise and market these emerging products.

Contributing Editor (303) 741-3377

Renée M. Covino reneek@aol.com

Contributing Editor (201) 280-2614

Tammy Mastroberte tmastroberte@gmail.com

ADVERTISING SALES & BUSINESS Associate Brand Director & Northeast Sales Manager (508) 385-2524

Rachel McGaffigan rmcgaffigan@ensembleiq.com

Associate Brand Director & Western Sales Manager (330) 840-9557

Ron Lowy rlowy@ensembleiq.com

Associate Publisher & Midwest Sales Manager Kelly Fischer (773) 992-4464 kfischer@ensembleiq.com

12 Fast Facts CATEGORY MANAGEMENT

14 Eye on Growth

Danielle Romano dromano@ensembleiq.com

Account Executive & Classified Advertising Terry Kanganis (201) 855-7615 tkanganis@ensembleiq.com Classified Production Manager Mary Beth Medley (856) 809-0050 marybeth@marybethmedley.com

14 Seen on Social 16 Retailer Tidbits 16 Supplier Tidbits

FOODSERVICE

EVENTS

60 What’s Hot on C-store Menus? Doubling-down on a familiar consumer favorite, ampm makes a statement.

Executive Vice President, Events & Conferences Ed Several (860) 830-8321 eseveral@ensembleiq.com

FOODSERVICE

Subscriber Services/Single-Copy Purchases

62 Two Roads to Success The Convenience Store News Foodservice Study shows the category continues to be successful, but challenges and rewards vary by company size. TOBACCO

70 Close Collaboration Want to grow your tobacco business? Try making the most of vendor partnerships. PACKAGED BEVERAGES

76 Buzzing With Energy Several factors are contributing to an energized energy drink segment at c-stores.

AUDIENCE ENGAGEMENT Director, Audience and Data (224) 231-6363

Gail Reboletti greboletti@ensembleiq.com

List Rental (847) 492-1350 ext.318

MeritDirect Elizabeth Jackson (847) 564-1468 CVN@Omeda.com

PROJECT MANAGEMENT/PRODUCTION/ART Vice President, Production (877) 687-7321 Creative Director (973) 607-1320

Derek Estey destey@ensembleiq.com Colette Magliaro cmagliaro@ensembleiq.com

Advertising/Production Manager (773) 992-4418

Ed Ward eward@ensembleiq.com

Art Director (973) 607-1321

Lauren DiMeo ldimeo@ensembleiq.com

CORPORATE OFFICERS Executive Chairman Alan Glass Chief Executive Officer David Shanker Chief Financial Officer Dan McCarthy Chief Operating Officer Joel Hughes Chief Innovation Officer Tanner Van Dusen Chief Human Resources Officer Ann Jadown Executive Vice President, Events & Conferences Ed Several CONVENIENCE STORE NEWS AFFILIATIONS Premier Trade Press Exhibitor

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.

Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by EnsembleIQ, 8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631. Subscription rates: $125 for U.S. addresses; $190 for Canadian addresses; $275 for all other addresses. Single copies (pre-paid only): $20 in the U.S. Foreign single copy sales (pre-paid only): $85.00. Periodical postage paid at Chicago, IL 60631, and additional mailing addresses. Copyright 2019 by EnsembleIQ. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or information storage and retrieval system, without permission in writing from the publisher. Reprints, permissions and licensing, please contact Wright’s Media at ensembleiq@wrightsmedia.com or (877) 652-5295. POSTMASTER: send address changes to Convenience Store News,, PO Box 3200, Northbrook IL 60065-3200.

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CSNEWS ONLINE

ONLINE EXCLUSIVE

MOST VIEWED NEW PRODUCT

Mtn Dew DEWnited States Collection

This summer, Mtn Dew is celebrating what makes the United States great with the DEWnited States Collection, a limited-edition bottle series representing all 50 states. Each bottle features artwork unique to the state it represents. In addition, the brand is releasing Mtn Dew Liberty Brew, a limited-edition blend that combines 50 different signature flavors. Collectible DEWnited States bottles of Original Mtn Dew, Diet Mtn Dew and Mtn Dew Liberty Brew are available at retail stores nationwide in 20-ounce bottles, 16-ounce bottle multipacks and 0.5-liter bottle multipacks. The products are available for a limited time. Fans have the opportunity to receive a $100 prepaid gift card when they collect all 50 bottles. PepsiCo Inc. Purchase, N.Y. mountaindew.com

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INDUSTRY ROUNDUP

Speedway Sees Change in Leadership President Tony Kenney hands the reins to former CFO Timothy Griffith started the month of July with a new president at its helm as Tony Kenney retired from the position he held for 14 years.

SPEEDWAY LLC

With his retirement, Speedway’s parent company, Marathon Petroleum Corp. (MPC), named Timothy T. Griffith as the successor. Griffith previously served as MPC’s senior vice president and chief financial officer (CFO). “Tony’s expert leadership of Speedway over the past 14 years has grown our retail business into a nationwide network of nearly 4,000 companyowned and -operated stores,” said MPC Chairman and CEO Gary R. Heminger. “We see tremendous growth potential for Speedway moving forward, thanks to Tony’s leadership. His retirement is well earned, and we wish him and his family the best.” Kenney began his career with MPC after graduating from Miami University of Ohio in 1976. In 1990, he transitioned to Emro Marketing Co., the predecessor of Enon, Ohio-based Speedway. Kenney assumed the role of president of Speedway in 2005.

Under his guidance, Speedway expanded from a Midwestonly brand into one of the nation’s largest fuel and convenience store chains. In recognition of his exceptional leadership, Kenney was named the Convenience Store News Retailer Executive of the Year in 2015. Griffith has been part of the MPC team since 2011 when he joined the company as vice president of finance and investor relations, and treasurer. He assumed the role of senior vice president and CFO at MPC in 2015. “The company will benefit from Tim’s leadership at Speedway as we continue to explore new markets and pursue new customers in a competitive and evolving sector,” Heminger said. With Griffith’s new position, Donald C. Templin succeeds him as executive vice president and CFO. Templin had been serving as MPC’s president of refining, marketing and supply since 2018. He joined the company as senior vice president and CFO in 2011, and also became CFO of MPLX GP LLC in 2012. He was president of MPLX GP LLC from 2016 to 2017. “Don’s detailed understanding of our business segments and commercial value strengthens our ability to deliver our strategic plans and commitments,” Heminger said. “This past year has been transformative for MPC, and Don has expertly guided our teams in managing the complexities of combining two large, successful companies. In his new role, I’m confident he will uncover further opportunities to capture value and unlock profitable growth.”

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INDUSTRY ROUNDUP

FAST FACTS Gen Zers are among the most noteworthy diners who tend to eat during the later dayparts. Asian-Americans and millennial adults between the ages of 25 and 34 are also disproportionately more likely to eat later in the evenings. — Packaged Facts, Eating Trends: Mealtimes and Snacking

Nearly 60 percent of urban shoppers report buying groceries online for mail or door-to-door delivery vs. less than 30 percent of suburban and rural shoppers. —Acosta, The Urban Grocery Shopper

23 %

Over the past four years, meals or snacks ordered via mobile app, internet or text message have grown 23 percent and currently represent 3.1 billion visits and $26.8 billion. —The NPD Group, Delivering Digital Convenience

13 states

Thirteen states recently introduced new gas taxes: California, Connecticut, Illinois, Indiana, Maryland, Michigan, Montana, Nebraska, Ohio, Rhode Island, South Carolina, Tennessee and Vermont. — AAA

Cumberland Farms Challenges Flavored Tobacco Bans The convenience store retailer files suit against six Massachusetts towns is fighting back against the patchwork of tobacco regulation across the state of Massachusetts, taking particular aim at flavored tobacco bans.

CUMBERLAND FARMS

The convenience store retailer filed a multi-defendant lawsuit against the boards of health in Barnstable, Billerica, Framingham, Sharon, Somerville and Walpole. Each board recently adopted new regulations that are based on a model developed and advocated by a private organization, according to the retailer. Based in Westborough, Mass., Cumberland Farms operates a network of nearly 600 convenience stores across eight states, including 200-plus stores in Massachusetts. According to the complaint, the regulations arbitrarily force Cumberland Farms to stop selling many flavored tobacco and nicotine products, while allowing competing businesses to continue selling them. Among the restricted products are prominent brands like Newport menthol cigarettes, Copenhagen wintergreen smokeless tobacco, Garcia y Vega flavored cigars, and Juul vaping devices, the company said in a release. In copying the private organization’s model regulation, these six local Massachusetts boards have created anti-competitive marketplaces that grant monopolies to specialty stores like smoke shops and smoking bars, according to Cumberland Farms. These new restrictions have no plausible public health rationale, the compliant argues. “Cumberland Farms is in the business of retailing the products that our guests want. That’s why we are here to celebrate our 80th anniversary this year,” said Brian Glennon, general counsel for Cumberland Farms. “We are proud of our excellent compliance rates in selling age-restricted products. Nobody does it better than Cumberland Farms, which is why we find the new regulations so nonsensical and frustrating. “We’re simply calling for a level playing field where we can continue to serve all of our customers, without unelected local officials taking away their right to choose where to shop and what to buy,” Glennon added.

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THE LEADER IN SAFETY AND RELIABILITY. CONSISTENT ﬂame height NO spitting, sputtering or ﬂaring DROP-RESISTANT from a height of 5 feet FLAME EXTINGUISHES within 2 seconds SAFE volumetric displacement

BIC. SAFETY YOU CAN COUNT ON. BIC will never compromise on the safety and quality of its lighters. Every day, BIC produces more than 7 million lighters worldwide and every lighter undergoes more than 50 separate, automatic quality checks. Trust BIC for safe, high-quality, reliable lighters.

*Source: IRI C-MULO Vol Sales of Pocket for the 52 weeks ending 12/30/18

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INDUSTRY ROUNDUP

Eye on Growth

Before the end of the year, Pilot Flying J plans to open six more travel centers in the Permian Basin region of West Texas. After the new store openings, the company will operate 92 locations in Texas, with more than 20 in the Permian Basin. Applegreen plc reached a deal with CrossAmerica Partners LP to operate 46 company-operated retail stores in the Upper Midwest. CrossAmerica will enter into a master fuel supply and master lease agreement with Applegreen. Refuel Operating Co. plans to build 10 new Refuel convenience stores over the next year. The $50-million investment will target Charleston and eastern South Carolina.

The company plans to open at least three more Rogers Market stores in 2020.

ATCO Inc. unveiled a new store concept, Rogers Market, in Fort Myers, Fla. The concept sets itself apart by focusing on two major elements: design and foodservice. EG America closed on its acquisition of Fastrac Markets LLC, adding 54 convenience stores in New York to its rapidly expanding portfolio. The deal also included Fastracâ&#x20AC;&#x2122;s wholesale fuel and transportation businesses. Getty Realty Corp. inked a sale-leaseback deal for six convenience store and gas station sites in Los Angeles. 1234 M Division Street sold the Mobil-branded portfolio to Getty Realty for $24.5 million with a 7.25-percent cap rate.

Seen on Social

Yesway Des Moines, Iowa Today is your LAST CHANCE to #SayYesToWinning with Yesway Super-Swipes! Stop in to Yesway today for your last ditch effort to win one of thousands of prizes, including FREE GAS FOR A YEAR! https://yesway. com/super-swipes/

The Spinx Co. Greenville, S.C. We are honored to receive the #1 Fundraising Team in Greenville, SC award and the #1 Fundraising Team for Overall Western Carolinas Official Hydration Sponsor for Greenville March for Babies from the March of Dimes! We love supporting healthy moms and babies! #spinx

Rutterâ&#x20AC;&#x2122;s York, Pa. We are coming to Leesport and we want YOU to work for a winner! We are holding open interviews on July 2 from 10AM - 6PM! Come see us at the Comfort Inn in Reading. #WorkForAWinner #OpenInterviews #WhyGoAnywhereElse

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IN THIS LIFE, YOU GET OUT WHAT YOU PUT IN.

VOSS IS PUTTING IN MORE THAN EVER BEFORE Announcing a strategic partnership with global entertainment icon, entrepreneur and longtime VOSS loyalist, Dwayne Johnson. • Our largest consumer-facing advertising and social campaign to date, featuring Johnson himself, beginning August 2019 will create more demand for VOSS • Co-created innovation, with new products launching early 2020, which will inspire consumers to get all they can out of life, echoing Johnson’s own ambition To see how your business can “live every drop”, reach out to Chris Cuevas (Christopher.Cuevas@vosswater.com, 512-969-8405), your local VOSS Distributor or visit vosswater.com

LIVE EVERY D R O P.™

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INDUSTRY ROUNDUP

Retailer Tidbits

Kum & Go LC is shifting 2,000 of its parttime positions to full-time positions. The move makes employees eligible for an enhanced benefits package that includes health insurance, 401k, paid time off, tuition reimbursement and leave for new parents.

Parker’s unveiled DailyPay, a new technology solution that enables employees to get paid daily, weekly or on demand. It is one of the first retailers in the convenience store industry to roll out the program.

7-Eleven Inc.’s 7NOW delivery smartphone app established 7NOW Pins that allow customers to order to parks, beaches, sports fields, entertainment venues and other public locations that may not have traditional addresses. Apache Oil Co. Inc. sold its petroleum marketing and retail fuels distribution company. The deal with an undisclosed buyer included 27 commission marketers, 12 lessee dealers and 56 wholesale supply accounts primarily concentrated around the New York and Boston The sale marks Apache metropolitan areas.

Oil’s exit from the retail fuels business.

Supplier Tidbits

Dash In debuted a Splash In Unlimited Car Wash Club with the opening of its latest neighborhood concept store in Clinton, Md. The membership club offers subscriptions to three levels of unlimited car wash packages. Casey’s General Stores Inc. is bringing E15 fuel to the forecourt of 12 more stores in Kansas. The retailer already offers the fuel at 10 of its locations in the state.

The National Restaurant Association launched ServSuccess, a career development offering that features three levels of professional certification, online training and assessment. Oberto launched a new look, new products and new brands for the meat snacks category. The company initiative includes reintroducing classic hits, improving staple products, and creating new jerky products.

PIM is investing more than $30 million into the expansion of its Franklin Township, N.J., facilities.

The Promotion In Motion Cos. Inc. (PIM) broke ground on an expansion of its manufacturing facilities. The nearly 80,000-square-foot addition will allow for new production lines.

Regatta Craft Mixers formed a multi-year partnership with US Sailing to serve as the official craft mixer and ginger beer of the program. Regatta will also be a national sponsor of the U.S. Match Racing Championship in October. Skupos announced a $26 million Series B financing round led by Insight Partners with participation from Unilever Ventures, Tao Capital, and prior backers Toba Capital, Dynamo Ventures and Loup Ventures. The financing will be used for ongoing product development and strategic expansion.

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SPONSORSHIPS ARE NOW AVAILABLE!

TOP

W MEN IN CONVENIENCE PRESENTED BY CONVENIENCE STORE NEWS

The 2019 Convenience Store News’ Top Women in Convenience awards program recognizes the integral role women play in convenience retailing. Women will be honored from the retailer, wholesaler and supplier communities in four different categories:

AWARD CATEGORIES* Women of the Year

Senior Level Leaders

Rising Stars

Mentors

SPONSORSHIPS AVAILABLE! CONTACT: PAULA LASHINSKY Vice President and Brand Director 917-446-4117 • plashinsky@ensembleIQ.com

KELLY FISCHER Associate Publisher/Midwest 847-894-8134 • kﬁscher@ensembleIQ.com

RON LOWY Associate Brand Director/West Coast 330-840-9557 • rlowy@ensembleIQ.com

TERRY KANGANIS Account Executive/Classiﬁed Advertising 201-855-7615 • tkanganis@ensembleIQ.com

RACHEL MCGAFFIGAN Associate Brand Director/Northeast 508-385-2524 • rmcgafﬁgan@ensembleIQ.com

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NEW PRODUCTS

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1. Fortified Water Featuring PODZ

2. B.O.S.S. Food Co. Superfood Bars

4. Miracle Nutritional 3. Triscuit Wheatberry Clusters Products CBD Line

Good2grow launches the next generation of its collectors tops. The new Fortified Water Featuring PODZ line is designed with older kids in mind (ages 7-12). The line features 10-ounce bottles of fortified water topped with a clear, twist-off, domed lid encasing popular threedimensional characters from movies, television and more. Fortified Water Featuring PODZ are currently available in two flavors: Orange Mango and Raspberry Lemonade. The beverages contain no added sugar, high fructose corn syrup or artificial colors, flavors or preservatives. They not only keep kids hydrated, but also provide a good source of Vitamin D and calcium, according to the company. Each bottle is 20 calories and has just 3 grams of sugar. good2grow Atlanta info.good2grow.com/PODZ

B.O.S.S. Food Co. introduces new packaging for three of its recently reformulated superfood bars. The reformulated bars are nonGMO, grain-free and paleo. They have no added sugars; 7 to 10 grams of complete vegan protein containing all 20 amino acids; 6 to 9 grams of prebiotic tapioca fiber; and MCT oil, a beneficial fat associated with energy, feelings of satiety, athletic performance and brain health. The new packaging features a brightly colored, solid background with a somewhat retro feel, and a lighthearted illustration of the barâ&#x20AC;&#x2122;s functional properties using key ingredients. To distinguish the flavors on the shelf, each bar is packaged in a different color. The suggested retail price for each 1.7-ounce bar is $2.99 to $3.99. They ship 12 to a case and 144 to a master case. B.O.S.S. Food Co. Houston (800) 344-8584 bossfoodco.com

For the first time in its more than 100-year history, the Triscuit brand introduces a new product that isnâ&#x20AC;&#x2122;t a cracker. Triscuit Wheatberry Clusters take an overlooked ingredient, wheat berries, and use it in a new, innovative way to come up with tasty flavors and combinations, according to the maker. Instead of grounding up wheat berries to make flour, Triscuit is using them in their original whole-wheat kernel form, and combining them with nuts, seeds and dried fruit. Triscuit Wheatberry Clusters come in three varieties: Cranberries & Cashews, Cherries & Almonds, and Pumpkin Seeds & Sweet Corn. The new product contains no artificial flavors or colors, and is Non-GMO Project verified. Mondelez International East Hanover, N.J. triscuit.com/products.html

5. Manitou Super-Premium Cigarettes

Miracle Nutritional Products launched 22 new CBD products. According to the company, this marked the largest new product launch in CBD history. The 22 new products include 1,000-milligram e-liquids in 12 flavors, oils, beverage products, pet shampoo and topical products. Vegan, sugarfree and organic varieties of gummies are available as well. Miracle Nutritional Products Hernando Beach, Fla. (863) 703-4367 miraclenutritionalproducts.com

Premier Manufacturing, the consumer products division of U.S. Tobacco Cooperative Inc. (USTC), introduces the Manitou cigarette brand to the superpremium cigarettes category. Manitou cigarettes contain only water and tobacco, and 100 percent of the tobacco is flue-cured and grown in the southeastern United States by growers/owners of USTC. Manitou cigarettes contain no reconstituted sheet tobacco, stems or fillers. They are 100 percent free from chemical additives like artificial preservatives, humectants or synthetic flavors. Available in six king-size varieties, Manitou cigarettes come in several styles for the adult tobacco consumer. Premier Manufacturing Inc. Chesterfield, Mo. gopremier.com 18 Convenience Store News C S N E W S . c o m

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6. Big League Chew Double-Size Pouch Big League Chew released the Double-Size Pouch, which contains as much gum as two regular pouches of Big League Chew. The Double-Size Pouch is available in two of Big League Chew’s most popular flavors: Outta Here Original and Big Rally Blue Raspberry. Filled with 4.24 ounces of shredded bubble gum and featuring a resealable stand-up gusseted pouch design, the new package option is available for a suggested retail price of $2.99. Ford Gum & Machine Co. Akron, N.Y. bigleaguechew.com

7. Forest Coffee Trading Co. CBD Cold Brew

8. New Jimmy Dean Breakfast Sausage Flavors

Forest Coffee Trading Co. and Evo Hemp team up to offer a cold brew coffee with a functional twist. The Forest Coffee Trading Co. CBD Cold Brew uses coffee beans sourced from a micro-lot producer in Northern Thailand, which are then combined with 15 milligrams of Native American-grown Evo Hemp CBD extract. The cold brew, packaged in 12-ounce bottles, expresses beautiful nuances of cocoa and dark berry, according to the maker. Cases of 12 bottles are available for purchase. This product is part of Evo Hemp’s recently announced brand partnership initiative. Each collaborative product in the initiative includes Evo Hemp CBD produced by the Native Americans of the Pine Ridge Reservation, and utilizes Evo Hemp Lab’s proprietary technology. Forest Coffee Trading Co. Denver forestcoffeetrading.com/shop

Tyson Foodservice expands its line of Jimmy Dean Breakfast Sausage with three new, on-trend flavor varieties: Maple Patties, Chorizo Patties and Barrel Smoked Skinless Links. The fully-cooked format provides fast and easy preparation for foodservice operators. A rebate of up to $500 is available for download at JimmyDeanVariety.com. Tyson Foodservice Springdale, Ark. (800) 261-4754 TysonFoodService@ casupport.com tysonfoodservice.com

10. Swisher Sweets Leaf Rough-Cut Cigars

9. Snickers Dark Chocolate & Twix Triple Chocolate Ice Cream Bars Mars Wrigley Confectionery brings two new rich, decadent ice cream treats to coolers. Snickers Dark Chocolate Ice Cream Bars mark the first new ice cream flavor in the brand’s history, featuring creamy peanut butter chocolate ice cream, peanuts and caramel, coated in rich dark chocolate. Twix Triple Chocolate Ice Cream Bars — an ode to the brand’s latest creation, the Twix Triple Chocolate Cookie Bar — features creamy chocolate ice cream coated with smooth caramel and crunchy chocolate cookies, dipped in chocolate. Available nationwide, the new ice cream bars have a suggested retail price of $1.99 for individual bars and $4.19 for a six-pack. Mars Wrigley Confectionery Hackettstown, N.J. mars.com

Swisher Sweets Leaf Rough-Cut Cigars are made with all natural tobacco and finished with a Connecticut broadleaf wrapper. Packaged in three-count pouches, the cigars are available in bold blends of Original, Honey and Sweet Aromatic. They are designed to satisfy an adult consumer’s mood for complex, rich or something in between. Swisher International Inc. Jacksonville, Fla. (800) 874-9720 swisher.com/product-category/cigars-cigarillos 20 Convenience Store News C S N E W S . c o m

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OUT OF STOCK. OUT OF SALES. 1

While 95% of U.S. households buy milk, it’s often understocked & underspaced. DAIRY DELIVERS 20% OF STORE PROFIT FROM JUST 3% OF STORE SPACE

9 OUT OF 10 STORES ARE NOT FULLY STOCKED. IN FACT, ON AVERAGE, 4.6 FLUID MILK ITEMS ARE OUT OF STOCK3

48% OF SHOPPERS HAVE 1 OR MORE DAIRY MILK OUT-OF-STOCK EXPERIENCE EVERY 5 TRIPS 4

KEY SEGMENTS ARE GROWING (WHOLE, FLAVORED, LACTOSEFREE, SINGLE-SERVE) BUT ARE OFTEN UNDERREPRESENTED ON-SHELF 5

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VISIT MILKPEP.ORG TO UTILIZE RESOURCES, INSIGHTS & DATA TO BUILD A STRONG CASE FOR PROFIT POTENTIAL

©2019 America’s Milk Companies. 1IRI Panel Data, 52 weeks ending 7/15/18. 2Willard Bishop Grocery SuperStudy™. 32018 audit, weekend shopper visits conducted by MilkPEP/Prime Consulting; 1,244 visits, 228 stores. 4IRI panel data. 5IRI Panel Data, Full Year 2017 dollars and Full Year 2013.

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RE RES

Is Your Business in Trouble? Take notice of red flags so that you can do something about them before it is too late ONE OF THE THINGS I enjoy most is walking around town, especially in the early hours of the day. It is a chance to observe the transition from the stillness of the night to the bustle of the day.

By Roy Strasburger, President, Strasburger Retail

People are going to work, deliveries are being made, and businesses open their doors to greet their customers. In many countries, you will see the shop owners sweeping the sidewalk in front of their store or watering down the pavement to keep the dust down. The day begins, the products are put on offer and, hopefully, the cash register will ring. How many times have you walked down a street and noticed that a store that’s been operating for years is now closed? When I see this, I always want to know what became of the business. What changed in the competitive environment to cause the store to close? Did something happen within the business that caused them to close their doors? Or did the owner just decide to retire and walked away? Every business has a story to tell. However, these are questions that are asked when you are on the outside looking in. How do you see these things happening in advance when you are on the inside? What are the events that tell you there is a problem with your business

so that you can put plans in place early enough to avoid closing the business? I thought it might be helpful to go through some points that can be red flags indicating trouble so that you can do something about them before it is too late.

Financial Performance Let’s start with the financial performance. The most obvious indicators are the numbers that should reflect in your bookkeeping and profit and loss statements. I hope it goes without saying that we should all have accurate accounting methods in place for running our stores. Useful financial information begins with collecting accurate and consistent data from your operation every day. This is truly one of those situations where “garbage in is garbage out.” The number of times our contract operations group goes in to operate a site and we find that there is no accurate financial information are too many to count. The operator was, in effect, running the store blind — not knowing what was going on. I suppose that’s one reason why the business owner calls us in to help. So, what are the financial fundamentals? Let’s start with the top of the profit and loss statement. If total sales/revenues are in a continuous decline compared to the previous year, there is a major problem. The store is either losing customers or the same customers are not buying as many products when they visit. In either case, this is a bad sign. The immediate remedies are to: Make sure your store is clean and presentable; 2. Evaluate your staff and ensure they’re customer friendly in service and presentation; and 3. Try to bring more customers into your store with new marketing ideas (signage, cleanliness, lighting and advertising) or promotions (providing added-value promotional items to customers so that they will spend more money and buy more items). 1.

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your business LEGISLATION / REGULATIONS SALES STRATEGIES

COMPREHENSIVE RESOURCES

CONSUMER INSIGHTS

MERCHANDISING SOLUTIONS

SALES & PROFITS

COLLABORATION

At AGDC one of our goals is to help drive our customers’ LEADERSHIP BRANDS

success. We represent the Altria Operating Companies’ vast portfolio of industry-leading brands. We aim to develop sales strategies that align with current consumer insights and your operational goals. Work with us and take advantage of our comprehensive resources to evolve and elevate your business.

Servicing: Philip Morris USA U.S. Smokeless Tobacco Company John Middleton Nu Mark Nat Sherman

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The next line of the financial statement to check is whether your gross profit margin is in decline. If your profit percentage has decreased over time, that means your retail prices have not increased in relation to the rise in the cost of the products you are selling, or you are suffering from large inventory shrink losses or excessive spoilage (more on this later). If the gross profit percentage is holding steady, you need to check your gross profit dollars. Gross profit dollars are what is left when you subtract your cost of goods and inventory shrink from your total sales, plus any rebates or allowances. If your gross profit dollars are declining, you have a problem with either falling sales or excessive inventory shrink and/or spoilage. Keep in mind that the amount of inventory loss or spoilage reported by employees may only be a small percentage of the actual amount. In many cases, inventory shrink — otherwise known as theft — and product spoilage are underreported and you may be losing money because products are going out the door (or into a dumpster) without being paid for. There are ways to put in place tight inventory controls, including tracking purchases accurately, doing regular store audits and inventory accounts, and maintaining a spoilage log at the store that is verified by management. We’ve now arrived at the literal bottom line of the profit and loss statement: the net profits generated by the store. If your net profit is declining, it is an indication that either sales or gross profit dollars are eroding, or that labor and operating costs have increased. If you find that your gross profit dollars are the same as previous years, then you need to look very hard at your operating costs. Questions you should ask are whether you are spending too much on staffing and labor and whether your controllable expenses (utilities, repairs, maintenance, etc.) are under control.

they are on the sales floor less and do not pay as much attention to the cleanliness of the store. Conversely, a clean and orderly store shows customer engagement and prompts the customers to make more frequent visits and buy more products. An increased number of out-of-stocks also can indicate a reduction of sales. The most important point: if the product is not on the shelf, you can’t sell it. It is a missed revenue opportunity. It does not count if the item is in a box in the storage area. If the customer can’t pick it up, it is out of stock. Additionally, out-of-stocks indicate that the store employees are not focusing on sales opportunities. The manager must order products before they run out; not after. In our stores, we use a “build-to” system. The build-to tells us two things: what the minimum number of items should be on the shelf when more are ordered, and what the maximum number of items on the shelf should be. For example, let’s say you are selling cans of beans. The build-to will tell you that when you get down to two cans, you should order more. It will also tell you that you should have a maximum of six cans. Indicating the maximum number of items on the shelf keeps employees from over-ordering and tying up your capital in inventory that’s just sitting on the shelf. The build-to number should be checked regularly (possibly, every six months) and adjusted according to the ordering history and the volume you are selling at the store. If the number of cans of beans that you are selling goes up, the minimum may need to be changed to three and the maximum to 10. On the other hand, if the number you are ordering is going down, the minimum may need to be changed to one and the maximum to four. As you’ve already deduced, if you are having to adjust your build-to down, then you have a sales problem.

The items I’ve mentioned up to this point are tangible signs of how the store is performing — hard numbers, percentages and trends. However, there are other, intangible, things to look for in order to check the pulse of your business.

An indicator that is much more difficult to judge is employee tenure. Everyone wants to have good long-term employees. However, if they have been with you for a long time, you need to make sure they are motivated and focused on growing the business. Everyone gets stale and complacent after a while. It is the job of a good manager to make sure everyone is moving forward.

One of the items I’m always focusing on is the cleanliness and presentation of our stores. In my experience, a store with declining sales is usually dirty, has dust on the shelves and on products, and looks untidy and unkempt. Whether this is the cause, or the effect, of the reduced sales is a matter for discussion. What I find is that a store that is not busy engages employees less, which means

None of these individual indicators (with the exception of the net profit number) is enough to judge your business by itself. They all need context to determine the overall impact. Checking several of these metrics on a regular basis will give you good insight into how your business is going and, I hope, provide you with advance warning to fix problems before they get out of hand. CSN

The Intangibles

Roy Strasburger is president of Strasburger Retail, a privately held retail consulting, operations and management provider serving the small-format retail industry nationwide. Strasburger Retail operates retail locations for companies that don’t have the desire, expertise or infrastructure to operate them. Learn more at strasburgerretail.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. 24 Convenience Store News C S N E W S . c o m

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The sixth-annual Top Women in Convenience awards celebrate the passion and achievements of women in the convenience store industry

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men

d n the ry

hen the U.S. women’s national team (USWNT) won its fourth Women’s World Cup championship this year, the team was feted with a ticker tape parade in New York City to celebrate their achievement. Congratulations flowed in from around the world commending the record-breakers for their exciting play, resilience, chemistry and passion.

Many of those same adjectives could be used to describe the 42 women from the convenience store industry who are being honored this year in the sixth-annual Convenience Store News Top Women in Convenience (TWIC) awards program. As the first and only c-store industry program that recognizes women for outstanding contributions to their companies and the industry at large, TWIC each year honors a diverse array of women from leading c-store retailers, distributors and supplier companies. Their job titles run the gamut from the C-suite to category managers, from financial executives to marketers, from sales leaders to human resources managers. TWIC winners are recognized in four categories: Women of the Year: Retailer, supplier or wholesaler executives of any rank who have had an exceptional impact on the success or direction of their company, as well as a positive impact on the convenience store industry as a whole. These visionaries have steered their companies into new markets, new opportunities and strong measurable growth. Senior-Level Leaders: Retailer, supplier or wholesaler executives at the level of director or vice president and above who have executed on a strategy and transformed their business in a positive direction. Rising Stars: Retailers, suppliers or wholesalers with job titles from store manager to just below vice president, who are making their mark on the industry even at early stages of their careers. Mentors: Retailers, including store managers, suppliers and wholesalers who have made an exceptional effort and had an extraordinary impact on the careers of their colleagues. Winners are chosen by CSNews in collaboration with the Network of Executive Women (NEW) and the 2019 Top Women in Convenience Advisory Board (which includes the 2018 Women of the Year honorees). From nearly 200 submitted nominations, this year’s judges chose five Women of the Year, 17 Senior-Level Leaders, 15 Rising Stars and five Mentors for recognition. Like the USWNT World Cup champions, this year’s TWIC champions will be publicly feted for their achievements. The sixth-annual TWIC Awards Gala will be held Wednesday, Oct. 2, from 5:30 p.m. to 7:30 p.m. at the Omni Atlanta Hotel at CNN Center in Atlanta. Nearly 300 convenience industry leaders are expected to celebrate with the honorees in what is sure to be one of the highlights of the many events taking place during the 2019 NACS Show.

2019 TOP WOMEN IN CONVENIENCE ADVISORY BOARD • Line Aarnes, Alimentation Couche-Tard Inc.

• Danielle Holloway, Altria Group Distribution Co.

• Sarah Alter, Network of Executive Women

• Missy Matthews, Childers Oil Co./Double Kwik Stores

• Laura Aufleger, OnCue Marketing

• Allison Moran, formerly of RaceTrac Petroleum Inc. (chairwoman)

• Kimberli Carroll, Ruiz Foods

• Matt Domingo, RAI Trade Marketing Services

• Pat Cordle, BIC USA Inc.

• Maura Scott, formerly of Altria Group Distribution Co.

• Dawn Gillis, 7-Eleven Inc.

• Diane Wallace, Coca-Cola North America

AUG

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WOMAN OF THE YEAR:

Sarah Bibbs

Vice President, Merchandising, Candy & Snacks, Eby-Brown Co.

She left her position at a mortgage company for the convenience channel, and never looked back Sarah Bibbs’ foray into the convenience channel was a leap of faith. Fifteen years ago, she was working in the mortgage industry when one of her colleagues left to take a position at Eby-Brown Co., the largest privately-owned tobacco, candy and convenience distributor in the United States. A few years later, Bibbs reached out to that colleague to discuss a potential sales job for her husband. The colleague told her about a newly created position at EbyBrown that he thought would be a perfect fit for her. After many conversations and overcoming her personal fears of upending her career, Bibbs took the leap into the convenience channel and never looked back, joining Eby-Brown as a pricing and promotions coordinator. “Throughout the past 11 years, I have held multiple positions with increased levels of responsibilities, all giving me the opportunity to diversify and grow my personal and professional skill set,” said Bibbs, who today is responsible for developing strong, long-term partnerships with the vendor community. Challenges she faces in her current role include delivering new and innovative solutions to the market so that Eby-Brown’s customers can grow their business. With trends in the candy and snacks category continually evolving and becoming more interesting daily, Bibbs must deliver the right product mix to all Eby-Brown customers — from independents to large chains. Despite the challenges, what Bibbs loves most about her position is that no two days are alike. “Every day, we face new challenges and opportunities that provide me with learn-

ing experiences,” she said. “I love learning about the new trends and the best way to integrate them into our business. I enjoy finding solutions that fulfill both the goals of Eby-Brown and our vendor partners, creating a positive outcome for everyone that ultimately benefits our customers.” Reflecting on her time and experiences in the convenience channel to date, Bibbs said what she’s found most rewarding is the network of people she’s collaborated with and learned new things from. Her work also has allowed her to live by her own code, achieve her career goals and stay true to herself. She advises fellow women in the c-store industry to always consider the work and value they can deliver to their company. “The results your work delivers will speak volumes and take you to the next level in your career,” she told Convenience Store News. “Set your personal and professional goals, stay focused, dedicated and, most importantly, stay true to yourself.” WOMAN OF THE YEAR:

Deb Hall Lefevre

Chief Information Officer, Alimentation Couche-Tard Inc./Circle K

She is a strong proponent of technology’s importance in driving the strategy to disrupt retail Deb Hall Lefevre has always been drawn to a career in technology because she sees technology as the tip of the spear in driving huge, positive change. “Digital has changed the way we live, the way we work and the way we play. We are all living digital lifestyles. Today, the pace of that change is faster than ever… and I love that, too,” she told Convenience Store News. “I believe we are uniquely positioned to grow and to disrupt what convenience, or what ‘making it easy,’ means to our customers and our employees.” A formidable force in technology, Lefevre became part of Alimentation Couche-Tard’s Circle K team in 2017, after spending the beginning of her 30-year career in technology in the telecommunications and fastfood industries. As Circle K’s first-ever chief information

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CONGRATULATIONS

SARAH BIBBS Vice President of Merchandising, Candy & Snacks

Sarah has demonstrated her unwavering commitment to building strong, long-term partnerships with the vendor community to select, promote and merchandise the best product mix for the candy and snack categories that enable us to assist customers with optimizing revenue growth opportunities. Throughout her decade long career, she has done an outstanding job for Eby-Brown and we are very proud of her industry accomplishments.

n family, w o r B y b E e r ti n from the e s n o ti la tu a r g n o ognition! c e r is Sarah, C th d n a t n e achievem d e v r e s e d ll e w a on omen! W p o T â&#x20AC;&#x2122;s n w o r by-B You are one of E

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officer, the focus of the role was at first more on traditional technology work, such as standardization and support following a history of acquisitions and integrations. Today, each day is different for Lefevre, but with a few key themes. Her core responsibilities are to develop the strategy and priorities for Circle K’s technology organization in close partnership with her functional peers, lead and develop the talent in the organization, and deliver secure and reliable solutions. “As technology begins driving the strategy to disrupt retail, I’m excited at the opportunity to lead this function inside a convenience company that is developing new solutions to seize the benefits of scale, harness the power of data, and improve the customer experience,” she expressed. “While I have only been in the industry for a couple years, I have found a can-do, humble and friendly culture at Circle K, where teamwork shines every day,” she added. “While it can be challenging that we are driving growth while staying lean, I find that the can-do attitude across the company makes Circle K feel like an energetic start-up on most days.” Over the course of her career, Lefevre has had a broad set of mentors and sponsors whom she said have served as “loving critics,” providing constructive and tough feedback that she needed to hear in order to continue growing and learning. She encourages other industry women looking to rise through the ranks to always remember that feedback is a gift. “Find various people you trust to give you constructive feedback throughout your career. Build a ‘board of directors’ with a mix of mentors and sponsors to ensure you have a diverse set of coaches who can also provide opportunities,” she suggests. “Additionally, I’d say it’s very important to be an effective communicator. I like the tagline ‘Be brief. Be brilliant. Be gone!’” WOMAN OF THE YEAR:

Jayne Rice Partner, Managing Director & Director of Institutional Sales, Marketing & Investor Relations, Yesway

Her past experience in other industries has given her a unique leg up in the c-store industry

Jayne Rice was introduced to the convenience channel in an unconventional way. After Brookwood Financial Partners, the private equity firm behind Yesway convenience stores, sold its real estate portfolio before the financial crisis in 2008, Rice and a few of her colleagues were tasked by the CEO to find uncorrelated real estaterelated businesses that would not be subject to the same cycles as commercial real estate or the economy in general. After researching more than 300 businesses, the team decided to invest in the c-store and fuel retailing space. However, while the decision to invest was made back in 2010, Brookwood did not officially become part of the industry until late 2015 with the acquisition of its first portfolio of 10 stores in Iowa.

There will continue to be an even greater need for women’s voices at the senior levels of the industry to better understand how to meet this consumer base that maybe in the past had been underrepresented.” — JAYNE RICE, YESWAY

“We had the luxury of creating a new c-store company from scratch and spent a great deal of time researching and deciding which industry best practices we wanted to implement,” Rice explained. “I was responsible for researching and eventually selecting a brand and identity firm out of New York [CBX] to not only create a name, logo and color scheme for the firm, which eventually became Yesway, but to also help us fine-tune our company values and create a brand ethos. … Never would I have guessed that by working for a private equity real estate investment firm, I would be recognized as a woman leader in the convenience store industry because of the work we have done over the last few years in creating a new brand from scratch.” Rice will admit that up until nine years

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ago, she knew nothing about the c-store space. However, one of the most rewarding aspects of her job, she says, is being able to apply her past experience in sales, marketing, investor relations and integration management in the private equity and insurance industries to a start-up business in a different industry. “Although perceived by some to be simple retail, the convenience industry is both sophisticated and complex, and it takes both art and science to run and grow a successful chain,” she said. Looking at the c-store sector as a whole, which has traditionally been a bastion for men, Rice believes that as the industry continues to evolve, so will its related opportunities and with that, will come new voices that will lead the sector going forward. “There will continue to be an even greater need for women’s voices at the senior levels of the industry to better understand how to meet this consumer base that maybe in the past had been underrepresented,” she said. “It is no longer an industry that does not cater to women. What I do see is a really dynamic industry that is changing rapidly and is full of opportunity.” WOMAN OF THE YEAR:

JoAnn Saverino

Vice President, Saverino & Associates Inc.

The 30-plus-year industry veteran believes women need to build each other up For JoAnn Saverino, a career in the convenience channel was expected. In 1988, she began working for her family’s sales and marketing business, Saverino & Associates Inc., and she’s been rising up the ranks ever since. Over the course of her 31-year career, she’s served in many roles for the company, from customer service supervisor to sales team associate to sales manager of the c-store division. In 2011, she was appointed to her current role as vice president of sales and marketing, overseeing the sales teams in 22 states. On any given day, you will find Saverino on the phone with her team or chatting with clients, answering emails, traveling to meet with customers, and working on reporting,

trackers and information sourcing. The best parts of her career, she says, are the people she’s encountered and how she has contributed to the success of others. “I have worked with some of the best and some of the worst, and have learned from all of them. I have made some very good lifetime friends while doing a job I am passionate about,” she expressed. “Knowing that by working hard and committing myself, I am also lending to the success of others; the realization of how many people that effects in the big picture is very rewarding.” Taking a tough challenge and finding a solution for both parties that is sensible, profitable and creates a successful partnership is very rewarding as well, according to Saverino. “We are a family business and many of our vendors and customers have been family businesses over the years, too, which adds another positive aspect for me personally,” she said. Rewards, however, aren’t reaped without overcoming challenges. There’s always pressure to perform well and, in many cases, Saverino believes what women do reflects on the entire gender. “I read a political quote that sums it up very well. It said, ‘If I fail, no one will say, she doesn’t have what it takes. They will say, women don’t have what it takes,’” she noted. Recalling her experiences with gender bias over the last three decades, Saverino notes that the barriers to advancement have improved greatly. However, she doesn’t think the industry is there just yet. She cites a number of lingering factors, such as the imbalance of the pay scale and workload expectations. Saverino believes women need to support one another by being mentors, reaching out to offer advice and guidance, and being an ear and shoulder for the next generation of women in line. “I tell women to keep a smile and a positive attitude. Hold your space at the table. Lean into the conversation; don’t be afraid to voice your idea or opinion. Take credit for your successes, as well as your failures. Negotiate for what you deserve. But also listen as much as or more than you speak, do your homework, work hard and smart, stay humble, and treat people the way you want to be treated,” she told Convenience Store News.

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TEAM SAVERINO / Saverino & Associates, Inc.

Congratulates!

JoAnn Saverino

Vice President of Sales / Marketing

Class of 2019 Woman of the Year

e applaud JoAnnâ&#x20AC;&#x2122;s leadership as she guides the Convenience Division totaling 13 Office Support Personnel and 23 Sales Reps. She directly services her own chain accounts and Eby-Brown. JoAnnâ&#x20AC;&#x2122;s excellent negotiating and marketing skills are responsible for her high level of proven successes.

Congratulations JoAnn on being the 1st Broker to receive this outstanding award. It is such an honor and well deserved.

Area of Coverage

Sales & Marketing Specialists TEAM SAVERINO/ Saverino & Associates, Inc. 538 Randy Road, Carol Stream, IL 60188 PH: 630.868.2600

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WOMAN OF THE YEAR:

Rebecca Troutman

Director of eCommerce, 7-Eleven Inc.

Her true passion is taking a trend, creating a plan, bringing it to life and watching it grow “Who wouldn’t want to work for the founder of Slurpee?” That is the question Rebecca Troutman posed to herself in 2004 when she saw a job posting for a field consultant role at 7-Eleven Inc. She thought joining 7-Eleven would be a wonderful experience to work for a company that was rich in history. She was right. Today, Troutman is a 15-year veteran of 7-Eleven. Over the course of her career at the convenience store chain, her roles have gained momentum in responsibility and deliverables, from field consultant to field training specialist to field merchandiser, national category manager for confectionery/packaged food and grocery, and director/project manager of business development. Currently, she is 7-Eleven’s director of eCommerce. In a typical day, Troutman works with her team to develop, source, promote and launch new items, as well as build visibility and trial of 7-Eleven’s private brand items online. Her current core responsibility is to build and grow the retailer’s eCommerce capabilities to meet the changing needs of customers, while holding true to founder Joe C. Thompson Jr.’s belief: “Give the customers what they want, when and where they want it.” “[What I love about my current role] is researching trends and finding niche ways in which I can make 7-Eleven relevant to customers, either through ways to drive traffic to our stores or through alternative channels for customers that know of the brand but do not have access to a store” Troutman said. “To take that trend, create a plan and bring it to life, and ultimately watch it grow is my true passion.” One of the most rewarding and challenging facets of Troutman’s c-store industry career has been witnessing the perception of c-stores change from a cigarettes and beer destination to one that offers fresh, quality

food and healthier options. She believes the industry still has a ways to go, though. Another challenge facing the c-store industry, she says, is overcoming gender inequality. According to Troutman, women as employees are faced with the realization that they are considered less capable than others. So, there are two choices: remove themselves from the situation or do their best to change the perception through education, hard work and mentoring. “I chose the latter,” she told Convenience Store News. “I see a general lack of understanding that women, as leaders, lead differently. If a company is looking to maintain its leadership structure as it has always been, then, yes, there are barriers for women to advance. However, if a company is willing to change its mentality and become more diverse in their definition of what good leadership is, then the opportunities are boundless and [depend] less on whether the candidate is male or female.”

If a company is looking to maintain its leadership structure as it has always been, then, yes, there are barriers for women to advance. However, if a company is willing to change its mentality and become more diverse in their definition of what good leadership is, then the opportunities are boundless.” — REBECCA TROUTMAN, 7-ELEVEN

Troutman has one key piece of advice for women in the industry no matter the obstacle they’re facing: to celebrate their diversity. “Cookie-cutter isn’t what will get you to the next level. Be unique with your views and ideas; be diverse in your skillsets; and find key people in your life to support and help you on your journey. Without those family/ friends/coworkers and mentors, it can be a lonely climb,” she said. “To quote P.T Barnum, ‘No one ever made a difference by being like everyone else.’”

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Congratulations! The Women of 7-Eleven Do It Again! Congratulations to 7-Eleven’s Rebecca Troutman, Amy Werth and Nancy Gallardo for being recognized by Convenience Store News as three of the 2019 Top Women in Convenience. Thanks to your talent and dedication, you have signiﬁcantly contributed to making 7-Eleven one of the world’s top convenience retailers.

women Rebecca Troutman of the Director of

year

eCommerce

Recognized for their exceptional impact on the success or direction of their company, as well as their positive impact on the convenience store industry as a whole.

SENIOR- Amy Werth

LEVEL

Senior Product LEADERS Director, Alcohol

RISING STARS

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Nancy Gallardo Category Buyer, Snacks

Recognized for executing strategy and transforming their business in a positive manner.

Recognized for making their mark in the convenience store industry in the early stages of their career.

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SENIOR-LEVEL LEADERS

Ericka Ayles Managing Director & Chief Financial Officer, Yesway

• Ayles oversees all of the administrative, financial and risk management operations of Yesway. She fulfills a leadership role in financial decision-making by providing strategic financial input to Yesway’s executive team, monitors and directs the implementation of strategic business plans, and develops Yesway’s financial and operational strategy. • Ayles’ sphere of influence extends to budget and forecasting oversight for Yesway. She directs all company analytics, trend analysis and KPI reporting; leads the risk management program for the company; and is responsible for reporting to investors. She serves on the company’s Executive and Investment Committees. • Ayles developed a robust reporting platform and data analytics team during a period of significant growth in 2018, which significantly reduced reaction time by operations teams, and established real-time and long-term data analysis for strategic initiatives to better understand bottom-line impact. In addition, she successfully integrated the reporting platforms of 11 separate acquisitions, including 63 new sites in 2018.

Margaret Barron

Senior Director, Global Brand, Alimentation CoucheTard Inc./Circle K

• Barron is responsible for developing the Circle K brand globally, managing brand royalties, delivering creative brand campaigns for all categories and marketing, overseeing the design team, and developing global brand strategy. She manages brand briefs from Europe, Canada and the United States. • Barron joined Circle K when the company acquired the Topaz brand in Ireland more than three years ago. Since then, her influence on Circle K’s marketing business, especially its growing brand, has been impressive and widely admired

throughout the company. Barron is the lead manager responsible for Circle K’s brand’s reputation and creative development. • Barron and her team will implement a global strategy for the Circle K brand in the next fiscal year. “Margaret has a truly big responsibility in building, marketing and growing the Circle K brand worldwide,” said Kevin Lewis, Circle K’s chief marketing officer.

Sharon Briggs Director of Merchandising, Mountaineer Mart

• Briggs has P&L responsibility for West Virginia-based Mountaineer Mart, a 17-store chain. She is most influential in the areas of marketing and promotions. • Briggs has increased store sales by more than 20 percent with innovative promotional ideas and marketing campaigns. She also efficiently implemented PDI software, including auto replenishment. During this past year, she’s focused most of her time on store layout and in-store promotion. With stores located in a wide array of markets, she has been methodically reviewing each store’s offerings and making product changes appropriate for those stores in densely populated city areas vs. highway sites vs. remote small towns. • Briggs has managed Mountaineer Mart for more than 17 years and she is as dedicated to her employees as they are to her. She sends each employee a personally signed birthday card and, for office employees, she brings them their own personally prepared lunch. She delivers homemade fudge to all of the stores for employees to share at Christmas time.

Lauren Denault Vice President, Customer Experience, Skupos

• Denault oversees all customer-facing activities with the Skupos platform, including ongoing support of retailers, software implementation, new account onboarding, and maintaining industry-leading levels of customer satisfaction. • Denault has grown customer experience at Skupos to 30-plus people supporting growth to 7,000-plus retailers and Fortune 500 brands on the Skupos platform. Her expertise in building processes to maintain high levels of customer support and proactive adoption have propelled Skupos into the fastest-growing software company in the convenience retail space. • Denault has been recognized as an industry leader in customer experience, garnering keynote speaking slots at software industry conferences like Pulse, and previously received Intuit’s star award for top-performing employees.

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The Convenience Distribution Association, representing convenience products distributors across the nation, congratulates all of the Top Women in Convenience honorees, with special congratulations to our CDA members:

Sarah Bibbs, Eby-Brown Co. Women of the Year honoree Tracey Brown, MondelÄ&#x201C;z International Inc. Katie Duncan, The Hershey Co. Andrea Garrison, RAI Trade Marketing Services Co. Dena Hawkins, Procter & Gamble Candice Lafourcade, The Hershey Co. Hope LaGrone, McLane Co. Dawn Letson, McLane Co. Suzanne McDonald, Core-Mark International Alexis Strack, Altria Group Distribution Co. Christine Vondran, BIC Consumer Products USA

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Ashley Englefield Dewitt

Director of Marketing, Englefield Oil Co.

• DeWitt handles marketing for Englefield Oil’s three divisions: Retail (Dutchess stores), Lubricants and Fuel. She oversees overall brand image and standards for store design and is involved in many other aspects of the business, including marketing and operations initiatives ranging from working with the Duchess merchandising team, to discussing new loyalty strategies with the marketing team, analyzing the financials of the stores, and working with the construction and design teams on layout and features of the newest store locations. • A third-generation family member, DeWitt holds the most influence in the retail side of the company. She oversees everything from new store design concepts to building the brand through strategic sponsorships and community initiatives. She developed the Crown Card Rewards loyalty program and built it into a robust program that includes successful campaigns such as drink club promotions, deep discounts on in-store products and even surprising members with free points or items added to their card. • DeWitt is the driver behind Englefield Oil’s involvement in philanthropic communities.

Mary Duffy Operations Manager, Co-owned & Co-operated Stores, Chevron Corp.

• Duffy manages 40 employees responsible for ensuring consistent execution of operational standards, training and development, regulatory compliance, licensing and permits, and payroll activities for a network of 300 stores with approximately 3,500 employees. She has oversight of all aspects of daily operations for Chevron’s company-operated sites in California, Oregon and Washington. • Much of her career at Chevron has been in roles that have supported the growth of Chevron’s company-operated network, from managing and developing the current back-office system, to working in the franchise team developing new concepts

to support the ExtraMile brand, working as a business consultant for both the retail and the company-operated organizations, and being part of Chevron’s original Convenience Retailing Group prior to the birth of the ExtraMile brand. • During her 30 years of experience with Chevron, Duffy has received recognition for various high-profile projects, including two back-office system projects, a new pointof-sale system and a new accounting system.

Gena Dunten Director, Wholesale Fuel, Alimentation Couche-Tard Inc./Circle K

• Dunten manages fuel supply and brand programs for approximately 2,000 wholesale customers across the U.S. This includes relationships with regional oil company reps, coordination of support for brand programs with the operational teams, and communication of brand information to wholesale customers. • Dunten is transforming the way in which Circle K Wholesale Fuels manages fuel and collaborates with brands. Gerardo Valencia, division leader for Circle K Wholesale Fuels and president of CrossAmerica Partners, said: “Gena has been instrumental in leading our journey to become North America’s best fuel wholesaler as we deliver our fuel optimization agenda for CrossAmerica by leveraging best practices from our legacy National Wholesale Fuels Circle K portfolio. This includes developing best practices for fuel pricing, managing brand programs, and leveraging Circle K Global Fuels capabilities to deliver value for CrossAmerica.” • The recipient of multiple ambassador trip awards based on job performance, Dunten participates in the BP Amoco Marketers Association, the NACS Women’s Leadership Program, Habitat for Humanity and numerous other charitable programs.

Andrea Garrison Senior Director, Tampa Region, RAI Trade Marketing Services

• Garrison leads a Trade Marketing Region Team of 80-plus high-level individuals who have a significant impact on Reynolds American Inc.’s (RAI) business in Florida. She is accountable for the development and succession plans for her team and the future leaders for RAI. • A 17-year veteran with the company, Garrison has been successful in multiple leadership roles that have had a positive and direct impact on the convenience industry. As a board member of the Florida Association of Wholesale Distributors, she has led and driven the vertical alignment engagement process for her convenience retail trade partners for the Tampa region.

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THE BAR JUST GOT HIGHER CONGRATULATIONS!

to one of our own for being named one of the Top Women in Convenience

Andrea Garrison Senior Director, Tampa Region

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• Garrison is extremely active in her community and her homeland of Brazil, especially when it comes to helping others in need. She is a founding member of FEED the Future, Brazil, which provides food and water to those in need in Brazil.

Deborah Grimes

Vice President of Fuel Procurement, Casey’s General Stores Inc.

• Grimes manages the fuel procurement and logistical delivery of all petroleum products for Casey’s more than 2,100 stores. She negotiates price, process and terms through over 150 terminals across 16 states, all while ensuring compliance with multiple regulatory requirements. She oversees a fleet of more than 300 gas drivers and fosters relationships with outside haulers to ensure none of Casey’s stores go without sufficient supply. • Grimes manages a multimillion-dollar budget and is accountable for more than $400 million in gross profit dollars coming from fuel sales. Gasoline accounts for the bulk of Casey’s total sales. • Grimes is a well-respected and trusted individual at Casey’s, having been with the company for more than 41 years. In 2005, she became a Casey’s director and in 2014, she became one of three female officers to join Casey’s senior leadership team.

her customers’ success, according to her nominator. • Lafourcade won supplier of the year awards eight times from large chain customers and also received internal awards for mentoring and leadership.

Suzanne McDonald Division President, Core-Mark International

• McDonald has spent more than 18 years in the convenience channel. Prior to joining Core-Mark, her first 15 years were with 7-Eleven Inc. in various roles in operations, category management and product development. • While with 7-Eleven, she worked with a team to transform the way the retailer’s franchisees ordered products to their store and the way vendors serviced those stores. • McDonald joined the Core-Mark corporate sales team in 2016 and, in her current position as division president, she provides leadership to more than 240 employees in the Denver division, which serves more than 1,200 locations across seven states.

Salena Sims Senior Category Manager, GPM Investments LLC

• Sims began her career in the convenience store industry in 1991, holding various roles in operations, human resources and marketing. Prior to joining GPM, her previous experience included positions with Dairy Mart, Coleman Oil Co. and Speedway LLC.

Candice Lafourcade

• She joined GPM Investments last year and now influences 1,200 locations in 17 states by managing categories to maximize sales and profits.

Strategic Customer Sales Executive, The Hershey Co.

• Sims has served on the R.J. Reynolds Tobacco Co. retail council.

• Lafourcade manages $39 million in sales at six large national convenience store chains in the Southeast. She manages data, merchandising, budgeting and all aspects of the business model, including influencing decisions on product selection, placement and promotion. Her strong influence and knowledge have made her successful. Lafourcade has become the “go-to” person for all things candy and snacks. • Lafourcade is open-minded, confident and data-driven. She will try new ideas and be flexible but, at same time, she reminds her clients that everything is driven by number. She will fight hard for

Alexis Strack Senior Manager, Recruiting, Altria Group Distribution Co.

• Strack leads a national recruiting team, which identifies and delivers highly capable talent to Altria’s sales and headquarters departments. • She began her career at Altria as a sales intern in 2005, working through various leadership roles in sales and account management before taking on a new opportunity in human resources and talent acquisition. • Strack earned both bachelor’s and master’s degrees in business administration and hopes to pursue a PhD in organizational behavior.

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Congratulations. Women of the Year 2019 Convenience Store News

Sarah Bibbs Vice President, Merchandising, Candy & Snacks Eby-Brown

Deb Hall Lefevre Chief Technology Officer, Alimentation Couche-Tard Inc. / Circle K

Jayne Rice Partner, Managing Director and Director of Institutional Sales, Marketing & Investor Relations Yesway

JoAnn Saverino Vice President, Sales and Marketing Saverino & Associates Inc.

Rebecca Troutmann Director of eCommerce, 7-Eleven Inc.

Servicing: Philip Morris USA U.S. Smokeless Tobacco Company John Middleton Nu Mark Nat Sherman

ÂŠ2019 Altria Group Distribution Company | For Trade Purposes Only

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Lisa Thomas Vice President, Human Resources, OnCue Marketing LLC

• Thomas transformed the way OnCue hires, retains and accommodates employees, while also cultivating a two-person human resources department into a six-person team that oversees all human resources functions for more than 1,000 employees. • Thomas was instrumental in proposing and establishing a retirement plan for OnCue’s employees, resulting in the 2018 board approval of a 401k program. • She also initiated the Employee Advisory Committee, which allows employees from all levels of the organization to provide input to the executive team on any topic.

Nancy Todys Senior Manager, Convenience Channel Development, Tyson Convenience

• Todys brings more than 24 years of marketing and product development experience to the convenience channel. In her current role, she leads the marketing team responsible for creating holistic communication strategies for the c-store channel at Tyson Foods. • She played an integral role in the development and growth of the Pierre Foods/ AdvancePierre Foods packaged sandwich and convenience foodservice business before transitioning that experience to the Tyson Convenience team in 2017. • Todys strives to bring forward thoughtful, insight-driven recommendations and oversight to help ensure innovative, trenddriven product solutions.

Holly Veale Director of Merchandising, EG America

• A previous Top Women in Convenience winner in the Rising Stars category, Veale is responsible for all areas of merchandising, advertising, loyalty and sales communication and execution. She oversees seven direct reports with a team of 40.

• After joining EG America in October 2018, she began leading the category management team, recruiting and hiring strong foundational leaders and showing strong leadership skills as the company more than doubled in size. • Veale was promoted to her current role after demonstrating her leadership, business acumen and capacity for team engagement and communication in a fast-growing company with a changing environment.

Amy Werth Senior Product Director, Alcohol, Dairy, Frozen Food & Treats, 7-Eleven Inc.

• Werth is responsible for the category merchandising team that supports more than 9,000 stores nationwide. Her team takes consumer insights and industry trends to build multi-year category strategies that include assortment, promotions, marketing, communications and merchandising execution at the store level. • She spent nine years at RadioShack in a variety of roles across merchandising, distribution and logistics before joining 7-Eleven. Since then, she has successfully managed a variety of food and beverage categories by collaborating with strategic vendor partners and working across departments. • According to her nominator, Werth has worked very hard to be ahead of the industry curve by placing big bets on innovations within beer and leveraging emerging consumer trends. Her leadership has been instrumental in holding her team accountable for execution that delivers positive results.

RISING STARS

Tracey Brown Customer Category Manager, Mondelez International Inc.

• Brown has been with Mondel z for 14 years and currently leads the confections category for Mondel z’s largest convenience customer, 7-Eleven. Prior to working at Mondel z, she worked at McLane Co. and Advantage Sales & Marketing. • Brown successfully manages Mondel z’s 7-Eleven confections category, which includes building long-term strategic plans with the retailer, creating and executing best-in-class scale events, and driving key initiatives. • She was responsible for leading two of the largest c-store scale events at Mondel z last year. The Sour Patch Kids Watermelon event aligned 7-Eleven and Slurpee to the Sour Patch Kids; and the Sour Patch Kids Zombie event included the launch of a 7-Eleven exclusive Sour Patch Kids Zombie package.

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RECOGNITION WELL DESERVED MENTOR HOPE LaGRONE PRODUCT DIRECTOR

RISING STAR DAWN LETSON CATEGORY MANAGER

Congratulations to McLane’s own Hope LaGrone and Dawn Letson on being recognized by Top Women in Convenience 2019. With their determined work ethic, dedication to customers and unwavering commitment to the industry, we are proud of their accomplishments and honored to celebrate this recognition with them.

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Breann Christiansen District Manager, Maverik Inc.

• Christiansen learned all aspects of operating a c-store in an intelligent and profitable way by working in many positions at Maverik. She has actively sought out opportunities to grow and improve her leadership skills. • She became a district manager eight years ago. In this role, she has direct responsibility for nine Maverik stores in northwest Wyoming. She has a hand in everything from human resources issues to loss prevention to the ongoing daily operations and profits of these locations. • Christiansen is known for her focus on people. By treating her team members well and leading by example, she has earned the admiration and respect of her peers, and is regarded as an extremely competent high performer.

Heather Clay Category Manager, Cumberland Farms

• Clay started out in the point-of-sale systems and pricebook department of Cumberland Farms 17 years ago, working her way up to manager, and then category manager nearly four years ago. • Her past work has been of critical benefit to the areas of IT, marketing, supply chain, finance and retail operations. Since becoming a category manager, she has made significant improvements to the consumer offering in her broad portfolio of categories, driving sales growth ahead of market trends in key categories. • According to her nominator, Clay has had an impressively broad scope of impact in a relatively short period of time. She’s been a nominee or winner of numerous internal awards at Cumberland Farms.

Harvey Collins Southeast Category Manager, Adult Beverage, Alimentation CoucheTard Inc./Circle K

• Collins oversees all aspects of the adult

beverage category, including assortment, innovation, validations, marketing programs, implementing inventory guidelines, partnering with vendors, and working with the operation and store teams, for the entire Southeast Business Unit, which consists of more than 420 stores and nearly 50 franchise relationships. • Some of her notable achievements include: leading the creation of beer inventory guidelines; implementing an updated version of inventory maintenance control form; and phasing in a product ranking system to optimize assortment during spring beer validations. Collins also completed the Leadership Program within Circle K and is establishing the Circle K Women’s Council Chapter for the Southeast Business Unit. • According to her nominator, Collins is one of the most creative and outstanding performers to ever be part of the division team.

Michelle Doyle Project Manager, ExtraMile Convenience Stores

• Doyle brings 30 years of petroleum, restaurant and retail industry experience to her current role, in which she manages site development for all northwestern states. She’s leveraged her extensive development experience to influence ExtraMile’s new image production and application. • As a team member, Doyle is known for fostering an environment that encourages exchange of ideas, best practices and developing process efficiencies. • In today’s competitive retail convenience environment, Doyle’s business acumen and focus on delivering a quality product make her an invaluable asset to the fast-growing ExtraMile franchise, according to her nominator.

Katie Duncan Director, U.S. Convenience, Southeast, The Hershey Co.

• Duncan is responsible for more than $120 million in revenue in the Southeast. Her responsibilities include hiring, training and developing sales executives, with dotted-line responsibilities that include finance, shopper marketing, customer development, category insights and retail. • She has held a variety of leadership roles over her 13 years with Hershey, as well as with organizations such as the Network of Executive Women, the Boys and Girls Club, and the Hershey Mentor Program. • According to her nominator, Duncan has not only delivered results for the organization, but she has also delivered significant talent to the organization through her exemplary coaching methods.

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Nancy Gallardo Category Buyer, Snacks, 7-Eleven Inc.

• Gallardo joined 7-Eleven as a field consultant/district manager in the San Francisco Bay area, holding numerous positions in operations, operations support and fresh food before moving to Texas to be a center-of-store merchandiser. • She is a proven success at helping stores improve their sales performance and infrastructure, according to her nominator. • In her current role as category manager for nutritional bars, alternative snacks and salty snacks, Gallardo manages more than $100 million in business and, in 2018, she launched a better-for-you snacks program.

Lisa Ham Senior Category Manager, Beer & Center Store, Yesway

• After just two years in the industry, Ham has made her mark at Yesway. She successfully launched computer-generated ordering on cigarettes and pricing strategies in multiple states, leading to consistent growth that outpaced the market. Additionally, in the center store, she launched multiple new brands, betterfor-you planogram designs and optimized SKU rationalization in a company where no two footprints are alike. • More recently, Ham has taken on the beer category, overseeing new resets that incorporate innovation, launching loyalty offers and maximizing center-store fuel offers that have led Yesway’s sales growth for 2019. • According to her nominator, Ham excels in data analytics, has achieved consistent sales increases in all of her categories year over year, and has been recognized internally as a strong leader.

Dena Hawkins Senior Account Executive, Convenience Channel Leader, Procter & Gamble

• As leader of Procter & Gamble’s (P&G) convenience channel business, Hawkins

develops joint business plans and creates strong, trusting relationships with customers to meet or exceed volume, share and ROI objectives, and deliver North American Sales Team objectives. • In her first year as convenience channel leader, the 15-year P&G veteran led her team to exceed its objectives by 4 percent, and her team is on track to exceed its objectives again this fiscal year by 12 percent. • According to her nominator, Hawkins assumes nothing and constantly looks for game-changing ideas and approaches. For example, she led the development of a plan with one of P&G’s top brands, which grew distribution 31 percent in the convenience channel.

Amy Hobson Texas Category Manager, Snacks & Candy, Alimentation Couche-Tard Inc./Circle K

• Hobson’s primary responsibility is the Texas Business Unit, but she also serves on the Snacks National Committee and serves as a resource for global procurement. • She developed a new-to-industry remerchandising store layout in less than four weeks, implementing it into 140-plus stores within four months after CST Brands Inc. merged with Circle K, and achieved positive sales results in all snack segments. • While serving as category manager at CST Brands, Hobson helped rebrand the company’s private label snack line.

Dawn Letson Category Manager, Snacks & Edible Grocery, McLane Co. Inc.

• Letson’s sphere of influence ranges from category stewardship to brand advancement. She engages directly with customers and suppliers at all levels and delivers insights on her categories with national relevance. • Letson was instrumental in the development of McLane’s Virtual Trade Show, an Internet-based trade show that enables retailers to access special offers from leading manufacturers, taking it from infancy to a multimillion-dollar sales tool. • Prior to taking on the snacks and grocery categories, Letson led the McLane Center for Category Innovation team, where she managed MPulse, the company’s premier c-store database and information source.

Mary Mamalakis

Senior Category Manager, Packaged Beverages, RaceTrac Petroleum Inc.

• Mamalakis manages a team of four

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DENA

CONGRATULATIONS

DENA HAWKINS

ON BEING NAMED ONE OF 2019â&#x20AC;&#x2122;S RISING STARS FOR TOP WOMEN IN CONVENIENCE Dena is Senior Account Executive, Convenience Channel Leader The entire Procter & Gamble family congratulates you for your well-deserved achievement and recognition!

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who work to source products, determine in-store merchandising, and set pricing and promotion strategies for all alcoholic and non-alcoholic packaged beverages. She is responsible for the management of 100 vendors, 70 distributors and four private label brands for RaceTrac.

• She has been involved in LEAD, the company’s grassroots women’s initiative that strives to link, empower, achieve and develop its female employees and get real about the issues facing women in the industry. • In 2017, RaceTrac was named Convenience Store News’ inaugural Beverage Leader of the Year due in part to Mamalakis’ leadership of the packaged beverages category.

Holly McKown Customer Development Manager, Convenience Retail, Coca-Cola Consolidated

• McKown has 26 years of convenience retail experience with Coca-Cola Enterprises, Coca-Cola Refreshments, The Coca-Cola Co. and Coca-Cola Consolidated, working with corporate chain customers spanning the Northeast region. Her primary responsibilities include customer business planning combined with budget development, evaluation and execution. • She successfully led her largest convenience retail corporate customer to positive sales dollar results for 2017 and 2018, even though the Maryland market convenience retail unit faced dollar declines. • She began her career with Coca-Cola Enterprises in 1992 during the transitional phase from conventional to advanced sales, quickly becoming the second female in Coca-Cola Enterprises to be promoted to an advanced sales account manager position.

Christine Vondran National Account Manager, Convenience, BIC Consumer Products USA

• In addition to managing the largest customers in the convenience channel, Vondran is responsible for national-level customers’ sales, profitability and market share for BIC Consumer Products USA. • According to her nominator, she is a leader at BIC, guiding, coaching and directing customer teams to grow and develop customer business. • Vondran earned the BIC Top Achiever Award for excellence in sales and customer management, the 2016 Sales Manager of the Year award, and Chairman’s Award for her work in developing a point-of-sale analytics tool utilized by the sales team.

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CHEERS TO YOU Congratulations to Holly McKown for being selected as one of Convenience Store Newsâ&#x20AC;&#x2122; Top Women in Convenience. Thank you for refreshing the world, inspiring moments of optimism and happiness, creating value, and making a difference through your remarkable contributions.

ÂŠ2019 The Coca-Cola Company

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Laura White Category Manager, Cigarettes, RaceTrac Petroleum Inc.

• White is responsible for the overall strategy, budgets, product assortment, merchandising, negotiation of manufacturer contracts, and category profitability across five states. • White led a companywide initiative at RaceTrac to redesign backbar merchandising in order to optimize total tobacco category space to sales. • White plans and leads quarterly roadshows with operational teams by market to educate on upcoming strategy plans. She also serves on the board of the National Association of Tobacco Outlets.

MENTORS

Pat Davis Operations Supervisor, RaceTrac Petroleum Inc.

• Davis is a 24-year RaceTrac veteran. She joined the team after completing graduate school at Embry-Riddle Aeronautical University, when she accidentally dialed the incorrect fax number to send her resume. • She oversees 12 stores and 172 employees in her area. While her nominator noted that Davis’ responsibilities are difficult to detail because she makes everything a priority, and does so gracefully, Davis sums up her role as simply: to make all of her general managers the very best general managers they can be. • Described as a “rock” for the team and often referred to as a RaceTrac “legend,” Davis is known for her passionate guidance and fervor for the brand. She is often looked to for answers. However, she takes a different approach; she asks the questions and then watches her team members break it down and find their own answers.

Maurine DesJardine Marketing Manager, Pester Marketing Co./Alta Convenience Stores

• A 30-year c-store industry veteran,

DesJardine joined Pester Marketing in 2016. Previously, she held the role of category manager/buyer for Western Convenience Stores and, before that, spent 21 years at McLane Co. Inc. • She leads a team of three women and one man — a rarity in the industry, her nominator emphasized. Under DesJardine’s leadership, her team is smashing its sales goals and making a name for itself all around the Rocky Mountain region. • Mentorship plays a large role in DesJardine’s professional and personal life. All of her team members are millennials, and she is committed to their success and development so that they may become future leaders.

Cindy Dunn Senior Manager, Training & People Development, Great Lakes Division, Alimentation Couche-Tard Inc./Circle K

• Dunn oversees the training department for Circle K’s Great Lakes Division, which consists of 425 stores. She also manages the Customer Service Mystery Shop program with an outside vendor, and is the Learning Partner for her division for the company’s new human resources system, Workday Learning. • Dunn has worked in the retail industry for nearly 40 years. During that time, she’s been recognized with numerous awards, from Manager of the Year to Excellence in Service. • Outside of work, she is very active in her church and demonstrates a strong commitment to her community.

Hope LaGrone Product Director, Confection & Regulated Beverages, McLane Co. Inc.

• LaGrone has been with McLane for 21 years and during that time, she’s worked with various product categories, including snacks, beverages, grocery, confection, health and beauty care/general merchandise and foodservice. • She oversees 18 teammates and managed $7.6 billion in purchases in 2018. Among her responsibilities are managing assets, category management and program development. • LaGrone is active in Altrusa International as president of the Temple Club.

Desiree Warnken Training Manager, Rutter’s

• Rutter’s has recognized Warnken for persistently striving for personal growth by actively seeking new roles with greater responsibility. Today, as training

50 Convenience Store News C S N E W S . c o m

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manager, she organizes, plans and executes training for all store staff, as well as maintains and develops new training curriculum based on the needs of the stores and staff. • Warnken’s nominator lauded her for being “an influencer” among her fellow employees, working tirelessly to develop strong employees, and recognizing Warnken as a mentor to many restaurant managers throughout her tenure. • Outside of work, she is a history buff and is passionate about donating to and volunteering for the Humane Society. CSN

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Make CBD Products an In-Store Destination Experts weigh in on the best ways to merchandise and market these emerging products By Melissa Kress

emerging category for retailers across all channels.

CBD IS ARGUABLY THE NEXT

With hemp-derived CBD gaining in popularity — in line with overarching health, wellness and antipharma trends — and product availability and variety increasing, the market is on track to grow to $23.7 billion through 2023, according to a new report by Brightfield Group, a predictive analytics and market research firm for the legal CBD (cannabidiol) and cannabis industries. That is a sales projection that may be too good to pass up for convenience store retailers, who are facing continuous declines in cigarette sales and a slowdown in foodservice growth. While the Chicago-based Brightfield Group expects mass retail chains to eclipse all other channels for CBD product sales this year — comprising 57 percent of U.S. sales in 2019 — drugstore chains CVS, Walgreens and Rite Aid have thrown their hat into the CBD ring, and some c-store operators are beginning to join the movement as well. In June, the Asian American Trade Associations Council (AATAC), one of the largest associations for independent c-stores and gas stations in the country,

announced that it is joining forces with Harvest Health & Recreation Inc. to roll out CBD products to more than 10,000 retail stores nationwide. AATAC’s primary and affiliate members operate many franchises of the most popular branded retailers, such as 7-Eleven, Circle K, Sunoco and Chevron, among others. The association’s multimillion-dollar partnership with Harvest Health & Recreation is starting out with two CBD vape product lines: Harvest’s Co2lors brand and its premium CBx Essentials brand, according to Harvest Chief Operating Officer John Cochran. “We are exploring numerous other product forms that make sense in convenience and will be bringing those to market with the AATAC team ASAP,” Cochran added. When announcing the partnership, AATAC said it believes c-stores and gas stations can account for $8 billion to $10 billion of the overall U.S. CBD marketplace. Altoona, Pa.-based convenience store retailer Sheetz Inc. is also getting in on the action. The more than 580store chain launched an extensive line of premium CBD products at a select group of 140-plus locations across Pennsylvania in the spring. The stores are offering both isolate and full-spectrum products, including topical

Kwik Trip Inc. dedicated a page on its website to explain to its customers what CBD is and isn't. 54 Convenience Store News C S N E W S . c o m

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rubs, patches, tinctures, vape pens, oral pouches, capsules and pet products. “We are excited to be the first convenience store to offer a broad selection of premium CBD products at this magnitude,” said Ryan Sheetz, associate vice president of brand at Sheetz Inc. “This is the next evolution for Sheetz in ensuring we are meeting the needs of our customers, giving them what they want, when they want it, 24/7/365.” Not to be left behind, cross-state competitor Rutter’s now offers CBD products in all of its stores, although it is the retailer’s corporate policy not to comment on the category. The York, Pa.-based chain operates 75 locations in Pennsylvania, Maryland and West Virginia. This summer also saw Kwik Trip Inc. beginning to stock its shelves with CBD offerings. The La Crosse, Wis.based operator of more than 560 c-stores in Minnesota, Iowa and Wisconsin is adding CBD vape pens, topical rubs, tinctures, drops and oral pouches to its inventory. The retailer also created a dedicated page on its website to explain to customers what CBD is and isn’t. Consumers today often confuse CBD with cannabis, but there is a difference. CBD is one of the many compounds found in hemp. The Agriculture Improvement Act of 2018 legalized CBD, derived from hemp, but with a 0.3-percent THC threshold. THC is the principal psychoactive component of cannabis. CBD products are not psychoactive like cannabis is. The Right Placement

counter. The retailer instituted a proof-of-age policy, requiring customers to be 18 years of age or older to purchase CBD. There are some challenges that must be overcome when merchandising CBD products in a convenience store, acknowledged Paul Eifert, vice president of development at Great Northern Instore, a designer, manufacturer and service provider of in-store displays. “Space is usually at a premium and room for graphics is often required to educate and help shoppers navigate the various product forms and strengths. … The small packages and limited brand recognition require extra attention to ensure the display glorifies the product and stands out to the shopper,” he explained. Providing security for the products is also important due to their high price points and small package sizes that can easily be prone to shoplifting, Eifert added.

“We are excited to be the first convenience store to offer a broad selection of premium CBD products at this magnitude.” — Ryan Sheetz, Sheetz Inc.

As with any emerging category, there is a learning curve and consumer education is needed. “Convenience stores are wonderfully busy places, so we always assume that the point-of-purchase materials and the product packaging has to do most — or all — of the work when it comes to consumer education,” acknowledged Harvest’s Cochran. “That said, more and more consumers are interested in and looking for CBD and even newer cannabinoids like CBN (which has been associated with great sleep benefits), so making them available in-store and prominently merchandised should yield revenue lift for our retail partners.” With CBD products spanning multiple categories, Cochran believes it is best for merchandising and marketing purposes to keep all CBD items displayed together. “I don’t think anyone knows yet what consumer adjacencies are strongest for CBD products. Near or on the checkout area and with other CBD products makes the most sense now. But water and healthier beverages would make sense as a strong secondary placement,” he advised. Sheetz stores merchandise all CBD products behind the

“In some instances, the display needs to be on the front counter and locked so that only the clerk can remove the product,” he said. “Product can be merchandised inline or on endcaps, but a locking case is recommended to secure the product.” Given CBD’s new presence in mainstream retail channels, Eifert agrees that there is a strong case for grouping the products together and creating one destination where shoppers can see and compare all the brands and product forms at once. “CVS has created an endcap in its stores for this purpose, and I believe others will follow. As the category matures and dominant brands emerge, individual branded displays with complete lines of CBD products will become more common,” he added. Great Northern Instore is currently working with several CBD product manufacturers to develop in-store merchandising strategies. Educating the consumer about the product and the brand are common asks from clients, according to Eifert. Care has to be taken with the language used on the graphics to highlight product

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benefits without making specific medical claims. “In some cases, we are asked to incorporate natural wood finishes and reclaimed materials to reinforce the healthy and natural foundations of the brands,”

he noted. “For the most part, we are developing smaller counter displays for individual brands. Some of these are modular and can grow in size to become endcaps that are a category solution and home to several brands.” CSN

Regulatory Concerns For all the buzz surrounding CBD products, their future remains up in the air due to regulatory matters.

focus enforcement actions on CBD products that make aggressive disease and medical claims,” she continued.

Regulation of the products falls under the authority of the Food and Drug Administration (FDA). Because CBD is an active ingredient in an approved prescription drug, the Food Drug & Cosmetic Act prohibits its use in food, unless the FDA creates an exception.

Beyond that, Spivey does not expect any new, sudden movement by the FDA.

Whether there is a pathway forward is a question that’s top of mind right now for many consumer packaged goods (CPG) companies as they eye the market. In February, then-FDA Commissioner Scott Gottlieb testified in front of Congress and indicated the FDA would likely find a path forward for CBD-infused food and dietary supplements. However, at the agency’s May 31st marathon hearing on CBD, current acting Commissioner Norman Sharpless made comments that suggest he may take a harder line than his predecessor.

“While the FDA has the authority to create exceptions allowing CBD in food, this would be new terrain for the FDA and Commissioner Sharpless’ comments were not encouraging this is the course the FDA would take — at least not anytime soon,” she said.

State by State As is the case with many regulatory issues, the states are not waiting around for the FDA to take action at the federal level; they are taking action of their own. “In the vacuum of federal regulation, many states have implemented legislation relating to use of CBD in food and dietary supplements, resulting in a tangled web of laws for distributors and manufacturers to navigate,” Spivey said.

“That being said, the FDA acknowledged the enormous number and variety of CBD-infused products on the market and did not indicate an intent to increase exercise of its enforcement authority,” noted Angela Spivey, a partner at Atlanta law firm Alston & Bird.

States such as Colorado, Oregon, Nevada, Texas and Washington, explicitly authorize the use of CBD as a food additive. Other states, such as Idaho, Mississippi and Louisiana, have taken the opposite approach, outlawing the use of CBD in food and dietary supplements.

Spivey did observe that in the course of his comments at the hearing, Sharpless raised several questions about CBD, including:

The majority of states — including Maine, Maryland and Pennsylvania — expressly adopt FDA regulation, which means CBD is not considered GRAS (generally recognized as safe) and cannot lawfully be used as a food additive, explained Spivey.

• What is a safe daily consumption limit for CBD? • How would a consumption limit account for the fact that users may consume different CBDcontaining products and products in different formats in the same day? • Are there any drug-interaction issues that need to be accounted for? • Are there any preexisting medical conditions that would contraindicate consumption (including pregnancy)? “To date, the FDA’s enforcement action, through warning letters, has been limited to product manufacturers that made claims the products could treat or mitigate serious or life-threatening disease or illness. The FDA has signaled it will continue to

“The status of state legislation is in constant fluctuation, which highlights the complex issues facing manufacturers and distributors that operate across state lines. Navigating state-by-state laws is onerous, at best,” she added, also pointing out that navigating interstate commerce issues is likewise problematic for distributors and manufacturers. Retailers may have an easier time navigating the web of regulations related to CBD use in food, to the extent that they do not implicate interstate commerce issues, she said. Risk mitigation for retailers comes down to the regulatory and licensing requirements of their particular state.

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It’s Not Just About PI Classics have plenty of potential to do well with customers, as familiar formats come with an intrinsic promise of enjoyment. Who doesn’t love pizza? The ampm Double Stuff Crust Pizza could see additional benefit by differentiating and increasing its uniqueness score, which currently sits at 39. Pizza is a perfect vehicle for exploring new tastes in a safe format. From toppings to sauces, and even the cheese being used to stuff the crust, there’s plenty of space for experimenting and providing a differentiator in a saturated pizza category. CSN

INTEREST BY CONSUMER TYPE UNBRANDED PURCHASE INTENT norms reflect comparison to all items

In particular, ampm doubles down on a consumer favorite with its Double Stuff Crust Pepperoni Pizza. This LTO scored a 92 for both Branded and Unbranded PI. And with a high Draw score of 87, the Double Stuff Crust Pizza is set to be a potentially great traffic driver.

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PRODUCT STORES (Among: Total)

norms reflect comparison to all items 100 = max possible score

unbranded PI

branded PI

uniqueness

87 would visit somewhere just for this item

frequency

definitely or probably would buy

extremely or very unique

would order the item all the time

56%

55%

34%

21%

benchmark norms

versus other c-stores’ items

versus other pizza

draw

value

excellent or good value for the dollar

48% 79

69% 96

versus other items from ampm

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Two Roads to Success The Convenience Store News Foodservice Study shows the category continues to be successful, but challenges and rewards vary by company size By Angela Hanson THEREâ&#x20AC;&#x2122;S PLENTY OF GOOD NEWS about the foodservice category, coming direct from convenience store operators themselves. Small operators and large c-store chains alike are continuing to report growth in the size, scope, sales and revenue of their foodservice programs, according to the exclusive 2019 Convenience Store News Foodservice Study.

Prepared Foods Offered

Small operators (those with one to 10 stores), while certainly enjoying the

Small Operators

Large Operators

Breakfast sandwiches

84%

80%

90%

Pizza

69%

67%

73%

Snacks/appetizers

69% 57%

90%

Other sandwiches

68%

64%

75%

Chicken

65%

61%

73%

Hot dogs

65%

54%

83%

Bakery items

65%

56%

80%

Hamburgers

55%

51%

60%

Salads

54%

41%

75%

Wraps

47%

39%

63%

Other roller-grill items

46%

34%

68%

Hot entrees

43%

34%

58%

Soup

25%

23%

28%

Tacos/quesadillas

24%

21%

28%

All other prepared food

22%

24%

18%

Not only are store infrastructure, menus and foodservice technologies improving as retailers invest in their programs, but optimism for the future also remains strong. Most retailers participating in the study have ongoing plans to further advance and enhance their foodservice programs, and â&#x20AC;&#x153;keep getting bigger and better,â&#x20AC;? according to one operator. The increased focus on foodservice, though, brings its own challenges for some operators, who report that they are unable to keep up with stiffer competition from other c-store foodservice programs, less foot traffic and an inability to lower prices due to higher costs.

Total

Note: Shading indicates a statistically significant difference at 95% confidence level

Foodservice Segments Offered % offering segment Total

Small Operators

Prepared food

95%

92%

Hot dispensed beverages

94%

Cold dispensed beverages Frozen dispensed beverages

Large Operators

Avg. # of stores with segment Small Operators

% of foodservice sales derived from

Large Operators

Total

Small Operators

516 3.2

1,426

51%

56%

42%

93% 96%

594 2.4

1,702

22%

21%

25%

86%

80%

96%

648 2.6

1,643

25%

75%

66%

91%

689 2.8

1,614

12%

100%

Total

Large Operators

Note: Shading indicates a statistically significant difference at 95% confidence level

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benefits of the category’s increasing importance, are facing more bumps in the road to success than larger operators are, and they are more cautious in their optimism and plans for the future.

Surveying the Current Landscape Foodservice is seen as a virtual necessity for c-stores today, as 95 percent of the retailers surveyed said they offer prepared food. Notably, 100 percent of large operators report offering prepared food, meaning that the small number of stores that don’t are all small operators, who may not have the resources to launch and sustain a foodservice program. Naturally, dispensed beverages to go with prepared-food purchases are nearly as ubiquitous. More than nine in 10 c-store retailers (94 percent) offer hot dispensed beverages, while 86 percent offer cold dispensed beverages. Three out of four retailers (75 percent) offer frozen dispensed beverages. However, the industrywide average for frozen beverages hides a notable difference based on chain size — 91 percent of large operators offer slushies and similar drinks, while only 66 percent of small operators do. Prepared food remains the major profit driver within the foodservice category, with 51 percent of foodservice sales being derived from this segment, followed by cold dispensed beverages (25 percent of sales) and hot dispensed beverages (22 percent). In regards to the overall foodservice experience in-store, it’s no surprise that large operators are embracing the role of competitive dining destination and offering extra amenities at higher rates than small operators. Such amenities include microwave ovens for customer use (84 percent of large operators vs. 55 percent of small operators) and in-store seating (62 percent vs. 48 percent, respectively). While less prevalent, more than 38 percent of large operators offer take-home/ heat-and-eat dinner solutions and 35 percent have outdoor seating.

Dispensed Beverages Offered Total

Small Operators

Hot coffee

94%

96%

Hot chocolate

82%

79%

87%

Fountain carbonated beverages

81%

73%

95%

Hot cappuccino/latte/espresso

77%

72%

87%

Frozen drinks (i.e., slushies)

66%

54%

87%

Iced tea

59%

54%

87%

Hot tea

58%

56%

Fountain non-carbonated beverages

55%

45%

72%

Iced coffee

48%

40%

62%

Fountain sports drinks

47%

34%

69%

Iced cappuccino/latte/espresso

38%

30%

51%

92%

Milkshakes

28%

18%

44%

Cold brew coffee

27%

18%

44%

Juices

27%

22%

36%

Smoothies

23%

13%

38%

Soft-serve frozen yogurt/ice cream

20%

18%

23%

Kombucha

Aguas frescas

13%

Note: Shading indicates a statistically significant difference at 95% confidence level

Expected 2019 Foodservice Sales Small Operators

Large Operators

5% Decrease

10% Stay the same

20% Stay the same

75% Increase

90% Increase*

Note: * indicates a statistically significant difference at 95% confidence level

Expected 2019 Foodservice Profits Small Operators

Large Operators

7% Decrease

Despite industry buzz about finding new ways to offer convenient foodservice, delivery service and meal kits are not widely offered at c-stores as of now. Looking ahead, more large operators than small operators say they are planning to add take-home/heat-and-eat dinner solutions (16 percent) and third-party delivery (16 percent). More small operators than large operators plan to add meal kits (12 percent).

Large Operators

7% Stay the same

27% Stay the same

66% Increase

93% Increase*

Note: * indicates a statistically significant difference at 95% confidence level

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Small operators today are also significantly more likely to give customers the ability to place orders ahead by phone (51 percent vs. 24 percent of large operators), whereas large operators are turning to technology for order-ahead options: 27 percent say they plan to add the option to order ahead via app, while 22 percent plan to add at-pump touchscreen ordering.

Whatâ&#x20AC;&#x2122;s On the Menu? Retailers were asked what types of foodservice items they currently offer. In the prepared food segment, breakfast sandwiches, offered by 84 percent, lead the pack, followed by pizza (69 percent) and other sandwiches (68 percent). General snacks/appetizers are also offered by nearly seven in 10 c-stores. The majority of retailers have chicken, hot dogs, bakery items, hamburgers and salads on the menu as well. In the area of dispensed beverages, hot coffee, offered by 94 percent, dominates the segment, followed by hot chocolate (82 percent), fountain carbonated bev-

Foodservice Sales by Daypart (% of sales) Small Operators

Large Operators

35 30 25 20 15 10 5 0 Breakfast AM snack Lunch PM snack Dinner Evening snack Late night

erages (81 percent) and hot cappuccino/latte/espresso beverages (77 percent). Cold brew coffee is on the rise, offered by 27 percent of all c-stores. This figure rises to 44 percent among large operators. The vast majority of dispensed beverages available at c-stores are self-service, as just 9 percent of operators say they have made-to-order beverages. Touchscreen fountain drink dispensers, such as the Coca-Cola Freestyle and Pepsi Spire units, are more likely to be offered by large

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FOODSERVICE

operators at 28 percent, compared to just 11 percent of small operators.

Foodservice Amenities Currently Offered Small Operators

Large Operators

Analyzing foodservice sales by daypart Microwave ovens for customer use shows that c-stores still benefit from the In-store seating “convenience” in their name, attracting the most foodservice customers during Take-home/heat & eat dinner solutions the breakfast and lunch hours, when conOutdoor seating sumers are most likely to want a speedy purchase. Despite recent efforts by some Catering retailers, sales during the dinner daypart Third-party delivery still don’t measure up.

55% 48% 29% 38% 22% 35%

84%*

62%

15% 8% 8% 11% 6% 11% 5% 11% 8% 3%

Drive-thru

Interestingly, small operators and large operators demonstrate different strengths Meal kits (cooking required at home) by daypart. Large operators see a slightly In-house delivery higher proportion of sales during the Note: * indicates a statistically significant difference at 95% confidence level breakfast daypart, while small operators see a slightly higher percentage of sales at lunchtime. Channels for Promotion Small Operators Large Operators More than half of large operators (54 per31% cent) and one-third of small operators (33 Loyalty program percent) report seeing the biggest sales 39% Social media growth in 2018 during breakfast, while 29 57% percent of small operators saw the big13% Proprietary mobile coupons/mobile apps gest growth at lunch. These dayparts are 43%* expected to drive foodservice sales growth 6% Billboards 43%* again in 2019, but there is some cautious 11% Radio optimism around dinner, as both small and 38% large operators predict increased sales this 13% Email year for the dinner daypart. 30%*

Industrywide, foodservice category sales Third-party mobile coupons/mobile apps continue to trend upward. For 2018, 74 Text message percent of c-store retailers said their sales increased last year, while just 10 percent said TV they decreased. Large operators were more likely than small operators to see a sales Direct mail boost (90 percent vs. 65 percent). TwentyGeofencing push notifications three percent of small operators reported no change in 2018 foodservice sales. Other

For 2019, retailers of all sizes expect their foodservice sales to increase, although large operators are significantly more optimistic than small operators; 90 percent of large operators expect higher 2019 sales, and 10 percent expect their sales to hold steady. A higher number of small operators expect their foodservice sales to stay the same (20 percent), while 75 percent of small operators expect their sales to increase. Additionally, 93 percent of large operators expect their 2019 foodservice profits to increase vs. 66 percent of small operators. Retailers cite a variety of factors driving the sales growth. The top reasons include: • A focus on innovation and food quality; • New and healthier offerings and flavors;

14%

Paper coupons

Yesterday & Tomorrow

None

78%*

27%

24%*

11% 5%

24%

19%*

16% 5% 14% 3% 3% 34%*

Note: * indicates a statistically significant difference at 95% confidence level

Most Successful Promotions Small Operators

Large Operators

48% 51%

Price discount

25%

Two-fers

22%

BOGO Bundling/meal deal Other Don't know

27%

43% 43%* 41%

2% 3% 11%

23%

Note: * indicates a statistically significant difference at 95% confidence level

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Main Competitors for Foodservice Program Total

Small Operators

Large Operators

Other c-stores

61%

55%

71%

National/regional QSRs

44%

32%

66%

(Subway, Quiznos, etc.)

41%

38%

46%

Coffee shops

21%

15%

32%

(Panera Bread, Chipotle, etc.)

20%

19%

22%

Grocery stores

20%

22%

17%

Food trucks

10%

Drugstores

Other

None

Don’t know

(McDonald's, Burger King, Wendy's, etc.)

Chain sandwich shops

Fast casual chains

Note: Shading indicates a statistically significant difference at 95% confidence level

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• Increased promotional efforts; and • More focus and effort being dedicated to the category. In terms of challenges, the foodservice arena is getting more and more competitive — not only within the convenience channel, but also across channels. Among those c-store retailers who expect their 2019 foodservice sales to drop, competition is cited as the foremost reason. More than six in 10 operators (61 percent) cite other c-stores as their chief competition, followed by national/regional quick-service restaurants (QSRs), chain sandwich shops and coffee shops. Large operators are more likely to list QSRs and coffee shops as their main competitors. Likely due to the heavy competition, promotions are on the rise, with 51 percent of all c-store operators reporting that they increased their number of foodservice promotions in the past year. This number is higher among large operators (65 percent) vs. small operators (44 percent). The top channels for promotion among large operators are loyalty programs, social media, proprietary mobile coupons/ mobile apps, billboards, radio and e-mail. Price discounts are the most effective promotion type for c-store operators of all sizes. Large operators are more likely to find success also with two-fers and buyone-get-one deals. Small operators are more successful with bundling/meal deals. To further enhance their foodservice programs, retailers are turning to a variety of strategies, with many seeking to expand their offering and hours of availability. Retailers also say they plan to invest in their equipment and infrastructure to offer more and higher-quality services. Boosting marketing and promotions is high on the to-do list as well.

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Despite the stiff foodservice competition inside and outside the convenience channel, competition is only the No. 2 obstacle to foodservice success, according to the retailers surveyed. Difficulty in hiring and retaining employees is the primary challenge, listed by 66 percent. Storelevel operational inefficiencies are also a concern, though more often an obstacle for large operators (61 percent) than small operators (18 percent). As c-store foodservice programs continue to grow in complexity, many of these challenges are likely to persist into the future. CSN

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TOBACCO

Close Collaboration Want to grow your tobacco business? Try making the most of vendor partnerships By Renée M. Covino WITH THE UNDERSTANDING that “we’re all in this together,” the partnerships between convenience store retailers and industry vendors have grown deeper in recent years, especially in the tobacco arena where regulation and innovation is rampant.

relationship, echoed Matt Domingo, senior director, external relations at Reynolds American Inc. Trade Marketing Services (RAI TMS). Its operating companies include R.J. Reynolds Tobacco Co., Santa Fe Natural Tobacco Co., American Snuff Co. and R.J. Reynolds Vapor Co.

Generally speaking, having closer vendor partnerships gives retailers the resources they need to grow the category. Insights into category data trends, promotional programs and space planning are a few examples of what a vendor partner can bring to the table, said Victor Cavanaugh, senior manager of category management for Swisher International Inc., a manufacturer of cigars, cigarillos and smokeless tobacco products.

Speaking about the company’s programs, Domingo explained that “RAI TMS and the retailers agree upon product presence for the tobacco category, as well as signage.”

Swisher offers a variety of retailer programs tailored to different business models, which give operators special packaging options. “Like our Swisher four-pack that offers consumers a promotional price for purchasing more, as well as seasonal offerings to build excitement in the channel,” Cavanaugh told Convenience Store News. Vendor partnerships help retailers grow their tobacco category in a responsible manner and build a collaborative business

Industrywide, the whole dynamic between retailers and suppliers is transforming. “We’re focused on evolving our relationships from being purely transactional to more of a collaborative relationship in which we jointly compile business plans and future forecasts,” said Rob Maneson, vice president of sales for Fontem Ventures, maker of the blu brand of tobacco products. “We’re aiming to share more data and insights, communicate on promotions and focus on retail innovation to build the tobacco business within c-stores.” Maneson added that increasing collaboration and ensuring vendors are aligned with each retailer’s objectives and deliverables is essential to driving growth.

Independent Opportunity Solid tobacco vendor partnerships are not just for the

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TOBACCO

“chain” of heart, either. That is, independent and small operators can benefit from supplier collaboration, too. About 60 percent of Skupos Inc.’s stores are single-site operators. Skupos, a data platform for c-store retailers, enrolls operators in tobacco data programs with the major category providers. Through these programs, retailers get access to scan data incentives whereby they get paid for the tobacco items they scan every day, in addition to any buydowns they may be receiving, according to David Hewlett, head of marketing. Retailers also get the benefit of multi-pack/multi-can programs so that they can offer competitive prices. “With competitive pricing, stores see more foot traffic, higher market basket size and a 6 percent average increase in overall store revenue,” said Hewlett. “With our newest add-on, Skupos Engage, our Verifone customers can also offer tobacco loyalty funds, which further extends their tobacco discounts and drives even more customers through the door.” Earlier this year, convenience distributors Core-Mark Holding Co. Inc. and Eby-Brown Co. LLC tapped Skupos as a partner for scan data technology. “We work with everyone from independents up through chains of 500 stores,” said Hewlett. “One of our core requirements for our software is that it must be easy to use and have the ability to be as hands-off as possible.” Moving forward, Skupos has a number of additional brand partnerships in development “to help improve access to discounts for small retailers and enable new brand-funded discounts to flow into convenience retail,” he noted.

Quick Tips to Get the Most Out of Vendor Partnerships • Leverage transaction data. Track top-selling items against products that drive the most revenue, advised David Hewlett, head of marketing for Skupos. With these kinds of insights, retailers can focus on quality merchandising by placing hot sellers in well-signed areas with clearly visible branding in-store. • Be open to education. “We encourage retailers to work with us at Fontem to learn about our products and engage their store staff to do the same,” said Rob Maneson, vice president of sales at Fontem Ventures. “The more knowledgeable the staff is, the more they can tell customers and accurately field their questions, ultimately resulting in more sales.” • Invest in the total tobacco category. “As tobacco and vape continues to grow, so does the need for space for it,” added Maneson. “Just as the candy or drinks category needs its own designated home, so does tobacco/vape products.” If retailers invest in a long-term space solution for tobacco, their accounts will have more room to grow, resulting in the best partnership program available. • Find solutions to the difficult issues together. That’s part of the collaboration equation, according to Victor Cavanaugh, Swisher International Inc.’s senior manager of category management. Swisher has a team of individuals that work to assist its sales representatives to solve difficult business decisions.

RAI TMS wants to collaborate with retailers regardless of size, and particularly wants to work together to leverage retailers’ loyalty programs for the good of tobacco sales.

• Expect change. Adult tobacco consumers’ evolving tastes are driving dynamic change around tobacco and nicotine products, noted Matt Domingo, senior director, external relations for Reynolds American Inc. Trade Marketing Services. “C-store retailers are typically at the forefront of making a wide variety of products available to meet their expectations,” he said. Knowing it won’t stop here, they should look to partner with companies that provide alternatives to traditional cigarettes with a broad portfolio across categories such as vapor, oral nicotine, tobacco-heating products and snus.

“Any retailer — chain or independent — that runs a loyalty program of their own and meets the requirements of our program is a retailer we seek to work with,” Domingo told CSNews, adding that interested retailers should contact their local RAI TMS territory manager to discuss the specific requirements for eligibility.

undergoing a transformation and change will remain rapid, significant and ongoing.

Swisher likewise offers programs to both independents and chains. “These programs are largely driven by the volume a retailer is moving in the OTP category,” said Cavanaugh. Qualifying chain customers can participate in the company’s Partners in Profit program, designed to increase the profitability of the category for chain retailers.

Teamwork for the Future How will tobacco retailer/supplier partnerships evolve moving forward? The way Domingo sees it, the tobacco category is

“Navigating change requires us to interact with our retailers differently,” he said. “Our partnerships will evolve and become more collaborative in nature, so we can identify, agree to and focus on mutual business objectives.”

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TOBACCO

“Navigating change requires us to interact with our retailers differently. Our partnerships will evolve and become more collaborative in nature, so we can identify, agree to and focus on mutual business objectives.” — Matt Domingo, Reynolds American Inc. Trade Marketing Services

Each year, Swisher continues to adjust its approach based on the trends in the marketplace. “Product groups are analyzed and adjusted to keep pace with evolving trends,” said Cavanaugh. “At the beginning of each year, we develop a business strategy that will address key issues that we see evolving.” Moving forward, Fontem envisions transactional

relationships evolving into “full business partner” relationships, said Maneson. “Becoming business partners will be mutually beneficial as we can work together to build executive account-specific initiatives and business plans.” CSN

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PACKAGED BEVERAGES

Buzzing With Energy Several factors are contributing to an energized energy drink segment at c-stores By Renée M. Covino WHAT’S THE LATEST BUZZ on energy drinks? Well, that’s just it — the category is abuzz with positivity. Several factors and category developments have convenience store retailers increasingly bullish on the energy drink segment.

The Beverage Buzz Memorial Day retailer survey, conducted by Wells Fargo Securities LLC, looked like it would be the strongest energy drink report of the season; that is, until the Fourth of July Beverage Buzz report came out — which was even stronger. “Retailers indicated energy category sales were up a robust 10.1 percent over the Fourth of July holiday this year, led by emerging brands,” according to the most recent report. “Retailers now expect the energy category to grow 7.8 percent in 2019, up from their 6 percent growth outlook in our Q1 survey, with the outlook for emerging brands remaining robust.” What’s more, retailers have increased their allocation to the energy drink segment significantly, with 32 percent of shelf/cooler space dedicated to energy today, up from 17 percent just three years ago, noted Bonnie Herzog, managing director of tobacco, beverage and convenience store research for Wells Fargo Securities.

The proliferation of emerging players is building category excitement. First, it was Bang made by Weston, Fla.-based Vital Pharmaceuticals/VPX Sports. Bang is the fastestgrowing energy drink in convenience stores, according to industry data. In 2018, Bang unit sales grew more than 400 percent in c-stores, according to IRI. Then, it was C4 from Bryan, Texas-based Cellucor; followed by Raze Energy, created by Longwood, Fla.-based Repp Sports; Hyde Powder Potion from Plano, Texas-based ProSupps; 3D Energy, made out of Louisville, Ky.; and most recently, Reign Total Body Fuel, a new brand from energy stalwart Corona, Calif.-based Monster Beverage Corp. “There has been a resurgence, and almost redefinition, of energy drinks to imply something that is clean, natural and essential to your everyday well-being,” said Stephen Krauss, creator of Cherry Bomb, an energy powder mix that’s slated to launch in the beginning of September. “Consumers are more health-conscious than ever and have been desperate to find the same ‘kick’ without damaging their bodies.” He believes energy powder mixes are a new healthy alternative that will work well for the convenience channel’s on-the-go shoppers. Having these mixes displayed at the checkout counter and beyond the beverage aisle presents the opportunity to c-store retailers to pique the interest of a new consumer looking for an energy alternative, he said.

Life Stages in Force At a macro level, millennials continue to be the most

Sales Growth Expected for FY19E for Top Energy Brands

• Total Energy Category • Monster Energy • Red Bull • Rockstar • Others

14.0%

Monster Energy 4.8%

12.0% 10.0%

Red Bull 6.0% Other 11.8%

Total Energy Category 7.8%

8.0% 6.0% 4.0% 2.0%

Rockstar 1.3%

0.0% -2.0% -4.0%

4Q16 Survey

1Q17 Survey

2Q17 Survey

3Q17 Survey

Outlook for CY17

4Q17 Survey

1Q18 Survey

2Q18 Survey

Outlook for CY18

3Q18 Survey

Nov 18 Survey

4Q18 Survey

1Q19 Survey

2Q19 Survey

Outlook for CY19

Note: “Others” includes multiple other energy drink brands, including (but not limited to) Bang Source: Wells Fargo Securities LLC

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PACKAGED BEVERAGES Shelf Space Allocation for Energy Category (% Of Total Shelf/Cooler Space)

32% 28% 17%

Allocation 3 Years Ago

Current Allocation

Allocation 3 Years Forward

Source: Wells Fargo Securities LLC

relevant consumers for energy drinks, but Generation Z is just entering adulthood now, noted Laura-Lynn Freck, director of shopper insights for Red Bull North America. There are also plenty of Generation X and even older consumers looking for pick-me-ups, she added.

c-stores, which cater to both the young and the old, are seeing the biggest spikes in the energy drink category. As consumers enter key life stages, they increase in relevancy for — and need for — the energy drink segment.

The way Freck sees it, the life stages of the generations is the most impactful driver of energy drink trends; thus,

“Those include entering college, joining the workforce, rising into energy-demanding work roles, becoming

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parents, and more,” Freck told Convenience Store News. “The life stages drive increases in consumption across multiple need-states and occasions, driving growth and frequency of purchase. We have seen an increase in consumption of energy drinks in at-work [occasions] and in fitness or sports [occasions].” In general, younger consumers expect their food and beverages to provide a benefit, she pointed out. “They also crave choice, so it is important to ensure that variety is available to meet consumer need. Size, sugar (or none) and flavor are the key drivers of choice for energy drinks, satisfying multiple occasions and need states uniquely,” she said. As consumers across demographics seek more function from their beverage choices, energy drinks, ready-to-drink (RTD) coffee and bottled water (especially sparkling water) are the key growth drivers for total beverage in convenience stores, leading in both percentage growth and overall dollar contribution, industry data

shows. In fact, in 2018, energy drinks surpassed carbonated soft drinks (CSDs) in dollar sales within Total U.S. Convenience for six out of the 12 months, according to IRI data. To capitalize on this development, smart c-store operators are ensuring that appropriate space and maximum assortment is given to those beverage segments providing the most growth and profit — i.e., functional energy drinks. Additionally, operators are seeking to drive incremental purchasing and basketbuilding via multiple purchase locations. Convenience stores that are really winning in sales and growth of energy drinks are the ones that treat the segment as a “destination category,” providing a full assortment of top-selling brands, appropriate space in the cold vault, and multiple options for purchasing across the store, according to Freck. Energy drink shoppers are great basket-builders and often grab a meal or a snack as well while in the c-store, she said. CSN

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FEATURE

A Slow Start for 2019 C- store Sales The Convenience Store News Midyear Report Card reflects a soft first half of the year By Don Longo FOR THE FIRST HALF OF 2019, convenience store retail sales mostly underperformed last yearâ&#x20AC;&#x2122;s sales pace, although business appears to be picking up now that the peak summer season is here.

Of the major product categories tracked by Nielsen, other tobacco products (OTP) exhibited the greatest dollar sales growth BEER GOES FLAT The beer category got off to a rough start during the first half of this year, with dollar sales flat on a slight decline in units. Last year at this time, total beer sales in dollars were up 1.7 percent as unit volume grew 1.1 percent. Dollar sales gains for the first half of this year (on a percentage basis) were strongest in super premium, imports and nonalcoholic brands, while microbrew/craft beer hit a bump in the road.

through the first six months of this year, according to the 2019 Convenience Store News Midyear Report Card. Salty snacks also saw solid dollar sales growth. On the other end of the spectrum, cigarettes and general merchandise could not keep pace with last yearâ&#x20AC;&#x2122;s firsthalf sales. And other important c-store categories such as beer, packaged beverages and edible grocery saw flat sales year over year.

Total Beer Budget Flavored malt Imports Malt liquor Microbrew/craft Nonalcoholic Popular Premium Super premium

DOLLAR SALES % CHANGE VS. YEAR AGO

UNIT VOLUME % CHANGE VS. YEAR AGO

0.1% 0.1% 1.5% 7.9% -7.3% -1.2% 3.5% -5.3% -3.7% 13.2%

-1.5% -5.5% 1.0% 6.4% -9.4% 0.0% -0.1% -5.5% -3.5% 10.4%

Source: Convenience Store News Market Research; Nielsen C-store Track, June 2019

CANDY HAS SINGLE SWEET SPOT The candy category has some ground to make up after a lackluster first half. Total candy dollar sales were down 1.4 percent on a 6.1 percent decline in unit volume. A year ago, first-half dollar sales were flat and units were down about 2 percent. The novelties/ seasonal candy subcategory was the only first-half standout, growing by 12 percent in dollars and 3.8 percent in units during the first six months of 2019. CIGARETTES SCUFFLING Headwinds against cigarettes increased during the first half of 2019. Dollar sales declined almost 5 percent on a 7.9 percent unit drop. According to a recent Tobacco Talk retailer survey by Wells Fargo Securities, poor weather in May and June dampened store traffic, putting considerable pressure on cigarette sales following the latest June 16 price increase on premium brands.

Total Candy Chocolate bars/packs Non-chocolate bars/packs Rolls/mints/drops Gum Bagged/repacked/pegged Novelties/seasonal

DOLLAR SALES % CHANGE VS. YEAR AGO

UNIT VOLUME % CHANGE VS. YEAR AGO

-1.4% -2.8% -6.0% -3.6% -2.3% -0.5% 12.0%

-6.1% -5.6% -7.9% -9.0% -11.5% -4.5% 3.8%

Source: Convenience Store News Market Research; Nielsen C-store Track, June 2019

Total Cigarettes Branded discount Fourth tier Imports Premium Subgeneric/private label

DOLLAR SALES % CHANGE VS. YEAR AGO

UNIT VOLUME % CHANGE VS. YEAR AGO

-4.9% -11.4% -14.7% 14.3% -4.1% 7.6%

-7.9% -11.5% -20.6% -6.4% -7.2% 7.8%

Source: Convenience Store News Market Research; Nielsen C-store Track, June 2019

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OTP STILL ON FIRE Other tobacco products once again led all major c-store categories in percentage growth during the first half of 2019. The total OTP category was up 15.3 percent in dollar sales, though unit volume was slightly down. The category’s performance was led by the electronic cigarettes subcategory, which increased 76.5 percent in dollars and 58.7 percent in units.

Total OTP Cigars E-cigs Other Papers Pipe/cigarette tobacco Smokeless tobacco

DOLLAR SALES % CHANGE VS. YEAR AGO

UNIT VOLUME % CHANGE VS. YEAR AGO

15.3% -3.4% 76.5% -7.1% -7.7% -11.0% 0.2%

-1.3% -3.8% 58.7% -14.8% -8.2% -13.6% -5.5%

Source: Convenience Store News Market Research; Nielsen C-store Track, June 2019

A FEW BRIGHT SPOTS IN BEVERAGES Poor weather likely hurt the packaged beverages category during the first six months of 2019. The overall category was up just 1 percent in dollar sales on a near 5 percent unit drop. Energy drinks, however, were up 8.4 percent in dollars and 2.9 percent in unit volume, continuing a resurgence that began in the first half of 2018. Enhanced water also continued to show significant growth.

Total Packaged Beverages Energy drinks Bottled water Carbonated soft drinks Enhanced water Iced tea RTD Juice/juice drinks Other packaged beverages Sports drinks

SALTY SNACKS BOUNCE BACK Salty snacks had a nice rebound in the first half of 2019. Dollar sales doubled last year’s increase, rising 4.1 percent, although unit volume declined by 3.4 percent. Unit volume was off throughout the category for the second year in a row. Contributing to the dollar sales gain was the potato chips subcategory, which increased 3 percent in dollars compared with flat sales a year ago.

Total Salty Snacks Crackers Mixed Nuts/seeds Other salty snacks Packaged RTE popcorn Potato chips Pretzels Puffed cheese Tortilla corn chips

DOLLAR SALES % CHANGE VS. YEAR AGO

UNIT VOLUME % CHANGE VS. YEAR AGO

1.0% 8.4% -5.5% -2.0% 5.3% -6.5% -5.9% 1.5% 0.2%

-4.9% 2.9% -8.5% -8.4% 2.3% -8.6% -8.3% -0.1% -8.0%

Source: Convenience Store News Market Research; Nielsen C-store Track, June 2019

DOLLAR SALES % CHANGE VS. YEAR AGO

UNIT VOLUME % CHANGE VS. YEAR AGO

4.1% 3.2% -2.9% -0.1% 4.8% 0.6% 3.0% 1.8% 9.7% 8.1%

-3.4% -3.0% -6.5% -4.7% -1.7% -6.1% -5.7% -3.8% 0.5% -0.6%

Source: Convenience Store News Market Research; Nielsen C-store Track, June 2019

GENERAL MERCHANDISE TAKES A TUMBLE Seasonal products drove sales gains in the general merchandise category over the first half of this year, but not enough to change the course of the entire category. While seasonal products were up 12.8 percent in dollar sales and 8.9 percent in unit volume, total general merchandise dollars declined 11.5 percent and units fell 14.4 percent.

Total General Merchandise Batteries Hardware/housewares School/office supplies Seasonal Smoking accessories Telecom/hardware Video/audio tapes Wearables/apparel

DOLLAR SALES % CHANGE VS. YEAR AGO

UNIT VOLUME % CHANGE VS. YEAR AGO

-11.5% -8.5% -20.4% -17.4% 12.8% -10.2% -22.6% -45.0% 2.9%

-14.4% -9.9% -28.1% -16.2% 8.9% -12.7% -31.5% -67.0% 5.5%

Source: Convenience Store News Market Research; Nielsen C-store Track, June 2019

EDIBLE GROCERY SHOWS SLIGHT IMPROVEMENT Edible grocery sales have improved somewhat so far this year. Through the first six months of 2019, dollar sales in the category improved to flat, up from a nearly 2 percent decline a year ago. Unit volume, though, is still down, by 2.2 percent. NON-EDIBLE GROCERY GOES TO THE DOGS Non-edible grocery products sputtered along during the first half of 2019. Dollar sales for the category were down 4 percent and unit volume declined 5.5 percent. The one bright spot was pet care products, which were up 2.6 percent in dollars over the first six months of the year. CSN

Total Edible Grocery Breakfast cereal Condiments Other edible grocery Packaged coffee/tea

UNIT VOLUME % CHANGE VS. YEAR AGO

0.3% -0.3% -2.6% -3.0% 3.8%

-2.2% -3.5% -1.8% -3.4% 0.0%

Source: Convenience Store News Market Research; Nielsen C-store Track, June 2019

Total Non-Edible Grocery Dish care Household care Laundry care Other non-edible grocery Paper/plastic/foil Pet care

DOLLAR SALES % CHANGE VS. YEAR AGO

UNIT VOLUME % CHANGE VS. YEAR AGO

-4.0% -7.4% -9.7% -1.0% -8.4% -4.6% 2.6%

-5.5% -8.4% -10.6% -6.4% -11.6% -8.0% -0.9%

Source: Convenience Store News Market Research; Nielsen C-store Track, June 2019

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DOLLAR SALES % CHANGE VS. YEAR AGO

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Convenience Store News

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FEATURE

Arizona State University’s Sun Devil Marketplace shows off Follett Corp.’s merchandising best practices.

Merchandising With ‘Wow’

Two design experts weigh in on the nuts and bolts of creating a more engaging in-store experience By Renée M. Covino DOES YOUR CURRENT STORE CONCEPT

include a “wow factor?” If not, it should. Customer expectations are continuously elevating thanks to the proliferation of great retail experiences — think Nike Town, Apple Store, Wegmans supermarkets and Eataly food markets, to name a few. “Since convenience is a common thread, design is becoming the catalyst for differentiation,” said Joseph Bona, president of Bona Design Lab, based in New York. “Design will get more sophisticated and will be an important line item in establishing budgets, as opposed to thinking whatever paint is the cheapest.” Good design should neither be created in a vacuum nor based on individual personal tastes or current trends. Rather, according to Bona, “it should be focused on a firm understanding of what your brand stands for and the storytelling that you deliver through an enhanced store experience.” To discuss the ins and outs of merchandis-

JOSEPH BONA

JENNIFER HATTON

President BONA DESIGN LAB

Senior Vice President Retail Operations FOLLETT CORP.

ing with “wow,” Convenience Store News tapped Bona, who has extensive retail design experience across all sectors, from convenience and mass market to drug and luxury, as well as Jennifer Hatton, senior vice president of retail operations for Follett Corp., an expert in the world of campus retail stores. Here are their insights:

CSNEWS: Why is in-store experience so important these days? HATTON: The in-store experience is more important than ever in the c-store landscape because the consumer is more sophisticated than ever

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FEATURE

before. Options are endless, and the expectations are higher for companies to not only deliver an aesthetically appealing environment that is clean and bright, with fresh offerings and breadth of assortment, but also friendly and engaged associates that provide consistent and exceptional customer service. BONA: In todayâ&#x20AC;&#x2122;s highly competitive retail landscape, where all channels of trade are competing on convenience, consumers are faced with many options and choices in meeting their daily needs. Convenience is no longer a differentiator, but rather a table stake. Experience is how bestin-class retailers are winning customer loyalty and distancing themselves from the competition. An enhanced retail experience enables them to establish a unique position in the marketplace and separate themselves from the sea of sameness that is often found across many retail chains.

critically important to effectively meet the needs of the on-the-go customer who expects an experience that is fast and efficient. BONA: Most importantly, it must start with each company and its unique individual stories and positioning. Experience is not only about what color to paint the walls, the type of lighting that is used in the environment or the style of graphics that deliver your messaging. Rather, it needs to begin with what makes your brand different from those of your competitors. Itâ&#x20AC;&#x2122;s all about storytelling â&#x20AC;&#x201D; delivering your message in your own way. All successful brands stand for something specific. Experience is how they curate that message throughout their built environment.

CSNEWS: What are some of the simplest ways for c-stores to tap into this? HATTON: Start with the basics: Convenience customers are looking for efficient, high-quality service with in-stock and well-merchandised products. Food should be fresh, and planograms should be current at all times. The overall environment should be clean, from the front windows to the exit, and throughout the entire store, from floor to ceiling. It is important to reduce sign pollution in the windows and be consistent with fixture height. Training for team members is also

Clean, uncluttered and in-stock remain the pillars of in-store merchandising.

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FEATURE

An enhanced in-store experience enables c-store retailers, like Enex, to establish a unique position in the marketplace.

So, the simplest approach (remember, simple and easy are not necessarily synonyms) is to begin with defining what you stand for. In this regard, I love to visit Maverik markets because their stores truly reflect the company’s culture. The adventurous store environment at Maverik is a testament to how both employees and customers embrace the great outdoors. The store experience is their “signature.”

CSNEWS: What are the more outrageous ways a c-store can offer an experience? HATTON: I believe it’s through innovation that uses technology, such as Coca-Cola’s Freestyle machines or Pepsi’s Spire beverage machines, and robots that are making salads. Another way is through new products, including new on-trend bakery items and fresh-baked cookies in-store, as well as fresh sandwiches, salads and sushi from local, respected restaurants. We are even piloting an edible fresh scoop cookie dough program with a company that was recently featured on “Shark Tank.” BONA: Today’s shoppers are savvy, and

authenticity is important to them. If you try to push “outrageous” gimmicks on them, they will call you out — and they have no shortage of social media channels with which to do that. None of this is to suggest, though, that you must be timid. I have always believed creating that engaging experience starts with the exterior. Curb appeal is what customers see every day, even when they don’t stop into the store. So, being a bit disruptive or a little outrageous can get customers’ attention and help you stand out from the crowd. However, you risk disappointing

customers if the promise made on the outside is not carried through on the inside. Retailers must commit to delivering a 360-degree customer experience.

CSNEWS: What are your best practices for c-stores to create a “wow factor?” HATTON: Top practices that are sure to create a “wow” experience are the continued introduction of contemporary design elements, such as stones, woods and luxury vinyl tile. Also, LED energy-saving lighting and spotlights surgically placed to highlight product, along with sleek fixtures at the point-of-sale that elevate the brand. Offering organic, gluten-free products and premium coffees are just a few examples of products that can not only create a “wow” factor, but also add credibility and trust to your assortment. BONA: First and foremost, create experiences that are authentic and built around giving meaning to your offer. If, for example, you have a robust food program, take cues from the restaurant industry, where higher-end establishments use open kitchens to show off how clean, precise and proud they are of how they prepare and deliver their food. Why not incorporate open kitchens in

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Lighting is an underutilized tool to create “wow” moments throughout a store.

a c-store environment to help establish your food program as being first-class? In addition, lighting is always the most misunderstood and most underutilized tool to create “wow” moments throughout the retail environment. Too often, retailers look to use uniform light levels to light their spaces, but highlights and contrasts are what creates drama. They enable you to feature key products or offers and make the shopping experience more enjoyable.

CSNEWS: What are some good examples of store design, store flow, fixtures, displays, signage, shelving, shelf tags, etc., that you’ve seen or created lately? HATTON: A good example is clean, uncluttered pricing, along with pricing strips and back tags to simplify restocking. Also effective is the reduction of cardboard in the form of displays and products shipped in trays. LED lighting in fixtures and coolers is another great touch. BONA: An enhanced retail experience

is a function of many elements coming together in a cohesive design. Layout should not only be a function of how equipment is laid out in a space but, more importantly, it should dictate how you want customers to navigate through the space and how you want to highlight key departments that reflect your unique offers and allow for speed of service. A few years ago, Duane Reade pharmacies in New York sought to reinvent themselves and attract a higher percentage of female shoppers to their beauty departments. Their prior approach hinged on selling cosmetics off standard metal gondolas. New York is the center of the beauty and fashion universe, so this stale approach to merchandising wasn’t

credible for their savvy customers. Duane Reade decided to go out and benchmark against best-in-class beauty retailers, an effort that led directly to a new “Look Boutique” department with individually lit shelving designed around specific merchandise categories, product sizes and displays. C-stores can and should do the same thing. Sometimes, what’s easy is not always what’s best for selling some of the expanded categories that c-stores are adding to the mix. Retailers need to elevate their game by using fixtures and displays that best present the merchandise. Signage, in particular, should complement this effort. Gone are the days of 1970’s super graphics — the words “Chill Zone,” let’s say, over the cooler vault — shouting out your message. These kinds of approaches date our industry. They create the appearance of being stuck in the past. Signage should be subtle, precise and functional. Design should reinforce your brand experience.

CSNEWS: How outrageous do you think the future will get for in-store experience at the c-store level? How do you foresee some of the top design trends evolving? HATTON: The in-store experience will continue to evolve from a convenience perspective, emulating some of the bigger-box stores. While self-service kiosks will continue to expand with emerging technologies, expect to see a more expanded assortment of technology as it relates to smartphones, charging stations, comfort-enhanced seating options, gaming and online pickup drive-thrus. Design will continue to be more contemporary using fixtures that are sleek in appearance at the point-of-sale vs. heavy, industrial-looking displays. BONA: Many still fail to appreciate the extent to which

our industry will follow in the footsteps of Amazon Go. But that doesn’t mean the future will be about technology alone. Much to my surprise, in my experiences with Amazon Go, the offer itself was what I found to be most impressive. Yes, technology made the shopping experience seamless and easy, but the food, beverages, meal kits and private label products are what made me wish I had an Amazon Go next door. As stated earlier, good design is not an end in itself; it’s about the entire environment being greater than the sum of its parts. CSN

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FEATURE

The Loyalty Perspective Our exclusive consumer research explores the whys and why-nots of loyalty program membership By Linda Lisanti

WITH SO MANY RETAIL channels looking to capture the “convenience” shopping occasion, customer loyalty is becoming a harder thing to come by these days. To establish loyalty — and then, equally important, to maintain it — many convenience store chains are implementing brand-new or newly enhanced loyalty programs with all kinds of bells and whistles.

members who are enrolled, but do not use the program is relatively small, at only 7 percent of shoppers, the study findings show.

As part of Convenience Store News’ exclusive 2019 Realities of the Aisle consumer study, which analyzes the demographics and purchasing behavior of c-store shoppers, participants were asked their thoughts on loyalty programs in the convenience channel. This year’s study, now in its 10th year, was specially crafted to explore how c-store shoppers define “convenience.” To take part in the study, all participants had to shop at a convenience store at least once a month.

The Reasons Behind Non-Membership

Among the 1,500 c-store shoppers surveyed, nearly two out of every three shoppers said they frequent a convenience store that has a loyalty program. However, just 40 percent of the shoppers said they’re currently enrolled in their store’s program and actively use it. Millennials (67 percent) are more likely than Generation X (61 percent) and baby boomers (59 percent) to say they are enrolled in their store’s loyalty program and actively use it. Whereas Generation Z (32 percent) is more likely than millennials (16 percent), Generation X (15 percent) and baby boomers (14 percent) to say their convenience store has a loyalty program, but they are not enrolled in it. The proportion of c-store loyalty program

Of the loyalty program members who are actively leveraging their membership, three-quarters (75 percent) are satisfied with the benefits they receive. Females (32 percent) are more likely than males (24 percent) to rate their satisfaction at the highest “extremely satisfied” level. Shoppers who have not enrolled point to several reasons why. The primary reasons cited include: • Rewards/points/discounts are not valuable (33%); • The program requires too many purchases to see benefits (30%); and • The retailer asks for too much information to enroll (19%). Looking at demographic differences, Generation Z (22 percent) and millennials (18 percent) are more likely than baby boomers (6 percent) to perceive the enrollment process as taking too long. Hispanics (24 percent) are also more likely than non-Hispanics (12 percent) to feel the process is too lengthy. Additionally, Hispanics (31 percent) are more likely than non-Hispanics (17 percent) to be deterred from signing up due to the feeling that registration requires too much information. Other reasons why shoppers say they are not enrolled in the loyalty program at the convenience store they shop most often are: they are indifferent/do not think about it; they do not shop there often enough; or they keep forgetting to sign up.

Where There’s a Loyalty Program, There’s an App Mobile apps are an increasingly important aspect of c-store loyalty programs, particularly among younger-generation shoppers. An optimized mobile-app

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experience has the potential to address the factors that dissuade shoppers from joining a loyalty program, such as reducing the time and customer information required to enroll. With a mobile app available, a customer can simply download the app. Once in-store, the cashier can scan their barcode or enter their phone number. In some cases, payment can be automatically connected to an Apple Pay or Samsung Pay. Additionally, shoppers who download the app can receive push alerts for special offers/discounts that are more relevant to them and based on their unique purchase history. More than half of active c-store loyalty program members (55 percent) have used their store’s loyalty program mobile app, according to the research. The challenge for greater adoption may be more of an issue of awareness than anything else, as only 6 percent of active members claim their store does not have a mobile app, whereas nearly one in five (19 percent) are not sure. In terms of demographic differences, males (60 percent) are more likely than females (52 percent) to have used their convenience store’s loyalty program mobile app. Females (22 percent) are more likely to be unsure if their store’s loyalty program has an app compared to males (15 percent). Age-wise, millennials (59 percent) and Generation X (56 percent) are more likely than baby boomers (43 percent) to have used their c-store’s loyalty program app. Baby boomers (26 percent) are more likely to be unsure if there’s an app compared to millennials (17 percent) and Generation X (17 percent). CSN

Top Marketing Factors Influencing Overall Convenience Store Visits % of Total Influenced to Visit a Convenience Store by: Loyalty program 33% Word of mouth 28% Coupon 26% Gas price app 23% Other 18% Mobile app offer 14% Social media promotion/message 13% Radio or TV advertisement 11% Email 10% Print circular 8% Billboard 8% Text message 6% Mobile ordering 6% None of the above 18% Base: 1,499 U.S. shoppers aged 18+ who shop convenience stores at least once a month Source: Convenience Store News 2019 Realities of the Aisle Study; EIQ Research Solutions

Top Marketing Factors Influencing In-Store Trips % Influenced to Shop In-Store During a Recent Trip by: Banners/window signs 27% Frequent buyer/loyalty programs 25% Promotional signage 25% Video displays on pump 17% Mobile app promotions/deals 17% Pumptoppers (print ads on pump) 16% Car wash promotions 12% Gasoline nozzle display ads 10% Coupons dispensed from pump 10% Other 8% Audio music feed with messages 5% None of the above 26% Base: 1,499 U.S. shoppers aged 18+ who shop convenience stores at least once a month Source: Convenience Store News 2019 Realities of the Aisle Study; EIQ Research Solutions

Does the convenience store you shop most often have a frequent shopper or loyalty program? 37% No, convenience store shopped most often does not have a loyalty program

I would enroll if they did 27% I would not enroll if they did 10%

I am not enrolled 16% I am enrolled but do not use 7% I am enrolled and actively use 40%

63% Yes, convenience store shopped most often has a loyalty program

Base: 1,499 U.S. shoppers aged 18+ who shop convenience stores at least once a month Source: Convenience Store News 2019 Realities of the Aisle Study; EIQ Research Solutions

METHODOLOGY

The 2019 Convenience Store News Realities of the Aisle Study was conducted via an online survey executed in partnership with CSNews’ sister company, EIQ Research Solutions. The questionnaire was fielded to a representative U.S.-based sample of 1,500 participants. In order to qualify, participants had to shop at a convenience store at least once a month.

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Does your convenience store’s frequent shopper or loyalty program have a mobile app? 19% Not sure if loyalty program has a mobile app 6% No, loyalty program does not have a mobile app

If they did, I would not use it 2% If they did, I would use it 5%

I have used it 56%

75% Yes, loyalty program has a mobile app

I have not used it 20%

Base: 602 c-store shoppers who are enrolled in a c-store loyalty program and are active users Source: Convenience Store News 2019 Realities of the Aisle Study; EIQ Research Solutions

8/5/19 7:10 AM

FEATURE

The Can-Do Attitude of Convenience The 2019 NACS Show will highlight what the c-store and fuel retailing industry is capable of in the present and future By Danielle Romano FROM EVOLVING STORE concepts and inte-

gration of the latest technology, to implementing fresh food programs and delivering memorable customer experiences, it’s hard to find something that the convenience and fuel retailing industry isn’t capable of. That’s why it is fitting that the overarching theme of the 2019 NACS Show will be “We Can.” Meant to inspire, the theme will help tell the story of what c-stores can do together as an industry, according to Jeff Lenard, vice president of strategic industry initiatives for NACS, the Association for Convenience & Fuel Retailing. “The NACS Show, the only global event for all things convenience, is the perfect venue to communicate the can-do attitude of our industry and what we can accomplish together, whether sharing ideas and learning from each other, communicating our voice to legislators and the media, or working

with our supplier partners to continue to stay ahead of tomorrow’s competition,” he said. “We use the theme to tell different aspirational stories like, ‘We can make convenience the future,’ and ‘We can make convenience mean more.’ After all, our history — documented over the past 50 years in Convenience Store News — shows that we can accomplish great things together.”

Keeping the Offer Fresh Now in its 46th year, the 2019 NACS Show will take place Oct. 1-4 at the Georgia World Congress Center in Atlanta. The event will welcome nearly 25,000 attendees, who will have access to an expo floor boasting more than 420,000 square feet full of new products and services that range from start-ups to big brands. The expo floor will span six categories:

• • • • • •

Fuel equipment & services; Food equipment & foodservice programs; Candy/snacks; Facility development & store operations; Merchandise; and Technology.

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FEATURE

This year’s show also will offer more than 50 education sessions developed by retailers based on what they want to learn the most, according to Lenard. A series of questions and “segments” have been developed to help guide attendees’ education-session selection based on topic. The segments are: Launchers, Experimenters, Transformers and Influencers. Considering the challenges and opportunities the c-store and fuel retailing industry currently faces, the NACS Show wants to help attendees prepare for the present and future. Lenard cites two significant changes happening in the industry right now: disruption of traditional retail models — think frictionless payment and redefining points of contact with customers, especially through delivery — and the shift toward healthier fresh-food and beverage offerings. A third trend that will be examined is cannabidiol, or CBD. The CBD product category is forecasted to be a $50-billion business within the next decade, but there is considerable confusion as to how federal and state regulation affects the sale of CBD products at c-stores. Two specialized education sessions will be held inside a new CBD Pavilion to help attendees understand the complex issue and what it could mean for their business. Additionally, NACS will introduce two brand-new “super sessions,” which are a bridge between the expo’s smaller education sessions and its larger general sessions. Presenting nationally recognized speakers in a more intimate setting, the key difference between the super sessions and the general sessions is the content. A general session is meant to be inspirational, but not necessarily industryspecific, whereas super sessions are both. This year’s NACS Show is amping up its networking events, too. The annual Kick-Off Party will be held at the Mercedes-Benz Stadium — the site of the annual SEC Football Championship game and, most recently, Super Bowl LIII — on Tuesday, Oct. 1. The following night, there will be a newly added NACS Show Happy Hour.

Making the Most of the Show To manage attending education sessions, exploring the expansive expo floor and taking part in networking opportunities,

NACS SHOW 2019 GENERAL SESSION LINEUP TUESDAY, OCT. 1 | 3:45-5 P.M. Jim Knight, a 30-plus-year training and development veteran, will highlight how team members’ behavior makes all the difference. Knight — who ran global training for Hard Rock International for two decades and whose experience spans organizational culture, world-class service, building rock star teams, employee branding and engagement, performance management, philanthropy and facilitation training — will leave attendees with key learnings on how to help their team members read the customer, strive beyond mediocrity, become guestobsessed, and turn a customer into a fan. WEDNESDAY, OCT. 2 | 10:30-11:45 A.M. Robyn Benincasa will take attendees on a fast-paced multimedia adventure that visually and viscerally imparts the mindset that allows teams to adapt, overcome and win as one entity against all odds. Benincasa is founder and CEO of Project Athena Foundation, a nonprofit organization that helps survivors live an adventurous dream as part of their recovery. She is a world-champion adventure racer, an award-winning motivational speaker, a three-time Guinness World Record kayaker, a San Diego firefighter, a 10-time Ironman triathlete, a New York Times bestselling author, and the proud owner of two bionic metal hips. THURSDAY, OCT. 3 | 10:30-11:45 A.M. NACS President and CEO Henry “Hank” Armour will take the stage to present the 2019 NACS Ideas 2 Go program, which annually showcases the best practices and emerging concepts that are redefining convenience in the United States and around the world. FRIDAY, OCT. 4 | 8:30-9:30 A.M. Daymond John is recognizable not only as a shark on ABC’s “Shark Tank” and a pioneer in the fashion industry, but also as a multiple New York Times bestselling author and branding guru. In 2013, President Barack Obama appointed John a Presidential Ambassador for Global Entrepreneurship, a position focused on promoting the power and importance of entrepreneurship on a global scale. His presentation will reinforce the positive culture and “can-do” attitude necessary for continued success in the c-store and fuel retailing industry.

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NACS Show attendees should plan ahead, Lenard advises. “Our attendee survey results from previous years show that those who pre-plan have a more positive NACS Show experience,” he notes. To plan ahead before hitting the expo floor and while on it, the My Show Planner — available at nacsshow.com — combines planning and logistics into one easy-to-use tool, allowing attendees to preview and select the education sessions they want to attend and devise a personal plan for the exhibitors they want to visit. Plus, the My Show Planner tool automatically syncs with the official NACS Show mobile app, so everything is available on all devices for easy access.

NACS recommends attendees devise a pre-show plan to ensure they don’t miss anything at the event that is personally important to them.

One other piece of advice Lenard shares is to try to meet people. “[It] can be difficult if you’re an introvert. However, you’ll quickly find that our industry is full of people just like you who are seeking new solutions,” he told Convenience Store News. “Think of a couple icebreakers like ‘What’s your biggest challenge?’ and the conversation can take off from there.” CSN

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STORE SPOTLIGHT

It’s All Relative Garrett’s Family Market focuses on delivering fresh food with a New England market feel By Danielle Romano

At a Glance Garrett’s Family Market Operator: Volta Oil Location: 111 Cedar St., Milford, Mass. Unique features: A store design inspired by New England; handcrafted and organic signature beverages; fresh hot and cold grab-and-go food; a full-service, next-gen Dunkin’ restaurant

VOLTA OIL IS NO STRANGER to the convenience retailing industry. In 1991, the petroleum distributor opened its first convenience store in Falmouth, Mass., and just shy of a decade later, it debuted the Rapid Refill banner in 2000. Today, there are 16 Rapid Refill stores in Massachusetts and New Hampshire, with the mission to be “your one stop for fuel, food, and a friendly smile.”

The winds of change, though, called out to Volta Oil when a new industry site became available a few years ago in Milford, Mass. The Plymouth, Mass.-based retailer saw the site as a blank canvas and an opportunity to develop a whole new brand and c-store concept — one that would answer consumers’ call for convenient fresh foods. With the site purchased and the gears in motion, the petroleum distributor and c-store operator tapped Mosely Group, a global consultancy based outside of Boston that works with food and beverage companies to explore opportunities, manage and sustain growth, and maximize profitability through the delivery of compelling consumer engagements. Together, they would conceptualize and design what is now Garrett’s Family Market.

“The goal was to develop a unique offering that answered today’s consumer needs, with a focus on ready-to-consume fresh foods and everyday convenience needs, together with the development of several proprietary signature food items,” explained Peter Garrett, president of Volta Oil.

“The goal was to develop a unique offering that answered today’s consumer needs, with a focus on readyto-consume fresh foods and everyday convenience needs, together with the development of several proprietary signature food items.” — Peter Garrett, Volta Oil

Fresh, Convenient Offers Located at 111 Cedar St., on Route 85 near the on/off ramps to Interstate 495,

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STORE SPOTLIGHT

The products at Garrett’s Family Market are merchandised using characteristics associated with New England, such as wood textures and soft color palettes.

Garrett’s Family Market was able to introduce all of the elements associated with a brand-new concept and newbuild location — from name and image to aesthetics and feel. Conceptually, the store is designed to be heavily focused on foodservice and to give customers the feeling of a market — one where they’d expect to find freshfood offers. The fare is merchandised and displayed using characteristics associated with New England, including wood textures and soft color palates. The warm aesthetics flow from the forecourt to the inside. Situated on two acres of property, Garrett’s Family Market is a 5,000 square-foot store that’s open 24 hours a day, seven days a week. Speaking to its convenient and fresh food offers, a variety of signature items are available — from craveable grab-and-go sandwiches, salads, calzones, snacks and desserts, to handcrafted and organic beverages. Through a successful partnership with Dunkin’, Garrett’s Family Market features a full-service Dunkin’ restaurant that reflects the company’s next-generation store model. In addition to offering indoor and outdoor seating, the Dunkin’ restaurant brings a new nitro brew coffeehouse tap system to the c-store, as well as a drive-thru.

Other amenities available at Garrett’s Family Market are: • Five self-service fuel islands, one self-service diesel island, and DEF at the truck island. It is the only self- serve gas station located in the city of Milford. • Indoor and outdoor patio seating; • Free Wi-Fi; • Lottery; and • An ATM machine. Garrett’s Family Market opened in January and held a ribbon-cutting ceremony on May 3. In attendance were members of the Milford Area Chamber of Commerce, town officials, state representatives, selectman and members of the local media. Samples of the menu items were passed around to guests and customers to promote the new food offering. Then, on Saturday, May 4, the operator held a grand-opening event that included giveaways, such as the opportunity to win a $1,000 grand prize of free gas. Two radio stations broadcasted live from the site, and the Dunkin’ cuppy and Boston Bruins bear mascots made appearances. In the short term, Volta Oil plans to closely monitor the success of the Milford Garrett’s Family Market to see what’s working and not working. The company is also building a second market on Cape Cod, which is expected to open at the end of the year. “Long term, we will evaluate the success of Garrett’s Family Market and potentially build additional stores and/ or convert existing Rapid Refill stores,” Garrett said. CSN

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HOT PRODUCTS SPECIAL ADVERTISING SECTION

Beverages

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Bitcoin ATMâ&#x20AC;&#x2122;s

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C-Store Recruiters

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Check Guarantee Services

Equipment / Supplies

ADINDEX 7-Eleven.....................................................................35 ADD Systems...........................................................51 Altria Group Distribution.....................................2, 41 Anchor Packaging.................................................63 Autofry/MTI..............................................................65 BIC USA.....................................................................13 Circle K.......................................................................31 Coca-Cola.................................................................49 Convenience Distribution Association...........37 Cookies United........................................................11 Curaleaf......................................................................59 Del Monte Fresh Produce...................................61 E-Alternative Solutions........................................13 E-Alternative Solutions........................................73 Eby-Brown................................................................29 Essentia Water........................................................9 Follett LLC................................................................53 Great Northern........................................................85 Hunt Brothers Pizza..............................................67 Imageworks Display & Mfg.................................95 J&J Snack Foods....................................................69 John Middleton Company..................................23 Krispy Krunchy Chicken......................................25 Mars Chocolate NA/Wrigley..............................7 McLane Company..................................................43 MilkPEP......................................................................21 Miracle Nutritional Products..............................55 On Cue.......................................................................48 Organic Valley Family of Farms........................78-79 Palmer Retail Solutions........................................57 Paytronix...................................................................89 Premier Manufacturing........................................Cover, 71 Reynolds American Trade Marketing Serv...5, 39 Saverino & Associates..........................................33 Smoker Friendly International...........................75 Swisher International............................................19 The Hershey Company.........................................45 The Wonderful Company....................................77 Trion............................................................................83 Tyson Foods.............................................................Back Cover Uline............................................................................68 Universal Merchants Outsert ............................Outsert Voss Water................................................................15

8550 W. Bryn Mawr Ave, Suite 200, Chicago, IL 60631 Phone 773-992-4450 Fax 773-992-4455 www.ensembleiq.com

AUGUST

CSN_Class_Aug_2019.indd 17

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Convenience Store News

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8/1/2019 4:35:08 PM

INSIDE THE CONSUMER MIND

When Hunger or Thirst Strikes Exclusive research investigates consumers’ thoughts on prepared foods and beverages As the lines between channels blur, all foodservice retailers represent some form of competition to convenience stores. Beth Brickel, senior research director on the Insights and Innovation Team at EnsembleIQ, parent company of Convenience Store News, shared insights gleaned from new exclusive consumer research at the 2019 CSNews Convenience Foodservice Exchange event, held in June. The national study asked shoppers who primarily visit c-stores, grocery stores or fast-food outlets about their thoughts on prepared foods and prepared beverages in various establishments. Here are some of the most interesting findings.

Which of the following are reasons you have chosen to purchase prepared ready-to-eat foods and/or beverages over a food or beverage prepared at home?

54% 50%

DON’T FEEL LIKE COOKING

37%

HAVE A CRAVING

47% of Males 62% of Females

REWARD FOR ME

46% of Males 55% of Females

34%

33%

29% of Males 40% of Females

28% of Males 38% of Females

NO MEAL PLANNED

32% of Males 41% of Females

TOO TIRED TO COOK

Prepared food and beverages are a lifeline for shoppers’ busy lifestyles today, where they lack the energy or time to cook at home.

When location or routine is not a factor, what do shoppers prefer? 37% of Males select Fast Food vs. 27% of Females 33% of Females select Fast Casual vs. 26% of Males

Prepared Food

32%

31%

30%

19%

30%

18% 5%

Prepared Beverage

35% of Males select C-Store vs. 25% of Females

40% of Females select Coffee Shop vs. 22% of Males

3% Fast food

Fast casual

6% 5%

Casual dining

Coffee shop

Grocery

3% Upscale grocery

3% 2%

2% Mass

Club

C-store

For hunger, fast food and fast casual establishments win. For drink occasions, the gains shift to coffee shops and convenience stores.

When the goal is satisfying hunger, shoppers prioritize quick and easy, but other factors also hold influence besides convenience.

42%

PRIORITIZE CONVENIENCE

31% Quality 25% Selection/variety 23% Prefer type of food 21% Financial

114 Convenience Store News C S N E W S . c o m

114.InsidetheConsumer_CSN_0819.indd 115

When the goal is satisfying thirst, shoppers prioritize an ample variety of options.

37 %

PRIORITIZE SELECTION/ VARIETY

35% Convenience 17% Financial 15% Prefer type of beverage 11% Prefer location type

Source: CFX 2019 Winning Share of Stomach Consumer Study; EnsembleIQ Insights & Innovation Team

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With alternative tobacco products growing their presence on the backbar, will there be a future without cigarettes?

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EDITOR’S NOTE

Breaking the Habit Will there be a world where combustible tobacco products are a thing of the past? of Convenience Store News began to think about a theme for this year’s Guide to Tobacco, the one question we kept coming back to was: Is combustible tobacco going up in smoke?

AS THE EDITORIAL STAFF

Cigarettes are still big business for c-stores. Yet, tobacco companies are increasingly diversifying away from combustible tobacco and introducing new nicotine-delivery innovation in the form of e-cigarettes, vapor products, heat not burn, oral nicotine pouches and more. Case in point: In just the past three months, Swedish Match brought its ZYN oral nicotine pouch nationwide, and tobacco industry giants Altria Group Inc. and Reynolds American Inc. unveiled plans for oral nicotine products of their own. Consumers already have a plethora of products to choose from within the cigarettes and other tobacco products (OTP) categories — and with a priority being placed by suppliers on R&D into new, innovative nicotine-delivery offerings, the options are only expected to grow. However, if international tobacco giant Philip Morris International Inc. has its way, there will be one less choice behind the backbar: cigarettes. In April, the company launched “The Year of Unsmoke,” a call to action to smokers, non-smokers and regulators across the globe to break the world’s cigarette habit. The call to action has three simple steps: 1. If you don’t smoke, don’t start. 2. If you smoke, quit. 3. If you don’t quit, change. Sounds good on paper, but how realistic is it? Buckle up, it could be an interesting ride. For comments, please contact Melissa Kress, Senior News Editor, at (201) 855-7618 or mkress@ensembleiq.com.

EDITORIAL EXCELLENCE AWARDS (2013-2018)

2016 American Society of Business Press Editors, National Azbee Awards Gold, Best How-To Article, March 2015 Bronze, Best Original Research, June 2015 2016 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best How-To Article, March 2015 Silver, Best Original Research, June 2015

EDITORIAL ADVISORY BOARD

2018 Jesse H. Neal National Business Journalism Award Finalist, Best Editorial Use of Data, June 2017

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

Brett Atherton Bolla Management

Jack Lewis GPM Midwest

Rick Crawford Green Valley Grocery

Danielle Mattiussi Maverik Inc.

Edward Davidson ER Davidson & Associates (7-Eleven Inc., retired) Jim Hachtel Eby-Brown Co.

2017 Eddie Awards, Folio: magazine Winner, Business to Business, Retail, Single/Series of Articles, May 2017 Honorable Mention, Business to Business, Retail, Single/Series of Articles, June 2016

Ray Johnson Speedee Mart

Vito Maurici McLane Co. Inc. Richard Mione GPM Southeast Jonathan Polonsky Plaid Pantries Inc. Greg Scriver Kwik Trip Inc. Roy Strasburger Strasburger Retail

2016 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2015 Business to Business, Retail, Single/Series of Articles, August 2015 2015 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Single Article, February 2014 2016 Trade Association Business Publications Intl. Tabbie Awards Silver, Front Cover Illustration, June 2015

2014 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2013 Business to Business, Retail, Single Article, February 2013 2013 Eddie Award Honorable Mention, Folio: magazine Business to Business, Retail, Full Issue, October 2012

AUG

20 1 9

Guide to Tobacco

CONTENTS AUG 19 8550 W. Bryn Mawr Ave., Ste. 200, Chicago, IL 60631 (773) 992-4450 Fax: (773) 992-4455 www.csnews.com Direct Mailing Address for Convenience Store News: 11-43 Raymond Plaza West, 16th floor, Newark, NJ 07102 BRAND MANAGEMENT Vice President/Group Brand Director Paula Lashinsky (917) 446-4117 plashinsky@ensembleiq.com EDITORIAL Editorial Director (201) 855-7606

Don Longo dlongo@ensembleiq.com

Editor-in-Chief (201) 855-7608

Linda Lisanti llisanti@ensembleiq.com

Senior News Editor (201) 855-7618

Melissa Kress mkress@ensembleiq.com

Associate Editor (201) 855-7619

Angela Hanson ahanson@ensembleiq.com

Associate Managing Editor (201) 855-7604

Danielle Romano dromano@ensembleiq.com

Contributing Editor (303) 741-3377

Renée M. Covino reneek@aol.com

Contributing Editor (201) 280-2614

Tammy Mastroberte tmastroberte@gmail.com

ADVERTISING SALES & BUSINESS Associate Brand Director & Northeast Sales Manager (508) 385-2524

Rachel McGaffigan rmcgaffigan@ensembleiq.com

Associate Brand Director & Western Sales Manager (330) 840-9557

Ron Lowy rlowy@ensembleiq.com

Associate Publisher & Midwest Sales Manager Kelly Fischer (773) 992-4464 kfischer@ensembleiq.com Account Executive & Classified Advertising Terry Kanganis (201) 855-7615 tkanganis@ensembleiq.com Classified Production Manager Mary Beth Medley (856) 809-0050 marybeth@marybethmedley.com EVENTS

EDITOR’S NOTE

3 Breaking the Habit Will there be a world where combustible tobacco products are a thing of the past? COVER STORY

8 Smoke Break With alternative tobacco products growing their presence on the backbar, will there be a future without cigarettes? CATEGORY INSIGHTS

16 18 19 21 23 24 25 26 27

Total U.S. Nicotine Cigarettes Total OTP Smokeless Cigars Vaping E-Cigarettes Papers Pipe & Cigarette Tobacco

Executive Vice President, Events & Conferences Ed Several (860) 830-8321 eseveral@ensembleiq.com AUDIENCE ENGAGEMENT Director, Audience and Data (224) 231-6363

Gail Reboletti greboletti@ensembleiq.com

List Rental (847) 492-1350 ext.318

MeritDirect Elizabeth Jackson

Subscriber Services/Single-Copy Purchases (978) 671-0449 EnsembleIQ@e-circ.net PROJECT MANAGEMENT/PRODUCTION/ART Vice President, Production (877) 687-7321 Creative Director (973) 607-1320

Derek Estey destey@ensembleiq.com Colette Magliaro cmagliaro@ensembleiq.com

Advertising/Production Manager (773) 992-4418

Ed Ward eward@ensembleiq.com

Art Director (973) 607-1321

Lauren DiMeo ldimeo@ensembleiq.com

CONVENIENCE STORE NEWS AFFILIATIONS Premier Trade Press Exhibitor

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.

4 Guide to Tobacco C S N E W S . c o m

AUG

20 1 9

Convenience Store News

COVER STORY

8 Guide to Tobacco C S N E W S . c o m

SMOKE BREAK With alternative tobacco products growing their presence on the backbar, will there be a future without cigarettes? By Melissa Kress FOR SEVERAL YEARS,

there have been grumblings about the state of the backbar. In fact, many industry insiders have urged convenience store retailers to find other categories to tap into and grow because they believe tobacco is going the way of the dinosaurs. Truth be told, though, tobacco as an in-store category is not dying. According to the latest Convenience Store News Industry Report, the cigarettes segment remains at the top in terms of in-store sales and the other tobacco products (OTP) segment comes in fourth, trailing only behind packaged beverages and beer/alcoholic beverages. That being said, cigarette industry volume remains under considerable pressure, as Bonnie Herzog, managing director of tobacco, beverage and convenience store research at Wells Fargo Securities LLC, found in the company’s second-quarter 2019 Tobacco Talk survey. The survey takes the pulse of retailers representing approximately 60,000 convenience stores, or roughly 40 percent of the channel. The latest findings show that retailers expect pressure on cigarette volume to remain elevated this year, primarily driven by: • The rise of dual tobacco use, • Smoker conversion to vapor products, • The rising costs of cigarettes, and • More alternatives like oral nicotine and heat-not-burn products. Taking these factors into account, Wells Fargo Securities expects cigarette industry volume to decline 6 percent in 2019, steeper than the traditional 3-percent to 4-percent decline of years past. When it comes to the electronic cigarette and vapor segment, however, retailers are bullish. The outlook is for

this segment to grow roughly 40 percent in 2019, according to Herzog. And new innovation on the backbar is stirring up more excitement. Notably, 80 percent of the retailers surveyed in the latest Tobacco Talk expect to begin carrying IQOS — the heat-not-burn tobacco product Philip Morris International (PMI) is bringing to the United States in 2020 through a pact with Altria Group Inc. Of that number, less than half are targeting the first quarter. Convenience store retailers are also eyeing an optimistic 3-percent increase this year in smokeless tobacco, driven by innovation in oral nicotine products. The emerging segment is seeing a lot of interest from tobacco companies, Herzog noted. For example, Swedish Match expanded its ZYN nicotine pouch nationwide this spring, and R.J. Reynolds Vapor Co., an operating company of Reynolds American Inc., added the VELO nicotine pouch to its modern oral-nicotine portfolio in July. In addition, Altria is acquiring an 80-percent stake in certain companies of Burger Söhne Holding AG, which will commercialize on! products worldwide. On! is an oral tobacco-derived nicotine (TDN) pouch product. “We’re excited to add on! to our companies’ terrific non-combustible portfolio,” Howard Willard, Altria’s chairman and CEO, said in June. “Through our companies and investments, we have access to the leading products and brands in the moist smokeless

AUG

20 1 9

Guide to Tobacco

COVER STORY

tobacco, e-vapor and heated tobacco categories. This acquisition will add another non-combustible product to our portfolio in what we believe is a high-potential, rapidly developing oral TDN products category.”

Vapor Bounces Back Electronic cigarettes and vapor products experienced a few rocky years, but they are making noise once again in the tobacco business. After roughly a decade in the market, the segment has shown its resiliency and ability to evolve.

seen adult consumers experiment with a variety of products. First, with cigalikes; then, with vapor tanks and mods; and now, adult consumers are moving to pre-filled pod systems, the tobacco executive noted. Maneson believes a combination of factors is fueling vapor’s resurgence.

As an early entrant into the space, blu has had a front-row seat to the ups and downs of e-cigarettes and vapor since 2009, and is ready to see what the future of the tobacco category will be. Fontem Ventures owns blu and is a subsidiary of Imperial Brands plc.

One aspect is that the FDA has acknowledged the potential public health benefit of adult smokers’ transition to e-vapor products and, for this reason, adult consumers are learning that they can trust the vape brands on the market today more than ever.

“Being in an industry that has changed and evolved so much in a decade and holding our place as one of the trusted consumer brands is an accomplishment we take great pride in,” said Rob Maneson, vice president of sales for Fontem Ventures.

“As adults learn there are potentially less harmful alternatives to smoking, they’re exploring their usage more and more as an alternative to traditional cigarettes,” Maneson explained.

“While there is still a lot of growth opportunity and maturation for the category, we’ve engaged with the FDA [Food and Drug Administration] on their regulatory strategy and look forward to working with local and state legislators on ways that we feel truly benefit adult smokers, while also helping to restrict youth usage and access,” Maneson added.

Vapor products fill that void they have been looking to fill, he pointed out.

Over the past 10 years, the e-cig and vapor segment has

“The category still has so much room to surprise and delight adult smokers, and though we know we have a long way to go, we at blu remain committed to developing products that exceed consumers’ expectations,” he added.

Total U.S. Cigarette Category Volume Cigarette Shipments 18 16

-3.5% -8.6%

Pack Volume (in billions)

Estimated

Difference

-4.2% -2.6% -2.5% -5.2% -3.1% -0.2%

Decline

-2.1% -4.1% -5.0% -5.5%

10 8 6

SET Increase FET Increase

Roll Your Own

Gas Prices Decline Juul

Vapor

22 SET Increases

Improving Economy

0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: Wholesale shipment to retail data through 3/30/2019; Management Science Associates Inc.

10 Guide to Tobacco C S N E W S . c o m

COVER STORY

Tobacco manufacturers are increasingly diversifying their product portfolios and moving away from combustible tobacco products.

Is a Seismic Shift Coming? It is apparent that today, more than ever, adult consumers have increasing choices when it comes to consuming nicotine. It is also apparent that tobacco companies are preparing for a day when cigarettes do not make up the lion’s share of the business. But are they preparing for a day when cigarettes disappear from the backbar altogether? Philip Morris International is. On April 8, the Switzerland-based tobacco company launched “The Year of Unsmoke,” which PMI defines as an “urgent call to action to smokers, nonsmokers, regulators and agents of change across the world to drive a better future for the world’s 1.1

12 Guide to Tobacco C S N E W S . c o m

billion smokers and their families, loved ones and communities.” The call to action follows the World Health Organization’s prediction that there will be approximately the same number of people who smoke in 2025 as do today. “It should be crystal clear: If you don’t smoke, don’t start. If you smoke, quit. If you don’t quit, change. That’s unsmoking,” said Jacek Olczak, PMI’s chief operating officer. “It is a fact that burning generates the vast majority of harmful chemicals found in cigarette smoke. Eliminating the combustion dramatically reduces the levels of harmful chemicals. There is a growing consensus among scientists and public health experts that products that do not burn and are backed by science are a much better choice than cigarettes.” PMI’s stated mission is to create a smokefree future that’s backed by science, technology and innovation to offer less

COVER STORY

harmful choices to those who would otherwise continue smoking. “Many people and organizations still prefer to focus on an ideological fight. The controversy they generate continues to confuse people who smoke, and those skeptics are quickly becoming the biggest advocates of continued cigarette smoking,” Olczak said. “The consequences of this confusion are that people continue to smoke cigarettes, whose harmful effects are well known. It is common sense to move away from ideology and take concrete steps forward together toward a common goal: remove smoke from our world and encourage 1.1 billion men and women to switch to better alternatives if they do not quit,” he added. This spring, international tobacco giant Philip Morris International launched “The Year of Unsmoke” campaign.

A new study commissioned by PMI and conducted by global research company Povaddo found that eight out of 10 people globally — or 79 percent — support PMI working with governments, regulators and public health experts to phase out cigarettes in favor of smoke-free alternatives.

14 Guide to Tobacco C S N E W S . c o m

Seventy-three percent believe it is a good thing for PMI to transform its business model away from cigarettes and to only sell alternatives like e-cigarettes and heat-not-burn products. Such a move would fall in line with the trajectory of the FDA’s Center for Tobacco Products over the past few years — especially under the direction of Mitch Zeller — where “the continuum of risk” is a frequent topic of discussion. Ambitious? Yes. Realistic? That remains to be seen. “That would be pretty cool, wouldn’t it? Unfortunately, we’re still experiencing some reservations when it comes to embracing vapor products, so it’s hard to give a definitive answer… but one can dream,” said blu’s Maneson. “Of course, we believe in the many benefits of vapor products and hope the rest of the world will one day welcome them as we have.” CSN

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TOTAL NICOTINE

CATEGORY INSIGHTS: Total U.S. Nicotine While overall nicotine volume in the United States is down slightly, there is one category standout â&#x20AC;&#x201D; vapor is up nearly 90% across all classes of trade. Other positive performers are large cigars (up nearly 7%) and snus (up nearly 3%). Roll-your-own (RYO) is down the most, by 22% plus.

52 WEEKS ENDING Q1 2018

52 WEEKS ENDING Q1 2019

CHANGE

52 WEEKS ENDING Q1 2018

52 WEEKS ENDING Q1 2019

CHANGE

Cigarettes

68.9% 66.7% -4.7%

Pipe Tobacco

0.3%

-4.4%

Large Cigars

18.2%

Roll Your Own

0.1%

-22.4%

Snus

0.3% 0.3% 2.7%

Vapor

0.6%

19.8%

6.8% -3.0%

Little/Filtered Cigars

1.1%

Moist

9.0%

9.0% -1.1%

Papers/Tubes/Wraps 1.5%

1.5% -1.1%

1.2% 89.8%

These numbers represent percent of total U.S. nicotine share.

Nicotine Distribution by Trade Class for U.S. The lionâ&#x20AC;&#x2122;s share of U.S. nicotine distribution belongs to the convenience/gas channel, which holds 57% of the store share and 71% of the volume. The next-largest channel in store share tracked by MSA is the dollar store channel (9%). The tobacco outlet channel, though, is No. 2 in volume (8%). Convenience/Gas

Tobacco Outlet

Drugstore

Dollar Store

All Other Trade

% VOLUME

% STORES

17% 2% 2%

27%

57% 9%

71%

5% 3%

Cigarettes vs. All Other Tobacco

Total U.S. Nicotine Trends

Compared to last year, cigarettes have dropped almost 5% in units this year, as consumers continue to embrace the other segments of tobacco, particularly the vapor segment.

% Change 52 Weeks Ending Q1 2019 vs. 52 Weeks Ending Q1 2018

Cigarettes

All Other Tobacco

Volume

3.0

Consumer Units (in billions)

The dollar store channel is emerging as a fiercely growing competitor to c-stores, posting double-digit increases in volume and distribution. That compares to essentially flat growth in the convenience/gas channel. All classes of trade are down in item count.

-4.7%

2.5

ALL CONVENIENCE/ OUTLETS GAS

-1.6%

-1.3%

TOBACCO OUTLETS

DRUG DOLLAR STORES STORES

ALL OTHER OUTLETS

-1.3% -13.1% 10.3% -3.0%

Distribution 1.3%

1.3%

2.1%

Item Count -4.0%

-3.7%

-2.8%

-6.6% 23.9%

-3.7%

-2.6% -3.9% -2.1%

2.0

+5.3%

1.5 1.0 0.5 0

Q1 2018

Q1 2019

Source: Wholesale shipment to retail data through 3/30/2019; Management Science Associates Inc.

16 Guide to Tobacco C S N E W S . c o m

The dollar store channel is posting double-digit increases in volume and distribution.

The path to purchase has become inﬁnite. We map the journey and give you back control.

SHOPPER JOURNEY

ASCENDANCE

MAPPING TOUCHPOINTS, DRIVING ACTION

and elevate your performance. ascendance@ensembleiq.com

INSIGHTS & INNOVATION

CIGARETTES

CATEGORY INSIGHTS: Cigarettes In the 52 weeks ended June 15, 2019, cigarette dollar sales took a slight downturn (down 1.30%) vs. a year ago, and unit sales were down more than 4% for the second consecutive year. The subgeneric/private label subcategory was the only segment that grew, with dollar sales up more than 13% for the second consecutive year.

DOLLARS

% CHANGE

UNITS

% CHANGE

-1.30%

770,600,158

-4.80%

Total Cigarettes

$55,071,091,360.89

Premium

$44,469,584,838.26 -1.10% 595,034,320 -4.70%

Branded Discount

$7,267,396,859.04

-6.10%

111,213,034

Subgeneric/Private Label

$1,758,793,157.88

15.60%

34,459,374

17.30%

Fourth Tier

$1,469,816,870.62

-1.60%

27,214,421

-5.60%

Imports

-10.20%

$109,117,452.40 -1.50% 2,693,478 -10.00%

Cigarette Segment Share The premium segment continues to account for the majority of cigarettes sold, even with dollar sales declining 1.10% and units down 4.70% â&#x20AC;&#x201D; almost as much as the overall category. Premium

Branded Discount

Subgeneric/Private Label

Fourth Tier

Imports

UNIT SHARE

DOLLAR SHARE

2.7% 3.2%

3.5% 4.5%

13.2%

14.4%

80.7%

77.2%

Cigarette Share by Region

Top 10 Cigarettes

Not much has changed in regards to cigarette share across the five major regions of the United States. The Southeast still holds one-third of the units sold, with the Midwest a close second.

The top 10 cigarette items account for just over 35% of all cigarette units sold in U.S. convenience stores. Premium cigarettes continue to be king of the road, comprising all of the top 10 items. The Marlboro brand holds seven of the top 10 SKUs.

Midwest

Northeast

Southeast

Southwest

West TOP 10 CIGARETTE ITEMS

DOLLAR SHARE

14%

13%

24%

14%

28%

UNIT SHARE

16%

20% 33%

Source: Management Science Associates Inc.; C-Metrics, 52 weeks ending 6/15/2019 C-Metrics is a projected convenience channel database for warehouse-delivered products

18 Guide to Tobacco C S N E W S . c o m

UNITS

Marlboro Gold KG BX 10CT 67,423,968 Marlboro Red KG BX 10CT 43,014,745 Newport MTH Green 100 BX 10CT 40,395,548 Newport MTH Green KG BX 10CT 32,997,549 Marlboro Special Blend Gold KG BX 10CT 19,144,967 Marlboro Gold 100 BX 10CT 17,300,055 Marlboro 100 BX 10 CT 14,827,443 Camel Blue KG BX 10CT 12,735,472 Marlboro Silver KG BX 10CT 12,656,436 Marlboro Special Blend Gold 100 BX 10 CT 12,555,422

UNIT SHARE

8.7% 5.6% 5.2% 4.3% 2.5% 2.2% 1.9% 1.7% 1.6% 1.6%

TOTAL OTP

CATEGORY INSIGHTS: Total OTP In the 52 weeks ended June 15, 2019, dollar sales of other tobacco products (OTP) were up 17.9%. Of the seven segments that comprise the OTP category in c-stores, three major product types showed an increase, with vaping performing phenomenally well at 299.5% growth.

DOLLARS

Total OTP Smokeless Cigars Vaping E-Cigarettes Papers Pipe/Cigarette Tobacco Pipes

% CHANGE

UNITS

% CHANGE

$12,537,198,310.42 17.9% 4,357,909,072 4.8% $7,026,651,933.69 4.5% 1,404,655,228 -0.8% $2,642,464,996.71 8.1% 2,649,309,674 5.6% $1,878,732,917.31 299.5% 106,686,288 270.8% $588,294,629.50 0.7% 47,972,350 -9.3% $201,940,374.13 -1.2% 126,070,551 -2.9% $197,667,123.74 -2.7% 22,917,746 -4.2% $245,634.09 -13.4% 36,878 -13.5%

OTP Segment Share

OTP Share by Region

Smokeless accounts for 56% of the entire OTP market, although it is down 7% vs. last year in segment share. Cigars, at 21% share, are the second-largest segment. Vaping, in the No. 3 spot, experienced a significant jump in segment share year over year, now accounting for 15%.

Across the United States, the Southeast holds the most OTP share (27%). There have been no big changes among the other four regions. The Northeast still holds the least share (17%).

Midwest Smokeless

Cigars

Vaping

E-Cigs

Papers

Northeast

Southwest

West

DOLLAR SHARE

2% 5%

Southeast

Pipe/Cigarette Tobacco

1% 18%

20%

15% 18%

56%

21%

17% 27%

OTP Retail Dollar Sales Trend (past two years) The table below shows the OTP retail dollar sales trend over the past 24 months (starting from July 2017). According to the trend line, OTP dollar sales show a slight increase. $1,400,000,000.00 $1,200,000,000.00 $1,000,000,000.00 $800,000,000.00 $600,000,000.00 $400,000,000.00

2019 Jun

2019 May

2019 Apr

2019 Mar

2019 Feb

2019 Jan

2018 Dec

2018 Nov

2018 Oct

2018 Sep

2018 Aug

2018 Jul

2018 Jun

2018 May

2018 Apr

2018 Mar

2018 Feb

2018 Jan

2017 Dec

2017 Nov

2017 Oct

2017 Sep

2017 Aug

2017 Jul

$200,000,000.00

Source: Management Science Associates, C-Metrics, 52 weeks ending 6/15/2019 C-Metrics is a projected convenience channel database for warehouse-delivered products

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Guide to Tobacco

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RACHEL MCGAFFIGAN Associate Brand Director/Northeast 508-385-2524 • rmcgafﬁgan@ensembleIQ.com

SMOKELESS

CATEGORY INSIGHTS: Smokeless Smokeless continues to be the largest segment of the OTP category, growing by more than 4% for the second consecutive year. Reynolds American Inc.’s growth started to slow in the past year, with growth falling from 9.4% in 2018 to 5.1% in the 52 weeks ended June 15, 2019.

DOLLARS

% CHANGE

Total Smokeless

$7,026,651,933.69

Altria Group

4.5%

100.0%

$3,839,502,720.92

1.9%

54.6%

Reynolds American Inc.

$2,475,532,915.19

5.1%

35.2%

Swedish Match

$557,462,047.74

19.3%

7.9%

$83,365,690.84

17.8%

1.2%

Swisher International

$58,798,121.97

5.0%

0.8%

Smokey Mountain Chew Inc.

$6,460,589.27

5.9%

0.1%

All Other

$5,529,847.44

-8.1%

0.1%

National Tobacco Co.

Smokeless Dollar & Market Share vs. Year Ago Altria Group and Reynolds American continue to comprise about 90% (89.8%) of smokeless dollar sales, leaving only 10% for the remaining manufacturers. However, Altria’s market share fell by 1.5%, while smaller manufacturers, like Swedish Match and National Tobacco Co., made up ground. DOLLAR SHARE VS. YEAR AGO

Total Smokeless Altria Group Reynolds American Inc. Swedish Match National Tobacco Co. Swisher International Smokey Mountain Chew Inc. All Other

MARKET SHARE VS. YEAR AGO

4.5%

-1.5%

Altria Group

1.9%

0.3%

Reynolds American Inc.

5.1%

1.0%

Swedish Match

19.3% 17.8% 5.0%

National Tobacco Co.

0.2%

Swisher International

0.04%

Smokey Mountain Chew Inc.

-0.01%

All Other

-0.02%

5.9% -8.1%

Smokeless Share by Region

Smokeless Share by Brand

The Southeast and Southwest regions continue to account for more than half of all smokeless unit share and almost half of the segment’s dollar share in the U.S. The Northeast region seems to be losing unit share slightly, dropping to 11% compared to 12% last year.

The top brands in this segment have not changed much in the past year, except for the Swedish Match brand, Zyn. The Zyn brand has broken into the top 10 and captured nearly 2% share of the segment. Still, Copenhagen, Grizzly and Skoal continue to capture nearly 80% (78.3%) of the segment’s dollars.

Midwest

Northeast

Southeast

Southwest

DOLLAR SHARE

18%

UNIT SHARE

22% 12%

22% 26%

West

16%

t DOWN

— FLAT

SHARE OF BRAND MANUFACTURER RANK TREND SEGMENT

22%

20%

s UP

11% 31%

Source: Management Science Associates, C-Metrics, 52 weeks ending 6/15/2019 C-Metrics is a projected convenience channel database for warehouse-delivered products

Copenhagen Grizzly Skoal Red Seal Camel Snus Kodiak Longhorn Red Man Zyn Timberwolf

Altria Group Reynolds American Inc. Altria Group Altria Group Reynolds American Inc. Reynolds American Inc. Swedish Match Swedish Match Swedish Match Swedish Match

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1 2 3 4 5 6 7 8 9 10

— 35.4% — 28.4% — 14.5% — 4.4% — 2.9% — 2.6% — 2.5% — 1.8% s 1.8% t 1.3%

Guide to Tobacco

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CIGARS

CATEGORY INSIGHTS: Cigars Cigars, the second-largest segment within the OTP category, showed growth in the latest 52 weeks with an 8.1% dollar sales increase and a 5.6% unit volume increase.

DOLLARS

Total Cigars Altria Group Swisher International ITG Brands LLC Swedish Match Cheyenne International Kretek International Good Times Tobacco Inter-Continental Cigar Prime Time International All Other

% CHANGE

$2,642,464,996.71 $830,627,811.29 $701,752,774.90 $461,355,681.05 $436,260,508.07 $34,094,313.18 $29,416,680.22 $24,568,980.48 $22,080,963.60 $20,235,271.92 $82,072,012.41

8.1% 7.4% 2.8% 27.5% 5.5% -6.5% -0.7% 8.1% 7.2% -3.8% 0.4%

DOLLAR SHARE

UNITS

100.0% 31.4% 26.6% 17.5% 16.5% 1.3% 1.1% 0.9% 0.8% 0.8% 3.1%

% CHANGE

2,649,309,674 681,256,244 794,942,613 270,979,076 544,363,937 95,090,731 25,728,785 36,479,215 9,879,161 50,628,531 139,961,383

5.6% 3.8% 3.8% 25.0% 4.6% -3.8% 0.5% 15.5% 6.7% -8.9% 9.1%

UNIT SHARE

100.0% 25.7% 30.0% 10.2% 20.5% 3.6% 1.0% 1.4% 0.4% 1.9% 5.3%

Cigar Dollar & Market Share vs. Year Ago Altria Group, Swisher International, ITG Brands and Swedish Match are the four major players in cigars, comprising a 92% market share combined. Among the four major manufacturers, ITG posted the largest gain in both dollar sales (up 27.5%) and market share (up 2.7%) in the past year. DOLLAR SHARE VS. YEAR AGO

MARKET SHARE VS. YEAR AGO

Total Cigars

8.1%

Altria Group

-0.2%

Altria Group

7.4%

Swisher International

-1.4%

2.8%

ITG Brands LLC

2.7%

ITG Brands LLC

27.5%

Swedish Match

-0.4%

Swedish Match

5.5%

Cheyenne International

-0.2%

Swisher International

Cheyenne International

-6.5%

Kretek International

-0.1%

Kretek International

-0.7%

Good Times Tobacco

0.0%

Good Times Tobacco

8.1%

Inter-Continental Cigar

0.0%

Inter-Continental Cigar

7.2%

Prime Time International

-0.1%

Prime Time International

-3.8%

All Other

-0.2%

All Other

0.4%

Cigar Share by Region

Cigar Share by Brand

Following last year’s trend, the Southeast holds the largest share of cigars (31% in dollars and 37% in units) among the five major regions of the U.S. The West, on the other hand, has the lowest share (14% of the dollar share and 15% of the unit share).

The top 10 cigar brands hold 90.4% of the segment’s market share. White Owl, Dutch Masters, Optimo and PomPom are seeing increases, while Jackpot decreased during the last 52 weeks.

Midwest

Northeast

Southeast

DOLLAR SHARE

14% 17%

15%

19%

s UP

t DOWN

— FLAT

West SHARE OF BRAND MANUFACTURER RANK TREND SEGMENT

UNIT SHARE

19% 31%

Southwest

16%

16% 37%

Black & Mild Swisher Sweets Backwoods Game White Owl Dutch Masters Optimo Cheyenne Pom Pom Jackpot

Altria Group Swisher International ITG Brands LLC Swedish Match Swedish Match ITG Brands LLC Swisher International Cheyenne International Swisher International Swedish Match

1 2 3 4 5 6 7 8 9 10

— 31.3% — 23.2% — 11.6% — 9.1% s 5.5% s 4.5% s 1.5% — 1.3% s 1.2% t 1.2%

Source: Management Science Associates, C-Metrics, 52 weeks ending 6/15/2019 C-Metrics is a projected convenience channel database for warehouse-delivered products

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Guide to Tobacco

VAPING

CATEGORY INSIGHTS: Vaping The vaping category is showing impressive growth, with dollar sales increasing nearly 300% to $1.87 billion in the 52 weeks ended June 15, 2019. Juul currently dominates the vaping market, with its dollar sales alone increasing 360.2% over the same timeframe.

DOLLARS

% CHANGE

Total Vaping

$1,878,732,917.31

299.5%

100.0%

Juul Labs Inc.

$1,556,683,203.49

360.2%

82.9%

Reynolds American Inc.

$151,526,210.13

103.1%

8.1%

Fontem US Inc.

$83,628,412.20

383.9%

4.5%

Eonsmoke LLC

$23,260,395.38

1,762.1%

1.2%

Japan Tobacco International

$15,050,004.16

11.6%

0.8%

Sottera Inc.

$14,352,842.63

50,459.4%

0.8%

EAS

$10,876,180.76 102.0% 0.6%

All Other

$23,355,668.04

16.9%

1.2%

Vaping Dollar & Market Share vs. Year Ago All of the major manufacturers in the vaping category, with the exception of Japan Tobacco International, generated more than a 100% increase in dollar sales year over year. Sottera Inc. showed an exponential increase, with a dollar jump of more than 500 times. This increase enabled Sottera to become the sixth-largest vaping manufacturer. MARKET SHARE VS. YEAR AGO

DOLLAR SHARE VS. YEAR AGO

Total Vaping 299.50%

Juul Labs Inc.

Juul Labs Inc. 360.2% Reynolds American Inc. 103.1% Fontem US Inc. 383.9% Eonsmoke LLC 1762.1% Japan Tobacco International 11.6% Sottera Inc. 50000%+ EAS 102.0% All Other 16.9%

Reynolds American Inc. Fontem US Inc. Eonsmoke LLC Japan Tobacco International

10.9% -7.8% 0.8% 1.0% -2.1%

Sottera Inc.

0.8%

EAS

-0.6%

All Other

-3.0%

Vaping Share by Region

Vaping Share by Brand

Vaping shows significant differences among the nation’s regions. The Northeast and Southeast account for higher shares, while the Midwest and Southwest both have shares less than 20%.

Juul dominates the market and captured nearly 83% market share in the latest 52 weeks. Continuing last year’s trend, Logic showed a downtrend in the past 52 weeks. Vuse, although it remains in the No. 2 position, lost 6.2% market share during the period.

Midwest

Northeast

Southeast

Southwest

DOLLAR SHARE

21%

West

19%

16%

10%

28% 25%

— FLAT

Juul Juul Labs Inc. Vuse Reynolds American Inc. blu Fontem US Inc. Eonsmoke Eonsmoke Logic Japan Tobacco International

1 2 3 4 5

— 82.9% — 8.1% — 4.5% s 1.1% t 0.8%

29% 26%

Source: Management Science Associates, C-Metrics, 52 weeks ending 6/15/2019 C-Metrics is a projected convenience channel database for warehouse-delivered products

24 Guide to Tobacco C S N E W S . c o m

t DOWN

SHARE BRAND MANUFACTURER RANK TREND SEGMENT

UNIT SHARE

16%

s UP

The vaping category is showing impressive growth, increasing nearly 300% in dollar sales.

E-CIGARETTES

CATEGORY INSIGHTS: E-Cigarettes E-cigarette dollar sales showed more than 30% growth last year, but slowed dramatically to only 1.3% growth in the 52 weeks ended June 15, 2019. Reynolds American Inc., with its Vuse brand, and Fontem US Inc., with its blu brand, captured more than 85% of the sales in those 52 weeks.

DOLLARS

Total E-Cigarettes

% CHANGE

$593,055,637.54

Reynolds American Inc.

1.3%

$396,958,362.79

Fontem US Inc.

14.1%

66.9%

$110,429,120.80

2.4%

18.6%

$44,309,162.18

-50.3%

7.5%

$24,244,866.75

5.1%

4.1%

Altria Group Japan Tobacco International

100.0%

National Tobacco Co.

$5,553,463.44

-35.0%

0.9%

All Other

$11,560,661.58

-67.0%

1.9%

E-Cigarette Dollar & Market Share vs. Year Ago Reynolds American continues to shine, capturing another 10% in market share vs. a year ago. E-cigarette dollar share numbers pretty much mirror the dollar share stats in the segment and show that e-cigarettes’ comeback in the convenience channel may only have been a short-lived dream. DOLLAR SHARE VS. YEAR AGO

MARKET SHARE VS. YEAR AGO

1.3%

Total E-Cigarettes

14.1%

Reynolds American Inc.

2.4%

Fontem US Inc.

-50.3%

Altria Group

5.1%

Japan Tobacco International National Tobacco Co.

-35.0%

All Other

-67.0%

10.0%

Reynolds American Inc.

0.8%

Fontem US Inc. Altria Group

-7.8%

Japan Tobacco International

0.4%

National Tobacco Co.

-0.5%

All Other

-3.8%

E-Cigarette Share by Region

E-Cigarette Share by Brand

The Northeast, West, Midwest and Southeast are all pretty evenly divided in share of the e-cigarette category. The Southwest continues to lag behind the other regions. However, it did grow 3% in dollar share compared to a year ago.

The top two brand families — Vuse and blu — continue to hold a tight grip on top. MarkTen, while placing third in the top 10, lost 6.6% of its segment share in the past year. The rest of the brands stayed consistent with only tenths of a percent growth.

Midwest

Northeast

Southeast

Southwest

DOLLAR SHARE

West

s UP

UNIT SHARE

t DOWN

— FLAT

SHARE OF BRAND MANUFACTURER RANK TREND SEGMENT

23%

20%

23%

12%

21% 21%

23% 22%

Vuse Reynolds American Inc. 1 — 66.9% blu Fontem US Inc. 2 — 18.6% MarkTen Nu Mark LLC 3 — 7.5% Logic Japan Tobacco International 4 — 4.1% V2 National Tobacco Co. 5 — 0.8% NJOY Sottera Inc. 6 — 0.8% Leap Swisher International 7 s 0.4%

Source: Management Science Associates, C-Metrics, 52 weeks ending 6/15/2019 C-Metrics is a projected convenience channel database for warehouse-delivered products

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Guide to Tobacco

PAPERS

CATEGORY INSIGHTS: Papers Papers showed a slight decrease in dollars (1.2%) during the 52 weeks ended June 15, 2019. The major manufacturers in this category are National Tobacco Co. and Republic Tobacco, which account for 42.1% share and 41.1% share, respectively.

DOLLARS

Total Papers

% CHANGE

$202,078,385.68

-1.2%

100.0%

National Tobacco Co.

$85,077,698.24

-2.3%

42.1%

Republic Tobacco

$82,984,668.70

-3.4%

41.1%

$7,715,767.10

4.6%

3.8%

HBI International

$5,886,449.42

29.8%

2.9%

Rouseco Inc.

$5,068,682.80

7.9%

2.5%

Great Midwest Tube

$3,476,655.29

8.9%

1.7%

All Other

$11,868,464.13

0.0%

5.9%

New Image Global Inc.

Paper Dollar & Market Share vs. Year Ago It’s surprising that among the six major manufacturers in the papers segment, only the top two show decreases in dollar sales. Still, no other manufacturers challenge their position in market share. MARKET SHARE VS. YEAR AGO

DOLLAR SHARE VS. YEAR AGO

Total Papers

-1.2%

National Tobacco Co.

-0.4%

National Tobacco Co.

-2.3%

Republic Tobacco

-0.9%

Republic Tobacco

-3.4%

New Image Global Inc.

New Image Global Inc. HBI International

4.6% 29.8%

0.7%

Rouseco Inc.

0.2% 0.2%

Rouseco Inc.

7.9%

Great Midwest Tube

8.9%

All Other

0.2%

HBI International

0.1%

0.0%

Paper Share by Region

Paper Share by Brand

Following the trend of pipe/cigarette tobacco, share of the papers segment also shows significant differences among the various regions of the U.S. Papers are popular in the east, especially the Northeast, and have the least popularity in the Southwest.

The top 10 brands in the papers category capture nearly 90% share of the dollar sales. Most brands remained unchanged in ranking over the past year except Royal Blunts and Premier.

Midwest

Northeast

Southeast

Southwest

s UP

t DOWN

— FLAT

West SHARE OF BRAND MANUFACTURER RANK TREND SEGMENT

DOLLAR SHARE

14%

15%

20%

25%

UNIT SHARE

17%

10% 31%

27% 31%

Source: Management Science Associates, C-Metrics, 52 weeks ending 6/15/2019 C-Metrics is a projected convenience channel database for warehouse-delivered products

26 Guide to Tobacco C S N E W S . c o m

Zig-Zag Job Gambler Top Royal Blunts Premier Golden Harvest Hot Rod Zen Bugler

National Tobacco Co. Republic Tobacco Republic Tobacco Republic Tobacco Royal Blunts Inc. Republic Tobacco Rouseco Inc. Great Midwest Tube HBI International Scandinavian

1 2 3 4 5 6 7 8 9 10

— 42.1% — 15.3% — 13.6% — 5.3% s 3.2% t 2.5% — 2.5% — 1.7% — 1.6% — 1.3%

PIPE & CIGARETTE TOBACCO

CATEGORY INSIGHTS: Pipe/Cigarette Tobacco Dollar sales in the pipe/cigarette tobacco segment took a slight decline in the 52 weeks ended June 15, 2019, showing a negative growth rate of 2.5%. The greatest losses came from Scandinavian Tobacco Group, declining 12.1%, and Xcaliber International, declining 7.2%.

% CHANGE

Total Pipe/Cigarette Tobacco

$197,611,540.43

DOLLARS

-2.5%

100.0%

Republic Tobacco Scandinavian Tobacco Group RSB Tobacco Reynolds American Inc. SX Brands Rouseco Inc. Inter Continental Trading USA Inc. Xcaliber International LTD Farmers Tobacco Co. All Other

$62,387,546.45 $26,846,573.32 $26,559,448.46 $21,627,063.45 $14,241,698.46 $9,103,297.60 $7,273,408.77 $4,018,936.04 $3,872,380.70 $21,681,187.18

-1.2% -12.1% 4.9% -5.7% 3.6% 2.0% 11.2% -7.2% 0.0% -34.3%

31.6% 13.6% 13.4% 10.9% 7.2% 4.6% 3.7% 2.0% 2.0% 11.0%

Pipe/Cigarette Tobacco Dollar & Market Share vs. Year Ago The top four pipe/cigarette tobacco manufacturers capture almost 70% of the dollar sales in this segment. While most show declining growth, RSB Tobacco grew sales around 5% for the second consecutive year. Meanwhile, market share among the top companies either declined or saw limited growth. DOLLAR SHARE VS. YEAR AGO

MARKET SHARE VS. YEAR AGO

-2.5% -1.2% -12.1% 4.9% -5.7% 3.6% 2.0% 11.2% -7.2% 0.0% -34.3%

Total Pipe/Cigarette Tobacco Republic Tobacco Scandinavian Tobacco Group RSB Tobacco Reynolds American Inc. SX Brands Rouseco Inc. Inter Continental Trading USA Inc. Xcaliber International LTD Farmers Tobacco Co. All Other

0.4%

Republic Tobacco

-1.5%

Scandinavian Tobacco Group

1.0%

RSB Tobacco

-0.4%

Reynolds American Inc.

0.4%

SX Brands

0.2%

Rouseco Inc.

0.5%

Inter Continental Trading USA Inc. Xcaliber International LTD

-0.1%

Farmers Tobacco Co.

0.1%

Pipe/Cigarette Tobacco Share by Region Pipe/Cigarette Tobacco Share by Brand It is clear from the regional charts that pipe/cigarette tobacco is most popular in the Northeast and Midwest. Together, these two regions account for more than 60% of the segment’s total dollar sales share and unit volume share. Midwest

Northeast

Southeast

Southwest

DOLLAR SHARE

18%

UNIT SHARE

21%

25%

West

24%

11%

12% 40%

38%

Source: Management Science Associates, C-Metrics, 52 weeks ending 6/15/2019 C-Metrics is a projected convenience channel database for warehouse-delivered products

The top 10 brand families capture about 72% of total pipe/ cigarette tobacco dollar sales. Republic Tobacco owns the most brands in the top 10, capturing four of the spots. The top 10 brands stayed relatively the same over the past year with one exception: the 4 Aces brand broke into the top 10. s UP

t DOWN

— FLAT

SHARE OF BRAND MANUFACTURER RANK TREND SEGMENT

Good Stuff RSB Tobacco Gambler Republic Tobacco Natural AM Spirits Sante Fe Tobacco Bugler Scandinavian Tobacco Group Criss-Cross SX Brands Largo Republic Tobacco Golden Harvest Rouseco Inc. Ohm Inter Continental Trading USA Inc. Top Republic Tobacco 4 Aces Republic Tobacco AUG

20 1 9

1 2 3

— 13.44% — 12.74% — 10.94%

4 5 6 7

s 10.88% t 6.26% s 6.08% s 3.82%

8 9 10

— 2.99% t 2.78% s 2.07%

Guide to Tobacco

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