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VIEWPOINT By Don Longo, Editorial Director
Moran Brought Passion for People to the Forefront Retailer Executive of the Year will be honored at our Hall of Fame gala in November
I
n her first interview after it was announced she would become RaceTrac Petroleum’s new CEO in December 2012, Allison Moran told Convenience Store News, “I’ve often said that I’ve worked for the company for 18 years (now 23 years), but I’ve been with RaceTrac my entire life.” Moran sat down with me that day at the company’s Store Support Center in Atlanta for an interview about RaceTrac’s recognition as CSNews’ 2012 Retailer Innovator of the Year. RaceTrac was honored for the innovation and operational success of its then-new RT6K prototype store, which became the key to the company’s future growth. In her typical modest fashion, she deflected credit to the entire company. “Everyone throughout the company contributed to the ideas that went into the new RaceTrac prototype,” she said, before For comments, please contact Don Longo, Editorial Director, taking me on a personal tour of at (201) 855-7606 or one of the newest stores. dlongo@ensembleiq.com. Earlier this year, Moran was selected by a blue-chip panel of her industry peers as the 2017 Retailer Executive of the Year (see our cover story on page 36). The award, now in its fourth year, recognizes a retailer executive who exemplifies leadership, business acumen, industry dedication, and com-
mitment to community service. Moran’s passion for the convenience store business started when she first joined her family’s company after moving back to Atlanta with her husband, Crawford. Her father, Carl Bolch Jr., who is still RaceTrac’s chairman, approached her with an offer to work on the creation of a store manager training program. “Let’s say the passion stuck, and there was no turning back,” she said. Moran, who stepped down from her CEO role on July 24, remains on the retailer’s board of directors. She will accept her Retailer Executive of the Year award at this year’s CSNews Hall of Fame ceremonies in Dallas. 7-Eleven CEO Joseph DePinto and Altria Group Distribution Co. Director of Trade and State Relations Blake Benefiel will be inducted into the CSNews Hall of Fame in the retailer and supplier categories, respectively. The Hall of Fame dinner on Nov. 2 is expected to draw more than 100 retailers and suppliers, with senior leaders from 7-Eleven, RaceTrac, Altria, and many other retailer and supplier firms in attendance, including several past Hall of Fame inductees. Throughout her career, Moran has brought her passion for people to the forefront, helping RaceTrac become one of the industry’s best-in-class retailers. I can’t think of a more honorable or deserving person to recognize as this year’s Retailer Executive of the Year.
EDITORIAL EXCELLENCE AWARDS (2013-2017) 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 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
EDITORIAL ADVISORY BOARD
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
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 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
4 Convenience Store News | SEPTEMBER 2017 | WWW.CSNEWS.COM
Brett Atherton Bolla Management Jon Bratta Core-Mark International Inc. Rick Crawford Green Valley Grocery Edward Davidson ER Davidson & Associates (7-Eleven Inc., retired) Jim Hachtel Eby-Brown Co. Ray Johnson Speedee Mart
Jack Lewis GPM Midwest
Kirk Leff McLane Co. Inc.
Roy Strasburger Convenience Management Services Inc.
Danielle Mattiussi Maverik Inc. Kyle McKeen Alon Brands Inc. Richard Mione GPM Southeast Jonathan Polonsky Plaid Pantries Inc. Greg Scriver Kwik Trip Inc.
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CONTENTS
SEPTEMBER 2017
VOLUME 53/NUMBER 9
36 COVER STORY
DEPARTMENTS
Leaving a Rich Legacy Former RaceTrac CEO and Retailer Executive of the Year Allison Moran takes pride in many milestone achievements.
VIEWPOINT
4 | Moran Brought Passion for People to the Forefront Retailer Executive of the Year will be honored at our Hall of Fame gala in November. 10 | CSNews Online 24 | New Products SMALL OPERATOR
28 | Operation: Convenience Store Turnaround Roy Strasburger and his team transform once-failing small operators into success stories. SMALL OPERATOR
32 | Are You Evolving? Category management and the convenience channel are. How about you? EXPERT’S VIEW
78 | The ‘Sandwich Generation’ Is in a Pickle More women than ever are juggling caregiving and career. STORE SPOTLIGHT
INDUSTRY ROUNDUP 12 | Two C-store Mainstays Say Goodbye
20 | FDA Charts New Roadmap for Tobacco Regulation
14 | Retailer Tidbits
20 | Fast Facts
16 | Supplier Tidbits
22 | Seen on Social Media
18 | Legislative Corner
22 | Eye on Growth
82 | Breaking the Mold MFA Oil’s new c-store prototype is all about the customer experience. GETTING TO THE CORE
98 | Cutting Back Consumption Health concerns have c-store shoppers evolving their beverage choices.
Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by EnsembleIQ, 570 Lake Cook Rd. Deerfield, IL 60015. Copyright © 2017 by EnsembleIQ. All rights reserved. Subscriptions: One year, $93; two years, $152. One year, Canada, $110; two years, Canada, $175. One year, foreign, $150. Payable in advance with a bank draft drawn on a U.S. bank in U.S. funds. Single copies, $10, except foreign, where postage will be added. Printed in U.S.A. Periodicals postage paid at Deerfield, IL, and at additional mailing offices. POSTMASTER: Send address changes to Convenience Store News, P.O. Box 1842, Lowell, MA 01853.
6 Convenience Store News | SEPTEMBER 2017 | WWW.CSNEWS.COM
CONTENTS
570 Lake Cook Road, Ste. 310, Deerfield, IL. 60015 (224) 632-8200 Fax: (224) 632-8266 www.csnews.com Direct Mailing Address for Convenience Store News: 111 Town Square Place, Suite 400, Jersey City, N.J. 07310
BRAND MANAGEMENT Group Brand Director (330) 840-9557
FEATURES TECHNOLOGY
70 | Mobile Payments’ Time Has Come Leveraging the cloud and mobile apps, c-store retailers can offer mobile payment options faster and easier than ever before as consumer adoption grows. NACS SHOW PREVIEW
74 | Finding the Future of the Industry The 2017 NACS Show aims to help attendees put their finger on the pulse of what’s happening in convenience and fuels.
CATEGORY MANAGEMENT FOODSERVICE
42 | Technology Is No Longer a Nice to Have, It’s a Need to Have It must be part of the shopping experience for c-stores to remain relevant. FOODSERVICE
46 | Bringing a Chef’s Perspective Foodservice Leader of the Year Ryan Krebs has used his experience as an executive chef to transform Rutter’s foodservice operations into restaurant quality. COLD VAULT
50 | Best-in-Class Beverages Beverage Leader of the Year RaceTrac has multiple strategies for success in the packaged and dispensed beverage categories. TOBACCO
54 | Butt Out! The country’s first menthol ban faces grassroots opposition. CANDY & SNACKS
58 | Not Your Father’s Jerky Innovative flavors and an expanded customer base have meat snacks evolving. MOTOR FUELS
64 | E15 in Expansion Mode The ethanol blend is expected to be at almost 2,000 locations by 2018.
Ron Lowy rlowy@ensembleiq.com
EDITORIAL Editorial Director (201) 855-7606 Editor-in-Chief (201) 855-7608 Senior News Editor (201) 855-7618 Associate Editor (201) 855-7619 Associate Managing Editor (201) 855-7604 Assistant Editor (201) 855-7614 Contributing Editor (303) 741-3377 Contributing Editor (201) 280-2614
Don Longo dlongo@ensembleiq.com Linda Lisanti llisanti@ensembleiq.com Melissa Kress mkress@ensembleiq.com Angela Hanson ahanson@ensembleiq.com Danielle Romano dromano@ensembleiq.com Chelsea Regan cregan@ensembleiq.com Renée M. Covino reneek@aol.com Tammy Mastroberte tmastroberte@gmail.com
ADVERTISING SALES & BUSINESS Associate Brand Director & Northeast Sales Manager Rachel McGaffigan (508) 385-2524 rmcgaffigan@ensembleiq.com Associate Publisher & Midwest Sales Manager Kelly Fischer (773) 992-4464 kfischer@ensembleiq.com Southeast Regional Sales Manager Erika Cann (330) 357-9207 ecann@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
CUSTOM MEDIA Vice President/Custom Media Division Pierce Hollingsworth (224) 632-8229 phollingsworth@ensembleiq.com General Manager, Custom Media Kathy Colwell (224) 632-8244 kcolwell@ensembleiq.com
MARKETING Strategic Marketing Director (224) 632-8214
Bruce Hendrickson bhendrickson@ensembleiq.com
AUDIENCE DEVELOPMENT Director of Audience Development Gail Reboletti (224) 632-8214 greboletti@ensembleiq.com Audience Development Manager Shelly Patton (646) 217-1045 spatton@ensembleiq.com List Rental The Information Refinery (800) 529-9020 Brian Clotworthy Subscriber Services/Single-Copy Purchases (978) 671-0449 EnsembleIQ@e-circ.net
ART/PRODUCTION Director of Production (973) 358-4875 Advertising/Production Manager (314) 403-4753 Art Director (224) 632-8245
Kathryn Homenick khomenick@ensembleiq.com Roz Gilman rgilman@ensembleiq.com Michael Escobedo mescobedo@ensembleiq.com
CORPORATE OFFICERS Executive Chairman Alan Glass Chief Operating Officer Rich Rivera Chief Financial Officer Len Farrell Chief Business Development Officer & President, EnsembleIQ Canada Korry Stagnito Chief Customer Officer/President of Enterprise Solutions Ned Bardic Chief Digital Officer Joel Hughes Chief Human Resources Officer Greg Flores Chief Brand Officer Jeff Greisch
CONVENIENCE STORE NEWS AFFILIATIONS
Premier Trade Press Exhibitor 8 Convenience Store News | SEPTEMBER 2017 | WWW.CSNEWS.COM
Reprints, permissions and licensing, please contact Wright’s Media at ensembleiq@wrightsmedia.com or (877) 652-5295.
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CSNEWS.COM TOP 5 Daily News Headlines
ONLINE EXCLUSIVE
The most viewed articles online.
1 | 7-Eleven Helps Prepare Customers for Great Eclipse 7-Eleven stores offered special, safe sunglasses that shoppers could use to view the “Great American Eclipse” that crossed the United States on Aug. 21. Available as a single pair or in packs of two, the “Explore Scientific Sun Catcher” solar eclipse glasses are approved for viewing by the American Astronomical Society. 2 | Oregon Gas Stations See Traffic Increase as Eclipse Nears Central Oregon gas stations saw long lines and some shortages in advance of the solar eclipse that passed over the region. Many drivers prepared for the event by filling up their gas tanks, and suppliers worked to try and keep gas stations adequately supplied. 3 | Missouri Gas Stations Prepare for Eclipse Traffic Gas stations are“extraordinarily good at making sure supply meets demand, so even if demand temporarily spikes, we’re very confident that there will be plenty of supply to meet that demand,” Ronald Leone, executive director of the Missouri Petroleum Marketers and Convenience Store Association, assured in the days leading up to the eclipse. 4 | Royal Farms Begins Recruiting for First N.J. Stores The company listed 10 open positions for one of the first five stores it will open in New Jersey. Royal Farms is looking to fill positions including shift leader, fuel attendant, beverage host, foodservice leader, and customer service associate. 5 | Turkey Hill Kicks Off 50th Birthday Celebration To commemorate a half century, Turkey Hill is rolling out a sweepstakes and slew of deals from Aug. 10 through Oct. 4. During that time, members of Turkey Hill’s rewards program will be automatically entered for a chance to win a 2017 Jeep Wrangler Unlimited Sahara 4x4, among other weekly prizes.
BP Turns to Text to Increase Customer Loyalty BP is on a mission to understand its customers’ taste for technology. As part of this mission, the fuels company has rolled out a texting-based pilot program called BP Offers. Launched at the start of August, BP Offers easily enables BP customers to join by simply texting “MOBILE” to 38831. Once BP Offers members, they start receiving personalized messages, interactive games, and discount codes directly to their phone. For more exclusive stories, visit the Special Features section of www.csnews.com.
PRODUCT HIGHLIGHT
The most viewed New Product online.
Mrs. Freshley’s Brownie With Oreo Cookie Pieces Mrs. Freshley’s and Oreo collaborated to create the Mrs. Freshley’s Brownie Made With Oreo Cookie Pieces. Available at convenience stores nationwide, the new snack layers Mrs. Freshley’s fudge brownie with classic Oreo cookie pieces. The new product comes in an individual 3-ounce pack, with 48 packs per case. The suggested retail price for the Mrs. Freshley’s Brownie Made With Oreo Cookie Pieces is $1.25 to $1.79. Flower Foods Thomasville, Ga. (866) 245-8921 www.flowersfoods.com
PHOTO GALLERY
MAVERIK CELEBRATES OPENING OF 300TH STORE Maverik Inc. achieved its long-pursued goal of operating 300 convenience stores with the opening of the milestone location in Spokane, Wash., on July 27. At just shy of 5,000 square feet, the 300th store — one of the company’s current prototype stores — fulfills an ambition that has been decades in the making, according to Maverik Chairman of the Board and Chief Pathfinder Tom Welch. “It’s been 20 years,” Welch told Convenience Store News. “Our long-term goal was Maverik No. 300.” 10 Convenience Store News | SEPTEMBER 2017 | WWW.CSNEWS.COM
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INDUSTRYROUNDUP
Two C-store Mainstays Say Goodbye PDQ Food Stores and Flyers Energy exit the store-ops side of the business
T
his summer saw two long-time channel players, PDQ Food Stores and Flyers Energy, bid adieu to the store-operations side of the convenience retailing industry. Kwik Trip Inc. reached a deal to acquire fellow Wisconsin retailer, PDQ Food Stores. Based in Middleton, PDQ is an employee-owned company with 34 company-operated convenience stores in southern Wisconsin. The sale signals its exit from the business after six decades. “This acquisition allows Kwik Trip to expand its presence in a market that is important to its overall retail growth strategy,” the La Crosse-based buyer said. “The PDQ management and employees have built an excellent brand over their 65 years in business and are well known for their excellent customer service and convenience.” The transaction is expected to close in early October, subject to approval by PDQ employees and other customary closing conditions. Starting the week of Oct. 9, PDQ stores will close for 24 hours. This time will be used to do an inventory count and move in the appropriate Kwik Trip equipment, supplies and merchandise. Kwik Trip will invest $30 million to $40 million in the PDQ stores to bring them up to the chain’s standards. The company plans to operate the acquired stores under the existing PDQ banner until planned remodels and reimaging are completed in mid-2018. The retailer also intends to bring PDQ employees into the Kwik Trip family. “It is Kwik Trip’s desire to hire any qualified PDQ coworker, both full-time and part-time. Because each store will require more coworkers than are currently employed, it will be necessary to hire new coworkers
12 Convenience Store News | SEPTEMBER 2017 | WWW.CSNEWS.COM
as well,” said John McHugh, director of public relations for Kwik Trip. Like PDQ, Auburn, Calif.-based Flyers Energy waved goodbye to the retail side of the convenience channel — for now — in late July with the sale of its 39 c-store and gas station sites to San Antonio-based Andeavor Corp., formerly known as Tesoro Corp. Andeavor will rebrand some of the locations to Mobil, Exxon, ARCO and Shell. The agreement allows the buyer up to 12 months to rename the newly acquired stations. All of the sites, with the exception of two, will remain on the Flyers Energy-owned commercial fueling network. “Refiners are looking for strategies to distribute their products, so the business climate was right for us to sell our retail stores,” Flyers Managing Partner Walt Dwelle said. “We continue to grow in commercial products, including renewable energy, and are still acquiring other companies when the deal is right.” Future acquisitions may include companies with retail stores, Dwelle said.
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INDUSTRYROUNDUP
retailer tidbits n Sheetz Inc. is partnering with
GED Testing Service to launch the GEDWorks program at the retailer’s corporate and store locations.
GEDWorks is a comprehensive program that’s free for employees who want to earn their general education diploma credential.
n Rutter’s Farm
Stores is doubling the size of its headquarThis move marks ters to 23,000 the third expansion of Rutter’s campus square feet. The this decade. $2-million-plus expansion is expected to be completed in February 2018. n Speedway LLC held open inter-
views on July 25 for more than 2,000 positions in nine states. Available roles include leadership positions, like shift leader trainees and co-manager trainees. n Cumberland Farms customers
have saved a total of $75 million through its SmartPay program since it launched in January 2013. Available as both a payment card and a mobile payment app, SmartPay Check-Link users save 10 cents on every gallon of gas. n TravelCenters of America LLC
launched a blog called “Back on the Road,” which shares truck maintenance tips, and news and information from the travel center operator. n 7-Eleven Inc. will provide sur-
charge-free ATM access at more than 8,000 U.S. locations through a multiyear agreement with MoneyPass and FCTI Inc. The rollout began in August and will continue through the second quarter of 2018. n Love’s Travel Stops & Country
Stores renewed its 21-year relationship with distributor McLane Co. Inc. Through the partnership, McLane will support the growth of Love’s as it adds approximately 40 to 50 stores per year.
14 Convenience Store News | SEPTEMBER 2017 | WWW.CSNEWS.COM
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INDUSTRYROUNDUP
supplier tidbits n British American Tobacco plc (BAT) closed on its
$49-billion acquisition of Reynolds American Inc. (RAI). BAT previously owned 57.8 percent of RAI, which is now an indirect wholly owned subsidiary of BAT. n Anheuser-Busch acquired Hiball, maker of Hiball
organic energy drinks and sparkling energy waters, as well as the Alta Palla brand of organic sparkling juices and sparkling water. This move deepens A-B’s investment in the nonalcoholic beverage sector. n Mars Inc. entered into a mul-
tiyear marketing partnership with the Washington Nationals baseball team. The pact includes a Skittles-branded “Taste the Rainbow” tarp along the team field’s third-base line, as well as M&M’S signage. n Convenience distributor Core-Mark Holding Co. Inc.
16 Convenience Store News | SEPTEMBER 2017 | WWW.CSNEWS.COM
introduced an upscale line of premium coffees. Called Arcadia Bay Street Coffees, the turnkey program was developed through a strategic alignment with Boyd Coffee Co. n Corona Extra partnered with Texas
Athletics to become the official sponsor of the University of Texas Longhorns. The brand’s “Horns Up, Limes In!” program will include access to Corona also can use university the university’s football, bastrademarks in certain point-of-sale, ketball and baseball programs. social and digital materials. n Hunt Brothers Pizza paid tribute to its first year in
NASCAR with a throwback paint scheme on the No. 41 Ford Mustang that Kevin Harvick drove in the Sport Clips Haircuts VFW 200 NASCAR XFINITY Series. The car sported red and white ribbon accents mirroring the brand’s former pizza shoppe design.
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INDUSTRYROUNDUP
legislative corner lations do not provide the necessary flexibility to work for many different formats.
n Three states approved legislation to raise
the legal age to buy tobacco products to 21. The T21 measures in New Jersey, Oregon and Maine will go into effect in 2018.
n The U.S. Department of Labor
(DOL) seeks the public’s input on its new overtime rule. In particular, the DOL wants feedback on questions related to the salary level test.
n A bipartisan group of U.S. senators introduced the
Healthy Food Access for All Americans (HFAAA) Act. HFAAA would create a system of tax credits and grants for businesses and nonprofits serving low-income and low-access urban and rural areas.
n A federal appeals court ruled that the Environmental
n NACS, the Association for
Convenience & Fuel Retailing, and the Society of Independent Gasoline Marketers of America (SIGMA) filed comments on menu labeling with the Food and Drug Administration. They contend the regu-
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The 60-day public comment period opened July 26.
Protection Agency fundamentally misinterpreted its authority under the national renewable fuel mandate by reducing the amount of ethanol allowed to be blended in the nation’s fuel supply. The court only ruled on the issue of the EPA’s use of its waiver authority; it dismissed other arguments from both sides.
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INDUSTRYROUNDUP FAST FACTS Nearly threequarters of respondents in a recent survey said they stop at gas stations and convenience stores for something other than fuel. Source: GasBuddy & Cuebiq Foot Traffic Report
Nearly 70 percent of retailers are optimistic about iQOS as the next growth catalyst for the tobacco industry and plan to carry it in their stores once commercialized in the United States. Source: Wells Fargo Securities LLC’s Tobacco Talk
On a national level, 32 percent of U.S. homes buy on-thego produce snacks and they do so an average of 3.1 times per year. Source: The Nielsen Co.
E-commerce is making its mark, with its share of CPG sales hovering in the single-digit range, around 8 percent. Source: IRI Channel Performance Report
FDA Charts New Roadmap for Tobacco Regulation Applications for newly deemed products get extension as focus shifts to nicotine and addiction
E
ight years after gaining regulatory authority over tobacco products, the Food and Drug Administration (FDA) unveiled a new comprehensive plan for tobacco and nicotine regulation. The plan “will serve as a multi-year roadmap to better protect kids and significantly reduce tobacco-related disease and death,” the agency said. The new approach places nicotine — and the issue of addiction — at the center of the FDA’s efforts. The goal, according to the agency, “is to ensure that the FDA has the proper scientific and regulatory foundation to efficiently and effectively implement the Family Smoking Prevention and Tobacco Control Act.” “The overwhelming amount of death and disease attributable to tobacco is caused by addiction to cigarettes — the only legal consumer product that, when used as intended, will kill half of all long-term users,” said FDA Commissioner Scott Gottlieb. With this shifting of its efforts, the FDA is also providing targeted relief in regards to some of the timelines described in its May 2016 final deeming rule, which extended the FDA’s authority to additional tobacco products. The relief is “to
make certain that the FDA is striking an appropriate balance between regulation and encouraging development of innovative tobacco products that may be less dangerous than cigarettes,” the agency explained, noting that it will seek input on critical public health issues, such as the role of flavors in tobacco products. Under the revised timelines, applications for newly regulated combustible products, such as cigars, pipe tobacco and hookah tobacco, will need to be submitted by Aug. 8, 2021, and applications for non-combustible products such as ENDS or e-cigarettes by Aug. 8, 2022. The FDA expects that manufacturers will continue to market products while the agency reviews their product applications. “Without Gottlieb’s leadership, over 99 percent of vapor products on the market today would have been banned in 15 months’ time,” said Greg Conley, president of the American Vaping Association. “This is, by no means, a perfect fix. The FDA’s deeming rule still bans any innovation in the market and, without major changes to the agency’s premarket review process, could still result in the vast majority of the market being banned in 2022.”
Correction In our August issue cover story, “Wonder Women,” Elise Goria’s profile should have identified Circle K’s beverage program as Polar Pop, not Fuller Pop. Leslie Saitta’s profile should have stated she previously worked at Superamerica Group and Speedway Superamerica LLC, not Speedway LLC. Megan Baccam’s title should have been Director, Hot Dispensed Beverages, U.S., Circle K Stores Inc. Jennifer Megison’s title should have been Senior Category Management Analyst, S&D Coffee and Tea, and her bio should have stated she’s worked for S&D Coffee and Tea for four years and been in the convenience channel for 25 years.
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INDUSTRYROUNDUP SEEN on SOCIAL MEDIA Cumberland Farms, Westborough, Mass.
Calling all #Massachusetts and #RhodeIsland residents! Stop by and purchase an iced coffee or Chill Zone drink to support @ TuftsMedicalCtr. NOCO Express, Tonawanda, N.Y.
Join us this Friday for our Pump It Up! event to raise money for @ WCNYLLS.
eye on growth n Western Alta
Holdings LP Co. acquired the operations of five convenience stores in a joint venture with R.H. Smith Distributing Co. Inc. The Washington stores will continue to This joint venture brings Western carry the Smitty’s Alta Holdings’ name, but be manretail division to aged by Pester the West Coast for the first time. Marketing/Alta Convenience Stores.
n GPM Investments LLC added seven
convenience stores from Jiffy Stop Food Mart to its growing Midwest portfolio. The sale marks the industry exit of Jiffy Stop President Wayne Compton, a 30-year convenience channel veteran. n Wawa Inc. opened its first stores
in Broward County, Fla., with a double-header grand opening July 27. The Pompano Beach locations are Wawa’s southernmost locations to date.
n CrossAmerica Partners LP is buy-
ing 102 commission-operated retail sites from Jet Pep for $72 million. These locations sold nearly 91 million gallons of unbranded fuel in 2016.
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n Hy-Vee Inc. is planning to open
a super-sized convenience store in Lakeville, Minn. The store will measure 8,800 square feet and sit on two lots.
464
NEWPRODUCTS Oh Snap! Dilly Bites
SToK Single-Serve Cold Brew Coffee
Oh Snap! Dilly Bites are a new graband-go healthy snacking option for pickle fans. The fresh-packed, bitesized dill pickle chunks are packaged in a 3.5-ounce, single-serve standup pouch with no added brine. Oh Snap! Dilly Bites are gluten free, fat free and made with non-GMO cucumbers. For merchandising, Dilly Bites are available in freestanding, peg-able or tearaway display case options.
With the popularity of cold brew coffee on the rise comes the release of SToK Single-Serve Cold Brew Coffee. The new product enables retailers to offer the smooth flavor of cold brew without the labor and time required in craft coffee brewing, according to the maker. SToK Single-Serve Cold Brew Coffee comes in 13.7-ounce bottles and is available in Mocha, Vanilla and Not Too Sweet Black varieties. All varieties are made with simple ingredients, such as coffee, reduced-fat milk, and cane sugar.
GLK Foods Appleton, Wis. (855) 572-8800 glkfoods.com
Brakebush Buttermilk Classic Fillet The Buttermilk Classic Fillet from Brakebush Brothers features a chicken breast wrapped in a crispy, southern buttermilk biscuit coating. The fillet is fully cooked with a touch of pepper, and “has more pizzazz than ordinary fillets yet it’s versatile enough to fit any application — all day, all ways,” according to the maker. Samples can be requested at the company’s website. Brakebush Brothers Inc. Westfield, Wis. (800) 933-2121 brakebush.com
WhiteWave Away From Home Broomfield, Colo. (888) 620-9910 whitewavefoodservice.com
Halls Kids Cough & Sore Throat Pops Halls is introducing two new products to its Halls Kids line: Cough and Sore Throat Pops and Vitamin C Pops, both made specifically for children. Halls Kids Cough & Sore Throat Pops, available in cherry and strawberry flavors, contain 5 milligrams of the active ingredient menthol for cough and sore throat relief. Halls Kids Vitamin C Pops provide 100 percent of the daily value of Vitamin C. Both new products come packaged 10 pops per bag. Mondelez International Deerfield, Ill. (855) 535-5648 mondelezinternational.com
Keurig Fall Flavors Keurig is meeting coffee lovers’ demand for seasonal fall flavors, and helping operators leverage the consumer trend, by offering fall favorites in a fractional pack. The pre-measured fractional packs enable operators to offer consistent quality and maximum flavor in their coffee, according to the company. Autumn selections include Green Mountain Coffee Pumpkin Spice, a blend that combines cinnamon and nutmeg with 100 percent Arabica coffee. Keurig Green Mountain Inc. Waterbury, Vt. (866) 901-2739 atwork@keurig.com commercial.keurig.com
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2016 Category Growth Leader*
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Stop by booth 7318 at the NACS Show to see our category leading products *#1 dollar growth in combined non-chocolate, gum, & mint categories IRI MULOC 52 weeks ending 1/22/17
NEWPRODUCTS Mistic E-Cigs New Flavors
New Twix Varieties
Mistic E-Cigs introduced five new flavors for its electronic cigarettes. Available in three-, five- and 10-pack cartridge refills, the new varieties in Mistic’s cig-alike line include: watermelon, cherry, mango, strawberry, and java (coffee). Each flavor cartridge contains premium e-juice with 1.8 percent nicotine by volume, and delivers a rich and satisfying flavor, according to the company.
Mars Chocolate North America’s Twix brand is giving consumers more ways to enjoy the classic sweet treat, including Twix Dark, Twix White, and Twix Peanut Butter. They will all be joining original caramel Twix on store shelves by the end of 2017. Twix Dark features the classic crunchy Twix shortbread cookie covered in golden caramel, enrobed in rich dark chocolate. Twix White, which was previously an exclusive seasonal offering, features two crunchy cookie bars covered with smooth caramel and enrobed in creamy white chocolate. Twix Peanut Butter, a returning fan favorite, is a combination of the crisp, crunchy Twix cookie and a layer of creamy peanut butter topped with milk chocolate.
Mistic E-Cigs Charlotte, N.C. (855) 282-3700 info@misticecigs.com misticecigs.com
Rich’s Sweet Middles Mini Dessert 4-Packs Rich’s Foodservice announced that its Sweet Middles mini desserts are now available in four-count packs. Previously only available in 6-count and 12-count packs, Sweet Middles feature a rich, creamy center sandwiched between two soft mini cookies. Available in Carrot Cake, Chocolate Soufflé and Crème Brulee varieties, they are made with premium ingredients, have no artificial colors or flavors, no high fructose corn syrup, and are free of peanuts and tree nuts. Sweet Middles have a suggested retail price of $2.39 for the 5.2-ounce four-pack clamshell, which come 12 per case. The product arrives frozen, and has a 21-day ambient shelf life. Rich Products Corp. Buffalo, N.Y. (800) 356-7094 richsfoodservice.com
Mars Chocolate North America Hackettstown, N.J. (908) 852-1000 mars.com
M
Sally the Salad Robot Chowbotics, a food robotics company, is aiming to revolutionize foodservice through automation. Founder and CEO Dr. Deepak Sekar developed Sally the Salad Robot to bring fresh, healthy food to places where it is currently inaccessible, including at convenience stores, the company stated. Sally allows the user to create custom salads with up to 21 seasonal ingredients, which are replenished daily, via an easy-to-use touchscreen interface. The robot also features five pre-programmed salads developed by Executive Chef Charlie Ayers and Chef de Cuisine Kelly Olazar. Chowbotics San Jose, Calif. info@chowbotics.com chowbotics.com
Jimmy Dean Fully Cooked Sausage Skillet To help retailers offer more to their customers, Tyson Convenience introduces the Jimmy Dean Fully Cooked Sausage Skillet. “Simply heat up the skillet, place it in a tortilla or other protein carrier, and add some signature sauces or toppings,” according to the company. The Jimmy Dean Fully Cooked Sausage Skillet features a blend of Jimmy Dean breakfast sausage, diced russet potatoes, peppers and onions. Eggs can be added to create breakfast skillets and omelets. Tyson Convenience Springdale, Ark. (800) 248-9766 tysonconvenience.com
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C
Y
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Contact Swedish Match Representative • 800-367-3677 • customerservice@smna.com GAMECIGARS.com
SMALLOPERATOR
Operation: Convenience Store Turnaround Roy Strasburger and his team transform once-failing small operators into success stories By Danielle Romano
L
ow in-store sales, high employee turnover and declining gross profit margins are just a few of the problems Roy Strasburger, president of Convenience Management Services Inc. (CMSI), may encounter when he and his team take over a convenience store and gas station. Temple, Texas-based CMSI’s mission, simply put, is to operate retail locations for those who don’t want to operate them, or don’t have the expertise or infrastructure to operate them properly. However, an operational takeover is never all that simple. In many instances, CMSI encounters small operators
whose businesses are failing in multiple aspects — from meager food quality, to poor customer service, to outdated store aesthetics — and need to be turned around in order to survive and then thrive in today’s competitive retail environment. Strasburger recently sat down with Convenience Store News to talk about one of his success stories: a once-failing Southwest U.S.-based small operator and fuel distributor. (The name of the operator is not being disclosed out of respect for client confidentiality.) Located in a rural area roughly 20 miles from a major city and situated on a major state highway, the 1,500-square-foot site features typical c-store fare; eight fueling stations; and a made-to-order restaurant, whose menu mainly consists of all-day breakfast and grilled items, as well as a pizza program. The store’s core demographics encompass households with $18,000-$35,000 annual incomes, Hispanic consumers, younger families, and commuting workers. When CMSI took over in 2015, this gas station/ convenience store site had been in operation for 10 to 15 years, but was facing a number of challenges, such as declining fuel gallons at the forecourt and low instore sales, particularly at its made-to-order restaurant. Operationally, the store lacked general cleanliness, and had poor customer service, declining gross profit margins, no discipline when it came to efficient pricing, countless out-of-stocks, and low employee retention. THE TAKEOVER BEGINS
Every takeover starts the same way: with a cleanup.
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According to Strasburger, every takeover starts the same way: with a cleanup. The CMSI team removes all products from shelves, which are then sanitized. Next, gondolas are removed and the area under and surrounding them is cleaned. Then, working their way outside, the team clears the premises of any litter, cleans fuel pumps, and pressurewashes the forecourt.
Speaking From Experience… Roy Strasburger, president of Convenience Management Services Inc., has four key pieces of advice for convenience store retailers who are struggling: • Be proactive. “Try and look at your store as if it weren’t your store. Look at it with a fresh set of eyes, especially if you’re constantly at the store,” he advises. “Bring in someone who will look at what needs to be done and do it.” • Understand that out-of-stocks are not a good thing — especially for small operators. “If you don’t have it, you can’t sell it. If something is sold out, yes it’s good [because you made a sale], but it’s not good because the product cannot be sold again until it is back in the store,” according to Strasburger. “Control and invest in backstock, especially for grab-and-go foodservice. This can drive additional sales.” • Employee training is critical. “This doesn’t always apply to small operators, but you can empower employees by letting them know what they’re supposed to do. It makes them happier and ultimately results in a better customer experience,” he said. • It is possible to win customers back into the store. “There’s basic advertising, cleaning the store, and word of mouth. Be careful not to target just Bubba. From a presentation point of view, we don’t think we’re successful until we get a good amount of female customers back in the store,” Strasburger concluded. Out-of-stocks and cleanliness were among the issues addressed.
“Anything that requires elbow grease, we do,” Strasburger explained. At this location in particular, all signage was removed from the windows. The biggest issue CMSI found during the cleanup process was that signage cluttered the windows, making it difficult for customers to see into the store and creating a gloomy atmosphere from the inside out. Once all signage was removed, the team made paint touchups outside the building, and replaced lights both inside and outside the store to create a more comfortable environment, especially for female shoppers. Just from the cleanup alone, CMSI began receiving positive feedback from customers. “The first comment from customers when CMSI took over was how much better the store looked overall and how nice it was to be inside,” Strasburger recalled. To conquer its second-biggest issue — low employee retention — CMSI put the gas station/c-store’s
employees through a relatively extensive training program that covered how to properly operate equipment, cleanliness, customer service, and day-to-day operations. Employees learned that operationally, the store functions at its best when litter is picked up from around the parking lot and fuel court daily, and a constant cleaning rotation inside the store is kept. “We found that the more someone knows about their job, the more comfortable they are and can meet job expectations,” Strasburger commented. “When you have a staff that wants to stay with you, employee retention becomes less of a problem.” From there, employees were taught how to create a system of “build-tos” — what CMSI refers to inventory and stocking as. The system helps track what items are in-store and what items are and aren’t on the shelves so employees know when to contact their distributor, McLane Co., for a reorder. Prior to CMSI’s takeover, this store did not have any inventory system in place.
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SMALLOPERATOR Tying into the implementation of build-tos, CMSI improved the store’s relationship with its direct-storedelivery (DSD) suppliers. Before CMSI, the DSD suppliers would short the store because the relationship was not properly maintained, according to Strasburger. Now, “proactive” talks have led to fully stocked shelves and a proper inventory at all times. With the build-tos in place and the DSD relationships on track, CMSI undertook the store’s margin control problem. Without a scanner, store clerks were guessing prices on most items. “Ninety-percent of the time, this leads to lower prices and ultimately a decline in margin pricing,” Strasburger stressed. CMSI amped up the store’s fuel pricing strategy, too. Although the store’s owner is a fuel jobber and ultimately controls the fuel’s pricing, CMSI now conducts price surveys twice a day, every day, to evaluate the market and what the store’s key competitors are offering. In some instances, the owner will change the price based on the data collected by CMSI. Moving to the store’s foodservice offering — which can be a success for convenience stores if executed properly — the business was struggling here as well. For starters, the menu for the made-to-order restaurant was too broad and included too many items. It deviated from what the store’s core customers wanted and liked. To combat this, CSMI The 1,500-square-foot rural store fulfills reduced the menu by 40 percent many needs. over six months to only include basic items that would resonate with shoppers. Next, foodservice employees went through proper training to obtain health permits, which they didn’t have before. CMSI also cleaned the store’s small seating area and added low-cost decorations to make the space more inviting and warm for customers interested in consuming their made-to-order food on the premises. “We weren’t trying to recreate Cracker Barrel, but we wanted to make it more comfortable than sitting under fluorescent lighting in the middle of a convenience store,” Strasburger noted. GETTING BACK ON TRACK
A store’s turnaround hits its biggest impact around
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Proactive discussions with suppliers have ensured proper inventory.
year three, in Strasburger’s experience. The first three months of a takeover center on “physical” aspects, like training, cleaning, connecting with suppliers, etc. After 90 days, the majority of those elements fall into place (e.g., better training and more aggressive hiring practices). By six months, the store will see a real impact. Six months into CMSI’s takeover of this Southwest operator, inside sales were up by 20 percent. One year later, inside sales were up by 35 percent, and fuel gallons increased 15 percent. Gross profit margin improved 6 percentage points. Strasburger expects the business to continue sales increases of 2 percent to 4 percent annually. In regards to foodservice, the store is up to 30 items from its reduction of 20. Specials run on rotation to see what customers are interested in and what they respond to. The store has also become a breakfast and coffee stop for local farmers and “local men of a certain age” who fuel up, buy items to take with them and buy a cup of coffee daily, according to Strasburger. “Not only have we increased sales, but we’ve created an enormous sense of community,” he commented, noting that the store will remain committed to not offering Wi-Fi or taking on a “Starbucks-y” approach in order to avoid overcrowding in the parking lot and allow customers on the go to come in, easily make their purchases and be on their way. CSN
September 26, 2017 • Rosemont, IL Co-Located with the Path to Purchase Expo!
Get the data and information you need to reach America’s fastest growing consumer segment: Multicultural Shoppers! We’ll cover these topics, with ample time for networking and connecting with other marketers, merchandisers and company executives: • Breaking Through the Clutter: The Importance of Multicultural Local Markets • The United States of Multicultural America: Threat or Opportunity? • Maintaining Relevancy with New Mainstream Consumer • Leveraging “People”-based Insights to Reach Hispanic Millennials • Think Like a Customer: How Retailers Are Changing to Meet the Needs of an Evolving Customer Base • The Cross-Cultural Shopper of Tomorrow: Gen Z • Connecting with the Passion Points of African-American and Hispanic Consumers
Sign up for the Summit and get admission to the Path to Purchase Expo show floor and keynotes! To discuss how this event can help you reach key brands and retailers interested in multicultural consumers, contact Katie Brennan at kbrennan@ensembleIQ.com
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SMALLOPERATOR
Are You Evolving?
Category management and the convenience channel are. How about you?
C
ategory management has been around for a long time. It was introduced in the early 1990s as part of Efficient Consumer Response to address the industry problems associated with the entire demand and supply operating continuum. It has evolved — and continues to evolve — as the shopper By Sue Nicholls, changes, data and technology become Category more sophisticated, digital continues to Management play a bigger role, and organizations are Knowledge Group striving to achieve collaboration with their retail and vendor partners. The other thing that’s evolving is the retailers that are competing for the convenience store shopper. According to the Category Management Association in its CatMan 2.0 whitepaper, more than 90 percent of store growth is coming from increasing store count, particularly in the form of smaller-format stores (that compete with c-stores). Retailers are focused on ensuring they can compete in this changing environment by having the right store format in the right geography at the right time. This is because many retailers are dealing with challenges in trip consolidation, with leakage to other competitive formats (including c-stores). Many continue to expand store count to secure a position in the right place at the right time. So, as a single-store owner or small operator, how are you going to compete with this continual growth of small stores that compete with the convenience channel and target the quick-trip shopper? The category management framework can help you become more strategic in your approach to make
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decisions on what to carry and how to shelve, price and promote it to better meet your shoppers’ needs. By moving to this approach, you will set up rules and guidelines to help you make easier, better and more strategic choices for your categories. THE OPPORTUNITY
The opportunity is to develop better-defined strategies, guidelines and processes that are shared both internally and with your distributors, wholesalers and vendor partners. As part of your overall strategies, you also need to: Properly define your categories and your segments Category definitions need to start with the shopper. Maximize your opportunity for success by grouping items in your store together based on products that deliver the solution to a similar consumer need, are substitutable in consumer usage, and/or have similarities that when managed together create a total effect for the shopper. Category definitions are affected by retailer format, strategies, category role and the target shopper. How the term “category” is defined is also essential to achieving success for your store. The good news is that NACS, the Association for Convenience & Fuel Retailing, has developed category definitions for c-store retailers that consider the differences of this store format. All you have to do is adjust the definitions based on your store type and store size. In net, categories that are larger and more important to your store and shoppers will usually have a more narrow definition, while ones that are less
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SMALLOPERATOR important will have a broader one. Get your category definitions right because it directly affects other areas of the business.
“
Assign category roles to give you more focus Not all categories are created equal, nor should they be treated equal. Category roles allow you to take a broad look at your category mix, determine the category’s relative importance, and apply similar tactical strategies across categories with the same role. This is an important foundation of your overall retailer strategy. Once you assign your categories, you need to establish your own strategic guidelines and principles across the tactics based on the role that is assigned. For example, destination categories (those that shoppers drive to your store to purchase) need to have a broader assortment (more items offered), more shelf space and prominence in your store, and more competitive pricing strategies. By applying these strategies broadly across categories within a specific role, it makes your job much easier when you are making tactical choices for your categories.
As category management evolves, and as the convenience channel continues to be more competitive with more stores, you need to adjust and improve your approaches to stay relevant in today’s world.
”
To summarize: Category roles are an important part of your category management foundations. By assigning roles and formalizing the tactical guidelines for each role, you’ll have a more aligned and consistent approach to categories across your store. Analyze your data and demand more from your partners Do you trust your gut instinct, intuition and experience to help guide you in making decisions for your store? Your opportunity may be to continue to tap into your instincts, but double-check them with data. There is incredible data available to you today that has not been available in the past. The big c-store chains are armed with data that goes beyond just what sells in the stores, to daypart data (what is sold at different times of day), to shopper insights that
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answer why they buy, to high-end technologies that house all the data. You don’t need all the fancy tools and technology to start to make more fact-based decisions for your categories. By tapping into your store’s point-of-sale (scanned sales) data, you can measure how your categories are performing vs. a year ago, make decisions on what products to list/delist, and set some strategies for your most important categories that go beyond a percentage growth objective. You can also tap into your distributors/wholesalers/ suppliers and ask them to provide you with analysis of your purchases by SKU year over year, category insights, and planograms to help you make better decisions across the tactics. This provides an alternative to get the SKU data if your store doesn’t have a system that can produce it in a good format. As category management evolves, and as the convenience channel continues to be more competitive with more stores, you need to adjust and improve your approaches to stay relevant in today’s world. By adopting some CatMan foundations into your store approach, checking and adjusting your strategies (including reviewing category definitions and roles), and looking at your business in a fact-based way, you can carve out a new path for the future with a more strategic focus on the shopper that ultimately drives sales and profit for your store. CSN Sue Nicholls is founder and president of Category Management Knowledge Group (CMKG), based in Calgary, Canada. She is a speaker and consultant, working with business partners to bring category management training solutions to different areas of retailing like the convenience channel. Editor’s note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News.
We Do It All For Them
Today’s consumers want the best for themselves and their families and store brands delivers it. That’s why every year, PLMA organizes its annual private label trade show. So that retailers and manufacturers can meet and work together to create the products shoppers want. Register today. Telephone (212) 972-3131 or visit www.plmaregistration.com.
Nov. 12-14 • Chicago
Cover Story
I
n her more than 20 years with RaceTrac Petroleum Inc., Allison Moran contributed to multiple accomplishments, including development of the company’s RT6K prototype store, continued growth that put the chain on Convenience Store News’ annual Top 100 list, and significant enhancements made to its prepared food and beverage offerings. But for Moran, her most significant achievement isn’t something that can be measured in store counts or sales figures. Instead, she’s most proud of the part she played in building a company culture at RaceTrac that puts people first — employees and customers alike. “It’s hard to describe how proud you feel when you see people who are just so committed in what they can accomplish, and the impact you can have on their
up. At the time, the company had no real formal training for store managers. “I would describe it as: If you were able to balance a register, great, you’d have a job the next day. If not, they’d find someone else to replace you,” Moran said. Over the next two years, Moran essentially functioned as the training department as she created a program that would provide the tools and basic skills managers-in-training need. “I found a real place that I could contribute to my family’s business,” she said. She was promoted to vice president of human resources in 1999. During her time in that role, she developed RaceTrac’s human resources team that today supports everything from training to leadership development, employee engagement, talent acquisition,
Leaving a Rich Legacy Former RaceTrac CEO and Retailer Executive of the Year Allison Moran takes pride in many milestone achievements individual lives and helping them grow into stronger and more confident people and leaders,” Moran told Convenience Store News, reflecting that watching the shift is “very, very gratifying.” For Moran, who stepped down from her role as RaceTrac CEO in July after succeeding her father, Carl Bolch Jr., in the position beginning in January 2013, RaceTrac has been a constant presence in her life. As chief executive of the more than 80-year-old company, she served as the most senior member of the third generation in the family business. Despite this seemingly destined path, however, Moran didn’t always intend to pursue a career at RaceTrac. Yes, the company was a regular topic at the family dinner table but, as she recalled, like many children of entrepreneurs, she had said she would never work for her father. After Moran relocated back to Atlanta in the mid1990s with her husband, Bolch approached her with an offer. RaceTrac was in need of a store manager training program. Moran joined RaceTrac in 1994 to develop it; a project she could build from the ground
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BY ANGELA HANSON benefits, payroll, awards, and all other aspects of the employee experience at RaceTrac. In 2005, Moran became senior vice president, leading the company’s RaceTrac division, which encompasses its company-operated stores. (The retailer also has a RaceWay division for its third-party contract operated stores.) At the same time that Moran began to oversee company operations, big changes were occurring in the convenience store industry. “There was an acknowledgment that what the consumer was looking for wasn’t just low-priced fuel and low-priced cigarettes. They wanted more of an experience,” she said. MAKING MAJOR CHANGES
Around this time, RaceTrac began work on what would become its RT6K prototype store. The design is 1,000 square feet larger than a traditional RaceTrac store, with ample space in non-sales areas and advances in food and beverage offerings. Prior to the RT6K model, store development was led by RaceTrac’s design, engineering and real estate
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Not being satisfied with the status quo was one of the things that has always differentiated RaceTrac. We’re never satisfied. We constantly challenge everything that we do.
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Being an innovator is figuring out what furthers your brand and giving a compelling reason for the consumer to choose you over all the other competitors. Then, quite readily, your competitors are going to pick up on it and offer the same thing.
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Cover Story
Moran is most proud of building a company culture at RaceTrac that puts people first.
teams. The end result would be handed over to operations as a finished product. For the new prototype, Moran brought in key store managers to get their input. “Leading that charge was such a collaborative experience,” she said. “We actually built a mockup and had the opportunity to engage in a space and get their feedback.” The involvement of those charged with running RaceTrac stores and fulfilling the needs and wants of customers on a daily basis did the trick. Moran noted that if the company had built the version of the store that was originally on paper, “we would have been way off the mark,” but due to the collaborative culture the team created, “we just keep getting better and better at the offer that we provide to our guests.” The innovative qualities of the RT6K prototype led to RaceTrac being awarded the inaugural Convenience Store News Retailer Innovator of the Year Award in 2012. Moran accepted the honor a few months before she officially became RaceTrac’s chief executive. Once in the CEO chair, one of Moran’s main goals was to extend the culture that the RaceTrac division had built to the rest of the company. To accomplish this, it involved a great deal of questioning at every level, taking an honest look at why the company did various things a certain way and if there was a better way to accomplish the same end result. “Our business had changed before our eyes,” Moran said. “I felt like a lot of the foundational processes that support what we do every day, we should constantly be questioning them.”
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This involved everything from the company’s ATM systems to various processes that could be improved or eliminated, removing redundancies that didn’t add value and streamlining things to focus on the things that did add value. “Not being satisfied with the status quo was one of the things that has always differentiated RaceTrac. We’re never satisfied,” she said. “We constantly challenge everything that we do. I worked very hard to continue to push that in parts of the business that I hadn’t worked with directly.” PUTTING PEOPLE FIRST
Following those early days of RaceTrac’s culture evolution, Moran proved herself to be a leading force in the convenience store industry. In 2014, she was selected as a Woman of the Year in the inaugural Convenience Store News Top Women in Convenience awards program; she was named one of the Top 50 Influential People of Atlanta by James Magazine (2015-2017); and the Shelby Report recognized her as the 2016 Woman Executive of the Year. Under Moran’s leadership, RaceTrac continued to make people-first improvements. After conducting a survey of more than 7,000 employees in 2014, the company launched an internal human resources task force to drive policy changes that addressed feedback specific to groups within the company. In 2016, RaceTrac used the results of this research to roll out upgraded benefits, including parental and bereavement policies for the Store Support Center team. The rollout likewise featured a variety of enhanced retail team benefits, including increased compensation starting from entry
Cover Story
level; an updated dress policy; a staffing restructure that gives store managers the discretion to staff their stores reflective of their location’s guest traffic and sales trends, resulting in more full-time associate positions; discounted meals; and bereavement leave. Making RaceTrac and its more than 700 stores a place where people want to work benefits employees and customers alike, according to Moran. “I don’t live to work, I work to live, and that’s how I believe the people I work with should approach the work they do. If you don’t enjoy what you do, go find a place where you do get that fulfillment,” she said, describing how the company’s cultural shift led to positive feedback about the friendliness of store associates and the enjoyable experiences customers had shopping at RaceTrac. “We worked really hard, but we had so much fun, too, and I think that’s what made our work unique.” During her years as CEO, Moran continued to push for innovation when it came to how RaceTrac developed and strategized. “Being an innovator is figuring out what furthers your brand and giving a compelling reason for the consumer to choose you over all the other competitors,” she said. “Then, quite readily, your competitors During her time as CEO, Moran worked steadfastly to make RaceTrac are going to pick up on it and offer the same thing. and its 700 stores a place where people want to work. “To me, it wasn’t that we went out and discovered some new, amazing approach to convenience. It was just finding a unique way that RaceTrac could deliver MOVING ON convenience to the consumer,” she said. “To me, that Although Moran is moving on from RaceTrac, she was what being an innovator was about.” is confident the company’s “future continues to be Moran points to the RT6K protobright” thanks to the people who continue to guide it type store as a turning point for and make it what it is today. the RaceTrac brand, as well “One of the things that’s important to as a game changer for the me, especially during my time leading I don’t live c-store industry. It helped the company, was the privilege I had to work, I work to live, to pave the way to the working with the people that I [did],” current day in which she said. “I had the unique position and that’s how I believe the c-stores are increasingly of leading the charge with truly, people I work with should competing with quicktruly capable leaders and individuservice restaurants. als who share my passion for my approach the work they do. “You can redefine family’s business and wanted to If you don’t enjoy what you yourself and redefine make a difference.” what the consumer Moran now looks forward to do, go find a place where expects from your a similarly bright future — even you do get that brand,” she said. “I think though she doesn’t have a specific deswe demonstrated a lot of tination in mind. fulfillment. confidence and courage and “In the words of Sheryl Sandberg, ‘given willingness to say it’s the guests that Option A is no longer an option, I choose who dictate what it is they want. I Option B,’” she said. “What that is exactly, I’m not think that made a big difference to the industry.” sure, but I am looking forward to the journey!” CSN
“
”
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CONGRATULATIONS TO ALLISON MORAN
2017 RETAILER EXECUTIVE OF THE YEAR
Building relationships. Building growth.
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FOODSERVICE
Category Trends + Insights from
TRENDSIGHTS
Technology Is No Longer a Nice to Have, It’s a Need to Have It must be part of the shopping experience for c-stores to remain relevant
C
onsumers today are accustomed to having the goods and services they want literally at their fingertips. With a few scrolls, taps and clicks, they can get what they want, when they want it. For example, digital ordering in foodservice is growing by double digits in a market that is not growing at all. And while using the internet to buy By Bonnie Riggs Restaurant Industry Analyst, food may lag behind online purchasing The NPD Group in industries such as travel and small www.npd.com appliances, online grocery customers in the United States report high levels of satisfaction and strong repeat rates. This doesn’t mean physical stores will cease to exist. As a matter of fact, NPD recently conducted a study on online grocery shopping, and those who grocery shop online say that 76 percent of their grocery spend
is still at brick-and-mortar stores. Virtual and physical stores can coexist because both are needed and each serves specific purposes. Convenience stores, in particular, have always met the consumer’s need for convenience — and that convenience will only be enhanced by technology. DIGITAL CONVENIENCE IN FOODSERVICE
Food-forward convenience store operators can pick up some tips from what is currently happening in foodservice when it comes to digital ordering. Digital ordering for delivery or pickup from a website or app is catching on quickly. Digital ordering now accounts for 3 percent of total foodservice traffic, or about 2 billion visits. Dinner is the meal most often ordered digitally, and families are the heaviest users of digital ordering. Fifty percent of digital orders come at dinnertime, and 35 percent of digital ordering includes parties with kids. People under the age of 35 and those with higher household incomes are also above-average users of digital The Digital Ordering Trend ordering for foodservice. Digital ordering has posted rapid growth in the past five years, and now represents a large share of delivery orders NPD has found that no matter the consumer, deals play an important role in digital ordering. When consumers order digitally, they are twice as likely to order on a deal, and that deal is usually a coupon. Twenty-nine percent of all digital orders use a coupon. Other top deals used are discounted price, daily special, and combined item special. Additionally, NPD found that the ability to pay with mobile Source: The NPD Group/CREST, year ended December 2016 boosts customer satisfaction scores *Digital Orders = Internet, mobile app and text message. Mobile app was added in 2013.
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FOODSERVICE
Category Trends + Insights from
Delivery Traffic on Deal
Source: The NPD Group/CREST, year ended December 2016
Dollars Spent In-Store vs. Online Online shoppers say appoximately three-fourths of what they spend on groceries is spent in stores
Source: The NPD Group/The Virtual Grocery Store Study, November 2016
and encourages guests to visit for reasons related to loyalty. While more consumers are placing orders using websites, orders placed via a mobile app are growing more strongly. It’s all about the mobile app, and it’s becoming an expectation on the part of the consumer. BRICK-AND-MORTAR RETAILERS STILL KEY
In the case of shopping for grocer-
ies online, grocery e-commerce has a lot of headroom for growth with only 7 percent of U.S. consumers shopping online for groceries in the last month, and those who do shop online still spend 76 percent of their total grocery spending at physical stores. Consumers who are lapsed from grocery shopping online, or have never shopped online for groceries, point out a number of barriers to their adop-
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tion, the top reason being that they want to pick out their own fresh items. The takeaway for convenience stores is to note the importance of fresh food and foodservice to consumers and leverage that need. NPD predicts online grocery shopping will grow at a faster rate than the early online pioneers, as consumers have already experienced the convenience of online shopping. In fact, 20 million consumers who are current, lapsed or new to online grocery shopping plan to increase their virtual shopping for foods and beverages over the next six months. However, in addition to selecting their own fresh foods, many consumers simply like the experience of shopping in a brickand-mortar store. These consumers say that walking the store reminds them of what else they need, or they like to see what’s new. Other barriers are the higher costs associated with grocery shopping online, like delivery or membership fees, and needing to wait for the delivery. The point is that convenience stores are still very much needed but, to remain relevant to customers, technology needs to be part of the shopping experience. There continues to be a large percentage of the population who will prefer to shop at brick-andmortar stores. Convenience store operators should market the unique consumer needs they meet; at the same time, they need to keep up with the times and leverage digital technology via their own click-and-collect programs, as well as partnering with third parties for delivery, in order to expand their offerings. CSN
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Bringing a Chef’s Perspective
Foodservice Leader of the Year Ryan Krebs has used his experience as an executive chef to transform Rutter’s foodservice operations into restaurant quality By Tammy Mastroberte
I
f it has to do with food, Ryan Krebs, director of foodservice at Rutter’s Farm Stores, is involved in the decision on it. Krebs joined the York, Pa.-based convenience store chain four years ago after working as an executive and corporate chef. He started at Rutter’s as a roving restaurant manager, moving from store to store as needed. After one year, he took over foodservice for a new store built in Harrisburg, Pa., and it soon became the busiest store in the company.
Rutter’s food menu is robust, offering options for breakfast through dessert.
“The store caught the attention of the corporate team, and I had more contact with my predecessor, Jerry Weiner,” Krebs told Convenience Store News, explaining that Weiner had a plan to retire. Two years ago, Weiner did retire and, while there were a lot of people who wanted to take over for him, Krebs was called in and asked if he would like to interview for the position — and he got the job. While he has a team of people who report to him, including the category managers for dispensed and hot beverages, produce and bakery, Krebs is the ultimate decision maker when it comes to food items. He works
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directly with manufacturers and distributors, and makes all equipment decisions. He recently made the decision to roll out chef coats to foodservice employees in all Rutter’s stores. “We are in the restaurant business, so all restaurant managers and assistant restaurant managers wear them,” he said. Since taking on the director of foodservice role, Krebs has also made menu and operational changes for greater efficiency. His initial goal was to take what Weiner had already created and bring a fresh set of eyes to it, in order to make it even better. He’s replaced some items with higher restaurant-quality ones, created some brand-new items, and revamped equipment. “I replaced a legend in c-store foodservice, so I didn’t want to come in and just put my stamp on things,” he explained. For example, Weiner started a dinner concept for Rutter’s stores with a couple of options before retiring, so Krebs took the program and expanded it into an entire category, with 15 different “basket meals.” Customers can choose a protein, starch and sides to build their own basket. Rutter’s uses the same approach for breakfast meals. “I am 100 percent convinced there is so much money sitting on the table for convenience stores with dinner. Customers come in for breakfast and lunch, but then they go to a QSR [quick-service restaurant], fast casual or casual restaurant for dinner. Dinner is where you get the highest dollar ring and margin, but that is when you typically get the least foot traffic,” Krebs said, noting that Rutter’s dinner concept has resonated with customers and grown the dinner daypart for the chain. EXPANSION & UPGRADES
In addition to the dinner expansion, Krebs revamped Rutter’s pizza program to make it a more relevant
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category. The retailer changed from serving small, personal-size pizzas to large, family-size, brick-oven pizzas with a self-activating yeast — a high-quality ingredient not usually seen in convenience store pizza, according to Krebs. The chain also redesigned its pizza boxes. Additionally, since roller grill was a flat category when Krebs took over, as the chain had been leaning into other food items on its robust menu, he worked with Kunzler and Co. to change the trajectory. Kunzler and Co. has been a partner of Rutter’s for more than 40 years. Together, they created a bacon-wrapped hot dog, stuffed with cheddar cheese and black pepper. Rutter’s had exclusive rights to it for three months, and it invigorated the category. The item is now available nationally through Kunzler and Co. “I am trying to build categories so we are a destination for people,” Krebs said, explaining how companies often put an egg roll on the menu and say they are in the Asian food business, but that is not his goal. “I recently rolled out a whole product line of high-quality seafood items, like crab chowder and fried scallops. I rolled out new items within a couple of weeks of each other and have had huge success in that category. It made us a seafood destination.” Rutter’s offers robust variety on its menu, and it’s all served 24 hours a day. Customers can get breakfast for dinner or dinner for breakfast. The chain also bakes its own breads daily, along with muffins and cookies, and works with a lot of pre-cooked items that are heated to provide consistency, according to Krebs. A lot has changed in terms of operational efficiency as well since he took over. — Ryan Krebs, Rutter’s Farm Stores Because the stores do such a high volume of foodservice, he brought in a new fryer filtering program, which simplified the process and improved the taste of the food. “We had a tedious and manual way of working with fryers, and I worked with a company that offers a pump to suck the oil out, and then another bottom pump to bring it back in,” he said. “This isn’t seen on the customer side, but almost 90 percent of our stores are at a 100-percent filtration rate, so the quality of food is a lot better, and it’s unheard of in the industry.” Krebs is always looking for better-quality options, like upgraded taco meat. But aside from upgrades, he will typically introduce a new menu item every two
“I get calls all the time asking, ‘How can I be you when I grow up,’ from other chains.”
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Krebs sees limitless potential for Rutter’s food program.
months. With the seafood items, he rolled out four within a couple of weeks. He usually likes to introduce about six “big and impactful items” per year. The chain also takes customer feedback into the equation. “We had one customer ask why we didn’t have banana peppers on the menu since we served subs. That would have been our fourth pepper option, but I was able to add it and it became the third-bestselling topping overnight,” he said. “We take customer feedback and have even had store-level employees create recipes for our menus.” THE INDUSTRY & THE FUTURE
Since starting in the c-store business four years ago, Krebs has seen firsthand the growing importance of the foodservice category. It’s on everyone’s radar and there isn’t a show, conference or meeting he attends in the industry where people are not talking about foodservice and how to make it better. “Particularly in the past two years, it’s become an everyday dialogue. I get calls all the time asking, ‘How can I be you when I grow up,’ from other chains,” he said. “Everyone has different challenges and hurdles.” He has seen more chefs come onboard at c-store companies, along with chains creating positions for food and beverage managers. Companies are realizing they need a director of foodservice, not just a director of marketing, he said, noting that he works closely with Rutter’s marketing department when it comes to all things food. Krebs describes himself as a “risk-taker” and believes the sky is the limit for what Rutter’s can do in the foodservice category. “I think we are pushing the envelope to places that convenience has not even wrapped its mind around. We have induction woks, cannoli, tiramisu. And if we can do it, then others can, too. It’s about growing the industry because there are so many competitors now outside of convenience.” CSN
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LEADER OF THE YEAR
Best-in-Class Beverages
Beverage Leader of the Year RaceTrac has multiple strategies for success in the packaged and dispensed beverage categories By Tammy Mastroberte
P
ackaged beverages and beer/malt beverages are the No. 2 and No. 3 categories for in-store sales at convenience stores, respectively, according to the 2017 Convenience Store News Industry Report, and dispensed beverages continue to contribute to the foodservice category, not only in sales but also in driving traffic through the doors.
Knowing your target customers is a must for beverage success, according to RaceTrac.
This year, Convenience Store News recognizes Atlanta-based RaceTrac Petroleum Inc. as its inaugural Beverage Leader of the Year. Sharing the honor are Steven Turner, executive director of food programs and offers — in charge of hot, cold and frozen dispensed beverages for RaceTrac’s 450-plus stores — and Rich Jacobs, director of both packaged beverages and tobacco — who also credits his team, including Mary Mamalakis, senior manager of packaged beverages, and Jillian Baker, category manager of alcohol. “My team is the reason why RaceTrac’s beverage category is looked upon as best-in-class in the c-store industry,” Jacobs told Convenience Store News, explaining that over the years, the packaged beverages segment has become much more complex. “Each year, the categories are launching a variety of new products trying to capitalize on market trends. This brings complexity to
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the category in regards to pricing, promotions and space allocation in the cold vault.” With these changes, there is more pressure on retailers to produce higher profits in order to offset the investments in both labor and technology, Jacobs noted. Leading the packaged beverage and tobacco teams, his role is to maximize profitability for the company. He said he accomplishes this through “strategic marketing initiatives, leveraging digital platforms for greater consumer engagement, managing suppliers, and negotiating contracts/promotions.” Jacobs started with RaceTrac in March 2014, initially hired as senior category manager for the tobacco category. In January 2015, he was promoted to his current role. He has 14 years of experience in the convenience store industry, including 13 years with Phillip Morris USA and Altria Group Inc. as well as time spent with The Coca-Cola Co., where he was an account manager in the Atlanta market. On the dispensed side, hot and cold dispensed beverages have been and will continue to be a traffic driver at RaceTrac stores, according to Turner. As with food, both quality and speed are two “essential components to growth in the categories.” The good news for convenience stores is they have the competitive advantage of offering variety along with the ability for customers to customize their offer, he explained. “We want to continue to use these categories to bring guests into our stores and, once they are there, get them to try our new food offers,” Turner said. “When we do this successfully, our overall program has experienced great results.” In his role, Turner works with the large food and beverage teams at RaceTrac to grow the category and develop advanced food offers for the future. He has been with RaceTrac for five years, previously as the director of foodservice, and was recently promoted to executive director, leading the food research and development, food safety and category management teams
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responsible for food and dispensed beverages. Prior to RaceTrac, Turner spent 11 years with McDonald’s Corp. on its operations team. “I joined RaceTrac soon after completing my MBA at Georgia Tech,” he said. “I saw huge potential within the convenience store channel for food, and was very impressed with the people and culture at RaceTrac, and wanted to be a part of that.” NEW & UPCOMING
In the packaged beverages category, both the alcoholic and nonalcoholic segments are experiencing innovation. Hard soda, seltzer waters and unique flavors in flavored alcoholic beverages are bringing in variety. In nonalcoholic, there are craft sodas, cold brew coffee, ready-todrink coffee, Monster Hydro, premium teas, and inno-
RaceTrac’s Beverage Best Practices Chosen as Convenience Store News’ inaugural Beverage Leader of the Year, RaceTrac Petroleum Inc. continues to grow the packaged and dispensed beverage categories for its more than 450 stores. Steven Turner, executive director of food programs and offers, and Rich Jacobs, director of both packaged beverages and tobacco, shared these best practices for all convenience store operators to keep in mind: Dispensed Beverages • C-stores should focus on building programs with a “foundation of great quality and fast service. If these two areas are not being executed, then the company will not achieve the results they are expecting,” Turner said. • “Variety does matter, but you need to monitor performance to make sure you are offering the right variety,” noted Turner. Steven Turner
Packaged Beverages • C-store operators must know their customers and what their target consumers want, and then go after that, said Jacobs. • “Don’t lose focus on your core product offers that still make up a large share of the business. Be aware of national/regional/ local consumer trends and bring in key innovation packages that meet those needs,” Rich Jacobs Jacobs advised. • It’s important to ensure adequate days of supply in order to reduce out-of-stocks and labor at store level, he added. • “Invest in digital platforms that drive consumer engagement and loyalty,” he said.
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Dispensed beverages are a traffic driver for RaceTrac’s stores.
vation in both energy drinks and better-for-you options, including Bai and coconut water, Jacobs shared. “In the packaged beverages categories, our focus is to leverage the strength of c-stores and what our consumers are looking for out of the store, which is immediate consumption,” he said. “Doing this fulfills a key mission trip for our guests, and the differentiation in the marketplace helps create a destination for packaged beverages in c-stores.” In the future, Jacobs foresees the packaged beverages category continuing as a huge profit center for c-stores, and he doesn’t believe the innovation in the category will slow down any time soon, as manufacturers continue to look at the millennial generation and their shopping behaviors. “There are several things that will be top-of-mind both in the short and long term. How will loyalty/digital platforms evolve? Will online shopping and home delivery services grab the dollar share of the c-store consumer?” Jacobs explained. “We’re always paying attention to how other trade classes like grocery, dollar stores and other retail environments are trying to grab the c-store consumer by offering grab-and-go food items and immediate-consumption packages near the point of purchase.” In the dispensed beverages category, there are some key trends that will be important for the future, Turner predicts. One is cold brew coffee, which he believes is “here to stay” and will be a “standard offer in top-tier c-stores and quick-service restaurants.” Another is the repositioning of tea and other better-for-you dispensed beverages, which will offset the decline in carbonated sodas. The last one is “Bean to Cup” and espressobased beverages. While they are two separate offerings, they will both help “elevate growth and profitability of hot dispensed beverages,” he explained. CSN
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The country’s first menthol ban faces grassroots opposition By Melissa Kress
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n Sept. 22, 2009, the Food and Drug Administration (FDA) banned cigarettes with characterizing flavors like fruit, candy and clove. This marked the agency’s first major move after receiving regulatory control over tobacco products — a result of the Family Smoking Prevention and Tobacco Control Act of 2009 that President Obama signed into law that June. Absent from the ban, however, was menthol. It also only targeted cigarettes. In the intervening eight years, countless local governments across the United States have enacted their own flavor bans, taking the regulation a step further by including all tobacco products. More than 100 towns in Massachusetts alone have such restrictions — in fact, as of late April, 43.5 percent of the Bay State’s population lived in municipalities that restrict the sale of flavored other tobacco products to adult-only retailers. Again, absent from these local rules has been menthol. But that all changed this summer when in June, the San Francisco Board of Supervisors, which has joint jurisdiction over the city and the
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county, unanimously approved an ordinance prohibiting the sale of all flavored tobacco products including menthol cigarettes. San Francisco Supervisor Malia Cohen introduced the legislation, unveiling the proposal with great fanfare on the steps of City Hall on April 18. “It’s time for us to focus on flavor,” Cohen said that day. “Restricting the sale of flavored tobacco is vital to ensuring that we give the next generation a fighting chance; a fighting chance of living a healthy, full life otherwise cut short by preventable diseases.” The final San Francisco Board of Supervisors vote took place June 20, despite the city’s Office of Economic Analysis finding that if enacted, the ban could have a material economic impact on the city. Specifically, its Banning the Sale of Flavored Tobacco Products: Economic Impact Report estimated the value of flavored tobacco cigarettes that would be affected by the legislation at $50 million per year approximately. The Board of Supervisors’ vote was immediately met with opposition. A coalition of retailers, supporters of small business, and adult consumers formed to bring the issue to the voters. Needing 19,400 valid signatures and collecting nearly 35,000 in three weeks, the Let’s Be Real San Francisco coalition successfully brought forward a petition to get the flavored tobacco ban measure on the ballot for voters to decide. “The unfortunate part, as you see across the country with many local ordinances, is that there is very little input from the business community, especially where the impact of these types of ordinances will hit the most,” said Jaime Rojas Jr., spokesman for Let’s Be Real San Francisco. “We are dealing with small convenience stores, gas stations, mom-and-pop businesses that follow the rules and regulations — especially in regards to tobacco products, which are already harsh and expensive as it is,” Rojas Jr. added. For example, in June 2016, California raised
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the legal minimum age to buy tobacco products from 18 to 21. It followed that with a $2 increase in the state’s cigarette excise tax this past April. “We see, specifically with the City of San Francisco and the county, that their initiative and their goal was to limit tobacco products for those under 18,” Rojas Jr. explained. “But the impact was really on the local retailer than on children. It’s redundant. We already have these rules and regulations not to sell to children, not to market to them, in place.” Pointing to the city’s Office of Economic Analysis report, Rojas Jr. noted the economic impact could be even greater than the estimated $50 million when you factor in the loss of payroll tax and property tax, as well as possible small-business jobs.
three, he believes a June election vote is the most probable. The ordinance calls for an April 1 enforcement date; however, that is now on hold until the voters pull the lever one way or another. “I think the number of signatures we were able to gather in such a short period of time is a good indication that the voters of San Francisco want this opportunity to decide on the freedom of choice,” Rojas Jr. said. “I think that is the most important thing.” The extra time also gives the coalition the opportunity to begin educating voters on the impact of what the ordinance means, he added. END OF MENTHOL?
“The impact was really on the local retailer than on children. It’s redundant. We already have these rules and regulations not to sell to children, not to market to them, in place.” — Jaime Rojas Jr., Let’s Be Real San Francisco
“Again we see with local government and those against tobacco, instead of seeing that the number of young smokers has gone down significantly in the past 10 years — and will continue to go down with the new rules like age restriction and tax increase — the target seems to be small-business owners,” said Rojas Jr. SAN FRANCISCO’S NEXT STEP
In early August, the San Francisco Department of Elections validated the signatures collected by Let’s Be Real San Francisco, setting up a possible showdown on the election stage. According to Rojas Jr., when the Board of Supervisors returns from recess in September, it can make one of three decisions: rescind the ordinance, call for a special election, or put the question on the ballot on the next scheduled election in June. Of the
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San Francisco’s menthol ban is the first of its kind in the country — at least two more towns have followed suit this summer, notably Minneapolis — but the measure may not spell the end of menthol cigarettes in the United States. According to Bonnie Herzog, managing director of tobacco, beverage and convenience store research at Wells Fargo Securities LLC, San Francisco’s vote is “a significant event, but not a ‘deal breaker’ for the menthol category, in our opinion.” As Herzog pointed out, San Francisco’s regulation goes further by banning all flavors — including menthol — in all tobacco products like cigarettes, cigars, smokeless tobacco, electronic cigarettes and vapor products. “We believe the net negative impact for manufacturers will be limited since we expect many consumers will likely move their purchases online or cross border, ultimately having the greatest negative impact on retailers,” Herzog said. Legal action could also stop other municipalities from enacting similar bans, she noted. “Ultimately, we think this goes the way of some of the minimum age restrictions that have been placed on the sale of tobacco products — consumers who want the product will still find a way to get it either by purchasing online, cross border, or on the black market. That said, the industry is most certainly watching this closely given the importance of menthol to the category,” Herzog said, citing that it is about 35 percent of total cigarette volume. CSN
CANDY & SNACKS
Chocolate + Non-Chocolate + Gum + Salty Snacks
Not Your Father’s Jerky Innovative flavors and an expanded customer base have meat snacks evolving By Renée M. Covino
I
n today’s world of snacking and mini-meals, protein is a dietary powerhouse, and that is good news for the meat snacks category. “Over 50 percent of consumers are looking for more protein in their diets, and sales with proteinrelated claims are up 50 percent compared to four years ago,” Cadent Consulting Group Managing Director Don Stuart told Convenience Store News. As another meat snack segment player put it: “Protein is certainly having a moment right now, and most consumers will tell you more is better,” observed Adam Beane, senior brand manager for Slim Jim, maker of meat sticks and jerky snacks.
According to Beane, health is a factor for some consumers. For others, it’s changing preferences on flavor profiles or protein sources. All of these factors are driving the evolution of the meat snacks category. Retailers are responding by expanding their betterfor-you options and building out new front-end sets around these newer offerings, he said. Meat snacks have become “the darling” of the snacking world in the last couple of years, the way market researcher Packaged Facts sees it. “Between paleo dieters and CrossFitters espousing the benefits of a high protein diet, the gluten- and wheat-free tribes avoiding anything to do with breads, and the continued negative press that carbs have been receiving, meat has
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come galloping to the rescue for many different types of snackers,” reported Norman Deschamps, an independent market analyst who works with Packaged Facts. Packed with protein, meat snacks are generally considered a better-for-you option than potato chips and other salty snacks. In fact, meat snacks are gaining on potato chips’ dominance, according to fellow marker researcher Nielsen. Looking at the snack category as a whole, “opportunity is found outside the realm of traditional potato chips and pretzels,” Nielsen states. Over the past four years, the $2.8-billion meat snacks category posted compound annual sales growth of more than 7 percent, with sales growth of 3.5 percent for the year ended Feb. 25, 2017. Potato chips, on the other hand, responsible for more than $7.2 billion in annual sales, posted dollar growth of just 1.7 percent in the last year. Pretzels, considered another snacking staple, lost 0.5 percent in sales in the last year, amounting to just under $1.5 billion. “Healthy snack choices. It’s really not that difficult. We’re all looking to get away from the ingredients that aren’t that good for us,” said Bob Crossley, Marketing Services, for Tillamook Country Smoker Inc., maker of jerky, meat sticks and similar snack products. American households spend an average of $25.81 per year on meat snacks, with their per-trip spend about twice as much as it is on potato chips ($7.42 vs. $3.61). Demographically speaking, Asian-American households spend the most each year ($31.61, on average). This group is 22 percent more likely to buy meat snacks than the average shopper, according to Nielsen. When looking at age segments, baby boomers are the biggest meat snack buyers, spending an average of $28.48 per year, making them 10 percent more likely to buy meat snacks than the average shopper. While meat snacks are bucketed evenly into jerky and sticks — each of which contributes about half of its total sales — it is jerky that experienced a particularly
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CANDY & SNACKS
Chocolate + Non-Chocolate + Gum + Salty Snacks
strong year last year, according to Nielsen, boasting sales growth of nearly 7 percent. Jerky has come a long way from what it used to be. Today’s jerky is not your grandfather’s jerky, or even your father’s jerky anymore. “Our customers have changed from the ‘My Father’s Jerky’ guy to a group who are more interested in the healthy aspect of jerky with some exciting flavors,” explained Tillamook’s Crossley. “They are also are interested in authentic brands and will develop loyalties to brands they can trust to deliver quality products.” Here are a half-dozen signs of jerky’s shift, as defined by industry experts: 1. The artisanal trend in the category has become more significant. Small-batch and craft offerings are at the core of innovation. Smaller pieces and more moisture, with the intent of making it easier to chew, are part of the latest offerings. 2. Improvements to core product lines are prevalent as well. Extra-tender pieces are part of what’s being highlighted. Premium is the name of the game. 3. Lapsed consumers are re-entering the category. But also, women and millennials have become the focus of new jerky marketing initiatives. 4. Cleaner ingredient lists are on the rise. Partially hydrogenated oils, for example, are vanishing from some existing product lines. Organic, grassfed, nitrate-free and antibiotic-free labels are becoming more prevalent. 5. New flavor varieties are continually rolling out to reflect regional and ethnic tastes. Some new flavors are also indicative of additional daypart consumption, such as at breakfast time. Recently introduced flavor varieties include hickory, maple, teriyaki, sweet, hot, barbecue, Korean barbecue, sriracha, chipotle, Texas chili, buffalo wing, fajita, and more. 6. Beef is still king, but more complex and alternative “meat” proteins abound, such as bison, pork, lamb, chicken, organ meat, turkey, kangaroo and salmon. What’s more, added ingredients include nuts, seeds, fruit, and trail mix. Slim Jim’s Beane anticipates that the artisanal trend will continue to impact the category in the coming years. He went so far as to say that the artisanal trend
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has become “significant.” “We know small-batch, craft offerings are of interest to a number of consumers who may have been Slim Jim fans at one point in their lives and are now buying us less often or not at all as their tastes have changed,” Beane acknowledged, noting that this is one of the primary motivations behind Slim Jim’s recent launch of 100% Turkey Sticks, as well as its upcoming launch of Premium Smoked Sticks due out later this year. All the new items are raised without hormones and contain no MSG, artificial flavors or artificial colors. Tillamook’s Crossley noted that today’s new meat snack customers are looking for an experience, not just a snack. “With the introduction of new flavors, new items and new package sizes to the meat snacks category, we feel that we can continue to garner attention from our new customers, as well as our standard customers,” he said, pointing to the brand’s Simply Crafted line of beef jerky made from just six all-natural ingredients. “We will always enjoy continued success from our standard flavors such as Old Fashioned, Teriyaki or Sea Salt & Pepper, but we also must continue to offer up those exciting flavors, while still maintaining brand identity.” CONVENIENCE MOVES
According to Packaged Facts, meat snacks continue to be the fastest-growing sales category within the healthy-ingredient snack market, particularly in the convenience channel. “Convenience stores are at the bullseye of the jerky trends — leveraging snacking and protein,” relayed Stuart of Cadent Consulting, noting that both male and female c-store customers are finding themselves increasingly interested in the category. “Jerky is actually more balanced in its appeal, about 60/40 male to female, than most people think,” he added. As with many snacks, the No. 1 cross-purchase item
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CANDY & SNACKS
Chocolate + Non-Chocolate + Gum + Salty Snacks
with a meat snack is a beverage, typically an energy drink or fountain soda, channel experts say. Thus, secondary placement near the cold vault or fountain machine to maximize the basket ring is encouraged. Jerky players have also seen great success from retailer promotions offering discounts for bundled purchases. “Our customers enjoy a very active lifestyle and are always looking for that next adrenalin hungry activity. The fuel that is needed for these activities needs to be in close proximity at retail — trail-mix blends next to quality meat snacks with healthy drink choices within reach,” Crossley suggests in terms of crossmerchandising opportunities. Meat snack manufacturers are not only ramping up line introductions, but they are also updating their in-store displays and merchandising. Many are working with retailers to maximize shelving efficiency based on the space available and their customer demographics. Packaged Facts predicts that meat snack sales will continue to see steady growth through at least 2020,
“There is no ‘standard of identity’ for jerky, so the imagination is the limit.” — Don Stuart, Cadent Consulting Group
reaching sales of $25.4 billion by then. While traditional brands and varieties will always have a place in the category, premium and artisanal brands are predicted to attract new consumers to the category for the first time. New users of a different species are also part of the evolution. “Dog jerky has proved to be popular and, in fact, if you go way back, it was one of the original jerkies,” noted Stuart. “The humanization of pet food has translated to a whole new life for dog jerky.” Also driving future growth of meat snacks will be “new chicken and turkey-based products, and perhaps more vegetable-oriented jerky with simple/cleaner labels,” Stuart added. “There is no ‘standard of identity’ for jerky, so the imagination is the limit.” CSN
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MOTOR FUELS
Gasoline + Diesel + Ethanol + LNG/CNG + Electric
E15 in Expansion Mode
The ethanol blend is expected to be at almost 2,000 locations by 2018 By Debby Garbato
W
ith its 2012 introduction, E15 became the highest concentration ethanol blend available for use in most traditional gasoline-powered vehicles. But it raised a lot of eyebrows. Consumers, it was theorized, might confuse E15 with other ethanol blends, put it in the wrong vehicle or not understand its purpose at all. As E15 has become more widely distributed, most myths have been dispelled. The higher-margin, higheroctane fuel is now sold by retailers large and small at nearly 900 locations across 29 states. While some drivers understand E15’s environE15 can cost up to 10 cents less per gallon than other fuels. mental and performance benefits, many are lured by E15’s lower price. not limited to flex-fuel vehicles. E15 works in convenOthers like that it generates American jobs and allevitional vehicles manufactured in 2001 and beyond (it is ates foreign oil dependence. Regardless of the reason, not recommended for motorcycle, chainsaw and other once people try E15, they tend to become hooked. “Nine hundred locations sell E15, which is a 200-per- small gas engines). While there is no “typical” E15 customer, it is cent increase over 2015,” said Mike O’Brien, vice popular among taxi and Uber drivers and other highpresident of marketing development for Washington, D.C.-based Growth Energy, which represents the etha- volume users, said Lance Klatt, executive director of both Minnoco and the Minnesota Service Station and nol industry. “This spectacular growth is fueled by demand for quality, cost-effective and environmentally Convenience Store Association. Minnoco was the first chain in its market to offer friendly solutions.” E15. After launching in October 2013, Minnoco now E15 can cost up to 10 cents per gallon less than sells E15 at 34 out of 36 locations. Overall fuel volume other fuels. It can generate margins about 4 cents per has increased 7 percent to 8 percent, with E15 repregallon higher than those garnered by standard E10 senting 33 percent of all fuel sold, Klatt reports. fuel, according to Steve Walk, chief operating officer For Minnoco’s independent dealers, E15 has of Boca Raton, Fla.-based fuel wholesaler Protec Fuel. been an important means of differentiation. Steven Typically, retailers experience a 15-percent increase in their overall fuel business within 12 months, he noted. Anderson, owner of Marshall Cretin Minnoco, offers E15 along with E30, E85, E Zero, and the standard E15 carries an 88 octane rating and is said to E10. He said E15 now represents 60 percent of his substantially improve a vehicle’s performance. E15 fuel sales. “Statistically, it’s beating E10 and we’ve had contains 15 percent ethanol, making it more envino performance issues. There’s a learning curve — ‘Is ronmentally friendly than E10. Unlike E85 and other this going to damage my car?’ — but once people are ethanol blends introduced in recent years, E15 use is
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MOTOR FUELS
Gasoline + Diesel + Ethanol + LNG/CNG + Electric
brought up to speed, they’re more apt to use it.” Many larger retailers have adopted E15 over the past two years. But Klatt said getting into the game early “gave us a short-term competitive advantage. We were ahead of the rest of the country, but they’ve caught up.” THE BIG BOYS
West Des Moines, Iowa-based Kum & Go LC first tested E15 at 10 locations in 2015. Today, 112 out of its 400 stores sell it in Iowa, Minnesota, Nebraska, South Dakota, Missouri, Arkansas, Oklahoma, Colorado and Wyoming. The retailer wanted to provide more choices, be more eco-friendly, and offset declining sales of “mid-grade” fuels. While it had featured E30 and E50 at some locations, they have been replaced by E15. Kum & Go continues to offer E10, E85 and ethanol-free premium. “E15 aligns with corporate sustainability initiatives and our goal to offer great choices to customers,” said Jim Pirolli, vice president of fuels. “Mid-grade fuels were declining. This was an opportunity to replace that with something that offered a better value. Most consumers don’t want to spend time learning the difference between gasoline grades. But when they find a product that’s a better value, they’re hooked. It seems the anti-ethanol rhetoric has died down as consumers understand they’ve been buying 10-percent ethanol blends [E10] for years.” Louisville, Ky.-based Thorntons Inc. introduced E15 (which it calls Unleaded15) in March 2016. To date, it has processed more than one million E15 transactions
Kum & Go says offering E15 aligns with its corporate sustainability initiatives.
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across 34 Chicagoland stores. Thorntons also sells E85 at 120 of its 180 locations; E30 is available at a handful of sites. “Unleaded15 has been well received, with adoption surpassing initial expectations,” Matt Nichols, Thorntons’ project manager, biofuels/business planning and analysis, told Convenience Store News. “We haven’t received a single complaint.” La Crosse, Wis.-based Kwik Trip Inc. rolled out E15 in February 2017. Based on early results, Kwik Trip has slowly expanded E15, said Joel Thorntons uses brochures as one Hirschboeck, general manager way to educate its customers. of fuel procurement and marketing. Today, it is sold at 150 out of its 550 locations in Wisconsin, Minnesota and Iowa. The company has also offered E85 for several years. “It’s been kind of an evolution as we evaluate different markets and demand for E15,” explained Hirschboeck. He said E15 is doing particularly well in Iowa, where consumers seem to understand it. “It’s a large corn state. This gives us a leg up on competition there,” he said. FUELING EDUCATION
Consumers’ knowledge of ethanol fuels varies, making education important. Protec offers retailers everything from signage and brochures to full-fledged events with food and balloons. However, it’s found pump interactions to be most impactful. “We have a whole fuel island marketing program,” said Walk. “Many people automatically hit ‘85 regular.’ But when the screen says you can buy something for less, it gets [their] attention.” Valparaiso, Ind.-based Family Express uses pumptoppers, digital media and brochures. The retailer has also worked with the Indiana Corn Marketing Council and South Shore Clean Cities on promotions and educational outreach initiatives touting air quality and overall benefits of E15, said Thomas Navarre, vice president of petroleum marketing and logistics. E15’s nuances are also explained on its website. Since July 2016, Family Express has offered E15 (which it calls Unleaded e15) at 19 of its 70 Indiana locations. One-on-one interactions also drive sales. In addition
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MOTOR FUELS
Gasoline + Diesel + Ethanol + LNG/CNG + Electric
to online and in-store brochures, Thorntons makes sure its employees are well-versed regarding the various fuels. “Guests’ knowledge regarding fuels varies widely,” said Nichols. “We put strong emphasis on ensuring our team is well-educated.” Kum & Go is researching what information customers want and how to best provide it. To date, it has found pump interactions fostered by on-site brand ambassadors to be particularly successful. “If a customer drives a 2001 or newer vehicle, there’s a 50-percent chance we can convert them to E15 with a one-on-one engagement,” said Pirolli. Despite initial speculation, E15 continues to grow. Other major retailers selling E15 today include Casey’s General Stores Inc., QuikTrip Corp., RaceTrac Petroleum Inc., Murphy USA Inc., MAPCO and Sheetz Inc., according to Growth Energy’s O’Brien. By 2018, O’Brien expects the number of locations offering E15 to double. “Nine out of 10 cars today can use E15. Increasingly,
“…Most consumers don’t want to spend time learning the difference between gasoline grades. But when they find a product that’s a better value, they’re hooked.” — Jim Pirolli, Kum & Go LC
consumers are finding out about benefits and demanding more choices. They’re always on the lookout for products that power their routines while making the world a bit better,” he concluded. CSN
TECHNOLOGY
Enterprise + POS + Digital + Payment Systems + Business Intelligence
Mobile Payments’ Time Has Come Leveraging the cloud and mobile apps, c-store retailers can offer mobile payment options faster and easier than ever before as consumer adoption grows By Tammy Mastroberte
F
or years, there has been a buzz in the retail industry about the game-changing mobile payment options on the horizon. Experts touted that it wasn’t a question of if, but rather a question of when. And it is becoming clear that the answer is now. In the United States, mobile payments are expected to triple by 2021, going from $80.7 billion in 2015 to $282.9 billion in 2021, according to a report by Forrester Research. This includes three types of mobile payments: mobile remote payment (in app), in-person payment, and person-to-person or peer-to-peer payment. Mobile inperson payment is expected to grow the fastest. “The low adoption rate of mobile payments in the years past was majorly due to the data breaches and security concerns of consumers,” Yogiata Sharma, research analyst at Allied Market Research, told Convenience Store News. “However, with technological developments aimed at improving security, such as EMV-enabled payments and the standardization of the same by the government authorities, it has aided the growth of contactless POS [point-of-sale] terminals.” Mobile money dominates the overall U.S. mobilepayment market, accounting for roughly 66 percent of market share in 2015. But from a growth perspective, the mobile wallet and bank card segment is estimated to register significant growth in the coming years, as Sharma explained. Today’s consumers, especially millennials, are more invested in mobile technology, including wearables like the Apple Watch and connected cars, noted Bryan Russell, U.S. program manager, mobile payment and loyalty, for ExxonMobil. The oil company’s Speedpass+ app currently accepts Apple Pay and Samsung Pay as forms of payment, in addition to any major credit or debit card. “They are migrating more to devices and are expecting to be able to do their transactions and interface
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with brands using these platforms,” Russell said. “Our capabilities as an industry, with the point-of-sale and cloud computing, enables us to serve those needs, and they continue to improve and enhance.” The target customer for mobile payments is between the ages of 19 and 32, showing a high utilization of mobile wallet payments. Customers are often more willing to use mobile payments if there are incentives or a special discount tied to it, according to Sharma. “For instance, when Starbucks launched its mobile app in the U.S. in 2015, nearly 21 percent of Starbucks’ U.S. transactions were being conducted through the mobile app within a time span of one year. Customers consistently use this app to order and pay to avoid waiting in the cashier line,” she said. EASIER THAN EVER
While near-field communications (NFC) and contactless payments where consumers tap their phone are still being used, there has been a shift away from that, allowing for easier entry into the mobile payment arena. Many Big Oil brands and marketers are using apps for payment processing. “Most retailers deployed contactless or NFC inside the store, but not a lot have it at the pump because it’s expensive. Using a mobile app, the authorization happens above the site from the mobile payment providers and they just push authorization down to the site,” said James Hervey, director of product marketing, Americas Petroleum Solutions, at Verifone Inc., explaining that an NFC reader is not needed for this
type of transaction. “This has opened up the petroleum and convenience sector to mobile payment adoption because you don’t need any new equipment. You just need a mobile payment provider.” Additionally, thanks to the Conexxus Mobile Payment Standard, adopted by the majority of POS providers, all a chain needs to do is make sure they are on the most up-to-date version of their POS software and download the mobile API from their vendor. It takes less than 15 minutes to have a site connected to accept mobile payments, according to Donald Frieden, CEO of P97 Networks, a mobile commerce solution provider. “If you are a branded marketer, all the work has been done because oil companies have launched their apps so a merchant doesn’t even have to worry about that,” Frieden said. “But even for private branded marketers, we work with the headquarters to select the payment types they want to enable and can roll out several hundred sites in a week.” At ExxonMobil, the company leverages both Apple Pay and Samsung Pay through its Speedpass+ app. When someone downloads the app, it automatically recognizes if the person has either of those payment options already on their phone and lets them know they can start using it via Speedpass+, Russell explained. “We make it streamlined so customers can use payment cards and wallets they already have, giving them a more enriched experience through the app because it integrates our loyalty program, manages receipts, and much more — all from one mobile payment app,” he noted. Rather than asking retailers to purchase new hardware and NFC or contactless readers for the pump, ExxonMobil chose to go the “above site” route and was able to launch and scale the program quickly. Last year, it launched at more than 6,000 participating Exxon and Mobil stations. In less than a year, it scaled to almost 10,000 sites. “Apart from the standard POS software upgrades, most ExxonMobil branded sites don’t need to add anything else to participate,” Russell said. Shell Oil Co. is another industry player offering mobile payment options to its customers via an app. The company signed a multi-year agreement with JPMorgan Chase & Co. to accept Chase Pay at its stations across the U.S. At participating locations, customers can pay using their mobile phones either though the Shell app or the Chase Pay app. “Chase Pay will help Shell transform our customer experience by tying the Fuel Rewards program to
Consumers expect the ability to do transactions with a brand across multiple devices, according to ExxonMobil.
Chase Pay, giving millions of our shared customers a seamless, rewarding experience both at the pump and in our stores,” said Dan Little, head of North America marketing for Shell, based in Houston. Phillips 66 is also partnering with Chase Pay to launch its new mobile commerce platform for the Phillips 66, Conoco and 76 fuel brands, driven by P97 Networks’ PetroZone solution. Using a mobile app, customers can locate stations, pay via the mobile payment wallet, and the company can deliver contextual commerce digital offers. At a recent company event in Las Vegas, Phillips 66 previewed future mobile integrations with Synchrony Financial; a new branded mobile debit product; a loyalty program with Kickback Rewards Systems; and in-vehicle payment with Honda Developer Studio to allow consumers to purchase fuel from the infotainment unit of their car. “There is still work to do before we see a big uptake of the connected car payment, but it will be game-changing and very transformational,” P97 Networks’ Frieden said. “By the end of the calendar year, we will see several automobile manufacturers that will be able to do some sort of mobile payment.” In a recent announcement, ExxonMobil said its app now includes the ability for customers to pay with Ford SYNC 3, as well as with the Apple Watch, to purchase Synergy gasoline and car ExxonMobil’s Speedpass+ app currently washes at 10,000 locations. accepts Apple Pay and Samsung Pay.
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TECHNOLOGY
Enterprise + POS + Digital + Payment Systems + Business Intelligence
The Apple Watch functionality came through an update to the app, which also included the ability to pair with Ford cars. “With Ford SYNC, it provides enhanced functionality and puts the app on the screen of the vehicle, enabling voice command to find the nearest store, select a pump, and pay for the fuel,” Russell explained. “We are also able to pull in the vehicle’s fuel gauge and put a virtual fuel gauge on the app.” Since the rollout of mobile payment, ExxonMobil has seen mobile transactions increase seven-fold from one year prior, and the average customer who uses the Speedpass+ app is purchasing two times more than those using a third-party credit card. “Also, when integrated with the Plenti loyalty program, we are seeing the purchases increase two and a half times more than our average customer,” Russell touted.
Retailers are not only embracing mobile payment, but also the digital marketing capabilities that go along with it.
MULTIPLE BENEFITS
While offering mobile payment gives consumers more flexibility, a faster transaction, brand loyalty and more, convenience store chains are finding other rewards, too, as a result of adding the payment option to their stores. “Everybody is realizing it’s not just about mobile payments, but how they can use digital marketing to transform their business,” Frieden said. “It gives them a platform to build relationships directly with the consumer, know what they are buying, and market to them to increase basket size.” Mobile also provides basket details Mobile payment can provide so retailers can see retailers with market basket data. what shoppers are buying and the frequency of their visits, and then incentivize them based on that activity. By leveraging the cloud, there is no dependency on systems either, so new marketing programs can be rolled out every week, Frieden pointed out. “Benefits include inventory tracking and identifying customer traits, thereby analyzing their behavior,” Sharma of Allied Market Research explained. “[Retailers] can use the mobile payment records to understand bestselling products, identify times
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where demand for specific products is high, and other critical parameters.” Offering mobile payment options, especially inside of a branded app, also helps with brand loyalty to drive more traffic to the app and to the store. In addition to the improved speed, ease, value and security, Shell believes consumers are more likely to choose Shell as their brand of choice as a result. “This will drive more business to Shell sites, which will benefit from more loyalty, more volume and more convenience store sales,” Little noted. As mobile payment continues to gain momentum, and new options like connected cars take hold, the future is likely to see mobile payments becoming more widely accepted and more widely expected by consumers. “It is definitely going to play a role in the future and is here to stay,” said Verifone’s Hervey. “We will see more and more connected cars leverage the payment interface with wireless connectivity built in.” Retailers that not only embrace mobile payment, but also the digital marketing opportunities that go along with it, will differentiate themselves in the markets where they operate and have a strategic advantage to drive more customer visits, said Frieden. “I’m not sure mobile will move the needle for interchange reduction, but it will increase the gallons sold and the basket size in the store,” he said. “The future is millennials, and they do everything on their phone. If you don’t support mobile payments, you will be missing out on a potential market of consumers.” CSN
You have the power to create customer loyalty. Wayne Smith, Male Age 31 Before Joining
6 Visits Fuel visits 4 per month
per month
After Joining
10 Visits 5 Fuel visits
per month
per month
Every convenience store has a “Wayne smith,� someone whose purchase behavior is brimming with potential. Six months ago, Wayne filled his tank and then signed up for the rewards program. Today, he visits the store more frequently and has added an extra fuel visit to his routine. Individual-level behavior data enables marketers to develop more profitable promotions, bolster sales in targeted categories, and motivate frequent fuel customers to make in-store purchases. High-fidelity software, 99.99% uptime, transaction speeds measured in milliseconds, and certified integrations with Verifone, Radiant, and Gilbarco make Paytronix the partner of choice for innovative, forward-thinking multiunit chains. Learn quickly, act instantly, and create revenue from carefully crafted customer relationships. Contact us today at (617) 649-3300, ext. 5, or visit paytronix.com.
Feel the power of L o ya L t y P r o g r a m s > E m a i L C L u b s > C u s t o m E r i n s i g h t s
Finding the Future of the Industry The 2017 NACS Show aims to help attendees put their finger on the pulse of what’s happening in convenience and fuels By Chelsea Regan
NACS SHOW 2017 GENERAL SESSION LINEUP TUESDAY, OCT. 17 | 3:45-5 P.M. Eric Chester, an award-winning speaker and bestselling author, will offer advice to c-store retailers about how to stand out as an employer, becoming a company where people are eager to work. Chester is a well-reputed source on matters pertaining to employee engagement and workplace culture, in addition to understanding the emerging generation of employees. He holds the National Speakers Association’s CSP (Certified Speaking Professional) credential.
R
eturning to Chicago this fall, the annual NACS Show will once again connect thousands of professionals in the convenience and fuel retailing industry. The 44th annual NACS Show, presented by NACS, the Association for Convenience & Fuel Retailing, will take place Oct. 17-20 at McCormick Place. There, more than 23,000 stakeholders in convenience and fuel retail from around the globe are expected to come together. Over the course of the event’s four days, attendees will have the opportunity to explore all there is to see at the 400,000-square-foot expo. “If you miss the expo this year, you will have to wait 361 days for your next opportunity. Do you want to wait 361 days?” asks NACS. Five main categories will serve as the focus of the 2017 NACS Show expo: • Fuel Equipment & Services • Food Equipment & Foodservice Programs • Candy/Snacks • Facility Development & Store Operations • Merchandise & Technology Like last year’s NACS Show in Atlanta, more than 1,200 exhibiting companies will be showcasing thousands of products relevant to the industry. Each category offers industry professionals a chance to learn more
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WEDNESDAY, OCT. 18 | 10:30-11:45 A.M. Chip Conley — hotelier, hospitality, entrepreneur, author and speaker — knows what it takes to be a great manager. Conley’s experience includes shift work at McDonald’s as a teen, founding boutique hotel brand Joie de Vivre Hospitality, and serving as the original head of global hospitality and strategy and now the strategic advisor for Airbnb. On stage at the NACS Show, Conley will discuss how to keep c-store employees motivated. THURSDAY, OCT. 19 | 10:30-11:45 A.M. “Ideas 2 Go,” which has featured hundreds of interviews with retailers from 38 states and five countries since its inception in 1994, will be featured in a general session alongside NACS President and CEO Henry Armour. In this session, retailers will provide a look inside their stores in a video tour showcasing some of their best ideas for both short- and long-term strategic planning. FRIDAY, OCT. 20 | 8-9 A.M. William Shatner, the Hollywood actor best known for playing Captain Kirk in the original “Star Trek” series, will serve as the keynote speaker at the 2017 NACS Show. In addition to his career as an actor, director, producer, screenwriter, recording artist and author, Shatner has made a name for himself as a philanthropist and horseman.
The Cool New Products Preview Room, an attendee favorite, is returning.
about the business, network with other professionals, engage in hands-on experiences, and conduct business. Opportunities to discover new products and insights will be endless at the 2017 NACS Show — from the returning Cool New Products Preview Room and Tech Edge program, to informative education sessions led by knowledgeable speakers. Among this year’s show highlights are: Cool New Products Preview Room: Those on the lookout for the latest new products will get the chance to find them — in addition to new innovations, services and other growth opportunities — at the 2017 NACS Show’s Cool New Products Preview Room. Product details, as well as exhibitor contact information, will be available. Additionally, those interested can compile and print a custom “shopping list.” This year, the Cool New Products Preview Room will be segmented into seven areas: Green (eco-friendly), Health & Wellness, New Design, New Flavors, New to the Industry, New Services, and New Technology. Education Sessions: NACS Show attendees can take part in educational sessions that cover all aspects of the c-store industry, including strategy, market analysis, and targeted information about specialized areas. Among
General sessions will take place all four days of the show.
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this year’s topics are Small Operator Workshops, Getting People From the Pump Into the Store, Building and Retaining a Winning Team, Protect Yourself From Data Breaches, What Does a Trump Administration Mean to the Industry, and Going Hyperlocal. Speakers: Dozens of speakers will present at this year’s NACS Show, including a number of highly regarded industry veterans. On the podium will be QuickChek Corp. Vice of Human Resources Bob Graczyk; NACS Director of Government Relations Paige Anderson; Kum & Go General Manager Sean Bremer; Gilbarco Veeder-Root Passport Program Manager Scott Oakes; Sheetz Inc. Director of Talent Development Emily Sheetz; and Anheuser-Busch Senior Director of National Category Management David Vartanian, among others. Tech Edge: Technology constantly evolves and reshapes how retailers in the c-store and fuel retail industry do business. The NACS Show’s Tech Edge program is designed to help industry professionals solve for the tech challenges ahead. Tech Edge, now in its fourth year, will partner with Conexxus for a two-and-a-half day program. Conexxus is a nonprofit, member-driven technology organization dedicated to the development and implementation of standards, technologies innovation and advocacy for the convenience store and petroleum market. This year’s Tech Edge program includes valuable sessions on data security, EMV, customer engagement, and more; group discussions on a variety of technology topics; networking opportunities; and access to new technology products and solutions. New Exhibitor Area: The New Exhibitor Area, located on the expo floor, features only supplier companies that have never previously exhibited at the NACS Show. It serves as a great way to discover upand-coming products that have yet to hit shelves. CSN
EXPERT’SVIEW NEW Horizons
The ‘Sandwich Generation’ Is in a Pickle More women than ever are juggling caregiving and career
I
f you’ve found yourself reading an email from your boss, fielding an “urgent” text from your 22-year-old daughter, while on hold with your father’s nurse, you are not alone. According to Pew Research, nearly half of Americans in their By Sarah Alter, 40s and 50s are part of the growNetwork of ing “Sandwich Generation,” people Executive Women “sandwiched” between aging parents and dependent children. What’s more, about one in seven of these middle-aged adults are providing financial support to both an aging parent and a child. It wasn’t supposed to be this way. The emotional, financial and time demands of dual caregiving can easily derail personal and professional goals. As a result, the nation’s primary caregivers — women — are turning down promotions and even leaving their jobs. “We’re working, we’re over-parenting, we’re taking care of our elderly parents who are living longer, and we’re trying to keep our marriages sexy and fun,” said author Sandra Tsing Loh. “It would be mad to think we could take on all of this stuff and not break down eventually. I know plenty of women who devote half their Weight Watchers points to Pinot Grigio,” Loh told APlaceforMom.com.
Convenience Store News is pleased to continue this series of exclusive educational columns by the Network of Executive Women (NEW), coinciding with the annual CSNews TOP WOMEN IN Top Women in Convenience CONVENIENCE awards given out each fall. Fifty female managers, executives and directors who work in the convenience store industry will be honored in our 2017 program. In addition to being a presentation sponsor for the Top Women in Convenience program, NEW and
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“Multitasking, caregiving women will start to blame themselves, even though they’re twirling 50 plates.” A report by MetLife and the National Alliance for Caregiving shows the financial toll of dual caretaking: Women who leave the workforce early to care for an aging parent lose an average of $142,693 in wages. The average loss of Social Security benefits is another $131,351, and an additional $50,000 is lost in pension payments. That amounts to a whopping average of $324,044 in lost income per caregiver. Companies’ bottom lines are affected, too. MetLife estimates that failing to support workers with eldercare responsibilities can cost as much as $34 billion a year in lost productivity, absenteeism, disengagement, turnover and increased healthcare costs. Here are a few suggestions for creating real change
CSNews have partnered to develop this series of columns directed at helping corporate leaders drive more inclusive company cultures. Sponsored by:
EXPERT’SVIEW NEW Horizons
that supports the Sandwich Generation and benefits your business: FLEX-WORK POLICIES
Flexible work schedules are critical to caregivers — and smart for businesses. Numerous studies show job sharing, flex hours, telecommuting and similar benefits have little or no upfront costs, but realize a significant return on investment through more productivity, better retention, and healthier (less stressed-out!) employees. A 2014 report by the White House Council of Economic Advisors, for example, revealed that 52 percent of workers surveyed believe they could do their job better if they were allowed a more flexible schedule. Women have been on the forefront fighting for workplace flexibility. The irony? Nearly three out of four teleworkers are men, according to a study by Flex+Strategy Group. Perhaps surprisingly, small employers (50 to 99 employees) are more likely to offer flexible work arrangements than large employers (more than 1,000 employees), according to the National Study of Employers published by the Families and Work Institute. Small employers are more likely to allow employees to flex their schedules, work some hours at home, choose when to take breaks, and take time off during the workday to attend to important family personal needs — with pay. WORKPLACE WELLNESS
Self-care — through exercise, stress management techniques and healthy choices — is critical for primary caregivers. Companies that offer workplace wellness programs are reaping the rewards, according to the Society of Human Resource Management’s Strategic Benefits-Wellness Initiatives report. Nearly two-thirds of the organizations included in the report offer some type of wellness program — to the benefit of their employees and the bottom line. Almost one half of the HR professionals at those companies said wellness initiatives decreased their healthcare costs. Two-fifths said wellness initiatives decreased unplanned absences. One-third said the initiatives increased work productivity. The most common wellness incentives or rewards: a reduction in employee healthcare premiums (38 percent) and gift cards (37 percent). FAMILY CARE RESOURCES
Much of the searching, emailing and phone calling around family care happens during business hours. It makes good business sense for employers to offer
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resources that help caregivers trim the time they spend finding resources. “The more the employer can be a filter on information, it saves so much time that employees might otherwise be spending on elder care websites hunting for what their family needs and how they can get through the day,” Ken Matos, senior director of research at the Families and Work Institute, told Care.com. Nearly 40 percent of the companies surveyed by the National Study of Employers provide access to information that helps employees locate child care in the community, and nearly half provide elder care resources. Some companies go as far as subsidizing caregiving options by selected vendors. More employers are sponsoring caregiver backup plans, which help provide last-minute care for a child or elder parent. A study of 5,100 employees using one such plan, offered by Bright Horizons, shows the benefits. Ninety percent of employees surveyed said backup care enhanced their productivity. Nearly as many said they were able to work at least one day in the previous six months they otherwise would have missed (an average of five days per employee). As transition planner Stephanie Chan puts it, employers who show they care “will go a long way in keeping employees happy and less stressed when they are likely to be most valuable to your organization.” NEW believes positive policies and programs can lighten the load faced by the Sandwich Generation. They can also help you keep trained talent, reduce absenteeism, improve morale and boost productivity — and create a better workplace for everyone. CSN Sarah Alter is president and CEO of the Network of Executive Women, Retail and Consumer Goods, a learning and leadership community representing more than 10,000 members, 950 companies, 100 corporate partners and 20 regional groups in the United States and Canada. Learn more at newonline.org. Editor’s note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News.
STORESPOTLIGHT Break Time
Breaking the Mold
MFA Oil’s new c-store prototype is all about the customer experience By Danielle Romano
B
reak Time, the convenience store chain owned and operated by Columbia, Mo.-based MFA Oil Co., isn’t hitting the brakes on innovation. Earlier this year, Break Time opened the doors to its 74th location, in Lee’s Summit, Mo., which showcases a new modern, open concept that is focused on enhancing the customer experience. Although Break Time has been fairly consistent with its store model over the last several years, the chain wanted to design a new store that customers would find inviting from the moment they pulled into the parking lot, Curtis Chaney, MFA Oil’s senior vice president of retail operations, told Convenience Store News. “We felt that we needed to bring a more modern, open look to our stores so our customers didn’t feel pressured to make a decision. We feel we accomplished
this with how open the store feels,” Chaney explained. The 5,000-square-foot Lee’s Summit store, which debuted in January, is also the first to incorporate Break Time’s new logo and accompanying graphics. OPENING UP
To create the desired shopping experience, Break Time made a series of simple, yet effective changes to the store’s aesthetics. For starters, the ceilings in the store were raised, including in the beer cave, where automatic doors were added. Next, the automatic entrance doors were moved to the front of the store, while the checkout was repositioned to the side. Previously, the checkout sat at the center of the store. Lastly, tile was eliminated from the sales floor and replaced with a stained concrete look
C
M
Y
CM
MY
CY
CMY
K
Break Time plans to use this prototype for all its new-to-industry locations.
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STORESPOTLIGHT Break Time
The Lee’s Summit, Mo., store is the first to incorporate new brand graphics.
new carryout food concept. According to Chaney, by adding Smokestack Bar.B.Q. to Break Time’s prototype, it “helped elevate our food offering beyond what was normal for us, and gives us an opportunity to set ourselves apart from other c-stores.” To bring this concept to life, Break Time partnered with Jack Stack Barbeque, a restaurant brand with a 60-year history in the greater Kansas City, Mo., area. The meats served at Break Time’s Smokestack Bar.B.Q. include hickory-smoked meats by Jack Stack. Several of Jack Stack’s savory sides and sauces are also available. In addition to Smokestack Bar.B.Q., Break Time continues to offer customers Hunt Brothers Pizza, Dashboard Diner sandwiches, f’real shakes, roller grill options, a beer cave, and traditional c-store fare at the Lee’s Summit store. Open 24 hours a day, the store likewise provides ATM access, indoor and outdoor seating, lottery and public restrooms. The store is joined on the 1.5-acre lot by a car wash. Although this is not the first Break Time to have a car wash, it is the first in recent years to be built with one included, according to the company. NO BRAKE LIGHTS AHEAD
with wood embellishments and a calming color palate. “Previously, we could build a 5,000-square-foot store that felt small because of many things deemed necessary such as drop ceilings, center checkouts and bulkheads. By eliminating these design elements, we were able to build a 5,000-square-foot store that felt very open and inviting to the consumer,” noted Chaney. With these clean and warm enhancements incorporated, Break Time customers can now walk into the Lee’s Summit store and immediately see its foodservice area, as well as easily navigate to the beer cave and seating area. “We are in the business of selling convenience and this new store design gives the consumer the opportunity to come into the store, quickly see what items they want to purchase, and go to the checkout. The beauty of the layout is that it is also allows those customers that want to spend a few minutes shopping at a more leisurely pace the opportunity to do so without slowing down the customer that has more of an urgency about them,” Chaney told CSNews. In addition to its differences in layout and design, Break Time’s 74th store stands apart from other locations on account of its foodservice offering. This is the retailer’s first location to offer Smokestack Bar.B.Q., a
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Since opening the Lee’s Summit location, Break Time has put welcome signs on three additional new stores, all of which have incorporated some aspects of the new prototype design. Break Time also rebuilt an existing store in Clinton, Mo., to have the same floor plan as the Lee’s Summit location and include Smokestack Bar.B.Q. Going forward, Break Time plans to use the prototype design in all of its new-to-industry locations, making it “the norm” but adapting depending on the size of the location, said Chaney. Any remodel or upgrade will incorporate elements where possible, too. Break Time currently operates convenience stores across Missouri and Arkansas. The c-store operator’s growth strategy calls for continuing to look for opportunities in its traditional marketing areas, while also looking at areas of Missouri where it doesn’t yet have locations, and opportunities in other states in which MFA Oil operates. The chain has started construction on a new site in Moberly, Mo., that will be 6,000 square feet and feature diesel fueling for semis along with other truck amenities such as showers and a lounge. It will be the third location to feature Smokehouse Bar.B.Q., with seating for 30 people. CSN
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HOTPRODUCTS Special Advertising Section
Pet Treats
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HOTPRODUCTS Snacks
Special Advertising Section
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HOTPRODUCTS Special Advertising Section
Gourmet Pet Treats
Car Wash Solutions
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HOTPRODUCTS Special Advertising Section
Beef Jerky
Skimming Prevention
Pizza Equipment
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CLASSIFIED Credit Card Processing / Merchant Services
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CLASSIFIED Credit Card Processing / Merchant Services
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CLASSIFIED General Merchandise
ATMs
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CLASSIFIED Plastics
Air Vacs
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CLASSIFIED Air Vacs
Petroleum/Equiment
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Age Verifier
CLASSIFIED ATM’s
Financial Services
Services
Equipment / Supplies
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CLASSIFIED Age Verifier
Equipment / Supplies
For Sale
Wholesale Refrigeration
Equipment / Supplies
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Sunglasses
CLASSIFIED Check Guarantee Services
General Merchandise
FUR TAILS FROM $2-$15 DAVY CROCKETT HATS $5.00 Silver Fox tails are a good seller!
We have: Red Fox tails, Coyote tails, White tails, Racoon tails, etc.
Leopard Rabbit Skin
Rabbit Skins come in White and Ivory for $2.00 and Leopard for $8.00
Strips Inc. Tel.: (718) 786-3381 Fax: (718) 786-0203 http://stripsinc.tripod.com STRIPSINC1@aol.com
ADINDEX
Add Systems .................................................................................................53 Altria Group Distribution Company ...........................................................2-3 Anchor Packaging ........................................................................................5 BakenJoy .......................................................................................................45 Boston Beer/Samuel Adams .......................................................................22 Campbell’s ....................................................................................................43 Cash Depot....................................................................................................68 Cenex .............................................................................................................33 Chevron .........................................................................................................7 Cheyenne International ..............................................................................55 Cookies United .............................................................................................49 Del Monte Fresh Produce ............................................................................15 E Alternative Solutions ................................................................................75 E & J Distillers ..............................................................................................14 FGXInternational ..........................................................................................13 Forte Products ...............................................................................................16 GSK Group ....................................................................................................67 Greencore usa ..............................................................................................83 Heineken .......................................................................................................51 Hunt Brothers Pizza .....................................................................................99 Hussmann .....................................................................................................81 Kretek/Djarum ..............................................................................................19 J&J Snack Foods Corp..................................................................................100 John Middleton.............................................................................................31 JTM Foods/JJS Bakery .................................................................................77 Krispy Krunchy Chicken..............................................................................61 Liggett Vector Brands ..................................................................................57 Living Essentials ..........................................................................................21 Logic ..............................................................................................................39 Mars Wrigley Confectionery .......................................................................17 McKee/Little Debbie ....................................................................................47 Micro Matic ...................................................................................................18 Paytronix .......................................................................................................73 Perfetti van Melle .........................................................................................25 Phillips 66 Company ...................................................................................65 Private Label Manufacturers Association..................................................35 Renewable Energy ......................................................................................69 RJ Reynolds Tobacco Company .................................................................9,41 Save-A-Lot ....................................................................................................23 Subway..........................................................................................................63 Swedish Match .............................................................................................27 Tillamook Country Smoker, Inc. .................................................................59 Tyson .............................................................................................................79 Universal Merchant Services ......................................................................Outsert Wenzel’s Farms ............................................................................................62 Wonderful Pistachios ...................................................................................11
570 Lake Cook Road, Suite 310, Deerfield IL 60015 Phone (224) 632-8200 Fax (224) 632-8266 www.ensembleiq.com
Convenience Store News (ISSN 0194-8733; USPS 515-950) is published 12 times per year, monthly, by EnsembleIQ, 570 Lake Cook Rd. Deerfield, IL 60015. Copyright © 2017 by EnsembleIQ. All rights reserved. Subscriptions: One year, $93; two years, $152. One year, Canada, $110; two years, Canada, $175. One year, foreign, $150. Payable in advance with a bank draft drawn on a U.S. bank in U.S. funds. Single copies, $10, except foreign, where postage will be added. Printed in U.S.A. Periodicals postage paid at Deerfield, IL, and at additional mailing offices. POSTMASTER: Send address changes to Convenience Store News, P.O. Box 1842, Lowell, MA 01853.
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GETTINGTOTHECORE
Cutting Back Consumption
63.4%
Health concerns have c-store shoppers evolving their beverage choices
N
The percentage of convenience store shoppers who say they’re trying to cut back on soda.
ever before have consumers been so interested, knowledgeable and concerned about what they’re putting into their bodies — and this most definitely encompasses beverages. EnsembleIQ Research, sister company of Convenience Store News, recently surveyed convenience store shoppers about recent changes in their beverage consumption and what prompted such changes. Among the findings: Six in every 10 c-store shoppers are trying to cut back on consuming soda, five in 10 are trying to cut back on energy drinks, and four in 10 are trying to cut back on frozen drinks (i.e., slushies) and beer. The No. 1 reason for all: health concerns.
Percent of shoppers trying to cut back consumption of: Soda Energy drinks Frozen drinks Beer Sports drinks Iced tea Juice Coffee Hot tea Bottled water
63.4% 53.0% 43.7% 40.0% 37.8% 28.1% 27.7% 27.6% 22.6% 9.0%
Percent of shoppers cutting back on consumption due to health concerns:
In addition to health concerns, shoppers are cutting back on soda because they have grown tired of the offerings.
Base: Consumers visiting a c-store at least once a month Source: Convenience Store News Market Research, 2017
More than one-third of c-store shoppers are drinking more bottled water than they used to.
Soda Energy drinks Beer Frozen drinks Coffee Juice Sports drinks Iced tea Hot tea Bottled water
86.2% 76.3% 75.0% 60.3% 56.6% 50.0% 49.6% 39.4% 16.7% 2.5%
C-store shoppers aged 55-64 lead all other age groups in health concerns around frozen drinks.
Base: Consumers visiting a c-store at least once a month Source: Convenience Store News Market Research, 2017
Are you satisfied with the selection of healthier/ better-for-you beverages currently available at convenience stores? TOTAL
Yes Want to collaborate and share expertise with your peers? The Council of Retail Experts (CORE) is an exclusive network of convenience store retail leaders who do just that. For more information on how to join CORE, please visit www.cvcoreinsights.com.
Survey respondents sourced via ProdegeMR, a leading provider of data collection solutions for the research industry. Visit www.prodegemr.com for more info.
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No
MALE
71.2% 75.0% 28.8% 25.0%
FEMALE
67.9% 32.1%
Female c-store shoppers are less satisfied than their male counterparts with the healthy beverage choices available. Base: Consumers visiting a c-store at least once a month Source: Convenience Store News Market Research, 2017
Success is simple. Come see us at NACS Booth #4650. Learn more. Download the Pizza Success Guide at huntbrotherspizza.com/CSN