CSN - November 2015 by ensembleiq

INNOVATION. ABSOLUTELY.

Innovation Partnership Proftability

We want to hear about your successes, challenges and feedback on the tobacco categories in your store. The more we understand your perspective, the more AGDC can improve the resources we offer to help your business thrive. Share your thoughts on how we can better serve your business by sending an email to AGDCTradeRelations@AGDC.com.

ÂŠ2015 Altria Group Distribution Company For Trade Purposes Only

VIEWPOINT By Don Longo, Editorial Director

Smart Loyalty In a smartphone world, loyalty programs must get smart and fun

e’ve all seen the customer whose wallet is bulging with plastic cards from a dozen different retailers. Is this customer really loyal to all those stores? I think not. Our cover story (page 22) points out that a growing number of retailers today plan to have the ability to identify customers when they walk in the door using smartphones, according to a report by retail consulting firm Boston Retail Partners. The article details the efforts of Thorntons, Gulf Oil, Chevron, QuickChek, Wawa, 7-Eleven and others that are jumping aboard the loyalty bandwagon. The ubiquity of smartphones appears to be fueling these efforts. But will consumers simply replace the dozen cards in their wallets with a dozen different apps on their phones? The key to a successful loyalty program is positioning the retailer to be the “preferred” app. One way to become a “preferred” app, especially among millennials, is to make your loyalty program fun. A nationwide survey sponsored by Colloquy, a research practice for loyalty practitioners, revealed that 34 percent of millennials said the word that best describes their participation in a customer rewards program is “fun.” By comparison, 26 percent of the general population chose the word “fun.” Equally revealing, 66 percent of the general population said “economical” is the word that best describes their loyalty program participation, vs. 56 percent of millennials.

Two other survey results set millennials apart when it comes to loyalty programs: • 40 percent of millennials said they joined a program for access to members-only sales, products and services, For comments, please contact vs. 33 percent of the Don Longo, Editorial Director, general population. at (201) 855-7606 or dlongo@stagnitomail.com. • 63 percent of millennials said it’s important their loyalty program participation supports lifestyle preferences such as wellness programs, sustainability efforts or a charity, vs. 53 percent of gen Xers (aged 35-50) and 46 percent of baby boomers (aged 51 and older). Millennials have very different perceptions about loyalty programs. They value experiencing new things over saving money, and they particularly like games. “Gamify everything,” commented Colloquy’s Research Director Jeff Berry. A little over one-quarter of millennials continued their participation in a loyalty program because it featured a competitive game, or social element such as badges, leaderboards or communities. Just 7 percent of baby boomers stayed with a program for these reasons. And 42 percent of millennials continue to participate in a program because it has a mobile payment option, compared with just 15 percent of baby boomers.

CSNews has been recognized with more editorial awards, including the prestigious Jesse H. Neal Award for business journalism, in the past six years than any other industry publication. 2013 Jesse H. Neal National Business Journalism Award Best Single Issue, October 2012 2013 Jesse H. Neal National Business Journalism Award Finalist, Best Profile, August 2012 2008 Jesse H. Neal National Business Journalism Award Best Single Issue, October 2007 2010 Trade Association Business Publications Intl. Tabbie Awards Honorable Mention, Front Cover Illustration, October 2009 2009 Trade Association Business Publications Intl. Tabbie Awards Gold, Front Cover Illustration, February 2008 Honorable Mention, Best Single Issue, October 2008

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

2015 American Society of Business Publication Editors, National Silver Azbee Award Best Profile (long form), February 2014 2015 American Society of Business Publication Editors, Midwest Regional Gold Azbee Award Best Special Supplement, November 2014 2015 American Society of Business Publication Editors, Midwest Regional Silver Azbee Award Best Profile (long form), February 2014 2013 American Society of Business Publication Editors, Midwest Regional Bronze Azbee Award Best Editorial/Commentary, July 2012 2010 American Society of Business Publication Editors, Northeast Regional Silver Azbee Award Feature Article Design, November 2010

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

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CONTENTS NOVEMBER 2015

VOLUME 51/NUMBER 11

22 | COVER STORY Got Loyalty?

Driven by new technology and consumer demand, changes are happening fast in the world of customer retention. 28 | 5 Best Practices for Loyalty Success Follow these tips whether launching a new rewards program or enhancing an existing one.

INDUSTRY ROUNDUP 12 | CSNews’ Top Women in Convenience Shine Bright 16 | Couche-Tard Comes Full Circle 18 | Retailer Tidbits 20 | Supplier Tidbits

HOW TO DO WORLD-CLASS FOODSERVICE 46 | Making Sense of the Latest Equipment & Technology Advancements 46 | Call to Action: Foodservice 101 48 | Call to Action: Foodservice 201 50 | Call to Action: Foodservice 301

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

6 Convenience Store News | NOVEMBER 2015 | WWW.CSNEWS.COM

ÂŠ2015 Blitz-Weinhard Brewing Co., Milwaukee, WI * Flavored Malt Beverage

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

BRAND MANAGEMENT Group Brand Director (330) 840-9557

Ron Lowy rlowy@stagnitomail.com

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

34 64 FEATURES 34 | Inspired Design With a little elbow grease and a lot of creativity, this year’s CSNews Store Design Contest winners think outside the box.

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

MARKETING & PROMOTION

51 | A Banner Year 7-Eleven’s mobile-first technology strategy pays off in a multitude of ways.

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

CATEGORY MANAGEMENT

EVENTS • MEDIA • RESEARCH • INFORMATION

TECHNOLOGY

54 | In With the New CSNews honors 25 top new products of the year during the NACS Show.

20154 CSNEWS

BEST NEW

PRODUCTSs

Awa rds

64 | As Seen at the 2015 NACS Show The hottest trends and newest products spotted by CSNews editors on the expo floor.

DEPARTMENTS VIEWPOINT

3 | Smart Loyalty In a smartphone world, loyalty programs must get smart and fun.

UNITED STATES MARKETS Convenience • Grocery/Drug/Mass Store Brands • Specialty Gourmet Multicultural • Green

President & CEO Harry Stagnito Chief Information Officer Kollin Stagnito Vice President & CFO Kyle Stagnito Senior Vice President, Partner Ned Bardic Chief Brand Officer Korry Stagnito Vice President/Custom Media Division Pierce Hollingsworth (224) 632-8229 phollingsworth@stagnitomail.com Production Manager Anngail Norris Human Resources Manager Sandy Berndt Strategic Marketing Director Bruce Hendrickson (224) 632-8214 bhendrickson@stagnitomail.com Director of Events Ken Romeo (203) 295-7058 kromeo@stagnitomail.com Director of Digital Strategy Matt McGuire (224) 632-8180 mmcguire@stagnitomail.com

CONVENIENCE STORE NEWS AFFILIATIONS Premier Trade Press Exhibitor

10 | CSNews Online 82 | Getting to the Core

8 Convenience Store News | NOVEMBER 2015 | WWW.CSNEWS.COM

CANADIAN MARKETS Convenience Pharmacy Foodservice

EDITORIAL ADVISORY BOARD Edward Davidson ER Davidson & Associates (7-Eleven Inc., retired) Rick Crawford Green Valley Grocery

Kyle McKeen Alon Brands Inc. Richard Mione GPM Southeast

Ray Johnson Speedee Mart

Matt Paduano Nice N Easy Grocery Shoppes

Jack Lewis Village Pantry LLC

Jonathan Polonsky Plaid Pantries Inc.

Roy Strasburger Convenience Management Services Inc. Jon Urbanik CST Brands Inc.

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

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CSNEWS.COM TOP 5 Daily News Headlines The most viewed articles online.

Incoming NACS Chairman Jack Kofdarali Stands Ready

1 | Reports: GPM Holding Co. to Acquire 175 Midwest Stores GPM Investments LLC could be growing again. A report by Israeli media outlet Globes reported that Arko Holdings Ltd., whose principal business is U.S. fuel company GPM, announced an agreement on Sept. 20 to buy up to 175 gas stations, convenience stores and tobacco stores in the Midwest. 2 | Speedway to Shutter 100 Dunkin’ Donuts Sites Speedway LLC will close 100 Dunkin’ Donuts franchise locations inside its convenience stores during the remainder of 2015 and 2016. The move comes after Dunkin’ Brands Group announced slowed comparable sales growth at its U.S. restaurants during its fiscal third quarter. 3 | Murphy USA & Core-Mark Sign Five-Year Supply Agreement Core-Mark Holding Co. Inc. will serve as the primary wholesale distributor to Murphy USA, delivering more than 75 percent of the merchandise sold in its locations. The contract, to begin in the first quarter of 2016, is expected to generate approximately $1.7 billion in annual revenue for Core-Mark, while creating efficiencies and a strategic supply chain relationship for Murphy USA. 4 | Kroger Bringing Gas Stations to Harris Teeter Stores The Kroger Co. is adding gas stations to Matthews, N.C.-based Harris Teeter Supermarkets Inc. locations, with the first slated to open this fall in Fort Mill, S.C., and a second expected in Charlotte, N.C. Kroger acquired the Harris Teeter chain in 2014.

POLL

5 | Cumberland Farms’ SmartPay Reaches $1B Mark Cumberland Farms Inc. surpassed the $1 billion mark in gas sold via its SmartPay mobile app since its launch in January 2013. The app, free for consumers to join and offering 10 cents off on every gallon of gas, has doubled transaction volume in the last 12 months.

Around which time of year do you offer the most seasonal merchandising and promotions?

ONLINE EXCLUSIVE

New NACS Chairman Jack Kofdarali, president of J&T Management, is an example of what can come from taking advantage of NACS’ events and educational opportunities, having attended many of them while building his career and expanding his business. “I can share with full confidence how getting involved with NACS helps your own business, and how getting engaged in NACS government relations events can make a huge difference on the results that may impact us negatively,” Kofdarali told CSNews Online. For more exclusive stories, visit the Special Features section of www.csnews.com.

PRODUCT HIGHLIGHT The most viewed New Product online.

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10 Convenience Store News | NOVEMBER 2015 | WWW.CSNEWS.COM

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INDUSTRYROUNDUP FAST FACT

CSNews’ Top Women in Convenience Shine Bright Awards reception at the 2015 NACS Show recognized 58 outstanding females By Melissa Kress

The likelihood of breaking out of your comfort zone and adding a new product to your c-store basket decreases dramatically with age: 55.6 percent of those aged 25-34 frequently try a new product, compared to 24.2 percent of those aged 65 and older. Source: Carbonview Research (page 82)

QUOTABLES

“The engagement between customer and store team will grow through technology and the growing importance of technology in speaking to customers, specifically millennials, is a key factor in what we will do moving forward.” — John Schaninger, QuickChek Corp. (page 22)

he convenience store industry’s top women and rising females took their turn in the spotlight Oct. 12 at Convenience Store News’ Top Women in Convenience awards reception. The second-annual event, held during the 2015 NACS Show, honored nearly 60 outstanding women making their mark in the convenience channel. “The CSNews Top Women in Convenience awards program was created to recognize a diverse array of women from both the retailer and supplier sides of the industry — from leaders to mentors to rising stars and role models,” said Don Longo, editorial director of CSNews. This year’s winners included 22 senior-level executives, five mentors, 18 rising stars, five store managers and three single-store owners. In addition, five leaders were lauded as Women of the Year. Joan Toth, president and CEO of the Network of Executive Women (NEW), noted how the industry has changed since her first NACS Show in 1979 and said the women being honored should “embrace this and leverage the power of women leadership.” Judging was conducted by CSNews in conjunction with NEW and the Top Women in Convenience Advisory Board, which includes last year’s Women of the Year. The 2015 Women of the Year are Jenny Bullard, chief information officer at Flash Foods Inc.; Kimberli Carroll, senior vice president, foodservice division at Ruiz Foods Products; Tammy Floyd, vice president and controller at CST Brands Inc.;

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Three of this year’s Women of the Year (from L to R): Stacy Loretz-Congdon, Jenny Bullard and Sandra Morgenstern.

Stacy Loretz-Congdon, senior vice president and chief financial officer at Core-Mark Holding Co.; and Sandra Morgenstern, president and CEO of Par Mar Oil Co. “These women were chosen as the best of the best from all the nominations received and are being recognized not only for their exceptional impact on the success and direction of their own companies, but also their positive impact on the convenience industry as a whole,” said Linda Lisanti, editor-in-chief of CSNews. Presenting sponsor Altria Group Distribution Co.’s Blake Benefiel, director of state and trade relations, training and compliance, and Danielle Keck, director of sales merchandising, were on hand to present the Women of the Year awards before a standing-room-only crowd gathered at the Las Vegas Convention Center. “It really touches my heart to look out and see so many women leaders in the audience,” Bullard said, adding that she was honored to accept the award.

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INDUSTRYROUNDUP Carroll echoed the sentiment, saying she is “grateful to this industry, to the company I’ve worked for the past 15 years, and grateful to the women in the industry.” Floyd told the audience she was “humbled to be among this group of people” and was honored to be chosen because CST Brands has “so many great women in our company.” Upon accepting her award, Loretz-Congdon acknowledged the many women who work at CoreMark and who served as mentors to her during her 26-year career at the company. Morgenstern offered her congratulations to her fellow honorees and recalled how far the convenience senior-level leaders Karla ahlert, treasurer, RaceTrac Petroleum Inc. debbie armentrout, general manager/owner-operator, Allen Oil/Quick Mart & More dagmar Boggs, president, global customer team, Coca-Cola North America Kathleen Byrd, CVP — c-store national accounts, Kraft Heinz Co. Myra Canterbury, president, Simmons Corp. Wendy Chronister, CEO, Chronister Oil Co. niki dePhilips, senior VP store development, Kum & Go LC Kelly Fulford, senior category development manager, General Mills Convenience Jane Green, VP marketing, Swisher International Cindy Henderson, executive director, operations support, CST Brands Carolyn Hood, national sales director, Wm. Bolthouse Farms Jeannine Peterson, director, foodservice, Circle K sharon Porter, director, sales & marketing, Insight Beverages nancy riggs, VP, Quik Stop, C-stores/Small Format Division, The Kroger Co. Kathy ronan, customer sales executive, convenience store channel, The Hershey Co. Melissa rosen, CEO/co-founder, Locali Conscious Convenience Tobi-lee russell, VP human resources, Cumberland Farms Inc. Becky shotwell, president, Stop’nGo of Medina Teresa smith, VP operations, Tom Thumb, C-stores/Small Format Division, The Kroger Co. Karin Thrift, director of sales, convenience, Clif Bar & Co. Ginny Webb, chief information officer, Love’s Travel Stops & Country Stores Whitney Woodward, VP human resources, RaceTrac Petroleum

MenTors sherry Bevers, senior customer accounts manager, U.S. Oil/U.S. Venture diana Farquhar, floating training manager, Alon Brands Retail Tonjalia Green, zone manager, CST Brands Cassandra Matos, product director, McLane Co. dayna reed, director, promotions & market research, RaceTrac Petroleum

risinG sTars Tara anderson, category manager, lunch daypart, Holiday Stationstores

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

industry has come. “I remind myself of years past when I sat in rooms with very few women other than myself representing our industry,” she said. Platinum sponsor The Kraft Heinz Co.’s Mike Ridenour, head of industry relations, took the stage to present the awards to this year’s 53 other honorees (see box below). In addition to Altria Distribution Group Co. and The Kraft Heinz Co., the 2015 Top Women in Convenience awards were sponsored by Acosta Sales & Marketing, Anheuser-Busch, BIC Consumer Products, The Coca-Cola Co. and R.J. Reynolds Tobacco Co.

leti andrade, executive director human resources, CST Brands Kelly andrus, manager, credit card services, Tesoro Refining & Marketing Co. linda Bell, regional operations manager, Turkey Hill Minit Markets, C-stores/ Small Format Division, The Kroger Co. lauren Bowers, regional manager, GSP Perri Brackett, account executive, Procter & Gamble Karen Brown, director of category leadership, Anheuser-Busch In-Bev Michelle delamielleure, senior manager of consumer insights, General Mills alissa ecker, growth channel customer supply chain lead, Kraft Heinz Co. leah emanuele, marketing assistant, GetGo (Giant Eagle Inc.) Jessica irwin, merchandising manager, center of store, GetGo amy Jowell, zone merchandising leader, 7-Eleven Inc. elena lau, regional operations manager, Loaf ‘N Jug, C-stores/Small Format Division, The Kroger Co. abby Panfil, director of sales strategy and planning retail sales, Kellogg Specialty Channels shaunna Patrick, director, convenience — West, The Hershey Co. Jamie rodgers, senior manager of hot foods & quality assurance, RaceTrac Petroleum stacie Tonniges, category manager, cigarettes & tobacco, Casey’s General Stores Inc. Kim Williams, senior category advisory manager, The Coca-Cola Co.

sTore ManaGers leslie Considine, complex manager, Ports Petroleum Tina Felton, Rutter’s Farm Stores veronica Holguin, Alon Brands soo sang, CST Brands Janet stembridge, RaceTrac Petroleum

sinGle-sTore oWners Gigi Colosimo, general manager/owner, On The Go Melissa lacour, owner, Black Bear Store d’Juana McCartney, part owner/manager, Wooly’s One Stop

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INDUSTRYROUNDUP

Couche-Tard Comes Full Circle Southeast will be the first region to transition to the new Circle K global brand By Melissa Kress

limentation Couche-Tard Inc. is merging its international retail brands under one banner: Circle K. The new Circle K global brand will replace CoucheTard’s existing Circle K, Statoil, Mac’s and Kangaroo Express branding on convenience stores and service stations across Canada, the United States, Scandinavia, and Central and Eastern Europe. The new brand will also appear on licensed stores across Asia and will be a fundamental part of CoucheTard’s future growth, according to the Canada-based convenience store retailer. The global Circle K brand will begin rolling out to stores in the U.S. in January. It will be seen on service stations in Europe come May 2016, while Canadian customers outside Québec will see the new Circle K brand starting in May 2017. Couche-Tard will maintain the company’s founding Couche-Tard retail brand in the Province of Québec in Canada due to the specifics of that market. “Circle K is a brand that is already popular with huge numbers of our customers and employees. Today we are setting out to make it easy for existing and new customers in more countries than ever before to prefer Circle K as their destination for convenience and fuel, with a fresh new look and feel and even better products for people on the go, always combined with fast and friendly service,” said Brian Hannasch, president and CEO of Couche-Tard.

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Leading the change in the Southeast, where the company acquired The Pantry Inc. and its Kangaroo Express stores, is Darrell Davis, senior vice president of operations for Couche-Tard. “It’s been a busy year and half for us internally as we look at all the different brands that we represent and what’s the go-forth strategy and being able to serve our customers better,” Davis told Convenience Store News. The c-stores in the Southeast United States — which include Circle K and Kangaroo Express locations — will be the first to feature the new Circle K brand and image. The process will take about a year. Included in the transitioning are nearly 2,400 stores in four divisions: the South Atlantic, Southeast, Florida and the Gulf Coast. All four divisions are represented by their own vice presidents. “We are a global brand, but we still have local decisions and local flair and local ways that we go to market,” Davis explained. Today, Couche-Tard operates four retail banners: Circle K, Kangaroo Express, Statoil and Mac’s. The company’s leadership team faced some “tough and emotional questions” when deciding which banner to make its global convenience brand, according to Davis. “The leadership team felt because Circle K already had a global presence, larger than the other brands it represented, the recognition of that name would be broader,” he said. “That in itself was one of the deciding factors in selection of the brand.”

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INDUSTRYROUNDUP

retailer tidbits n QuikTrip Corp. is testing a new in-store, sit-down

restaurant concept at a Tulsa, Okla., location and a drive-thru window to be added this fall. There is currently no timetable for the length of the test.

n 7-Eleven Inc. and PayNearMe

introduced a new bill pay app that allows consumers to pay more than 17,000 national and local billers with cash at participating 7-Eleven stores. The app is marketed exclusively by 7-Eleven to its customers. n Kum & Go LC began construc-

tion on its new headquarters, The Krause Gateway Center. Construction is expected to continue through early 2018. n Native Roots will open the first

two Gas and Grass locations in Colorado Springs next month. The new retail model combines a traditional gas station with a marijuana dispensary. n Riiser Energy and its R-Store loca-

tions marked their 70th anniversary with a weeklong celebration that kicked off Sept. 20. R-Store locations offered in-store sales, R-Store app specials and a Green Bay Packers ticket giveaway. n SuperAmerica LLC reached a

multiyear contract renewal with Eby-Brown Co. LLC. Eby-Brown will remain the exclusive supplier to all corporate SuperAmerica stores and will be the authorized supplier for its franchise locations. n Sheetz Inc. opened its second

convenience store without a gas station on Sept. 22. Located near Penn State University, the store features casual dining options and a beer cave. n Wawa Inc. and Citi Retail Services

signed a multiyear pact for a private label consumer credit card program. The Wawa credit card launched Sept. 30.

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

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INDUSTRYROUNDUP

supplier tidbits n Convenience distribu-

tor Pine State Trading Co. completed its asset purchase agreement with compet-

ing wholesale distributor Albert H. Notini & Sons. Lowell, Mass.based Notini & Sons was founded

in 1890 and carried an expansive product line for c-stores. n The Coca-Cola Co.

formed a new National Product Supply System (NPSS) in order to build a stronger, more streamlined production system in the U.S. market. The NPSS will facilitate optimal operation of the product supply system for Coca-Cola bottlers. n R.J. Reynolds Tobacco Co.

signed a technology-sharing term sheet with British American Tobacco Limited. The pact provides a framework for collaboration and mutual cross-licensing of vapor product technologies through 2022. n Anheuser-Busch is adding Golden

Road Brewing to its craft beer portfolio. Golden Road’s products include Point the Way IPA, Wolf Among Weeds IPA, Golden Road Hefeweizen, and 329 Days of Sun Lager. n Heineken kicked off its integrated

global “Spectre” campaign, a continuation of its 18-year partnership with the James Bond movie franchise. Limitededition Heineken and Heineken Light bottles and packaging hit store shelves in late September.

20 Convenience Store News | NOVEMBER 2015 | WWW.CSNEWS.COM

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Got Loyalty? Driven by new technology and consumer demand, changes are happening fast in the world of customer retention By Tammy Mastroberte

oyalty is not what it used to be. What started in the convenience store industry as punch cards and points with limited redeeming options is evolving thanks to technology, coalitions and consumer demand. And this evolution is not slowing down any time soon. Earlier this year, 46 percent of retailers reported loyalty programs as a top priority, and in the next five years, 883 percent more retailers plan to have the ability to identify customers when they walk in the door using smartphones, according to a report by retail consulting firm Boston Retail Partners. “Loyalty is less and less about points and thresholds,” said Mark Johnson, CEO and chief marketing officer of Loyalty360, the loyalty marketers association based in Cincinnati, Ohio. “Loyalty programs should boost interest and engagement for brands.” For convenience stores, the goal is not only to drive fuel customers into the store, but also to encourage repeat visits. Using the latest technology, operators can identify who is at the pump or in the store, and personalize offers based on each consumer’s activity. Thorntons Inc., based in Louisville, Ky., launched its Refreshing Rewards loyalty program powered by Paytronix Systems Inc. in September 2014. Rewards are based on three levels: Welcome, Premium and VIP. Using the Paytronix Rules and Wallets Engine, the program can segment registered customers by how often they visit or purchase gas, and the company can deliver varying levels of rewards based on visits, spending and purchase behavior.

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Thorntons’ goal is to encourage gas-only customers to shop inside the store and also drive frequent shoppers’ incremental visits by leveraging their transaction history. “While it’s very difficult to get someone who is not using a convenience store to begin using it, Paytronix has given us the ability to capitalize on the huge opportunity to increase the visits for existing customers,” said Thorntons President Tony Harris. Additionally, while gas discounts play a role in the Refreshing Rewards program, members can also receive personalized perks based on the things they purchase most, as well as frequent purchase rewards and automatic sweepstakes entries. Despite the declining gas prices of late, “fuel rewards will be part of programs consistently moving forward,” according to Loyalty360’s Johnson, noting fuel still has an emotional appeal. In fact, many c-store rewards programs either focus rewards around gasoline or include it as a major component of the program. “Consumers became hyper-sensitive as soon as gas exceeded $4 per gallon and while the hypersensitivity has waned a bit, the concern has not gone away,” said Rick Dery, senior vice president and chief marketing officer for Gulf Oil LP, based in Framingham, Mass. “People still like the idea of spending less on what you have to and more on what you want to, so paying less for gas is still something resonating with customers.” In July, Chevron Corp. launched a new Techron Advantage Fuel Credits program in collaboration with Synchrony Financial that enables Techron Advantage personal credit card and Visa cardc-

cardholders to earn 3 cents per gallon in fuel credits at participating Chevron and Texaco stations. Visa cardholders can also earn 10 cents per gallon on purchases of $300 or more at non-fuel merchants each month, and 20 cents per gallon when spending $1,000 or more. “Chevron has had a loyalty discount as part of our Visa co-branded card since 2008. With the new program launch, we are excited to offer an enhanced loyalty discount to the entire cardholder base,” said Brian Sardelich, consumer card manager at Chevron. Savvy c-stores are expanding their customer rewards beyond fuel as well, as today’s consumers are demanding choice, simplicity and flexibility from loyalty programs, according to Dennis Armbruster, vice president and managing partner of LoyaltyOne Consulting based in Toronto, Ontario, Canada. “One thing is consistent, no matter what industry, and that is choice and flexibility,” he said. “The more open you make the rewards side of the equation, the better.”

to launch Plenti, one of the first coalition programs in the United States. Plenti allows shoppers to earn and redeem rewards points across various brands, including ExxonMobil, Rite Aid, Macy’s, AT&T, Nationwide, Direct Energy and Hulu. Not tied to a credit card, the program is free to join and works with all payment networks, including MasterCard, Visa and cash payments. “In every other major geography in the world outside of the U.S. — Canada, Germany, United Kingdom, Australia — coalition is the predominant loyalty model,” Armbruster noted. “Most traditional

Coalition loyalty

While many loyalty programs allow customers to earn points on purchases made at the company’s locations and redeem points in the same way, coalition loyalty programs are starting to gain some traction. These programs span across other businesses and industries, allowing consumers to earn points shopping at participating merchants, and in some cases choose how and where they redeem the points. American Express teamed with marketers earlier this year

WWW.CSNEWS.COM | NOVEMBER 2015 | Convenience Store News 23

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propositions for customers to apply rewards toward bills they don’t like to pay, such as gas and electricity, and there is a demand for it from customers, Armbruster said. “There is an appetite for that, and I applaud Gulf for going down this path. I think others should take a look at that,” he noted. Gulf is now testing the next phase of the program, which will include a mobile app, offering customers the ability to pay via mobile, redeem Power Points and rewards at the pump, and more. GettinG teChniCal

Gulf oil currently has more than 10,000 users in its Power Points loyalty program.

models rely on a grocery chain because of the percentage of income from grocery, but the U.S. doesn’t have a national grocery chain so that’s a challenge.” Gulf Oil took the coalition approach when creating its Power Points loyalty program for Gulf Electricity customers in October 2014. The company extended Power Points to its branded dealers in July 2015. In the past, points accumulated from shopping at a number of participating retailers, including Macy’s, Target, Walmart and Home Depot, could be used to pay Gulf Electricity bills. Now, consumers can choose to apply the points toward their Gulf Orange Card bill or receive a Gulf cash card in the mail to use at any Gulf location for gas or merchandise inside the store. The company currently has more than 200,000 Gulf Orange cardholders and more than 10,000 Power Points users, with the numbers growing every day, Dery said. “Customers can shop online at any of the participating stores and get a percentage back on their total purchase in Power Points,” he explained. “Right now, each Power Point is worth $1 and that will roll into a customer’s account and translate to Gulf gas cards or as payment toward their Gulf Orange card.” LoyaltyOne has done research around value

With the continued evolution of mobile apps and mobile payments, technology is reshaping the way consumers participate in loyalty and rewards programs from retailers. In fact, consumers are requesting this more than ever. “We created our mobile app and redesigned our website through OpenStore by GasBuddy because consumers have been asking for it,” said John Schaninger, vice president of sales and marketing at QuickChek Corp., based in Whitehouse Station, N.J., and operating 140 convenience stores in New Jersey and New York. “What the consumers ask for, we have to deliver.” Wawa Inc. and 7-Eleven Inc. also both launched mobile apps connected to rewards, with Wawa introducing a mobile app and Wawa Rewards program earlier this year. As of January, Wawa stores were accepting mobile payments, and the app also allowed

QuickChek’s app engages users with targeted digital coupons, campaigns and games.

24 Convenience Store News | NOVEMBER 2015 | WWW.CSNEWS.COM

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customers to make in-store purchases using a Wawa gift card from their smartphones. Customers can sign up to earn Wawa Rewards, redeem rewards and more from the app. Meanwhile, 7-Eleven’s new loyalty platform, 7Rewards, is based on its mobile app and enables customers to receive a free beverage for every six purchased, including coffee and fountain drinks. Each time a customer purchases a cup, the cashier scans the barcode in the app and a “punch” appears in the app. After six, a “You’ve earned a free cup” notification appears in the app. “7-Eleven is a beverage destination for millions of Americans, with over 60 percent of our customers including a beverage with each purchase,” said Laura Gordon, 7-Eleven’s vice president of marketing and brand innovation. “We know that millennials like to have plenty of choices and, hands down, 7Rewards offers more beverage variety than any other rewards program.” At QuickChek, its new website and app launched in March was the fastest launch in OpenStore history in

Give More, Get More

Retailers need to step up their game to win over today’s tech-savvy consumer. Loyalty programs must strengthen interactions with the customer and increase loyalty by enabling enhanced services and rewards, including: • Real-time customer identification in-store to enable guided selling; • Customized rewards based on customer preferences; • Gamification to engage customers and encourage social interaction; and • Mobile tracking and redemption of rewards and offers. Source: Boston Retail Partners

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terms of the number of downloads, Schaninger noted. The company can now offer digital coupons and campaigns directly to mobile phones. “Typically, we offer something free or a price promotion, where a notification pops up on the screen of their phone alerting them to the message or deal,” Schaninger said, explaining technology will be playing an even larger role in the future. The company already installed beacons in all of its stores, and will be looking at geo-fencing soon so the retailer can message customers when onsite or inside the store. “The engagement between customer and store team will grow through technology and the growing importance of technology in speaking to customers, specifically millennials, is a key factor in what we will do moving forward,” he said. other industries to WatCh

Loyalty programs are not just evolving in the convenience store industry. The changes underway are affecting all industries, and c-stores can learn from them as well, including the restaurant, hotel, grocery and drugstore industries. “The hotels are creating simplicity and personalization, so X amount of stays equals a free stay no matter what entity you stay at,” said Johnson, citing Wyndham Rewards and Best Western Rewards as two leading examples. Wyndham customers can choose to earn airline miles or partner points instead of Wyndham points when staying at a property, and they can also earn points through car rentals and other partners. At Best Western, rewards members can redeem points earned at a number of participating retailers including Amazon, Apple and Walmart, and a variety of dining and airline partners. Some loyalty programs in other industries offer the option of donating rewards to a local group or charity. Target’s Red Card lets customers earn points toward their local school, while a grocery chain in California donates a percentage of sales to any registered nonprofit in the community or a school program, said Armbruster. “If parents register their card for a local organization or school, then a percentage of sales over 30 days will be sent to the organization for membership dues, kids equipment fees, etc.,” he noted. “It’s this outside-of-thebox offering that has value to consumers.” CSN

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Follow these tips whether launching a new rewards program or enhancing an existing one

By Tammy Mastroberte

oyalty programs continue to change and evolve in all retail industries, and with new and more powerful technology available today, these changes are happening faster than ever before. From upgraded point-ofsale (POS) systems and mobile apps to geo-fencing and beacons, rewarding customers is becoming easier and more targeted. “It’s about transactional engagement rather than a punch card, and technology is much more sophisticated today with point-of-sale terminals now coming with loyalty ports to allow for individual customer purchase history,” Anton Bakker, CEO and founder of Outsite Networks Inc., told Convenience Store News. With the data and analytics available today, programs are moving away from a one-size-fits-all approach and instead targeting promotions and offers to a customer’s behavior and purchasing. While many convenience stores started a loyalty program offering cents off on gasoline, incentives are moving into the store as well, which is where profitability lies. “Many companies are shifting loyalty from the pump to inside the store,” observed Andrew Robbins, president and co-founder of Paytronix. “They are shifting loyalty from the pump to inside because sales

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in-store for profitability is more important.” Below are five best practices convenience stores can utilize when either starting a new loyalty program or looking to maximize an existing one.

Keep It Simple While loyalty and rewards programs may be complex and detailed on the backend, the message to the customer should be simple. Employees should be able to easily communicate how the program works and it should be easy for consumers to understand, according to Tony Chidiac, vice president of retail at OpenStore by GasBuddy. “I sign up and get X, or I download the app and get X, such as a free fountain drink,” Chidiac said. “Another example is digital punch cards. That is more complex on the backend in terms of what a c-store needs to do, but it’s very simple for the customer.” This is especially true when launching a loyalty program or trying to get more members because the simpler it seems, the more likely people will want to sign up. “A lot of programs are overly complicated, and there needs to be a simple message to the customer,” Robbins agreed. “When you start a new program,

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you really want to focus on enrollment with a simple message, and then you can worry about engagement.” When it comes to simplicity, nothing is simpler and more effective than an instant price rollback at the pump, said Stephen Goodrich, CEO of ZipLine, whose ACH payment platform is the loyalty mechanism behind Cumberland Farms’ hugely successful program. “We’re an immediate gratification culture.”

Communication Is Key Consumer-facing technology is playing a big role

in today’s loyalty and rewards programs, including digital coupons, direct communication and mobile payment via smartphones and apps. And communication with customers is one of the most important marketing tools in loyalty, Chidiac explained. “There is an expectation from consumers for programs to be digital and have some form of two-way communication between the customer and the store or brand,” he said. “If they don’t have this, they are missing an opportunity.” When it comes to communicating, whether via

C-store Loyalty Programs at a Glance Here are some of the loyalty program providers available in the convenience store space, what they offer and whom they are working with: • Belly (www.bellycard.com) — Offering both an app and/or card, customers can sign up to earn points for rewards unique to a c-store brand, and retailers can connect with customers through email campaigns. A retailer can also segment their list to target customers based on behavior. Clients: 7-Eleven, Shell, ampm • Epoxy (www.epoxyapp.com) — A gift and loyalty app built by store owners, it allows customers to store gift cards and rewards in the app, and offers a digital punch card approach. Customers can also send a gift card to a friend and receive a gift card for themselves in return, and write reviews inside the app to allow a chain to monitor its reputation and respond quickly when needed. Epoxy also includes analytics regarding customer referrals, gift cards and loyalty cards via a dashboard. Client: Speedee Mart

• Outsite Networks (www2.outsitenetworks.com) — A transaction-driven program for in-store, at the pump and mobile. The company integrates with Apply Pay and Google Wallet, as well as tap beacons that can be used in-store and at the pump. The system also offers data and analytics, along with benchmarking to compare a company’s performance against the industry. Clients: Circle K, CITGO, Woodfin Oil/Pit Stop • Paytronix (www.paytronix.com) — As a vertical marketing engine, the company works with a number of restaurant companies, connecting with point-of sale systems, online ordering and delivery, and more. Paytronix can track behavior by customer segment, providing analytics and insights to drive visits and loyalty. Client: Thorntons

• Kickback Points (www.kickbacksystems.com) — Formed in 2000, this coalition loyalty program includes more than 2,000 companies in the United States and Canada. The company provides initial consulting, program architecture, equipment, supplies, full set-up and training. Kickback Points also offers customized reporting, gift card programs and private credit card programs. Clients: Conoco, Phillips 66, FastLane Convenience

• Zingon (www.zingon.com) — Retailers can create a customized app for both Android and iOS and integrate a loyalty program, mobile payment, coupons and offers through Zingon. Text message and coupon alerts can be sent to customers, and the company provides “card swipe” messaging via SMS, based on customer profiles and buying history from loyalty card reporting. Client: Flash Foods

• OpenStore by GasBuddy (www.openstoreloyalty.com) — This program offers a full digital marketing platform for convenience stores, including a branded app, website, texting and email marketing, all managed from one dashboard. The platform is open and integrates with a number of technologies, and the company will be rolling out online food ordering later this year. Clients: Speedway, SuperAmerica, QuickChek, Rutter’s Farm Stores, E-Z Mart

• ZipLine (www.zipline.biz) — Card and mobile-based “payments as loyalty” platform, where retailer savings on payments interchange is leveraged as price rollback at the pump or for consumer points. ZipLine can be used as a standalone program or integrated with other loyalty apps or card programs to augment an existing program. Clients: Cumberland Farms, Fastrac, Flash Foods, Parker’s, Ricker’s

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text messaging, in-app notifications or email, c-stores are still falling behind other industries, cautioned Paytronix’s Robbins. A good communication program allows a company to keep customers active and engaged, while reminding them about promotions and more, he said. “Messaging customers about a change of gas prices in their area, or sending a message when a customer is at the pump with a deal to drive the customer into the store are opportunities available today,” Robbins explained.

Personalize Offers Like everything today, loyalty and rewards programs are becoming more personal. With data and analytics, as well as more sophisticated POS technology, c-stores can target promotions and offers based on customer behavior, keeping deals relevant to each

“You have to jump in with two feet — you can’t be halfway. I’ve seen companies do a phenomenal job giving away coupons or putting out signage, but then cashiers don’t know about the program or how to redeem a coupon.” — Tony Chidiac, OpenStore by GasBuddy

individual, and even broaden the areas of the store a particular customer shops. “If I’ve never been in the store and only buy gas, sending a message for a free coffee might get me in there,” said Robbins. In the loyalty world, programs are moving to transactional analytics. C-stores need to know who is a coffee customer vs. a fountain beverage customer, and then target offers and rewards to their purchase history. This is especially important with millennials. “Particularly with millennials, if you are not relevant to them, you are wasting their time,” Outsite’s Bakker noted. “They will engage with you the more relevant you are, and being transactional means you can be relevant to their behavior.” Additionally, while many c-stores traditionally think about promotions and offers by category, this

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Millennials only want to receive offers that are relevant to their individual purchase behavior.

mindset needs to begin shifting to customer segments when it comes to loyalty, according to Robbins. For example, simple segments can include customers who only buy gas and never come inside the store; customers who do both; and customers who only come inside the store but never buy gas. Each segment would require a different offer or reward. “After they segment that way, c-stores can break them down further by the things they buy, such as coffee buyers and tobacco buyers, and then overlay frequency in,” he said. “Some people come into the store 10 or 20 times per month, and a store needs to treat those people differently than people who come in one time per month.”

The Top-Down Approach When launching or building a loyalty or rewards program, there needs to be internal communication from the CEO to the store level. C-store companies need to get everyone on board, and explain the goals of the program and what it will look like for customers. “It’s imperative to have everyone on board from the top to the bottom,” OpenStore’s Chidiac stressed. “Companies need to get the store-level cashiers involved because they are the ones promoting the program.” He recommends offering an employee incentive program tied to the loyalty program for store-level employees to give them motivation when promoting the program or app. Also, everyone should understand the program and how it works. “You have to jump in with two feet — you can’t be halfway. I’ve seen companies do a phenomenal job giving away coupons or putting out signage, but then cashiers don’t know about the program or how to redeem a coupon,” Chidiac noted. This is where employee training comes in, and

companies need to invest the time and resources into this, especially for frontline staff, echoed Robbins, explaining that it’s not enough to just put a flyer out and expect people to sign up. C-stores need to engage and train their staff members from day one. “Loyalty is not a light bulb. You don’t just flip a switch and there is light,” Bakker agreed. “It is not an additional item one does, it is the item one does. So, companies need to become loyalty centric in their marketing approach — and where the rubber meets the road is the cashiers in the store.”

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Make It Mobile With the introduction of mobile apps, c-stores can connect with loyal customers on the go, and utilize messaging and notifications to communicate relevant promotions and more. Some are even utilizing geo-fencing and beacons to target promotions to those in proximity to the store or out at the fuel pump. Mobile apps also allow for gaming, another popular avenue for c-stores to engage customers. OpenStore created a balloon game for QuickChek Corp., which is involved in an annual balloon festival every year. The company finds more than 50 percent of users are playing the in-app games today, Chidiac explained. “They could be a slot machine approach where people match three like prizes and win prizes from the store, like free mugs; or a bubble pop game where if they pop five and three of them are the same, they win a prize,” he said. The next wave of mobile will be mobile wallet integration. Consumers will not have a wallet for each retailer, but they will be utilizing

materials on the windows and the pump were how c-stores engaged, but now customers are finding out about offers through mobile engagement,” he said. CSN

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WWW.CSNEWS.COM | NOVEMBER 2015 | Convenience Store News 33

Inspired Design With a little elbow grease and a lot of creativity, this year’s winners think outside the box By Melissa Kress & Danielle Romano

ome consumers may think all convenience stores are alike, but insiders know this isn’t true. There are many features that differentiate a retailer from its competitor down the block: foodservice offerings, prices and added services, to name just a few. But a c-store retailer needs to draw consumers in the door for them to find that out, and a key to doing that is creating a store design that sets it apart from the pack. This year, the 10th annual Convenience Store News Store Design Contest recognizes 14 c-store chains excelling in this area: five main category winners, four honorable mentions and five specialty award winners. The Store Design Contest honors both new and rebuilt convenience stores whose designs excel in areas such as interior layout, use and effectiveness of signage and logos, and exterior property and landscaping. Awards are presented separately to chains and single stores. Construction or remodeling of eligible stores must have taken place between January 2014 and February 2015. Winners were selected based on innovation, creativity and the positive impact of the design and/or remodel on the retailer’s overall business. This year’s winners span the country. A Tampa, Fla., flagship store took the top honor in interior design for showcasing its family-owned, multi-generation community roots, while another flagship location in Hermiston, Ore., worked with a modest budget to meet the needs of three distinct customer groups, capturing the award for Best Mid-Budget Remodel. Here, we profile the five main category winners. Descriptions and photo slideshows of all 14 winners, including honorable mentions and specialty awards, can be found on CSNews.com. Buckle up as we travel across the United States and take a peek at how c-store retailers are thinking outside the box when it comes to store design.

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And the Winners Are… Best Original Design Winner: 5 Points Market, Kerrville, Texas Honorable mention: Alltown Market, Orono, Maine Best interiOr Design Winner: Radiant, Tampa, Fla. Honorable mention: Lambo’s, Tuscola, Ill. Best sky’s the limit remODel Winner: Metro Market, Augusta, Ga. Honorable mention: PS Market, South Elgin, Ill. Best miD-BuDget remODel Winner: Space Age Fuel, Hermiston, Ore. Honorable mention: Holmes Oil, Raleigh, N.C. Best lOw-COst remODel Winner: Love’s, Middletown, Pa. Best travel Center Design Winner: Coffee Cup Fuel Stop, Moorcroft, Wyo. Honorable mention: Mach 1, Harrisburg, Ill. Best FOODserviCe PresentatiOn Winner: Royal Farms, Hunt Valley, Md. Honorable mention: Kings Cross Bay, Ozone Park, N.Y. Best graPhiCs Winner: Valley Co-op, Bellevue, Idaho Descriptions and photo slideshows of all the winners, including honorable mentions and specialty awards, can be found in the Special Features section of CSNews.com.

ConvenienceWorks

Best Original Design

Winner: 5 Points Market, Kerrville, Texas Designer: Paragon Solutions

Points Market is the definition of “luxury convenience in a pint-size package,” according to its designer. The 2,380-square-foot micro convenience store’s exterior is coated in ledge stone capped with an asymmetrical arch. The interior features solid goldenrod and Texaspatterned period walls that are completed with creamy chocolate ceilings and suspended ceiling clouds above the cashier. The “lavish” look is finished with blonde wood counters, chalkboard signage, and sleek black and silver accents. When it came to the small footprint of the store, the retailer felt it was important to fit in all the essentials while staying in constant contact with its customer base. In order to do so, 5 Points Market offered an interactive customer questionnaire at checkout, which set the stage for it being on target with ideal store offerings its customers want. This focus to stay on point and love for signage design influenced the retailer to rebrand other locations to the 5 Points theme. Subsequently, Paragon Solutions created an entire 5 Points branding. 5 Points Market offers unique amenities and products including craft beer, local wines and specialty coffee served by a barista at the 5 Points Café. Seating is unlimited and can be found inside and outside, where customers can relax under a dappled sunlight.

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Best interiOr Design Winner: Radiant, Tampa, Fla. Designer: Walker Brands

he Radiant convenience store, located at 27741 Wesley Chapel Blvd. in Tampa, is Radiant Group LLC’s newest 6,000-square-foot flagship store that has exceeded expectations with five times the increase in inside sales over the previous smaller Radiant store in the same location. With increased competition in the Tampa Bay market, Radiant Group worked with design firm Walker Brands to develop a brand positioning and strategy to not only guide its store design, but also create a customer experience to stand out in today’s market. “The design represents Radiant’s authentic familyowned, multi-generation community roots in the Tampa Bay area,” the retailer said. “The identity was evolved to be more contemporary, and the environmental graphics visually express the history of Radiant, the neighborhood of the store and the corporate philanthropic commitment to the community.” The retailer’s goal was to use 360 degrees of interior surfaces to celebrate Radiant’s story, as a more restricted set of merchandise and point-of-sale guidelines enable customers to easily find product categories with branded touchpoints. Sitting in a prime location directly off the interstate, the store offers freshly brewed coffee and specialty teas by a local gourmet roaster, Joffrey’s Coffee and Tea, a self-serve yogurt and milkshake bar, retail and grocery items, a Subway restaurant and Marathon gasoline.

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

Best sky’s the limit remODel Winner: Metro Market, Augusta, Ga. Designer: Paragon Solutions

etro Market by Sprint is “a larger-than-itappears convenience store” in downtown Augusta that combines gourmet food with walk-in convenience and a rooftop bar, according to its designer. Dimensional graphics and unexpected architectural details, such as coffered ceilings, textured wall treatments and black porcelain enamel subway tile, add interest while creating a warm environment. The store’s neutral palette and crisp materials also create a high-end shopping experience. Custom food orders are encouraged with easy access to kiosks and succinct signage simplifying the process. Plus, a well-thought-out layout and clear wayfinding provide easy navigation. Although the retailer Sprint Food Stores Inc. was challenged with incorporating all the convenience of a c-store into the building’s long, slender footprint, the remodel’s results have been high foot traffic and abundant customer praise.

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

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Best miD-BuDget remODel Winner: Space Age Fuel, Hermiston, Ore. Designer: King Retail Solutions

he Space Age Fuel store in Hermiston serves as the Oregon chain’s flagship location, as well as the retailer’s only travel center. The store aims to meet the needs of three unique customer types: over-the-road professional truck drivers, local customers and traveling customers. When creating the remodel plan, the retailer wanted a layout that not only works well, but also meets the needs of both professional truck drivers and residential/non-commercial travelers. Therefore, the store is laid out with a separate entrance for diesel customers who are more likely to utilize the showers, lounge and business center. Space Age Fuel refreshed its branding at this store by creating a standout identity that distinguishes it from other truck stops and travel centers. This was done through the reimaging of colors, finishes, lighting, cabinetry, fixtures, graphics and signage. A major focus of the store is its extensive prepared food offering, which includes fresh and healthy packaged meals to go; light grab-and-go options for breakfast, lunch and dinner; a Hot Foods bar; and proprietary Coffee Planet self-serve café. The store’s “farm to table” approach includes year-round in-store fresh produce, as well as an exterior standalone summer produce stand that is leased and operated by a local farmer. Space Age Fuel plans to extend this new, modern store design to its other locations.

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

Best lOw-COst remODel

Winner: Love’s Travel Stop, Middletown, Pa. Designer: DAS Companies Inc.

ove’s Travel Stops & Country Stores partnered with design firm DAS Companies Inc. to reimagine how consumers shop for mobile electronics at highway travel stops. Together, they created the MOBILE 2 GO zone, in which they remodeled the apparel department into a sensory-charged, convenient, mobile electronics shopping experience. The MOBILE 2 GO zone features: • A host of interactive displays that serve as “virtual salespeople” • Electronic Engagement Center • Sound Station • TV Tower display • Garmin vivofit display The interactive merchandising is housed in a maplelaminate, slatwall-anchored bookcase system. Products are organized by category within the bookcases and in coordinating H-island displays placed on a diagonal to encourage customer entry. The remodel objective was to drive incremental Love’s comp store sales, while establishing Love’s as the destination for mobile electronics on America’s highways. Despite executional challenges in the remodeling process, within 90 days and five store remodels, Love’s saw a double-digit percentage sales increase, shopper traffic increase, positive customer feedback and a strong Love’s store operations reception, according to the contest entry. As a result, Love’s expanded the MOBILE 2 GO zone rollout to 100 new and remodeled stores. CSN

44 Convenience Store News | NOVEMBER 2015 | WWW.CSNEWS.COM

FOODSERVICE Prepared Food + Hot, Cold, Frozen Dispensed Beverages

HOW TO

Making Sense of the Latest Equipment & Technology Advancements

By Bob Phillips

Call tO aCtIOn: Foodservice 101

• Don’t be an early adopter. Resist the temptation to run out and embrace version 1.0 of anything. Let someone else be the guinea pig and have to work around all the unexpected design flaws. • There very well may be competing technologies in the marketplace (think VHS vs. Betamax). You might want to wait for the smoke to clear and see which technology emerges as the standard before investing. • Read up. Trade magazines, industry articles and reviews are a great place to start. The convenience store, supermarket and restaurant industries have many avenues to find the latest and greatest alternatives. • Conduct formal evaluations to determine your specific needs. Is speed most important? Is it space in the kitchen? All equipment should be evaluated to best achieve your goals.

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

onvenience store retailers are always looking for a way to get a leg up on the competition — not only competitors within the convenience channel, but also other off-premise channels that continually seem to be encroaching on their turf. Perhaps the best way to stay ahead of the curve is to keep current with the latest innovations in equipment and technology, especially as they pertain to your foodservice operation. With customers’ tastes seemingly in a state of perpetual change, innovations in foodservice equipment and technology provide c-store operators an excellent opportunity to enhance — or even create — a competitive advantage against the competition, increase efficiencies, expand their customer base, and ultimately build their brand in the marketplace. “Each day, there is a new way to communicate to [your customers], serve them faster and with higher quality food,” explained Convenience Store News How To Crew member Ed Burcher, a former c-store executive with foodservice expertise and currently the principle at Burcher Consulting, a suburban Toronto company specializing in foodservice, convenience, retail and merchandising solutions. “I do not suggest chasing the ‘shiny penny’ when it comes to new technology, but staying abreast of the changes is critical for serving great food in an efficient manner.”

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RECEnt InnOVatIOn

There has obviously been a steady stream of equipment/technology products and systems coming into the market over the past five years, often rendering previous standards obsolete. Burcher points to cook chill technology, a system designed to cook food, then rapidly chill to minimize microbial growth. “This has opened up really highquality hot foods and proteins while maintaining a process that is easy to execute and implement,” he said. When asked to identify the most innovative new foodservice equipment or technology, How To Crew members offered up a veritable cornucopia of products. Ryan Krebs, director of foodservice at York, Pa.based Rutter’s Farm Stores, pointed to the Coca-Cola Freestyle and Pepsi Spire fountain units. “They allow for hundreds of choices with the same footprint as a standard eight- or 16-valve fountain machine, with upgraded visual and marketing options,” he noted. The only drawback is that each beverage company demands exclusivity, which means both machines cannot be used at any one location. Krebs also cited the Turbo Chef oven as a singular piece of equipment that has resulted in improved business performance. “It allows for multiple cooking methods on set timers. It is also helpful in executing many diverse items with consistent results in a timely and Foodservice 201 effective manner.” How To Crew • Make sure that integrating technologimember Chad Prast, cal innovation is part of your operasenior category mantional, marketing and growth strateager of fresh foods gies. But don’t succumb to the “Oh and dispensed bevlook! Bright! Shiny!” syndrome. erages for Murphy • Innovation should be an integral eleUSA Inc., reported ment of who you are. Make sure you that “Lancer and have the necessary resources (peoCornelius seem to be ple, money, training, support, etc.) to getting very innovamake the innovation succeed within tive lately trying to your business model. keep up with the • At this stage, a retailer should have digital screens.” the contacts and relationships wherePrast also cited by companies bring new items to Coca-Cola’s Freestyle their attention. And they should know fountain unit what items can meet the needs of the and “coffee-wise, store, staff and customer. Bunn and Curtis are doing a good job

Call tO aCtIOn:

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

with single-cup coffee brewers, but they are missing the boat on offering a machine that can do a larger size cup of coffee,” he said. “Fifty percent of our coffee customers purchase 20-ounce or larger coffee, and most singlecup machines do 12-ounce or less.” Customer behavior related to social media, online ordering and mobile apps are key drivers to the advances in foodservice technology design, according to How To Crew member Mathew Mandeltort, vice president of foodservice strategy at Naperville, Ill.based Eby Brown Co. With counter space at a premium, equipment with a small footprint is also imperative. “The development of all-in-one specialty coffee systems not only balances the need to meet customer demands, but also the reality of space limitations typically found in convenience stores,” Mandeltort added. David Bishop, How To Crew panelist and managing partner of Barrington, Ill.-based Balvor LLC, identified the soft-heat brewing system as one of the most important pieces of foodservice equipment that has come to market in recent years. “This system has so many benefits that its impact is felt well beyond the hot dispensed beverage category,” he said. According to Bishop, soft-heat technology improves product quality and operational controls relative to holding times with digital timers. In addition, it enables the freed-up labor to focus on other foodservice-related tasks. BRaVE nEw wORlD

The impact on an organization of adding a new product requiring specialized or dedicated equipment can be profound. Beyond the initial capital outlay, there may be issues related to maintenance, training on its usage, workflow (e.g., how does the staff integrate producing the new product into the existing production scheme), and speed of service. “We are in the process of developing a Panini program that will require the introduction of a sandwich press into existing production space for retailers,” shared Eby-Brown’s Mandeltort. “Retailers will have to take into account the cost of the machine, power supply availability, staffing, maintenance, storage of new product, display of new product, etc. There are a lot of moving parts if a product is simply not an extension of what you are already producing.” Many interesting customer-facing solutions are available today. It is important for retailers to understand which solutions are a strong fit for their

FOODSERVICE Prepared Food + Hot, Cold, Frozen Dispensed Beverages

Our How To Crew business models. “Mobile ordering apps could drive more sales, reduce wait times and improve the shopping experience in cases where a retailer has a strong take-home business (e.g., pizza),” said Bishop. “Kiosks or ordering screens are great for retailers who have a strong made-to-order program today,” he continued. “Back-office analytics can help align labor and prep schedules with demand at a more granular level. [For example,] looking at historical sales trends, retailers can prep accordingly to meet demand and minimize waste.” Today, consumers want quality foods fast and at a reasonable price. What this means for operators is that they constantly need to find ways of improving speed of service (i.e., reducing wait times), delivering a consistent product experience, and ensuring the program is profitable and generating the level of expected returns. “Equipment in this context ideally can help with each, but that is based on the assumption that the operator is already working with a relatively strong program. If not, equipment at minimum in the near term can help strengthen speed of service and product quality,” Bishop said. But is it better to hold on to lower-cost equipment that does the job but takes longer, or invest in highend equipment that costs more but shortens turnaround time and increases quality? “It is more about the process,” Burcher maintained. “There are great Panini grills that can take five and a half minutes Foodservice 301 to make a grilled • Understand how the innovation is [cheese] sandwich going to impact your target customand there are highers. If you’re known for the quality of speed ones that can your customer interactions and suddo a similar job in 45 denly disrupt that through the use of seconds. In each case, kiosks, be sure your customers don’t there are drawbacks feel the dining experience has been — speed, quality, compromised by the diminishment of consistency. In genhuman interaction. eral, the better equip• Seek out suppliers/manufacturers that ment is preferred will design equipment to your needs. if the operator and Detail your goals and objectives, and culinary development then have the equipment designed to people know how to meet them. best utilize the equipment. Sometimes, the

Call tO aCtIOn:

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

David Bishop — Balvor LLC Ed Burcher — Burcher Consulting Joseph Chiovera — XS Foodservice & Marketing Tom Cook — King-Casey Jack W. Cushman — CST Brands Inc. Dean Dirks — b2b Solutions Eric Giandelone — Mintel Foodservice Ryan Krebs — Rutter’s Farm Stores Mathew Mandeltort — Eby-Brown Co. LLC Larry Miller — Miller Management & Consulting Services Maurice Minno — MPM Group Paul Pierce — Pure Plates Tim Powell — Q1 Productions Food & Beverage Chad Prast — Murphy USA Inc. Jennifer Vespole — QuickChek Corp.

lower-cost equipment does a better job when combined with processes in the store to improve speed.” Bishop stressed that if the goal is to consistently deliver a quality product fast and at a value your customers expect, then retailers really need to evaluate this very carefully. “While you don’t want to spend more than you need to, the key is ensuring the equipment can support your business as it grows,” he said. “Whether that’s from a capacity standpoint or the ability to support other types of products.” Customers have been very receptive to technological improvements at Murphy USA. “Overall [response] has been very good. Take coffee for example. Just going from glass pots to soft heat 15 years ago would have been looked at negatively by some customers. Now customers accept it and don’t even think twice,” Prast relayed. “On the fountain side, we have moved to a lot of touchscreen machines, which customers seem to pick up quickly with very few issues. I think millennials have zero issues with technological advances, and other customers are getting used to it much quicker than in the past.” Customers are seeking the “daily double” when they visit a convenience store: high-quality food combined with fast service. These factors require manufacturers to make continual improvements to their technology and equipment. “It is important for c-store operators to keep up with these developments in order to satisfy their customers’ needs, while at the same time staying ahead of their competition in the fight for food and beverage sales,” noted How To Crew member Tom Cook, principal of design firm King-Casey. CSn

TECHNOLOGY Enterprise + POS + Digital + Payment Systems + Business Intelligence

TECHNOLOGY IMPLEMENTATION OF THE YEAR

A Banner Year 7-Eleven’s mobile-first technology strategy pays off in a multitude of ways By Brian Berk

n any other year, the Convenience Store News Technology Implementation of the Year award would involve one special thing a retailer did to improve its business. This year’s winner cannot be lauded for just one thing, but rather a group of things. 7-Eleven Inc. has had a banner year in terms of technology and is being honored with the Technology Implementation of the Year award for its multifaceted efforts. “We are honored to receive this award,” Steve Holland, senior vice president and chief information officer for 7-Eleven, told Convenience Store News. “Joe [DePinto], our CEO, is very pleased as well. Thank you for the award.” Most of the efforts involve 7-Eleven’s popular app. “We were very purposeful in our approach,” said Holland. “We saw the consumer changing and the marketplace changing even faster. We did a very thorough CSA [Current Situation Analysis] of where the consumer is at, where they are going, how they want to be connected and where they want to be connected. Our joint teams of Marketing, Innovation and IT led us to a mobile-first strategy.” The 7-Eleven executive noted there has been an explosion in the usage of smartphones in the United States and Canada, which led the convenience store chain to ask how it could solve consumer problems. “The CSA led us to creation of our app, connecting with the app and learning more about the customer,” said Holland. “We’ve become much more relevant and can serve them more. This was clearly on our strategy map.” The Dallas-based retailer has been quite pleased with its overall mobile efforts thus far. “7-Eleven is

about being your convenient neighborhood store,” said Holland. “This convenience extends to the mobile device in your hand.” Perhaps most notable among 7-Eleven’s mobile efforts was the c-store retailer’s launch of the 7Rewards loyalty program, which entitles customers to receive a free beverage for every six purchased. Having this program tied to the app is important, Holland relayed, because loyalty information updates in real time so customers don’t need to track anything on their end. Many consumers are also familiar with 7-Eleven’s birthday promotion, entitling customers to a free Slurpee on July 11 (7/11). But the chain stepped up this promotion this year, making it an entire week instead of one day. Customers who downloaded the mobile app received a multitude of benefits, including free prizes, during 7-Eleven’s birthday week July 12-18. “The 7-Eleven birthday week was a joint effort among our Merchandising, Operations, Marketing, IT and Innovation groups here,” recalled Holland. “So it was an all-handson-deck effort to not celebrate one day, but to celebrate a whole week. Working with our suppliers and manufacturers to create more value for the customers through the app, we saw dramatic increases in what we call digital adoption. Consumers were downloading the app, activating the information and then scanning products on a regular basis. And these customers kept on returning from a loyalty perspective. “7-Eleven’s marketing department is top-notch and they really know how to combine fun, digital and knowing the consumer. We help provide the enabling technology to them,” he continued.

WWW.CSNEWS.COM | NOVEMBER 2015 | Convenience Store News 51

TECHNOLOGY Enterprise + POS + Digital + Payment Systems + Business Intelligence

In late July, app users received yet another benefit nesspeople to mothers with kids and anyone else who when they got a free medium Slurpee drink offer by wants to declutter their day.” purchasing any Sour Patch Kids candy or Stride Sour The Postmates partnership allows 7-Eleven to meet Patch Kids gum. “Sour Patch became the No. 1 seller the needs of these customers, who want the ultimate in in our stores during this time,” said Holland. “This convenience. “This is a great way to serve Postmates idea came from our customers. Our customers told us and 7-Eleven customers together,” he continued. “When they would like to see certain things. One of them was Sour Patch Kids. It “Customers are demanding was a tremendous hit and continues to more convenience because be a great seller for us.” Yet another promotion involving they are trying to fit in more the app was a sweepstakes held in during the time they have. That May called the All Access Chill, where registered 7-Eleven app users were eliextends from businesspeople gible for a bevy of prizes, including a to mothers with kids and meet-and-greet with teen pop sensation Austin Mahone. anyone else who wants to “This promotion was also about declutter their day.” listening to what consumers wanted,” the 7-Eleven exec explained. “Music is — Steve Holland, 7-Eleven Inc. a huge way to connect to mainstay customers. Music lovers had a way to win more than 1,700 we look at the data, we are delivering faster to 7-Eleven prizes, including tickets to top concerts and an once-incustomers than other retailers because our stores are a-lifetime experience with Austin. Delivering a bunch of within those neighborhoods [in which customers request value and fun with our app was really a key thing.” delivery]. So, we are closer to those customers. Thus, the consumer is delighted with the service.” DELIVERING FOR CUSTOMERS

7-Eleven’s marketing and innovation platforms certainly don’t end with its mobile app, however. For example, the c-store operator, led by its Innovation area, teamed up with San Francisco-based Postmates to offer on-demand delivery via the Postmates iOS, Android or web app. This service allows 7-Eleven customers to receive an assortment of the retailer’s items — including hot foods, snacks and other convenience items — delivered in one hour or less. After initially offering this service to the San Francisco and Austin, Texas, markets, 7-Eleven was so pleased with early results from the program that it added it to select stores in New York City, Philadelphia, Miami, Chicago, Los Angeles and Seattle. Going forward, 7-Eleven plans to offer this service in even more cities, revealed Holland. Through its CSA, 7-Eleven noticed a shifting marketplace in which customers have less time to do things they desire, making delivery service so important. “Customers are demanding more convenience because they are trying to fit in more during the time they have,” stated Holland. “That extends from busi-

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

BEYOND MARKETING

7-Eleven’s technology approach doesn’t only involve successful app-related campaigns, Holland stressed. The c-store retailer recently undertook a large project to better equip all of its 8,400-plus stores and franchisees in the United States and Canada. “In March, we finished a complete technology overhaul of our back-end office systems for all of our franchisees and stores,” Holland relayed. “In fact, we replatformed 8,400 locations in a span of 189 days. We replaced the underlying programming language and databases that drive our store operations at each one of our store servers/in-store processors. “So, we’ve migrated away from some old technology to using state-of-the-art Microsoft .NET programming, as well as an Oracle database with our key technology partner NEC,” he added. “It was an enormous effort and the team knocked it out of the park.” Store processes are now faster; more predictive data is available to make better decisions; and the overall system is easier for franchisees and sales associates so they can focus more time on fresh food, product assortment and serving the customer. CSN

free webcast series

Winning the Backbar Battle: Other Tobacco Products are key to overall tobacco category growth Date: Tuesday, November 17, 2015 Time: 2:00 pm ET/1:00 pm CT/11:00 am PT Duration: 1 hour Other tobacco products (OTP) – which include cigars, smokeless, e-cigarettes, papers, pipes and loose tobacco – accounted for almost 5 percent of in-store sales and gross margin dollars in the convenience store industry last year, according to the 2015 CSNews Industry Report. Convenience store operators know that the OTP category continues to change at a rapid pace, presenting them with numerous tough decisions. Join this free CSNews webcast for a penetrating look at the evolution of OTP and the ongoing innovation in the category with special guests David Bishop, Managing Director, Balvor, and Joe Teller, Director, Category Management, of Swedish Match. Teller will be providing the latest trends and insights in the OTP category, focusing on the ever-changing and highly competitive Cigar category. Innovation, packaging, manufacturer programs and new growth segments are driving this important category to new heights. Tune in for the latest news. Bishop will share insights and perspectives derived from the Balvor Retail Composite benchmarks, focusing on key trends, including a look at the state of Moist Smokeless by price segment, the rise of Small Cigar Pouches, giving SNUs some added context, and the changing look of Electronic Nicotine Devices. He provides his thoughts on how these trends will likely infuence retailer strategies going forward and, in turn, OTP proftability.

PRESENTERS:

David Bishop Managing Partner Balvor LLC

Joe Teller Director Category Management Swedish Match

MODERATOR:

Tell us when registering what you are interested in having us discuss. We will incorporate your suggestions into this interactive webinar. If you’re a convenience store retailer, you don’t want to miss this event.

Sponsored by:

The MeaT SnackS

ReVOLUTIOn

Meat snacks: Satisfying consumer needs for portable fast fuel D

uring the past year, the market for meat snacks has ballooned in the United States. Sales of meat snacks, which include meat sticks and jerky, grew nearly 14 percent in the 52 weeks ending May 2015, according to Nielsen, outpacing the

The Meat Snacks Revolution

nearly 7 percent growth of the year prior. And Nielsen projects that the U.S. meat snack category will be worth $2.5 billion in 2015, with convenience stores accounting for nearly $2 billion of the total dollars.

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Consumer demand for dried meat has risen so sharply, in fact, that it now dwarfs the once high demand of comparable snacks. Euromonitor reports that jerky now outsells seeds, party mixes and pita chips combined.

Beef jerky on the menu Even restaurants have begun to ofer jerky on their menus with greater frequency. Jerky has long been a part of ethnic cuisines, particularly Thai, and now more mainstream chefs are recognizing the versatility and lean nature of jerky. Among the variety of jerky dishes being showcased at eateries nationwide are:

Why the big switch to meat snacks? Research suggests it’s because the inherent characteristics of these snacks meet some of the key criteria consumers use to select snacks in general: to replace a meal, to curb hunger between meals, and to satisfy a craving.

• Hand Cut House Beef Jerky at The Country Cat Dinnerhouse and Bar in Portland, Ore.

But dried meat’s popularity owes a great deal more to other factors besides snacking habits. The market for meat snacks has been on the rise from a consumer behavior standpoint, and nutrition, innovation, changing tastes and product variety are all contributing to its nationwide surge.

• Biltong and Chili Bites, SA Style Beef Jerky at Springbok in Houston • House Beef Jerky at The Cannibal Beer and Butcher, Brooklyn, N.Y. The growing category also has a made-to-order model ofered at SlantShack Jerky in Jersey City, N.J. SlantShack allows customers to “build” a jerky by selecting a meat, thickness, rub (i.e., Jerk McGurk’s Wild RubDown) and glaze (i.e., Sesameshire).

Healthier options lure consumers Americans’ health, weight and diet continue to be hot topics of discussion, and one of U.S. consumers’ current obsessions is protein. According to NPD, more than half of Americans say they want more protein in their diet, and half believe that animal meat is the best source of protein.

Top reasons consumers choose salty snacks As a treat

60%

To satisfy a craving

58%

Because my children ask

42%

Curb hunger between meals

35%

Take the place of a meal

24%

Try a new flavor

20%

Try a new product

18%

As a stress reliever

12%

As a mood booster

12% Source: Mintel, Salty Snacks, Executive Summary, U.S., January 2015

The Meat Snacks Revolution

The MeaT SnackS

ReVOLUTIOn

Consumer choices for best protein sources

11% Eggs

10% Dairy items

50%

8% Beans/lentils

Animal protein*

22% Other

*Animal protein does not include lunch/deli meat, which is part of â&#x20AC;&#x153;Other.â&#x20AC;?

Younger consumers tend to be the most concerned about finding better-for-you oferings, and they will look for these types of products in venues such as c-stores: When asked how important it is to find better-for-you products in convenience stores, 63 percent of consumers ages 18 to 24 rated this

Source: NPD Group

very/extremely important, according to recent Carbonview research. Thatâ&#x20AC;&#x2122;s a monumental change in consumer attitudes, considering that c-store consumers, along with vending and sporting event food consumers, historically have placed health and wellness at the bottom of the list.

The Meat Snacks Revolution

Stephen Silzer Director, Marketing — Ball Park® Jerky

Rob Ramsey Senior Manager, Channel Marketing — Tyson Convenience

yson Foods, Inc., with headquarters in Springdale, Ark., is one of the world’s largest food companies with leading brands such as

and . The Ball Park® brand was launched in 1957 in response to a request from the owner of the Detroit Tigers baseball team. Today, Ball Park® products can be found in supermarkets, convenience stores and sports venues. Why is Tyson opting to get into the meat snacks business with Ball Park® Flame Grilled Jerky at this time–what are some of the dynamics of the market for meat snacks in general and beef jerky in particular that are fueling the additions? Rob Ramsey: Snacking continues to be a growing trend with 95 percent of Americans snacking daily and a shif in consumers’ eating habits away from the traditional three meals a day. Within the snacking landscape, high-protein snacks are one of the fasting-growing categories, if not the fastest-growing category. With these insights in mind, we saw an opportunity to not only enter this category with Ball Park® Flame Grilled Jerky, but also help drive incremental growth for a category with low household penetration. As the #1 beef hot dog brand in the country, according to the latest 52 weeks IRI data ending Aug. 16, 2015, and a brand that has a longstanding heritage with fame grilling, we believe that we can bring a signifcant number of our loyal Ball Park® consumers who are not currently purchasing jerky to the category. Ball Park® Flame Grilled Jerky became available to consumers beginning in October 2015.

What makes your jerky distinctive in the market, in terms of the product and favor profle? Stephen Silzer: We have identifed key barriers that hold consumers from buying jerky, which include tough texture and high levels of sodium. With the launch of Ball Park® Flame Grilled Jerky, we have addressed these barriers to ofer a product to consumers that is unique within the category. Our proprietary method for making Ball Park® Flame Grilled Jerky produces a jerky that is tender and locks in fame-grilled favor and also has at least 27 percent less sodium than USDA data for beef jerky. Consumers responded incredibly positively to both Ball Park® Flame Grilled Beef and Pork Jerky, with nearly 90 percent purchase intent afer tasting. How does package design, including convenience-oriented features, size and graphics, play into attracting consumers to meat snacks from the Ball Park® brand? Stephen Silzer: With the package design for Ball Park® Flame Grilled Jerky, we wanted to highlight our key point of diference to consumers, which is that our jerky is fame grilled to be tender. Tis is brought to life through key iconography on the package in addition to product naming and photography. Te inclusion of product photography is unique in this category and helps Ball Park® Flame Grilled Jerky break through at shelf and create appetite appeal. Te package is also resealable for convenience. For more information, visit TysonConvenience.com or call 1-844-FLMGRLD.

A DV E RTO RI A L

TOUGH AND TENDER: BALL PARK® FL AME GRILLED JERK Y

ORIGINAL BEEF The Ball Park® brand from Tyson Foods, Inc. is rolling out a new line of Ball Park® Flame Grilled Jerky, available to consumers beginning October 2015.

BOURBON BBQ BEEF

The new jerky products, made from lean cuts of beef or pork, are created using a cooking method touted for tenderness. One of the new taglines, in fact, is “Dried to be tough, fame grilled to be tender.”

PEPPERED BEEF

With eight grams or more of protein, the products are gluten-free, contain no artifcial favors or colors and do not have MSG, except for MSG that naturally occurs in the soy sauce and autolyzed yeast extract ingredients.

BARBECUE PORK

The Ball Park® Flame Grilled Jerky line includes these favors: Original Beef, Bourbon BBQ Beef, Peppered Beef, Barbecue Pork and Teriyaki Pork. Each comes in a 2.85-ounce resealable package, with a suggested retail price of $6.99-$7.99. For more information, visit TysonConvenience.com or call 1-844-FLMGRLD.

TERIYAKI PORK

A DV E RTO RI A L

The MeaT SnackS

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Robust Millennial demand for meat snacks Although theyâ&#x20AC;&#x2122;re not quite as enthusiastic as Generation Z about healthful c-store products, Millennials are also contributing to the boom in meat snacks. According to Carbonview research, one of the top four food items that Millennials said they purchased on their last visit to a convenience store was a meat snack. The significance of this finding is that it is equal to the percentage who purchased prepared foods, which have been aggressively promoted by c-stores eager to cash in on the categoryâ&#x20AC;&#x2122;s high margins and increasing consumer demand.

How important is it to you that you can find better-for-you options in a convenience store?

iMporTance: Extremely Very Total very/extremely important

63%

Somewhat Not very Not at all

50% 46%

44%

42% 34%

33% 30%

30%

31%

30%

28%

24%

22%

20%

26% 22% 19

18% 12%

24%

14%

14% 11%

10% 10%

8% 4% 4% ToTal

Gen Z

Note: Gen Z are ages 18 to 24; Millennials are ages 25 to 34.

Millennial

all Male

all feMale

Source: SBI/Carbonview September 2015 survey

The Meat Snacks Revolution

DRIED TO BE TOUGH. FLAME GRILLED TO BE TENDER.

At Ball Park® brand, we know that meat from the grill just tastes better, which is why we developed a new jerky experience—our flame grilled jerky recipe starts with lean cuts of beef or pork grilled on an open flame for a uniquely tender texture. Then we season in 5 different flavor combinations, all a good source of protein and gluten free. FOR SALES INQUIRIES CALL TOLL-FREE

1-844-FLMGRLD

The MeaT SnackS

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Top 5 foods purchased on last c-store visit

Millennials* All males

(Max=40% for gas)

35%

Salty snacks (chips, etc.)

29% 35%

Candy 26% 25%

Prepared food 23%

25%

Meat snack 17%

24%

Ice cream 17%

*Ages 25 to 34

Source: SBI/Carbonview C-Store Shopper Survey, September 2015

Add to this finding that meat snacks are also one of the top five purchases for total c-store male consumers, and it’s obvious there’s a void being filled by meat snacks for today’s hurried and mobile consumer looking for quick energy. In addition to looking for healthier c-store fare, younger consumer groups appear willing to pay more for products that taste good and also ofer health benefits. What’s more, Millennials and Gen Z favor the more non-traditional, organic and highly profitable meat snack flavors and meats. Suppliers are hoping that Millennials hang onto their taste for meat snacks as they move ahead in their careers and increase their disposable income. Product innovation contributes to growth While beef jerky still accounts for more than three-quarters of meat snack sales, turkey continues to be the fastest-growing type of jerky. According to NPD, cases of turkey jerky shipped to distributors and foodservice outlets spiked to triple digits in April 2015 compared with the same period in 2014. 10

The Meat Snacks Revolution

The MeaT SnackS

ReVOLUTIOn

Types of jerky preferred by consumers 79% Beef jerky

8% Poultry jerky (chicken and turkey)

7% Game jerky (deer, elk, salmon, buffalo)

6% Pork jerky

Source: IBISWorld, 2015

Alternative meats are also rising in popularity. For example, a number of vendors at the National Confectioners Association’s Sweets & Snacks Expo in May 2015 showcased bison, deer and elk. In addition, food companies like EPIC and Omnibar have experimented with new formats, such as meat chips, and DAS Foods ofers Benny’s Original Meat Straws as a garnish for cocktails such as the Bloody Mary. More companies are entering the category too, and adding new twists to what is considered a traditional product. Hershey moved into the salty snack game in early 2015 by acquiring gourmet producer Krave Pure Foods for $300 million. As a result, Krave had access to the mainstream market and immediately began generating buzz for experimenting with jerky flavor combinations, such as Pineapple Orange, Black Cherry Barbecue Pork, and Five Peppercorn. Krave’s founder expects the brand to double its business in 2016 and has even signed an agreement to include product in Starbucks’ restaurants across the nation.

oferings are individually wrapped dried meat snacks in four varieties: Oven-Roasted, Sweet Barbecue, Smokehouse, and Cracked Pepper. Smaller companies are also driving growth. Fusion Jerky of South San Francisco, which targets women as its core consumers, has emerged as a leader in all-natural artisan jerky with oferings such as Chipotle Lime and Garlic Jalepeno jerky. Unprocessed, organic and all-natural niche jerky such as Basil Citrus and Island Teriyaki, for example, have also sparked interest and growth for what has traditionally been considered “man food.”

In July 2015, Hormel Foods introduced Spam Snacks—dried meat chunks in flavors like classic teriyaki and bacon. The company also began testing a product from its Jennie-O Turkey Store brand called All Natural Turkey Breast Sticks. These unique The Meat Snacks Revolution

Jack Link’s fans the flames of innovation with new varieties

“G

lobally inspired favors are on trend in snacking and are one component of meat snack category growth,” says Kevin Papacek, director of marketing for Jack Link’s. “Consumers are looking for fun favors to satisfy their adventurous palates while still seeking a healthier snacking alternative. Te addition of Jack Link’s limited edition Wild Side favors gives consumers the favor variety they’re seeking.”

As turkey and bacon expand, chicken continues to be a strong protein in meat snacks, growing 229 percent. Jack Link’s’ chicken makes up more than 81 percent of chicken sales in the category, according to Nielsen data. To be sure, 2015 has been a busy year for Jack Link’s, which launched a new logo in April, along with new packaging and a new clean label showing that the jerky has no artifcial ingredients, no added MSG, no preservatives and no sodium nitrates.

As an example of that sense of culinary adventure, Korean BBQ Pork Jerky is the newest product in the Jack Link’s lineup. “Te favors associated with this Eastern Asian cuisine encompass the predominant and mainstream favors of that region, which are garlic, white onion, ginger, peppercorns, soy sauce and sesame seeds. Te method of cooking this specifc product includes a technique new to the jerky category—Jack Link’s adds a ‘kiss of fre’ to its Korean BBQ Pork Jerky by fame grilling the product to caramelize the sugars,” explains Papacek.

To support its new products, packaging and clean label, Jack Link’s continues to build awareness through its marketing eforts, developing best-in-class corrugate and rack solutions, secondary displays and category management insights, while developing frst shopper marketing programs.

In addition to bolder, more diverse favors, diferent protein choices also provide greater variety for today’s consumers. “Turkey has the largest share of all ‘new’ proteins and has increased double digits over the past three years. We see opportunity for growth in both new favors of turkey products and new innovations with chicken and pork,” says Papacek, who cites this year’s launch of new Jack Link’s Original Chicken Jerky and Small Batch Bacon Jerky. “Tose products are already performing very well in the category.”

Jack Link’s® Protein Snacks—Feed Your Wild Side™ Jack Link’s is a global leader in snacks and the No. 1 meat snack manufacturer worldwide. Headquartered in Minong, Wis., Jack Link’s is a family-owned company that represents a heritage of quality and consumer trust, with the mission to Feed Your Wild Side. Jack Link’s ofers more than 100 premium meat snacks in a variety of favors, sizes and price points, appealing to nearly every consumer and occasion. Visit JackLinks.com for more information.

A DV E RTO RI A L

Jack Link’s® Protein Snacks product guide Jack Link’s Beef Jerky is seasoned with a unique blend of spices and expertly smoked for an unmistakable, authentic jerky taste. Varieties include Original, Teriyaki, Peppered, Sweet & Hot, Steakhouse Recipe, KC Masterpiece® Barbeque, Jalapeño Carne Seca, Sriracha, Original Hickory Smokehouse, and Cholula® Hot Sauce. Jack Link’s Jerky features a new, simple ingredient label (excluding Cholula Beef Jerky) that has no added MSG, no preservatives and no sodium nitrates. Jack Link’s helps adventurous eaters Feed Their Wild Side with their limited edition Wild Side™ Flavors: Kung Pao Beef Jerky and Chili Lime Beef Jerky. Jack Link’s Original Turkey Jerky and Jack Link’s Sweet Teriyaki Turkey Jerky are both made with solid strips of lean, white meat turkey breast. Original Turkey Jerky is seasoned and smoked over mesquite, and the other flavor is

seasoned with sweet teriyaki and garnished with sesame seeds. Both are 98 percent fat free with no added MSG. Jack Link’s Original Chicken Jerky is made with all white breast meat, seasoned with a blend of spices and with 11 grams of protein per serving. Jack Link’s BBQ Pork Jerky and Jack Link’s Korean BBQ Pork Jerky are made with lean strips of pork seasoned to perfection, giving the taste of summer all year long. Jack Link’s Small Batch™ Handcrafed Beef Jerky is made with thick slices of premium beef and is available in three flavors: Original No. 11, Peppered No. 15, and Teriyaki No. 17. Hand-cut slices of tender beef are slow-cooked in small batches and smoked in a traditional smokehouse. This time-honored process results in an ultra-tender, intensely smoky and savory beef jerky A DV E RTO RI A L

that embraces the Link family’s 100plus years of experience in crafing America’s favorite meat snacks. Jack Link’s also produces Small Batch Bacon Jerky No. 9, a true testament to the lore of meat. Jack Link’s Tender Bites are made from cuts of lean beef, chicken and turkey, seasoned with a secret blend of spices, hickory-smoked and slowcooked to deliver a tender, rich and hearty meat snack. Flavors of beef include Original Beef Steak, Teriyaki Beef Steak, and Peppered Beef Steak. Other flavors include Flamin’ Bufalo Chicken Tender Bites and Oven Roasted Turkey Tender Bites. Jack Link’s also makes a variety of other products including Tender Cuts, Steaks and Strips, Sticks and Meat and Cheese Combo Packs. Additionally, Jack Link’s other jerky brands include SQUATCH™ Snack Sticks, MATADOR® Beef Jerky and World Kitchens® Jerky.

The MeaT SnackS

ReVOLUTIOn

Price increases Input prices have increased on all meat snacks because the meat industry is in short supply of fresh beef due to the drought and growing demand for U.S. beef from overseas markets. According to a Jack Link’s spokesman, fresh beef is at its highest price since 1987. The U.S. cattle herd shrank to its smallest size in more than 60 years, reports Oberto Brands, while worldwide beef consumption has spiked 20 percent in the past five years. Retailers have been able to pass those increases on to consumers. Price increases have averaged nearly 7 percent this year, double the rate of food-at-home inflation. Jerky companies are also downsizing packaging but charging the same prices. Jack Link’s, which now sells more than $1 billion in meat snacks each year in all segments, updated its packaging and reduced sizes from

3.25-ounce and 9-ounce bags to 2.85-ounce and 8-ounce bags, respectively. At c-stores, Jack Link’s’ share of the estimated $647 million in annual sales is double that of household brand Slim Jim, but only a single percentage point above Slim Jim in unit share at 38 percent. Meat snack suppliers and category analysts contend the category will remain in positive growth territory even if commodities and prices go up. Many believe that consumer demand will remain the same, and they are already making an investment in snacks that tend to be considered premium based on unit price. Convenience stores continue to be the top destination for meat snacks, and retailers are in a prime position to market and merchandise these profitable products as a healthy and crave-able energy boost.

Share of c-store snacks

50%

Dollar Share Unit Share

38%

37%

24%

15% 10%

Jack Link’s

sLiM JiM

Matador

Penrose

Private LabeL

2% >2%

oberto

others

Source: Nielsen–c-store sales, 52 weeks ending December 27, 2014

The Meat Snacks Revolution

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EDITOR’S NOTE

Take Care of the Basics First

NACS Show session underscores fundamentals of creating your foodservice program

unning a successful foodservice operation in your convenience store can be very tricky because there are so many variables to consider from one retailer to another, and even from one store to another at the same retail chain. Customers are different. Employee capabilities are different. And management enthusiasm and commitment may vary. An educational session at last month’s NACS Show delved into the fundamentals and what to do to get started in foodservice. “Running a foodservice operation is significantly different from setting up a cooler, putting up a display [or] stocking the shelves,” said John Zikias, chief operating officer of Holmes Oil, which operates the Cruizers chain of about 25 c-stores in North Carolina. When considering foodservice, retailers must ask themselves if the timing is right, is their team committed, should they go with their own brand or partner with a branded operator, are they willing to take chances and willing to change, and do they have the time and ability, according to Zikias. “We just rolled out a fried chicken program and you wouldn’t believe how much we had to do and how many decisions we had to make,” he noted. “Not just the product to be served, but we had to look at equipment, suppliers, what small wares are needed, etc.” “Do your homework” was the advice of Dan Duffy, director of foodservice for Coen Oil/Ruff Creek

Markets, with 28 c-stores in Pennsylvania, West Virginia For comments, please contact and Ohio. With the mantra, Don Longo, Editorial Director, “proper preparation prevents at (201) 855-7606 or dlongo@stagnitomail.com. poor performance,” Duffy advised retailers to examine the best-in-class chains, learn from what they are doing, leverage their successes, and identify how you want to be different. Dan Hogan, vice president of foodservice for Fastrac Markets, with 46 stores in upper New York State, said his company believes food is its future. The company started out by developing a strong pizza program to build a base of customers, and is now moving aggressively to expand its foodservice to include a café concept, indoor seating and drive-thrus. They all stressed that you can’t run your foodservice operation like your c-store retail operation. And they all noted the importance of executing on the basics first before evolving into more complex foodservice offerings. Or, as a speaker at another NACS Show session — Joseph Chiovera, principal of XS Foodservice & Marketing Solutions — said: “Build a foundation before differentiation.” Things like menu development; product refinement and optimization, or getting more from the same or some of the same ingredients; design modification and improvement; and labor optimization all come after you’ve got the basics down pat.

You can’t run your foodservice operation like your c-store operation. Execute on the basics first before evolving into more complex foodservice offerings.

WWW.CSNEWS.COM | Guide to Foodservice 3

CONTENTS

EDITOR’S NOTE

3 | Take Care of the Basics First

NACS Show session underscores fundamentals of creating your foodservice program. FOOD SAFETY

24 | A Good Company Culture Includes Good Hygiene

Better personal hygiene awareness is the area in most need of improvement. FOODSERVICE EQUIPMENT

28 | Connected Kitchens Are

Coming to C-stores

Integrated technology is helping leading operators succeed in foodservice. THE FOODSERVICE CUSTOMER

30 | To Reach Millennials, Educate It’s the clearest path to their minds, taste buds and wallets.

32 | What’s New in Foodservice

4 Guide to Foodservice | WWW.CSNEWS.COM

In Search of New Horizons

Team Sheetz travels the country in search of the latest foodservice trends and best practices.

SEGMENT SNAPSHOTS

10 | Prepared Food 14 | Hot Dispensed Beverages 18 | Cold Dispensed Beverages 20 | Frozen Dispensed Beverages TOP POINTERS

12 | Prepared Food 16 | Hot Dispensed Beverages 19 | Cold Dispensed Beverages 22 | Frozen Dispensed Beverages

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COVER STORY

In Search of New Horizons Team Sheetz travels the country in search of the latest foodservice trends and best practices

By Renée M. Covino

ou don’t get to be a leading convenience store foodservice performer by standing still. With fresh offerings and customizable menu options, Sheetz Inc. is one c-store operator that knows how to move forward in food. And its foodservice team is literally moving — actually traveling together on a regular basis — in a continuous effort to stay current. Part of Sheetz’ strategy is to keep abreast of the competition, particularly in the fast-casual restaurant sector, as a means to stay ahead of the more directly competitive quick-service restaurant (QSR) market. Sheetz does this, in part, through annual visits to chosen “foodie” cities where company executives immerse themselves in the local culinary flair in what they call a fast-casual “dine-around.” Most recently, the Sheetz

6 Guide to Foodservice | WWW.CSNEWS.COM

leadership and foodservice team, led by Executive Chef and Director of Culinary Dan Coffin, visited Denver. “We’re passionate about keeping an eye on fast-casuals, and Denver is the birthplace of a lot of great fastcasuals,” Coffin told Convenience Store News. “It’s also a top city for millennials to move to. There’s a lot going on, not just in the food itself, but in the total experience of fast food or the ‘limited service’ world. There’s a lot of aspirational brands doing some neat stuff and if we’re keeping an eye on them, it puts us in a position where we feel we are ahead of the QSR market.” Upon arrival in Denver, the Sheetz team, which Coffin described as a cross-functional group of the company’s leadership and foodservice executives, split up into four groups of six to “tour” peripheral concepts. All together, they observed 20 different fastcasual restaurants in the market.

WhERE TEam ShEETz haS BEEn Denver New York Washington, D.C. Chicago Raleigh, N.C.

WhICh ‘FOODIE CITIES’ aRE UP nEXT?

When it comes to foodservice, Sheetz believes in continual evolution. The convenience store chain is always looking for new ways to enhance its fresh food, beverages and overall dining experience.

Los Angeles San Francisco Toronto Miami

“It was important that we not just look at the food, but look at the entire experience,” Coffin emphasized. “How do you feel when you walk through the door? What’s the flow like? How is the staff engaging you? What’s the décor? What’s the food offering? How knowledgeable is the staff about the food offering? Everything that goes into a fast-casual food experience; that’s what we’re looking at [during our dine-arounds].” Diving in

During Team Sheetz’ recent trip to the Mile High City, there were several fast-casuals that resonated with Coffin and the Sheetz team. Among them: • Modmarket — “They’re taking Panera to the next level,” Coffin stated. • Etai’s Bakery Café — Coffin describes this as a gluten-free bread company with a very relevant café business. “They take some very relevant dietary issues and inject vegan, vegetarian, gluten-free, etc., into it. But they don’t make it feel like a menu just for that; they make it feel like a regular menu, sim-

ply highlighting what fits with which dietary needs. It’s an important piece of their business.” • Illegal Pete’s — This place where “Mission-style” Mexican food is served in a steam table assembly line was applauded by Coffin for “taking the Chipotle concept and doing more with it.” In addition to the bar inside, “they opened up the menu a little more, but even more than that, they know how to target their customer,” he said. “Their employees look completely different, the environment looks completely different. It’s a little grungier with a focus on local artists and music. There’s music posters all over the place, stickers — it’s a hipster crowd. There’s way more facial hair, tattoos and piercings than you see on the employees

WWW.CSNEWS.COM | Guide to Foodservice 7

COVER STORY

at Chipotle, which definitely isn’t a bad thing. It’s a similar food offering, but the experience presented is completely different. And that’s more memorable to their target and differentiates them completely.” • Live Basil Pizza — “Fast-casual pizza is growing so much and this local pizzeria concept with truly artisan products is proof of that,” according to Coffin. • Snooz — This breakfast concept is another millennial magnet. “We really love what they do. They are so creative; everything is a twist of comfort and traditional, but really well-executed with really good flavors,” Coffin described. “And the staff is incredible; very knowledgeable and engaging. They’ll stop and have a conversation and make you feel comfortable; they are not rushing you. Hospitality is definitely a cornerstone of what they do.” The one thing, in fact, Coffin noticed to be “incredibly apparent in all the concepts” was employee knowledge of the products and the way they engaged customers. “They weren’t afraid to come from behind the counter,” he said. “I think some folks in the c-store industry are doing a great job with that, but it really

highlighted how important hospitality is to the overall foodservice experience and what it means to make customers feel welcome and the impact that has.” Another widespread observation was the effectiveness of the menu boards, which “really stood out everywhere we went. They’re really good at getting their message across at what they had to offer and doing it from a distance,” Coffin said. “A customer can be 30 feet away and they could easily see what they were getting into. They clearly knew what food business they were in by looking at the menu board, even if they didn’t know it when they walked in the door.” One surprising takeaway for Coffin was that table service was available, but it wasn’t happening as much as he expected it to be. “These fast-casuals are incredibly fast and focused,” he noted. At Live Basil Pizza, for instance, the pizza took only about two minutes to cook so “in the time it took to place your order, telling them what you wanted on the pizza and customizing it exactly as you wanted, then moving down the line to the register, your pizza was halfway cooked.” While he initially expected to see more concepts

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8 Guide to Foodservice | WWW.CSNEWS.COM

bringing the food to the table, he realizes it adds a lot of labor. Instead, “we saw speed and we saw it at a super level,” he recalled. The DoWnloaD

Shortly after Team Sheetz returned to the chain’s headquarters in Altoona, Pa., the group reconvened and did a “download,” as Coffin calls it. That is, they all sat back, replayed and reinforced the highlights taken away from the Denver fast-casual experience. These dine-arounds, according to the executive chef, are not so much intended to churn up “earthshattering ideas,” but rather push for a continual evolution in foodservice. “We see all these aspirational brands, and we recognize some are going to do great for the next 10 years and some will go adrift in two,” he said. “But they’re all unique, and they help us to look at our brand and validate the things we are doing and want to do to make our experience different and better.” Even more specifically, Coffin said this most recent dine-around experience “fortifies our thoughts around

The first fuel-free Sheetz convenience store, with a complete focus on food and beverage offerings, opened at West virginia University in March.

freshness, seasonality, the importance of having an offer for kids that appeals specifically to them, and making sure the flavor is right in every foodservice product.” As Sheetz’ executive chef for the past five years, Coffin has immersed his team in the fast-casual success of other cities, namely New York, Washington, D.C., Chicago and Raleigh, N.C. Up next, he’s considering Los Angeles, San Francisco, Toronto and Miami. “There’s a lot of value in this,” he concluded. “As a group, it makes us challenge what we’re thinking about today and where we should be in five years.” CSN

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ANYTIME MENU SOLUTIONS • Small Bites & Starters • Soup, Salads & Dressings • Sandwiches & More • Pizza Pies • Sidekicks • Sips & Gulps • Sweet Treats

WWW.CSNEWS.COM | Guide to Foodservice 9

PREPARED FOOD

Who Is the C-store Prepared Food Customer? Men are more likely to purchase prepared food at a c-store than women, as 60.7 percent of those who have done so in the last month are male, and nearly half of them are aged 25-34 or 35-44. Households with children are also slightly more likely to visit c-stores to buy prepared food. By Gender

cHIldren In HouseHold

On What Occasions Do They Typically Shop? Prepared food purchases at c-stores are most likely to occur as part of a daily routine, or during a vacation or other trip. More than 62 percent of purchasers said they visit c-stores on the way to or from work or school, while 60.3 percent do so while traveling for pleasure. While traveling to/from work or school While traveling for pleasure While running other errands Special trips to the convenience store from home While traveling for business

62.9% 60.3 55.6 49.8 26.8

Base: 912 respondents who purchased prepared food at a c-store in the past month Source: Convenience Store News Market Research, 2015

60.7% 39.3%

52.2%

47.8%

Hungry consumers who donâ&#x20AC;&#x2122;t want to take the time to prepare their own dinner are among the best prepared food customers for c-stores, as 57.5 percent of those who buy prepared food do so from 4 p.m. to 6:59 p.m. and 41.1 percent do so from 7 p.m. to 10 p.m. Still, the breakfast daypart is important, too, as 39.7 percent buy prepared food between 6 a.m. and 8:59 a.m.

By reGIon Northeast Midwest

South West

21.7% 20.3%

23.4%

At What Time of Day Do They Typically Shop?

34.6%

6 a.m. - 8:59 a.m. 9 a.m. - 10:59 a.m. 11 a.m. - 1:59 p.m. 2 p.m. - 3:59 p.m. 4 p.m. - 6:59 p.m. 7 p.m. - 10 p.m. After 10 p.m. Donâ&#x20AC;&#x2122;t know

39.7% 34.0 37.0 38.0 57.5 41.1 14.0 2.1

Base: 912 respondents who purchased prepared food at a c-store in the past month Source: Convenience Store News Market Research, 2015

What Elements Influence Their Decision to Visit a C-store? By AGe 18-24 25-34 35-44

HouseHold Income

45-54 55+

20.6% 14.3% 23.7%

18.4%

Less than $35,000 $35,000 - $49,999 $50,000 - $74,999

$75,000 - $99,999 $100,000 or more

15.9% 21.1% 20.8%

23.0%

18.1%

24.1%

Base: 912 respondents who purchased prepared food at a c-store in the past month Source: Convenience Store News Market Research, 2015

10 Guide to Foodservice | WWW.CSNEWS.COM

Nearly half of c-store prepared food customers are independent thinkers who say they are not influenced by outside elements. However, word of mouth is otherwise most likely to have an impact on decision-making, followed by radio/TV advertisements and coupons. Word of mouth Radio or TV advertisement Coupon Promotion or message on social media Mobile app offer from convenience store Print circular Billboard Text message Email Other Not influenced

19.4% 15.9 12.6 12.3 10.9 10.9 10.6 8.8 8.2 2.5 48.9

Base: 912 respondents who purchased prepared food at a c-store in the past month Source: Convenience Store News Market Research, 2015

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PREPARED FOOD

Pointers on Prepared Food

High-quality prepared food is more important than ever as busy consumers increasingly recognize that convenience stores can be an excellent source for a quick, satisfying meal. Retailers of every size are experimenting with their offerings, and educational tracks at industry events like the NACS Show regularly feature multiple levels of category guidance. There’s no single right way to build a prepared food program, but by laying out clear goals and staying aware of consumer desires, c-store operators can turn their store into a dining destination.

l Don’t jump to a complex program right away. If

small or inexperienced c-stores try to do too much too soon, there is a strong likelihood that they will end up overwhelmed and not achieve what they set out to do. Keith Boston, director of prepared foods for Cumberland Farms Inc., recommends that retailers start small and keep things simple in order to properly grow a program.

l Get better with better-for-you foods. The number

of c-store shoppers interested in healthy foods they can eat on the go has increased from 59 percent to 66 percent in seven years, and three-quarters say they’re eating healthier than they used to, presenting an opportunity for savvy operators to capitalize on this better-for-me movement.

l Become part of the morning routine. Consumers

expect c-stores to have breakfast items, and the morning daypart is a high-traffic period for the channel. Combining items like pastries and warm breakfast sandwiches with a coffee program will establish a store’s reputation as an easy alternative for breakfast.

l Cold grab-and-go products can serve as a key point

of entry or expansion. “Many products can be sold out of the cold grab-and-go case and then microwaved, which presents low risk to new operators with minimal staffing needs and operation costs,” said Rob Ramsey, senior manager, channel marketing for Tyson Convenience. “Established operators should look to add a cold grab-and-go program to expand into other dayp-

12 Guide to Foodservice | WWW.CSNEWS.COM

arts and provide products beyond current offerings.”

l Add customizable items to the menu. C-store chains like Wawa, Sheetz and QuikTrip have made a name for themselves with their made-to-order prepared food offerings. Customization takes more time and absolutely requires consistency, but stores that do it right will boost their quality perception.

l Be prepared for menu labeling. Not all c-stores

will be required to follow the Food and Drug Administration’s menu labeling regulations, set to be implemented in December 2016, but those that are required will have to provide accurate information for all “restaurant-style” food and display it appropriately.

l Strive to be “food forward.” It may be a long-term

process that can’t be rushed, but c-stores that continuously improve the quality and variety of their prepared food offer are known to also improve their scores regarding customers’ intent to revisit, visit frequency and customer satisfaction.

HOT DISPENSED BEVERAGES

For What Reasons Do They Typically Shop at a C-store?

Who Is the C-store Hot Dispensed Beverage Customer?

Not surprisingly, c-store hot dispensed beverage purchasers typically shop at a convenience store to buy a beverage. They also come to the store most often to buy gasoline and get snacks. Just shy of half of c-store hot dispensed beverage purchasers are also lottery players.

The largest share of c-store hot dispensed beverage buyers are men. However, in the South, which has the largest regional share of these purchasers, women outpace men as hot beverage shoppers. Another interesting find is that those aged 55 and older make the most c-store hot dispensed beverage purchases by age.

To buy a beverage (net) To buy hot beverages To buy fountain/frozen beverages To buy packaged beverages To buy gasoline To buy snacks To buy prepared food/fast food for immediate consumption To buy lottery tickets To buy candy/gum To buy cigarettes To use the restroom To buy a newspaper/magazine

By Gender

cHIldren In HouseHold

56.4% 43.6% 49.9% 50.1%

88.3% 67.4 51.4 43.3 75.7 64.5 49.1 47.6 46.9 35.2 32.6 30.6

Base: 605 respondents who purchased hot dispensed beverages at a c-store in the past month Source: Convenience Store News Market Research, 2015

At What Time of Day Do They Typically Shop?

By reGIon Northeast Midwest

South West

24.5% 22.6%

20.0%

32.9%

By AGe 18-24 25-34 35-44

26.1% 20.7%

9.1% 19.8%

Less than $35,000 $35,000 - $49,999 $50,000 - $74,999

$75,000 - $99,999 $100,000 or more

17.5% 21.0% 18.7%

24.3%

18.0% 24.8%

Base: 605 respondents who purchased hot dispensed beverages at a c-store in the past month Source: Convenience Store News Market Research, 2015

14 Guide to Foodservice | WWW.CSNEWS.COM

6 a.m. - 8:59 a.m. 9 a.m. - 10:59 a.m. 11 a.m. - 1:59 p.m. 2 p.m. - 3:59 p.m. 4 p.m. - 6:59 p.m. 7 p.m. - 10 p.m. After 10 p.m. Don’t know

46.0% 34.0 37.9 37.9 58.2 40.0 15.9 1.7

Base: 605 respondents who purchased hot dispensed beverages at a c-store in the past month Source: Convenience Store News Market Research, 2015

HouseHold Income

45-54 55+

Need a boost! The majority of c-store hot dispensed beverage buyers (68 percent) make their purchase between the hours of 9 a.m. and 3:59 p.m., when customers are either starting out or in the midst of their days at work and school.

What Elements Influence Their Decision to Visit a C-store?

It appears c-store retailers don’t need to jump through hoops to reach out to hot beverage purchasers. Only 9 percent of male purchasers and 11 percent of female purchasers said they are influenced by receiving an offer via a c-store’s mobile app, for instance. Word of mouth Radio or TV advertisement Coupon Promotion or message on social media Mobile app offer from convenience store Print circular Billboard Email Text message Other Not influenced

19.8% 14.5 13.6 11.7 9.6 9.6 9.3 7.6 7.4 2.6 54.0

Base: 605 respondents who purchased hot dispensed beverages at a c-store in the past month Source: Convenience Store News Market Research, 2015

HOT DISPENSED BEVERAGES

Pointers on Hot Dispensed Beverages Hot and fresh. That’s not only how convenience store customers want their coffee, but also how they expect retailers to present their hot beverage program to them. Today’s customers are in search of a higher-quality cup, but still for an affordable price. The “traditional” is on its way out as trends in consumption continue to evolve, from “craft” preparation to an ever-widening range of flavor preferences to an increase in single-origin brews. Not to mention espresso-based products and cold-brew coffee sold in bottles trending upward. C-store retailers need to adapt and stay on trend if they want to find success with their hot beverage program.

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l Coffee for One. An emerging

trend at c-stores is the customized single-serve brewing solution. “This allows store owners the opportunity to provide coffee options in off-period times to eliminate waste,” according to Jodi Conachen, spokesperson for Community Coffee Co. C-store retailers such as Pilot Flying J and 7-Eleven have built upon this model by launching their own brands of single-serve coffee for brewing.

on trend, almost to the point of it being an expectation, noted Community Coffee’s Conachen. But c-store operators sometimes confuse variety with the number of options and flavors offered. Instead, Mathew Mandeltort of

Eby-Brown Co. LLC believes operators should focus on a welldesigned condiment bar and offer customers ample ways to customize their coffee with a variety of sweeteners, milk, cream, syrups, toppings, etc.

l “Third Wave” Coffee.

Consumers are showing they are willing to pay more for a great product coupled with an experience, said David W. Mendez, president and CEO of WB Law Coffee Co. To remain a contender in the coffee arena, Mendez advises c-store retailers reevaluate their current coffee program according to four areas: drip coffee, training, décor and layout, and espresso.

l On the Go. For customers who

prefer their coffee to go, 7-Eleven’s new “Stay Hot” cup keeps coffee hot longer, does not require a sleeve, and is plastic and recyclable. Pilot Flying J also introduced its new “PhilMor” travel coffee mug and refill program. The branded mug is available in 20- and 24-ounce sizes for $3.49 with a MyRewards card.

l Next Stop: Success. A “one-fit

solution” is not the answer, according to Todd Mackey of Coffee Solutions Inc. His tips for redeveloping a c-store coffee program include: ensuring the core brand is strong; differentiating strategies for full-service vs. self-service; empowering store associates, who are the face of the program to customers; educating consumers; and most importantly, continually learning.

l A Cup of Customization.

Beverage customization remains

WWW.CSNEWS.COM | Guide to Foodservice 17

COLD DISPENSED BEVERAGES

Who Is the C-store Cold Dispensed Beverage Customer? It’s no surprise that the largest share of c-store cold dispensed beverage buyers are in the South, where hotter temperatures lend themselves to refreshing, cold beverages. The customer base also skews toward the traditional convenience channel shopper: male and 25-44 years old. By Gender

cHIldren In HouseHold

56.0% 44.0% 51.2% 48.8%

What Other Products Do They Purchase at C-stores? Retailers may want to consider promoting their fountain program at the pump. An overwhelming majority of shoppers who bought a cold dispensed drink also bought gas — at 86.1 percent. Gasoline Candy, gum or breath fresheners Prepared food/fast food Canned/bottled soda Packaged salty snacks Hot beverage Lottery tickets Packaged sweet snacks Beer/malt beverages Bottled water Cigarettes Frozen drink/slush

86.1% 79.0 75.4 64.9 62.6 54.9 47.8 47.4 46.7 46.5 41.2 40.1

Base: 561 respondents who purchased cold dispensed beverages at a c-store in the past month Source: Convenience Store News Market Research, 2015

By reGIon Northeast Midwest

At What Time of Day Do They Typically Shop?

South West

14.4% 25.3%

23.4%

36.9%

C-store cold dispensed beverage buyers appear to prefer late-day visits to c-stores. The hours between 4 p.m. and 10 p.m. are among the most popular. 6 a.m. - 8:59 a.m. 9 a.m. - 10:59 a.m. 11 a.m. - 1:59 p.m. 2 p.m. - 3:59 p.m. 4 p.m. - 6:59 p.m. 7 p.m. - 10 p.m. After 10 p.m. Don’t know

42.4% 33.7 39.9 39.9 61.7 44.2 18.0 2.1

Base: 561 respondents who purchased cold dispensed beverages at a c-store in the past month Source: Convenience Store News Market Research, 2015

By AGe 18-24 25-34 35-44

HouseHold Income

45-54 55+

19.6% 14.8% 22.5%

18.9%

Less than $35,000 $35,000 - $49,999 $50,000 - $74,999

14.3% 18.4%

24.2%

24.1%

$75,000 - $99,999 $100,000 or more

24.1% 19.3%

Base: 561 respondents who purchased cold dispensed beverages at a c-store in the past month Source: Convenience Store News Market Research, 2015

18 Guide to Foodservice | WWW.CSNEWS.COM

What Elements Influence Their Decision to Visit a C-store? Slightly more than half of fountain drink consumers don’t need any prodding to make the purchase. This is particularly true for 69.1 percent of consumers aged 55 and older. Word of mouth Radio or TV advertisement Coupon Promotion or message on social media Billboard Print circular Mobile app offer from convenience store Text message Email Other Not influenced

20.7% 15.0 11.9 11.6 10.3 9.6 9.3 7.8 6.4 2.3 53.1

Base: 561 respondents who purchased cold dispensed beverages at a c-store in the past month Source: Convenience Store News Market Research, 2015

Pointers on Cold Dispensed Beverages

At this year’s Convenience Store News Beverage Retailing Summit, one industry insider noted that no one does dispensed beverages better than convenience stores. The channel beats its competition when it comes to attracting those consumers who make buying fountain drinks a habit. While recent statistics show c-store cold dispensed beverage buyers don’t need much of a push to make this purchase, there are some tried-and-true methods that operators can use to maximize sales and profit opportunities at the fountain. l Keep ‘Em Coming Back. What better way is there

to retain customers than with free refills? RaceTrac Petroleum Inc. found so much success with its summer Sodapalooza program — a $7.99 cup got you free refills through the end of July — that it brought the program back this fall with FreeFill Fridays in October. Kangaroo Express this year also celebrated the fifth anniversary of its Roo Cup program, whereby a $6.99 cup got consumers 25-cent refills throughout the summer.

l Made to Drink. Made-to-order has been a big

hit with consumers in regards to prepared food, so it stands to reason the same concept would work with cold dispensed beverages. To this end, Wawa Inc. rolled out Coca-Cola Freestyle chainwide this year. The touchscreen soda fountain features more than 100 different Coca-Cola beverages and custom flavors. PepsiCo Inc. also has a stake in the game with Pepsi Spire.

turned the cold dispensed area of its stores into quasi research labs. The Midwest retailer’s offer includes up to 32 different fountain drinks and as many as eight flavor shots.

l Entry Into an Exclusive Club. Everyone likes to

feel special, and c-store shoppers are no exception. Earlier this year, 7-Eleven Inc. customers in Florida were given an exclusive taste of AriZona Mucho Mango at the fountain. The Mucho Mango flavor in fountain-beverage form was only available at 7-Eleven stores. The chain featured the flavor at more than 760 locations in the Sunshine State this spring.

l The More, the Merrier. Why

offer just five cold dispensed beverage options when you can offer five, six or even seven times that amount? Kum & Go LC has

WWW.CSNEWS.COM | Guide to Foodservice 19

FROZEN DISPENSED BEVERAGES

How Often Do They Shop at a C-store?

Who Is the C-store Frozen Dispensed Beverage Customer?

Among c-store frozen dispensed beverage purchasers, 70 percent visit a convenience store either almost every day or two to three times a week. Conversely, just 7.4 percent said they visit c-stores less than once per week.

Nearly one-quarter of the convenience store shoppers surveyed purchased a frozen dispensed/slush beverage in the past month. Among this group, the majority are male, with sales in the South (where itâ&#x20AC;&#x2122;s most often hot) far outpacing all other regions.

Almost every day Two or three times a week About once a week Two or three times a month About once a month

By Gender

cHIldren In HouseHold

53.1% 46.9% 60.8% 39.2%

South West

17.6% 21.0%

24.1%

18-24 25-34 35-44

45-54 55+

13.1% 16.8% 15.1% 27.8% 27.3%

At What Time of Day Do They Typically Shop?

6 a.m. - 8:59 a.m. 9 a.m. - 10:59 a.m. 11 a.m. - 1:59 p.m. 2 p.m. - 3:59 p.m. 4 p.m. - 6:59 p.m. 7 p.m. - 10 p.m. After 10 p.m.

43.8% 40.9 42.0 43.5 65.6 46.9 20.2

Base: 352 respondents who purchased frozen dispensed beverages at a c-store in the past month Source: Convenience Store News Market Research, 2015

What Other Products Do They Purchase at C-stores?

37.2%

By AGe

Base: 352 respondents who purchased frozen dispensed beverages at a c-store in the past month Source: Convenience Store News Market Research, 2015

Buyers of frozen dispensed beverages like to visit c-stores in the late afternoon, perhaps to cool down after a hot day. The 4 p.m.-6:59 p.m. timeframe is the most visited daypart for this customer base by a landslide, with the 7 p.m.-10 p.m. daypart next on the list.

By reGIon Northeast Midwest

27.3% 43.2 22.2 5.4 2.0

Along with frozen dispensed beverages, these consumers also purchased candy/gum/breath fresheners the most in the past month, followed by gasoline, prepared food/fast food, canned/ bottled soda, and packaged salty snacks.

HouseHold Income Less than $35,000 $35,000 - $49,999 $50,000 - $74,999

13.4% 19.0%

$75,000 - $99,999 $100,000 or more

20.2% 20.5%

27.0%

Base: 352 respondents who purchased frozen dispensed beverages at a c-store in the past month Source: Convenience Store News Market Research, 2015

Candy, gum or breath fresheners Gasoline Prepared food/fast food Canned/bottled soda Packaged salty snacks Fountain/dispensed soda/drink Bottled water Hot beverage Beer/malt beverages Packaged sweet snacks Lottery tickets Cigarettes 100% fruit juice Energy drinks Meat snacks Milk Sports drinks Bottled/canned iced tea Newspaper

86.6% 85.5 84.9 66.8 64.5 63.9 57.1 56.3 55.1 53.1 46.9 44.3 42.3 41.8 41.5 41.2 39.5 38.4 36.1

Base: 352 respondents who purchased frozen dispensed beverages at a c-store in the past month Source: Convenience Store News Market Research, 2015

20 Guide to Foodservice | WWW.CSNEWS.COM

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Pointers on Frozen Dispensed Beverages

There are few things more enjoyable on a hot day than a frozen beverage. Case in point: 7-Eleven Inc. sells an estimated 13 million Slurpees per month. Although frozen dispensed beverages will always have some seasonality sway, customers will come running to convenience stores all year long as long as the flavor mix is innovative and compelling.

l Be Bold. Bright colors and fruit flavors continue to

appeal to core users and should be a mainstay of any frozen dispensed offering. New product introductions are a good way to get customers to return to the convenience store. “Increased flavor variety is a key tactic to growing the category. Customers love to try new products,” noted Matt Inderlied, senior vice president, customers, at FBD Partnership LP, a supplier of frozen beverage dispensers. Likewise, today’s consumers are seeking bold flavors and more seasonal options, according to Justin Marx, beverage marketing manager at The Kraft Heinz Co., maker of Crystal Light Frozen.

l Sour Is Sweet. C-store retail-

ers should not be sour on selling frozen dispensed beverages with a sour punch. Sour flavors are especially craved by the pre-teen through young adult demographic. “When branded with sour candy, this adds relevance for the customer,” relayed Inderlied. 7-Eleven perhaps had this in mind when it introduced the Sour Patch Kids Watermelon Slurpee earlier this year.

l Go With the Flow. Juice-added fla-

vors, a longtime favorite of consumers, continue to have relevance. “Juice-added flavors create a more authentic flavor for

22 Guide to Foodservice | WWW.CSNEWS.COM

the customer,” stated Inderlied. “Lemonade is the first of many [flavors] to add juice.”

l Keep It Local. Leveraging local and regional beverage brands in frozen-beverage form can be a big hit, as customers tend to be passionate about products exclusive to their area of the country. “Big Red, Vernors, Squirt and Faygo are a few examples of a way to drive incremental sales in the category,” Inderlied said, as 7-Eleven has done. l Count the Calories. Upcoming require-

ments that mandate convenience stores to clearly label calorie counts on menuboards could have a significant effect on frozen dispensed beverages. Hence, low-calorie and sugar-free options are quickly transitioning from an optional product offering to a mandatory one. “Retailers impacted by this requirement are at risk of customers thinking twice before purchasing frozen beverages once they see the calorie declarations,” said Marx. “Customers still want to treat themselves away from home, but are placing greater scrutiny on what they consume and are seeking healthier options when they choose to indulge.” Lower-calorie and sugar-free products can bring users back to the category and turn a light user into a medium user.

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FOOD SAFETY

A Good Company Culture Includes Good Hygiene

Better personal hygiene awareness is the area in most need of improvement

have been involved in the foodservice industry for most of my life, beginning when I was a child helping my grandparents in a small country store in Harrisonville, Pa. Folks would visit that store for gas or a quick bite to eat and sit on the front porch to chat. Of course, most of those old country stores no longer exist, as they’ve been largely replaced by convenience stores. At the beginning of their era, convenience stores were simply gas stations where customers could pick up something quick to eat. Over the past decade, the convenience store concept has become much more complex. It’s no longer a place where you fill up your tank and grab a hot By Francine L. Shaw, Food Safety dog and a Training Solutions Inc. candy bar. Convenience stores now have menus — and with menus come food safety responsibilities. Convenience stores have become more than ever like restaurants. I’ve been involved in the “convenience store world” for years. From food safety training and developing HACCP (Hazard Analysis Critical Control Point) plans to thirdparty audits and health inspections, I’ve done it all. Let’s just say, I’ve seen the good, the bad and the ugly. The one area of the business that could use the most improvement is better awareness of personal hygiene. Don’t misunderstand me; some organizations

24 Guide to Foodservice | WWW.CSNEWS.COM

do a fantastic job of training their team members. Others just don’t seem to understand the importance. Perhaps they don’t realize how easily or how quickly foodborne illnesses can happen due to poor personal hygiene. Everyone assumes tragedies happen to the “other guy.” But what if the “other guy” is you? It won’t simply affect the unit where someone became ill. It will affect your entire brand, potentially causing your organization to go bankrupt and face prospective lawsuits. It’s not the type of national recognition anyone is seeking. A few months ago, I was on my way into a convenience store to perform a health inspection. Upon my entry, I passed an employee next to the front door smoking a cigarette and holding a puppy. She finished her cigarette and walked into the unit, where she proceeded to prepare someone’s food without washing her hands or donning gloves. Needless to say, I stopped the food from being served, as there was potential for multiple foodborne illnesses in this situation. But what if I hadn’t been there to stop her? Another time, I’d spent considerable time conducting food safety training, auditing and developing a HACCP plan for a convenience

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store chain. One evening, I received a panicked phone call from a company executive. It seems, even after the extensive training, one of the foodservice employees had been working for a week with diarrhea. Now there was viable concern that she may have a foodborne illness and customers may have been infected! All of the protocols for restrictions and exclusions had been incorporated into their new policies and procedures, but they weren’t being followed. We took all of the proper precautions and waited for her test results from her doctor. Fortunately, it was not a foodborne illness, but the close call reminded this c-store chain’s staff about the importance of good hygiene at all times. Recently, I was driving home late at night and I was starving. I pulled off the highway to grab a quick bite to eat and get some gas. I went into a convenience store and ordered a plain hot dog. The server — without putting on any gloves — picked up a hot dog, put it in a bun and placed it in the microwave. She then took my meal out of the microwave, and the hot dog slipped out of the bun and onto the counter. With her bare hands, she pushed the hot dog back into the bun. Then, she turned around to get a pair of gloves. Her hands were moist from the hot dog (My Hot Dog!) and she couldn’t get the gloves apart, so she blew into the glove. She may as well have licked my food. Up until now, I’d just been quietly observing the situation (these circumstances give me great stories), but this was more than I could take. I didn’t take that hot dog, but I did get a good story of what not to do. Personal hygiene is so very basic, yet so very essential. Handwashing with soap stops the spread of disease and can save more lives than any single vaccine or medical intervention. Each year, 19 million people get food poisoning due to improper hand-washing. Improper handwashing can lead to each of the “Big Six” foodborne illnesses: Hepatitis A, Shiga-toxin producing Escherichia Coli (STEC), Norovirus, Salmonella Typhi, Salmonella Non-Typhoidal (NTS), and Shigella, not to mention Staphylococcus Aureus and more. Again, this mistake could potentially destroy your brand. If I’ve heard it once, I’ve heard it a thousand times:

“I don’t need to be in this food safety training class, all we serve is…” But I’ve got news for you. Your staff can make someone sick if they handle any food with contaminated hands (or gloves). This even has the potential to be deadly. So, what’s an operator to do? Create a culture focusing on food safety. Make it a priority. Your team will emulate your actions. Promote good personal hygiene, explaining why washing your hands properly is imperative. Also, implement a standardized dress code. Clothing must be kept clean so workers don’t contaminate the food. Nobody should be preparing food in a hoodie they wear to carry out the trash or to the gym. Everyone should be wearing a clean apron as a protective covering over their uniforms or personal clothing. Everyone assumes Implement a tragedies happen to the double handwashing policy. Wash “other guy.” But what if once in the restthe “other guy” is you? room and again when returning It won’t simply affect to the work stathe unit where someone tion. After all, they are touching the became ill. It will affect doorknobs that your entire brand, everyone prior potentially causing your to them touched, and who may not organization to go have washed their hands. Did you bankrupt and face know the average prospective lawsuits. door handle has about 360 types of bacteria on it? Make certain your hot water is set at a minimum of 100 degrees for handwashing, you’ve got plenty of bubbly hand soap and an acceptable way for hand drying. And overall, make sure good hygiene is part of your company culture. CSN Francine L. Shaw is president of Food Safety Training Solutions Inc., which offers a robust roster of services, including food safety training, food safety auditing, responsible alcohol service training, writing HACCP plans, and more. The Food Safety Training Solutions team has more than 100 years of combined industry experience in restaurants, casinos and convenience stores. Editor’s note: The opinions expressed in this article are the author’s and do not necessarily reflect the views of Convenience Store News.

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FOODSERVICE EQUIPMENT

Connected Kitchens Are Coming to C-stores

Integrated technology is helping leading operators succeed in foodservice

oday’s consumer is increasingly food conscious and more discriminating about their dining choices. Convenience stores are gaining market share by offering a new menu of fresher, healthier foods. To remain competitive, convenience stores are creating or expanding their foodservice kitchens. Yes, kitchens! Some operators may not consider that they have a kitchen, but if their store is equipped with something as basic as a microwave oven to prepare foods or dispensing machines for hot and cold beverages, they have a kitchen. With many factors to consider, including space limitations, speed requirements and customer expectaBy Jeff Zazzara, Emerson Climate tions, convenience stores embracing Technologies Retail Solutions the shift to foodservice are making investments in store equipment and technologies. Because of equipment costs, convenience stores may start with one core foodservice production item, like a speed oven. With many menu items relying on this core piece of equipment, uptime is critical to meet customer expectations and build a positive brand reputation. The addition of new kitchen equipment is one more system for operators to manage in their stores. Expanding into foodservice can increase revenue, but it also creates a more complex store environment to navigate. Equipment management for kitchens becomes even more important as productivity and food quality can directly affect the customer experience, and ultimately the bottom line. Many convenience store facilities currently utilize a building management system to control HVAC, lighting and refrigeration. So, why not connect the kitchen equipment into the store’s existing facility management system? This is the simple solution for operators, and

28 Guide to Foodservice | WWW.CSNEWS.COM

it’s an emerging capability today. By integrating the management of foodservice equipment with building controls, an operator can use one single platform to control all systems. Addressing OperAtOr pAin pOints

Convenience store operators have a lot to worry about. Facility management and equipment maintenance is not their only responsibility. Upon each visit, consumers expect a convenient shopping experience. Wouldn’t it be nice if store operations were also convenient? With emerging connected kitchens technology, operators will find it easier to manage the foodservice space, giving them the visibility to closely monitor and control what matters most to shoppers: food quality and consistency. Some connected kitchen solutions available today allow operators to: • Monitor ice machines to ensure they are consistently producing ice. • Measure food temperatures to consistently provide products that are fresh, hot and ready for customers to purchase. • Keep up with equipment maintenance, identifying potential failures before they occur to avoid any disruption in day-to-day operations. • Extract and analyze system data around the use of kitchen equipment, like ovens or grills, to strategically plan for demand and peak cycles. increAsing revenue thrOugh Menu MAnAgeMent

As convenience stores expand their foodservice offerings, variety is important. But making menu changes in kitchen equipment programs has traditionally been a slow, manual process. For example, to add new items to ovens across a chain, USB files or manual instructions would be mailed out to each location. Then, local store staff would each individually upload the new menu file to their equipment before they could

sell the new item to customers. The process is slow, unreliable and nearly impossible to monitor for brand and food quality consistency. Today, many equipment manufacturers have integrated control technologies into their kitchen systems. If this equipment is integrated into the facility management system, the cooking program can be remotely updated. Menu files can be transmitted from a remote monitoring center directly to the kitchen equipment, reducing the need for store employees to be involved in the process. Menu broadcast can reduce the time, costs and in-store staff involvement needed to make these changes as new items are introduced. And thereâ&#x20AC;&#x2122;s validation that the entire system is using the right settings for food quality and brand consistency. On average, the traditional method costs a convenience store chain about $40,000 per menu item change, and it could take about six months to implement. New data suggests that most convenience stores change their menus seasonally, and some update monthly. Convenience store operators are able to expedite this process with a connected kitchen, increasing their efficiencies to make menu changes in minutes, rather than months. They also have the flexibility to update menu items more often, adapting to food trends and giving customers what they want. Achieving A strAtegic AdvAntAge

Early adopters of the connected kitchen system are seeing additional strategic advantages to menu broadcast. As they are facing competition from other convenience store brands, and from quick-service restaurants and supermarkets offering foodservice, efficient menu adaptability is increasingly valuable. With menu broadcast through connected kitchens, convenience stores can get ahead of competitors when it comes to variety. They have the ability to add, adjust or remove menu items remotely. Implementing limitedtime offerings becomes less painful. Quickly adjusting menus to offer regional specials or seasonal options across an entire enterprise can take minutes instead of months. And when they come to an end, those items

can be removed with a simple software change, removing the risk of an associate hitting the wrong button that may affect the entire program. As convenience stores invest in foodservice equipment to evolve their stores and keep up in the changing retail landscape, a single platform that integrates foodservice equipment management with building controls can help them succeed in this new space. Leading convenience stores today that have adopted the connected kitchen system are seeing multiple benefits. Connected kitchens enable convenience stores to increase revenue opportunities by adding new prod-

ucts that meet consumer demands and compete with various foodservice and retail formats. Operators are able to make the most of their foodservice equipment investments while avoiding the headaches that come with adding new systems to an already complex facility. And, with all systems managed under one platform, operators are able to focus on the customer, consistently providing them with fresher, healthier options and a positive shopping experience. CSN Jeff Zazzara is director of foodservice enterprise product management for Emerson Climate Technologies Retail Solutions business. He is currently leading the development of enterprise services for commercial foodservice operators. He has 18 years of experience in the refrigeration industry with a strong background in the application and design engineering of supermarket refrigeration. Editorâ&#x20AC;&#x2122;s note: The opinions expressed in this column are the authorâ&#x20AC;&#x2122;s and do not necessarily reflect the views of Convenience Store News.

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THE FOODSERVICE CUSTOMER

To Reach Millennials, Educate It’s the clearest path to their minds, taste buds and wallets By Howland Blackiston, King-Casey

“M

arketers Obsess Over Millennials” was a recent headline in the New York Times, underscoring the importance of this generation that will account for 50 percent of the U.S. workforce by the end of this year and 75 percent by 2020. Convenience store owners trying to expand their foodservice business are eager to tap into this market, but where to start? Start by Educating thE cuStomEr

Our research and client experience suggests that education is one important way to differentiate your foodservice offerings. Remember first that millennials (generally considered to be those born from 1978 to 2000) are the best-educated generation in U.S. history. They thirst to learn, and their easy familiarity with the Internet and social media means that learning is built into every aspect of their daily life. A recent article referred to them as “Generation Why” because they are so curious and inquisitive. Educated people seek choices and millennials embody this trait: 57 percent compare prices in a store. Educated people are discriminating: one study found that only 32 percent of millennials find brand communications helpful, and 30 percent refuse to

30 Guide to Foodservice | WWW.CSNEWS.COM

read content if it is not educational or entertaining. A Forbes writer summed it up nicely: “Successful marketers will make sure they feel informed and involved, not just marketed to.” This suggests a general retail strategy of brands being educational and informative — the more information available, the better. Customers should feel they have enough data points about a brand, their products and services to make a wise shopping decision. Remember, millennials like to comparison-shop, and they like to shop brands that are supportive of the causes that are important to them (such as caring about health and wellness, and compassionate about social and environmental issues). thE rolE of in-StorE communicationS

As related to a c-store’s foodservice offerings, printed communications within the store environment play the most critical role in educating customers. There are many opportunities to educate the customer in the various food-related “customer zones” throughout the store. The trick is to develop communications that are zone-appropriate and are responsive to customer needs and expectations within each of the zones. For example, if customers are shopping the produce zone, they may want to know more about the freshness, origin and nutritional benefits of your produce. Here is the right zone for educating the customer about a particular food product (e.g., “Local Corn Picked This Morning, Rich in Antioxidants”). In the “pre-order zone” (where customers line up to place their orders), here is a good place to educate the customer regarding good values, new products or delicious food pairings (e.g., “Save by Pairing Our New Italian Stallion Sandwich

with a Tuscany Lemonade”). The dine-in zone (where customers will spend more time) is the perfect zone for educating the customer about your brand, or perhaps engaging them in a social media interaction. The key is to pair the right educational message to the right customer zone. thE rolE of thE mEnuboard, SpEcifically

Here’s a specific area where you can list the facts that really matter to millennials: calorie counts (it will soon be mandatory), plus nutritional details beyond calories, and source of origin. Be as precise as you can in the latter regard, not just country or even state. The successful Five Guys burger chain lists the specific farm, city and state where they get the potatoes for their fries. Our clients at Burgerville, a chain in the Pacific Northwest, were way ahead of the game here — for years, its menuboards have highlighted their “Fresh, Local, Sustainable” positioning and recognized their local suppliers of items like Tillamook Creamery cheese, Walla Walla sweet onions and cage-free eggs. It features (on the menuboard and in other zones throughout the store) seasonable fresh ingredients for their fruitflavored milkshakes and smoothies (e.g., “Northwest Blackberry is the seasonal fruit in August”). thE rolE of dESign & thE EnvironmEnt

Printed communications is the most important aspect of millennial education. But store design and the retail environment can also play a role in educating the customer. The new Starbucks “Clover” brewing system is an educational display zone within the store that allows customers to see and understand how this type of coffee is being brewed. Customers can smell the tantalizing aromas and ask questions about the process and its benefits. Its “edutainment” at its finest. Within Chipotle Grill’s order zone, the display of fresh ingredients visually shows customers that this brand uses really fresh ingredients, while allowing millennials the luxury of customizing their orders. Whole Foods stores are literally built on the sustainability ethic that millennials cherish. Stores are LEEDcertified, using sustainable building materials, LED lighting, efficient HVAC systems and eco-friendly food packaging. In this sense, every zone in the environment is educating the consumer regarding how Whole Foods is making a difference to the environment.

And back at Burgerville, communications within the dine-in zone let customers know the brand is compassionate about the environment, with 100 percent of the stores operating on wind power. On the c-store front, the new 7-Eleven stores include produce displays using wooden crates and bushel baskets that visually reinforce the brand’s “fresh from the farm” offerings. Again, it’s the design details within these store zones as much the actual communications that educate and influence millennials. Education iS a two-way StrEEt

Millennials grew up in a time when technology exploded. They use their cellphones more than any other generation, particularly on social media to ask friends for advice before making a decision, such as which restaurants to visit and what to eat once they arrive. These traits certainly argue that brands should be active across the spectrum of social media, finding fun and creative ways to engage the customer outside of the actual in-store experience. Equally importantly, when you marry millennials’ technological savvy with their desire to have their opinions heard, you create a terrific opportunity for leading edge c-store operators to install electronic feedback mechanisms in their restaurant areas. This action will recognize and gratify millennials, as well as providing real-time market research for the operator. cSn Howland Blackiston is a principal and co-owner of King-Casey, a retail consulting and design firm. He serves a portfolio of clients in the retail and restaurant fields, and is a key proponent of King-Casey’s COZI (Customer Operating Zone Improvement) strategic discipline and process. As a book author, lecturer and noted authority, Blackiston has been a featured speaker at hundreds of conferences, workshops, universities and special events in more than 40 countries. Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.

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WHAT’S NEW

Viper Elite FCB Dispenser

The Viper Elite FCB Dispenser offers expanded drink portfolios with individual barrel flexibility (FCB/FUB) and profile settings. It also has an updated styling that combines high-tech performance with a high-tech look, according to maker Cornelius Inc. Additional features include Intelligent Defrost, in which patented adaptive defrost keeps the machine up and running during peak demand; C3 Technology for cooling, carbonation and controls that provide drink profile consistency, build repeat sales and minimize syrup usage; programmable sleep mode to conserve energy in off hours; and syrup flexibility that features new pressure transducers to ensure syrup change capabilities in the future. The Viper Elite is techniciandesigned, ADA-compliant and offers easily accessible manuals and service videos via QR code. Cornelius Inc. Glendale Heights, Ill. (800) 238-3600 Publications@cornelius.com www.cornelius.com

Krispy Krunchy Jambalaya

Krispy Krunchy Chicken introduced a newly improved jambalaya to its menu of side items. The new jambalaya features a blend of 10 herbs and spices, including hints of onion, garlic, bell pepper and celery. The dish is complete with rich, savory notes that come from its premium meat, according to the company. Krispy Krunchy Jambalaya is MSG- and preservative-free, with a suggested retail price of $1.99 per serving. Krispy Krunchy Foods LLC Alexandria, La. (800) 290-6097 info@krispykrunchy.com www.krispykrunchy.com

Mofat Turbofan 20 Series

New Day’n Night Bites Sandwiches

Day’n Night Bites, a provider of pizza and sandwiches to the convenience store industry, is introducing two new sandwiches to the market: the Sausage Biscuit and the Chicken Biscuit. Premium-selected meat, including flavorfully seasoned pork patties and potato-breaded chicken breast patties, are placed between slices of buttermilk biscuits. Both new sandwiches, which are available after Nov. 1, accommodate the cost structure of sandwiches in the c-store market, bringing value to the customer, according to parent company Land Mark Products. Land Mark Products Inc. Milford, Iowa (800) 338-4340 www.daynnightbites.com

Chester’s Express Program

Making its debut at the 2015 NACS Show, the Chester’s Express program has a smaller footprint and features a simplified menu of bone-in chicken, tenders, breakfast biscuits, sides and more. The program is intended to make operating a Chester’s location easier, according to the company. Through the new program, retailers and operators have access to turn-key development assistance, a comprehensive library of simple and instructive training videos, customized marketing toolkits and ongoing operations support. Chester’s International LLC Birmingham, Ala. (205) 949-4690 info@chestersinternational.com www.chestersinternational.com

The Moffat Turbofan 20 Series offers durable and easy-to-clean porcelain enamel oven chambers that are fully insulated and provide optimum heat retention and efficiency. Designed for easy use, the mechanical thermostat and time controls’ dropdown door assembly with staycool design and quiet operation make the Turbofan 20 Series ideal for simple front-of-the-house baking, reheating and cooking, the company stated. Moffat Winston Salem, N.C. (336) 661-0257 sales@moffat.com www.moffatusa.com

32 Guide to Foodservice | WWW.CSNEWS.COM

WHAT’S NEW

ThermoServ Insulated Drinkware

Created specifically for the convenience store market with a focus on value-added coffee and fountain vessels, ThermoServ’s newly updated insulated drinkware can be customized to integrate with a retailer’s existing marketing messages. The commercial drinkware features a proprietary polyurethane insulation that keeps hot drinks hot for up to four hours, and cold drinks ice-cold for up to eight hours. In addition, ThermoServ’s custom capabilities and strategic marketing expertise allows the company to custom-mold and print products to the customer’s brand colors, and work with them to build programs based around stores’ existing marketing campaign themes or in-store messaging. ThermoServ Dallas (800) 635-5559 www.thermoserv.com

Tulkof Spicy Kimchi Aioli

Spicy Kimchi Aioli is the newest addition to Tulkoff Food Products Inc.’s foodservice squeeze bottle line. The aioli takes the components of kimchi, a traditional Korean dish of fermented cabbage, and combines it with the creaminess of mayonnaise, a proprietary spice blend, cilantro and garlic. Spicy Kimchi Aioli is trans-fat free, low in sodium and cholesterol, and does not contain high-fructose corn syrup or artificial flavors, according to the maker. Tulkoff’s foodservice squeeze bottle line also includes Spicy Chipotle Chili Aioli, Creamy Horseradish Sauce, Extra Bold Cocktail Sauce and Extra Bold Horseradish Sauce. Tulkoff Food Products Inc. Baltimore (800) 638-7373 www.tulkoff.com

Safe-T-Fresh TS5X5 Food Container

The TS5X5 PET square clamshell food container is the newest member of the Safe-TFresh line of patented tamper-evident products. The container size is meant for takeout servings and fulfills the needs of grab-and go-alternatives such as sandwiches, desserts, snacks, salads, veggies and more. The TS5X5 is designed with the merchandiser in mind and promotes more attractive product merchandising that highlights the quality of its contents, according to the maker. The container incorporates a tamper-resistant locking mechanism and patented tear-strip hinge, eliminating the need for shrink bands or wraparound labels to prevent product tampering. It is disposable and manufactured with 100-percent recyclable PET. Inline Plastics Corp. Shelton, Conn. (800) 826-5567 www.inlineplastics.com

DaVinci Gourmet Syrups With Spice

DaVinci Gourmet Syrups With Spice can be used to transform beverages and culinary creations. The syrups deliver a spicy kick that adds distinction at every temperature, according to the maker. Available flavors include: Habanero, the spiciest syrup which contains a subtle chili flavor; Peach Chipotle, which balances the flavor of sweet peaches with the heat of smoky peppers; and Chinese Five Spice, which features a blend of anise, cloves, cinnamon, pepper and fennel for a mild, complex spice. DaVinci Gourmet Ltd. Seattle (800) 640-6779 DaVinciGourmet@kerry.com www.davincigourmet.com

Schmidt’s Bahama Mama Spicy Split Sausage Sandwich

AdvancePierre’s BIG AZ line just got bigger with the addition of Schmidt’s Bahama Mama Spicy Split Sausage Sandwich. The sandwich is served with egg and cheese on a homestyle, fresh-made buttermilk biscuit. Each hand-assembled sandwich is individually labeled and wrapped in crisp, white butcher paper for fresh-made appeal, the company said. The Spicy Split Sausage Sandwich joins the 2X Sausage & Cheese Biscuit and Biscuit Stacker as breakfast offerings in the BIG AZ line. Sandwiches have a 14-day refrigerated, nine-month frozen shelf life. They can be sold from a sandwich warmer or microwaved on demand from a cold case. The product is packed in eight-count cases. AdvancePierre Foods Inc. Cincinnati (800) 969-2747 www.advancepierre.com

34 Guide to Foodservice | WWW.CSNEWS.COM

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