CSN - 1219 by ensembleiq

W H AT ’ S N E X T I N C O N V E N I E N C E A N D F U E L R E TA I L I N G

3 steps 3to higher profits Look inside to find out how successful retailers sell over 100 bottles of 5-hour ENERGY per week. ®

DECEMBER 2019 CSNEWS.COM

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With its impressive gross profit and brand recognition 5-hour ENERGY is one product you want to sell more of. ÂŽ

Look inside to find out how some retailers are maximizing profits with 5-hour ENERGY shots. ÂŽ

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

The

JOY of

Serving Hall of Famer Gus Olympidis learned early on the power of a positive customer experience.

HOT CATEGORIES THAT WILL DRIVE YOUR 2020 IN-STORE SALES

DECEMBER 2019 CSNEWS.COM

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The future of our industry is about innovation, products with the potential to reduce harm and adult consumer choice. Through our companies and strategic partners, we’ve invested in the most compelling portfolio of non-combustible products. We strive to give adult consumers the choices they want today — and invest and develop products for tomorrow.

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

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VIEWPOINT

Giving Is Always in Season C-stores should be proud of being good neighbors in their communities AS WE ENTER THE HOLIDAY SEASON, it is a good time to reflect on all the good things convenience store retailers do as part of the communities in which they operate. C-stores annually are among the largest contributors to major national charities like United Way, Muscular Dystrophy Association and the American Heart Association.

7-Eleven, for example, has pledged to increase corporate giving to 1 percent of its operating net income annually by 2025, and it directs a lot of its attention to programs that directly benefit young people in their communities. But what impresses me even more is the smaller, regional giving that goes on — a lot of it under-reported in mainstream media — across the country. Here’s a small sampling: • Savannah, Ga.-based Parker’s donated $27,000 to Beaufort County Schools as part of its Fueling the Community program, which donates 1 cent of every gallon of gas sold on the first Wednesday of each month to local schools. • After Hurricane Florence, GPM Investments partnered with Samaritan’s Purse to raise $65,729 in disaster relief aid. • Jacksons Food Stores last month launched the Gift of Peace campaign to help end domestic violence in six western states. The retailer is matching customer donations to organizations that battle

domestic and sexual violence. • The Wills Group, operator of Dash In stores, partnered with Rebuilding Together, a national organization that repairs the homes of people in need and revitalizes communities. Employees were joined by more than 100 Navy volunteers and local residents as part of “Make a Difference Day” to make repairs throughout Anne Arundel County, Md. • Supporting the U.S. military and first responders, Yesway on Veterans Day joined forces with Operation Homefront to recognize military service members with a $50,000 check presentation at one of its Iowa c-stores. • Supporting four-legged military heroes, Weigel’s completed its third-annual benefit for Smoky Mountain Service Dogs. “More Wags for Warriors” was a three-week event to build a larger training facility for highly trained service dogs. And, as our September cover story on human trafficking revealed, c-stores are not reluctant to take on huge societal problems, either. With stores in almost every U.S. community, convenience retailers have the ability to address problems like few other companies. Kudos to the convenience store industry, and here’s wishing all our readers a safe, happy and giving holiday season. For comments, please contact Don Longo, Editorial Director, at (201) 855-7606 or dlongo@ensembleiq.com.

EDITORIAL EXCELLENCE AWARDS (2013-2019)

EDITORIAL ADVISORY BOARD Brett Atherton Bolla Management

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

2013 Jesse H. Neal National Business Journalism Award Best Single Issue, October 2012

2013 Jesse H. Neal National Business Journalism Award Finalist, Best Profile, August 2012

Laura Aufleger OnCue Express

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

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

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

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

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

Chris Hartman Rutter’s Ray Johnson Speedee Mart Jack Lewis GPM Midwest

2015 American Society of Business Press Editors, Midwest Regional Azbee Awards Gold, Best Special Supplement, November 2014 Silver, Best Profile (long form), February 2014

Ruth Ann Lilly GPM Investments Danielle Mattiussi Maverik Inc. Vito Maurici McLane Co. Inc. Richard Mione GPM Southeast Jonathan Polonsky Plaid Pantries Inc. Greg Scriver Kwik Trip Inc. Bill Stein Core-Mark Roy Strasburger Strasburger Retail

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

DE C

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

2015 American Society of Business Press Editors, National Azbee Awards Silver, Best Profile (long form), February 2014

2013 American Society of Business Press Editors, Midwest Regional Azbee Awards Bronze, Best Editorial/Commentary, July 2012

Rick Crawford Green Valley Grocery

Joe Lewis ExtraMile Convenience Stores

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CONTENTS DEC 19

VOLUME 55 N UMB ER 12

30 79 FEATURES

DEPARTMENTS

COVER STORY

VIEWPOINT

STORE SPOTLIGHT

30 The Joy of Serving Hall of Famer Gus Olympidis learned early on the power of a positive customer experience.

3 Giving Is Always in Season C-stores should be proud of being good neighbors in their communities.

79 Playing a Hand Rutter’s adds video gaming terminal rooms to attract new and existing customers.

38 Finding a Home Hall of Famer Scott Hill found the perfect fit after joining Jack Link’s Protein Snacks.

10 CSNews Online

INSIDE THE CONSUMER MIND

20 New Products FEATURE

72 Get Ready for the 2020 C-store Tech Evolution Delivery, mobile apps and the checkout experience are moving into the 21st century.

SMALL OPERATOR

94 Making Healthy Convenient C-stores can do a better job of satisfying the needs of better-for-you shoppers.

24 The Carrot or the Stick Understanding the value of positive reinforcement.

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CONTENTS DEC 19

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

EDITORIAL Editorial Director (201) 855-7606

Don Longo dlongo@ensembleiq.com

Editor-in-Chief (201) 855-7608

Linda Lisanti llisanti@ensembleiq.com

Senior News Editor (201) 855-7618

Melissa Kress mkress@ensembleiq.com

Associate Editor (201) 855-7619

INDUSTRY ROUNDUP

CATEGORY MANAGEMENT

12 Marathon Petroleum Will Spin Off Speedway Retail Network

SPECIAL REPORT

14 Eye on Growth 14 Fast Facts 16 Retailer Tidbits 16 Supplier Tidbits 18 Convenience Store News’ Future Leaders in Convenience Event Inspires HOW TO 46 How to Discover More Sales With Delivery Experts detail must-do steps for c-stores looking to establish a solid delivery business.

52 Hot Categories That Will Drive Your In-Store Sales in 2020 These six product categories will generate incremental revenue in the new year. FOODSERVICE

61 What’s Hot on Today’s Menus? Move “beyond” the basics with plant-based proteins. FOODSERVICE

62 Innovation Plus Execution Equals a Winning Formula Kwik Trip tops this year’s roster of Foodservice Innovators Awards honorees.

Angela Hanson ahanson@ensembleiq.com

Associate Managing Editor (201) 855-7604

Danielle Romano dromano@ensembleiq.com

Contributing Editor (303) 741-3377

Renée M. Covino reneek@aol.com

Contributing Editor (201) 280-2614

Tammy Mastroberte tmastroberte@gmail.com

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

Rachel McGaffigan rmcgaffigan@ensembleiq.com

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

Ron Lowy rlowy@ensembleiq.com

Associate Publisher & Midwest Sales Manager Kelly Fischer (773) 992-4464 kfischer@ensembleiq.com Account Executive & Classified Advertising Terry Kanganis (201) 855-7615 tkanganis@ensembleiq.com Classified Production Manager Mary Beth Medley (856) 809-0050 marybeth@marybethmedley.com EVENTS Executive Vice President, Events & Conferences Ed Several (860) 830-8321 eseveral@ensembleiq.com AUDIENCE List Rental (847) 492-1350 ext.318

MeritDirect Elizabeth Jackson

Subscriber Services/Single-Copy Purchases Omeda (847) 564-1468 CVN@Omeda.com PROJECT MANAGEMENT/PRODUCTION/ART

TOBACCO

66 Twice the Opportunity Two different tobacco products purchased together are more commonplace than you think.

Vice President, Production (877) 687-7321 Creative Director (973) 607-1320

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

Advertising/Production Manager (773) 992-4418

Ed Ward eward@ensembleiq.com

Art Director (973) 607-1321

Lauren DiMeo ldimeo@ensembleiq.com

CANDY

70 Converting Convenience Shoppers Into Confectionery Buyers Eight in 10 customers don’t even visit the candy aisle when in a c-store.

CORPORATE OFFICERS Chief Executive Officer Jennifer Litterick Chief Financial Officer Dan McCarthy Chief Innovation Officer Tanner Van Dusen Chief Human Resources Officer Ann Jadown Executive Vice President, Events & Conferences Ed Several

CONVENIENCE STORE NEWS AFFILIATIONS Premier Trade Press Exhibitor

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

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

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Visit goyatrade.com or email us at salesinfo@goya.com

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uct contains nicotine. dictive chemical. Why JUUL? # 1 Vape Share | $3B Sales | #4 Backbar Brand (Including Cigarettes)

Top vapor brands ($ share) 68.9%

13%

11.6%

3.4%

1.9%

1.2%

=100%

JUUL

NJOY

VUSE

blu/myblu

Logic

Share of Profit

JUULpods are ranked #1 ring, profitability, velocity, $ share change, $ share, and $ sales/week. Source: Nielsen, Convenience, Last 16 Quad-Weeks ending 08/10/19

Average weekly profitability $679.1

$395.1

$128.2

$127.8

$55.8

=$1,386

JUUL

NJOY

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Vuse

blu/myblu

Share of Profit

Calculated based off of the total share of profit of $ velocity of the top 5 brands in the e-cigarette industry; assumes 6% rebate & 3% combustible rebate. Source: Nielsen, Convenience, Latest Quad Week ending 08/10/19

CSNEWS ONLINE

MOST VIEWED NEW PRODUCT

FreeReceiptPaper

Convenience store operators can eliminate sunk costs for thermal paper by partnering with FreeReceiptPaper, which partners c-stores with advertisers who incentivize fuel buyers with fourcolor, magazine-quality ads on the back of gas pump receipt rolls. This reinforces their national campaigns and provides customers with “Buy Right Now & Save” coupons, according to the company. Qualifying c-stores receive their receipt paper for free.

Opportunity Marketing Group Phoenix (602) 888-4160 freereceiptpaper.com

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EARTH’S FINEST WATER. NOW AVAILABLE FOR DIRECT ORDER. We’ve reimagined our delivery service to make stocking FIJI Water easier than ever. To schedule your delivery or find your local distributor, visit business.fijiwater.com or contact our customer care team: Phone: 888-426-4602 | Email: delivery@fijiwater.com FIJI Water is also available at Sam’s Club, Costco, and BJ’s or wholesalers of choice including McLane, Core-Mark, Eby-Brown, and The HT Hackney Co.

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INDUSTRY ROUNDUP

Marathon Petroleum Will Spin Off Speedway Retail Network The convenience store chain will become a separate company by year-end 2020 By Melissa Kress AFTER A 10-MONTH strategic review process, Marathon Petroleum Corp. (MPC) has decided to spin off Speedway LLC. The retail network will become an independent company by year-end 2020.

Upon completion of the spinoff, Speedway will be the largest U.S.-listed convenience store operator “boasting a coast-to-coast retail network and a nationally recognized brand,” MPC Chairman and CEO Gary Heminger said during the company’s third-quarter earnings call on Oct. 31. Findlay, Ohio-based energy company Marathon Petroleum kicked off the strategic review in January, following MPC’s tie-up with Andeavor. That transaction closed Oct. 1, 2018. “Over the past year, our primary operations focus has been integrating our two businesses, enabling us to execute and achieve our targeted synergies. Consistent with our continued focus on transforming our business to deliver shareholder value, beginning in January this year, we embarked upon a strategic review process to identify the next steps in our value creation process,” Heminger explained.

Under the plan, the new Speedway will consist of all of MPC’s company-owned and company-operated convenience stores — which collectively generate $1.5 billion of annual EBITDA. MPC will retain its direct dealer business, which primarily operates on the West Coast. This separately managed business within the retail segment is only fuel supply with no merchandise sales. “As we look ahead, we are truly excited about the opportunity the separation presents to each company to unlock value and drive total shareholder return,” the chief executive said. “We believe this transaction has significant benefits for both MPC and future Speedway shareholders, and has the potential to create an enterprise value of approximately $15 billion to $18 billion.” One of the key drivers behind the spinoff decision, according to Heminger, was the recent growth in Speedway’s scale and earnings power. “The number of stores has nearly tripled since 2011 to roughly 4,000, and the membership within our Speedy Rewards loyalty program has nearly doubled,” he noted. As part of the separation process, MPC will establish a long-term, market-based supply agreement with Speedway, which will remain headquartered in Enon, Ohio. MPC also announced several leadership moves, including Heminger’s decision to retire after the first quarter of 2020.

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INDUSTRY ROUNDUP

Eye on Growth

Majors Management LLC acquired McDonald Oil Co.’s 18 Summit Food Store locations in Georgia. The deal also included four open dealer accounts. Riiser Fuels Holdings LLC acquired Baltus Oil Co.’s eight convenience stores. The Wisconsin sites operate under the Bread & Butter Shop banner. Stinker Stores expanded its presence in Wyoming with the acquisition of J.H. Kasper Oil Co. The transaction included one truck stop, three convenience stores, two card locks, and a bulk fuel and lubes business.

If the business model is successful, the new concept store will serve as a prototype for additional urban sites to open across the chain’s footprint.

Kum & Go LC will open its firstever urban convenience store in downtown Des Moines in spring 2020. The 3,000-square-foot store will serve as a test site for new items.

The Cigarette Store Corp., dba Smoker Friendly, added the 33-store Smoker’s Outlet chain to its portfolio. With this acquisition, the company will retain the 120 employees who work for Smoker’s Outlet, which has stores throughout Missouri. ExtraMile Convenience Stores LLC opened its 900th store. Located in Carlsbad, Calif., the c-store is operated by G&M Oil Co. LLC, one of ExtraMile’s largest franchisees.

Wawa Inc. plans to open 10 to 15 new convenience stores in Maryland. The expansion will begin with five new store openings across the state in 2020.

Buc-ee’s will open its first Georgia location in 2021. The planned 53,000-square-foot travel center will have 116 fueling stations and operate 24 hours a day.

Casey’s General Stores Inc. is building a third distribution center that’s set to rise in Missouri. The Joplin facility will initially serve 400 to 600 Casey’s locations.

Thorntons opened three new c-stores in Illinois in four weeks. They include a 5,500-square-foot location in Romeoville, a 4,400-square-foot location in Prospect Heights, and a 9,150-square-foot location in Roscoe.

FAST FACTS

70% 6 in 10 More than 70 percent of Gen X men and women are more likely to visit merchants with a rewards program, as are more than 60 percent of millennial men. — Payment Trends in the United States, Zipline

Six in 10 adults worldwide prefer to eat many small meals throughout the day, as opposed to a few larger ones. — State of Snacking, Mondelez International

BETWEEN

900

million & $ billion

1.2

By the end of 2019, hemp CBD sales are projected to reach between $900 million and $1.2 billion. — Nielsen

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Your competitors are selling 100+ units of 5-hour ENERGY shots per week. How do they do it? ®

with a whopping 50% gross profit, generating $1.58 to $1.64 per bottle. That’s the kind of gross profit you need more of.

Here's how... These are the best practices of the most successful 5-hour ENERGY shot retailers:

Top 5-hour ENERGY shot retailers sell an average of 127 units per week. That’s around $11,000 per year in gross profit just from 5-hour ENERGY shot sales. ®

1. Multiple locations in-store. One 15-box rack at each register plus at least one secondary location such as an endcap, a floor display, or next to the coffee station. These retailers have learned that if the consumer sees 5-hour ENERGY they buy it. It is one product which sells well from all four locations in your store. ®

2. Keep displays full and clean looking. Out of stocks on any flavor have a huge negative impact on sales. 3. Clearly advertised pricing and multi-unit discounts.

The 15-box rack It’s the classic retail success – lots of profit in a small space. You get 180 bottles of 5-hour ENERGY shots packed neatly into a footprint that’s 18.5 x 12 inches. That works out to a gross profit of $1.31 per square inch some of the most profitable inches in your store. ®

More 5-hour ENERGY = More money ®

5-hour ENERGY shots should be the focus of your front-end space. Why? It’s one of the highest performing impulse products ®

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Call 866-960-1700 Then press 5 for sales, then 1 for domestic sales

www.5hourenergy.com/trade Individual results may vary. See www.5hourenergy.com for more details. Regular Strength 5-hour ENERGY® shots contain caffeine comparable to a cup of the leading premium coffee. Extra Strength 5-hour ENERGY® shots contain caffeine comparable to 12 ounces of the leading premium coffee. Limit caffeine products to avoid nervousness, sleeplessness, and occasional rapid heartbeat. ©2019 Living Essentials Marketing, LLC. All rights reserved.

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INDUSTRY ROUNDUP

Retailer Tidbits

EG Group is relocating its U.S. headquarters from Cincinnati to Westborough, Mass., home of Cumberland Farms’ office and warehouse facility. EG acquired Cumberland Farms in late October. The move will be effective Jan. 1.

C-store chain Wesco is now offering its employees financial wellness capabilities. A partnership with Even gives workers tools to help them plan, spend, borrow and save.

Pilot Flying J now offers its full- and parttime employees six weeks of paid parental leave. To be eligible, employees must have at least one year of service and have worked at least 1,250 hours in the past 12 months. Mini Stop is removing beef from its menu and replacing it with the plant-based Impossible Burger. The revamped menu will feature nine options.

Phillips 66 is partnering with GetUpside at its Phillips 66, Conoco and 76 gas stations. The platform brings customer personalization to the company’s 22,000 sites. TravelCenters of America Inc. and IHOP Restaurants inked a franchise development agreement to open up to 94 IHOP locations over the next five years inside TA and Petro branded travel centers. The TA Restaurant Group will operate the restaurants. ExxonMobil launched Exxon Mobil Rewards+, a new allin-one app. It replaces the Exxon Mobil Speedpass+ app, which debuted in 2016.

Mini Stop is the first c-store chain to fully replace traditional burger meat with plant-based meat.

Supplier Tidbits

7-Eleven Inc. introduced El Salvador Bourbon Single Origin coffee to its stores. The chain now brews more than half of its coffee from Rainforest Alliance Certified beans.

Juul Labs pulled its mint-flavored pods from the market. The move affects both in-store and online sales in the United States. Harbor Wholesale Foods acquired a significant portion of Food Services of America’s Seattle business. The deal included a 250,000-square-foot distribution facility in Kent, Wash.

The Food and Drug Administration approved Swedish Match’s bid to market its General Snus smokeless tobacco products as less harmful. This marked the first time the agency approved a tobacco product’s modified risk application. Jack Link’s Protein Snacks formed a strategic alliance with blockchain startup SKUxchange. The partnership will enable the company to deliver smart digital offers across multiple industry verticals.

This is the third time in 2019 that the Altria Group Inc. subsidiary raised prices.

Philip Morris USA took an 8-cent list price increase on 12 of its cigarette brands. The move translates to a roughly 2 percent to 3 percent increase.

Paytronix Systems Inc. rolled out a series of upgrades to the Paytronix Rewards Platform during PXUX 2019. The upgrades to Paytronix Order & Delivery include single sign-on, open dollar discounts, and bundling discounts. VP Racing Fuels Inc. signed a new distribution agreement with California Fuels & Lubricants (CFL), servicing Southern California. Among the pact’s elements, CFL will market VP’s branded retail programs.

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

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INDUSTRY ROUNDUP

Convenience Store News’ Future Leaders in Convenience Event Inspires Industry veterans shared their wisdom with this year’s class of 15 honorees By Angela Hanson AUTHENTICITY, CONTINUAL IMPROVEMENT

and meaningful relationships were among the key themes at the secondannual Convenience Store News Future Leaders in Convenience (FLIC) event. Fifteen up-and-comers in the convenience store industry were honored as Future Leaders in Convenience during the Nov. 6 awards ceremony, held at the Chicago Marriott Downtown Hotel. The goal of FLIC is to help develop the next generation of convenience retail leaders, aged 35 or younger, by providing a forum for talented young business people to hone their leadership skills, while recognizing the achievements of a select few emerging leaders. The honorees were nominated by their peers and chosen for the ways in which they are already significantly contributing to their companies and the convenience store industry as a whole. Along with the awards presentation, the event featured multiple speakers who shared personal advice from their time in the c-store industry and some important lessons they learned as they became leaders. During his opening address, Matt Domingo, senior director of external relations, trade marketing for RAI Trade Marketing Services Co., spoke about the importance of relationships, noting he most admires the standout leaders he’s met during his own career for what they did for others and how they led their teams. A key milestone in learning to lead is being OK with not knowing everything, he added. Another key aspect of leadership, according to Domingo, is continual improvement. Not only should developing leaders strive to get out of their comfort zones and never stop learning, but they should also always strive for the opportunity to coach and develop others. He also stressed the importance of building teams with diverse

2019 FUTURE LEADERS IN CONVENIENCE HONOREES • Jeff Bush, Parker’s • Kala Capolunghi, QuickChek Corp. • David Cole, Plaid Pantry • Drew Dickerson, OnCue Marketing LLC • Mike Gallagher, 7-Eleven Inc. • Brett Hughes, Mirabito • Melissa Lessard, Alimentation Couche-Tard Inc./Circle K • Thierry Lyles, Family Express Corp.

• Harry MacIntyre, RaceTrac Petroleum Inc. • Dana Renfro, Yesway • Darren Renwick, Yesway • Brett Silva, ExtraMile Convenience Stores LLC • Emily Smith, Enmarket • Tyler Tetzloff, Family Express Corp. • Alan Weaver, RaceTrac Petroleum Inc.

backgrounds and experiences, which Domingo said naturally leads to diversity of thought — something that only makes a company stronger. Gus Olympidis, the 2019 Convenience Store News Hall of Fame retailer inductee, also shared some words of wisdom while reflecting on his time in the c-store industry. The founder, president and CEO of Valparaiso, Ind.-based Family Express Corp. spoke about embracing change. He urged this year’s FLIC class not to fear trying new things that lack guaranteed results. If the goal is to never make a mistake, a company likely won’t be a market leader, according to the Hall of Famer. “You hope not to make too many or catastrophic mistakes, but they happen,” Olympidis acknowledged. Derek Gaskins, senior vice president of merchandising and procurement at Des Moines, Iowa-based Yesway, stressed the importance of authenticity. He believes that when people compartmentalize and try to be different at home vs. at work, it won’t get them to where they want to go. “It won’t help you lead and inspire people,” he said. “We’re all human.” Sponsors of the 2019 Future Leaders in Convenience program include founding and presenting sponsor RAI Trade Marketing Services Co., and silver sponsor Altria Group Distribution Co.

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THE 50 MOST INFLUENTIAL PEOPLE IN CONVENIENCE STORE HISTORY

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1. Marley Natural CBD Products Docklight Brands introduces a portfolio of CBD products that celebrates the life and legacy of international reggae icon Bob Marley. The Marley Natural line includes: three varieties of Marley Mellow Mood CBD tea (Herbal Honey, Peach Raspberry and Lemon Raspberry); two varieties of Marley CBD Wellness Shots (Berry Prickly Pear and Coconut Pineapple); four varieties of Marley CBD Chocolates (Sea Salt Dark, Jamaican Spice, Candied Ginger and Blue Mountain Coffee); and five types of Marley CBD skin care. The products come packaged in displayable cases with low price points, designed for easy trial for first-time CBD customers. Docklight Brands Inc. Seattle marleynatural.com/cbd

2. Tapatío Frank Sigma Foodservice and Tapatío Foods join forces for a grilled frank that features the bold, spicy flavor of Tapatío Hot Sauce. The Tapatío Frank has the flavor of the hot sauce directly infused, so there is no need for the added cost of hot sauce condiments. The Tapatío Frank can be eaten hot off the roller grill, out of the hot case, or served from the kitchen. Sigma Foodservice Phoenix (602) 285-2657 bar-sfoods.com/foodservice

3. Cherry Vanilla Coke 4. Lay’s Flamin’ Hot Dill Pickle Cherry Vanilla Coke and Cherry Vanilla Coke Zero Sugar combine the taste of Coca-Cola with two classic flavors: cherry and vanilla. These new varieties were born from the idea of having “fun with perfection,” which celebrates the creation of Coke and its perfect taste 134 years ago, according to the company. Starting Feb. 10, 2020, Cherry Vanilla Coke and Cherry Vanilla Coke Zero Sugar will be available nationwide in 12-ounce cans and 20-ounce PET bottles. The Coca-Cola Co. Atlanta coca-colacompany.com

One of Lay’s most popular limited-edition flavors, Flamin’ Hot Dill Pickle, returns as a permanent addition to the Lay’s brand portfolio. Lay’s Flamin’ Hot Dill Pickle potato chips combine Lay’s iconic Flamin’ Hot flavor with the tangy taste of dill pickle to create a unique and delectable flavor unlike any other, according to the maker. The product also offers a sneak peek at Lay’s all-new packaging design, including a bold purple bag. Lay’s Flamin’ Hot Dill Pickle chips come in a 7.75-ounce bag for a suggested retail price of $3.49. Frito-Lay North America Inc. Plano, Texas fritolay.com/snacks/ product-page/lays

5. Trolli Sour Brite Mystery Night Crawlers Ferrara Candy Co.’s Trolli Sour Brite Mystery Night Crawlers innovation is the brand’s first mystery treat and features white and neon sour sanded gummy worms that leave fans guessing with every bite. Each package contains three dual-flavored crawlers: White & Pink, White & Green, and White & Blue. Mystery Night Crawlers are available in a 3.8-ounce peg bag with a suggested retail price (SRP) of $1, a 5-ounce peg bag with a SRP of $1.79; and a 7.2-ounce peg bag with a SRP of $2.29. Ferrara Candy Co. Oakbrook Terrace, Ill. trolli.com

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6. Eggcheff Scrambled & Eggcheff Cooker Eggciting Products is bringing two new devices to the market: Eggcheff Scrambled and Eggcheff Cooker. The Eggcheff Scrambled device cooks scrambled eggs automatically in a minute and even adds the fork in the cup or mug. Fresh ingredients like tomato or cheese can be added and cooked to order. The Eggcheff Cooker device brings the cooking time of an egg down from 12 minutes to one minute. Just choose if you want a hard, medium or soft boiled egg. Neither device requires staff. The devices are also slim, ventless, and use a patented hybrid heating technique.

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Developed to provide greattasting protein, Premier Protein 30g Protein Bars are packed with 30 grams of protein and contain no artificial sweeteners, flavors or colors. Ideal for a quick, on-the-go meal replacement, these protein bars provide sustained energy, according to the company. Seven varieties are available: Chocolate Peanut Butter, Yogurt Peanut Crunch, Peanut Butter Crunch, Salted Caramel, Dark Chocolate Mint, Dark Chocolate Almond, and Double Chocolate Crunch. Premier Nutrition Corp. Emeryville, Calif. premierprotein.com

Borden Dairy brings its first 2 percent, no-sugar-added milk for kids to the market. Available in Chocolate and Strawberry flavors, Borden Kid Builder milks have 50 percent more protein (13 grams per 240-milliliter serving) and calcium (490 milligrams per 240-milliliter serving) than regular milk, and are made from cows not treated with artificial growth hormones, according to the company. The suggested retail price is $1.59 for the 12-ounce single-serve bottle and $4.29 for the 52-ounce multi-serve bottle. Borden Dairy Dallas bordendairy.com

9. JOB Virgin Unbleached Cone Packs JOB Virgin Unbleached Cone Packs come prerolled and equipped with a tip to provide consumers with an easier way to pack, fill and enjoy. They are made of unbleached, chlorine- and dye-free fibers that are responsibly harvested. The ultra-thin, lightly porous cones offer a slow burn and truer taste, with minimal ash. JOB Virgin Unbleached Cone Packs come in two retail sizes: 1 1/4 size with six cones per pack, or king size with three cones per pack. Republic Tobacco Glenview, Ill. (800) 288-8888 info@rpbtob.com therepublicgroup.net/eng

Eggciting Products Amsterdam theeggcheff.com

10. PDI Offer Network PDI Marketing Cloud Solutions is expanding its Elevate service, which gives convenience retailers the ability to optimize CPG trade funds. With more than 30,000 locations, the new PDI Offer Network includes chains, independents and single-store operators across 10 the United States unlocking promotional and analytical tools previously not available to retailers or accessible to CPGs, according to the company. The PDI Offer Network allows retailers to take advantage of incremental and hard-to-reach brand dollars previously unavailable to chains without a national geographic footprint, while CPG brands gain unprecedented customer and product insights by accessing quality data from large retail chains and single-store operators. PDI Alpharetta, Ga. pdisoftware.com 22 Convenience Store News C S N E W S . c o m

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The Carrot or the Stick

SMALL OPERATOR

RE RES

Understanding the value of positive reinforcement

WHEN I WAS YOUNG, I had a summer job working in a convenience store. My manager was an older man — a c-store veteran. He was my first real retail boss. His name was Mr. Bernard and he took the time to explain to me what he wanted me to do, what the result should be, and what his expectations were of me in completing the task.

By Roy Strasburger, President, Strasburger Retail

Receiving the proper instruction was obviously very important and I performed the duties which, in this case, were emptying the shelves of product, dusting them, putting the product back, and fronting and facing everything. The task took me several hours and, when I finished, Mr. Bernard came over to inspect my work. He looked at the shelves, picked up a few items to look underneath them to see if the shelf was clean, and took a step back to survey the entire scene. After a moment’s silence, he turned to me and told me that those were

probably some of the cleanest shelves he’d ever seen. My 12-year-old heart almost burst with pride knowing that I’d finished something that was not only done properly, but also had been praised for the quality of the work done. A few days later, Mr. Bernard assigned me another task. Once again, he explained to me what needed to be done, how it should be done, and his expectations. This day’s task had to do with cleaning the front parking lot of the store. It was a hot August day in Texas, and I went to work cleaning up the parking lot: picking up trash, removing cigarette butts, and washing down the outside ice merchandiser box. When I finished, Mr. Bernard came out. He walked around the parking lot and then stood quietly for a few moments. Eventually, he turned to me and said, “Roy, you’ve done a nice job, but it is not quite up to the standard that I know you

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can do. If you do a few extra things, like scraping up the bubblegum and picking up the dead crickets, it would go from being a good job to being an excellent job.” Even at that age, I knew that I had not met Mr. Bernard’s expectations. But the way the news was broken to me, in a positive manner and with instructions on how to make changes to do better, it wasn’t a slap on the wrist. I wasn’t crestfallen by my poor performance. I was actually motivated to do better because I could see the path to meet the expectations. It was not a negative interaction, but rather an opportunity to improve my performance and, additionally, myself. Needless to say, in a couple of hours, there wasn’t any bubblegum and nary a cricket to be seen. Mr. Bernard was a master trainer. Positive reinforcement is the most effective way to develop skills and habits when training people. The ultimate training goal is to teach everyone how to perform to their maximum level in order to meet high standards and expectations. Typically, there are two methods to achieve this: the carrot or the stick. I far prefer the carrot when I am helping someone learn something or when I’m the student. Using the stick, or negative reinforcement, only builds resentment within the student and lowers morale. Once a person’s attitude is on the downhill slide, it is very difficult to turn it around, and the negative attitude becomes infectious. Soon, your whole team will start developing negative attitudes and the workplace will become toxic. The ironic thing is that positive reinforcement is almost as easy to use as negative reinforcement. Admittedly, positive reinforcement takes a little more thought sometimes. It is not always easy to see the positive upside of an inferior performance — you sometimes have to look for it. But you can also say that the absence of a negative reaction is actually a positive reaction in itself. Bottom line, if you don’t do something mean, then you’re actually doing something positive. At StrasGlobal, we have tried to develop, and continue to work on, creating a humane and caring environment for our teammates. We are always preaching the golden rule: “Do unto others as you would have them do unto you.” I believe that everyone wants to be treated with kindness and fairness. Therefore, if that is the way you want to be treated, that is the way you should treat others. This does not mean that there should not be discipline or negative consequences to actions or the failure to meet expectations. What it does mean, I think, is that in most cases, people should be given a second chance and the opportunity to learn from their mistakes. The phrase, “constructive criticism,” often gets a raised eyebrow as being code for telling someone off in a nice way, but I don’t see anything wrong with that. As long as you’re being honest and positive with your feedback to someone, then the comments are valid and have value. When setting expectations, it is important that there

is a clear understanding as to what happens if the expectations are not met. Whether it is a chance to redo the task, a requirement of more training to be done, or termination, the consequences need to be clearly communicated and confirmation received that the listener has understood them and taken them onboard. It is only when the actor understands the full scope of the plan and the impact of the results that he or she can actually perform the task and learn from it. Just having someone go through the motions without an understanding of the purpose will not create expertise or a skill set in and of itself. Positive reinforcement can be done in several ways. In addition to handing out pats on the back, there can be material rewards as well as intangible ones. The classic tangible positive reinforcement is when a prize, such as a dinner, cruise or trophy, is presented to the person completing the task. Examples of intangible reinforcements are putting someone’s name on a plaque, making them the employee of the month, or giving them a special shout-out during a company gathering.

Overcoming the desire to show your authority through negative comments and actions is one of the steps toward being a great teacher and leader. Of course, the prize and the reinforcement must reflect the scale of the task. The reward for properly cleaning the parking lot should be different than the reward for meeting sales objectives, but the impact to the recipient should be the same — a feeling of recognition and appreciation for a job well done. Having said that, I do not believe in participation trophies. You know what those are — you get an award for just showing up. No effort is required except for being present. The reward must be based on the accomplishment of a specific objective. Otherwise, all of your motivational techniques will be worthless and will fail to deliver the desired results. It is also important that the reward system is consistent and applicable to everyone who is doing the same task. In addition to training the proper conduct, this leads

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to a sense of team-building and bonding. One of the most interesting things we have tried is where is the entire team benefits from the positive reinforcement for one person’s actions. For example, if a team member completes a training module, then the entire team gets pizza to celebrate the event. I do not recommend the opposite — punishing the entire team for the failure of one person. Once again, that becomes demoralizing and negative.

need to exert your power over someone when you are in a position of power. Overcoming the desire to show your authority through negative comments and actions is one of the steps toward being a great teacher and leader.

A final byproduct of positive reinforcement is that it makes you feel good about the way you are helping people. A positive encounter with a person, even when they have not met your expectations, allows you to feel better about your performance and yourself.

When I find myself in a teachable moment, either as the teacher or the student, I think of Mr. Bernard and how he helped me grow and understand the power of positive reinforcement. I think he helped me to become a better person.

I firmly believe that we have an innate instinct to be nurturers and to help others. It is also natural to feel the

Carrots are not only good for your eyes; they are good for your soul. CSN

As the old saying goes, “you catch a lot more flies with honey than with vinegar.” If you use positive reinforcement, you will be building a long-term relationship with your student.

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

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COVER STORY

The Joy of

Serving BY ANGELA HANSON

Hall of Famer Gus Olympidis learned early on the power of a positive customer experience

s young adults, some eventual stalwarts of the convenience store industry had a sense of what their paths would be based on family history or personal interest, while others wound up working in the c-store business and were surprised to discover how much they enjoyed it.

For Kosta “Gus” Olympidis, founder, president and CEO of Valparaiso, Ind.-based Family Express Corp., his first step into the c-store industry was literally a walk by a small-town 7-Eleven store where he saw a sign about an available franchise. “I often describe my early beginnings as a derivative of youthful indiscretion,” Olympidis told Convenience Store News, reflecting on the start of a career that would eventually lead him to become a successful entrepreneur, a leader in the retail community, and the 2019 retailer inductee into the Convenience Store News Hall of Fame. Just 21 years old at the time and more likely to be taken for a store-level employee than a franchisee, Olympidis made a decision that would prove fruitful. He called the number listed. While he credits serendipity and good fortune as playing roles in his career path, Olympidis also points to his time as a franchisee as being important to his development as a businessman, relating it to an advanced MBA program in the c-store space. Olympidis’ 7-Eleven franchise was the typical size for the era, occupying only approximately 2,400 square feet. The logistics of operating in a small space with a daily distribution model taught him a great deal, and he acknowledges some elements of Family Express’ vertically integrated model have roots in the innovation pioneered by others in those early days. “As a young person with some intellectual curiosity, this was wonderful training grounds for developing the knowledge, and subsequently the expertise,” he said. “To this day, I have not just respect for 7-Eleven, but some emotional connection — some gratitude for the opportunity to learn.” Along with his time operating the 7-Eleven franchise, Olympidis gained knowledge from another formative retail experience: working with his father at a clothing store in Greece. The Hall of Famer immigrated to the United States from Greece when he was a teenager, but as a child, he helped out his father, who was a partner in a clothing store in downtown Athens. “The joy of my life was to work behind the counter for the Christmas season, never getting paid for it other than the joy of serving customers,” Olympidis recalled. That experience influenced the eventual company values of Family Express, which today focuses on building relationships and recruiting people who are geared toward serving others. The result is both good for people and good for business. “I learned early on how to put the right shirt and tie together and how to respond to the notion of delivering an experience that was positive enough to result in a sale,” he said.

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Going Solo

Roughly two and a half years after joining the 7-Eleven community, Olympidis heard the call for something more. He decided to go out on his own and opened his first independent store on Christmas Day 1975. Initially known as Time Low, he renamed the brand Family Express in 1987. “The nature of my personality is to live a very independent existence,” he said. Olympidis noted that his experience is far from unique, as the convenience store space is “littered” with companies whose founders started out as franchisees of major c-store chains before creating their own companies. Despite the knowledge he’d gained from his time with 7-Eleven, going out on his own was not without its challenges. “It’s a very quick wake-up call,” he said of the difference in analytics support, merchandising and accounting as a franchisee compared to being responsible for everything as an independent operator. The elements that ultimately contribute to retail success, according to Olympidis, are “not the sexy stuff,” but they’re necessary nonetheless. Focusing on the fundamentals, he took Family Express from a single store on the west side of Valparaiso to a chain of 70-plus stores across northwest and central Indiana. The vertically integrated company owns its own warehouse, trucking fleet, central distribution facility and bakery. Family Express also sells private label products, such as fresh food, milk, energy drinks and bottled waters, to help the brand stand out. Olympidis compares his company to Kwik Trip Inc., which also has a vertical integration model, but he isn’t rushing to catch up to the La Crosse, Wis.based retailer’s store count of 600-plus locations. Family Express, though, is taking a major step by moving into a new market — suburban Indianapolis — and expanding its distribution center, which includes an on-premise central bakery. Instead of trying to become the biggest, Olympidis wants to be the best and maintain the company’s “living brand” culture, which focuses on its workforce as a powerful motivator for customers to choose Family Express over a

Family Express has grown into a chain of 70-plus convenience stores across northwest and central Indiana.

competing c-store. “Living brand” is the result of putting significant time and resources toward hiring the right people. “We’re proud of recognizing early on that a serving workforce is a powerful competitive advantage,” he said. The company is known for its uniquely friendly and helpful employees, which is “probably the single most fundamental differentiation of Family Express in the marketplace.” The retailer makes use of an online screening process and reviews about 50 prospects for each one employee it eventually hires. As a result, Family Express sees very low turnover and is currently enjoying the lowest turnover in its history. Along with the screening process, Family Express uses a hiring protocol based on programmatic hiring, a process that initiates store-specific hiring based on formulated and anticipated attrition rather than starting the process after a position opens up. This avoids overand under-staffing and has enabled Family Express to attain zero turnover in half its locations since two years after the protocol launched in 2007. The forward-thinking process reflects Olympidis’ habit of expecting the unexpected and making business challenges a normal part of daily operations. “The challenges are almost part of the recipe. They’re inherent,” he said. “Attaching a flavor of everyday-ness to them helps you invent and helps you innovate and build an attitude of can-do, because every challenge you’re facing today reminds you of the multiple challenges that you had to overcome throughout the journey.” His focus on the routine everyday challenges may be why Olympidis sounds fairly modest when discussing his company’s achievements. “We have a proclivity to challenge the sort of thing that seemed odd at the time and once it succeeds, then you call it innovation,” he explained. “But along the way, you also accumulate a litany of mistakes that just didn’t work out.”

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THE BAR JUST GOT HIGHER CONGRATULATIONS! to the Convenience Store News Hall of Fame Retailer of the Year

Gus Olympidis

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Olympidis celebrated with his family, including his three sons — Spiro, Dimitri and Alex — and wife Beth, who are all part of the company.

Olympidis views both successes and mistakes as building blocks for overall success. He recounted one instance where an Indiana safe manufacturer was advertising the rigidity of its safes, which would stand up to fires and bullets. “I remember arguing we’ve never had a fire, never had someone try to put a bullet in a safe,” Olympidis said. He realized, though, that what he could use was a safe that would not require a store manager to be sequestered in the back room counting cash when he or she could be performing more valuable work. Reasoning that soda machines could read dollar bills and dispense a can, he questioned, “Why can’t we do the same thing and have the machine count money rather than our people counting money?” Thus, Family Express became the first c-store company to use an electronic safe. Olympidis teamed up with a manufacturer to develop a primitive currency reader. The initial model didn’t work very well, but then Olympidis had the idea to incorporate the currency readers used by slot machines in Las Vegas. Not only were they up to the heavy use that c-stores also required, but they were more likely to count the money correctly. “I kinda thought the mob would expect them to be accurate,” he said with a chuckle. His manufacturing partner added the suggested equipment and the resulting safe was significantly improved for the time. “It became very practical,” he said.

2018 Hall of Famer Jay Ricker presented Olympidis with his award.

A Seamless Transition

Reflecting on his decades in the c-store business, Olympidis has witnessed lots of change. He points to the addition of fuel to c-stores as the most monumental change the industry has experienced, so much so that fuel pumps and c-stores are inextricably associated with one another, and many people don’t even realize this was not always the standard. The rise of foodservice in c-stores is another sea change for the industry, he says. And a third major change — one that may be just beginning — is the move toward building frictionless experiences for consumers, which Olympidis feels very strongly about. “We are presiding over an occasion where the consumer is interpreting their expectations of the experience in a very different way than in the past,” he said. “It has to do with eliminating friction wherever we can — assuming we’re smart enough to define friction.”

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That’s something he has his doubts about because, in his view, the idea of friction is much broader than most people think. To some, frictionless is the experience offered by Amazon Go stores, where customers can walk in, select the items they want to purchase, and walk out without a traditional payment process. But according to Olympidis, frictionless has more to do with satisfying the consumer mindset of “I want it the way I want it when I want it.” For the consumer who doesn’t want to spend time making a payment, the cashier-free experience offered by Amazon Go may be the ideal frictionless experience. However, for those who are uncomfortable with this process and desire traditional payment, the opposite may be true. “You may think you’re removing friction,” Olympidis said. “You may actually be adding it.” He believes the perfect frictionless store offers traditional checkout, selfcheckout and unattended checkout options side by side, truly giving all customers what they want, the way they want it, when they want it. He acknowledges that it’s a complex endeavor, but finds it unlikely that retailers will be holistically successful without executing in this way. Currently, Family Express is building a seamless customer engagement ecosystem by working with multiple digital partners to connect solutions that otherwise operate in separate silos. Its partners include Paytronix as its primary loyalty partner, Olo as the online ordering platform, Big Club Digital for website development, and National Carwash Solutions for its car washes.

Olympidis is still keeping an eye on other ways Family Express can reduce friction, too, which could even be found in the bathrooms, as people today prefer a touchless experience there. “The handle is friction,” he pointed out. “Nothing technological about it.” The emergence of frictionless and consumers’ changing expectations of what “convenience” means make the present day a time of great change for the c-store industry, one that Olympidis admits is “almost overwhelming” for some. But even after 44 years in the business, he’s ready to embrace the coming changes and keep making his company better. And he isn’t doing it alone. Along with his carefully selected Family Express team, Olympidis’ three sons and wife Beth are part of the company. Dimitri runs the central enterprises; Alex is in charge of company operations and human resources; and Spiro oversees fuel procurement. As he and Beth raised them, Olympidis made sure to pass along the importance of serving others, including Family Express’ storelevel employees. Since the inception of Family Express, Olympidis has made a point of visiting stores on Christmas Day to express his gratitude and help out. From his early years spent helping out at his father’s clothing store to the day he opened his own store, Christmas remains a special day for Olympidis. “Could be shoveling the walk or cleaning the restroom,” he said. “This tradition survives today but it isn’t just the immediate family that’s doing it, but essentially every member of the management team.”

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CONGRATULATES

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FINDING A HOME Hall of Famer Scott Hill found the perfect fit after joining Jack Link’s Protein Snacks BY MELISSA KRESS

ith college graduation on the horizon, Scott Hill assumed he would build his career in the family business. He was right about that, but wrong about which family. Hill’s original plan had him following in his father’s footsteps and entering the insurance field. He probably should have clued his father in, though, he admits. Upon telling his father of his plans to join him at his company — one month before receiving his diploma — his father told him that he lacked the necessary training. “I told him, ‘I just went to college,’ and he said, ‘That doesn’t mean you trained to be an insurance agent,’” Hill recalled. Since his father’s company lacked a training department, he told his son to find a company that had one. “I learned a hard rule about assumption in life,” Hill told Convenience Store News. Hill did eventually join his father in the insurance field. However, after his father passed away, he realized he did not want to follow his path in the industry. His next moves took him to the University of St. Thomas in Minneapolis for his master’s degree in business administration, and then on to the corporate world in finance. Lucky for the convenience store industry, Hill didn’t find a home there either, and instead found a better fit within the Link Family and their company, Jack Link’s Protein Snacks.

Rolling Up His Sleeves

Hill, this year’s supplier inductee into the Convenience Store News Hall of Fame, joined Jack Link’s in June 2000 after receiving a call from CEO Troy Link on Mother’s Day. Despite his lack of experience in the consumer packaged goods (CPG) industry or in jerky, the chief executive was looking for someone he could train “the Jack’s way.”

“It’s a great honor to be accepted within the industry and be recognized for mine and Jack Link’s contribution to the industry.” — Scott Hill

Hill set out to learn the industry. “To learn the nuances and different regional focuses on beef jerky took a while, but I am a personal believer and user in it, so it came naturally,” he said. “It’s just fun. As we continue to build the company and learn from our trials and tribulations, you learn from your mistakes and you learn from your wins, and you keep going.” Since his first day with the company on June 1, 2000, he has tackled several positions, including national sales director and his current position as vice president of convenience sales. In his 19-plus years with Jack Link’s, he has had a front-row seat to the changing world of protein snacks.

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“There have been immense changes. Our company has grown up from a small/ medium [player] to a large CPG player that can compete with the best of the best,” Hill noted. Discussing changes he’s witnessed in c-store industry specifically, he points to the increasing importance of category management. “Back in the day, it was really just selling smokes and gas. That basically was all the gas stations needed to do to make money,” he explained. “As gasoline went up and the margins got compressed, the stores really had to generate margin inside of the store vs. the forecourt. They really started digging into the category management.”

Hill was supported by his colleagues (from left to right) Troy Link, Sean Reid and Elizabeth Jarocki.

When he joined the field, jerky was delivered direct to c-stores vs. the wholesale warehouse model and, according to Hill, Jack Link’s only did business with 12 of the top 25 wholesalers. Wanting to grow the business, the Minong, Wis.-based company began working with the wholesalers, gaining their business and trust. “The category managers created a home for beef jerky and we delivered the red rack in 2001-2002 and found a home for beef jerky on the endcap. It really started blossoming at that point,” he recounted. The convenience channel has come a long way in other ways, too, according to Hill. “Look at the loyalty programs, and the made-to-order food, and now you have deliveries. They created destinations for many reasons — whether you are stopping for your morning coffee or your cigarettes or your gasoline,” he said. “You also have people stopping for their pantry refill, and for their lunch and dinner which is happening more and more with the great food offering. You wouldn’t think gas stations could be a culinary delight, but they actually really are and that’s exciting to see,” he added. With the shift in how people can get products today — whether by a drone or mobile cart or Uber — the pressure for the purchase is going to continue to rise and that service, that customization, is going to come to the forefront, Hill predicts.

Playing a Role

As a key CPG partner in the convenience

Hill’s mother Nancy and son Ryan joined him at the awards gala.

channel, Jack Link’s is shifting and changing along with today’s consumers. “At the end of the day, you move along with consumer trends. The nice thing about beef jerky is that the harder we worked, the luckier we were. We also had some wonderful trends; you had South Beach, you had Atkins, and you now have Keto,” he explained. “As we play in the refrigerated space with our Cold Crafted line, we’ve gone from a zero percent business to the No. 2 brand in protein snacking inside the cold case,”

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COVER STORY

Company founder Jack Link was in attendance to help honor Hill.

2018 Hall of Famer Rick Brindle passed the torch to Hill.

he continued. “It is just shifting where the consumer is buying and, in my 19 years with Jack Links, I’ve never seen a product line — when given the correct space in the cold case — compete for our No. 1 item and it’s winning.”

It’s about retailers and suppliers working together to make the best offering for consumers and understanding what the consumers are looking for and making that happen, according to Hill.

Aside from the role he plays in helping Jack Link’s navigate the evolving space, Hill has helped the c-store industry adapt to the shifting landscape. He attended one of his first meetings of the NACS Supplier Board in 2001 and it wasn’t long before he joined a committee. His involvement led him to apply for a seat on the board — and after receiving recommendations from Judy Gleason at Circle K, Steve Loehr at Kwik Trip Inc., and Kennith Fries at 7-Eleven Inc., he was elected to the panel. “Troy Link also called all the nominating people and advised them he would give me the time and the funding to be able to participate on the NACS board. It was definitely a team effort,” he recalled. Even the NACS Supplier Board has changed in the past nearly two decades. “At that point, I was one person going for two slots. Now, you have 50 people going for one to three slots,” Hill said. “The competition is much fiercer as time has gone on and as NACS has continued to grow their show and the Supplier Board has become more relevant in the industry.”

“I think that is what stands out in my timeframe on the Supplier Board. You build these relationships with the various retailers and you start getting into the stage of creating opportunity vs. being on the outside looking in,” he said.

Words of Wisdom

As an industry insider now, Hill sees a wealth of opportunity in the convenience channel. “It may seem like an old boys club, so to speak, but realistically it is not. It really doesn’t matter who you are. What matters is that you put the time, energy and focus on it,” he said. And it does take time, he stressed. “You can’t just walk in and be an expert in convenience stores overnight. That is some of the problem with the major CPG companies; they don’t dedicate the proper resources to the channel because they move them into different channels before they hit their full stride,” Hill said. Digging in and putting in the time has certainly paid off for him. “The nice thing about the Hall of Fame award is that it is not something that can be purchased. You’re nominated and elected by your peers,” he said. “It’s a great honor to be accepted within the industry and be recognized for mine and Jack Link’s contribution to the industry. I want to thank everybody that helped my career and helped our company grow.” CSN

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1. Three of the convenience store industryâ&#x20AC;&#x2122;s top executives were honored at the Hall of Fame gala. 2. From left: Brian Hannasch, Gus Olympidis and Scott Hill take a moment to celebrate together.

3. Alicia Cleary of Anheuser-Busch presents the Retailer of the Year award to Brian Hannasch, president and CEO of Alimentation Couche-Tard Inc. 4. Couche-Tard National Marketing Director Melissa Lessard with Kim James, senior director of the Global Center of Excellence, Merchandising and Marketing, at Circle K.

5. From left: Yesway executives Darren Renwick, Lisa Ham, Joseph Petrowski, Dana Renfro and Derek Gaskins.

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6. From left: Austin Chentnik, Thierry Lyles, Aaron Brown and Kent Meyer of Family Express. 7. NACS President and CEO Henry “Hank” Armour took part in the awards presentation.

8. Brent Cotton of The Hershey Co. presented Olympidis with a special congratulatory treat. 9. From left: Future Leader in Convenience honoree David Cole of Plaid Pantries with Ryan Fasel and Chris Leitz of Family Express. 10. From Circle K Stores, Executive Vice President Darryl Davis (left) and Senior Vice President of Operations Joern Madsen.

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Discover More Sales With Delivery Experts detail must-do steps for c-stores looking to establish a solid delivery business By Renée M. Covino

AMAZON REDEFINED THE DELIVERY GAME by changing consumers’ expectations for the convenience, speed and method by which they could receive products.

“We expect everything from cupcakes to kayaks delivered as fast and conveniently as pizza,” said Marc Gorlin, founder and CEO of Roadie, the “on-the way delivery service” that aims to connect people and businesses that have items to be delivered with drivers already heading in the right direction. “So now, we have a big urgency problem and suddenly, companies across every corner of retail are desperate to find ways to speed up their supply chain and bring the store closer to the customer.” But it’s not all about speed. Customers want more than next-day, same-day or scheduled deliveries — they want the freedom to choose. “Customer’s delivery needs can be different for every transaction and they want optionality at the point-of-sale, while the overwhelming majority of retailers aren’t prepared to deliver,” Gorlin added.

Testing & Watching Are convenience stores prepared to deliver on delivery?

customers,” said Sue Welch, CEO of Bamboo Rose, a supply chain and delivery process platform. In this digital era, consumers expect to be able to source products more conveniently and quickly than ever before, Welch explained. “If a retailer isn’t meeting those expectations, they will quickly find a new retailer who can,” she said. “Given this highly consumer-driven retail environment, it’s imperative that retailers make the proper technology investments to support delivery capabilities without sinking margins.” Onfleet, a cloud-based logistics management software provider that powers thousands of delivery fleets in the United States and 90 other countries, recently conducted a survey among 1,000 U.S. consumers and found that 76 percent say they would be more inclined to buy from local stores rather than Amazon if those stores offered same-day delivery; 54 percent say they would be willing to pay for local store delivery. “Delivery has become an expectation, no longer simply a nice-to-have, and must be thought of as a core element of those convenience stores looking to stay relevant, as Amazon continues to drive expectations even higher,” stated Khaled Naim, Onfleet’s co-founder and CEO. “Same-day delivery is in keeping with the

Some are, while many others are now trying to gauge the opportunity by testing delivery in select markets and with select items, such as prepared food, packaged beverages, snacks and even beer. These tests are often made possible by using third-party delivery services like Grubhub, Uber Eats, DoorDash or other local delivery partners. In some cases, smartphone apps are being created specifically for delivery. Industry experts maintain that c-stores with a delivery service will attract new customers and increase the spending and loyalty of existing customers. “Supporting new channels like delivery will increase the loyalty of your current customer base and also open up opportunities with new

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mission of a convenience store — easy, frictionless and fast. They can no longer afford to think of delivery as an afterthought.”

Must-Dos to Master Delivery With delivery increasing in importance — and expected to keep rising for the foreseeable future — it’s imperative that c-stores offering delivery get it right. Best practices for delivery are emerging. The experts offered up the following: • Offer delivery on everything: Anything that can be found in the store should be available for delivery. And make sure it is offered at the same price, said Naim. • Offer one-hour, two-hour and same-day delivery options: Onfleet’s research found that for most people, same-day delivery is enough, especially if there is a financial incentive to wait more than two hours, such as free delivery. However, a small proportion of people do like to have the one- and two-hour options. It’s fair to impose a delivery minimum, or to charge for the rapid options. • Provide accurate ETAs and delivery updates: These are important to customers, and meeting your ETAs will keep them coming back, noted Naim. Nearly half of consumers in Onfleet’s survey said that accurate ETAs are extremely important in the delivery experience. • Put the right infrastructure in place: You can’t manage a profitable, scalable delivery service using spreadsheets, chat apps or paper manifests, according to Onfleet. You need to have software in place to

manage route planning, dispatch and communications. Analytics are also essential to help ensure you’re meeting goals and can plan for future growth. • Outsource first, then be ready to switch to an in-house team: Onfleet recommends that c-store retailers try outsourcing deliveries to start, while developing aspects of their online system, such as online ordering, consumer apps, etc. Then, they should move to an in-house team once they have a handle on current demand and are able to predict it for three to six months out. During the outsourcing period, retailers should learn everything they can from their outsourcing partner, including how to gauge and develop predictive models for demand and how to create a great customer experience. • Digitize your operational data: Doing so allows your supply chain team to execute based on high-quality, real-time data, Welch advised. • Support collaboration both internally and externally: According to Welch, this means leveraging software platforms that connect different stakeholders across the organization, but also work to connect the range of supply chain and manufacturing partners in your larger retailer community. • Leverage data technologies: Welch recommends utilizing technologies like machine learning and artificial intelligence to complement and enhance your current supply chain team and processes.

What’s to Come How do the experts see delivery evolving in the near and distant future?

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Gorlin of Roadie expects the local supply chain trend to continue in the coming years. “Retailers have shifted away from a centralized supply chain built around regional distribution centers and warehouses toward a more localized supply chain — one optimized for fast, efficient, last-mile delivery to stores and homes — not just in major metros, but in rural towns and communities,” he said. “They’ll continue leveraging existing retail assets like brick-and-mortar stores and warehouses to extend their reach, speed and efficiency of supply chains. And they’ll be looking at new models that can engage their existing customers, store associates and their local community to make delivery faster, easier and more personal.” Robots and drones will also become a factor. “Although actually building that infrastructure at scale is still a good ways into the future,” predicts Gorlin. As delivery becomes increasingly prevalent in the market, Welch foresees a company’s moral and ethical values playing a stronger role moving forward. Consumers are going to look to buy from retailers that are aligning their delivery practices with their broader corporate social responsibility and sustainability initiatives. Welch believes specific themes that will emerge in the delivery space will be around strategically packing orders to minimize wasted space and leveraging packaging materials that are recyclable. As more retailers deliver different types of products — food, general merchandise, apparel and more — they will need to account for the unique challenges each brings to delivery. In 2020, home food delivery will be very popular, according to Welch. Some retailers will succeed in this area and others will fail, she said. “Supporting food home delivery is both expensive and risky,” she warned. “Delivering a spoiled product to a consumer can irreparably damage that brand’s relationship with the customer or, worse, drive a public health crisis that can hurt the brand’s relationship with an entire consumer market.” The overall economy will play a role, too, according to Welch. Many of the fast delivery times retailers are offering today are driven by capital from other parts of their business or outside investment. To her, this means that while delivery is very popular with consumers today, it isn’t necessarily wildly profitable for retailers. “If there are blips in the economy, we could see scenarios where retailers can no longer provide the delivery-driven customer experiences that their customers have grown to love,” she cautioned. CSN

Ready or Not? How can a convenience store retailer determine if delivery is the right move, right now? While there is no exact science, there are some basic questions to ask and answer: 1. Have you studied successful delivery

programs and how they operate? This is always a good idea before venturing out in any endeavor, said Lewis Goldstein, founder of Blue Wind Marketing, a full-service marketing and advertising agency. An enterprising delivery retailer should have good business knowledge of delivery king Amazon, as well as traditional players in the convenience channel that have experience in delivery, such as 7-Eleven Inc. and Wawa Inc. Their knowledge should also extend to non-traditional convenience retailers such as digital player goPuff.

2. Are you already personalizing your

customer shopping experience? Do you have a solid loyalty program or other methods of personalizing the customer experience? A stellar delivery program will personalize the experience to each customer based on their shopping history and items they’ve expressed interest in, according to Goldstein. “Retailers that prioritize personalization will win more delivery customers over the long term,” he said.

3. Can you transfer your customer experience to delivery? Instead of focusing on keeping up with Amazon’s expedited shipping, retailers should focus on building better customer experiences, said Will Walker, enterprise manager at Roadie, “the on the way delivery service.” From a delivery standpoint, this means creating a logistics infrastructure that can reliably deliver orders when buyers want them delivered. This is accomplished by leveraging multiple delivery models and creating a reliable set of options that include urgent, same-day, next-day delivery and more. 4. Do you understand a community-driven

supply chain approach? “This means being able to support seamless digital collaboration with a range of retail community partners to ensure they’re efficiently driving the highest quality products to market,” explained Sue Welch, CEO of Bamboo Rose, a supply chain and delivery process platform. “Without these capabilities and processes, convenience retailers risk losing money on delivery initiatives and disappointing consumers through sub-par customer experiences.”

5. Are you prepared to continually raise the bar on delivery? Retailers who want to do well in delivery don’t settle on their laurels; they find ways to offer a better service and experience than their competitors, said Goldstein. The best delivery programs are already doing this, and it is becoming expected by consumers.

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Hot Categories That Will Drive Your In-Store Sales in 2020 These six product categories will generate incremental revenue in the new year By Don Longo

GENERATING INCREMENTAL SALES gains from inside the convenience store is getting harder every year. According to the latest Convenience Store News Industry Report, inside sales growth declined from a solid 3.8 percent in 2016, to a barely adequate 2.1 percent in 2017, to a disappointing 1.6 percent in 2018.

While 2019 sales results are yet to be finalized, it appears that most categories — with the exception of other tobacco products (OTP) and salty snacks — are barely meeting, or falling below, the previous year’s growth rates, according to CSNews’ 2019 Midyear Report Card. So, if c-store retailers want to be successful in 2020, they will need to optimize the performance of the few product categories that are poised to have a big year. Here are CSNews’ picks for the six categories that will shine the brightest in 2020:

1 Hot, Cold & Frozen Dispensed Beverages Within the fast-growing foodservice category, hot, cold and frozen dispensed

beverages have tended to underperform in comparison to prepared foods over the past few years. There are multiple reasons for that. Convenience stores have been faced with increased competition from retailers in other channels such as Dunkin’, Starbucks, McDonald’s and other fast-feeders, as well as other c-stores that have run sustained price-driven promotions, such as any-size cup of coffee for $1. Many also have upgraded their coffee offering to meet consumer desires for alternative hot beverages like espresso, cappuccino, frappes, smoothies, shakes and more. In 2020, though, CSNews foresees improved technology driving increased sales of smoothies, cold brew beverages, shakes and frappes in the convenience store market. La Crosse, Wis.-based Kwik Trip Inc. has been seeing stellar results from its rollout of Fresh Blends, a self-service beverage machine. Kwik Trip developed Fresh Blends in partnership with Beverage Innovations Inc., which creates the drink mixes, and Wellbilt, the equipment manufacturer. All new Kwik Trip stores are being outfitted with two Fresh Blends units. Other c-store retailers, like 7-Eleven’s new lab store in Dallas, have now installed similar machines. Look for more c-store retailers to follow suit with similar self-service beverage experiences in 2020. Fountain drinks have had a spotty performance over the past few years, too, but based on what the CSNews

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editorial team viewed at this year’s NACS Show, it appears that innovation will drive the category in the new year. Many of the beverages that have been introduced to the cold vault in recent years are now making an appearance on the fountain wall.

2 The New Cold Vault

Today’s cold vault looks nothing like the cold vault of five, four or even three years ago. Once dominated by two or three brands of carbonated colas, today’s cold vault doors are filled with a rainbow of different colors, flavors and beverage types. The Coca-Cola Co., for example, unveiled more than 20 new beverages at the 2019 NACS Show, held in October. Among the new drinks are Cherry Vanilla Coke, Sprite Winter Spiced Cranberry, Dunkin Cold Brew, and Minute Maid Blue Raspberry, to name a few. And one of the most ballyhooed introductions is Coca-Cola Energy, the first energy drink under the Coca-Cola brand. This, along with the successful launch of Bang Energy drinks to the cold vault, plus new entrants Reign and Adrenaline Shoc, and the still-powerful Red Bull promises to keep the energy drink category lively and growing in 2020. The sports drink category has a potential strong newcomer in BODYARMOR, as consumers are increasingly drawn to “super” hydration. Sports drinks, as well as bottled water, packed with electrolytes, vitamins and minerals are all the rage, in both still and sparkling versions. Essentia bottled water is a premium bottled water making its mark in c-store cold vaults.

Speaking of water, Sparkling Ice unveiled Talking Rain Elevate, a naturally flavored water with caffeine, electrolytes, no sugar and functional ingredients aimed to enhance performance. And Sparkling Ice Coconut Limeade will be rolling out in 2020. Meanwhile, kombucha and ready-to-drink teas are expected to continue performing well, forcing retailers to make tough choices in allocating the space in their cooler doors. On the alcoholic beverage side of the cold vault, beer giants like Anheuser-Busch continue to emphasize category management, proposing that a balanced approach in every beer segment based on consumer insights is the most profitable way to assort a c-store’s beer offering. That doesn’t mean the beer marketers are putting innovation on the backburner. MillerCoors, for example, plans to introduce new alcoholic beverages like Cape Line Sparkling Cocktails, Blue Moon Light Sky and MOVO Wine Spritzers in the first quarter of 2020. In addition, Corona is coming out with Corona Hard Seltzer to capitalize on the growth of the hard seltzer subcategory where retailers are finding it difficult to keep White Claw hard seltzer in stock. Analysts like Wells Fargo Securities’ Bonnie Herzog predict shelf space for hard seltzers will increase by “an eye-watering 70 percent in 2020, on top of a 20 percent increase in 2019.”

3 Better-for-You Snacks

7-Eleven Inc. in May launched a test in 125 Los Angeles stores of nearly 100 better-for-you items from 31 different emerging companies. Products include options for power-snackers, restricted diet-followers and anyone looking for ways to incorporate more functional, betterfor-you drinks and snacks to keep them fueled while on the go. The items span keto, paleo, vegan, organic, high protein, low glycemic, gluten free, nutrient dense, plant based and cold-pressed options. Examples of these

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better-for-you snacks include black bean chips, beet chips and chickpea puffs. Young consumers between the ages of 18 and 34 are particularly interested in the functional aspect of foods, according to research conducted by youth marketing and millennial research firm Y-Pulse. Growing consumer demand for “clean labels” and “transparency” in packaged foods is also affecting the snacking industry, according to a recent Packaged Facts report. While these terms are subjective and vary in priority from consumer to consumer, they generally mean consumers are: • Seeking out natural/organic and minimally processed products; • Avoiding artificial or GMO ingredients, controversial ingredients like high fructose corn syrup, or specific allergens such as gluten or soy; • Demanding information on ingredient sourcing and processing, such as whether or not it was made in the U.S.; and • Addressing eco-consciousness and sustainability concerns. Michael Caporusso, director of category management at Core-Mark Holding Co., a convenience channel distributor, told CSNews earlier this year that millennials and women are looking for snacks with authentic global-oriented flavors that are conveniently available for their busy lifestyles. They want products that have clean labels and are locally sourced, and emphasize specific health callouts like high protein or gluten free.

Caporusso urged c-stores to embrace snack innovation while still addressing the needs of “traditionalist” consumers. “Retailers must ensure they are carrying top items and in multiple pack sizes,” he said. “Different shopper profiles are looking for the same top items in different types of packs. Single-serve appeals to on-the-go, busy shoppers making impulse purchases; multi-service appeals to shoppers looking for a portable snack at a high value; while value consumers are seeking to trade up pack size, building bigger baskets at perceived better value.” Many of the winning products in this year’s CSNews Best New Products Awards contest reflect the attempts of several snack brands to “clean up” their product lines to appeal to today’s customer base that demands healthier snack choices. A few winning examples include: Zero Sugar Beef Jerky from Tillamook (appealing to those consumers seeking low carb, high protein or keto lifestyles); Sahale Coconut Snack Mixes (portion controlled, convenient to sprinkle on a smoothie or yogurt); Pickle Cutz from Van Holten’s (fresh flavorsealed package, bold flavor); and David Pumpkin Pepitas Sea Salt/Green Chile with Lime from Conagra (highenergy source, plant based, and convenient packaging for on-the-go consumers). Approximately 60 percent of consumers are looking for more protein in their diets, and 54 percent say they want to eat more plant-based foods and beverages.

4 CBD-Infused Products

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4 psychoactive compound found in the cannabis plant that promises to relax the body without altering the mind like THC, the psychoactive compound found in marijuana. While many states have begun to legalize or decriminalize cannabis, CBD — which is federally legal as long as it contains less than 0.3 percent THC — is surging in popularity among consumers. C-stores, as an industry, were a little slow to jump on the CBD bandwagon. But after giant mainstream retailers like Walmart and Walgreens started to sell CBD-infused products, the convenience channel appears to have jumped into the market with both feet. Sheetz Inc., among others, has begun selling CBD products in select stores; convenience channel distributors, such as McLane Co. Inc., have begun highlighting them; and NACS, the trade association for the c-store industry, devoted significant floor space at its 2019 show for CBD product exhibitors.

CBD is currently most popular in gummies, topical rubs, oils, capsules, vaping pens, dips and pouches. In CSNews’ special “How To” series on CBD, published this year, Brightfield Group predicted the market for CBD-infused products will grow to $23.7 billion through 2023. Meanwhile, Nielsen projects legalized cannabis sales in the U.S. to reach $41 billion by 2025, although it acknowledged that most retailers and CPG companies are still in the early stages of learning about this market. Nevertheless, those are huge potential markets, too good to pass up for smart convenience store retailers.

5 Chicken

Popeyes launched a new chicken sandwich in August against Chick-fil-A’s super-popular chicken sandwich. Chick-fil-A poked Popeyes’ new sandwich on social media as a copycat, and Popeyes responded. The tweets went viral and demand for Popeyes’ new chicken sandwich was so great that the chain sold out nationwide after running out of chicken breast. The New York Times reported that thanks to the “Chicken Wars,” Popeyes nearly doubled its Twitter following from 106,000 in early August to 187,000. Chick-fil-A’s Twitter presence grew from 1.03 million followers to 1.09 million. While Popeyes and Chick-fil-A were sparring online, KFC announced to great fanfare that it was launching Beyond Meat chicken wings and nuggets for one day only at one Atlanta store. What does all this have to do with convenience stores? Fried chicken has been a signature item at several c-store chains across the country, providing a point of differentiation from many competitors. Savannah, Ga.-based Parker’s is noted for its award-winning Southern-inspired food that includes freshly made Southern fried chicken. Mid-Atlantic c-store chains Royal

“We are excited to be the first convenience store to offer a broad selection of premium CBD products at this magnitude,” said Ryan Sheetz, associate vice president of brand at Sheetz. “This is the next evolution for Sheetz in ensuring we are meeting the needs of our customers, giving them what they want, when they want it, 24/7/365.” Research by Culinary Visions found that 48 percent of consumers say they are most interested in trying cannabis-infused products in baked goods; 45 percent are interested in trying them in candy/gummies, 44 percent in snacks, and 41 percent in nonalcoholic beverages. Numerous experts also predict that cannabis (marijuana) will eventually become legal across the nation. For now, almost a dozen states and Washington, D.C., have legalized marijuana for recreational use for adults over the age of 21.

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CATEGORY MANAGEMENT

Farms and High’s of Baltimore are also well-known for their signature hand-breaded chicken. And, this year, York, Pa.-based Rutter’s enhanced its already copious foodservice menu by adding “No Antibiotics Ever” chicken to all its stores. Options include grilled chicken, boneless chicken chunks, wings and tenders, which are available both at Rutter’s hot grab-and-go units and its touchscreen ordering kiosks. Kwik Trip, in one of the company’s most significant investments ever made in its stores, also introduced fresh fried chicken this year. What started in one Wisconsin store has now expanded to 215 Kwik Trip locations frying hand-breaded chicken in-store. Among the equipment added to both new stores and retrofits are two deep fryers, a sifting table, a commercial dishwasher, and a ventilating hood with fire suppression system. The chicken wars between Popeyes and Chick-fil-A “affected everyone who sells chicken in a positive way,” said Dan Shapiro, executive vice president for Krispy Krunchy Chicken, which has seen its branded fried chicken program installed at more than 2,400 c-stores. “Our chicken sandwich sales went up” as the social media battle waged on, he noted. Chester’s Fried Chicken, another popular branded fried chicken program in the convenience channel, this summer debuted its new Chester’s Fried Chicken Sandwich is all 113 Love’s Travel Stops that have a Chester’s quick-serve restaurant. The fried and marinated chicken breast comes with crinkle-cut pickles and is served on a brioche bun. Overall, chicken sandwiches rank second only to burgers as the most popular food item on restaurant menus, according to the tracking done by The NPD Group. Chicken sandwiches ordered during the year ended February 2019 rose 4 percent from the previous year to 4 billion servings; burger orders were flat from a year ago at 8.6 billion servings. Expect more c-store chains to take advantage of the popularity of chicken in 2020.

6 Alternative Tobacco Products

Despite the national crackdown on youth vapor use, the alternative tobacco products category, particularly oral nicotine products and other non-combustible products, should be a bright spot in the overall tobacco business in 2020. In a recent earnings call,

Altria Group Chairman and CEO Howard Willard said he believes that in the next decade, non-combustible products can surpass combustibles as the preferred choice among adult tobacco consumers. “We intend to lead this historic transformation with our unmatched portfolio of non-combustible products and investments,” Willard said. That includes e-vapor and oral nicotine products, such as its recently acquired On! tobacco-derived nicotine pouch product. At the 2019 NACS Show, nicotine — rather than tobacco — was in the spotlight. Altria showed off IQOS, its heat-not-burn product, while Kretek International Inc. showcased its DRYFT nicotine pouches. Other hot entries in this growing subcategory include Reynolds’ Velo nicotine pouches and Revel nicotine lozenges, and Swedish Match’s ZYN nicotine pouches. Wells Fargo Securities’ third-quarter 2019 Tobacco Talk survey of c-store retailers found that retailers “are overwhelmingly bullish on the outlook for modern oral nicotine products.” Verbatim comments in the survey back that up. “This will be THE way consumers will get nicotine in the future. It is not tied to tobacco, and consumers are looking for these items in our stores,” said one survey participant. Another predicted: “Hugh growth. The ability to control nicotine consumption in an easy-to-understand manner is a big plus. So is it being tobacco-free.” Of course, any predictions of market growth pertaining to the tobacco category are perilous due to the alwayspresent specter of government regulatory pressures (federal, state and local). However, it does appear that with all the attention currently on the vapor category, oral nicotine pouches, sticks and the like will have some room to grow in 2020. CSN

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FOODSERVICE

What’s Hot on Today’s Menus? Move “beyond” the basics with plant-based proteins IMPOSSIBLE BURGER, Beyond

Meat, Awesome Burger…we could go on. All are tied to one thing: the rise of plant-based proteins. What was a flash in the pan has now become a significant force in quick-service restaurants. This month, we look at the emergence of plant-based proteins targeting the mainstream consumer.

OPERATOR: KFC ITEM TYPE: LimitedTime Offer DATE: August 2019 PRICE: $6.49

KFC Breaks the Rules KFC’s Beyond Fried Chicken Nuggets broke the rules. The nuggets are advertised to deliver the expected KFC fried chicken flavor but, when surveyed, consumers were not so certain. With an Unbranded Purchase Intent (PI) score of 34 and an even lower Branded PI score of 15 (though it did score a perfect 100 in Uniqueness), the nuggets definitely did not generate a great set of scores. But in KFC’s Atlanta trial store, the nuggets sold out in less than 5 hours.

DESCRIPTION: The new plant-based Beyond Fried Chicken offers the finger lickin’ good fried chicken flavor only KFC can deliver as a perfect choice for those searching for plantbased meat options on-the-go. Beyond Fried Chicken nuggets come with a choice of your favorite dipping sauce, like KFC’s signature Finger Lickin’ Good sauce. Get 6 nuggets with a side and medium drink for $6.49.

PRO TIP #1: Consider providing younger consumers the

opportunity to experiment with a novel LTO. Nearly one in three eat plant-based alternatives at least once a week. The LTO doesn’t need to be a core item — but it can become one!

PRO TIP #2: Integrate multiple data sources into your ideation. Move beyond traditional and expected, and occasionally leverage broader cross-category consumer trends to maximize the energy of your 2020 LTOs. CSN Data was sourced from Datassential SCORES, a database of consumer ratings for every new menu item at 130 of the top chains, and the Plant-Based Eating Keynote Report, which dives deep into key industry topics from both consumer and operator perspectives to uncover critical insights and the opinions of thousands of consumers and hundreds of operators. Learn more at datassential.com.

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

Sure, some of it is tied up in the fanfare of a novel launch, but generating excitement to get customers through the door is what a limited-time offer (LTO) should do. Plant-based excels in leveraging consumers’ excitement for alternative options. So, you’re saying I need to focus on plant-based meat?! Not exactly. We turned to our Plant-Based Eating Keynote Report for direction.

KFC PRODUCT SCORES (Among: Total)

norms reflect comparison to all items 100 = max possible score

unbranded PI

branded PI

100 uniqueness

frequency

definitely or probably would buy

extremely or very unique

would order the item all the time

39%

63%

22%

would visit somewhere just for this item

excellent or good value for the dollar

52%

34%

benchmark norms

versus other QSR items

100

draw

versus other specialty entrees

value

versus other items from KFC

Datassential, a Chicago-based food and beverage industry research and consulting firm, brings clients real-world insights on flavor trends, foodservice and consumer packaged goods, globally.

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FOODSERVICE

Kwik newe vice inclu chick and s froze mach

Innovation Plus Execution Equals a Winning Formula Kwik Trip tops this year’s roster of Foodservice Innovators Awards honorees A Convenience Store News Staff Report INNOVATION WITHOUT SUPERIOR execution doesn’t mean a thing. Kwik Trip Inc., this year’s Convenience Store News Foodservice Innovator of the Year, is a shining example of a company that consistently achieves both.

The La Crosse, Wis.-based chain of more than 650 convenience stores in Minnesota, Iowa and Wisconsin tops this year’s roster of five Foodservice Innovators Awards honorees. Now in its eighth year, the annual awards program recognizes c-store retailers that are raising the bar on quality, service and innovation in the fast-growing and critically important foodservice category in the convenience channel. Winners are chosen by CSNews’ Foodservice Advisory Council, a panel of foodservice experts from the retailer, supplier, wholesaler, research and consulting fields.

Kwik the F Edito

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Kwik Trip's newest foodservice initiatives include a fried chicken program and self-serve frozen beverage machines.

Kwik Trip, which was previously honored as the Foodservice Innovator of the Year in 2015, was lauded by one expert on the Foodservice Advisory Council as “one of the industry leaders in foodservice.” The retailer was also praised for having “an outstanding leadership team.” Earlier this year, Kwik Trip Foodservice Director Paul Servais was separately honored with the Foodservice Leader of the Year award at CSNews’ 2019 Convenience Foodservice Exchange event in Dallas. This annual award goes to a leader who not only contributes to the foodservice success of their own organization, but also to the advancement and growth of the category in the convenience store industry overall.

“Innovators like Kwik Trip are not just great operators themselves; they are raising the perception of foodservice for the entire c-store industry,” said CSNews Editorial Director Don Longo, who visited one of Kwik Trip’s newest stores in Prairie du Sac, Wis., in October, to present the Foodservice Innovator of the Year award to the company. Servais accepted the award in front of store coworkers, district and regional supervisors, and several headquarters executives including Kwik Trip co-founder and CEO Don Zietlow and Leadership Development Specialist Carl Rick. During the award presentation, Longo noted that such success would not be possible without Kwik Trip’s 24,000 employees — or coworkers, as they’re called — and its finely-tuned, vertically integrated distribution system that gets fresh food from a central commissary to the stores every day. Kwik Trip Foodservice Director Paul Servais (right) accepts the Foodservice Innovator of the Year award from CSNews Editorial Director Don Longo.

“Forty percent of our gross profit dollars are from food and these numbers will continue to grow.” — Paul Servais, Kwik Trip

Recent foodservice achievements by Kwik Trip include: • Smoothie Program: Kwik Trip was the key developer of the Fresh Blends unit, an all-inclusive, self-service customer experience that makes smoothies, cold brew beverages, shakes and frappes at the touch of a screen. Three years in development, Kwik Trip worked with Beverage Innovations Inc., which creates the drink mixes, and Wellbilt, which builds the machines, to bring Fresh Blends to market. Due to its immediate success, all new Kwik Trip stores are being outfitted with two Fresh Blends machines. “This is outstanding technology that they rolled out with great success and is now available to the general market,” said one Foodservice Advisory Council member. “It’s forward-thinking and very engaging.”

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FOODSERVICE

• Take-Home Meals: The retailer’s new Kitchen Cravings take-home meals cold case is located front and center as customers enter the store. The selection includes prepackaged pizzas and 10 different meals for customers to take home and eat. Offerings include Buffalo wings, Chicken Alfredo, Turkey with Mashed Potatoes and Gravy, and Meatloaf — each sold for about $5. The meals are made at a new test kitchen built at the chain’s central commissary and delivered overnight to stores for sale the next day. Kwik Trip is in the process of expanding its central commissary as it grows the take-home meals program. • Fried Chicken Introduction: In one of the most significant investments the company has ever made in its stores, Kwik Trip introduced fresh fried chicken this past February. It debuted at its store in West Salem, Wis., on Feb. 1. Today, there are 187 stores that are frying up hand-breaded chicken. Among the equipment added to both new stores and retrofits are two deep fryers, a sifting table, a commercial dishwasher, and a ventilating hood with fire suppression system.

three-year PHA commitment, which will bring PHA’s fruit and vegetable initiative to all its Wisconsin stores and promote consumption of fresh, frozen, canned and dried fruits and vegetables. • Home Delivery: Kwik Trip has started dabbling with delivery, partnering with the third-party delivery service Eat Street this spring at its Wisconsin stores. Most of the delivery orders are for fresh food, according to Servais. Foodservice accounts for 30 percent of inside sales for Kwik Trip — significantly higher than the industry average of 16.5 percent of sales, according to the 2019 CSNews Industry Report. “Forty percent of our gross profit dollars are from food and these numbers will continue to grow,” added Servais, noting that the retailer plans to continue growing its store count. It expected to open two to four new stores a week from late October through the end of December. THE OTHER 2019 FOODSERVICE INNOVATORS AWARDS WINNERS ARE:

• Healthy Food Options: Kwik Trip in 2014 was the first convenience retailer to sign a commitment with Partnership for a Healthier America (PHA) to provide healthy food options to its customers. This year, the retailer signed its third QuickChek team members (from left) Bob Graczyk, Maria Fidelibis,Chris Smyly, Rob Easley and CEO Dean Durling accept their award.

PREPARED FOODS INNOVATOR OF THE YEAR:

“QuickChek stands out among Northeast c-store chains as clearly the best when it comes to fresh, prepared subs and sandwiches.” — Convenience Store News Foodservice Advisory Council member

QuickChek Corp. QuickChek, the overall Foodservice Innovator of the Year winner in 2016, takes home this year’s prize in the prepared foods category. This spring, the Whitehouse Station, N.J.-based chain expanded its foodservice team by appointing Chris Smyly as director of foodservice and hiring chef Ted Kwiecien as culinary specialist. “QuickChek stands out among Northeast c-store chains as clearly the best when it comes to fresh, prepared subs and sandwiches,” said one Foodservice Advisory Council member. Added another: “QuickChek continues to add relevant, easy-to-execute flavors to their menu, including vegetarian, Angus and Mediterranean options. They deliver on fresh, and recently amped up their culinary team to place additional focus on the category.”

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and frozen beverages category, having won this award in 2014. Judges extolled the retailer’s great partnerships with Jones Soda Co. — for 7-Select flavors Berry Lemonade, Mango Lemonade, and new Airheads Cherry Pineapple Blast and Kiwi Strawberry — as well as with Glaceau, teaming up for the first Glaceau Vitaminwater Chill, a Slurpee Lite frozen beverage. The debut flavor was Blueberry Lavender. Bill Connelley receives the award on behalf of Cumberland Farms.

HOT BEVERAGES INNOVATOR OF THE YEAR:

Cumberland Farms This is Cumberland Farms’ second win in the hot beverages category, repeating its performance from 2017. Among other factors, judges spotlighted the chain’s recent cookie-flavored limited-time offers: Mint Chocolate Cookie Coffee and Toasted Caramel Coconut Cookie Cappuccino. To deliver a supreme customer experience, Cumberland Farms also recently debuted a Coffee Cup-Scription program. For $25 a month, customers can receive two cups of coffee each day. The deal includes Cumberland Farms’ signature Farmhouse Blend and Farmhouse Bold hot and iced coffee, hot chocolate, hot tea, regular cappuccino, and new mocha frozen cold brew. On the marketing side, the retailer enlisted wrestling icon Ric Flair as the newest spokesman for its 99-cent coffee, as well as deals on pizza, breakfast items and Chill Zone beverages.

7-Eleven Senior Product Director Amy Werth accepts the honor.

COLD & FROZEN BEVERAGES INNOVATOR OF THE YEAR:

7-Eleven Inc. 7-Eleven is a repeat winner in the cold

Also not to be overlooked are the retailer’s marketing plans around 7-Eleven Day, Slurpee giveaways, new innovative flavors, and tie-ins with its 7Rewards loyalty program. “It started with the Slurpee and continues. When I think of cold beverages, 7-Eleven always comes to top of mind,” said one Foodservice Advisory Council member. “7-Eleven still owns the slushie category and they do the best LTOs,” another judge noted.

Choice Market founder Mike Fogarty receives the Innovator to Watch award.

FOODSERVICE INNOVATOR TO WATCH:

Choice Market Denver-based Choice Market, a new kind of convenience store that combines quick service with fresh, quality food from local vendors and the latest technology, is this year’s Foodservice Innovator to Watch. This awards category was introduced in 2017. Inspired by the small grocery stores he saw during the time he spent living and studying in Europe, founder Mike Fogarty opened the first Choice Market in downtown Denver in 2017. In October, he opened the second Choice Market in the Lincoln Park neighborhood of Denver, and a third Denver location was slated to open before the end of the year. This summer, the retailer also branched out by creating an innovative new vending program. The first two Choice Mini-Marts opened in Denver's newest music venue, the Mission Ballroom. All consumers have to do is simply walk up to the Choice Mini-Mart and scan their credit card to unlock the door. Each machine is stocked with fresh and local products, such as snacks, fruit, sandwiches, salads, jerky and more. CSN

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TOBACCO

Twice the Opportunity Two different tobacco products purchased together are more commonplace than you think By Renée M. Covino and vapor products in the same shopping basket? You bet, according to a recent study by Management Science Associates Inc. (MSA).

TRADITIONAL CIGARETTES

“In the analysis we’ve done on market basket, the most likely item to be purchased with vapor is cigarettes,” said Don Burke, senior vice president of MSA. “Those consumers who smoke will often go to vapor when they can’t [smoke], so there’s a lot of interaction between all the different tobacco categories and vapor.” While the cigarette and vapor combination is the most common in the tobacco arena these days, it’s certainly not the only one. Dual tobacco usage is trending across the category and also includes smokeless and cigarettes, electronic cigarettes and nicotine pouches, and a host of other pairings. Atlanta-based RaceTrac Petroleum Inc., operator of 550 convenience stores in Georgia, Florida, Louisiana and Texas, is one convenience retailer witnessing the trend. “We see the poly-usage across all [tobacco] categories, but it’s picking up in vapor products, as well as in combustible cigarettes,” observed Laura White, tobacco category

manager for RaceTrac. Nicotine pouches are also a growing part of the trend, she noted. Keeping up with innovation is part of the strategy for c-stores looking to capitalize on the dual usage phenomenon. Other target areas offered by industry insiders include:

Know & Carry the Bright Spots It’s more likely that tobacco consumers will combine items that are trending. Such items, according to Burke, currently are deep-discount private label cigarettes, vapor, cigars and smokeless items, which he said are pretty flat this year, but predicted to be growing again soon. The “modern oral nicotine category” is also on the rise and getting a lot of attention.

Go Big on Mint & Menthol in Vapor Late last year, vapor giant Juul Labs stopped selling its flavored Juul pods, including Cucumber, Mango, Crème and Fruit flavors. It continued the sale of its tobacco and menthol-based products, which consisted of Virginia Tobacco, Classic Tobacco, Mint and Menthol. Although business initially declined somewhat after the pullout, Juul’s business and the entire vapor category has come back strong, with consumers buying mint and menthol as flavor substitutes, according to Burke. “It turned around rather quickly,” he said. “This proves that consumers are willing to try another flavor within the same product.” (In November, Juul pulled its Mint pods from the market as well.)

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TOBACCO

“It’s exciting to see the innovation. Tobacco consumers want new, too, and I still think there’s a lot more to come.” — Anne Flint, Cumberland Farms

Test a Higher-End Vapor Product This tip is for convenience store operators who aren’t afraid of higher-end items in general, and perhaps are in competition with a nearby tobacco outlet or vape shop. Smoker Friendly tobacco stores are gaining share (doubling month over month) with the Glas vaping system and pods, a higher-end product. Smoker Friendly International President Terry Gallagher said it’s not for everyone, “but it’s really making up the difference for us and performing very well.” Cigarette consumers are reaching for it as a dual usage item in many of Smoker Friendly’s stores.

Keep New in the Mix Higher-end opportunity or not, everyone wants to try something new, according to RaceTrac’s White, especially tobacco customers in these volatile times. The chance for dual purchases increases exponentially if tobacco sets include innovation, and associates are knowledgeable and trained to talk up new items. Westborough, Mass.-based convenience store chain Cumberland Farms (now part of EG Group), with 567 stores in seven Northeast states and Florida, has had recent success with ZYN nicotine pouches, a new product made from tobacco-derived nicotine salt. The brand is selling well alongside Cumberland Farms’ exclusive brand of cigarettes. “It’s exciting to see the innovation. Tobacco consumers want new, too, and I still think there’s a lot more to come,” said Anne Flint, director of category management.

Strive for Innovation With Margin Innovation is definitely paving the way, but in order for the dual trend to be successful, it should be “innovation with margin,” according to Gallagher. “When we’re having compression with core products because of pricing in retail contracts, we’re looking for margin to make up for the continuing decline in cigarette margin,” he maintained.

Get Ready to Educate About IQOS Not all tobacco innovation is going to be successful for c-stores, especially in the beginning. Philip Morris International’s new tobacco heating system IQOS is one item the convenience channel is feeling cautiously optimistic about. The way Gallaher sees it is: “We have an advantage in our tobacco stores to spend time testing it, and we’re more sales-oriented and have the

ability for proper training. Our associates are consumers of every tobacco product we sell. And there’s going to be a hurdle to get consumers to understand how this works. There’s going to be a learning curve similar to when e-cigarettes first came on the scene eight or nine years ago.”

Get a Leg Up With Loyalty Programs Tobacco loyalty programs are not only worthwhile for the value they add for consumers, but also for the effective dual targeting they allow for retailers. “We are working diligently on loyalty programs to get consumers to bounce back,” Gallagher shared. “We’re doing a lot with electronic couponing and a direct mail program.” This has been leading to more dual purchasing, he noted.

Think Nicotine, Not Tobacco The modern oral nicotine category represents less than 1 percent of the entire nicotine delivery market, but it has the highest growth rate next to vapor, according to Burke. The top three items in the category currently are ZYN, Dryft and On! The pouches are getting the most attention lately, with not much traction yet for the toothpicks, lozenges and gum. “When we tracked it, only one-third of c-stores in the country are carrying it, but there’s a lot of opportunity for increased sales and distribution gains,” Burke said. And if the trends around vapor and modern oral nicotine continue, “you will see more and more consumers becoming dual users,” he added. Management Science Associates will officially start tracking the modern oral nicotine category in 2020.

Beware of Fake News Retailers are cautioned to stay calm regarding the recent news surrounding vapor-related deaths and illnesses. A lot of it is spun by the anti-tobacco groups and the media latching on, Burke explained. “They’ve taken it and created a lot of hype without a lot of homework and it’s very damaging to the industry,” he said.

Actively Cross-Promote Dual usage can extend beyond the tobacco category, increasing market basket even further. Items frequently purchased with tobacco and prime for cross-promotion include coffee, lighters and energy drinks, according to convenience retailers. CSN

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CONTACT YOUR SWEDISH MATCH REPRESENTATIVE OR CALL 800-367-3677 FOR ADDITIONAL DETAILS

12/2/19 11:00 AM

CANDY

Converting Convenience Shoppers Into Confectionery Buyers Eight in 10 customers don’t even visit the candy aisle when in a c-store By Danielle Romano

TODAY’S RETAIL LANDSCAPE is changing as rapidly as its customers. One constant is that when a customer enters a convenience store, the main candy aisle remains the most common place to pick up confections. More than half of c-store shoppers make their confectionery purchase decision at the shelf — meaning most customers are open to in-store influence.

However, only 20 percent of c-store shoppers enter the confectionery aisle and actually browse it, and just 17 percent of those shoppers end up purchasing. That leaves the opportunity to convert 83 percent of shoppers who enter the store, according to Shaf Lalani, vice president of customer experience for Mars Wrigley U.S. The candy maker recently released its Path to Purchase approach, which considers the full shopping journey, as well as how consumers use confections today and in the future. The approach outlines key areas of opportunity, inside and outside the store, to help retailers provide a seamless, integrated experience that ultimately results in more sales. While the main candy aisle will continue to be a chief source for purchases, there are additional opportunities to drive confection sales throughout the rest of the c-store, especially since 62 percent of shoppers make their confectionery purchase decision at the shelf. The category is still highly impulsive. According to Shopper Intelligence, an international provider of shopper insights, impulsivity around confections is 53 percent vs. other categories at 23 percent.

Additionally, a recent survey of c-store confection shoppers showed that overall, 42 percent of shoppers know the exact confection item they are going to purchase, 37 percent are partially planned (either brand or pack), while 21 percent have no elements planned. Thoughtfulness in shelving can drive trial in the category. “On average, the c-store shopper is spending about two and a half minutes in the store, 27 seconds of which is spent interacting with the confection category. We need to ensure the displays are prevalent and well planogrammed, so shoppers can easily find the brands and pack types they are looking for,” explained Glenn Frazier, director of category management, and Renee Balliet, senior manager of shopper insights, for The Hershey Co. “The main aisle continues to yield the highest conversion rate for the category, while we see multiple points of interruption such as endcaps, freestanding displays and front-end checkout merchandising create strong engagement and conversion as well,” the executives said.

The Why Behind the Buy Consumers who shop for confections use candy for connecting, celebrating and gifting, which motivates them to make a quick but planned trip to a c-store. At the same time, other consumers treat themselves in real-time, which builds baskets while in-store, Lalani pointed out. According to Mars Wrigley, the core four confectionery shopper drivers are: 1. Recharge — refresh and renew, now or for later. 2. Reward — treat or reward yourself or loved ones. 3. Connect — enhance informal sharing occasions. 4. Celebrate — seasonal events and special moments.

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Fellow candy company Ferrero USA is also seeing that pack type and placement matters as trip drivers. Singles are clearly more impulsive than take-home items, but even within take-home, there are variances. Laydown bags or multipacks are more likely to be a planned purchase tied to a purpose, whereas stand-up bags of unwrapped minis may be more of an impulse treat to share, notes Phil DeConto, vice president of category management and shopper insights. There is also the potential for a “planned impulse purchase” where the shopper makes the decision to treat themselves in advance but hasn’t committed to an exact item or even category. Off-shelf merchandising and point-of-sale is important to ensure this shopper picks confections over the sea of other categories, DeConto said. Then, shelf placement and packaging can help distinguish particular brands to win the purchase. “With shoppers having increasing sources of information, the potential decision locations are expanding as well,” he observed. “Digital and shopper marketing can help confections be a part of the pre-trip consideration. Then, in-store marketing and shelf placement drives visibility and ultimately the purchase decision during the shopper’s visit.”

activity, displays, and in-aisle signage, Frazier and Balliet shared. “Keeping displays relevant and easy for shoppers generates strong engagement and conversion. Signage to help navigate the aisle aids in the shopper journey as well,” they said. Use affinity merchandising with other key tripdriving categories: “This can include shopper marketing overlays to tie the purchase together, but if that isn’t an option, then simply proximity merchandising can help,” suggests Ferrero’s DeConto. “We’ve seen convenience stores have success grouping products with shoppers’ need to ‘recharge’ in mind.” Impulse products span further than just confectionery: “Key items for c-store retailers to leverage to build baskets include salty snacks like jerky or nuts, single-serve beverages, and magazines. At checkout, these products should be merchandised near confections because, like confections, these products fulfill shoppers’ desires or needs that they may not have planned for when entering the store,” Mars Wrigley’s Lalani advised. CSN

Consumer Connections The convenience shopping trip is brief and targeted, so confections need to stand out to win over customers who didn’t already have the category on their mental shopping list. To that end, here are some key pieces of advice that c-store suppliers have for their retailer partners in order to get shoppers to convert into confectionery buyers: Straightforward appeals: Hershey executives say there is a simple formula for confection: “See candy, buy candy, eat candy.” The three most impactful catalysts for driving confectionery impulse purchases are promotional

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FEATURE

GET READY FOR THE 2020 C-STORE TECH EVOLUTION Delivery, mobile apps and the checkout experience are moving into the 21st century By Melissa Kress

industry has always kept up with the changing needs of its customers. Many retailers who can trace their roots back to dairy farms and milk delivery eventually grew into brick-andmortar stores. Moving through the 20th century, they expanded to offer fuel — which then evolved even further into selfservice forecourts.

THE CONVENIENCE STORE

Now, as we are firmly in the 21st century, it has become clear that it’s going to take a lot more than pump-your-own gas for convenience retailers to keep up with today’s customers. Heading into 2020, Convenience Store News asked c-store operators what they think are the hottest and most promising technology trends that will help the industry profit in 2020. Here’s what they said:

Taking Delivery to the Next Level Interestingly, the more things change, the more they stay the same. For example, delivery is still a value-added service, but it’s being taken up a notch. From drones to autonomous vehicles to third-party providers, delivery today is definitely not your grandfather’s delivery.

“I think we are a hop and a skip from fulfilling orders at the curb. Doing so successfully with smaller baskets than most other verticals will require engineering technology that will make that transaction faster and more accurate than that of the big-box stores,” said Mark Holloway, chief information officer for Enid, Okla.-based Jiffy Trip, which is owned by Hammer Williams Cos. To ensure success, he says it is also “paramount” to get information into and out of the chain’s ecosystem securely, and that is where technology plays a key role. “Not only should our app be letting the customer know their order is being processed, what the status is, and which parking lot space to pull into, but we should have technology at the store that knows when they are pulling into the lot and verifying that the device is in the specified spot,” Holloway explained. “We can’t hire someone just to put the orders together and run them out. We’ve got to make this digital experience complete at the transaction. Digital IDs, mobile wallets, labor optimization and store inventory utilization have all got to be in alignment to make it work.”

Taking Self-Service to the Next Level For those customers who prefer to maintain control, self-service is taking on new forms as well. E-commerce giant Amazon created a stir when it opened its first brick-and-mortar location and introduced walk-in, walkout shopping. In the wake of Amazon’s move, many

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c-store retailers have followed suit and began removing store associate from the checkout process.

Taking Mobile to the Next Level

“Finding new ways to use frictionless technology is the biggest thing our industry has coming in the next year,” said Chris Hartman, director of fuels, forecourt and advertising at The Rutter’s Cos., the York, Pa.-based operator of Rutter’s convenience stores.

Today, it is more than just connecting people from one physical place to another. More and more, mobile is about how people — and brands — communicate.

The first step is implementation; then comes fine-tuning, according to Hartman. “As retailers continue to implement various forms of ‘frictionless’ technology, it will be refined to suit the customer’s and retailer’s needs,” he said. “It will be evolutionary, not revolutionary.”

“We’ve got a lot of catching up to do with getting to know our customers and personalizing the shop. Google, Facebook and Amazon know us very often better than we know ourselves, and they aren’t using a loyalty program to do it,” he explained. “They aren’t targeting segments of customers; they are targeting individuals with things that the end user doesn’t even realize they want, because they’ve never seen it before.”

Frictionless does not mean the same thing to everyone, but the main takeaway is to make the customer experience more “seamless,” explained Hartman.

The good news is that the convenience channel is uniquely positioned to take advantage of the mobile trend, according to Sucharita Kodali, vice president and principal analyst at Forrester Research.

Still in its infancy, he believes the frictionless experience will evolve over the next five years as habits change, making it more mainstream. However, he cautioned that the industry will see more government control and “that unknown will take time.”

“The truth is, most retailers are not well suited to mobile apps because they don’t see their customers all that frequently. The average retailer may see their customer only a few times at best and in those cases, an investment in a mobile app doesn’t necessarily make a lot of sense. In the case of c-stores, however, which can see their best

Remember when mobile meant there were more cars on the road?

From that standpoint, the convenience channel may be lagging behind, Holloway noted.

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customers multiple times a week, this type of shopping environment is actually perfect for a mobile app,” Kodali discussed during a recent webcast hosted by retail technology provider Diebold Nixdorf. “The types of transactions and the frequency of the transactions are also well suited for thinking about digital wallets.” Jiffy Trip has started capturing granular data on its customers — as detailed as possible. “We are capturing petabytes of data because we know that at some point, someone will figure out how to do it and we don’t want to be left out,” Holloway said. “It’s time we start using that data. I would rather offer one person that 10 cents off a 12-pack that it would take to get them to pull the trigger than to offer a 10-cent discount to 500 people as a group because I need to make sure they see my brand before the next one. The better I tailor to their individual wants and needs, the more they know I have their best interest in mind.” As a leader in retail technology, Rutter’s was the first c-store chain in the country to offer a mobile app when it launched its first version more than 10 years ago. “As we’ve seen over the years, mobile apps continue to grow in importance for c-stores, especially as frictionless transactions continue to become integrated with the app. The best thing for retailers is to have an app that can be updated to adapt to the customers’ needs as they change, Hartman advised. 19_2318_Convenience Store News_DEC Mod: October 7, 2019 3:20 PM Print: 10/30/19 3:53:36 PM page 1 v7

π FIGHT FATIGUE

Holloway agrees that AI will grow in importance in the future. Those first companies to really figure out machine learning, AI and APIs (application programming interfaces) will really have an advantage, he said.

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“The biggest thing that I see apps being able to do, that they can’t right now, revolves around AI [artificial intelligence]. The ability for a company’s app to predict a customer’s need state, provide them with a solution, pay for that solution and have it prepared for their arrival (or delivered) is where things are headed,” Hartman said. “My generation (millennials) are what we call ‘time-starved,' which means we don’t feel there are enough hours in the day,” he continued. “Being able to cut time off of everyday activities, using predictive AI, will be the next wave of innovation.”

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“While we may have decades to hash it out, fuel is going to be an attractor that becomes smaller and smaller. We’ve got to step up our game to become the destination for other reasons,” said Holloway. CSN

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FEATURE

DELIVERING MORE VALUE The top convenience wholesalers focus on new products and technology enhancements By Don Longo

CONTINUED CONSOLIDATION and acquisition activity marked a year in which the nation’s top wholesale distributors to the convenience store industry focused on technology enhancements for their customers and new products like CBD-infused items, foodservice, novelty items and ethnic food products.

According to the 2019 Convenience Store News Top Wholesalers Report, the 21 largest convenience channel distributors combined for only a 1 percent increase in sales last year, to reach about $88.1 billion in sales. The yearover-year growth lagged the previous year’s sales increase of 4.8 percent. Although McLane Co. Inc. declined to participate in CSNews’ study this year, figures from its corporate parent, Berkshire Hathaway, peg the wholesaler’s total sales at nearly $50 billion, slightly better than the previous year and still plenty high enough to hold onto its top spot on CSNews’ annual Top Wholesalers ranking. At its National Trade Show earlier this year, McLane showcased its proprietary Fly Guys Pizza, which is planning to launch a new flavor next year, and its private label CVP (Convenience Value Product) line, which debuted 40 new products including four new dog treats from Beau Dacious, phone accessories from Road-Tech, and CVP health and beauty products. In the technology area, McLane showed off its latest customer-facing tech on a variety of devices — from Surface

Top Wholesalers Summary TOTAL SALES (Percent change vs. year ago): Top 21 wholesalers

$88.1 billion (+0.9%)

Top 5 wholesalers

$61.2 billion (+0.7%)

AVERAGE SALES PER: Company Retailer location served Warehouse

$4.196 billion $590,838 $668 million

Full-time employee

$2.580 million

PERCENT OF SALES: Chains 50% Independents 50% Source: Convenience Store News Market Research, 2019

Percent of Sales by Category Cigarettes 68.2% Other tobacco products

10.6%

Foodservice 6.9% Candy/gum/packaged sweet snacks

4.9%

Salty snacks

2.9%

Grocery 1.9% General merchandise/HBC

1.6%

Packaged beverages

1.5%

Fresh produce

0.6%

Other 0.5% Gourmet/natural/specialty food

0.4%

Source: Convenience Store News Market Research, 2019

Pros and smartphones, to Honeywell handheld devices and a new tablet built specifically for c-store operations. Featured technology includes its recently announced back-office management solution, a one-stop-shop for retailers and all their tech needs; and a new text notification feature on McLane’s Delivery Tracker Application that sends a text message to a retailer’s phone if their delivery is delayed. In this year’s No. 2 position, Core-Mark Holding Co. Inc. posted a 4.5 percent revenue increase, reaching more than $16 billion in annual sales. Operating in all 50 states, Core-Mark serves 43,000 retailer locations, making 51,000 deliveries per week. Core-Mark recently announced that it broke ground on an industry-leading Center of Excellence (COE), scheduled to open in 2020. The Core-Mark COE will have five hubs to deliver an immersive

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ESTIMATED SALES

RANK

2019

Company/Headquarters

Chief Executive

Latest FY1 (millions)

RETAIL SERVICE

Previous FY % (millions) change

Trading Area

Locations Deliveries Served per Week

PERCEN

Chain

McLane Co. Inc., Temple, Texas 2

Grady Rosier

$49,987

$49,775

0.4%

50 states

50,000

n/a

Core-Mark Holding Co. Inc., South San Francisco, Calif.

Scott McPherson

$16,395

$15,688

4.5%

50 states

43,000

51,000

65%

Eby-Brown Co., Naperville, Ill. 3

Thomas & Richard Wake

$5,032

$5,400

-6.8%

MN, IA, WI, IL, MO, KY, IN, MI, GA, TN, NC, SC, MS, AL, ND, SD, PA, WV, VA, OH, NY, MD, DE

8,800

10,600

67%

H.T. Hackney Co., Knoxville, Tenn.

William Sansom

$4,000

0.0%

AL, AR, FL, GA, MS, NC, SC, TN, LA, TX, KY, OH, PA, VA, WV, MD, IN, IA, MI, MO

22,000

n/a

Imperial Trading Co./S. Abraham & Sons, Elmwood, La. 4

John D. Georges

$2,300

0.0%

LA, MS, AL, GA, TX, OK, AR, TN, KS, MO, MI, IN, KY, WI, OH, PA, WV, IL

5,500

5,650

65%

Consumer Product Distributors Inc., Chicopee, Mass. 5

Eric Polep

$1,593

$1,554

2.5%

MA, CT, RI, NH, VT, ME, NY, NJ, PA

4,995

5,650

63%

Harold Levinson Associates LLC, Farmingdale, N.Y.

Edward Berro

$1,376

0.0%

NY, MA, CT, NJ, PA

9,000

9,500

AMCON Distributing Co., Omaha, Neb.

Christopher H. Atayan

$1,289

$1,249

3.2%

AR, CO, GA, IA, ID, IL, IN, KS, KY, MN, MO, MT, NC, ND, NE, OK, SD, TN, TX, UT, VA, WI, WV, WY

n/a

6,306

72%

GSC Enterprises Inc., Sulphur Springs, Texas

Michael Bain

$973

0.0%

AR, KS, LA, MS, NE, NM, OK, TX

n/a

Cooper-Booth Wholesale Co., Mountville, Pa.

Barry J. Margolis

$647

$623

3.9%

PA, MD, DE, NJ, VA, WV

n/a

1,325

35%

Chambers & Owen Inc., Janesville, Wis. John K. Owen

$600

0.0%

WI, MI, MN, IA, IL

1,200

1,250

45%

Southco Distributing Co., Goldsboro, N.C.

Sherwin Herring

$597

0.0%

NC, SC, VA, TN, GA

1,600

2,100

55%

Team Sledd, Wheeling, W.Va.

Robert M. Sincavich

$575

0.0%

WV, OH, PA, VA, MD, KY, DE

1,000

1,200

50%

Harbor Wholesale Foods, Lacey, Wash. 6 Justin Erickson

$575

$538

13.5%

WA, OR, ID, CA, AK

3,000

2,200

40%

Topicz, Cincinnati 7

Adam Greenberg

$405

$380

6.6%

OH, KY, IN, WV, TN, IL

900

975

Tripifoods Inc., Buffalo, N.Y.

Gregory G. Tripi

$326

$325

0.3%

IN, NY, OH, PA, WV

1,500

850

80%

Resnick Distributors, New Brunswick, N.J.

Steven Resnick

$315

0.0%

NJ, PA, NY, CT, MD, DE, DC, VA, NC

1,000

35%

Capitol Distributing, Caldwell, Idaho

Tremayne Arnold

$304

$275

10.5%

673

1,151

75%

Stephenson Wholesale Co. Inc., Durant, Okla. 8

Tammy Cross

$296

$295

0.3%

OK, TX

2,820

3,858

20%

Charles C. Parks Co., Gallatin, Tenn.

Charles C. Parks III

$276

$281

-1.8%

TN, KY, VA, NC, SC, GA, AL, MS, AR, IN

570

705

70%

Allen Brothers Wholesale Distribution Inc., Philadelphia

Jeff B. Allen

$264

$262

0.8%

PA, DE, NJ, NY, DC

1,171

745

48%

Footnotes: FY=Fiscal year 2 Note: These results are from the latest 10-K of Berkshire Hathaway (McLane's corporate parent). Sales include convenience, grocery and foodservice operations. 3 Eby-Brown was acquired by Performance Food Group of Richmond Va., in March. 1

ID, OR, WA, UT, NV, AZ

Imperial Trading Co./S. Abraham & Sons' corporate parent is Georges Enterprises LLC of Elmwood, La. 5 Consumer Product Distributors dba J. Polep Distribution Services 6 Harbor Wholesale Foods acquired a division and distribution center of Food Services of America of Kent, Wash. 7 Topicz corporate parent is Novelart Manufacturing Co. 8 Stephenson Wholesale dba Indian Nation Wholesale 4

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VICE

veries Week

PERCENT OF SALES

WAREHOUSES

EMPLOYEES

Sq. Feet Full-time Part-time (thousands)

PRODUCTIVITY RATIOS: SALES PER

Chain

Indep.

# of Warehouses

Sales

Sq. Foot

n/a

65%

35%

5,500

5,000

n/a

67%

33%

2,000

2,250

100

n/a

65%

35%

829

63%

37%

93%

72%

n/a

Employee (thousands)

Location (thousands)

Delivery (thousands)

n/a

$1,000

n/a

$2,981

$3,279

$381

$321

200

$2,516

$2,236

$572

$475

n/a

$182

n/a

1,038

156

$2,774

$2,216

$418

$407

387

895

115

$4,116

$1,780

$318

$280

500

597

133

$3,276

$2,305

$153

$145

28%

689

571

n/a

$1,871

$2,257

n/a

$204

n/a

450

n/a

$2,162

n/a

35%

65%

210

266

$3,081

$2,432

n/a

$488

45%

55%

252

260

$2,381

$2,308

$500

$480

55%

45%

210

192

$2,843

$3,109

$373

$284

50%

200

250

$2,875

$2,091

$575

$479

40%

60%

312

460

$1,843

$1,250

$192

$261

95%

120

170

$3,375

$2,382

$450

$415

80%

20%

250

120

$1,304

$2,717

$217

$384

35%

65%

100

135

$3,150

$2,333

$315

75%

25%

106

158

$2,868

$1,924

$452

$264

20%

80%

197

261

$1,502

$1,134

$105

$77

70%

30%

179

154

$1,542

$1,792

$484

$391

48%

52%

$4,062

$3,300

$225

$354

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experience that allows retailers and vendors to gain real-time insights into emerging trends and opportunities. The hubs will include a collaboration hub for Core-Mark and customers to work on joint strategies and goals; a culinary test kitchen; a modern retailing experience hub to view virtual product placement and store layout using the latest software tools; an insights and data center for leveraging leading-edge data analytics tools; and a people training facility. Eby-Brown Co., which last year purchased Pittsburgh-based A.J. Silberman and was itself acquired in March by Performance Food Group of Richmond, Va., maintained its hold of third place on the 2019 Top Wholesalers list. Eby-Brown generated just over $5 billion in sales, a 6.8 percent decline. Operating in 23 states, Naperville, Ill.-based Eby-Brown serves 8,800 retailer locations, with about 10,600 deliveries per week. Rounding out the top five are H.T. Hackney Co. of Knoxville, Tenn., followed by Imperial Trading Co. of Elmwood, La., which is owned by Georges Enterprises LLC. With about $4 billion in sales, H.T. Hackney operates in 21 states, serving 22,000 retailer locations. Imperial Trading, which acquired S. Abraham & Sons a year ago, has annual sales of $2.3 billion and operates in 18 states, serving 5,500 retailer locations. Among this year’s top 21 wholesalers, strong performances were also turned in by AMCON Distributing Co. of Omaha, Neb. (up 3.2 percent in revenue), Cooper-Booth Wholesale Co. of Mountville, Pa. (up 3.9 percent), Harbor Wholesale Foods of Lacey, Wash. (up 13.5 percent), and Capitol Distributing of Caldwell, Idaho (up 10.5 percent). Harbor acquired a division and distribution center of Kent, Wash.-based Food Services of America this year. Convenience channel wholesalers continue to generate the majority of their sales from cigarettes — on average, 68 percent of the top 21’s sales came from this category in the past year, about the same as in previous years. Other tobacco products (OTP) constituted 11 percent of sales. Foodservice is holding steady at about 7 percent of sales, followed by candy/gum/

Sales per Retail Location Served 1 McLane Co. Inc.

$999,740

2 Team Sledd

$575,000

3 Eby-Brown Co.

$572,000

4 Chambers & Owen Inc.

$500,000

5 Charles C. Parks Co.

$484,000

6 Capitol Distributing

$452,000

7 Topicz

$450,000

8 I mperial Trading Co./S. Abraham & Sons

$418,000

9 Core-Mark Holding Co. Inc.

$381,000

10 Southco Distributing Co.

$373,000

Source: Convenience Store News Market Research, 2019

Sales per Delivery per Week 1 Cooper-Booth Wholesale Co.

$488,000

2 Chambers & Owen Inc.

$480,000

3 Team Sledd

$479,000

4 Eby-Brown Co.

$475,000

5 Topicz

$415,000

6 Imperial Trading Co./S. Abraham & Sons $407,000 7 Charles C. Parks Co.

$391,000

8 Tripifoods Inc.

$384,000

9 Allen Brothers Wholesale Distribution Inc. $354,000 10 C ore-Mark Holding Co. Inc.

$321,000

Source: Convenience Store News Market Research, 2019

packaged sweet snacks at about 5 percent of sales, and salty snacks at 3 percent. Grocery currently represents only approximately 2 percent of overall sales. Seventy percent of the participants in this year’s study say they have expanded the product categories they carry in the past year. The most oft-mentioned new additions are products containing CBD (cannabidiol), an emerging growth category for c-stores. Other new additions include fresh flowers, Hispanic food products, seasonal non-foods merchandise, foodservice, novelty items, refrigerated grab-and-go items, and vaping products. No one reported eliminating any categories in the past year. The top distributors have also implemented a number of new services and business solutions over the past year to help their retailer customers. These include enhancements to ESP applications, fresh planogram schematics, new merchandising and display racks, online and mobile ordering apps, upgrades to customer ordering websites, and handheld apps. In regards to external factors, increased government regulation is the single biggest trend impacting business, according to the majority of participants in this year’s study. CSN

METHODOLOGY Rankings for the 2019 Convenience Store News Top Wholesalers Report are based on sales for the last full fiscal year for each company. Data for this report was gathered through a survey conducted among the largest wholesalers primarily servicing c-stores that derive the majority of their sales from tobacco and candy products. Additional data was obtained through company reports and other public sources of financial data. In some cases, estimates have been made by CSNews based on historical data and current industry trends. 78 Convenience Store News C S N E W S . c o m

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STORE SPOTLIGHT

Playing a Hand Rutter’s adds video gaming terminal rooms to attract new and existing customers By Danielle Romano A VIDEO GAMING TERMINAL (VGT)

At a Glance Rutter’s Location: 2125 Susquehanna Trail, York, Pa. Size: 6,675 square feet Unique features: 220-square-foot video gaming terminal room with five terminals; Rutter’s full-service foodservice menu; ATM; seating

room is an amenity that may not commonly be associated with convenience stores. However, that perception is about to change for Rutter’s with the debut of its first of more than a dozen VGT rooms expected to open this year. In October 2017, Pennsylvania Gov. Tom Wolf signed into law Act 42, which legalized video gaming terminals and expanded gambling statewide. The state legalized internet gambling and fantasy sports betting, and allowed for 10 new mini-casinos to be built around the state. Video gaming terminals are allowed at certain “truck stop establishments.” According to the law, qualifying truck stop establishments must: • Have diesel islands to fuel commercial motor vehicles; • Have sold or have projections to sell an average of 50,000 gallons or more of diesel or biodiesel fuel each month for 12 months; • Have at least 20 parking spaces dedicated to commercial motor vehicles;

• Have a convenience store; • Be situated on a parcel of land not less than 3 acres owned by the establishment; and • Not be located on any property owned by the Pennsylvania Turnpike. Given these parameters, Rutter’s started considering the appeal of VGTs in its strategic plan. The retailer’s strategy calls for larger stores, heavy foodservice, and larger lot sizes. In addition, Rutter’s thought VGTs would be a way to reach new and existing customers. “Since we have been building larger sites with diesel fueling and larger lots, it was an easy fit, working through the ROI [return on investment] and increased traffic flow that it would bring to the site,” Rutter’s Vice President of Marketing Robert Perkins told Convenience Store News.

A Retrofitted Offer Rutter’s executives visited locations in Illinois where VGTs have been legal since 2012. And after a slow process — mostly driven by the state and the Pennsylvania Gaming Control Board — Rutter’s introduced the first of its VGT rooms at

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STORE SPOTLIGHT

“[We are] enhancing the customer experience for the existing customer that we service for lottery now with a different way of ‘gaming,’ while also attracting new customers.” — Robert Perkins, Rutter’s

one of its York, Pa., stores in August. The room was executed in conjunction with Marquee by Penn, a subsidiary of Penn National Gaming Inc. Retrofitted into the 6,675-square-foot store at 2125 Susquehanna Trail in York, the VGT room measures approximately 220 square feet. By law, it fits the maximum five gaming terminals and is restricted to customers aged 21 and above. It is open 24 hours a day, seven days a week. “[We are] enhancing the customer experience for the existing customer that we service for lottery now with a different way of ‘gaming,’ while also attracting new customers,” said Perkins. To communicate the availability of the VGT room, Rutter’s is utilizing exterior signage and social media vehicles. The retailer is also partnering with Penn National Gaming, which operates 43 casinos and racetracks across Pennsylvania and Wyoming. While promotional activity is regulated by law as to what Rutter’s can and cannot do, the retailer is working on potential crosspromotions between the c-store and VGT room. In the meantime, customers can enjoy Rutter’s food and beverages while playing in the VGT room. The retailer’s foodservice offer remains a focal point of the business. Its full foodservice menu is available — from basket meals, burgers and sandwiches to coffee and handcrafted drinks, like shakes and smoothies.

The video gaming terminal rooms are open 24 hours a day, seven days a week.

As of now, Rutter’s plans to have 12 Pennsylvania stores featuring VGT rooms by the end of this year. The Yorkbased chain operates a total of 75 convenience stores in Pennsylvania, Maryland and West Virginia. As is the case with traditional Rutter’s locations, those offering a VGT room will vary in amenities. Some will have the availability of a beer cave, car wash, and indoor and outdoor seating as well, according to Perkins. CSN

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ADINDEX Altria Group Distribution..................................2

Liggett Vector Brands.......................................55

BIC USA Inc...........................................................35

Living Essentials..................................................Cover, 15

Blue E-Cigs............................................................95

Miracle Nutritional Products...........................51

Bobâ&#x20AC;&#x2122;s Red Mill.......................................................23

Mondelez International.....................................41

Chesters International.......................................59

Paytronix................................................................47

Cookies United.....................................................43

Premier Manufacturing.....................................29, 53

Creek Run LLC.....................................................36

Reynolds American Trade Marketing Services.............................................17, 33, 39

E-Alternative Solutions.....................................21 Eby-Brown LLC....................................................37 Forte Products.....................................................28 Goya Foods Inc....................................................7 ImageWorks Display & Marketing Group...27 John Middleton Company...............................25 JUUL Labs..............................................................8-9, 96

Swedish Match North America LLC.............13, 57, 69 Swisher International.........................................5, 49, 67 The Wonderful Company.................................11 Uline.........................................................................74 Universal Merchants...........................................Outsert Yesway.....................................................................19

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

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201 9

Convenience Store News

12/2/2019 8:30:58 PM

INSIDE THE CONSUMER MIND

Making Healthy Convenient C-stores can do a better job of satisfying the needs of better-for-you shoppers Nearly two out of every three convenience store shoppers consider themselves to be health-conscious, but of these, only 27 percent are satisfied with the current better-for-you offerings at c-stores today. This indicates a critical area of opportunity that will only grow in importance. The 2019 Convenience Store News Realities of the Aisle Study asked c-store shoppers about their feelings on health and wellness, including specific concerns they have around the food and beverages they consume. Hereâ&#x20AC;&#x2122;s a look at the findings.

61%

of convenience store shoppers consider themselves to be health-conscious.

Concerns for Total Shoppers Fresh Sugar Calories All-natural Protein Non-processed Fat Ingredients I can understand and pronounce

39% 35% 34% 27% 25% 23% 21%

Sodium Carbohydrates Non-GMO Artificial sweeteners Artificial flavors Locally sourced/produced Growth hormones Caffeine Antibiotics Functional/vitamin-enhanced Vegan/plant-based Gluten

20% 19% 18% 16% 13% 12% 12% 11% 9% 7% 7% 6%

Concerns by Gender Female Male

Fresh 43% 35% Calories 34% 33% Sugar 33% 37%

All-natural 28% 25% Non-processed 27% 20% Ingredients I can understand and pronounce 25% 16% Protein 21% 29% Non-GMO 20% 16% Sodium 18% 22% Fat 18% 24%

21%

TOP HEALTH CONCERNS AMONG ALL C-STORE SHOPPERS:

Artificial sweeteners 17% Carbohydrates 17%

16%

Locally sourced/produced 13% Growth hormones 13%

11%

Artificial flavors 12% Caffeine 12%

13%

21% 10% 10%

Antibiotics 8% Vegan/plant-based 8%

Functional/vitamin-enhanced 6% Gluten 6%

5% 6%

Comparing the results among men and women, male c-store shoppers are more concerned with protein and fat content, while female c-store shoppers are more concerned with attributes like fresh, non-processed, familiar ingredients and non-GMO.

FRESHNESS SUGAR CONTENT

ONE IN FOUR c-store shoppers is not satisfied with the selection of healthy food and beverages thatâ&#x20AC;&#x2122;s available at convenience stores today.

CALORIES

Source: Convenience Store News Realities of the Aisle Study, 2019

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

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