NACS Magazine - April 2020 by NACS Magazine

convenience.org | APRIL 2020

loy. p e d d n st a e t o t e e tim

Now is t

FIGHTING

Tobacco Bans

CYBERATTACKS

How to Prevent and Protect

COOL NEW PRODUCTS GUIDE

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

APRIL 2020

38 48 50

Labor & Delivery

Despite challenges, many retailers are finding the need to jump on the delivery train.

A Trusted Partnership A Q&A with Heritage CBD.

Pumped Up for Carbon Neutrality

58 62 68

What to consider when you’re considering a carbon offset program.

A Town Without Tobacco

How retailers can fight total tobacco bans like the one enacted by Beverly Hills, California.

Under Siege

Cover Art by Beyond Definition PLEASE RECYCLE THIS MAGAZINE The presence of an article in our magazine should not be permitted to constitute an expression of the association’s view.

The convenience retailing industry is a prime target for data attacks.

The Customer Experience Journey

NACS 2020 Leadership Forum attendees learn how to create a more customer-centric organization.

STAY CONNECTED WITH NACS

TWITTER @nacsonline FACEBOOK facebook.com/nacsonline INSTAGRAM instragram.com/nacs_online LINKEDIN linkedin.com/groups/1776505 Subscribe to NACS Daily—an indispensable "quick read" of industry headlines and legislative and regulatory news from Washington, along with knowledge and resources from NACS, delivered to your inbox every weekday morning. Subscribe at www.convenience.org/NACSdaily.

CONVENIENCE.ORG

APRIL 2020 |

APRIL 2020

The hot dispensed beverage category generated $52,077 in gross profit dollars per store in 2018.

We want [customers] to leave thinking this is nothing like anything theyâ&#x20AC;&#x2122;ve experienced before in a convenience store.

P.96

IDEAS 2 GO | P.34

06 Convenience.org

76 Cool New Products

08 From the Editor

84 Gas Station Gourmet

22 Good Work 24 Inside Washington

NACS takes an active role in litigation; only six months until the EMV liability shift happens at fuel dispensers.

34 Ideas 2 Go

After nearly half a century, Jiffy Trip has reimagined the way it does business.

| APRIL 2020

86 Global Trends

Exploring new strategic realities for our industry.

90 Category Close-Up

Jerky and protein bars provide more healthful snacking options for busy customers; hot dispensed beverages deliver high margins and keep customers returning.

104 Back Page

CONVENIENCE.ORG

iStock.com/fotofermer

12 NACS News

Papacitoâ&#x20AC;&#x2122;s brings Southwestern flavor to northern Minnesota.

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VOLUME 19, ISSUE 4

APRIL 2020

EDITORIAL Kim Stewart Editor in Chief (703) 518-4279 kstewart@convenience.org

Reduce Credit Card Fees Retain more of your hard-earned revenue.

Sara Counihan Managing Editor (703) 518-4278 scounihan@convenience.org Lauren Brooks Digital Content Manager (703) 518-4283 lbrooks@convenience.org CONTRIBUTING WRITERS Terri Allan, Sarah Hamaker, Al Hebert, Pat Pape, Jerry Soverinsky, Melissa Vonder Haar DESIGN Beyond Definition www.beyond-definition.com

ADVERTISING Stacey Dodge Advertising Director/Southeast (703) 518-4211 sdodge@convenience.org Jennifer Nichols National Advertising Manager/ Northeast (703) 518-4276 jnichols@convenience.org

NACS Payment Processing Program (PPP) is designed to reduce card processing fees for unbranded convenience and fuel retailers by offering a flat 2.9 cent transaction fee after interchange.

Ted Asprooth National Sales Manager (703) 518-4277 tasprooth@convenience.org

PUBLISHING Erin Pressley Publisher and Vice President, Education & Media (703) 518-4208 epressley@convenience.org Rose Johnson Audience Development and Production Manager (703) 518-4218 rjohnson@convenience.org

NACS BOARD OF DIRECTORS CHAIR: Julie Jackowski, Casey's General Stores Inc. OFFICERS: Lisa Dell'Alba, Square One Markets Inc.; Andy Jones, Sprint Food Stores Inc.; Jose Victor Paterno, Philippine Seven Corp. (7-Eleven Convenience Store); Ken Parent, Pilot Travel Centers LLC; Donald Rhoads, The Convenience Group LLC; Jared Scheeler, The Hub Convenience Stores Inc.; Kevin Smartt, Kwik Chek Food Stores Inc. PAST CHAIRMEN: Frank Gleeson, Aramark Northern Europe; Joe Sheetz, Sheetz Inc. MEMBERS: Chris Coborn, Coborn's Inc. Little Dukes; Joseph DePinto, 7-Eleven Inc.; Bhagdeep Dhaliwal, Dhaliwal & Associates Inc.; Anne Gauthier, St. Romain Oil Company LLC; Varish Goyal, Loop Neighborhood Markets; Thomas Gresham, Double

Quick Inc.; Brian Hannasch, Alimentation Couche-Tard Inc.; Christine Hogan, Wheels Convenience Stores; William Kent, The Kent Companies (Kent Kwik Convenience Stores); Chuck Maggelet, Maverik Inc.; Chuck McDaniel, QuikTrip Corporation; Charles McIlvaine, Coen Oil Company; Lonnie McQuirter, 36 Lyn Refuel Station; Glenn Plumby, Speedway LLC; Robert Razowsky, Rmarts LLC; Stephen Spinks, The Spinx Company Inc.; Richard Wood, Wawa Inc. SUPPLIER BOARD REPRESENTATIVES: Rick Brindle, Mondelēz International; Drew Mize, PDI STAFF LIAISON: Henry Armour, NACS GENERAL COUNSEL: Scott Sinder, Steptoe & Johnson LLP

NACS SUPPLIER BOARD CHAIRMAN: Drew Mize, PDI CHAIRMAN-ELECT: Rick Brindle, Mondelēz International VICE CHAIRMEN: Thomas Blair, MillerCoors; Brent Cotten, The Hershey Company; Frank Squilla, InComm PAST CHAIRMEN: Jay Ard, Coca-Cola Company; Kevin Martello, Keurig Dr Pepper; Brad McGuinness, Qopper Inc. MEMBERS: Blake Benefiel, Altria Group Distribution Company; Steve Bradley, Wilbur Curtis Co. Inc.; David Charles Sr., Cash Depot; Alicia Cleary, Anheuser-Busch InBev; Tony Gaines, NVIP LLC; Josh Halpern, FIFCO USA; David Jeffco, Krispy Krunchy Foods LLC;

Tim Knight, BIC Corporation; Vito Maurici, McLane Company Inc.; Bryan Morrow, PepsiCo Inc.; Sharon Porter, Saputo Convenience; TJ Powers; John Thomas, iSEE Store Innovations LLC; George Ubing, E&J Gallo Winery; Dean Zurliene, Monster Beverage Company RETAIL BOARD REPRESENTATIVES: Stephen Loehr, Kwik Trip Inc.; Chuck Maggelet, Maverik Inc.; Chuck McDaniel, QuikTrip Corporation STAFF LIAISON: Bob Hughes, NACS SUPPLIER BOARD NOMINATING CHAIRMAN: Joseph Vonder Haar, iSEE Store Innovations LLC

NACS Magazine (ISSN 1939-4780) is published monthly by the National Association of Convenience Stores (NACS), Alexandria, Virginia, USA. Subscriptions are included in the dues paid by NACS member companies. Subscriptions are also available to employees of nonmember companies at a rate of $70 per year. Please add $15 for delivery outside the United States. Subscription requests: nacsmagazine@convenience.org

convenience.org/PPP

POSTMASTER: Send address changes to NACS Magazine, 1600 Duke Street, Alexandria, VA, 22314-2792 USA. Contents © 2020 by the National Association of Convenience Stores. Periodicals postage paid at Alexandria VA and additional mailing offices.

1600 Duke Street, Alexandria, VA, 22314-2792

CONVENIENCE.ORG

WHAT’S ONLINE | APRIL 2020

Get the inside scoop on all things convenience by downloading our weekly podcast! Convenience Matters® is the only podcast in the convenience industry that brings together thought leaders and retailer superstars each week to discuss matters of convenience. Download the podcast today, and gain access to industry knowledge and trends — all in 24 minutes or less! Available on:

Tune in at conveniencematters.com

The NACS State of the Industry Compensation Report of 2019 Data is now available! Considered an essential guide for HR professionals, this report provides critical benchmarking data and breakouts of the latest available numbers in the convenience industry. The report includes indispensable data on salaries, turnover, benefits and recruitment and features a section geared toward small operators. New this year, we’ve added additional corporate positions, employee engagement surveys and a breakout of voluntary and involuntary turnover. This digital report is based on data submitted by 120 retail companies representing more than 20,000 stores and more than 214,000 employees. Purchase your copy today: www.convenience.org/compreport.

Stay Up to Date

NACS knows the health and safety of your employees and your customers is top priority—just as the health and safety of the convenience retail community is top priority for us. We are actively monitoring the COVID-19 crisis, keeping in touch with local, state and federal agencies, health experts, employment law firms, event venue partners, retailers and suppliers as conditions evolve. You can read the latest information, view resources, such as guidance for emergency planning and response, and learn about safety precautions and employer guidance at www.convenience.org/coronavirus. CONVENIENCE.ORG

iStock.com/wildpixel

What’s top of mind in convenience? We’ll tell you.

Let’s Compare

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FROM THE EDITOR

A Novel Disruption Kim Stewart Editor-In-Chief

When the world is topsy-turvy, it’s reassuring to know that the local gas station or corner market will do its damnedest to remain open for refueling and refreshment. 8

| MARCH 2020

How do you prepare for an emergency? As I write this column in mid-March, the World Health Organization has just declared the novel coronavirus disease 19 (COVID-19) a global pandemic. The number of cases in the United States and around the world continues to multiply, the stock market is in turmoil, oil prices have tanked and people are hunkered down at home. Meanwhile, businesses are scrambling to implement emergency contingency plans to keep their employees safe—and their doors open. Needless to say, business as usual is being disrupted. At NACS, we’ve been discussing what disruption looks like in the convenience and fuel retailing industry for years—it was a top theme at last year’s NACS State of the Industry (SOI) Summit. Declining trips, labor costs and hiring shortages, dollar stores, cashierless stores, frictionless checkout, omnichannel, payments security and tobacco regulations count among them. A pandemic, though, wasn’t in the script. We’d already drafted our cover story, “Labor and Delivery,” when news of COVID-19 broke. Ahead of the outbreak, consumer demand for last-mile food and merchandise delivery services was growing but is now on steroids. If customers can’t venture out, delivery is one way to bring the c-store to them. “In this age of delivery, the burden is now on the retailer to come to customers,” Joseph Bickham, president of Fuel City, told us.

The NACS Research team this year will field a comprehensive study to examine the role delivery will play in store operations, profits and trips. Two other disruption-related mustreads this month are “A Town Without Tobacco,” which details how retailers can fight total tobacco bans like the one enacted by Beverly Hills, California, and “Under Siege,” which outlines steps retailers can take to prevent, respond to and recover from a cyberattack as cybercriminals target our stores. In uncertain times it’s important to remember what we do know. Our 24/7 industry is adept at responding to and operating in emergencies. We are a bulwark against the storm for our communities. When the world is topsyturvy, it’s reassuring to know that the local gas station or corner market will do its damnedest to remain open for refueling and refreshment. NACS has an arsenal of resources to help retailers prepare for and respond to emergencies, including COVID-19. Visit the NACS Coronavirus Resource page at www.convenience.org/coronavirus and www.convenience.org/disaster to learn more. I wish you nothing but health and happiness, my friends. Be well.

CONVENIENCE.ORG

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The sale of tobacco products to minors is prohibited by law. This is an age-restricted product and age verification is required at sale. CALIFORNIA PROPOSITION 65 WARNING: This product contains chemicals known to the State of California to cause cancer and birth defects or other reproductive harm. TM and ÂŠ 2020 JUUL Labs, Inc. All rights reserved.

NACS NEWS

Investing in Future Leaders Applications are open for the NACS Scholarship Program.

Scholarship recipients are awarded $3,000 for costs of undergraduate or college education.

M Application Deadline: June 1 12

| APRIL 2020

any of our convenience industry leaders began at the store level. Through hard work and commitment to learning, these employees followed career paths to senior leadership positions. Since 1994, the NACS Foundation Scholarship Program has recognized and supported the convenience store employees who demonstrate the potential and the determination to hold future positions of senior leadership in the industry. The program provides a way for convenience and fuel retailers to retain, reward and develop the next generation of industry innovators. The deadline to nominate a NACS retail member company employee and apply for a scholarship is Monday, June 1. Selected applicants are awarded $3,000 each for costs of undergraduate or college education. In addition, scholarship recipients receive a stipend to attend the 2020 NACS Show in Las Vegas, where they will

be recognized during a special evening ceremony and given a firsthand opportunity to learn more about the exciting career paths in the convenience industry. The programâ&#x20AC;&#x2122;s commitment to recognizing and developing future leaders honors the memory of industry icon Jim Yates, founder of E-Z Mart Stores and former NACS chairman from 1992â&#x20AC;&#x201C;93. In 2011, a donation from Altria expanded the program to include honoring the memory of David Erickson, former CEO of Erickson Oil Products. Since its creation, the NACS Scholarship Program has awarded more than half a million dollars in scholarships to employees of NACS retail member companies who demonstrate leadership potential. Now through June 1, you can help recognize a rising leader within your company. Visit www.conveniencecares.org/ Future-Fund for more information, including eligibility and how to apply. CONVENIENCE.ORG

Zip up beverage profits

With The Most Versatile Merchandising Solution on the Market.

Full Page.indd 1

3/27/2020 12:35:27 PM

ZIP Track is a cost-effective, modern merchandising system that forwards and faces product offerings at all times. Add new facings easily with this quick to install and adjust system. Custom spring tensions and lane depths are available to fit any and all shelf and product needs. ®

ZIP Track is manufactured from sturdy plastic material for durability and long merchandising life. ®

Adjustable width Change width from 2.00” to 3.75”. Supports all sizes from mini Red Bull® cans to oversize Gatorade® bottles. Reset lane width on set-up in less than 30 seconds.

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Custom depth Available in any lane depth for custom fit to your retail environment. Match any standard shelf or spec custom depths for special needs.

Adjustable spring tension The only design with dual spring capability. Fine tune to push the lightest and heaviest products. Change springs and push strength in 10 seconds. Seven spring tensions, with multiple combinations possible.

3/27/2020 2:37:41 PM

3 SELL IT

Deploy ZIP Track® for many different size and shape beverages.

ZIP IT Use actual product to set lane width. Slide product front-to-back to ‘ZIP’ tracks together in final position.

2 FILL IT Fill it with product. ZIP Track® maintains its width accurately for the entire length of facing without the need for a rear anchoring system.

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800-444-4665 TrionOnline.com/ZipTrack

3/27/2020 2:47:34 PM

Use in multiple storewide categories

Accommodates many size & shape containers Perfect for all beverages including alcohol

297 Laird Street | Wilkes-Barre, PA 18702-6997 | 800-444-4665 | TrionOnline.com/ZipTrack ÂŠ 2020 Trion Industries, Inc. | Beverage Digital Ver 2.0 - 11-19-19

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3/27/2020 2:54:07 PM

Be Prepared: NACS Resources for COVID-19

Amid concerns about the worldwide spread of the COVID-19 virus, the U.S. Centers for Disease Control and Prevention (CDC) has released guidance at www.cdc.gov/coronavirus for businesses and employers to plan for and respond to community outbreaks in the United States of COVID-19.

Much of what the agency is recommending falls under what’s considered good hygiene in general: Make sure to wash hands frequently, cover coughs and sneezes and be vigilant in cleaning common surfaces in the workplace. The CDC also stresses that businesses should encourage sick employees to remain at home until they are fever-free for 24 hours without using fever-reducing meds—and waive any requirements for a doctor’s note as local medical facilities may be overwhelmed. The agency also asks that employers be flexible in allowing their staff to stay home to care for family members who may be ill. The CDC says that employees with confirmed cases of COVID-19 or a family member with a confirmed infection should notify their supervisor and refer to CDC guidance on how to conduct a risk assessment of their potential exposure. The CDC recommends that employers inform fellow employees of their possible

NACS Calendar of Events

2020 MAY 19-21

iStock.com/PeopleImages

FUELS2020 Dallas, TX

JULY 12-17

NACS Financial Leadership Program Wharton School of Business, University of Pennsylvania Philadelphia, PA

JULY 19-24 JUNE 2-4

NACS Convenience Summit Europe Berlin, Germany

CONVENIENCE.ORG

NACS Marketing Leadership Program Kellogg School of Business, Northwestern University Chicago, IL

For the most up-to-date information on event cancellations, please visit www.convenience.org.

AUGUST 2-6

NOVEMBER 1-6

OCTOBER 11-14

For more information about these NACS events, visit www.convenience.org/events.

NACS Executive Leadership Program Cornell University Ithaca, NY

NACS Innovation Leadership Program Massachusetts Institute of Technology, Boston, MA

NACS Show Las Vegas, NV

OCTOBER 25-30

NACS Women's Leadership Program Yale University, New Haven, CT

APRIL 2020 |

NACS NEWS

exposure to COVID-19 in the workplace, but keep the information confidential as required by the Americans with Disabilities Act. NACS is monitoring developments in the U.S. “The 24/7 convenience and fuel retailing industry is well-versed in emergency preparations, and some of the same best practices we employ in the face of hurricanes and other hazards, for example, can be applied to operations in the face of a national health crisis,” said Jeff Lenard, NACS vice president of strategic communications.

The NACS emergency preparedness toolkit can help. You can find the toolkit at www.convenience.org/disaster, and look for the NACS Convenience Store Emergency Planning and Job Aids resource. The information includes a plan evaluation document, as well as tasks and checklists for store employees to perform during emergency and disaster planning and recovery. The guide and individual job aids aren’t hazard-specific, and several can be used by retailers in pandemic scenarios.

MEMBER NEWS RETAILER Parker’s has hired John Rhine as a financial planning and analysis analyst. In his new position, Rhine blends traditional financial reporting and analysis practices John Rhine with business intelligence technology and develops data-driven financial forecast models. Rutter’s announced the hiring of Sean Pfeiff and Adam Long as senior category managers for the marketing and merchandising team. Pfeiff will oversee packaged beverage, beer, wine, lottery and ATM categories, and Long will manage tobacco, CBD, pre-paid services and gift cards. Enmarket has hired Ryan Krebs as director of foodservice. Krebs is a classically trained chef, and his background includes restaurants, fine dining hotels, nonprofits, health care and the convenience store market.

| APRIL 2020

SUPPLIER Dover Fueling Solutions has added two new senior leaders to its DFS Solutions business. Matt Tormollen has been appointed as DFS vice president and general manager of DFS Solutions, and Matt James has been named senior director of product marketing for the DFS Solutions business.

Matt Tormollen

Matt James

T&S Brass and Bronze Works has hired Nikolai Hinzer as its Europe regional sales manager.

Ryan Krebs

Casey’s General Stores Inc. announced that Bill Walljasper, senior vice president and chief financial officer, will retire from the company later this year. He plans to continue as chief financial officer through the completion of the company’s fiscal 2020 year-end

reporting and oversee a transition period with his successor.

KUDOS Parker’s Kitchen has been named the 2019 Southeast Retailer of the Year by The Shelby Report.

Nikolai Hinzer

GSP won two silver ADDY awards for its 2019 holiday card at the AAF Tampa Bay (American Advertising Federation) ADDY Awards Gala.

CONVENIENCE.ORG

“Our goal is to take category management to the next level and drive higher sales and profits for YOU. Our Category Management, Focused Marketing Initiatives, and Technology Ordering Solutions make it easy for you to maximize and optimize your entire store – making sure you have the right products for your customer when they want it. We are continually developing innovative strategies and solutions designed to help you grow business through marketing and supply chain programs by making your store more efficient, profitable, and a destination for the convenience store customer.”

“Start growing your business! Become a partner today!” Contact your local Core-Mark representative or visit: www.core-mark.com

NACS NEWS

Online Training Leads to Success

One of the keys to success in this industry is developing high-performing employees. From the store level to the manager level, the right training and development can position your employees for success—leading to increased retention, better customer service and ultimately more profits. To help you achieve consistency in your training offer, NACS partnered with Ready Training Online (RTO), a premier solutions provider for learning management and web-based training. Through RTO, NACS e-Learning offers two affordable, flexible solutions: Training Solution #1: Subscription Our subscription-based options are the most popular, offering access to a complete and affordable training program built to fit your company’s specific needs—including access to state-of-the-art

learning management capabilities and an extensive online convenience store training library. Training Solution #2: Single View Forty titles are available, specific to the convenience and fuel retailing industry. The single-view option allows for customization and flexibility and is the perfect selection for a refresher, an add-on to your current training program or for an employee who’s looking for supplemental or ongoing c-store training. Each single-view selection is priced for a one-time view and—unlike the subscription solution—does not include any learning management capabilities. Your log-in credentials will be provided via email upon receipt of authorized payment. For more information about these programs, visit www.convenience.org/elearning.

Ignoring the October 2020 deadline for EMV at the pump could cost you more than upgrading. Conexxus has held several free webinars to educate retailers. Watch to learn: • The basics of contact and contactless EMV • What is under way to streamline certification

| APRIL 2020

•T he current state of the industry on EMV deployment, industry fraud and trends and • Fraud prevention techniques • What to consider when implementing EMV at the dispenser To view the webinars, visit www.conexxus.org/webinars. CONVENIENCE.ORG

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NACS NEWS

NEW NACS MEMBERS NACS welcomes the following companies that joined the organization between January 16, 2020, and February 15, 2020. NACS membership is company-wide, so we encourage employees of member companies to create a username by visiting www.convenience.org/Create-Login. All members receive access to the NACS Online Membership directory, latest industry news, information and resources. For more information about NACS membership, call (703) 684-3600.

NEW RETAIL MEMBERS Gowell's Shop N Save dba Gowell's Markets Litchfield, ME Trenton Marketplace dba TLC Stores Trenton, ME KD Properties Inc. dba Bottle N Bins Monterey, CA Mighty Moose Marts LLC Keene, NH mmm.baby

NEW SUPPLIER MEMBERS Accelerate Smyrna, GA www.accelerate360.com APM Partners Webster, NY www.pizzametry.com Asian Food Solutions/ Comida Vida Oviedo, FL www.asianfoodsolutions.com www.comidavida.com

CMC Tech Inc. Houston, TX www.CCTVFACTORY.com

Oil Solutions Group Inc. Colleyville, TX www.oilsolutionsgroupinc.com

Core Coatings Inc. dba Core Image Solutions Suwanee, GA www.coreimagesolutions.com

RadiusAI Inc. Phoenix, AZ www.radiusai.com

Crook & Marker Hamilton, NJ www.crookandmarker.com Diesel.Market Inc. Austin, TX DME Delivers dba DME Visual Daytona Beach, FL Flowsell International Carrum Downs, Australia www.flowsell.com.au G2G Protein Bar Orem, UT Legion Redwood City, CA www.legion.co Lily's Sweets Boulder, CO www.lilys.com

BP Lubricants USA Inc. Wayne, NJ www.castrol.com

Linron Company Houston, TX www.linron.com

Champion Industries Winston Salem, NC www.championindustries.com

McDade and Associates Plum, PA www.mcdadeassociates.com

| APRIL 2020

RawNature5 Corp dba Koia Los Angeles, CA www.drinkkoia.com Silentmode Sdn Bhd dba E-POS system solution provider Bandar Baru Bangi, Malaysia www.getslurp.com Slurp LLC dba Slrrrp Glendale, CA Smoodi Inc. Allston, MA www.getsmoodi.com Sonilex Industries LTD Pasco, WA www.sonilexind.com SupHerb Farms Turlock, CA www.supherbfarms.com The Ginger People Marina, CA

Viasat Inc. Carlsbad, CA Western Spirits Bowling Green, KY www.westernspirits.com Zephyr Solutions Avon, OH www.askzephyr.com

NEW HUNTER CLUB MEMBERS BRONZE

Red Bull North America Inc. Santa Monica, CA www.redbullusa.com

GLOBAL COUNCIL ADVANTAGE C.H. Guenther and Son San Antonio, TX www.chg.com Cargill Inc. Wayzata, MN www.cargill.com Qopper Inc. San Jose, CA www.qopper.com

Transchem Inc. dba Transchem Group Cambridge, ON, Canada www.transchem.com Tropical Valley Foods Plattsburgh, NY www.nextorganics.com CONVENIENCE.ORG

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NACS NEWS

BY THE NUMBERS

Rare vs. Frequent Customers NACS regularly surveys and assesses customers’ (and clusters of customers) values, concerns and paths to purchase to help our members better understand their customers and drive more value. Segmenting for gender, generation and community are common methodologies. Below, we look at frequency of visits. Based on a recent survey, we discovered that rare shoppers are largely comprised of adults 50 and older. While people in this age group don’t generate a lot of profits for c-stores, the demographic can—and often does—stop stores from being built. Why? Because they flood zoning hearings when you are attempting to open a new store. So, the key for retailers is not to design a store for these older, rare shoppers but instead, discover ways to let these shoppers know that your store has more to it than they think.

Frequent Customers

Rare Customers

(multiple visits/week)

(visit once a month or less) are 50 years old or older

are 49 years old or younger

31%

value gas price

37%

say convenience stores share their values

go inside the store after buying gas

35%

value convenience

69%

value gas price

say convenience stores share their values

go inside the store after buying gas are somewhat/very satisfied with food options at the store

21%

value convenience

are somewhat/very satisfied with food options at the store

Rare customers—and in fact, all customers—go inside the store for two things at roughly the same pace: • To use the bathroom: 19% of rare customers vs. 19% of overall average • To shop for fill-in groceries: 11% of rare customers vs. 9% overall average Source: NACS Consumer Survey conducted by PSB PSB conducted online interviews from January 24–30, 2020, among 1,253 gas consumers (American adults age 18+ who drive at least once or twice per week and who purchase gasoline for a vehicle at least once or twice a month). The margin of error for this study is +/- 2.77% at the 95% confidence level.

| APRIL 2020

CONVENIENCE.ORG

GOOD WORK

Energy Efficiency Tools

BY THE NUMBERS

2019 NACS joined the Energy Star Program

3 billion metric tons Amount of greenhouse gas reductions achieved by U.S. families with the help of Energy Star

Up to 15% possible reduction in a facility's energy usage to be found in “Treasure Hunt for Convenience Stores”

| APRIL 2020

ith utilities as one of the highest operating expenses in the convenience retail industry, NACS has partnered with Energy Star to bring a variety of convenience-store-specific resources to retailers that are designed to help save money and energy. Energy Star is a U.S. Environmental Protection Agency (EPA) voluntary program. A newly released “Energy Star Action Workbook for Convenience Stores” can help retailers plan their energy efficiency strategies and maintain the momentum for the long term. In recent years, retailers have increasingly developed and incorporated business goals and KPIs that focus on energy management and sustainability into their strategic plans. The guide is available at www.convenience.org/energystar. Late last year, NACS and Energy Star released “Treasure Hunt for Convenience Stores” to help retailers and their teams discover energy savings in a collaborative effort that can reduce a facility’s energy usage by up to 15%. Access the Treasure Hunt at www.convenience.org/energystar. The EPA suggests that retailers share with employees and customers more about their sustainability efforts, such as energy management and use of certified Energy Star equipment. By taking credit for some things already being done, retailers can share their story with customers who care about environmental responsibility.

Since 1992, Energy Star and its partners have helped save American families and businesses nearly 4 trillion kilowatt-hours of electricity and achieve more than 3 billion metric tons of greenhouse gas reductions, equivalent to the annual emissions of more than 600 million cars. In 2017 alone, Energy Star and its partners helped Americans avoid $30 billion in energy costs. If companies are interested in becoming an Energy Star partner, additional benefits include the use of Portfolio Manager, an online tool to measure and track energy and water consumption, as well as greenhouse gas emissions. Use it to benchmark the performance of one building or a whole portfolio of buildings in a secure online environment. To learn more, visit www.energystar.gov. In 2019, NACS officially joined the EPA’s Energy Star program as an association partner committing to “help protect the environment by promoting superior energy performance.” As a partner, NACS will encourage members to use Energy Star’s free resources like Portfolio Manager and continue to release tools like the Action Workbook and Treasure Hunt. In the coming months, we will share and host webinars featuring Energy Star experts and explore additional learning opportunities. CONVENIENCE.ORG

Weigel’s Hosts Food Safety Tour

A USDA-sponsored tour provided professionals from three African countries an opportunity to learn about U.S. food safety protocols and the U.S. food regulatory system.

East Tennessee-based Weigel’s, the area’s oldest local dairy, hosted the Cochran Fellowship in March, a group of foreign agriculturalists and food safety advocates. The U.S. Department of Agriculture-sponsored tour provided professionals from three African countries an opportunity to learn about U.S. food safety protocols and the U.S. food regulatory system. Weigel’s and its Broadacres Dairy was selected to host the group and provide a tour of the dairy facility. “It was very nice to discover the processes used and see how much you care about food safety,” said Nabil Maovia, a USDA foreign agricultural service member. The dairy plant tour was guided by Douglas Roach, Weigel’s Broadacres Dairy plant manager. “I think the tour created a chance to help a lot of people today,” he said. “I hope they learned something that can keep their countries healthier.” Weigel’s operates 68 convenience stores, a dairy and a bakery, all within a 100-mile radius of corporate headquarters in Powell, Tennessee. CONVENIENCE.ORG

Speedway Raises $11.8 Million for Kids In 2019, Speedway LLC raised $11.8 million for kids treated at Children’s Miracle Network Hospitals across the United States—a 25% increase from the previous year’s efforts. The donations were raised by daily contributions from customers, business partners and employees throughout the year. Speedway’s partnership with Children’s Miracle Network Hospitals began in 1991 and has since raised more than $121 million for the children’s charity through various fundraising activities. Most funds come year-round from customers who contribute via a donation prompt while checking out or in donation canisters at each store. The company also celebrated a new fundraising record of $2.7 million at its annual Speedway Miracle Tournament, one of the largest golf fundraising tournaments held to benefit Children’s Miracle Network Hospitals. Children’s Miracle Network Hospitals raises funds and awareness for 170 member hospitals that treat more than 10 million kids each year. A donation made at a local Speedway directly supports the member hospital serving that community.

VERC Enterprises Wins Workforce Grant VERC Enterprises, with locations throughout Massachusetts and New Hampshire, was recently awarded $140,000 as part of a statewide Workforce Grant Training Program, where the funds will go toward employee training. VERC has matched the grant with its own funds, bringing the total cost of the training to $280,000. Barry Ahern, vice president of operations at VERC Enterprises, said the company sought the grant based on feedback from employees in the company’s Annual Employee Engagement Survey. The specific areas of training will include leadership and management skills, supervisory skills, lean thinking and processes for operations, ESOL (English as a second language), Microsoft Office tools, task and time management and effective communications/teamwork. This is the third time that VERC Enterprises has applied for and received a Workforce Training Grant, which is designed to train more than 6,500 workers and create 1,361 new jobs in Massachusetts by 2021.

APRIL 2020 |

INSIDE WASHINGTON

It’s All Legal

NACS takes an active role in litigation to advance the convenience and fuel retailing industry.

hile you are likely familiar with NACS’ legislative efforts in Washington, you may be less aware that NACS often takes on a role in litigation to advance the interests of its members. Here is a recap of litigation NACS is involved with on the industry’s behalf as of February 2020:

for injunctive relief (rules changes) is still being litigated. NACS opted out of a settlement reached in 2012 and joined a group filing its own opt-out suit. That opt-out suit, along with the class case for injunctive relief, is undergoing the expert discovery process. NACS ROLE: Plaintiff suing Visa, MasterCard and other defendants

In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, U.S. District Court for the Eastern District of New York BACKGROUND: NACS helped initiate class action litigation against Visa, MasterCard and the 25 largest card-issuing banks to challenge the ways that interchange fees and card network rules are set. CURRENT STATUS: A monetary settlement for the class has received approval from the U.S. District Court, and appeals challenging it have been filed. The class case against the defendants

U.S. v. Philip Morris, U.S. District Court for the District of Columbia BACKGROUND: The U.S. Department of Justice sued cigarette manufacturers in 1998 for a series of claims related to the negative health effects of smoking, including that the manufacturers misled the public about the health effects of smoking. In 2007, the Court ruled against the manufacturers and ordered them to make restitution in a variety of ways, including by requiring manufacturers to tell the public they misled them. One part of that order provided for manufacturers to require

| APRIL 2020

CONVENIENCE.ORG

iStock.com/Chalirmpoj Pimpisarn

BY LYLE BECKWITH

INSIDE WASHINGTON

signage at retail points of sale carrying those corrective messages. NACS filed an amicus brief on appeal to the D.C. Circuit Court of Appeals objecting to the point of sale sign requirement and won. (An amicus brief is a legal document filed in appellate court cases by non-litigants with a strong interest in the subject matter.) NACS has participated in two additional rounds of briefing on that issue in the U.S. District Court. CURRENT STATUS: The Department of Justice has modified its request to be in-store signage (rather than point of sale), and the District Court has requested

ONE VOICE This month, NACS talks with TJ Lynch, vice president, c-store at KeyImpact Sales & Systems Inc. What does NACS political engagement mean to you, and what benefits have you experienced from being politically engaged? Participating in NACS Day on the Hill, along with being a NACSPAC supporter, has heightened my awareness of the current issues and concerns of the c-store industry, TJ Lynch which in turn allows me to become a betterinformed partner and supplier to the c-store industry. What federal legislative or regulatory issues keep you up at night? In relevance to my specialties, future menu-labeling requirements keep me awake at night. These will have an immediate and long-term effect on the overall food supply chain to the c-stores. What c-store product could you not live without? Easy—a good cup of coffee, plus I always grab a box of Mike and Ike® for my afternoon pick-me-up!

| APRIL 2020

an evidentiary hearing on that question. NACS is participating as an amicus. The Court has asked the parties for a timeline for holding the hearing in 2020. NACS ROLE: Amicus opposing the Department of Justice’s request for an order for in-store signage Pulse v. Visa, U.S. Circuit Court of Appeals for the 5th Circuit BACKGROUND: Pulse sued Visa for violating the antitrust laws in connection with blocking smaller debit networks like Pulse from competing for debit transaction volume. The District Court ruled in favor of Visa, and Pulse appealed the case to the 5th Circuit. NACS, along with other merchant trade associations, filed an amicus brief on appeal supporting Pulse. CURRENT STATUS: The case was argued in October 2019 and is awaiting a decision. NACS ROLE: Amicus supporting Pulse New Hampshire Lottery Commission v. Barr, U.S. Circuit Court of Appeals for the 1st Circuit BACKGROUND: The New Hampshire Lottery and NeoPollard Interactive sued the U.S. Department of Justice for reversing its 2011 decision that opened the door to internet lotteries and returning to the traditional rule that internet lotteries violate the Wire Act. CURRENT STATUS: New Hampshire and NeoPollard were successful in the District Court, which concluded the Wire Act does not cover online lotteries. The Department of Justice appealed. NACS and the Coalition to Stop Internet Gambling filed an amicus brief in support of the Department. Briefs were filed in December 2019. NACS ROLE: Amicus supporting the Department of Justice CONVENIENCE.ORG

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Lyle Beckwith is the NACS senior vice president of government relations. He can be reached at lbeckwith@convenience.org MLP_April_half.pdf

OTHER RECENT CASES NACS HAS BEEN INVOLVED WITH BUT HAVE CONCLUDED: •V alero v. EPA (2019): NACS filed an amicus brief opposing Valero’s attempt to change the point of obligation for ensuring a certain volume of renewable fuel is put into the motor fuels mix each year. NACS was successful. NACS may need to participate in an appeal of this decision. •F MI v. Argus Leader Media (2019): NACS filed an amicus brief in the U.S. Supreme Court opposing the effort of the Argus Leader newspaper to get store-level SNAP redemption data throughout the United States. NACS was successful. 3/17/20

•N ACS v. New York City Dept. of Health and Mental Hygiene (2017): NACS filed suit to stop New York from implementing menu labeling regulations before the FDA regulations went into effect. NACS was successful in delaying New York’s implementation of the law. Please continue to watch this space as well as the various other NACS outlets. You can receive updates by signing up for the NACS Daily e-newsletter at www.convenience.org/ nacsdaily, and be sure to check www.convenience.org for timely updates on any developments in these cases or future cases.

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Driving insights that shape your customer experience. convenience.org/ExecEd-Kellogg Half Horz.indd 1

| APRIL 2020

3/17/2020 10:25:07 AM CONVENIENCE.ORG

INSIDE WASHINGTON

October Is Coming ONLY SIX MONTHS UNTIL THE EMV LIABILITY SHIFT HAPPENS AT FUEL DISPENSERS.

BY ANNA READY BLOM

30%-45% The amount of c-store retailers who say they will be fully EMV deployed by October 1

$450 million Cost of counterfeit fraud to c-store industry due to EMV liability shift

| APRIL 2020

and software programming that they cannot control. Yet these retailers will still be on the hook. IF ONLY YOU COULD FLIP A SWITCH Many people assume the EMV transition is as easy as getting new point-of-sale (POS) hardware and turning it on, but the transition process is much more complex. To fully transition, retailers must retrofit or install new fuel dispensers, receive new certified software and have that software installed by certified technicians. This is why the fuel deadline was deferred three years to October 2020. As the new deadline approaches, the industry still faces supply chain constraints. There are reported delays and CONVENIENCE.ORG

iStock.com/sakhorn38

FACTS & FIGURES

What’s happening outside of Washington may soon get the attention of policymakers. The date when liability for fraud hits fuel retailers unless they have fully enabled EMV chip card readers at their automated fuel dispensers (AFDs) is right around the corner—October 1. However, it is estimated that only about 30% to 45% of the convenience industry will be fully EMV deployed by October 1. Worse yet, it’s projected that the industry could be hit with a whopping $450 million in counterfeit fraud due to the liability shift. That’s no small number for an industry whose average pre-tax profit is $71,784 per store. By and large, c-store retailers are trying to make the necessary changes but face external limitations on equipment

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backlogs in each step of the process. In a recent Conexxus survey, retailers who were trying to make the transition cited the lack of software availability as the No. 1 challenge, followed by challenges with hardware installation and upgrades. While the cost to upgrade fuel dispensers is exorbitant, the expected fraud losses could push many c-store retailers out of business. Fuel dispensers are targets for thieves, and they often are a testing ground for fraudulent cards because customers can use a payment card without seeing a store employee. During the liability shift for inside store sales, merchants saw thieves targeting sites that were not fully EMV enabled, especially those along major interstate corridors. NACS expects the same to happen with the AFD liability shift and cautions retailers to make the transition as quickly as feasible. Anna Ready Blom is the NACS director of government relations. She can be reached at ablom@convenience.org.

THE CRUX OF THE ISSUE The EMV transition in the United States, dictated by the major card networks, has

been a mess. At the crux of the issue is how EMVCo, the payment standard-setting body controlled by the major card brands, writes and requires standards for payments technology without any other industry having a voting voice—no retailers, banks, smaller networks, fintech companies or consumer groups make those decisions. For example, EMVCo released the specifications for chip card technology that were then implemented by the major card brands and rolled out in the U.S. without PIN or another form of dual authentication, which differed from how EMV was rolled out in the rest of the world. If retailers and other stakeholders had a true voice in the process, imagine how different and how much smoother this transition could have been. Fundamental reform is needed to ensure similar messes don’t happen again (and again). For EMV research and compliance resources, visit www.convenience.org/EMV.

NACSPAC DONORS NACSPAC was created in 1979 by NACS as the entity through which the association can legally contribute funds to political candidates supportive of our industry’s issues. For more information about NACSPAC and how political action committees (PACs) work, go to www.convenience.org/nacspac. NACSPAC donors who made contributions February 1-29, 2020, are: Shanali S. Bhagat American Energy Distribution

Jimmy Alexander Frangis PDI

Doug Wagner Venture Gaming

Sajid Chaudhry NSR Petro Services LLC

Ieva Grimm J.M. Davis Industries Inc. Jim Dandy/Handy House

William Weigel Weigel's Stores Inc.

R. Timothy Columbus Steptoe & Johnson LLP

Brent Oakley Vibenomics

Doug Yawberry Weigel's Stores Inc.

Karim W. Dhukani Easy Lane Stores

Nick Paich GSTV

William P. Douglass W. Douglass Ltd. dba Douglass Distributing Company

Keith Solsvig Buddy's Kitchen Inc.

| APRIL 2020

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IDEAS 2 GO

A New Beginning After nearly half a century, Jiffy Trip has reimagined the way it does business. BY SARAH HAMAKER

In its new concept stores, Jiffy Trip emphasizes beverages with an expanded cold vault, extensive craft beer and wine selection and increased cold fountain and hot beverage offerings.

We cater to families and kids because we understand that kids drive visits.

our years ago, Jiffy Trip’s management realized that to stay relevant in today’s competitive marketplace, they needed to take a hard look at every aspect of their operation. “We started going around the country to tour stores from Florida to Pennsylvania, the Midwest and Texas, to discover what the best in class were doing,” said

SEE MORE! Ideas 2 Go showcases how retailers today are operating the convenience store of tomorrow. To see videos of the c-stores we profiled in 2019 and earlier, go to www.convenience.org/Ideas2Go.

| APRIL 2020

Alex Williams, chief operating officer of the 28-unit chain. That 18-month journey took Jiffy Trip in a new direction, both inside the company culture and outside in its stores. “What we discovered was that a shift is taking place, as those convenience stores that are on the cutting edge are not merely gas stations—they are one-stop shops with restaurants that happen to also sell fuel,” he said. A FRESH FOCUS During that time, Jiffy Trip management discovered two key takeaways that they incorporated into a new concept. So far, the company has opened two new locations based on those takeaways. “No. 1 was that people want fresh, prepared food,” Williams said. “The pre-packaged trend seems to be CONVENIENCE.ORG

ABOUT

Name of company Jiffy Trip JT's Made to Order is Jiffy Trip's proprietary foodservice brand. Customers can enjoy their freshly made salads, subs, burgers and pizza at tables in the store or get their food to go. Beer fans can find lots to choose from in the beer cave.

Date founded 1972

going away in favor of fresh, prepared food made-to-order.” To meet that need, the company created its own proprietary foodservice brand called JT’s Made to Order, which operates like an in-store restaurant. Customers also can order fresh salads, subs, burgers and pizza from a kiosk or drive-thru window. The other focal point was beverages. “Drinks drive visits,” Williams said. Jiffy Trip expanded the cold vault, put in a large beer cave, added an extensive craft beer and wine section, and increased the offerings on the hot and cold fountain area. “We cater to families and kids, especially in our fountain and frozen beverages selections, because we understand that kids drive visits,” he said. These two adjustments impacted the store design as well. In addition to indoor seating near the foodservice, the new stores have smaller centers and larger perimeters. “While the square footage is bigger, our shelf section actually shrunk,” he said. For example, the space has larger refrigerated open air coolers along the edges of the store. Another modification has been to ensure customers can get in and out as

# of stores 28

CONVENIENCE.ORG

quickly as they can. For example, a customer can order and pay for a burger via a touchscreen kiosk. A self-checkout option near the door allows guests to bypass a cashier. The drive-thru gives customers another choice for ordering food, as well as any other item in the store. “We

Website www.jiffytrip.com

BRIGHT IDEAS Jiffy Trip’s new locations emphasize beverages with a large cold vault, beer cave and craft wine and beer selection. But the focal point is the customizable fountain area. “I don’t think you can overestimate what a very clean, nice fountain area with a good selection that’s customizable can do for your store’s traffic,” said COO Alex Williams. At each of the new locations, the fountain area grew from 10 to 50 selections, including 30 soda options, six non-carbonated beverages and a selection of cold teas. The hot coffee area has a wide selection of flavors plus refrigerated wells for creamers, in addition to standard half-and-half. “These condiment changes for the hot coffee bar have proven very successful in allowing people to customize their drinks,” he said.

APRIL 2020 |

IDEAS 2 GO

really wanted to give customers as many options to shop and pay as we could,” Williams said.

Sarah Hamaker is a freelance writer and NACS Daily and NACS Magazine contributor based in Fairfax, Virginia. Visit her online at www.sarahhamaker.com. FLIP_April_half.pdf

A FRESH CULTURE The new focus affected more than just what new Jiffy Trip stores would look like—it overhauled the company culture. “If you’re building a convenience store right now, either without a fresh food program or an expanded beverage offering, you can’t differentiate yourself from the competition,” Williams said. “It used to be our competition was other c-stores, but now it’s with QSRs, Walmart and dollar stores.” The company also adjusted its pricing to stay competitive with dollar stores and curated its alcohol section “so customers didn’t need to go to the liquor store to get a great bottle of wine,” he said. “We want 3/17/20

to be a one-stop shop that’s always there for whatever our customers need.” Beyond slaking the thirst and filling the hungry bellies of customers, Jiffy Trip pays attention to other needs, such as having family restrooms with a childsize toilet and keeping all restrooms very clean. “We want to exceed our customers’ expectations when they walk in and when they leave,” Williams said. “We want them to leave thinking this is nothing like anything they’ve experienced before in a convenience store.” Jiffy Trip wants to expand its new ideas beyond two stores. This month, the company started building its 29th store, with a goal of growing to 50 locations by 2025. “We’re a company that’s growing, embracing technology and innovation, and we’re willing to adapt to be successful,” Williams said.

9:51 AM

July 12-17, 2020

cultivating smarter decision-making.

convenience.org/ExecEd-Wharton Half Horz.indd 1

| APRIL 2020

3/17/2020 10:25:48 AM CONVENIENCE.ORG

ALL Y R T

IO ELIC

S VO R FLA

LABOR &

DELIVERY Despite challenges, many retailers are jumping on the delivery train. BY TERRI ALLAN

ttracted to the prospects of a larger customer base and higher basket rings—not to mention serving consumers who may be reluctant to venture out due to health concerns— many convenience store operators are scrambling to offer delivery of prepared foods and merchandise. But for others, there’s still uncertainty about the profitability and long-term viability of delivery. “C-store delivery has come on so fast,” remarked Joseph Bickham, president of the six-unit Fuel City chain in the Dallas area, which has offered delivery for the

CONVENIENCE.ORG

past two years. Bickham believes the channel’s quick adoption of on-demand sales stems from the fact that c-stores are competing with QSR operators more than ever, “and that means competing when it comes to delivery,” he said. “In this age of delivery, the burden is now on the retailer to come to customers.” Elvis Ankeney, co-owner of Ankeney Fine Foods in San Francisco, agreed. “Delivery is a service that is becoming increasingly valuable to many consumers. People don’t want to shop in stores anymore,” he said. And according to the

APRIL 2020 |

retailer, the time is now for c-stores to jump on board the delivery train. “If we can get in front of this trend, we’ll have a competitive edge,” Ankeney explained. With increased operating costs, potential impact on in-store visits and concerns that arise from both a food quality and safety perspective that added delivery time brings, customer delivery may not be a realistic offering for all c-stores. “Retailers are definitely exploring the fit of delivery solutions into their offerings,” noted Lori Buss Stillman, vice president of research at NACS. “Ultimately, operators must strike the right balance between product offerings, fulfillment options and how to present the best overall value proposition to consumers. Now is definitely the time to be testing and learning.”

given time, and not a brick-and-mortar experience. In addition, average tickets are higher generally for delivery orders than in-store purchases, even excluding delivery fees, retailers reported. “Our delivery baskets are typically larger than in-store,” said Bickham, “and we’re seeing larger group orders.” Yet, delivery comes with its share of challenges for retailers. Depending on the model—own or third party—delivery brings added costs to merchants, including labor, vehicles and purveyor fees. Even packaging needs to be figured in. At Fuel City, for example, the compartmental containers used for in-store foodservice orders are replaced with separate containers for each foodservice item ordered for delivery. “Retailers have to

Delivery is a service that is becoming increasingly valuable; people don’t want to shop in stores anymore. INCREMENTAL SALES INCENTIVE The appeal of customer delivery to retailers is understandable. Incremental sales are a big incentive. “Delivery provides good revenue and good margins,” said Art Sebastian, vice president, digital experience, marketing, loyalty, e-commerce and customer insights and analytics at Casey’s. The Iowa-based chain has been delivering pizza and other items for about five years now, and according to Sebastian, “It’s a growing part of the business.” About 850 of 2,000-plus Casey’s stores offer delivery for $1.99 per order. Store employees handle the deliveries. Moreover, delivery allows convenience retailers to access potential new customers —those who only want product delivery at a

| APRIL 2020

ask themselves, ‘What type of packaging is best for off premise?’” noted Mike Fogarty, owner of Choice Markets, with three stores in Denver, all of which offer delivery. “And if you’re a small operator and have to stock different packages and wraps, where do you store it?” Fogarty continued. Stillman pointed to the “unintended consequences” that the rise in delivery has on retailers, such as “softness in trips, the lost meal occasions and impulse purchases.” Indeed, Bickham conceded that an initial concern at Fuel City was that delivery would cannibalize in-store traffic. “We’re still monitoring that,” he reported. Perhaps the biggest concerns c-store operators have about delivery relate to the quality of the food and service that the customer experiences. “Food safety CONVENIENCE.ORG

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is a massive issue,” remarked Stillman. “With delivery, there are the added challenges that come with food handling from store to door.” For that reason, many c-stores limit the items they offer for delivery. “We don’t deliver hot food,” said Dani Cone, owner of Cone & Steiner General, with three locations in Seattle, one of which offers on-demand delivery. “I’m concerned about the quality, so we’ve adjusted our delivery items.” Even Foxtrot, the Chicago-based chain that was founded as a delivery-only convenience store five years ago, limits the products it delivers. According to Mike LaVitola, co-founder and CEO of the nine-unit-and-growing chain, among the items Foxtrot doesn’t deliver are coffee and avocado toast. A few large c-store chains, however, report that they haven’t encountered issues with food quality as part of their delivery programs. According to 7-Eleven, which offers delivery through nearly 1,000 stores, “Our hot food is prepared on demand, and our average delivery times are under 30 minutes. These two factors ensure quality and freshness are maintained throughout the delivery.” Casey’s Sebastian also noted that with the company’s own delivery model, “We’ve had no product degradation.” Another challenge to delivery cited by several convenience retailers is the customer-service experience. Orders that are never delivered, delayed deliveries, poor quality food and rude delivery personnel all reflect negatively on the store, and that impact can be magnified via online commentary. NEW CUSTOMER DRAW Convenience retailers are generally employing two different models when it comes to delivery—third-party providers or in-house

| APRIL 2020

delivery—and they each come with their own share of advantages and challenges. Among the on-demand providers c-stores have partnered with are DoorDash, Grubhub, Postmates and Uber Eats. “It’s a good funnel, especially for a new business,” said Choice Markets’ Fogarty, who has partnered with all of the major delivery apps and reported that delivery now accounts for 30% of his sales. “Getting on their platform can be helpful in getting you to grow your business. It provides visibility and can pave the way for first-time customers to become repeat customers.” Ankeney and Bickham pointed to lower overhead costs associated with using a third-party versus a store’s own delivery program. “We don’t have to pay an employee a minimum of $15.50 an hour, and we don’t incur vehicle charges,” the San Francisco retailer said, noting that delivery now comprises between 10% and 20% of the store’s sales. At Fuel City—where delivery accounts for less than 2% of the chain’s business— by working with third-party delivery providers, “we haven’t had to adjust our labor,” Bickham said. “While we’re seeing added sales with margins that are lower than in-store sales, we’ve had no higher labor costs.” As Bickham and other retailers point out, delivery provider fees can be substantial, reaching up to 30% of the ticket and adversely impacting gross margins. Other challenges of the third-party model include POS integration and the need for separate terminals for every provider. “When you only have four feet of counter space to begin with, your selling space can be compromised,” Stillman of NACS said. One of the biggest downsides to partnering with delivery providers is that typically retailers don’t have access to customer data. “We don’t even know the ZIP codes of where the orders are going to,” remarked Bickham. “Access to that information could help us with marketing initiatives and help us to determine where we build new stores.” CONVENIENCE.ORG

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Delivery provider fees can be substantial, reaching up to 30% of the ticket and adversely impacting gross margins. Due to the challenges, “some retailers are getting fed up with third-party delivery,” Fogarty reported. Indeed, the Denver retailer is launching its

SURVEY SAYS …

The NACS Research team is preparing to launch a comprehensive industry study on the role of delivery in the convenience retail industry, with plans for a white paper to be released by year’s end. “Establishing a baseline of the current state of delivery is critical,” said Lori Stillman, NACS vice president of research. “Long term, we are committed to quantifying to convenience retailers the role delivery will play in store operations, profits and trips,” Stillman noted. NACS plans to field the online survey to retailers this summer. Questions will touch on last-mile delivery solutions; available products; delivery partners, fees, radius, promotions and dayparts, among others. Preliminary findings are slated to be unveiled at the NACS Show in Las Vegas, October 11-14. 44

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own seamless platform in the second quarter, including a new app, website, loyalty program and delivery via its own electronic vehicles. “We want to own the entire experience,” Fogarty said. While 7-Eleven works with DoorDash and Postmates, the chain presumably has access to customer data as orders are placed via its 7NOW app. The app serves nearly 400 cities and more than 30 million households, 7-Eleven said, and carries a flat $3.99 delivery fee. A VOLUME GAME Retailers such as Casey’s and Foxtrot that rely on in-house delivery programs prefer the ability to hire their own personnel despite the added labor and vehicle costs. Foxtrot’s LaVitola reported that while the company has experimented with outside providers, they’ve opted for their own as “we feel we can attract better carriers.” Sales at Foxtrot—which charges customers a flat $5 fee per order—are split 50/50 between in-store and e-commerce, LaVitola said. Delivery orders average $50, while in-store tickets average $15. Cone, meanwhile, tried a third-party provider for a few months, but orders CONVENIENCE.ORG

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With delivery, there’s the added challenges that come with food handling from store to door. didn’t meet her expectations, so she’s taken delivery in-house. “I wonder if third-party delivery is ideal for all c-stores,” the Seattle retailer remarked. “With fees that can range between 20% and 30% of the ticket price, it’s a volume game. A successful delivery program comes down to who your customer is. We operate urban c-stores, so we’re more for the customer who finds us along the way.” Cone estimated that delivery orders account for between 5% and 7% of Cone & Steiner’s sales. Earlier this year, Casey’s began tweaking its delivery model and testing a hybrid program that combines the company’s

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own delivery with that of third-party providers, including DoorDash. According to Sebastian, the new system will allow the c-store chain to expand its delivery offerings and frequency. While many c-stores are investing heavily in delivery programs—whether their own or through another provider— questions remain about the future of the service and the channel’s role. “The delivery value proposition continues to evolve,” remarked Stillman. “It will be a service the industry will need to figure out how to provide.” Still, she noted, whatever path retailers take, the goal must be on serving the consumer. “Any growth opportunity must center on consumers,” remarked Sebastian. “If they’re in the store, that must be the focus. If they’re looking for delivery, that must be the focus. Retailers today must meet consumers where they want to be met.”

Terri Allan is a New Jersey-based freelance writer, specializing in the beverage industry. She can be reached at terri4beer@aol.com and on Twitter at @terriallan. CONVENIENCE.ORG

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TRUSTED PARTNERSHIP How to know if you are selling safe and legitimate CBD products.

Tim Van Epps Founder, Heritage CBD www.heritagecbd.com

HERITAGE CBD IS IN A UNIQUE POSITION TO UNDERSTAND THIS NEW MARKET BECAUSE OF YOUR BACKGROUND IN RETAIL AND CANNABIS. Yes, I’m the CEO of The Sandri Companies, which is a petroleum distributor and c-store operator in New England. I have a few side projects, including a marijuana dispensary in Massachusetts. When I heard that the state was coming out with a hemp program in 2018, I jumped at the chance to get a license and put a team together to specialize in CBD products. Because CBD offers so many potential benefits while also being non-intoxicating, the market is far greater than that of THC. BECAUSE THE CBD INDUSTRY IS STILL LARGELY UNREGULATED, IS IT TRUE THAT CBD PRODUCTS OFTEN DON'T CONTAIN THE AMOUNT OF CBD ITS LABEL SAYS IT DOES? It’s true that the FDA doesn't currently monitor the manufacturing of hempderived CBD, so brands are not under strict scrutiny when it comes to how they create, label or sell their CBD products. Unfortunately, you do see a lot of companies looking to turn a quick profit by taking advantage of a trend. Some are being outright misleading and claiming there is CBD in their products when there isn’t,

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while some simply don’t know what they are doing when it comes to formulating. So, there is no consistency when it comes to the potency of CBD in their products. In late 2017, the Journal of the American Medical Association released a study that found that out of 84 CBD products they tested, only 26% contained the amount of CBD listed on the label. We were keenly aware of this when we founded Heritage CBD, and we saw it as both an opportunity and a risk. It’s a risk because inferior and disingenuous products threaten the market and make people question if they can trust CBD or doubt its effectiveness. But it’s an opportunity for the companies like us that have the expertise to consistently formulate high-quality products and are committed to regulating ourselves until the government catches up. WHEN ALL CBD PRODUCTS BECOME LEGAL TO SELL, WHAT SHOULD RETAILERS LOOK FOR TO ENSURE THAT THEY ARE SELLING SAFE AND LEGITIMATE PRODUCTS? CBD products available at retail are derived from hemp. When hemp is planted, it absorbs everything in the soil around it, which can be a safety concern if that soil is contaminated. Look for brands that are transparent about the origin of their hemp. Quality brands use hemp grown using responsible farming CONVENIENCE.ORG

practices in soil that is pre-tested for toxins. They also test throughout the growth cycle for purity and to ensure that the naturally occurring amounts of THC remain within the legal limit of 0.3%. Heritage CBD partners with local family farms in Massachusetts to grow our hemp and insist upon organic farming and clean soil. And, because we follow current Good Manufacturing Practices (cGMP), we can trace all our products back to the farm the hemp was grown on. Both retailers and consumers should be looking for CBD products that have thirdparty lab results easily accessible for every batch. Look for a batch code on the packaging and make sure you can easily locate an independent Certificate of Analysis (COA) for that exact batch through a QR code or on their website. Good companies have nothing to hide and want to establish trust with consumers. Avoid any brands making claims about therapeutic or medical use. That is one area that the FDA is watching out for, and the good brands know this and follow the rules. Another thing to confirm is that the CBD brands you carry have a phone number, and someone answers it when you call. Consumers have questions about CBD, and the quality brands have a team dedicated to getting them answered. If you can’t get someone to answer your call or reply to a message quickly, that’s a red flag.

current legal landscape. Our Muscle Salve is our No. 1 selling product. Gummies are an easy way to incorporate CBD into your routine. Tinctures are fast acting and make it easy to adjust dosing, while capsules provide a consistent dose in pill form, which some people prefer. CBD vape products work rapidly and are especially popular in c-stores.

This interview was brought to you by support from Heritage CBD, a NACS member.

CONSUMERS ARE LOOKING FOR HEALTHIER FOOD OPTIONS AS WELL AS INGREDIENT TRANSPARENCY, SO THEY WOULD ALSO WANT THOSE SAME QUALITIES IN THEIR CBD PRODUCTS, RIGHT? Absolutely, transparency and quality are key. CBD is usually a part of a wellness routine. Heritage CBD products are all-natural, and we never include anything unnecessary. Even our CBD gummies use natural flavors and are colored with fruit juice and beta carotene rather than artificial dyes. They do contain sugar— that’s part of why they are delicious—but no artificial sweeteners or fillers. All ingredients should be clearly listed, and as mentioned before, those third-party labs help consumers have confidence. DOES CBD HAVE A SUSTAINABLE FUTURE IN CONVENIENCE STORES? We think it’s only a matter of time before CBD will be an added ingredient in snacks and beverages produced by the major brands, so in the long term, yes. In the near term, it will be important for c-stores to place value on carrying quality CBD products if they want to see repeat sales.

IS CARRYING A VARIETY OF FORMS OF CBD IMPORTANT? We think it is. Consumers want choice. Topicals are a great place to start given the CONVENIENCE.ORG

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What to consider when youâ&#x20AC;&#x2122;re considering a carbon offset program. BY JERRY SOVERINSKY

| APRIL 2020

CONVENIENCE.ORG

hen it comes to pursuing a carbon neutral life, few are sufficiently worthy to take a Greta Thunberg, crossing-theAtlantic-in-a-sailboat path. But for those so inclined, opportunities to reduce emissions are far more practical and accessible, with carbon offsets taking care of whatever is left. Climate change, greenhouse gases and sustainability are top of mind among consumers, who are tweeting, posting and liking content related to the environment. â&#x20AC;&#x153;The percentage of Americans who say global warming is personally important is now at a record high, 72%, up 9 percentage points since March 2018,â&#x20AC;? Anthony CONVENIENCE.ORG

APRIL 2020 |

Leiserowitz, the director of Yale’s program on climate change communication, said in an interview with National Geographic. It’s perhaps little surprise then that “flight shaming” is a growing movement, with traveler guilt propelling the carbon-offsetting market for economy flights to $3.8 billion annually during the next five years, according to a 2019 Citi assessment. Enter the convenience store industry, whose 122,500 locations that sell fuel are a prime target for … “drive shaming?” Perhaps not so fast, with the automobile holding personal significance for millions of Americans, who own more than 250 million cars and trucks. But there is a growing chorus among the public for doing something to address climate change. And if driving less isn’t an option, then perhaps offsetting the impact of driving is. WHY “A sustainable approach,” writes the Environmental Protection Agency (EPA), “is a

systems-based approach that seeks to understand the interactions which exist among environmental, social and economic pillars to better understand the consequences of our actions.” For retailers adopting a carbon offset program, each of these pillars would weigh on their motivation and degree of participation. For instance, for those who find strong alignment with the environmental and social pillars, the economic pillar might temper their involvement. That is, what if the initiative imperiled jobs? The retailer would then need to find a comfortable balance among all three to justify involvement (recall, there are few trans-Atlantic sailors whose focus is solely on the environmental pillar). HOW For GreenPrint, a company that offers sustainability initiatives, including carbon offset programs, to the convenience store industry, its promise is to deliver strong returns on all

How a Carbon Offset Works Metric Ton of Carbon Dioxide Reductions

Carbon Emissions = Carbon Offsets

Carbon Emissions

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Carbon Offsets

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three. “It’s a hot topic and a bridge to the future, a way to engage customers in something that is relevant and timely,” said Pete Davis, CEO at GreenPrint. And while supporting consumers’ desires to curb their carbon footprint, the programs can lead to increased sales. “They build loyalty and business; it’s something that is easy to do without capital,” he said. Some retailers look to GreenPrint for an integrated marketing operation, while others retain management of those tasks in-house. And stations that sell more fuel and decide to offset a greater percentage of projected emissions will pay more (offsetting is accomplished by planting trees, helping to fill landfills or other actions whose end results help offset the emissions caused by driving). GreenPrint’s pitch to retailers cites strong customer engagement and loyalty for a retailer that participates in a carbon offset program. “This is a competitive differentiator [for retailers],” Davis said. At a time of shrinking fuel margins, the ability to differentiate one’s brand is a strong selling point. WHO SpeedyQ Markets “We are unbranded and wanted to find something that we could do with our fuel to [distinguish] it,” said Kyle Lawrence, president of Kimball, Michigan-based SpeedyQ Markets. His company began working with GreenPrint in 2018, and to date, the partnership has resulted in its planting nearly 5,000 trees to help offset emissions associated with customer fill-ups. GreenPrint helped launched SpeedyQ’s DRIVE program, a unique branding that is communicated across various touchpoints. For SpeedyQ, a carbon offset program is a compelling story to tell its customers. “We were looking for something positive to tell the customer that they could associate with our fuel,” Lawrence said. While the program has been in place less than two years, “We feel that there has been a volume lift,” Lawrence said, though how much is uncertain. “It’s tricky because tracing the increase to one thing is not easy.” A post-launch survey conducted by GreenPrint at five participating locations revealed a Net Promoter Score (NPS) of 80 for SpeedyQ customers who were aware of the program, an exceptional figure but one CONVENIENCE.ORG

We are unbranded and wanted to find something that we could do with our fuel to [distinguish] it. lacking context as a pre-launch survey was not conducted. Twice Daily Nashville-based Twice Daily Convenience Stores sought to set itself apart in a crowded market and has worked with GreenPrint in launching its Twice Daily THRIVE program. “We want to be the premier convenience retailer in our market and offer a differentiated experience that excites our customers and team members,” said Ken Hagler, senior director of merchandising for Twice Daily. Additionally, Hagler sees a carbon offset program as aligning with the company's societal pillar for sustainability. “We partner with local communities and organizations to support their sustainability efforts,” Hagler said, such as those focused on urban agriculture and nature conservancy. “There are seven farmers markets we work with, and we give away thousands of tree saplings each year … And we’ve committed to the Arbor Day Foundation to plant 25,000 trees.” (To date, Twice Daily has planted nearly 22,000.) As to measuring customer loyalties or increased sales, Hagler said for Twice Daily, the focus is on being “environmentally responsible and doing the right thing.” While acknowledging the cost of partnering with an offset solutions provider—“We spend in the hundreds of thousands of dollars per year”—he said the cost is borne internally. “We know that some retailers will raise prices on a gallon of gas a penny or two to offset the program, but we decided not to take that approach. … We look at it more long term and feel that it will have a positive impact on our fuel volume anyway,” Hagler said.

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Based on pre- and post-launch surveys, Hagler said the brand’s NPS score has risen from 23 to 44, a significant jump in less than two years. “There’s a greater awareness of the program, and it’s being positively received by our guests,” he shared. Shell Oil giant Shell offers consumers the ability to offset carbon from their fuel purchases. Last year, the brand introduced a program in the Netherlands to apply carbon credits toward customers’ purchases of Shell V-Power gasoline or diesel. Each carbon credit represents the removal of one ton of carbon from the atmosphere, according to Shell, and the company will invest in projects to protect and regenerate forests as part of efforts to help offset the emissions from the fuel purchase. Shell puts the power in motorists’ hands by giving them a way to offset driving emissions by paying a

small fee (about one cent per fuel liter) designated to fund carbon reduction initiatives. Implemented in stations in Austria, Germany, Switzerland and the United Kingdom, the money is used to fund conservation and restoration projects around the globe. While the carbon offsets Shell offers are only for the consumer portion of emissions—from the burning of gasoline—the company plans to fund carbon offset projects for its portion of the emissions from the manufacture, transport and sale of the fuel as well. Overall, the program will contribute to Shell’s three-year target, which started in 2019, to reduce its net carbon footprint by 2% to 3%. Green Gas Nonprofit Green Gas allows customers to offset their driving emissions at the gas pump via donations. The donations then fund a portfolio of projects tackling climate change.

Investments in emission-reducing projects in developing countries

Companies/ governments needing to meet their emissions targets

Carbon offsets, including tree planting & renewable energy projects

Certificate obtained for payment of carbon offsets 54

| APRIL 2020

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Watch Out: Greenwashing Scot Case, author of The Seven Sins of Greenwashing and contributor to the NACS upcoming Green Toolkit, lays out the following as messaging that could run afoul of FTC rules: •S in of hidden trade-offs: A claim suggesting a product is inherently green-based without context as to its development (i.e., paper is derived from a sustainable source, though its product is fraught with greenhouse gas emissions) •S in of no proof: A claim made without third-party certification or evidence •S in of vagueness: A claim that lacks precision or is overly broad (i.e., all natural) •S in of worshiping false labels: A claim that implies third-party endorsement •S in of irrelevance: A truthful claim that is meaningless (i.e., “CFC-free,” because CFCs are banned under the Montreal Protocol) •S in of lesser of two evils: A claim that, while true, may distract the consumer from a more significant environmental impact (i.e., organic cigarettes) •S in of fibbing: Claims that are false (i.e., claiming that a carbon offset program reduces emissions)

The Green Gas button appears on gas pumps in a handful of states across the U.S. East Coast. Pressing it allows customers to donate $1 (to offset an average fill-up of 10 gallons) to green projects that benefit the health of their community and planet. The company is beta-testing the next version of the program across a national footprint that would allow customers to opt-in, but the cost will be borne by the retailer. This new version will be free to customers, “because we realize the value we bring to retailers,” said Liam Madden, co-founder of Green Gas. Green Gas is also known for creating the world’s first carbon neutral way of paying for gas—the Green Gas Card—a gas payment card that syncs directly to consumers’ bank accounts and donates 10 cents per gallon to environmental projects that

| APRIL 2020

absorb carbon pollution from the atmosphere, offsetting 100% of the carbon emissions of all fuel purchased with the card. SO WHAT? In his report, “The Seven Sins of Greenwashing,” Scot Case addresses false and misleading claims made to consumers about environmental practices or benefits (see sidebar). While the report is instructive for consumers, it is also highly relevant and useful for retailers who are pursuing a carbon offset program. Case cites marketing language that retailers use to promote carbon offset programs. “Phrases like, ‘This program reduces carbon emissions’ or anything that references reducing emissions is simply false,” he said. “A carbon offset program does not reduce emissions. It offsets them.” Additionally, because a retailer can choose the percentage of their carbon offset participation, providing transparency is important. (Are you offsetting 2%? 30%? What are you communicating to your customers?) The distinction is not trivial and goes to the heart of consumer perceptions about carbon offset programs. All of which doesn’t diminish the importance of a carbon offset program; rather, it places an extra effort on retailers’ parts to ensure that the end results are communicated accurately and align with their corporate sustainability goals. And then, for retailers like Hagler, the decision to participate is an easy one. “When you look at the big picture, it’s the right thing to do,” he said. “And we want to become the destination of choice for folks who want to do the right thing, too.”

erry Soverinsky is a J Chicago-based freelance writer and NACS Magazine contributing writer.

CONVENIENCE.ORG

A TOWN WITHOUT

Tobacco 58

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How retailers can fight total tobacco bans like the one enacted by Beverly Hills, California. BY MELISSA VONDER HAAR

he push by city councils and local boards of health to enact onerous tobacco regulations is hardly a new phenomenon. In recent years, monitoring and battling proposals to limit the sale of flavors, certain pack sizes or the number of tobacco licenses has unfortunately become a necessary part of the job for convenience retailers. But a city banning all tobacco sales? That seemed a reach, even for the most aggressive of local governments. Enter Beverly Hills. In June 2019, the city council of Beverly Hills, California, voted unanimously in favor of an ordinance prohibiting the vast majority of tobacco sales. Sam Bayless, director of policy for the California Fuels and Convenience Alliance (CFCA), noted that the report supporting the ordinance cited international cities that had successfully enacted tobacco bans but failed to mention those cities also had passed alcohol bans and bans on women entering certain businesses without male chaperones. “The city council went into this process with their decision already made,” he said. The ordinance’s passage marked the first total tobacco ban successfully enacted in the United States—a milestone touted by the city’s leadership. “We are a city that has taken the lead on restricting smoking and promoting public health,” John Mirisch, the mayor of Beverly Hills, said in a statement. “Somebody has to be first, so let it be us.”

CONVENIENCE.ORG

Yet the ban wasn’t as total as this statement suggests: While the city council refused to consider the effects on convenience retailers— which Bayless described as “crippling”—it was willing to carve out exemptions at the request of celebrities, hedge fund managers and luxury hotel owners. Under the ordinance, cigar lounges and hotels are still permitted to sell tobacco. Matt Domingo, senior director of external relations for Reynolds American Inc., noted that while the ban passed in June 2019, it does not go into effect until January 2021. “There’s certainly time for that to be amended,” he said. “I’m not saying it will be, but there’s a lot of time before enactment for things to develop.” Bayless said he hasn’t seen any indication that suggests the city will revisit the ordinance, but only time will tell. In the meantime, retailers can look to the past for examples of how similar measures have been bested—and lessons on how the industry can fight back against such crippling proposals. SAME PROPOSAL, OPPOSITE OUTCOME Beverly Hills was the first to pass a total tobacco ban but not the first to propose one. A prominent example was the case of Westminster, Massachusetts: In November 2014, the town’s Board of Health also considered a total tobacco ban, saying it had a “moral obligation” to restrict youth tobacco access.

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John Shaer, executive director of the New England Convenience Store & Energy Marketers Association (NECSEMA), said tobacco retailers, suppliers and industry associations quickly jumped into action. “Everybody was rowing in the same direction to bring it to the attention of the general public,” he said. More than 500 people showed up to a public hearing about the proposed ban, which was called off by the board just 20 minutes in after Westminster citizens made it clear how much they opposed the measure. Interestingly, even though those who spoke said they did not approve of smoking, they were vehemently opposed to the ban based on the precedent it set. “The conversation flipped,” said Shaer. “It was no longer about cigarettes, the harms of tobacco and a retailer’s right to sell a legal product responsibly. A total tobacco ban became about civil liberties.” Though the Board of Health initially had said it would consider written public comments through December, just days after the November public hearing it voted 2 to 1 to drop its efforts to ban tobacco sales. To some extent, Shaer credits the focus on civil liberties with the positive outcome in Westminster. “When business goes in and starts

The conversation flipped. A total tobacco ban became about civil liberties. 60

| APRIL 2020

talking about how proposals will harm their business, the conversation immediately becomes one of profits vs. public health,” he said. “That’s a losing conversation.” THE PLAYBOOK Shaer acknowledged that the population of Westminster is a little less progressive than that of Beverly Hills, where the civil liberties issue might not have played as strongly. But there are a couple of universal tactics that retailers operating in regulation-heavy areas like California, Massachusetts and New York should consider when facing proposals at the local level. These include: 1. Build Relationships Early: “The best way for retailers to avoid legislation like this is to begin outreach before these ordinances begin,” said Bayless of CFCA, encouraging retailers to engage with local governments and agencies on issues like age restriction and responsible tobacco sales, as well as inviting those representatives to visit the stores. “When you go into these local municipalities, there’s already been someone there from the other side for months,” agreed Anna Bettencourt, a senior category manager at Massachusetts-based VERC Enterprises. “We’re way behind by the time we walk in the door.” 2. D on’t Underestimate the “Antis”: The antitobacco groups pushing the type of tobacco bans seen in Beverly Hills and elsewhere don’t just have a leg up when it comes to relationships with local regulators. “Big Anti-Tobacco has tremendous money flow. They’re smart; they’re super wellorganized; and they are singular in their mission,” Shaer said. “We have a formidable opponent.” 3. I mprove Your Radar: One of the reasons extreme tobacco regulations are so prominent at the local level is that city councils and boards of health can pass measures in a matter of days. Often the industry has just days to respond—if that. It’s why associations like NECSEMA and others employ local teams whose sole job is to monitor proposals and public hearings, alerting retailers as early as possible. “Early detection is crucial,” said Jim Calvin, president of the New CONVENIENCE.ORG

York Association of Convenience Stores. “All too often, we find out too late.” 4. M ake Some Noise: “Here’s the thing about local boards of health: They’re able to do what they do because no one pays attention,” said Shaer. “They fly under the radar.” One strategy for successfully fighting back is to ensure local regulators are not, in fact, operating in the dark, whether it’s through materials in the store, social media, traditional media or good old-fashioned grassroots outreach. “We need to fight in non-traditional ways because the traditional ways aren’t working,” Shaer said. 5. S how Up: Attending public hearings is a must for retailers. “Lawmakers expect manufacturers to show up with a story,” said Domingo of Reynolds. “But the story that our trade partners, both retailers and wholesalers, can tell is a very different one. It strikes a different chord in the mind of a lawmaker when they hear about a third or fourth generation small business trying to make ends meet, for example.” Calvin agrees, adding “you don’t need to outnumber the antis. You don’t need to out-scream them. You just need to provide some balance.” THE FIGHT CONTINUES These guidelines become more and more important as additional cities attempt similar bans in the wake of Beverly Hills. Manhattan Beach, California, and Concord, Massachusetts, both have total tobacco bans on the docket for 2020. Retailers in other regulation-prone areas expect total tobacco ban bills to come their way. “To be frank, it’s not going to be any surprise when that proposal comes,” said Lonnie McQuirter, director of operations for 36Lyn Refuel Station in Minneapolis. “It’s not an if, so much as a when.” Some hope that the slew of tobacco regulations that passed at the federal level last year—including T21 and the U.S. Food and Drug Administration’s flavor guidance—might appease local officials. Experts caution otherwise. “Some health and education groups do not think that the FDA went far enough,” said CONVENIENCE.ORG

We need to fight in non-traditional ways because the traditional ways aren’t working. Anna Ready Blom, director of government relations at NACS. “I would suspect that those groups will continue to push for more stringent bans at the state and local level.” Others, perhaps rightfully, aren’t as concerned about such regulations coming to less regulationprone areas. As Domingo notes, “California, Massachusetts and Minnesota account for over 90% of the local ordinances that have passed to date across the country.” That may be the case. For now. “They start in Massachusetts and California because those are the natural first dominos to push, but they’re not the only dominos,” Shaer said. “Money is poured into those areas, then they start to topple.” If there’s any good news to the tale of total tobacco bans, it’s that these kinds of extreme measures have united tobacco retailers, manufacturers, associations and consumers like never before. “It’s poked the bear,” said Shaer. “Our industry is wide awake. We may lose a battle here and there, but it isn’t going to be because we’re sleeping.”

elissa Vonder Haar is the M marketing director for iSEE Store Innovations.

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UNDER SIEGE

The convenience retailing industry is a prime target for data attacks. What are you doing to protect your network? And how will you respond if a breach occurs? BY JERRY SOVERINSKY

| APRIL 2020

CONVENIENCE.ORG

onvenience stores are in the news and for unenviable reasons. A recent spate of data breaches has led to the theft of credit and debit card information from millions of customers, while infiltrating critical operating systems for convenience retailers. “Attacks Targeting Point-of-Sale at Fuel Dispenser Merchants,” warned a November 2019 Visa Security Alert, notifying merchants of increased efforts by cybercriminals to target fuel dispenser merchants. But these were not pump-based attacks. Rather, they struck at the nerve center of these merchants’ data infrastructure: POS systems. “It is important to note that [the attacks] differ significantly from skimming at fuel pumps, as the targeting of POS systems requires the threat actors to access the merchant’s internal network,” Visa continued. These POS attacks are an evolving threat that requires an all-hands-on-deck approach from fuel marketers to minimize vulnerabilities. Indeed, earlier this year, York, Pa.-based Rutter’s announced that it had uncovered a data breach of customer information that may have begun as far back as August 2018. An “unauthorized actor may have accessed payment card data from cards used on point-of-sale (POS) devices at

CONVENIENCE.ORG

some fuel pumps and inside some of our convenience stores through malware installed on the payment processing systems," Rutter's said in a press release. This came just two months after Wawa, Pa.-based Wawa announced that it discovered a data breach— up to nine months after “malware began running on in-store payment processing systems at potentially all Wawa locations,” the company said in a press

APRIL 2020 |

release. The result? The compromise of more than 30 million payment cards, according to security news site Krebs on Security. Why are petroleum retailers being targeted? According to Mark Carl, CEO of ControlScan, cybercriminals are intensifying their efforts on the petroleum industry because they have discovered vulnerabilities. “As these attacks continue to deliver huge successes for the attackers, they will continue to target both upstream and downstream petroleum resources to look for additional value,” he said. The effort is not new, according to Carl. “The threats began in earnest with the breach of a vendor back in early 2016, which likely produced a significant amount of technical knowledge that the attackers could use to perpetrate attacks. Given the success that they’ve seen, they’ve also gained significant knowledge of petroleum systems along the way.” PREVENTION, NOT DETECTION Despite these ominous findings, a compromise is not inevitable, cybersecurity professionals insist. Instead, retailers should proactively reassess their IT infrastructure and antivirus protection to minimize the impact from cyberattacks. For those with sufficient resources, it’s not a matter of simply boosting security personnel, for whom demand far outstrips supply. By 2022, the global shortage of IT workers will reach 1.8 million, according to the Center for Cyber Safety and Education.

| APRIL 2020

And even for those companies that maintain an internal IT department, an increased number of false security alerts are straining their availability to deal with more critical cybersecurity pursuits, while evolving complexities make it difficult for them to respond effectively. “While many IT staff are good at defensive security, they haven’t really worked with systems that are under attack and therefore don’t necessarily know what they are looking for,” Carl said. “Firewalls will not completely keep attackers out of environments.” The key is pursuing a proactive posture, one predicated on prevention, Carl said, rather than a reactive one, which operates on detection. The latter is characterized by signature-based antivirus software that spots known threats. (You know these solutions all too well. They bloat system resources and slow boot up time as they continuously download updates in their endless game of cat-and-mouse against cybercriminals.) But systems that rely on such reactive protection are vulnerable to new strains. The network systems for large enterprises include hundreds/thousands of endpoints, each of which creates an additional vulnerability for the company. It wasn’t always this way, of course. Historically, networks consisted of a primary, standalone hub. But as personal computers proliferated during the past 25 years, their ability to link to a central hub has created a complex web of touchpoints—endpoints, actually—each creating an entry point for a would-be cyberattack. And as cyberattacks grow increasingly more deceptive, human error has led to an increased number of breaches. “Phishing is one common threat vector,” said Linda Toth, director of standards for Conexxus. “People are composing emails that look like they’re originating from within the organization, capturing information from LinkedIn and other social media outlets that makes it look authentic. And all it takes is just one employee to trigger a breach.” With legacy antivirus software, these endpoints are unable to prevent more complex attacks from executing, necessitating a more powerful solution. “Advanced threat detection and response capabilities must be employed to fully protect the environments,” Carl said. Solutions such as Managed Detection and Response (MDR) from third-party vendors “deploy advanced endpoint CONVENIENCE.ORG

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“ FIREWALLS WILL NOT COMPLETELY KEEP ATTACKERS OUT OF ENVIRONMENTS.” security to all assets, active email monitoring and logging all activity to a centralized SIEM [Security and Information and Event Management]. But the most important part remains the human factor. Only staff that understand specific tactics and methods of a sophisticated adversary are likely to detect them, as is demonstrated with recent successful breaches that went undetected by IT staff for months.” Carl said that even with advanced detection solutions in place, a retailer should focus on making sure that systems are closely monitored: “The right team will proactively monitor the entire environment 24/7/365 to know when a compromise has occurred, will have tools to quarantine individual systems from the environment and will take immediate action to contain and limit the scope of the attack.” Jim Shepard, director of data protection and reg compliance for Phillips 66, agrees, “As a merchant, your core business activity is selling products, and you may not have the staff to successfully manage the security of your operating environment. That’s when it’s necessary to get help with a managed security provider.” The stakes are significant, and perfection is the only acceptable outcome. “We have to get it right 100% of the time. The crook has to get it right just once,” Shepard said. A TEAM EFFORT There is of course no way to prevent cybercriminals from launching attacks. But until legacy antivirus applications have been replaced with advanced threat detection and response capabilities, human error will continue to create system vulnerabilities, a weakness that cybercriminals rely on to inflict damage. And when that happens, all efforts must turn toward remediation to prevent further widespread damage from lateral attacks in the environment. The first step in the process is activating an incident response plan, a prepared course of action for disasters (see “The First Line of Defense” in the October 2019 issue of NACS Magazine). Ideally, this would be a plan that you continually update, incorporating best practices from previous events. And all plans begin with a first point of contact. “Reach out to your first responders; they are responsible for activating your plan,” Shepard said.

| APRIL 2020

Even if you manage a robust, internal IT staff, remediation must tap third-party professionals who specialize in addressing breach scenarios. “Work with an incident response team. If you don’t have one, bring in somebody who understands the specific tactics, tools and methods of sophisticated attack groups,” Carl advised. Next comes containment mode. “That means disconnecting from your network. Not powering off your systems, because that could be problematic, but going offline to reduce your exposure,” Shepard said. Carl and his team deploy endpoint security, “identifying where the attacker is and extracting them from the environment, including cloud-based systems like Office365 that may be commonly overlooked.” Next is the post-recovery phase. “Figure out what that entails for your organization,” Shepard said. “You’ll want to preserve your logs and other evidence that could explain what happened. This will go a long way toward helping you remediate and prevent future occurrences.” Backups are critical for restoring operations, and Carl said operators should adopt a robust backup protocol. “It won’t stop a ransomware attack, but it will reduce its impact, and you might not have to pay to decrypt critical data,” he said. Finally, building on your learnings from the remediation process, revise your existing plan, ensuring that any subsequent efforts gain efficiency and effectiveness. A NEW PERSPECTIVE Protecting your data and your customers’ information is an ongoing challenge. Successfully addressing this escalating industry concern depends on a smarter approach, one that employs proactive prevention, rather than detection. The success of your company— and the safeguarding of your customers’ sensitive data—depend on it.

Jerry Soverinsky is a Chicago-based freelance writer and NACS Magazine contributing writer.

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THE

CUSTOMER EXPERIENCE JOURNEY NACS 2020 Leadership Forum attendees learn how to create a more customer-centric organization. By Erin Pressley and Kim Stewart 68

| APRIL 2020

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ontrary to headlines, retail isn’t dead or dying, but the blisteringly competitive landscape means business leaders must double down on discerning what customers want in this digital age and then delivering the experience they crave to survive and thrive. To complicate matters, it’s getting harder to differentiate an experience from a product and a product from an experience. Digitally native companies—especially those with a direct relationship to their customers—have led the way. At the NACS Leadership Forum held in February in Miami Beach, Florida, thought leaders shared insights to help retailers navigate the customer experience journey from observing and understanding customers, to shaping formats and processes, to executing the in-store experience with buy-in from their teams. The forum, which drew more than 225 convenience retailers and suppliers, kicked off with a panel discussion entitled “Help Your Company Thrive by Creating Good Jobs.” Retailers who invest in their workforce and make consistent, concerted efforts to empower and energize employees are ahead of the game when it comes to finding high-quality staff and retaining them, which translates into superior value for employees, customers and investors. It’s what’s called the Good Jobs Strategy, and it’s based on research from MIT professor Zeynep Ton. Chet Cadieux, chairman and CEO of Tulsa, Oklahoma-based QuikTrip, and Sarah Kalloch, executive director of the Good Jobs Institute, joined NACS President and CEO Henry Armour on stage for a candid discussion of QuikTrip’s embrace of Good Jobs principles in its business, where strong investment in QT employees has translated into lower costs, higher profits and greater customer satisfaction. In her work, Kalloch sees a lot of retailers struggling with labor issues, profitability, dirty stores and losing customers to the competition. “Companies that really get out of this vicious cycle invest in people. They have great training. They have great schedules,” Kalloch said. CONVENIENCE.ORG

The four pillars of the Good Jobs strategy are: 1. Focus and simplify 2. Standardize and empower 3. Cross-train employees 4. O perate with slack (having extra employees on hand to shift among tasks as needs arise) The base of the Good Jobs strategy is values and leadership, Kalloch explained. “The best employers are 100% committed to their customers, and they see the value in their employees.” QuikTrip sets clear expectations for employees, Cadieux said. “Every employee knows exactly what success looks like and what failure looks like,” he said. Employees cross-train on jobs throughout the store. There are standard procedures for things like cleaning countertops, and store layouts are standardized across the chain. Paperwork is sent to headquarters. “We operate with 30% slack on every shift,” Cadieux said. The chain has about 24,000 employees, and about a third are relief employees or floaters who can quickly step in to fill in for absent employees, no matter the store location. QuikTrip has a rigorous hiring, onboarding and training process. The chain only hires about 1% of applicants. Once on board, every new hire is assigned a trainer who shadows them in the store. Trainers’ success is intertwined with those of the employees they are showing the ropes. “We’re big believers in performance-based pay,” Cadieux said. “So those trainers are on a reward system that rewards them for generating good employees,” but “they aren’t punished for pulling the plug on somebody” who isn’t working out.

No matter what tech comes your way, you will be able to survive because you know how to take care of your customers.

APRIL 2020 |

David Allison, author and the founder of Valuegraphics, shared four main profiles of c-store shoppers— workaholics, loyalists, pit-stop adventurers, everyday debt-driven— based on his customized research for NACS.

Armour asked Cadieux to share the moral reason behind QuikTrip’s embrace of the Good Jobs Strategy. “For me that’s very personal,” said Cadieux, whose father, Chester, founded the company with former classmate Burt Holmes in 1958. “I grew up working in the stores with these guys and gals. We are so blessed with people for staying so long,” he said. “I have a huge sense of debt owed to our store team members. I feel like we owe them an opportunity at success. That’s our purpose. That’s the reason I get out of bed each morning … I feel that’s a debt that’s owed by QuikTrip and personally by my family.” OBSERVE: UNDERSTAND THE CUSTOMER Customer journeys are a progression of touchpoints that collectively add up to the experience customers get when they engage with companies. Seeing the world as their customers do helps leading companies better serve customer needs. On day two of the Forum, David Allison, author, human behavior expert and founder of Valuegraphics, outlined the values convenience store patrons have in common, based on first-ofits-kind data from a global study. It’s common to hear how millennials have different character traits than Gen X, or how age determines how we

think, but it’s wrong, Allison said. Understanding your customers is best achieved through the lens of Valuegraphics. Allison’s research measured 420 variables, digging into what people truly value. Using algorithmic survey-targeting techniques to collect information from 500,000 surveys, Allison said his data are an exact representation of the real world, with 95% accuracy and a margin of error of 3.5%. In simple terms, the data show how closely demographic groups relate and agree—or don’t agree—on 420 variables. Looking at baby boomers, Gen X and millennials, not one of the groups agreed more than 15% when looking at the 420 variables. Put simply, the labels we use to better understand the population further distance ourselves from true understanding. Demographics are valuable but only as a description or definition of who you want to influence or talk to. Psychographics, such as how people behave around specific events, products, etc. are also valuable, but Valuegraphics add a third data set that Allison posits will help you change behavior. Allison surveyed 1,850 respondents who shop in convenience stores three times a week to come up with four main profiles of a c-store shopper: • 51% Workaholics • 17% Loyalists • 15% Pit-Stop Adventurers • 12% Everyday Debt-Driven • 5% Splinter groups Workaholics love being a workaholic, and they work as many as 80 hours a week—or it feels like they do. Allison said, “They loathe wasting time since it’s time they could be working.” Workaholic customers want delivery, text ordering—essentially, they want more speed, “so anything you can do to help them save time will be a hit.”

Today’s most dangerous disrupters, they are not stealing customers, they are stealing customer activities from the established companies. 70

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LISTEN UP!

Missed the Leadership Forum? Tune into Convenience Matters to hear podcast hosts Jeff Lenard, vice president, strategic industry initiatives, NACS, and Carolyn Schnare, director, strategic initiatives, NACS, interview Leadership Forum keynote speakers David Allison (episode No. 209), Michel Falcon (episode No. 212) and Chris Walton (episode No. 211). Also catch their chat with Zeynep Ton, MIT professor and co-founder of the Good Jobs Institute (episode No. 205). Browse these and more episodes at www.conveniencematters.com/episodes.

Loyalists are habitual and routine. “They will drive by the same stores, always sit in the same spot at one restaurant they like, and they value long-term relationships,” said Allison. Since they are store and product loyal, consistency is everything to them, so if you do change, do so slowly. Pit-Stop Adventurers comprise 15% of the ecosystem. These folks love excitement: They want to taste everybody’s food, try everything and have a fear of missing out. “They have a need to touch base and expect familiarity of basic products.” These customers want experiential items and services, and anything too expensive or wasteful is a deal breaker for them—what matters to them is the experience. The 12% that comprise Everyday DebtDriven “are reactionists and want it now and will pay a premium for it—which is why they are also debt-driven,” Allison told the crowd. They gravitate toward consumption-based purchases and would want drive-thru and made-to-order specialty foods. SHAPE: REDESIGN THE BUSINESS In the afternoon keynote on day two, Thales Teixeira, author, former Harvard Business School professor and co-founder of consultancy Decoupling.co, shared with attendees a framework for understanding and responding to disruption by eliminating consumers’ pain points and reimagining a more efficient and bespoke customer experience. “No matter what product or service you’re selling or what the customer group is, all

| APRIL 2020

businesses offer activities to customers that can be classified into one of three types,” said Teixeira. Is it a value-creating activity (eating good food, for example), a value-eroding activity (buying groceries, filling out forms with personal information, for instance) or a value-capturing activity (payments, etc.)? “Decoupling,” Teixeira said, “is the breaking of the links between customer activities—often by a digital player—that have been traditionally provided together.” For example, videogame fans no longer need to go to the store to buy physical copies of games. Instead, they can play games for free on services like Zynga, subscribe to online game-streaming services like Steam and even watch other gamers play in real time with services like Twitch, then they decide if they want to buy the game, just watch for fun or learn how to master it. “There is a recipe for disruption,” Teixeira told attendees. Reducing costs for the consumer at each stage, whether that’s money, time or effort, “dictates whether customers will choose to decouple or not,” Teixeira said. “First, the most important part:” 1. M ap out the customer value chain (all activities your customer needs to engage to acquire, use and dispose of your products). 2. I dentify the type of value in each of these three activities (value-creating, value-eroding, value-charging). 3. Find the weakest link in that chain—the activity that customers are least happy about. “That is the beachhead. That is where you’re going to try to break apart and steal that activity,” Teixeira said. 4. I ncrease the specialization forces—reduce the monetary, time or effort costs for those customers to do that activity. Eventually you’ll start to steal away customers from established companies. 5. Anticipate the competitive response. CONVENIENCE.ORG

Best Buy, for example, has adapted to the fact that electronics shoppers were going into the stores to find and test products and looking up reviews and prices at Amazon.com or other e-commerce sites while in the store—and then purchasing online instead of at Best Buy. Now Best Buy is a showroom, and it charges manufacturers shelf-slotting fees to showcase their products. “What you see here is a parking lot for brands,” Teixeira said. “What Best Buy did was rebalancing,” he explained. “To fend off disruption, co-existence with your attacker is key.” Teixeira outlined the four drivers of disruption: 1. C ustomers disrupt markets, not startups. The technology in itself is not disruptive, it’s that consumer behavior changes. 2. Technology changes rapidly and can speed growth, but the disruptive ingredient is business model innovation, not technology alone. Focus on the business model innovation, which helps you know which technology to employ to speed up that business. 3. Understand what’s going on in your industry by mapping out the customer value chain. 4. L ack of innovation is a customer-centricity problem not an R&D problem. Telling your people, “let’s be more innovative,” or telling your suppliers, “I need something new” rarely works because the problem is that the organization is not focusing enough on what its customers want.

FIVE WAYS TO FIND SUCCESS The “Store of the Future” is a term that gets bandied about a lot in retail, and it’s one that’s fraught with peril because it’s used to describe very different ideas. Chris Walton, chief executive officer and founder of Omni Talk and Third Haus, broke down the term into three concepts for Leadership Forum attendees as part of his day two morning keynote, “Know Thyself: Five Ways to Find Success in This New Era of Convenience Retailing.” To discover the insights from Walton’s presentation, read “Know Thyself, Know Thy Customer” from the February issue of NACS Magazine.

“Today’s most dangerous disrupters, they are not stealing customers, they are stealing customer activities from the established companies,” Teixeira said. EXECUTE: ALIGN YOUR TEAM Rewiring a company to provide leading customer experiences requires active engagement from company leaders and frontline staff. Day three of the forum featured insights from Michel Falcon, entrepreneur, founder of the People-First Culture philosophy, author, restaurant owner and investor.

(Left) Don Rhoads, NACS Board member and president of The Convenience Group LLC, moderated this year's event; (right) Thales Teixeira discussed how retailers can decouple the customer vaclue chain to achieve success in this time of disruption. CONVENIENCE.ORG

APRIL 2020 |

Michel Falcon, entrepreneur and restaurant owner, says businesses must integrate their values into the hiring process. His company's five values are embroidered into the seams of every apron worn by staff.

Falcon is at the helm of a $40 million company, running several restaurants and employing more than 300 people. “Regardless of the industry or size or whatever we have in common, it is our responsibility as leaders to manage the behaviors and expectations of our people,” said Falcon. If a company wants to build an admired brand, it needs to identify what it wants the market to see and feel when they see that brand. It has to evoke emotion and that emotion has to be positive. To get there, companies must embrace a people-first culture. “A people-first culture is simple to understand,” Falcon said. “It’s about building a business that is admired by customers, employees and the communities you reside within.” After all, he said, “We want our employees to be engaged every day—not just on payday.” So why, if this is what employers want, do companies fall short? Falcon advises companies to start with purpose: “What is the purpose of your company? And it can't be about making money—your team

won’t align around it.” His company’s mission: Consistently deliver seamless experiences (to anyone, whether customers, colleagues or suppliers). Most companies have a mission, vision and values—“But how often do we integrate values into hiring?” Falcon asked. He has his company’s five values embroidered into the seams of every apron worn by staff and visits his restaurant locations regularly, always quizzing staff on the values. If they forget, he has them stop what they are doing and memorize them before coming back onto the floor. “If employees know the purpose of our company and then create alignment and bring purpose to the team as individuals, then authentic engagement will follow,” Falcon shared. And be sure to focus on engagement first before focusing on new products and processes. “People don't fail, processes do,” he stated. “The education people need to succeed is vital, and if they are not succeeding we need to ask if the education we provided is not serving them well.” Falcon believes in investing heavily in learning and development. “If our team members are trained well to deliver great experiences that will feed the customers.” And your learning and development program can’t be static since your customers are changing often. Let’s face it, Falcon stated, “Companies do have money for learning and development, we are just choosing to spend it somewhere else.” Join us next year at the NACS Leadership Forum, February 10-12, 2021, in Miami.

Erin Pressley is the NACS vice president of media and education. She can be reached at epressley@convenience.org.

Kim Stewart is editor-in-chief of NACS Magazine and editorial director of NACS. She can be reached at kstewart@convenience.org.

In addition to thought-provoking keynote sessions, the NACS Leadership Forum brings together convenience retailers and suppliers for one-on-one networking meetings.

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CONVENIENCE.ORG

COOL NEW PRODUCTS This advertorial-style guide of services and packaging appears quarterly (January, April, July and October) and is an information-packed tour of ideas and approaches that can change how consumers view your store or choose your brand. It spotlights the newest thinking in convenience and fuel retailing and gives you an advance look at ways of staying in front of industry trends. Products are categorized the same way we organize the Cool New Products Preview Room at the NACS Show each year in October— New Design, New to the Industry, New Flavors, Health & Wellness, Green (EcoFriendly), New Services and New Technology. Products are considered “new” this year if they’ve been introduced since last year’s NACS Show (after October 4) and before this year’s NACS Show (October 11). The products featured here also can be seen at www.convenience.org/coolnewproducts during April, May and June.

COMPANY

ClickIt Inc.

PRODUCT

NeverGone Network Video Recorders

NeverGone – Powered by ClickIt

ClickIt Inc. is proud to release its latest Video Management System platform designed to meet the demands of the most demanding retail environments. Designed and manufactured in the USA, NeverGone Network Video Recorders (NVR) are offered with an onboard (16) port POE switch, Gigabit NIC, HDMI, various HDD sizes, and ClickIt’s VMS software is utilized by major retailers the world over. You no longer have to settle for rebranded, off-shore VMS systems to meet aggressive budgets. NeverGone VMS systems deliver superior quality at budget conscious price points.

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CONVENIENCE.ORG

COMPANY

Anchor Packaging PRODUCT

Fry BabyTM Crisp Food Technologies® Container

Package Keeps Food Hot and Crispy

Fry BabyTM container is the latest addition to the award-winning Crisp Food Technologies® line. This 6”x 3” size is perfect for servings of French fries, chicken strips, nuggets, wings and other foods. Hinged Fry Baby containers integrate anti-fog in both clear bases and clear lids, keeping food looking fresh on display for grab ‘n go and avoiding order errors. Fry Baby is a game-changer, containing the high-performance attributes of Crisp Food Technologies at a cost less than a coated paperboard box. Fry Baby packages will supercharge impulse purchases and repeat sales while saving operators on packaging costs. Unique, patented, convection cross-flow design relieves moisture and condensation while maintaining food temperature and texture. Consumer reusable and recyclable. For free samples and more information, visit www.30minhd.com/NACS.

COMPANY

Driver’s Friend LLC PRODUCT

Driver’s Friend™

Don’t Drive Without Driver’s Friend™

Driver's Friend® is a new, better way to maintain energy, alertness and focus. With just two delicious, mocha-flavored chews, Driver's Friend provides energy within 30 minutes that lasts up to 4-6 hours. Driver’s Friend combines a unique blend of ingredients in our proprietary formula—caffeine (equivalent to one cup of coffee per serving), b-complex vitamins that help release energy from food and our patented, exclusive HydroQsorb® CoEnzyme Q10 that is essential for the production of ATP, which is the “energy of life.” Our convenient, grab-and-go packets can be easily stored in a pocket or glove box, ready to chew anywhere. No water needed. If you like energy shots, you’ll love Driver’s Friend™. Call (877) 257-3924, visit www.driversfriend.com or email info@driversfriend.com. CONVENIENCE.ORG

APRIL 2020 |

COMPANY

Lavi Industries PRODUCT

NeXtrac Mobile Merchandiser

Increase Impulse Sales Even in Tight Spaces

Increase sales per square foot anywhere in your store with our small-footprint mobile merchandiser. Double-sided slatwall accepts all standard accessories and seamlessly integrates with our NeXtrac Merchandising and Checkout Queuing Systems. Use as a stand-alone display, or easily integrate into your checkout queue to merchandise to a captive audience. Numerous signage and accessory options available. Choose from black or satin finish in a variety of sizes. For more information, please call (888) 285-8605 and visit www.lavi.com/store-fixtures.

COMPANY

Placon

PRODUCT

Crystal Seal® reFresh® Parfait Cups

100% Recyclable Parfait Cups

Crystal Seal® reFresh® Parfait Cups are made using 75% or more post-consumer recycled content and are 100% recyclable. Each parfait cup features a patent pending sealing mechanism and tamper-evident tab, to ensure your products are kept safe. Available in 8-ounce or 12-ounce sizes, each cup comes readily made to be used with our single or two compartment insert trays and insert fit lid to keep your ingredients fresh until you are ready to mix-in. For more information, please call (800) 541-1535 and visit www.placon.com.

COMPANY COMPANY

Premier Manufacturing

PRODUCT

ZipTrack®

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Manitou

Manitou Super Premium Cigarettes

Manitou cigarettes contain only water and flue-cured tobacco. To make Manitou a unique premium product, only the finest whole leaf flue-cured tobacco from the upper stalk position is used. Manitou cigarettes contain no reconstituted sheet tobacco, stems or fillers; also, no additives and no artificial flavors. Manitou cigarettes are 100% free from chemical additives like artificial preservatives, humectants or synthetic flavors commonly found in other brands. Manitou offers six king-style varieties for the adult consumer. For more information, visit GoPremier.com, or call (800) 272-8656.

Trion Industries Inc.

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Zip Up Beverage and Storewide Profits

Trion Industries has introduced the ZipTrack® single-serve beverage pusher system. Each product lane quickly adjusts to fit everything from skinny Red Bulls to oversized Gatorades, while consistently keeping each drink pushed to the shelf front for easy customer choices. However, it’s not just for beverages! Deploy ZipTrack® in multiple categories to showcase many different types of product from food, health, beauty and more! This durable, American-made system utilizes your full shelf depth and eliminates space-wasting gravity feed shelves. For more information, call (800) 444-4665 and visit www.triononline.com. CONVENIENCE.ORG

COMPANY COMPANY

Swisher International PRODUCT

Gold River

Gold River Western Cut Snuff, Swisher International

Stake your claim on a unique snuff that is “A Cut Above.” Western Cut Gold River moist snuff is a longer cut, easier to pack and a bold tobacco blend that is sure to satisfy. The Grip & Twist easy opening can is ideal for the consumer on the go. If you like “Awesome,” rush to Gold River! For more information, call (800) 874-9720.

COMPANY

Replications Unlimited PRODUCT

Choice Enclosures

New Economical Modular Dumpster Enclosure System

Choice Enclosures is a new dumpster enclosure system designed with customizable modular framing and composite panels providing high end brick or stone appearance at a fraction of the cost. This modular system allows for labor saving quick installation utilizing your existing pad with design options to match existing buildings. Standard or heavy duty gates and posts are optional. Call for details (314) 524-2040, or visit www.choiceenclosures.com. CONVENIENCE.ORG

Swisher International PRODUCT

Swisher Sweets Banana Daiquiri

Swisher Sweets Banana Daiquiri, Swisher International

Happy hour starts here. With the smooth sweetness of banana perfectly blended with a splash of rum, this timeless taste will give customers a reason to celebrate. Available in a variety of market-driven price points and only for a limited time. Raise a toast to limited edition Swisher Sweets Banana Daiquiri and enjoy happy hour at any hour. For more information, call (800) 874-9720.

COMPANY

BackTrack Video Inc. PRODUCT

BackTrackVideo.net

Earn Thousands Annually

BackTrackVideo.net is an online platform that connects buyers and sellers of video related to accidents, incidents and crime. Capture video of auto accidents or other incidents and earn $250 for each video sale! Sign up for free. Use any camera. Special software, hardware or apps not required. Send notifications to local and nationwide buyers. They buy, you get paid; it's that easy! Busy intersections earn thousands annually. Register today at www.BackTrackVideo.net.

APRIL 2020 |

2019 COMPANY

NACS

PRODUCT

NACS State of the Industry Compensation Report© of 2019 Data

Attract and Retain Top Talent

NACS has released its 2019 State of the Industry Compensation Report©. This report provides you with the visibility you need ensure your wages and benefits offerings are competitive and aligned with today’s competitive marketplace. Order your copy today and see where you stack up in your efforts to attract, engage and retain the right talent to help your organization grow. Visit www.convenience.org/compreport to order your copy, or contact Doug Spencer, director, NACS Solution Center at (703) 518-4293.

COMPANY

The Hershey Company KIT KAT Duos

PRODUCT

KIT KAT Duos Mint + Dark Chocolate

The new KIT KAT® DUOS Mint + Dark Chocolate feature a combination of two iconic flavors. A mint flavor crème on the top and dark chocolate on the bottom, all surrounding light and crispy wafers. KIT KAT® DUOS Mint + Dark Chocolate are available nationwide in standard 1.5-ounce bar (SRP: $1.09) and in king size 3.0-ounce bar (SRP: $1.89).

COMPANY

The Hershey Company

PRODUCT

| APRIL 2020

Reese’s Take 5 Bars

Reese’s is taking over Take5! It has the perfect combination of five key ingredients: chocolate, peanut butter, caramel, peanuts and pretzels. Reese’s Take5 Bar is the ideal combination of salty, sweet, crunchy and chewy in one candy bar. Available nationwide in standard bar (1.5 oz., SRP $0.99) and king size bar (2.55 oz., SRP $1.69). CONVENIENCE.ORG

COMPANY

Mondelez Global LLC PRODUCT

SOUR PATCH KIDS CRUSH® and SWEDISH FISH CRUSH®

SOUR PATCH KIDS CRUSH® Flavored Soft & Chewy Candy

SOUR PATCH KIDS and SWEDISH FISH brands are leaders in the candy category. We ignite the love for our brands by focusing on our core candy with exciting innovations. In c-stores, we continue to see successful launches and activations. SOUR PATCH KIDS & SWEDISH FISH CRUSH® flavored Soft & Chewy Candy, brings together three iconic brands! CRUSH® Orange is the No. 1 fruit-flavored soda brand among gen pop, teens and Hispanics, and 80% of SOUR PATCH KIDS Soft & Chewy Candy consumers feel CRUSH® fits the SOUR PATCH KIDS brand extremely well. The Keurig Dr. Pepper team also will be licensing the SOUR PATCH KIDS brand to launch CRUSH® SOUR PATCH KIDS Blue Raspberry Flavored Soda in April 2020. For more information, call (855) 535-5648 (M to F: 9:00 am to 6:00 pm ET) and visit www.mondelezinternational.com.

COMPANY

Mondelez Global LLC PRODUCT

TRIDENT Vibes Sour

NEW TRIDENT Vibes Sour

TRIDENT Vibes gum is expanding with a new sour flavor product, delivering exciting consumer appeal with candy-like attributes. The TRIDENT Vibes Sour has a sour citrus punch flavor that delivers a candy-like sour and a lime-fruit twist. Each square piece of this sugar-free gum is coated with a crunchy candy-like outer shell that gives way to a smooth, effortless chew. No leading gum brands offer a sour flavor profile, yet sour is driving huge growth in the adjacent candy category1 (+57% over past seven years). 38.5% of sweet candy buyers also buy sour candy, signaling a huge opportunity for gum.2 TRIDENT Vibes Sour arrives in the spring of 2020. For more information, call (855) 535-5648 (M to F: 9:00 am to 6:00 pm ET), and visit www.mondelezinternational.com. Source: (1) Nielsen Panel 5/23/19 and Nielsen xAOC L52; (2) The NPD Group/SnackTrack 2.1 4/19/2019 CONVENIENCE.ORG

APRIL 2020 |

COMPANY

Heritage CBD PRODUCT

All-Natural CBD Salve

Stay Active with Fast Acting CBD Topicals

Heritage CBD All-Natural Muscle Salve is infused with penetrating menthol and soothing hemp extract. Naturally occurring CBD is absorbed through your skin on any area you choose to apply. Available in a 1-ounce jar or convenient stick, this is our No. 1 selling product. Heritage CBD is a trusted source of reliable, all-natural, high-quality CBD. Our products are carefully made in small batches with only the finest ingredients including potent hemp extract that contains a broad spectrum of non-psychoactive cannabinoids. We control every step of the production process to ensure that Heritage CBD exceeds industry quality standards from soil-to-store. Every batch is tested for purity and potency by an independent lab, and consumers can easily locate third-party test results online. For more information, please call (800) 674-3671, or visit HeritageCBD.com.

INDEX NEW TO THE INDUSTRY

Anchor Packaging.................................................................... 77 Clickit Inc..................................................................................... 76 Driver's Friend........................................................................... 77 Lavi Industries............................................................................ 78 Placon........................................................................................... 78 Premier Manufacturing........................................................... 78 Trion Industries Inc................................................................... 78 Swisher International.............................................................. 79 NEW DESIGN

Replications Unlimited............................................................ 79

COMPANY

Reliva CBD

NEW SERVICES

BackTrack Video Inc................................................................ 79

PRODUCT

Reliva CBD Gummies

Experience the Reliva Difference Today

Join thousands of Reliva customers who enjoy their CBD infused treats. Each package contains 10 gummies with 10mg of CBD for convenient dosing. One bite is all it takes to see why Reliva Gummies have become one of Americaâ&#x20AC;&#x2122;s top selling CBD products at retail. For more information, email info@relivacbd.com, and visit www.relivacbd.com. The FDA maintains that the sale of these products is illegal under the Federal Food, Drug & Cosmetic Act.

| APRIL 2020

NACS

NACS State of the Industry Compensation ReportÂŠ of 2019 Data..................................80 NEW FLAVORS

The Hershey Company............................................................80 Mondelez Global LLC................................................................ 81 HEALTH & WELLNESS

Heritage CBD.............................................................................. 82 Reliva CBD................................................................................... 82

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GAS STATION GOURMET

Burritos in Lake Country

Papacito’s brings Southwestern flavor to northern Minnesota. BY AL HEBERT

Papacito's Burritos has three locations in northern Minnesota, and the newest is at the Little Chief Outpost in Fergus Falls. From L to R: Zach Rogers, Little Chief general manager; Dustin Nagel; and Lucas Johnson, owner of Papacito's.

hen Rick Beach, owner of Perham Central Station in Perham, Minnesota, wanted to bring his foodservice program to the next level, he didn’t have far to look. He reached out to his brother-in-law Lucas Johnson,

A BURRITO FOR EVERY MASCOT Lucas Johnson knew he needed to connect with the three communities Papacito’s Burritos serves. Since most small communities revolve around school sports teams, Papacito’s launched three burritos named for local high school mascots. “In Perham, we have ‘Stinger’ because the high school mascot is a yellow jacket. This includes Spanish rice, chipotle chicken, queso shredded cheese, lettuce and Chipotle ranch dressing. At Detroit Lakes, the mascot is the Laker. Our ‘Laker’ has Spanish or lime rice, chipotle chicken, queso, lettuce and the chorizo and chipotle ranch dressing. The ‘Otter’ in Fergus Falls is named for their high school mascot. It’s Spanish rice, potatoes, queso, sour cream, cheese, lettuce, chipotle ranch and seasoned ground beef.”

| APRIL 2020

who bought the store’s existing foodservice operation, which focused on burritos. “I changed things and brought in fresh ingredients,” Johnson said. Papacito’s Burritos became a hit with the 3,000plus residents in an area dotted with lakes. “Perham is pretty rural. We’re an hour west of Fargo, North Dakota, and there’s not a lot of options for different food,” said Johnson. From the start, Johnson’s strategy was to offer quick-service food focused on fresh ingredients. “My wife and I did a bunch of market research, which was riding around and eating burritos for a few weeks,” he said. “For our anniversary we had a taqueria excursion.” CUSTOM BURRITOS At Papacito’s, customers build their own burritos. “We walk customers down the line and let them choose each ingredient,” Johnson said. “It’s more Southwestern or Mission-style rather than Mexican. We’re like the Subway of burritos. It’s what makes it interesting for people,” he said. “We cut and marinate all our meats in house,” he said. Meats include a choice of shredded beef, pulled pork, regular shredded chicken and the most popular—chipotle-style chicken—as well as CONVENIENCE.ORG

seasoned ground beef and chorizo-style sausage. “Not many people had heard of chorizo in northern Minnesota,” Johnson explained. Breakfast burritos, tacos and quesadillas are on the menu, too, and there’s a fresh-baked biscuit and homestyle-gravy offer topped with sausage. A kid’s menu features tacos and quesadillas. Papacito’s also offers stuffed quesadillas, burrito bowls, salad bowls and a taco in a bag. Portion sizes are in keeping with local appetites. “My dad and two brothers are truck drivers,” Johnson said. “They would spend $10 on lunch and would still be hungry. So, we offer something fairly substantial,” he said. Papacito’s features a regular 10-inch burrito and a large one that’s on a 12-inch tortilla. “You can spend $10 and be full,” Johnson said. NEW MARKETS As customers flocked to Central Station for Papacito’s Burritos, Johnson and his wife, Amy, kicked around ideas for their next venture—“either a food truck or a stand-alone restaurant,” he recalled. He opened the restaurant 20 minutes down the road in Detroit Lakes. In 2019, the third location opened in nearby Fergus Falls inside the Little Chief Outpost gas station. “We were up and running there in six weeks,” explained Johnson. “The idea was to get someone in with a customer base,” said Zach Rogers, general manager of the Little Chief Outpost. “My cousin ate at the store in Perham. He liked it and met Lucas. Then, my dad ate there, and he liked it.” Rogers is seeing the benefit of having an established food program in the c-store. “It’s busy every day,” he said. Little Chief Outpost sells fuel, food, bait, tackle, sporting goods, camping supplies “and everything you need on the way to the lake!” according to the gas station’s website. Anglers can stock up on lures, rods, reels, live bait and terminal tackle here in addition to more typical c-store supplies like cold drinks and snacks. The outpost even stocks drills for ice fishing. CONVENIENCE.ORG

Not many people had heard of chorizo in northern Minnesota.

The burritos are made-to-order from the fresh ingredients—meat, veggies and toppings—customers choose as they walk down the line.

LOCAL CONNECTIONS Johnson’s marketing strategy for Papacito’s has been incremental, especially when it comes to the second location. “Detroit Lakes is very tourist driven. We didn’t market to tourists right away, so we focused on attracting locals via social media,” he said. Turning residents into loyal customers early has been beneficial. “They’re here all year-round. That made us successful right away. We have regulars coming in a couple of times a week,” he said, adding, “It hit the mark perfectly rather than focusing on tourists.” Managing the social media falls to Johnson, who tries to keep things interesting. “What we do is a burrito of the month. We’ve had quite a few. We do it one month and only once, then it’s gone. We did a jambalaya burrito with andouille sausage. During Lent we do a shrimp burrito. We focus our Facebook and Instagram on that type of stuff.” Johnson feels good about Papacito’s fit with c-stores. When someone wants food that’s fast, fresh and hot, a c-store with good food is the perfect stop before work at lunch or on the way home, he said.

Al Hebert is the Gas Station Gourmet and showcases America’s culinary treasure— gas station cuisine. He shares these stories and on occasion, a recipe or two at www. GasStationGourmet.com. He is a NACS Magazine contributor, bringing foodservice ideas to readers.

WHAT’S NEXT? “We’ve had a few offers to do more expansion. We’ve had offers to get into universities. We’ve kicked around franchising. For now, I’m focused on slow growth to make sure we don’t lose what we do really well,” he said.

APRIL 2020 |

GLOBAL TRENDS

EV Lessons from Norway

Exploring new strategic realities for our industry. BY DAN MUNFORD

| APRIL 2020

France. The U.K.’s plan, announced in February, also would ban hybrid vehicles. As a consequence, European car manufacturers find themselves with little choice but to plan for an electric future. Within this wider context of mandated change, decisive regulatory policy measures at a national level in Norway have made the country an outlier within Europe. NORWAY: EV TEST LAB Norway is now a global test lab for electric cars and for the new consumer behaviors the transition to electric creates. It has been clear for some time that for car producers, moving to EV is not just about regulatory pressure. In Norway, it’s increasingly apparent that consumers may in fact prefer electric vehicles once price parity has been achieved, which could contribute a considerable “pull” effect to the situation. CONVENIENCE.ORG

iStock.com/anouchka

he global car manufacturing and fuels convenience industry faces new strategic realities that combine powerful regulatory push and consumer-demand pull effects toward an energy shift, creating a perfect storm of change. The popularity of electric vehicles is growing exponentially, and it’s not expected to slow anytime soon. The latest Bloomberg Electric Vehicle Outlook Report predicts that EV sales will shoot from a record 1.1 million worldwide in 2017 to 11 million in 2025 and 30 million in 2030. European governments are queuing up to set out visions, backed by tough regulation, to eradicate the sale of new petroleum and diesel cars as early as 2025 in Norway and the Netherlands, starting in 2035 in the United Kingdom—five years earlier than previously targeted—and by 2040 in

Recent years have certainly seen considerable growth in EV/hybrid market share. So far this year, 26% of all new car sales in Norway are fully electric vehicles, and if you add plug-in hybrids, the total is 45%. Challenges do remain, however. One being that the European automotive and fuels convenience industries may need to be given more time to adapt, and there remain significant uncertainties and broader strategic questions for governments. Of particular concern: European carmakers may have waited too long versus their counterparts in China to make the switch. There are long waiting lists for new EVs in Norway, and many consumers are buying secondhand and importing cars. At the heart of the debate is the CO2 emissions challenge. European carmakers are obliged to meet the European Commission’s mandatory regulation to reduce the CO2 emissions of their new cars to an average 95 grams CO2/pr km by 2020. If these targets aren’t met, carmakers face hundreds of millions of euros in potential fines for noncompliance. According to a recent PA Consulting Group report, just four of the 11 big carmakers—Volvo, Jaguar Land Rover, Toyota, Renault, Nissan and Mitsubishi— are expected to meet their individual CO2 requirements. Fines in 2021 could range from €1.36 billion ($1.52 billion) for Volkswagen to €307 million for Ford and €126 million for Daimler. This could potentially put certain car producers out of business. It seems the only way to solve the new standard is to sell a lot of zero emission cars. Norway has always taxed petroleum and diesel cars heavily. Import taxes currently equate to as much as 20% to 30% of a car’s value, and this has allowed the Norwegian government to create incentives for EV buyers simply by not levying the tax and by making electric vehicles VAT free. This is one of several measures that create the sense of CONVENIENCE.ORG

two classes of drivers in the country: EV versus the rest. Drivers of conventional internal combustion engine (ICE) vehicles find themselves road-toll taxed for entering Oslo, leaving Oslo and soon even for being in Oslo. EV drivers find they can park for free in municipal spaces and drive in bus lanes. One of the key questions requiring further exploration is what will consumers prefer once price parity has been reached? More research needs to be done, but early indications are that—at least at current levels of EV use in Norway— consumers prefer electric cars. Peer pressure may also be a factor. Despite depending on oil for its wealth, Norway is an environmentally conscious and focused society. Thanks to considerable hydroelectric capacity, 100% of electricity produced in Norway is sustainable. This consciousness, together with widespread and genuine concerns about air pollution on cold, still winter days, means that peer group pressure allegedly makes it increasingly problematic to turn up in a diesel car.

NACS GLOBAL CALENDAR OCTOBER 11-14, 2020 NACS Show Las Vegas, Nevada www.nacsshow.com

COST PARITY Predictions seem to indicate that cost parity for electric vehicles over ICE cars is coming fast. According to PA Consulting, most automakers are planning for price parity between conventional diesel and electric cars this year and between petroleum and electric by 2027. If this is true, given the popularity of high-tech electric vehicles among customers who love the user and maintenance experience, rapid market growth outside of Norway may come sooner than anticipated.

WATCH ME Visit www.globalconveniencestorefocus.co.uk to watch a video interview with Christina Bu, CEO and secretary general of the Norwegian EV Association.

APRIL 2020 |

Most automakers are planning for price parity between conventional diesel and electric cars this year and between petroleum and electric by 2027.

Dan Munford is managing director of Insight Research; www.insightresearch.co.uk.

| APRIL 2020

China is certainly committed to making the most of this energy revolution. The world’s largest car market is fast-tracking vehicle electrification. One of the country’s most successful carmakers, Hangzhou-based Geely Automotive owns Volvo—and it is noteworthy that this trusted European-based brand expects EVs to make up half of its worldwide sales by the middle of the next decade, with the remaining models hybrids supplied by a new unit combining Volvo and Geely’s next-generation ICE and hybrid powertrains. But are European carmakers ready for a mass market? After all, although EV ownership has grown rapidly in Norway, it could well have grown even faster if it were not for significant waiting lists for all types of electric vehicles (a painful reality). As Peugeot maker PSA Group’s Chief Executive Carlos Tavares has pointed out, Chinese buyers could step in with their own EV technology if European companies are crippled by fines. GEOPOLITICAL BUMPS IN THE ROAD European governments may re-assess some of the geopolitical realities of their decisions going forward. Some appear to have signed up to a rapid shift to EVs without considering the impact, not only on the forecourt and oil industries, which have provided the basis of transport

infrastructure for the past 100 years, but also on manufacturers. After all, the auto industry employs 12.6 million workers in Europe. Jaguar Land Rover’s recent move to a three-day week was in part a consequence of government mishandling of diesel regulation. One other reflection might be whether government reconsiders the possible geopolitical implications of its decisions. Europe won’t want to lose high-value manufacturing jobs. And, just as the shift to oil caused a geographical shift of focus to resource-rich geographies like the Middle East, European governments also will consider the power politics of sources of supply for lithium and cobalt for lithium-ion battery production. Congo is home to nearly half of the world’s cobalt reserves and produces 50% to 60% of the global supply of cobalt currently. China saw it early and made a massive $6 billion “minerals for infrastructure” deal in 2007 in the Congo. But investing in one of Africa’s most chaotic countries is a messy and frustrating business, no matter who you are. It seems clear that some governments have considered the question more so than others. Hydrogen fuel cell technologies are being taken more seriously in markets like Japan and South Korea that have a history of concerns around access to rare raw materials. Hydrogen certainly still figures in the mosaic of fuels that leading suppliers plan to offer in the long term. What is clear, however, is that certain countries are moving much faster than others. The Japanese government has made massive investments and is aiming to have 40,000 fuel cell cars on the road by 2020. South Korea also recently announced substantial government intervention, planning 18,000 hydrogen power vehicles soon. These decisions can probably only be understood in the context of wider geopolitical concerns. This article was reprinted with permission by Insight Research and appeared in the Global C-Store Focus newsletter. CONVENIENCE.ORG

iStock.com/anouchka

GLOBAL TRENDS

CATEGORY CLOSE-UP / ALTERNATIVE SNACKS

A Healthy Alternative

Jerky and protein bars provide more healthful snacking options for busy customers. BY SARAH HAMAKER

JUST THE FACTS Alternative snacks joined the top 10 merchandise categories in terms of gross profit contribution in 2017 and moved up to the No. 8 spot in 2018, according to NACS State of the Industry data.

| APRIL 2020

either a meal replacement or a smaller intermittent snacking choice. “Snacking occasions continue to grow, with millennials leading the trend,” Gough said. “The alternative snacks category can be a perfect combination of convenient, portable and healthful," she said. “The role of snack food is changing in different ways in reaction to Americans’ desire for balance, portable snack foods and holistic wellness,” David Portalatin, NPD food industry advisor, said in announcing NPD’s “Future of Snacking” report release last June. “Consumers over the age of 40, including Gen Xers and younger baby boomers, will drive growth in snacks like nuts and seeds, cereal bars, toaster pastry and meat snacks, while older baby boomers are going for it with higher consumption of chocolate candy, frozen novelties and ice cream.” APPEALING MARGINS What makes alternative snacks particularly appealing to retailers is high margins. “Alternative snacks had a 42% margin for retailers, so while it is a small percentage of in-store sales, it has the potential to be a profitable one,” Gough said. The category has experienced steady growth year-over-year, with higher sales during the summer months potentially driven by an uptick of travelers on the road. CONVENIENCE.ORG

iStock.com/4kodiak

ustomer preferences for healthy and portable snacks have accelerated demand for alternative snacks in recent years. “Alternative snacks tend to fit with a healthier lifestyle,” said Jayme Gough, analyst for NACS. “These products also often work for keto, paleo and other popular diets as well.” Often packed with protein and easy to eat on-the-go, alternative snacks options for customers are often seen as

Industry Sales % of In-Store Sales 2017

2018

1.31% 1.63%

Gross Margin %

Avg. Sales/Store 2017

2017

2018

43.77% 42.44%

$22,986 $23,578

Source: NACS State of the Industry Report of 2018 Data

iStock.com/Juanmonino;

Alternative snacks joined the top 10 merchandise categories in terms of gross profit contributions in 2017 and moved up to the No. 8 spot in 2018. “The category continues to do well at c-stores, and we expect it will stay in the top 10 for the foreseeable future,” Gough said. “Alternative snacks are thriving in c-stores,” agreed TD Dixon, chief marketing officer of Jack Link’s Protein Snacks. “Snacking growth is anticipated to be driven by sales of meat snacks, cheese snacks and other salty snacks, such as pork rinds, chocolate-covered salty snacks and veggie chips.” The category has had strong sales at Smitty’s Fuel & Food in Defiance, Iowa. “People are more conscious about being healthier and not consuming so much sugar,” manager Michele Ertz said. “So we sell a lot of protein bars and beef jerky these days.” IT’S ALL ABOUT THE MEAT Meat snacks garner the most sales in the category, comprising 45% of sales in 2018, according to NACS State of the Industry (SOI) data. “Meat snacks have gained a lot of traction, and the rise in popularity of diet trends like paleo and keto, which eschew processed grains, have had some degree of impact,” Gough said. “An assortment of meats other than beef and non-meat options lead the way in innovation for the subcategory, as well as a wide variety of new flavor profiles.” CONVENIENCE.ORG

According to Jack Link’s Protein Snacks, meat snack sales grew 38.5% from 2013 to reach $3.8 billion in sales in 2018. The company forecasts the category will grow an additional 27.8% to reach $4.6 billion by 2023. “Consumers are increasingly seeking fresh and less processed foods and are increasing their snacking throughout the day,” Dixon said. Jerky has always been a good seller at Shout & Sack in Vinita, Oklahoma. “Travelers will buy the big bags, and our locals pick up the single-serve meat snacks,” said Julie Jamarik, store manager. Lately, the top-selling flavor at Smitty’s and at Coniston General Store in Croydon, New Hampshire, has been teriyaki. “Our customers don’t go for spicy in meat snacks, but teriyaki has been very popular,” said Coniston General Store owner Roxanne. Hot continues to be a trend across the category but especially in meat snacks. “One out of every four consumers is eating hot and spicy foods more often than a year ago,” Dixon said. “In the meat snack subcategory, hot flavored items grew 9.6% in the past year.” For its jerky line, Jack Link’s Protein Snacks released its hottest flavor yet—Jack Link’s Wild Heat Beef Jerky. The company also launched two hot flavors in its bar line.

One out of every four consumers is eating hot and spicy foods more often than a year ago.

MORE THAN A BAR Health, energy and protein bars are the third-largest contributor to the alternative snacks category with 24% of sales.

APRIL 2020 |

CATEGORY CLOSE-UP / ALTERNATIVE SNACKS

PER STORE, PER MONTH SALES

2017

2018

2019

$2,478

$2,500 $2,400 $2,300 $2,200 $2,100 $1,949

$2,000 $1,900 $1,800 $1,700 $1,600 JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

“The language around better-for-you products has been shifting to highlight what is in a product rather that what's not, especially for health, energy and protein bars,” Gough said. At Shout & Sack, protein bars have kicked off 2020 with a bang. “Eighteen months ago, we expanded our protein bar section to carry more flavors,” Jamarik said. “Lots of people come in at the beginning of the year on a fitness kick, and that boosts sales of protein bars through March or April.”

The NACS Convenience Tracking Program (CTP) comprises consumer behavior analytics from more than 10,000 convenience store shoppers across 42 states, representing the most comprehensive consumer-driven metrics available to the industry. To learn more about CTP and how to participate, contact Leroy Kelsey, director of industry analytics, at lkelsey@convenience.org or visit www.convenience.org/ctp.

| APRIL 2020

Jamarik is always on the lookout for new products in the category, as well as listening to customer requests for specific items. “If a customer asks for a particular flavor or bar, I’ll order one box and see how it sells,” she said. Items that sell well could earn a permanent place on the shelves. Smitty’s Fuel & Food also listens to customer requests for protein bars. “We’ve brought in a larger variety of the One brand because of customer requests for more nutritious alternatives,” Ertz said. Suppliers are also seeing the potential in wholesome bars. For example, Jack Link’s Protein Snacks recently introduced Lorissa’s Kitchen Whole-Made Medley Bars, a new product line that combines three leading protein sources with wholesome ingredients. “While the majority of consumers believe whole plant foods are healthier than processed options, more than half still want meat-like taste,” Dixon said of the new product. CONVENIENCE.ORG

iStock.com/StockPhotosArt

Source: CSX; csxllc.com

CATEGORY CLOSE-UP / ALTERNATIVE SNACKS

Subcategory Performance ALTERNATIVE SNACKS

% of Sales

Avg. Sales/Store

Avg. GP$/Store

Gross Margin %

2017

2018

2017

2018

2017

2018

2017

2018

58.9%

45.0%

$13,536

$10,604

$5,576

$4,437

41.19%

41.84%

Other Alternative Snacks

2.7%

25.0%

$629

$5,899

$259

$2,205

41.18%

37.38%

Health/Energy/Protein Bars

32.2%

24.0%

$7,404

$5,654

$3,613

$2,831

48.80%

50.06%

Granola/ Fruit Snacks

6.2%

6.0%

$1,417

$1,421

$612

$533

43.22%

37.54%

100.0%

$22,986

$23,578

$10,060

$10,006

43.77%

42.44%

Meat Snacks

TOTAL

For more information on NACS category definitions, visit www.convenience.org/categorydefinitions. Source: NACS State of the Industry Report of 2018 Data

Sarah Hamaker is a freelance writer and NACS Daily and NACS Magazine contributor based in Fairfax, Virginia. Visit her online at www.sarahhamaker.com.

PICK UP A SNACK As with salty snacks, many retailers find they don’t have to work hard to sell alternative snacks. “We have an endcap of beef jerky but our protein bars inline and feel the category is doing well enough on its own, so we don’t run specials or promotions,” Ertz said. “However, this year we will increase the amount of space devoted to alternative snacks because we want to bring in healthier products in the category.” Coniston General Store also leaves the category alone to sell itself. “We merchandise it in the aisles, and people seem to find it OK,” Roxanne said. “We might make the section larger to offer more variety, but other than that, we’ll keep things the same.” Retailers can bring attention to alternative snacks by offering these products in various destinations throughout the store. “Because 38% of consumers say

THE POWER OF CSX DATA CSX, the engine behind category metrics and NACS State of the Industry data, provides current and customizable tools for financial and operational reporting and analysis in the convenience industry. Retailers can measure their company by any of the myriad metrics generated via our live database. Contact Chris Rapanick at (703) 518–4253 or crapanick@convenience.org for a complimentary executive walkthough.

| APRIL 2020

the snacks found at checkout influence their snack choice, having an array of alternative snacks available to pick up at the counter is another way to capture impulse sales,” Dixon said. Shout & Sack follows that advice by showcasing new alternative snack products by the checkout for impulse buys. Recently, the store also swapped the candy with the bar section, moving the bars close to the register on the center aisle. “The first thing customers see is our protein bars, and that has really upped the sales of those products,” Jamarik said. ALTERNATIVE FUTURE Retailers should continue to profit from alternative snacks as the healthy trend stays strong. “Retailers can promote the category as nutritious, on-the-go snacks, the perfect compliment to an active lifestyle.” Gough said. Overall, the category offers opportunities for retailers to also carry popular and trendy products. “We think format innovations will continue to grow the category by providing more usage occasions for consumers,” Dixon pointed out. Jamarik with Shout & Sack said the store likes to have a mixture of new products and “old faithfuls because some customers like to try new things and some enjoy the same things. The alternative snacks category gives us enough of both to keep all customers happy.” CONVENIENCE.ORG

CATEGORY CLOSE-UP / HOT DISPENSED BEVERAGES

The Daily Grind Is Good

Hot dispensed beverages deliver high margins and keep customers returning. BY PAT PAPE

JUST THE FACTS Within foodservice, hot dispensed beverages were the second largest percentage of sales (12.4%) behind prepared food, according to NACS State of the Industry data.

sales. Additional subcategories include specialty coffee (11.8%), refills (8%), hot chocolate (8%), coffee club mugs (0.4%), hot tea (0.1%) and other offerings (0.2%), according to Jayme Gough, NACS analyst. Generating the largest gross margin of any category within foodservice (62.45%), hot dispensed beverages represented 4.11% of in-store sales in 2018, slightly down over the previous year. “Within foodservice, hot dispensed beverages were the second largest percentage of sales (12.4%) behind prepared food (73.3%), and the largest beverage category in foodservice,” Gough said. “The category generated $83,397 in sales per store and $52,077 in gross profit dollars in 2018.” Thanks to new equipment and beverage offerings and morphing customer demographics, there are more ways for retailers to leverage America’s love affair with java. QUALITY AND CUSTOMIZATION While there is no significant change in the quantity of coffee being consumed, it’s obvious that coffee drinkers expect quality. Whether they choose traditional or gourmet brews, add flavorings or sweeteners or enjoy their coffee black, they want their own personalized cup of joe.

| APRIL 2020

CONVENIENCE.ORG

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very day, approximately 63% of the adult U.S. population raises a cup of coffee to their lips to get the day started, reports the National Coffee Association. That simple act by more than 180 million people daily has made the neighborhood convenience store a mandatory morning stop. There, coffee is king, making up 71.5% of hot dispensed beverage category

Industry Sales % of In-Store Sales 2017

2018

4.30% 4.11%

% of Stores Selling

Avg. Sales/Store 2017

2017

2018

95.6% 96.5%

$87,464 $83,397

iStock.com/AlexandrBognat

Source: NACS State of the Industry Report of 2018 Data

Last November, Casey’s, the Ankeny, Iowa-based retailer, unveiled a refreshed coffee program featuring six different coffee offerings, all created from 100% Arabica premium coffee beans. Guests have options ranging from Casey’s Classic, a blend of Central and South American coffees, to the Java Estate, a sweet combination of fruity Ethiopian Yirgacheffe, according to Tom Brennan, chief merchandising officer, Casey’s. “Our guests are looking for a consistent, high-quality cup of coffee with the ability to customize,” he said. “And we carefully selected suppliers that could provide us coffee beans from the best coffee regions around the world, including Central and South America, North America, Africa and Asia.” Customers also want something indulgent on occasion, and a hot beverage can satisfy that need. “Dayparts have changed dramatically,” said Bob Pierce, senior vice president, North America, for Bunn, the equipment manufacturer. “People are often using coffee as a snack.” At Rutter’s, the York, Pennsylvaniabased chain, “The standard classic coffee still reigns as top dog, but we’re seeing limited time offers grab some attention and engage the customers,” said Chad White, category supervisor for Rutter’s. CONVENIENCE.ORG

“We recently did a Cinna-doodle coffee, and this was a big hit for our customers. A lot of the growth we’re seeing is in cold-coffee specialty drinks. Frappé, iced lattes and cold brew are continuing to gain traction with our customers.” Coffee technology—new equipment that can create assorted drinks and often clean itself—helps retailers class up the coffee bar while cutting back on in-store labor. RaceTrac of Atlanta, with locations in a dozen states, has installed state-ofthe-art equipment that grinds and brews one perfectly portioned cup of coffee at a time, guaranteeing freshness. “This equipment also brews iced coffee, which is unique and lets us offer all bean varieties iced,” said Tiffany Plemmons, director of food and dispensed beverages, RaceTrac. “We even offer rotating seasonal creamers to add variety, including Reese’s, Peeps, pumpkin and other fun creamers. This variety of bean flavors and add-ins allows our guests to be their own barista for a price that’s just as satisfying.” In addition to pleasing the customer’s palettes, there are side benefits to the new brew equipment. “Historically, you brewed coffee to get the right extraction, and that takes three to four minutes,” said Pierce. “Bean-to-cup gives you a cup of coffee in a one-minute

A fuel reward is what seems to drive the customer.

APRIL 2020 |

CATEGORY CLOSE-UP / HOT DISPENSED BEVERAGES

PER STORE, PER MONTH SALES

2017

2018

2019 $3,963

$4,000 $3,800 $3,600 $3,400 $3,200 $3,000 $2,719

$2,800 $2,600 JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

Source: CSX; csxllc.com

Our guests are looking for a consistent, highquality cup of coffee with the ability to customize. 98

| APRIL 2020

timeframe. Plus, you don’t need the same type of staff to manage the coffee brewers because it’s self-serve. “With bean-to-cup, consumers have a beverage made just for them. They hear the beans being ground and see the coffee being brewed right into the cup. But nobody else in the store is doing the work. We’ve made the equipment much more intuitive for the guest and easier to operate and clean for the retailer. That way they can manage it effectively and efficiently and still keep up with customers’ desire for a high-quality coffee beverage,” Pierce said. PROMOTIONAL APPEAL The key to a great c-store cup of coffee is taste, and true coffee aficionados will

drive out of their way to purchase their favorite beverage. But formally promoting coffee still has its appeal. Casey’s announced its recent coffee upgrades with an aggressive $1-anysize campaign for the first 30 days. “We’ve now transitioned to a $1-anysize-coffee offer that bundles coffee with our popular breakfast foods— breakfast burrito, sandwiches and pizza,” said Brennan. “Our new coffee, coupled with our launch and sustaining promotions, has resulted in increased unit velocity. Feedback from our guests is very positive.” RaceTrac monitors up-and-coming beverage bar trends. “We are looking at promotions that bring coffee guests back in the afternoon daypart for a great CONVENIENCE.ORG

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CATEGORY CLOSE-UP / HOT DISPENSED BEVERAGES

Subcategory Performance HOT DISPENSED BEVERAGES

% of Sales

Avg. Sales/Store

Avg. GP$/Store

Gross Margin %

2017

2018

2017

2018

2017

2018

2017

2018

Coffee

70.9%

71.5%

$43,349

$40,252

$38,282

$37,713

61.71%

63.24%

Cappuccino/Specialty Coffee

12.1%

11.8%

$7,365

$6,635

$6,618

$6,503

62.79%

66.15%

Refills

9.1%

8.0%

$5,587

$4,516

$4,934

$2,762

61.71%

41.27%

Hot Chocolate

7.2%

8.0%

$4,404

$4,481

$4,322

$4,933

68.57%

74.31%

Coffee Club Mugs

0.3%

0.4%

$95

$80

$63

$95

22.40%

30.45%

Other Hot Dispensed Beverages

0.2%

$121

$113

$92

$84

52.99%

50.34%

Hot Tea

0.2%

0.1%

$196

$211

$75

$71

55.49%

59.92%

TOTAL

100.0%

$87,464

$83,397

$54,294

$52,077

62.08%

62.44%

For more information on NACS category definitions, visit www.convenience.org/categorydefinitions. Source: NACS State of the Industry Report of 2018 Data

iced coffee pick-me-up,” said Plemmons. “While we don’t offer a cold brew or nitro product yet, we are keeping a close pulse on our guests to see if this is something they want us to introduce.”

RESPONSIBLE RETAILING Consumers love their coffee, but many abhor one-use paper products. In response, many coffee shops are replacing paper cups with everything from glass jars to rental mugs, and U.S. convenience stores are feeling the widespread pressure to be more environmentally friendly. RaceTrac has replaced Styrofoam cups with a recyclable product that keeps drinks warmer longer, and “our new equipment has also reduced our coffee waste 30% by brewing on-demand instead of using large carafes,” said Plemmons. Rutter’s recently moved away from foam products in some areas and hopes to cut more waste from its coffee program. “This will continue to be important to customers and will only gain traction in the coming years,” said White. Some coffee shop owners predict that coffee drinkers will eventually carry around their own reusable mugs in the same way stainless steel water bottles have become a stylish accessory.

100

| APRIL 2020

Adds White, “We find success in pairing our coffee and fuel rewards program. We recently ran a double gas rewards promotion and saw good success.” Rutter’s also bundles coffee with various food offers at a special price, but “a fuel reward is what seems to drive the customer,” he said. PERFECTING THE PROGRAM For large chains like Casey’s, it may be easy to develop a proprietary hot beverage bar program, but for smaller chains or independents, there are comprehensive programs in the marketplace that have already done all the work and can deliver a competitive operation. One example is Arcadia Bay, a trademarked coffee program from Core-Mark that is available à la carte and customizable. It features everything from equipment and coffee to condiments and dairy alternatives. “Sometimes the equipment can be earned through coffee purchases or you can actually buy it outright,” said Jac Moskalik, corporate director of Fresh for Core-Mark. “It depends on what’s best for the customer at the time.” CONVENIENCE.ORG

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CATEGORY CLOSE-UP / HOT DISPENSED BEVERAGES

Pat Pape worked in the convenience store industry for more than 20 years before becoming a full-time writer. See more of her articles at patpape.wordpress.com.

In addition, the company has a Core Solutions team that performs category reviews and makes coffee bar recommendations based on a retailer’s existing program, current demographics and neighborhood competitors. “Arcadia Bay also offers a nitro and cold brew program,” said Moskalik. “It’s definitely more trend focused and performs better in highly populated areas. Those beverages will probably never outpace hot coffee, but they speak to a different demographic—the millennials. To stay

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relevant in coffee, you must innovate, and that’s just another way to innovate.” Before making any changes to an existing coffee program, take time to study your current customer base and consider your target customer, Moskalik advised. “Check out the competition around you, and understand your market,” she said. “Once your program is in place, work hard with your distributor to market it. You can have the best coffee out there, but if you don’t tell the story, customers won’t know about it.”

Thank you to these advertisers who have demonstrated their support of the convenience and fuel retailing industry by investing in NACS Magazine.

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ADD Systems............................................................................................65 www.addsys.com

E & J Gallo Winery.......................................................................89 www.gallo.com

NACS Marketing Leadership Program at Kellogg..................................32 www.convenience.org/execed-kellogg

A ltria Group Distribution Company................ Inside Front Cover AGDCTradeRelations@Altria.com www.altria.com

H unt Brothers Pizza......................................................................3 (800) 453-3675 www.huntbrotherspizza.com/nacs

NACS Payment Processing Program........................................................4 www.convenience.org/PPP

Back Track Video Inc...............................................................................29 info@backtrackvideo.net

I TG Brands.................................................................................... 75 www.itgbrands.com

Bob’s Red Mill.......................................................................................... 37 www.bobsredmill.com

J UUL..........................................................................................10-11 retailers@juul.com

B UNN.......................................................................................... 103 www.bunn.com/fast-cup

K rispy Krunchy Foods LLC........................................................... 57 (800) 290-6097 www.krispykrunchy.com

C ash Depot.....................................................................................7 (800) 776-8834 sales@cdlatm.com www.cdlatm.com Cheyenne International LLC.................................................................... 21 www.topcigar2020.com CHS Inc. – Cenex Petroleum...................................................................45 www.cenex.com/businessopportunities

Lavi Industries.........................................................................................43 (800) 624-6225 sales@lavi.com www.lavi.com/store-fixtures L iggett Vector Brands Inc...........................................................25 (877) 415-4100 www.liggettvectorbrands.com

ClickIt Inc................................................................................................. 27 www.clickitinc.com

L iving Essentials LLC (5-hour ENERGY)...................................... 33 (866) 960-1700 www.5hourenergy.com/trade

Conexxus Annual Conference................................................................101 www.conexxus.org

Loomis U.S...............................................................................................67 www.loomis.us

Cool New Products Guide................................................................. 76-82 www.convenience.org/coolnewproducts

M ars Wrigley Confectionery U.S................................................95 www.mars.com/made-by-mars/mars-wrigley

C ore-Mark International Inc. . ....................................................15 www.core-mark.com

Motel 6 Inc.................................................................................................9 (888) 842-2942 frachisesales@g6hospitality.com www.motel6franchise.com

C URTIS..........................................................................................99 (800) 421-6150 Dietz & Watson Inc..................................................................................93 www.DietzAndWatson.com DMF Bait Company.................................................................................. 19 (800) 332-2248 orders@dmfbait.com www.dmfbait.com

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| APRIL 2020

NACS Convenience Matters.......................................................................6 www.conveniencematters.com

Petrol Plaza.............................................................................................83 www.petrolplaza.com Premier Manufacturing Inc.............................................................. 5 & 31 www.gopremier.com Reliva LLC....................................................................... Inside Back Cover info@relivacbd.com www.relivacbd.com S wedish Match North America (Game).......................................71 (800) 367-3677 www.smna.com S wedish Match North America (Swiss Roll)...............................55 (800) 367-3677 www.smna.com S wedish Match North America (White Owl)..............................47 (800) 367-3677 www.smna.com S wedish Match North America (Zyn)..........................................17 (800) 367-3677 www.smna.com S wisher International Inc........................................................... 41 (800) 874-9720 www.swisher.com T he Hershey Company................................................. Back Cover www.HersheySolutions.com Trion Industries Inc.................................................................... b/t 12 & 13 www.triononline.com

NACS Financial Leadership Program at Wharton.................................36 www.convenience.org/execed-wharton NACS Foundation.....................................................................................45 www.convenience.org/future-fund

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The FiveSecond Rule

I’m on a Mission, Deer A convenience store employee in Fort Collins, Colorado, received some unexpected patrons one afternoon. Lori Jones was working her usual shift when suddenly a doe walked into the store and began perusing the merchandise, as if it were picking out some gifts for her family. Jones was able to shoo the deer out, but about a half hour later, the doe showed back up, and this time, with her entire family in tow. The doe strolled into the store once again, but the other three deer peered into the store just outside the door, waiting for mom to give them the OK to enter. Jones was able to draw the doe out but not before snapping some incredible close-up images of the doe and her family. 104

| APRIL 2020

Solve a math problem and get free c-store merchandise? Seems too good to be true, but one young convenience store worker in the Bronx makes that a reality for customers. The game is simple: Solve a math problem and get five seconds to grab anything off the convenience store shelves for free. The goal is to help people, according to the 20-year-old college student, who pays for everything that is grabbed. The worker, Ahmed Alwan, created a TikTok showing the game, and he now has 500,000 followers on TikTok and 82,500 on Instagram. Alwan plans to continue making videos and has started a GoFundMe to support the game and enable him to help more people.

Love Is in the Air One couple can thank a c-store for their love story. Ashton and Jake first met at a Pilot Flying J store in Knoxville, Tennessee, when Ashton asked for Jake’s number. Since that momentous day, each year on their anniversary, they stop into the store to celebrate, and Jake could not think of a more befitting place to ask Ashton to marry him. “It seemed fitting that I ask for her hand in marriage at the place she asked for my number. We call it ‘our Pilot’ and always stop by on the anniversary of when we started dating. Now we’ll stop by for the anniversary of our marriage,” said Jake.

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