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THE NEW CHEW WITH A DIFFERENCE Japan’s #1 Soft Candy
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CONTENTS
EDITORIAL
JUNE/JULY 2020
44 48 The enduring strength of convenience
N 06 FACE TIME
Niki Carlino, National Sales Manager, B-fit
08 STORE REVIEW
OTR have opened their fourth Victorian store in Stawell
14 AACS
The association share insights from their 2019 State of the Industry report
20 LEADERS FORUM
Industry Leaders share their thoughts on the state of the industry
44 CATEGORY FEATURE: COFFEE
We take an in-depth look at the steady growth of coffee in C-stores
48 CATEGORY FEATURE: SUGAR CONFECTIONERY
Why sugar confectionery continues to perform well in convenience
52 CATEGORY FEATURE: FOOD TO GO
o one could have predicted what a tumultuous year 2020 would be. As COVID-19 began to sweep the world in January, few places were spared from its deadly and devastating impact. The Australian government's swift response has seen the country achieve one of the world’s most successful containments of the virus. However the economic toll from the subsequent restrictions and rapid change to our lifestyles has left a different kind of devastation. While we've been warned the impacts will begin to hit far harder this month, the true extent won't be evident until later this year. One positive to emerge from the crisis was convenience being rightly recognised as an essential service. For the many and ever evolving challenges thrown at the industry in the last few months, we have also seen convenience come into its own. The adaptability and resilience of the industry has never been more evident than during this pandemic. Consumers have come to view their local C-store as a safe and reliable alternative to
supermarkets and the efforts of stores to go above and beyond to secure stock has strengthened customer loyalty. It’s this adaptability and commitment to delivering a safe and reliable service to local communities that we explore in this issue’s Leaders Forum. Here, thought leaders in the field share their take on the state of the industry, what they’d like to see change, how they feel COVID-19 has affected convenience and how they envision the next six months. Also not to be missed is the Australasian Association of Convenience Store’s overview of their highly 2019 State of the Industry report, showing the impressive continued growth of convenience. We also take a look at the steady growth of coffee, examine why sugar confectionery continues to perform well in convenience and look at the evolution of food-on-the-go. Regards, Naomi White
We examine what’s next for the evolving category
56 PRODUCT NEWS
C&I’s choice and all the latest NPDs
62 OPINION
Skye Jackson and Darren Park
66 PETROL NEWS
Dan Armes on the importance of a business coach and the latest p&c news
72 SUPPLY FIND 4 June/July 2020 | C&I | www.c-store.com.au
Safa de Valois
James Wells
Keith Berg
Ben Curtis
Jeremy Gough
PRIME TIME
28 Black New Zero Calorie Variety
No calories, no sugar, but 100% taste and energy - that’s the credo of the latest product from 28 BLACK. With its new variety Absolute Zero GuavaPassion Fruit, 28 BLACK not only brings more variety of flavours to its range, but also responds to the growing demand for flavoured, sugar free energy drinks. “In order to fully exploit the market’s shift towards low sugar and less synthetic products, it was important to us to expand our range with a product that meets the consumers’ wish for a calorie-free energy drink without sacrificing taste,” said Chrish Graebner, General Manager of Level Beverages. 28 BLACK Absolute Zero Guava-Passion Fruit is like all 28 BLACK products: without taurine and preservatives, lactose and gluten free and suitable for vegans. The new variety is available at Caltex now, RRP $3.95.
PepsiCo fuse two greats into new super snack
PepsiCo have just revolutionised snacking, combining two of their greats into one refreshing package for Doritos Mountain Dew. The limited edition snack infuses Mountain Dew’s lemon, citrus tang flavour into Doritos’ corn crunch. Doritos Brand Manager, Eric Burke said flavour was a global first and they chose Australia for the launch because of our love of both products. The unique flavour hit is available nationally in 7-Eleven stores now and will launch in supermarkets, petrol and convenience stores in mid-July.
Dairy Farmers flavoured A2 Milk Cadbury Cherry Ripe Sticks Peters, Australia’s most iconic ice cream brand, has partnered with the nation’s favourite chocolate confectioner, Cadbury, to release a new spin on a cult classic with the launch of Cadbury Cherry Ripe sticks. Cherry Ripe, one of Australia’s favourite chocolate bars, can now be enjoyed in frozen form. If features the classic Cherry Ripe flavour you know and love, with coconut pieces mixed through, coated in Cadbury’s Old Gold dark chocolate. It’s the perfect opportunity to take a moment for yourself and indulge in a little ‘you’ time. They are available now in the ice cream freezer as a four pack, RRP $8.50 or single stick, RRP $4. Published by C&I Media Pty Ltd (A division of The Intermedia Group) 41 Bridge Road (PO Box 55) Glebe NSW 2037 Tel: 02 8586 6292 Fax: 02 9660 4419 E: magazine@c-store.com.au
Publisher: C&I Media Pty Ltd Safa de Valois Commercial Director: Safa de Valois Editorial Director: James Wells
The Intermedia Group takes its Corporate and Social Responsibilities seriously and is committed to reducing its impact on the environment. We continuously strive to improve our environmental performance and to initiate additional CSR based projects and activities. As part of our company policy we ensure that the products and services used in the manufacture of this magazine are sourced from environmentally responsible suppliers. This magazine has been printed on paper produced from sustainably sourced wood and pulp fibre and is accredited under PEFC chain of custody. PEFC certified wood and paper products come from environmentally appropriate, socially beneficial and economically viable management of forests. The wrapping used in the delivery process of this magazine is 100% biodegradable. DISCLAIMER This publication is published by C&I Media Pty Ltd (the “Publisher”). Materials in this publication have been created by a variety of different entities and, to the extent permitted by law, the Publisher accepts no liability for materials created by others. All materials should be considered protected by Australian and international intellectual property laws. Unless you are authorised by law or the copyright owner to do so, you may not copy any of the materials.
In great news for A2 milk fans, Dairy Farmers has just introduced their first flavoured milk to the range. The Goodness Chocolate Flavoured Milk also contains 25% less sugar than regular chocolate milk, reflecting the wider trend towards lower sugar and better-for-you products. The new milk is available as both a single portion 300ml size and a share/family sized 1.5L bottle. Lion Dairy & Drinks Marketing and Innovation Director Darryn Wallace said it was an exciting addition. “We know how popular A2 protein milk is, so it’s a natural fit for our iconic Dairy Farmers brand to offer consumers greater choice, starting with our Australian-first fresh A2 chocolate flavoured milk.” Both pack sizes are available now in Coles stores across VIC, NSW and ACT as well as select leading retailers.
Editor at Large: Keith Berg
Features Editor: Jeremy Gough
Editor: Naomi White
Graphic Designer: Adrian Tipper
Account Manager: Ben Curtis
Contributor: Simon King
The mention of a product or service, person or company in this publication does not indicate the Publisher’s endorsement. The views expressed in this publication do not necessarily represent the opinion of the Publisher, its agents, company officers or employees. Any use of the information contained in this publication is at the sole risk of the person using that information. The user should make independent enquiries as to the accuracy of the information before relying on that information. All express or implied terms, conditions, warranties, statements, assurances and representations in relation to the Publisher, its publications and its services are expressly excluded save for those conditions and warranties which must be implied under the laws of any State of Australia or the provisions of Division 2 of Part V of the Trade Practices Act 1974 and any statutory modification or re-enactment thereof. To the extent permitted by law, the Publisher will not be liable for any damages including special, exemplary, punitive or consequential damages (including but not limited to economic loss or loss of profit or revenue or loss of opportunity) or indirect loss or damage of any kind arising in contract, tort or otherwise, even if advised of the possibility of such loss of profits or damages. While we use our best endeavours to ensure accuracy of the materials we create, to the extent permitted by law, the Publisher excludes all liability for loss resulting from any inaccuracies or false or misleading statements that may appear in this publication. Copyright © 2020 - C&I Media Pty Ltd.
Average Total Distribution: 21,108 AMAA/CAB Publisher Statement Period ending 31 March 2019 PROUD MEMBERS OF:
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June/July 2020 | C&I | www.c-store.com.au 5
FACE TIME
A CREATIVE APPROACH TO BUSINESS A love of art and business and a passion for health is a successful mix for National Sales Manager: B-fit, Niki Carlino
Niki Carlino credits his fine arts background for his creative approach to business
6  June/July 2020 | C&I | www.c-store.com.au
FACE TIME FEATURE
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grew up in Sydney, where I still live. I’ve always loved the arts and throughout school I really wanted to be a creative artist and work as either a painter or sculptor. The original plan was to be a fine artist.
My first job was in a local fruit market while I was studying in high school and this was a great learning experience and my first introduction to the retail sector. However, I wasn’t a fan of getting up at 4am on the weekends! I followed my passion for art into university where I studied Fine Art and completed a Master of Art at UNSW for four years before I made my way into the workforce. My major was painting dealing with colour and conceptual shapes and images. While unfortunately I do not actively practice now, I am definitely looking into pursuing this more in my free time, as I still appreciate painting. Many of my hobbies outside of work revolve around the arts, as well as films, reading and good food. Art was a focus but I think I also always wanted to work in business. I have always been fascinated by consumer goods and the needs that have given rise to the FMCG categories and the products in it. It might sound funny, but I enjoy shopping in a well serviced store that enables me to choose the products I need while also having a large selection of organic and natural products. My first job out of university was as a sales representative selling juices and CSDs to the major supermarkets. It just came about from a friend who referred me. I’ve held numerous positions over the last 21 years since, ranging from Sales Representative through to Sales Director. I’ve also worked extensively with key retailers and distributors in the UK and USA. In my most recent roles, my key responsibilities have been managing and instilling collaborative relationships, both internally and externally, and ensuring KPIs are met. The experience I’ve gained over the last two decades working in the food and beverage industry led to my current role which I’m extremely excited about; launching into the Australian market a unique, new to the category, plant based, organic hydration beverage brand called B-fit. B-fit is a truly differentiated product offering to the category and we’ve built strong plans to expand our presence in the market over the next 12 months. And the best thing about it is it tastes incredible!
you beverages' that offer plant based nutrition with less sugar, no artificial preservatives, sweeteners or colours and deliver on taste. Bfit delivers on all these attributes. It is a busy role and every day brings something new. I like to start working early, so essentially on any given day I start by breaking down plans to understand and focus on both customer and internal key priorities. It’s also great to be able to work with so many departments as it gives me an insight into all parts of the business, from finance to logistics. Being part of a great team is also a great motivator. Following product inception through to creation really motivates me as well and the innovation that this channel allows businesses to showcase. I also enjoy the interaction and negotiation with the buyers as these conversations always are robust and can lead to some great results.
- Niki Carlino
Coming from an arts background also allows me to think creatively and I’m always interested in applying my skills to the creative and marketing teams and casting lenses over these functions. It especially comes in handy around clean labelling which now is gaining traction in the FMCG space.
Advice for suppliers:
I think that flows into my work philosophy too, which is to be the best version of yourself no matter what and be mindful of others and treat all just like you would your family. Family is a big focus for me and instilled by my Italian heritage. I have two beautiful daughters aged four and one and a beautiful partner that creates our family of four. My kids have made me more patient and allowed me time to play and be engaged with their needs. And while COVID-19 has brought about its challenges for all businesses, adaptability is key within business so the transition to new ways of working have been fantastic. I’m learning so much now within the current scenario and I’m looking forward to being part of the new retail landscape in the future. C&I
• Collaboration with retailers is key at the moment. • Find your voice within the retailer space and succeed together. • Embrace channel data and insights and share with retailers where appropriate
Advice for retailers:
My current role consists of leading the strategy on route to market, developing and deploying new distribution points for Bfit. This consists of developing end to end go to market and channel strategies for the brand. This entails building and maintaining long term relationships with current and new customers and their management teams by providing guidance, information and support around Bfit and education around the benefits of Bfit. One of the things that I’m very proud of professionally is the relationships I’ve been able to foster within the FMCG space, both nationally and internationally. It is especially satisfying seeing NPD you launch become part of the fabric of shoppers’ habits. Those habits are starting to change in Australia where people are now looking for true 'better for
Coming from an arts background also allows me to think creatively and I’m always interested in applying my skills to the creative and marketing teams.”
Niki Carlino enjoys his down time with his family
• Understand your shopper in the convenience channel: when and how they shop different categories in your store. • Embrace the new when it comes to systems, products, NPD and social trends. • Following these steps will enable you to service customer needs and expectations before your competitors and your store will become a shopping destination. June/July 2020 | C&I | www.c-store.com.au 7
24-25
MARCH 2021 Melbourne Convention & Exhibition Centre C&I Expo brings retailers and suppliers together over two big days of business. The retailer audience consists of owners and operators of convenience stores, service stations, independent supermarkets, corner stores, newsagents, mini marts and foodservice stores that have a convenience offer. Suppliers and wholesalers are also more than welcome to exhibit and attend. Visitors experience the latest in convenience products, services and merchandising.
For more information visit www.candiexpo.com.au Platinum Sponsor
Symposium & Networking Drinks Sponsor
REGISTER NOW For Australia’s largest and most important trade event for Convenience retailers
ORGANISED BY: Interpoint Events Pty Ltd for C&I Media Pty Ltd
Media pty. LTd.
41 Bridge Road Glebe NSW 2037 Ph: 1300 789 845 | Fax: 02 9660 4419 Email: exhibition@c-store.com.au www.c-store.com.au
FEATURE STORE REVIEW
FUELLING CUSTOMERS 24/7 OTR’s new multi-million dollar store in the regional Victorian town of Stawell is already proving a hit.
The multimillion dollar design is OTR’s fourth Victorian store
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n Stawell, in the Wimmera region of regional Victoria, a leisurely two hours’ drive from Melbourne, OTR has recently celebrated the opening of their fourth store in the state.
Officially opened for business on April 22, the store was the completion of a carefully considered, multi-million-dollar design, first developed in 2016. Located on the Western Highway, which links Melbourne and Adelaide, the OTR team has integrated facilities catering to longhaul truck drivers and tourists visiting the town on route to the nearby Grampians National Park, such as a Truckie Lounge and diner, offering visitors a much-needed spot for respite. “It is an important consideration for OTR to build world-class facilities like we have at OTR Stawell, which has a shower, laundry and private lounge area for truckies to relax in,” OTR CEO Warren Wilmot said. “We value the time and dedication that our truck drivers put in on the road so it is nice to be able to offer a place where they can refresh and unwind with a hearty meal and rest safely while passing through Stawell”. 10 June/July 2020 | C&I | www.c-store.com.au
Many OTR guests love the clean, brightly lit presentation of the store inside and out and they love the modern range of textiles and finishes we use.” Warren Wilmot
Travelers and the 8,000 strong local population are also well served in the diner, which dishes up everything from light snacks to sit down meals such as fish and chips, steak, chicken schnitzels and burgers. It is also family friendly, with a dedicated kid’s menu. Another drawcard is a Hungry Jack’s restaurant, which has been designed with plenty of spacious seating – although due to COVID-19 restrictions, diners are yet to fully enjoy this area. Beyond the Whopper, the fast-food restaurant will also serve the Bacon Deluxe, Angus, Tendercrisp and Low Carb range of burgers as well as the vegan Cheeseburger and plant-based Rebel Whopper in a broad menu catering to many tastes and dietary requirements. The store, which operates 24/7, also stocks the extensive food range OTR is known for, such as barista made C Coffee, freshly squeezed OhJ! Juice and New York style hot dogs from Moe’s Dog & Shake. as well as EAT and CHILL - OTR's range of iced drinks, cakes, hot pastries and fresh sandwiches. OTR has also placed an emphasis on ready-to-go options, from salads and healthy snacks to road trip staples such as chocolate, chips and cool drinks. And they offer a full range of tobacco products.
STOREFEATURE REVIEW The store features OTR’s trademark sleek and functional design with bright lighting and an easy to navigate interior. “Many OTR guests love the clean, brightly lit presentation of the store inside and out and they love the modern range of textiles and finishes we use, which are more like a café than a typical petrol station,” Mr Wilmot said. “Our dine-in seating and greenery create warm, inviting spaces where customers like to spend time, which is especially important for travellers and truck drivers who need to take a break on the road. Being open 24/7, we also know that the abundant range of food and supermarket items on offer in OTR stores gives guests confidence they can come to us whenever they need for just about whatever they need!” Stawell is a community experiencing rapid growth, with the local population expected to tip over the 9,000 mark next year, thanks to its booming mining and construction industries and hydroponic market gardens. It also has a strong local sporting culture, particularly in netball and AFL and OTR hope to participate in the local community events when COVID-19 restrictions are relaxed.
But the best feature of Stawell is the people, said Mr Wilmot, both the staff and the local community shopping in store. “To be honest, the best feature of OTR Stawell is the people – our team are passionate and committed to bringing fun and great service to their job every day. We hope next time you’re passing through Stawell you pop in and say hello. You’ll be glad that you did”. Fuel is also an important part of the store, especially given its location and Stawell offers a premium range of Advantage fuels in UPL 91, diesel, AdBlue, premium ULP 95 and premium ULP 98. It also has a dedicated truck canopy delivering high flow diesel and premium diesel, which has been very welcomed by truck drivers who now have a comfortable, convenient place to refuel. “We are well-equipped to service all the fuel needs of local residents, consumer travellers and the trucking industry passing through Stawell. In addition to this, customers can use their BP card at any of our OTR sites including Stawell.” The store is located at 34 Ararat Rd, Stawell, Victoria. C&I
It has been great to hear that guests appreciate the 24 hour offers that we have available and that we’ve already made a huge impact in Stawell.” Warren Wilmot
And although it’s only early days for the store, locals have been very welcoming and Mr Wilmot said they have received lots of positive feedback, particularly for their burgers, loaded hot dogs and barista made coffee. Locals are also appreciative of having a retailer ready to serve them any hour of the day. “It has been great to hear that guests appreciate the 24 hour offers that we have available and that we’ve already made a huge impact in Stawell. It’s been awesome to be welcomed into the community with open arms,” he said. The store has also generated 50 new jobs across the OTR and Hungry Jack’s teams, with the majority of employees living in the Wimmera area and offering opportunities for those aged from 15 to 50 plus. Hiring locally is important to OTR, Mr Wilmot said, and not only supports the local community but helps drive success by providing a wealth of knowledge about the area the stores serve.
Stawell store manager Jason Chyer serves up barista made C Coffee
OTR CEO Warren Wilmot said the store has been well received by locals
It also features a Hungry Jack’s store, serving their full range of flame grilled burgers
“We want to have an involvement within regional areas and local team members possess the great qualities that we strive for to ensure our guests’ experience is everything that they expected and more,” he said. “We also work closely with the team to develop new leaders who are ready to take on leadership positions across OTR in the future. With nearly 3,000 team members in our 155 sites, we have a great track record of promoting from within and creating positive and successful retail careers at OTR”. The store is also well placed to negotiate the challenges posed by COVID-19, with its drive through service proving popular with customers looking for safe, quick and contactless ways to pick up their favourite food. And their Click & Collect and OTR and Hungry Jack’s App ordering functions have been a hit with consumers. As has their new, completely touchless HappyWash car wash. June/July 2020 | C&I | www.c-store.com.au 11
Jeff Rogut, AACS CEO
CONVENIENCE CLIMBS IN VALUE TO $8.8 BILLION
Last month we unveiled the latest AACS State of the Industry Report and while the data was presented in unusual virtual circumstances, the strength in the numbers told a familiar story for an industry known for adaptation and innovation.
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ccording to the report the industry achieved solid growth of 2.1% in merchandise sales (excluding petrol) in 2019, with the performance of the Food and Beverages category in particular catapulting the value of the channel to nearly $8.8 billion. We thank our retailers and IRI Australia for making their data available and much credit goes to Convenience Measures Australia for compiling the AACS State of the Industry Report and providing many of the insights quoted. While the 2019 calendar was categorised by various challenges in retail trade conditions, convenience once again 14  June/July 2020 | C&I | www.c-store.com.au
proved its value proposition to consumers. This has never been clearer than right now, as the Coronavirus pandemic plays out. The number of convenience stores in Australia according to the report sat at 6,995 as at the end of 2019. Now in 2020, the year which marks the 30th anniversary of the establishment of the AACS as the voice of Australian convenience, the industry for the first time is looking to exceed 7,000 stores nationally. The continued strong performance of our channel is an ideal accompaniment to the major milestones our industry is celebrating, including the 30th birthday of AACS.
It will be interesting to see how the events of early 2020 will impact next year’s report and which trends that have arisen because of the pandemic will continue to evolve beyond it. In the meantime, the Australian government has deemed our industry an essential service and our operators take their responsibility to provide the items people need in these distressing times very seriously. They, and their staff, should be commended.
PERFORMANCE HIGHLIGHTS
According to the AACS State of the Industry Report, the value increase in merchandise sales for the convenience channel in 2019 was $179 million, slightly down on the 2018 result of $201 million (+2.4%).
The average transaction value for the year was in line with the year prior at $9.69 while the average daily number of merchandise transactions per store was 498, an increase of 3.1%. Food was a clear standout, with Food sales up nearly 6% to $4.038 billion. On the flipside, Non-Food categories delivered sales of $4.738 billion, down by more than 1% on the 2018 result. The decline is in part due to the Tobacco category delivering growth of 0.83% in 2019 compared to 6.4% the previous year.
BEVERAGES: A REFRESHING RESULT
During 2019, the report found on average, more than 70% of convenience shopping baskets included a beverage.
Constant change has never deterred our leading operators and our industry, more than most, has a reputation for adaptation.”
Jeff Rogut, AACS CEO
June/July 2020 | C&I | www.c-store.com.au 15
The latest result positions 2019 as one of the convenience industry’s best-performing years of the past three decades.� Jeff Rogut, AACS CEO
Packaged Beverages grew 4.4% over the year to deliver the greatest dollar value contribution of any convenience category, at $79 million. Convenience customers are increasingly including a beverage among their purchases, in many instances combined with a Food on the Go purchase, with the trend to healthier alternatives continuing to play out and new market entrants in 2019 having a positive impact on the category. Energy drinks, soft drinks and flavoured milk led the way in terms of dollar share in the Packaged Beverages category, while Tea Drinks and Protein drinks delivered the best performance in terms of dollar growth. Hot Dispensed Beverages was the fastest growing category in convenience for the third year running, growing 18% to contribute another $46 million in sales, taking the category value to more than $300 million. As we have seen in recent years, convenience stores are established as legitimate coffee destinations and their premium quality offerings are being rewarded with more frequent visits from customers. Those who typically get their caffeine fix from the convenience store now do so more than once every two days.
HEALTHY APPETITE FOR FOOD ON THE GO
The Food on the Go category grew at 11.5% generating $68 million in additional sales to the channel. This outstanding result made it the second fastest growing category in convenience in 2019, accounting for 38% of total channel growth and total sales of $659 million for the year. 16  June/July 2020 | C&I | www.c-store.com.au
Like coffee, convenience stores are now an established destination for fresh sandwiches, wraps and hot food, with customers responding positively to the quality and freshness of the convenience food offer. In the Take Home Food category, growth slowed to 3.5% in 2019 in a sign the category is maturing with consumer having
now accepted that meals on offer from convenience stores represent value for money. This category generated $149 in sales for the channel, $5 million up on the 2018 result. In the other food categories, Confectionery (+2.1%), Snackfoods (+4.1%) and Ice Cream (+5.6%) all recorded impressive growth over the year.
OTHER KEY NUMBERS
Fuel theft cost the average store $166.91 in losses each week in 2019, a 1.8% decrease over the prior year, yet still a significant sum for any small business. Shoppers increasingly visited convenience stores for milk and bread in 2019, with the Milk category growing 1.4% to record sales of $146 million and Bread up 5.3% for sales of $40 million. Though growth in Tobacco sales was only 0.8% for the year, it is still a very important legal category for convenience stores, with the contribution of legal tobacco sales to the overall channel sales being almost 39% in 2019. The Grocery category grew 1% for sales of $40 million however the result for this year will tell an interesting story as consumers show a preference to grab their staples from convenience stores during the pandemic.
VOCAL AFTER 30 YEARS
At the time AACS was established in 1990, the convenience channel was undergoing change as new players, products and innovations converged to shift perceptions of what the modern convenience store was, and the role it would play in the community. Constant change has never deterred our leading operators and our industry, more than most, has a reputation for adaptation. Considering the economic backdrop and
challenges for retailers generally, the latest result positions 2019 as one of the convenience industry’s best-performing years of the past three decades. The challenges and the changes will keep coming, the COVID-19 crisis being the latest factor to impact our stores, but convenience remains resilient, responsive, innovative and in many areas, ahead of the curve. The industry will still need a strong voice. As we respond to this pandemic, the AACS will maintain the pressure on Government and other authorities on the areas that impact our members most. The high cost of unfair tap-and-go debit card fees; securing fair supply for our operators for critical items like grocery and hygiene products; illicit tobacco and other crimes and more: the AACS will remain vocal on the issues that matter most to our members. The complete AACS State of the Industry Report 2019 is available to AACS members as part of their membership in the ‘members section’ of the AACS website, and for purchase by non-AACS members for $2900.00 inc. GST. C&I
FURTHER INFORMATION: Jeff Rogut Chief Executive Officer Australasian Association of Convenience Stores Ph: +61 467 873 789
MEDIA ENQUIRIES: Stephen Naylor Wise McBaron Communication Ph: +61 (2) 9279 4770
June/July 2020 | C&I | www.c-store.com.au 17
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2020 LEADERS FEATURE FORUM
LEADERS FORUM C&I spoke to industry leaders to get their take on how COVID-19 has impacted convenience
20  June/July 2020 | C&I | www.c-store.com.au
2020 LEADERS FORUM
One thing the COVID-19 crisis has shown is that we are all stronger together.
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s the global pandemic continues to ravage the world, leaving a rising death toll in its wake, Australia has emerged as one of the global leaders in containing the virus. But the unique and unprecedented challenges it has created has also generated a lot of fear and uncertainty. And as panic buying stripped supermarket shelves in March, convenience stores emerged as local heroes, going to great efforts to secure stock of essential items – including the elusive toilet paper, and consumers came to view stores as a safe and reliable option for their groceries and staples. The efforts of businesses to keep customers and staff safe, both through rigorous cleaning regimes and social distancing measures should also be acknowledged. As should the work of suppliers to secure steady supplies of stock amid the largest sudden increase in retail trade on record. And special mention also to those in petrol, who are dealing with significant drops in demand and a global oversupply. But in testament to the staying power of the industry and despite the uncertainty posed by the virus and its economic fallout, the future looks bright for convenience. It was in this spirit that we approached this year’s Leaders Forum. It would be remiss of us to have the ear of this calibre of industry leaders and not ask how they view the impacts of greatest health and economic threat of this century.
Taking this approach, we invited industry representatives, key retailers and category leaders to share their valuable insights, highlight their achievements, pinpoint the challenges they feel need addressing, discuss how they have adapted to COVID-19 and how they view the immediate future for convenience. What resulted was a masterclass in ingenuity, adaptability and resilience. Each company has dealt with different constraints, restrictions and difficulties, but all have found their own work-arounds, played to their strengths and ensured a continuity of business amid incredibly arduous conditions. One strong trend shared by this year’s contributors was an unwavering optimism for the future of convenience. Each felt we would continue to grow, evolve and become even more indispensable to consumers. It’s heartening to see that those at the top of their game hold such passion and belief for the industry. And while we can’t yet know how the rest of this year will play out — though judging from these responses we’re in for some exciting endeavours, no doubt in next year’s Leaders Forum we will look back with pride at the industry’s strength throughout the pandemic and at how our collective hardwork, dedication and passion allowed convenience to continue to thrive. June/July 2020 | C&I | www.c-store.com.au 21
2020 LEADERS FORUM
Matthew Dodson General Manager, Out of Home Company, Patties Foods I am genuinely proud of how the convenience industry is working together. We’re all reaching out to each other to make sure everyone has the right support.” Matthew Dodson
What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
Convenience is a fast-moving channel where we have seen Food-on-the-Go achieve double digit growth over the last five years, making it the third largest category instore. The impulsive nature of the consumer means integrated sales and marketing activations are essential within the category and something we’re always pushing boundaries with. Four’N Twenty is the number one brand in hot, on-thego savoury within the convenience sector. Our products are well-loved by Australians and draw people into stores. The Four’N Twenty Traveller and King-Size Sausage Roll bundles have also been hot sellers on the new petrol and convenience delivery services. The diversity of the channel accounts for the largest volume of outlets, on a smaller scale. This enables tailored innovation to cater to the unmet needs of consumers, shoppers and trade partners, which has been key in driving the double-digit growth we’ve seen. Innovation contributing to the growth of Patties Foods includes a range of products across our branded portfolio, delivering to Food for Now and Food for Later. With Food for Now, the morning breakfast rush remains alive and well, with 50% of consumers agreeing that breakfast is the most important meal of the day. Consumers are seeking portable on-the-go offers that are not only delicious, but filling enough to avoid mid-morning hunger pains. This is where Herbert Adams has delivered the Breakfast Collection, with strong results in its first few months in market. Then with Food for Later, major convenience retailers have Ruffie Rustic Foods ready-made meals in the freezer catering to the current need for quick, delicious meals at home. The high-quality meals are made with real, fresh ingredients and are perfect for time-poor people. The biggest challenge facing the industry is not only maintaining the double-digit growth in food-on-the-go, but continuing to deliver innovation that makes petrol and convenience outlets a destination of choice for food.
22 June/July 2020 | C&I | www.c-store.com.au
Highlight one achievement at Patties you’re particularly proud of in the last 12 months.
It’s been a busy year at Patties, and we’re particularly proud of making history with Four’N Twenty’s first-ever Meat Free Pie. It was a bold reimagining of one of Australia’s most iconic foods, however there was a clear and growing demand for a plant-based alternative. And with 53% of consumers considering themselves to be vegans, vegetarians or meat reducers in an effort to be more health and environmentally conscious, the much-anticipated pie was definitely a hit! Supported with a sensational online launch program that generated 357 million consumer conversations with a positive sentiment of 89%, Four’N Twenty Meat Free has been flying off the shelves across Australia.
How has Patties adapted to the evolving challenges of COVID-19?
Like all Australian businesses, we’ve felt the impact of COVID-19 and are operating on a reduced workforce, while still providing delicious, quality food to Australians via chilled and frozen categories. With less people eating out, we’ve experienced a greater demand for our products and we’re continuing research and development and have some exciting new projects in the pipeline.
How do you envision the next six months for convenience?
I am genuinely proud of how the convenience industry is working together. We’re all reaching out to each other to make sure everyone has the right support. Food for Now and Food for Later will remain key drivers as people return to work and school with a renewed focus on convenience shopping. We see Food for Later with Ruffie Rustic Foods and the need for petrol and convenience delivery services continuing to build. Favourites such as the Four’N Twenty Traveller range will remain popular with consumers and exciting new flavours such as Philly Cheesesteak will assist in fuelling the doubledigit growth.
. . . ow N or f d Foo ! er t a L or f d oo F HERBERT ADAMS BREAKFAST COLLECTION
RUFFIE RUSTIC FOODS MEALS
The breakfast rush remains alive and well, now more than ever, with 50% of consumers agreeing that breakfast is the most important meal of the day. Consumers are seeking portable on-the-go offers that are filling to avoid mid-morning hunger pains.
Shoppers are increasingly seeking convenient meal solutions made with real, fresh ingredients.
The NEW Herbert Adams Breakfast Collection is the perfect pairing to your morning coffee, with 3 delicious flavours to choose from: • Classic Bacon and Egg • Vegetarian Breakfast • Homestyle Beans and Bacon
Inspired by the food scene, Ruffie Rustic Foods ready-made meals are a contemporary rustic twist on all the favourites, available in 5 varieties: • Butter Chicken
• Slow Cooked Beef Ragu
• Plant Based Portobello Mushroom Risotto
• Linguine Carbonara
• Plant Based Spaghetti & Meat-free Balls
We are Pie-oneers – now serving Breakfast!
It’s delicious, made easy.
FOUR'N TWENTY MEAT FREE PIE
FOUR'N TWENTY TRAVELLER PHILLY CHEESESTEAK
53% of consumers consider themselves to be vegans, vegetarians or meat reducers in an effort to be more conscious and balance their diet.
Australia’s number 1 and most loved pie brand Four’N Twenty proudly introduces the NEW Traveller Philly Cheesesteak to its range.
Four'N Twenty's NEW Meat Free Pie is a real game changer! The sensational online launch program generated 357 million consumer conversations, with 89% positive sentiment, so it's no surprise stock has been flying off shelves across Australia.
Inspired by Four’N Twenty ambassador and Philadelphia 76ers basketball superstar Ben Simmons, it’s the classic taste of 100% Australian beef and onion, topped with a delicious Philly cheesesteak style cheese sauce, wrapped in golden pastry.
The Four’N Twenty Meat Free Pie is a delicious plant-based filling wrapped in golden flaky pastry, that is the perfect addition to the core range in the warmer.
The Great Australian Taste – providing a global twist on the local favourite.
The Great Australian Taste – now also available in Meat Free.
DRIVING GROWTH THROUGH INNOVATION FOR MORE INFORMATION CALL YOUR PATTIES REPRESENTATIVE ON 1800 650 069 OR EMAIL INFO@PATTIES.COM.AU
2020 LEADERS FORUM
The ability of convenience to launch products is often neglected by suppliers and overrun by the majors.” Tim Xenos
Tim Xenos Executive Director, Olympian Products and Distribution What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
That the convenience industry is dynamic and always evolving. I also enjoy launching brands to consumers which large department stores are reluctant to do. Convenience is at the forefront of consumers’ minds. The ability of convenience to launch products is often neglected by suppliers and overrun by the majors, which creates its own challenges. While the majors are moving towards a higher percentage of private label products, convenience has the ability to support brands and companies that are looking to launch innovative products. The challenge for convenience is ensuring that brands are well supported so they can be moved off the shelf.
Highlight one achievement at Olympian Products you’re particularly proud of in the last 12 months.
Olympian has in the past 12 months supported and launched international products which have previously had a difficult time succeeding in this market. Supporting these high quality brands and building awareness of the products, adding new ranges to our portfolio and building our own profile have been our successes. 24 June/July 2020 | C&I | www.c-store.com.au
How has Olympian Products adapted to the evolving challenges of COVID-19?
Reducing minimum order quantities, providing direct deliveries and changing our product mix has enabled us to adapt. Extending our range back in February by adding PPE products including sanitisers, dispensers, wet wipes and other sanitary items enabled us to continue supporting our customers with their additional needs. Underpinning these actions is maintaining our pricing at competitive rates, rather than gouging by taking advantage of the demand. These responses and our great service has enabled us to keep and build our loyal customer base.
How do you envision the next six months for convenience?
Convenience retailers will have to adapt to the higher hygiene standards consumers have come to expect if they want to maintain their customer base. The majors have an advantage with their size, so cleanliness will be key. Fortunately, it’s economical and easy to install permanent sanitising stations, so improving hygiene protocols shouldn’t be burdensome. As the market itself continues to evolve with more consumers working from home, they’ll be looking to purchase multi packs and convenience items in bulk. There will be more of a focus on grab-and-go, individually wrapped items and take-home packs.
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For more information on how to order contact Olympian Products & Distribution on 1800 413 711 or sales@olympianproducts.com
2020 LEADERS FORUM
Darren Park CEO, United Convenience Buyers What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
I’ve been working in convenience for just over 30 years now and as an Industry we have come so far. There is still so much improvement to come and challenges to face and we all have the chance to make a contribution. Is there any other space in Australian Retail where anyone, in any role can make a difference to an Industry? Right now, the challenge that we all need to address is one of employment. Undeniably, job loss is one of the most common factors that contributes to issues of mental health. We have seen trade partners bring health and wellbeing programs to our Industry, which are all very welcome. I would like to see an industry program to support our employees. Most importantly, if you feel you’re one of these individuals, don’t lose hope. While you’re in the process of finding a job, don’t neglect your mental health and seek the help of a professional if you need to.
Highlight one achievement at UCB you’re particularly proud of in the last 12 months.
I remember writing last year about the pride I have in my team. If it’s possible, I’m even prouder 12 months on. UCB is about members first, trade partners next and then us. To
see my team focus on solving member challenges (and also non-members) with trade partners with collaboration, fact and a good humour is my highlight. Long may it continue.
How has UCB adapted to the evolving challenges of COVID-19?
UCB prides itself on offering the best of information to our members in a timely manner. COVID-19 has challenged us to deliver enhanced support in a fast changing and an information complex environment. Using the resources of Industry bodies such as ACAPMA and NACS has allowed us to support our members with the very best of information.
How do you envision the next six months for convenience? COVID-19 has seen the influence of the major Australian grocery chains hold, well in excess of what is sensible. From sweeping up essentials, altering opening and closing times under the guise of social distancing, through to seeking ACCC relief on supply chain collaboration with competitors. What has become visible to many is the organised way they lobby. They are not friends of convenience, they seek to see our Industry disappear. The next six months should see our industry take this threat seriously.
Jeff Rogut CEO, AACS How has AACS adapted to the evolving challenges of COVID-19; Highlight one achievement at AACS you’re particularly proud of in the last 12 months.
The AACS is the voice of the convenience industry and 2020 marks its 30th anniversary. AACS began the year gearing up for a celebration – not just of itself, but of the entire convenience industry. Obviously the 30th anniversary of the establishment of our Association would soon turn out differently. The world took an unexpected, unprecedented turn. Recent months have been taken up with lobbying on behalf of the industry with state and federal governments to ensure that the ‘essential’ nature of our industry was recognised. As was how we serve our communities and emergency services etc, be it with petrol, food and beverages to go, and increasingly basic groceries, as customers seek to avoid crowds at the larger supermarkets. My pride is not reserved for AACS at this time, but rather in our operators who have continued serving their customers during these uncertain times and who quickly adapted stores to comply with evolving health and safety requirements. As well as our suppliers who were met with unprecedented demands in some categories and have done their best to try to ensure that our stores remain stocked.
26 June/July 2020 | C&I | www.c-store.com.au
What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry? The convenience industry has a history of innovation and despite difficult conditions will continue to evolve to meet challenges presented to serve their communities. We would like to see our stores being able to sell alcohol as convenience stores around the world are able to do. During the ‘shutdown’ we saw other stores and even pubs starting to compete with us and selling groceries, milk, bread, paper goods etc, which, from a community perspective we understand. Our industry however is restricted from being able to compete and offer products such as beer or wine, which they sell.
How do you envision the next six months for convenience? The next few months will see our stores continuing to comply with the various health and safety requirements as well as rebuilding inventories. They will also take lessons from the past months and seek out new opportunities and to be prepared for any future such disruptions. We have a strong, resilient and vibrant industry and it will continue.
2020 LEADERS FORUM
Mark McKenzie CEO, ACAPMA What do you most enjoy about convenience and what is one industry challenge you’d like to see addressed?
Perhaps more than ever before, the Australian petrol convenience industry is in the midst of a revolution that will potentially reset the relationship between servos and their customers. This revolution involves the establishment of a 21st Century version of the ‘local corner shop’ — one that utilises digital innovation and harnesses changing consumer trends to deliver a modern local shopping solution that is convenient, affordable and sits naturally alongside internet shopping and large format stores. It is an exciting time to be working with the industry to covet this opportunity for the benefit of the industry as whole.
Highlight one particular achievement at ACAPMA over the last 12 months.
Almost a decade ago, ACAPMA invested in an online and mobile enabled industry training platform designed to support front-line staff working in the petrol convenience industry. The platform was formally recognised late last year by being short-listed for a global training award in mobile enabled e-learning. At the same time, subscribers to the training platform ticked over 20,000 annual users. This achievement is a credit to those involved in the early days and to our dedicated team that have built on this legacy to get us to where we are today.
How has ACAPMA adapted to the evolving challenges of COVID-19?
ACAPMA has ramped up its collaboration with other industry bodies during COVID-19 under the umbrella of its membership of the Council of Small Business Organisations of Australia. This partnership has provided an unprecedented opportunity to work at the highest levels of government – both federal and state/territory – and sectors like the Australian Banking Sector, to ensure the needs of the businesses that comprise our industry were heard. This national dialogue allowed us to increase the frequency and effectiveness of our member communications about government initiatives, all at a time when business owners most needed it. This higher frequency and quality of our member communications is something we will continue post COVID-19.
How do you envision the next six months for convenience?
The individual experiences of convenience businesses with COVID-19 has varied markedly. While the focus of the next six months will be on safety, and given that many people will likely continue to work from home over the next three to four months, there is an opportunity for petrol and convenience outlets to highlight our stores as convenient, affordable and safe places to shop in the future. We must not miss this opportunity.
George Tsapoutas General Manager, The Distributors What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
I enjoy the ever-changing evolving environment of convenience, it challenges both myself and The Distributors to continually develop and grow our high level of service to meet the changing requirements of our customers, suppliers and consumers. The convenience channel is about servicing their local community and I am very proud to work in an organisation that focusses on local service nationally. Coming out on the other side of COVID-19 the importance of local convenience stores needs to have a greater industry awareness.
Highlight one achievement at The Distributors you’re particularly proud of in the last 12 months.
Winning awards is not what we set out to do at The Distributors. Our goal is to provide the best local service, nationally. And if through doing that The Distributors receives customers and industry recognition, like the UCB and AACS supplier of the year, it is a good feeling. It makes me proud to be part of The Distributors Group Team that delivered such a high level of service to our customers.
How has The Distributors adapted to the evolving challenges of COVID-19? Each day has brought a new challenge during COVID-19. The Distributors have met these by implementing a number of process and systems changes that have allowed us to continue to service our customer and supplier network safely and without interruption. I am incredibly proud of The Distributors members and their teams’ willingness to adapt to the new processes and work safe standards that allows The Distributors to keep essential supplies moving to the convenience market.
How do you envision the next six months for convenience?
Every day will bring its own new set of challenges. We are currently in a space that no one has been in before and we have to be reactive to daily announcements. On a positive note, I believe that this will be a great opportunity to attract and keep a whole new set of convenience shoppers, as consumers choose to shop local. As an industry post COVID-19, we need to keep these consumers coming back to shop and purchase products at their local convenience store. If we can successfully do that, then post COVID-19 I see a strong retail convenience marketplace that The Distributors are looking forward to servicing.
June/July 2020 | C&I | www.c-store.com.au 27
2020 LEADERS FORUM
Sam Faire Vodafone Australia, National Business Manager — Prepaid Consistent product innovation and great offers are posing a real threat to traditional grocery stores and QSRs.” Sam Faire
What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
The convenience industry is extremely versatile and innovative and has dramatically changed over the years from being primarily service stations to now being a one-stop-shop where you can find almost anything you need. Consistent product innovation and great offers for consumers are posing a real threat to the traditional grocery stores and QSRs. What I enjoy most about this industry is that no two days are ever the same. We work together with category managers to achieve joint goals and think outside the box to grow our businesses in an ever-changing industry – whether it’s new product ranging or utilising new platforms to reach our customers. According to the 2019 AACS State of Industry Report, the Communications category is ranked fifth overall, bringing in $244m worth of revenue annually. Consumers will always need telco products and there are big opportunities for growth.
Highlight one achievement at Vodafone you’re particularly proud of in the last 12 months.
Over the past 12 months the team has done a huge amount of work on channel efficiencies, with a focus on partnerships. The Prepaid Team supports an extremely large and diverse retail and distribution footprint with 28,000 points of presence. This takes a huge amount of support, collaboration, planning and communication for all involved. It simply couldn’t be done without the support of all the retailer, distribution and partners across Australia. So, what achievement am I most proud of… building and having an amazing team of people that value each other and the partners we work with.
How has Vodafone adapted to the evolving challenges of COVID-19?
Like a lot of organisations across the world, Vodafone implemented a work from home policy early on, building on the existing flexible working policy for employees in state offices. Vodafone worked closely with state governments to ensure retail staff were supported and safe during the evolving situation. IT support solutions enabled the new working environment, maximising communication, 28 June/July 2020 | C&I | www.c-store.com.au
collaboration and productivity. Vodafone has also rolled out a large amount of employee support initiatives with a strong focus on health and wellbeing. We have launched several initiatives to support our customers, such as: • A temporary $10 per month ‘Stay Connected Cap Plan’ to provide relief to customers experiencing financial hardship due to COVID-19 impacts. • Plans for registered health practitioners to receive a twomonth credit on their monthly Postpaid access fee or Prepaid recharge. • We aren’t charging any late payment fees for overdue accounts to support our customers from March 26 until at least June 30, 2020. • Additional support for customers experiencing financial hardship. • Data overage cost has been reduced to $5/GB in Australia. • nbn™ Education Assistance. • Unlimited standard national calls. • Free access to key government and health websites.
How do you envision the next six months for convenience?
Due to the circumstances the world finds itself in, I believe we will see more changes than ever in the next 6-12 months with consumers dramatically changing their shopping behaviour. I think the key to success will be how well both retailers and suppliers adapt to the ‘new normal’ and a reliance on ‘convenience’ with consumers spending less time in store and adhering to social distancing measures. Whether it’s online shopping or food on-the-go, convenience for consumers will be more important than ever.
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When you purchase a $30 Starter Pack and activate on Prepaid Combo Plus with Automatic Recharge. Zone 1 – 20 Countries: Canada
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Starter Pack discount ends 31.07.20 and must be activated within 365 days of purchase. Bonus 250 mins int. calls ends 31.07.20. Zone 1 countries may vary. Extra Data for new and existing customers on all Automatic Recharges made by 31.12.20. Data for use in Oz. Terms and conditions: Starter Pack: Offer available where advertised. Personal use only. You will require a credit or debit card to activate and/or opt-in to Auto Recharge online. Starter must be activated within 365 days of purchase. Extra data available to new and existing Prepaid Combo Plus customers (‘Eligible Customers’) who purchase and activate a Prepaid $30 and above Combo Plus Starter Pack and opt in to Automatic Recharge between by 31.12.20 (inclusive, unless extended). Extra Data is available on every Automatic Recharge made by 31.12.20 (‘Eligible Recharge’) for both new and existing customers opted in to Automatic Recharge. Extra Data: 15GB on $30 Prepaid Combo Plus Starter Pack (10GB included, total 25GB). Applied within 72 hours following successful activation of Starter Pack. Limit 2 per Eligible Customers. When you activate your Vodafone SIM you accept the Vodafone Standard Form of Agreement. A summary and the full agreement are available at vodafone.com.au/sfoa. All offers subject to change. Recharge costs additional. Not transferrable or redeemable for cash. For new customers prescribed ID and user details must be provided. To find out more about Automatic Recharge head to https://www.vodafone.com.au/atr. Personal use only. Business customers must have an ABN/ACN. Bonus 250 Standard International Voice Call Minutes from Australia to Zone 1 countries to new and existing Prepaid Combo Plus customers (`Eligible Customers’) who purchase and activate a Prepaid $30 Combo Plus Starter Pack by 31.07.20 (inclusive, unless extended). Applied within 72 hours following successful activation of Starter Pack or Recharge. Zone 1 countries may change, see vodafone.com.au/idd for list of current countries. Calls charged in per minute increments. Zone 1 allowance will be used first, thereafter, bonus minutes will be used. If you exhaust your Zone 1 allowance and bonus, or if you make a standard voice call to a country outside the included countries, you will be charged on top of your minimum monthly spend at our standard international Pay-As-You-Go rates- these rates are subject to change, see vodafone.com.au/idd for current rates. Services subject to device capabilities, network limitations & customer location. Offer not transferrable or redeemable for cash and subject to change. MV03315 04.20
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2020 LEADERS FORUM
Stephen Eyears Head of Strategy, Innovation and Business Development, 7-Eleven What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
How has 7-Eleven adapted to the evolving challenges of COVID-19?
Highlight one achievement at 7-Eleven you’re particularly proud of in the last 12 months.
How do you envision the next six months for convenience?
Our customers’ needs change so quickly at the best of times, and COVID-19 is only going to accelerate those changes. Making sure as an industry we are agile and able to adapt quickly in the retail environment as well as in the digital and last mile spaces will be a really exciting challenge ahead.
We’ve just launched 7-Eleven Delivery in Melbourne, so for customers who can’t get to us, we can get to them. This new service is ideal for people who are unable to get out for basic-essentials or ready to eat foods and need delivery within a shorter timeframe. In some suburbs there are within the hour delivery options, but for most suburbs, customers can order ahead for next day delivery. The team took this from concept to trial in only a few weeks, in response to changing consumer needs throughout COVID-19.
The 7-Eleven team, both support office and store teams, have been truly extraordinary in what they have achieved together over the last few months. The entire organisation has worked together to address the challenges, and support each other, while dealing with what’s put in front of them. They have ensured that consumers have been able to get essential basics in smaller stores in their local neighbourhoods. Our people have been amazing.
How we work and where we work as a society will look different in the months ahead. Consumers will be looking for convenient products and services in their local communities, as well as digital solutions that meet their needs in new ways. Whether it is providing an excellent value option for a morning coffee run in your local neighbourhood when working from home, or 24/7 parcel drop off to post care packages for family and friends interstate, we’re there to provide consumers with what they need.
Olivia Sutherland Snacks Marketing Director, PepsiCo ANZ What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
How has PepsiCo adapted to the evolving challenges of COVID-19?
Highlight one achievement at PepsiCo you're particularly proud of in the last 12 months.
How do you envision for the next six months for convenience?
I enjoy the convenience channel because it is highly innovative, it possesses a culture of pace and it delivers shopper focused execution. I like having a high level of engagement with our consumers, and the convenience channel enables us to meet their needs for different consumption occasions than grocery. One challenge that I would like to see addressed is an improvement to the shopper journey; I would like to get the salty category located in areas of maximum footfall to drive incremental sales.
This year we’ve had two innovations that have been tailored specifically for the convenience channel. We kicked off 2020 with Doritos Shots explicitly designed for the on-thego occasion in P&C, as well as Doritos Mountain Dew. I’m especially proud of the success of Doritos Mountain Dew as it was an Australian-led global innovation at the time of launch and it became a top-selling line for the retailer (Summit Insights April 2020).
30 June/July 2020 | C&I | www.c-store.com.au
PepsiCo has demonstrated its agility as we have successfully pivoted our brand plans in response to COVID-19. We were due to host a live performance by Lime Cordiale as part of our Snacks and Tracks campaign to launch our Doritos Food Truck flavours. Our teams moved quickly to convert this to a virtual event and we were able to reach more than 10 times the number of people than we could have hosted at a live event. We’ve also utilised home delivery services in partnership with Deliveroo to give our consumers a packet of our new Smith’s Take Away range.
I imagine we will see the occasions increase as restrictions ease. I think we will also see the basket size increase, as consumers don’t want to travel to supermarkets that cater to larger amounts of occupants. A report commissioned by Convenience Measures Australia at the peak of the pandemic detailed that 47% of supermarket shoppers were using P&C stores for nonfuel items during this period and I anticipate this trend will continue over the next six months.
2020 LEADERS FORUM
Skye Jackson Head of Merchandise Planning Caltex Australia Limited What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
I love the speed of change within the convenience industry. We are great at recognising the changing needs of our customers and what ‘convenience’ means to them and then quick to tailor our offers to meet this. An example recently at Caltex has been the extension of our offer to Uber Eats. For some of our customers today ‘convenience’ means getting a pie delivered to their door! I’m one of those people that love change, so this is the perfect industry for me! The one thing I’d love to see improve is our fresh supply chains. The geography of our country makes it very difficult to enable good, cost effective and frequent distribution of fresh food to our entire networks, and given the growth expected within this category in the coming years, this really needs to be a focus.
Highlight one achievement at Caltex you’re particularly proud of in the last 12 months.
We had a pretty big year last year, but certainly the opening our first Caltex Woolworths Metro pilot stores in North Ryde and Kingsford are at the top of my list. This was the culmination of many months of work from numerous people within our organisation and in partnership with the Woolworths Metro team. We are really pleased by the results we’ve seen so far and I’m excited to be working with Woolworths this year on more of these stores.
How has The Caltex adapted to the evolving challenges of COVID-19?
The most important thing Caltex has focused on is the safety of our team and our customers. We’ve quickly moved our support teams to working from home, while our store teams have dealt with many changes, sometimes on a daily basis. I’m most impressed by our store and operations teams who have had to execute so many new changes and procedures in these difficult times, while still serving our customers with a smile. I’ve heard great stories from the field like one of our stores that allowed a regular elderly customer to call ahead for them to fill her car so she wouldn’t have to get out. It shows how strong the value of care is within our organisation. In addition to this, we’ve quickly adapted to the changing needs of our customers — we’ve never sold so much toilet paper before!
I love the speed of change within the convenience industry. We are great at recognising the changing needs of our customers.” Skye Jackson
How do you envision the next six months for convenience?
It is going to be interesting to see how customer behaviour changes post-COVID-19. I think as an industry, we could expect to see more customers utilising our channel for essential items, as people shy away from crowded areas like supermarkets, especially if they only want to pick up a few items. We have seen increased demand for grocery and essential items in our stores, so I’m excited about our relationship with Woolworths and the ability for us to better service the changing needs of our customers through this partnership. June/July 2020 | C&I | www.c-store.com.au 31
2020 LEADERS FORUM
Dru Saab Head of Retail, amaysim As we move through and out of the COVID-19 pandemic, we think people will be more than happy to support their local communities and shop local.” Dru Saab
What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
Fast moving consumer goods is an exciting category, as it moves and changes quickly with the times. Take COVID-19 as an example, which saw more people shopping in these types of stores. I enjoy the challenge in keeping up to date with what is happening in these channels and working with our partners to create impulse purchase offers and to ensure the growth of both parties. Convenience encompasses a variety of products, telco being one of them. In these types of stores, there is high foot traffic and brings in all types of shoppers, who either have time constraints or are just passing through. From our perspective, it is important for us to be able to promote the products that are popular and resonate with customers who are looking for a good deal. Moving forward, I think that bundling our SIMs with other products will be something new and our expectation is that it will do well too. I think one of our biggest challenges in this industry is lost sales. This is due to customers having very little time in store, so our window of opportunity to get their attention is limited. We need to gain this within the first minute. This challenge is accentuated by some of the stores being quite small which makes visibility difficult. Generally telco is located at the back of the store so it can get missed or overlooked by a customer. Our aim is to get telco near or at the front of the store in full view.
Highlight achievement at amaysim you’re particularly proud of in the last 12 months. It’s hard to narrow it down to just one achievement as we have so many. My favourite and most recent is the company response of amaysim to COVID-19. We quickly kicked into gear and provided our existing customers additional data to ensure that they would be covered whilst working from 32 June/July 2020 | C&I | www.c-store.com.au
home and to keep the kids entertained while in lockdown. This shows our agility and that we are empathetic to our customers’ needs, which are two of our core values.
How has amaysim adapted to the evolving challenges of COVID-19?
Strangely enough when COVID-19 impacted everyone mid-March, not much changed at amaysim in our Sydney and Melbourne offices, other than working from home. We continued as normal and adapted to having Zoom meetings and phone calls. Our efficiencies have not dropped and we are still achieving project deadlines. Of course, being a telco, we are always on the go and working remotely, so it wasn’t that different. On the other hand, our office in the Philippines was impacted and we had to make adjustments to ensure that we continued to support our customers. Some of our staff had to stay at home due to the pandemic and follow local government rules, which meant that we did not have our full complement of Customer Service agents. Due to this we had staff in Sydney and Melbourne volunteering their time to help with calls and LiveChat. One Team, One Dream! In the Retail team, we found that our mass market channels were very busy due to panic buying, so we supported the channel with additional stock deliveries and merchandising with our field team.
How do you envision the next six months for convenience?
The next six months will be very exciting for the industry. Shopping has changed, people are now used to going to their local convenience stores to top up their groceries and small items, due to COVID-19, so we think that they will continue shopping in this way. From research, coffee and snacks remain a large draw card in these channels. As we move through and out of the COVID-19 pandemic, we think that people will be more than happy to support their local communities and shop local. This will be one of the areas where we will be focussing on to grow the amaysim footprint.
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2020 LEADERS FORUM
Desmond D’souza Head of Growth Channels, Mondelez What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry? Being such a dynamic channel, I enjoy having the opportunity to test and learn. It’s a channel that is pivoting itself to cater to shopper missions and every player is trying bold new ways of delighting the shopper and driving conversion instore. Mondelez International is actively participating in these experiments – from our work on the ‘store of the future’, partnering with online hyperlocal delivery platforms and expanding our portfolio to cater to greater shopper and consumer needs. The challenge is how convenience can accelerate its reinvention to create incremental shopper missions and occasions, whilst avoiding an overlap which shifts shoppers from one channel to the other. This, I think, will give the channel a sustainable growth opportunity.
Highlight one achievement at Mondelez you’re particularly proud of in the last 12 months.
I’ve been proud of our ability to execute multiple innovations such as Cadbury Caramilk and Marble. These launches have not only delighted consumers but are also driving incremental growth for our customers across channels. Bringing back iconic favourites like these is often more challenging than developing something totally new.
Shoppers have a recollection of appearance, taste and texture and expect you to offer them the same characteristics – even if it’s been off the shelves for almost a decade
How has Mondelez adapted to the evolving challenges of COVID-19?
In times like these, consumers turn to brands they can trust. We are fortunate to have a portfolio of market-leading brands that are trusted and admired by so many. These are the brands that provide consumers a sense of normality in what is for most people a challenging and stressful time. Like other food companies, we have worked hard to adapt to changing consumer needs. While we’ve had some great innovations this year, we recognise the strength of our core SKUs which sit at the heart of what consumers want from our brands.
How do you envision the next six months for convenience?
COVID-19 has really pushed us all at Mondelez International to think differently. Some of the convenience players have been quick to act and recover their in-store sales by going beyond the existing boundaries. While it will take time for fuel sales to recover, it’s a channel that can adapt quickly to new opportunities, while staying true to what the channel was built for – convenience.
Wade Death Director, Jack & Co. What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
I enjoy the dynamism of the industry. But as an industry, we still have a reputational issue in the eyes of many consumers. And I have to say it’s frustrating to still employ staff who tell me Jack & Co pay them twice what their last employer, also in the industry, did. A considerable amount of wage fraud may have been hunted out of the industry, but some obviously remains and I can’t see our industry reaching the reputational standpoint we should if this continues.
Highlight one achievement at Jack & Co you’re particularly proud of in the last 12 months.
Prior to COVID I would have said I’m proud of the tweaks we’ve applied to our offer this year, which has lifted us 10-20% in sales by doing things better. I would also have said I’m proud of the dedication of our store teams to work through really challenging circumstances throughout the bushfires, as we were very heavily affected. But to be honest I think COVID-19 has been another level. Particularly because of the rapid onset of restrictions. The rules were changing daily and I’m pleased with how well our store teams worked together, despite the disruption to their normal working practices. Rarely do we throw so many 34 June/July 2020 | C&I | www.c-store.com.au
operational changes at staff so quickly and enforce such instantaneous compliance.
How has Jack & Co adapted to the evolving challenges of COVID-19?
We were straight onto installing Perspex screens in stores, all of which have always had handwash stations. We put out hand sanitizer for customers straight away (in addition to staff-use sanitiser) and I think the customers rewarded us for getting on the front foot. We amended cash handling practices and enforced a-number-of distancing rules in tight staff/kitchen areas to ensure we were compliant. We modified our offer and range very quickly to try and maximise sales during that period, to pleasing results.
How do you envision the next six months for convenience? I think like every industry it will be tight. I suspect there will be a number of long-term behavioural factors that will suit our industry and businesses into the future, so we need to maximise these to their full extent. We have always been proactive with ordering technology platforms in stores, such as Hey You, Deliveroo and Uber and I am sure they will see continual customer support in the next six months. I am thankful we put so much emphasis on innovation over the years, as this will hold us in good stead for the next three to six months.
2020 LEADERS FORUM
Lou Jardin Managing Director, SPAR Australia What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
The convenience channel has evolved dramatically over the last few years as Coles and Woolworths have modified their offer to take advantage of the changing consumer. Such as big-step changes like self-scan that speeded the customer experience, to home-shopping and now convenience foods, whilst increasing the number of small format stores. This has challenged traditional convenience to catch-up and modify their offer to stay relevant. SPAR has a huge advantage, as part of an international network that is very strong in convenience which allows us to adapt and learn from best practice.
Highlight one achievement at SPAR you’re particularly proud of in the last 12 months.
SPAR Australia takes its role in “supporting family businesses” very seriously. In February this year we launched our next stage of investment into our retailers. This program has been evolving over the last 10 years and has accelerated over the last 12 months. SPAR is extremely proud of providing continued and increasing support for our many retailers. This
investment is crucial in the development of making SPAR unique in supporting its retailers. One of SPAR’s underlying and core principles is “family business supporting family businesses”— we at SPAR take this very seriously.
How has SPAR adapted to the evolving challenges of COVID-19?
The SPAR Team was very quick to react and develop strategies to support SPAR retailers. During this very challenging period we did not miss one delivery day. We at SPAR are very proud of this achievement. We had the added responsibility where many SPAR stores were the only store in town. Every order was carefully checked to make sure that every store was able to receive the stock as it became available
How do you envision the next six months for convenience? The big challenge we all face is to modify our offer to take advantage of the stay at home consumer. There is an increased need for basic cooking ingredients but at the same time consumers are looking for quality meals as restaurants remain closed or limited in what they can offer. Online will become increasingly important and our ability to adapt will build the platform for the future.
Justin Rejske Managing Director, Melitta Coffee Solutions What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry? Convenience and Impulse is fast paced and innovative with leading players always trying to exceed the consumer’s expected rate of change. Narrowing in on hot beverages, consumer demand for coffee on-the-go continues to rise and has been one of the few categories with positive year on year growth. One major challenge in the industry I would like to see addressed is sustainability. The push for a plastic-waste-free society has gained momentum over the past 12 months and will only grow further in the future. The reduction of single use cups is an easy one that must be addressed short term, however longer term I see consumer demand for non-dairy alternatives driving change in convenience.
Highlight one achievement at Melitta you’re particularly proud of in the last 12 months.
As a family business the Melitta Group is based on strong values. It is very important to us to make a positive contribution to society and to act responsibly. Another distinguishing feature of our company has always been innovative strength. These strengths are the very qualities that we are demonstrating in the current COVID-19 crisis: in view of the current health situation and the urgent need
for face masks, we have taken the initiative and combined our wide-ranging expertise to come up with an innovative solution within a very short space of time. With a great deal of passion, commitment and dedication, we have succeeded in producing a face mask shaped like a coffee filter within just ten days.
How has Melitta adapted to the evolving challenges of COVID-19?
Three key themes: passion, team spirit and courage! Over the past two months, working together we have all demonstrated that team spirit, cohesion and acting responsibly, which are what characterise us. Thanks to the values we live by, our philosophy as a family-owned company and our strong corporate culture, we are able to weather this crisis. Even though many of us are currently working far apart from one another, through this situation we are continuing to grow together.
How do you envision the next six months for convenience?
While everyone’s uncertain how long it will take for governments to reduce mandatory social restrictions and consumers to return to pre-COVID-19 times, the industry will adapt and bounce back with new initiatives through entrepreneurial spirit, just like our founder Melitta Bentz did in 1908 by delighting coffee lovers with the invention of the coffee filter. June/July 2020 | C&I | www.c-store.com.au 35
2020 LEADERS FORUM
Diann Melas Operations Manager, Gascorp (Budget Petrol) What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
The most enjoyable part about convenience is the fast paced environment. Our customers demand our business and industry to be constantly evolving. The range in a service station has evolved over time to offer more supermarket style ranging. One challenge I’d like to see addressed is to see suppliers value the importance of P&C similarly to supermarkets, ensuring we receive stock and pricing that allows us to remain competitive. This has proved challenging through the stock shortages which COVID-19 brought about.
Highlight one achievement at Budget you’re particularly proud of in the last 12 months.
The greatest achievement of 2019 for our independent Budget Petrol stores was our 12 Days of Christmas Promotion. It was our first promotion run across all stores which gave consumers the opportunity to win one of 12 fantastic prizes, the promotional value was over $25,000. The biggest prize was a year’s worth of fuel for one very lucky customer. We also donated to 12 different charities and had 12 Santa store visits giving free goods to consumers. We hope our 2020 plans will be bigger and better.
How has Budget adapted to the evolving challenges of COVID-19?
Although probably the most challenging time in the 35 years of our operation, we adapted quickly to ensure we were continuing to trade safely, being one of the essential services which remained operational. With the assistance of UCB we were one of the first within the independents to install social distancing decals on our flooring, COVID-19 health and safety precautions, sneeze guards on all cashier points and sanitiser for customers. We saw fuel volumes drop by up to 80% overnight and the demand for sanitiser, toilet paper/ paper towel grow by 1000%. Not something that anyone, including Budget, was prepared for.
How do you envision the next six months for convenience?
Convenience is tough in general, however in the current climate the next six months will prove to be the most challenging for our industry. The turnover is just not there; this makes it difficult to maintain certain parts of our convenience business i.e. fresh food and food-to-go will be difficult to support with 50% less customers walking through the door. All we can do is continue to offer our high levels of personalised service to ensure our customers keep coming back to support their local Budget Petrol.
Haydn Tierney Managing Director, Bowser Bean What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
The P&C industry continues to grow and remains relevant despite the changing nature of retail in Australia. I relish the opportunity to take what is traditionally a grudge purchase and offer the consumer a pleasant and rewarding retail experience in terms of both offer and convenience. Petrol retailers can no longer rely on the old 'servo' equation of petrol, soft drinks, chips, lollies and tobacco. Instead, we need to embrace food on-the-go and meal solutions, coffee and evolving convenience lines. P&C locations should strive to become part of their customer’s daily routine rather than a weekly petrol fill up point.
Highlight one achievement at Bowser Bean you’re particularly proud of in the last 12 months.
We have successfully launched two greenfield locations. This has allowed us to design store fit-outs from the ground up that communicate our commitment to great food and coffee while still servicing traditional and developing P&C lines.
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How has Bowser Bean adapted to the evolving challenges of COVID-19?
We took steps to protect our staff by installing protective screens and through ongoing communication. We sharpened our offer and ensured community awareness of our product mix and available purchasing channels. We have also actioned new methods for customers to make purchases, including via their phone, drive thru and online ordering. We hope to roll out our first Bowser Bean branded delivery services soon.
How do you envision the next six months for convenience? Never before has a retail change of this nature and magnitude been forced on Australians. Consumers will emerge from COVID-19 with different buying habits and likely seeking better offers. However, the transaction may not look the same as it did previously. Stores need to ensure their offers are primed for this new market as well as optimal marketing channels: phone, online, app, drive thru and forecourt service. Embrace food on-the-go and meal solutions, coffee and evolving convenience lines. P&C locations should strive to become part of their customer’s daily routine rather than a weekly petrol fill up point.
2020 LEADERS FORUM
Steve Cardinale Managing Director, New Sunrise What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
Virtually overnight COVID-19 has changed consumer behaviour and with that, customer and staff expectations. COVID-19 has had a physical and psychological impact on all of us and our families, staff and customers. Some of us have coped better than others. There is no doubt that the virus will change the way we interact. We all now think twice about touching a door handle or petrol nozzle and have great respect for each other’s personal space.
Highlight one achievement at New Sunrise you’re particularly proud of in the last 12 months.
What were once seen as standard mundane procedures in retail have now become critical business imperatives and competitive points of difference between retailers. In fact, these simple tasks have always been important to consumers and a key point of difference between retail stores. It is about consistently doing the small simple tasks well. New Sunrise launched a retail boot camp in May, which was a road to recovery initiative and concentrated on setting the store up for success in this new hyper-sensitive environment.
How has New Sunrise adapted to the evolving challenges of COVID-19?
In New Sunrise we were forced to rethink the customer’s experience in our store, as well as the safety of our staff. We all needed to move quickly to review our operating model to give reassure them we were the safest place to shop and work. I am proud to say our team were very fast to react and within two weeks of the commencement of social distancing, we provided a total social distancing and communication pack. This included counter sneeze guards and a number of social distancing signs for the pumps, store entrance and floor decals. COVID-19 comes on the back of bush fires and drought. The good news is the drought is starting to break; however many independents and their communities are still suffering. Regardless, I still get a strong sense of gratitude from New Sunrise independents retailers.
How do you envision the next six months for convenience?
It is not going to be an easy road, however I feel the future looks good for New Sunrise retailers, and we have a lot to look forward to. We have re-engineered our promotional activity and our customer value proposition and taken a fresh new look at all our categories. We have already commenced rolling this out and we are seeing good sales growth well above the market.
Karen Walsh Executive Manager — Payments, Suncorp What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
During COVID-19, convenience has been more important than ever. In fact, heading to my local store to stock up on bread, milk, or afternoon snacks has been one of my few daily outings while working from home! I love that I’m able to go when it’s convenient to me and the variety of products available in one place has certainly made life simpler during such an uncertain time. In terms of challenge, I often hear from our small business customers about how they struggle to make savings and reduce the day-to-day running costs of their business.
Highlight one achievement at Suncorp you’re particularly proud of in the last 12 months.
Implementing Wave and Save, or least-cost routing, for more than 3,000 of our merchant customers is one of the things I’m most proud to have been involved with at Suncorp. EFTPOS is the lifeblood for many of our small business customers, so being able to help process cards the cheapest way possible is such a simple, but important, way we can make a difference to a business. Particularly over recent months when customers and businesses have shown a strong preference for card-based payment.
How has Suncorp adapted to the evolving challenges of COVID-19? We have been supporting our customers online and via the phone and where possible our stores have remained open. Financially, we know this has been a difficult time for many, especially small business owners, and it’s critical to ensure they have the support they need to get through this. Suncorp’s support options and financial relief measures aim to assist everyone who may be facing financial challenges as a result of COVID-19. Our website includes all the details of our COVID-19 support measures.
How do you envision the next six months for convenience?
COVID-19 has brought a level of uncertainty, and while the convenience industry is an essential service, we do know it will face challenges, especially in business districts where many people are working from home. That said, we’d encourage our convenience customers to pick up the phone to find out how we can help them navigate the uncertainty of COVID-19 by accessing solutions such as Wave and Save or financial relief.
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2020 LEADERS FORUM
Theo Foukkare General Manager Sales, Pacific Optics; AACS Supplier Board Director Commitment to progress through innovation in products, retail concepts and genuine love of customer service is in my opinion what underpins the ongoing success of convenience.” Theo Foukkare
What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
The best thing about convenience is the people and their passion! There are so many personalities and entrepreneurs that continue to make convenience great. Their commitment to progress through innovation in products, retail concepts and genuine love of customer service is in my opinion what underpins the ongoing success of convenience. Having been a part of the industry for over 23 years now, so much has changed, whilst in the same breath so little has changed. Great products, convenient locations, easy access, excellent customer service and a passion for success continue to be important ingredients in winning. I see the single largest opportunity for the industry is for our ability to be allowed to sell alcohol in convenience. Industry forecasts suggest it could add up to $1.6 billion per annum in incremental revenue to the channel, which will drive increased foot traffic and greater in store sales across all categories at the same time. This would be a real game changer for convenience and the time is now.
Highlight one achievement at Pacific Optics you’re particularly proud of in the last 12 months.
A year is a long time and it’s very hard to highlight just one achievement. I am particularly proud of our product and business achievements. Our biggest product achievement was the launch of our True Wireless Airbudz headphones. Not only did they represent amazing value at an RRP of $40 in comparison to the Apple version, they delivered an incremental $3 million plus in retail sales over the last 12 months for our partners. In business, we are extremely proud of achieving sustained results during the most adverse trading period we will likely ever experience, whilst keeping our team in safe and in jobs.
How has Pacific Optics adapted to the evolving challenges of COVID-19?
The COVID-19 pandemic is an event most of us will never likely live through again. Our priorities quickly escalated to the safety of our people and partners, as well as the 38 June/July 2020 | C&I | www.c-store.com.au
ongoing business continuity of supply. We very quickly implemented a COVID-19 management plan for all front line sales team, warehouse and office staff in line with government regulations. We also developed a work from home strategy implemented at pace, which has worked flawlessly. Pacific Optics were an early adopter of Microsoft Teams over 12 months ago, so the transition to work from home was made easy given the entire company was already live, trained and ready to go – and it was built into our daily routine. Clearly the demand for hand hygiene exploded like we have never experienced. Utilising our existing relationships and given our strong sourcing capability, we were quickly able to introduce a range of hand sanitiser, face masks and antiseptic wipes to satisfy demand. These products arrived in late April and were supplied to our partners in early May. The speed of introduction of this range has greatly assisted us in managing our overall health and maintaining the majority of our team in place throughout this period.
How do you envision the next six months for convenience?
The next six months will be very interesting in Australia, as currently there are over five million Australians on life support in some way or another: loan deferral, rent deferral, early access to superannuation, Job Keeper, Job Seeker and other government subsidies. All eyes are on September/October for when this support ends, which will give a better insight into the economic impact. Throughout this pandemic, the convenience channel has been deemed an essential service, which outside of significant declines in fuel volume, has been able to maintain a relatively strong level of shop sales. Albeit slightly deflated, but much better off than most industries. Early indications are showing that convenience will most likely continue to be used more as a safe, convenient, less crowded option than in the past, with a large number of consumers realising that the range on offer across the entire store is a lot more than what they were aware of. A lot of NPD from the March to June quarter has been pushed back, so I expect that the second half of the year will be jam packed with innovative new lines that will greatly assist in driving traffic back into the channel.
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2020 LEADERS FORUM
Scott Thomson National Business Development Manager, SodaStream Australia Consumer buying habits have perhaps been changed forever and we need to recognise these changes and adapt swiftly.” Scott Thomson
What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
I enjoy the dynamic nature and the need to continually evolve to meet consumer needs and expectations. SodaStream was launched in Australia around 50 years ago with a product offering well ahead of its time. Over these past five decades SodaStream has grown and evolved together with changing consumer and global trends, but at the very core, it has remained true to its essence. SodaStream is an inhome beverage making system that is revolutionary in that it empowers consumers to make better-for-you beverages when, and how, they wish. The SodaStream system is also environmentally friendly. By using one BPA free carbonating bottle over multiple uses, we enable consumers to reduce their eco-footprint with ease. In fact, one carbonating bottle saves over 2000 single use plastic bottles from ending up in our environment or in landfill. Australians continue to be sustainably minded and this is not a trend that will change. The convenience industry is, however, perceived as being wasteful, and contributing to the ever growing waste.
Highlight one achievement at SodaStream you’re particularly proud of in the last 12 months.
In 2019, SodaStream globally saved a staggering 2.8 billion single use plastic bottles from entering oceans and landfill. SodaStream continues to lead the way in helping to reduce peoples’ impact on the environment while empowering them to create and enjoy their sparkling water from the convenience of their home. It’s exciting to be a part of a company that gives so much to the world. I am so very 40 June/July 2020 | C&I | www.c-store.com.au
proud to be a part of such an innovative and thriving brand that delivers both to the environment and to our retailers.
How has SodaStream adapted to the evolving challenges of COVID-19?
The demand for SodaStream Sparkling Water Makers, Flavours, and Gas Cylinders has strengthened during these difficult times. Consumers are increasingly looking for ways to enjoy the things they love, at home. SodaStream caters perfectly to this. Many retailers have had to shift their focus in how they get to market via channels like online service, home delivery or in some instances, a complete product focus shift, with many unfortunately not able to weather the storm. With this change in the way we shop day to day, for us one particular channel has stood out amongst the rest: P&C. With major retail slowing, or in some cases, shutting down, the service station has become a ‘one stop-shop’ for SodaStreamers. The forecourt units have become a well recognised beacon to consumers, while for retailers, it has provided incremental sales in an area previously underutilised.
How do you envision the next six months for convenience?
There is light at the end of the tunnel for all Australians. Many retailers will begin to get back to some normality, but one big positive we can take from this harrowing experience is that COVID-19 has given businesses and business leaders a new perspective, the drive to adapt, and develop a different outlook on consumer needs and habits into the future. The convenience channel is robust and has seemingly thrived through these tough times. Consumer buying habits have perhaps been changed forever and we need to recognise these changes and adapt swiftly.
2020 LEADERS FORUM
Consumers need to be confident they will find their favourite brands or else they will be less likely to shop in the channel.”
Damien Moran National Business Manager, Grocery Consumer Health Care, iNova
Damien Moran
What do you most enjoy about convenience and what is one challenge you’d like to see addressed in the industry?
I enjoy working in the convenience channel because it’s very fast paced. There are also a lot of collaboration between retailers and suppliers and so there seem to be less barriers in terms of what can be achieved. One of the challenges that I have noticed in the channel is ranging consistency. There is a lot of potential to drive sales of non-traditional categories in convenience. However, in order for these categories to grow, there needs to be greater consistency in terms of retail ranging. Consumers need to be confident that they will find their favourite brands or else they will be less likely to shop in the channel.
Highlight one achievement at iNova you’re particularly proud of in the last 12 months.
iNova distributes a wide range of market-leading, branded prescription medicines and non-prescription healthcare products. While we have a lot of great brands, we are a relatively small player in convenience. Developing the new
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Difflam 8-Pack, specifically for the convenience channel, has been very exciting.
How has iNova adapted to the evolving challenges of COVID-19?
COVID-19 has resulted in unprecedented demand for some of iNova’s products and brands. While this has put a lot of pressure on our supply chain, we have been able to maintain very high service levels. In order to achieve our fulfillment rates, we have had to change the way that we work with some of our retail partners. Greater transparency and alignment was required in order to optimise the supply chain.
How do you envision the next six months for convenience? It’s difficult to say what will happen in the next six months. The recent government regulations that were imposed due to COVID-19 have had a significant impact on convenience. I am hoping that Australian COVID-19 infection rates will continue to decline and that these restrictions will start to ease. Social distancing has resulted in a very challenging retail environment and I am hoping to see the market return to normal.
COFFEE
CAFFEINE FIX
Convenience stores wake up and smell the coffee
Training staff in food hygiene and operating and troubleshooting the machines is crucial to success
There is a common misconception that simply putting in a coffee offer will lead to sales.”
T
he impressive growth of hot coffee sales through convenience is continuing to play a leading role in helping stores maintain profitability in an often challenging trading environment.
With long-term declines in such crucially important categories as tobacco hitting bottom lines, many operators have sought to build up their hot food and hot beverage offering… with impressive results.
Steve O’Shea, Suntory Coffee The 2019 State of the Industry report from the Australasian Association of Convenience Stores (AACS) shows the basket penetration of both beverages and food has continued to flourish, with beverages now represented in more than 70% of baskets. The data shows the hot beverage category is the fastest growing category in convenience for the third year running and is now worth more than $300 million. When executed well, the introduction of a quality coffee offer will typically deliver value across multiple categories. Besides the coffee sales themselves, the category will commonly trigger growth in companion products such as fresh food, bakery and snacks. There can also be an increase in forecourt traffic which has a positive flow-on effect for other categories such as fuel sales and tobacco. With food in particular, good management and good planning can make all the difference in boosting basket size.
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The AACS says that hot beverage shoppers typically buy 3.7 times per week and those who prefer to get their caffeine fix from convenience stores do so every two days. Most coffee is sold during the morning period, with up to 70% of coffee sales occurring before 11am in convenience. Mornings see tradies, people commuting to work, students and parents doing school runs pop in for their morning brew. As the day progresses, stores generally see commercial travellers, taxi drivers, delivery drivers and regulars coming back for their afternoon pick-me-up. Another key afternoon group is parents on their way home from picking up the kids, who often grab a coffee and a treat for the children. The potential then is clear, but this is a category which requires careful management. There is no ‘one size fits all’ solution when it comes to developing a convenience coffee offer. There are many factors that play a part in the success of an outlet, including location, site access/parking and the proximity to competitors. What is important everywhere though is an understanding that Australian coffee consumers have quite a sophisticated palate. While there has been coffee growth on the back of competitive pricing, shoppers continue to call out quality as the main reason for purchasing hot coffee from the convenience channel. It is the operators who focus on quality and consistency for their coffee and food offer that have seen the most significant year on year sales growth.
COFFEE
Roasting Warehouse Specialty Coffee offers a national capability for supply chain, equipment sales and servicing
Roasting Warehouse Specialty Coffee is a company that offers a national capability for supply chain, equipment sales and servicing and barista training. The company’s national business development manager, Anthony Warthold, said that there are two moments of truth in retail. “The first is when someone chooses your product or service and the second is when they use your product or service,” he said. “When it comes to coffee, the second moment of truth is vitally important… operators can build an amazing coffee and food offer, but if they don’t deliver on taste, quality and value, it’s unlikely they will get repeat business.”
Melitta’s coffee machines integrated into Pie Face in Broad Meadows
“Fully automatic self-service coffee machines are highly desired by our convenience store customers due to their high quality, consistency and ease of use: not only for the consumer but also the staff,” he said. “The advantages of a fully automatic coffee machine mean staff just need to keep the hoppers filled with fresh milk, coffee beans and chocolate powder, then consumers have the choice to dispense a large assortment of high quality products. Finally it’s then only a matter of inserting a cleaning tablet for daily maintenance.” Barista coffee offers tend to work best in high-volume sites located on main roads or near busy shopping precincts. For many convenience stores, space is also a major consideration and, in smaller outlets, a barista coffee offer just isn’t achievable.
Similarly, Suntory Coffee – which provides a full suite of products including award-winning fresh coffee blends, barista equipment, a team of service technicians and a team of in-house barista trainers – says any investment in a coffee offer needs to be very purposeful and set up specific to a site’s growth objectives.
In making their hot beverage machine decision, stores then need to look at their budgets, consider ongoing operational costs, analyse their bench space, and plan for who will be looking after the area.
“There is a common misconception that simply putting in a coffee offer will lead to sales,” said Suntory Coffee’s group customer manager, Steve O’Shea. “A lot of investment, hard work and passion is involved to make it a truly successful and sustainable offer.”
Most new coffee machines are extremely easy to use and maintain, and staff are generally given full operational and cleaning instructions by suppliers. At a minimum, staff must be able to troubleshoot simple, straightforward fixes, carry out regular cleaning and handle things like milk refills or spills.
The company says that consumers now know that cafés aren't the only place they can get a great quality coffee on the go, and this helps stores get customers in the door and opens up the opportunity to upsell them and build loyalty.
Keeping the coffee work station clean is vitally important, not only to make it more appealing to consumers and encourage sales, but also from a food safety perspective.
“In recent years we have seen the convenience and impulse channels steadily increase their investment in coffee and a big focus of this has been on improving quality,” said Mr O’Shea. “Whilst we can’t forget about price, we know consumers primarily focus on quality and taste when choosing a coffee destination.” Melitta Professional Coffee Solutions Australia – which offers branded products including coffee and consumables, coffee machines, and after-sales service – says the type and brand of machine used to make the store’s coffee is critical. With convenience stores often operating long hours with limited staff, the company’s managing director, Justin Rejske, says highquality, fully automatic machines are very popular in the channel.
Roasting Warehouse Specialty Coffee says that most sites will require a preventative maintenance service on the coffee machine and grinder at least twice per annum, however this is dependent on volumes. Other areas where customers will congregate, such as condiments stations, tables/benches need to be maintained and kept clean and tidy. It says push button coffee machines can become quite messy very quickly, so it’s important to pay special attention to those areas, especially during busy morning trading. While attracting customers through the door with the promise of a quality offer is a great first step, it is only half the battle. Good coffee is a major drawcard during the morning rush, where coffee is commonly bought alongside typical convenience type breakfast products like doughnuts, muffins, sandwiches and bottled water. During other day parts, such as lunch or afternoon
AT A GLANCE • Hot beverage shoppers typically buy 3.7 times per week, and those who prefer coffee from convenience channels visit once every two days. • While stores can’t forget about price, consumers primarily focus on quality and taste when choosing a coffee destination. • Bundling coffee with food is a proven method of enticing consumers to trade up. • Most coffee is sold during the morning period, with up to 70% of coffee sales occurring before 11am in convenience.
June/July 2020 | C&I | www.c-store.com.au 45
FEATURE COFFEE
An example of Melitta’s coffee machines in store
Think about the travel path from the coffee machine to the cash register, every step along the way presents a sales opportunity.”
Justin Rejske, Melitta Professional Coffee Solutions Australia
snack time, the complementary co-purchase of choice becomes more like pies, sausage rolls, and confectionery. However, it is important for stores not to ‘overdo’ it. Melitta’s Justin Rejske says that ‘less is more’ in terms of product position near the coffee machine. “Don’t overcrowd the area but focus on the real co-purchase opportunities,” he said. “Also think about the travel path from the coffee machine to the cash register, every step along the way presents a sales opportunity.” In the petrol and convenience space when point of sale material is everywhere, stores can easily become cluttered with far too many messages. A cleaner outlook with clear value propositions is often a better approach to engage consumers. Mr Rejske says many of Melitta’s chained convenience store customers have achieved exceptional sales results by creating appealing, well-lit and dedicated coffee spaces.
Anthony Warthold from Roasting Warehouse Specialty Coffee says bundling coffee with food is a proven method of enticing consumers to trade up. “Things like breakfast combos are a good way to increase basket size during busy trading periods such as the morning rush,” he said. “Loyalty programs are also a good way to reward loyal customers for their patronage and are generally well received.” Another option is to surprise consumers by providing a small item with their coffee at no charge, such as a bite-sized cookie. The customer appreciation of this small item and the perception of value can ensure repeat visits. Consumers are used to ‘upselling’ in petrol and convenience outlets so staff mentioning things like a coffee loyalty program, or a combo with food items can be highly effective.
“If a coffee machine can be seen from outside the store or when entering the front door, then point of sale material isn’t critical,” he said. “However, if the coffee machine isn’t visible, point of sale becomes an important tool in capturing the attention of consumers.”
The AACS State of the Industry Report shows that hot beverages visit frequency is the strongest of any category and sits at 32% above the channel average. This indicates the strength of the category in driving foot traffic and shows why coffee will continue to have a growing impact on the look, feel and profitability of convenience stores up and down the country. C&I
Store operators should try various promotional activities and track the results to see which campaigns are more successful than others.
* Convenience & Impulse Retailing magazine would like to thank Suntory Coffee, Melitta Professional Coffee Solutions, and Roasting Warehouse Specialty Coffee for supplying information for this article.
46 June/July 2020 | C&I | www.c-store.com.au
SUGAR CONFECTIONERY
SWEET TREATS Why sugar confectionery is still holding its own in convenience.
F
or many of us, there are few things sweeter than a sugary treat. Sugar confectionery is the ultimate moodlifter, an easy and quick pick-me-up and a way to share joy with family and friends. Whether it’s a singleserve treat picked up when refuelling or a share bag of lollies for those at home, confectionery is the indulgence of choice for many Australians.
Australians would shell out an incredible $159 million on the holiday period alone. And while the average spend was calculated at a modest $21, some families in Sydney’s affluent north shore area admitted to shelling out $1000 on confectionery for last year’s holiday. AACS CEO Jeff Rogut said it remains an important category for convenience throughout the year.
According to the Australasian Association of Convenience Stores’ (AACS) State of the Industry Report for 2019, the confectionery market saw sales of $493 million last year, up 2.1% on 2018. It is the strongest result from the category since 2016.
“Confectionery remains a highly impulsive category in convenience stores and even in tough retail conditions, performs well as consumers seek out small treats for themselves,” Mr Rogut said.
The report also found that in the last five years, only 2017 failed to deliver growth, while the past two years have both seen $10 million in value growth. Sugar confectionery is the strongest performer in the category, accounting for 60% of the growth.
A breakdown of results showed chocolate confectionery accounted for 57.3% of the category, sugar confectionery (including gum and mint) made up 38.9% and nutritional bars totalled 3.8%.
Our obsession peaks in October with the onset of Halloween. Last year confectionery company Mars Wrigley estimated
“Although chocolate bars are the core sellers in the category, sugar confectionery represents a solid percentage of sales.
48 June/July 2020 | C&I | www.c-store.com.au
SUGAR CONFECTIONERY
AT A GLANCE • Value growth often outpaces unit growth in the category. • The impulsive nature of confectionery purchases makes it an important category for convenience. • Promotions and innovative products drive sales in the category, as does point of sale merchandising. • It is also a strong performer in grocery, where IRI Australia estimate its worth to the sector at $570 million. • Lower sugar options continue to grow in popularity with consumers.
Promotions and innovative products drive sales in the category, as does store placement where products are within arms-reach of the service area,” Mr Rogut added. Sugar confectionery performs well in grocery, too. According to IRI Australia, it’s worth approximately $570 million annually to the sector. IRI also found that recent panic-buying sparked by COVID-19 had a positive affect on the category, with the value growth for the category in March this year – when panic buying began, at 11.6% compared to March 2019. However, the government imposed social distancing restrictions had a negative impact on petrol and convenience sales for that month. The drop in fuel demand and fewer public transport commuters had a drastic effect on sales, which IRI calculated at an alarming 53% decline. The global pandemic and resulting lifestyle changes, such as working from home and temporary pause on socialising also saw a change in the type of confectionery sought by consumers. Earlier this year consumers sought permissible indulgence and premium products and value growth outpaced unit growth at 5.3% and 2.8% respectively as consumers traded up to fewer, more premium offerings, IRI said. However, once the pandemic hit, figures from March reveal unit growth outpaced value growth, at 18.8% and 11.6% respectively.
Australia’s high sugar confectionery consumption rate was a big drawcard for Morinaga, who recently introduced their popular Hi-Chew range of fruit flavoured, chewy lollies into the Australian market. The brand has a cult following and an incredible 170 flavours internationally. In Australia, they have introduced three 90g/100g packs of assorted flavours and four flavours in a stick format. The brand appeals to Gen Zs and millennials with a ‘discovery’ mindset, and as they sell at a higher retail price point to their competitors, also appeal to those with discerning tastes by being perceived as a more premium choice. The confectionery’s blend of familiar and exotic flavours also entices consumers to trial the chews. Managing director and CEO of Morinaga Asia Pacific Terry Kawabe said the brand viewed Australia as one of the more favourable international markets. “Consumption per capita in Australia of sugar confectionery is significantly higher than other Asian markets such as Japan and China,” Mr Kawabe said. “The Australian trend is similar to the USA market where Morinaga have achieved great success over the last 10 years. We believe the footprint in the USA should be synchronized in the Australian market.”
“Like most Food and Beverage categories Sugar Confectionery has benefited from the stockpiling and panic purchasing we have seen recently,” IRI Australia lead consultant Justin Nel said.
Mr Kawabe said the format of Hi-Chew was well suited to convenience, which was an important channel for the brand as impulse merchandising was key for driving sales.
“However, I think there is also an element of allowed indulgence, as consumers take solace in comforting foods during these uncertain times. Not to mention all the parents and first-time teachers trying to manage their students.”
“Grass root merchandising such as merchandising units at checkouts have worked extremely well in encouraging consumer trial. The different packs, sticks and bags are both ideal for the convenience channel. The stick is the ideal impulse and trial option,” he said.
Consumption per capita in Australia of sugar confectionery is significantly higher than other Asian markets such as Japan and China.” Terry Kawabe, Morinaga Asia Pacific
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SUGAR CONFECTIONERY
Like most Food and Beverage categories Sugar Confectionery has benefited from the stockpiling and panic purchasing we have seen recently.” Justin Nel, IRI Australia
“However, differentiation of the true to life fruit flavours, unique chewy texture, and flavour variety will definitely deliver an exciting sales opportunity for convenience channels.” One of the market leaders in Australian confectionery, Nestlé, are also experiencing growth. Their Allen’s range is the largest lolly brand in Australia and is worth $150 million. Head of marketing confectionery at Nestlé, Joyce Tan, said the top sellers were Allen’s iconic lolly Snakes Alive, Party Mix, Retro Party Mix, Red Frogs, Chicos and Killer Pythons. Of particular note were Snakes Alive (220g) which has grown 5.4%, Killer Pythons up 21.8% and Frogs Alive up 12.6%, according to the Nielsen Scantrack Combined Australia Grocery/ Conv MAT (to 23/02/2020). Interestingly, the top sellers in their medium lolly bags ranges remain the same across both convenience and grocery channels. Fit for purpose products in convenience, such as Allen’s mini bags and travel cups, also continue to be strong performers for the brand and add incremental sales to the Allen’s range. Ms Tan said convenience stores were critical in driving impulse purchases and driving sales at counter and off-location displays was crucial to swaying consumers to try products, as they reached shoppers from multiple touchpoints. Better-for-you treats have also been gaining in popularity in recent years. While they in no way replace indulgent treats, brands are looking to offer reduced sugar products and minimise or eliminate the use or artificial colours and flavours. One brand which has been offering delicious fruit jelly lollies and chews free from artificial colours or flavours since 1991 is Mondelez’s The Natural Confectionery Co. The brand’s range of snakes, dinosaurs, sour squirms and fruity chews appeal to kids, while parents can take comfort in providing a treat with no-nasties. The brand has also delivered a reduced sugar option
50 June/July 2020 | C&I | www.c-store.com.au
in their 25% less sugar range, which Euromonitor analyst Stevani Susanto said has been a hit with consumers. Mr Susanto said sugar aversion was an increasing trend in confectionery, adding consumers’ health concerns were pushing them away from sugary snacks and towards those that are perceived as healthier or lower in sugar. “In recent years, more sugar confectionery manufacturers have launched sugar-free or reduced-sugar variants of their products due to rising demand for low-sugar options as well as to reinvigorate sales,” Mr Susanto said. “For example, under its The Natural Confectionery Co brand, Mondelez launched the 25% Less Sugar Jellies range in late 2018, while Nestlé followed suit by launching the 25% Less Sugar range under its Allen’s brand across supermarkets and independent grocery retailers in 2019.” Another trend is the rise of sharing formats, as the consumption habits of consumers change and as consumers tend to feel less guilt about indulging when it was a shared experience, Mr Susanto said. This has been particularly true of chocolate. “As chocolate confectionery posted relatively conservative growth, retailers were looking for ways to boost value sales through aligning their packaging with people’s consumption habits. As consumers seek out permissible indulgences, chocolate confectionery manufacturers were making it easier for consumers to indulge with less guilt,” he said. “One of the ways this is done is by introducing larger packs for sharing occasions. For example, Robern Menz reintroduced a bag format of Violet Crumble in early 2019. When Violet Crumble was still under Nestlé, the bag format was stopped back in 2010. Robern Menz is bringing back this format in line with consumers’ increasing desire for portion control.” C&I C&I would like to thank IRI Australia, AACS, Morinaga Asia Pacific and Nestle for their contribution to this article
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FOOD TO GO
FAST FOOD
The food-to-go market in the UK is showing exponential growth, driven by the vibrant convenience retail sector. Simon King reports
T
he UK food-to-go market is forecast to be worth £23.4 billon (A$42.3bn), up from £18.5bn (A$33.5bn) in 2019, growing by 26.4%, according to recent data from IGD Research. The data highlights that the foodto-go channel is set to experience double the growth of the wider UK food and grocery retail market – 12.5% – over the next five years. In the UK, the food-to-go sector can be segmented into a number of different areas including specialist food-to-go retailers, convenience stores, forecourts, quick service restaurants (QSRs), coffee shops and supermarkets. In the spirit of competition, the product offering across the retail mix can often be as varied as the outlets themselves. What the majority of food-to-go outlets have in common, however, is the need to be able to respond both quickly and efficiently to peaks in demand throughout the day, whilst at the same time minimising over-production and any potentially costly end-of-day wastage. As convenience stores offer an increasingly diverse range of products and services, it is natural that more and more people are rediscovering the true convenience that they provide. 52 June/July 2020 | C&I | www.c-store.com.au
A typical food-to-go offering consists of freshly baked products such as bread rolls, Danish pastries, tray-bakes, pasties, pies and sausage rolls. Many of these products are either frozen or partbaked and simply ‘finished off’ in a small convection oven to provide the allusion and appeal of a fresh baked product. IGD head of shopper and food-to-go insight Rhian Thomas said: “Food-to-go remains a key growth opportunity for businesses, and one that appears particularly attractive given the structural and growth challenges being faced by UK supermarkets and hypermarkets right now.” While there continues to be good opportunities for growth in this area, the gap will grow between those businesses who are actively targeting food-to-go growth and those who simply want a presence in the channel. Opportunities remain, however, for those with clearly defined and relevant strategies. Ms Thomas added: “Convenience and food-to-go are increasingly intertwined, as food-to-go success becomes increasingly critical to the prospects of most convenience stores. Similar principles apply to the forecourt channel, where the added need to encourage dwell time among shoppers will grow in importance as the factors influencing where and how people stop on the road shift.”
FOOD TO GO
Scottish convenience retailers embrace food-to-go Last year, Scottish convenience store operators could apply to the Scottish Government Capital Investment Programme, which offered funding to assist the creation of in-store food-to-go facilities. Under the programme, retailers could apply for up to £7,500 (A$13,581) and any funding offered had to be matched by the retailer. Dr John Lee, head of policy and public affairs at the Scottish Grocers Federation, said: “We received 95 applications – the standard was very high. Food-to-go, as a category, is becoming increasingly important.” “It’s responding to customer needs, giving the stores a point of difference and helping them to stay competitive in the face of the challenges from the big supermarkets, the discounters and online. Food-to-go is hard work, but for the stores that are doing it right, it is paying off.” Dr Lee added: “In Scotland, the convenience store as a traditional grocery store will begin to morph into something where food-to-go could be the biggest part of the business. There was a broad range of applications: some are setting up pretty large deli-style operations in-store, others are just at a starter level, using the kind of coffee machines that also allow you to make porridges and soups.” Dr Lee said that he was delighted that the funding programme had resonated well with Scottish independent retailers. “I don’t think that any other trade association has managed to do this for their members – over the past two years we have leveraged in £550,000 (A$995,992) worth of direct investment to our members.”
“Consumer expectations around convenience and forecourt food-to-go are rising fast, creating an opportunity for businesses to invest and upgrade, or else risk getting left behind. The good news here is that there’s lots of growth to go for, and in many locations, there remains opportunity to do more to meet these evolving shopper needs. Those businesses who focus more on emulating competitors rather than investing in how they can innovate will meet the big challenges.” Outside of the convenience store sector, food-to-go specialists in the UK include Greggs, Leon, Pret and Subway. IGD research said that sales among food-to-go specialists will increase from £5bn (A$9.1bn) in 2019 to £6.3bn (A$11.5bn) in 2024. Ms Thomas said: “Food-to-go specialists include a wide selection of different operators, and within this segment we’ve witnessed contrasting fortunes and performance over the past year. What is clear, however, is that significant growth opportunities exist for those with a relevant proposition who target the right locations. “While menus continue to evolve, with vegan and vegetarian lines gaining more profile on many menus in 2019, the location question is a fascinating one right now, as the combination of
Convenience and food-to-go are increasingly intertwined, as food-to-go success becomes increasingly critical to the prospects of most convenience stores.” Rhian Thomas, IGD
Foodservice gains traction in UK convenience sector A new report from the Association of Convenience Stores (ACS) provides a comprehensive view of the UK convenience sector. The Local Shop Report 2019 states that there are 46,388 convenience stores in mainland UK; Wales, where the author of this article lives, has more shops per head than any other part of mainland UK. Looking at foodservice, the ACS report highlighted seven key categories and gave the percentage of stores in the convenience sector that provide each service: • 34% – Customer-operated coffee machine • 24% – In-store bakery • 23% – Hot food counter or cabinet • 22% – Food preparation area/kitchen • 14% – Serve-over coffee machine • 12% – Microwave for customers • 10% – Food-to-go concession June/July 2020 | C&I | www.c-store.com.au 53
FOOD TO GO
AT A GLANCE • In Australia, food onthe-go grew 11.5% in 2019 and is worth $659 million, according to the AACS 2019 State of the Industry Report. • It is the second fastest growing category and the third highest by value in Australian convenience. • The take home food category increased by $5 million last year, generating $149 million in total sales for the channel. • Consumers are increasingly looking to healthy, fresh and better-for-you options such as pre-made wraps, sandwiches and salads. • Stores who cater different offers to different dayparts generate more sales, particularly for the lunchtime offerings.
Many businesses – small and large – are moving away from their traditional bakery offering to a sharper food-togo focus.”
Consumers are increasingly looking to healthier on-the-go options
Food and beverage combos remain important for driving sales
high rents and increased competition on high streets encourages a growing number of operators to vary their location strategy.”
“There is a definite opportunity in driving a higher spend in food-to-go through the hot offering,” Mr Rigali said.
Staying on the theme of location, HIM Research and Consulting said that food-to-go out-performs the overall market at sites where there is more footfall and where ranges have been invested in.
“Both ideally work hand in hand – in the right locations. Hot food and drink will help drive more breakfast and lunch trade and can be a source of some localised competitive advantage. Cold food is easier operationally and more of a basic expectation.”
Giorgio Rigali, communications manager at HIM Research and Consulting, said: “12% of all the trips to convenience are driven by the food-to-go mission. The largest barrier for shoppers to buy more food-to-go products from convenience stores is a lack of meal deals, according to 27% of shoppers.”
A food-to-go offering plays to the strengths of the convenience store operator. Despite having to contend with the online shopping revolution, convenience stores offer in abundance the sense of community and warmth that online retailers can only dream of.
Looking at average transactions, Mr Rigali said that hot food-togo is usually more expensive for the retailer, £5.61 (A$10.19) vs. £4.73 (A$8.59) for chilled food-to-go.
Convenience also equates to speed and instant gratification – the food-to-go sector is a prime example. Convenience stores are there exactly when you need them. C&I
Peter Linden, the NPD Group
Bakery outlets show strongest growth among QSR channels Bakery outlets have seen the strongest growth in on premise business amongst quick-service restaurant channels in the UK, according to a new report. The Bakery Trends Tracker Report, compiled by The NPD Group, reveals that sales and visits in the financial year ended April 2019 were up 19% and 18% respectively. The report concludes that this growth offers a solid platform with which bakery chains and independents can attempt to gain a greater foothold in the food-to-go and delivery markets. It claims that currently, bakeries only service 3% of total click and collect, but sales are already 54 June/July 2020 | C&I | www.c-store.com.au
increasing from this low base. Peter Linden, insight manager, foodservice UK, at The NPD Group, said: “Many businesses – small and large – are moving away from their traditional bakery offering to a sharper food-to-go focus.” “This involves putting on good coffee, offering new food choices such as pizza, salads, pasta, hot sandwiches, croissants, pasties and much more, and meeting the demand for click and collect and delivery.” “Bakeries by their very nature focus on food-to-go and this is where the growth is, with sales in this part of Britain’s total out-of-home market having grown by 8% in the year to April 2019.”
Mr Linden continued: “Bakeries can secure more growth by increasing their share of the food-to-go market from their current level of just 5%, and by bringing their food-to-go appeal to dayparts they don’t normally service, such as dinner.” He added that although many ‘old-school’ style family run bakeries still exist in the UK there are also a growing number of ambitious outlets ready to compete with big high street chains. “We believe competition will heat up,” he said. “Bakery chains are ideally suited to riding some of the big trends in British foodservice and have responded imaginatively to consumer demand for convenience.”
Find the best news in store at
www.c-store.com.au Convenience and impulse retailing is fast paced and exciting, and staying up to date with the latest news, trends and products is crucial for the success of your business.
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PRODUCT NEWS
Keep fit with plant based B-fit In great news for health-conscious Aussies looking to boost their hydration, a new, unique and certified organic beverage has just hit the market. Plant-based hydration drink B-fit features naturally occurring electrolytes sourced from high quality ingredients and created for those looking for a healthier choice. Lightly sweetened with pure agave nectar and manuka honey, B-fit harnesses nutrients from coconut water and botanicals and features no artificial sweeteners, colours or preservatives. Making it a great choice both for those seeking peak hydration, and those looking for a natural, plant-based beverage. Leading Australian nutritionist Lee Holmes said hydration is key to keeping to the body functioning at optimum levels and B-fit offers consumers a great way to achieve this. “Without adequate hydration, fluid balance and temperature are affected, joints and muscles can become inflamed and nutrients cannot be properly delivered,” Ms Holmes said. “B-fit is the perfect option for anyone seeking a delicious and replenishing drink that ticks many nutritional boxes. With its unique blend of ingredients, it’s a smart choice for aiding performance and supporting energy levels.” B-fit comes in three flavours: Dragon Fruit, Lemon Lime and Mango. Get your B-fit fix now in Caltex stores across Australia (RRP $5). The brand also has plans to expand distribution into select grocery stores and gyms in the coming months.
Clean is here to stay thanks to Olympian Products The instore shopping and working experience is forever changed now that we better understand how easily germs can be passed around from person to person. Finding efficient and effective ways to protect consumers and employees is top of mind for business owners and there are simple, economical strategies that can be implemented to give your team and customers peace of mind. Encouraging store visitors to sanitise their hands upon entry can be as easy as installing a permanent sanitiser dispenser, and with floor space at a premium it’s the wall-mounted units that are the heroes here. The latest addition to Olympian Products’ personal care and hygiene range is a sleek, durably designed tamper-proof unit that will fit any retail or office décor. Easy to install, the one litre touch-free dispenser operates on electricity or batteries. The units are also ideal for use in kitchens, staff rooms and back of house areas where employees need to maintain high levels of hygiene. "Fortunately it's economical and easy to install permanent sanitising stations, so improving hygeine protocols shouldn't be burdonsome," says Olympian Products Executive Director Tim Xenos. Olympian Products can also supply the hand sanitiser gel, as well as other PPE like wipes and masks. You can order now by calling 1800 413 711 or sending an email to sales@ olympianproducts.com
56 June/July 2020 | C&I | www.c-store.com.au
PRODUCT NEWS
Power through with KANGURU, now in Mixed Berry & Pomegranate KANGURU is back with a brand new flavour for their daily performance drink range. The new Mixed Berry & Pomegranate flavour joins their Original flavour as Australia’s first botanical infusion performance drink. Both use +1,000mg of super botanicals and balanced vitamins, are sugar free and have been scientifically developed to help the body generate its own clean-smart-energy and vitality. KANGURU’s Mixed Berry & Pomegranate and Original performance drinks have been created by Australian Surgeon and founder of Red Kangaroo Beverages, Dr David Kitchen. “Our new Mixed Berry & Pomegranate flavour delivers a delicious, fresh and crisp new taste, with all the benefits our customers have enjoyed from the Original,” Dr Kitchen said. “Unlike traditional energy drinks, KANGURU contains only effective quantities of premium natural ingredients that have been infused scientifically to deliver real energy real benefits.” KANGURU’s unique formulation includes more than 1,000mg of five super botanicals (Yerba Mate, Guarana, Korean Red Ginseng, Schisandra and Green Tea) and a balanced set of B Vitamins including B1, B2, B3, B5, B6 and B12. All the ingredients are of the highest grade, provided in legitimate beneficial amounts and then brewed into an infusion that then becomes KANGURU Original and Mixed Berry & Pomegranate. The new KANGURU Mixed Berry & Pomegranate 250ml cans are priced from $2.90 and will be available for purchase online at Amazon and in Australian supermarkets and convenience stores. For more information visit: www.KANGURUenergy.com.au.
Try Difflam Plus Anaesthetic this winter to ward off colds When a sore throat strikes, most people take action early on. More than 90% of us buy sore throat lozenges to ease cold and flu symptoms.1 Difflam Plus Anaesthetic lozenges provide rapid numbing relief for a painful sore throat with a triple action formula. And they also have anti-inflammatory properties, thanks to the ingredient Benzydamine, which is clinically proven2 to reduce swelling and pain caused by inflammation They also contain an antibacterial agent to help kill bacteria and are sugar, gluten and lactose free, making them a great choice for those with food allergies or intolerances. Difflam is Australia’s number one sore throat brand in Pharmacy3 and this product, an exclusive to petrol and convenience stores, is a great way to keep painful sore throats at bay. Difflam Plus Anaesthetic Lozenge comes in a delicious and soothing Honey & Lemon flavour and is available as an 8-Pack — a new and convenient pack size for your customers on the go. * Data on file: Paradigm Shift Difflam Research 2018; Mahon W.A et.al Benzydamine: A critical review of clinical data. Int J Reac 1985; IRI Pharmacy & Grocery Scan Sales Data MAT 16.02.2020. June/July 2020 | C&I | www.c-store.com.au 57
PRODUCT NEWS
ALLEN’S SOURZ a random mix of tangy fun Allen’s are back with new Allen’s SOURZ Tangy Randoms, a random mix of delicious and lightly sour fruit flavoured jellies. Offering a different mix in every bag, SOURZ fans can have endless fun with millions of possible combinations of fun shapes, textures and flavours. There are more than 80 different SOURZ shapes, featuring everything from crocodiles, teapots, stars, echidnas and trains. And with seven flavours and four different jelly textures thrown into the mix, fans never quite know what they’re going to get! Each and every bag is original. And while there are many combinations, what they don’t contain is any artificial colours or flavours. They are available now and RRP is $2.95.
MILKYBAR Whirl Bar the perfect chocolate mix Australia’s leading white chocolate brand* has a new and exciting way for fans to enjoy its delicious taste. Combining the best of MILKYBAR’s creamy white chocolate that shoppers know and love with a swirl of milk chocolate, MILKYBAR Whirl Bar strikes the perfect balance between milk and white chocolate. And the delicious mix is sure to sway milk chocolate lovers over to the white chocolate side to satisfy their curiosity. MILKYBAR Whirl Bars are available for impulse distribution throughout June and the 45g bars RRP for $2. *AC Nielsen Australian Combined Grocery/Convenience database MAT 26/01/2020
58 June/July 2020 | C&I | www.c-store.com.au
PRODUCT NEWS
Give in to your 'fillings' with KITKAT filled bars Australia’s number one medium chocolate bar in Australian convenience* KITKAT has a new bar set to excite fans. Part of what drives KITKAT’s success is strong annual NPD and the brand has another unique and exciting platform set to excite fans with its new filled bars. The delicious creation features a multi-textural format of mainstream flavours, with a twist! Extending the appeal of the KITKAT 4 Finger format, the new flavours appeal to a younger, more discerning demographic, highlighting a growth
area for the brand. And the bars’ unique vertical packaging is sure to guarantee on shelf impact. The KITKAT filled bares will be available in two flavours. The first, Mint Cookie Fudge, features crispy wafer fingers topped with mint fudge and cookie pieces covered in smooth milk chocolate. The second, Gooey Caramel, has crispy wafer fingers topped with gooey caramel, covered in deliciously smooth milk chocolate. Both bars are available now, RRP $2. *AC Nielsen Australia Convenience Year 2019
June/July 2020 | C&I | www.c-store.com.au 59
PRODUCT NEWS
Hi-Chew: Japan’s Best Selling Soft Candy now in Australia
Hi-Chew fruit chews, the most popular soft candy in Japan, is now available for distribution throughout Australia. Hi-Chew is a top seller throughout Asia and has achieved rapid sales growth in various Western markets, including the United States. “Over the past five years, Hi-Chew sales have more than tripled in the US,” Managing Director and CEO of Morinaga Asia Pacific Co Terry Kawabe said. “We are in virtually every major retail chain, including Costco, Walmart, Target, Kroger, Walgreens, CVS and 7-Eleven. Hi-Chew sales exceeded USD$50 million in 2019 with growth of 40% YOY, making it the second fastest growing sugar confectionery brand in the USA. Hi-Chew is known for its long-lasting chewy texture and a wide variety of fruit flavours. The candy was created in 1975 by Morinaga & Co. Ltd. one of Japan’s 'Big 4' confectionery companies. Hi-Chew quickly became the bestselling soft candy in its home market. Since then, the fruit chews have been offered in more than 170 flavours and achieved success worldwide. The primary distributor in Australia will be Grocery Corporation. “We look forward to launching the Hi-Chew brand in Australia through 2020. Hi-Chew has gained a strong and loyal following over the past decade, particularly in the USA and New Zealand. We look forward to tapping into this global sentiment and replicating international success with the brand locally,” Managing Director of Grocery Corporation Anthony King said. Initial offerings in Australia will include three 100/90g peg bags, each with assorted flavours, and 57g sticks in four flavours. The peg bags will be available for retail purchase in select Coles stores, the entire range will be available for wholesale purchase via The Distributors. For samples of Hi-Chew candy, product images, logos, or more information, please contact: Grocery Corp. on telephone +61-2-8404-0240 or email enquiries@grocerycorp.com.au — socials: Facebook and Instagram HI-CHEW ANZ website www.morinag-ap.com
Vodafone add 250 minutes of International calls to $30 Prepaid plans There is no doubt COVID-19 has impacted all of us in some way, and there has never been a more important time to stay connected with one another and check in on loved ones. Vodafone has launched a number of initiatives to help customers stay connected during this time, most recently introducing International calls on their $30 Prepaid plans. Vodafone is now offering 250 minutes to 20 Zone 1 counties up until July 31, 2020 to customers who activate and recharge their $30 Vodafone Prepaid SIM. Countries include: Canada, China, Germany, Guam, Hong Kong, Iceland, India, Ireland, Japan, Malaysia, Mexico, New Zealand, Norway, Puerto Rico, Singapore, Romania, South Korea, Sweden, the United Kingdom and the Unites States. This is available to new and existing customers who recharge on the Vodafone $30 Prepaid Combo Plus, making it that little bit easier stay connected with their loved ones overseas during self-isolation. This is in addition to other measures the telco has taken to help keep customers connected. Among the ways Vodafone has reached out to offer assistance is thanking health care practioners through a two-month credit on their monthly Postpaid access fee or Prepaid recharge. As well as dropping all late payment fees for overdue accounts until the end of this month. They have also reduced data overage costs to $5/GB in Australia and are offering free access to key government and health websites. For more details on Vodafone plans and ways the telco is helping customers through the crisis visit www. vodafone.com.au.
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PRODUCT NEWS
Heinz releases a new range of plant- Cadbury Marble based packs with a protein punch returns to shelves Heinz has released a new range of plant-based protein soups to get you through winter. Following the trend towards vegetarian and flexitarian diets, the soup giant has released a Plant Proteinz range of soups. The range has six new flavours: 7 Veg with Quinoa; Moroccan Style Chickpea with Smoked Paprika; Mediterranean Style Tomato Soup with White Bean and Parsley; Lentil and Roasted Sweet Potato Dahl with Ginger and Turmeric; Mexican Style Black Bean Soup with Sweet Potato and Coriander; and Creamy Coconut, Pumpkin and Chickpea. All flavours pack 15g of plant-based protein per serve and come in a convenience friendly single-serve pack size. The range is available now in Woolworths and select IGA stores.
Cadbury has delighted fans by bringing back their Dairy Milk Marble flavour. Eight years after it disappeared, the fan favourite has returned to shelves to a lot of excitement from consumers. Featuring a hazelnut praline centre coated in a milk and white chocolate swirl, it’s the perfect choice for those who can’t choose between white or milk chocolate. The newly returned block also features Cadbury’s new look packaging. The signature purple packaging has been given a modern makeover with a redrawn wordmark and new iconography and typography, taking inspiration from John Cadbury’s own handwriting. Modelez Australia director of chocolate marketing Paul Chatfield said it would bring some comfort, happiness and nostalgia to an uncertain time. "John Cadbury believed in generosity and the special bonding of people, through a simple block of chocolate. It seems fitting that we're launching the new Cadbury Dairy Milk packaging to reflect the founding principles of generosity and authenticity at such a challenging time," he said. Cadbury Dairy Milk Marble is available at Coles, Woolworths and IGA stores, RRP $5.
Dare + Maxibon = Maxi-Dare
The New (frozen) Cowgirl is in Town
Clear out your freezers – Peters Ice Cream and Dare Iced Coffee have joined forces to release two delicious hybrids in their Maxi-Dare range. The first is a Maxibon ‘double espresso’ ice cream with a slab of Dare Iced Coffee ice cream swirled with coffee syrup. The second is a Dare Maxibon Latte, with hints of Maxibon’s signature vanilla ice cream and chocolate biscuit melded through Dare Iced Coffee. Find both Maxi-Dare Editions exclusively at 7-Eleven stores in Victoria, New South Wales, Queensland and Western Australia now. South Australian fans can pick one up at OTR stores.
Streets has introduced a new pal for Bubble O’Bill in Bubble O’Jill. According to Streets, the Bubbleton-born ice cream treat is big sister to Bill and was “always the brains of the operation” and is a hardened Cowgirl with a talent for the lasso who listens to the sound of the bull-whip to fall asleep and can even “bring a horse to water and make it drink”. And she is now taking pride of place in ‘wanted’ posters in convenience stores across Australia and can be yours for an RRP of $2.50. To find out more about Jill and to hear how Bill feels about his big sister visit www.facebook.com/streetsicecream or www.instagram.com/streetsicecreamau.
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OPINION
SKYE JACKSON Head of Merchandise Planning, Caltex Australia
Labour is the single largest cost in our business, so even very basic tech that can help to optimise labour utilisation is very worthwhile.”
HOW TECHNOLOGY CAN WORK FOR US
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arlier this year I got back from a holiday in Japan. It's a bit of an annual pilgrimage to chase some decent snow. And although it wasn't a great season, post-COVID-19 I won't complain! While I was there, I frequented a number of convenience stores and ate my fair share of Ramen noodles. The most surprising thing I noticed this trip was the variances in technology between our countries. We learnt one day—the very hard way, just how far apart payment technologies are between our countries. We kitted ourselves up the first day, caught the shuttle bus to a nearby lift and found out they don’t have tap and go! We are so accustomed to using our phone or watch to pay we didn’t even consider they wouldn’t have it! So, what did that mean? A long walk back to where we were staying, because shuttle buses don’t take people away from the mountain at 8am! On the flip side, they have had self-serve in place for years in their hospitality businesses. Yes, the tech is very simple, but the concept of ordering and paying at a machine instead of from a person is widely used throughout Japan. Some can be as basic as ordering through a machine to get a ticket that you hand over to be served, which is great when you have a language barrier. What do we have to gain from this in our industry? Labour is the single largest cost in our business, so even very basic tech that can help to optimise labour utilisation
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is very worthwhile. When launching our new format, Caltex Woolworths Metro, we knew self-serve would be an important part of our offer and so we launched with selfserve registers for shop and fuel. This is important to ensure we can serve the customers quickly, while still maintaining our ‘convenience’ with a much-expanded range. Still, we have been surprised with just how easily customers transitioned to this new technology in our channel. Supermarkets have been pushing people to self-serve for years, so when it comes to uptake with consumers, they already know how to use them. What’s next? Coles revealed earlier this year that they would be 100 per cent self-serve within the decade. That doesn’t necessarily mean you’re going to have to painfully scan your family of four’s weeks’ worth of groceries yourself! What if it’s more like Amazon Go? You walk in, put things in your trolley and then just walk out and you’re e-mailed your receipt within seconds, that sure beats lining up! What about the cigarettes you say?! We’ll never remove labour because we’ll always need someone to check ID?! What if the same technology that uses facial recognition also knows your date of birth and then allows you to use the vending machine? Anything is possible! In the wake of COVID-19 the path towards this touchless society is only likely to speed up, maybe in the next trip to the snow in Japan my iWatch will work for payment! C&I
Save The Dates Association Partner
WED 8 - THU 9 SEPTEMBER 2021 Convenience & Impulse New Zealand Expo 2021 The Cloud, Auckland
The Convenience & Impulse New Zealand Expo brings together New Zealand convenience retailers and suppliers from all banners and brands to gather for two days of education, networking and business building.
For more information visit www.candiexpo.co.nz
OPINION
DARREN PARK CEO United Convenience Buyers
The recent behaviour of giant grocers in Australia has raised my ire. Did they use human psychology and emotions to improve their competitive position in the middle of a pandemic?” Darren Park
COVID-19: DID AUSTRALIAN GROCERY CHAINS USE FEAR FOR PROFIT? T
hanks to social media, new technologies and ever evolving research into consumer behaviour and neuroscience, companies large and small know more about what makes us tick. And we help them; they mine our digital footprints from loyalty cards, our credit card spending habits and even when we view products while online shopping. But despite all this whiz bang technology, the recent behaviour of giant grocers in Australia has raised my ire. Did they use human psychology and emotions to improve their competitive position in the middle of a pandemic? Our brains are hardwired to fear potential threats. We are born knowing how to be afraid because our brains have evolved to deal with fear. You’ve no doubt heard the term Fight or Flight. Stay and battle it out or run as fast as you can to the hills. So how does this translate to selling groceries? Let me share a timetable from my own recent observations: •M arch 20: Supermarkets across NSW were given permission to receive deliveries 24 hours a day to restock their shelves. • March 24: Supermarkets needed to collaborate on distribution and were provided interim authorisation by ACCC. •M arch 25: Supermarkets requested 24-hour trading to help ease shopper congestion, which was granted for many states. •M arch 27: In my own state of NSW, stores that had previously closed at 10pm began closing at 8pm. •M arch 30: Three days later, my local store began closing at 6pm to help them deal with home delivery. •A pril 10: Good Friday and April 25, ANZAC Day: Don’t get me started. Is there no shame?
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Social distancing rules were announced in quick succession, limiting the number of shoppers allowed instore at any one time. This, as many will have noted, created long lines of shoppers standing outside waiting to get in. So, tell me again, what was the urgent need from grocery chains for 24-hour trading all about? Some may say that each step implemented, one-byone in quick succession and breathlessly announced with broad media coverage, was just dumb luck. Maybe even innocent. But in my opinion, that could be underselling the planning and advocacy of the big grocery chains. A cynic might say, however, that this was a well-coordinated approach fuelling hysteria. Hysteria can create “FOMO” or fear of missing out, causing an environment ripe for panic buying. And what we have subsequently learned from their own announcements is that shoppers’ fear of missing out has gifted grocers outsized profits. How many times have we heard “it’s like Christmas volumes back to back to back”. My question now is simple. Will all these trading conditions be wound back? If so, when and what as an Industry, will we do to make sure they are? Australian C-store operators have provided shoppers with excellence in safe service and on many, many occasions delivered over and above to their local communities. Sometimes at personal cost. C-store operators, particularly Independents, deserve to see the legislative environment return to a neutral stance and not see big business potentially being rewarded again at their expense. Until next time, Darren Park C&I
n i o J
AACS
The peak body for the Australian Convenience Store industry, celebrating over 30 years serving the industry
The Australasian Association of Convenience Stores (AACS) is the champion of the convenience industry and now in 2020 we celebrate our 30th anniversary. We have a long history serving retailers and suppliers; we’ve witnessed seismic changes, game-changing innovations, shifts in consumer behaviour, new regulations and much more. As we highlighted some years ago when we produced our ‘AACS Convenience 2020’ report important elements to success remain collaboration, innovation and differentiation. As we look ahead to the New Year and new decade, our path is clear: we’re focused on helping you understand where we are, where we’re going, how we’ll get there and how we may add value to your business – large or small.
AACS: EVENTS THROUGHOUT THE YEAR • • • • • • • • • • •
AACS supplier round table meetings AACS State of the Industry Report launch AACS Convenience Leaders Summit AACS Gala and Awards Dinner AACS Education AACS CEO Forum AACS Overseas Study Tour AACS Peter Jowett Industry Award AACS Women in Convenience program AACS weekly e-newsletters AACS Downunder Study Tour
ALL AACS MEMBERS RECEIVE THE FOLLOWING BASIC BENEFITS: • • • • • • • • • •
The annual AACS State of Industry Report Val $2500 Comprehensive networking opportunities Meetings with prominent Industry speakers Government lobbying on issues impacting on the industry International and local study tours Access to international speakers Convenience specific training Access to research and presentations Weekly eNewsletter 10% discount on all AACS training programs
To enjoy the diverse benefits of AACS membership, contact AACS CEO Jeff Rogut on jeff@aacs.org.au for more information
www.aacs.org.au
PETROL NEWS ROUNDUP DAN ARMES Founder of ServoPro
LESSONS FROM COACHING 2000 PETROL STATION OWNERS How a business coach can keep your goal on track
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While the COVID-19 crisis has brought uncertainty and stress, it has also been a time where business owners have reassessed what is important to them.” Dan Armes
he Covid-19 crisis brought with it many challenges for petrol station operators. In many ways, it was a busy time because we all had to scramble and make quick decisions to ensure our businesses would remain open. Business owners needed to make quick decisions on how to reduce costs as sales dropped and how to quickly get access to government stimulus for much needed cash flow. Also, how to access stock when suppliers were unable to maintain their normal supply. While the COVID-19 crisis has brought uncertainty and stress, it has also been a time where business owners have reassessed what is important to them. In times of crisis we tend to stop, think and form a new perspective on the business we have created. During the COVID-19 crisis I have found many of our ServoPro members keen to discuss business strategies and to rethink their goals for their business. This has made me realise the importance of having a business coach and the role a coach plays as someone you can talk to objectively. Someone who is not stuck in the day to day grind of running the business and caught up in the constant issues that need to be resolved. Someone
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who can cast a fresh set of eyes and a new perspective on how the business is performing and what opportunities are available for growth. So why have a business coach? Think about professional athletes and sports people at the top of their sport. They will tell you that having a coach is critical to their success. If an athlete wants to become the best they can be, they don’t have time in their short career to work it all out on their own. They need to call on the experience of someone who has been through it all before or someone who has already built up experience in becoming the best. Someone who understands the technical side of their sport and who is up to date in the latest developments and technology. A talented sports person could manage their own improvement and practice a lot, but with around fifteen years to get to their peak and reach their goals it would be highly unlikely that they would reach their full potential on their own. If you have been in the fuel industry for a while, no doubt you have some connections in the industry and know some other petrol station operators. How beneficial is it when you discuss with these other business owners
PETROL NEWS things that are and are not working in your businesses? That fresh perspective you get from talking to someone outside your business may give you one small idea that can have a massive impact. For an elite athlete, having a coach isn’t a luxury, it’s a necessity. This is also true for business owners. Accountability is one of the greatest benefits of working with a business coach. It’s almost impossible to look objectively at your own business. Your business coach will always tell you the truth, even if you don’t want to hear it. A business coach may tell you to give up on that expensive slushy machine you put in a prime position, but which failed to give you the expected return on your investment. You may not want to get rid of it, but a business coach will give you objective advice based on data and factual insights which will help you to identify investments that are worth pursuing —and when to cut your losses and move on. What are some of the areas in your business you have been neglecting? Is it that you don’t have time or is it you don’t know where to start? Do you lack the motivation to take action? Let’s look at a few areas I find petrol station operators should be focusing on. Do you have an action plan to achieve your business goals? What is the timeframe for reaching these goals? What are the actionable steps you can take to reach your goals? What do you need to do daily, weekly and monthly to achieve your goals? Do you have systems and processes in place to ensure your business is growing and reaching its potential? What is your operational plan? How can you improve efficiency through automation and streamlining your processes? Are your sales increasing year on year? If your sales are increasing is your profitability also increasing? So many times I have seen petrol stations who are seeing positive growth in sales and revenue but profitability is stagnant. In what areas are you making the most money? Are you capitalising on these areas?
Are your licences, registrations and compliance areas up to date and in place? When was the last time your staff completed formal training? Are you offering the products and services your customers want? It sounds simple, but often this is not the case. Do you still have the same offering you had five years ago? Your customers’ needs and wants have changed substantially in the last five years. Have you adjusted your offering? How are you acquiring new customers? Where do you get new customers from? Are you still spending money on old ways of marketing where you can’t measure the return on investment or are you taking advantage of new ways to engage with customers like on social media? What are your goals for future growth? What new products and services can you add to your offering to grow your business? What about your team? Do you have great people working with you that share your vision? Have you shared your vision with them? Are they trained in key areas of your business? Have you invested in them? When was the last time you did a full audit on the top ten expenses in your business and looked at ways to reduce them? When was the last time you negotiated fuel pricing with your fuel supplier? I recommend you do this at least every six months. If you wanted to invest in your health and fitness, what would you do? You would hire a personal trainer. Think about a sport you enjoy playing. If you wanted to improve quickly, would you just keep practicing by yourself? If you own a business, you understand the need for growth in all aspects of your trade. You know the benefits which can be gained from seeking advice from a friend, mentor or coach to speed up the process. If you are looking for actionable steps to grow your business, seeking accountability or simply lacking in motivation, try consulting a business coach or seek out a mentor who knows your industry and can guide you towards a more profitable and professional outcome for all the effort you put into building your business. C&I
For an elite athlete having a coach isn't a luxury, it's a necessity. This is also true for business owners.” Dan Armes
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PETROL NEWS
OTR celebrates Glandore reopening
OTR has brought Guzman Y Gomez to Adelaide’s south. The convenience and petrol retailer are celebrating the reopening of their Glandore store on the Anzac Highway, following a six-month rebuild which now features the Mexican QSR, complete with a drive-thru. It’s the fifth Guzman Y Gomez to open in South Australia. The new OTR store also stocks a full range of Krispy Kreme doughnuts, C Coffee, OhJ! freshly squeezed juice, Moe’s New York-style hot dogs and shakes and OTR brands CHILL and EAT. It will offer a premium range of BP fuel. The store is also following strict cleaning protocols amid COVID-19 and has easily accessible hand sanitiser, hand washing facilities and staff have increased their cleaning schedule for high-touch areas. General Manager of OTR Darryl Cotter said the Glandore redevelopment was part of the company’s investment program. Ten stores have already been newly built or refurbished through the program in the last year and another six are set to open later this year. Including in Salisbury North, Gepps Cross, Mt Gambier, Murray Bridge, Aberfoyle Park in South Australia and at Mildura, in Victoria. “OTR is the state’s most innovative leading convenience retailer and we are proud to keep investing in our stores. We aim to continuously give customers an amazing in-store experience and champion job growth throughout Australia, with 400 positions created this year alone,” Mr Cotter said. “OTR is a passionate and local South Australian family business, committed to generating jobs and investing in the future of Australia. Come and say hello to our local OTR Glandore team!”
EG Group finalises Oliver’s Real Food supply agreement deal
Health-focused fast food chain Oliver’s Real Food (OLI) has finalised a longterm supply agreement with UK based EG Group. Under the agreement EG will pay Oliver’s a one off $500,000 license fee for the exclusive use of Oliver’s branding under a 10 year deal. Oliver’s will also supply all products sold at EG’s Oliver’s outlets. Under the deal, EG will also be required to open 100 Oliver’s outlets within 12 months of signing the deed. The agreement follows the termination of an initial acquisition plan announced in March, in which EG were to pay OLI $0.10 cash per share. However the deal did not proceed as OLI’s net indebtness exceeded the agreed $800,000. Oliver’s Founder and Chairman Jason Gunn said the company were thrilled with the new arrangement. “We are delighted to have reached this commercial arrangement with EG. EG recognised in Oliver’s a brand with significant credibility in this market, and we have found in EG a fantastic partner to expand the Oliver’s brand rapidly, on a national scale. We have enjoyed working with the team at EG over the last nine months, and we look forward to developing the relationship in the years to come,” Mr Gunn said. The deal follows EG’s failed takeover bid for Caltex, which the petrol company rejected in favour of a deal with Canadian chain Couche-Tard. That deal is currently on hold due to the challenges posed by COVID-19 and the resulting drop in global fuel demand. 68 June/July 2020 | C&I | www.c-store.com.au
C&I Supply-Find is a popular print and digital resource used by retailers to find suppliers of business services, maintenance providers, and manufacturers and suppliers of capital equipment for their shops and forecourt. C&I Supply-Find Partners are marketed in every issue of C&I magazine and promoted on the C&I website in an easy to search form. Twice a week, one Supply Find Partner is also promoted in the C&I WEEK eNewsletter, read by 7,900 industry decision makers. C&I Supply-Find presents a very cost-effective way to stay front of mind in the industry and guarantees 12 months of coverage for a very small investment.
12 Month Print & Digital Package
12 Month Print & Digital Package
Enhanced Package
Premium Package
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ex GST
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Each C&I Supply-Find print listing includes a high resolution company logo, company contact details and 150 word description of the company for the Enhanced Package. Premium Supply-Find Partners receive a 300 word description of their company in every edition, along with company logo and contact details.
Contact the team to discuss your requirements: Safa de Valois Publisher & Commerical Director E: safa@c-store.com.au P: +61 405 517 115
Ben Curtis National Sales Manager E: bcurtis@c-store.com.au P: +61 415 404 264
PETROL NEWS
VEA and AQR bolster portfolios
The new supply chain will increase deliveries of stock to stores
7-Eleven partners with Emergent Cold to expand supply chain capabilities
7-Eleven Australia has partnered with Emergent Cold to evolve and expand its supply chain capabilities and focus on fresh food. The convenience store chain has already rolled out the first phase of the partnership, by increasing its ambient food and drinks deliveries from weekly to daily. Other key categories will move over to the new supply chain in a phased migration between now and August. 7-Eleven CEO Angus McKay said the partnership offered the company a supply chain which can rapidly scale, expand and respond to demand and network growth. “We’ve been working on this project for three years. The new supply chain ecosystem will help our stores to make sure they have what their customers need when they need it. One delivery per day, instead of once a week for ambient and frozen products, will help our franchisees to better manage inventory control and cash-flow,” Mr McKay said. “It also has operational benefits as store team members are not having to manage huge delivery volumes at once, or daily multi temperature single vehicle deliveries.” The new arrangement will handle huge volumes of daily stock – including 4,000 sandwiches, 6,000 packs of sushi, 8,000 meat pies, 16,000 sausage rolls and an incredible 30,000 cartons of milk per day. And each week, 4.5 million product units will be delivered to 7-Eleven stores in 70 specially designed trucks. “7-Eleven is growing strongly, and while our supply chain has served us well, it needs to evolve to enable our future growth. With more than 700 stores, we have well and truly outgrown our previous supply chain system, we needed to control our own supply chain,” Mr McKay added. “Our new supply chain ecosystem with our strategic partner Emergent Cold will enable us to expand to meet our projected volumes and ambitious store growth.” “Our new ecosystem will further strengthen the direct relationship we have with many of our suppliers. We’re focused on working to deliver collective sustainable growth for our store owners, our suppliers and our business overall by ensuring our customers can buy the products and services they want, at the time and in the store that suits them, in the quantity they need.” 70 June/July 2020 | C&I | www.c-store.com.au
It’s been a busy few months for Viva Energy Australia (VEA) and APN Convenience Retail (AQR), with both companies expanding their portfolios. Viva Energy last month announced they would acquire Westside Petroleum in full, almost two years after purchasing an initial 50%, noncontrolling stake in the petrol retailer. Westside Petroleum operates a network of 50 service stations across New South Wales, Victoria and Queensland and displays a mix of both Shell and Westside branding. VEA has said they will continue to expand the retail business and strengthen their Shell card offering. The purchase will be subject to FIRB and ACCC regulatory approval. While AQR has acquired two regional Coles Express stores in a $10.2 million deal. The Gatton (QLD) and Inverell (NSW) stores are both under five years old, have been leased by Coles and have a combined weighted average lease expiry of 8.3 years. APN has also completed four fund-through-development projects worth $19.8 million since December. Three stores are in South Australia, a Liberty station in Edinburgh North and two Mobil X stations in Hampstead Gardens and Gepps Cross, as well as a Liberty in Gosnells, Western Australia. The acquisitions are expected to be settled by the end of the month and will push the AQR’s portfolio value to $425 million.
PETROL NEWS
Caltex unveils new Ampol logo as they move closer to brand transition Caltex has revealed the newly redesigned Ampol logo as it gears up for a major rebrand back to the name. Unveiling the modernised logo last month, Caltex said it “nods to our proud 80 year history, but is a modern reflection of our organisation, as it exists today”, adding it symbolised ‘forward momentum’ and reflected their growth, evolution and drive. The sleek, pared back red and blue logo will begin to be rolled out in the coming months, 25 years after Caltex merged with the brand and retired the name. Sites in Melbourne and Sydney will begin to feature the Ampol signage in the second half of this year, before a national roll out begins next year. The petrol company announced in December last year it would return to the Ampol name, after US oil company Chevron terminated their licensing agreement with Caltex. Caltex, who retained the rights to the Ampol name following their merge in 1995, will fully transition their branding by the end of 2022. Caltex Interim CEO Matthew Halliday said the transition to Ampol reflected their position as an independent and growing company. “Trusted and high-quality products, a commitment to customer service, market leading networks and infrastructure and playing a positive role in local communities remain at the heart of our business, as they were when Ampol was established over 80 years ago,” Mr Halliday said. “At the same time, the new Ampol logo reflects our growth and evolution into new markets and geographies and our ongoing drive to be world-class in everything we do. Our fresh new symbol will connect Ampol with a new generation of customers and underpins our commitment to again make it Australia’s most loved and admired fuel brand.”
The new logo features a sleek and modern design
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Visit www.envirotank.com.au or call 1800 818 354 for more information
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Petroleum equipment and services
Gallagher Fuel Systems
Gascorp Pty Ltd – Budget Petrol
Gallagher Fuel Systems is a designer, manufacturer and supplier of quality fuel dispensing systems. The innovative PULSE fuel dispenser range combines advanced electronics, corrosion resistant metal work, the highly accurate Tatsuno meter and a modular design. All Gallagher PULSE dispensers are internet capable. With the Data Centre application, each dispenser performance can become visible, via any internet enabled device. This powerful tool with its automated configurations and tools can fix issues remotely and reduce site visits. It brings pro-active servicing to the industry and significantly reduces overall servicing costs. Gallagher Vapour Recovery solutions fully comply with environmental regulations, provide comprehensive compliance reporting and reduce forecourt pollution, creating a healthier working environment and community. Gallagher’s latest edition to the PULSE range are the 5 product dispensers. The pressure only model offers one of the smallest footprints at only 2100mm. Mixed pressure and suction models are available with integrated LPG as an option.
Budget Petrol, established in 1985 is one of the oldest and largest groups of independent service stations in NSW, with over 60 locations in the Sydney Metropolitan area. Our Retail stores strive to provide our customers with Quality Fuel at Budget Prices. Our Wholesale arm – Gascorp Pty Ltd offers independent operators a business model which enables them to run their own business without interference, while utilising the backing of a competitive, professional and reliable brand. We offer competitive Mobil supplied fuel prices, Valvoline Oil, LPG Supply, In Store Programs, ATMs, Banking Partners and Environmental Regulation Support. We also operate our own fuel transport company which allows us to offer the highest levels of service for fuel deliveries and logistics. We can help independents looking to: • Lease their property to a reputable company • Sell their property freehold • Reimage and brand their site • Change fuel supplier and retain their independent brand
Contact: Derek Hjelm, Business Development Manager Australia Phone: 0424 164 814 Email: derek.hjelm@gallagher.com Web: www.gallagher.com
Contact: Diann Melas Phone: (02) 9564 2355 Email: fuels@gascorp.com.au Web: budgetpetrol.com.au
Shipman King Pty Ltd
ELGAS SWAP’n’GO®
Shipman King Pty Ltd is an Australian designer, manufacturer and distributor of equipment for the service station forecourt industry. Under their ESKAY brand, Shipman King’s long history has enabled the company to become a major supplier of this equipment throughout Australia, New Zealand and the Pacific region. With an extensive product range and ability to service the whole of Australia, Shipman King is truly your one stop shop. Australian owned, Shipman King’s product range includes: • Fill Adaptors and Caps, Dip • Monitoring Wells and Ground Boxes Cap Assemblies • Durapipe PLX Polyethylene • Upflow Vents, Pressure Piping System Vacuum Vents • Underpump Containment Sumps • Dip and Fill Product Markers and Browning Spill Safe Boxes • Vapour Recover Equipment, Stage • Adblue Equipment 1 and 2 • Sloan-LED Canopy Lights • Overfill Prevention Valves • Cim-Tek Spin-On Filters complete with aluminium tube • Husky Fuelling Products ready for retro fitting • Aboveground Tank Equipment For their complete product range, please visit Shipman King’s website.
Elgas SWAP’n’GO® is the leading BBQ gas exchange program brand in Australia. The program offers your business the opportunity to increase sales and profits with a very well-known and respected brand. SWAP’n’GO® also provides your customers with fast, safe and easy transactions. Out-of-date bottles are accepted at no extra charge. You can add to or replace your declining refill sales, and low margins, with a reliable, convenient and secure swap program that has low labour costs for you. SWAP’n’GO® maintains a record of excellence in safety, with comprehensive staff training in the safe handling of LPG. Elgas SWAP’n’GO® is backed by a national network of refilling plants and branches to ensure that your business receives quality service. SWAP’n’GO® also creates a massive summer stockpile to provide uninterrupted service during the seasonal peak periods. Contact Elgas today to become a SWAP’n’GO® dealer.
Contact: Nigel Howlett Phone: (03) 9459 9900 Email: sales@shipmanking.com.au Web: www.shipmanking.com.au
Phone: 1300 652 003 Email: swapngo@elgas.com.au Web: www.elgas.com.au/swapngo
72 June/July 2020 | C&I | www.c-store.com.au
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C&I Supply-Find is a detailed listing of suppliers of products for resale, business services, maintenance providers, and manufacturers and suppliers of capital equipment for shop and forecourt. It is included in every issue of C&I Retailing Magazine, six times per year to a circulation of around 22,795 businesses. The rate for posting in C&I Supply-Find is $2,950 + GST for one full year (six print issues and 12 months on our website). Bookings are a minimum of one year. For a 1/2 page, the rate is $5,900 + GST per year. For all advertising enquiries with C&I Media, please contact
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