Convenience Store Decisions January 2017 by WTWH Media LLC

Volume 28 •19Number 1 • 6JANUARY Volume • Number • JUNE 2017 2008

Business Solutions for Retail Decision Makers

Shuffling the Deck

C-store operators are betting that a Trump administration will usher in a more business-friendly environment.

HARBOR COMMUNICATIONS

P U B L I C AT I O N

INSIDE THIS ISSUE: The 2017 Social Media Awards page 22

Traditional Food Still Tempts ............42 Cigarettes: Smoke & Mirrors? ..........46 Meat Snacks Gain Weight ...............50

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Let’s take 2017 to the next level.

Our People | Our Brands | Your Success Our People | Our Brands | Our Customers’ Success

Getting your tobacco categories to the next level begins with setting goals for the future. Let’s work together to develop a plan to enhance your store’s performance. Contact your AGDC Sales Representative today to make success a reality.

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DEPARTMENTS 8 Editor’s Memo: Optimism for a Prosperous

New Year

10 Leadership Profile: Shaping Clifford Fuel’s

Future

16 Front End: CSD’s Quick Bites 18 Front End: Industry News 20 Front End: EMV Deadline for Pumps

Extended Until 2020

21 Convenience Store Solutions: A New Year

Brings New Hope

42 Foodservice: Traditional Food Still Tempts

50 Category Management: Meat Snacks

Gain Weight

JANUARY 2017 • Volume 28 • Issue 1

54 Category Management: Adult Beverage

Boom

InsidethisIssue

58 Operations: Understanding the Hispanic

22 Special Report: 2017 Social Media Awards

60 Operations: Measures to Safeguard the

Market

CSD presents its fifth annual review of social media trends, best practices for the new year and c-store retailers succeeding on social platforms.

Workplace

61 New Stuff!

28 Cover Story: Shuffling the Deck

64 Quick Stop

Convenience store operators are betting that a Trump administration will usher in a more business-friendly environment.

65 Ad Index 66 Industry Perspectives: A Strong Tradition

of Keeping SCORE

46 Cigarettes: Smoke & Mirrors? Can ongoing price increases on cigarettes continue to compensate for dropping unit sales?

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Convenience Store Decisions

A H A R B O R C O M M U N I C AT I O N S L L C C O .

EDITORIAL

CONTRIBUTING EDITORS

Editor-in-Chief,Vice President John Lofstock jlofstock@csdecisions.com Senior Editor David Bennett dbennett@csdecisions.com Senior Editor/News & Online Erin Rigik Del Conte edelconte@csdecisions.com Associate Editor Howard Riell hriell@csdecisions.com Associate Editor Marilyn Odesser-Torpey mot@csdecisions.com

President Harbor Communications Dan Ramella dramella@csdecisions.com

COLUMNISTS

Group Publisher Tom McIntyre tmcintyre@csdecisions.com

Jim Callahan Fran Duskiewicz James Johnson, Jr. Terry Johnson Allan Parnell David Quezada

ART Creative Director Erin Canetta ecanetta@csdecisions.com

Webmaster Dave Miyares dmiyares@csdecisions.com

EDITORIAL ADVISORY BOARD

NATIONAL ADVISORY GROUP BOARD

Robert Buhler, President and CEO Open Pantry Food Marts • Pleasant Prairie, Wis.

Peter Tamburro, Board Chairman Clifford Fuel Co. • Utica, N.Y.

Jim Callahan, Director of Marketing (Retired) Geo. H. Green Oil Inc. • Fairburn, Ga.

Tony Harris, Past Board Chairman Louisville, Ky.

Brad Call, Executive Vice President Maverik Inc. • Salt Lake City

Mary Banmiller, Director of Retail Operations Warrenton Oil Inc. • Truesdale, Mo.

Greg Lorance, Dispensed Category Manager Cumberland Farms • Framingham, Mass.

Greg Ehrlich, Operations Consultant Englefield Oil Co. • Heath, Ohio

Kyle McKeen, President and CEO Alon Brands • Dallas

Joe Hamza Nouria Energy Corp • Worcester, Mass.

Billy Milam, President RaceTrac Petroleum Inc. • Atlanta

Brent Mouton Hit-n-Run Food Stores • Lafayette, La.

John Kelly, Chief Operating Officer and Vice President, Operations Mountain Empire Oil Co. • Greenville, Tenn.

Robert O’Connor O’Connor Petroleum Co. • Hales Corners, Wis.

Convenience Store Decisions is a three-time winner of the Neal Award, the American Business Press’s highest recognition of editorial excellence.

SUBSCRIPTION INQUIRIES To enter, change or cancel a subscription: Web (fastest service): www.ezsub.com/csd Phone: 844-862-9286 (U.S. only, toll-free) Fax: 440-333-1892. Mail: Convenience Store Decisions P.O. Box 986, Levittown, PA 19058 Copyright 2017, Harbor Communications, LLC 6 Convenience Store Decisions

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Publisher John Petersen jpetersen@csdecisions.com Vice President, Sales Tony Bolla tbolla@csdecisions.com (773) 267-1897

PRODUCTION Production Manager Barbra Martin bmartin@csdecisions.com

Scott Zaremba, President and CEO Zarco 66 • Lawrence, Kan.

ADVERTISING

Mark Battersby Anne Baye Ericksen Pat Pape Lisa White

John Schaninger QuickChek • Whitehouse Station, N.J.

YEO BOARD OF DIRECTORS Jared Sturtevant, Board Chairman CST Brands, Director of Marketing

Alex Olympidis, Board Vice Chairman Family Express Corp., Director of Operations Alli Bixler, Assistant to the President The Kent Cos. Sharif Jamal, Corporate Training Manager Chestnut Petroleum Distributors Lindsay Lyden, Vice President, Development Truenorth Energy Dana Moloney, Food Service Director Warrenton Oil Co. Jeremie Myhren, Vice President, IT Road Ranger Bart Stransky, Executive Director, Merchandising RaceTrac Petroleum Inc.

OFFICE LOCATIONS

Headquarters

19111 Detroit Rd., Ste 201 Rocky River, OH 44116 (440) 250-1583 (440) 333-1892 (fax)

Editorial and NAG

1420 Queen Anne Rd., Ste 4 Teaneck, NJ 07666 (201) 837-2177 http://twitter.com/CStoreDecisions www.facebook.com/CStoreDecisions

Convenience Store Decisions (ISSN 1054-7797) is published monthly by Harbor Communications, LLC., 19111 Detroit Rd., Suite 201, Rocky River, OH 44116, for petroleum company and convenience store operators, owners, managers. Qualified U.S. subscribers receive Convenience Store Decisions at no charge. For others, the cost is $80 a year in the U.S. and Possessions, $95 in Canada, and $150 in all other countries. Single copies are available at $9 each in the U.S. and Possessions, $10 each in Canada and $13 in all other countries. The annual Sales Trend Handbook can be purchased for $75. Periodicals postage paid at Cleveland, OH, and additional mailing offices. POSTMASTER: Send address changes to Convenience Store Decisions, P.O. Box 986, Levittown, PA 19058. GST #R126431964, Canadian Publication Sales Agreement No: #40026880. Materials in this publication must not be reproduced in any form without written permission of the publisher. Direct requests to: Editorial Department, 1420 Queen Ann Rd., Teaneck, Suite 4, NJ 07666. Phone: (917) 601-9623. Copyright 2016, Harbor Communications LLC. All rights reserved. Circulation audited by Business Publications Audit of Circulation, Inc.

www.linkedin.com/CStoreDecisions

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EDITOR'SMEMO

Optimism for a Prosperous New Year T

JOHN LOFSTOCK Editor-in-Chief (201) 837-2177 jlofstock@ csdecisions.com Follow me on Twitter @CSDEditor

business owners, Trump's positions align with the Republican agenda. He additionally tapped two individuals with direct ties to the industry to cabinet positions: Rex Tillerson, CEO of Exxon Mobil Corp., as Secretary of State; and Andrew Puzder, CEO of CKE Restaurants Inc., as Secretary of Labor. This is a positive first step. For the most part, the convenience store industry remains in lockstep with Presidentelect Trump's vision for the next four years. Doug Galli, vice president and general manager of Reid Stores, told CSD's David Bennett, “The real problem is the entire government bureaucracy. They write rules and regulations that are stifling business growth. We have layer upon layer of government agencies with oversight that is nearly impossible with which to comply. The insanity has to stop.” Interestingly, Business Insider also predicted that Trump's resistance to increased automation could slow e-commerce's growth, a boost for c-stores. E-commerce companies are seeking to deliver goods—which include daily meals and groceries—to consumers as quickly as possible, and this involves automation within distribution centers as well as the potential utilization of drones for delivery. This is a trend that should be alarming to c-store owners. However, if Trump maintains his stance to protect American workers from being displaced by machines, this could make it more difficult for online retailers to boost their productivity, the report said. This could stall the evolution of e-commerce and last-mile delivery, preventing the sector from delivering seamless e-shopping experiences for customers. Questions abound about what the next four years will bring, but there are plenty of reasons for optimism for convenience store owners. The BUSINESS RULES In this month's in-depth cover stor y, cover story begins on page 28. Please enjoy Convenience Store Decisions analyzes Trump's and share your thoughts with me at jlofstock@ potential impact on six crucial areas affecting csdecisions.com. the convenience store and petroleum industry: labor, healthcare, tobacco, fuels, foodservice regulations and taxation. On each of these issues, often identified as leading concerns of convenience store

HE 2016 PRESIDENTIAL ELECTION cycle will be remembered as vicious and exhausting for many Americans, but also as a turning point that saw the balance of power in the U.S. shift from career politicians to political neophytes with an extensive background in growing businesses. This indicates that Americans are looking for a new direction and they see President-elect Donald Trump as the man who can drive that change. Love him or hate him—there seems to be no in-between—the next four years will ultimately be defined by whether he can forgo the campaign rhetoric and be the productive leader his supporters believe him to be. Furthermore, can President-elect Trump produce a business-friendly agenda that helps boost a sluggish economy and loosen some of the legislation restrictions that have hampered businesses over the past eight years? Under President Obama, businesses—specifically small businesses—often had to bear the brunt of onerous regulations and rule changes. What was equally frustrating is that many operators I've spoken to through the years felt the majority of laws were unnecessary, unfair and counterproductive for the purpose of boosting the economy and creating jobs. Trump has made no secret of his eagerness to drastically overhaul, and reduce, the federal government's rulebooks—rolling back "every wasteful and regulation which kills jobs." He promises a moratorium on new rules and much smaller agencies. He has also promised to reduce the business tax rate to 15% for "businesses, both small and large, that want to retain the profits within the business."

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FRONTEND NEXT GENERATION LEADERS

Shaping Clifford Fuel’s Future With on-the-job training, industry veterans are helping Mike Clifford learn the ins and outs of the competitive convenience store industry.

Mike Clifford Clifford Fuel Utica, N.Y.

By John Lofstock, Editor

ROWING UP IN THE conve- manager, and his brother Jimmy, nience store industry is tough. who handles fuel operations for the It’s even tougher when the 21-store chain based in Utica, N.Y., to chain is growing and the pres- get up to speed to lead the chain into sure is on to produce positive results. a new era. The retail industry is changing, costs are higher and customers’ Welcome to life in the family business. For Mike Clifford, a third-genera- demands are constantly evolving. Still tion executive at Clifford Fuel Co., the Clifford is ready for the challenge. “Convenience stores have become ride has been a great experience, save for some sleepless nights as he a complex business,” Clifford said. learns how to navigate the competi- “Stores are always busy, customers want tive c-store landscape. The stakes are their immediate needs met and we high, as they are in any family busi- are under constant pressure to improve. The result is that we have become a ness, and the pressure is real. Clifford Fuel was founded by Mike’s mature industry with a heavy emphagrandfather Jack Clifford in 1961 and sis on food and retail technology.” Clifford started working at the famnurtured into a competitive force over the past four decades by Mike’s father, ily business about five years ago Jim Clifford, a former executive board after college. Like countless others in member for the New York Association his situation, he wasn’t sure c-stores were in his future. “I grew up around of Convenience Stores (NYACS). Now it’s up to Mike, category the industry, but didn’t start working

Clifford Fuel’s newest location includes Nice N Easy’s world-class foodservice program, free WiFi service, ample in-store seating and a beer cave featuring imported and domestic beers and a vast assortment of micro-brews from a host of New York-based breweries.

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in stores until I was in college,” he said. “Then when you see how the industry has been t ra n s fo r m e d over the past 10 years and hear about the great Mike Clifford things other chains are doing, you find that the bar has been raised for all of us and this is a great industry with unlimited opportunities.” GROWING CONVENIENCE Among the opportunities Clifford Fuel continues to explore is its partnership with Nice N Easy, which was forged some 35 years ago with founder John McDougall. Clifford is the largest Nice N Easy franchisee. Though CST Brands—and subsequently Alimentation CoucheTard—acquired Nice N Easy following MacDougall’s death in 2014, Clifford Fuel continues to fly the brand. There is, however, some talk internally of developing its own c-store brand. The chain’s newest store is a 5,000-square-foot site in Oriskany, N.Y., which is a raze and rebuild of an older site.The company celebrated a grand re-opening in November 2016. The spacious store includes Nice N Easy’s world-class foodservice program, more than a dozen seats, free WiFi service and a beer cave featuring a vast assortment of micro-brews from New York-based breweries. CStoreDecisions ecisions .com

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FRONTEND NEXT GENERATION LEADERS The new store, branded with Citgo fuel, promotes convenience for its many time-starved customers. On the foodservice side, the unit features Nice N Easy’s menu of made-to-order subs, wraps, salads and sandwich melts. The Mama Mia brand offers freshly-made pizzas and stromboli.

For those looking for healthy graband-go snacks, a chilled front-end gondola markets a variety of fresh fruit cups and parfaits. While the in-store offering is loaded with amenities, the forecourt is equally stocked. The fuel island features six fueling positions. Additionally,

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CLIFFORD FUEL at a Glance CLIFFORD FUEL CO. WAS founded

in 1961 by Jack Clifford in Dolgeville, N.Y. Located in rural Herkimer County, the company supplied home heating oil, natural gas, farm gas and diesel. It supplied five service stations with gasoline and had just five employees. Today, the third-generation business owns 21 locations, which includes 17 Nice N Easy c-stores. The company also supplies more than 40 locations owned by independent operators and has 250 employees. Headquarters: Utica, N.Y. Store Count: 21 C-Store Brand: Nice N Easy Foodservice Brands: Nice N Easy, Subway, Dunkin’ Donuts Fuel Brands: Sunoco, Citgo Car Washes: 5 Social Media: www.facebook. com/CliffordFuel; twitter.com/ CliffordFuel customers can take advantage of Citgo gift cards to receive up to five cents off of each gallon purchased. “I have been fortunate to work with a great team and learn from an experienced staff that has allowed me to grow into this position,” Clifford said. Specifically, Clifford has leaned on Rick Miller, operations manager for Clifford Fuel., and Peter Tamburro, the general manager of convenience store operations for the chain. Tamburro is also the chairman of the National Advisory Group (NAG). Clifford is active in NAG’s Young Executives Organization (YEO). “There is a big learning curve, especially when dealing with vendors,” Clifford said. “Learning to negotiate contracts with our vendor partners took some time, but you learn by doing it and not being afraid to make mistakes. Peter and Rick have been invaluable resources, as has my dad, who has instilled in me a great work CStoreDecisions ecisions .com

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FRONTEND NEXT GENERATION LEADERS Founded in 1961 by Jack Clifford in Dolgeville, N.Y., Clifford Fuel continues to grow. Now it’s up to Mike Clifford, category manager, and his brother Jimmy, who handles fuel operations, to help lead the chain into a new era.

ethic and a true understanding of how valuable our partnerships with vendors are to the company.” LONG RETAIL HISTORY Clifford Fuel began its long relationship with Nice N Easy in the early 1980s and has grown steadily since.

tors failed. Nice N Easy gained critical mass in a competitive market. “We’re in the same markets as a lot of the Nice N Easy corporate stores, so we get the benefits of the brand name and all the marketing that “We began by leasing a gas sta- goes into their own stores here as well,” tion we owned to Nice N Easy right Clifford said. “Plus, because they are after they started operations in 1980,” such a progressive chain that likes to introduce a lot of new programs, we Jim Clifford said. The relationship worked for both are in a position to take advantage sides and blossomed. About five of the ones that work and pass on years later, Clifford Fuel converted those that aren’t as effective.” C l i ffo rd n o te d t h a t N i c e N another store it owned to the Nice N Easy brand and began operating as Easy also organizes a myriad of a franchisee. It was very much a two- promotional programs for the community and holds several events in way street. Working with a large chain like the central New York area to benefit Nice N Easy helped Clifford Fuel learn charitable organizations. His employto be a c-store operator, an impor- ees are encouraged to participate tant profit center for the company in the events, including a variety of that helped it expand through the walks and runs with the American years when other local fuel distribu- Heart Association.

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FRONTEND

CSD’S QUICK BITES

Swipe Fee Views

A recent survey found voters who cast a ballot in 2016 believe that banks are taking advantage of retailers and oppose the fees that merchants are charged every time a debit or credit card is swiped, including:

of all voters oppose swipe

% fees of any kind.

63% 67% 76%

of Trump voters believe that banks are taking advantage of retailers. of all voters believe that banks are taking advantage of retailers.

of all voters believe that big banks got a bailout while millions of Americans were left to suffer.

Source: Wilson Perkins Allen Research on behalf of the Retail Industry Leaders Association (RILA), Nov. 20-22, 2016

SEASONAL CANDY SALES

Source: Packaged Facts “Chocolate Candy Market in the U.S., 11th Edition”

• 39% of U.S. adults purchased chocolate candy from seasonal sections in stores in 2015, up from only 27% in 2014. • Seasonal Halloween chocolate dollar sales rose 61% in 2015. • Seasonal chocolate candy sales during Winter/Christmas increased 3% in 2015.

What’s Ahead for 2017

Beer & Wine Opportunity Millennials, Generation Xers and baby boomers make in-store shopping trips more than once per week, and 40% of buyers walk into the store undecided on what alcoholic beverage to purchase. Of the 60% who do have a planned beverage purchase, 21% end up changing their mind in store, and 50% of those who changed their mind ultimately buy a different brand than they originally intended. Source: Information Resources Inc. (IRI)

CSD/NAG Idea of the Month Customers crave customization and new flavor experiences at the coffee bar. Engage customers by showing them how to combine brewed coffee with an offering from the cappuccino machine and syrups to create a recipe of the month. This can be done via signage at the coffee bar.

Retailers are focusing less on overall growth and more on shopper behavior, including developing smaller, more productive stores; digital retailing and online shopping; and more tailored assortment strategies by region and season. Top hurdles include the vulnerability of regional supply chains to natural and external disasters, continued growth of e-commerce and continued consolidation. Transparency, social responsibility and traceability remain key issues. Private label in the U.S. continues to grow. Source: International Dairy-Deli-Bakery Association (IDDBA)”What’s in Store 2017?” report

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Snack sales go great with beverage sales. And when it comes to baked sweet goods, Little Debbie products are the sales leader*. In fact, 4.7 million Little Debbie products are sold every day â&#x20AC;&#x201C; thatâ&#x20AC;&#x2122;s 55 every second. In a world where snacks and drinks go hand in hand, imagine what that can do for your business. To learn more, call (800) 315-6208 or visit LittleDebbieCStore.com. Little Debbie products are sold DSD by wholesale distributors. *Nielsen ScanTrack, Convenience Stores channel of trade, 52 weeks ending July 30, 2016.

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INDUSTRYNEWS Swiss Farms Welcomes Hot Stuff Pizza Celebrates 30 Years ‘New Hire’ Cruiser Orion Food Systems introduced its Swiss Farms, the Delaware County, Pa.-based, 13-store drive-through market chain, has introduced Cruiser the Rooster. The chain’s iconic rooster was recently named via a contest through social media. Cruiser will have a number of responsibilities as company mascot. As brand and community ambassador his role will include tasks ranging from hand shaking and school visits, to assisting with Chef demos, media interviews and photo opportunities. “We are so excited to welcome Cruiser into our family,” explained Scott Simon, CEO of Swiss Farms. “The search was quite extensive, but we strongly feel his unbridled enthusiasm, experience and love for our brand all make him an ‘eggcellent’ candidate for the position.”

Cigar Makers Receive FDA Warning Letters The U.S. Food and Drug Administration (FDA) has issued warning letters to four tobacco manufacturers — Swisher International Inc., Cheyenne International LLC, Prime Time International Co. and Southern Cross Tobacco Co. Inc. — for selling flavored cigarettes that are labeled as little cigars or cigars, according to a press release that the FDA issued Dec. 9. The FDA noted this was in violation of the Family Smoking Prevention and Tobacco Control Act (TCA). The FDA said the companies received warning letters for products under the “Swisher Sweets,” Cheyenne,” “Prime Time,” and “Criss-Cross” brands in a variety of “youth-appealing” flavors, including grape, cherry, wild cherry and strawberry.

Sheetz Commits to $47,500 Salary

signature pizza in rural South Dakota in 1986. It was the first company to make fresh pizza in convenience stores in the U.S. when it opened in Webster, S.D.Today, Hot Stuff Pizza has 1,000-plus locations in rural and metro areas, serving up a menu consisting not only of pizza, but other items for all dayparts.

Casey’s Acquires Guppy’s NRC Realty & Capital Advisors LLC in conjunction with Ravinia Capital LLC announced the sale of fi ve Guppy’s convenience stores, located in and around Cedar Rapids, to Casey’s General Stores last month. The stores were owned by Elgin, Iowa-based Fauser Energy Resources, marking Fauser’s exit from the convenience store business.

Chevron Celebrates 500th ExtraMile Franchise Chevron Products Co., a division of Chevron U.S.A. Inc., has announced its 500th franchised ExtraMile convenience store. Since the first store opened more than 10 years ago, the ExtraMile store concept has experienced steady growth, setting new standards in convenience store retailing that complement the changing tastes and busy lives of consumers.Today, Chevron has more than 755 company-owned and franchised locations throughout California, Oregon and Washington.

Pilot CEO Haslam Deposed in Civil Lawsuit

Pilot Flying J CEO Jimmy Haslam was deposed Sheetz announced that all of the company’s salaried Tuesday, Dec. 13, in a civil lawsuit against the Pilot employees now earn a minimum base salary of $47,500 Flying J in relation to the trucking rebate fraud scheme per year. The decision was made in connection to the pro- that came to light after federal agents raided the composed Federal Labor Standards Act (FLSA) rule from the pany’s headquarters in April 2013. The Akron Beacon U.S. Department of Labor, which called for an increase to Journal reported that the deposition occurred in a conthe minimum salary for salaried employees, which was set ference room at the Pilot Aviation hangar at a Knoxville, to take effect on Dec. 1. Despite a federal judge’s injunc- Tenn. airport. It was not open to the public. The lawsuit tion on Nov. 22, which prevented the regulation from going was filed by companies that opted not to participate in into effect, Sheetz plans to move forward with the salary an $85 million settlement between Pilot and 5,500 truckchanges already communicated to its employees. ing companies in connection with the rebate fraud. 18 Convenience Store Decisions

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THERE’S

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2015

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2016

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FRONTEND News

EMV Deadline for Pumps Extended Until 2020 Issues with regulatory-compliant EMV hardware and software to enable most upgrades by 2017 prompted shifting the compliancy deadline. By Pat Pape, Contributing Editor

ITING TECHNOLOGICAL AND REGULATORY challenges, Visa, MasterCard and American Express recently announced that the U.S. deadline for installing EMV (Europay, MasterCard and Visa) chip-card readers at automated fuel pumps has been extended to Oct.1, 2020 from Oct. 1, 2017. More than 1.7 million merchants—or about one-third of all U.S. stores—now accept chip cards, and the nation has already seen a 43% reduction in counterfeit-card fraud among merchants using chip technology, according to Visa. However, selling fuel comes with a complex set of challenges, and gasoline retailers need more time to make the mandated upgrades. Companies now have three more years to migrate from traditional magnetic stripe-based payment card scanners to chip readers before they would incur any financial liability for fraud perpetrated at the point of sale (POS). But preparing gas pumps to be EMV compliant is more difficult and costly than updating an in-store POS. While many existing fuel dispensers will be eligible for EMV-ready retrofit kits, some older fuel pumps will need to be replaced before chip readers can be installed. Even five years after announcing the EMV liability shift, there are issues regarding a sufficient supply of EMVcompliant hardware and software, as well as enough professional installers, to ensure a majority of upgrades are completed by October 2017. “The card brands have come to understand that these challenges are not of retailer creation, but a result of late specifications, certification complexity and supply chain constraints, rather than a lack of resolve to adopt EMV,” Gray Taylor, executive director of Conexxus, told news outlets recently. Conexxus is a non-profit, technology organization based in Alexandria, Va., dedicated to standards and innovation for the convenience store and petroleum markets. “We are still sifting through the details…We don’t see this announcement as a true game delay, but a bit of breathing room to work out the challenges,” Taylor said. Other finance and technology insiders have publicly stated that the extended liability deadline comes as no surprise since EMV has required about a decade for complete implementation in most parts of the world. 20 Convenience Store Decisions

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FUEL PUMP THEFT The deadline postponement doesn’t mean that gas station owners can take a vacation from their EMV upgrade plans. In fact, fuel retailers using the traditional, magnetic-stripe card readers could become liable for fraud losses even before the new deadline if their creditcard fraud increases beyond a certain level. Currently, fuel-pump credit-card fraud is relatively low, making up an estimated 1.3% of all U.S. payment fraud. A number of available fraud prevention tools, have helped curb fraud activities at fuel dispensers, Visa reported, including the Visa Transaction Advisor (VTA). In seconds, VTA analyzes nearly 500 pieces of data, such as past transaction history, to create a risk score and either approve the fuel sale or ask the customer to complete the transaction inside the store. According to Visa research, fraudsters asked to go into the store to finalize a sale will typically drive away instead. BUSINESS AS USUAL The new deadline may take the immediate pressure off retail fuel merchants that have been scrambling to develop a new EMV payment system and locate the necessary hardware and software to meet the mandates. But for many more, it will be business as usual as they work to wrap up their existing plans for compliance. One of those retailers is Rutter’s Farms Stores of York, Pa. “We already have our plans in place, and this announcement really doesn’t impact us, said Derek Gaskins, chief customer officer for Rutter’s. Recently, Rutter’s announced that it is using the mandatory EMV update as an opportunity to update other features of the fuel dispensers at its 66 convenience locations throughout Pennsylvania. The company plans to retrofit the fuel pumps with NCR’s Optic outdoor payment solution, which features a large touchscreen, an EMVcompliant payment terminal and 2-D barcode scanner. Not only will the new system accept EMV payments, Gaskins said, it can read magnetic-stripe cards, mobile phones and mobile wallets. The system also features new media capabilities, such as full-motion video, which allows the chain to promote in-store products and services to customers at the gas pumps. Rutter’s also plans to integrate its VIP Club rewards program into the retail system. CStoreDecisions ecisions .com

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Convenience Store Solutions

A New Year Brings New Hope Thinking about what you want to achieve and then developing the right plan is half of what you need to succeed. By Jim Callahan

S WE START A brand new year, plans for improvements and new successes are being rolled out in many boardrooms across the c-store industry. Of course, every good idea starts with the correct mindset, which usually includes the willingness to hear different suggestions and the conviction to follow a chosen course of action. First, however, you must have the conviction.

BELIEVE AND ACHIEVE The late “Tug” McGraw, New York Mets relief pitcher extraordinaire, is credited with coining a simple catchphrase that helped the Mets become a better team at the time. The phrase was ‘You Gotta Believe.‘ His teammates bought in and that year—1973—they ended up winning the World Series. A few years ago, I wrote a couple of articles regarding the benefits of business “mind control” and while this article brushes up against that concept, it is really meant to spur the reader’s thinking about thinking. I hear the terms ‘not now’ and ‘I’m so tired’ used often. To me, they’re used merely to send a message that you want to be left alone or that you don’t feel like getting out of your chair. But also realize that over time, your mind will begin to believe it and eventually that becomes the answer to everything. Years ago when I was much younger and in much better shape, I recall coming home from work at the end of the day and literally dragging myself up the stairs wondering whether or not I could even muster enough energy to change into my workout clothes, let alone exercise to remain in shape. However, 15 minutes into the workout, I’d start to feel like a champ and when I finished I had a spring in my step and more energy than when I started. Now, I know there are endorphins and other body chemicals involved, but I also know that it got so that the harder and longer I worked out the less tired I was, and the better I felt. Soon it became a mindset. Those very same mind-inducing elements are often at work when we’re engaged in tackling a business report, finding a book-keeping error, appraising an employee, fronting merchandise or ensuring the bathrooms sparkle. That concept of caring about outcomes must also extend to store employees. CStoreDecisions ecisions .com

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IN THE STORE I’ve often said that after food, clothing and shelter, human beings’ next basic need is appreciation. If you agree, then you possess the attitude to building better employee morale, which is indeed a critical key to longterm employee retention. Also, strengthening your mindset to improve a store’s operation will ultimately provide a destination that your customers will want to come back to. Find ways to let your customers know that the work you do and the products you sell are what they need. Always let them know that you appreciate their business. Remember, it’s not enough to take care of your existing customers; you also must become adept at attracting new customers—the life blood of any successful business. This can be done in various ways including a solid loyalty program or upgrading foodservice offerings such as coffee. Coffee is the hot beverage of choice in convenience stores and the No. 1 subcategory of the hot dispensed beverages category, generating nearly 77% of the category’s sales. Broken down, this segment delivers nearly three-quarters of its sales during morning service hours. Combine that trend with your freshest baked goods and you can deliver a value-added offering to patrons. It all starts with that first step. Wishing for something can’t change the outcome, but accepting the results and working to improve can certainly make a difference. I know a lady that agonized over her looks as age took over. When she had reached the age of 30, she lamented that she looked different from when she was 20. Ten years later, the lady felt equally bad when at age 40, she didn’t look the same as she did at 30. She couldn’t accept what her mind was telling her, but she also couldn’t devise a plan to improve her mindset. In the end, be careful of what you’re telling your mind. And, don’t ever forget: you gotta believe. Train your mind and success will undoubtedly follow. Jim Callahan has more than 40 years of experience as a convenience store and petroleum marketer. His Convenience Store Solutions blog appears regularly on CSDecisions.com. He can be reached by phone or email at (678) 485-4773 or via e-mail at jfcallahan1160@gmail.com. January 2017

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SPECIAL REPORT

2017 Social Media

Awards

CSD presents its fifth annual review of social media trends, best practices for the new year and c-store retailers succeeding on social platforms. By Erin Rigik Del Conte, Senior Editor

OR THE FIFTH STRAIGHT year, Convenience Store Decisions reviewed the Facebook (FB) and Twitter pages of more than 60 c-store chains and is recognizing those going above and beyond in creativity and connection with their fans and followers. Heading into 2017, if your c-store chain isn’t active on social media, “you need to be.” That’s advice straight from Brienna Pinnow, director of product marketing for targeting, Experian Marketing Services, a global information services company providing analytical tools and data—including social media data. “That social media is exploding and has the skill and reach to truly influence people is an understatement at this point,” Pinnow said. Convenience store chains that are not on social media or that merely keep a profile and respond to a few questions are missing a huge opportunity to be an influencer. The key to social influence in 2017 will be to create content, and develop your brand voice and personality. 22 Convenience Store Decisions

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Now that social media has been around for years, the bar has been raised. It’s time to go beyond focusing on basic metrics of likes, shares and retweets. “Those are great indicators, but they’re just that. They’re one ingredient in the recipe for a successful social media presence and engagement strategy,” Pinnow said. ACTIVE LISTENING The top best practice going into 2017 is to not only post and engage but also listen. But it’s important to listen to your specific audience and learn how to separate it from the “noise” composed of many competing viewpoints on social media. Pinnow used an example that occurred several years ago with Cracker Barrel to illustrate the point. After a controversy surrounding remarks by the star of Duck Dynasty, Cracker Barrel reacted to the outrage on social media and quickly pulled Duck Dynasty products from its shelves. Cracker Barrel customers, however, were not happy with CStoreDecisions ecisions .com

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SPECIAL REPORT

that move, and the chain reversed course, putting the products back on shelves. Pinnow pointed out that originally, the chain was hearing the overall noise on social media, but when it listened to its specific customers it realized they still wanted the products despite the controversy. Using data can help you separate the noise from your audience’s message. Data can reveal who your social fans are and what else they are interested in, which can help your chain better target its messaging. “Heading into 2017, we’re seeing more companies opt to use third party data to extend their reach on social media,” Pinnow said.

use the information they provide, she said. If, for example, you’re asking customers which candy bar they like best, let them know there will be an in-store promotion or in-app coupon for the winner. Now that they know why their information is needed they may be more invested and respond. “Help them understand how what they say just changed your business—that’s when it’s meaningful to both sides of the equation,” Pinnow said.

DON’T FORGET CREATIVITY It’s easy for marketers to get caught up in the execution and overlook the most important part—creativity. Most people want to skip to the metrics of how many posts, like, shares, retweets occurred—but that’s only a small piece of BEYOND MR. CHATTY In moving beyond retweets and likes, consider that many the overall story. Creativity is a key component to every social media platof your followers may take a more passive approach to social media. Pinnow noted more than half of social media form regardless of whether your following is big or small today—after all, you’re preparing for tomorrow’s numbers. users fall into that category. “Creativity is the one place where you can stand out and “By using data, you can understand who they are even if they’re passive. You can see, that, for example, 88% of my organically begin to grow a larger following and differenaudience is female and married and they have children and tiate yourself,” Pinnow said. One reason creativity is sometimes brushed over is they also follow (XYZ Pizza Co.),” Pinnow said. Then you can use that information to your advantage—for example, because it’s not easy to constantly create original content. “When you commit to original creative pieces, they have maybe a pizza promotion or partnership is in order. The lifestyles and values of even your more silent fans the ability to live on, go viral and cement your unique brand. This is one piece completely in your control and it can differshould inspire your content on social media and beyond. Data can also help you see valuable partnerships, such as entiate you,” Pinnow said. Pinnow’s advice for 2017 is to focus not only on who is in the above pizza example. Observe who your fans are following and the overlapping opportunities that might exist seeing your posts, but on what they see. One recommendation for c-stores is to encourage your for partnerships. fans to create and submit original content, which leading chains like Maverik are doing. From encouraging fans to INFLUENCERS MATTER Social media is often thought of as earned media, built post photos and videos of themselves in your stores to offerthrough online word of mouth. But paid media—paying ing other contests for creative submissions that tie in your to advertise or to boost a post—can help you extend your voice and branding—it’s a great way to involve your fans. “When you encourage your fans to create content for you, reach. Data can help you identify the influencers that spread posts. While they may be different from your target cus- they feel like they are truly becoming part of your brand,” tomer, you’ll also want to attract more influencers using Pinnow said. It can also be helpful for chains that lack the resources to regularly create unique content. paid media to better extend your message. Data can also help you learn what social media platform your base uses, so you can target your customer base on the platform where they spend the most time. “Many marketers think ‘I’ll create one message and then FAN-BASED GROWTH AWARDS I’ll just blast it across all of my different accounts.’ That’s a Most overall growth on FB and Twitter combined. This big no no,” Pinnow said. How you present on Instagram award calculates the number of new FB fans and Twitter folneeds to be different from your approach to Twitter, etc. in lowers between Dec. 3, 2015 and Dec. 2, 2016. order to be successful. Winner: Speedway grew 314,347 new FB Fans and 61, Once you determine the platform where your base 514 new Twitter followers in 2016 for a total of 375,861 new spends time, encouraging your fans to engage with trivia fans/follower. and either/or questions is a great way to gain fan particRunner Up: Corner Store grew 207,060 new FB fans and ipation, but Pinnow advised retailers to ensure content is 3,295 new Twitter followers for a total of 210,355 new fans/ meaningful. Share with your audience how you’re going to followers in 2016.

THE AWARDS

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SPECIAL REPORT MOST FACEBOOK FAN GROWTH IN 2016 This award recognizes the chain with the most fan percentage growth between Dec. 3, 2015 and Dec. 1, 2016. To be considered chains needed a minimum of 10,000 FB fans. Winner: CST Brand’s Corner Store grew from 96,404 fans in 2015 to 303,464 in 2016, (215% growth). Runner Up: Rutter’s grew from 32,488 fans in 2015 to 45,868 in 2016, (41% growth). “Increasing our FB page likes has been a goal this year,” said Jared Sturtevant, supervisor of digital marketing for San Antonio-based CST Brands, who oversees digital marketing along with Kristin Putman, digital marketing analyst. “We grew our fan base by using a mix of engaging content and targeted advertising to reach our core customers.Comprehensive research conducted by CST Brands helped us select our most valuable customers and allowed us to customize our content strategy and advertising to reach them on social media.” MOST TWITTER FOLLOWER GROWTH IN 2015 This award recognizes the chain with the most follower percentage growth between Dec. 3, 2015 and Dec. 2, 2016. To be considered, chains needed a minimum of 5,000 followers on Twitter. Winner: CST Brand’s Corner Store grew its Twitter followers from 2,303 in 2015 to 5,598 in 2016, (143% growth). Runner Up: Speedway grew from 54,486 followers in 2015 to 116,000 in 2016, (113% growth). Sturtevant noted that CST Brand’s primary focus this year has been on growing its FB audience, which is more engaged than its Twitter fan base. “We do utilize a similar content strategy on Twitter, but with more content overall and lower advertising spend,” Sturtevant said. EMERGING FACEBOOK USERS WITH MOST GROWTH This award recognizes emerging FB users with the highest growth percentage of FB fans between Dec. 3, 2015 and Dec. 1, 2016. To be considered chains needed more than 50 and fewer than 5,000 fans on FB. Winner: Cenex Zip Trip grew from 1,151 fans in 2015 to 1,995 in 2016 (73% growth). Runner Up: Crosby’s grew from 2,745 fans in 2015 to 4,174 in 2016 (52% growth).

workers—frequent, it had a strong year for Twitter as well. “Twitter reaches a slightly younger audience, so we follow brands and others on Twitter while keeping that in mind,” said Jared Scheeler, managing director for The Hub Convenience Stores based in Dickinson, N.D. “We also have a strategy of posting and retweeting interesting and relevant things to that particular target market in an effort to build brand awareness and sales. About 40% of our team is in the ‘Twitter generation,’ and we encourage them to retweet our info whenever relevant. We’re selective with our use of hashtags and tweeting at other companies to increase our reach,” Scheeler added. TWITTER TWEETER AWARD This award recognizes the retailer with the highest number of Tweets overall. Numbers were compiled on Dec. 2, 2016. Winner: Sheetz with 36,100 total tweets. Runner Up: 7-Eleven with 28,000 tweets.

SHOUT OUTS! As Pinnow pointed out, there’s more to social media than basic metrics. In the shout out awards, CSD gives a ‘shout out’ to a few creative posts and campaigns that caught our eye. Thank you to everyone who submitted a nomination! BEST ENGAGEMENT WITH A SINGLE POST OR PROMOTION Winner: Speedway On Sept. 14, Speedway posted to FB its take on a meme about life stages. It read: “Friend 1: Promoted, Friend 2: Engaged and Friend 3: Expecting! Me: One more club gets me a free Speedy Freeze!” The post was simple, but effective, resonating with fans to the tune of 8,200 likes, 493 comments and 9,584 shares. CSD is giving a shoutout to this post because it did several things right. It brought in a comic and creative element,

EMERGING TWITTER USERS WITH MOST GROWTH This award recognizes chains with the most Twitter follower growth percentage among chains with more than 50 but fewer than 1,000 followers. Results were tallied between Dec. 3, 2015 and Dec. 2, 2016. Winner: The Hub Convenience Stores grew from 81 to 230 followers (184% growth). Runner Up: Enmarket, grew from 123 Twitter followers in 2015 to 236 in 2016 (92% growth). While The Hub is primarily focused on FB where its primary customers—professionals and blue collar oil field 24 Convenience Store Decisions

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SPECIAL REPORT tied back to the store by incorporating a product, educated about the existence of the chain’s club program, all while also being “meaningful” by resonating with the universal life pressures and social expectations Millennials are confronting at this stage in their lives and to which older generations can also relate. BEST ENGAGEMENT WITH AN ONGOING CAMPAIGN Winner: Stewart Shops for #StewartsFamous Stewart’s #StewartsFamous campaign involved fans in content creation in a simple yet creative way, embraced the selfie trend and tied back to the physical c-stores. From May 9 to Sept. 26, Stewart Shops encouraged fans to upload selfies with Stewart products. Fans could post and tag the selfie #stewartsfamous or email it. Using the hashtag allowed fans’ friends to see the post and participate as well. An email address was provided to include the less social media savvy. Winners became “Stewart’s Famous” by being featured as “Fan of the Week” on Stewart’s FB, Twitter and Instagram pages, as well as its website and on TVs in the c-stores. “The popularity of selfies has shown us that people like to take pictures of themselves doing something fun. So why not take a picture when you’re the happiest: eating ice cream?! And from ice cream, to iced coffee, refreshers and chips —our customers really guided how this campaign evolved,” said Maria D ’Amelia, public relations specialist of Stewart’s Shops, which is based in Ballston Spa, N.Y. She credited the simplicity of the campaign along with the possibility to become “Stewart’s Famous,” and timing of the selfie trend for why it resonated so well with customers. BEST HOLIDAY PROMOTION Winner: CEFCO, 12 Days of Coupons This creative holiday promotion let fans know about products at CEFCO Stores, encouraged customers to join the SMS (text) Club, drove them into the stores for one-cent deals and encouraged them to try products. 2016 is the second year the chain has held the 12 Days of Coupons campaign, noted Kessler Tormey, social media manager for CEFCO, based in Temple, Texas. With the 2015 promotion, the main goal was to grow FB fans. In 2016, “our goal was to grow our connection with customers using ‘CEF Club,’ our new SMS program for customers to receive weekly deals.” The promotion ran Dec. 1-12. Fans texted “cefcosanta” to 55123 to receive a coupon for a one-cent deal of the day. The 26 Convenience Store Decisions

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promotion was announced Nov. 28 on FB, Twitter, Instagram and Google+, and holiday-themed posts continued throughout the campaign. Discounted items included a mix of “big name” brands and products new to CEFCO stores. Another goal of the promotion was to increase loyalty through the brand. “We think of it as a holiday gift to our customers and a way to show our appreciation,” Tormey said. By texting the keyword ‘cefcosanta,’ the customer received two texts—one with their coupon, and one noting they’d been signed up for CEF Club with the option to opt out. As of day eight of 12, CEFCO had 1,798 new CEF CLUB SMS subscribers and over 11,000 coupon redemptions. Meanwhile CEFCO’s FB page likes increased 128% and page engagements increased 52% between Dec. 2-8 compared to the previous week. BEST COMMUNITY SPECIFIC ENGAGEMENT Winner: Seasons, “Kicks 4 Kids” charitable fundraiser Throughout the NFL season (Sept. 2016-January) the Seasons Corner Market convenience chain raised money at all of its stores for local Hasbro Children’s Hospital in Providence, R.I. It partnered with New England Patriots Kicker Stephen Gostkowski, of Kick 4 Kids Foundation, who donated $500 for each successful field goal he kicked. “We’ve used our Facebook page to create a call-toaction for customers to donate at our stores, and to spread awareness of the programs offered by the local children’s hospital,” said Michael Schiemer, digital marketing manager for Colbea Enterprises, which operates Seasons. The FB campaign included videos, photos and giveaways. FB posts gained more than 400 Likes, 100+ Shares, 5,000+ video views, and a total reach of 23,000+ customers. “Most importantly, these FB campaigns are generating thousands of dollars in additional customer donations. By the end of the NFL regular season we also estimate reaching an additional 5,000-10,000 local customers with these FB posts,” said Schiemer. Considering the chain has 23 stores, the reach was impressive, but more importantly, it resonated with the local community. The campaign also used Twitter, Snapchat and Instagram. “We feel that this is an excellent example of using social media for good and giving back to the local community,” Schiemer said. CStoreDecisions ecisions .com

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SPECIAL REPORT sketches. “Our customers love the show and no one else does anything like this in our area for their stores,” said Moon Mahmood, marketing officer. The primary goal, he said, is to entertain customers. Despite having around 400 FB fans, their videos have received as many as 1,400 views with help from FB boosting to expand the reach. Country Mart is a prime example of how small chains with limited resources can still find creative ways to engage customers on social media. Country Mart sometimes even lets customers participate in the video making. BEST AT ENCOURAGING FAN ENGAGEMENT CREATIVELY & CONSISTENTLY Winner: Phillips 66 Phillips 66 used a number of creative ways to engage fans in 2016. Here are three: BEST OMNI CHANNEL CAMPAIGN In honor of the Winner: CST Brands’ for Fresh & Friendly Check-In Campaign In June 2016, CST Brands ran a “check-in” promotion. 2 0 1 6 P h i l l i p s 6 6 “The customer had to be at a Corner Store or Nice N Easy Big 12 Conference location with their mobile phone and our app installed. B a s k e t b a l l They selected ‘Check-In’ on the app, which created a social Championship, it media post on either FB, Twitter or Foursquare that was pre- called for fans to populated with our social handle, the address of the store make a ‘Great Assist’ passing or sharing and a clickable link to our website,” Sturtevant explained. If the customer added the words “Fresh & Friendly”—the a FB post; for each CST Brands’ promise—into the comment of that post, they share it donated $1 to were entered to win a $50 gift card. CST Brands gave away Boys & Girls Clubs of Greater Kansas City. one $50 gift card for Nice N Easy and one for Corner Store. As the long-standThis campaign succeeded in getting social media fans to assist in content creation, spread awareness of the brand ing sponsor for the promise, connected the app with social media and in-store Albuquerque International Balloon Fiesta it shared beautiful, high-quality videos of the event that saw 1.1 million visits and also tied to the company’s website. Sturtevant called the omni-channel campaign “the per- impressions, 434,000+ engagements, and a 40.35% engagement rate on FB alone. fect storm of digital marketing.” Phillips 66 developed a series of Slo-Mo videos that It brought more than 8,000 social media posts in just four weeks and nearly 4,000 included the words “Fresh & ran from September to November 2016 across Facebook, Friendly.” After the sweepstakes was over, some 222 fans still Instagram and Twitter. The slow motion videos featured such activities as a dog drinking water, and combined checked-in and mentioned “Fresh & Friendly” during July. amassed over 3.73 million impressions and 1.33 million+ video views and engagements. The Slo-Mo Campaign highCREATIVITY AWARD lighted the beauty of everyday life. Winner: Country Mart: Comic video series on FB. Kathleen O’Brien, social media coordinator for Phillips Beginning in May 2016, Moon Mahmood—whose father Tariq Mahmood runs Country Mart with two locations in 66 focused on engaging consumers by building “socialWestfield, Mass.—and his two brothers began combining at-the-core executions that make our brands part of the conversations our consumers are having in social.” their passion for film making with c-store marketing. Phillips 66 joined social media in mid-2014. In 2016, Each week they Phillips 66 leveraged new tools to co-create content with act in and produce fans and followers, such as Twitter Moments and SnapChat. a video set in the “For Albuquerque International Balloon Fiesta, we realc-store and post ized our consumers had an appetite for behind-the-scenes on YouTube and and exclusive content from the event,” she said. We leverthe company FB aged our brand presence and unique access to bring the page—the videos event directly to our consumers’ social feeds.” CSD feature comedic CStoreDecisions ecisions .com

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with

INNOVATION

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COVER STORY

Shuffling the Deck C-store operators are betting that a Trump administration will usher in a more businessfriendly environment. By David Bennett, Senior Editor

Griffith. “However, I do feel as though the incoming adminearned a reputation as a self-publicist and an assertive istration will be more favorable for business in general.” For c-stores to match up with bigger and more resourceschemer. Now, as the soon-to-be leader of the free world, President-elect Trump is still viewed by many as a self-pub- ful retail competitors, they must be able to operate in a more nimble environment. Insisting he would drain “the swamp,” licist and an assertive schemer. He’s also projected as a likely pro-growth leader, heading once elected, some in the c-store industry say the incoming an administration with an agenda that prioritizes big tax cuts president can help by slaying a few authoritarian alligators. for business and a regulatory rollback not seen in the country since former President Ronald Reagan labeled ketchup BETTER TIMES a vegetable. President-elect Trump has stated that, after Doug Galli, vice president and general manager of his inauguration, he intends to press forward with Reid Stores, who participated in our wages article, said the next president should make way for his goals to overhaul the tax code, healthcare and businesses to operate efficiently—a path curimmigration laws. rently choked by tons of bureaucratic red tape. Though it’s too early to forecast what is “The real problem is the entire governgoing to happen under the new adminisment bureaucracy,” Galli said. “They write tration, the moves the president-elect has rules and regulations that are stifling busimade so far should give convenience retailness growth. We have layer upon layer of ers an idea of what’s to come. First are his cabinet selections. Among the choices are government agencies with oversight that is Rep. Tom Price, tapped to run the Department nearly impossible with which to comply. The of Health and Human Services, and Andy insanity has to stop.” Puzder, president and CEO of CKE Restaurants Inc., Of course there are many other issues with which c-stores must contend going forward including the chosen to head the U.S. Department of Labor. However, proponents insist the important thing is not probable repeal and replacement of the Patient Care and the industries the nominees represent, but the fact they Affordable Care Act (ACA). In addition, the minimum wage is set to rise in 21 states in 2017. This is aside from the fedknow about business and what makes businesses work. Robert Griffith is the president of Golden Pantry Food eral minimum wage hike proposed under the President Stores Inc., a convenience chain of more than 40 stores Obama’s administration. As a new administration takes the helm, Convenience based in Watkinsville, Ga. Like others in the c-store comStore Decisions looks at some of these issues in the following munity, Griffith is quietly optimistic. “This entire election cycle has been very interesting, pages. How the next four years plays out is up for debate, but also unpredictable, based on President-elect Trump’s but many convenience retailers do seem optimistic as they campaign promises and now, cabinet appointments, said wait to see what happens. N THE WORLD OF New York real estate, Donald Trump

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COVER STORY

More Wage Clashes to Come Living-wage issues will continue to be a point of contention for convenience stores going forward. However, the industry might have powerful allies waiting in the West Wing.

WAGES

By CSD Staff

ITH JUST DAYS BEFORE it was scheduled to take effect, the presidential campaign, Puzder has criticized President a federal judge on Nov. 22 halted the implementa- Obama’s proposal to increase the federal minimum wage tion of a rule that would have extended overtime to $10.10 an hour from $7.25, calling it counterproductive. Galli called the fast-food maverick a great choice. eligibility to some 4 million Americans. “We need people in the Department of Labor that know The Labor Department's reworking of the overtime rule, crafted by the Obama administration, would have required and understand how to create jobs and what it means to run employers to pay time-and-a-half to their employees who a profitable business. The labor increases (especially in New worked more than 40 hours in a given week and earned less York State) and work rules have been nearly impossible to follow. We have had to raise our retails two years running than $47,476 a year. Critics claimed the mandate would force retailers to just to stay ahead of the payroll increases with more to come accept reduced profits or cause them to raise the price of in our ‘blue’ state.” Reid Stores Inc. is a division of the Reid Group, which goods to cover added expenses. Others feared such a wage operates 50 locations throughout western New York and hike could result in fewer jobs. northwestern Pennsylvania. The group of companies also includes Reid Petroleum Corp. an independent, full-service REPRIEVE GRANTED That one decision by a federal judge gave unprepared marketer of motor fuels. Galli, who also chaired the New York Association of employers a reprieve to solidify their planning. For others such as Doug Galli, vice president and general manager of Convenience Stores (NYACS) this year, said association Reid Stores, it was a reprieve at a time when hard decisions members of NYACS have been on the front lines of New York State’s wage wars. Most believe that the contrast were being made. “We had a plan in place to move our store managers to between living-wage initiatives and the cost of doing businon-exempt. It would have cost us around $200,000/year in ness is stark. Crosby’s is no exception. overtime,” said Galli. “We ask our store managers to work a 46-hour work week. They averaged around 47-48 (hours). STRIKING A BALANCE “We do believe that there has to be a balance struck We feel that is fair. Most of our store managers were upset with the change. They would lose flexibility with schedul- between business and personal needs. As a company we reing; the bonus program would be reduced because it would invest in our stores and facilities as well as grow through have to be calculated on the number of hours they worked. acquisition,” Galli said. “We pay a competitive wage with a very nice bonus program for our management teams. We It was a real nightmare.” Now, as a new administration prepares to take charge, would have to eliminate the bonus and reduce the flexibilwage initiatives and the potential effects they have on U.S. ity we allow our exempt store managers if the overtime rate businesses—including convenience stores—are sure to sur- is held up. Regardless of what the federal government does, doing business in New York State, we are already on the face regularly over the next four years. President-elect Donald Trump's pick to lead the U.S. path of much higher wages.” Before the measure was suspended by the federal Department of Labor—and have a large influence on what direction the new administration takes—is Andy Puzder, judge, Puzder had been vocal against new overtime rules president and CEO of CKE Restaurants Inc., which includes proposed by the U.S. Department of Labor, a position seemthe Hardee’s fast food chain. A Trump supporter during ingly aligned with the new president-elect. 30 Convenience Store Decisions

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12/27/16 5:42 PM

COVER STORY

Healthcare Will Change, but How? HEALTHCARE

No matter the GOP’s best intentions, reducing Obamacare to nothingness probably won’t happen. However, convenience retailers will have to wait and see what component parts President-elect Donald Trump keeps and what goes away. By CSD Staff

and Human Services. Now that one of the prime critics endured as much magnification, criticism and acco- of Obamacare is well positioned to plan the next steps of lades as the Patient Protection and Affordable Care healthcare reform, is there reason for convenience retailers Act (ACA). Initiated by President Obama’s administra- to be concerned? “There should be optimism that employer mandate pention and passed by Congress in 2010, the law—known as Obamacare—has been lauded for providing 20 million alty exposure and some of the ACA's administrative costs Americans healthcare insurance and equally slammed for (including reporting obligations) will go away,” said David Fialkov, vice president of government affairs at the National spurring confusion and a spike in premium costs. And there’s more to come for the ACA as the next admin- Association of Truck Stop Operators. “It is unclear at this early stage whether and to what extent a replacement law istration outlines its own healthcare blueprint. The transition team of President-elect Donald Trump has can or will deal with cost issues, however.” In his career, Fialkov has also served as legislative counsel released a sketch of his healthcare proposals with details of his intention to repeal President Barack Obama's health- to the National Association of Convenience Stores (NACS). care law. In part, the plan would allow people to buy health insurance across state lines and allow states to establish COMMUNITY CONCEPTS Prior to 2014, and for the purpose of setting health insurhigh-risk pools. ance rates, insurance carriers determined a “small group” is to be “community rated,” meaning rates for those employEVALUATING PRICE Last year, Congress passed a reconciliation bill that ers would be based on the insurance carrier’s total book of would have repealed the mandates that individuals have business claims experience, and not the claims experience of coverage and that companies with 50 or more employees that individual employer’s employee. That concept might provide workers with affordable insurance. Also, it would also come under scrutiny. “The biggest decision that will have to be made is have done away with the federal subsidies by 2018, eliminated funding for Medicaid expansion and canceled a whether ‘community rating’ is retained from the individual and small group markets,” Fialkov said. multitude of Obamacare-related taxes. In the c-store community, companies such as St. Romain Rep. Tom Price, a Georgia Republican and chairman of the House Budget Committee helped write the language for Oil Co., which operates 10 Y-Not Stop locations throughout the bill, which is now seen as one of the main paths forward central Louisiana, will be monitoring the overhaul of the to repeal portions of the ACA. It would also employ the ACA closely. Annie Gauthier, chief financial officer and cosame budget reconciliation rules Democrats used to origi- owner of St. Romain, agrees with Fialkov that companies shouldn’t fear the future of healthcare. nally pass the ACA in 2010. “I believe small and middle-sized chains should be optiThis reconciliation option would leave in place the basic structure of the ACA, including the insurance exchanges mistic about the potential changes to the ACA, although I and rules that require insurers to cover existing conditions think we’re facing more months (if not years) of uncertainty and permit young adults to stay on their parents' insurance as we wait and watch to see what will change and how and when,” Gauthier said. "As an employer who proudly offers policies until age 26. It’s no coincidence that Price was recently tapped by coverage to our team members, I look forward to a system President-elect Trump as head of the Department of Health that may better serve our team members and our company.” EW PIECES OF LEGISLATION in recent U.S. history have

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COVER STORY

Tobacco Is a Hot-Button Issue TOBACCO

A long-time magnet for governmental regulation and unyielding taxes, tobacco remains a vital category for convenience retailers. Under a new administration, should retailers expect any lessening of federal controls of tobacco products such as e-cigarettes? By CSD Staff

OBACCO PRODUCTS HAVE BEEN a darling of sin taxes

and anti-smoking advocates for decades. Despite tobacco manufacturers’ lobbying efforts in city halls and state capitols, the industry has been rebuffed at many turns. For instance, in the state of California—which many states tend to follow when it come tobacco regulation—Gov. Jerry Brown last summer signed sweeping tobacco control bills that will raise the smoking age in California from 18 to 21 and treats electronic cigarettes as tobacco products. Such rulings and laws have greatly impacted the c-store industry. In fact, the last segment mentioned above—e-cigarettes—faces a long up-hill battle due to the FDA’s deeming regulations, which among other mandates, bans the sale of deemed products to anyone under 18. This covers electronic nicotine delivery systems (ENDS), also called e-cigarettes, personal vaporizers and vape pens.

GRANDFATHER CLAUSE The FDA’s deeming regulations also call for any vaping products created after Feb. 15, 2007 to be subjected to extensive testing before companies can sell them to consumers. Because the FDA considers virtually any change in a product to constitute a new product, this means that the deeming regulations will essentially freeze the vaping market. Not only will ENDS manufacturers not be able to introduce new products, but they will also be unable to make changes in existing products without approval. This results in nearly 99% of all current products on the market falling under this new regulation. That’s where the administration of President-elect Donald Trump and the Cole-Bishop Amendment come into play, said Don Burke, senior vice president with Management Science Associates Inc., a diversified information management company. The Cole-Bishop Amendment would move this predicate date forward nine years, allowing for products that have been created through Aug. 8, 2016, to be grandfathered. Though it’s all speculative until formal action is taken by the 34 Convenience Store Decisions

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new administration, Burke said, early clues from the administration could be construed as positive signs for retailers. “It’s encouraging. I think with the results of the election and the orientation of less regulation on the part of Trump and Pence; more likely the Cole-Bishop Amendment going through Congress is more likely to pass. And, that would be a better opportunity for vape,” said Burke. FDA APPROVED At the time of writing this article, President-elect Trump had not selected the finalist to head the FDA. Bloomberg News reported that President-elect Donald Trump could nominate Jim O’Neill, a Silicon Valley investor. O’ Neill previously has commented publicly about overhauling the agency. Other comments to which convenience retailers may be paying attention are attributed to Vice President-elect Mike Pence, who has condemned the feds' staunch concern with safeguarding against public health issues like tobacco use. Mary Szarmach, vice president of trade marketing and government relations for Smoker Friendly International LLC, is the immediate past president of the National Association of Tobacco Outlets (NATO). She said while Pence’s comments must be taken in context, it is revealing for retailers that have been stricken by the overabundance of tobacco legislation. “I have read that he has questioned secondhand smoke studies and vaping studies, basically aligning himself with the group that believes there is junk science and inaccurate numbers in these studies,” said Szarmach. “He has always been against government regulation, and seems to stand with our industry on that. I think he will be an ally for us, fighting against additional taxation, and working on the FDA Center for Tobacco Products—holding them accountable and policing their arbitrary decisions.” In the end, responsible actions regarding tobacco will still rest prominently with retailers. “I think if we continue to do good work keeping tobacco out of the hands of youth, this administration will probably let us do business as usual, I hope,” said Szarmach. CStoreDecisions ecisions .com

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COVER STORY

Can New Fuels Flourish? The new president-elect has indicated he plans to create an economic agenda steeped in more oil drilling and fewer regulations. However, will this stunt the steady growth biodiesel and alternative fuels have enjoyed the last few years?

FUEL

By CSD Staff

Douglass said. “This would rebalance the fuel price inequity energy industry of restrictive environmental reg- currently favoring the large refiners and large marketers ulations. He’ll have a kindred spirit in Oklahoma over the small, independent retailers. Currently this buying Attorney General Scott Pruitt, who he picked to head the disparity is 10-cents-per-gallon on unleaded and 17-centsper-gallon on diesel. Biofuels could be good if the small U.S. Environmental Protection Agency (EPA). Trump has put together a group of A-listers—from Exxon retailers were not at such a huge RIN buying disparity.” Mobil CEO Rex Tillerson, Trump’s pick for secretary of state, to Rick Perry, who is expected to move to lift restrictions on BEAN EXTRACT While corn is the primary ingredient in ethanol, soybeans drilling, green-light pipelines and diminish emissions conhave become a leading renewable source of biodiesel. Today, trols as head of the U.S. Department of Energy. However, alternative fuel proponents and retailers such about 50% of all biodiesel in the U.S. is made from soybean as Douglass Distributing Co.—owner and operator of 22 oil, according to the American Soybean Association. Teutopolis, Ill.-based Meyer Oil Co., which operates 17 Mach Lone Star Food Stores hope to maintain today's momentum 1 Stores in central and southern Illinois, has incrementally built of homegrown renewable biofuels like ethanol. its volume of bean oil-blended fuel offerings over the last few years. Currently, Mach 1 sells 11% bean oil at all 17 locations. SUPPLY AND DEMAND “Whatever the administration decides, they need to look Current fuel policy, based on the Renewable Fuel Standard, creates a strong incentive for fuel marketers to blend renew- at it as a long-term vision and remove the annual instabilable fuels into the fuel supply while lowering the price at the ity such as removing and reinstalling the $1-per-gallon bean pump for consumers. Credits called Renewable Identification oil credit,” said Alan Meyer, chief operations officer of Meyer Numbers (RINs) are the mechanism for insuring that the pre- Oil. “Producers and retailers have to have an idea where the government incentives will be so infrastructure can be built.” scribed levels of blending are reached. An incentive to boost U.S. biodiesel production, the bean If gasoline blenders fail to comply with the mandated volumes (based on the volume of gasoline they sell in the U.S.) tax credit has had several near death experiences; it was they are required to buy RINs to make up the shortfall. Each allowed to lapse at the end of 2009, 2011, 2013 and 2014. Of course, there’s more to the alternative fuel picture than qualifying volume of biofuel (one gallon of corn ethanol, or its energy equivalent) is tracked by a unique 38-digit serial just beans. Douglass encourages the new president-elect to look at developing natural gas as a fuel option. There are others. number—the RIN—as it passes through the supply chain. “I would focus on more self-sustaining energy sources Because these refining and importing companies aren’t often blenders, they need to buy RINs to comply with such as hydrogen as this won't cause a shortage anywhere industry regulations. The blending is often conducted by else,” Meyer said. Trump seemingly is already developing an energy plan bigger oil companies, explained Bill Douglass, chairman for the nation that Meyer can get behind. and founder of Douglass Distributing. “I hope he continues to focus on domestic production to This doesn’t foster an equal playing field for retailers, keep prices low and removes some of the instability caused something Trump officials should review, said Douglass. “The new administration needs to change the point of by foreign dependence,” Meyer said. “This is currently not obligation for the transfer of Renewable Identification an issue, but future concerns can be alleviated by lowering Numbers from the refiners and importers to the rack,” domestic production costs.” RESIDENT-ELECT DONALD TRUMP WANTS to free the

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12/28/16 8:41 AM

COVER STORY

Food Rules Gnaw at C-Store Operations Will the ‘regulatory creep,’ which marked the Obama administration, withdraw under President-elect Trump?

SNAP

By CSD Staff

HERE’S NO SHORTAGE OF pundits who assert that com- Assistance Program (SNAP) criteria and menu labeling. pliance with governmental rules and laws is a greater Both were hot-button issues during 2016. It was just recently, encumbrance on small companies than large ones, however, that some new SNAP mandates initiated by the thwarting small business formation, growth and job creation. U.S. Department of Agriculture (USDA) were altered—to The federal government’s track record of increasing the relief of many c-stores. For example, the earlier version of the rule would have regulatory burden on American companies extends to the convenience channel. More and more that burden has required that 85% of a store’s food sales be from items that are not cooked or prepared at the location. Opposition encroached on c-store food offerings. pushed the USDA to trim the requirement to 50% of gross food sales. Also, the language was clarified, specifying that SNAP RELAXED Two food-related mandates that have climbed to the healthy snacks can count as staple foods. “What I would add is that the Food and Nutrition Service forefront of c-store concerns are Supplemental Nutrition

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COVER STORY (FNS) heard our comments and complaints about the proposed SNAP rule loud and clear,” said Jack Kofdarali, immediate past chairman of the National Asssociation of Convenience Stores (NACS). “The final comments (ending May 18, 2016) helped to vastly change it in our favor. While we do still have some questions for FNS we consider this a huge win for our industry.” He acknowledges the final rule is still complicated. Some studies indicate that many Americans, including the 15% of rural households that are food insecure, live several miles away from grocery stores or have restricted transportation options. C-stores such as Kent Kwik—part of the Kent Cos., based in Midland, Texas meet an important need in these areas. Bill Kent, president and CEO of Kent Cos., said SNAP isn’t a highlight in every one of Kent Kwik’s 41 stores, but is a critical service at many locations. “It varies from store to store, but it’s very important,” Kent said of his company’s participation in SNAP. “We need to be a part of it. We want to be a part of it. And in some stores, it’s a substantial part of their business. It’s important to the whole industry.” A host of states have levied taxes on sugary drinks. Critics have argued that such taxes don’t help to reduce consumption, and that they feed bureaucracies that waste money instead of helping the public. Kent agrees and antic-

ipates that new Trump administration will work to pare down some of the spread of government regulations that hovers over U.S. c-store operations. “You hope there’s a general reduction in this regulatory creep that occurs,” said Kent, who serves on the NACS board, including its legislative committee. “It’s like a glob that just keeps growing and consuming more and more.” MENU LABELING As part of the Affordable Care Act passed in 2010, the rules mandate that restaurants and retailers selling prepared foods in 20 or more U.S. locations must place calorie counts next to menu items or on menu boards. Scheduled to be enacted industry-wide next year, the menu-labeling rule will tax retailers’ resources, said Kofdarali, who also serves as president of Corona, Calif.based J&T Management Inc., that up to a year ago had operated 28 Arco/ampm stores in southern California. Last year, Kofdarali sold 24 of those stores and is looking at other industry opportunities. “The new administration is aware of the importance of fixing the menu labeling law,” said Kofdarali. "Congressional leaders have indicated it is near the top of the list of regulatory changes in need of swift action in 2017, as retailers are already beginning to spend money to prepare for a May 5, 2017 compliance date.”

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COVER STORY

Tax Proposals and Consequences Under the Trump administration, the overall tax bills for most U.S. taxpayers—including many owners/operators and convenience store businesses—are almost certain to be lowered.

TAXES

By Mark Battersby, Contributing Editor

NY CHANGE IN WASHINGTON brings the possibility, indeed the likelihood, of tax law changes and the election of Donald Trump as the 45th U.S. president is no exception. In his campaign, the president-elect highlighted several goals of tax reform that included reducing the official corporate tax rate to 15% from the current 35%. Of interest to the owners of many small convenience store businesses—and their heirs—the estate tax would be repealed if the president-elect’s proposals bear fruit. However, capital gains on property held until death and valued over $10 million would be subject to tax, with an exemption for small businesses and family farms.

COMPANIES, PARTNERS AND CORPORATIONS Most incorporated businesses, so-called “C” corporations, are taxed twice—once at the entity level and again when shareholders pay taxes on dividends and capital gains. In other words, pass-through businesses such as limitedliability companies, partnerships and S corporations, don’t pay taxes at the entity level since their profits are passed to the owners and taxed at the individual income tax rate. There’s a general agreement that the marginal tax rate on C corporations is too high, but if that’s cut, pass-throughs wouldn’t get a reduction and may even face a tax increase. One alternative would be to give pass-throughs a reduced rate compared to wage income, which has been proposed by Trump (a 15% rate cap) and the House GOP (a 25% rate cap). Both plans have a top ordinary rate of 33%, according to published reports. The most likely scenario appears to tax pass-through entities at 15% but tax again on distributions. That's good news for convenience store businesses that retain a substantial share of their income. It would also increase the tax differential between corporate investment and passthrough investment. Most corporate tax expenditures, except for the research and development (R&D) tax credit, could be eliminated in exchange for a lower corporate tax rate. So, in order to pay 40 Convenience Store Decisions

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for lower business tax rates, Trump proposes the elimination of certain unspecified “corporate tax expenditures.” DOUBLING DOWN President-elect Trump has also proposed a doubling of the Code Section 179 small business first-year expensing election from $500,000 to $1 million. That would mean expenditures of up to $1 million for equipment and other business property could be written-off as an expense in the first year. As the new Congress is seated, it's more than likely the president-elect's proposals will be incorporated into a host of other changes. Where this will end up is hard to predict since, already on the congressional drawing board are a number of tax proposals along with many tax bills that never made it out of committee. More likely, when Congress undertakes the 2018 budget this spring, it will consider these items: • creating a new business rate for sole proprietorships or pass-through entities instead of taxing them at individual rates; • reducing the corporate tax rate to 20%; • providing for immediate expensing of the cost of business investments; • allowing net operating losses (NOLs) to be carried forward indefinitely and increased by an interest factor, and eliminating NOL carrybacks; • generally eliminating certain (but unspecified) special interest deductions and credits; and, • moving “toward a consumption-based tax approach.” In the long run, the overall tax bills for most U.S. taxpayers—including many owners/operators and convenience store businesses—are almost certain to be lowered, but deductions for individuals are very likely to be reduced resulting in higher tax bills. There could be cutbacks in certain tax credits and deductions for particular industries. In other words, some taxpayers may benefit less than others, making it more important than ever to keep an eye on lawmakers. CStoreDecisions ecisions .com

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FOODSERVICE

Traditional Still Tempts Retailers don’t have to reinvent the wheel to tempt customers with their foodservice offerings. By putting some new spins on some old favorites they can successfully compete for share of demand across all dayparts. By Marilyn Odesser-Torpey, Associate Editor

LTHOUGH PIZZA AND ROLLER pizza LTOs were the most popular PERFECTING PIZZA Ryan Krebs, director of foodservice grill items have been conve- of all new food items. She pointed nience store staples for many to the LTO build-your-own pizza at at York-Pa.-based Rutter’s Farm Stores, years, that doesn’t mean they Cumberland Farms, a Neapolitan knows that first hand. In June 2016, he have to elicit a ho-hum, been-there-ate- style pie (thin crisp crust with tender introduced a new “very high quality” middle) at Maverik and a beer cheese pizza with a self-activating yeast crust that reaction from consumers. In a survey of c-store customers variation at Turkey Hill Minit Markets. and has seen sales soar. “When the yeast activates it proAranas suggested that pizzas built released last August by Datassential research group, pizza ranked third in on flatbreads can also make interest- duces a pizza with a really fresh brick oven-style crust,” Krebs said. interest after bakery and sweet breads, ing LTOs. The pies are pre-dressed with mar“Consumers seem to be more willing said Jennifer Aranas, the company’s to try exotic toppings when they are inara and cheese. Customers can senior project manager. choose from over 50 additional topA Datassential SCORES report, offered on a flatbread crust,” she said. Half of consumers surveyed by pings. There is no charge for veggies which calculates consumer ratings for new items and limited time offers Datassential said that a good crust is or dipping sauces such as garlic butter, (LTOs) showed that in three of the the crucial component of any good ranch dressing, sriracha and barbecue. Additional proteins are available for most food-forward convenience stores, pizza, Aranas noted. 42 Convenience Store Decisions

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FOODSERVICE

70 cents each on the eight-inch pie and “THIS GENERATION IS TOO YOUNG TO $1.40 on the 16-inch one. REMEMBER THE SHRIVELED HOT DOGS OF About four months ago, Rutter ’s unveiled an egg-based breakfast pizza, THE PAST, SO DOES NOT HAVE THE NEGAwhich Krebs reported is “doing very TIVE PERCEPTIONS THAT GEN X OR EVEN well.” The topping options are the BOOMERS HAVE OF BUYING FOOD ‘AT A same as for the regular pizza. GAS STATION.’” In addition to the made-to-order (MTO) option, which is available -TIM POWELL, VICE PRESIDENT in 53 of the company’s 66 central OF CONSULTING, Q1 PRODUCTIONS Pennsylvania locations, the stores keep eight-inch breakfast and cheese or pepperoni pizzas in their hot grab-and-go Pizza is also a draw for Atlanta- times more likely to purchase a roller boxes. Personal-size pies sell well all day, while large- size sales peak during based RaceTrac which has more than grill item than the typical consumer. “This generation is too young to 430 locations across Georgia, Florida, the dinner daypart and on weekends. The self-activating yeast crust Louisiana and Texas. The majority of remember the shriveled hot dogs of requires a baking time of a little less the stores feature grab-and-go slices the past, so does not have the negathan six minutes for a personal pie and (each one-sixth of a 16-inch pie) with tive perceptions that Gen X or even eight minutes for a large, so signs in toppings such as pepperoni, cheese, boomers have of buying food ‘at a gas the stores, including on the customer meat lovers and supreme out of the hot station,’” Powell said. “They’re used to kiosks, suggest that customers call case, said Michael Elliott, the chain’s seeing interesting items such as taquitos, premium sausages and breakfast category manager of hot foods. ahead to order to eliminate the wait. “These premade slices are not only potato sticks from the roller grill.” “Our call-ahead program has been Powell noted that this consumer made fresh every day in our stores, but very successful,” Krebs said. To spur sales when the new pizza they are also made every hour to main- segment “covets the pricing, conveprogram was launched, the stores tain our standards for freshness, taste nience and addicting taste/flavor of roller grill foods.” While hot dogs offered a special price point or addi- and quality,” Elliott said. Currently, a handful of RaceTrac still account for between 50-60% of all tional gas discounts when customers used their store rewards cards to stores also offer a customizable MTO roller grill purchases, filled products purchase a pie. The stores have also option where guests can choose from such as buffalo chicken and cheese offered a combo deal with free two- more than 10 toppings to put on their and jalapeño cheeseburger roller grill liter soda and a promotion that knocks own seven-inch or 16-inch pie. Elliott links, sriracha-flavored taquitos and 59 cents off the price of a soda or coffee noted that the company’s goal is to pork, chicken and vegetable egg rolls, eventually offer this MTO experience are making the most impact in terms with a pizza purchase. of attracting interest and sales. at all of the stores. RaceTrac’s Elliott said that roller grill “Every day our pizza sales are experiencing growth,” remains one of the largest foodservice categories at his stores and still presents Elliott said. opportunities for future growth. “We have seen year-over-year KEEP ROLLIN’ When it comes to roller growth in this category for the past grill, the other c-store standard, five years,” Elliot said. Each RaceTrac location has between sales are growing among the upper Millennial age range (25- three to six roller grills. Best-selling 34 years old) and that growth items include 100% premium all-beef is expected to be sustained, hot dogs, taquitos, roller bites in flavors according to Tim Powell, vice such as Monterrey jack and Buffalo, Roller grill offerings are simple in concept, but still president of consulting at the and tamales. All new and remodeled very popular with a majority of c-store customers. Chicago-based research firm stores have expanded Taste Works topMore retailers are bringing additional items to the Q1 Productions. These patrons pings bars, which display anywhere menu to spice up their lunch and dinner selections. are more than two-and-half from eight to 12 fresh condiments. 44 Convenience Store Decisions

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FOODSERVICE

FOODSERVICE POINTERS

• For pizza, crust matters. • Offer personal-size portions when it’s feasible. • Millennials are the biggest roller grill fans. • Customers often want new, higher-end roller grill items.

agreement with its supplier, Kunzler Meats, the item is to be an exclusive for the chain until the end of January 2017. “This has been a huge thing for us and we have seen our sales explode overnight,” Krebs said. “It has revitalized our roller grill program and has

become our No. 2 best-selling item in the category. He added, “This experience screamed at me that customers, especially Millennials and Gen Z, want roller grill items that are new, different and higher end.” CSD

Because the stores have numerous customers who buy food from the roller grill every day, it is important to keep the offerings fresh and fun, Elliott said. To achieve that, new products are added as LTOs on a quarterly basis. “Our approach around LTOs is to feature something a little different and ‘out there’ that might not make it as an everyday item, but certainly drives excitement and trial on the grill,” he explained. “Guests grow tired or ‘blind’ to seeing the same products featured month after month. Constantly innovating and pushing the envelope gives us our competitive edge.” Some of the recent LTOs have included a bacon cheddar dog, pork and vegetable egg roll, chicken habanero tamale, and chicken and waffle taquito. In addition to the quarterly LTO program, RaceTrac regularly executes an SKU analysis of nearly every roller grill item to review movement, cost and quality. While combo roller grill deals tried in the past failed at fueling sales, RaceTrac’s “everyday low price” of two items for $2.50 is a crowd pleaser, Elliott said. In October, during the week of the NACS Show, Rutter’s, which has roller grills in all of its stores, rolled out a bacon-wrapped cheddar dog with cracked black pepper. According to an CStoreDecisions ecisions .com

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CATEGORYMANAGER’S NOTEBOOK

Smoke and

Mirrors? Can ongoing price increases on cigarettes continue to compensate for dropping unit sales?

By Anne Baye Ericksen, Contributing Editor

N EARLY NOVEMBER 2016, Philip Morris USA, owned by Altria Group Inc., Reynolds American Inc., and several other tobacco companies added eight cents to the perpack wholesale price of their top cigarette brands. ITG Brands upped the ante by levying a 16 cent hike. The move isn’t a surprise to convenience store owners, operators and managers as it reflects a trend of price increases that’s been happening since 2014 for most manufacturers. What’s more, it appears the pattern will continue into 2017. According to Nielsen data reported by Wells Fargo Securities, pricing of cigarettes in all retail channels jumped 3.5% for the four weeks ending Dec. 3. The price boosts, however, have not translated into proportionate sales gains. For the same four weeks, sales dollars grew by 1%. In a 52-week comparison, dollar sales for cigarettes rose 1.6%. Rather, the price increases have buoyed the category as it continues to face falloffs in volume or unit sales. The Alcohol and Tobacco Tax and Trade Bureau this past November released its statistical report for tobacco products manufactured domestically last September. A monthly tally showed a decrease of nearly two billion units. A cumulative year-to-date assessment also showed a falloff of more than eight billion units. For the aforementioned four weeks, cigarette unit sales in all retail channels fell 2.4%. According to Wells Fargo Securities, volume sales for the fiscal year 2016 will reveal a loss of at least 2%. The market research organization also 46 Convenience Store Decisions

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predicts volume will continue its downward trek by another 3% during fiscal year 2017. BRAND BREAKDOWN Some cigarette brands have fared better than others. Wells Fargo Securities revealed Reynolds American’s Natural American Spirit posted an impressive 16% growth in volume for the same four-week period. The brand posted an equally impressive 15.1% for a 12-week period ending Dec. 3, which is topped by 19.6% unit sales growth for the past year. Although pricing for the brand did creep up over the four weeks, at 2.8% it’s below the national average. Philip Morris USA’s Marlboro also posted positive figures across the board for the same period—dollar sales were up 0.9%, volume was up 1.7% and pricing climbed 2.6%. Perhaps some of that performance can be attributed to the expanding popularity of Marlboro Black. In the same month of November, the Wall Street Journal reported that the less expensive option reached a marketshare of 44.1%, in part due to popularity among Millennials. “Customers may start trying a lower-priced brand—Pall Mall, L&M, Winston, Kool or fourth tier [cigarettes]—which we try to make similar penny profits on,” said Bailey Lyden, vice president of retail for Brecksville, Ohio-based Truenorth Energy LLC, which owns and operates 110 truenorth c-stores. “One factor that does help is the fact the fuel prices are low, which leads to more disposable income,” he added. “This helps customers absorb the price increases.” CStoreDecisions ecisions .com

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CATEGORYMANAGER’S NOTEBOOK TAXING TOLL Of course, a dwindling number of smokers are a major contributing factor for the lessening of volume sales. “The Centers for Disease Control and Prevention reported the adult smoking rate was at a historic low of 16.8% during 2014, down from 17.9% in 2013 and 20.9% in 2008. This clearly shows the smoker base is decreasing year on year and will continue during the future period,” said Manjunath J, a lead analyst for Technavio, a global research firm. Both analysts and healthcare experts generally agree this downward trend most likely will not reverse itself. Industry watchers assert new taxes on cigarettes will contribute to further price hikes. Although federal excise tax per pack has been $1.02 since 2010, the average state tax has gone up each year since 2008, reports Wells Fargo Securities. Estimates place the 2016 average state tax increase at 4.5%, with six states issuing higher taxes on cigarettes last year. November ballots in California, Colorado, North Dakota and Missouri each featured proposed cigarette tax hikes; however, only California’s Proposition 56 passed. Effective April 1, the tax on cigarette sales in the Golden State will change rise to $2.87 per pack from 87 cents per pack. “As of August 2016, the average tax per retail price per pack is around $2 in the U.S.,” said J. “The increase in taxes always will result in an increase in selling price.”

DOLLAR SALES % OF TOP BRANDS Percentage Changes (for the period ending Dec. 3, 2016)

4 weeks

12 weeks

52 weeks

Marlboro

0.9%

0.7%

1.0%

L&M

4.4%

4.6%

8.4%

Virginia Slims

-3.2%

-2.4%

-1.0%

Newport

1.9%

2.9%

4.3%

Camel

0.1%

-0.7%

0.2%

Pall Mall

-1.8%

-1.4%

-0.6%

Natural American Spirit

19.3%

18.2%

22.6%

FUTURE QUESTIONS Maverick 7.1% 6.8% 3.3% All these circumstances—the deflation of the smoking Winston -4.2% -3.7% -1.5% population, manufacturer price hikes and higher taxes— have analysts and convenience store operators wondering Kool 5.8% 2.7% -0.1% if tobacco will finally lose its stake as a top performer. In 2015, tobacco products combined accounted for more than Source: Nielsen Total US xAOC Including Convenience Database and Wells Fargo Securities LLC 35% of in-store sales for c-stores, according to the National that’s stifling growth of new developments or products,” Association of Convenience Stores (NACS) survey data. Some analysts project that U.S. consumers will opt for added Story. “We’ve been dealing with the same technology e-cigarettes and vaping devices over combustible cigarettes for quite some time. They have to quickly reinvent themselves in bigger numbers, and Big Tobacco companies will con- and come up with next-generation technology.” Recently, Philip Morris USA submitted a Modified Risk tinue to invest in these alternatives. While in London for the introduction of IQOS, the company’s heat-not-burn smoke- Tobacco Product application to the FDA for IQOS, which is less cigarette, Philip Morris International CEO, André already on sale in Asia and Europe. The federal agency has Calantzopoulos, intimated traditional cigarettes could be 60 days to evaluate the application and determine if it will be passed on to the substantive review stage. phased out and replaced by alternative products. When the FDA released its final deeming regulations “As tobacco companies see the decline in the number of smokers, they are looking for other products to stay com- last year, industry watchers and manufacturers expressed petitive in the marketplace,” said Ray Story, CEO of the concern about the costly and arduous application process. However, Story holds out hope the incoming administraTobacco Vapor Electronic Cigarette Association. Lyden believes the traditional cigarette consumer will tion of a new president and Republican control in the House begin using more alternative tobacco items such as e-cig- and Senate could lead to less federal regulations. “If that happens, we should see new products,” Story arettes and vape products. However, those options may said. “Once the technology reaches a level where we can change as new regulations pressure the market. “The problem is that the U.S. Food and Drug Administration mimic the conventional cigarette experience and eupho(FDA) has put such an onerous burden on the e-cigarette cat- ria, we will see a decline in conventional tobacco sales like egory that a lot of companies are going out of business, and we’ve never seen.” CSD 48 Convenience Store Decisions

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CATEGORYMANAGER’S NOTEBOOK

Meat Snacks Gain Weight Convenience store customers crave variety, which is a big draw in today’s meat snacks category. By Howard Riell, Associate Editor

ROM A WIDE VARIETY of flavor offerings, including specialty meats, to various textures and forms, the meat snacks category succeeds in meeting consumers’ desires. The category is well positioned at what some refer to as the intersection of snacking trends and consumer demand for protein. New brands, flavors and formats have the potential to bring new consumers to the category, which will drive growth through 2017 and beyond. Marketers continue to develop creative ways to get consumers to test the jerky segment, including reframing jerky to fit into other categories such as energy bars and trail mixes. Millennials are continuously on the prowl for new flavor experiences, which has led to experimenting with jerky in new shapes, sizes and flavor profiles. Meat snacks have grown in popularity, as consumers view these as a convenient, tasty and high-protein snack, market research company Mintel Group Ltd. recently reported. “These nutrient-dense snacks also fit into several niche diets including gluten-free. The segment also benefits from simple ingredients and strong flavor and ingredient innovation from large and niche brands alike,” Mintel stated.

REAL FOOD More gourmet and premium meat snack options are entering the marketplace in response to consumers looking for authenticity and higher quality. Indeed, offering such upscale protein items—in concert with unconventional forms and exciting packaging—has been one way for companies to break into the already crowded field. Jack Link’s three-year-old premium brand Small Batch Jerky saw sales grow 75% in the past year, according to market research firm Packaged Facts. An increasingly popular buzzword is “exotic proteins,” which— while still a minute share of the market—include venison, bison, buffalo, lamb, elk, boar, duck, pheasant and ostrich. Another emerging trend is so-called meat bars, led by such brands as Epic, Krave and Tanka. Beef remains the dominant flavor, outselling turkey, pork and chicken. The category continues to grow more competitive as well, as evidenced by the number of new brands vying for shelf space. For 50 Convenience Store Decisions

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CATEGORYMANAGER’S NOTEBOOK “ADD SOME VARIETY INTO THE MIX AND TRY OUT SOME OF THE NEWER ITEMS. WE HAVE TAKEN A LESS IS MORE APPROACH IN SOME OF OUR STORES, AND ARE SEEING SALES SPIKES AS WE HAVE THE TOP FLAVORS, AND ARE INCURRING LESS WASTE WITH SLOWER SELLERS.” -HEIDI REMBECKI, DIRECTOR OF MERCHANDISING, NOCO ENERGY CORP.

Another is Jack Link’s Lorissa’s Kitchen brand, which instance, Slim Jim, a category leader, continues to expand its flavor profile. In addition to its Original, Barbecue and markets a jerky with higher moisture for what it called a Habanero, the company has recently added Turkey Sticks more tender bite. “Lorissa’s Kitchen is not your standard looking package as well as Barbecue and Habanero offerings—a response to consumers looking for new, bolder, more “extreme” flavors. or product,” Rembecki said. The line comes in four flavors: Such spicier flavor innovations are also capturing busi- Korean Barbeque Beef, Ginger Teriyaki Chicken, Sweet Chili Pork and Szechuan Peppercorn Beef, which touts 100% ness from Millennial-age consumers. So pronounced has been the proliferation of meat snacks, grass-fed beef, responsibly raised pork and antibiotic-free in fact, that Euromonitor International said it fears the cat- chicken with no preservatives, added growth hormones, egory is becoming saturated. According to spokesperson and is gluten free. As with other categories, newness is an essential ingrediMarissa Bossler, there are dozens of artisanal meat snack players banking on the natural protein hype, and meat giants ent in stirring consumer trial. Merchandising should also be updated from time to time. such as Tyson have already started to launch snack variants “We’ve started to use the ConAgra rack that allows the of their existing brands. “In addition, Hershey and General sticks to be lying down out of the box,” said Rembecki. Mills have already made their forays into the category.” According to Chicago-based market research firm IRI, for “The labeling allows consumers to see what the varieties are the 52-week period ending Oct. 30, 2016, the multi-outlet much easier than the old stand-up of boxes.” Indeed, innovative products, flavors and merchandisers convenience store channel showed dried meat snack sales of just over $1.5 billion, a 0.71% increase over the same period may be just what some retailers need. Rembecki suggested last year. ConAgra Foods’ Slim Jim brand, which holds 19% that some c-store operators fail to spend time and attenmarket share with $243 million in sales, posted 11% growth tion on building the category, relying instead on traditional in dollar sales in the past year, according to Packaged Facts. favorite brands. “However, looking at the newer items will Oberto and Bridgford Foods posted dollar sales growth bring new users into the category.” Critically reviewing the category also helps operaof 18% and 30% in that period, respectively. tors keep from ending up with a small section, with heavy inventory dollars tied up, she added. “They should take a COOKING UP INNOVATION Sales are being driven by more health-conscious shoppers, peek more than once a year.” but also changes in flavors to appeal to a broader crowd. An emerging trend in the meat snacks category is meat bars, PROMOTING CHANGE Sam Odeh, founder and CEO of Power Buying Dealers which are pushing the market with brands such as Krave. “New bars coming out from Krave with non-traditional (PBD) USA Inc., of greater Chicago, includes 25 owned and flavors typify that innovation,” said Heidi Rembecki, director franchised locations in Illinois, Georgia and Florida. Odeh of merchandising for Tonawanda, N.Y.-based NOCO Energy said he is seeing many new touches in the form of different Corp., which operates the NOCO Express convenience chain. meats, spices, brands, sizes and line extensions being introFor example, the Hershey Co. launched Krave Bars—the duced to PBD’s locations. “What’s important in my opinion first items to come out of its partnership with Krave Pure is the high-end protein, which is used as a meal during the Foods, the Sonoma, Calif.-based meat jerky company it day instead of a snack.” Odeh said he has enjoyed success with the category by acquired last year. The bars are available in four flavors: chipotle cherry beef, cranberry thyme turkey, mango jalapeño merchandising it next to his assortment of energy drinks. pork and wild blueberry barbecue beef. Each selection fea- On the other hand, he keeps meat snacks away from endcap tures dried fruit and quinoa. According to Packaged Facts, displays. “It tends to signal non-health snacks, like chips.” Krave Jerky sales rose 71% to $38.3 million, with volume A wide assortment is likewise needed. “They must carry all sales growth of 84% in the past year behind increased dis- sizes of bags.” Price promotions, especially those that bundle with energy drinks, are also helping drive sales. CSD tribution since being acquired by the Hershey Co. in 2015. 52 Convenience Store Decisions

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SAVE THE DATE! The convenience store industry’s exclusive organization for next-generation leaders and up-and-coming decision makers will be held May 24-25 at Maverik’s Base Camp headquarters in Salt Lake City. A team-building Habitat for Humanity project will take place on May 23. In addition to networking and a firsthand tour of Base Camp, Maverik’s test kitchen, training facilities and convenience stores, YEO’s will hear how the chain nurtures its outstanding retail culture, communicates with customers through its industry-leading loyalty program, tackles foodservice, staffing and developing its convenience store operations.

Registration for the 2017 YEO Roundtable and the Habitat for Humanity team-building project will open in mid-January.

For information on NAG and YEO membership or to reserve a space in the the 2017 YEO Roundtable, contact NAG Executive Director John Lofstock at (201) 837-2177 or jlofstock@csdecisions.com.

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CATEGORYMANAGER’S NOTEBOOK

Adult Beverage Boom

The convenience channel continues to experience growth in beer, while there’s also opportunity for growing wine and adult beverages sales in some regions. By Lisa White, Contributing Editor

HERE IS SIZABLE INTEREST for beer, wine and spirit man- December. January and February are the slowest months ufacturers and retailers to work together to win over for moving beer, wine and liquor. “Our liquor distributors tell us how grocery stores move consumers, according to a new study from IRI. Millennials, Generation Xers and baby boomers these products, and we essentially see the same buying patmake in-store shopping trips more than once per week, terns,” said Magestro. According to data from the Nielsen Co., 23% of conveand 40% of buyers walk into the store undecided on what product to purchase. Of the 60% who do have a planned nience stores reported selling alcoholic beverages in 2015, beverage purchase, 21% end up changing their mind in with approximately 82% of these stores selling beer, close to store, and 50% of those who change their mind ultimately 70% providing wine and about 32% offering liquor. buy a different brand than they originally intended. Certainly, when a convenience category shows growth, it POTENTIAL PROFITS Although c-stores are not expected to be a primary stop pays to make the jump and become a trendsetter. Mad Max Convenience Stores, based in Saukville, Wis., for beer, wine and liquor, customer support makes it evihas 12 locations in its home state, where the retailer is expe- dent that there is growing potential in this retail channel. “We learned over the last four years that it takes two riencing increased in-store sales of beer, wine and liquor. In the last four years, all of its new stores have included years to mature a liquor market in our stores, for customers to understand we have a full line and for them to tell their an alcohol section, no matter where the site is located. “We’ve discovered that wine and liquor are markets that friends,” said Magestro. “Will we ever be as big as liquor or the c-store industry as a whole doesn’t want to get involved big box stores? No, but we will carry the items that turn, and with, maybe due to regulations or the price points, but it’s customers show us that it’s worth it by buying the product.” The success of the category can be attributed partly to a category we need to have, expand on and tweak, depending on the area,” said Steve Magestro, Mad Max’s president. Millennials, who are visiting c-stores multiple times a day, Liquor has been a part of Mad Max stores’ lineup for rather than once daily or a few times a week like other about six years, and sales have followed a seasonal ebb and consumers. Liquor distributors are starting to realize that, dependflow. Being up north, these products begin to move in spring and gradually build to a peak season in November and ing on the store’s location, convenience stores can help the 54 Convenience Store Decisions

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THERE’S A NEW

BOSS IN TOWN

l l a e r u o y ‘ d n a ! s e is a r g n i t t ge

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CATEGORYMANAGER’S NOTEBOOK segment by expanding sales opportunities. “What’s interesting is, if a c-store is competitive, it will have customers coming in to buy product; however, the wine side is more fickle,” said Magestro. “Wine is like craft beer; stores can’t sell the same wine types year in and year out.” These offerings have to be constantly changing, as consumers are seeking something different with wine and craft beer month to month. “With wine, it’s important to foster relationships with suppliers, since they know what’s selling in the big box stores,” said Magestro. Mad Max Convenience Stores, based in Saukville, Wis., has 12 Mad Max relies on a couple of its distributors, which locations in its home state and is experiencing increased in-store serve as partners rather than just order takers, to determine sales of beer, wine and liquor. Liquor has been a part of Mad the best wine varieties to carry. Max stores’ lineup for about six years, and sales have followed a Jeff Lenard, vice president of strategic industry initia- seasonal ebb and flow. Such products begin to move in spring and tives, for the National Association of Convenience Stores gradually build to a peak season in November and December. (NACS), based in Alexandria, Va., has seen more of a focus for 2017,” said Heidi Rembecki, NOCO’s director of on local beer and growlers. “There are a record number of breweries in the country merchandising. Varieties include Mark Anthony Brands’ White Claw now and many are too small to bottle or can their product, so beer is only available in kegs,” Lenard said. “I have seen Hard Seltzer, Boston Beer Co. affiliate Hard Seltzer Beverage stores like Kum & Go and Mendez Fuel both do a great job Co.’s Truly Spiked and Sparkling Spiked Seltzer. NOCO Express stores, located in western New York, do with growlers and local beer. And then there is Kent Couch, not sell wine due to state regulations. who has 50-plus taps in Bend, Ore.” “There is definitely a leaning toward more craft beer, and we have a couple stores centered around these prodWHAT’S SELLING Beer, wine and liquor sales and trends are regional and ucts,” said Rembecki. “It’s important to stay on top of these brands and evaluate new lines as they are launched.” also can vary from store to store in the same city. In some states, the landscape of retail sales is changing. For example, starting July 1, 2016, Tennessee grocery stores SPACE RACE Designating space for beer, wine and other alcoholic bevare now permitted to sell wine. “Although we were not the first c-store in Tennessee to erages can be challenging in smaller footprints. NOCO Express stores typically allocate five doors in the get a wine license, Git N Go was the first c-store chain to acquire a license and start selling wine in the state,” said cold vault for beer, with some stores incorporating beer caves. Beer vaults are typically located at the rear of the store William Baine, CEO of the four-store operation. “The margin on wine is around 30%, however the category has some or off to the sides, with beer caves adjacent to cooler doors. “One of our newer locations includes an open air craft additional shrink issues in our space.” The regulations, licensing fees and ongoing training cost case,” said Rembecki. “We’re focusing on craft cases as part make this an expensive category to get into for retailers in of remodels and new builds when they make sense to the the state. Consequently, this creates a significant barrier to area, as this is a growing and profitable segment, though still a smaller portion of the overall beer category.” entry in the convenience channel. Craft beer in cans, as opposed to bottles like in the past, “Our stores are in the top quartile in NACS inside sales, and we still expect half of the category margin to go to have become more prevalent recently, as well. Mad Max’s Class C-size stores, which are 4,750 square ongoing costs,” said Baine. Some Mad Max stores do well with craft beer, depending feet, include 15 coolers and a walk-in beer cave, for a total of 35 linear feet of wine and liquor. on the area and its demographics. “We make sure to have big walk-in coolers to accommodate these products,” said Magestro. “We believe in IN NEW YORK Tonawanda, N.Y.-based NOCO Energy Group’s 36 the wine, liquor and beer segments and need to expand NOCO Express stores started seeing the popularity of offerings.” As impulse items, these products are kept in the front of spiked or alcohol-infused water and seltzer water rise by the stores. This also provides easier accessibility for custommid 2016. “If a c-store doesn’t currently carry it, it’s in the mix ers seeking a quick one-stop shop. CSD 56 Convenience Store Decisions

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Thank you to our Key Partners

January 2016.indd 1

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COLUMN OPERATIONS

Understanding the Hispanic Market Growing populations warrant c-stores’ investment in Hispanic/Latino communities. By James Johnson, Jr., Terry Johnson and Allan Parnell

Dr. James Johnson, Jr.

trends, an uneven pattern of Hispanic/Latino population growth was evident at the state level in 2015, with three types of Hispanic/Latino markets for potential c-store growth and expansion: • Nine U.S. states, including California, Texas, Florida, New York, Illinois, Arizona, New Jersey, Colorado and New Mexico—account for about 63% of Hispanic/Latino population growth between 2010 and 2015. They were home to 76% of the nation’s Hispanic/Latino population in 2015. Most of the Hispanic/Latino communities in these states are long-established and therefore are mature markets. • Another 27 states—relatively new Hispanic/Latino population migration magnets—captured 28% of Hispanic/ Latino population growth between 2010 and 2015. Hispanics/Latinos began moving to these states in signifiBY THE NUMBERS In 2015, the U.S. Hispanic/Latino population totaled 56.5 cant numbers during the late 1990s/early 2000s and growth million, representing 18% of the nation’s total population. continues as a function of both migration—domestic and Its growth (12.2%) outpaced total U.S. population growth international—and natural population increase. Combined, (3.9%) between 2010 and 2015, extending a more than two- these states were home to about one-fifth of the nation’s Hispanic/Latino population in 2015. Given the timing of decade trend. In absolute numbers, the Hispanic/Latino population their growth and development, Hispanic/Latino commuincreased by 6.2 million during this period. Nearly three nities in these states are defined as emerging markets. • The remaining 14 states (plus the District of quarters of this growth (74%) was the result of natural population change, that is, more births than deaths. The balance Columbia)—future Hispanic/Latino population growth was due to international migration, that is, an influx of magnets—captured the balance of net Hispanic/Latino population growth between 2010 and 2015. In these states, Hispanic/Latino newcomers from abroad. Significant domestic migration—movement within the Hispanic/Latino population influx is fairly recent— the U.S.—undergirded this growth, leading to consid- mainly since 2010. Most of the growth to date has been a erable regional redistribution of the Hispanic/Latino function of international as opposed to domestic migrapopulation. The South was the primary migration des- tion, which typically foreshadows continued growth tination, continuing a trend dating back to at least the through chain migration from abroad. For this reason, early 1990s, and received net flows of Hispanic/Latino Hispanic/Latino communities in these states are labeled migrants from the Northeast, the Midwest and the West as incipient markets. As a result, major opportunities exist for c-store owners between 2010 and 2015. Taking into account both natural growth and migration to expand in existing mature and emerging markets. They ISPANICS/LATINOS CONTINUE TO RESHAPE our nation’s demography and consumer markets. They are the nation’s youngest consumer group, with a median age of 28 and tend to be brand-loyal consumers, especially when culturally-sensitive marketing and advertising are used to target them. Their buying power is impressive—an estimated $1.5 trillion in 2015. Convenience store owners have a unique opportunity to garner a greater share of these dollars if they understand the diversity that exists within the Hispanic/ Latino population. Also, to increase their odds for success, retailers need to redesign their stores and broaden their mix of products and services.

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COLUMN OPERATIONS

also have an opportunity to strategically position them- various Hispanic/Latino selves for first-mover advantage in incipient markets. demographics including Mexicans, Puerto Ricans, LOOKING AHEAD Guatemalans, Salvadorans, Among the nation’s major race/ethnic groups, the Colombians, Ecuadorians, Hispanic/Latino population is projected to experience the Peruvians, Cubans and largest absolute gains (34.8 million)—accounting for 59% Dominicans. of projected total U.S. population growth—between 2015 All of these groups enter and 2040. the U.S. with different culSuccess in fully tapping this booming market will hinge t u r a l o r i e n t a t i o n s a n d on convenience store owners’ ability to customize their consumer tastes. product and services mix to align with consumer tastes Moreover, each group Dr. Allan Parnell and preferences of the specific Hispanic/Latino group(s) typically follows well defined in their local markets. migration streams when they settle in the U.S. But such statistics may mask critical success factors in attracting and retaining Hispanic/Latino customers. DIFFERING DEMOGRAPHICS Convenience store owners must understand that where At the regional level, for example, Mexicans are concenHispanic/Latinos live in the U.S. is strongly influenced trated mainly in the West and South; Puerto Ricans are in by their specific country of origin. The U.S. Census covers the Northeast and South; Cubans are overwhelmingly in the South; and Dominicans reside mainly in the Northeast. Because the various groups often overlap in some regions and group-specific socio-demographic metrics may differ 2015 in significant ways from aggregate statistics on Hispanics/ Latinos, settlement patterns can be quite nuanced at the A N P I C S /LATINO P HI OPULATION neighborhood or community level where store location decisions are typically made. B Y T HE NUMBERS Given the strong and deeply-rooted family orientation Hispanic/Latino Population Hispanic/Latino Population Change of Hispanics/Latinos, convenience store owners must Mexicans 64% 7.3% strive—in all of these markets—to make convenience 12.3% 10% Puerto Ricans 14.5% 9% Central Americans stores true shopping destinations—one-stop venues, not 8.9% 6% South Americans only for healthy food and basic household items that 9.5% 5% Other Hispanic/Latino 9.2% 4% Cuban align with group specific cultural tastes and preferences, 16.7% 3% Dominican but also for a range of services that address basic social 0 10 20 30 40 50 60 70 80 Int90l. ati 100 0 2 4 6 8 10 12 14 16 18 20 Migr on 26% and health needs of the population. Consistent with the concept of Hispanic/Latino new Components of Hispanic/Latino Net Population Growth, 2010-2015 L CHANGE NATURA % 74 urbanism—a form of community development that aligns with the unique family, cultural and community orientaHispanic/Latino Regional Migration Trends Hispanic/Latino Population Growth Typology tions of Hispanics/Latinos—such an expanded model is likely to work especially well in food deserts where grocery +19 +7 stores are nonexistent. +16 +131 +68 Hispanic/Latino buying power will only increase in +37 the years ahead—as the various specific origin groups become better educated and more upwardly mobile. Hispanic/Latino Consumer Markets For c-store owners, making a concerted effort to attract and retain Hispanic/Latino consumers makes good business sense. 2015

2010-2015

35,320,579

2,390,896

5,266,738

574,848

5,079,021

644,595

3,320,848

271,568

2,467,107

214,753

2,046,805

173,220

1,760,354

251,483

Specific origins data cover the period 2010-2014

thousands

2010-2015

Immigrant Gateways

New Hispanic Magnets

Future Growth Magnets

2015

Immigrant Gateways/Mature Markets (63% of net growth)

New Hispanic Magnets/Emerging Markets (63% of net gorwth)

Future Growth Magnets/Incipient Markets (10% of net gorwth)

2014

2015-2040

Regional Distribution of Hispanic/Latino Population by Specific Origin Mexican

10.4%

33.6% 9.1%

10.3%

29.4%

7.8%

74.6%

7.8% 1.9%

1.8%

72.8% 16.5%

South American Other Hispanic/Latino

Non-Hispanic 264,615

49.7%

49.3% 3.5%

Dominican Central American

2040 288,593

2015

2.7%

Purto Rican Cuban

Projected Population Change by Race/Ethnicity

5.4

40.1%

36%

5.7

12.7% 7.1% NE

29.2% S

17% 31.1% 40.1%

14.8% 49%

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58_59_Oper_Hispanic Demographics.indd 59

White 198,354 Black

9.1% 1.6%

195,197 21.1%

39,782

AI/AN

2,359

Asian

16,978

2 or More Races

6,593

Hispanic

56,754

48,163

11.2%

2,623 69.3%

28,756 99.3% 13,089

61.4%

91,626

thousands

James Johnson, Jr. is the William R. Kenan Jr. Distinguished Professor of Strategy and Entrepreneurship at Kenan-Flagler Business School, University of North Carolina at Chapel Hill.Terry Johnson is the principal of Yuubik Consulting. Allan Parnell is vice president of the Cedar Grove Institute for Sustainable Communities. January 2017

Convenience Store Decisions 59

12/28/16 12:23 PM

By Mitch Zeller

COLUMN OPERATIONS

Measures to Safeguard the Workplace Easy access to cash, the presence of alcohol and tobacco products, and solitary late-night or early-morning shifts are among the factors that make convenience stores workplaces that require added protective considerations. By David Quezada

HE CONVENIENCE STORE INDUSTRY nearly doubled law enforcement can train employees in specific conflict dein size over the last three decades, according to the escalation techniques and detailed, step-by-step instructions National Association of Convenience Stores (NACS). on what to do in case of a robbery or assault. The latest CSD/Humetrics Human Resources • Limit access to cash. Require workers to deposit cash into Benchmarking Survey found that convenience store own- drop safes frequently to reduce the amount of cash on-hand. ers expected these growth trends to continue, with more You can also prohibit the use of bills greater than $20 bills. than one quarter of those surveyed having anticipated hir• Establish what to do in case of a robbery. Make sure employees ing more employees in 2016. are then trained in what to do during a robbery, like calling 9-1-1 and activating a silent alarm. PREPARING EMPLOYEES • Staff appropriately. If your store is located in a high crime Working in a convenience store involves a certain level area, consider staffing two or more workers in order to of risk, for which many new employees aren’t initially pre- reduce the risk of assault. pared. Easy access to cash, the presence of alcohol and • Address adequate outdoor lighting. Make sure parking lots and tobacco products, and solitary late-night or early-morning all areas of the property are well lit, including behind the shifts are among the factors that make convenience stores store where garbage dumpsters are often located. more dangerous places to work. • Do not do your banking at a set time. Robbers will look for On average, convenience stores experience a work- patterns to spot potential times to target staff. If you are related homicide rate that is seven times higher than other depositing a large amount at one time, consider using a industries, according to the Centers for Disease Control and cash transit service. Prevention. Not surprisingly, homicide is the leading cause • Always have two people present at opening and closing times, if of death in retail establishments. it’s feasible. Have one person shutting up and the second In a growing industry where hourly employee turnover positioned away from the door but with a clear view of is estimated to range from 55-77%, smart convenience store what is happening. owners realize there are recruiting and retention advanPrevention techniques like these and others are only tages as well as cost savings to be gained by offering their effective if they are being used. Business owners should frontline employees a safer work environment. regularly review and monitor safety practices to make sure In addition to protecting a business’s employees, work- everyone understands the correct procedures in case of an place safety programs that teach violence de-escalation emergency. Workplace violence is serious and frightening, strategies can help convenience store owners keep the but by implementing these practices, employers can greatly cost of their workers’ compensation insurance and related reduce the risk of adverse incidents. expenses under control. No business owner wants to see their property damaged There are a number of violent acts that could occur dur- or employees injured or killed. By taking preventative steps to ing a robbery, including actual or threatened bodily harm, reduce the risk of workplace violence, convenience store ownharassment or property damage. ers can help protect their employees, customers and business. One of the smartest things a business owner can do is to maintain a safe workplace—it makes good business sense, PREVENTIVE MEASURES There are some important prevention measures business and it’s the right thing to do. owners can implement to reduce the risk of workplace vioDavid Quezada is vice president, Loss Control Services for EMPLOYERS, lence, including: • Implement a violence prevention training program. A professional a company that offers workers’ compensation insurance and services training program conducted by a reputable professional or to small businesses.

60 Convenience Store Decisions

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12/23/16 10:23 AM

NEWSTUFF Creations & Innovations to Convenience Products and Services

DISPENSED CRAFT OREO CANDY BARS BEVERAGES Sunny Sky Products is introducing a revitalized look behind Pure, its dispensed craft beverage line. With a modern and fresh feel, Pure’s new rebrand will be sure to grab the attention of your customers at the fountain. Pure consists of Sunny Sky’s deliciously-crafted sodas made with cane sugar as well as craft teas, lemonades and flavor shots. These craft beverages are a unique product as they provide consumers the fun, innovative flavors their taste buds desire outside of the ordinary fountain beverage. If you are looking to differentiate your beverage program, Pure is your answer. It is the better beverage your customers are demanding—superior flavor and quality, a pure difference you can taste. Available in 2.5-, three- and five-gallon bag-in-box.

For More Information From Sunny Sky sales@sunnyskyproducts.com

FRENCH TOAST SAUSAGE Johnsonville has introduced the new Ultimate French Toast Sausage, as the most recent addition to its Ultimate Premium Sausage line. This unique sausage pairs the aroma of sweet cinnamon with a smooth, buttery, maple syrup flavor that delivers a French toast experience without the mess. The Johnsonville Ultimate French Toast Sausage is a perfect addition to any roller grill program. Its on-trend flavor capitalizes on the high demand for savory and proteinbased breakfasts. According to Datassential’s 2016 Food Report, there is a micro-trend called the “new savory” where traditionally-sweet items are turned into savorydominant foods. The market research firm added that the trend is stretching dayparts, which means that consumers will find the Johnsonville Ultimate French Toast an attractive offering for lunch, dinner and snacking. Like all Johnsonville Sausage products, the new Ultimate French Toast Sausage is made with the operator’s convenience in mind, frozen for storage convenience, and available 1/5-pound bags to a case.

For More Information From Johnsonville

Mondelez introduces Milka OREO Chocolate Candy Bars, which combines two of the world’s most iconic brands and treats: OREO cookies and Milka European chocolate candy, the No. 1 chocolate candy in Europe. The new chocolate candy bar line is a permanent offering and comes in an assortment of formats. The Milka OREO Big Crunch Chocolate Candy Bar: A layer of crunchy OREO cookies between two layers of rich vanilla creme filling, coated in European Milka chocolate candy. It will be available in one 10.5-ounce sharing size tablet at a suggested retail price (SRP) of $4.99. The Milka OREO Chocolate Candy Bar: Delicious bits of OREO cookie mixed in rich vanilla creme filling coated in European Milka chocolate candy. It will be available in three sizes: 1.44-ounce at an SRP of 98 cents, 2.88-ounce at an SRP of $1.69 and 3.52-ounce at an SRP of $1.79.The Milka OREO ChocoMix Snack Mix Bag: OREO mini chocolate sandwich cookies, Golden OREO mini sandwich cookies, Milka Chocolate Candy Buttons, and candy-coated chocolate pieces mixed together for a delicious multi-texture experience. It will be available in a 6.1-ounce bag at an SRP of $3.69.

For More Information From Mondelez www.oreo.com or www.mondelezinternational.com

DELIVERING HOT SNACKS General Mills has introduced two new flavors of Chex Mix: Jalapeño Cheddar and Hot & Spicy, which offer increased heat to meet consumer expectations. Chex Mix Jalapeño Cheddar delivers hotter, cheesier flavor than ever while Hot & Spicy is “really freaking hot.” Available in 3.75-ounce size with suggested retail price of $1.69. General Mills noted that “spicy adventure” is the third largest and fastest-growing category in c-store salty snacks (GMI Proprietary Salty Segmentation Study, 2015) and these powerful new options deliver on-trend flavor. Contact your General Mills Convenience sales representative for details.

For More Information From General Mills

(800) 837-5391

(800) 767-5404

www.cstore.johnsonville.com

www.generalmillscf.com

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NEWSTUFF Creations & Innovations to Convenience Products and Services

CHEEZ-IT SNACK MIX Retailers understand that consumer cravings keep evolving and to stay ahead of the curve, they need dynamic snack options. Cheez-It has responded with Sweet & Salty Snack Mix. As a $1 billion brand (Nielsen Aug. 8, 2015), Cheez-It is a key driver in the snacks category, growing +$10.8 million in the past year in convenience. Sweet & Salty Snack Mix is made with real cheese crackers, salty pretzels, crunchy snacks and M&M’s brand chocolate candies. Today, consumers are increasingly seeking sweet-and-salty flavors to satisfy cheese snack cravings, (Nielsen ending Aug. 8. 2016, Specialty Channels Demand Spaces). Retailers can leverage the variety of flavors and platforms the entire Cheez-It line offers to satisfy multiple customer trends.

For More Information From Kellogg Co. www.kelloggsspecialtychannels.com

CIGARS FOR ‘OUTLAWS’ Swisher Sweets’ Outlaws Cigars are inspired by the rugged mindset of the modern-day outlaw. Each cigar combines Swisher’s 150-year tradition of cigar making excellence with the unique and distinct tastes of an outlaw’s life on the run. Available in three-count packages, Outlaws Natural Leaf Cigars include: Original – Combination of air-cured tobaccos encased in a bold broadleaf wrapper; Double Barrel Rum – Enhanced by oak barrels and wooden casks for the perfect rum cigar; Honey Maple – Dedicated to the outdoors, the one-of-a-kind blend is unmistakably Swisher; Campfire – Blend of dark fire tobacco and a hint of marshmallow for a rustic experience; and Peach Brandy – Inspired by bootleggers’ aging peaches to create perfectly smooth Brandy. Outlaws Cigars are rough-cut, hand-rolled cigars crafted in Honduras from sun-grown tobaccos. The result is a rugged cigar with a surprisingly mellow, sweet taste and an easy draw. All blends are currently shipping nationwide.

For More Information From Swisher International (800) 874-9720

MAXIMIZING ENERGY DBI Distribution, marketers of the popular Mini Thin family of energy products, has introduced the new Mini Thin Mini product. Mini Thin Mini helps boost energy levels and also helps to ramp up metabolism so that exercise is effective. It is sold in very small tablet form or mini tablets, which many consumers find easier to swallow. This product although small, provides mega results. It is ideal for consumers looking to maximize their energy levels at a fraction of the cost of energy shots and drinks. It conveniently fits in a shirt pocket, purse or cup holder. The suggested retail price is $2.49 each. Mini Thin Mini products are available in 24-unit display boxes, consisting of 12 display boxes per case.

REDESIGNED CANNED TEAS At the NACS Show 2016, The Coca-Cola Co. featured Peace Tea as a member of the company’s family of brands, for the first time. Peace Tea is now available in newly redesigned 23-ounce cans in seven flavors, including Razzleberry, Caddy Shack, Sweet Lemon Tea, Green Tea, Georgia Peach, SnoBerry and Texas Style Sweet Tea.

For More Information From The Coca-Cola Co. www.coca-cola.com

For More Information From DBI Distribution www.dbidist.com

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PREMIUM BAKERY ITEMS Hill Country Bakery started with premium ingredients and fresh baked goods delivered to local restaurants and coffee houses in a small town in Texas over 20 years ago. Over the years the company has hand crafted favorite coffee house recipes for Pound Cakes, Loaf Cakes, Coffee Cakes, Crumb Cakes, Muffins, Decadent Bars, Danish and Cinnamon Rolls. It takes pride in quality and carefully-sourced ingredients from around the world from Korintje Cinnamon to Whole Ripe Bananas. Hill Country Bakery uses authentic lattice cut Danish dough, which is more difficult to produce, but the results are worth the effort. Over the last few years the company has watched convenience stores elevate their coffee offerings. Now, Hill Country Bakery is providing the same high-end quality products but now in an individually-wrapped package for portability, optimum shelf life and delivery price value.

For More Information From Hill Country Bakery www.coffeehousecafe.net

MODULAR COUNTER Boost your food-to-go sales with the Modular Counter. The Modular Counter by Fri-Jado allows retailers to present hot and cold products in a single line-up. The display entices customers through a clear product presentation. Retailers can combine hot and cold products in meal deals. The product is easy to install and retailers can adapt the counter to any store format thanks to its smart and uniform design. The Modular Counter is available in full-serve / self-serve, hot / cold / ambient, 30-inches or 40-inches and with curved or squared glass. Patented holding technology ensures food safety, extends shelf lives and cuts waste. Operator ergonomics have also been considered: the space-saving design on the operator side provides easy operator access.

For More Information From Fri-Jado

CLOSED-TANK SYSTEM R.J. Reynolds Vapor Co. made its VUSE VIBE closed-tank system available nationally at more than 25,000 stores in November, serving as yet another example of the company’s commitment to providing innovative, smoke-free alternatives for adult tobacco consumers to consider. The device is sold at retail with a rechargeable battery, a pre-filled two-milliliter tank and a USB charger. Sealed, pre-filled replacement tanks for VUSE VIBE are available at retail in packs of two. Tanks for VIBE hold four times the amount of liquid as VUSE SOLO and feature a more powerful battery that lasts longer than the SOLO battery. VUSE VIBE is available in four styles, including Original, Melon, Mint and Nectar. VIBE uses puff activation, meaning there are no buttons to push or settings to figure out. The product provides an intuitive and satisfying vaping experience.

For More Information From R.J. Reynolds Vapor Co. www.vusevapor.com

QUALITY CANDY LINE Consumer Value Products (CVP) has announced the introduction of the Yum Bees Candy line. This new line is CVP’s premier control label candy line that offers various hard, gummy and chocolate candy products as well as a variation of favorite name-brand products. With bright, fun packaging and quality ingredients, this line of tempting treats will deliver sweet profit margins and value that national brands can’t beat. These sweet treats will hit shelves beginning in 2017. McLane Co., the supply chain services company providing grocery and foodservice supply chain solutions, announced at its annual National Trade Show that it is rebranding its private label company Salado Sales to CVP (Consumer Value Products). The private label company will offer quality private label product lines equal to or better than name brands for a lower price and higher margins for retailers, and will be offered only to McLane customers. CVP is launching five new brands. Among them is CVP’s Yum Bees Candy line.

For More Information From Consumer Value Products www.mclaneco.com

www.usa.frijado.com or us.info@frijado.com

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Convenience Store Decisions 63

12/27/16 10:39 AM

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ADD Systems .....................29 800.922.0972 / www.addsys.com

Altria Group Distribution Co. ......2

Hatco Corp. ............................31

www.EngageTradePartners.com

Home Market Foods ................43

Southeast Petro-Food Marketing Exposition ..............................38

www.RollerBites.com

Apter Industries ...................11

JT International U.S.A. ............25

Blu ......................................19

KT&G .........................13,15

800.441.7146 / www.apterindustries.com

800.966.9709

www.blucigs.com

www.ktngusa.com

Campbell’s Beverage ...............7

Kretek ................................9

www.campbellsfoodservice.com

Cash Depot ...........................14

800.776.8834 / www.cdlatm.com

Chef’s Cut Real Jerky ..............45

www.djarumcigar.com

Liggett Vector Brands ............47

919.781.9744 / www.sepetro.org

Spark Vapor Brands ...............35 800.280.8089 www.sparkvaporbrands.com

Stout Brewing Company ..........55 800.746.3419 www.stoutbrewingcompany.com

Subway ................................12

877.415.4100

203.877.4281 / www.subway.com

Little Debbie ..........................17

Swisher International ..............68

877.210.2575 www.chefscutrealjerky.com

800.615.6208 www.LittleDebbieCStore.com

Cheyenne International, LLC .....49

Mason Ways ........................39

866.254.6975 www.GoNAkedWith Aura.com

800.837.2881 / www.masonways.com

E-Alternative Solutions ..........37

www.mclanekitchen.com/goto/mobile

Gulfcoast Software Solutions, Inc. ..........................3

866.481.4604 / www.nynab.com

312.483.9452 / www.cuevapor.com

R.J. Reynolds ..........................67

888.815.8460 / www.hatcocorp.com

www.AGDC.com

McLane Company .....................5

ClassifiedAds

ADVERTISER INDEX

800.874.9720 / www.swishersweets.com

Tillamook Country Smoker ......51 800.325.2220 / www.tcsjerky.com

Tyson ................................33 www.tysonconvenience.com

North American Bancard .........64

727.449.2296 / www.gulfcoastsoftware.com

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Convenience Store Decisions 65

12/28/16 2:46 PM

INDUSTRYPERSPECTIVES

A Strong Tradition of Keeping SCORE If you don't already know, there's a unique nonprofit group that specializes in helping businesses be more successful. By Fran Duskiewicz

NE OF THE MORE attractive aspects of our industry is the very real commitment to community involvement as continually shown by its companies, both large and small, and its various trade organizations and trade journals. Maybe that commitment stems from our being an integral part of everyday life in our communities and, possibly, some of it comes from the entrepreneurial spirit that created many c-store companies. Entrepreneurs know they needed help to achieve success and they want to return that help in kind. That was certainly the case at Nice N Easy Grocery Shoppes and the feeling remains with me to this day.

tunities on every corner. Early in our relationship I learned it was my job to listen and absorb the vision, then figure out how we could get done the things he wanted to do. It was supremely exciting and the excitement never stopped until nature forced it to stop. We encouraged entrepreneurship among our management teams. We embraced that brand of thinking within our franchise community. Every time I wanted to tighten things up a bit, I was reminded that was not the way we did things at Nice N Easy. Entrepreneurial spirit was in our DNA. So was community involvement. So here I am working with a volunteer organization that assists entrepreneurs. It feels right. It IS right. I think John MacDougall, Nice N Easy founder, would be tickled, knowing what a control freak I am.

MENTORING BUSINESSES That’s why when I wanted to get back out and do something in the business community here in Naples, Fla., JOINING THE CAUSE I’m writing this because I want people to know that SCORE was such a perfect opportunity for me. I didn’t know it existed until I read an article in a regional weekly SCORE exists and that you don’t need to be retired to get about an organization whose members were mentoring involved. There are more retired executives here in Naples local entrepreneurs, helping them with start-ups, business than you can count. Not all of them are good at helpplans, securing financing and working through business ing start-up businesses. It’s a different world from being a master of the universe, but it’s perfect for me, and I think it issues that they can’t solve alone. Previously known as the Service Corps of Retired would be a good exercise for many reading this column. New businesses spur the economy. Economic growth Executives, the nonprofit is now recognized as SCORE, or ‘Counselors to America's Small Business.’ Headquartered is great for the convenience industry. What could be in Herndon, Va., there are 364 chapters of SCORE through- more productive and rewarding than a successful c-store out the U.S., with more than 3,000 volunteers. It is also a owner or executive helping a fledgling business get off resource partner of the U.S. Small Business Administration. the ground in their neighborhood and then mentoring The odds are there are offices near where many of our them through their issues? Plus, who knows what sort of industry companies are headquartered. Services are pro- creative alliances might arise? Look to see if SCORE has a chapter near you. Also, if vided free for those seeking assistance. I’ve had a great time with the people I am counseling. you’re motivated to help, see how that can be accomTheir businesses range from operating a horse farm with train- plished. Somewhere along the line, someone gave you ing, riding and housing facilities, to a fellow who is trying to a chance to be successful. Pay it forward and you’ll reap find a niche selling his goods on Amazon, to a young man the rewards. Creativity and bold thinking is the essence of our who wants to design and sell sportswear and someday own his own indoor soccer team. Their enthusiasm is contagious industry, as is the willingness to take a chance on doing something with a high risk/reward factor. What a perfect and it fires me up in wanting to help them succeed. I worked side by side with an entrepreneur for 30 years. opportunity to help our communities—more specifically His mind never stopped. He saw challenges and oppor- our business communities. 66 Convenience Store Decisions

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MOIST SNUFF

12/27/16 5:53 PM

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