Convenience Store Decisions July 2018

Volume 29 • Number 7 • JULY 2018 Business Solutions for Retail Decision Makers

® A

H A R B O R COMMUNICATIONS

P U B L I C AT I O N

2018

Chains to Watch With a new foodservice platform, FriendShip Food Stores is reinforcing customer ties. And, previously a Nice N Easy franchisee, Blueox is rebranding for the future.

INSIDE:

Food Q&A with KT’s Steve Loehr Taming Meat Snack Sales

Good Store Design Pays Off

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20 48 52

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your business LEGISLATION / REGULATIONS SALES STRATEGIES

COMPREHENSIVE RESOURCES

CONSUMER INSIGHTS

MERCHANDISING SOLUTIONS

SALES & PROFITS

COLLABORATION

LEADERSHIP BRANDS

At AGDC one of our goals is to help drive our customers’ success. We represent the Altria Operating Companies’ vast portfolio of industry-leading brands. We aim to develop sales strategies that align with current consumer insights and your operational goals. Work with us and take advantage of our comprehensive resources to evolve and elevate your business.

©2018 Altria Group Distribution Company | For Trade Purposes Only

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July 2018

Vol. 29 • No. 7

CONTENTS COVER STORIES

to Watch: 28 Chains Blueox Sets Its Own Trail A former Nice N Easy franchisee rebrands as Blueox Neighborhood Market, with plans for ongoing remodels, new food and technological platforms.

to Watch: 32 Chains FriendShip Sails Toward New Horizons With a revitalized foodservice strategy and other company initiatives, FriendShip Food Stores is charting a course for fresh retail waters.

EDITOR'S MEMO

OPERATIONS

8 Honoring

52 Good Store Design Pays Off

the Kwik Trip Culture

FRONT END 10 On Location: High’s Reaching New Heights 14 CSD’s Quick Bites 16 Industry News

18 Supreme Court Rules Online Retailers Must Collect

Sales Tax 19 Convenience Store Solutions: Strengthening Your Store Core 20 Executive Corner: Kwik Trip Redefines Healthy Food Agenda 22 YEO Highlights: Cumberland Farms Hosts YEO Conference

TECHNOLOGY 56 Fostering Financial Services 58 Steps for Stopping Theft

BACK END 60 Product Showcase 64 Quick Stop 65 Ad Index

10

FOODSERVICE

36

36 Developing Deli Destinations

CATEGORY MANAGEMENT 42 Improving Your Dispensed Program 44 Energized for Summer

50

47 Column: Perception of C-Store Food is Higher 48 Taming Meat Snack Sales 50 Salty Snacks Pack a Profit

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THE CSD GROUP Convenience Store Decisions • Leading Through Innovation 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 .

Convenience Store Decisions

EDITORIAL

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

Contributing Editors Anne Baye Ericksen Pat Pape Brad Perkins Jeffrey Steele Columnists Jim Callahan Mark Doyle Tim Powell Gary Stibel Production Manager Barbra Martin bmartin@csdecisions.com

VIRTUALMART ADVERTISING

Group Publisher Tom McIntyre tmcintyre@csdecisions.com 440-250-1583 Publisher John Petersen jpetersen@csdecisions.com 440-250-1583 Vice President, Sales Tony Bolla tbolla@csdecisions.com 773-267-1897

Webmaster Dave Miyares dmiyares@csdecisions.com

Creative Director Erin Canetta ecanetta@csdecisions.com EDITORIAL ADVISORY BOARD

Robert Buhler, President and CEO Open Pantry Food Marts Pleasant Prairie, Wis. Jim Callahan, Director of Marketing (Retired) Geo. H. Green Oil Inc. • Fairburn, Ga. Brad Call, President Colour Du Jour • Salt Lake City Bill Kent, President and CEO The Kent Cos. Inc. • Midland, Texas Greg Lorance, Dispensed Category Manager Cumberland Farms • Framingham, Mass.

Billy Milam, President RaceTrac Petroleum Inc. • Atlanta Patrick J. Lewis, Managing Partner Oasis Stop 'N Go • Twin Falls, Idaho Scott Zaremba, President and CEO Zarco 66 • Lawrence, Kan.

OFFICE LOCATIONS

Headquarters 19111 Detroit Rd., Ste 201 Rocky River, OH 44116 P: (440) 250-1583 • F: (440) 333-1892 Editorial and NAG 1420 Queen Anne Rd., Suite 4 Teaneck, NJ 07666 (201) 837-2177 http://twitter.com/CStoreDecisions www.facebook.com/CStoreDecisions www.linkedin.com/CStoreDecisions 6 Convenience Store Decisions July 2018

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NATIONAL ADVISORY GROUP (NAG) BOARD

Peter Tamburro, Board Chairman Clifford Fuel Co. • Utica, N.Y. Mary Banmiller, Director of Retail Operations Warrenton Oil Inc. • Truesdale, Mo. Greg Ehrlich, Chief Operating Officer Beck Suppliers Inc. • Freemont, Ohio Doug Galli, Vice President, General Manager Reid Stores Inc./Crosby’s • Brockport, N.Y. Joe Hamza, Chief Operating Officer Nouria Energy Corp • Worcester, Mass.

Brent Mouton, President and CEO Hit-n-Run Food Stores • Lafayette, La. Robert O’Connor, President and CEO O’Connor Petroleum Co. • Hales Corners, Wis. Vernon Young, President and CEO Young Oil Co. • Piedmont, Ala.

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 2018, Harbor Communications, LLC

YOUNG EXECUTIVES ORGANIZATION (YEO) BOARD

Bart Stransky, Board Chairman RaceTrac Petroleum, Executive Director, Merchandising and Supply Chain Dana Moloney, Board Vice Chairman Warrenton Oil, Strategic Workforce Partner Alex Olympidis, Director of Operations Family Express Corp.

Alli Bixler, Director of Special Projects The Kent Cos. Sharif Jamal, Corporate Training Manager Chestnut Petroleum Distributors Lindsay Lyden, Vice President, Development Truenorth Energy Jeremie Myhren, Vice President, IT Road Ranger

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

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.

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EDITOR’S

Memo

Honoring the Kwik Trip Culture

For any questions about this issue or suggestions for future issues, please contact me at jlofstock@ csdecisions.com.

H

ONESTY, INTEGRITY, RESPECT, HUMILITY KT in Action While it remains firmly committed AND innovation. These are the words that deto serving others, Kwik Trip backs it fine Kwik Trip…and it shows.

The La Crosse, Wis. convenience store chain exempli- up with operational excellence. Its fies what it means to be a “people company.” It is fully setup is unsurpassed in the convecommitted to customers, employees and its vendor part- nience store industry. The company’s ners, not as a strategy to grow the business, but because 176,000-square-foot dairy on its large La Crosse campus is it’s the right thing to do. When this is your core mission, where tanker trucks pull up to the door every day, bringing greatness surely isn’t far behind. The chain serves as a raw milk that will be pasteurized and packaged. The cream shining example of how to serve others and for this rea- is turned into ice cream. The dairy also churns out Nature’s son Convenience Store Decisions is proud to honor Kwik Touch brand milk. In addition, Kwik Trip bottles orange juice, water and teas, and even runs its own ice-making facility.

Trip as the 2018 Convenience Store Chain of the Year.

Also on this expansive campus is the company’s comKwik Trip is the 29th Chain of the Year and the second two-time winner. We will honor the company on Oct. 8 missary, where the signature Kitchen Cravings sandwiches and salads are assembled and where there are a food at Stratosphere Theater in Las Vegas.

This dynamic chain has been an inspiration for more safety lab, research and development facilities, ice and than half a century. From a vertically integrated distribu- bottling plants as well as warehouses covering hundreds tion system to raising the bar on fresh food to establish- of thousands of square feet.

The 360,000-square-foot distribution center, with its ing employee-centric benefit packages, Kwik Trip has 200-plus employees, is the hub that delivers more than forged a wide path for competitors to follow.

6,000 products regularly. That type of seamless operation wouldn’t be able to compete without a distribution Kwik Trip is the 29th Chain of the Year system to transport products to every store in its network. and the second two-time winner. We The company added a trucking fleet, which led to Conwill honor the company on Oct. 8 at venience Transportation, Kwik Trip’s trucking division.

Stratosphere Theater in Las Vegas.

Not only is Convenience Transportation charged with vehicle maintenance, but it also supports all fuel operations, Company founder and CEO Don Zietlow opened the for both the fleet and retail pumps. In 2012, the company doors to the first store in 1965. Not only did Zietlow at- added certified natural gas (CNG) to its fuel line-up.

Another service extended to Kwik Trip co-workers at tain his dream, but he surpassed it many times over. Today, Kwik Trip operates more than 630 total locations in its corporate campus is access to direct healthcare.

With its commitment to retail excellence comes naWisconsin, Iowa and Minnesota.

The chain currently employs more than 21,000 people tional attention. So far in 2018 Kwik Trip was voted the and serves seven million guests each week. What’s even No. 1 Top Workplaces in Wisconsin by the Milwaukee more impressive is that Kwik Trip’s turnover rate is just 30%. Journal Sentinel. It placed No. 65 on Forbes’ List of Best In a convenience culture, where customers expect Places to Work in the U.S. The chain also received a nagreat service, high quality and a memorable shop- tional award from the Council of State Administrators of ping experience, Kwik Trip exceeds expectations ev- Vocational Rehabilitation (CSAVR) for its strong devotion ery day. From its employees to its world-class facili- to employing job seekers with disabilities.

Please join us in congratulating Kwik Trip as the 2018 ties, they simply have no weakness and it’s a pleasure to see them in action. Family businesses made this Chain of the Year. industry what it is today and as long as outstanding companies like Kwik Trip continue to thrive, the convenience store industry will continue to reach new heights.

“

”

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FRONTEND

Profile

High’s

Reaching New Heights With a prototype store and new customer service programs, High’s of Baltimore is climbing the c-store ladder in the Maryland market.

This new 4,800-square-foot store—open 24 hours—is the prototype design for future High’s of Baltimore locations.

By David Bennett, Senior Editor

I

N 1928, THE HIGH’S BRAND was born—the ice-cream store chain grew rapidly throughout the Mid-Atlantic. At one time, there were more than 500 locations, making High’s one of the largest ice cream store chains in the world.

Over the decades, owners thinned out the ice cream empire, selling many of the parlors. Eventually, the company transitioned to a convenience operation, under the banner High’s Dairy Stores. In 2012, Carroll Independent Fuel Company acquired High’s and began to build off of the proud heritage the company still enjoys.

Currently, High’s operates 48 convenience stores throughout Maryland. In addition, the Carroll Branded Fuel division operates and services approximately 250 locations under the Carroll Motor Fuel banner and a variety of other fuel brands.

The chain’s newest c-store opened this past May in the city of Millersville. The property had been a former dealer site High’s had provided fuel to. Working with the owners to obtain and redevelop the property, it’s now home to a new 4,800-square-foot store—open 24 10 Convenience Store Decisions July 2018

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hours—that is the prototype design for High’s, going forward.

“This was a site where Carroll Fuel serviced a dealer for many years. As the dealer exited operating the business, we were able to work with the owners on this location to design and build a ground-up new store,“ said Brad Chivington, senior vice president of High’s.

dipped ice cream, sundaes and milkshakes. High’s is also developing a proprietary personal-size pizza program with made-to-order options that will deliver a high quality, fresh pie to customers in minutes.

“In addition, we have signature breakfast sandwiches made on site, as well as chicken sandwiches and hamburgers,” Chivington said. “We recently have placed a fresh-made proprietary cold sandwich, salad and sides program for our grab-andgo fresh case as well.”

So far, the response to the program initiatives has been encouraging. Chivington explained each

FOOD ADDITIVES With the Millersville location, High’s is embarking on the development and expansion of its proprietary foodservice across the entire network of High’s locations. High’s has also added a team of industry veterans with a great deal of knowledge to spearhead the effort.

The new store features an expanded hot dispensed beverage offering, a greater fountain and frozen drink offering, fresh High’s new store in Millersville boasts a revamped beverage fried chicken under program where patrons have many choices. the High’s Fryer banner and hand-

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FRONTEND

Profile

introduction was spurred by its customers in the first place.

“We are always open to customer feedback and take all of the comments received very seriously,” he said. “We had a demand for an improved foodservice program and we have answered it with our High’s Fryer Program, and a phenomenal handdipped ice cream program. We will continue to listen to our customers and answer with new and fresh offerings in our store.”

ICE CREAM ORIGINS Just as High’s roots can be traced back to the production of quality ice cream, ice cream still produces a strong following among the c-store’s customer base.

“Not only do we sell our High’s Heritage Premium ice cream in 32 ounces and pint packages, but it’s also what is served in our hand-dipped ice cream locations as well,” said Chivington. The legacy and heritage of our product goes all the way back to 1928. We will be commemorating our 90th anniversary this summer with a celebration for our customers and our associates.”

Made locally, High’s Heritagebrand ice cream is a calling card for many store patrons.

“The essence of our product is to provide quality fresh ingredients and deliver a rich creamery ice cream that will bring smiles to those who remember from their childhood in days gone

Ice cream has been a big part of High’s going back to 1928. Ice cream still produces a strong following among High’s customer base.

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Fresh fried chicken under the High’s Fryer banner is just one initiative that High’s has added. The c-store is also developing a proprietary personal-size pizza program.

by as well as to a new generation of customers,” said Chivington. “The ice cream and dairy are key to our identity today as well as for the future to let our customers know we will provide quality, fresh products to meet their needs.”

The transformation of the chain’s operations has even extended to the company’s mascot, a cow now that remains nameless.

“We have been having much discussion over naming our mascot,” said Chivington. “I believe shortly we will be engaging our customers and associates in submitting recommendations for a name for her as she will be an integral part of representing the High’s brand and we want to create an identity and personality for her that reflects that.”

COMMUNITY INVOLVEMENT Because of current Maryland laws, High’s can’t sell beer. However, that hasn’t precluded the retailer from engaging the craft beer community.

“We do participate in a variety of community events and festivals in the areas around our stores as part of our business and social responsibility,” Chivington said. “We participated in a craft beer festival at the start of the summer to promote our recently remodeled store in St. Michaels and to reintroduce ourselves into the community.

Perhaps the company made a bigger impression late last year when it donated $20,000 to the Red Cross to aid

in hurricane relief efforts for those who were impacted by Harvey, Irma and Maria. High’s also supports the Maryland Food Bank through monetary gifts, food donations and volunteer labor.

CUSTOMER CENTRIC High’s employs a loyalty program that recognizes customer’s purchases of various items in the stores, allowing them to build up cents off per gallon discounts they can redeem. The c-store also has a mobile app that provides information on our locations, amenities, directions and special offers. However, it’s looking to do a complete revision and relaunch of both its loyalty program and mobile app, Chivington said, will provide greater value for its customers and improve the way High’s engages them.

The Maryland retailer has also made changes to assist in developing further its employees’ customer service skills—with the help of a training support manager and the company’s vice president of operations.

“They include a new store (familiarization process) that provides better feedback to our store associates, allowing them to pinpoint issues directly in the store, a leadership and training program that is focused on customer service as well as participating in the BARS program (a self-regulating program for monitoring the sale of age-sensitive products),” Chivington said. “Great customer service is a top priority for us.”

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QuickBites Breakfast is Best

60% of U.S. consumers want more protein in their diets.

Fewer adults agree breakfast is the most important meal a day:

24% increase in demand for plantbased proteins since 2015.

• 52% in 2017 compared to 57% in 2007

But breakfast still wins over lunch & dinner:

(over 43 milion people) regularly use

plant-based protein alternatives such as almond milk, tofu and veggie burgers.

Plant-based Protein Enters Spotlight

19% growth in shipped cases of plant-based proteins.

• 18% say lunch is the most important meal • 19% say dinner is the most important meal

14% of U.S. consumers

86% of those using plant-based proteins regularly do NOT consider themselves vegan or vegetarian.

Source: NPD Group, June 2018

Source: Packaged Facts: “Breakfast and Breakfast Foods All Day: Culinary Trend Tracking Series.”

New England Customers Buying Local

According to a Forager survey of local food buying habits in New England and Upstate New York:

84%

70%

of respondents are shopping for local foods in stores

say vegetables like fresh greens and cucumbers are at the top of their lists

47% say fruit such as strawberries and tomatoes are at the top of their lists

40%

77%

94%

61%

spend at least $50 or more a week on local food

buy local because it tastes better

buy local to support the local economy and its farmers

buy local to support the health of the planet.

Source: Forager Survey, June 2018

Consumer Understanding of GMOs

Despite consumers’ growing familiarity, in-depth knowledge is quite limited as to which products have (or don’t have) GMO ingredients or which crops use GMO seeds. Younger consumers profess to have more awareness and knowledge about GMOs compared to older consumers, particularly Boomers.

57%

62%

55%

57%

52%

I understand what GMOs are

32%

48%

© 2018, The Hartman Group, Inc.

28%

30% 19%

44%

26% Gen Z (18-20)

Millennials (21-39)

Gen X (40-53)

16%

Source: NPD Group, June 2018

Boomers (54-72)

Source: Organic & Natural 2018 report, The Hartman Group

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• Online grocery shoppers take an omnichannel approach and still shop at brick-and-mortar grocers.

39%

I know which crops are most likely to use GMO seeds Total

• 16% (52 million people) of U.S. customers now shop online for groceries —using delivery or click and collect—up from 6% in early 2017.

44%

I know which products have GMO ingredients

CUSTOMERS SHOPPING ONLINE FOR GROCERIES

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INDUSTRY

News

Yesway Welcomes Industry Veterans Yesway welcomes Derek Gaskins as senior vice president of merchandising and procurement, and Jeff Keune as senior vice president of food service and innovation, to its senior management team.

These two industry experts are collaboratively assuming and elevating the traditional chief marketing officer role. Gaskins most recently served as chief customer officer for Rutter’s Farm Stores & Dairy. Prior to Rutter’s, he served as senior vice president in marketing & merchandising with Mid-Atlantic Convenience Stores and as vice president of marketing with NACS. Keune was most recently the principal consultant and partner for the TruthPoint Consulting Group.

Prior to TruthPoint Consulting, Keune was the chief marketing officer for Thornton’s Inc.

VERC Wins Best of Plymouth Award VERC Enterprises has received the 2018 Best of Plymouth Award in the Convenience Stores category, for the 11th consecutive year. VERC Enterprises now qualifies for induction into the Plymouth Business Hall of Fame. The award recognizes companies that have achieved exceptional marketing success in their local community and business category; including a proven ability to enhance the positive image of small business service to their customers and community, and who have demonstrated the ability to use their best practices and implemented programs to generate competitive advantages and long-term value.

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of International Cash Systems, an ATM service provider in West Milton, Ohio, the reusable bags make beverages cold.

Wawa Revamps Hoagiefest This summer, Wawa’s Hoagie is getting an update. After a 10-year run of Wawa’s popular Hoagiefest campaign featuring 1960s-inspired theming and graphics, Wawa has completely reinvented its Hoagiefest campaign for 2018. This year Hoagiefest features brand-new graphics, special effects and contemporary music. Additionally, Wawa is adding special pricing during Hoagiefest for all three hoagie sizes in all varieties – $3 for Junior; $4 for a Shorti and $5 for a Classic.

This year’s Hoagiefest campaign runs from June 18 through Aug. 5 in all Mid-Atlantic Wawa stores and Washington D.C. Also new for Hoagiefest in 2018, participating Wawa stores will have all-new original decorations and selfie stations to help create the unique Hoagiefest state of mind and generate excitement through the summer.

Bagging Indiana’s Beer Laws Expanding cold beer sales and allowing retail sales of alcohol on Sundays are things many Indiana residents have long wanted and issues that could be gaining traction.

But a complex set of forces has kept that from happening. In the interim, Chill Indiana bags are the Indiana Petroleum Marketers and Convenience Store Association’s attempt to draw attention to Indiana’s laws and give customers a way to enjoy cold beer. Developed with the help

Global Partners Buys Cheshire Oil Stores Global Partners LP is acquiring 10 company-operated gas stations and convenience stores from New Hampshire-based Cheshire Oil Co. LLC. The Cheshire portfolio has nine stores in New Hampshire and one in Brattleboro, Vt. All of the locations are branded T-Bird Mini Marts and market Citgo fuel. The purchase is expected to close in the third quarter of 2018 and is subject to customary closing conditions.

Pilot to Add 5,000 Summer Workers Pilot Flying J is expanding its team this summer by more than 5,000 as it prepares for the influx of travelers throughout the company’s busiest time of the year. Pilot Flying J is focused on hiring dedicated team members in positions that range from entry-level up to management roles across the company’s retail, restaurant and deli operations throughout North America. Unlike other summer jobs, the company intends for both full-time and parttime hires to extend well beyond Labor Day. The combined network of more than 750 Pilot and Flying J Travel Centers, operating in 44 states, serves more than 1.6 million customers daily.

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News

Supreme Court Rules Online Retailers Must Collect Sales Tax Decision hailed as one that will give retailers an opportunity to compete on a level playing field.

By CSD Staff

T

he U.S. Supreme Court late last month overturned the States that seek fair enforcement of the sales tax, a tax the landmark Quill case and ruled that states may re- many States for many years have considered an indispensquire online retailers to collect state sales taxes even able source for raising revenue.” if they don’t have a physical store in the state.

The 5-4 decision came in the case South Dakota v. “Tireless” Effort “This decision culminates years of tireless work by the Wayfair. The Court noted the decision was not based on changes in technology since the Quill decision. The ruling retail community to reverse a pre-internet era rule that disupholds a 2016 South Dakota law that requires online mer- torts free markets and puts local brick and mortar stores chants with more than $100,000 in annual sales to state at a competitive disadvantage with their online-only counterparts,” said Deborah White, residents or 200 transactions general counsel for the Retail with state residents to collect Industry Leaders Association sales tax. The ruling was swiftly (RILA) and president of the Repraised by retail groups. tail Litigation Center. “This was “Retailers have been waiting the right case and the right time for this day for more than two for the Court to act, and we decades. The retail industry is couldn’t be more pleased with changing, and the Supreme the outcome.”

Court has acted correctly in Addressing the suggestion recognizing that it’s time for that new collection requireoutdated sales tax policies to ments would be a burden to change as well,” said Matthew start-ups and small online retailShay, president and CEO of the The court ruling upholds a 2016 South Dakota law that ers, White pointed to the draNational Retail Federation (NRF). requires online merchants with more than $100,000 in matic changes in network com“This ruling clears the way for a annual sales to state residents or 200 transactions with puting and e-commerce in the fair and level playing field where state residents to collect sales tax. last quarter century. all retailers compete under the “The Court clearly didn’t buy same sales tax rules whether the argument made by the respondents in this case that they sell merchandise online, in-store or both.”

NRF argued in a friend-of-the-court brief last year that remote sales tax compliance represented the same burden the court’s 1992 Quill Corp. v. North Dakota decision was today that it did in 1992,” White said. “Through its decioutdated and that sales tax collection is no longer the bur- sion, the Court has acknowledged that the same computden it might once have been due to changes in technol- ing sophistication that has fueled exponential growth in ogy. In the brief, NRF cited a wide variety of software avail- e-commerce has also dramatically simplified remote sales able to automatically collect the sales tax owed, much of it tax collection.”

Given the Court’s ruling, White expects the 45 states available free or at low cost.

NRF and other retail groups said in a second brief filed with a sales tax to work expeditiously on legislative and this year that lack of uniform collection is “inflicting ex- regulatory solutions to close the online loophole in their treme harm and unfairness” on local retailers by “distort- states.

“States had this authority taken from them decades ing the retail market in favor of absentee ecommerce.”

The court agreed, noting, “It is unfair and unjust to ago,” said White. “Most will work quickly and judiciously those competitors, both local and out of State, who must to reclaim their authority and create a level playing field for remit the tax; to the consumers who pay the tax; and to all retailers selling to customers in their states.”

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CONVENIENCE STORE SOLUTIONS

Strengthening

Your Store Core

Weak spots in your operation can degrade the whole structure of a c-store.

By Jim Callahan, Contributing Editor

N

O MATTER HOW ELEGANT OR special your store is, whether you are a big retailer or a smalltown community c-store, success often lies in paying heed to your weaknesses and capitalizing on your strengths.

Weak spots in an operation aren’t often visible. Rather, they hide in the shadows, or just below the surface, ready to appear at the least opportune moment. Weak spots of a retail operation are like rust in the chassis of your automobile. It creeps on the floor boards, spreads to the quarter panels and can eventually affect the motor that drives everything forward.

Curbing operational weaknesses is easier said than done. It takes good and steady assessments, monitoring each department, evaluating staff, garnering customer feedback, communicating to suppliers. It all involves shining a harsh spotlight on all operational areas in the quest of doing better.

Do you know what your weakest link is? Are you aware how long it’s been your weakest link? Have you any inkling as to how many dollars it’s costing you each year and equally as important: what impact is it having on your retail reputation?

PRETTY GOOD Understand that unless you address weak points in your operation, whether it’s subpar customer service, poor store maintenance, a weak inventory management program or some other aspect of the business.

Let us place an indelible mark in our minds so that we do not stay complacent and guilty of accepting “pretty good” in a world that more and more demands excellence, pretty good no longer does the job or fills the bill.

The top quartile of convenience stores are routinely closing down and boarding up inefficient operations— perhaps even better than “pretty good” locations— whose numbers are still probably better than the average c-store.

What’s more, they are building brand new, state-ofthe-art stores, perhaps close to the old location in an effort to realize better opportunities to serve more customers and gain significantly higher sales volumes and better long-term growth opportunities. It’s part of a smart operator to shed his weak spots. cstoredecisions.com

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Jim Callahan has more than 40 years of experience as a convenience store and petroleum marketer. His Convenience Store Solutions blog appears regularly on CStoreDecisions.com.

He can be reached at (678)485-4773 or via email at jfcallahan1160@ gmail.com.

Along the same lines, it’s counter-productive to plan for the optimal number of customer parking spaces for that modern c-store location if you suffer from serious issues such as staffing problems. Whether it’s improper training or poor employee attitude, both will hold you back from achieving your place in the sun. I dare say, store staffing and attitude problems are more important and absolutely unforgiveable weak spots than say, designing and building prime parking spaces.

Consider a no-nonsense, well-enforced policy that covers employer expectations and employee responsibilities. As the Seattle Fish Market training program teaches us: you get to choose your attitude every day. Eliminate weak links.

Regarding other areas, you can take it to the bank that cleanliness throughout the store, especially around the foodservice area and restrooms, is also critical to the long-term health of any c-store operation. It’s simple math, but eliminating trouble spots in these areas will add dividends in terms of more sales.

I saw a first the other day. A customer was walking out of a QuikTrip with three large pizzas. Did you ever imagine that a c-store would achieve multiple sales of a big ticket item like large pizzas? Consumers who frequent convenience retailers such as QuikTrip know they can depend on several positive points, whether it’s clean restrooms or fresh food items.

A few years ago, I listened as a frustrated tobacco district manager for a major brand, lamented that his district only averaged 6.1 days of inventory for their most popular facing of cigarettes, meaning they would be out of that brand for almost one full day per week. Now that is a weak (week) link that shouldn’t ever be tolerated.

I could go on and on, but you get the idea. It’s critical to your business to be able to identify your weak spots, in every category and get to work on them. It will pay your company off in the long run and result in greater customer satisfaction.

Because in the end, isn’t that what we all are striving for?

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EXECUTIVECORNER

Kwik Trip Redefines Healthy Food Agenda Steve Loehr has been at the forefront of the chain’s push to provide more nutritious choices.

Steve Loehr

By David Bennett, Senior Editor

A

s America embraces healthier eating habits, the cstore channel has undertaken the slow and methodical process of transforming the country’s perception of an industry that deals in unhealthy, mostly processed food products, to one dedicated to serving consumers healthier and more nutritious options.

Steve Loehr, vice president of operations support for LaCrosse, Wis.-based Kwik Trip Inc., has helped develop various company programs, from managing quality assurance programs via vertical integration distribution systems to raising the bar on fresh food offerings in company stores to establishing employee-centric benefit packages.

As the former chairman of the National Association of Convenience Stores (NACS) executive committee and now a member of the National Advisory Group, he continues to champion healthy foods as a top industry issue. He recently shared his thoughts with us.

Convenience Store Decisions (CSD): Kwik Trip was an early purveyor of healthy food options in its stores, to include offering fresh produce. How has this decision helped shape the long-term relationship the company enjoys with its customers today?

Steve Loehr (SL): Kwik Trip was the first convenience store to become a member of Partnership for a Healthier America (PHA). We had some built-in advantages going into it because we have historically sold bananas, apples, oranges, potatoes, onions, etc. for many years, so our guests were used to seeing healthy food options in our stores long before the term “healthy food options” even existed. So, adding even more options and promoting them more has built our reputation among our guests as a great place to go for healthy food.

CSD: Fresh produce offerings such as bananas and potatoes have been staples for KT. Can you explain how Kwik Trip has expanded its fresh food platform in the last few years to provide customers even more choices?

SL: We have grown the choices by adding a variety of cut fruits, vegetables, salads, etc.

CSD: Has the philosophy of fresh extended to the chain’s expanding foodservice menu?

SL: The greatest impact to our food menus was in providing healthy options to our combo deals—adding water, or skim or 1% milk as part of those deals, as an example.

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CSD: Kwik Trip is considered one of the trail-blazing convenience store retailers when it comes to healthy food options—a course that more convenience stores are now embarking on. Would you say the c-store industry has made positive inroads in terms of providing consumers healthier foods?

SL: I think the industry as a whole has made huge strides in this area. Again, we had a huge advantage in that we self-distribute so we could act and react quicker versus a retailer that has to get buy-in from their wholesaler first.

CSD: The general perception that the c-store channel remains unhealthy when it comes to food offerings? Is the industry effectively chipping away at that perception?

SL: Again, the industry has made great strides. In fact, the NACS Supplier Board has this very thing as one of their key issues to address this year.

CSD: Because of evolving consumer demographics, it’s necessary that c-stores still strike a balance between stocking indulgent snacks and similar items with fresher, healthier food options. How does Kwik Trip go about assessing that fine balance of indulgent and healthy to meet customer expectations?

SL: We look at this balance frequently. I remember my first meeting with the PHA Board. I said we are serious about growing our healthy food options but “we still want to sell 800 donuts and cookies a day, too.” To their credit, they understood that and that is one of the reasons why the partnership has worked as well as it has.

CSD: Kwik Trip was an early collaborator with PHA. How did this collaboration come about?

SL: I credit NACS and specifically Jeff Lenard for having the foresight and dedication to coordinating this effort.

NACS facilitated bringing us together and subsequently has helped add a dozen more retailers since.

CSD: What have been some of the benefits of being a PHA partner?

SL: PHA has a lot of ties in Washington, D.C. and a lot of connections with manufacturers. With NACS assisting in adding the retail dimension, it makes the partnership an impressive juggernaut, all to the benefit of the consumer.

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FRONTEND

YEO Highlights

Cumberland Farms Hosts YEO Conference Two-day event brings c-store executives under 40 together for store tours, educational sessions and networking opportunities.

By CSD Staff

T

he Young Executives Organization (YEO)’s fifth Annual Conference kicked off on Wednesday, May 16 in Massachusetts.

Hosted by Westborough, Mass.based Cumberland Farms, the twoday event included an all-star agenda of speakers, store tours and interactive demonstrations at Cumberland Farms’ commissary and distribution center.

John Lofstock, executive director of the National Advisory Group (NAG) welcomed the more than 70 attendees from 40 c-store chains to the conference.

“There is a huge demand for young executive leadership in the industry and there was a big demand to offer them a group to call their own,” Lofstock said, as he explained how YEO has grown since the first meeting five years ago.

John McMahon, chief human resources officer, Cumberland Farms, began the educational sessions by speaking on company culture and what it takes to create changes.

When considering your current culture, McMahon said to consider what it feels like when you work in an organization. “What does it feel like when things go well and not well? How will people react?”

While many corporations say their people are what matters most, it’s important to walk the talk. “You have to live it and get people to believe it to differentiate in competitive ranks,” said McMahon.

ENHANCING STRATEGIC THINKING Jill Johnson, president of Johnson Consulting, spoke on enhancing strategic thinking for young professionals,

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YEO members pose for a group photo at Cumberland Farms’ headquarters in Westborough, Mass. More than 70 attendees heard from guest speakers, toured Cumberland Farms facilities and participated in a tour of local convenience stores.

including how to effectively communi- “Breakfast is incredibly important. It’s repetitive and you can get the cuscate new ideas to leadership.

She urged young executives to tomers to return every day. It’s easy to consider what the older generation execute,” he said.

Schaninger explained that owners has done to make the business survive to this point, and to include that and senior management must be the information when building a case for drivers of the food program for it to why and how an idea is a good finan- be successful and all levels of the organization must be engaged. cial investment.

John Schaninger, president and CEO of The Schaninger Group, who FAMILY IDEALS Peter Tedeschi, candidate for Maspreviously spent 38 years with QuickChek spoke on the top focus areas for sachusetts 9th Congressional District and formerly the CEO of Tedeschi effective foodservice programs.

One of the first and most important Food Shops, spoke on the role of famconsiderations is to determine why ily businesses in the c-store industry.

He explained how his grandfather you want to sell food. When it comes to choosing a daypart, Schaninger began the business by driving into town recommended starting with breakfast. and purchasing a range of foods to

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FRONTEND

YEO Highlights

(From left) William Miller and Alexis Strack, of Altria; Michael and Stephanie Martone, of Cumberland Farms; and Tom McIntyre, of Convenience Store Decisions.

Ron Rutherford, of Apter Industries, visits the Alltown convenience store in Stoughton, Mass., with Jill Johnson, of Johnson Consulting.

The team from Kent Cos. in Midland, Texas, enjoys the YEO reception. (From left) Alex Garoutte, Blair Garoutte, Kaci Dykton and Jessica Boyd.

bring back and sell out of his truck. The business evolved over the years into supermarkets and then convenience stores. Tedeschi also spoke about his own experiences in a family business.

He outlined the importance of working with government representatives to help them understand the impact of rules and regulations on convenience stores.

“Politics and retail are a lot alike.

They are both about people,” he said.

nity to ask questions, sample food, network with peers and gain ideas to bring back home.

EFFECTIVE COMMUNICATION Linda McKenna, principal with Convenience Store Coaches Inc., spoke on some of the problems facing managers and district managers today and how communicating effectively can be a common issue.

While more Millennials today want feedback, effectively communicating messages is essential. Young executives can often benefit from communication training.

“Talking is not communication.

Communication is information given, information received and information understood,” McKenna said.

The afternoon concluded with a tour of Cumberland Farms’ distribution center, foodservice commissary and test convenience store.

YEO members spent the second day of the conference touring convenience stores in the greater Boston area, including an Alltown Convenience Store, VERC Enterprises and Seasons Corner Market.

Attendees also had the opportu-

YEO members tour Cumberland Farms’ distribution center, foodservice commissary and test convenience store on its sprawling campus in Westborough, Mass.

(From left) Ian Foote and Andrew Fourney, of MacEwen Petroleum Inc.; Jill Johnson, of Johnson Consulting; and Jeremie Myhren, of Road Ranger.

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YEO’S MISSION YEO members are industry leaders who are 40 years of age or younger.

Members are entrepreneurs, leading top businesses and actively pursuing a higher level of professionalism in the convenience store and petroleum marketing industry. For additional information, contact John Lofstock at jlofstock@csdecisions.com.

YEO will meet again at the NAG Conference, set for Sept. 9-12 in Jacksonville, Fla. at Ponte Vedra Inn and Club. Registration is now open. For more details visit: www.nagconvenience.com.

Peter Tedeschi, the former president and CEO of Tedeschi Food Shops, and a candidate for Massachusetts 9th Congressional District, spoke on the role of family businesses in the c-store industry.

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YEO Joins Habitat for Humanity Photos by Jen Araya Photography

F

or the second straight year, the 2018 YEO Conference featured a team-building exercise by partnering with Habitat for Humanity on a construction project on May 15.

Members of YEO, which is part of the National Advisors Group (NAG), worked at Cumberland Farms’ headquarters complex to construct three playhouses with Habitat for Humanity’s Operation Playhouse, which builds playhouses for children of military veterans in Massachusetts.

After the build, members participated in a dedication and presentation of the treehouses to the families.

The efforts are meant to support Operation Playhouse, which was formed to give back to more local veterans and military families.

Habitat for Humanity MetroWest/ Greater Worchester is the only habitat affiliate in Massachusetts to offer this program, and one of a handful across the U.S. to honor sevicemembers through Operation Playhouse. Teams work together to construct and decorate colorful and themed children’s playhouses, which are then donated to the veterans’ families.

Before the Operation Playhouse event, a community outreach manager contacts the family and the theme of the playhouse is chosen. Typical themes have included a pirate ship, firehouses, a barnyard, sports teams and other themes.

As part of the 2018 YEO Conference, YEO partnered with Habitat for Humanity’s Operation Playhouse. YEO members and Cumberland Farms employees built three playhouses for the children of local veterans.

NAG Executive Director John Lofstock presents a playhouse to Darren Herbert and his son Camden. Herbert, who is still active in the U.S. Army, served both in Afghanistan (2002-2003) and Iraq (2009-2010). cstoredecisions.com

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FRONTEND

YEO Highlights

The Cumberland Farms team paints a playhouse for John Washburn, who currently serves in the Massachusetts Army National Guard.

As part of Operation Playhouse, teams work together to construct and decorate colorful and themed children’s playhouses, which are then donated to veterans’ families and their children at the end of the day.

Teams of 12 assembled and painted three playhouses inside of Cumberland Farms headquarters in Massachusetts.

Daniel McNally, a U.S. Air Force veteran, received a New England Patriots-themed playhouse for his twin sons Charley and Ben.

Construction of the playhouse included roofing, framing and electrical wiring for solar lighting.

Operation Playhouse is a unique program that benefits local veterans, military families and their children. More than 30 YEO members and Cumberland Farms employees worked together in May to build three playhouses for local veterans.

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Cover Story

Chains to Watch

Blueox Sets Its

Own Trail

A former Nice N Easy franchisee rebrands as Blueox Neighborhood Market, with plans for ongoing remodels, new food and technological platforms.

By Erin Del Conte, Senior Editor

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fter 35 years as a Nice N Easy Grocery Shoppes franchisee, Blueox Corp. is creating its own c-store brand under the Blueox Neighborhood Market banner and embarking on an aggressive remodel to rebrand and refurbish all 11 company-owned c-stores over the next two years.

The retailer is also rolling out a new loyalty program within its new Blueox mobile app, and improving foodservice elements from new bread ovens to updated in-store seating areas.

For its new brand creation, dynamic rebranding initiative, and commitments to community stewardship, customer connections, foodservice excellence and technology innovation, CSD is recognizing Blueox Neighborhood Market as a 2018 Chain to Watch.

NICE-N-EASY START Blueox can trace its roots to the 1940s, when a man by the name of George Paye, from Oxford N.Y., began a coal business. As the business transitioned from coal to fuel in the 1950s, Ken Thompson bought the business and renamed it Thompson Fuel Service, which was purchased by David L. Emerson in 1965. Emerson’s son David B. Emerson and Neil Bartle also purchased ownership in the company in the 1970s.

In the 1980s, Thompson Fuel entered the c-store industry with the acquisition of Lounsberry Truck Stop in Nichols, N.Y. 28 Convenience Store Decisions July 2018

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In 1982 the younger Emerson and Bartle signed on as a Nice N Easy Grocery Shoppes c-store franchisee, opening their first Nice N Easy franchise convenience store in Morrisville, N.Y. Founded by John MacDougall, Syracuse, N.Y.based Nice N Easy became renowned in the industry for its connection with customers as well as an industry leader in upscale foodservice.

“Some of our (acquired) locations were smaller and couldn’t support Nice N Easy’s qualifications, so we branded those Big Blue Convenience Stores,” explained Julia Miller, director of business growth and development for Blueox Corp.

From there the c-store arm grew to 11 stores NEW FACE, FOCUS made up of both Nice N Easy franchise sites and Blueox rolled out the new banner to all stores earBig Blue Convenience Stores, serving rural mar- lier this year, but the store renovations will continue kets in the heart of upstate New York. through 2019. All locations continue to offer ValeroIn 1984, Thompson Fuel rebranded as Blueox branded gas.

Corp. A decade later, David B. Emerson retired “There used to be regulations from Valero as to as president of Blueox Corp. With Bartle now at what colors your building had to be and that’s gone the wheel, Blueox expanded into a propane gas away, so now we’re changing the color-scheme of all supplier with the purchase of H & H Fuels in 1997. of our buildings,” Miller said.

The fuel arm became known as Blueox Energy Remodeled buildings feature a gray exterior with Products & Services. Today, David Martin, chief black trim, black roof and bright blue signage with operating officer and vice president of Blueox a ‘swishy’ design that matches the design used on Corp., helms the company.

Blueox energy vehicles. The chain is also unifying the When Nice and Easy, in 2014, sold its assets look of its sign packages. Outside signage features a to San Antonio-based CST Brands, which sub- red, orange and gold background. sequently sold to Canada-based Alimentation Store sizes vary, with the largest footprint measurCouche-Tard’s Circle K division in 2017, Blueox ing around 3,200 square feet. Inside the stores, the saw an opportunity to launch its own c-store brand. design mimics that of the exterior, with gray walls, The move would allow Blueox to combine the for- black trim and a blue swishy-design banding along mer Nice N Easy franchise stores and the Big the top of the walls. Category identifiers are called Blue Conveniences Stores under a single brand out in the red, orange and gold color scheme. umbrella. It decided to use the banner Blueox Drawing from its Nice N Easy roots, a commitment Neighborhood Market, leveraging the brand to a superior customer experience is top of mind for recognition of Blueox Corp. and Blueox Energy the Blueox brand, and store associates are being Products & Services. trained on upgraded customer service expectations.

“In Spring 2017 we informed Circle K that we were not going to move forward with their franchisee program and that we were going our own route,” Miller said.

During summer 2017, Blueox developed the aesthetics and vision for the new brand.

“A lot of the value we were hoping to deliver to our customers very closely aligned with what Nice and Easy had always tried to do,” Miller said. Those values include a being a committed Blueox Neighborhood Market aims to present clean, attractive stores while offering community member, providing a superior food program and acting as a committed community member in the a superior food program, and neighborhoods it serves. offering clean, attractive stores. cstoredecisions.com

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Cover Story

Chains to Watch

“We’ve developed six steps of customer service, which are posted by the register. If a customer doesn’t experience that they have a way to contact the district manager. Or if they do experience that and it blows their mind, they have a way to let us know that we’re doing things well,” Miller said.

FOOD PYRAMID As a former Nice N Easy franchisee, Blueox is also no stranger to quality foodservice execution and it has plans to continue tweaking and fine-tuning its foodservice offering to compete in today’s market.

Blueox currently features a foodservice program called Blueox Market Made that features grab-and-go sandwiches, subs and burgers; dinner bowls, mac and cheese, and steak and potatoes. Other popular meal items include pizzas, Stromboli, parfaits and fruit cups. The meals are made fresh daily in the stores and then placed in the warmer or cold case.

Currently, the chain is developing a kid’s meal concept to offer meal options parents can feel good about feeding their kids on the go. “We envision some variation of macaroni & cheese, fruit cups, cheese sticks, milks/juice etc.,” Miller said.

Blueox is also installing bread ovens in stores in order to bake fresh bread for the subs, as well as cookies, muffins and donuts. The stores offer three types of bread—white, honey wheat and Italian herb & cheese. The dough arrives frozen, and must be thawed and proofed before it is placed in the bread oven each morning.

As part of the remodel plan, stores are updating seating areas, switching out retro-looking booths for new tables and chairs that allow for bigger groups.

“We are trying to create an atmosphere where people want to come in and stay, not just get in, get out, get on with their day. And they can do that too, but we want to also offer the other experience,” Miller said. “We hope customers will bring their family, sit down and grab a dinner meal. We really want to be that community destination.”

The c-store chain also wants to attract customers shopping for basic grocery needs, and provides a selection of locally-grown produce and meats in addition to traditional c-store items.

Inside the stores, the design mimics that of the exterior, with a blue wave-design banding along the top of the walls. Category identifiers are called out in the red, orange and gold color scheme.

“We’re trying to position ourselves as a technology company as a whole, even on the energy side,” Miller said. “In the rural areas where we operate, nobody has an app, so we’re on the forefront of that in our area,” Miller said.

Inside the app, customers can gain rewards—such as an 89-cent deal on any size fountain drink, as well as random rewards and free items through 50 different club programs.

Starting this summer customers can also cash in points for gas discounts.

The stores are also installing a new software system, moving from a legacy PDI system to the PDI Enterprise program, with expected launch this July.

Between the location remodels and its new loyalty initiative, Blueox is looking to boost foot traffic and turn visitors into loyal customers.

With its values targeting fresh and community connections, Blueox is committed to finding opportunities to provide added value to the neighborhoods it serves. This summer it’s testing a weekend farmer’s market concept inviting local community businesses to showcase food, produce, services and other local products, to help bring awareness to neighborhood businesses.

The chain also donates to local causes, with a main focus on kids and schools. It holds fundraisers using bottle drives and sub sales, and also caters school events.

The energy side of the Blueox business already maintains a solid reputation as a community steward, and Blueox MOVING AHEAD Blueox partnered with loyalty provider Outsite Networks, plans to build the same type of community relationships debuting a new and improved loyalty program this past with its c-store arm.

“We want to be contributing to and supporting everyspring to tie into its new brand. The loyalty program works within the Blueox Neighborhood Market app or via the thing we can in the communities we serve,” Miller said, Blueox Neighborhood Market card. Technology will continue “and we think it resonates with customers that we’re putting our money right back into our community.” CSD to be a key focus for the chain as it grows into the future.

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Cover Story

Chains to Watch

FriendShip

Sails Toward

New Horizons

With a revitalized foodservice strategy and other company initiatives, FriendShip is charting a course for fresh retail waters.

By David Bennett, Senior Editor

T

he FriendShip chain is located along the south FRIENDSHIP KITCHEN shore of Lake Erie. While the highly seasonal marThe newly launched foodservice concept begins…and ket can create challenges for c-stores, FriendShip is ends with the retail brand. experienced in weathering unique retail climates.

“FriendShip Kitchen is branded 100% FriendShip, from Beck Suppliers Inc. is a petroleum marketer that owns the highway exit signs, to the fuel forecourt to the store and operates FriendShip. The family business offers other itself,” said Ehrlich. services that include gasoline, diesel and propane distriThis next generation, FriendShip Kitchen is the largest bution, tank installation and removal, automatic car wash retail space the c-store chain, which now operates 25 stores, equipment and air vending machines. has developed to date. The 5,500-square-foot store conFor all its diversity, the company, based in Fremont, tains a full-service kitchen, gourmet coffee bar, oversized, Ohio, a few years ago began planning to transition the upscale restrooms and a beer cave with touch-free doors. convenience chain to an organization with a more robust The building’s architecture, layout, materials and graphfoodservice focus. After amassing a group of industry vet- ics were developed in conjunction with a complete brand erans—led by Greg Ehrlich, president of Beck Suppliers, refreshment. Square Dot, an independent design partnerthe result is FriendShip Kitchen, which officially rolled out ship based in Columbus, Ohio, led the brand refreshment this June with a prototype store in Elyria, Ohio, part of the and store-identity design, while Gray Cat Enterprises led greater Cleveland region. the site layout, operations and menu planning.

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(Far left) Ed Burcher, vice president of foodservice for FriendShip, shows off the pizza program for customers.

(Top) FriendShip’s new prototype store in Elyria, Ohio is one of many next-generation stores being planned. The Elyria unit was designed to have 0plenty of space for customers to browse.

“This new store has gone from ideation to opening over a period of 36 months,” Ehrlich said. “When we started the project it was just a concept, and even as the concept was developed, it was not until about 12 months ago that we settled on the location. This facility incorporates best practices from leading companies within the convenience and restaurant industries. Our product selection and menu were developed to meet both current and emerging consumer trends.”

One of the areas FriendShip chose to upgrade was its coffee programs. Beans are ground fresh and new coffee makers ensure every cup is quality.

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The interior of the Elyria location is designed with an uncluttered floor layout, boasting unencumbered sight lines that make the store open and spacious. Displays are smaller and there’s plenty of room for patrons to move around.

It’s also easy to get to the food.

FriendShip Kitchen offers a broad array of hot and cold freshly-made beverages, meals and snacks. Customers can start their day with freshly-prepared on-the-go breakfast sandwiches, stuffed burritos, donuts and muffins. Its FriendShip Signature coffee blends are all made with gourmet roasted beans, ground just before brewing.

The combination of offerings are designed to entice customers. Moreover, the continuity of the foodservice platform will go far in making FriendShip Kitchen a food destination.

“As morning turns to lunch, our delicious breakfast pizzas transform into traditional oven-baked pies topped with a variety of fresh ingredients,” said Ehrlich. “Fresh slices of pizza are always ready to go and whole pies can be made to order with call-in and on-site ordering available. Online and mobile app ordering is not currently available but is under evaluation. Salads, sandwiches and wraps are made fresh on premises for time-starved customers looking for healthier dining options.”

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Chains to Watch

STEADY AS SHE GOES The first FriendShip location opened in 1985 near the coast line of Lake Erie. Beck Suppliers was started by grandfather Virgil Beck in 1950, expanded by sons Bill and Larry.

In 2000, sons Doug, Dean and Brian purchased the company from their dad, with Doug serving as president until his passing earlier this year.

The Beck family that recognized a big part of FriendShip’s future and ability to compete resided in good food. They set out to fill their ranks with experts.“We needed execution, but we were looking for innovators,” Ehrlich said.

The FriendShip management team blends a talented group of FriendShip veterans with outside executives from top chains in the country, Ehrlich said. Ehrlich is a former management consultant with A.T. Kearney, led three convenience chains and has consulted to convenience retailers The family architects of FriendShip Kitchen: (from left) Olivia Beck, and suppliers as president of Convevo Partners.

Dean Beck, Brian Beck and Chelsea (Beck) Carvalho.

As the company transitions to a foodservice focus, it was looking for a highly-skilled foodservice leader. Foodservice specialist Ed Burcher also joined the company ranks in 2017 as vice president of foodservice. Burcher is a former food- which is located less than 20 miles from Cleveland.

“As this is our first new-to-industry FriendShip Kitchen service leader for Wawa and the architect of Petro Canada’s Neighbours convenience store and food service programs. store, we expect to make some changes as we learn what is These two industry leaders joined an already talented working well and what can be improved,” said Ehrlich. “We retail management team led by Brian Beck, senior vice have an alternate 4,600-square-foot design that we expect president; Gregg Edwards, vice president of operations; to break ground on soon.” and Kevin Campbell, director of marketing.

Other staff in key positions include Aaron Hirt, district SWEEPING CHANGES manager for new store concepts, who came over from While foodservice is a priority, the company has Speedway after about eight years with that company. Hirt expanded its reimaging efforts to other parts of the retail said the dynamic team that FriendShip was putting together operation. For example, last fall the company opened and the direction the company was headed excited him, a new-build, tunnel car wash on the outskirts of Amherst, prompting him to make a career shift.

Ohio. Ehrlich explained that Beck Suppliers is already expe“The personalities I encountered are some of the best rienced at installing car wash equipment, and decided in I’ve worked with,” said Hirt.

2017 to get into the business full-bore.

All the planning and hard work is paying off. FriendShip The car wash features modern amenities including RFID is already preparing to break ground on its next new-gen- vehicle tags that allow customers to automatically access eration store—this one in the city of Olmsted Falls, Ohio, the car wash system. There are also modern vacuums that customers can use for free.

There are three packages that patrons can buy or they can pay for single washes. Beck has installed a system using large foam fingers that spin slowly to protect the vehicle’s finish. The company even provides patrons Simoniz microfibre drying towels that are laundered and used again.

Now and in the future, FriendShip is dedicated to maintaining strong ties to its customers, emphasizing the concept of ‘friendship.’ That concept for now will remain up close, in focus and personal. This is especially true at the foodservice counter.

“We considered using ordering kiosks, however, we value the time our hosts have with our guests, and decided the The new FriendShip store also offers a wide variety of grab-and-go efficiencies added with kiosks were not worth losing the offerings, including a bevy of sandwiches. personal interactions with our chefs,” Ehrlich said. CSD 34 Convenience Store Decisions July 2018

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cstoredecisions.com

6/22/18 2:01 PM

9 TH - 12 T H BER TEM

at the beautiful Ponte Vedra Inn & Club Ponte Vedra Beach, Fla.

REG

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NAG 2018

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Committed to building profits and relationships!

The National Advisory Group (NAG) is an association of small, mid-sized and family-owned c-store chains and the executives that run them.

This exclusive, member-driven group convenes annually to exchange ideas with the motivation to improve their business performance and ultimately their bottom line. The setting of this conference encourages an extremely educational, yet highly social environment. The schedule consists of top-notch speakers, retail information exchanges, opportunities to address burning issues within your business, a chance to get to know your peers in similar size operations and much more!

FOR MORE INFORMATION:

RETAILERS should contact John Lofstock 201.837.2177 • jlofstock@csdecisions.com SUPPLIERS should contact John Petersen 440.250.1583 • info@nagconvenience.com

6/22/18 5:03 PM

SUNDAY, SEPTEMBER 9

1 pm – 7:30 pm: Registration 1 pm - 4 pm: Hospitality Suite 4 pm – 5 pm: NAG/YEO Board Meeting 6 pm – 7 pm: Opening Reception 7 pm – 10 pm: NAG Opening Night Dinner at Ponte Vedra Inn 9 pm – 12 am: Hospitality Suite

non-competing chains to discuss relevant business issues. We all want uninterrupted time with people who “do what we do,” but rarely do our busy lives allow us the luxury of benchmarking what we do and how we do it with other professionals. As you listen, learn and share with your small group of retailers, you will find that what you are doing right will be validated, what you might be doing wrong will be challenged, and how you might do things better will be encouraged. The relationships formed in this intimate setting will last a lifetime and be firmly measured in increased profitability and decreased legal liability.

MONDAY, SEPTEMBER 10

12:15 pm - 1:15 pm: Lunch

7 am – 8 am: Breakfast 8 am - 8:15 am: Welcome/Conference Overview

1 pm - 5 pm: NAG Golf Outing, Ponte Vedra Ocean Course.

(Boxed lunch will be served.)

8:15 am - 9:15 am: Burning Issue 1: Family Business Planning. How to build an outstanding corporate culture from the top down. Family businesses are the backbone of the convenience store industry. Having a winning culture is often the crucial difference in attracting great employees and gaining a competitive advantage over other retail chains. Family business owners are generally driven by a sense of responsibility for the stewardship of the business. They seek to manage not only the assets and performance of the business, but also the family’s most important heritage—the values that are passed on from generation to generation. Values that underpin the sustainability of the family business, and its culture. In this session, hear from three leading convenience store retailers that will highlight the importance of family leadership in the c-store industry.”

SPEAKERS: • Bill Douglass, President and CEO, Douglass Distributing • Charley Jones, President and CEO, Stinker Stations • Steve Loehr, Vice President, Operations Support, Kwik Trip Inc. Moderator: John Lofstock, Executive Director, The National Advisory Group

1:30 pm: NAG Retail Store Tours: The Best of Jacksonville

Bill Douglass

Charley Jones

Steve Loehr

John Lofstock

9:15 am - 9:30 am: Networking Break 9:30 am-10:30 am: Burning Issue 2: The Machine Revolution: Are Robotics Right for Convenience Stores? From robots in the aisle to customer service bots, this session will deal with emerging robotic technology and how this technology will change retail in the future. Already, leading U.S. retailers such as Amazon, Lowe’s, Stop & Shop and McDonald’s are using robotics as a way to manage wage increases and rising training costs. Learn what the technologKyle Nel Bob O’Connor ical future holds for Paul Martin convenience stores.

SPEAKERS: • Paul Martin, UK Head of Retail Operations, KPMG • Kyle Nel, Executive Director of Lowe’s Innovation Labs Moderator: Bob O’Connor, President and CEO, Jetz Convenience Centers

10:45 pm – 12:15 pm: Information Exchanges Part 1 The Information Exchanges are the heart and soul of what makes NAG so unique. Attendees will be formed into small groups of

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5 pm - 6: 30 pm: YEO Reception 6:30 pm - 9 pm: Dinner On Your Own to Explore Pontre Vedra Beach 9 pm – 12 am: Hospitality Suite

TUESDAY, SEPTEMBER 11 7 am - 8 am: Breakfast

8:10 am - 9:10 am: Burning Issue 3: Foodservice: Reigniting the Dinner Daypart.

Daypart sales are growing, but this has been a tough mealtime to crack for convenience stores. This session will deal with getting a better understanding of what customers want at this important daypart, where they are shopping and what it will take to get them in your stores. The panel will also discuss the components of building strong take-home menus that satisfy busy customer lifestyles.

SPEAKERS: • K eith Boston, Vice President of Foodservice, C u m b e r l a n d Keith Boston Farms Carlos Acevedo Jerry Weiner • Carlos Acevedo, Culinary Innovation and Research Chef, Yesway Moderator: Jerry Weiner, Weiner Consulting Co. 9:15 am - 10:15 am: Burning Issue 4: Store Design and Layout: Identifying the Best Concepts Your Customers Will Find Appealing. A good retail store layout starts on paper, where details such as building specs, customer traffic flow and product placement come together.

Every design step requires thoughtful planning and some trial and error, but when the doors are open, a stellar store layout will encourage customers to browse and buy. Hear from leading retailers on how their design successes are helping drive sales.

SPEAKERS: • Danielle Mattiussi, Vice President of Retail Operations, Maverik Inc. • Jacque Hager, Director of Operations, Big 10 Marts • Spencer Thomas, Chief Operating Officer of Southwest Georgia Oil Moderator: John Schaninger, President, The Schaninger Group

Danielle Mattiussi Jacque Hager

Spencer Thomas

John Schaninger

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10:30 am -12 pm: INFORMATION EXCHANGES BREAKOUT SESSIONS • Benefiting from the Supplemental Nutrition Assistance Program (SNAP). Learn how the new rules affect the c-store industry.

• EMV Compliance. How it affects c-stores and what you can do to save money.

Moderator: Jeremie Myhern, Vice President, Information Technology, Road Ranger • Storm and Disaster Preparedness. Whether it’s a hurricane, an ice storm or a human emergency, c-stores and gas stations should plan on how to Jeremie Myhern respond effectively.

• P r i v a t e L a b e l P ro d u c t B r a n d i n g .

Environmentally-friendly packaging, bulk offerings, new coffee opportunities, how to maintain freshness.

• Human Resources: Embracing Technology.

How technology and Web-based apps are helping staffing, scheduling and training employees.

Moderator: Chris McKinney, Director of Human Resources, Sprint Mart Chris McKinney

12 pm -1 pm Lunch 1:15 pm - 2:30 pm Burning Issue 5: Foodservice: Doing More with Less.

Foodservice remains a high growth category for convenience store owners. Given the category’s enormous profit potential, operators must embrace foodservice to attract a steady stream of customers. In this session, convenience store retailers will offer fresh ideas for maximizing the foodservice menu in small spaces. Combi-ovens, ventless fryers and other modern equipment can perform multiple functions, boosting food quality that enables growing sales and optimizing profits.

Stephanie Mahoney John Zikias Hannah Holt SPEAKERS: • Hannah Holt, Marketing & Operations Director, Holt Oil • Stephanie Mahoney, Food Services Development Manager, MFA Oil Co. Moderator: John Zikias, Chief Operating Officer, Holmes Oil Co. 2:45 pm - 4 pm: YOUNG EXECUTIVES ORGANIZATION (YEO) BREAKOUT SESSION. Leading the Next Generation: How to manage effectively and with authority. When it comes to successful leadership, attributes like vision, communication and integrity never go out of style. But today’s business environment is constantly evolving and executives face new pressures every day. Executives must be able to build strong teams in the face of recruiting and retention challenges, keep up with the latest technology and demonstrate strong business acumen. As young leaders take charge of a growing workforce, they are also faced with complex issues such as sexual harassment in the work-

place and the growing use of social media. In this YEO breakout session, learn how you can stay out in front of these issues and effectively manage a crisis situation when one arises. (Open to Retailers and Suppliers) SPEAKER: • Linda McKenna, Principal, Employee Performance Strategies Inc. 5:30 pm - 6:30 pm: NAG Reception Linda McKenna

6:30 pm - 9 pm: NAG CONFERENCE DINNER & AWARDS CEREMONY

9 pm – 12 pm: Hospitality Suite

WEDNESDAY, SEPTEMBER 12 8 am - 9 am: Breakfast

9 am - 10:15 am: Burning Issue 6: Building a Better Car Wash: Cleaning Up in the Forecourt. Car wash usage is surging in the U.S. and convenience stores are in a prime position to capitalize on this growing trend. But not all car wash operations are equal. Due diligence is needed when selecting the right location, deciding how much money to invest, what type of equipment is best and which cleaning chemicals are right for your market. Learn from successful car wash operators what it takes to make such a business shine and how to generate consumer interest.

SPEAKERS: • Bill Martin, President, Metro Express Car Wash • Michael Meyer, Facility Operations Officer, Meyer Oil Co. • Hill Peyton, VP, Corporate Relations, Gate Petroleum Moderator: Peter Tamburro, General Manager of Convenience Operations, Cliff’s Local Markets

Bill Martin

Michael Meyer

Hill Peyton

Peter Tamburro

10:15 am - 10:30 am: Break

John Lofstock

10:30 am - 11:30 am: Ideas Boot Camp: Gamechanging ideas retailers can take home with them that are guaranteed to boost retail profitability. Foodservice expert Dr. Nancy Caldarola and NAG Executive Director John Lofstock identify best practices and opportunities from top convenience store operators around the country.

SPEAKERS: John Lofstock, NAG Executive Director 11:45 am: Conference Wrap Up and Takeaways 12 pm: Depart

Thank you to our sponsors:

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As the convenience store and petroleum industry continues to evolve, training the leaders of tomorrow is more important than ever before. To help young executives have a group that is solely focused on exchanging personal experiences with peers in their age group, the National Advisory Group (NAG) is proud to announce that it has relaunched the Young Executives Organization (YEO).

YEO’s mission is to cultivate young talent in the convenience store and petroleum industry through implementation of education and networking.

YEO accomplishes this mission by leveraging the experience of NAG members to help foster superior leadership skills.

YEO members are industry leaders who are approximately 40 years of age or younger. Members are entrepreneurs, leading top businesses and actively pursuing a higher level of professionalism in the convenience store and petroleum marketing industry.

Membership in YEO provides young convenience store and petroleum industry executives with an opportunity to network with other NAG members and influential industry leaders. It also gives young executives a platform to express their ideas, leadership abilities and vision for the future of convenience retailing.

Membership in YEO is open to all NAG-member company employees at no cost. If you are not a NAG Member, join NAG now at www.nagconvenience.com. If you are a young executive or if your operations have a young up-andcoming executive please join us at the NAG Conference in Florida!

A Florida landmark since opening in 1928, this 300 acre Florida beach resort is located in fashionable Ponte Vedra Beach.

Celebrated as one of the great Florida resorts, it is easy to see why so many choose Ponte Vedra for their Florida vacation.

HOW TO REGISTER Go to: www.nagconvenience.com. NAG will confirm your hotel room and your meeting registration. A credit card number must accompany your registration.

HOTEL PRICING A block of rooms has been reserved for the NAG Conference at these special rates: Golfview rooms at $209/night Oceanview rooms at $229/night

Golf rate is $130 for golf and $40 for club rentals

Your hotel costs are NOT included in the cost of the conference and should be booked through the NAG registration site. Please make your room reservation by 8/13/18. It is NOT necessary to call the hotel. Please contact the NAG Event Coordinator for suite pricing and availability at NAGRegistration@mocandco.com.

CONFERENCE REGISTRATION RATES

Member April 15th - July 20th: Super Saver Price, $579 July 20th - August 12th: Early Bird Price, $629 August 13th onward: $779 Non-Member April 2nd - July 20th: Super Saver Price, $679 July 20th - August 12th: Early Bird Price, $829 August 13th onward: $879 Spouse/Guest $399

For additional information, contact John Lofstock at jlofstock@csdecisions.com or YEO Board Chairman Bart Stransky bstransky@racetrac.com.

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6/22/18 5:04 PM

Technology Solutions for C-Stores!

Convenience Store Decisions introduces its newest offering—the CS/TEK technology platform for C-Store Retailers and Decision Makers—jointly developed with our partners at ConnectMii Communications. CS/TEK is part solution provider directory and part insights—a “one stop shop” for C-store Technology and Operations influencers to go and learn about trends and suppliers they can partner with to stay ahead of the game. The platform includes relevant articles, insights and interviews. CS/TEK directory listings include a unique “book a meeting” feature that allows you to schedule and meet by desktop video with solution providers.

ARCHIVED VIDEOCAST EVENTS: How C-Stores Can Thrive in the Age of Instant Gratification sponsored by P97

C-stores have new opportunities to satisfy consumer preferences as society shifts toward an on-demand economy. With Amazon providing 2-hour home delivery and online ordering/direct delivery from Uber Eats and Grub Hub, convenience stores should consider new services to satisfy the immediate needs of customers. Today, mobile apps provide the ideal platform to deliver targeted digital marketing programs and curbside delivery to deliver new experiences and accelerate sales growth.

Brighter Strategies Through Signage sponsored by Lexmark

Signage is an effective means convenience store operators can utilize to get their message across to their customers. Today’s savvy shopper is not only drawn to custom store interiors and unique product presentations, but seek a fuller shopping experience. Effective signage solutions provide convenience stores the opportunity to interact with customers in a modern and practical way. Also, accurate and attractive product signs deliver the information your shoppers need.

Technology suppliers, we have a schedule of upcoming videocasts on Controlling Costs with IOT, Payment Systems, POS and more! We would enjoy partnering with you to develop a videocast topic that showcases your capabilities. To schedule a demo of the CS/TEK platform or to learn more please contact John Petersen at (216) 346-8790 or jpetersen@csdecisions.com

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Foodservice

Deli

Developing Deli Destinations Convenience stores continually weigh proprietary or branded deli and sandwich programs. There’s a hungry market for each.

A CSD Staff Report

E

ver since convenience stores began to target customers for immediate food consumption, two schools of thought have evolved concerning which method is best for presenting food: proprietary or premade, branded options.

“It depends on the customer,” said Robin Gabriel, coproprietor at Hinsdale, Ill.-based convenience retailer Hinsdale Shell. “Customers in a hurry—maybe they’re on their way to work, or maybe they’re running late—love grab-and-go. Customers that come in for lunch and have time are willing to wait to have a sandwich made fresh.”

Be it proprietary, grab-and-go, or both, there is no argument that a wellrun foodservice operation is a key component in a convenience store’s profitability. Given the intense competition c-stores contend with day-in and day-out from fast-food restaurants and other gas and convenience locations, a compelling foodservice operation can often seal the deal.

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“A unique food offer can help you distance yourself from the competition by offering something only found at your store,” said Joseph Bona, president and founding partner of New York-based Bona Design Lab LLC, a foodservice consultancy serving the c-store industry. “It can provide a sense of destination and drive customers past the competition and into your store.”

Take Wawa, for example. The Pennsylvania-based chain has built a solid reputation as a destination stop for food thanks largely to its fresh sandwich program.

“We did have some premade sandwiches,” said Lynn Hochberg, Wawa’s director of product development. “But we’re pretty fast, so we decided not to have a redundant product offer.”

That doesn’t mean one should discount the value of a clean, wellmanaged grab-and-go operation for customers on the run who simply want to grab something to eat and, well… go. Quality food, available in the time it takes to check out, can make your store a foodservice destination for the

in-and-out customer. Indeed, many chains, such as 7-Eleven and E-Z Mart, depend on premade items exclusively for their foodservice offerings. Also, grab-and-go offers the ultimate in expediency.

“We do not do a proprietary program at any of our locations,” David Rolf, E-Z Mart’s director of purchasing, explained. “We only do food out of a hot box or a grab-and-go warmer, premade.”

Atlanta-based RaceTrac recently decided to transition from offering both proprietary and grab-and-go items to exclusively grab and go.

“Our guests told us that they prefer quicker food options to fit their on-the-go lifestyles, so RaceTrac has made the decision to shift our food offering to focus more on grab and go,” said Steve Turner, RaceTrac’s executive director, food programs and offers. Turner lists a wide variety of grab-and-go products available at RaceTrac, including sandwiches, pizza slices and breakfast sandwiches, a Swirl World frozen treat station and a

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Find out more at tysonconvenience.com

@TysonCStore

Š2018 Tyson Foods, Inc. Trademarks and registered trademarks are owned by Tyson Foods, Inc. or its subsidiaries or used under license.

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Foodservice

Deli

Chains, such as 7-Eleven and E-Z Mart, depend on premade items exclusively for their foodservice offerings. Grab and go offers the ultimate in expediency.

“Crazy Good Coffee” bar with up to six blends of flavors and a variety of sweeteners and toppings.

“We are excited about the offer and think it provides a compelling reason to visit our stores, whether you’re on the go and looking for something quick, or you’re a destination guest looking for a full meal,” Turner said.

Even at Wawa, where proprietary reigns supreme, some grab-and-go offerings are available. Just not traditional sandwiches.

“We focus our express case on different things, such as items with more trendy ingredients and easy-to-grab healthy options,” said Hochberg.

RIGHT ENVIRONMENT For c-stores that see themselves in direct competition with fast food, it’s important to provide a similar dining environment. Toward that end, Hinsdale Shell offers space inside and outside the store for dining.

“We have tables inside,” Gabriel said. “It’s like a little lunch bar, and there are two tables customers can sit at. We also have a bench outside they can eat at.”

Another important ingredient in a c-store’s profitability paradigm: flexibility.

“If a customer asks for something not on the menu, we’ll make it for 38 Convenience Store Decisions July 2018

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them 99% of the time if we have the ingredients,” Gabriel continued. “For instance, say someone doesn’t want bread on the sandwich—maybe they want it wrapped in lettuce instead— we’ll accommodate our customers any way we can. If someone wants an extra pickle slice on their sandwich, give them a damn pickle!”

Hinsdale Shell also prides itself on not up-charging its customers.

“A lot of places will charge the same price whether it has bread or not, continued Gabriel. “We’ll take off the price of the bread.”

In order to succeed with a proprietary initiative, efficient use of available space needs to be studied and executed, particularly for a c-store adding a proprietary initiative to an established grab-and-go program.

“You definitely need space,” explained Wawa’s Hochberg. “It all depends on what your focus is. Variety, speed and volume dictate your space.”

Efficient use of space is a key to profitability.

“It has to be easy for your associates to prepare the food properly,” said Hochberg.

And another kind of space needs to be considered, as well: plentiful parking. While a jam-packed parking may seem like a music to a c-store opera-

tor’s ears, in reality, it translates into lost profits during peak foodservice sales periods where prospective food customers might drive right past and visit a nearby McDonald’s, Burger King, Wendy’s or Subway instead.

“We see a direct correlation between parking and increased foodservice sales,” Bona noted. “Every parking spot that is perceived to be front of store can be worth anywhere between 0.75%-1.5% of additional foodservice sales. To drive more throughput, you need more parking.”

FRESH FOCUS In terms of freshness, the c-store industry has come a long way over the past few years.

Tim Powell, vice president of consulting at Q1 Consulting, a Chicago-based firm that helps food companies develop proven business strategies, said fresh is definitely in.

“It’s improved versus five years ago, but only about 30% of stores really stress freshness,” Powell noted. “Clear packaging in clam shells and clear tops, black bottoms has improved the perception.”

And make no mistake, the market for items perceived as “healthy”—including “natural” and “organic” products—is enormous.

Indeed, according to Euromonitor International, the London-based market research firm, North America is one of the two largest markets in the world for packaged health-and-wellness food product sales in 2017.

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“Being natural is consumers’ priority, which helps explain why ‘freefrom’ and ‘organic’ packaged foods continue to lead the way in the healthand-wellness space,” said Maria Mascaraque, food and nutrition consultant for Euromonitor International.

“Consumers are seeking functionality in the food they consume, but only if it comes through natural ingredients.”

At Hinsdale Shell, a wide variety of salads have been introduced into the store’s foodservice operation for customers wanting to ingest something perceived as healthier. All are premade, grab-and-go items available to customers.

“We make green salads—chef salad, garden salad, Caesar salad, chicken Caesar salad and spinach salad,” Gabriel said. “We also offer homemade potato salad, two kinds of pasta salad, coleslaw, fruit salad and veggie trays.”

However, not everyone is on the freshness bandwagon just yet.

“I think the convenience store industry has, in general, a poor image for freshness and quality,” said Ed Burcher, vice president of foodservice at FriendShip Food Stores in Ohio and former president of Burcher Consulting.“The research that I have seen and been a part of shows that we do not do a particularly good job conveying or executing on freshness, and it is reinforced by our behaviors, product choices and merchandising.”

Powell agreed that c-stores have a long way to go to achieve the perception of freshness to consumers.

“This group does not like throwing coffee, sandwiches, salads or roller grill items away, which hurts everyone long run,” he said.

another day. It only takes one bad experience to lose a customer that you may never get back no matter how hard you try.”

Hinsdale Shell’s Gabriel concurred, but admitted if she had to choose, it would be consistency.

“If a customer comes in and orders a Marty Special, loves it, and comes back two days later for another, they’re expecting the exact same thing,” she said. “That’s huge for us. We don’t want to be a one-trick pony. We want to do it all.” CSD

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QUALITY OR CONSISTENCY? One of the issues a c-store faces in offering a deli program is which is more important—quality or consistency? The short answer is both.

“Yes, quality and consistency go hand in hand,” said Bona. “You can’t have one without the other. You can’t deliver high quality one day and not cstoredecisions.com

36-39_Fdsv_Deli.indd 39

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July 2018 Convenience Store Decisions 39

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Category Management

Cold Dispensed

Improving Your Dispensed Program Retailers say that sales of cold and frozen dispensed beverages are mirroring the growth in convenience foodservice, which in turn is being shaped by consumer preferences.

By Marilyn Odesser-Torpey, Associate Editor

J

ust as consumers are looking Solochek, senior vice president, indus- that feature 20 different options.

Over the past couple of years, the for more from the food they eat, try relations for NPD Group research. they’re also looking for more “Food-forward convenience store company has strived to expand its from the beverages they drink. retailers have already recognized the program into newer product segFor convenience stores, this includes need to change what’s coming out of ments that appeal to a broader base. cold and frozen beverages made their spigots to keep up with what’s The line-up now includes a Rutter’sbranded iced tea, Kickstart energy from natural ingredients and filtered new and on trend.”

Chuck Moyer, food service category drink from Pepsi and vitamin water water with no artificial sweeteners or supervisor for Rutter’s convenience options from Coke. preservatives.

Each store also has four to six frozen “When you think of convenience stores, sees the cold and frozen disstores historically, consumer vis- pensed categories growing but noted carbonated offerings available. Those its have been beverage driven, but that he sees that growth coming from with six offerings have four core flavors in dispensed cold and frozen bever- outside the category segments to and two limited time offers (LTOs) that ages retailers have to change from which convenience store retailers have change seasonally. In addition to its made-to-order milkshakes, the stores traditional carbonated soft drinks to become accustomed.

“Carbonated soft drinks have seen also have f’real machines. other beverage types,” said Warren a flattening or slightly downward trend Moyer said that cold brew prodwhile enhanced waters, energy drinks ucts are continuing to gain traction. and cold coffee options continue to Last year, Rutter’s introduced a freshemerge,” he said. “So future growth brewed iced coffee option in some may not come from the same dispens- locations. Customers can utilize the ers we have relied on for decades, same creamer, sweetener and syrup » Consumers are looking for rather the inclusion of made-to-order options available for the stores’ hot clean beverages. programs, bubblers, fresh-brewed urn beverage program. dispensers, etc.”

Rutter’s also provides pump-top bottles of fruit syrups at its cold bev» Deliver on the basics. erage fountains to allow patrons to MORE VARIETY customize their iced tea and lemonade.

The average Rutter’s store offers 16 » Cold coffees and teas “Looking forward, I believe flavored/ fountain options and four fl avor shots. currently are hot sellers.

Newest locations are utilizing the specialty lemonades and teas will lead Cornelius Pro touchscreen dispensers the way in new offerings and growth

Fast Facts:

42 Convenience Store Decisions July 2018

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centers, versus being made with flavor concentrates or premade mixes, Stuart explained. These beverages contain no preservatives, have cleaner ingredient labels and are naturally sweetened.

In July, the company plans to launch a new line-up of craft beverages that it is calling “Artisan Beverages.”

Additive- and preservative-free hand-mixed cold brew coffee is being rolled out to Pilot/Flying J stores nationwide to replace the traditional premixed flavored iced coffee.

Some locations also offer f’real frozen blended coffee drinks.

Fresh iced tea is steeped with full loose-leaf tea instead of fannings (small pieces that are left over after higher grades of tea are gathered).

The green tea is all natural and organic and the homestyle lemonade sweetened with pure cane sugar.

To further increase its variety, Pilot Flying J is also looking at sparkling waters and other naturally-sweetened drinks. Over the summer Stuart expects both its cold and frozen dispensed beverage sales to increase, CRAFT SALES Scott Stuart, senior bev- particularly the non-carbonated beve r a g e i n n o v a t i o n a n d erages, lemonades and teas.

A typical store in the chain offers development manager for Pilot Flying J, which has more between 28 and 35 varieties of cold than 750 retail locations in 44 dispensed fountain drinks and teas. states, noted that some con- Syrups are also available, so customsumers have been steering ers can create their own flavors.

About 320 of the locations dispense away from the more familiar carbonated soft drinks. As a result, ICEE-branded frozen beverages. LTOs much of the company’s efforts in this category are featured on a quarand innovation are being poured into terly basis.

In development is a selection creating craft and “better-for-you” of seasonal flavors such as tropical beverages.

Craft beverages are hand-mixed aguas frescas with watermelon, strawon-site at the Pilot and Flying J travel berry and mango for summer and, for

over the next year or more with the reemergence and growing popularity of bubblers,” said Moyer.

At the frozen dispensers, he believes that one of the biggest draws for the younger generation is the ability to mix different flavors.

Rutter’s offers a variety of refillable mugs that allow customers to purchase both hot and cold refills at a discounted price. During the company’s “Summer of Freedom Sweepstakes,” customers who purchase limited edition 50th anniversary mugs will have the chance to win free refills for a year.

Dispensed beverages are also an integral part of the VIP Rutter’s Reward loyalty program. Every time card-carrying customers purchase a beverage, they earn cents off on fuel.

At the touchscreen-ordering kiosks, the stores offer drink/food bundles. Rutter’s covers south-central Pennsylvania and recently opened its 70th and first out-of-state location near Martinsburg, W.Va.

soft drinks have seen “Carbonated a flattening or slightly downward

trend while enhanced waters, energy drinks and cold coffee options continue to emerge.

”

–Chuck Moyer, food service category supervisor, Rutter’s cstoredecisions.com

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The Cold Truth

NPD Group research for the 12 months ending March 2018 on Expanded Beverage Service revealed the following about cold and frozen dispensed beverages at convenience stores: Approximately one in six beverages (excluding tap water) are from a fountain station.

The top five beverages sourced from a fountain station are frozen/slushy soft drinks, carbonated soft drinks, iced tea, lemonade and tap water.

One-third of beverages (excluding tap water) that are sourced from a fountain station are consumed between 11 a.m. and 2:59 p.m.

winter, a spiced pear beverage and some variations on ciders.

The company relies heavily on bundling to promote the category. This summer, for example, customers who purchase any deli item can get a fountain drink for $1.

At Des Moines, Iowa-based Yesway convenience stores, the cold and frozen dispensed beverage category is a key traffic driver, particularly as the company expands with new stores and acquisitions, according to Jeff Keune, senior vice president of food service and innovation.

“Our focus is delivering the highest quality by using filtered water and always checking the brix—the correct amount of syrup to water—to make sure the beverage tastes like it should,” he noted. “It’s important to get the basics right.”

Keune also pointed out that the company is investing in 16-head beverage dispensers with flavor shots in its stores that have the space to accommodate them, to offer customers the greatest variety and customization options every time they visit. CSD July 2018 Convenience Store Decisions 43

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Category Management

Energy Drinks

Energized for Summer C-stores warm up to the growing demand for popular energy drinks by infusing their store selections with top sellers.

By Anne Baye Ericksen, Contributing Editor

A

s soon as the temperatures outside signaled the onset of summer, Terry Messmer, sales manager for Tri Star Energy, increased in-store signage promotions for his top-sellers in the energy drink category.

The company, based in Nashville, Tenn., operates 91 Twice Daily and Tri Star convenience store locations throughout the state.

“Usually, to start off summer, we put a big push on the top brands in energy.

Starting in May, we had a promotion for the 12-ounce Red Bull Summer Edition flavor, which is coconut berry this year,” said Messmer. “We’ve been pushing it with signage outside, by the cooler and on the sales floor.”

Red Bull this past April released the fruity flavor, distinguished by a 12-ounce white can, on sale until Labor Day.

PUMPED UP For the convenience store industry, summer traditionally brings expectations of greater foot traffic and in-store sales, especially for cold packaged and fountain beverages. This year, expectations for a boost in energy drink purchases have been set higher than 44 Convenience Store Decisions July 2018

44-46_CM_Energy Drinks.indd 44

usual due in part to a lackluster perfor- with more frequency. In fact, when compared to carbonated soft drinks (CSD), mance over the past 12 to 18 months.

“Energy drinks experienced mod- caffeinated beverages, including coffee est growth in 2017, while energy shots and tea, earned more in convenience have seen sales slip somewhat of store sales for the past 52 weeks: CSD late,” said Gary Hemphill, managing cashed in $7.8 billion versus $8.3 billion director of research for the Beverage for energy drinks, according to Wells Fargo Securities data.

Marketing Corp.

“The energy drink category was “Shots are struggling, but that may be because there’s not really much up slightly in 2017, but has been up excitement with the category lately,” high single digits since December agreed Messmer. “The introduction 2017,” said David Hallman, senior catof new 5-hour Energy shot flavors and egory manager, packaged beverages, the media exposure has slowed a bit.” for Kum & Go L.C. The Des Moines, According to Information Resources Iowa-based c-store chain owns and Inc. (IRI), a Chicago-based market operates more than 400 stores in 11 research firm, 5-hour Energy SS Energy Midwestern states.

As the months ticked closer to sumShot maintains its market dominance mer, the numbers continued to pick with nearly 93% of the dollar share.

So far in 2018, consumers seem to up momentum. For the four weeks be reaching for cans of energy drinks ending May 19, 2018, energy drinks

Fast Facts: » Energy drinks, including coffee and tea, out-sold carbonated soft drinks. » Monster Energy registered an increase in dollar sales of more than 17%. » Approximately two-thirds of c-store owners and operators feel higher gas prices could dissuade customers from buying energy drinks, according to a recent survey. cstoredecisions.com

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The convenience store industry’s young executives and next-generation leaders face unique challenges as they grow their businesses in the fast-paced, competitive convenience store market. The National Advisory Group’s (NAG) Young Executives Organization (YEO) was formed specifically to addresses these challenges and help the industry’s leaders of tomorrow identify solutions with others in their age group.

YEO exists to serve as an effective conduit for getting young professionals more involved and prepared for leadership positions both in their companies and in the broader convenience store industry. YEO membership offers next-generation leaders a network of other young leaders in similar positions. The group meets twice annually at the YEO Conference in the spring and the NAG Conference in September.

For information on joining YEO contact NAG Executive Director John Lofstock at jlofstock@csdecisions.com.

THANK YOU TO OUR 2018 YEO CONFERENCE SPONSORS:

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Category Management

Energy Drinks

“Performance of the c-store channel operators support and expand the in all retail channels posted 7% growth in sales per Nielsen data, reported has a significant impact on the per- energy drink category’s growth despite

by Wells Fargo Securities. In c-stores, formance of the category since about a possible negative influence of higher energy drink sales rose 6.8% in the half of the energy drink volume goes gas prices? For many, the answer is to same four weeks. However, 12- and through that channel,” said Hemphill. increase customer awareness through 52-week measurements still reveal “That’s because energy drink sales multiple merchandising efforts.

“Summer months are a key selling a lingering effect from last year’s remain primarily driven by impulse.”

So how do c-store managers and season for non-alcoholic (NA) bevstale sales: 4.8% and 3.3% increases, erages, [and] energy is the largest respectively. category within NA beverages,” said According to Nielsen, sales of Dragana Ilic, NA beverage buyer for Monster jumped more than 17% for BRAND PERFORMANCE Army & Air Force Exchange Services the same four weeks, bringing its While original Red Bull and Monster 12-week activity up to 14.1%.

Energy tightly hold onto the No. 1 and 2 (AAFES). Because the energy category is the largest in NA beverages, their Although Red Bull leads Monster positions of dollar share in convenience cooler space/presence has increased as in total dollar share, according to data stores, there’s competition for the rest of a result of the increased sales.” AAFES from IRI, sales remained weak. For the the market. serves military personnel and their famfour weeks ending May 19, sales grew Brand $ Share ilies with operations in all 50 states as 2%. Meanwhile, Rockstar lost ground, Red Bull 26.69% well as U.S. military facilities abroad. declining 6.6% in dollar sales.

“Vendors/distributors provide our Conversely, the energy drink mix Monster Energy 14.02% stores with a vast variety of promosegment recorded an impressive Red Bull Sugar Free 6.45% tional materials ranging from banners, 23.85% rise in dollar sales in a yearpallet wraps, window clings, shelf danto-year comparison ending April 22, Monster Energy 5.31% glers, and even additional coolers to per IRI. Several brands reported subZero Ultra highlight new item launches or feastantial unit sales gains, including NOS 4.38% tured promotions,” Ilic said.

Crystal Light’s three offerings: Energy Monster Rehab 2.88% While Hallman hasn’t allotted on the Go (147.47%), Pure SS Energy greater cooler space for cold energy (589.23%) and SS Energy (39.26%).

Monster Mega Energy 2.55% drinks in the Kum & Go stores, he has Another big performer was Vital 4U SS Monster Energy Lo Carb 2.50% expanded marketing signage, includEnergy Drink Mix (42.90%). ing pump-topper clings.

Rockstar 2.06% “We also ran an Energy Club where CONSUMER AWARENESS Monster Juice 1.94% consumers got their 10th free when While late spring sales figures show they bought nine. The signage and Club promise, enthusiasm is tempered Red Bull 1.93% The Blue Edition were key contributors to the growth of with concern regarding rising prices the energy drinks in 2018,” Hallman said. at the fuel pumps. The U.S. Energy Red Bull 1.68% In addition to traditional merchanAdministration anticipates the inflated The Yellow Edition dising and promotional strategies, Tri fuel costs will carry on throughout the Rockstar Pure Zero 1.48% Star engages social media channels summer.

Red Bull to reach customers even before they When Wells Fargo Securities queried 1.33% The Green Edition arrive at the stores.

65,000 c-store owners and operators The retail chain also uses the about the effects the higher gas prices Monster Energy 1.32% medium to advertise local events and have had on both cigarette and bevUltra Sunrise sponsorships. erage sales, nearly two-thirds thought Full Throttle 1.26% “We had success with a consumer the situation could dissuade customers Rockstar Punched 1.23% giveaway that we tied in with an energy from buying energy drinks, especially if drink partner and gave the prize away Monster hikes its prices, too.

AMP Energy 1.21% thru social media. We also look to Then there’s the effect on basMonster Energy promote and execute programs with ket-item purchases if fuel customers 1.04% Absolute Zero energy drinks that sponsor local events don’t come inside for energy drinks. where we can engage our consumers Common companion items include Red Bull 1.04% The Red Edition and give them an opportunity to win cigarettes, roller-grill products, soft prizes and other experiences through drinks and even other brands of Source: IRI, a Chicago-based market research firm, Total US Convenience data, 52 weeks ending April 22, 2018. our social media,” said Messmer. CSD energy drinks.

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Category Management

Column

Perception of C-Store Food Is Higher Sales of prepared foods in retail segments are expected to grow, and c-stores are angling to maintain a piece of a growing pie.

Tim Powell is a vice president and senior analyst for Q1 Consulting LLC. Learn more at www. q1consultingllc.com.

By Tim Powell

A

s retail professionals, many of us realize the historic stigma of convenience store food.

In 1980, Clark W. Griswold in Vacation set back the evolution of the segment with the phrase “I’m so hungry I could eat a sandwich at a gas station.”

Fortunately, over the past 20 years, leaders in the segment, such as Sheetz, Wawa, Rutter’s and select others have created the c-store as a destination for consistently high quality, fast and fresh food.

As these retailing leaders will acknowledge, it hasn’t been easy to develop the “restaurant” image in shoppers’ minds. Consumers who were not around to observe the foodservice “revolution” in the channel (those born after 1995) are actually more likely to refer to convenience stores by name (for example Wawa

or Casey’s), which is the pinnacle of any c-store brand looking to become a meal destination.

Prepared foods also have grown in variety, sales and profits in several other retail channels over the same period, including mainstream supermarkets, drug stores, club stores and mass merchandisers (e.g., Walmart, Target). As shown in the chart, crosschannel success has actually helped bolster the c-store prepared-food reputation.

FOOD OPPORTUNITIES Q1 Consulting recently completed a study, called “2018 Opportunities in Convenience Store Prepared Foods,” on the expansion of “Grocerants” or retailers that are offering prepared foods as basket builders, banner differentiators, traffic drivers and a way

RANKING OF EACH SEGMENT ON THE FOLLOWING PREPARED FOOD FACTORS %Indicating Good/Excellent

Retail Segment

Food Freshness

Food Quality

Pricing

Trustworthiness

Supermarket

84%

80%

65%

80%

Mass Merchandiser

70%

70%

70%

68%

Convenience Store

54%

49%

45%

47%

Drug Store

45%

50%

42%

58%

Source: Q1 Consulting LLC 2018 Convenience Store Prepared Foods Research

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to increase profitability. The explosive growth of offsite commissaries has made it possible for retailers without kitchens to take advantage of the high patron demand for prepared food.

In April 2018, consumers who had purchased prepared food in the past year in one of the retail segments (shown in the table) rated their experience on four factors: food freshness, food quality, pricing and trustworthiness.

From a high-level perspective, supermarkets reigned supreme on all four factors, followed by mass merchandisers. Convenience stores rated higher than drug stores on most attributes.

The expansion of prepared foods in the retail segments will continue to be a growth opportunity as it meets the demands of the time-starved consumer.

Convenience stores that continue to do the right things—top quality food, excellent service and clean surroundings—will continue to help move the segment forward. It is then that trends such as meal kit solutions, delivery and other mobile demands can be sufficiently addressed on a store-by-store basis.

And finally, to achieve optimal success in prepared foods, retailers must think and behave like fast-casual restaurants. This means clearly showing when the food was made (not when it will expire); transparent, premium packaging, made-to-order options and disposing of food when its fresh appearance has passed.

July 2018 Convenience Store Decisions 47

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Category Management

Meat Snacks

Taming

Meat Snack Sales

Pearson Ranch, a New Mexico company that manufactures jerky made from elk, venison, wild boar and buffalo like these feeding on its New Mexico ranch, is becoming popular in the meat snacks category.

High-protein meat snacks address shoppers’ “betterfor-you” wants.

By Pat Pape, Contributing Editor

W Fast Facts: » The meat snack category has experienced compound annual sales growth of 7% or more over the past four years. » Among meat-snack shoppers between the ages of 18 and 34, 42% like preservative-free offerings. » Of those aged 35-54, 45% prefer jerky made from grass-fed beef.

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hen Scott Zaremba, CEO of Lawrence, Kan.-based Zarco USA, built his newest convenience outlet, he included a sit-down barbecue restaurant. Immediately, Stanley James Smokehouse, which combines the first names of his and his business partner’s dads, inspired an entirely new business operation: fresh, homemade, all-beef jerky.

“We’ve sold beef jerky for 35 years,” Zaremba said. “As we progressed into the barbeque-cooked-on-site restaurant concept, beef jerky was just a natural fit for what we’re doing. We have all the materials, technology and licensing in order to be able to create our own jerky.”

The licensing is necessary because, in addition to selling jerky in his own stores, Zaremba plans to package the product and offer it to other retailers in three flavors: regular, spicy and “fire.”

“Beef jerky has always been a good seller in the Midwest,” Zaremba said. “Some small, private-label locals have come and gone over the years, and we knew there was a market for it. We have the product and ability, and it’s a good profit margin item. It’s just a matter of being able to produce a consistent, quality product that is better than the vacuum-packed stuff that comes in on the national level.”

SNACK FACTS Meat snacks are often high-protein, shelf-stable, portable and ready to eat, but they’re not all alike.

In fact, the definition of “meat snack” is changing as several manufacturers introduce novel products, such as trail mix, that use meat as an ingredient.

Consumers can select from a variety of formats, such as dried meat shaped like a stick, chunks, cubes, shreds and bars, plus strips made from thin meat slices pressed together.

According to a recent report from Nielsen, the meat snack category has experienced compound annual sales growth of 7% or more over the past four years, with total sales rising 3.5 % in 2017. The consumer research firm adds that among ethnic groups, Asian-American households spend the most each year on meat cstoredecisions.com

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In a Mintel survey, 54% preferred Asian-

flavored products, including teriyaki jerky. snacks—an average of $31.61 annually.

The most common jerky meats are beef and turkey, Nielsen reported, but other exotic options range from alligator and alpaca to buffalo, duck and fish.

This past December, Mintel researchers surveyed meatsnack consumers to gauge their preferences. Among the findings, more than half of those respondents ages 18 and older want to purchase products made from prime cuts.

Of those aged 35-54, 54% said they prefer Asian-flavored products, including teriyaki jerky, and 45% want jerky made from grass-fed beef.

Forty-two percent of meat-snack shoppers aged 18-34 like preservative-free offerings, while 45% said they would purchase jerky as a snack bar-style product.

VARIETY AND FLAVOR

enjoy hunting, mountain biking and hiking,” said Michael Cordonnier, category manager/buyer for Fast Break.

“You’re starting to see more customers migrating to betterfor-you,” said Cordonnier. “I’m not saying ‘healthy,’ because I don’t know of a convenience health store that’s really killing it. But, people are making a conscious effort to choose better products, and jerky is a better product. People are willing to spend a little more for a better product.”

In addition to stocking many national brands, Fast Break stores carry meat snacks from Pearson Ranch, a New Mexico company that manufacturers jerky made from elk, buffalo, venison or wild boar, all of it free of nitrites, MSG and gluten. Pearson Ranch raises much of its meat on its two ranches—one in New Mexico and another in Missouri.

Today’s consumers demand variety in almost everything, and meat snacks are no exception. While beef and turkey continue to be the most frequently purchased jerky products, some c-store retailers offer meat snacks featuring both BASKET SALES unique flavors and exotic meats.

Bulk bags of jerky have been a boon for Fast Break.

Between sticks and bags of jerky, Rutter’s, the York, Pa.-based “When I first started, we hardly sold any 10-ounce bags [of chain, presents customers with 100-plus meat snack SKUs. jerky], but the larger bags have really taken off for us,” said “We carry a wide variety in our stores compared to what I Cordonnier. “I love the basket rings that come with our see from others in the industry,” said Joe Bortner, category jerky. Rarely do you see someone come in and buy just a supervisor at Rutter’s. “We have a few options that could be 2.5-ounce bag of jerky.” categorized as ‘different.’ This past year, we added Lorissa’s Plus, the typical jerky customer usually walks away with a Kitchen to our mix, which calls out grass-fed, no hormones, drink, such as an isotonic, energy drink or Gatorade, he said.

MSG or preservatives. This adds a new layer into our mix To keep meat snacks in front of customers, Fast Break that you may not find in your everyday set.” merchandises the products both on end caps and inline, In addition, Rutter’s recently announced a strategic and hangs danglers over promoted items. “In the past, I’ve effort to source more local products and has partnered with done a lot of bundling,” said Cordonnier, who also uses a local farm to offer venison jerky, “a central Pennsylvania window posters to communicate with shoppers. favorite,” Bortner said.

Fast Break also relies on its own website, social media Knoxville, Tenn.-based Pilot Flying J, which operates and the company’s loyalty program, Pay Day Rewards, to more than 750 travel center locations in 43 states, also car- showcase special offers and let shoppers know of bargains. ries an abundant selection of meat snacks.

Customers who have given prior permission also receive “But we find that our guests enjoy the standard, original, email announcements about food and drink specials. teriyaki and peppered flavors the most,” said Chris Cope, “The meat snack category is quickly evolving with new senior category manager for Pilot. “While men remain brands and flavors,” said Cope. “And pack types are the majority purchasing jerky products, new brands, such branching into other categories, such as trail mixes, meat as Krave and Lorissa’s Kitchen, have different flavor pro- chips and meat bars that continue to expand the consumer files that appeal to a different audience, and that helps to demographics and keep them engaged.” bridge the consumer gap.”

As the category continues to evolve, the options for Fast Break, a 27-store chain based in Klamath Falls, Ore. changing consumer preferences continues to grow, said has a customer base of “outdoors men and women who Bortner. CSD cstoredecisions.com

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Category Management

Salty Snacks

Salty Snacks

Pack a Profit

Brisk sales of chips and other fashionable snacks are helping c-stores salt away in-store revenue.

By Jeffrey Steele, Contributing Editor

S

Variety: Top dollar growth segment given Mintel’s more recent finding that about 94% of U.S. consumers snack at drivers in the latest year were tortilla and potato chips, as well as popcorn, least once daily.

Within the convenience channel in flavors from mild to hot and spicy. last year, salty snacks grew 6.5% in A variety of forms are also gaining via wheat, potato and wheat, potato dollar sales and 0.7% in unit sales.

“Variety, flavors and convenience, and corn, pork rinds and chicharrones. as well as lifestyle, are trends that are “We also see variety play a role with driving growth within the convenience the growth of snack mixes and popchannel salty snacking universe,” said corn, with the flavor profiles ranging Sally Lyons Wyatt, executive vice from sweet to savory,” Wyatt said.

Convenience: Snacks that can be president and practice leader for client insights with Chicago-based eaten on the go are desired by 57 % Information Resources Inc. (IRI), a of consumers, Wyatt reported. Growth has been witnessed in 2.6, 5.2 and 9.5leading market research firm. ounce packages of chips, as well as in re-sealable snack bags, she noted.

Lifestyle: Lifestyle ingredients are growing, but doing so off a comparatively small base, Wyatt said. » Variety, flavors, convenience and lifestyle are among trends Examining core snacking within multioutlets plus convenience in 2017, driving sales increases in chips and salty snacks within the confunctional, allergy and diet claims repvenience channel. resented what she termed “the top increasers.”

Among the latest trends » Chips and salty snack brands are not changing dramatically, is the use of Himalayan salt, “which but each year brings additional flavors, such as lime, jalapeño helps drive the permissibility of many and bacon-flavored. of the salty snacks because of its health benefits,” she reported. » Better-For-You (BFY) chips and snacks are tallying gains as Notable innovations reported by IRI consumers seek healthier snacks, but still trail traditional snacks about the category include the use of by a sizable margin. coconut in salty snacks, among other sweet-tasting ingredients.

nack lovers are always in search of the next new flavors and styles of chips, nuts, pretzels, popcorn, seeds and other salty snacks. For that reason, convenience retailers continually hunt for the next big flavor or format consumers will consider worth their salt.

Total U.S. sales of chips and dips grew 13% between 2012 and 2016, Chicago-based Mintel Group reported. In addition, salty snacks were up 24%, and nuts, seeds and trail mix increased 28% during the same period. These stats aren’t surprising

Fast Facts:

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“We also see caramel being used gests on-the-go consumers prefer to drive the savory and sweet options “healthier snacks in one area and more while caramel is on trend,” Wyatt said. indulgent snacks in another.”

“Seasonal flavors and packaging have become a way to drive incremen- FRITO FOREVER tal sales during the holiday periods.

Customers of Shout & Sack love Flavor expansions across sweet, savory, their chips and salty snacks, according sweet and savory and blends continue to Chris Carter, owner of the conveto win. Although small volume today, nience retailer which operates along protein chips have hit the convenience historic Rt. 66 in Vinita, Okla. channel and appeal to some of [its] “Here in Vinita, Okla., it’s Frito-Lay, consumer base.”

Frito-Lay, Frito-Lay,” I have 16 feet of Wyatt singles out for special men- salty snacks and it’s 100% Frito-Lay tion bacon-flavored salty snacks as a brands. I also have 16 feet of cheeses, continuing trend and egg white chips cashew nuts and sunflower seeds.” as a brand new trend now arriving at convenience retailers.

is likely to go big for Peanut Trading Company’s Southern Fried Salted Peanuts, which Carter said comes in flavors that include Cajun, Garlic, Spicy Bay, Ranch and “BBQ.” “I put them in my mouth and then crack them,” Carter said. “They all sell awfully good . . . I just happened to be going through my order book and decided to buy them. Travelers along Rt. 66 buy a lot.”

Carter merchandises his chips and salty snacks on the counter at all three checkout lines, as well as on end caps.

He believes that his salty snack and

BETTER FOR YOU A fairly recent trend has been the increasing public embrace of BetterFor-You (BFY) snacks, which as a category grew by 18% from 20152017, Mintel reported.

However, the BFY category still faces headwinds; it’s not even within shouting distance of traditional salty snacks’ acceptance. Mintel’s September 2017 “Better for You Snacks” report indicated general snacking consumer behavior is “almost universal,” but BFY snacks are purchased by less than half of consumers, here or abroad.

This photo, supplied by the National Association of Convenience Stores (NACS), shows how this Asked which snacks they had purDash In store in Virginia has the salty snack display connected to an open-air cooler. chased in the past three months, a Lightspeed/Mintel survey of 2,000 respondents found 49% had bought BFY snacks, significantly trailing the Another big seller at Shout & Sack chip sales benefit from his regular 64% and 61%, respectively, that is Andy Capp’s fries, a brand of fla- advertisements, not just on his store’s popped for nuts and traditional chips. vored corn and potato snacks that website and on social media, but via From her perspective at IRI, Wyatt are shaped to resemble French fries, traditional advertising outlets like reports healthier items’ impact on tra- and named for a comic strip char- radio and newspapers as well.

In Lawrence, Kan., where Zarco USA ditional salty snacks varies. For instance, acter popular in 1960 comics, Andy a simple ingredient list plus a corn pro- Capp. Particularly popular with Shout is incorporating its barbecue-infused file enables tortilla chips to enjoy a & Snack patrons are Andy Capp’s Hot foodservice platform at its c-stores, CEO Scott Zaremba said a notable healthy halo of sorts. Tortilla chips are Fries and Cheddar Fries, Carter said. up 8.7% in dollar sales and 3.7% in During baseball season, Shout & trend is an increasing assortment of unit sales within the convenience chan- Sack also sells a high volume of sun- flavors being unveiled in both chips nel. Appealing flavors like salsa verde, flower seeds. Fans of the seeds find and salty snacks. A continual parade tapatio hot sauce, chili and lemon and them up near the cash register, on of flavors like lime, jalapeño, ranch others also help stoke sales. pegs in displays and in a barrel. “The and different flavors of barbecue are When it comes to merchandising top three flavors are sizzling bacon, appearing as “that industry continues to try to search out every taste bud chips and salty snacks within c-stores, ranch and dill pickle,” Carter said.

Wyatt said anecdotal evidence sugThe same Shout & Sack customer available,” Zaremba said. CSD cstoredecisions.com

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Operations

Store Design

Good Store

Design Pays Off

Store displays and fixtures factor into a c-store’s branding, helping to increase revenue and foot traffic.

By Lisa White, Contributing Editor

W

hen Cruizer’s, a division of Chapel Hill, N.C.-based Holmes Oil Co., began its successful rebranding project, the goal was to differentiate its stores with a cohesive brand message that included more than just an updated logo and new paint.

The 25-store chain enlisted Tampa, Fla.-based design firm api(+) to create a total rebranding plan.

“We met with the folks at api, and I told them the store limits my sells,” said Edward Holmes, CEO of Cruizer’s.

“I wanted to take a location with proven numbers to see what would happen if we tore it down, rebuilt, expanded and modernized it.”

The chosen store was in rural Wilsonville, N.C. close to nearby

Jordan Lake, which attracts 50,000 visitors in the summer.

“The trend we’re seeing with today’s c-store designs that was related to this project is creating a distinct personality to set the stores apart from other retailers in the channel,” said John Scheffel, api(+) design studio director, who helped spearhead Cruizer’s prototype project. “The goal is to create a safer and cleaner environment for more visibility inside the store using glass and open spaces, along with brighter illumination and improved amenities, like restrooms. For Cruizer’s, we created a distinct tone of voice that is evident through all the graphics and promotions as well as the store fixtures and design.”

The redesign includes white fix-

Fast Facts: » Nearly three in four American drivers (72%) say they stop to use the restroom when driving on a vacation. » Strategic layouts for fountain drinks, frozen beverages and coffee that entice customer traffic can result in more sales. » Attractive bathrooms are an effective calling card.

52 Convenience Store Decisions July 2018

52-55_Oper_Costs and Design.indd 52

tures; light and bright vivid colors, such as green, light blue and orange; a light-colored floor; and clean, crisp design lines.

“We have no fixtures provided by vendors or manufacturer branding on our end caps,” said Holmes. “This creates a uniform look for us, since we’re focusing on what we’re offering, not who’s offering it.”

The prototype includes lighting under sales counters and within the candy set to bring added attention to the products.

CRUIZER’S BRANDING This design emphasizes Cruizer’s, rather than its gas brands —Exxon, Mobil and Valero. Even though the outside gas canopies remained, its columns tie into the c-store brand.

“Inside the store, we specified white on traditional gondola shelves to tie in with the clean design aesthetic,” said Tom Henken, api(+) vice president and director of design. “We also included impulse stations in front of each checkout line, integrating the fixtures as part of a millwork package.”

Millwork was used to divide the beverage wall and create headers or surrounds in three areas—fountain drinks, frozen beverages and coffee. cstoredecisions.com

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Operations

Store Design

DISTINGUISHING DISPLAYS More and more, retailers are featuring open floor plans that allow additional space for foot traffic and better sight visibility.

Counter fronts include faux plywood taking what we wanted and improving on it. With the new logo, design elements to tie it all together.

“In terms of the store layout, we and attitude of the store, they created tried to make the hot dog and con- a different consumer experience than diment areas more user friendly with we had before.” signage atop the gondolas,” said Scheffel. “We also added a refrig- REVAMPED VISION erated fixture that emphasizes fresh Des Moines, Iowa-based Git N Go, salads and sandwiches, along with an which has more than 40 locations in endcap highlighting fresh donuts and Iowa and Illinois, recently revamped its pastries.” own interior look with lit shelving disThe results of the design have been plays, hard surface countertops and impressive. new floors installed in its foodservice “Our in-store sales are up 38%, food areas. sales are up 50% and gas volumes “It communicates to the customer have increased 90%,” said Holmes. that we are serious about food,” said This design overhaul extended to William Baine, CEO of Git N Go. “The the restrooms, which saw the previous under lit displays draw consumers’ single occupant bathroom expanded eyes to the product, and consequently to fit more traffic. we saw a nice incremental sales The completely hands-free rest- increase after these were installed.” room fixtures include an all-in-one C-store retailers should not undertouchless sink, soap dispenser and estimate store displays and fixtures. paper towel dispenser, as well as par- Everything from gondolas and shelvtitions separating the entryway instead ing to restroom sinks and hand dryers of doors. help create an appealing ambiance Moving forward, Cruizer’s plans that factors into a store’s branding. to remodel two larger format stores, The restroom, in particular, can stripping the sites down to the walls, make an impression. implementing the new brand concept, Consider that nearly three in four which will be extended to the exterior. American drivers (72%) say they stop There also is a new prototype store to use the restroom when driving on a under construction in east Raleigh, vacation, compared to 68% who purN.C., which is 4,800 square feet. chase gas and 66% who buy food or “The overall plan is to have all drinks, making it the most frequent Cruizer’s consistent in design, which reason for stopping, according to the will take about five years,” said National Association of Convenience Holmes. “api did an incredible job of Stores (NACS).

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When it comes to displays at Salt Lake City, Utah-based Maverik’s more than 300 locations across 11 states, the theme is ‘Show Them, Don’t Tell Them.’ Typical signage consists of large, colorful photos depicting food and offerings, rather than verbiage. A colored waterfall above the beer vault is designed to draw in customers.

The tan fixtures have been updated to a charcoal color scheme that hides dust more effectively. All fixtures have been lowered to eye level, so product is no higher than five feet. Newer stores have angled gondolas, which provide more access to the coolers.

“We like the lower displays, because it allows customers to see across the floor and eliminates the feeling of being in a maze,” said Aaron Simpson, Maverik’s vice president and chief marketing officer. “We’re also getting rid of the clutter to showcase food better.”

For its two big monthly candy promotions, Maverik has implemented two candy bins with promotional signage on top and another by the register to encourage impulse buys.

“We’ve gotten away from freestanding racks and have built fixtures in cabinetry by the front counter and near the chips,” said Simpson.

Having lower shelving also makes people feel safer, since customers can see what’s going on, said Linda Cahan, owner of Cahan & Co. in Portland, Ore., a retail design consultancy. She added that c-stores are using more natural materials, like real wood in displays and countertops, rather than laminate and metal.

“We’re noticing more rounded corners, which softens edges for a better customer flow,” said Cahan. “That’s really important, because with sharp edges, people tend to unconsciously back away to avoid corners.”

Richmond, Va.-based Little Oil Co.’s CornerStone Market in Emporia, Va. has incorporated the local Hokie stone, a popular limestone rock, on the front of the building to help set it apart.

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Far from a traditional convenience store, CornerStone has an open inteEffective store schemes include rior plan and no window signage. exterior plans that incorporate “We have 12 48-inch television branding of fuel dispensers. screens around the building, each playing its own content, such as craft beer being poured into a mug or pizza coming out of the oven piping hot,” said Barry Grizzard, sales manager for CornerStone. “These visuals entice “The thing with a restroom is that customers.” the cleaner it is, the more people will respect it and keep it tidy,” said Cahan.

Maverik recently upsized its restBIG ON BATHROOMS Unlike c-stores of the past, rest- rooms, making them more appropriate rooms have become more of a to service each location.

“Our stores’ themes are the Great focus, as these are thought to be an extension of the brand as well as a Outdoors and this runs through to the barometer of the store’s cleanliness. bathrooms,” said Simpson. “Tiling This has become even more vital, with goes halfway up the wall, the ceilings many retailers’ foodservice programs are blue and there’s a mural of outdoor scenes on the wall above the tile.” front and center.

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CornerStone puts a great emphasis on its restrooms, which it also upsized to include four stalls for women and two stalls and two urinals for men.

“Everything is touchless and doubled, including the sinks, soap and paper towel holders,” said Grizzard, referring to the new layout. CSD

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Technology

Financial Services

Fostering

Financial

Services

While cash is here to stay, how money is saved, withdrawn and converted is changing quickly.

By Brad Perkins, Contributing Editor

O

Fast Facts: » C-stores have an opportunity to offer financial services as customers move away from traditional banking. » Kiosks are one way c-stores could offer multiple financial services with minimal labor costs. » Offering money orders, bill pay and other financial services can help c-stores compete in a time of retail disruption.

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ffering banking services at a c-store may seem daunting or even impossible, learning what banks offer and whether it’s possible to offer versions of some of those services in c-stores is one more way retailers can maximize convenience for customers in an age of ongoing disruption.

“Part of it is you need to start learning what financial services entails,” said Daniel Burrus, futurist and CEO of Burrus Research Associates. “Are we talking about checking accounts, savings accounts; getting a new credit card; getting a small business loan?”

You may not see bank branches opening in convenience stores, but there are many ways that convenience stores can—and already do—offer financial services. From money orders to gift cards; check cashing to bill pay, many stores are embracing financial and payment services because of the convenience.

“The benefit of purchasing money orders and prepaid cards from a convenience store is that it’s simply more convenient and affordable,” said Brent Chadwick, vice president of finance and chief financial officer at Beaverton, Ore.-based Plaid Pantry,

which offers money orders in its 108 locations in the Pacific Northwest.

“Our pricing is the lowest in our market, and you would have to drive by a lot of Plaid Pantries to get to a bank to purchase your money order.”

And if getting started seems hard, there is likely already one financial service in the store—the ATM. They aren’t going away any time soon, some have evolved to take mobile applications, and Burrus suggests with the right demographics, a convenience store ATM could offer Bitcoin or other cryptocurrency.

But cash equals security concerns, and with the availability of mobile payment technology pushing some to ditch the cash, adding another payment component could soon become a necessity.

In 2018, Casey’s General Store introduced Amazon Cash, which allows customers to pay for their purchases using barcodes on their mobile devices that connect to their Amazon accounts.

The benefit is that the company can draw in customers who either don’t have bank accounts or are concerned about credit card safety and would rather use mobile pay. cstoredecisions.com

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“

Smart vending has huge potential in convenience stores and part of that could be covered with financial services. A smart vending machine uses a combination of artificial intelligence and the camera to be able to learn about the person standing in front of the vending machine very quickly.

”

–Daniel Burrus, futurist and CEO, Burrus Research Associates.

known entities? Burrus envisions the ability to scale up to compete with the likes of Amazon or Walmart by embracing technology.

“Any kind of service that can be provided through a kiosk would be very viable,” he said. “A kiosk is a visual gateway.

Of course, that involves some training, but I think convenience stores are also looking for a way to keep manpower down and not have to do a lot of training. The more it can be self-explained through the device, the better and that’s why a kiosk is going to be useful.”

Another key growth area in payment technology is the smart vending machines which, like kiosks, can either direct customers to the product in the store, sell it directly or even deliver it.

“Smart vending has huge potential in convenience stores and part of that could be covered with financial services,” WHAT’S NEXT? As mobile payments grow, tried-and-true items like Burrus said. “A smart vending machine uses a combination money orders and bill payments will continue to succeed of artificial intelligence and the camera to be able to learn because they are profitable and drive increases in foot traffic. about the person standing in front of the vending machine Plaid Pantry has been offering money orders for 20 years very quickly. Typically, in a vending machine, [customers] and began doing so to increase the number of custom- only have certain things that they can buy; that are right ers coming into its stores. And as the rules of commerce there that you get at the touch of a button.”

But smart vending machines can recognize people, idendictate, the more foot traffic, the more people purchasing tify loyalty cards and even offer items that it doesn’t have in additional items.

“I believe people come to the store to get the money stock, prompting convenience store customers to bypass order and will occasionally grab a drink or a snack while Amazon to use the machine in the store.

With so many options, it can be hard to decide what in the store,” Chadwick said. “The hope is that when they need a quick stop for something else in the future they will to add. But whether it’s increased adoption of payment services like mobile pay, money orders or check cashing; have a good experience in our store and come back.”

Kent Oil, which has been offering check cashing and bill partnering with a bank branch to offer banking; or something more, two things are clear: a store needs to know its pay at 14 of its stores for nearly 20 years, would agree.

“We have 14 Mr. Payroll locations—payroll checks cashed demographics to offer what will fit, and popular added serinside our stores—it’s a solid business model for us,” said vices will bring in customers.

“For us, many of our locations are in rural areas that Terry Adkinson, chief operating officer at Kent Oil. “We also accept payments for various utility companies and fees are have limited stores that can take these types of payments,” attached to each bill. Our customers really enjoy having Richardson said. “Consumers are looking for access to these types of services and we will at least attempt to prothat service available.”

These programs bring in additional customers looking vide those that make sense for Casey’s. If the consumers are to spend additional money, even if they are in to use ser- looking to use these services, they are going to shop where vices. So how do convenience stores expand beyond the they are accepted or sold.” CSD “Amazon Cash was offered as another payment platform to help capture consumers,” said Mike Richardson, vice president of marketing for Casey’s. ”As with most new rollouts of this type of service it has started softly but continues to grow.”

That growth is expected to push convenience store owners to add mobile payments quickly. A 2017 JP Morgan Chase study showed that only 36% of merchants accepted digital wallet payments. But that should change.

“Mobile payments are continuing to grow very rapidly because they are so much more secure versus making a payment from a credit card, even when the credit card has a chip,” Burrus said. “I think the mobile payment future is extremely bright.”

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Technology

Column

Steps for

Stopping Theft

There are many preventative measures retailers can take to reduce being preyed upon.

By Mark Doyle

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heft continues to plague the retail industry, with shoplifting leading the way. The convenience channel isn’t immune.

In 2017, shoplifting apprehensions increased 2.3%, with the dollars recovered from these shoplifters increasing almost 13%.

This is the 8th increase in both shoplifter apprehensions and dollar recoveries in the past 10 years. While dishonest employee apprehensions and recovery dollars were down (almost 4% and 7%, respectively), retail theft overall continues to be a serious problem for retailers negatively impacting their bottom line.

These are some of the numbers gleaned from the 30th Annual Retail Theft Survey conducted by Jack L. Hayes International Inc. The survey queried 21 large retail companies with 16,409 stores and more than $428 billion in retail sales (2017).

The overall results aren’t shocking, but they do provide a credible snapshot of how theft is affecting the total industry. Among some of the key findings: • Shrink. 62% of survey participants reported an increase in shrink in 2017, with 29% reporting a decrease, and 9% reported shrink stayed the same.

• Shoplifting. Apprehensions: 391,760 shoplifters apprehended in 2017, up 2.3%.

• Recoveries. Over $149 million recovered from shoplifting apprehensions, up 12.9%.

PREVENTIVE ACTIONS Retailers can implement good customer service: Shoplifters want and need privacy; so take it away from them.

If they respond, “I’m just looking,” teach employees to counter with: “Ok, great. I’ll keep my eye on you in case you need any assistance.” Honest customers are fine with this (you are there if they need help). However, it’s the last thing a shoplifter wants to hear.

Other actions to consider: • Have good sight lines on the sales floor. Do not block the view of high value and highly popular items, and keep these items in sight of employee work areas.

• Hire honest and motivated employees. Train them to prevent shoplifting, what to look for, how to respond to a possible shoplifter, etc.

• Use technology to your advantage. Remember, technology in the forms of electronic article surveillance, closed circuit TVs, merchandise alarms, product tie-downs 58 Convenience Store Decisions July 2018

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Mark Doyle is president of Jack L. Hayes International, Inc. and has over 32 years of experience in the shrinkage control/ loss prevention field.

for pricey items such as vape kits, can be installed.

• Limit item quantity on the floor. Limit the number of certain items (high value or highly pilferable) placed on the sales floor. This will reduce vulnerability to large losses of these items and make it easier to identify missing items.

• Prosecute shoplifters. Thieves know which retailers prosecute and those that don’t. In the end, prosecution is a good deterrent.

DISHONEST EMPLOYEES Effective Pre-Employment Screening Process: The first step to controlling employee theft starts at the point-of-hire; do not hire the ‘bad apple.’ Money spent up-front in the screening process to identify ‘quality’ employees will result in savings from reduced turnover and losses. Some measures might include: • POS Exception Monitoring: Use a POS exception based monitoring program to quickly identify possible fraudulent transactions at the point of sale (i.e. excessive refunds/voids; refunds/voids before or after store hours; excessive reward credits, dummy SKU usage, etc.).

• Auditing for Compliance: Ensure consistent compliance to company policies and procedures by conducting unannounced loss prevention/shrink audits on a regular basis. Auditing not only helps keep awareness high, but by reducing the opportunity, you reduce the chance of theft/loss.

• Training & Awareness. Invest in loss prevention training and awareness programs for all employees and a reward program for employees who report dishonest activities.

• Back to Basics. Ensure that basic store security steps are in place and adhered to at all times, including, Door controls: Doors locked and Exit doors alarmed.

Trash controls: Process supervised, clear bags, cartons flattened, and dumpster locked.

Package/bag checks: Conduct whenever an employee exits the location.

Sales Verifications: “Pass-outs” are an easy way to steal with friends/relatives; have management conduct daily unannounced sales verifications.

Opening and closing: Always assign two employees for security and safety.

The full survey can be found at: hayesinternational.com/ news/annual-retail-theft-survey.

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PRODUCTShowcase Drop-In Dry Well The Vollrath Co. LLC has launched a new drop-in dry well powered by induction. The Modular Induction Dry Well Drop-In uses induction technology to deliver superior hot food holding and precise temperature control in a waterless well. Offering unmatched flexibility, the Dry Well features the option of as few as one, or as many as six wells. Constructed of stainless steel, the well and flange are durable, easy to clean and seamlessly match other commercial foodservice equipment. Each well contains two induction capsules for two warming zones per well. The zones can operate independently or be synchronized and run through a single control panel per well. Induction ultimately eliminates the need to refill wells with water, reducing employee labor and maintenance during operation. It also removes the risk of burns from steam. No water eliminates the need for drains, and the expensive plumbing infrastructure that goes along with them.

Celebrating Chewy Big Chewy NERDS, the newest product from the popular NERDS brand, received the Most Innovative New Product Award in the non-chocolate category at the National Confectioners Association’s (NCA) 2018 Sweets & Snacks Expo in Chicago. Now available at retailers nationwide, Big Chewy NERDS features a chewy center covered in a crunchy NERDS candy shell, and is moving the popular brand, known for its small size and bold flavors, into the growing chewy candy segment. A bag of the new NERDS product contains a variety of flavors, such as Orange You Nerdy?, LeftClick Lemon, Strawber2y Squared and Giga Grape.

Big Chewy NERDS are available in six-ounce Medium Peg ($1.99 SRP) and 10-ounce Stand Up Bags ($2.89 SRP).

Company: Ferrara Candy Co. www.nestlecandyshop.com

Company: Vollrath Foodservice www.vollrath.com/inductiondrywell

Bolder Flavors Tulkoff Food Products Inc. has introduced three new bold flavors Kickin’ Dippin’ Sauce, Spicy Jalapeño Aioli and Garlic Aioli, to its foodservice squeeze bottle line. The Baltimore-based manufacturer created these items based on a response to foodservice operators and their customer demands for unique fullflavored mayonnaise-based products that can be used across a variety of menu options and dayparts. All items are geared for foodservice and able to be used as a mayonnaise replacement, dip for fried foods or sandwich spread. The new items have a six-month refrigerated shelf life, packed in an 18 fluid-ounce inverted squeeze bottle and are free of high fructose corn syrup, trans fats, gluten and artificial flavors. Tulkoff’s squeeze bottle line currently consists of Spicy Kimchi Aioli, Spicy Chipotle Chili Aioli, Creamy Horseradish Sauce, Extra Bold Cocktail Sauce & Extra Bold Horseradish Sauce. All squeeze bottle products are available now and are sold in an eight-count sealed tray pack.

Company: Tulkoff Food Products Inc. www.tulkoff.com

Order Pick-Up Platform Apex Order Pick-Up Technologies is working with more than 12 different quick-service restaurant brands and a large number of foodservice operators and concessionaires to help them solve a critical industry issue—in-store order pickup. The Flow-Thru Locker Solution from Apex makes order pick-up as fast and easy as the order-ahead process. The two-sided lockers load from the rear, ensuring employee workflows aren’t interrupted, while providing a well-defined pick-up area for order-ahead customers. An easy-to-use order bump bar and status monitor makes order processing fast and efficient. This eliminates the need for employees to interact with order-ahead customers, giving them more time to assist in-store customers.

The Flow-Thru Locker Solution integrates easily with a restaurant’s existing infrastructure – including point of sale (POS), kitchen display systems (KDS) and mobile apps.

Company: Apex www.apexsupplychain.com/foodservice

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PRODUCTShowcase Freestyle Gets an Upgrade Coca-Cola Freestyle is introducing enhancements to existing dispensers and launching a next-generation dispenser: CocaCola Freestyle 9100. Existing dispensers are being refreshed with additional brands and categories, an on-screen calorie display feature, a new user interface and an update to the Freestyle app that allows users to discover leading beverage mixes in their region. Coca-Cola Freestyle 9100 launched at the 2018 NRA Show and will begin rolling out nationally in 2019. The next-generation dispenser’s large, high-definition screen creates an easier consumer journey to find favorite beverages or sample something new from more than 200 drink choices, including more than 100 low- or no-calorie options. The dispenser is also outfitted with Bluetooth connectivity, so, as soon as Freestyle app users walk into a c-store, they can connect to the dispenser, pour their favorite beverages and create new mixes without even scanning a QR code. Coca-Cola Freestyle 9100 features an improved crew dashboard and enhanced diagnostics, giving operators real-time precision updates on how much product is remaining and when it will run out. The new dispenser also comes equipped with built-in microphones, speakers and optical sensors to allow for future developments to create an interactive user experience.

Company: Coca-Cola www.coca-colacompany.com

$3 Super Snackers Krispy Krunchy Chicken’s second quarter national promotion for 2018 is focused on outstanding flavor and affordable price with its “$3 Super Snackers” deal.

Customers can choose any two-pieces of Reese’s Outrageous Bars explode with chicken they prefer with fries or choose texture and flavor, complete with caramel a Krispy Chicken Sandwich with fries— and crunchy Reese’s Pieces candy sur- both for just $3. The promotion runs berounding creamy peanut butter and cov- tween now and July 8. ered in smooth milk chocolate. Reese’s Company: Krispy Krunchy Chicken Outrageous is available in a 1.4-ounce www.krispykrunchy.com standard bar, a 2.95-ounce King-size bar and a 10.50-ounce bag.

Outrageous Bars

Company: The Hershey Co. www.hersheys.com/cstore

ChamoyFlavored Pickles Van Holten’s has perfected the Chamoy flavor for pickles and is rolling it out in a 30-count barrel. Now available, the barrel comes in an easy-to-carry box and includes serving bags. Chamoy Is Mexico’s flavor fiesta condiment with Chinese origins. Made from pickled fruit, chilis and lime, it tickles your taste buds with, salty, sour, fruity and mild spice flavors. Many people enjoy Chamoy sprinkled on fruit or drizzled on chips, but it can also come as a Mexican popsicle or shaved ice. Van Holten’s Pickle-In-A-Pouch, Pickleback and Pickle-Ice are available in theatres, convenience stores, and grocery stores throughout the country. Chamoy Pickles can be ordered one barrel at a time when shipped with current Van Holten’s products, making it easy for current distributors to add.

Company: Van Holten’s www.vanholtenspickles.com

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PRODUCTShowcase Enriched Breakfast Bites Food Operations Solutions Avery Dennison is solving food supply chain and operational issues for convenience stores by introducing innovative products under its growing Freshmarx brand. As of May 7, 2018, the U.S. Food and Drug Administration requires nutrition labeling for all standard menu items. One of Avery Dennison’s new products, Freshmarx Nutrition, offers an “all-in-one” food and nutrition solution to address this regulation. Other solutions include the Freshmarx Tablet System, which solves kitchen challenges related to food labeling, employee training, mobile printing and space constraints by combining the Avery Dennison 9485 portable printer with the Freshmarx Prep software application on an iPad; and Freshmarx Food Donate and Waste, which helps determine exactly how much food inventory is being lost as a result of inaccurate inventory management and ordering processes. This application allows for easy tracking using a weigh scale—along with labeling and logging—so restaurants can measure and analyze food waste in order to reduce inventory costs and minimize waste by discarding less food, or by donating excess.

Company: Avery Dennison www.averydennison.com/ freshmarx

Rich’s Foodservice’s French Toast and Pancake Breakfast Bites may look like donut holes, but they offer nutritional value. Made with enriched whole grain flour, the bites contain no high fructose corn syrup, artificial colors, flavors or sweeteners. Operators can serve them in a variety of formats: dust them with powdered or cinnamon sugar, serve with syrup, dip in glaze and decorate with sprinkles. The 0.51-ounce bites are fully cooked and frozen, ready to pop into the oven for two to three minutes. There are 384 per pack, with a suggested retail price of 50 cents per three-bite serving size.

Company: Rich’s Foodservice www.richsfoodservice.com

Dark Horse wine is available in cans. The can format is the fastest-growing format across ALL wine formats. Dark Horse is known for being a leader with unexpected offerings, and cans align with its product proposition.

The can format expands usage occasions for Dark Horse, and the wine category as a whole. The 2017 Dark Horse California Rosé boasts a refreshingly dry style that explodes with flavors of fresh red fruit, subtle minerality and a hint of floral – all racing toward a bright, crisp finish. The 2017 Dark Horse Pinot Grigio offers notes of apple and hints of lemon, complemented by a subtle minerality and an elegant finish.

Company: E. & J. Gallo Winery www.darkhorsewine.com

Upgrade Your Coffee Wilbur Curtis Co. has introduced the GemX IntelliFresh Coffee Brewing System with FreshTrac. Sitting atop a proud lineage stretching back almost 40 years to the introduction of their famed Gemini Satellite Brewing System, the GemX brewer represents the new pinnacle of Curtis innovation. It combines “brains” and brilliant design elements to power a superior coffee program. The GemX comes fully loaded with cutting edge technologies, and it’s encased in a slender, sophisticated form factor that will turn heads and attract sales. Curtis’s evolutionary FreshTrac technology takes the guesswork out of serving fresh coffee while also streamlining labor. It replaces often distracting audible alarms and mechanical timers with a simple, intuitive and customizable system of three LEDs that glow and flash, letting operators track coffee freshness from across the room. Because over- or under-heating can kill coffee flavor, GemX is also engineered with Curtis’ exclusive IntelliFresh technology, a “gentle” heating system that keeps coffee at its ideal temperature regardless of the volume in the satellite. Options include G3 GemX with its universal control module and easy-to-read, true-green LED display; or G4 GemX with its large 4.3-inch icon-driven interface, onscreen instructions for fast, intuitive training and real-time feedback on the brewing process, and a USB port that lets operators easily transfer recipes from store to store..

Company: Wilbur Curtis Co. Inc. www.wilburcurtis.com/gemx

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Wine To Go

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PRODUCTShowcase Crispitos Filled Tortillas Tyson Foodservice’s State Fair Crispitos filled tortillas, formerly under the Tyson Crispitos Brand, are a delicious, fun, on-the-go offering with versatile quick-prep options. Since 1985, Crispitos filled tortillas have been satisfying the cravings of school kids, college students as well as adults looking for a flavor-packed grab-and-go offering at convenience stores. The transition of Crispitos filled tortillas from the Tyson Brand to the State Fair Brand includes a change in brand code, but the product formulation, case specifications, UPC and GTIN numbers, order fulfillment process, and manufacturing and production facilities will all stay exactly the same.

Now, as part of Tyson Foodservice’s State Fair brand family, State Fair Crispitos filled tortillas are available in three new, on-trend flavors: Sriracha, Korean BBQ and Chicken Bacon Ranch. The entire State Fair Crispitos product portfolio of 11 hand-rolled tortillas are fully cooked for quick prep, quick serve and low labor costs.

Company: Tyson Foodservice http://www.tysonfoodservice.com/products

Mini Warmer

Fire & Freeze Mondelēz International is introducing two bold new takes on Sour Patch Kids with the launch of new Sour Patch Kids Fire and Sour Patch Kids Freeze. Made with a heating sensation, new Sour Patch Kids Fire Fruit Variety Mix includes four flavors: Angry Watermelon, Berry Blaze, Apple Fever and Tropical Flame. Made with a cooling sensation, new Sour Patch Kids Freeze Lemonade Variety Mix includes flavors Lemonade, Strawberry Lemonade, Cherry Lime Lemonade and Blue Raspberry Lemonade. Both are available nationwide for a suggested retail price of $2.49 per 7.2-ounce bag.

Company: Mondelēz International Inc. www.mondelezinternational.com cstoredecisions.com

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Tomlinson Industries introduces the new Glenray Mini Warmer. This 5.3-quart warmer provides the flexibility to try new things in smaller batches, test market it and expand the customer base.

The mini warmer goes places fullsize kettles and warmers can’t, meaning smaller operations can offer soups, stews, sauces, gravies and dips while occupying a dramatically smaller footprint.

The mini warmer offers premium features including a removable stainless-steel insert, extra-sturdy stainless-steel hinged lid, and corrosion-resistant black powder-coated steel or stainless-steel body. The Glenray Mini Warmer also has adjustable temperature control to 205 degrees, at-a-glance power-on light and one-year warranty.

Company: Tomlinson Industries

New Rice Triangles A new, triangle-shaped, Japanese rice ball snack, Tri Onigiri, is now launching in convenience stores in the New England market. The product is the latest healthy alternative to sushi for people on the go from the creator of yuso, with new packaging and exciting new flavors. The triangle-shaped rice ball—known as onigiri in Japanese – is a popular food all over the world, including parts of Asia, Europe and now the U.S. Tri Onigiri is made in small batches in Massachusetts.

The fresh, refrigerated snack is a high in protein, low in fat update on the 1,000-yearold rice balls, which date back to 11th century Japan. Tri Onigiri’s spicy filling is surrounded by sushi rice and wrapped in crunchy nori, a pure, dried, crunchy seaweed. It is available in two savory flavors: Sriracha Salmon and Spicy Hummus.

The refrigerated snack has a nine-day shelf life. The wholesale distributed price is $3.33 (SRP $3.99-$5) per piece and a pack of six pieces is $20. The minimum order is three packs (18 pieces).

Company: Tri Onigiri www.trionigiri.com

(216) 587-3400, ext. 112

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Classifieds /Ad Index Cash Depot

55

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59

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E-Alternative Solutions

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KT&G

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Liggett Vector Brands

40-41 27

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Mars Wrigley Confectionary www.mars.com

2018

17

NicoGen Pharma Solutions

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North American Bancard 866.481.4604 / www.nynab.com

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13 64

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2

SAVE THE DATE

Line up for NAG 2018 at the beautiful Ponte Vedra Inn & Club September 9th thru 12th II Ponte Vedra Beach, FL RETAILERS should contact John Lofstock at 201.837.2177 • jlofstock@csdecisions.com SUPPLIERS should contact John Petersen at 440.250.1583 • info@nagconvenience.com

cstoredecisions.com

65_Ad index.indd 65

July 2018 Convenience Store Decisions 65

6/23/18 11:58 AM

INDUSTRY

Perspective

Dealing with Portfolio Presbyopia With the success of smaller brands, the need for c-stores to manage their product portfolios has become a multi-level talent.

Gary Stibel is the founder & CEO of the New England Consulting Group. His career spans more 30 years of line management and management consulting.

By Gary Stibel

N

ot too long ago, some industry gurus were predicting that the consumer packaged goods (CPG) business would become increasingly concentrated with no more than two brands and one private label in every category.

Coke, Pepsi and a private label, for example. Crest, Colgate and a private label.

Today the pendulum has swung back in the other direction. Like an individual whose far and near visions begin to weaken, making it harder to focus clearly on close objects—a condition known as presbyopia—retailers are faced with the fact that smaller, successful brands are winning where larger legacy brands aren’t.

For instance, Budweiser and Miller are declining while craft beers grow. Ditto, Yoplait and Dannon, vis à vis Chobani, Noosa and Siggi’s.

This shifting CPG paradigm can be blinding at times.

Call it portfolio presbyopia.

Years ago, researchers projected that if you give consumers too many flavors of jams and jellies to choose from, it makes their decisions more difficult, and most consumers simply pass.

So, what happens when the consumer realizes that the pendulum has actually swung too far, and they are now spending way too much time in retail aisles or on the internet trying to decide among too many brands, flavors, scents, sizes and prices.

CONVENIENT EXPERIENCE The original convenience stores were driven by location, location and location. Having a convenience store strategically located for the purchase of fill-in items like milk, eggs, cigarettes and grab-go-sandwiches was the order of the day.

That was then. Today, c-store market leaders have evolved into destinations for great coffee, fresh food and a range of snacks and beverages in addition to supplying all a family’s needs, both household and personal.

And while the breadth of product line is important to ensure that consumers can find what they want and need, it is beginning to approach complexity syndrome that could discourage sales and return visits because of the vast array of choices and options on the sales floor.

66 Convenience Store Decisions July 2018

66_Industry Perspectives.indd 66

What can c-store operators do to control this portfolio presbyopia?

First, focus on your own label and be sure that it’s as good as, or better than national brands.

Second, stock at least one national brand, but it doesn’t have to be the market leader.

For example, Heinz and private label are more than enough ketchup options; however, Hunt’s and Del Monte are both recognized national brands.

If either brand wants to generate trial versus the market leader (Heinz), what better way than to share exclusive distribution with private label in a quality c-store chain.

And what better way to encourage all three national brands to compete more aggressively for your business than to give one national brand exclusive distribution.

Third, be very stingy when adding more than two or three brands to your portfolio. It’s surprisingly unnecessary in the majority of categories you stock, but absolutely necessary in categories like beverages and snacks.

Finally, reallocate space gained by limiting assortment in unnecessary categories to build equity for your brand.

For instance, bananas, apples and other fresh fruits are relatively inexpensive and signal to the consumer that your c-store has fresh foods as well as shelf stables. The scent of freshly-brewed coffee or fresh food also contributes to a positive shopping experience and has been proven to increase sales.

Also consider leaving room for local and insist that local adds value. Local merchandise is on trend and in demand even/particularly at premium price points.

Moreover, local entrepreneurs appreciate retail distribution more than national brands and will usually go out of their way to support retailers who give them that opportunity. Therefore, insist upon in-store signage and promotion that will benefit your brand as much as it will your local supplier.

While portfolio presbyopia is becoming more common among mass retailers and in electronic commerce, there is a large opportunity for convenience store chains/ operators to create the equivalent of multi-focal lenses and make their convenience store a truly convenient and better experience for all.

cstoredecisions.com

6/22/18 11:22 AM

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