Convenience Store Decisions August 2018 by WTWH Media LLC

Volume 29 • Number 8 • AUGUST 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

Cultivating

C-Store Careers The newest addition to Yesway, industry veteran Derek Gaskins is part of a growing number of senior leaders who are switching from other convenience retailers or other industries.

INSIDE:

C-Store Patrons Hungry for Dinner Cigars Reﬂect Regulatory Heat

Contract Negotiations Made Easier

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Volume 29 • Number 8 • AUGUST 2018 Business Solutions for Retail Decision Makers

® a

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

p u b l i c at i o n

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your business LEGISLATION / REGULATIONS SALES STRATEGIES

COMPREHENSIVE RESOURCES

CONSUMER INSIGHTS

MERCHANDISING SOLUTIONS

SALES & PROFITS

COLLABORATION

LEADERSHIP BRANDS

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August 2018

Vol. 29 • No. 8

CONTENTS 22 COVER STORY

Cultivating C-Store Careers

The newest addition to Yesway, industry veteran Derek Gaskins is part of a growing number of senior leaders who are switching from other convenience retailers or other industries.

EDITOR'S MEMO

OPERATIONS

8 NAG

64 HR Column: Why a Leadership Mindset Matters

Partners with Folds of Honor

FRONT END 10 On Location: Pony Express Gallops Ahead 14 CSD’s Quick Bites 16 Industry News

18 TravelCenters Moving Ahead with Express Format 20 Convenience Store Solutions: Pumping Up the

Fuel Volume

FOODSERVICE 28 Infusing Quality into Burger, Sausage Programs

34 Selling Bakery Concepts

66 Contract Negotiations Made Easier

BACK END 68 Product Showcase

72 Quick Stop 73 Ad Index

74 Industry Perspective: INVESTing in Future Leaders

40 Equipment Evolution Heating Up 46 Hungry for Dinner

CATEGORY MANAGEMENT 50 Packaged Beverages Trend Upward 54 Cigars Reﬂect Regulatory Heat

TECHNOLOGY 58 Tech Column: Implementing Scan Data Can

Help C-Stores 60 Unwrapping Gift Cards

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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

Contributing Editors Anne Baye Ericksen Scott McKinney Pat Pape Jeffrey Steele

ADVERTISING

Columnists Jim Callahan John McMahon Jeremie Myhren

Publisher John Petersen jpetersen@csdecisions.com 440-250-1583

Production Manager Barbra Martin bmartin@csdecisions.com

Vice President, Sales Tony Bolla tbolla@csdecisions.com 773-267-1897

Associate Editor Marilyn Odesser-Torpey mot@csdecisions.com

Webmaster Dave Miyares dmiyares@csdecisions.com

Creative Director Erin Canetta ecanetta@csdecisions.com

Digital Operations Manager Nicole Lender nlender@csdecisions.com

EDITORIAL ADVISORY BOARD

NATIONAL ADVISORY GROUP (NAG) 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 August 2018

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VIRTUALMART

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

Group Publisher Tom McIntyre tmcintyre@csdecisions.com 440-250-1583

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

NAG Partners with Folds of Honor

OCKY SICKMANN, WHO RETIRED FROM Anheuser-Busch in 2016 and is a survivor of the Iran Hostage Crisis, understands the dangers facing our military servicemen and women. That’s why Sickmann joined Folds of Honor in 2016 as a senior vice president. With his involvement in Folds of Honor, Sickmann has been able to educate and encourage others to support the Folds of Honor mission, which is to support the families of our military heroes who gave their lives in the service of their country. If you don’t know Sickmann’s story, you should. It is literally material for a Hollywood movie. He enlisted in the Marines in 1975 in the wake of the Vietnam War. He spent a few years in the infantry before joining the Marine Corps Security Guard Battalion (present-day Marine Corps Embassy Security Group), which watches over U.S. embassies worldwide.

Supporting military veterans and other “military causes is extremely important to NAG and to me personally. ” In October 1979, Sgt. Sickmann was posted to the embassy in Tehran, Iran. Weeks later, on Nov. 4, radical Islamic students stormed the compound and took Sickmann and 51 other Americans captive. Over the next 444 days he and his fellow hostages were held captive. In April 1980, eight U.S. servicemen died during a failed rescue attempt known as Operation Eagle Claw. Since then, Sickmann has spent much of his career honoring their memory. “In 1980, eight heroic servicemen died attempting to free me and the rest of the Iranian hostages. Their sacrifice is one I will never forget,” Sickmann told me. “I know first-hand that freedom doesn’t come without sacrifice. For that I am incredibly honored to serve with an organization that is dedicated to helping families who’s loved ones make the ultimate sacrifice for our country,” The National Advisory Group (NAG) is proud to announce that Sickmann will be the keynote speaker at the 2018 NAG Conference in Ponte Vedra Beach, Fla. Sickmann will share his experiences and educate attendees on the work Folds of Honor is doing for veterans and active duty military personnel.

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For any Giving Back to America’s Heroes questions about Sickmann was released from capthis issue or tivity on Jan. 20, 1981, just minutes suggestions for after Ronald Reagan completed his future issues, inaugural address after being sworn please contact in as the 40th President of the Unitme at jlofstock@ ed States. He retired from the Macsdecisions.com. rines shortly after his release and joined Anheuser-Busch, where he focused on military accounts for nearly 35 years. Supporting military veterans and other military causes is extremely important to NAG and to me personally. I am a submarine Gulf War veteran, CSD’s Senior Editor Dave Bennett served two tours in Iraq and Bill Donohue, president of Harbor Communications, is a former Marine. Internally, we are always looking for ways to give back veterans’ groups and their families. Folds of Honor, which was founded by Maj. Dan Rooney in 2007, provides educational scholarship assistance to spouses and children of fallen or disabled service members. The group has provided more than 10,000 scholarships to qualified applicants. NAG Conference attendees will be able to support Folds of Honor by purchasing Challenge Coins for $13, which represents the 13 folds to a flag. All money raised will go to Folds of Honor scholarships. Earlier this year, NAG and the Young Executives Organization (YEO) partnered with Habitat for Humanity’s Operation Playhouse to build playhouses for the children of three veterans in Boston. YEO’s mission is to cultivate young talent in the convenience store and petroleum industry. I can’t think of a better way for the convenience store industry’s next generation of leaders to bond and network than by joining together in the service of others. This was entirely a volunteer opportunity, but the response to participate was extraordinary. I hope participation in this year’s NAG Conference and support for Folds of Honor is just as extraordinary. Visit www.foldsofhonor.org to donate to this important organization and register for the 2018 NAG Conference at www.nagconvenience.com to hear Rocky Sickmann’s inspiring story.

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FRONTEND

Profile

Pony Express Gallops Ahead

Pony Express c-stores offer a hub with food, essentials and loyalty rewards for the communities it serves. By Erin Del Conte, Senior Editor

ONY EXPRESS CONVENIENCE STORES IS positioning itself for the future, expanding its foodservice offering, upgrading locations, growing its loyalty program and offering a community hub with essential groceries for residents in food deserts. The first Pony Express location opened in Winnebago, Neb. as a grocery store. The building had been originally designed for The Winnebago Tribe of Nebraska, which commissioned its economic development corporation, Ho-Chunk Inc., in 1996, to use the property to build the first Pony Express store to meet the needs of the community on the reservation. Pony Express remodeled the location to add gas pumps and a restaurant with a lunch menu. “The first location started as a convenience for the community members, so they didn’t need to travel for what they needed. They could get milk and bread and everything they needed,” said Aleisha Barclay, operations specialist for Pony Express.

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Today, Pony Express operates seven convenience stores. Three are located on the Winnebago reservation, two are located on an Omaha reservation and one location is off reservation. The sites range in size from its 12,500-square-foot grocery store to its 1,500-2,000-square-feet traditional c-stores, and all are located in rural areas. Some of the larger stores feature space for a restaurant area with seating. Each store acts as the hub of the community it serves. “Farmers come in in the morning to get their coffee and talk about their day, and some of those same folks return at lunch to see the daily special, and then they may come back again after work to get gas. It’s the place to be in our community. If they need anything that is where they are going to go,” Barclay said. A lot of Pony Express customers— both on and off the reservation— lack access to transportation, and it being a rural area, nearby options are limited. To meet the specific needs of the community, Pony Ex-

The Pony Express Winnebago location features a laundromat, check cashing and a restaurant to better meet the needs of rural residents, who rely on the location as a community hub for most of their shopping needs.

press offers check cashing services at two locations, including the original Winnebago, which also includes a laundromat. While all locations offer fuel and tobacco, two of the stores feature an expanded grocery section. “They offer meat and one of our stores cuts and packages the meat on site,” Barclay said. UPGRADING FOR TOMORROW Pony Express is also embarking on a chain-wide remodel initiative that will make over each store with a new brand design featuring an updated color scheme and logo. So far, two locations have been remodeled, both inside and out, with another set for conversion before the end of the year. Pony Express plans to update at least one store per year until all seven are updated under the new look, which Barclay described as “brighter, more modern and more inviting.”

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FRONTEND

Profile

The redesign takes into consideration that most Pony Express locations act as community hubs, by better utilizing space and creating a more open layout. “I think a lot of convenience stores are overstocked to where it seems like you’re walking through a very tight aisle. With the new design, our customers don’t feel rushed or squeezed, and I think that’s a big competitive advantage for us,” said Ben Preston, marketing manger for Ho-Chunk Inc. FOOD FOCUSED Pony Express continues to develop its foodservice offering. While Pony Express operates a number of programs and promotions in a unified way across its seven stores, when it comes to foodservice the chain opts for different strategies depending on the needs of each location. “Some of our locations are more equipped and built to be the ‘community hub,’ while some are more traditional c-stores where people want to come in and out quickly, so we have different meal strategies for different locations,” Preston said. Two locations feature an expanded kitchen area with 10-15 tables, so guests can eat in the store. These stores offer homemade lunch specials, made in-house daily. “Just this week they had chicken fried steak and mashed potatoes, tacos and chicken noodle soup— all homemade,” said Barclay. Two other Pony Express stores feature a Cooper’s Express co-branded chicken program, which the chain first introduced two years ago, and plans to expand to a third location this year. One store features a Piccadilly Circus Pizza program, while another features a made-to-order unbranded pizza program. All locations feature fryers for products, such as egg rolls, and offer a full roller grill program. Graband-go items are also available at all seven locations, including pre-made sandwiches in the cooler case as well 12 Convenience Store Decisions August 2018

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Pony Express uses different foodservice strategies depending on location. It offers a Cooper’s Express co-branded chicken program at two locations with plans to add a third.

as ‘healthier items’ like fruit cups and yogurt, and high-protein meat and cheese sticks. The two locations with expanded kitchens also offer premade salads. While the majority of Pony Express customers are local repeat customers, most locations are set off a highway, so the chain uses billboards and other signage to alert travelers to its food programs. LOYALTY COMMITMENT Pony Express rolled out its loyalty program three years ago, but in 2017 it began using the program to its full potential, messaging customers and having cashiers mention the loyalty program at every transaction. The result has been a huge increase in usage among customers. To use the Pony Express loyalty program, customers can text to enroll and use their phone number as their ID, or they can opt for a traditional plastic card. “You can type in your phone number at the pump and your gas price will roll back by three cents a gallon,” Barclay said. In addition to the fuel rollback, customers also earn points on merchandise bought in the store based on how much they spend.

“If they spend $10 they get 10 points, and once they get 100 points that equals $1 they can redeem in the store for free merchandise. They also earn points by gallons of fuel bought,” Barclay said. The loyalty program also offers a diesel club program popular with truckers. Not only does it offer a three cent per gallon discount on diesel, but after they use their loyalty card to buy diesel five times they get 500 points ($5), and 10 diesel purchases gets them 1,000 points ($10). Pony Express is also investing in data collection and analysis. “We’re in the early stages of building those out. We’ve invested a lot of time in the loyalty program and now we’re working to be able to track active customers, foot traffic, learn what our peak hours are and analyze the best products to offer, as well as the best times to communicate with customers, so we’re investing more in the backend,” Preston said. In May, customers who used their loyalty card or number were entered into a drawing to win a road trip pack that included a $50 gift card, a 12-pack of soda and a bag of family size chips. On the customer-facing end, Pony Express is working to expand promotions. “A lot of our stores, even in rural areas, are competing with the grocery stores offering gas like Walmart and Hy-Vee, so we’re looking not only at how do we compete on price, but how do we make our loyalty program more valuable to our customers?” Preston said. Currently, Pony Express is positioning for future growth. After 20 years of honing its operations and expanding to seven stores, the chain is ensuring the proper systems and infrastructure are in place to sustain operations as it moves into the future. “Once we do get these systems in place and the infrastructure built, we’ll be able to scale hopefully pretty quickly,” Preston added.

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QuickBites Private Label Preference

FLEX FUEL USAGE GROWS The U.S. market continues to gain traction.

E15

Generation X 31% of all dollars are spent on private brands across all outlets.

Compared to:

Older Millennials 19% of all dollars Younger baby boomers 19% of all dollars.

Americans have driven more than 5 million miles on E15 fuel.

Source: Food Marketing Institute (FMI) and IRI, 2018

Growth Energy and Prime the Pump secured commitments for more than 2,800 retail sites to offer E15 by 2021.

1,400 stations across 30 states offer E15 fuel.

Source: Growth Energy, July 2018

SNACK TRENDS

Estimated retail dollar sales of the U.S. salty snacks industry: $24 billion in 2017, with a compound annual growth rate (CAGR) of almost 4% between 2012 and 2017. The U.S. salty snacks market is predicted to exceed $29 billion in 2022. Source: Packaged Facts’ “ Salty Snacks: U.S. Market Trends and Opportunities”

consumers Foodservice ering and d or e expect th cess to be ro p t en m pay onless. ti ic fr easy and

t fast and Guests expec aurants. st re in i iF free W

74% of guests feel it is extremely important.

60% of those polled feel WiFi is extremely important.

45% of restaurant operators state this capability is operating excellently.

44% of restaurant operators state this capability is operating excellently.

ive expect to rece Also, guests ts and promoun digital disco latform they p y an on s tion ially mobile choose, espec devices.

60% feel it is extremely important 35% of restaurant operators state this capability is operating excellently.

Boston Retail Partners, “Restaurant Digital Crossroads: The Race to Meet Guest Expectations” report.

MORE CUSTOMERS SOCIALIZING AT HOME

28% of younger Millennials (aged 24-31) drink at home because they believe ‘it takes too much effort to go out.’ 15% of baby boomers (aged 54-72) agree it takes too much effort to drink away from home. 55% of American consumers prefer drinking at home.

DRINKING AT HOME IS SEEN AS: • more relaxing (74%) • cheaper (69%) • personal (35%) • helps them control alcohol intake (38%) Source: Mintel, June 2018

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INDUSTRY

News

Riiser Fuels Acquires Mad Max Chain Riiser Fuels Holdings LLC has acquired all 11 convenience stores of Saukville, Wis.-based Mad Max Convenience Stores. “The time was right to sell even though I was looking at additional locations for ground ups and existing sites,” Steve Magestro, president and co-owner of Mad Max Convenience Stores told CSD. Riiser Fuels is based out of Wausau, Wis. and presently operates 34 convenience stores throughout the Wisconsin area. Riiser Fuels is an investment group formed by Don Draughon and J.D. Dykstra in June to acquire Wisconsin-based Riiser Energy and its 34 R-Store convenience stores, according to WSAU News.

Philadelphia Uhholds Sugary Soda Tax The Pennsylvania Supreme Court, on July 18, upheld Philadelphia’s 1.5-cent-per-ounce tax on soda and other sweetened beverages in a blow to soda manufacturers. According to a report by Philly. com, the 4-2 majority opinion found the city of Philadelphia did not violate state law when it introduced the

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tax, after those opposing the tax argued it amounted to double taxation because it is passed on to customers who already pay sales tax on the beverages. Philadelphia became the first big U.S. city to pass a tax on soda and sweetened beverages in 2016.

Wawa, Uber Eats Expand Delivery Wawa Inc. is adding Uber Eats as a delivery option for a specified group of stores that will deliver to select locations in Pennsylvania, Florida and Washington, D.C. Uber Eats will offer food delivery from eight Wawa stores. Wawa locations in Washington, D.C., and Clifton Heights, Pa., are the newest stores to become part of Wawa’s delivery option.

Global Partners Buys Champlain Oil Global Partners LP has completed the acquisition of retail fuel and con-

venience store assets of Vermontbased Champlain Oil Co. The acquisition includes 37 company-operated gas stations with Jiffy Mart-branded convenience stores in Vermont and New Hampshire, and approximately 24 fuel sites that are either owned or leased including lessee dealer and commission agent locations. The transaction also includes term fuel supply agreements for approximately 65 gas stations, primarily in Vermont and New Hampshire. The 126

stations primarily market major fuel brands such as Mobil, Shell, Citgo, Sunoco and Irving.

Rutter’s Welcomes New Fuel Director Chris Hartman has joined York, Pa.-based Rutter’s as director of fuels and forecourt, marking the 11th generation of the family to join the business. In this new role, Hartman will oversee the procurement and retail of all fuel products for Rutter’s convenience stores including the Fleet Card Program. He will also manage the forecourt experience, which encompasses car washes, air and vacuum, EV charging and signage for all locations.

Minit Mart Debuts ‘GoGo Rewards’ TravelCenters of America’s Minit Mart Convenience Stores is introducing a benefits and rewards program for customers called GoGo Rewards. Members will earn 20 points for every $1 spent in a Minit Mart store and 10 points for every gallon of gasoline purchased. Points can be redeemed

for store merchandise or discounted fuel prices and exchanged for $5 Minit Money certificates to be used as cash for purchases in almost 300 Minit Mart stores. Additionally, members will be eligible for a wide range of frequency club offers and participation in a sweepstakes.

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FRONTEND

News

TravelCenters Moving Ahead

with Express Format

New travel center model offers broader platform for potential franchisees. By David Bennett, Senior Editor

ravelCenters of America LLC, operator of the TA and Petro Stopping Centers travel center brands, will be able to provide its customer base more wide-ranging service with its new TA Express model, expected to officially launch by the end of 2018. Barry Richards, president and chief operating officer of TravelCenters, told Convenience Store Decisions the company is now scouting locations that will be suitable to site the company’s prototype model. He explained TA Express will offer the retailer more geographic flexibility as well as a more appealing calling card for potential franchisees The Westlake, Ohio-based retailer also operates the Minit Mart convenience store brand.

NETWORK CAPACITY “We can do ground up, but 20-25acre parcels are becoming scarcer and scarcer that are convenient to the interstate,” said Richards. “So, we felt there was demand for more locations because we had those requests from customers—from fleets—but there are some holes in our network.” A typical tract for a TravelCenters site occupies 24 acres and when developed provides parking for about 200 trucks. Most locations include a full truck repair center, usually a fullservice restaurant, one or two quick service restaurants (QSR), fresh ‘to-go’ meal selections, showers, a driver’s lounge, a laundry and other amenities. The TA Express model would likely encompass 10-15 acres, with a 9,000-square-foot center, which is about half of a normal building foot18 Convenience Store Decisions August 2018

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Westlake, Ohio-based TravelCenters of America is expanding its foray of retail services with its new TA Express platform, which will provide patrons more geographic outlets. print. Parking space would accommodate approximately 100 trucks. Even with the smaller TA Express model, patrons shouldn’t expect anything less in terms of the services they have come to expect from TravelCenters. “Our reduced-size offering will be equal to most known travel center operations that are out there today,” said Richards. Depending on the layout, the model might not be able to fit a fullsize restaurant, said Richards. Rather, the TA Express model can chose from multiple QSRs that TravelCenters operates at its various locations including Burger King, Dunkin’ Donuts and Tim Hortons. TA currently offers more than 500 full- and quick-service restaurant locations at its stores across 43 states. TA Express sites also will increase the number of fueling options for professional drivers and will accept the same fuel programs and payment methods as traditional TA and Petro locations. In addition, professional drivers in TravelCenters’ UltraONE Program will be able to earn and redeem points at TA Express locations.

FRANCHISE MODEL Also, the introduction of the new TA Express platform should help breathe new life into the company’s franchise program because of the flexibility to add potential locations into the entire TravelCenters network, providing an advantage to franchisees as well, said Richards. Of 179 TA sites, 14 are franchises. Of the 77 locations that are part of the Petro portfolio, 13 are franchises. A model that has operated for 40 years, the company’s franchise platform is set to grow, offering seamless advantages for both TravelCenters and its franchisees, Richards said. “We have some great operators out there flying our flag,” said Richards. “But, we have the capability to do a lot more. It’s a great way to grow the brand.” TravelCenters is currently reviewing potential parcels now and expects to have at least one TA Express location up and running by the end of 2018. Richards said that densely populated areas such as Dallas, Houston and Chicago are potential locations that the retailer will assess. Any site selected will include reasonable proximity to freeways and good distribution points. At the beginning of 2018, Richards replaced Thomas O’Brien, who ended his run as chief executive officer of TravelCenters, steering the company for nearly 11 years. The company’s board of directors also at the time tapped Andrew Rebholz, a longtime employee and then the current chief financial officer and treasurer, to be the next CEO.

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CONVENIENCE STORE SOLUTIONS

Pumping Up the

Fuel Volume

By putting fuel volume in the proper light and focusing on growing that fuel capacity, it can boost inside sales. By Jim Callahan, Contributing Editor

HERE’S INDEED AN IMPORTANT CORRELATION between the gallons of fuel convenience retailers sell and the number of dollars earned as part of their inside sales. Retail gasoline prices are among the most recognizable price points in American commerce. And with good reason: gasoline purchases account for approximately 5% of consumer spending in any given year, according to the Fuels Resource Institute. In 2017, the average household spent $2,450 for gasoline—about 4.3% of total household income. No doubt, the dollars customers spend inside a convenience store, after purchasing their gas, is a significant amount as well. In fact, fuel sales are the single most important element in driving inside sales. Of course, relying on fuel volume and fuel sales as the only measuring stick of a store’s business success is skewed. There are a host of factors that determine if a store is profitable, just like there are a host of factors when determining overhead costs. OLD THINKING There is a concept that was once prevalent in the industry that existing fuel gross profits should pay for the costs associated with the rent/lease/mortgage of a convenience store. What’s more, some owners still calculate electricity and other utilities into that figure. Fuel retailers face the same question that all retailers face: sell at a low profit per unit and make up for it on volume, or sell at a higher profit per unit and expect less volume. Either way, margins on fuel sales aren’t that great. Sometimes, fuel sales and the cost of doing business are linked. For example, stores in areas in which real estate costs are higher may pass along this cost of business. Also, seasonal factors may apply. Store owners in areas where customer traffic dramatically drops off off-season may need to adjust their business model. Yes, selling fuel is complicated. Still, there are operators that look at their profit and loss statements (P & L) and feel that inside sales are where their profit emanates from and they come to look at fuel

20 Convenience Store Decisions August 2018

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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.

offerings as a necessary evil, especially when they have to write that big check for a tanker full of gasoline and diesel. Rather, maintaining healthy fuel volumes is good for overall business. Just don’t hang too big of a hat on those sales, as in relying on those fuel sales to cover much of the operational overhead. Hopefully, fuel is serving another important role: getting patrons inside the store. Here are few things that might keep fuel volumes in perspective: • Each and every operational department should contribute its fair share of the entire overhead of the store. That’s one way of knowing which departments are making a profit. Of course, there are various types of overhead costs and there are various ways for a store to conduct a thorough examination of its profitability. • By putting fuel volume in the proper light and focusing on growing those volumes you will see and appreciate the correlation between the two. Inside sales in every single department will increase proportionally and you will have more profit in more categories. • I grew up in the era of the major oil companies controlling retail pricing and watched in disbelief as they refused to acknowledge that companies such as QuikTrip, Wawa, RaceTrac and Sheetz often would price below them. The independents didn’t have to steal the markets as the majors just handed it to them, thinking that they were not real competition because they did not fly a major oil flag. How did that work out for the majors? They eventually sold many of their stores and now are merely suppliers to both their branded customers as well as those same independents. My best advice is to protect your fuel volume. Stabilize it first and then enable it to grow. Successful c-stores have earned their dominance in that strategy and the red ink they once had on their P & L’s protecting and growing their volumes is now a bright shade of black. And, they don’t plan on losing it. cstoredecisions.com

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Cover Story

Transitioning Leadership

Cultivating C-Store

Careers The newest addition to Yesway, industry veteran Derek Gaskins is part of a growing number of senior leaders who are switching from other convenience retailers or other industries. By David Bennett, Senior Editor

ount Derek Gaskins among the deepening pool of senior professionals who are finding new niches in the convenience store industry. As the new senior vice president of merchandising and procurement for BW Gas & Convenience, d/b/a Yesway, headquartered in Des Moines, Iowa, Gaskins acknowledges that he brings a wealth of experience and industry knowledge to the newly created role. He also reflects a growing number of senior leaders who are either transitioning to successful convenience chains from other c-store chains, or are bringing their talents to convenience retailers after stints in other industries, including quick-service restaurants, transportation or the military. The convenience store industry is no different from some other industries that are thriving in a healthy U.S. economy where unemployment statistics are at near-record lows and there’s a high premium on senior professionals. Consider: • The unemployment rate for those ages 55 and over is 3.2% as of February 2018, according to the U.S. Bureau of Labor Statistics. • That’s lower than the current unemployment rate of 4.1% for the entire U.S. population and 14.4% for teens. • More companies are hiring experienced senior workers in this tight labor market. A native of Washington, D.C., Gaskins said he has heard from many in the industry who were surprised to hear he had opted this past June to leave Rutter’s, where he had earned a reputation for helping develop several modern service programs as part of his responsibilities as chief customer officer at Rutter’s—which itself is now generating attention among other progressive c-store chains. 22 Convenience Store Decisions August 2018

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ing its advertising mix to encompass social media, mobile, cable, television and radio. He also helped revamp the store branding and remodels to help achieve record company growth. All of his talents made Gaskins a great get for Yesway. Thomas Trkla is the founding member, chairman and CEO of Brookwood Financial, parent company to Yesway, where he also serves as chairman and CEO. Trkla directs all aspects of Brookwood’s and Yesway’s businesses, including managing operations, shaping and setting the company’s culture. Brookwood, a Massachusetts-based private equity investment firm specializing in acquiring and managing value-add commercial real estate and related businesses, launched Yesway with the acquisition of Country Stores, a 10-store portfolio in western Iowa, in December 2015. Now the convenience chain has grown—mainly through acquisition—to at least 150 sites. The company reached its 150-store milestone and has significantly expanded its footprint into three new states —South Dakota, Wyoming and Nebraska with the acquisition of 26 Fresh Start convenience stores. “Yesway is a brand on the move,” said Gaskins, “the culture in many ways is that of a startup, and is filled with extremely intelligent, driven, passionate team members.” The high-functioning marketing and category management team that Gaskins touts includes Jeff Keune, senior vice president of food service and innovation, Darrin

“It was a very difﬁcult decision to make. (President & CEO) Scott Hartman is a strong mentor to me personally and professionally,” said Gaskins. “Scott gave me an opportunity to help drive Rutter’s brand to new heights, and the Rutter’s family will always be special. The culture was dynamic, and I am forever appreciative of the opportunity I had to lead the brand.” Prior to his tenure at Rutter’s, Gaskins served as senior vice president in marketing and merchandising with MidAtlantic Convenience Stores and as vice president of marketing with the National Association of Convenience Stores (NACS).

TALENT SHOW During his tenure at Rutter’s, Gaskins spearheaded the VIP tier of the Rutter’s Rewards loyalty program to capture more information on consumer segments, buying behaviors and category afﬁnities. Other achievements included helping raise Rutter’s to new digital heights by expandcstoredecisions.com

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Shifting Executive Tide Not all company transitions of high-placed executives are smooth. Scott Keller and Mary Meaney earlier this year published a report, “Successfully Transitioning to New Leadership Roles” for McKinsey& Co. describing some of the challenges that companies face. Leaders ranked organizational politics as the main challenge: 68% of transitions falter because of issues related to politics, culture and people, and 67% of leaders wish they had moved faster to change the culture. These matters aren’t problems only for leaders who come in from the outside: 79% of external and 69% of internal hires report that implementing culture change is difficult.

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Cover Story

Transitioning Leadership

represents the latest addition “Derek to Yesway’s senior leadership team. With his hiring, Yesway’s leadership now includes distinguished industry veterans overseeing each aspect of the company’s operations, each bringing a unique and indispensable perspective to our way of doing business.

”

Thomas Trkla, chairman and CEO, Yesway

Samaha, vice president and brand manager and Tony Sparks, vice president of merchandising. “Tom Trkla has assembled a team of superheroes,” said Gaskins. “The executive team is comprised of many of the best and brightest from a broad range of industries. We are bringing a collaborative approach, backed by our collective knowledge, insights and energy to the table to deliver the Yesway strategic growth.” Trkla was glad to add Gaskins and his multifaceted talents to the mix. “Derek represents the latest addition to Yesway’s senior leadership team,” said Trkla. “With his hiring, Yesway’s leadership now includes distinguished industry veterans overseeing each aspect of the company’s operations, each bringing a unique and indispensable perspective to our way of doing business.” In addition to shared vision on how they see Yesway expanding its retail presence, both men are products of the Kellogg School of Management at Northwestern University, which “develops brave leaders who inspire growth in people, organizations and markets.”

GOOD TIME TO SWITCH John Schaninger joined QuickChek Corp. in 1978 as an assistant manager, growing through the operation’s ranks from assistant manager to become vice president, sales and marketing. Last year, he departed the successful c-store chain to launch the Schaninger Group, a retail consulting firm. He explained that as the c-store industry recruits and retains better talent, it will become a sought-after industry for executives to transition to. As more talent comes, more are sure to follow. “We have seen quite a few (convenience) retailers now 24 Convenience Store Decisions August 2018

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achieving ‘Best Places to Work’ status, either in their states or national,” said Schaninger. “This reflects a true commitment to the team members, and typically encompasses encouragement to personal growth, reward and recognition. As we focus more on developing teams, we are able to keep those individuals within the industry.” As more convenience retailers become first-class, the industry as a whole benefits. Take Yesway, which is priming its leaders for challenges in and outside the convenience business. “Working at Yesway provides a solid career foundation within the c-store industry that can be translated to other industries as well,” said Trkla. “Our careers and training teach social skills, personal accountability and salesmanship. In addition, as one continues to grow within the organization, he or she will build financial acumen and leadership skills. John Matthews is president and CEO of Gray Cat Enterprises, a planning and marketing services firm. About 20 years ago, Matthews was vice president of marketing for White Hen Pantry, a successful c-store chain that was breaking new ground in foodservice and other service segments at a time when much of the industry was treading heavily to make a profit. “I’ll admit, when I first looked at joining the c-store industry in 1997 I was skeptical. Then, I started to understand the complexity of the business and became fascinated. Coming from the quick-service restaurant industry, the c-store industry presented a tremendous opportunity to expand my

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Cover Story

Transitioning Leadership

The unemployment rate for those ages 55 and over is 3.2% as of February 2018, according to the U.S. Bureau of Labor Statistics. scale, scope and skill set,” said Matthews. “From dealing normal part of my job. In the end, I decided to take these with 4,000 SKU’s; to categories that reach every customer new skills and seek opportunities elsewhere, which led me segment including age-restricted products; the dynamics to Tri Star Energy.” Her vast HR experience has helped Cox’s transition at Tri of gasoline as a driver in the industry; interfacing with the biggest brands in America like Coke, Pepsi, R.J. Reynolds, Star and Twice Daily go smoothly. Cox acknowledges the Philip Morris, Anheuser-Busch, etc.; and customer traffic biggest challenge at her new company has been to learn an volumes that dwarf the QSR industry. It provided me the industry that incorporates many business disciplines. “The biggest challenge has been grasping the nuances opportunity to expand beyond marketing to merchandising, real estate management, facilities management, etc. to of the various lines of business—distribution, supply, commercial, retail, wholesale—and how they operate together become a better-rounded executive.” All of that can be enticing for senior executives looking yet individually. Also, understanding the metrics and importo make a career change, which is happening more and tant terminology and how those impact the HR world, has more. In turn, these career changes are helping make the been critical to getting more comfortable in my role here.” Since Cox joined Twice Daily, it has rolled out sevindustry fuller and more dynamic. “I always said—even back in the ‘90s—that when the eral impactful programs and initiatives over the past year, transformation of the industry starts to attract people from including the creation and implementation of a new career other industries, the talent surge will accelerate,” said page. The company has also provided a platform to help Matthews. “I remember telling folks that if the VP of mar- drive its employment branding as well as help drive organic keting from the GAP or Panera were to join this industry, traffic to the company’s site. In her HR role, Cox has helped reconfigure Tri Star’s c-stores would take on a whole new look and feel.” employee benefits portfolio, which has proven to be a strong tool for recruiting and retaining workers. JOINING THE RANKS “We converted our 401K plan to a safe harbor plan while Christy Cox has brought a wealth of business competencies to Nashville, Tenn.-based Tri Star Energy, which rolling out a unique initiative to increase our 401K participaincludes the Twice Daily convenience chain as its vice presi- tion, which has been very successful. Recently, we rolled out our new team member assistance fund called Tri Star Cares. dent of human resources (HR). B e f o r e t h a t , C o x This fund was created to provide financial support for our spent 20 years at Logan’s team members who are facing personal or family hardship Roadhouse restaurant as a result of a catastrophic event,” said Cox. “Finally, our chain, some of that time new performance management program creates a culture as director of human of continuous feedback and recognition by introducing a resources. When she platform by which the team members receive consistent, learned of an opportunity on-going feedback throughout the year, as opposed to a that entailed jumping to once-a-year evaluation.” Matthews explained that Cox and other talented individthe c-store industry a year ago, it came at the right uals will spell the future of the convenience store industry. time in her professional It will be on the c-store industry to ensure that talent pipeline continues. career, Cox said. Convenience store retailers need to cultivate this talent “Logan’s Roadhouse had been through a lot in order to survive and hopefully prosper,”said Matthews. of transition over the past “The new store designs that now accommodate foodservice Christy Cox is one member of the few years. During that require that companies find the appropriate talent to mannew generation of retail experts time, I had many opportu- age these migrations. In some cases, the talent can come who are joining the convenience nities to learn more about from within. In many cases, it has to be brought in from store ranks. things that had not been a other industries.” CSD 26 Convenience Store Decisions August 2018

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Foodservice

Burgers & Brats

Infusing Quality into

Burger, Sausage Programs Whether it’s a classic offering or a meatalternative, customers demand fresh, quality burgers and sausages. By Erin Del Conte, Senior Editor

his summer’s big barbecue trend sounds like something of an oxymoron: vegan barbecue. Nonetheless, as customers seek to up their protein intake while also keeping an eye on healthy eating, plant-based foods are finding their way onto grills and menus this summer. Market research ﬁrm Mintel found omnivores looking to eat healthier on occasion are driving the vegan barbecue trend, buoyed by a surge in specialty vegan products—like black bean chipotle. Some 33% of U.S. consumers plan to buy more plant-based food products in the next year, according to Mintel. NPD Group, a global information company, found that as consumers demand more protein in their diets, they’re increasingly looking to incorporate plant-based proteins. Some 60% of U.S. customers tell NPD Group they want more protein in their diets, and 14% (43 million customers) regularly use plant-based alternatives like veggie burgers and tofu, even though 86% of these customers don’t consider themselves to be vegan or vegetarian. Warrenville, Ill.-based The PRIDE

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Stores, which operates 12 c-stores in the Chicagoland area, features two alternative meat options—a turkey burger and a veggie burger—at its Urban Counter restaurants, which are known for hand-pressed, made-toorder burgers. “I think they do perceive that as healthier. And it is,” said Mario Spina, owner & CEO of The PRIDE Stores, of the alternative meat options. Some patrons even opt for chopped veggie burger as the “meat” on top of a salad. “People do get excited when they see a turkey burger or a veggie burger on the menu because there’s an

option instead of just having a regular burger all the time,” Spina said. While Urban Counter makes all of its regular burgers on-site, it purchases the veggie burgers instead of making them in house. Spina has noticed a lot of burger places adding black bean burgers lately to appeal to those seeking an alternative. The numbers back up the trend. NPD found 19% growth in cases of alternative proteins shipped from broadline foodservice distributors to independent (one to two units) and micro-chain (three to 19 units) restaurant operators in the year ending March 2018, compared to same

Fast Facts: » After years of fancy foodie trends, many customers are looking for a classic burger. » As customers seek to up their protein intake while still being healthy, many are seeking alterative or plant-based options. » Value, quality, freshness and price are top considerations of customers. cstoredecisions.com

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Foodservice

Burgers & Brats

period a year ago. Beef alternatives things, and I think at the end of the are the main driver of the category’s day the people go back to what used growth and account for 44% of the to make a burger, what a basic burger used to be,” he said. plant-based products being shipped. Customers want simple, quality While burgers are the largest beef alternative category, ball products—like ingredients, including bread with butmeatless meatballs—that are used as ter, pickles, lettuce, tomato, onions, ingredients have surpassed burgers and house-made ‘secret’ sauces and freshall other plant-based protein products in made burger patties, he said. “I think everything is kind of cyclical and goes terms of growth, according to NPD. David Portalatin, industry advi- back to the basics. We’ve been seesor for NPD’s Food Sector, pointed ing a lot of that. The classic burger we out that the plant-based protein cat- have seems to be our best seller.” When The PRIDE Stores first introegory has mainstreamed beyond people who choose a meatless diet. duced its Urban Counter restaurant, “Food manufacturers and operators Spina said he wanted the food to have really improved the quality and stand on its own and compete with taste of plant-based foods over the any burger establishment out there. past several years and these foods “At first, people were shocked when are appealing to a variety of consumer we asked them how they wanted their burger cooked. They could not believe segments for a variety of reasons.” we were making them a hand-pressed, half-pound, cooked-to-order burger BEEFED UP But obviously, not everyone is out of a gas station.” Today, its burger business is boomlooking for a meat alternative. The majority of customers to The PRIDE ing. The c-store chain operates five Stores’ Urban Counter restaurants are Urban Counters with plans to add there for something meaty. The big- three more by the end of the year. It’s gest burger trend Spina is seeing is currently building two new convenience stores—one in Naperville, Ill., demand for a classic burger. “It always seems that everything and one in Palatine, Ill., both of which goes back to the beginning with every are slated to include Urban Counters. trend. There’s been a lot of really cool “We also just purchased a station in and new burgers out there and people West Chicago, Ill. that we are currently trying a whole bunch of really creative remodeling that will have an Urban Counter as well,” Spina said. Last fall, Urban Counter introduced its first special burger, which it called its “Fall Burger.” “It was a housemade seasoned turkey patty topped with cranberry jelly, crispy fried onions, arugula, cheddar cheese on a brioche bun,” Spina said. This summer, Urban Counter is introducing a summer special “Avocado Burger,” which offers a house-made, half-pound burger patty topped with roasted jalapeños, balsamic onions, Provolone cheese and avocado on a brioche bun. When The PRIDE Stores first introduced its Given customer enthusiasm, The Urban Counter restaurant, customers were PRIDE Stores is considering adding a limsurprised to find hand-pressed, half-pound, ited-time-only burger for every season. cooked-to-order burgers at a gas station. In addition to burgers, Urban 30 Convenience Store Decisions August 2018

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Counter also offers sausages, including Italian sausage, Polish sausage and bratwurst, which are popular with customers. “At our Saint Charles-based freestanding Urban Counter location, we’ve been carrying a larger menu because we’ve got the space there. We do a smoked Andouille sausage. It’s got caramelized onions, roasted mushrooms, a grain mustard and it’s on a French bread roll,” he said. Urban Counter offers upscale bread carriers for burgers and brats. “We try to keep it minimized as much as we can because it’s easier to use. You don’t have to keep much inventory on bread, and the bread stays fresher,” Spina said. It offers a poppy-seed bun for hot dogs, and a French bread roll for the bratwurst and the smoked Andouille sausage. The burgers come on a brioche bun. “It makes it a little more upscale than just a regular old bun,” he said. “Our burgers are big and juicy and they come with a lot of different toppings depending on what you get, so the brioche bun holds that in a little bit better than a standard bun would do. A standard bun would fall apart right away.”

LET’S BE FRANK Des Moines, Iowa-based Yesway Convenience Stores offers an assortment of hot dogs and sausages on the roller grill, focused on delivering the best value via quality, freshness and price. “We serve an all-beef hot dog and are looking to make sure that we are managing our offering to ensure that the hot dogs are available (in stock), fresh and great tasting,” said Jeff Keune, Yesway’s senior vice president of food service and innovation. In addition to the all-beef hot dog, Yesway offers brats, pepperjack sausage, smoked sausage with cheddar and Polish Sausage. Customers can dress their sausages with a set of condiments available in squeeze bottles or packets that are held cold. Condiments include ketchup, mustard, relish, mayo, spicy

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Foodservice

Burgers & Brats

During the breakfast daypart, mustard, jalapeños, banana peppers, Yesway features a breakfast sausage pickles and sauerkraut. “We are currently exploring an biscuit as part of its value menu. “We expanded set that could include sig- also serve maple pancake sausage nature sauces / condiments to further and blueberry pancake sausage roller elevate the offering and deliver great grill items and both have done very well,” Keune said. taste,” Keune said.

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Yesway, which is a two-year-old company with numerous industry veterans among its ranks, is at the start of its foodservice development, having brought on Carlos Acevedos as its culinary innovation and research chef last October. The chain is currently looking into adding burgers to its menus. “We have a number of burger ideas in development,” Keune said, including Day ‘N Night Bites burger products as part of its packaged commissary offering. “We have done burger promotions around these products and they have done well,” he noted. Yeway currently operates 150 stores in Iowa, Kansas, Missouri, Oklahoma, Texas, South Dakota, Wyoming and Nebraska. The chain plans to acquire 500 convenience stores in the U.S. over the next several years. As acquisitions grow, the chain is noticing opportunities to expand its foodservice lineup. “We are partnering in a number of locations with Orion Foods and other branded concepts,” Keune said. “In addition to partnerships we are building platforms of our own that might include burgers, but that is still something that is in its early stages of development.” CSD

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Yesway offers all-beef hot dogs, brats, pepperjack sausage, smoked sausage with cheddar and Polish Sausage as part of its roller grill program.

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Foodservice

Bakery

Selling Bakery

Concepts

Proprietary bakery products not only boost convenience store breakfast sales but can be a game-changer all day long if retailers emphasize the freshness factor. By Marilyn Odesser-Torpey, Associate Editor

t was no surprise that one of the most popular booths bread sales in existing locations, Kwik Trip and Kwik Star have at the International Dairy Deli Bakery Association’s maxed out the production capacity of their 160,000-square(IDDBA) Show and Sell in June was the one making foot proprietary Kwikery Bake Shoppe. The company is doughnuts on the spot, according to Eric Richard, building a second 200,000-square-foot bakery that will open IDDBA’s education coordinator. Consumers, he said, sim- later this year dedicated to producing breads and buns. Bakery products are delivered to the stores from the curply can’t resist the sight and smell of fresh bakery products. A customer might come into a convenience store for just rent facility to be thawed, some baked off or heated in a a cup of coffee, but put a tempting-looking doughnut, muf- TurboChef oven and some finished with icing or other topfin, pastry or breakfast sandwich on house-baked bread in pings. The products are displayed in a 10-foot, three-shelf, front of him and a breakfast sale is likely to follow. And even self-serve display case. Two or three tables are also placed when a morning treat is just a sweet memory, the delicious throughout each store to merchandise three- and six-packs impression it left will bring that customer back for more of popular items such as doughnuts, muffins and cookies. Doughnuts are by far the stores’ best sellers, Servais and not just for breakfast, but throughout the day, said Paul Servais, food ser- noted. For its premium line of raised-yeast doughnuts, vice director for about the bakery produces a dozen items including long johns, 600 Kwik Trip and Kwik Persians, fritters and bismarks. In addition, it offers a signaStar stores in Wisconsin, ture glazed doughnut, three kinds of fried cake doughnuts and four old-fashioned dunkers. Minnesota and Iowa. » Seeing is buying when it Every day, the stores display eight different types of A recent week’s unit comes to quality bakery count from the stores cookies; 10 flavors of muffins, a cinnamon roll, four varietproducts. showed that 3.5 million ies of bars, four kinds of bagels and 16 different breads and bakery items (exclud- rolls. The bakery just added an apple turnover as part of its » Retailers can engage baking bread and buns) premium line and introduced a caramel icing to compleery customers with limitedment its chocolate and cinnamon pastries. were sold. time-only contests. “We regularly add new items to our bakery section to With the opening of new stores (the com- keep things fun and fresh for our customers,” Servais said. » Also, emphasize the conThe apple turnovers are thawed and finished in the pany added 70 new cept “made fresh for you.” stores in the past year) stores’ ovens. Bagels are thawed and given a few minutes and strong pastry and in the oven “to bring them back to life,” said Servais.

Fast Facts:

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Foodservice

Bakery

“Finishing items in-store adds time and labor, so we limit the number of items that require it,” Servais said. “But we also want to offer our products at their best.” Kwik Trip and Kwik Star are working on a limited time only (LTO) program for their premium and cake doughnuts, cookies and muffins. LTOs remain on the menu for three months at a time. LTOs can be a great way to engage and communicate with customers to find out what products and flavors are trending, IDDBA’s Richard said. “Ask customers when they’re in the stores or through a social media contest what products and flavors they would like to see featured,” said Richard. “It’s a way to test the waters and, if the items are a hit, they can be added to the permanent menu.” Kwik Trip and Kwik Star stores do “tons of sampling” and use colorful signage to make sure customers are aware of their bakery products. Every day, they also run a price promotion for one of the items.

INCREMENTAL SALES While doughnuts have long been, as Richard described it, “the white board of bakery,” allowing retailers to innovate with frostings and toppings (a Velveeta- and Spicy Cheetos-topped doughnut was the talk of the Show and Sell), soft pretzels also offer countless opportunities to show creativity and set stores’ programs apart. “Doughnuts are still king,” said Chuck Moyer, food service category supervisor for York, Pa.-based Rutter’s convenience stores. Each day the stores showcase eight varieties, including glazed, cream-filled and iced sprinkletopped to appeal to kids. But, for the past 15 years, sweet-dough soft pretzels have been so “hugely successful” that they are also a signature item for the stores. Pretzels are available pre-wrapped at the register for grab and go or through the in-store restaurants’ ordering kiosk.

Customers choosing the kiosk option can have their pretzels heated up and/or adorned with a sweet or savory topping such as cinnamon butter or garlic butter. Side dipping sauces are also offered for both the regular-size pretzels and baked-to-order pretzel bites. Rutter’s baked-on-site cookie program is also robust, Moyer stated. It features four varieties that are baked every day, three core flavors and an LTO that changes at least three times a year. Single cookies are sold from the standard-size, 16-tray bakery case. They are also packaged in threes and displayed in multiple areas such as the coffee condiment bar and check-out area. “The majority of our volumes come from strategic positioning of packs,” Moyer said. Door clings on the milk cooler promote the classic pairing with cookies. Muffins are more than a breakfast item at Rutter’s. Three core flavors and a seasonal LTO sell all day as breakfast to customers who work the second and third shifts and many shoppers eat them as an anytime snack, he said. Some desserts such as tiramisu and cheesecake come in frozen to be thawed and portioned. They are available in the bakery case and through the kiosks as upsell items throughout the day. “Bakery is oftentimes an incremental sale, an easy catch for convenience stores,” Moyer said. For sandwiches, Rutter’s stores bake their own sub and ciabatta rolls. Earlier this year, Moyer added two kinds of loaf cake slices to the bakery selection. He noted that the appeal of the slices spans all dayparts from breakfast through dessert, which makes it a strong c-store item. By early August, Rutter’s will have 71 locations in Pennsylvania and West Virginia with four more expected to open in 2018 and will enter the Maryland market. Fifty-seven of the current stores bake on site in pre-pro-

For the 52 weeks ending March 25, 2018, fresh bread and rolls were the best-selling bakery products in the U.S., with sales amounting to

$13.39 billion. Source: Statista

36 Convenience Store Decisions August 2018

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7/25/18 8:14 AM

9 TH - 12 T H BER TEM

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

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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 â&#x20AC;˘ jlofstock@csdecisions.com SUPPLIERS should contact John Petersen 440.250.1583 â&#x20AC;˘ info@nagconvenience.com

7/25/18 4:56 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, Ponte Vedra Inn. featuring keynote speaker Rocky Sickmann, Senior Vice President, Folds of Honor 9 pm – 12 am: Hospitality Suite

NAG so unique. Attendees will be formed into small groups of non-competing chains to discuss relevant business issues. 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. Rocky Sickmann

MONDAY, SEPTEMBER 10 7 am – 8 am: Breakfast 8 am - 8:15 am: Welcome/Conference Overview

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 values that are passed on from generation to generation. In this session, hear from three leading retailers who 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, NAG

Bill Douglass

Charley Jones

Steve Loehr

12:15 pm - 1:15 pm: Lunch 1 pm - 5 pm: NAG Golf Outing, Ponte Vedra Ocean Course. (Boxed lunch will be served.) 1:30 pm: NAG Retail Store Tours: The Best of Jacksonville 6:00 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: • Keith Boston, Vice President of Foodservice, Cumberland Farms • Carlos Acevedo, Culinary Innovation and Research Chef, Yesway • Brad Chivington, Senior Vice President, High’s of Baltimore Moderator: Jerry Weiner, Weiner Consulting Co.

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 technological future holds for convenience stores. SPEAKERS: • Paul Martin, UK Head of Retail Operations, KPMG • Kyle Nel, Executive Director of Lowe’s Innovation Labs • Marco Mascorro, Co-Founder and CEO, Fellow Robots Moderator: Bob O’Connor, President and CEO, Jetz Convenience Centers

Paul Martin

Kyle Nel

Marco Mascorro

Carlos Acevedo

Brad Chivington

Jerry Weiner

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 convenience store retailers on how their new 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, Brand Manager, Southwest Georgia Oil Moderator: John Schaninger, President, The Schaninger Group

Bob O’Connor

10:45 pm – 12:15 pm: Information Exchanges Part 1 The Information Exchanges are the heart and soul of what makes

NAG_0818_4Pager_Rev.indd 2

Keith Boston

Danielle Mattiussi Jacque Hager

Spencer Thomas

John Schaninger

7/26/18 11:25 AM

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 should plan on how to respond effectively. • Private Label Product Branding. Jeremie Myhern Environmentally-friendly packaging, bulk offerings, new coffee opportunities, how to maintain freshness. • Human Resources: Embracing Technology. Moderator: Chris McKinney, Director of Human Chris McKinney Resources, Sprint Mart 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. SPEAKERS: • Hannah Holt, Marketing & Operations Director, Holt Oil • Stephanie Mahoney, Food Services Development Manager, MFA Oil Co. • Larry Jackson, Managing Director, Good to Go Markets Moderator: John Zikias, Chief Operating Officer, Holmes Oil Co.

tion challenges, keep up with the latest technology and demonstrate strong business acumen. 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)

Linda McKenna

SPEAKER: • Linda McKenna, Principal, Employee Performance Strategies Inc.

5:30 pm - 6:30 pm: NAG Reception 6:30 pm - 9 pm: NAG CONFERENCE DINNER & AWARDS CEREMONY. NAG honors Scott Apter, Apter Industries 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, President, Gate Petroleum Car Washes Moderator: Peter Tamburro, General Manager, Clifford Oil

Bill Martin Hannah Holt

Stephanie Mahoney

Larry Jackson

John Zikias

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 reten-

Scott Apter

Michael Meyer

Hill Peyton

Peter Tamburro

10:15 am - 10:30 am: Break 10:30 am - 11:30 am: Ideas Boot Camp: Gamechanging ideas retailers can take home with them that are guaranteed to boost retail proﬁtability. John Lofstock

SPEAKERS: John Lofstock, Executive Director, NAG

11:45 am: Conference Wrap Up and Takeaways 12 pm: Depart

Thank you to our sponsors:

NAG_0818_4Pager_Rev.indd 3

7/26/18 11:26 AM

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.

NAG_0818_4Pager_.indd 4

7/25/18 4:56 PM

Convenience Store Decisions Honors Kwik Trip as the 2018 Chain of the Year!

th Chain of the Year Award

Join us as we honor the Wisconsin retailer’s decades-long commitment to co-workers, guests and the communities it serves. The industry will recognize Kwik Trip on October 8th, 6pm-9pm at the Stratosphere Hotel and Casino in Las Vegas during the NACS Show. Kwik Trip exempliﬁes what it means to be a “people company.” It is fully committed to customers, employees and its vendor partners, not as a strategy to grow the business, but because it’s the right thing to do. When this is your core mission, greatness surely isn’t far behind. The chain serves as a shining example of how to serve others and for this reason the Editors and the Editorial Advisory Board of Convenience Store Decisions are proud to honor Kwik Trip as the 2018 Convenience Store Chain of the Year. RETAILERS ONLY Register here: https://2018kwiktrip.eventbrite.com SUPPLIERS CONTACT: Tom McIntyre, Group Publisher, Convenience Store Decisions 440.250.1583 • tmcintyre@csdecisions.com

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7/23/18 1:12 PM

Foodservice

Equipment

Equipment Evolution Heating Up As foodservice equipment continues to advance, delivering the ability to prepare food more quickly and with greater taste and quality increasingly spells the difference between robust success and mediocrity. By Jeffrey Steele, Contributing Editor

Fast Facts: » Setting the right equipment for foodservice operations means thinking in store as well as in kitchen. That means open-air coolers as well as hot cases, where food can be kept hot or cold and fresh before patrons’ eyes. » Food equipment should be chosen not just to achieve food quality, freshness and ﬂavor, but for its ability to enhance food safety. » Among foodservice equipment most valued by operators, ease of use and cleaning, dependability and versatility appear to score highly.

40 Convenience Store Decisions August 2018

40-42_Fdsv_Equipment.indd 40

ot all foodservice equip- and sandwiches,” said Lenard. “And ment is in back-of-the-house because there’s no door, it’s a great food prep areas. According way to showcase healthier items to Jeff Lenard, vice president like assorted fruits and vegetables, of strategic industry initiatives for the yogurt and prepared salads.” Another piece of in-store equipNational Association of Convenience Stores, open-air coolers that greet ment being prioritized by c-store customers not far inside convenience operators is the hot case that allows store front doors can entice custom- customers to quickly reach for prepared hot food. ers to buy. When sorting between different For c-stores, foodservice provided 22.5% of in-store sales and foodservice equipment options, own33.9% of gross-proﬁt dollars in 2017, ers and operators must give priority according to results from the NACS to ovens, warmers, microwaves and State of the Industry Report of 2017 other gear that consume little space Data. Not surprisingly, foodservice and are versatile enough to allow the equipment is playing a critical role store to multitask, Lenard said. “You have to look at how the behind those impressive ﬁgures. How do retailers present food equipment can be utilized for difthat’s fast and appealing? One way ferent uses,” said Lenard. “You may need that equipment to prois the open-air cooler or fresh case. “Those refrigerated units don’t duce various entrees depending have doors, allowing customers to on different daypart or different quickly grab a salad, boiled eggs demographics.” cstoredecisions.com

7/25/18 4:45 PM

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Foodservice

Equipment

When sorting between different foodservice equipment options, owners and operators must give priority to versatile ovens, warmers and microwaves.

JOB ONE The foodservice equipment needs of convenience retailers are as varied as the stores themselves. La Crosse, Wis.-based Kwik Trip offers an extensive grab-and-go menu and sells a variety of sandwiches, appetizers and its very own pizza. Facilities manager Chad Juel said the company considers many factors when purchasing foodservice equipment for its more than 600 retail locations. Juel looks at items and asks will the equipment make coworkers’ jobs easier and will it improve product offerings. Other factors include maintenance and other considerations. Among the equipment trends Juel and colleagues are monitoring is the fact remote connectivity is coming to more and more equipment. Being able to evaluate the performance of a piece of equipment, or perform troubleshooting from the company’s support center, is a huge advantage for Kwik Trip. “We are looking to incorporate equipment diagnostics and reporting into our Building Automation System,” said Juel. Thanks to advances in equipment technology, another trend is modern ovens’ ability to prepare more food in less time, he said. In some cases, that may mean more than one cook chamber. In other cases, it may involve the use of microwave ovens to reduce cook time. “Not all store layouts and food volumes are the same,” Juel said. “So each store is evaluated to have the best mix of equipment.” Kwik Trip, which operates stores in Wisconsin, Minnesota and Iowa, is committed to growing its food program, and recognizes it must invest in its facilities in order to do so. Each year, the company evaluates all its stores to determine where it can use capital expenditure dollars to increase sales. That evaluation can lead to new equipment in its stores, kitchen additions to provide more space or HVAC store upgrades to handle the heat load generated by foodservice equipment, Juel said. As for service agreements with suppliers, Juel explained Kwik Trip is always seeking to leverage its vertical integration, which includes the company service department. “We only purchase foodservice equipment that we can service ourselves,” said Juel. “Because of this, our expectation is that we are able to perform all warranty, preventative, maintenance and corrective maintenance repairs.” 42 Convenience Store Decisions August 2018

40-42_Fdsv_Equipment.indd 42

Another important function of foodservice equipment is helping operators maintain food safety. “If serving [prepared] foods, you have to be attuned to food safety issues,” said NACS’ Lenard. “It’s critical to work with your equipment vendors to make sure that every food item you prepare and serve is done with as much attention to food safety as possible. You can’t just sell food; you have to sell food safety. As convenience stores differentiate themselves from other channels that also serve food, and as they serve more fresh and prepared food, it’s critical to focus on quality not just related to food taste but to food safety. And they need to rely on someone who can help them do that.”

FRESH AND HOMEMADE Often, how much equipment is needed is entirely dependent on the amount of from-scratch food preparation the store undertakes. Santa Ana, N.M.-based Warrior Fuel, which has two Sandoval County locations, uses stoves, ovens, refrigerators, freezers, microwaves, burrito warmers, cold cases and open-face refrigerators in preparing the stores’ authentic Mexican specialties, said Sylvia Gibson, manager of retail operations. Featured fare includes homemade soups, burritos, tamales and more. The stores open at 5 a.m., and serve breakfast, lunch and dinner. All the stores’ south-of-the-border sensations are prepared on the stove in the kitchen, and then carried to the warmers in the store where they’re kept fresh and hot. “Everything is fresh and homemade,” Gibson said. “We serve a lot of different entrees.” The equipment attributes Gibson and staff prize the most include simplicity, compact size and versatility. “Everything needs to look clean and be easy to work with and be convenient, [to ensure] volume and customer service,” said Gibson. “Compactness is important, but we have pretty good-sized kitchens. Versatility is essential; it’s very important we can prepare many different food items on a piece of equipment.” CSD

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7/23/18 1:06 PM

Foodservice

Lunch & Dinner

Hungry for Dinner

Convenience retailers eye evening daypart opportunities. By Howard Riell, Associate Editor

H Fast Facts: » C-stores are competing against not just other c-stores but restaurants of every description, as well as supermarkets. » Discounting at times dilutes the perception of quality. » More and more, U.S. consumers value authenticity in the form of real, natural and minimallyaltered food.

46 Convenience Store Decisions August 2018

46-48_Fdsv_LunchDinner.indd 46

aving solidly staked their claim on the breakfast and lunch dayparts, many convenience store operators are looking to round out their dining experience by tackling dinner service. They do so knowing that they’ve got convenience and speed of service working for them, but also that they are competing against not just c-stores but restaurants of every description as well as supermarkets—many of which are staking a claim for convenience through one-stop shopping and delivery. “The biggest advantage a convenience store (can offer) is, of course, the convenience of ordering ahead, picking up—often through a drive-through window—and getting home quickly,” said consultant Arlene Spiegel, president of Arlene Spiegel & Associates in New York.

FULL COURSE Another form of convenience is the ability to get an entire meal in one basket. According to market research ﬁrm NPD Group, consumers continue to grow more concerned with the ability to purchase entire meals, rather than having to assemble them piecemeal. They also value authenticity in the form of real, natural, minimally-altered food. “In order to be considered a meal solution, especially for the family, the menu needs to address the complete meal experience,” said Spiegel. “For example: protein or grain entrée plus two sides and side salad, plus fresh bread/rolls, dessert and beverage are a compelling offering for the busy homemaker.” The biggest mistake c-stores make in trying to build dinner sales, she added, is offering individual items instead of complete meal solutions. Another is discounting items, which she said implies that the operator is trying to get rid of an item. “This is the antithesis of the freshness messaging.” Anne Boysen, principal of Austin, Texas-based After the Millennials, a consulting ﬁrm specializing in next-generation issues and trends, believes grabbing market share at dinner must include appealing to Millennials. “7-Eleven attracts its customers with the aromas of freshly-baked pastry and ready-to-serve dinners with Millennial appeal. It would be natural to offer more of these deli-type stores by gas stations.” Millennials and post-Millennials also care about health and wholesomeness, Boysen added. “Fast-casual chains such as Chipotle are responding; convenience stores can, too.” cstoredecisions.com

7/25/18 8:17 AM

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7/20/18 6/4/18 3:12 3:30PM PM

Foodservice

Lunch & Dinner

Feeding a Feeding Frenzy “The Power of Foodservice at Retail 2018” report published by the Food Marketing Institute in Arlington, Va., looks at trends in retail foodservice and details how Millennial shoppers look at everyday meals. Among some top ﬁndings: • Millennials (ages 19-37) average fewer weekly dinners that require some level of preparation. • Older Millennials (ages 28-37) are interested in nutrition information. • Older Millennials also want to know about food safety measures and detailed calorie information. • While younger Millennials (ages 19-27) are also interested in nutrition, they are even more interested in variety and the ability to select from a number of different cuisines. • Millennials of all ages want to experiment more with the world’s cuisines.

REINVENTING THE DAYPART Broomall, Pa.-based Swiss Farms offers a top-notch dinner program in all of its 13 stores. The company, in business for 50 years, brands itself as “America’s Drive Thru Convenience Store.” As Scott Simon, president and CEO, notes, c-stores nationwide appear to be reinventing themselves when it comes to the dinner daypart. “If you look at Wawa and Royal Farms, for example, they are all about it,” said Simon. “7-Eleven invested a billion dollars last year in what they are going to do with fresh food and delivery, and ordering ahead and paying ahead. I would say that the whole industry is beginning to emerge into a 24-hour business, and making dinner part of that program.” Indeed, to take advantage of the growth of at-home recipe kits and restaurants’ prepared foods to go, 7-Eleven has expanded its prepared-food program with several new locally-made, chef-inspired, heat-and-eat, restaurant-quality Italian, home-style, Asian and Mexican meal solutions targeting dinner business. Meals like Chicken Parmesan, Creamy Chicken Alfredo, Spaghetti Bolognese and others can be heated at the store for immediate consumption or taken to go, and carry a suggested retail price of $3.99 to $4.99. Swiss Farms is focusing not on its numerous competitors, but on its customers’ needs. “Our focus is on Millennial customers who say, ‘Look, I want high-quality food but I don’t want to have to pay the tip. I want quality food but I want to eat it at home, and I want to be able 48 Convenience Store Decisions August 2018

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to eat it on my terms,’” said Simon. “That is the itch that we are scratching. I don’t really worry about my competition.” Fresh food program: Swiss Farms launched its freshfood program in January 2017, and is enjoying what Simon termed great success. The menu features about a dozen entrees, including lasagna and pizza, made from scratch in the chain’s commissary kitchen. Other menu favorites are French fries, mashed potatoes, mac and cheese, fresh green beans and more, all delivered daily. “We are geared towards go home and reheat it yourself,” Simon said. Swiss Farms’ management has not had to work hard at building dinner business, since most foodservice sales come between 4 p.m. and 7 p.m. “That’s our big time,” said Simon. “As a percentage, sales are probably skewed a little heavier at night. It really solves the need on the way home when you have to pick food up and get some dinner. People are stopping for essentials, so why not grab a fresh entree and side dishes?” Most dinner decisions are made between 4 p.m. and 6 p.m., Spiegel pointed out, so radio, television and ‘push’ social media messaging should take place during these times of day. “Bounce-back coupons given out at breakfast and lunch with a dinner-time offer are also a good incentive.” Consumers can go through the drive-through lane to collect a meal to bring home, or use the chain’s app to order ahead. In addition, a delivery service should be in place by the end of August, serving all of Delaware County. “The average sale is low, so no one is going to want us to drive to New Jersey,” Simon said. The average check is under $10, and online rings are about a $22. Walk-in customers spend an average of $9.80. “The percentage of sales through delivery will depend on radius and zip code. We have not gotten that granular yet, but it will be something competitive.” Dinner offerings are trumpeted via social media and store fliers. “We will tweet out something that says, ‘Hey we have hot chicken—come on by and get it.’ Or, we might have a coupon that we are running in a magazine that says, ‘Buy one, get one,’ and that is usually a dinner entree. It could be the same item at lunch, but the portion sizes are usually fixed for dinner sales. I think people eat differently for lunch than they do for dinner.” Juan Martinez, principal of Profitality, a foodservice consultancy in Miami, Fla., said online ordering offers tremendous opportunities for c-stores. “The store could make the food as the guest is coming in,” said Martinez. “One specific product they could do is take-and-bake pizzas, for example, as well as other products that could be delivered as ready to heat.” Simon advises c-store operators who want to build a dinner program to begin by finding out if there is a need. “Talk to your customers. What do they say?” CSD cstoredecisions.com

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Category Management

Packaged Beverages

Packaged Beverages Trend Upward Consumer demand for healthier beverage options continues to spur development in the convenience store cooler. Low-sugar beverages with straightforward ingredients such as ﬂavored waters, sparkling waters and ready-to-drink coffees continue to deliver sales. By Scott McKinney, Contributing Editor

Fast Facts: » The National Association of Convenience Stores reported this past April that packaged beverages continue to be a leading source of revenue (15.8%) and gross proﬁt (20.1%). » Other sub-categories with year-on-year growth in convenience stores include ready-to-drink iced teas. » In convenience stores, PET/still-bottled water dominated the bottled water segment, accounting for $11.8 billion in sales for the 52-week period ending May 20, 2018.

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ealth-conscious consumers native beverages (3.5%) and bottled are the driving force behind water (0.6%). America’s per capita consumption the dominant trends in the packaged beverage category of bottled water in 2017 exceeded over the past year, according to indus- 42 gallons, a 12% advantage over the try analysts and convenience store consumption of carbonated drinks. Ready-to-drink (RTD) coffee outperbeverage category managers. “The two mega-trends most impact- formed all other segments, with 12.3% ing beverage consumption today increase in sales volume and 14.4% are consumer demand for health- increase in retail sales. Enhanced ier refreshment and variety,” said water also saw double-digit growth, Gary Hemphill, managing director according to BMC. In convenience stores, PET/stillof research for Beverage Marketing Corp. (BMC). “Due to this, the mar- bottled water dominated the bottled ketplace continues to splinter with water segment, accounting for $11.8 a steady onslaught of new product billion in sales for the 52-week period introductions as well as new catego- ending May 20, 2018, according to scan data from Chicago-based IRI, ries emerging.” The National Association of while sparkling water accounted for Convenience Stores reported this nearly $2.6 billion. past April that packaged beverages continue to be a leading source of rev- SIMPLER INGREDIENTS enue (15.8%) and gross proﬁt (20.1%) U.S. consumers continue to seek for convenience stores, with enhanced out healthier alternatives to traditional water showing the strongest annual carbonated soft drinks and energy increase in 2017 (9.1%). drinks. Much of the supply for conOther segments with year-on-year sumer demands has been provided growth in convenience stores include by smaller, niche segments in the marready-to-drink iced teas (3.5%), alter- ket: per BMC’s research, RTD coffee cstoredecisions.com

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Category Management

Packaged Beverages

analyst at Euromonitor International. “Cold brews tend to be much lower in sugar than energy drinks, or even Carbonated Drinks $8.58 Bil -0.90% 4.9 Bil -2.30% other forms of RTD coffee, so you can Bottled Water $4.26 Bil 4.30% 2.5 Bil 1.90% get a similar energy burst in a healthSource: Information Resources Inc. (IRI) Total U.S. Convenience Store All Scan data for the 52 weeks ending June 17, 2018 ier way,” Barry said. “At the same time, there is also an incredible quantity of and enhanced water saw double-digit or 20-ounce market.” Eaton attributes new products entering the category sparkling water’s popularity to custom- from both large and small players. growth in 2017. VERC Enterprises, based in east- ers who seek healthy drinks, but still That means both more space being devoted to cold brews as well as just ern Massachusetts, operates 26 stores want a carbonated refreshment. RTD coffee has also been a reliable a better variety of options for consumin Massachusetts and southern New Hampshire. Meghann Eaton, cate- generator for the New England chain ers to choose from.” David Hallman, senior category gory manager for beverages at VERC over the past calendar year. “Starbucks is still the top dog for manager at Kum & Go, a West Des Enterprises, saw parallels with the national trend of steady growth in us,” said Eaton. “The whole brand Moines, Iowa-based convenience does well, from Frappuccino and dou- store chain with more than 400 stores sparkling beverages and RTD coffee. “Sparkling water has always been a ble shots, to cold brews. We expanded in 11 Midwestern states, reiterated the healthy growing category for us, with space in the doors for this category impact health concerns have on the 15% year-to-date growth,” said Eaton. from two shelves to at least half a door.” packaged beverage market. “The main driver of growth in flavored The new health-savvy consumer “This year we added one liter sparkling water to a few sets, which has is choosing cold brew coffee over and sparkling water is health-conscious brought in new customers to the cat- high-sugar energy drinks, according consumers,” said Hallman. “People are egory without eating into the half-liter to Matthew Barry, senior beverages more interested in the product nutrition-

Product Segment

$ Sales

%Change vs Year Ago

52 Convenience Store Decisions August 2018

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Unit Sales

% Change vs Year Ago

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als than ever before, and are looking to consume products with cleaner ingredients and fewer categories.” This trend has contributed to an uptick in flavored waters, sparkling waters and cold brew coffee sales at Kum & Go. Hallman said that cold brew coffees have improved since the beginning of the year, corresponding with a rapid rise in iced coffee sales over the past two years, and the chain will likely increase space for new cold brew coffee items in 2019.

ON THE BUBBLE Sparkling and flavored waters have been driving factors behind the growth of bottled water, according to Alexander Esposito, another research analyst at Euromonitor International. “While in the past sparkling waters have been a relatively niche product in the American bottled water scene, especially compared to European mar-

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kets, they are now moving out of the as pink grapefruit, lemon and black premium niche they once occupied cherry, as well as limited edition seaand are gaining mainstream popular- sonal offerings. The brand excels at reaching out to its customer base ity,” said Esposito. Despite La Croix’s nationwide through a diverse array of media, said growth, Eaton said the beverage drew Eaton, contributing to its popularity in the Northeast. lackluster results at VERC. Traditional carbonated beverage “We carried La Croix last year, as singles in the cooler, but it didn’t move companies are also responding to the well,” she said. “We may have been high demand for sparkling water. Pepsi earlier this year introduced too early for New England, so I would like to try them again in 2019.” Instead, its bubly sparkling brand, while Polar Beverages and Poland Springs Coca-Cola’s Dasani sparkling water are the standout sparkling water sell- and Nestlé Waters’ host of regional sparkling brands are all performing ers in VERC’s coolers. Polar’s line of sparkling waters has well, according to BMC’s Hemphill. an especially strong following in its “Sparkling water is hot right now, so home base of New England. “People most of the leading brands are experiare trying to cut their soda intake, but encing strong growth.” Indeed, one of Coke’s fastest growwant the carbonated taste still. That’s why Polar’s crazy fun flavors do so ing lines of products in the U.S. has been sparkling water, anchored by well,” Eaton said. Polar offers a wide selection of fla- DASANI Sparkling, smartwater sparvors, including natural flavors such kling and Topo Chico. CSD

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Category Management

Cigars

Cigars Reflect

Regulatory

Heat

Popular-priced cigars and cigarillos continue to be a c-store staple, even as lawmakers consider rolling out more restrictions. By Scott McKinney, Contributing Editor

While volumes continue to increase, Cigar Association of America (CAA) in ost recently, the U.S. Food and Drug Administration retailers report cigar sales remain Washington, D.C. “You’ve got to take ( F D A ) e x t e n d e d c o m - largely price-driven. Premium cigars into account the flavorings, the nicotine ment deadlines on three continue, as they traditionally have, to content and the definition of a preadvanced notices for ANPRMs do well in specific areas and locations. mium cigar. Within levels of nicotine, it (Advanced Notices of Proposed That said, they are gaining wider dis- really does affect cigarettes more than Rulemaking) on nicotine, flavored tribution because consumers like the it does us, but they will eventually get to us. That is why we have to comment, tobacco products and premium cigars, one- and two-count foil packs. because there really is no testing right extending into July. now for cigars.” An ANPRM is only a request by the RESTRICTIONS As Euromonitor International FDA for information, studies and data Experts explain that the regulatory on a particular topic and isn’t a pro- process currently in motion is impor- recently reported, the general extension of public smoking bans across the posed regulation. Rather, the agency tant for retailers to understand. is seeking information to determine “You have to take all three of them— country may have an adverse impact whether a new regulation should be nicotine, flavored tobacco products on demand for cigars as it becomes proposed in the future. and premium cigars—into account,” increasingly difficult and inconvenient The new deadlines are: said Craig Williamson, president of the to smoke them. • Nicotine levels in cigarettes and possibly other tobacco products: July 16, 2018. • The role of flavors in tobacco products: July 19, 2018. » C-store cigar sales topped $3.3 billion for the 52-week • Premium cigars: July 25, 2018. period ending May 20, 2018. In the interim, cigar sales remain strong. According to IRI, statistics for the convenience store channel for the » Channel also rose 13.48% over the previous year. 52-week period ending May 20, 2018, sales topped $3.3 billion, an increase » Federal regulators are mulling ban on flavored cigars. of 13.48% over the same period a year ago.

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54 Convenience Store Decisions August 2018

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Category Management

Cigars

“The FDA issued an Advanced Columbia issued an injunction against that they are all pretty close, because Notice of Proposed Rulemaking to the FDA delaying the enforcement they are all the same shape, they obtain information from the pub- of the agency’s six new cigar health are all the same size, basically,” said lic about the role that flavors play warning statements and the new pipe Williamson. “It’s not like cigars, so in tobacco products,” explained tobacco nicotine health warning state- we are working on that, and we are Thomas Briant, executive director of ment. The injunction, NATO reported, responding to them about the nicotine.” Nor are the ramifications limited the National Association of Tobacco applies to the cigar and pipe tobacco Outlets (NATO). “After reviewing warning statements on product pack- to premium cigars, Williamson said. the comments, the FDA will decide ages and in product advertisements Popular-priced cigars are also potenwhether to restrict the number or that were otherwise scheduled to go tial targets for regulators. “When they get around to regulating kinds of flavors or prohibit the sale of into effect on Aug. 10, 2018. The CAA has been working with a flavors, and they will, there’s no quesflavored tobacco products, including variety of groups to develop testing tion of that, any one of these three has flavored cigars.” If flavored cigars are prohibited by protocols for cigars and nicotine levels. an impact. Anytime they try to take the FDA, Briant continued, retailers “It is not just nicotine levels; it is usage away from our ability to sell or manuwill experience a decline in the sale of rate within the category of cigars,” said facture our product, it has an impact flavored cigars, along with a very real Williamson. “That is why it is important on just everybody involved in this cigar likelihood of an illicit market for fla- to respond, to educate them that, look, process -- from convenience stores to vored cigars. “Adults will likely seek there is no testing out there. We are try- the brick-and-mortar cigar shops.” out alternative sources for their pre- ing to come up with it, but it could be a ferred flavored tobacco products, a year or two years away.” PAYING HEED Now, cigars are significantly differdemand which could be satisfied to Fred Faulkner, sales and marketing some extent by an illicit marketplace.” ent from cigarettes in the way they director for Bakersfield, Calif.-based On July 5, 2018, a federal judge for draw and are packed. Jaco Oil Co., which operates or leases “You do a cigarette test and you find 54 Fastrip Food Stores in California and the U.S. District Court for the District of

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Arizona, called his cigar business steady. “We have a few stores that do quite well, but a lot of our stores are located in rural markets, with somewhat of a Hispanic base, and quite frankly we don’t sell a lot of cigars in those markets,” said Faulkner. Fastrip locations carry a small selection of premium cigars, he added. “People like the pre-pack premium cigars, which come in their own little pouches.” Cigars serve as an alternative for many cigarette smokers, which are part of the segment’s success in many of Fastrip stores. “I think that when people cut back on cigarettes to some degree smoking cigars is, for some folks, a little bit more of a luxury,” said Faulkner. “They are switching because they can’t smoke during the course of their work day, typically, so when they do smoke they’re taking a cigar and enjoying it a little bit more.”

Staying abreast of regulatory devel- we look at our customers we want to opments is important, said Faulkner. make sure that we are doing a good “You do have to pay attention to this job keeping up on flavor profiles.” stuff, but I don’t know if there’s any“We have allocated it the space thing that we can do other than just that it deserves,” Simmons continued, paying attention to what is going on “and are making sure that it is consisin the marketplace,” said Faulkner. “I tent throughout all of our stores. We know we have a lot of stores, but we’re have customers who are hitting mulreally just a small player in this thing. tiple stores, so we really want to have Everybody is still going to be depen- that consistent look and feel so that dent on the major manufacturers to go they know that we have a good prodout and fight the battles over this.” uct offering.” Stinker operates 105 stores in Idaho and Colorado as well as one site in Wyoming. STAYING AHEAD While it is the popular-priced Cigar sales also remain steady at Stinker Stores Inc. in Boise, Idaho, brands that are driving the cigar market at Stinker, Simmons agreed that which recently updated its set. “We have spent some time setting the success of premium cigars in the our schematic and making sure that c-store channel depends strongly on we are ahead of all of the changes and local demographics. “I definitely think capturing cigar sales where we can,” there should be some offering in each said Kimber Simmons, category mer- of the categories. As you look at maxichandising and marketing manager for mizing sales, it needs to really be what Stinker. “We had a cigar set that had the demographic in that market is not been refreshed in a while, and as looking for.” CSD

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Technology

Column

Implementing Scan Data

Can Help C-Stores

Jeremie Myhren has been managing IT in the convenience retail industry since 2000. He is presently the chief information officer for Road Ranger LLC in Rockford, Ill.

Scan data analysis and machine learning can assist c-store retailers in maximizing their potential. By Jeremie Myhren

t has been almost 45 years since a 10-pack of Juicy Fruit gum was the first item ever to have its barcode scanned. The collective convenience retail industry has long since implemented point-of-sale (POS) scanning, and for many those implementations are a distant memory. When I first started in the industry in 2000, I would occasionally stop at mom-and-pop convenience stores and smaller chains that were still “open ringing” retail merchandise. Today, in 2018, I cannot recall the last time I’ve seen such a thing. I wouldn’t fault one for making the assumption that our industry is long since done with the adoption of retail scanning and there really is not much more to say on the topic.

service provid“ers,Lookwhotodooutside the analysis for you, providing you with the results so you can go act on them.”

”

However, I would deeply challenge that assumption if face to face with most convenience retailers. While we’ve all moved past creating and managing our merchandise price books and doing the necessary work to get our POS systems to scan, as an industry we still struggle with effectively understanding and responding to the data that is collected as a result of scanning. On the surface, scanning is quite simple—we build a list of every item we sell, create a description and set a retail price. Depending on how our POS systems are configured we can block our cashiers from selling items for the incorrect price, and we can block our systems from selling items that aren’t in our merchandise price book. We can look at reports and determine over customizable 58 Convenience Store Decisions August 2018

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periods of time how much we are selling of a given item, or collections of items. We can even implement item level inventory, giving us a truer understanding of our retail margins and greater visibility into theft and loss. Based on my experience in the industry, that is where the majority of convenience retailers’ efforts and implementations of merchandise scanning extend. ESSENTIAL INFO Others, however, see great value and opportunity hiding in that data and take it to another level. Whether leveraging technologies such as basket analysis to understand what products commonly sell together (and conversely, what products do not pair well), or using cutting edge machine learning techniques, such as those employed by startups like C-B4 to perform advanced retail pattern recognition, our industry’s past investments in implementing retail scanning still have significant additional ROI dollars left to extract. Who do you turn to, if after evaluating your current scan data practices you have found opportunity for improvement? Meet with your key technology suppliers, such as your POS system supplier and your back-office accounting software provider. Ask them how they can help you answer some of these unanswered questions of your data. Look to outside service providers, who do the analysis for you, providing you with the results so you can go act on them. If you find some of these key questions of your data unanswerable, start to think about upgrading or replacing any legacy systems that are blocking you from fully monetizing your data. Whether you’re a retailer or a supplier for the convenience industry, whether you work in fields like marketing, accounting, operations, IT or any of the other supporting professions commonly found within the industry, whether you represent a large chain or an independent operator with one or a handful of stores, the understandings and epiphanies that can be found in scan data apply to all of us.

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Technology

Gift Cards

Unwrapping

Gift Cards Card currency creates customer touchpoints for c-stores. By Anne Baye Ericksen, Contributing Editor

ift cards and open-loop prepaid cards offer giftgivers a means to show their generosity while simultaneously allowing recipients the freedom of making their own purchasing decisions. This convenience continues to grow in popularity. First Data reports nearly 100% of gift cards purchased last year were redeemed. Perhaps the best statistic for convenience stores, though, is that, for the ﬁrst time, more gift cards were picked up from a card mall or display units than directly from the retailers issuing them. What’s more, most analysts anticipate the category to continue to gain value. ResearchandMarkets.com projects the global gift card sector to reach $750 billion by 2026. Mercator Advisory Group Inc., estimates open-loop cards—such as a prepaid Visa card that can be used anywhere—could surpass the $350 billion mark in less than two years. However, there’s more to the business of these cards than convenient gift giving. Both open-loop and closedloop (for a speciﬁc store) card types present multiple sales possibilities; whether c-stores sell the actual cards or individuals are redeeming those cards in your store, whether it’s a proprietary version or prepaid cards functioning like debit accounts.

Fast Facts: » Nearly 100% of gift cards issued in 2017 were redeemed. » The overspend for gift cards averages between $23 and $38. » About 69% of employees would appreciate a gift card as a reward for a job well done. 60 Convenience Store Decisions August 2018

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“Gift cards are closed-loop connections to customers because they’re captive sales. People have to come back to my location to use the card, and that offers a relationshipbuilding opportunity,” said Marina Hodges, board chair and spokeswoman for the Retail Gift Card Association, a trade association representing the closed-loop gift card industry. Subsequent retail visits can occur if shoppers don’t spend the entire balance during their initial use. According to research, customers also often exceed the card balance, splitting the transaction with more traditional payment methods. First Data states that three-fourths of gift card holders in 2017 overspent the original value of a closedloop card by at least $23.

BRANDED CURRENCY Of course, c-stores have been selling closed- and openloop cards for years. In fact, many chains have created proprietary gift cards, often referred to as branded currency. “We started that many years ago because it creates brand loyalty,” said John McHugh, director of public relations for Kwik Trip. “Our guests like them because, in our market, they make very popular gifts.” Headquartered in La Crosse, Wis., the company owns and operates more than 600 retail and car wash sites. In addition to their general gift cards, Kwik Trip offers rechargeable car wash cards that owners can add funds to and gift cards for Karuba coffee purchases. Although the category may not be a regular basket item such as snacks or beverages, Hodges said c-stores could lose out on future card proﬁts, if they don’t address the changes taking place with how, where and why consumers use the alternative payment methods. Of course, technology plays a big role. “There’s been a proliferation of smartphones and apps, and that drives cards to the digital age,” said Hodges. For the past few years there’s been a buzz around e-wallets and mobile pay apps. Some of this enthusiasm stemmed from the mass appeal of the Starbucks’ mobile cstoredecisions.com

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Technology

Gift Cards

Gifting for Millennials

While baby boomers feel good handing over an actual gift card, Millennials indicate they are more interested in a virtual version.

*89% of gift card purchasers are Millennials. *67% of Millennials are interested in receiving digital gift cards. *60% of Millennials would be interested in receiving a gift card through social networking platforms or a messaging app.

*82% of Millennials would be interested in redeeming loyalty points via gift or prepaid cards.

Source: The State of Consumer Gift Card Preferences in 2018, Blackhawk Network Inc., July 11, 2018; Hawk Incentives, May 30, 2018

pay program. Customers pay for their caffeine cravings with the scan of a barcode on their smartphones. “The Starbucks app is built on a store-value platform for customers to build up points they can spend later. The first thing customers have to do, though, is to have an e-gift card in order to [authorize] the app,” said Hodges. However, other e-wallet programs haven’t experienced similar acceptance rates. According to the Mintel Group, most people still prefer to pay with credit cards (38%), closely followed by debit (33%). Another 18% deals in cash, while only 2% use prepaid cards and 1% rely on e-wallets. Although prepaid cards—closed-loop gift cards weren’t specified in the survey—are only preferred by a small percentage of consumers, they do meet the needs of certain transactions. For example, because prepaid cards basically function as a debit card, consumers can use them to purchase goods at any c-store, retailer or restaurant that accepts debit payments. Also, because they pull from preloaded funds rather than linking to a bank account, prepaid cards offer a security buffer for online shopping. “If you don’t have access to physical retail locations, you can get purchases online with open-loop cards. That’s something more and more people are taking advantage of,” said Hodges. Also, research indicates consumers would welcome more flexibility regarding where and on what closed-loop cards can be used. According to the State of Consumer Gift Card Preferences in 2018 survey by Blackhawk Network Inc., 60% of respondents would be interested in gift cards that could be applied to multiple brands within a given category. Nearly two-thirds would be interested in gift cards accepted by a variety of local restaurants.

CHANNEL SURFING Traditionally, gift and prepaid cards have been marketed with displays near registers. While this functions as a reminder to customers as they check out, there are more active 62 Convenience Store Decisions August 2018

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approaches that could motivate more sales. For example, retailers can tie proprietary cards to store loyalty programs. Hawk Incentives found that more than half of shoppers believed they’d be more likely to stay engaged with a loyalty program if gift cards were a bonus rather than additional merchandise or discounts. Additionally, 82% of Millennials would prefer cashing in loyalty points for gift or prepaid cards. Of course, social media presents opportunities for contextual commerce, or empowering consumers to make purchases from the platforms of their choosing. Pymts.com reported this spring that 36% of consumers made a shopping transaction directly from Facebook. “Retailers want to reach their customers where they are, and where they are is on social media,” said Hodges. “It’s all about touchpoints. The more you touch customers and become relevant to them, the closer relationships you build.” Another trend in the category is employee recognition. “We give $20 gift cards to every coworker on their birthday. We also give gift cards for perfect Secret Shopper scores and hitting food goals on focus days,” said McHugh. It’s not just c-stores gifting employees. Corporations across all industries are in on the trend, too, and employees apparently appreciate this type of gesture. Nearly 70% of respondents to the Blackhawk Network survey admitted they would like a gift card as a reward from their employers. “Some local companies use our gift cards for employee recognition. We also use them to reward our employees for going above and beyond,” said Sean Bumgarner, vice president of Scrivener Oil Co., which operates 11 Signal Food Stores in Missouri. Analysts also suggest consumers will continue to seek out more e-gifting options. That said, anecdotal evidence indicates it’s still a minority. “We are not equipped to accept digital e-cards. In our market it seems like customers still prefer the physical gift cards, although it will just be a matter of time before they shift to e-cards,” said Bumgarner. CSD

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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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6/22/18 5:15 PM

Operations

HR Column

Why a Leadership Mindset Matters

Cumberland Farms developed a management program, cultivating basic skills necessary for members to be successful. By John McMahon

o one disputes that leadership matters in any organization. We all know good leadership when we see it because leaders inspire and engage us. We follow them for the right reasons. In fact, research shows the quality of a company’s leadership is a critical component in meeting the expectations of investors, customers and team members. It’s also a fact that when you are in a leadership role, people are watching you and the attitude you bring to your role each day is contagious. A positive, can-do attitude will inspire and motivate your team to give that discretionary effort when it’s needed, and to the betterment of the team. At Cumberland Farms, we were confident that if our leaders brought that positive approach to their job each day, we would see tangible results. The first thing we did during my tenure was to develop a management program that would cover the basic skills and thought processes necessary for someone to be a successful leader. ROLE MODEL The first module in the program focused on “Your Role as a Manager.” We spent a great deal of that first day discussing the concept of what it means to have the right leadership mindset and why that is a foundational building block for any successful leader. The program also contained sessions on building specific skill sets like how to give feedback, how to conduct a performance review discussion, how to handle disciplinary matters and other basic competencies. This program has continued to evolve over the past six years and Cumberland Farms has put more than 600 managers through these programs during that period. As our managers’ confidence continued to grow, they became more effective leaders and the response from their team members was very positive. One of the best ways to measure the impact of this training was to participate in an engagement survey. At Cumberland Farms, we decided to participate in the ‘Great Place to Work’ survey and did so for the first time 64 Convenience Store Decisions August 2018

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John McMahon is recently retired from his role as chief human resources officer of Cumberland Farms and is now a consultant on leadership and HR Strategy. He can be reached at jpmcmahon42@ gmail.com.

five years ago. Based on a number of questions in the survey, which is designed to determine the level of overall engagement of the team, you are given a score. In our first survey, 69% of the participants felt overall this was a great place to work. In addition to receiving a score, we also got thousands of comments and ideas on how to improve the workplace for everyone. We took those comments seriously and worked on the most impactful issues we felt would move the needle. Fast forward five years later, to 2017 when the company participated in the survey again, and 83% of our team members felt Cumberland Farms was a great place to work. Your team members want to know that they have a voice in the direction they are going and how critical decisions are made in the company. Effective leaders understand that we have two ears and one mouth—we need to use them proportionately in order to really hear what’s going on. We also create an environment where everyone has a voice, where people feel valued and respected. This culture of inclusion creates a place where people want to be part of the team. We found they often chose to remain at the company as well. Our retention numbers between 2012 and 2017 improved significantly. In fact, our hourly turnover rate dropped to about 60% in 2017, from a 100%-plus level in 2012. When an organization can create the right mindset within the leadership ranks, it helps drive collective organizational success by establishing a culture of accountability while motivating your teams to deliver an outstanding guest experience, improved profitability and overall superior results. At the end of the day, leadership is a privilege. How we think about it and how we show up each day allows us to not only impact the success of the company we work for, but impact the lives of the team members who work with us side-by-side. Bring that positive, can-do leadership to work each day and watch your team soar.

cstoredecisions.com

7/26/18 12:45 PM

CStoreDecisions ecisions .com

CStoreDecisions.com is geared toward C-Store retailers, convenience store suppliers, and distributors looking to stay abreast of industry trends, new product offerings and category management best practices.

Thank you to our Key Partners:

We use the latest media technology, delivering content the way you want it: print issues, digital issues, enewsletters, and videos. Use CStoreDecisions.com to help you strengthen your peer network with social engagement through Twitter, LinkedIn, Facebook, YouTube, Pinterest, and Google+. Browse, bookmark, share and interact with the most relevant industry content and people in the market.

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7/24/18 9:13 AM

Operations

Contract Negotiations

Made Easier Thoughtful planning and established relationships help smooth the way for angst-free negotiating. By Pat Pape, Contributing Editor

o matter their size, all convenience store chains have contracts with numerous vendors and service providers, and each contract must be re-negotiated at some point. Preparing for those negotiations several months in advance is an important ﬁrst step in ensuring the goods and services that will keep your stores running smoothly. When contract negotiations with a broadline provider loomed this year for 28 Fast Break convenience stores—part of Ed Staub & Sons Petroleum—leaders at the Klamath Falls, Ore.-based chain began planning a full six months ahead.

“Jeff (Chase, director of operations) and I sat down and made a ‘best outcome’ list,” said Michael Cordonnier, category manager/buyer and marketing manager for Fast Break. “And we did everything we could to achieve those goals. That’s literally the time when they’re super focused on getting you to sign that agreement. Don’t be afraid to get out your red pen and line through items on the contract that you don’t like. It’s kind of a boiler-plate agreement. I’m sure they come to the table with a list as well.” When Chase and Cordonnier attend an industry event, they focus on gathering pertinent information on potential suppliers.

Fast Facts: » Suppliers should be vetted to ensure they are a good ﬁt for your store operation. » Meeting different members of a distribution team can help facilitate the selection process. » A company’s good reputation can assist in the negotiation process. 66 Convenience Store Decisions August 2018

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“Our meetings aren’t 15 minutes done and gone. Our meetings may be three hours,” said Chase. “We talk about what’s going on in the industry, what they can do, what they have, what they are doing with their families this weekend. We build on that partnership. They give us a lot of information. We’re there before the show opens and stay until it closes. We want to learn everything we can.” Ryan Krebs, director of foodservice for Rutter’s, is responsible for agreements that get the necessary food and supplies to the York, Pa.-based chain’s 70-plus locations. Prudent supply-related planning is vital to its everyday retail operations. “Give yourself a signiﬁcant amount of time if you are matching up other distributors to ensure that you’ve vetted what everyone has,” said Krebs. “Even if things with your distributors are going well, bringing in other competition is the right thing to do to keep your present distributors honest. You may not know how much someone else wants your business, and they may have benefits associated with their program that you didn’t even know existed. Things can be surprising in a positive way.” cstoredecisions.com

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BUILDING RELATIONSHIPS “While we’re getting to know them, we’re thinking ‘is this somebody we want to do business with for the rest of our lives,’” said Cordonnier. “When suppliers get a chance to talk about their product and what it’s doing and then talk about their competition’s product, we often learn something that can affect our next contract in a huge way.” Before Fast Break selects a new supplier, they meet the leadership team, “the warehouse guys” and, if possible, the owners. “Everyone is important on every level,” said Chase. Thanks to an established partner relationship, the chain recently negotiated a vendor rebate and arranged for it to be donated to the local Smart Reader program, which provides free books to third-graders. “At the end of the day if all we’re left with is the fact that we’ve maximized our margin, then we’ve failed,” said Chase. “But if we can maximize our margin and do tremendous things for our community, that’s what I want to do.”

ATTRACTING VENDORS

that they’ll get to the delivery person as soon as possible because that person has a job to do and has to be out of the store at a certain time.”

SWITCH HITTING In February, more than two-thirds of the 900 KFC outlets in Britain were forced to shut their doors after they ran out of chicken. It’s because the Colonel’s new delivery partner had trouble getting product to the restaurants. Eventually, the problem was resolved, but after extensive negative publicity. In the end, KFC reconnected with its former chicken delivery service. “There are always struggles and learnings to go through if you switch distributors, especially in the first couple of months,” said Krebs, noting that most major distribution companies have set timelines for preparing to take over a new account.

Cordonnier believes that “switching broadlines is more painful than working through any problems you have [with your existing supplier]. A broadline is an anchor for your stores, and that relationship cannot be fickle. It should be ‘how long can we make this relationship last?’ Distributors all have the same issues: it’s weather, late trucks, flat tires, pickers or the Christmas tree season. If one does better on service, their costs are probably higher.” In rural, less-populated areas where Fast Break operates, the company has the choice of two, maybe three, broadlines. If the company has issues with service, management prefers to target problems and work with the distributor to resolve them rather than immediately seeking a new provider. “That might not be best in every case, but where you have fewer options

two years you go from “If every one distributor to the next, maybe you need to look at your own process and wonder ‘why do I keep picking the wrong guys.

Retailers that offer benefits beyond bottom-line profits are especially attractive to vendors. At Fast Break, the company’s good reputation has -Ryan Krebs, director of foodservice, Rutter’s served it well. “If you have a relationship with a broadline, and you aren’t doing every“They work backward just like you like we do, you can’t be knee-jerk and thing you can to fill their trucks and drive down the cost per mile, and you would if you were building a new think the grass is greener all the time,” aren’t telling them that every time you store,” Krebs continued. “They have Chase said. “You can only do that a few see them, you’re missing out on a huge certain teams that handle specific times, because eventually, they won’t negotiation point. Cost per mile is every- responsibilities and timetables that care about your business.” Krebs agreed. tell them how long it will take to hire thing in distribution,” Cordonnier said. “If every two years you go from one Rutter’s store employees are trained drivers, have them trained and set to be friendly and to handle deliver- up logistics. It’s a ton of work, but as distributor to the next, maybe you long as everyone hits those deadlines, need to look at your own process and ies in a systematic manner. “Our stores don’t often see manu- you’ll have a semi-seamless transition.” wonder ‘why do I keep picking the Once the dust settles, “it’s business wrong guys,’” he said. “Rutter’s goal facturers, but they do see the delivery guys,” Krebs said. “We have a very as usual. It’s just a different truck on is to be in business with partners for a structured approach to accepting your lot,” Krebs added. “There is addi- long time. Once they understand our products—what we do, how and when tional work to be done if you’re setting business, understand our growth and we take the temperatures and where up a price book or inventory sheets know where we’re going, it should be the products go. At the same time, we with different costs on them. But you a continued partnership that grows for everybody.” CSD have expectations of our stores too— just adjust and make it a priority.”

”

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PRODUCTShowcase Wafﬂe Layer Bars

RTD Cold Brew Red Diamond Coffee and Tea is the new player in the bottled cold brew market with the debut of its single serve, ready-to-drink Fitz Cold Brew Coffee. Launched first in foodservice during the summer of 2017, the beans that make Fitz Cold Brew Coffee are purposely selected, blended, roasted, ground and steeped with cold brew in mind. The end result is a distinctively smooth, refreshing boost of energy that fuels consumers any time of day, every sip of the way. The Fitz Cold Brew Coffee line comes in three 12-ounce flavors: Black, Dark Chocolate and Slightly Sweet. Each 12-ounce Fitz Cold Brew Coffee contains approximately 250 milligrams of natural caffeine. The drinks are 100% cold brew coffee, made without the use of artificial ingredients and must be refrigerated at all times. Product is available to ship.

Hershey’s is introducing Waffle Layer Crunch Strawberry Bar and Waffle Layer Crunch Dulce de Leche Bar. Hershey’s Waffle Layer Crunch Strawberry Bar combines the delicious Hershey’s Milk Chocolate consumers love with crispy Waffle Cone Pieces and ice cream-inspired Strawberry Flavored Crème. Hershey’s Waffle Layer Crunch Strawberry Bar will be available in August 2018 in a 1.4-ounce standard bar, a 2.8-ounce King-size and a 6.3-ounce bag. Hershey’s Waffle Layer Crunch Dulce de Leche Bar combines the Hershey’s Milk Chocolate with crispy Waffle Cone Pieces and ice cream-inspired Dulce de Leche Flavored Crème. Hershey’s Waffle Layer Crunch Dulce de Leche Bar will also be available in August 2018 in a 6.3-ounce bag.

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

JUUL Silver Device Kit JUUL Silver Device Kit is perfect for adult smokers looking to switch from cigarettes. The JUUL Silver Device Kit is available wherever JUUL products are sold. Silver is a permanent addition to the JUUL product lineup and the kit includes a JUUL Device, USB Charger, and a one-year limited device warranty. Order today by contacting your local distributor or becoming a retailer now.

Company: JUUL www.juul.com/retail/wholesale

Craft Ginger Beverages Brooklyn Crafted, a Brooklyn-made craft ginger beer and ginger ale brand, has introduced a rebranded craft ginger beer and ginger ale collection. With a nod to the brand’s Brooklyn roots, the new logo features a clean, modern image of the New York skyline, while the packaging offers vibrant colors that represent each of the different flavor varieties. Each authentic ginger beer and ginger ale variety is made with only the highest quality ingredients as well as 100% fresh, unfiltered ginger pieces you can actually see. In addition to the rebrand, Brooklyn Crafted is also extending its line of 12-ounce bottle formats with its existing Mango and Lemon Lime flavors, and is introducing a new Classic Ginger Ale in a one-ounce bottle format.

Company: Brooklyn Food & Beverage www.brooklynfoodandbeverage.com

Company: Red Diamond

(205) 577-4000

www.reddiamond.com/ﬁtzcoldbrew 68 Convenience Store Decisions August 2018

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cstoredecisions.com

7/25/18 8:21 AM

PRODUCTShowcase Waste & Windshield Station Add pizzazz and ultra convenience to your forecourt. Forte’s Convenience Plus Waste/Windshield Station will make your sites more inviting and your customers will notice and appreciate it. This efficient valet encompasses all the features to meet your customers’ needs for convenient and easy access to a trash can, paper towels and windshield fluid. The Convenience Plus has a covered top to protect from the elements and an ergonomic pull-out waste bin drawer with a 42-gallon capacity ideal for high-trafficked areas. It requires maintenance less often. Each windshield housing is equipped with an ample and deep washer bucket that stays filled longer and keeps the squeegee in place. The towel tray towel dispenser is suitable for C-fold towels. All components are detachable and fit inside the waste bin, allowing the complete unit to be shipped in one single carton for freight saving costs. The Convenience Plus’ full dimensions are 45-inches wide x 26-inches deep x 40-inches high, and installation is simple and effortless.

Company: Forte Products (816) 813-3337 www.forteproducts.com

Sangria Cigarillos

Unique Energy Offering

Skye Energy Drinks are hitting the convenience shelves with new fervor. The beverWhite Owl is exage, which has a one-of-a-kind taste, forpanding upon the mula and color, began in Europe in 2012. award-winning Skye Energy Drinks in regular and sugar Limited Edition free are branded with only one flavor as FoilFresh franchise that is the most appealing to consumers. In to include White over 5,000 taste tests, 97% approved Skye Owl Sangria. Slow drinks over all others in down and enjoy a tests. Pricing for consmoke that’s as revenience stores will laxed and smooth as a sip of robust red make the Skye prodwine, with just enough delicious, fruit taste ucts one of the most to tantalize your taste buds. The latest slow profitable items on the burn cigarillos from White Owl give you the shelves. In addition perfect bouquet of mellow tobacco paired to the 8.4-ounce and with a vine-ripened flavor and a pleasant, 12-ounce cans, dediintoxicating aroma. On July 3, this new cated stylish refrigLimited Edition offering began shipping. erators for stores with White Owl Sangria is available in “two for limited space are also 99 cents,” “two for $1.49,” and “Save on available. The compa2” formats. ny also provides specialty-dedicated products for charitable programs, which paves Company: Swedish Match North America the way for high volume sales. Purest Pro(800) 367-3677 ductz International’s EDU division distribcustomer.service@smna.com utes the product in the U.S. and Canada.

Company: Skye Energy Drinks USA

Stuffed Waffles There’s a “hot,” new grab-and-go breakfast item available for convenience stores with the national rollout of the Pillsbury Stuffed Waffle. The sweet maple-flavored waffles stuffed with savory sausage, egg and cheddar cheese appeal to convenience store customers looking for a hearty and delicious option to eat on the go. Available from General Mills Foodservice, the new Pillsbury Stuffed Waffle is a great addition for convenience stores with hot foodservice programs. Easy to prep and package, the frozen waffles are shipped frozen, warmed in-house, packaged in the convenient grab-and-go container and placed in a warmer or hot holding area. General Mills also offers a number of point-of-sale marketing materials such as window clings, shelf tags and more. The Pillsbury Stuffed Waffle contains 15 grams of protein per serving. SRP: $3.19.

Company: General Mills Convenience www.generalmillscf.com

sales@pureproductz.com cstoredecisions.com

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August 2018 Convenience Store Decisions 69

7/25/18 8:21 AM

PRODUCTShowcase Waste Receptacles

Kiwi-Peach Cigarillos Summer is here and so is a unique blend of kiwi and peach now available as your favorite cigarillo. Swisher Sweets Limited Edition Coastal Cocktail cigarillos pair the tropical tartness of kiwi with sweet peach for the ultimate taste of summer. Available for a limited time in a resealable two-count pouch with the “Sealed Fresh” guarantee, Swisher Sweets Coastal Cocktail is ready for shipment to stores nationwide. It is offered in “two for 99 cents,” “save on two”, and “two for $1.49” options. Swisher Sweets Coastal Cocktail is sure to be a customer favorite from coast to coast all summer long. This edition of Swisher Sweets is available only while supplies last. For more information or to place an order, contact your Swisher representative.

Company: Swisher International (800) 874-9720

http://trade.swisher.com/ coastal-cocktail/

Thinner Meat Snack Watch out jerky, there’s a new sheriff in town and its name is Stryve Biltong. This thin sliced meat snack may look like jerky, but there is no comparison in taste, texture or nutritional value. Each batch contains the best cuts of top round steak trimmed of all fat and is naturally seasoned before it is hung to air dry for up to three weeks. Due to this all-natural drying process, Biltong contains 50% more protein than jerky on average. Each 2.25-ounce bag contains 36 grams of protein and less than one gram of sugar. It’s the healthiest protein snack you can put on your shelves.

Paris Site Furnishings introduces Inox litter receptacles and recycling containers. Constructed of stainless steel and Ipe hardwood, these 32-gallon waste containers feature warm, contemporary styling with robust, construction for years of trouble-free service. These rugged and stylish containers are available as single, stand-alone units or as tandem models that are ideal for use as waste and recycling receptacles. They are well suited for outdoor usage, and include built in-anchor holes for secure mounting to a solid surface like concrete. Inox litter receptacles are ideal for stand-alone waste or recycling collection, or can be paired with other Inox series site furnishings including six-foot backed or backless benches, bike racks, planters, and more..

Company: Paris Site Furnishings and Outdoor Fitness sales@peml.com

Company: Stryve Biltong www.stryvefoods.com

Colliding Gum Varieties Mars Wrigley Confectionery is introducing new JUICY FRUIT gum varieties. JUICY FRUIT Collisions is bringing the power of two-flavors-in-one to stick gum. With two flavors colliding in every stick, it’s an exciting taste explosion with every chew. Now available in Strawberry Watermelon and Tropical Berry flavor collisions. SRP: $1.19 in 15-stick Single-Serve Pack, $2.69 in a Multipack with three 15-stick Single Serve Packs. JUICY FRUIT Mixies has debuted with four fruity flavors in each bottle, containing a mix of Original, Strawberry, Watermelon and Grape flavors. SRP: 15-piece Single Serve bottle $1.49, 40-piece bottle $3.49 and 120-piece Stand-Up Bag. JUICY FRUIT Tropical is a sweet and tasty flavor available now. Blowing bubbles can now taste even sweeter with this new flavor that will take taste buds on an island getaway. SRP: five-piece pack 79 cents.

Company: Mars Wrigley Confectionery www.mars.com 70 Convenience Store Decisions August 2018

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PRODUCTShowcase Collectible Cans Coca-Cola’s Sprite is keeping it cool, crisp and refreshing all summer long with its new collection, “The Fresh Faces Series.” Hitting shelves this month, the limited-edition series features ﬁve of the freshest personalities in hip-hop music and culture—rappers Logic, KYLE and MadeinTYO, social media comedian Jay Versace and music producer Wondagurl. For a limited time (now until Sep. 2), fans can collect illustrated 16-ounce cans and 20-ounce bottles of the talented group, which continues Sprite’s 30-year legacy of working with artists who shape and redeﬁne music culture. The summer-long marketing campaign features custom live and animated video, interactive social content and live activations that will help bring the talent’s freshness to life. Fans can also unlock unique artist content and exciting rewards through the sip & scan app.

Company: Coca-Cola Co. www.coca-colacompany.com/stories/sprite-fresh-faces-series

Heated Display Cabinet Hatco Corp.’s Intelligent Heated Display Cabinet with humidity regulates air temperature and simultaneously balances humidity levels to provide the best environment for holding pizzas and other foods, while a 360-degree view and energy-efﬁcient LED lighting keep the focus on the product.

Company: Hatco Corp. www.hatcocorp.com

Breath Freshener Kiss of Fresh Air Breath Mist has innovated the fresh breath category in convenience stores as the perfect alternative to gum and mints. The 24-count impulse box is available with four ﬂavors; Peppermint, Spearmint, Strawberry Mint and Cinnamon. Kiss of Fresh Air Breath Mist is the “New Choice for Fresh Breath.”

Company: Kiss of Fresh Air Breath Mist mark@sprayinnovationsusa.com

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Kitchen Leasing Program Welbilt Inc., a global provider of commercial foodservice equipment, has launched the Welbilt Kitchen Leasing Program. This first-of-its-kind program is designed to provide all of the hot, cold and beverage equipment needed to run a professional kitchen. The program is available to customers in the U.S. Welbilt’s Kitchen Leasing Program will include the entire range of Welbilt brands and is offered in partnership with Marlin Finance that acts as the lessor. The program will empower in many ways: The up-front costs for setting up a professional kitchen will be significantly lower and the cash flow savings can be invested in other important areas of the new or established restaurant business. Operators can shift their attention from the kitchen equipment to their customers leaving them with more time to focus on customer experience, food quality, and culinary creativity. Leasing allows operators to change products, implement new technologies, create better efficiencies, get new warranties, update kitchen layouts and even develop new menu concepts with little to no extra costs.

Company: Welbilt Inc. www.welbilt.us/sales/ﬁnancing August 2018 Convenience Store Decisions 71

7/25/18 8:22 AM

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7/20/18 1:45 PM

Classifieds /Ad Index

ADD Systems

www.go.addsys.com/growing

Avery Dennison

www.averydennison.com/freshmarx

Brakebush

800.933.2121 / www.brakebush.com/cstore-burger

Calico Brands

800.544.4837 / www.calicobrands.com

Cash Depot

800.776.8834 / www.cdlatm.com

Core-Mark

www.core-mark.com/food-service/

Danone North America

888.620.9910 / www.DanoneAwayFromHome.com

Del Monte Fresh

800.950.3683 / www.freshdelmonte.com

E-Alternative Solutions

800.377.7709 / www.cuevapor.com

Gulfcoast Software Solutions, Inc. 727.449.2296 / www.gulfcoastsoftware.com

Hatco

888.815.8460 / www.hatcocorp.com

Home Market Foods

800.367.8325 / www.HomeMarketFoods.com

Hunt Brothers

800.453.3675 / www.huntbrotherspizza.com/CSD

Kohler

31 29 53 52 25 19 43 51 3 41 21 37 15

www.kohlerpower.com

KT&G

5, 7, 9

www.ktngusa.com

Krispy Krunchy

800.290.6097 / www.krispykrunchy.com

2018

Little Debbie MarkTen

McLane Company

www.mclaneco.com/savings

NicoGen Pharma Solutions

516.693.7367 / www.RogueNicotine.com

North American Bancard

866.481.4604 / www.nynab.com

Pierce Chicken

800.336.9876 / www.poultry.com

Prairie City Bakery

800.338.5122 / www.pcbakery.com

R. J. Reynolds

www.EngageTradePartners.com

Subway

203.877.4281 / www.subway.com

Swedish Match

800.367.3677 www.whiteowlcigar.com www.gamecigars.com customerservice@smna.com

55 17, 56-57 61

Swisher International

800.874.9720 / www.experienceacid.com

Texas Pete

www.TexasPeteFoodservice.com

Tyson Convenience

800.682.7272 / www.tysonconvenience.com

White Castle

614.228.5781 / www.whitecastle.com

76 27 33 49

44-45

SAVE THE DATE

2018

800.315.6208 / www.LittleDebbieCStore.com

Line up for NAG 2018 at the beautiful Ponte Vedra Inn & Club September 9th thru 12th Ponte Vedra Beach, FL

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

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August 2018 Convenience Store Decisions 73

7/25/18 9:21 AM

INDUSTRY

Perspective

INVESTing in Future Leaders Utilizing universal character traits such as work ethic, judgment, natural leadership and good communication skills will ensure a higher rate of success.

Steve Sandman has worked in the tobacco industry for more than 30 years, most recently as president of Republic Tobacco. His extensive experience includes product management. He can be reached at (812) 569-1388.

By Steve Sandman

ne of the most important responsibilities any operation’s current leadership has is its development of future leadership and ensuring that transition is smooth and seamless. As they say, it’s easy to talk the talk, but much more difficult to walk the walk. I’ve had the opportunity over the years, going as far back as my early 20s as a training and development manager at R.J. Reynolds to learn about what works and what doesn’t. To assist in my success in training the next generation of leaders, I developed a simple acronym that helped me stay on track and prepare the next set of leadership: INVEST. I-IDENTIFY: A critical aspect in leader development is identifying the right skill set. Many skills are unique to a job position and are not easily transferable; meaning just because someone is currently in charge of coordinating your advertising, doesn’t mean they should head up your marketing department. Utilizing universal character traits such as work ethic, judgment, natural leadership and good communication skills will ensure a higher rate of success. N-NURTURE: Nurturing is defined as ‘to support and encourage, as during the period of training or development; foster.’ While it’s obvious to support a future leader’s work on a specific project, there are many other areas where one can provide this key element. For example, inviting your employee to attend events outside their normal scope of daily work such as a trade show or conference you attend, a social function such as a dinner, or even a more senior management meeting. Let your employees see you in a variety of settings, give them your insight into how you think in these situations, and provide feedback as to how they conducted themselves in venues they may not be familiar with. V-VISION: We often find ourselves hesitant to “put ourselves out there” when talking to an employee about what their future might look like, as we fear it may not work out, providing that long term roadmap provides a great incentive for commitment, enthusiasm, and dedication as you ask 74 Convenience Store Decisions August 2018

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your future leader to embrace taking on more responsibility and longer hours. You can avoid the verbal contract an employee might interpret by talking in terms of your company and what kind of a person is a future leader. E-EDUCATE: Education comes in many forms, and it’s not always the most obvious such as sending your future leader to seminars and conferences. The most important knowledge is that you’re able to share including your success stories and failures, and what you learned from all of those experiences. It’s a great idea to have the employee spend time with others that have been put into positions of future leadership already, and to also to have them spend time outside of their group department. S-STIMULATE: Stimulating your candidates thought process is one of the truly fun areas of the development process and will also contribute greatly to establishing a trust and rapport between you both. Try putting your employee in hypothetical situations, along with yourself, and ask them to think about how to solve a problem or take advantage of an opportunity, and that you will do the same. Set up a time frame and get back together to see what you both developed for solutions, compare those ideas and settle on how you would go forward. T-TIME: Time is the most important element of developing your future leader, and that means YOUR time! All of the ideas, investments, and intentions you have are worthless unless you dedicate your time to your future leader’s advancement. If you invest the time in your candidate, you’ll see your work load lighten up as you will delegate more work to the up and coming leader. As a senior leader in your company, developing future talent and making the transition as smooth as possible is one of your greatest responsibilities. By utilizing the INVEST outline, it can serve as a helpful reminder to establish effective workforce guidelines.

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7/25/18 8:23 AM

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