Convenience Store Decisions September 2017 by WTWH Media LLC

Volume Volume 28 • Number 9 • SEPTEMBER 2017 19 • Number 6 • JUNE 2008

Business Solutions for Retail Decision Makers

® A

HARBOR COMMUNICATIONS

P U B L I C AT I O N

C-Stores Still Fit

Despite the ending of CST Brands and the unknown of Amazon, Kwik Trip and other retailers are pieces of an evolving industry.

Coffee Category Grows Cold ...............48 Smokeless Is Back on Track ..............58 Tea Craze Refreshes Sales ..................62

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Volume Volume 28 • Number 9 • SEPTEMBER 19 • Number 6 • JUNE 2017 2008

Business Solutions for Retail Decision Makers

® A

HARBOR COMMUNICATIONS

P U B L I C AT I O N

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DEPARTMENTS 8 Editor’s Memo: Why Networking Matters

for Young Professionals

10 Company Profile: Gordonsville Keystop

Welcomes Eclipse Watchers

16 Front End: CSD’s Quick Bites 18 Front End: Industry News 20 Front End: John MacDougall/NAG

Scholarship Winners Chosen

22 Front End: Cumberland Farms Unveils

New Store Design

24 Convenience Store Solutions: Learning

to Cope With Stress

SEPTEMBER 2017 • Volume 28 • Issue 9

34 Foodservice: Chicken: Flying Off the

Shelf

40 Foodservice: Sandwiches Offer Fresh

Twist

52 Foodservice: Foodservice Marketing Still

InsidethisIssue

Crucial

26 C-Stores Still Fit

62 Category Management: Tea Craze

Despite the ending of CST Brands and the unknown of Amazon, Kwik Trip and other retailers are pieces of an evolving industry.

66 Category Management: Salty Snacks

Refreshes Sales Boost Demand

72 Category Management: Tapping Craft

48 Coffee Category Grows Cold

Beer Sales

Coffee offerings in c-stores are hotter than ever, including cold-brew coffee programs. As this beverage offering gains in popularity, convenience chains such as Wawa are brewing up new programs to capture a different beverage experience.

78 Category Management: RaceTrac

Wraps Up Sodapalooza 2017

82 Technology: Easy as L-E-D 86 Technology: Best Practices in Deterring

58 Smokeless Back on Track Smokeless continues to be a bright spot in the tobacco category, reflecting durable consumer loyalty and acceptance of the latest line extensions.

Theft

88 Operations Column: Strategies for Site

Planning

92 Operations Column: Selecting an Opti-

mal Location for Your C-Store

96 Real Estate Column: Are Sale/Lease-

backs Beneficial?

98 New Stuff! 104 Quick Stop 105 Ad Index 106 Industry Perspectives: A Fond Farewell

4 Convenience Store Decisions

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Convenience Store Decisions

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

EDITORIAL

CONTRIBUTING EDITORS

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

ART Creative Director Erin Canetta ecanetta@csdecisions.com

President, Harbor Communications Dan Ramella dramella@csdecisions.com (440) 250-1583

COLUMNISTS

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

Jim Callahan Fran Duskiewicz Bryant Ficek John Matthews Terry Monroe

PRODUCTION Production Manager Barbra Martin bmartin@csdecisions.com

NATIONAL ADVISORY GROUP BOARD

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

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

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

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

Brad Call, President Colour Du Jour • Salt Lake City

Greg Ehrlich, Chief Operating Officer Beck Suppliers Inc. • Freemont, Ohio

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

Doug Galli, Vice President, General Manager Reid Stores Inc./Crosby's • Brockport, N.Y.

Kyle McKeen, President and CEO Alon Brands • Dallas

Joe Hamza, Chief Operating Officer Nouria Energy Corp • Worcester, Mass.

Billy Milam, President RaceTrac Petroleum Inc. • Atlanta

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

Patrick J. Lewis, Managing Partner Oasis Stop 'N Go • Twin Falls, Idaho

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

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

Vernon Young, President and CEO Young Oil Co. • Piedmont, Ala.

Press’s highest recognition of editorial excellence.

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

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September 2017

Publisher John Petersen jpetersen@csdecisions.com (440) 250-1583 Vice President, Sales Tony Bolla tbolla@csdecisions.com (773) 267-1897

Webmaster Dave Miyares dmiyares@csdecisions.com

EDITORIAL ADVISORY BOARD

Convenience Store Decisions is a three-time winner of the Neal Award, the American Business

ADVERTISING

Anne Baye Ericksen Pat Pape Brad Perkins Lisa White

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

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

OFFICE LOCATIONS

Headquarters

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

Editorial and NAG

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

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

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P E R F E C T PAIRINGS FOR C-STORE PROFITS

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EDITOR'SMEMO

Why Networking Matters for Young Professionals

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

• Be Specific in Asking For What You Want. Don’t waste the time of your networking contacts. Be clear about what you are hoping to gain from the meeting. Tell them exactly what you want to do and why you think they can help you. "Ask if there are any events or trade association meetings you should consider to help you build your network and gain some good foundational experience," Johnson said. "Then respect their insight and follow up by attending and getting involved." • Face Time is Critical. We’re all too used to communicating by text and email. While that works in many situations, networking calls for much more personal methods. "You need to build a relationship. This means personal connections," Johnson said. "People can only get to know, like you and want to help when they meet you in person. This takes more time and effort, but the truth is, networking takes work to build a relationship." • Use Your Expertise to Help Others. Today's young executives are well ahead of the preYOUTH MOVEMENT This is where YEO can help. The association vious generations in technology. You can provides young executives a platform to dem- enhance your networking relationship by onstrate their leadership abilities and vision for sharing something you learned about a new the future while gaining valuable feedback technology or simply send them links to articles on topics you think are relevant to the business from seasoned NAG members. Jill Johnson, the president of Johnson leader’s industry. "Share what you are learning as a way of Consulting Services, offered four strategies to help young executives enhance their networking thanking your new networking connection efforts by being efficient, organized and focused. and keeping in touch. One interaction is not • Build Relationships in Small Increments. enough. Remember to pay it forward too by askRemember, older generations work off of rela- ing if there is anything you can do to for them," tionships, not casual one-time meetings, said Johnson said. "There might not yet be an answer, Johnson. Relationships built carefully over but it counts that you’re interested in a twotime—with mutual interests—can help define way street if possible. You may have insight on some emerging technology or simply an idea your career path. "Building relationships with professionals is on a challenging problem they are having a skill, and like any new skill, you have to prac- with a young professional on their team. Always tice it over time. Be patient and let the natural remember: you have valuable knowledge, too." To learn more about the work the Young timing work to your advantage," Johnson said. "Slowly and carefully is better than rapid and all- Executives Organization is doing, contact me in. Be selective and try not to cast your net too at jlofstock@csdecisions.com. wide. You want networking connections that can help you in your field. As you gain confidence, learn to express yourself more clearly and ask insightful questions, which will also help you prepare for job interviews. S THE CONVENIENCE STORE and petroleum industry continues to evolve, training the leaders of tomorrow is more important than ever. That's the driving force behind the National Advisory Group's (NAG) Young Executives Organization (YEO). This growing group of emerging industry leaders is keenly focused on education and networking with other next-generation executives who are facing similar challenges in the competitive convenience store industry—something that will be on full display at this month's annual NAG Conference in Nashville. This is not an easy industry for young professionals. In addition to learning the business, they are faced with other daunting challenges such as learning to negotiate with vendors, managing employees who can be much older than them and, perhaps most importantly, making connections with experienced professionals that can help them navigate the rocky terrain.

8 Convenience Store Decisions

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FRONTEND PROFILE

Gordonsville Keystop Welcomes Eclipse Watchers Last month’s rare natural phenomenon proved that location is everything as one Tennessee c-store served many curious onlookers. By Erin Rigik Del Conte, Senior Editor

N MONDAY, AUG. 21, America experienced its first total solar eclipse since 1979, and eclipse chasers were out in droves to watch the event, especially along the “path of totality” —that cut through 12 states, from Oregon to South Carolina—where the total eclipse was most visible. Convenience stores along the path were busy the week before, preparing for a huge influx of customers before and after the eclipse on Monday. Before Mother Nature turned down the lights, Gordonsville Keystop, right off Interstate 40 in Gordonsville, Tenn.—about 50 miles east of Nashville—readied itself for a crush of onlookers expected to show up at the retailer’s location situated along the prime eclipse viewing path. “The Chamber of Commerce says there will be between 100,000 to 200,000 people here (in Smith County). I have trouble believing that because the county only has 20,000 people. It’s a small county, so if it happens there are going to be people everywhere,” said George Gebhardt, owner of Gordonsville Keystop, the Friday before the eclipse as

Customers don special glasses as they prepare to watch the eclipse last month. Gordonsville Keystop completely sold out of eclipse glasses the week before the event. 10 Convenience Store Decisions

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he prepared for the onslaught. The county set up a number of viewing locations in the neighborhood, including at the local fairgrounds, a few churches and a local park, and asked any local businesses with an extra parking lot to make space available for potential eclipse viewers. Gebhardt made his parking lot available as an eclipse viewing spot. Gebhardt explained that the totality—or darkest part— of the eclipse was expected to last two minutes and 40 seconds in his area. The eclipse was expected to begin around 12 p.m. and end about 3 p.m. with total darkness descending around 1:30 p.m. DARK DAY AHEAD Gordonsville Keystop has been in business since 1997. When Gebhardt acquired the property it housed an old service station, which he tore down and replaced with the 2,500-square-foot Gordonsville Keystop convenience store. Despite being off Interstate 40, the c-store sees a lot of local business in addition to the Interstate travelers passing through. Gordonsville Keystop has offered a Hunt Brothers Pizza program since day one, which takes up a modest 400 feet of space within the store and includes two pizza ovens. The program helps him compete with the numerous quick-service restaurants also available nearby. “We were one of Hunt Brothers’ very early customers,” said Gebhardt. Gordonsville Keystop was one of 25 stores that received a pizza shop makeover from Hunt Brothers Pizza in celebration of its 25th anniversary last year. Gebhardt expected the pizza program to be a big asset in helping the store satisfy the eclipse viewers. To help him prepare, Hunt Brothers Pizza made an early delivery on Thursday, stocking the site’s big walk-in freezer with extra pizza products. CStoreDecisions ecisions .com

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“They are willing to help us do anything they can help us do,” he said. “This sounds funny but ‘we’re all in the dark,’ as far as what is going to happen on Monday, but I expect a big pizza business if we have all of those people.” Gordonsville Keystop usually does a large volume of pizza sales on a normal day, and Gebhardt was prepared to sell out.“I would say on Monday, we’ll probably sell 100200 pizzas, which might not sound that big if you’re a pizza place, but it’s big if you’re a c-store.” In addition to Hunt Brothers’ pizza, breakfast pizza and wing bites, the store was prepared to serve the usual c-store foodservice fare, such as corn dogs, egg rolls, hamburgers and hot dogs. “But by far our biggest sales dollars are in pizza,” said Gebhardt. Gebhardt also worked with his c-store distributor H.T. Hackney to get extra product in stock in advance of the eclipse, so that customers who stopped in were sure to find what they needed. With extra inventory on hand, the owner was ready for whatever Monday’s eclipse brought. “They are saying people will be out early finding their place to view,” Gebhardt said, adding he hoped that meant a lot of customers would stop in for breakfast pizza. “Starting fairly early in the morning—and especially in Nashville—they are predicting tremendous traffic jams. Police are saying not to stop on the Interstate. This has never happened around here, so they’re trying to be really ready for it,” Gebhardt said. “We will have a couple extra employees here (on Monday), and we’re trying to get them here early in case there is a gridlock in traffic.” Before Friday, preceding the eclipse, Gordonsville Keystop was completely sold out of eclipse viewing glasses, having sold more than 800 pairs. SUNNY SALES On the morning of the eclipse, Gordonsville Keystop welcomed a surge of customers before 11:30 a.m., and CStoreDecisions ecisions .com

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FRONTEND PROFILE another big surge after 2:30 p.m.—even though Smith County didn’t see the huge numbers of travelers it was anticipating. “Nashville also said they had a big influx of people, but not as many as they thought there would be either,” Gebhardt said. Despite the more manageable crowds, Gebhardt saw a sizeable boost in traffic and in-store sales from the eclipse. While the store’s breakfast pizza sales were only slightly above average, overall pizza sales for the day were up 15%, with a total of 80 pizzas sold. Surprisingly, the product customers most wanted was Moon Pies—in honor of the moon covering the sun. Moon Pies consist of two round graham cracker cookies, with marshmallow filling in the middle, dipped in a flavored coating. Gordonsville Keystop completely sold out of Moon Pies and also sold out of eclipse t-shirts. “After the eclipse was over, around 2:30 p.m. or so, traffic was backed up for the next two hours,” he said. “We get busy when the Interstate gets busy. One surprising thing to me is we did not do more gas volume than usual, but inside sales were up 15%, and customer counts were also up about 15%. We’ll take that any time.”

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During the actual eclipse, Gordonsville Keystop had about 30 people watching from the parking lot. A number of watchers were travelers from out of state, who hadn’t realized the eclipse was going to be occurring on their driving path. “Since it was happening they stopped to watch,” Gebhardt said. Store employees came to the rescue, sharing their eclipse glasses with the travelers so they could get a look at the eclipse. “I think it was a good day for people to watch,” Gebhardt said. “On the news they were saying people got over all the negative news (in the media lately) and were just interested in focusing on something happening in nature; something positive. Everyone seemed pretty upbeat about it, and no one was complaining about the traffic or anything.” The next total eclipse is anticipated on April 8, 2024, with the path of totality extending from Texas to Maine. “The eclipse won’t be right here in totality, but it will be in Kentucky, which is not too far from us,” Gebhardt said. His advice to those c-stores on the prime viewing path in 2024? “I would think everyone would be more aware of getting eclipse glasses from a certified supplier.” And, stock up on the Moon Pies.

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FRONTEND

CSD’S QUICK BITES Store Visits Up • Visit frequency was up at convenience stores during the second quarter.The number of GasBuddy app users that visited gas stations and convenience stores once a week or more grew from 48% to nearly 53% during the quarter.

Source: a recent study by Cuebiq and GasBuddy

• Also, 74% of respondents June 2017 said they Source: stop atNielsen stations and stores for something other than fuel.

Generations Similar in Restaurant Visitation

25% of visits are made by Millennials

23% of all restaurant visits are from Gen X (ages 36-52)

26% are generated by baby boomers

Source: NPD Group’s “What Matters Most to Key Generational Groups”

Global Flavors Influence Trends Exciting flavor influences from around the world are influencing American culinary trends. Here are just a few: • Aji Chiles • Blood Orange • Buttermilk • Chai • Intentional Charring • Mustard Seed • Nutella — chocolate-hazelnut spread

• Ponzu — a Japanese dipping sauce

• Preserved Lemon — a Moroccan specialty

• Salsa Verde • Seaweed/Sea Vegetables • Sweet and Savory Jams • Varietal Gala and Fuji Apples

Source: Packaged Facts’ Culinary Trend Tracking Series’“Food and Beverage Flavor and Ingredients.”

Smoking Age Rising

Maine has joined New Jersey, Hawaii and California in raising the tobacco purchase age to 21.

Demand Grows

• 50% of consumers say they are most likely to purchase organic fresh produce such as fruit and vegetables, compared to other food categories like juice (39%) and dairy/milk/yogurt (38%). • 29% of Americans say they do not typically buy food and drink with an organic or natural claim.

• 32% of consumers say half or more of the groceries they buy are organic. Source: Mintel, August 2017

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INDUSTRYNEWS

Target Looks to Expand Delivery Program Target Corp. is acquiring Grand Junction, a transpor tation technology company, to improve and expand Target’s delivery capabilities. San Francisco-based Grand Junction offers a software platform that’s used by retailers, distributors and third-party logistics providers to manage local deliveries through a network of more than 700 carriers. Currently, Grand Junction is working with Target on its same-day delivery pilot at the Target store in New York’s Tribeca neighborhood.

Amazon Tests Instant Pickup

In August, Amazon introduced ‘Instant Pickup,’ which allows Prime customers to order from a list of hundreds of basic supplies—such as non-perishable foods and personal care items and Amazon devices—via the app and collect them from a nearby pickup locker in two minutes flat. Amazon is fi rst testing the service at fi ve college campuses across the U.S., with plans to quickly increase its test audience. Instant Pickup plans to use the company’s existing network of locker pick up locations. Previously, the lockers were already being used for pick up of regular Amazon Prime packages and dropoff of returns.

CrossAmerica Obtains Jet Pep of Alabama C ro s s A m e r i c a Pa r t n e r s LP has entered into a definitive agreement to acquire certain assets of Holly Pond, Ala.-based Jet Pep Inc. for $72 million. The assets consist of 102 commission-operated retail sites, including 92 fee sites, five lease sites and five independent-commission accounts. The locations sold nearly 91 million gallons of unbranded fuel in 2016. In addition, Circle K Stores Inc., a subsidiary of Alimentation CoucheTard and the general partner of CrossAmerica, has also agreed to purchase certain other assets from Jet Pep Inc., including a fuel terminal, associated trucking equipment and 18 other retail sites for an undisclosed amount.

Turkey Hill Celebrates 50 Years Turkey Hill is celebrating its 50th anniversary with sweepstakes and deals on c-store products. In 1967, Charles and Emerson Frey opened the first Turkey Hill Minit Markets store in Lancaster, Pa. Today the chain operates 270 stores and counting in Pennsylvania, Indiana and Ohio. To celebrate the 50th Anniversary, Turkey Hill is offering a sweepstakes and hot deals from Aug. 10 through Oct. 4.

Flyers Energy Divests C-Stores Love’s Travel Stops to Begin Diesel Oil Changes Love’s Truck Tire Care is now prepared to offer diesel oil changes at more than 130 locations, and Love’s continues to roll out the service to additional locations. Since introducing the concept with a focus on tires in 2008, Love’s Truck Tire Care has developed into a full-service maintenance operation. The company continues to add oil change capabilities to existing locations. The majority of locations are expected to be oil-change ready by the beginning of 2018.

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Flyers Energy has exited the retail business, selling all 39 of its convenience stores to San Antonio-based Andeavor Corp., formerly known as Tesoro, effective July 28. According to a report in the Auburn Journal, Andeavor plans to rebrand some of the Flyers locations to Mobil, Exxon, ARCO and Shell. The agreement allows Andeavor up to 12 months to rename the stations. All of the sites except two are expected to remain on the Flyers Energyowned Commercial Fueling Network.

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FRONTEND News

Winners of John MacDougall/NAG Memorial Scholarship Chosen

The $1,000 grants for NAG members will help offset the rising cost of education. A CSD Staff Report

• Loreta Murataj, Gate Petroleum. S THE FOUNDER OF Nice N Easy Grocery Shoppes, John MacDougall was a longtime supporter of the Loreta is a junior at Penn State National Advisory Group (NAG). In his personal life, University in University Park, Pa. She he was also a strong supporter of higher educa- is a science major. Loreta is active tion. MacDougall passed away in 2014. To remember his in the Jacksonville, Fla. Police work and his longtime support of NAG, the association is Athletic League (PAL) and an avid proud for the third year to present the John MacDougall/ golfer. She is an employee of Gate Petroleum, where she has worked for NAG Memorial Scholarship to NAG members. For 2017, NAG awarded five $1,000 scholarships to the past four years while on break members who work in the convenience store industry from her studies. • Jolene Servais, Kwik Trip. Jolene or are children of an employee of a NAG member comis a freshman at the University of pany. This year’s winners are: Wisconsin at Platteville who is major• Kiely Barker, Clifford Fuel. Kiely is ing in business administration. She going into her junior year at Nazareth was the valedictorian at Arcadia College in Rochester pursuing a High School earlier this year where Doctorate of Physical Therapy. She she also played in the school orchesspends her semester breaks working tra. She was also the recipient of the in her hometown store, Taberg Cliff’s American Legion’s Good Citizen Local Market. Kiely works alongside Award. Her father Paul Servais works the store manager, Shaun Barker, for Kwik Trip in La Crosse, Wis. who is also her father (pictured). The NAG scholarship fund was developed to help qualified individuals offset the rising cost of higher edu• Alex Carnicom, FriendShip Foods. cation. Among NAG’s core mission is to help groom Alex is a junior at Tiffi n University in the convenience store leaders of tomorrow. In keeping Tiffin, Ohio. He is majoring in law with that theme, NAG created this scholarship fund for enforcement and will intern in his employees and children of NAG member companies. field of study this year in Washington, “The National Advisory Group’s Scholarship Program D.C. Alex also played for the Tiffin is important to NAG because college graduates earn, University football team the past two on average, $25,000 more per year than someone seasons. His father Robert Carnicom, with just a high school diploma, according to a report wo r k s fo r F r i e n d S h i p Fo o d s i n by The College Board,” said John Lofstock, executive Freemont, Ohio. • Chase Hamilton, Tri Star Energy/ director of NAG. “The cost of attending college may Daily’s. Chase is a freshman at the seem daunting, but that’s exactly why finding, applyUniversity of Tennessee, Knoxville ing for, and receiving scholarships are essential to majoring in business administra- avoid big student loans. Scholarships are no longer tion. He graduated from Sycamore a bonus; they’re crucial for bridging the gap between High School in 2017, where he was a the increasing cost of tuition and what families can three-sport standout in football, wres- afford to pay out of pocket. Congratulations to this tling and soccer. Chase also served year’s winners.” For more information on NAG and the NAG on the student council and was the director of the Sycamore School Scholarship Program, please visit www.nagconveAdvisory Council. Chase’s dad Rick Hamilton works for nience.com, and be sure to mark your calendar for the 2017 NAG Conference in Nashville Sept. 10-13. Tri Star/Daily’s in Nashville, Tenn. 20 Convenience Store Decisions

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Cumberland Farms Unveils New Store Design Cumberland Farms recently opened its first “next-generation” store in Titusville, Fla. The new location boasts a host of amenities including self-service ordering terminals for its expanded foodservice program. By David Bennett, Senior Editor

UMBERLAND FARMS ON AUG. 18 opened its first “next-generation” store in Titusville, Fla. The first of its kind in the Sunshine State, the Titusville store features Cumberland Farms’ newest design, equipment and food offerings as the company continues its extensive and aggressive remodeling and expansion initiatives in Florida. The Framingham, Mass.-based retailer explained this “next-generation” design enhances customer convenience and offers an expanded menu that rivals fastcasual restaurants. Additional locations are expected to open over the next year. David Heilbronner, director of brand strategy and advertising, said the design strategy had been in the works well before the recent unveiling. “We have been working on this project for the past 18 months,” said Heilbronner. The new 5,000-square-foot store at 4560 S. Washington Ave. offers several new food and beverage options. Smoothies, frozen espresso and milkshakes are available, as well as specialty coffee drinks including espresso, cappuccino and lattes are part of the new offerings. “With our next generation stores, we’re really focused on enhancing the overall customer experience and offering an expanded menu that competes with fast-casual chains,” Heilbronner said. The chain also has its own line of Farmhouse “premium snacks,” including pretzel pieces, kettle chips, cookies and shortbread, and a line 22 Convenience Store Decisions

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of Farmhouse Creamery products, including ice cream sandwiches and “Ultimate Scoop” ice cream. NEW BEGINNINGS An expanded food menu features a variety of specialty items, including ciabatta sandwiches, frittatas, melts and macaroni & cheese, all of which can be requested on self-service ordering terminals. The new stores also offer indoor community counters and outdoor patio seating as part of

the updated architectural elements. In 2009, the chain rebranded with a new logo and colors of blue and green. That decision marked the beginning of the transformation from older, legacy stores. The business has grown into a leading gasoline and convenience store retailer, and has renovated and reopened over 300 stores as part of its multiyear remodeling initiative. Over the next year, the brand has plans to expand its next-generation store design. “We are excited to introduce the future of Cumberland Farms to Titusville,” said Ari Haseotes, CEO of Cumberland Farms in a news release. “We currently operate 14 stores across Brevard County and

have plans to expand in Florida over the next several years. We hope our self-service ordering terminals make us even more convenient and that customers enjoy our new food and beverage offerings.” Currently, the convenience chain operates nearly 600 convenience stores across eight states, but primarily in New York, New England and Florida. Heilbronner said there’s a possibility that the company will reinvest in some of its legacy locations, but those plans have yet to be finalized. “It is possible that some remodels will integrate the new features—it all depends on the space available,” said Heilbronner. MARKING TIME Earlier this year, the chain reported that Cumberland Farms customers have saved a total of $75 million through its SmartPay program since it launched in January 2013. Available as both a payment card and a mobile payment app, SmartPay is free to join and use. SmartPay Check-Link users automatically save 10 cents on every gallon of gas when they fill up at any Cumberland Farms gas retail location in the Northeast or Florida. SmartPay mobile app users also receive a free Farmhouse Blend coffee, free Hyperfreeze beverage or free bottle of water for every 50 gallons of gas purchased. A third-generation company, Cumberland Farms, which began in 1939, is still family owned and operated. CStoreDecisions ecisions .com

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Convenience Store Solutions

Learning to Cope With Stress How do we learn to deal with pressure on the job? It’s not easy, but developing certain tools can help. By Jim Callahan

EALLY, WHEN YOU GET right down to it, stress is like any obstacle you either must master, learn to control or at the very least, come to terms with. Whether it’s learning to manage a business, converse with family or handle yourself, there’s a certain amount of pressure to execute well while trying to meet expectations. Often, stress is a by-product that accompanies your best efforts. However, self-induced pressure can become a strain if you allow it to be—or in many cases, allow it to build up until it becomes an impediment.

WELCOME TO MANAGEMENT An example of what I mean happened early in my career. I’ve told this story before, but it bears repeating. At the age of 23, I was working as an accounts receivable supervisor for a medium-size company. Thanks to a gent named T.J. Reichert, I managed 17 accounts and worked with 23 employees. Part of the job was handling a closely-scrutinized, weekly ‘projection of income.’ Of course, the duties always changed. T. J. came into my office one afternoon and laid a large, special file of reports in my lap, which promised to be time consuming. Thinking quickly, I asked him if he could prioritize the reports. Walking away from me, he replied to “do it all,” and then uttered: “But, nothing else must suffer.” Wow. Welcome to management, I thought to myself. It was always my nature that I preferred to work extra hours than worry about missing a deadline. Then my $125 per week salary and position made me exempt from overtime pay. You’d be right that T.J.’s expectations created some feelings of stress. I would also note that being able to effectively handle pressures in the early stages of my career enabled me to gain a measure of maturity, and thus be able to handle bigger stressors later in my life. FULL-COURT STRESS So, how do we learn to cope with stress on the job? It’s not easy, but developing coping tools can help. One means I would recommend is to set realistic goals and measure your progress regularly. You can sit down with your supervisor and go over your work objectives, asking them to be 24 Convenience Store Decisions

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honest about how you are viewed within the organization and what advice they would offer to help make you more successful. It’s important that you talk with someone you respect and that you listen carefully to his or her advice when it comes to projects and performance. Equally important is to be honest with yourself about the evaluation and whether you have the desire to strengthen your role within the organization. As you find that the part you play in the organization is clearer and more transparent, those inner feelings that spur stress will become less looming. There’s an old saying about “making oneself smaller and the world larger.” In other words, try to see the bigger picture and your part in it. It can also serve as a reminder that a career can be a long journey and if we don’t learn to deal with stress early on, it can be a bumpy road indeed. There are many experts that can attest to the belief that controlling stress is a vital part of your well-being—both in your professional life and your personal habits. Learning to achieve personal relaxation is a skill that takes practice. To that end, you can practice one or more of the easy relaxation techniques described below, twice a day: • Find a quiet place. • Get into a comfortable position—lie down on the floor or sit with uncrossed legs. • Breathe easily and naturally. • Keep muscles loose, limp and relaxed. One of the very best ways that I’ve found to cope with stress is to exercise until I am tired (when I’m in decent shape, it takes a while; when I’m not, it takes much less time). Moreover, I find the better I maintain good physical conditioning, the less stress bothers me and the better I sleep, which translates to being well-rested. I equate this to performing better because when you’re physically fit, you ultimately feel better about yourself. The feeling of being able to take on the world soon follows. 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 contacted directly at (678) 485-4773 or via e-mail at jfcallahan1160@gmail.com. CStoreDecisions ecisions .com

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COVER STORY

C-Stores Still Fit 26 Convenience Store Decisions

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Despite the ending of CST Brands and the unknown of Amazon, Kwik Trip and other retailers are pieces of an evolving industry. By David Bennett, Senior Editor

HEN CST BRANDS INC. had

closed the deal on Nice N Easy Grocery Shoppes at the end of 2014, it allowed the San Antonio-based retailer a substantial foothold in the Northeastern U.S. market. At the time, CST Brands, parent of the Corner Store convenience chain, was considered one of the most progressive operators in the industry, integrating modern platforms that put customer service at the forefront. In fact, in a short span CST Brands had strung together a few c-store acquisitions with the help of its general partner CrossAmerica GP LLC, a wholly-owned subsidiary of CST Brands. The capper came at the end of 2015 with the addition of Flash Foods Inc., a highly touted 164-store chain in Waycross, Ga. In the spring of 2016, Kim Lubel, president and CEO of CST Brands told Convenience Store Decisions that both

acquisitions were viable, despite criticism from some investors that the publicly-traded CST Brands had overpaid for the Flash Foods chain. “The recent Flash Foods acquisition was accretive to CST,” Lubel said at the time. “Like our Nice N Easy acquisition, we expect to leverage some of the industry leading practices from Flash Foods, including their loyalty program and inventory management program. At the same time, we can leverage our distribution expertise and food offerings to enhance the Flash Foods network.” It was only a short while later, in August 2016, when Alimentation Couche-Tard Inc. shook the industry with the announcement it was purchasing CST Brands for $4.4 billion, providing the Canadian convenience giant a gateway into the lucrative Texas market. Among its many retail operations, Couche-Tard also owns the Global Circle K brand.

It wasn’t that long ago that CST Brands Inc., led by Kim Lubel, president and CEO, was considered the right model for a changing c-store industry. The San Antoniobased chain grew rapidly through timely acquisitions and organic growth. CST Brands is now part of Alimentation Couche-Tard’s growing group of convenience brands. CStoreDecisions .com

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As part of the deal, Couche-Tard fast-casual dining market in the U.S. is acquired 1,263 CST Brands c-stores, expected to reach $66.9 billion, accordprimarily operating under the Corner ing to the research firm Technavio. Retail disruptors including Amazon, Store, Nice N Easy and Flash Foods banners, as well as adding as a partner Walmart, Dollar General, Kroger, CrossAmerica, which operates a mas- Starbucks and Panera Bread aren’t just planning their next innovations—they ter limited partnership or MLP. Lubel announced recently she is are hatching initiatives to further dominate their respective channels. leaving CST. That’s not to say the c-store industry is void of innovators. The list of leading A FISH STORY If there’s a moral to the story, it’s chains is long: Casey’s General Stores, that in any industry, big fish will Wawa, Sheetz, RaceTrac, Kwik Trip, always get gobbled up by bigger fish. QuickChek and QuikTrip, to name a And while the acquisition of CST few. From the ground, c-stores still fit the Brands caused ripples across the con- retail landscape because they still meet venience channel, most companies the needs of the American consumer. Still, the industry is as challenging look upon Couche-Tard’s growth plan as another wrinkle in the evolution of as ever. Nick Lacaillade, vice president of the c-store industry. Some observers might say that con- retail & corporate development for solidation in the industry is making it Certified Oil Corp. in Columbus, Ohio, harder for smaller convenience opera- accepts that the industry is becoming tors to compete in a channel evolving at less fragmented with some corporaa rapid clip. However, the word rapid tions holding a strategic advantage. “I think it only makes it harder and can be attached to every retail channel today. For instance, by 2020, the harder for the independent chains

CONVENIENCE STORE INDUSTRY STILL EXPANDING A GLANCE AT THE overall annual growth of store volume in the convenience industry shows a rapid acceleration between 1985-2005. At year-end 1985, the store count was 90,900 stores; at year-end 1995 the store count was 101,100 (11.2% increase) and at year-end of 2005, the store count was 140,665 (39.1% increase), according to National Association of Convenience Stores (NACS) data. Comparably, from 2005-2010, the industry store count had increased a total of 4%. Since 2010, annual store count figures have narrowed even more: • 2010: 146,341 stores • 2011: 148,341 stores/ 1.4% increase over 2010 • 2012: 149,200 stores/ 0.6% increase over 2011 • 2013: 151,282 stores/ 1.4% increase over 2012 • 2014: 152,794 stores/ 1.0% increase over 2013 • 2015: 154,195 stores/ 0.9% increase over 2014 • 2016: 154,535 stores/ 0.2% increase over 2015 Jeff Lenard, NACS’ vice president of strategic industry initiatives, said that slowdown isn’t so much a sign of decline, but that the industry has reached a cooling off period compared to when it was eclipsing other channels by a good margin. “Our store growth has slowed compared to a decade or so ago, but that’s because our industry is already so massive,” said Lenard.“Convenience stores (154,535) comprise 34.1% of all retail locations (about 453,000). And looking at the broader store count overall, small format remains strong. The only channels really seeing growth are convenience, drug and dollar.”

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The two days spent with the PFS team were some of the most productive and informative I have spent with any company. Brian Griffith, CEO Golden Pantry

COVER STORY operates 110 c-stores in Oregon and Washington State, holds an enviable position because its footprint is adequate to operate efficiently, within the communities it serves. “No question there are some competitive advantages to being very large but having 110 stores has its advantages too. We can execute programs that the very large and the very small chains can’t. Vendors like to partner -CARL RICK, LEADERSHIP DEVELOPMENT with us because we are willing to take SPECIALIST AND OWNER, KWIK TRIP calculated risks and we execute as promised. I am not sure that is always the case with the mega chains or franIt’s reminiscent of another acquisi- chise model.” to compete on cost, given the scale that these large chains are creating,” tion, when the retail giant acquired 182 said Lacaillade. “That said, we oper- Tedeschi Food Shops, located across ORGANIC OPPORTUNITY Kwik Trip Inc. is fully vertically ate mainly in Ohio where Speedway the greater Boston region and New integrated with a 176,000-square-foot is dominant so nothing has really Hampshire in May 2015. David Bishop, managing partner of dairy and food kitchen to comchanged in our competitive landscape.” In his assessment, some conve- the sales and marketing practice Balvor plement the bakery. It also owns a nience chains are getting bigger and Inc. in Barrington, Ill., said while both 360,000-square-foot distribution censome are getting better at what they do Couche-Tard and 7-Eleven are grow- ter, and produces more than 6,000 food best. More and more, foodservice sales ing bigger, each is distinct from the products regularly, and the transportation network that delivers them to are replacing the profit void that ciga- other in terms of operational strategy. “Couche-Tard and 7-Eleven fun- stores fresh seven days a week. rette sales used to fill. The 500-plus store chain values “M&A (mergers and acquisitions) is damentally have different operating the strategy of Circle K and 7-Eleven models as the former operates most acquisitions as well as organic growth. with very few new-to-industry stores of its stores while the latter franchises For example, when Kwik Trip, which is being built. Their business model is very the majority. With that said, both are based in La Crosse, Wis., was looking at different than a Sheetz, Wawa, RaceTrac, attracting more supplier support and expanding in the city of Madison, Wis., QT (QuikTrip) or Kwik Trip. These guys resources as they build scale, which the opportunity came this summer with know what they need to build to cater will be less for others. Couche-Tard’s the purchase of PDQ Food Stores, a 34 their more sophisticated food offer, and organizational structure has fueled a company-operated convenience stores. “The company’s philosophy on fair amount of innovation related to it really can only be done organically.” store design, merchandising and fresh acquisitions has always been to take food programs, and their recent acqui- them as they come,” said Carl Rick, GROWTH SPURTS a leadership development specialist But it could also be a sign that sitions will help drive more to come.” Jonathan Polonsky, president and for Kwik Trip and a third-generation some companies are finding it hard to increase profits organically by sell- chief operating officer of Plaid Pantry, owner. “No matter how many acquiing more goods, or improving margins. based in Beaverton, Ore., said such sition opportunities there are, we have The big deals struck by Couche-Tard acquisition activity is evolving out of to be disciplined enough to only take the ones that fit our strategic initiatives and 7-Eleven are shaping the industry necessity. “Everyone is looking for growth and in a given market. Acquiring for the measurably. 7-Eleven, this year, entered into an agreement to buy 1,108 conve- if the big guys want to move the needle sake of acquiring would only hurt us nience stores, mostly on the East Coast they have to make significant acquisi- in the long run. The current economic and Texas, from Sunoco for $3.3 billion. tions,” said Polonsky. “I would expect climate has really only confirmed our Along with the store locations, this type of consolidation to continue need to be disciplined in our approach 7-Eleven, which has been building its as long as money is cheap and organic to acquisitions.” PDQ was a good fit for the growing fresh food platform in recent years, is growth is muted. I don’t see any dragaining a whole new menu of break- matic impact to the overall channel retailer in a number of ways, he said. “As we looked at PDQ, we saw fast and lunch tacos with Laredo Taco due to these deals.” Rather, he said Plaid Pantry, which how they excelled at customer service Co. and the Stripes convenience chain.

“NO MATTER HOW MANY ACQUISITION OPPORTUNITIES THERE ARE, WE HAVE TO BE DISCIPLINED ENOUGH TO ONLY TAKE THE ONES THAT FIT OUR STRATEGIC INITIATIVES IN A GIVEN MARKET. ACQUIRING FOR THE SAKE OF ACQUIRING WOULD ONLY HURT US IN THE LONG RUN.”

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COVER STORY and quickly realized they would be a great fit,” said Rick. “The more we have worked with their coworkers in the last few weeks to work through the details we have come to see that our cultures are very similar.” Kwik Trip has stated a goal of building 50 new stores this year, and is now eyeing central Minnesota—a target of opportunity for the growing chain. “Quite frankly, it was the biggest hole on our map. We’ve been filling in holes in Wisconsin and building in northeastern Minnesota for several years now,” said Rick. “Last year, we started in St. Cloud, Minn. because we could move product there easily over the highway system from La Crosse. Plus, having several stores in the market makes our truck routing that much more efficient.”

growth plans for existing and potential new markets.” Exploring new markets is a fulltime job for most convenience chains. COMMUNITY PARTNER Acquiring a fleet of stores is the A second job is tracking what the most expedient means for a conve- competition is doing. The job has nience chain to gain instant access to become more complex with the growa community. For some chains such as ing shadow cast by e-commerce Des Moines, Iowa-based Kum & Go, businesses—led by Amazon. which currently operates 412 stores in 11 states, organic growth is just as ‘CART’ BLANCHE Online is poised to become a bigger important—and is a measured part of part of the overall grocery shopping its business plan. Kristie Bell, communications direc- equation as U.S. shoppers start movtor for Kum & Go, said maintaining ing the mundane task of shopping for a strong brand identity helps in that regularly replenished goods—beverages, paper products pet food and pursuit. “Of course, there are some markets other household basics—online. In January 2017, the Food Marketing that are harder than others in which to grow a footprint, but part of our strat- Institute and Nielsen released preegy is to build relationships in the liminary findings from a joint report communities where we operate stores indicating that, by 2025, online groand begin to understand the regu- cery shopping could reach $100 billion lations, codes and capacity for each annually, or about 20% of the market market to best understand the num- share. Now, online groceries account ber of Kum & Go stores that is ideal for for 4.3% of food and beverage sales in each market. There is no one-size-fits- the U.S. While the shift to online is not surall approach, but we do consider all of these factors as we determine our prising, the rapid pace of the shift is. 32 Convenience Store Decisions

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Of course, Amazon will have a big influence on the numbers. In its buildup to finalizing its $13.7 billion deal for Whole Foods Markets on Aug. 28, the company announced that prices on a slew of Whole Foods items will drop. Products that will see a price cut include bananas, organic avocados, eggs and salmon. Amazon announced that certain Whole Foods products will be available through Amazon.com, AmazonFresh, Prime Pantry and Prime Now. It’s no secret that Amazon is also eying the convenience channel. At the end of 2016, Amazon unveiled Amazon Go, a new cashier-less convenience store in its hometown of Seattle that uses artificial intelligence and sensors to track which items consumers take off shelves. The Wall Street Journal reported recently that the Chinese e-commerce company, Alibaba had unveiled a cashierless convenience store concept that could become a model for Amazon’s convenience initiative. “Of course, we don’t underestimate any competition and obviously Amazon is very good at what they do,” said Plaid Pantry’s Polonsky. “But even as they try to sell everything to everyone, I believe very strongly that c-stores will continue to be viable for a very, very long time. People will always want immediate consumables and it’s tough to replicate what we provide folks unless you have a store on the corner.” If Couche-Tard has its way, that corner store will be a Circle K, or another name brand within its portfolio. The company recently acquired more than 500 Holiday Stationstores from Minnesota-based Holiday Stationstores Inc., moving the growing company into six new states. CSD CStoreDecisions .com

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FOODSERVICE

Flying Off the Shelf For years, foodservice stakeholders have urged Americans to eat more chicken. More and more, convenience store patrons appear to be listening. By Brad Perkins, Contributing Editor

MEETING DEMAND Indeed, the variety of options is what has people coming sumption of beef outpaced chicken 63 pounds to 28, Americans have been consuming, per capita, back to chicken. “The demand is there,” Super said. “We’re increasing more chicken than beef every year since 1992. The National Chicken Council (NCC), which keeps track supply a little bit, but seeing consumer demand to be high of the U.S. Department of Agriculture statistics in this area, and in terms of consumption, we’ll be at a record per capita attributes several reasons to chicken’s growth in popularity. in the U.S.—92 pounds per person [in 2018].” As people desire healthy food that is also high quality, “It’s a combination of taste, nutritional value, versatility and price,” said Tom Super, senior vice president of com- fast and inexpensive, they have frequently found chicken as munications at the NCC. “We ask folks all the time, ‘What a favorite. And trends show that will continue. “Chicken is growing at a faster rate than the red meat catare the top factors when purchasing chicken?’ Those usuegory, and I think that goes back to the healthy perception,” ally rise to the top.” Health. Taste. Versatility. It seems like a recipe for success. said Ryan Krebs, director of food service at Rutter’s Farm And it has been. Super attributes the increase in popularity Stores, which operates 68 c-stores in Pennsylvania. “People to the availability of many different types of chicken prepa- still love fried, but certain people in certain markets are rations and products, multiple dayparts, preparations and looking for somewhat healthier alternatives. People look it as a healthier alternative to red meat.” sizes of chicken entrees, snacks and sides. But also cost. As it becomes available in new and different ways, pairs “Chicken is relatively inexpensive and is more affordable compared to some proteins,” said Super. “There are with other foods and appears at unexpected parts of the a lot of fully-prepared products available and expanding. day—breakfast, anyone?—its popularity will continue to Hot prepared foods as well, whether it’s classic old chicken grow. And that’s good news for convenience store owners. “We are seeing a lot more purchasing of chicken at breaksandwich or fried chicken—those are hot, filling, affordable fast,” Krebs said. “One of our big sellers is putting fried meals.” HEREAS A GENERATION AGO, per person con-

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FOODSERVICE chicken on breakfast sandwiches or in burritos. We added that six or eight months ago and it’s done very well for us. We already had the chicken, so it was an easy add.” Though breast meat remains the most popular, customers want to be able to put different parts of the chicken into many different meals and snacks. And convenience stores are listening. “We can cross utilize. Chicken can be put in burritos, in quesadillas, in tacos, you name it,” Krebs said. “We spread that out across a lot of different categories beyond just chicken going on a sandwich. And if you get it grilled, people can get protein but not eat grease. I think the grilled category is growing and staying relevant.” Offering chicken in different ways—breast, chicken strips, boneless, rice bowls, fried, grilled—can increase business and keep people coming back at any time of day. Rutter’s Farm Stores has three sizes for its chicken strips and allows customers to pair chicken with just about anything. “We’ve seen a move in the wrap category. The grilled chicken on caesar salad; it’s a healthy alternative for salad and wraps,” Krebs said. “We build burritos and wraps that include both fried and grilled chicken and bacon and cheese and ranch or barbecue. We create some of those items ourselves and also, on the kiosks, we cross over the categories. You can put shredded pork on the chicken sandwich. We just charge them extra for the additional protein.”

CHICKENING OUT IN AMERICA JUST THIS PAST JUNE, Nation's Restaurant News released its annual Top 100 list, including a breakdown of the 10 fastestgrowing U.S. chains as measured by American sales growth in 2016. If the casual dining market is any indication, Americans are consuming chicken more than ever. In 2016, three of the five fastest-growing restaurant brands were chains selling chicken fingers, wings, or chicken sandwiches: 1. Raising Cane's (a chicken-finger chain) 2. Jersey Mike's Subs 3. Marco’s Pizza 4. Wingstop 5. Chick-fil-A

Krebs. “The problem lies in cook times because you can’t WHAT’S NEXT Chicken is far from the saturation point. But how will do it from frozen and you have to be able to manage your spoilage and inventory a little more. I think bone-in chicken convenience stores continue to reap the benefits? “I think more hot, prepared ready-to-eat meals, whether is a big category—it’s a dinner item, you could serve it in that’s fried chicken or chicken sandwich or chicken ten- bulk. If it’s non-breaded, I would put it in our Turbochef ders or a sandwich you stick in microwave,” Super said. oven, so it would be either baked or broiled. There are some “Making more of a variety of products but keeping them all good products out there.” With new products and increased focus on health and fast, convenient and affordable—those are the three dynamquality often comes increased costs. But industry innovaics over the past couple years.” Those three dynamics are boosting the move into items tions have helped keep chicken at a price point that make with chicken that previously were reserved for pork or beef. sense for convenience stores at all dayparts, and should stay “Right now we have core, high-volume items, but what that way for many years. “We’ve become much more efficient in terms of raising I’m seeing in the category is a lot of different types of innovation,” Krebs said. “We’re starting to see more chickens on the animal, what it takes to raise a healthy chicken, in prothe roller grill or chicken-infused offerings—chicken-apple cessing plant efficiency [and] feed conversion,” Super said. sausage with spinach and feta or sun dried tomatoes— “We’re leaps and bounds over other proteins. We’re able to some really nice stuff. It’s kind of for Millennials because produce a pound of meat at a cheaper price.” Chicken’s popularity and versatility is showing that they’re more aggressive in the flavors, so you’re beginning to see a lot of manufacturers develop chicken items for the being cheaper doesn’t have to sacrifice quality. After all, it’s a quality, healthy option that built chicken up in the first roller grill, which I think is a great idea.” Chicken patties and burgers are also growing as sub- place. “It’s about the quality to us,” Krebs said. “We believe we stitutes for beef. But one area that could be growing for convenience stores is dinner. Krebs sees it as an untapped charge our customers an honest price for that quality and market that can compete against fast-casual restaurants, they’re willing to pay a price for that quality. If I change a and he has begun looking into ways to expand into dinner product, it isn’t due to money—many times it may cost me more—it’s about the quality and the upgrading I give to my while diversifying existing items. “I am searching right now for bone-in chickens,” said customer.” CSD 36 Convenience Store Decisions

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Samitas and Schwarma, Rodriguez said. Meanwhile, the Lobster Roll is an engrained in the American example of an East Coast offering that diet. This also makes them an is now popular nationwide. The Bahn Mi, which is on 2% of ideal vehicle for introducing advenrestaurant menus, but has the fastture via a familiar food. Market research firm Datassential’s est growing menu penetration, often “2017 Sandwiches Keynote Report” includes a baguette with roast pork, indicates customers love sandwiches topped with fish sauce, Asian caband sandwich components, includ- bage and vegetables. It likely succeeds ing the varieties of meats and cheeses because it pairs a familiar roast pork that go into them. When customers sandwich with a new and interestare asked about the foods they like, ing flavor profile, allowing for “safe “sandwich varieties rate pretty high experimentation.” The idea is to hit the mark with a compared to other types of food,” said Jackie Rodriguez, senior project man- sandwich item that’s not 100% familiar, but also not completely outside the ager at Datassential. Innovation is exploding on sand- comfort zone. “This is especially true wich menus with both global and for a c-store audience, which tends to regionally-focused ingredients cur- lean toward more ubiquitous ingredirently trending upward. For example, ents and less toward the cutting edge,” the top 10 varieties growing the fast- said Kyle Chamberlain, project manest on restaurant menus were items ager, Datassential. That includes sandwich names. like the Bahn Mi sandwich, Torta, MERICANS LOVE SANDWICHES, WHICH have long been

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For example, Rodriguez suggested a c-store might introduce the Bahn Mi but call it “Saigon Pork Sandwich” to increase a familiarity. The top five fastest growing flavors and condiments according to Datassential include sriracha, bacon jam—savory jams are huge—spreads made from Greek yogurt, kim chi, kale, daikon (a Japanese radish) and beets. If the top five flavor trends seem too “out-there” for c-stores, consider that McDonald’s launched its Kale and Sriracha Mac Sauce Burger nationwide in July, which shows how far some of these trends have come. Kale is no longer just for the health food crowd. “It’s something that everybody from all walks of life is interested in right now. And the same is now true for sriracha when a couple of years ago that might have been too spicy or too unusual for a lot of folks,” Chamberlain said. CStoreDecisions ecisions .com

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FOODSERVICE When Datassential asked customers what would motivate them to eat sandwiches more often, one of the top answers was healthier versions of ingredients or healthier sandwich options in general. Customers are also willing to pay more for premium

wiches throughout the day that it is testing deleting non-breakfast sandwiches from the menu in the name of simplicity. BREAKFAST IS BOOMING Breakfast sandwiches are indeed A recent article in USA Today reported that Dunkin’ Donuts has seen in demand. Datassential found that such a demand for its breakfast sand- between 2005-2016 the number of U.S. restaurants offering breakfast sandwiches grew 41%. Restaurants are pulling innovation for breakfast sandwiches from other daypart menus. “The fastest growing proteins are fried chicken, brisket, pork belly, chorizo and prosciutto—things that you might expect on a charcuterie plate,” said Chamberlain. Popular cheeses include Fontina, Asiago, Gruyére and smoked cheeses. Daypart blending is also trending, where a fried egg might appear on a dinner daypart sandwich and fried chicken might make an appearance on breakfast sandwiches. “So what might be perceived as a breakfast sandwich really can play a different role throughout the day,” said Rodriguez. NOCO Express, based in Tonawanda, N.Y., offers breakfast sandwiches throughout the day via its cold cases. “The most popular is our Sausage Egg and Cheese on a bagel. We also offer the Sausage Egg and Cheese on a maple flatbread, which is becoming very popular,” said Linda Hulings, who manages the Nickel City Foods line for NOCO Express’ 37 locations. ingredients like kale or antibiotic-free chicken.

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CASTING BREAD NOCO Express customers have shown a demand for non-traditional bread items, and NOCO meets that need by offering a sandwich of the month. This August, NOCO offered ham & Swiss cheese on a pretzel roll for $5.49. “We are influenced by trends and the sales of the sandwich. During the summer, we offer our lighter sandwiches and wraps like our Buffalo Chicken Finger Wrap and Chicken Caesar Wrap. We also offer our complete eight-inch subs and specialty sandwiches, such as Buffalo Chicken Sandwich on a jalapeño roll with freshly-sliced spicy chicken CStoreDecisions ecisions .com

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FOODSERVICE In addition to driving sandwich in Massachusetts and New Hampshire. sales with the sandwich of the month, “Right now, we’re just continuing to NOCO also markets the sandwiches focus on Mayflower.” Mayflower Provisions gets meat with signage at the pumps. “When a customer pulls up to a NOCO Express fresh delivered three times a week store, they see the fresh food signs —such as butcher-style roast beefs, turkeys and hams—which it sells via its everywhere,” Hulings said. butcher shop, but also slices, flavors and cooks in-house for its sandwiches. FRESH FORWARD Fresh local produce—including When VERC Enterprises acquired Plymouth, Mass.-based Mayflower cucumbers, melons, lettuce, strawFood & Spirits—now renamed berries and blueberries— is delivered Mayflower Provisions—in December six days a week and sold in the store’s of 2016, it acquired a quarter-cen- extended produce section—but also tury old location that offered a robust used on sandwiches as well. “We get a lot of our (ingredients) foodservice program, including an inlocally sourced. If you’re going to get house baker, chef and butcher. The 7,000-square-foot store contains a sub or a sandwich at Mayflower, we bake the bread, use our own in-house meats—at least for roast beef, turkey Grilled cheese and subs are consumers’ favorite sandwiches, although affinity is consistently high across many other varieties. At-home favorites such as peanut butter and ham—and use fresh locally-proand jelly rank comparably to classic foodservice offerings such as Philly cheesesteak. duced vegetables and fruits every day,” Vercollone said. America’s Favorite Sandwiches: Affinity (% who love, 5-pt scale) Mayflower Provisions charges 10-20% more for sandwiches compared 51% with other VERC c-stores, which offer 44% pre-packaged, vacuum-sealed sand38% 36% wiches that arrive at the stores two-three 35% 35% 34% 34% 34% 33% 32% 32% 31% 30% days a week. 27% 27% Mayflower makes about 30% of its sandwiches in advance for the graband-go cold case, and the other 70% are made to order. It also features madeto-order breakfast sandwiches made Grilled Sub Chicken Philly Turkey Grilled Pulled Cold Roast Beef Ham & PB & J Club Fried Steak Egg BBQ Cheese CheeseChicken Pork Cut Cheese Chicken Salad Chicken from scratch in the store until 10 a.m., steak including an Egg and Cheese bagel; 97 92 90 89 89 88 87 88 87 85 86 85 83 78 79 99 and Egg, Cheese and Ham (or bacon Percentile rank (versus all foods and flavors) or sausage) on an English muffin. Source: Datassential; 2017 Sandwiches Keynote Report “The egg is freshly broken. The NOTE: Findings are from FLAVOR, a consumer rating tool covering more than 2,600 foods and ingredients. For more information on how FLAVOR can help you decode consumer preferences, contact Brian Darr at 312-655-0594 or brian@datassential.com. bacon, sausage and ham are cooked in-house. So our breakfast sandwiches NOCO first began offering pre- a 1,000-square-foot deli, 1,000-square- are made with fresh ingredients,” packaged sandwiches via Nickel foot butcher shop and 500-square-foot Vercollone said. As for incorporating new flavors, City Foods in 2008, beginning at its bakery. VERC Enterprises is continutop 10 locations and expanding to all ing the food program the store had Chef Tony Andrews, who has been with the store for 13 years, is Jamaican locations within the year. Today, all when it was acquired. With an in-house bakery, the store and incorporates Jamaican flavors into sandwiches are made fresh daily, prepackaged and delivered to the stores in bakes its own bread in-store for its many items from homemade chili to a sandwiches. “We hope to be bring- jerk chicken. the evening. Upon acquiring the Mayflower Today its Sonoma Chicken Salad ing (in-house bread baking) out to the Sandwich on Grilled Flatbread is its rest of the chain at some point,” said store, VERC completely renovated it, top selling specialty sandwich, and it’s Leo Vercollone, president of VERC adding all new equipment. “The second biggest thing is we’ve Enterprises, which operates 27 c-stores available year round.

breast, jalapeño Monterey jack cheese and dressed with a spicy aioli, or our Triple Decker Sandwich with freshly sliced ham and turkey, Swiss cheese and coleslaw with Russian dressing all on three slices of seeded rye bread,” Hulings said. During the fall and winter, NOCO offers heartier sandwiches like a BBQ Pulled Pork and Carved Turkey. This year, it’s adding a Sloppy Joe. In addition to white and wheat sub rolls, NOCO also offers flatbreads, pretzel breads, brioche rolls, jalapeño rolls, rye bread and wheat breads. Each specialty sandwich is made on different bread. The breads are supplied by local vendors.

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FOODSERVICE tried to get is locally-sourced prod- than 400 c-stores in 11 states, offers ucts,” said Vercollone, who added the a variety of sandwiches—both cold store is partnering with local farms to and hot—in stores that offer food. provide produce and fruit, as well as Marketplace stores, those opened since February 2016, include an assorteggs and certain meats. Even though committing to local ment of made-to-order sandwiches, and from-scratch foods has been time including: Grilled Cheese (ham can be consuming, the difference in quality added), Beef Brisket, Italian Chicken Panini and Philly Steak & Cheese. has been worth the effort. Anyone running a successful foodConsumers today don’t want to see preservatives on ingredient labels. service program knows that excess “We’re using few ingredients. We’re food often results in spoilage and keeping it fresh. I don’t know how waste. Kum & Go took a unique many convenience stores you know approach to this issue and launched of that have a chef, a butcher and a a ‘Food Rescue’ program in Colorado baker and fresh locally-sourced pro- Springs in January 2017, which has duce,” Vercollone said. “We want to now rolled out to all 16 Colorado really learn and get really good at it at Springs locations. “Safe, prepared excess food is stored Mayflower before we try to bring it to properly in coolers until the partner the rest of our chain.” agency picks it up—typically onethree times per week—and delivers it FOOD TO THE RESCUE Kum & Go, which operates more to a charitable organization who will

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distribute the food to its clients,” said Kristie Bell, communications director for Kum & Go. Breakfast sandwiches and hot and cold lunch sandwiches are among food items donated by the convenience chain. According to its Colorado Springs partner, Care and Share, Kum & Go has provided more than 28,000 meals year-to-date to fight hunger in the Colorado Springs community. “We expanded into Des Moines, and (in August) launched our 21st store for the entire program,” Bell added. Kum & Go’s original goal was to have 25 stores on board by the end of 2017—but it’s now shooting for 45. “So far, the program has been a huge success for the communities and for our associates, who like to know that the food is going to those in need, instead of being thrown into the trash,” said Bell. CSD

2/1/17 6:27 12:42 PM 8/25/17 AM

FOODSERVICE

Coffee Category Grows Cold

its Florida and mid-Atlantic stores. The bodied coffee with low acidity and cold-brew offering comes in two fla- hardly any bitterness. “Our development team had been duced in the 1970s, is now vors of traditional black or sweet cream, working on it for more than a year to one of the most popular both in 16-ounce and 24-ounce sizes. The c-store’s cold-brew coffee incor- make sure that we were going to have Wawa foodservice offerings. Selling millions of cups every year, there’s been porates a slow steeping process, using a consistent product, both in quality few reasons for the retailer to tinker Wawa’s unique coffee beans, said as well as in execution for the stores,” Mary-Rose Hannum, Wawa’s senior Hannum said. “We also wanted to use with its perfected proprietary formula. H o w e v e r , t h i s y e a r t h e director of fresh food and beverage our own blend, so we do use a formuPennsylvania-based c-store opted experience. The response from cus- lation of our dark roast.” Driven by changing taste profiles, to expand its beverage program to tomers has been positive so far. “Sales have been strong so we’ve steered mostly by Millennials, cold include cold-brew coffee selections to stay up with the expanding popularity been excited about that and certainly coffee beverages was a logical addition. “Cold brew was the thing up and have gotten positive feedback and of cold-brew beverages. Market penetration for cold-brew reviews whether it’s through social coming—really up and coming—for beverages rose to 21% in the first half media or just talking with our custom- the last several years,” said Hannum. of 2017 among U.S. coffee drinkers ers,” said Hannum. “We would say it’s compared to just 15% in 2015, accord- been a success and we look forward to SOMETHING BREWED For convenience store chains looking to data from the National Coffee it continuing to grow. Since it is new, it’s about an awareness that we have it ing to add to their foodservice bottom Association (NCA) in New York. line, cold brew is the latest iced coffee This past July, Wawa announced it and it’s available at Wawa.” Wawa Cold Brew is made through craze popularized by companies such was making its cold-brew iced coffee, Wawa Cold Brew, available in all of its a small-batch process, using triple- as Starbucks and Dunkin’ Donuts. Even 7-Eleven put its own spin on 760-plus locations as part of its specialty filtered water and low temperature beverage program, which is already in extraction that delivers a smooth, full- the category this summer by promoting AWA INC.’S SIGNATURE BRANDED coffee, intro-

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FOODSERVICE condiment bars, promotional cam- coffee, free Wi-Fi and a curbside patio along with other urbanized offerings. paigns and customer experience. Wawa operates stores in Delaware, “I don’t think we’re there yet,” said Milletto, referring to c-store coffee pro- Florida, Maryland, New Jersey, Pennsylvania and Virginia. grams reaching their full potential. Wawa’s nitro cold-brew coffee proMore experts point to cold-brew coffee as a game changer for retailers gram has yet to be formally rolled out because not only is it sought out by con- chain-wide, but the company is hopesumers as an iced beverage option, it ful it will make a big splash. “We thought it was appropriate as provides a unique revenue stream that we’re in the city, a lot of universities doesn’t divert from hot-coffee sales. around, a lot of young people—and we (will) certainly have the space,” NITRO FUELED Convenience retailers that align their said Hannum. product offerings to the latest retail trends are paying attention to the lat- FULL OF BEANS Coffee programs at c-stores that earn customer loyalty more than not boast a nearly perfect balance of quality, service and cost. To that end, industry suppliers are helping retailers realize their coffee potential. For instance, Core-Mark Holding Co. this August announced the release of its new, upscale line called Arcadia Bay Select Coffees. Along with Boyd’s Coffee Co., a Pacific Northwest coffee roaster for 115 years, Core-Mark has developed a premium line of coffee exclusively available to Core-Mark customers. Arcadia Bay Select Coffees includes Arabica bean coffees sourced from eight coffee growing regions including Kona, Core-Mark’s new Arcadia Bay Select Coffees program features 10 varieties of both “single Brazil, Ethiopia and Guatemala. origin” and blended 100% Arabica bean coffees.The program also provides c-stores with To make the program even more marketing support, signage, menu boards and prefab kiosks. seamless, the supplier is providing c-stores with marketing support, signage, menu boards and prefab kiosks. Riverside, Calif.-based GT beverages are helping boost sales dur- est coffee craze: nitrogen-infused coffee. ing the summer months, said Bruce Starbucks earlier this year announced Petroleum, which operates under the Milletto, founder, owner and presi- nearly 500 locations would have nitro convenience banner GT Fast Mart, recently adopted the new Arcadia dent of Portland, Ore.-based Bellissimo cold brew on tap by summer’s end. Tap is the key word because of how Bay line. The strategic move is already Coffee Advisors. Milletto has advised a few name-ranked convenience chains, the coffee is created. Nitrogen is added showing positive results. “On the advice of Core-Mark, we including when he worked with Sheetz to a keg along with coffee to yield a moved from a liquid coffee program Inc. when the chain was adding its foamy, caffeinated beverage. Again Wawa is pushing the cold to the Arcadia Bay Select Coffees, said crew-serve coffee program. It should come as no surprise that brew envelope, making nitro cof- Amy Prewitt, store manager at GT Fast consumers are becoming more par- fee a standard offering at a new store Mart. “We love the new signage that ticular about the quality of coffee they being planned in Washington, D.C. supports the program, and our coffee drink, Milletto said. Many convenience The planned 9,200-square-foot store is sales are up more than double digits retailers have elevated coffee to a higher scheduled to debut this winter on 19th since we have made the change and level, boasting fresher product as well Street NW and will featuring subway we plan on adding more coffee varietas fuller conceptualized coffee spaces, tile-wrapped walls, nitro cold-brew ies to support the program.” CSD freshly-brewed iced coffee with mobile app ads and on its website, encouraging patrons to fill a Big Gulp cup with ice, add coffee and condiments. The consumption of specialty coffee is increasing as shoppers are prioritizing experience over price in the consumption of gourmet and specialty coffee beverages. Within the $48 billion retail coffee market, approximately 55% of spend is expected to go toward specialty coffee in 2017, according to the Specialty Coffee Association of America. Among all those percolating dollars, the increasing popularity of cold-brew

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effective incentives. She added that when distributing couinto habit, according to Scott Zaremba, president of pons in-store, their value as a marketing tool can be increased when coupled with food sampling at the point of sale. Lawrence, Kan.-based Zarco USA convenience stores. Another way to use coupons in-store to encourage return “If we can get consumers to come into our stores four times, we’re pretty confident they’ll remain custom- visits is to offer a bounce-back deal. For example, breakfast customers can receive a coupon for a lunch item or vice versa. ers,” Zaremba said. Last March, Cubby’s Convenience Stores, with 36 locaFor many customers, their first encounter with Zarco USA and Sandbar Subs (the company’s proprietary food- tions in Nebraska, Iowa and South Dakota, offered a service offering) is through a coupon. Zaremba distributes bounce-back coupon to promote sales for its signature Junction Burger. The coupon allowed customers who coupons heavily at local events. “It can’t be a 50-cents-off coupon; it must have true merit, bought one of the burgers to get another for half price when like maybe a free lunch, to result in action,” said Zaremba. they returned for another visit. De Lone Wilson, the company’s president, declared the promotion a success and said “Those coupons are redeemed 20-25% of the time.” Community events are Zaremba’s preferred place to he would repeat it in the future. Wilson has also done direct mail couponing with fooddistribute coupons because “people who are loyal to an organization or event usually also demonstrate that loyalty service partner Godfather ’s Pizza, using Godfather ’s in other areas of their lives.” He also reaches out to local mailing list, with good results. Ryan Krebs, director of food services for Rutter’s Farm businesses by sending sandwiches with coupons attached. Stores, which has 68 locations in Pennsylvania, distributes high value coupons via direct mail to areas within a one mile INCREASING INCENTIVES New York-based foodservice restaurant, retail and hospi- radius of new stores leading up to their opening. The coupons tality consultant Arlene Spiegel agrees that coupons (“either may offer a buy one get one for burgers or $2 off of a pizza. He also brings coupons to surrounding businesses for old-fashioned printed ones or online through an app”) can be T TAKES FOUR CUSTOMER interactions to change trial

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distribution to their employees. Recently, Rutter’s partnered with a local minor league baseball team and, in addition to having Rutter’s beverages at the stadium, gives out coupons to game attendees. Krebs noted that all three of these couponing strategies yield high redemption rates. Distributing coupons and food samples to local noncompetitive businesses and organizations such as schools and fire and police departments also pays off for Cubby’s, Wilson said. These recipients often place large orders when they have meetings. An easy way for stores to reach all customers with their

foodservice message is to put a menu and ordering information in every bag, regardless of what is being purchased, Spiegel said. And weekly circulars that promote packaged goods should also feature foodservice specials. PROMOTING FOR SUCCESS For its 24 stores—many in modest towns—Cubby’s does a good amount of local newspaper advertising. Mostly, the ads focus on a foodservice offering and a liquor, wine or beer special. “We’re evaluating all of our newspaper advertising right now to determine if the small town papers are bringing in enough return,” he said. Billboards, the majority of which focus on food and change frequently, have a “huge impact” for Rutter’s, especially in markets that have multiple stores, Krebs said. “You want to say what you want to say, but you are communicating with people who are driving 70-80 miles per hour,” said Krebs. “I’ve seen competitors be too wordy or busy. You have to get right to the point with the right image and as few words as possible.”

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FOODSERVICE To add power to the introduction of unique food products, Rutter ’s uses radio (mostly sports talk) and local television. A recent example was a bacon-wrapped cheddar-stuffed hot dog that Krebs developed with one of the chain’s suppliers. For three months, Rutter’s was the only convenience store where this item was available. Another broadcast media-promoted food item was a Pennsylvania Dutch-style chicken pot pie, a local specialty. “We received huge responses for both of these items,” Krebs said. As part of upgrading the gas pumps to meet the requirements for accepting Europay, Mastercard and Visa chip technology, Cubby’s added GSTV and produces videos focusing on the stores’ foodservice offerings. Inside the stores are digital menu boards featuring professionallystyled and shot food photography. Rutter’s gas customers are exposed to foodservice promotions at three or more points during the gas pumping experience. Aside from pumptoppers, food is advertised on the hose hangers. A music and messaging system that plays inside the stores is also piped outside to the pumps. And coming soon will be digital optic screens at the pumps that will play the company’s commercials. For continual instore broadcasting of tempting food images, Rutter ’s has large, f l a t - s c re e n , d i g i t a l televisions. In some stores, and being rolled out to more, are Cornelius touchscreen beverage fountain machines that also have programmable flatscreen units. “On the beverage machines I can advertise anything I want,” said Krebs. “It’s a good place to promote our pizzas and burgers.” At the stores’ food ordering kiosks, new items are showcased for at least a month to keep them front of mind for customers and make them easier to order. The kiosks also encourage the purchase of add-on items for a higher ring per order. For example, a burger order will prompt the display of a screen suggesting the addition of a side, making it a combo with a discounted soda or adding a dessert. “The majority of the time we are able to upsell the order,” Krebs said. After eight years of offering touchscreen ordering, Zaremba has determined that a large number of options can be too much of a good thing. “If there are too many choices, the ordering process can get really backed up and we are looking for a quick transaction,” Zaremba said. “It’s a balancing act and we had to back down on some of the choices on our system to speed things up.” 56 Convenience Store Decisions

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FINDING WHAT WORKS For c-store retailers that don’t have the budget for instore television or ordering kiosks, food suppliers can often provide high quality product photos for displaying on indoor and outdoor signage, circulars and ads, said Spiegel. Photos can also be used to define the space for foodservice and draw customers to it. Rutter’s has open kitchens so customers can’t miss the fact that the food is made on the premises. “We hang our hats on transparency,” Krebs said. “Restaurants and bistros have pretty recently started doing open kitchens, but we’ve been doing it for 10 years.” Heavy sampling gets the food, especially new items, from sight to taste buds at Rutter’s. Advertising food on the company’s website may seem like a no-brainer, but not all operators take full advantage of the opportunities it presents. Rutter’s posts its full menus in Spanish as well as English. A separate value menu highlights choices ranging from 99 cents to $1.99. Social media outlets such as Facebook, Instagram and Twitter, also provide dynamic, yet inexpensive platforms for, according to Spiegel, “keeping the brand on the customers’ radar and insuring that you are reaching critical demographics.” Wilson noted that Cubby’s works with a local marketing company to post food images and run promotions on social media about once a week. An example is a Wednesday night “Beat the Clock” promotion, which runs from 5 p.m. to 8 p.m. and allows customers to get a special price on pizza when they call in their orders. Loyalty programs can allow operators to know what customers really want and make personalized offers to them, Spiegel said. Rutter’s Reward Card holders, for example, can earn cents off per gallon of gas with in-store purchases. “About 90% of my food items are attached to rewards,” Krebs said. C-stores with apps can use them to offer coupons, other special promotions and reminders to customers about the availability of foodservice, particularly at traditional mealtimes, Spiegel noted. “The best time for dinner alerts is from 4 p.m. to 7 p.m. when customers are thinking about ‘What’s for dinner,’” said Spiegel. Whatever the medium for promoting foodservice (or anything else in the stores), the goal is to get into customers’ and prospective customers’ minds without being annoyingly intrusive. “We aim to make people aware rather than making them feel invaded,” Krebs said. CSD CStoreDecisions ecisions .com

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CATEGORYMANAGER’S NOTEBOOK

Smokeless Back on Track Smokeless continues to be a bright spot in the tobacco category, reflecting durable consumer loyalty and acceptance of the latest line extensions. By Howard Riell, Associate Editor

The category was buoyed by demand for snuff, includHE ADVERSE IMPACT OF this year’s voluntary recall from the U.S. Smokeless Tobacco Co. has lessened con- ing both U.S.-style dip and Swedish-style snus. The success siderably, prompting strong category sales across the of snus marks a pivot in the smokeless tobacco category, according to industry experts. convenience store channel. Bonnie Herzog, managing director–equity research, bevTop brands such as Copenhagen, Grizzly and Skoal posted strong results recently. According to Information erage, household & personal care, tobacco & c-stores for Resources Inc. (IRI), for the 52-week period ending July Wells Fargo Securities LLC, recently said that smokeless 9, 2017, sales of smokeless tobacco in the channel topped tobacco dollar sales remain a bright spot, as consumers con$6.5 billion, an increase of 4.53% from last year. Chewing tinue to respond positively to brand expansions. Growth tobacco and snuff accounted for nearly $6.3 billion, an also reflected continued consumer loyalty to the category and acceptance of the latest line extensions, Herzog noted. increase of 4.16%. “Notably, sales of (Altria Group subsidiary U.S. Spitless tobacco registered sales of about $298 million, a Smokeless Tobacco Co.’s) Copenhagen outpaced Reynolds spike of 12.91%. Indeed, there is plenty of reason for optimism. The American Inc.’s Grizzly, which suggests light at the end of smokeless category should continue to grow steadily, as it the tunnel with regard to USSTC’s (U.S. Smokeless Tobacco has for decades. Further smoking restrictions, along with Co.) January recall,” said Herzog. social pressures involving combustibles, should continue to develop dual users over time. As in other categories, major RECALL FADES Indeed, memories of USSTC’s voluntary recall after conmanufacturers such as Altria Group and R.J. Reynolds sumers in six states complained of foreign metal objects in cans Tobacco Co. are well positioned for the future. including Skoal, Copenhagen, Cope and Husky, are fading. “That’s all done,” said Bill Walsh, general manager of EASING CONCERNS Issues stemming from this year’s recall have largely been Vacaville, Calif-based Wood Oil Co., which operates four resolved. While there were obvious challenges with out-of- convenience stores in the Golden State. “People didn’t even stocks and the timing resulting from production shortages, really care. The only problem we had was, obviously, getmanufacturers kept in communication with retailers to ting product because they had pulled everything and were alleviate concerns after the initial shock and resulting dis- slow to put it back out. But if we got product we were fine; customers were buying it up.” ruption occurred. 58 Convenience Store Decisions

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CATEGORYMANAGER’S NOTEBOOK “The recall issues are all behind us, with the exception of maybe a couple of Skoal pouch SKUs,” said Tim Greene, category director of tobacco and general manager of Smoker Friendly International LLC, based in Boulder, Colo. “These have little to no impact on our business.” He and his colleagues have found that pre-priced and two-fer promotions work well, and for the most basic of reasons. “Customers like to see sale pricing.” “We had some recall issues due to a product contamination,” said Jeff Chase, controller/director of convenience store operations for Ed Staub and Sons Petroleum Inc. in Klamath Falls, Ore., “It only affected a few products, and the manufacturer pulled the product and reissued new product within about two days.” Ed Staub and Sons Petroleum operates 18 Ed’s Fastbreak convenience stores.

3 TIPS FOR BOOSTING SMOKELESS SALES 1. Try eliminating out-of-stocks. 2. Always provide fresh product. 3. Be aggressive with promotions.

As with locations, customer relationships also come into play with smokeless, Walsh added. “We have our regulars. The cashiers all know what they want when they walk in the door, and they buy pretty much buy the same amount.”

MOVING FORWARD Expanding smokeless business will require that retailers VOLUME INCREASES do little more than adhere to the rules of good retailing. Smokeless sales remain consistent, retailers reported. C-stores need, first, to be in stock and carry a wider vari“The trend over the last three months has shown positive volume increases over the same months a year ago by ety of choices. The set should be visible and advertised, as as much as 10%,” said Greene. “However, margins continue it can be a traffic driver in the same way as cigarettes. Any type of discount, such as two- and three-fer deals, capture to be squeezed.” Smoker Friendly comprises 103 stores in five states, consumer attention. Many retailers continue to successfully including 20 Gasamat convenience stores that offer fuel. sell rolls of smokeless, though these may face pressure in The most prevalent trend that Greene and his colleagues the long-term as taxes and price increases result in higher have seen thus far in 2017 is a push by the majors to partici- out-of-pocket expenses. “The most important thing retailers can do is have invenpate in their multi-unit and loyalty programs. Copenhagen FC and LC continue to dominate the cate- tory, and fresh inventory, earning your customer’s trust that gory, Smoker Friendly has found. Copenhagen LCW is its their brand is fresh and available is invaluable,” Greene third-most-popular SKU. “Copenhagen has a loyal follow- said. “On the other hand, out-of-stocks and expired product are a fast way to lose that customer.” ing in the regions we operate,” said Greene. Greene considers the next most important strategy is for Greene added that he doesn’t necessarily see a big c-stores to be aggressive with their promotions. change in the demographics of the smokeless customer. Chase recommends c-stores ensure they have updated “If anything, I see a switch to pouch SKUs, and Wintergreen continues to do well. But those trends have offerings that are merchandised well and they shouldn’t run out of product. been in place for the past couple years.” “Include discount in your loyalty program, and accept Walsh said smokeless sales at his stores remain consistent. “I haven’t really seen any growth. I know that they came coupons. We have found that a multi-can discount, and out with refrigerated products a few years ago, and com- adding it to our loyalty program, helped increase sales and panies are coming in and basically handing out coupons to drive more traffic,” said Chase. Chase predicted that the spate of local and state smoking try and talk them up, but I have never really had a demand for it,” said Walsh. “Maybe there’s one customer who buys restrictions will lead to a continued increase in smokeless it, but after two or three months he disappears. For us it’s products for at least the next few years, with growth conpretty much a staple, just like our cigarettes sales, which are tinuing into 2018 at a 2-5% pace. Walsh also sees continued stability for 2018. His advice also pretty consistent.” Catering to differences in locations can give savvy man- to c-store retailers then is to remember that price is imporagers a sound advantage. Wood Oil operates one store on a tant to customers. “They need to make sure they have a competitive price smaller local highway, and it excels in the category. “They sell tons of chew,” Walsh said. “It could be that we are compared to their neighbors,” Walsh said. “Price surveys the only game in the area for people who are traveling. The other are very important, and something that I do constantly. stores are in the middle of big cities, and though their sales are That’s actually the best way to help yourself, because peonot as big as that store’s, we are still pulling in $3,000 a month.” ple will drive across town for 10 cents.” CSD 60 Convenience Store Decisions

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CATEGORYMANAGER’S NOTEBOOK

Tea Craze Refreshes Sales The growing ready-to-drink tea segment is spurring more retailers to expand their cold vault selections while employing their own lines of flavorful, fresh-brewed teas. By Lisa White, Contributing Editor

T WASN’T THAT LONG ago that juice and tea beverages were being overshadowed by the hard-charging introduction of energy drinks, thirst-quenching ‘ades’ such as Powerade and Gatorade and the ever-evolving lines of bottled water, which continue to emerge. However, a resurgence in ready-to-drink (RTD) ice tea brands such as Gold Peak—part of Coca-Cola’s RTD tea portfolio—and AriZona are bringing the forgotten segment back into focus. Now, c-stores are inundated with new and unique flavors, healthier ingredient profiles and effective marketing programs. As a result, tea and juice sales are on an upswing. According to market research firm Nielsen, iced tea sales totaled nearly $1.6 billion in c-stores in the 52 weeks ending June 3, 2017, almost a 10% increase compared to the previous year. By comparison, c-store sales of juice in the 52 weeks ending June 3, 2017 totaled more than $2.2 billion, a drop of 2.6% from 2016, according to Nielsen. Refrigerated juice and drink smoothies led the way with more than $223 million in sales in the channel, followed by orange juice at more than $213 million. This was followed by lemonade at almost $59 million and refrigerated fruit drinks at $35 million. The influence of changing consumer preferences on overall sales is unmistakable. “In today’s c-stores, the tea and juice categories are being given more space and a larger assortment of flavors and brand assortment are also being provided,” said Brian Ferguson, chief merchant at Knoxville, Tenn.-based Pilot Flying J, which operates about 550 locations nationwide. “This is primarily being driven by the tea category. Additionally, as the breakfast and lunch segments grow, both categories continue to shine through bundle deals. Teas and juices have also become very popular items in private labeling, as consumers demand the freshest product available.” 62 Convenience Store Decisions

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COOL OFFERINGS C-store retailers are noticing a shift in the beverage climate favoring tea more so than juice. “Both the juice and tea categories are seeing growth in c-stores due to the increase of both flavors and styles,” said Ferguson. “That being said, as the consumer continues to move from carbonated soft drinks to more natural and lower-calorie beverages, we are seeing a larger growth in the tea category. Although still growing, the rate of growth within the juice category has slowed slightly due to the negative connotation of its high sugar content.” Fruit-flavored teas are hot across the country, but the type varies, depending on location. “Within the tea category, fruit flavored teas, including peach, mango and watermelon, are always a consumer favorite, while premium tea, including black, green and white, continue to have more and more success,” said CStoreDecisions ecisions .com

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CATEGORYMANAGER’S NOTEBOOK TRACKING ONE-YEAR JUICE AND TEA SALES Iced/ready-to-drink tea: $1.6 billion in dollar sales (+1.2% from previous year ) Juice drinks (shelf stable): $2.2 billion in dollar sales (-2.6% from previous year) Packaged coffee & tea: $85 million in dollar sales (-9.7% from previous year) Source: Nielsen, Total U.S., Convenience Stores, 52 Weeks Ending June 3, 2017

Ferguson. “Looking at juice, this category is always evolving as premium, pressed, smoothies and Kombucha (fermented sweetened black or green tea used as a functional beverage and touted for its health benefits) are all beginning to disrupt the traditional juice landscape.” The quest for unique flavors has led to the emergence of new brands, including China Mist, a line of naturallyflavored teas from Farmer Brothers in Scottsdale, Ariz., and Brooklyn’s ITO EN North America’s iced-steeped cold-brew ready-to-drink line.

“Iced teas and lemonades continue to show promising growth,” said Moyer. “Whether this is a fountain option or fresh brewed tea, customers continue to seek new and fun flavor options.” Due to the potential, Rutter’s has chosen to offer both as part of its dispensed program. Lemonade and Rutter’s branded iced tea are available as fountain options that can be modified with flavor shots. In addition, its locations offer a fresh-brewed black tea, green tea and iced coffee option that can be customized using flavored syrups at the condiment bar.

MORE TEA “The biggest thing we’ve seen in tea growth is more MORE VALUE C-stores are implementing juice and tea promotions consumers opting for iced tea,” said Melissa McPherson, category manager for NOCO Express, a Tonawanda, N.Y.- and paying more attention to placement at the store level based chain of 37 locations. “Customers are no longer to bring added visibility to these beverage varieties. For example, the majority of NOCO’s stores include a looking for sweetened varieties; they want more unique full door dedicated to tea, while juices are situated by iced flavors.” The biggest seller at NOCO Express and On the Go coffee or grab-and-go dairies. “We have a Teavana promotion running right now and stores is Teavana’s Pineapple Blueberry flavor. The chain redid its beverage sets last spring and has since have seen great movement due to that,” said McPherson. seen a big uptick in its beverage sales, with some exceptions. “We also held a Snapple promotion in May and June that “We haven’t had as much growth in juice,” said did well, too. Customers are seeking value in these drinks.” At Pilot Flying J locations, both tea and juice beverages McPherson. “It seems like, for us, many customers have been opting more for waters, teas and energy drinks. can be found both in the traditional cold vault as well as We attribute this to consumers looking to reduce sugar throughout its deli cold cases. As a result, the opportunity intake. Even though juice is considered healthy, people for bundle sales is always there. According to Ferguson, the chain has had success in are migrating toward water.” At York, Pa.-based Rutter’s Farm Stores, which has 68 offering the traditional “2-for-1” deal. “We have also been successful in bundling the beverlocations, cold vault trends from 2016 seem to have carried over through the first half of 2017. This has favored ages with breakfast and food offerings,” he said. Pilot Flying J continues to put a larger emphasis on brand all beverages, with the exception of juices. “Carbonated soft drinks hold the top spot for packaged and flavor assortment as well as on premium products. “As the consumer continues to demand this assortbeverage unit sales, however we continue to see the share of the category decrease,” said Chuck Moyer, Rutter’s ment and premium offering, core juices, including apple, food service category supervisor. “Energy drinks, bottled orange and cranberry, have lost space to these super prewaters, enhanced beverages, ready-to-drink coffees and mium brands,” said Ferguson. Packaged juices and teas seem to have a leg up in terms teas continue to lead the way in category growth.” of expanding beverage programs. “Based on what I am seeing in-store and consumer habMORE OPTIONS By comparison, dispensed beverages have seen the its, I would expect the functional and premium beverages same carbonated soft drink trend, although with a push to continue to grow in the space, as more people continue to seek alternative refreshment options,” said Ferguson. CSD for more non-carb options. 64 Convenience Store Decisions

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CATEGORYMANAGER’S NOTEBOOK

Salty Boost Demand Consumers’ propensity for all things snacking is good news for c-store operators.

Whatever the latest trend, there’s little doubt that product innovation is helping drive momentum in the c-store category. “Our sales in the salty snack catBy Pat Pape, Contributing Editor egory are very healthy, and chips are the primary product driving the majority of growth,” said Hilary Freedman, senior category manager HE IDEA OF THREE balanced for Atlanta-based RaceTrac, which has meals—once a normal American 670 locations in 10 states under the lifestyle—is slowly going the way RaceTrac and RaceWay banners. of rotary phones and television SALTY SNACKING “Unusual bold flavors continue to Salty snack sales in the convenience rabbit ears. These days, almost everychannel grew 4.3% in 2016, accord- be requested by our guests, and chips one who eats is a perpetual snacker. According to the Hartman Group, ing to the NACS State of the Industry have the most flavor variety of any of a research and consulting firm based report, with the ever-popular potato our segments,” she said. “We are planin Bellevue, Wash., 91% of Americans chip retaining first place in the con- ning to bring in a lot of non-traditional, snack several times during the day, sumer popularity contest. Overall, better-for-you-type salty items this fall, and snacking now accounts for half of c-store potato chip sales grew by 4.6% but I do not anticipate those items selllast year. Comparable, unit sales rose ing at the same velocity or demand all eating occasions nationwide. that we see within the chip segment.” While consuming three healthy 3.1%. With limited real estate, conveNew chip flavors that are now being meals a day remains an ideal, today’s over-scheduled consumers eat when introduced in the market combine tra- nience store retailers must carefully time permits instead of planning their ditional salty tastes with flavors of select which flavor options they tasks and obligations around tradition- different dining experiences, including should offer. “The only issue is being able to have creamy garlic Caesar, milk chocolate, ally established meal times. Easy access to foods and beverages crushed red pepper, ketchup, wasabi all the products that they’re advertisand the declining ritual of sit-down ginger, biscuits and gravy, cinnamon ing,” said Scott Zaremba, who owns two Zarco convenience stores in family meals has made snacking a con- with sugar and chicken with waffles.

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venient activity that can be geared to the personal needs of the individual. Snacking requires little or no preparation, and snacks are typically less substantial than a meal, often containing 200-300 calories, Hartman reported. And when U.S. consumers nosh, chances are good they are enjoying salty snacks.

CStoreDecisions ecisions .com

8/25/17 6:39 AM

CATEGORYMANAGER’S NOTEBOOK

POTATO CHIPS HARD TO BREAK

As c-store customers seek out pork rinds, popcorn and tortilla chips, potato chips are still the main snack most reach out for. $ Sales

$ Sales % Chg YAgo

$ Share of Type

Top Potato Chip Makers

$1.64B

5.77%

100%

Frito Lay

$1.03B

8.41%

63.16%

Kellogg Co.

$177M

0.16%

10.83%

Private Label

$56M

4.81%

3.41%

Herr Foods Inc

$48M

-4.63%

2.93%

UTZ Quality Foods

$45M

-1.16%

2.72%

Category Leader

Source: Information Resources Inc. (IRI) Total U.S. Convenience Store All Scan data for the 52 weeks ending July 9, 2017

Kansas. “There are always too many varieties. You could have a Walmartsized store and still not have all the varieties out there.” “Salty snacks is a key category for us, and manufacturers keep coming up with new products that sell,” said Mike Thornbrugh, manager of public and government relations at QuikTrip Corp., the Tulsa, Okla.-based convenience chain with more than 750 stores throughout the U.S. “We can’t carry all the creative ideas, and we’re not real interested in fads,” Thornbrugh said. “We stick to the old standbys that people really want and buy frequently. But we do try different things from time to time. Everybody has their own tastes, and we try to have enough varieties to meet their needs.” Another retailer, Square One Markets, isn’t prone to replacing the salty standards often with the newfangled flavorings. “I think they are a novelty,” said 68 Convenience Store Decisions

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Lisa Dell Alba, president and CEO of, the 11-store chain in Pennsylvania. “People are willing to try the crazy flavors, but I think they prefer their traditional chips and Doritos.” Tortilla corn chips were the next top seller behind chips, followed by “other salty snacks,” nuts/seeds and puffed cheese. These items also are produced in atypical flavors, including black bean and rice tortilla chips and eggnog popcorn. PREFERRED PACKAGING Traditionally, salty snacks have been available in simple plastic packs. But some shoppers are looking for more substantial packaging, such as standup pouches with a wide base that sit erect and allow them to nibble with less chance of spillage. “Many manufacturers are introducing resealable, gusset bags,” said Freedman. “I’m not confident that guests are specifically seeking out this type of packaging, but it provides us

as the retailer the flexibility to merchandise in different places within the store, since many of the items are able to stand on the shelf, as well as in pegged format.” Resealable bags allow consumers to eat what they want now and save the rest for later, while at the same time ensuring that the bag’s contents are safe from dust and moisture. Today’s consumers are interested in clean-label food products, those made with minimal ingredients that can be pronounced, and that applies to salty snacks. Mintel, the consumer research organization with headquarters in Chicago, reports that 27% of shoppers say they look at the ingredient list before buying salty snacks, and 20% agree that salty snacks free from artificial ingredients are worth paying more for. MOVING MERCHANDISE C-store operators are already doing a good job selling salty snacks to consumers, but there are some traditional tricks they can use to move more products. “Sales of salty snacks at c-stores reached an estimated $3.2 billion in 2016,” said Caleb Bryant, senior foodservice analyst at Mintel. “The key for operators is staying up with the overall trends in the market and stocking snacks that appeal to their core consumers.” Millennials are an important consumer group within the salty snack market, but the youngest members of that group, the iGens are especially significant. According to Mintel, 97% of iGens (the post-Millennial group, or IGeneration—also known as GenZ) have purchased at least one salty snack in the past three months, and 29% of iGens say that salty snacks help get them through the day. “iGens are actually the primary purchasers of salty snacks,” Bryant said. “They are heavy snackers in general, and brands need to start paying attention to these younger consumers.” CStoreDecisions ecisions .com

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CATEGORYMANAGER’S NOTEBOOK Communicating with iGens is best accomplished through social media: Facebook, Twitter, Instagram, Pinterest and Snapchat. When investigating new consumer products, 81% of iGens rely on social media as a resource, according to Mintel data.

A classic way to sell more is to bundle snacks with a beverage at a value price. Mintel also reported 43% of consumers say that salty snacks are best paired with a beverage. A well-promoted salty-snack-plus-drink offering can help boost sales.

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Like all areas of a convenience store, the snack section should be kept clean, neat, stocked and faced, and signage communicating special snacks’ value should be placed on shelves underneath the products or in other visible locations inside the store and at the fuel pumps. As for the future of salty snacks, The Hartman Group believes boundaries between what is a meal and what is a snack will continue to change to meet consumers’ busy lifestyles, creating more undefined eating occasions and more opportunities for consuming salty treats. “We don’t have the ability to determine if people are purchasing packaged snack items in place of a meal, but do know that today’s consumer is not eating three traditional meals a day,” said Freedman. “Snacking on-the-go is common among our guests, and salty snacks fit that bill.” CSD CStoreDecisions ecisions .com

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CATEGORYMANAGER’S NOTEBOOK

Tapping Craft Beer Sales

Increasingly, customers expect their favorite c-stores to stock up on their favorite local and regional craft beers. By Anne Baye Ericksen, Contributing Editor

“Microbrews make up about 14% of our overall beer sales. HIS PAST JULY,THE Brewers Association announced it is issuing a certified independent craft brewer label seal, They were at about 12% this time last year,” said Reilly available to qualified producers. The upside-down Musser, vice president of marketing and merchandising for beer bottle image symbolizes the upending effect the Robinson Oil Corp. The Santa Clara, Calif.-based company craft sector has had on the packaged beer market, and the owns and operates 34 Rotten Robbie c-stores in California. Because most microbreweries can’t compete with the fact that the product has been brewed by a smaller producer and possesses all the characteristics associated with national advertising abilities of Anheuser-Busch, MillerCoors and Pabst Brewing Co., they rely on word of mouth and a craft blends. The hope was the marker would stimulate more con- vibrant social media community. However, Musser makes sure she markets craft labels as heavily as other beers. sumer awareness about micro- and regional brewers. “We promote three types each month on our window sig“This seal is a simple way to provide that clarity—now they know what’s been brewed small and certified indepen- nage: a premium beer (Bud/Coors) because that is still a dent,” said Bob Pease, Brewers Association president and major part of our sales, a microbrew and an import, because those are growing like crazy,” Musser said. CEO, at the time. Total sales of craft beer in U.S. convenience stores for the In a time when U.S. consumers are becoming even savvier and choosier when it comes to craft beer, this inde- 52 weeks ending July 16 registered approximately $1.1 bilpendent designation also could benefit convenience stores lion, per Information Resources Inc. (IRI), a Chicago-based in that customers can more quickly distinguish craft beers market research firm. That represents a 9.2% increase comamong the national and import labels also housed on pared with the same period in 2016. Also, the number of craft beer case sales in c-stores climbed nearly 7%. shelves and in coolers. As the number of c-stores that continue to stock local and regional brews continues to grow, retailers are betting that GROWING LOCAL ROOTS Over the years, the craft beer sector has narrowed the the robust demand for craft offerings in the convenience sales gap between microbreweries and the major producchannel won’t go flat anytime soon. 72 Convenience Store Decisions

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CATEGORYMANAGER’S NOTEBOOK In 2016, packaged craft beer accounted for 12% of the total beer volume in the U.S., according to the “National Beer Sales & Production Growth” report released by the Brewers Association. In fact, last year marked a double-digit increase for all craft beer, including import craft labels.

ers that have dominated the category for generations. In 2011, packaged craft beer represented less than 6% of the market share by volume. That more than doubled during the past six years. In 2016, packaged craft beer accounted for 12% of the total beer volume in the U.S., according to the “National Beer Sales & Production Growth” report released by the Brewers Association. In fact, last year marked a double-digit increase for all craft beer, including import craft labels. “Craft has certainly grown and gained share. It’s been the growth engine of the beer category,” said Bart Watson, chief economist for the Brewers Association. “The first wave of the craft beer trend was in the early to mid-‘80s, then in the late ‘90s, and every day since 2003. There’s been a huge increase of the amount of our shelf space going toward craft beer,” said Chris Groves, creative director and certified cicerone for Consumers Beverages Inc. The Buffalo, N.Y.-based beer/convenience retailer operates 17 stores throughout the state. Retailers and analysts agree this current craze parallels the food movement that has focused on farm-to-table and

ENDLESS BUSINESS

Since 2009, the number of craft brewery operations in the U.S. continues to grow every year.

Years Tracked

Number of Breweries

2009

1,596

2010

1,749

2011

1,977

2012

2,420

2013

2,898

2014

3,743

2015

4,504

2016

5,234

Source: Brewers Association, March 2017

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greater consumer awareness of food sources. “I do think the better-for-you trend is part of it. Consumers like seeing where their products are produced,” said Watson. GAINING GROUND Despite this indie reputation, the craft element has taken charge of the industry. In 2016, there were 5,234 craft breweries in operation throughout the country. This represents 99% of all U.S. breweries. What’s more, the number of operating breweries increased last year by 16.6%. “In the past three years, Buffalo has gone from five breweries to 25 breweries,” said Groves. “Places like Portland, Ore., Ashville, N.C., and Austin, Texas, I believe, are cities that have 50% of beer sold in the city produced by breweries located in the city. When you compare a city like that to us, with our population, there’s still a lot of room for growth here.” Even within the craft sector, however, there’s distinction between local and regional. The Brewers Association indicates that the majority of craft beers is produced by microbreweries, with a total of 3,132, and another 1,916 craft brewpubs; whereas there are less than 200 regional craft breweries. What’s not clear is if microbrewers remain localized because their size prohibits expanding distribution infrastructure and manufacturing capabilities, or if it’s more of a deliberate choice to maintain a local, indie profile. “Three to five years ago, the regional beers were growing rapidly, while today it is more local. The craft beer market has become more local with tap rooms gaining greater momentum,” said Brian Sudano, managing partner for the Beverage Marketing Corp. “San Diego may be the Napa Valley of craft beer,” he conCStoreDecisions ecisions .com

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CATEGORYMANAGER’S NOTEBOOK tinued. “However, even beer from the San Diego area is not traveling outside of local markets as well as five years ago, but better than other regions.” After several years of the craft beer segment exceeding growth expectations, some analysts caution there could be a slowdown soon due to some areas reaching market saturation as well as larger breweries attempting to strengthen their presence by acquiring smaller operations. “National brewers are getting into the fuller flavor space. We’ve seen a wave of acquisitions over the last two or three years,” said Watson. Still, Watson said the convenience store channel remains primed to profit from the current craft trend. “C-stores have had a lower share of craft beer sales, but they’re experiencing more tremendous growth than other channels right now,” said Watson. “Craft beers have typically been in 12- or 22-ounce bottles, but we’re seeing them move into cans and different sizes. That makes it easier for c-stores to sell them. Also, craft beer is a great fit for small, local chains.” AN EDUCATED ADVANTAGE This time of year, craft beer promotions typically focus

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on Oktoberfest blends or introducing winter ales. While seasonal brews continue to be very popular, seasonality seems to be falling off as a key selling point. Rather, unique flavor blends are what continue to lure in customers all year round. Nielsen research reveals that nearly half (48%) of craft beer customers associate the segment with unique flavors, and an equal percentage identify it with featuring high-quality ingredients. “I think consumers want to try new beers and want good quality beer. It’s kind of like wine; consumers are constantly trying new varieties and having fun doing it,” said Musser. Unique flavor combinations, however, present stores an opportunity to connect with customers. Of course, that requires a deeper knowledge of the products. Groves often sends his staff to breweries so they can become familiar with the process and ingredients, so they can then confidently share that expertise with consumers. “You have to educate yourself to stay in tune with customer wants and needs,” Groves said. “Every brewery has some kind of educational piece. After all, part of the craft movement is about educating people. And if you educate customers, they will be lifetime customers.” CSD

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CATEGORYMANAGER’S NOTEBOOK

RaceTrac Wraps Up

Sodapalooza 2017 This year’s event featured offerings such as Frozen Powerade Mountain Berry Blast and other frozen drink options, while “TracFanatics” were enticed by free refills and coupons. By Erin Rigik Del Conte, Senior Editor

UMMERTIME MEANS S O DA PA LO O Z A AT A t l a n t a -

based RaceTrac Petroleum Inc., which has been running consecutive Sodapalooza promotions since 2014, according to Marianne Simpson, promotions manager for RaceTrac. The annual event encourages fans to purchase a cup Marianne Simpson fi lled with coupons and enjoy free refi lls during the promotion period. This summer Sodapalooza kicked off May 3, running through July 31. Simpson explained the highlights of this year’s Sodapalooza, from what was new in 2017 to how the promotion has become synonymous with the RaceTrac brand. Convenience Store Decisions (CSD): Tell us a bit about what the Sodapalooza campaign entailed this year. How was it different from previous years? Marianne Simpson (MS): Sodapalooza is an exciting time for RaceTrac and our guests. For three months, guests can purchase a Sodapalooza cup and refill it with our variety of fountain and tea options. Each cup comes filled with coupons that are valid for in-store offers or partner offers specific to each market. A new flavor for guests this summer was Frozen Powerade Mountain Berry Blast. The (20-ounce) cup retailed for $11.99 (the same price as 2016), and just like in 2016, loyalty members, i.e. guests with the RaceTrac app, could receive $2 off of the cup through a coupon in the rewards app. CSD: What kinds of coupons do you offer in the cups? MS: We like to provide our guests with fun ways to keep their summer exciting in addition to the Sodapalooza promotion. We fill each Sodapalooza cup with coupons for food promotions or activities around the area, valued between $30-$150, depending on the market. The coupons range anywhere from free Jack Link’s Beef Jerky to buy-one-get-one breakfast sandwiches to a free bag of ice with the purchase of a Coca-Cola 78 Convenience Store Decisions

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CATEGORYMANAGER’S NOTEBOOK BEVERAGE INDUSTRY ADAPTS WELLS FARGO SECURITIES ANALYST Bonnie Herzog, the managing director of equity research for beverage, household & personal care, tobacco & c-stores, weighed in this summer on key beverage trend and outlook takeaways from Beverage Digest’s ‘Market Marts Conference’ in New York City. “We continue to believe that the beverage industry has many opportunities —and challenges—but believe the overall outlook for the industry's leaders remains favorable,” Herzog said. Herzog pointed to the four key themes in the expansive beverage market: • Authenticity, relevancy, taste and functional attributes remain key traits of successful brands, both old and new. • Manufacturers continue to raise the bar to leverage consumer and retail insights and are increasingly making efforts to stay ahead of evolving consumer tastes. • The shift to lower sugar content in beverages is driven as much by consumers' evolving taste preferences as they desire to be healthier as it is by the threat of sugar taxes. • Distribution is the largest barrier to entry for new brands, but a key competitive advantage of the major incumbents.

12-pack. They also include offers relating to discounted Atlanta Braves Tickets, as well as deals to Sea World and the Dallas Zoo. CSD: Describe your new flavor Frozen Powerade Mountain Berry Blast. MS: Powerade Mountain Berry Blast has always been a big hit with our fountain guests, so this year we were excited to offer a frozen option as well. The product really resonated and offered a true isotonic frozen option, and we saw a big lift in frozen movement after introducing the new offer.

CSD: From a retailer perspective, how does Sodapalooza benefit RaceTrac? MS: Sodapalooza is an opportunity to d r i v e i n - s t o re t r a f fic and engagement with our most loyal guests. It also serves as a brand-building platform, creating content for our social channels advertising creative and media relations. CSD: In 2016, RaceTrac rewarded fans who participated in the #SodapaloozaSelfie contest on social media. Did you create any social promotions around Sodapalooza 2017? MS: This year, we launched Sodapalooza with compelling imagery to get our TracFanatics excited about the promotion. Our social content supported the ‘Summer in the South’ video series where a filmmaker goes on a road trip to make a documentary about summer in the South. With the help of his RaceTrac guide, and a few Sodapalooza cups, he learns how to beat the heat and survive. The content introduced us to a cast of characters including Louise, who knows a thing or two about Southern hospitality. CSD: Does RaceTrac’s ‘Summer in the South’ promotion dovetail off of Sodapalooza? MS: While Sodapalooza is our most popular promotion of the year, we wanted to use this momentum to have our ‘Summer in the South’ campaign be about more than Sodapalooza. Anyone who lives in the South knows that we have great weather all year long. Our goal was to capitalize on the benefits of a summer of free refills while encouraging guests to check out our Swirl World (frozen yogurt) selection, along with our Nathan’s all-beef hot dogs.

CSD: Is there anything you’ve learned from past years doing this promotion that aided you in improving it this year? If so, what? MS: Annual promotions like Sodapalooza allow us to take some time in between to reassess and determine if we would like to update the promotion in the future. Over the CSD: What does RaceTrac do to keep customers returning all years, we have developed meaningful partnerships that year long for frozen dispensed drinks? enable us to offer guests enticing coupons to places like Sea MS: We like to switch things up to keep guests interested and coming back. In the past, we’ve invited Sodapalooza World or Atlanta Braves baseball games. The partnerships we have allow us to offer guests exclu- cup owners to come back in the fall...For example, in sive deals through the coupons in the Sodapalooza cup. Our October 2016, we invited our guests to bring in their guests especially enjoy the FreeFill aspect of Sodapalooza, Sodapalooza cups and receive free refills for a week. We but we’ve heard great feedback surrounding the partner are always looking to reward our most loyal TracFanatics, coupons and how they give our guests great ideas for fun and they certainly took advantage of this bonus FreeFill offer. CSD activities during the summer months when school is out. 80 Convenience Store Decisions

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TECHNOLOGY

Easy as L-E-D

LED lighting can boost security, savings and help drive traffic to your stores. By Brad Perkins, Contributing Editor

ing. The perception is that LEDs are costly. But prices have stores looked like in daylight. But a few trips after come down even as demand has risen to the point that the market’s growth is predicted to reach $175 billion over the dark were even more illuminating. “We, as a team, went on nighttime site rides to next six years, according to Research and Markets’ 2017 really see what our stations looked like at night,” said Aaron Solid-State and Other Energy-Efficient Lighting Market by Gardner, director, wholesale fuel division, at the Anderson, Technology study. This trend is partially due to the cost of LED technology Ind.-based chain. “We were able to get a better understanding of what the consumer was seeing. We knew what it took dropping, but also because these lights last longer than their to get customers on the lot from 8 a.m. to 5 p.m., but our 5 regular counterparts, while offering more customizable p.m. to 12 a.m. customer base was dwindling, and after the options that convenience stores can tweak based on their needs. Driving this increase is the powerful mix of security night site rides we saw why.” The answer was lighting. As experts agree, lights do and savings LED lighting brings. “Two of the key drivers are the lighting has to offer more than just illuminate a physical space. They invite openness, stress security and showcase products. But they cost savings and safety,” said Frank Sharp, senior technican also go a long way in determining whether customers cal leader with Electric Power Research Institute (EPRI)’s stop. So, Ricker’s, which operates nearly 60 stores, enacted Power Delivery and Utilization research team. “People are interested in cost-savings, and it’s almost the same price a plan to upgrade lighting in its stores. “This is something that we have put an emphasis on at now as a traditional product so it’s an easy decision to our dealer locations in hopes of increasing the evening busi- make.” Pilot Flying J chose to upgrade based on a strong return ness at all of our locations,” Gardner said. on investment, energy efficiency and because the lights bring savings based on reducing electricity usage and AFFORDABLE ENERGY A powerful way to do that without breaking the bank avoiding maintenance costs. “We are installing LED in all our new builds and remodis to upgrade to energy-efficient LED or solid-state lightIKE MANY COMPANIES, RICKER’S knew what its

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TECHNOLOGY

OTHER LED FACTS FOR THOSE DWINDLING NUMBER of retailers that haven’t committed to LED upgrades in some form, here’s a few additional facts also worth considering:

Andy Jones. “It was instant improvement. From going from old metal halo bulbs to LED, even in sites where we didn’t add additional fixtures, it was noticeable. And when you put new lighting in coolers, it makes all the product in coolers pop.” Moreover, Ricker ’s, which also worked with LSI to upgrade 75 of its stores with under-the-canopy LEDs, installed an average of 16 under-the-canopy LEDs per store, to complete the rest of its locations by the end of the year. “The focus for us was cleaner, brighter looking stores,” Gardner said. “This does tie into a more secure presence, and energy savings was an added bonus to the already positive results we saw. We are excited to see the impact that LED lights will continue to make on our sites, as customer traffic should likely increase and energy efficiency should provide sizeable cost savings over time.”

LEARNING THE LINGO The benefits of upgraded lighting are apparent. But how do stores get started? 1. When LED light is used in delicatessen displays and “Look at different types of fixtures and decide on a comin places with fresh food, it has been proven to breed significantly less bacteria than its halogen or fluorescent pany that has been in business for a long time and that is counterparts. reputable,” Jones said. 2. An incandescent lamp converts about 9-10% of the There are many things to consider in upgrading lighting energy fed to it into light, whereas LEDs convert nearly inside and outside of the store, including two that may seem 100% of the energy they consume as light. unexpected—lumens and kelvin. Lumens measure the 3. LEDs contain no mercury— and at least 95% of an LED is recyclable. amount of light that comes from the bulb. Kelvin measures 4. LED lamps on average are not subject to serious damage the temperature of the lighting as it appears in a location. from external shock. If you try this with an incandescent These are important for both placement and aesthetics. The lamp, you’re going to be cleaning up glass at least, and higher the lumens, the brighter the canopy lights. if it’s a compact fluorescent lamp, not only will it break, But lights inside the store should be softer and warmer there are mercury decontamination procedures recombecause if they’re too bright, it will feel stark and uninviting. mended by the Environmental Protection Agency to follow. But if they are too soft outside, it can compromise the secuSource: Kastor Energy March 2017 rity of the lot, dumpster and entrance. And that’s a key benefit of working with a reputable company that offers warranties and the range of products that els,” said Bryan Martin, Pilot Flying J energy manager. “This are important to a successful lighting upgrade. They are includes all interior lighting, cooler doors, showers, rest- able to provide support and options that cater to all comrooms and sales floors. On the outside of the building, we panies. A lighting partner will be able to recommend lights, are upgrading the lights to LED in the parking lot, canopies fixtures and bulbs that work for every operational area. But just as important as a reputable partner is being open and building soffits. Signage has been or will be converted to LED during the FEP process over the next several years to the change. “The big takeaway is think long term,” Sharp said. “You’ll at all stores.” Sprint Foods, which has 19 locations in Georgia and have these products longer than the ones you’re taking out. South Carolina, used a state government grant to partner Think about it in broad terms, don’t just think of it as a lamp. with LSI Industries to upgrade lighting in its stores. The Lighting is an investment in the store, and you want to be team replaced, on average, 26 canopy lights, 10 area lights, ready when prices come down and additional features are 30 interior lights and 12 cooler doors, installing new LED available.” Those additional features include controls like daylight lighting and fixtures in all areas. The result was an average savings of $7,600 at each location and, just as importantly, a sensors, motion sensors, GPS and internet connectivity and the ability to schedule for areas that may need more light at new, warmer look to the stores. “What a difference in appearance, both inside and out; one point of the day and less at other times. “(In) some stores you will see canopy lighting during the perimeter and coolers,” said Sprint Foods President 84 Convenience Store Decisions

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TECHNOLOGY The cost of LED technology has been dropping over the last few years. Not only do LED lights last longer than their regular counterparts, the technology also offers retailers more customizable options that convenience stores can install on site and tweak based on their needs.

the day not really providing any illumination—timers can remove that and extend the life of the lighting,” Sharp said. “Color tunability is coming—changing light to warmer light in evening—that’s costly now but becoming less costly. Maybe you don’t want to put controls in today but maybe you will eventually. Think about where you want your store or business to be. A few more dollars now may have a longer impact.” Another way to reduce costs associated with a lighting

A division of

upgrade is to check whether local or state governments offer rebates, like Sprint Foods did in securing rebates from Georgia Power for its upgrades. Because ultimately, the way the store appears is vital, regardless of the time of day. “You want the store to look inviting,” said Martin. “It needs to feel like a safe place to park, fuel and shop.” CSD

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COLUMN TECHNOLOGY

Best Practices in Deterring Theft Good training and hiring practices can go a long way in alleviating loss prevention. By Erin Rigik Del Conte, Senior Editor

REVENTING THEFT AT C-STORES starts with best practices in hiring and training, cash management and handling suspected shoplifters. Convenience Store Decisions spoke with loss prevention expert Chris McGoey, ‘the Crime Doctor’ and founder of McGoey Security Consulting for some of his advice on navigating these areas of the loss prevention puzzle.

Convenience Store Decisions (CSD): Hiring and training employees correctly can go a long way toward protecting stores from issues with theft and cash management. What can retailers do to ensure they are hiring honest employees and setting high standards right from the start?

7. Hire cashiers based on their ability to absorb detailed training and implement your specific procedures with a high-degree of accuracy. 8. Make all cashiers rise to the same minimum level of competency and accountability within a reasonable time or replace the new cashier. Accurate cashiers need to act as shift sales and cash accountability endpoints to balance against each other. 9. Cashier training should be in writing with step-bystep shift procedures as a guide. Good cashiers will hold relief shifts accountable for being accurate. Good cashier accountability and periodic shift rotation tends to keep other cashiers honest.

Chris McGoey (CM): Poor quality applicants are plentiful CSD: When it comes to cash handling and management, and available on short notice when they are unemployed what are some best practices you recommend? and change jobs frequently. Due to the nature of unsuper- CM: There are several best practices, to include: 1. Hire cashiers that are fast and accurate regardless of vised shifts in c-stores, the opportunity for cashiers to be customer volume. Not everyone is competent to be a dishonest is a much greater risk than at other retail stores. good cashier. Multiple poor cashiers make accurate It’s critical to put hiring systems in place and take the time cash accountability impossible and opens the door for necessary during the vetting process. dishonesty. Good employees are out there to be discovered if you 2. Train each cashier to use a standard method for recordalways are looking for them. Hiring honest and hard-working transactions, making change and balancing their ing c-store employees is a challenge for everyone. One of own drawer at end of shift. No variations or shortcuts the best indicators of cashier honesty is successful past allowed. employment in a similar capacity. 3. Using a standardized method aids in training new Here are some rules of thumb for hiring cashiers: employees and provides a basis for detecting dishon1. Always visibly accept employment applications even esty and bad practices when reviewing video footage. with a full staff. 4. All stores should use a safe for dropping $20 bills upon 2. Use an application form tailored for c-stores that highreceipt and excess cash that accumulates. lights cashier abilities and the importance of being 5. To reduce the risk of robbery, a cashier should not be complete and accurate because it will be verified. able to immediately open a safe. The best c-store safes 3. Capture at least five-years of verifiable work history, have cash-drop slots that have a timed-delayed access education and references. capability. Signs should support that the cashier can4. Return any applications that are not 100% complete. not open the safe or that a time-delay safe is in use for Watch for invalid addresses, gaps in employment, and robbery prevention purposes. Similarly, signs should details necessary to check references and background. support that all $20 are dropped into the safe imme5. Make the applicant fill in any blanks and vague infordiately and that a limited amount of cash is available. mation. It’s their first test about following directions 6. Preparation of store bank deposits are best left for the and being accurate. day shift when the risk off robbery is lowest. 6. A pre-employment interview should be used to eval7. It’s important to prepare a daily bank deposit to limit uate the applicant’s suitability for managing cashier the amount of cash left in the store overnight. duties. A math quiz about making change accurately 8. There are a variety of bank-depository services availis a reasonable request. 86 Convenience Store Decisions

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able, depending where the store is located and the associated risk of hand-carrying deposits to the bank. 9. At minimum, trips to the bank with a deposit should be random at times, inconspicuous as possible, and not bundled with other errands causing delay. CSD: How do you recommend handling shoplifters? CM: Best practices for handling shoplifters will vary based on location of the store, time of day, amount of prior thefts and number of staff on duty: 1. Greet each customer while making eye-contact for a full second as they enter the store. 2. Higher-risk stores should mount a video monitor from the ceiling near the entrance that captures a closeup head and shoulder image of everyone that enters. Shoplifters and robbers hate this deterrent feature of having their image recorded. 3. High-risk stores should use video surveillance cameras in blind aisles, but I prefer cashier to customer verbal interaction. 4. Continue to make periodic eye contact while asking if

a suspicious customer needs assistance. 5. Get out from behind the counter, enter the same aisle and offer to help them find an item if someone is lingering and seems to be watching you. 6. Short of physical confrontation, tell actual shoplifters to return the concealed items and leave or the police will be called. 7. Warn known shoplifters not to return or risk the police being called to contact them for a charge of trespassing. 8. Develop a store policy and train all staff about handling suspected shoplifters after speaking to legal counsel and the police in your neighborhood. 9. Most convenience stores are not set up or trained on how to lawfully confront or detain a shoplifter so a policy should be set for how it is to occur or not. Don’t wait and leave it to chance or rely on individual employee instinct. Chris McGoey is the founder of McGoey Security Consulting. Learn more from him online at www.crimeschool.com.

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COLUMN OPERATIONS

Strategies for Site Planning There are factors to consider and much data to gather when assessing the right plan to build a new store. By John Matthews

Population Counts. Population count is the next logevaluating store attributes within a potential store ical indicator for your location. Not only do you want to trade area. The process utilizes both a science and look at the population count as it stands today—and is it an art to the overall selection process combining a enough to support a site—but also how has it been trending. number of factors that weigh on the viability of the location. Positive growth indicates a viable marketplace while negaComplicating the process is that each location has tive trends may raise a red flag. In addition, gaining a better understanding of the ethits own special attributes, nicity and socio-economic which makes site selection “POSITIVE GROWTH INDICATES A trends in the trade area will more directional in nature as opposed to a cookie-cutter VIABLE MARKETPLACE WHILE NEGA- offer a better snapshot into the merchandising mix that process. That being said, here are some key attributes that TIVE TRENDS MAY RAISE A RED FLAG. should be presented at the site. should be considered in the IN ADDITION, GAINING A BETTER Geographic Nuances. overall evaluation: Determining whether Traffic Counts. While these are clearly site specific (think UNDERSTANDING OF THE ETHNICITY the site is seasonal or of the difference between a AND SOCIO-ECONOMIC TRENDS IN not should factor into your analysis. Operators rural site and an urban site), shouldn’t necessarily shy analyzing the traffic counts THE TRADE AREA WILL OFFER A away from seasonal type will help offer a predictabilBETTER SNAPSHOT INTO THE stores but rather not be surity of volume. The key is to prised by them after they understand what the potential traffic patterns are for the MERCHANDISING MIX THAT SHOULD open. Closely related to seasite before one can look solely BE PRESENTED AT THE SITE.” sonality would be a trade at traffic counts. If a road cararea driver—i.e., a mall or ries a number of cars, but that road does not feed well into the site, the traffic counts may theme park—that may positively or negatively impact your store’s performance. Monitoring these outside forces will be misinterpreted. Understand the natural flow into the site before assess- tighten up your model. In addition, look for the non-seaing the traffic counts. One way to gain some perspective on sonal enhancements or barriers to your site. A river that how traffic counts mirror volumes is to compare existing bisects your trade area, for instance, will effectively cut your traffic to the store no matter how close in proximity site volumes with their traffic counts. Many operators jump right into new site selection with- the homes are. Even certain companies can impact your site. A large out looking back at existing sites and creating a model based on their geographic areas. This may give you a more manufacturing facility that releases a number of employees at the same time can cause bottlenecks in the traffic flow reliable predictive model for your future sites. EAL ESTATE SITE SELECTION can be a complex web of

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COLUMN OPERATIONS

Each potential store location has its own special attributes, which makes site selection more directional in nature as opposed to a cookie-cutter process. There are some key attributes that retailers should consider in the overall evaluation of the site including: traffic counts, population counts, site visibility and surrounding competitors.

that will cause potential customers to avoid the area at these peak times. Visibility. This may be more anecdotal than the other attributes but should still be a consideration. Judging whether the site is easily viewed from afar as opposed to a site that is hidden by overgrown trees should be a factor. Driving the site from all four directions allows for the owner to gain the perspective of potential customers as they approach the location. Other considerations would include the speed of the traffic as it approaches the potential site. If the traffic flow is traveling at too great a speed or drivers are distracted due to complicated traffic patterns, the opportunity to notice your location is diminished. Competitors. Obviously, understanding the competition within the trading area is critical. I would approach this competitive evaluation in a three-fold fashion: a) gasoline, b) convenience store, and c) quick-service restaurants. Look at the competitive landscape in degrees of competition —meaning, some competition has greater negative impact than other competition. Ranking your competition based on this impact for all three categories will paint a more holistic picture. Keep in mind that some competitors may impact only the gasoline while others may have a greater impact on convenience product sales. With the c-store industry creeping further and further into foodservice, mapping the quickservice restaurants in the trade area will give you a better indication of the viability of your foodservice operation. Location. Location, location, location. There are many factors that come into play when picking the best location. 90 Convenience Store Decisions

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Is it a premier corner? What day part side of the street is the site? Is there easy ingress and egress into the location? Are there divided highways in front of the location that make access more difficult? Is this an inside lot location and not even a corner? What is the length of the property frontage? There are considerations for the actual site location that need to be evaluated in the context of the other attributes. Let’s face it; there are a number of variables that come into play. While one cannot be certain that accurately depicting all of these attributes into a real estate site evaluation model can guarantee success, it will at least put you in a better risk aversion position. That is the science of it. I have been around the block long enough to know that some stores simply defy their science and just work. The art of site selection is far harder to quantify than the science. While those stores are the anomaly, evaluating new locations by putting their attributes through the litmus test above, helps minimize the downside risk of opening an underperforming location. John Matthews is the founder and president of Gray Cat Enterprises Inc., a strategic planning, operations and marketing services firm that specializes in helping businesses grow in the restaurant, convenience and general retail industries. With more than 25 years of senior-level experience in retail and a speaker at retail-group events throughout the U.S., Matthews has recently written “Game-Changing Strategies For Retailers,” which is available on Amazon. In addition, he has two step-bystep manuals,“Local Store Marketing Manual for Retailers” and “Grand Opening Manual for Retailers,” which are available at www.graycatenterprises.com. CStoreDecisions ecisions .com

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The Editors and Editorial Advisory Board of Convenience Store Decisions are proud to honor Sheetz as the 2017 Chain of the Year! Donâ&#x20AC;&#x2122;t miss the opportunity to be a part of the oldest and most prestigous award event for c-store retailing on October 18th, 6pm-9pm at The Crystal Gardens at Navy Pier in Chicago during the NACS Show.

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COLUMN OPERATIONS

Selecting an Optimal Location for Your C-Store There are various factors that determine the “Goldilocks Zone,” but they’re all driven by traffic. By Bryant Ficek

4,500-5,000 square feet). The average daily traffic for this typical site would be expected to be about 2,000 cars enterstore land use is in the name: convenience. Customers generally choose to visit these ing and 2,000 cars exiting. Traffic studies show half or more of these expected trips retail sites because of the ease and speed with which they can get in, get their product and continue will come from pass-by traffic on the adjacent road or roads, onward to their destination. Selecting the optimal loca- translating into about 1,000 or more cars. The remaining tion for a convenience store with just the right amount 1,000 vehicles would be considered ‘new’ (more traffic jarof convenient access and traffic volume can be challeng- gon) to the surrounding roads. New traffic is defined here as representing a driver speing. That where the “Goldilocks Zone” comes in. Surrounding traffic volumes can impact a store’s suc- cifically going to the development (not associated with a cess. So, what is the Goldilocks Zone, or the number of commute or other purposed trip) or diverting from another vehicles, for convenience store developments? In terms nearby major road not immediately around the site. To convert this expected pass-by traffic into the total trafof traffic, research suggests the optimal convenience store location is adjacent to roads with between 5,000 and 15,000 fic on an adjacent road requires thinking about individual vehicles per day. This is based on the expected pass-by drivers. How many can reasonably be expected to stop at a traffic and the ability to obtain access to that public road. new development? Obviously not all or even most drivers on a road will stop Here’s an overview of how to evaluate a site’s traffic suitat one individual store. At the high end, we think a reasonability using pass-by traffic and direct access. able expectation is assuming one out of every five drivers already on the road will become a pass-by trip. Therefore, PASS-BY TRAFFIC Studies regarding the traffic generated by convenience continuing the calculation, the adjacent road must have an stores suggest most of the site’s trips will come from the average daily traffic volume of at least 5,000 to support the adjacent roadway. In traffic engineering lingo, this is expected pass-by trips at the new convenience store. Our referred to as ‘pass-by’ trips and defined as traffic already minimum threshold of adjacent street traffic is thus estabtraveling on the road for a different purpose (like the stan- lished to optimize the chances for pass-by traffic and for the dard commute from a home to the workplace) that will store’s success. include a stop at the new store in the future. The importance of this term is that the success of a site will be partially DIRECT ACCESS To establish maximum threshold of adjacent street trafdetermined by the amount of nearby traffic and how much fic, our experience leads us to consider the ability to obtain of that traffic stops at a new store. To translate this into traffic volumes, consider a typical direct site access to a road. Public agencies (particularly counties and states) convenience store with gas pumps (building size of roughly LL YOU REALLY NEED to know about convenience

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The National Advisory Group (NAG) is an association of small to mid-size and family-owned convenience store chains and the executives who run them. Members meet 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, retailer information exchanges, opportunities to address the burning issues within your business, a chance to get to know your peers in similar size operations and much more! For information on NAG membership or NAGâ&#x20AC;&#x2122;s Young Executives Organization (YEO) contact NAG Executive Director John Lofstock 201.837.2177 â&#x20AC;˘ jlofstock@csdecisions.com

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COLUMN OPERATIONS

Too many cars...

Plans that go into choosing a store location are varied. One consideration that’s important to any project is how much vehicular traffic there is and how it flows in and around the target location. Spack Consulting uses a concept called “the Goldilocks Zone,” which in part, defines the optimal amount of vehicular traffic at a given location. Too little traffic is detrimental to a c-store’s profitability and too much vehicular traffic can be a problem when it comes to coming and going.

Too few cars...

This one is just right....

of adjacent street traffic is established to optimize the potential for direct access and for the store’s future success.

IN THE ZONE As discussed above, we have established our Goldilocks Zone for a successful new convenience store as between 5,000 and 15,000 vehicles per day on the adjacent road. These roads provide enough volume to maximize the pass-by trips, but not enough that the safety of the road is compromised with direct access. There are exceptions to every rule and we obviously are focused on safety and mobility, which is related to want every trip to and from a site to be safe. Many successaccess. New site access to public roads goes against both ful stores are located in small towns without high volume of these metrics. More access results in more confl icts roads. Similarly, stores can be successful with less than ideal and a greater chance of crashes. In other words, the road access that may require a driver to turn down a side street before reaching the development. becomes less safe. But for site planning regarding surrounding traffic, your Mobility is optimized with limited and controlled access, the extreme example being the Interstate system, which has chance of success increases if you are located along a road highly controlled interchange locations. Obviously, direct in that sweet spot. Ideally, on a corner of two roads that are access to a road is the most convenient option for a new each in that range. Accounting for adjacent traffic volumes and site access store. Access management, where the public agency controls and limits access, can therefore go against the success is just one aspect of how using a respected traffic engineer can help identify desirable sites. Other roadway characterof a site. In general, public agencies apply access management istics that may be of impact include the traffic control type, principles to higher order roads like highways and arteri- multi-modal options (transit, bikes, pedestrians), and the als. The traffic volume on a road is often indicative of its geometry of the surrounding transportation network. When brought in early in the planning process, the traffic status, meaning highways and arterials usually have larger volumes and vice versa. The higher volumes and status engineer can also consider site circulation and other issues mean a public agency obtains a greater safety benefit and to help make the new store as convenient—and successful— improves mobility for a large number of drivers by limiting as possible. direct property access. Access that could be allowed and justified on a road with Bryant Ficek is the vice president of Spack Consulting, an engi5,000 vehicles per day gets tougher when that daily volume neering services company, which is part of the Spack Enterprise increases two- or three-fold. Based on our work, at approxi- family of companies. He is responsible for the firm’s traffic mately 15,000 vehicles per day, even a limited direct access engineering and transportation projects. His experience includes managing and working on more than 1,000 traffic impact studright-in/right-out or entrance only can be tough for many ies, including those for convenience stores. public agencies to approve. Thus, the maximum threshold 94 Convenience Store Decisions

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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. We use the latest media technology, delivering content the way you want it: print issues, digital issues, enewsletters, and videos.

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COLUMN OPERATIONS

Are Sale/Leasebacks Beneficial? Sometimes a sale/leaseback strategy can be a strategic boon for c-stores looking to manage their real estate holdings differently. By Terry Monroe

ECENTLY A FRIEND OF mine sent me an email showing a beautiful new convenience store that was listed for sale and wanted to know why would a new store by a notable convenience chain appear listed for sale. Well, let me digress for a moment and I can explain why. Years ago, there was a book written named “McDonald’s Behind the Golden Arches” by John Love that tells the story of Ray Kroc and how he acquired the franchise rights to McDonald’s and grew the concept into one of the largest and most profitable companies in the world. For those of you who don’t like to invest the time to read, you can watch the movie, which came out in the theatres in December of 2016 called “The Founders” starring Michael Keaton, which also tells the story of Ray Kroc and the success of how he acquired and built McDonald’s.

AND A BAG OF FRIES The reason I refer to the book and the movie is because most people believe that McDonald’s is a successful chain of stores that is in the hamburger business to which they

McDonald’s legacy may be based on the sale of burgers and shakes, but its profit profile changed drastically when founders first adopted a different real estate management plan.

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would be partially correct. But the truth of the matter is that McDonald’s almost went broke selling hamburgers and it wasn’t until the company changed its business model to reflect a real estate business model that the fast food chain was able to avoid going broke. The decision actually catapulted it into the money-printing machine it eventually became. In other words, McDonald’s is the poster child for a business that was able to use the sale of hamburgers and other food items as the vehicle to pay for and generate profits from the real estate the stores were located on. I don’t want to go into detail on its business plan, but McDonald’s makes the bulk of its money from royalties that are tied to the franchise owner’s success of selling hamburgers (the vehicle), and McDonald’s gets a percentage of those sales. McDonald’s also owns the real estate on which each restaurant is located, so the company is paid rent, extracte from the sale of hamburgers and other items. So, the more hamburgers McDonald’s peddles, the higher the gross sales and the more royalties the franchisee pays McDonald’s and the more rent McDonald’s receives. So, how does this play into the convenience store my friend saw listed for sale on the internet? Well, this convenience company, like many other large retail chains, had decided not to invest its capital into the real estate, but really has decided to invest its money into the business, allowing it to grow the enterprise at a much faster rate. For example, to build the new store in question, the cost may have been $4.5 million, which is a lot of capital to invest and tie up for many years. By owning the real estate and all the improvements that go with building a new convenience store, first you must find a lender who will loan you the money, which will tie up a considerable amount of available credit and then you must provide the money for the startup of the business and the inventory. With a large investment as such, a company may be limited as to how much money it can borrow and therefore limits the growth of the company just so it can own the realCStoreDecisions ecisions .com

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By leasing instead of owning the real estate that a c-store company invests in, it often allows the company to focus on its core business and provides it more capital to invest back into the enterprise.

PORTFOLIO PLUS Plus, since the purchase of the real estate ties up a lot of money I would be limited to the number of locations I could build, which was fine with me, because even if you were only building convenience stores that cost $1 milLEASING OPTION lion per site, after 20 years you would have a $20 million By leasing instead of owning the real estate, this will portfolio. allow the company to focus on its core business while havThe concept mentioned above, which involves finding ing more capital to invest. Ultimately, if each of the stores it good real estate locations, is generally what most operaopens is successful, it allows it to generate even more profits. tors will do once they obtain the capital to acquire their first This strategy allows the company to dominate a market store, because they know they are going to continue to operthat much faster too. ate their business locally. However, let’s look on the flip side of the coin as to why Of course, there are many different scenarios that can be you would chose to own the property. worked from the leasing of the real estate for your business Once when I was in the video store and restaurant busi- to owning your own real estate, and I would be happy to nesses I wanted to own the real estate and I would use elaborate on these on more detail. Having owned multiple the video or food sales as the vehicle to pay for real estate, units and applying the McDonald’s concept to leasing my owned by me personally. units, it allowed me to grow to 155 stores, mainly because I In turn, I rented the property back to the company I was invested all my money back into the business and not into operating. the real estate that housed that business. The operating company got to write off the rent it was As you can see, there are pros and cons in both scenarios. paying me and I had the benefit of getting the rent and the It all goes back to your original business plan and which appreciation of the real estate and eventually the owner- way you want to grow. ship of the real estate, which I planned to sell or use for my Terry Monroe is the president of American Business Brokers retirement. In other words, the real estate became a forced savings & Advisors and the author of “The Art of Buying and Selling a plan with tax benefits. And if I was good at picking good Convenience Store,” and “Cashing In on the Hidden Wealth of real estate locations for my business, I knew that if the vehi- Your Business.” He serves as an advisor, consultant, assists in market valuations, and is a speaker, a professional intermediary, cle (restaurant or video) I had rented the real estate to ever and a market maker for privately held companies and has been quit being profitable I could lease the real estate to another involved in the sale of more than 500 businesses. He can be concept. contacted at www.TerryMonroe.com. estate. And why should they own the real estate, especially if they are not in the real estate business, but instead are in the convenience store business or the drug store industry or the dollar store business?

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NEWSTUFF Creations & Innovations to Convenience Products and Services

HOT & SPICY ON THE GO

NATURAL LEAF GRAPE CIGARILLOS

Twang introduces Twangerz Sriracha Salt, which satisfies customer demand for hot and spicy chili flavor on the go. Bold Sriracha flavor travels anywhere. Sriracha has become a household name and favorite condiment, especially among Millennial consumers. Sriracha is now used as a flavor enhancer for snacks, candy, cocktails and more. Demand for bold and spicy flavors remains strong. Twangerz Sriracha Salt is available in a 10-count tray, power wing, shipper and new two-tier display. Merchandise it next to the grab-and-go section with salads, sandwiches, fruits and veggies, or in the snack section near chips, popcorn and snack mixes.

Optimo Natural Leaf Cigarillos continue a tradition of quality and innovation as Optimo Cigarillos are now available in a grape blend finished in first-class candela leaf wrapper. Optimo Natural Leaf Grape Cigarillos are packaged in two-count, resealable foil pouches. Each Optimo Cigarillo pairs a top-quality natural leaf wrapper with an artful blend of imported tobaccos to deliver a smooth, rich, satisfying taste. The Optimo Natural Leaf Grape Cigarillo is the only cigar with the classic grape filler blend wrapped in green candela leaf. Optimo Cigarillos are available in “2 for 99 cents,” “Save on 2” and “2 for $1.49” pouches.

For More Information From Twang

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

www.twang.com

AMERICANA CANDY TINS CandyRific has teamed up with the M&M’S brand to create two themed candy tins featuring retro-style designs. These collectible tins are sure to be a hit, and will be available this fall. Each display contains 12 tins featuring one of two M&M’S brand Americana designs: one features a picture of three American soldiers circa World War II, and the other is adorned with a waving American flag. Each tin contains six FUN SIZE bags (.46-ounce each) of M&M’S brand Chocolate Candies. The suggested retail price is $5.99. Ships in one, 12-count display per mixed case.

For More Information From Candyrific www.candyrific.com

LOW-CAL POPCORN SkinnyPop has launched its cheesiest, most flavorful popcorn yet: Aged White Cheddar and Pepper Jack. Similar to other SkinnyPop readyto-eat flavors, the new real cheese varieties are made using the fewest, cleanest and simplest ingredients possible, including real organic, rBST-free cheese. At only 47 calories per cup, these new flavors will satisfy cravings for full-flavored cheesy popcorn, but at half the calories of competitors. The new Aged White Cheddar is a classic flavor with a rich and creamy taste made with real white cheddar cheese that’s aged to perfection. The new Pepper Jack puts a unique twist on a delicious cheese flavor by adding a hint of spice. Both flavors are non-GMO, gluten-free, kosher and contain no artificial ingredients or flavors. Both flavors are available in July at retailers nationwide at a suggested retail price of $3.50 for a 4.4-ounce bag.

For More Information From Amplify Snack Brands www.amplifysnackbrands.com

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FRUIT-FLAVORED KRISPY KREME JELLY SMOKES White Owl continues to expand upon the BEANS award-winning Limited Edition FoilFresh franchise to now include Strawberry Kiwi. The complementary flavors of sweet strawberries and tangy kiwis are paired perfectly for a fresh new flavor twist. White Owl Strawberry Kiwi Cigarillos are bursting with a delicious, fruity flavor and are now in season for a limited time! This Limited Edition offering is available in “2 for 99 cents,”“2 for $1.49” and “Save on 2” formats.

For More Information From Swedish Match Cigars Inc. (800) 367-3677 customer.service@smna.com

The delicious flavors of irresistible Krispy Kreme doughnuts come to Jelly Belly jelly beans this summer.The new line began shipping bulk in June, with packaged products following in late summer in time for the holiday shopping season. This collection includes novel flavors inspired by Krispy Kreme’s most popular doughnuts. Jelly Belly jelly bean flavors Original Glazed, Strawberry Iced, Glazed Blueberry Cake, Cinnamon Apple Filled and Chocolate Iced with Sprinkles are mixed together for the perfect indulgence. Fans of both Krispy Kreme and Jelly Belly will line up to taste these sweet flavors. In time for the holiday selling season, packaged items including a 4.25-ounce Gift Box, one-ounce bag, 2.8-ounce grab and go bag and 7.5-ounce gift bag are planned in time for fall displays.

For More Information From Jelly Belly Candy Co. (800) 522-3267

MINI COOKIE DESSERTS Rich’s Foodservice’s popular Our Specialty Sweet Middles mini desserts are now available in four-count packs, making them the perfect grab-and-go treat for convenience store shoppers. Previously only available in six-count and 12-count packs, Sweet Middles feature a rich, creamy center sandwiched between two soft mini cookies inspired by nostalgic dessert flavors: Carrot Cake, Chocolate Soufflé and Crème Brulee. Made with premium ingredients, they have no artificial colors or flavors, no high fructose corn syrup, and are free of peanuts and tree nuts. Sweet Middles can add to a c-store’s bottom line: operators can earn an approximate gross profit margin of 50%. The suggested retail price is $2.39 for the 5.2-ounce four-pack clam shell, which come 12 per case. The product arrives frozen, and they’re easy to serve, with no cutting required; just defrost one day and display at room temperature. The 21-day ambient life allows for a premium, fresh experience without the waste. Rich’s created new, attractive merchandisers to display the Sweet Middles four-packs: a basket that holds 10, a two-tier rack that holds four, and a wire rack that holds 12.

www.jellybelly.com

NATURAL ALKALINE WATER Waiakea Hawaiian Volcanic Water has introduced its naturally alkaline water in sixand 12-pack cases. Individuals can choose from a six-pack of Waiakea’s one-liter bottles for $20 or a 12 pack of its half-liter bottles for $23. Waiakea Hawaiian Volcanic Water has long set itself apart from other premium water brands. The brand became the first bottled beverage to become certified CarbonNeutral for its variety of eco-initiatives. Additionally, as a naturally alkaline and electrolyte-rich premium water, Waiakea has won numerous awards for its exceptional taste and has received ample attention among health, beauty and fitness industries.

For More Information From Waiakea www.waiakeasprings.com

For More Information From Rich’s Foodservice www.richs.com

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NEWSTUFF Creations & Innovations to Convenience Products and Services

QUICK CORNBREAD

GRAB-N-GO PICKLES OH SNAP! Pickling Co., a division of GLK Foods LLC, is changing the way people think about pickles and veggies. Its pickles and veggies are fresh, convenient, made to taste delicious, and how they’re packaged makes selling them a snap. Not only does the attractive pouch grab attention, it’s designed with merchandising flexibility in mind. Merchandising options include freestanding, peggable or tear-away display case. And placement options include wall deli, refrigerated deli, service deli or grab and go. Oh Snap! comes in seven deliciously crunchy choices that are always crisp, perfectly seasoned and great tasting—with no brine added. The products are gluten-free, fat-free and made with nonGMO cucumbers and veggies.

Tyson Convenience introduces Chef Pierre Mini Cornbread Loaves. Cornbread is a staple of American cuisine. No fried chicken dinner or barbeque is ever truly complete without it. And now, convenience stores don’t have to worry about what they are going to combo with or add alongside as a side with prepared food items. Chef Pierre Mini Cornbread Loaves offer a fast and easy side dish for retailers—large and small—who are looking to complement their prepared food offerings with that classic cornbread taste and texture. Chef Pierre Cornbread Mini Loaves are individually wrapped, and made from cake-style batter, with a moist and tender texture all in a unique mini loaf format. Simply thaw and serve. The loaves have a 21day ambient shelf life and are perfect as a grab-andgo snack or side item with prepared food items

For More Information From Tyson Convenience www.tysonconvenience.com

For More Information From OH SNAP! Pickling Co www.ohsnappickles.com

TERIYAKI FLAVORED SNACK STICKS Wenzel’s Farm, a producer of small batch, handcrafted and naturally hickory smoked meat snacks, has announced that its Teriyaki-flavored snack sticks are now gluten-free. With this change, the entire line of snack sticks, and all other Wenzel’s Farm products are now gluten free. Wenzel’s Farm produces 10 flavors of snack sticks, along with many other quality meat products including summer sausage, brats, kielbasa, thuringer and other award-winning meats.

For More Information From Wenzel’s Farm www.wenzelsfarm.com

BAKED ORGANIC FRIES Snikiddy, a line of tasty snacks made from simple, wholesome, real-food ingredients, is revamping its line of Baked Fries to now include 70% organic ingredients. Touting bold flavors for the more adventurous members of the household and parent-approved ingredients, Snikiddy Baked Fries are available in three varieties, including Hot & Spicy, Cheddar and Bold Buffalo. Bolstering its better-for-you presence in the snack aisle, Snikiddy’s new Baked Fries hit store shelves in June. The relaunch follows the brand’s recent unveiling of USDA Certified Organic Baked Cheese Puffs, which are available in two cheesy flavors: Mac & Cheese and Grilled Cheese. Snikiddy Baked Fries will retail for $2.99 and will be available nationwide in natural and grocery stores.

For More Information From Snikiddy www.snikiddy.com

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M&M’S ICE CREAM BARS HEALTHY Brand Ice Cream Bars are each individually wrapped and feature BAR SNACKS M&M’S chopped M&M’S Milk Chocolate Candies inside reduced fat vanilla ice New Pure Organic Bars are made with wholesome organic ingredients in their simplest form—USDA Organic, non-GMO Project Verified, vegan, gluten-free, dairy-free and soy-free—to deliver a great taste that meets your customers’ need for cleaner snacking. Loaded with wholesome, natural ingredients like fruits, nuts and whole grains, and luscious elements like chocolate, vanilla and nut butters, Pure Organic products are sure to satisfy. Pure Fruit & Nut Bars and Pure Ancient Grains Bars are available in a variety of flavors your consumers will love.

cream, all smothered in creamy milk chocolate. This new item builds on the excitement around the M&M’S Brand Cookie Sandwich, which is outpacing the category, growing over 10%, (Nielson). The frozen novelty Bar format is growing more than two times the category, (Nielson). Part of this increase may be that parents’ preferred frozen novelty format is a Bar, since it’s clean and convenient for families. The suggested retail price is $1.79 for a 2.64-ounce single and $3.99 for a box of six 1.63-ounce bars.

For More Information From Mars Chocolate North America www.mars.com

For More Information From The Kellogg’s Convenience Team www.kelloggsconvenience.com

NEW MENTHOL CIGARETTE As part of its commitment to offering smoking pleasure for adult smokers, R.J. Reynolds Tobacco’s Newport brand is now making its Newport Platinum styles available nationally. Newport Platinum styles offer adult smokers a fresh take on Newport cigarettes with a refreshingly smooth menthol taste that is different from the traditional Newport family. Newport Platinum will be available in two styles including: Newport Platinum (Kings and 100's) with a smooth and flavorful taste, and Newport Platinum Blue (Kings and 100's) with a full-bodied and flavorful taste. Newport Platinum is being offered in direct response to demand from adult menthol smokers for a different menthol product offering from the brand. Newport Platinum styles broaden the Newport portfolio and enable the brand to offer a more diverse range of products for the diverse range of adult smoker tastes. Newport is R.J. Reynolds’ top-selling cigarette brand. It is the No. 1 selling menthol cigarette brand in the U.S. and the second-largest cigarette brand in the U.S.

For More Information From R.J. Reynolds www.rjrt.com

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WINE IN A CAN Backpack Wine offers a unique combo of great-tasting, quality wine in a rebellious and fresh manner and brings the convenience and accessibility of a can, along with the great taste and higher quality that people who enjoy wine appreciate. Backpack Wine’s Snappy White is a Washington State Riesling based blend with a touch of sweetness and weight that finishes with refreshing acidity. This balanced white delivers notes of green apple and Asian pear, making it perfect for cocktail hour or with spicy summer dishes. Cheeky Rose is a Washington State Pinot Blanc and Sangiovese Rose blend is a drier expression, with a touch of peach, strawberry and rose petal; a clean crisp blush wine, it’s a bright treat with an open grill in the summer or rich foods in the winter. Both wines are available in a box of four 250-milliliter cans.

For More Information From Backpack Wine Jim Doehring, president of Backpack Wine at jdoehring@backpack-wine.com

September 2017

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NEWSTUFF Creations & Innovations to Convenience Products and Services

NON-GMO CRACKERS Known for its delicious crackers that start with three simple and authentic ingredients (wheat, oil and salt), the Triscuit brand is transitioning its entire portfolio of products to be Non-GMO Project Verified. The Non-GMO Project is the country’s leading independent verifier of non-GMO foods and the only third-party non-GMO verification system in the U.S. Triscuit Cracker boxes bearing the Non-GMO Project Verified seal began rolling out to retailers nationwide in late July, with the transition of the full product line expected to be complete by the end of September 2017.

For More Information Mondeléz International

STACKABLE CUBER ICE Hoshizaki America Inc. has introduced the newest icemaker with the KMEdge Design featuring increased production with greater energy efficiency. The KM-1301S_J model (formerly KM-1301S_H) produces up to 1,400-pounds of ice daily a 3% increase while using 8% less electricity. Stack two units to produce double the ice in the same footprint. The 48-inch wide icemaker is available as air, water or remote air-cooled. The remote air-cooled model is ENERGY STAR qualified.

For More Information From Hoshizaki America Inc. www.hoshizakiamerica.com

www.triscuit.com

UPSCALE COFFEE LINE

CHICKEN MENU ITEMS Hot Chicken is a top trend in 2017, and Chester’s is leading the charge. As a limited time offer to its ever-popular menu line up, Chester’s has taken its classic family recipe for chicken to the next level—by creating a partnership with The French’s Food Co. Any chicken or tender meal can now be tossed in Frank’s RedHot Stingin’ Honey Garlic Sauce. The new sauce option takes the taste of fan-favorite honey garlic and kicks it up a notch with spicy cayenne pepper. Now Chester’s fans have an easy, spicy flavorful new option to make summer even hotter. Since launching the new menu item earlier this month, participating Chester’s locations nationwide have seen an enormous response to ‘Get it Honey Stung’ chicken. Chester’s ‘Get it Honey Stung’ sauce topper is available for a limited time only.

Core-Mark Holding Co. Inc. has released its new, upscale line of coffees: “Arcadia Bay Select Coffees.” Core-Mark’s new premium line of coffees offers a fully-branded, turnkey line of modern brewing and dispensing options, installation and service for convenience operators looking to expand their profit base. Utilizing its successful strategic alignment with Boyd’s Coffee Co., Core-Mark and Boyd’s have developed a premium line of coffee exclusively available to Core-Mark’s customers. Arcadia Bay Select Coffees include 10 varieties of both “single origin” and blended 100% Arabica bean coffees sourced from eight famous coffee growing regions from around the world, such as Kona, Brazil, Ethiopia and Guatemala. The new Arcadia Bay Select program supports operators by offering marketing support, signage, menu boards, pre-fab kiosks, branded cups, varying roast levels, single origin coffees, improved taste and quality profiles, as well as Rain Forest Alliance and Certified Organic Coffees.

For More Information From Chester’s

For More Information From Core-Mark

www.chestersinternational.com

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September 2017

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the quality of everything in the store. Guests have a reason other than gasoline to come and see us.” All of the company's stores going for-

but new guests now think of us when they are headed for lunch or looking to bring dinner home to their families. Providing a great, upscale offering has

ClassifiedAds

The new store design stands at about 6,000 square feet. RaceTrac President Max Lenker said RaceTrac worked on the project for “six to eight years.”

Tomlinson_half.indd 1

38 Convenience Store Decisions

l November 2014

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1/28/16 9:03 AM

NACS - Chicago Oct. 17 - 20 Booth #424

10/30/14 5:10:54 PM

cks Dunnage Ra • ts c u d ro P urt ses • Foreco a B y la p is D rs • Storage Merchandise

ays.com www.masonw plete Catalog Com 800-837-2881 104 Convenience Store Decisions

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September 2017

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ADD Systems .......................5 800.922.0972 / www.addsys.com AdvancePierre ....................35 www.freshcutsandwiches.com Altria Group Distribution Co. .....2 www.altria.com

Del Monte Fresh ...............43 800.950.3683 www.freshdelmonte.com E-Alternative Solutions ........61 800.377.7709 www.cuevapor.com

KT&G ..........................13,15 www.ktngusa.com

Raybern’s ...........................46 www.rayberns.com

Liggett Vector Brands ...........41 877.415.4100

Ruiz Foods ...........................47 www.ruizfoods.com

Little Caesars .........................54 313.471.6764 / www.LCEcorp.com

Scotsman Ice Systems ...........23 www.scotsman-ice.com Sonic Drive-In .........................14 www.sonicdrivein.com

Apter Industries ..................11 800.441.7146 www.apterindustries.com

Excel Dryer ..........................83 877.661.3972 www.exceldryer.com

Little Debbie .........................49 866.483.4664 www.LittleDebbieCStore.com

Axis Communications ..........87 www.axis.com/retail

f’real ..............................79 www.freal.com/NACS

Logic ...............................63 844.552.9623 / www.logicvapes.us

Brakebush .....................38-39 800.933.2121 www.brakebush.com/conversation

GasBuddy ....................89 www.business.gasbuddy.com

MasonWays ......................104 800.837.2881 www.masonways.com

Calpipe Security Bollards ........85 877.283.8518 www.calpipebollards.com

Gulfcoast Software Solutions, Inc. ........................3 727.449.2296 www.gulfcoastsoftware.com

Campbell’s Beverage .............31 www.campbellsfoodservice.com

Hershey ..........................25 www.thehersheycompany.com

Cash Depot ........................76 800.776.8834 / www.cdlatm.com

Home Market Foods ................53 800.367.8325 / www.rollerbites.com

PFS Brands ......................28-29 855.632.3373 ww.PFSbrands.com/partner

CB Distributors ....................55 888.824.3256 www.cbdistributorsinc.com

Hussman ............................45 469.322.6300 / www.hussman.com

Phillips 66 ............................17 844.312.8577

ICEE ................................81 800.423.3872 / www.icee.com

POSA Tech ..........................105 888.491.4006 x203 www.posatech.com

Chef’s Cut Real Jerky .............70 877.210.2575 www.chefscutrealjerky.com Chobani ........................51 877.847.6181 www.Chobani.com Coca-Cola ........................7 www.cokesolutions.com/retail

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ITG Brands .........................33,77 www.ITGBrands.com Kretek International ....................9 www.djarumcigar.com Krispy Krunchy ................37 800.790.6097 www.krispykrunchycash.com

Smokey Mountain Snuff ..........59 www.smokeymountainsales.com

ClassifiedAds

ADVERTISER INDEX

Stout Brewing Company ..........73 800.746.3419 www.StoutBrewingCompany.com Subway ...............................42 203.877.4281 / www.subway.com

National Tobacco ..................75 800.331.5962

Swedish Match 800.367.3677 www.gamecigars.com .............21 www.swedishmatch.com ..........57

North American Bancard ......103 866.481.4604 / www.nynab.com

Swisher International .......65,108 800.874.9720 www.experienceacid.com Texas Pete ..........................19 www.TexasPeteFoodservice.com Tomlinson Industries .............104 216.587.3400 www.tomlisonind.com

Prairie City Bakery ................12 800.338.5122 / www.pcbakery.com

Wonderful Company ...............69 800.528.NUTS (6887)

Premier Nutrition ....................67 www.premiernutrition.com R.J. Reynolds .....................107 www.EngageTradePartners.com

Septembere 2017

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8/25/17 11:33 AM

INDUSTRYPERSPECTIVES

A Fond Farewell

After more than 30 years in the convenience-store industry and a couple of more years writing about c-stores, a new opportunity awaits. By Fran Duskiewicz

HEN I WAS DEEP in the middle of everything that was going on in the industry, I had little patience for those who I believed were coasting on past experiences and preaching about issues that might have been viable years ago, but which were barely applicable to what most of us were facing in our jobs, right here and now.

the second sale of Nice N Easy and the need to move on, I felt as though I had summed things up pretty well for myself, also. Many of my columns have been about the sweet times at Nice N Easy, the fun we had, and often about a piece of the industry that might be gone all too soon—creative mid-sized companies.

NAPLES AND BEYOND The second thing that’s happened, I can’t tell you that NIC-NACS Just a few years ago, when I stood on the stage at much about, at least, not right now. Let’s just say that I National Association of Convenience Stores’ (NACS) am a principal in a brand-new business starting here in State of the Industry Summit (SOI), reviewing the data as Naples, Fla. that needs my particular skill set. In fact, I am chairman of the research committee, I was living that stuff. typing this in my new office on a Saturday. Some things It was about as real for me and the attendees as it could never change, you see. It involves grab ‘n go foodservice, take-home meals, be. The positive feedback I received during the networking opportunities showed me that I was right on target. a dash of community service and completely self-serve And making people laugh during the presentation was a checkouts—all in remarkably unique and creative setbenefit, although I’m sure I made NACS nervous at times. tings. A news release will be forthcoming, I imagine. I Here’s an inside secret. I never rehearsed and I rarely suppose I might simply write my own, just like at Nice N knew what might come out my mouth, but I didn’t sweat Easy. I’m working with another entrepreneur who walks it because I knew my material. Over the past couple years, I’ve done my best to stay around dropping ideas all over the place. I’m using my on topic with current issues or to provide inside informa- experience and industry knowledge to gather them up tion we found valuable at Nice N Easy Grocery Shoppes. and give them shape and form. Again, some things never I’ve studiously avoided being “that guy” who spouts “well, change. I’m as excited and upbeat as I can possibly be. back in my day….” I want to thank John Lofstock, editor-in-chief of Well, a couple of things have recently transpired. One is that I feel as though I’ve run out of things to say. I gen- Convenience Store Decisions (CSD) for giving me the erally write these columns in my head around 3 a.m., the opportunity to write this column. It’s been extremely thertime I woke up for years in either a blind panic or in a apeutic. When I go back and the read the early ones, moment of inspiration when the solution to a problem the pain is evident. Senior Editor Dave Bennett has been particularly patient with me because I tend to use every occurred to me. Now, it’s pretty much a trip to the bathroom. But before second I have available before deadline to perfect the I drift back to sleep, I construct my column—what I want darn things. Everyone at CSD has been wonderful to me and, to say and how I want to say it. I wish it were more romanthankfully, all my other good friends at the other trade pubtic than that, but it is what it is. Essentially, when I sit at the keyboard, the column is lications are all still my good friends.That’s important to me. So, this is the last one, but I’m upbeat, positive and forwritten. It’s just passing through my fingers. At that point, the old English teacher in me kicks in and I edit, edit, edit— ward looking. I hope the next time my name hits the trade press it’s for doing something new and creative. probably too much. Excelsior. After I wrote my column about traveling back home, 106 Convenience Store Decisions

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September 2017

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8/25/17 9:21 AM

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