CStore Decisions August 2019

CStoreDecisions

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Solutions for Convenience Retailers

Navigating

Next-Generation

Leadership As truenorth celebrates 100 years, Bailey Lyden and Lindsay Lyden share their perspectives on transitioning leadership to the fourth generation.

INSIDE

August 2019

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Will Regulations Extinguish Cigar Flavors?

40

Burgers, Brats Bolster Lunch and Dinner Sales

50

Negotiating Supply and Distribution Contracts

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CStoreDecisions.com

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CONTENTS AUGUST 2019

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Number 8

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Volume 30

CStoreDecisions

22

EDITOR’S MEMO

8 Building a Brand That Connects With Customers

FRONT END

10 16 18

Profile: Zippin Updates Frictionless C-Store Quick Bites Industry News

CATEGORY MANAGEMENT

32 36 40 44

Sweet Indulgence Sweet and Sensory Excitement Will Regulations Extinguish Cigar Flavors?

Beverage Sales Surge

FOODSERVICE

50 Burgers, Brats Bolster Lunch and Dinner Sales 56 Cooking Up Quality Foodservice TECHNOLOGY

58

COVER STORY 22 Navigating Next-Generation Leadership

The Evolving Data Revolution

As truenorth celebrates 100 years, Bailey Lyden and Lindsay Lyden share their perspectives on transitioning leadership to the fourth generation.

OPERATIONS

62

Negotiating Supply and Distribution Contracts

32 BACK END

67 73 74

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CSTORE DECISIONS •

August 2019

Product Showcase Ad Index The Art of Engagement

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the CSD Group www.cstoredecisions.com

CStoreDecisions .com CStoreDecisions CStoreDecisions

Convenience Store Decisions

Convenience Store Decisions • EDITORIAL

CREATIVE SERVICES

VICE PRESIDENT, EDITOR-IN-CHIEF John Lofstock jlofstock@csdecisions.com

VICE PRESIDENT, CREATIVE SERVICES Mark Rook mrook@wtwhmedia.com

EXECUTIVE EDITOR Erin Del Conte edelconte@csdecisions.com

CREATIVE DIRECTOR Erin Canetta ecanetta@csdecisions.com

SENIOR EDITOR Thomas Mulloy tmulloy@csdecisions.com

ART DIRECTOR Matthew Claney mclaney@wtwhmedia.com

ASSOCIATE EDITOR Isabelle Gustafson igustafson@csdecisions.com ASSOCIATE EDITOR Howard Riell hriell@csdecisions.com

DIGITAL MEDIA/ WEB DEVELOPMENT WEB DEVELOPMENT MANAGER B. David Miyares dmiyares@wtwhmedia.com

EDITORIAL ADVISORY BOARD

DIGITAL MARKETING

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

DIRECTOR, AUDIENCE DEVELOPMENT Bruce Sprague bsprague@wtwhmedia.com

DIGITAL MARKETING DIRECTOR Virginia Goulding vgoulding@wtwhmedia.com

VIDEO SERVICES

DIGITAL MARKETING MANAGER Amanda Fourlaris afourlaris@wtwhmedia.com

VIDEOGRAPHER Bradley Voyten bvoyten@wtwhmedia.com

CONTRIBUTING EDITOR Anne Baye Ericksen Scott McKinney

VIDEOGRAPHER Derek Little dlittle@wtwhmedia.com

COLUMNISTS Ed Collupy Nick Powell John Schaninger

VIDEOGRAPHER Graham Smith gsmith@wtwhmedia.com

ADVERTISING

PRODUCTION/ CUSTOMER SERVICE

EVENTS MANAGER Jen Kolasky jkolasky@wtwhmedia.com

CUSTOMER SERVICE MANAGER Stephanie Hulett shulett@wtwhmedia.com

EVENT EXHIBITOR & SPEAKER MANAGER Michelle Flando mflando@wtwhmedia.com

PUBLISHER John Petersen jpetersen@csdecisions.com

CUSTOMER SERVICE REPRESENTATIVE Barbra Martin bmartin@csdecisions.com

EVENTS MARKETING SPECIALIST Christina Lograsso clograsso@wtwhmedia.com

VICE PRESIDENT, SALES Tony Bolla tbolla@csdecisions.com

DIGITAL PRODUCTION MANAGER Reggie Hall rhall@wtwhmedia.com

(216) 533-9186

(216) 346-8790

(773) 859-1107

REGIONAL SALES MANAGER Ashley Burk aburk@wtwhmedia.com

DIGITAL PRODUCTION SPECIALIST Nicole Lender nlender@csdecisions.com

WEBINAR COORDINATOR Halle Kirsh hkirsh@wtwhmedia.com SR. DIGITAL MARKETING STRATEGIST Mike Ulanski mulanski@wtwhmedia.com

EVENTS

FINANCE CONTROLLER Brian Korsberg bkorsberg@wtwhmedia.com ACCOUNTS RECEIVABLE SPECIALIST Jamila Milton jmilton@wtwhmedia.com

(737) 615-8452

REGIONAL SALES MANAGER Patrick McIntyre pmcintyre@wtwhmedia.com (216) 372-8112

Bill Kent, President and CEO The Kent Cos. Inc. • Midland, Texas Greg Lorance, Dispensed Category Manager Cumberland Farms • Framingham, Mass.

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

NATIONAL ADVISORY GROUP (NAG) BOARD Robert O’Connor, Board Chairman O’Connor Petroleum Co. • Hales Corners, Wis. Mary Banmiller, Director of Retail Operations Warrenton Oil Inc. • Truesdale, Mo. Greg Ehrlich, Chief Operating Officer Beck Suppliers Inc. • Fremont, Ohio Doug Galli, Vice President, General Manager Reid Stores Inc./Crosby’s • Brockport, N.Y. Joe Hamza, Chief Operating Officer Nouria Energy Corp • Worcester, Mass.

Brent Mouton, President and CEO Hit-N-Run Food Stores • Lafayette, La. Peter Tamburro, General Manager Clifford Fuel Co. • Utica, N.Y.

Bart Stransky, Board Chairman RaceTrac Petroleum Inc. • Atlanta Garet Bishop, Chief Financial Officer BFS Cos. • Morgantown, W.Va. 2011 - 2019

SUBSCRIPTION INQUIRIES To enter, change or cancel a subscription, please e-mail requests to: bmartin@csdecisions.com or Mail: Convenience Store Decisions, 1111 Superior Ave., 26th Floor, Cleveland, OH 44114 Copyright 2019, WTWH Media, LLC

Convenience Store Decisions (ISSN 1054-7797) is published monthly by WTWH Media, LLC., 1111 Superior Ave., Suite 2600, Cleveland, OH 44114, 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. Periodicals postage paid at Cleveland, OH, and additional mailing offices. POSTMASTER: Send address changes to Convenience Store Decisions, 1111 Superior Avenue, 26th Floor, Cleveland, OH 44114. GST #R126431964, Canadian Publication Sales Agreement No: #40026880.

CONVENIENCE STORE DECISIONS does not endorse any products, programs or services of advertisers or editorial contributors. Copyright© 2019 by WTWH Media, LLC. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, or by recording, or by any information storage or retrieval system, without written permission from the publisher. Circulation audited by Business Publications Audit of Circulation, Inc.

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Brad Call, President Colour Du Jour • Salt Lake City

YOUNG EXECUTIVES ORGANIZATION (YEO) BOARD

EDITORIAL AND NAG 1420 Queen Anne Rd., Suite 4,Teaneck, NJ 07666 Ph: (201) 321-5642

CSTORE DECISIONS •

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

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

WTWH MEDIA, LLC 1111 Superior Ave., 26th Floor, Cleveland, OH 44114 Ph: (888) 543-2447

6

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

SENIOR DIGITAL MEDIA MANAGER Patrick Curran pcurran@wtwhmedia.com

ASSOCIATE EDITOR Marilyn Odesser-Torpey mot@csdecisions.com

VICE PRESIDENT/GROUP PUBLISHER Tom McIntyre tmcintyre@csdecisions.com

Leading Through Innovation

August 2019

Caroline Filchak, Director, Wholesale Ops Clipper Petroleum • Flowery Branch, Ga. Kalen Frese, Food Service Director Warrenton Oil Inc. • Warrenton, Mo. Alex Garoutte, Director of Marketing The Kent Cos. Inc. • Midland, Texas Sharif Jamal, Corporate Training Manager Chestnut Petroleum Inc. • New Paltz, N.Y. Lindsay Lyden, Vice President, Development Truenorth Energy • Brecksville, Ohio Jeremie Myhren, Chief Information Officer Road Ranger • Rockford, Ill.

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Editor’s Memo

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

Building a Brand That Connects With Customers As the convenience store industry evolves, your brand image and what it stands for will define you in the eyes of your customers and your employees. Consider the outstanding social perceptions of companies like Southwest Airlines and Costco to realize the importance of how your brand is perceived in the marketplace.

Brand image is something c-store retailers need to constantly nurture. Forward-thinking chains across the industry are building new store formats with eye-catching graphics and impressive branded and proprietary foodservice programs. The newer stores present a refined retail experience and help to build a perception of brand excellence. Still, many c-store owners talk about their company culture but often can’t define it. A welldefined culture is crucial for attracting top talent and keeping customers coming back to your stores.

“

“

If you can’t make people see what makes you unique, your offering is a commodity and you’ll be competing primarily on price alone.

Customers are overwhelmed by messages today, and as a result, it’s tougher than ever to grab and hold customer attention. If you can’t make people see what makes you unique, your offering is a commodity and you’ll be competing primarily on price alone. This approach will be short lived as your competitors offer a fuller shopping experience.

Lindsay Pedersen, author of the new book “Forging an Ironclad Brand: A Leader’s Guide,” pointed out that companies are constantly failing to notice what she calls the “empathy gap” that exists between their offerings and the customers they’re trying to reach.

“Empathizing begins long before you sit down to conceptualize messaging,” Pedersen said. “Empathy has to be baked into your processes and the very fabric of your culture. Otherwise, you’ll fail to serve the customer and ultimately fail the business.”

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August 2019

STRONG FOUNDATION

At the foundation of a compelling brand is putting yourself in the customers’ shoes.

“You have to truly get to know the humans you’re seeking to connect with,” Pedersen said. “When you don’t, you’ll not only fail to persuade them to buy and build a loyal relationship over time, you may put out a tone-deaf message that blatantly alienates them.”

Pedersen offered tips for success: Forget the Golden Rule. We all know the Golden Rule: Do unto others as you would have them do unto you. But the goal of the marketer is to tap into the customers’ needs and wants, which might be quite different from their own.

If retailers market as if they themselves are the target, the strategy is destined to fail.

Find out what customers really want and need, not just what they say they want and need. Henry Ford famously said, “If I had asked people what they wanted, they would have answered ‘faster horses.’”

Discover the deep-seated, unspoken, perhaps even subconscious desires of your customers.

Then create an offering that caters to their needs.

One of the worst things you can do is get your customers to open up to you, then do nothing.

Make your customers — not your business — the heroes in your marketing. When you tell stories about your business, let your customers be the stars.

Tell your story in a way that allows your respect for the customer to shine. Before asking them to like you, make sure you first understand and empathize with them. This creates trust and a tight bond, both of which are necessary for a successful relationship.

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FRONT END Profile

Zippin Updates Frictionless C-Store The newly reopened store uses vision cognition technology, machine learning and smart shelf sensors to provide a frictionless solution to a well-known problem.

Isabelle Gustafson • Associate Editor

As retailers race to figure out the future of frictionless checkout, Zippin, a fully functional, public convenience store in San Francisco, offers a cashierless model using its own frictionless technology.

The convenience store, which uses vision cognition technology, machine learning and smart shelf sensors, originally opened in August 2018 but recently reopened with longer hours, an updated design and an enhanced selection of products, including more fresh and prepared food items.

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CSTORE DECISIONS •

August 2019

Customers simply use an app on their phone to enter the store, grab what they want and leave.

“When the receipt comes, we tell them exactly how much time they spent in the store,” said Krishna Motukuri, Zippin CEO and co-founder, noting that getting lunch can take a matter of seconds.

San Francisco passed a law in May banning entirely cashless brick-and-mortar stores to ensure residents without a smartphone or a bank account can still access the same services as other residents.

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FRONT END Profile

Zippin co-founders, from left: Abhinav Katiyar, head of engineering; Motilal Agrawal, chief scientist; and Krishna Motukuri, CEO. The idea for Zippin was born in 2014 from Motukuri’s own frustration over waiting in a long checkout line for a single item.

In response to the new law, Zippin now also accepts cash. Employees are available outside the store to assist — and to explain the technology to customers who are new to the concept.

But because the actual shopping area is only 250 square feet, there might not be any employees inside the retail space.

This means the store does not sell age-restricted products like alcohol and tobacco. But Motukuri believes this is simply a technological roadblock.

“Technology will get better,” he said. “For instance, age-restricted products today, by law, require a human to check the customer’s ID. That could be something that could be automated. … in the next five or 10 years, most of them (could be) automated.”

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August 2019

“

The industry’s obviously just getting started, but it’s picking up very rapidly. It looks like, in the next five to 10 years, you should expect most convenience stores to be entirely checkout-free.

“

FROM THE TOP The idea for Zippin was born about five years ago from Motukuri’s own frustration over waiting in line.

His wife asked him to pick up milk on the way home, so he stopped at their local grocery store, only to find — you guessed it — a massive checkout line.

“I just turned around immediately because there was no way I was going to wait five minutes for a single gallon of milk,” he said.

“That essentially got me thinking; I was there, a willing customer, and there were numerous

products, numerous gallons of milk for me to buy. But this bottleneck called checkout is what actually made the sale fail.”

Motukuri said he saw this as an opportunity for change. He and co-founders Abhinav Katiyar and Motilal Agrawal got to work.

The result combines vision cognition technology, machine learning and smart shelf sensors.

The cameras and software work together to recognize the products, but because all of the cameras are overhead looking straight down, rather than on the walls, they “almost never see a customer’s face,” said Motukuri.

Privacy is a big concern for many shoppers, he said.

The feature allows a sense of anonymity.

“You can actually walk into the store completely

– Krishna Motukuri, Zippin CEO and co-founder

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FRONT END Profile

At San Francisco-based Zippin, customers simply use an app on their phone to enter the store, grab what they want and leave; no face-to-face communication necessary.

covering your face, and then you could use a payment method that’s completely privacy-friendly,” he said.

RETAILER ADVANTAGE C-store retailers can learn a lot from the data, such as which products customers pick up but then put down because of the nutrition label or price, for example. This information can help stores better market products going forward.

“The loyalty programs that most of the retailers have are designed so that at least they know what products customers are buying,” said Motukuri. “But it’s only limited to that — what they are walking out of the store with.”

The technology can also help with restocking and inventory management.

The store employee scans the products when they come in; as soon as the employee places the product on the shelf, the system automatically updates the inventory.

In addition, when the shelf is running low, the technology will know and alert employees in real time.

Smart checkout technology systems are expected to process more than $45 billion in transactions for retailers by 2023, according to a 2018 study by Juniper Research, "Future Stores & the Retailers Building Them.” That translates to a 182.2% compound annual growth rate (CAGR) between 2018 (when smart checkout transactions were estimated to total $253 million) and 2023.

MOVING FORWARD Ultimately, Zippin plans to use its technology to help retailers without the capability, resources or time to create their own frictionless technology.

Motukuri said the cost of the technology is based on the size of the store — $25 to $30 per square foot.

Zippin’s space is small, with only about 100 SKUs, but the technology itself has unlimited capacity.

So far, Zippin is “working with four major retailers,” though they haven’t dis...there was no way I was going to wait five closed which just yet. But Motukuri’s minutes for a single gallon of milk. That confident other retailers will get on board once they do. essentially got me thinking; I was there, a “The industry’s obviously just getting willing customer, and there were numerous started, but it’s picking up very rapproducts, numerous gallons of milk for me to idly,” he said. “It looks like, in the next five to 10 years, you should expect buy. But this bottleneck called checkout is most convenience stores to be entirely what actually made the sale fail. checkout-free.”

- Krishna Motukuri, Zippin CEO and co-founder

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August 2019

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quickBites 87% consume

CUSTOMERS REACH FOR

ICE CREAM AND DAIRY

dairy

67% consume dairy regularly

60% seek dairy

DAIRY:

Healthy and Strong

for bone health

56% believe real

dairy is necessary for a balanced diet

Ice Cream Shops Winning More Millennials

45% expect dairy to be healthier than other foods.

While 4 in 5 Americans

38% seek it for

digestive health

will pick up frozen treats at the supermarket, ice cream shops are especially popular among younger consumers.

10% limit

consumption

3% don’t

consume it at all

T he main reason for limiting/avoiding dairy is a stated lactose intolerance or dairy sensitivity.

39%

Source: Ryan Toney, Cargill Dairy Enterprise Group, 2019 Western Dairy Management Conference.

of millennials will buy their frozen treats from a specialized store. Half as many baby boomers will do the same.

Source: Loacker Questionnaire Store Chart, Statista Online Survey, n=2,006 respondents, June 2019

WHO SCREAMS FOR ICE

CREAM?

Regular ice cream Two-fifths of is the most companies popular see increased category of demand for frozen premium desserts. ice cream. The average American U.S. ice cream Families are the consumes more companies made primary customer than 23 pounds more than 898 group for ice of ice cream million gallons of cream retailers. per year. regular ice cream in 2015.

Ice cream makers and retailers say the Great Lakes region is the most successful ice cream market.

ased on B production figures, low-fat ice cream is the second most popular category.

Source: International Dairy Foods Association Ice Cream Sales & Trends, idfa.org Source: International Ice Cream Association

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CSTORE DECISIONS •

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August 2019

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FRONT END Industry News Gus Olympidis to Receive NAG’s Lifetime Award for Convenience Retailing The National Advisory Group (NAG) announced that the association will honor Gus Olympidis, CEO and founder of Family Express, with the 2019 NAG Lifetime Award for Convenience Retailing.

Olympidis has left an indelible mark on the convenience retailing industry over the past 44 years. Since the company was founded on Christmas Day in 1975, Olympidis’ vision has been “to be the finest small chain of convenience stores and fueling centers in the world.” Family Express, headquartered in Valparaiso, Ind., operates 75 stores throughout northwest and central Indiana.

Olympidis will receive the award on Sept. 10 at the 2019 NAG Conference in Minneapolis. To register for the conference or view the agenda, visit www.nagconvenience.com.

Kum & Go Selected as Mars Wrigley’s First Innovative Merchandising Incubator Kum & Go was selected as Mars Wrigley Confectionery’s first Innovative Merchandising Incubator. Hampton, Iowa-based Kum & Go will receive custom solutions that drive sales and improve merchandising. At the end of the testing period, Mars Wrigley and Kum & Go will meet to evaluate the success of the solution and determine if new or additional recommendations are needed to drive sales next year.

Mars Wrigley announced the Innovative Merchandising Incubator in April 2019, inviting retailers nationwide to submit their biggest challenges in the retail space. Each submission was evaluated on specific criteria, including national or strong regional presence, number of stores and openness to implementing Mars Wrigley’s in-store recommendations.

Speedway President Anthony Kenney Retires Anthony Kenney, president of Marathon Petroleumsubsidiary Speedway, is retiring after 43 years with the company. Kenney began his career with the company in 1976. Under his leadership, Speedway has expanded from a Midwest-only brand into one of the nation’s largest fuel and c-store chains.

Timothy Griffith, Marathon Petroleum senior vice president and chief financial officer, has been named the new president and assumed the role in July.

“We see tremendous growth potential for Speedway moving forward, thanks to Tony’s leadership. His retirement is well-earned, and we wish him and his family the best,” said Marathon Petroleum Chairman and CEO Gary Heminger.

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August 2019

San Francisco Bans E-Cigarettes, More States Enact Tobacco 21 Laws San Francisco is the first U.S. city to ban e-cigarettes. The legislation is seen as a way to crack down on what the Food and Drug Administration (FDA) has called a youth vaping “epidemic.” The law mandates that any e-cig products be evaluated by the FDA in a premarket review before being sold. Because no manufacturers have done that yet, the law is expected to halt all vape sales in about seven months. Groups representing small businesses oppose the measure, saying it will force some stores out of business.

Meanwhile, as of press time, 18 states and the District of Columbia have passed laws raising the legal age to purchase tobacco and electronic cigarettes from 18 to 21.

Weigel’s Enters New Market With 68th Store

Powell, Tenn.-based Weigel’s, CStore Decisions’ 2019 Chain of the Year, opened its 68th store in Kingsport, Tenn. The new location features made-to-order food items at the new Weigel’s Kitchen, a dedicated quick foodservice kiosk.

“We’ve had many requests to expand to the Kingsport market,” said Weigel’s CEO Ken McMullen. “So we are excited to now offer our newest store design and fresh food offerings in this community. We have eight gas pumps with easy access so our customers can get in and out and be on their way quickly. We have designed this store to serve our customers in Kingsport the best in every way possible.” cstoredecisions.com

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R E N W O I O P INNOV T

THE

OF

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Transitioning Leadership

Cousins Bailey Lyden, vice president of retail, and Lindsay Lyden, vice president of development, represent the fourth generation of the Lyden family business, True North Energy.

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Navigating

Next-Generation

Leadership

As truenorth celebrates 100 years, Bailey Lyden and Lindsay Lyden share their perspectives on transitioning leadership to the fourth generation.

Erin Del Conte • Executive Editor

As fourth-generation executives in the Lyden family business, True North Energy, cousins Bailey Lyden and Lindsay Lyden credit the generation above them for easing their integration into the company and positioning the chain for the future. They also know firsthand the joys and challenges of joining a family company as next-generation leaders.

In 2019 the Lyden family is celebrating the 100th anniversary of True North Energy, which started as The Lyden Oil Co. in 1919. Based in Brecksville, Ohio, the company operates 108 truenorth c-stores in Ohio and Illinois and supplies fuel to 200 dealer locations.

100 YEARS

William Geoffrey Lyden Sr. — Bailey’s and Lindsay’s great-grandfather — founded The Lyden Oil Co. in 1919 as a bulk fuel delivery business.

Over the next 50 years, the company grew to include 120 filling stations. When the second generation — William Geoffrey Lyden Jr. — became CEO, he propelled the business forward into c-store retailing and opened the first c-store under the banner Fast Check Food Mart in 1982.

The third generation, William Geoffrey “Geoff” Lyden III (Bailey’s father) and Mark Lyden (Lindsay’s father), were at the helm in 1999 when The Lyden Co. formed a 50-50 joint venture with Shell Oil and created True North Energy. Geoff Lyden served as CEO from 1994 until he passed away in November 2018. Today, Mark Lyden serves as CEO. cstoredecisions.com

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“The third generation really brought the company to the next level,” said Lindsay Lyden, vice president of development. “They had the vision to form the joint venture with Shell after the BP and Amoco merger. They purchased assets in Chicago at the right time. My dad and uncle excelled at buying assets at the right time, and we were able to grow a lot because of their foresight.”

Geoff Lyden Lindsay joined the company in 2006 after graduate school, first working in the purchasing department buying capital items for raze and rebuilds and other construction projects. “That gave me a great foundation,” she said.

The position gave her a broad tutorial on the c-store business as she purchased dispensers and pipes, tanks and fountain machines and gained insight into how the difMark Lyden ferent parts of the company worked together from a building and equipment operating perspective.

Bailey anticipated joining the family company from a young age.

“It was always my goal to work for the company and to support it in any way I could,” said Bailey Lyden, vice president of retail. At 14, he got his chance to start working at the stores. While he wasn’t old enough to work the register, a manager taught him everything from stocking shelves to cleaning restrooms.

“It helped me grow an appreciation for what our employees do every day,” Bailey Lyden said. “I think that is really important. It also helped me earn a little street cred from all our operational folks.”

In 2007, after graduating from the University of Colorado, he joined the company full time, overseeing the chain’s car wash business.

CREAMER

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— Lindsay Lyden, truenorth vice president of development

PASSING THE BATON

A common challenge among young executives can be convincing older generations to give them an opportunity to lead. At truenorth, however, the third generation paved the way for the fourth generation to carry the torch. cstoredecisions.com

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Transitioning Leadership

In 2008, truenorth brought in consultants Chris Harris and Rhonda Cain from Retail Strategies, who recommended focusing on the ‘inside business’ of c-store retailing.

While the third generation excelled at distributing and retailing gasoline, they had limited knowledge in operating c-stores.

Cain and Harris wanted to take the fourth generation, whose knowledge wasn’t clouded by gasoline retailing, teach them cstore retailing and let them own that aspect of the business. “(The third generation) allowed us to take on the responsibility. It was a nice compliment that they believed we could do this, rather than hiring somebody else from the outside,” Lindsay Lyden said.

With their parents’ blessing, the fourth generation learned from Retail Strategies how to run all c-store categories themselves.

Bailey handled merchandising and learned how to negotiate with vendors, while Lindsay oversaw marketing.

“We treated gasoline as just another SKU,” Bailey Lyden said. “We invested a lot in our backend system. We (collected) scan data for line item inventory, so we became more sophisticated as a retailer.

That helped me understand the business more.”

What stands out to both Bailey and Lindsay is the third generation’s open mindedness in shifting focus to the in-store side of the business.

“We were very lucky they had that vision,” Lindsay Lyden said.

The move secured truenorth’s 26

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stability during a decade permeated by evolving customer expectations, family business closures and industry consolidation.

“Today you need 15 cooler doors of beverage selection, a beer cave, big and nice restrooms, and foodservice,” Bailey Lyden said.

Because of the third generation’s foresight, the company was able to reinvest in its locations and was well positioned to deliver on those expectations.

When the time came to add more support staff in terms of category managers and field merchandisers, the third generation supported the fourth generation in taking that need seriously, and also foresaw the need for bigger stores to accommodate changing demands. The truenorth stores have grown from 2,500 square feet to 4,200 square feet, and the chain’s SKU count has expanded as well.

“It’s driving profitability, and it’s paying off,” Bailey Lyden said.

As her father’s industry role expanded, Lindsay transitioned into the position of vice president of development. Her early experiences at the company prepared her for her current role.

“Because I did all the purchasing when I first started, I knew how all equipment worked. Now I oversee the permitting, planning, zoning and building of sites from the ground up,” she said.

Bailey transitioned into the role of vice president of retail in 2015.

“Bailey and I were very fortunate that we did shift our focus from being gasoline retailers to convenience retailers early in our careers here at the company,” Lindsay Lyden said.

The move gave them opportunities to prove their leadership capabilities early on.

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Transitioning Leadership

In 2008, the company shifted its focus to the in-store side of the business. The truenorth stores have since grown from 2,500 square feet to 4,200 square feet.

NAVIGATING A FAMILY BUSINESS

Working with your family can bring both challenges and benefits.

Getting to work with your family members every day can be a fun privilege. Lindsay’s husband, Daniel Niese, works for the company, too, as treasurer.

Working with family can also have the added challenge of making business conflicts feel more personal.

“When you get to those tough times, it’s a little harder because it is your family you’re reporting to.

You have to have the boundary not to take it home with you,” she said.

For example, Lindsay and her husband travel to and from work together. “We have to consciously say, ‘We are on our journey home.

This is where work shuts off.’”

Both Lindsay and Bailey have the same piece of advice for other 28

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young executives navigating the family business: “Be patient.”

In many cases, older generations aren’t ready to hand over the reins when the younger generation comes of age.

“Learn and soak up all you can from previous generations, and then when the transition happens, it will be smooth,” Lindsay Lyden said. “Enjoy the process.”

Remember that the business is bigger than your day or your generation, and focus on how to best contribute to extend that legacy for the next generation and beyond, she said.

The current generation can do much to aid the transition of the incoming generation. At truenorth, Bailey and Lindsay credit the third generation with creating a welcoming environment for them.

“Their vision for our generation was so well received by our em-

ployees that the respect was there from day one,” Bailey Lyden said.

“But we also had to earn credibility, and be humble and respectful.”

Lindsay Lyden noted it can take time for new generations to win the trust of those above them at the company. “People didn’t really take me seriously until I was involved in the company for a good amount of time.”

While most young executives want to move forward quickly, the first steps are earning respect and observing before trying to influence.

“It’s important to listen more than you talk early on,” Bailey Lyden said. “You’ve got to know and understand the industry experience around you. Know that you don’t always have the answer. Learn to ask the right questions.”

Appreciate your competition, he said, and learn from them as much as you can.

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Transitioning Leadership

The third generation brought in consultants from Retail Strategies in 2008, who taught the fourth generation how to run the inside part of the business. Bailey Lyden handled merchandising while Lindsay Lyden managed marketing for the convenience stores.

“If you don’t have a good understanding of the business, you can’t really be that impactful,” he said. “Some employees had 25-plus years with us. I took the attitude of, ‘We want to learn from you. Tell us how to support your efforts.’ That perspective helped us to be well received.”

TRANSITIONING LEADERSHIP

Succession planning is a challenging but necessary discussion for family businesses to have early to protect the business for generations to come.

“You plan for it. You embrace it, and it’s always going to be tough,” Bailey Lyden said.

When his father, Geoff Lyden, passed away last November from cancer, it brought a sudden change in how the family operated the business, but having plans helped keep the business running smoothly despite their loss.

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“We were prepared for it in the sense that we had plans in place, and the family has worked and studied over the years to make sure we stay (committed to) quality control, which is of the upmost importance to us,” Bailey Lyden said.

“We have too much at stake, and we’re responsible for too many people to have anything break that apart.”

“He was very influential,” Bailey Lyden said of his father. “I learned

a great deal from him, and it’s because of his efforts that the company’s in the position it is now. He was so smart, and he always was looking forward. That really helped us.”

Today, the company is continuing to reinvest in its c-store business.

“We believe in the company. We believe in this channel of businesses, and we think the c-store industry has some real staying power long-term,” Bailey Lyden said.

Time will tell if a fifth generation will enter the family business one day down the road.

Bailey’s younger brother, William, who is not currently active in the business, and Lindsay’s sister, Colleen, a veterinarian, both have young daughters. There are also two children on the other side of the family.

“Everybody’s under the age of seven in the fifth generation now,” Bailey Lyden said.

When the fifth generation does come of age, the fourth generation has been well prepared from their own experiences to aid their transition into leadership. CSD

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Category Management | Sweet Snacks

Sweet indulgence C-store customers seek packaged sweet snacks with better-for-you ingredients and a quality price point.

Scott McKinney • Contributing Editor

At convenience stores, time is a central consideration for sweet snacking behavior.

“Sweet snacks and natural snacks account for most morning snacking occasions, with sweet snacks again outpacing other categories after 10 p.m.,” according to market research firm Datassential. Snacks are most commonly paired with beverages, especially coffee before 7 a.m., and impulsive snacking increases as the day goes on. Fifty-five percent of sweet snack purchases are impulsive, according to survey results in Datassential’s “The Keynote Report: Snacking.”

At Certified Oil, a 70-store chain based in Columbus, Ohio, sweet snack purchases are growing. “2019 is off to a positive start, especially considering (spring) weather in the Midwest didn’t cooperate or translate into increased transactions,” said Neil Frandsen, vice president of marketing at Certified, which recently sold its c-stores to EG Group. “The overall snack category is up 4.5% year-to-date.”

Packaged sweet snacks are up 4%. The bump comes as Certified Oil adds new product lines.

“In the pastry line, we added a Krispy Kreme single-serve packaged sweet snack rack … it was very strong out of the gate,” Frandsen said. The chain also offers Hostess and Little Debbie sweet snacks — and freshened up some SKUs in its food bar section, adding more One Bar SKUs and Quest SKUs. PRIVATE-LABEL SUCCESS

7-Eleven anticipates growth in sweet snacks in its 9,000-plus U.S. locations in the coming year, particularly in single-serve snacks and popcorn, said Emily Stegman, 7-Eleven senior category manager.

In terms of pairings, 7-Eleven sees a high affinity in sales between hot beverages and sweet snacks, and the chain considers this for its store positioning and promotions.

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fast facts: • C-store retailers can increase sweet snack sales by cross-merchandising them in the coffee section.

• Sweet snack competition from other channels is strong. Focusing on variety and innovation can drive sales.

• Sweet snack customers are interested in claims like better for you, no artificial colors or flavors and gluten free.

“Sweet snacks are positioned adjacent, ExtraMile also remains optimistic for sweet snacks or as close as possible, to the hot beverage through the rest of 2019. “The sweet snacks category bar, and through our 7Rewards loyalty prohad positive results in 2018, mainly due to increased All gram, we are activating more cross-category Commodity Value (ACV) on top-selling brands and strong promotions with proprietary and hot beverpromotional activity,” said Brett Silva, category manager, ages to encourage trial and ongoing sales,” ExtraMile Convenience Stores LLC. “I expect this momenStegman said. 7-Eleven said there is a time tum to continue to grow the category in 2019.” factor for sales, with doughnuts and Sweet snacks are positioned adjacent, or as close breakfast pastries performing well in as possible, to the hot beverage bar, and through the morning, cookour 7Rewards loyalty program, we are activating ies and snacks in the afternoon, and, more cross-category promotions with proprietary and where available, hot beverages to encourage trial and ongoing sales.

Hispanic bakery all day long.

– Emily Stegman, category manager for 7-Eleven 7-Eleven sees sweet snacks remaining popular across all The chain — with more than 800 stores in California, demographics, particularly women and Oregon and Washington — merchandises sweet snacks younger shoppers, and considers sweet near the coffee bar when possible and, regardless of store snacks a special occasion or ‘treat yourself’ layout, focuses to ensure products are adjacent to high purchase. “I think consumers want to continaffinity categories. ue to treat themselves, but are also looking ExtraMile is expanding its private-label offering, and for some better-for-you options in the sweet in February 2019 launched its ExtraMile EXTRAGOOD snacks category,” said Stegman. doughnuts. “There are four flavors of eight-count mini gem cstoredecisions.com

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ExtraMile sees increased attention on better-for-you options such as protein in sweet snack items, but still sees the majority of sales from the core items, such as danishes, doughnuts, snack cakes and so on. On the West Coast, the chain has seen Hispanic brands and flavors perform well, especially in the sweet snacks category.

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Consumers are looking for healthier snacks, but the indulgent side still has its place on the shelf.

John Benson, a director in the restaurants, hospitality and leisure practice at consulting firm AlixPartners, said to promote the category, c-stores should build a platform that’s targeted and differentiated to the sweet snack buyer and purchase occasion.

Sweet snack consumers seek a between-meal option that offers value, low price, deals or pairings. “The consumer is interested in claims — better for you, no artificial colors or flavors, low fat, low sugar, high fiber, gluten free, no high fructose corn syrup,” said Benson.

Consumers see c-stores as a destination for pastries and doughnuts, but fierce competition exists from other channels, Benson said. C-stores can maximize sales by focusing on including variety and innovation.

“Sweet snacks are more about experience, fun, the feeling they are getting and having that doughnut or muffin,” said Benson.

He encouraged convenience store retailers to experiment with synergies. For example, as c-stores optimize their coffee platforms, they’d be wise to crossmerchadise with sweet snacks. “Consumers are willing to pay more for premium coffee, but they’re often more price resistant in sweet snacks. In testing strategy, consider pairing with coffee.” CSD cstoredecisions.com

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Category Management | Confections

SWEET AND SENSORY

EXCITEMENT While the health trend threatens to slow non-chocolate

candy growth, new candy launches aim to capture customer attention by stimulating senses of touch, taste and smell.

Erin Del Conte • Executive Editor

Non-chocolate candy products are vying to leap ahead of the pack with wild colors, interesting textures and daring flavors. But will new innovation be enough to boost sales in the segment?

Non-chocolate candy dollar sales hit $7.9 billion in 2017, up 3% from 2016 and 13% from 2012, and growth is expected to continue through 2022, but at a slower rater, according to market research firm Mintel.

Beth Bloom, associate director of Food and Drink Reports for Mintel, said consumer health concerns are driving the slowdown as they reduce category participation.

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fast facts:

Some 27% of non-chocolate confectionery eaters reported eating fewer products in the category in • Optimizing candy sets can 2018 compared to 2017, with the highest percentage lead to increased sales.

(61%) of respondents reducing consumption to lower their sugar intake, Bloom said. “Growth is forecast in both the chewy candy and seasonal segments • Candy trends include through 2022, while hard candy and ‘other’ nontropical and more extreme chocolate confectionery are expected to see dollar sales declines.” sour flavors, better-for-you Lisa Dell’Alba, president and CEO of Square One claims and items that stimuMarkets, which operates eight c-stores in Pennsyllate the senses. vania, expects the non-chocolate candy segment to stay “relatively flat” toward the end of 2019, also pointing to healthier eating trends and a demand for smaller “bite-sized” treats.

But at The Hub convenience stores in North Dakota, the non-chocolate candy demand appears rosier. The five-store chain enjoyed a 9.3% increase in non-chocolate sales across all five of its c-stores from May 2018 to May 2019.

“This growth is about 50% greater than our overall inside sales growth during that period,” said Jared Scheeler, CEO of The Hub. He attributed the growth to successful execution of product promotions and working with manufacturers on product and set optimization. Scheeler expects the non-chocolate candy segment to continue growing in his stores given increased category innovation.

WHAT’S TRENDING?

Mintel found strawberry continues to trend as a popular flavor, while tropical options are growing in popularity. Sour flavors make up a growing share of launches.

“Sour options appear to be getting more extreme,” Bloom noted.

“Mintel Trend Sense of the Intense asserts that the dominance of screen culture has led to a cacophony of visual noise. As a result, marketers are increasingly seeking to stimulate the senses of touch, taste and smell to deliver more memorable products. …”

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Category Management | Confections

Relaxing Confectionery Piques Customer Interest

For example, Ferrara Candy Co.’s Trolli brand’s new Sour Brite Crunchy CrawlSignal Analytics found over the past two years ending ers won “Best in Show - Most Innovative February 2019, consumer discussion around the relaxing Product Award” at the May Sweets & benefits of confectionery — such as those offering a calmSnacks Expo. The brightly-colored treat ing effect, stress relief or sleep aid — has been steadily creates a dual-texture experience with increasing, but market launches are lagging behind. a hard shell on the outside and sour Consumer posts on relaxing confectionery have more gummy on the inside. than doubled over the past two years. The graph below Square One Markets is capitalizing on shows the confectionery ecosystem, specifically gummies the rollout of most new candy products, and chews, comparing products in market vs. consumer including recent launches of Duos — or discussions. (U.S. & UK Data, March 2017 – February 2019) two flavors in one piece of candy.

“We have brought both the Starburst Duos and Ice Breaker Duos into the stores,” Dell’Alba said. “The fruit flavor seems to do well, especially with the young adult segments.”

At The Hub, extra-large standup bags, such as two-pound bags of gummy worms and 28-ounce bags of Mike and Ike, are resonating with weary travelers, Scheeler said. Opposite the national trend, The Hub’s sour segment has taken a slight decline over the past year.

“The growth we have seen is in nonsour candy as well as licorice,” Scheeler said. He expects the launch of Starburst to “provide a spark” to the line, and noted SweeTARTS sales are growing. “It doesn’t hurt that some of our top nonchocolate brands — Skittles and AirSource: Signals Playbook Insights heads — have received an organic and likely unintended boost from some NFL players over the past few years.”

Mintel’s Bloom noted claims related to premium positioning and ingredient transparency — such as “no additives,” “GMO-free” mize its candy assortment and merchandising. and “organic” — appear to be on the rise. While only “The first thing we realized is that we didn’t have 17% of non-chocolate confectionery eaters noted it’s enough non-chocolate SKUs in our candy bar sets to important that products contain no artificial ingredimaximize the category,” Scheeler said. ents, and 8% reported it’s important that products are Once The Hub made that change, it saw an immediorganic, Bloom said these claims could be cues that ate increase in non-chocolate sales, he added. “But the products are better for you than standard offerings. interesting thing was that we also saw an increase in chocolate sales even though we technically eliminated some of those SKUs to make way for the non-chocolate.

OPTIMIZATION STATION The optimization of product placement made a tremenThe Hub has worked with both Mars Wrigley Confectionery and The Hershey Co. in the past year to optidous difference in our category sales.” CSD 38

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HYATT REGENCY Minneapolis, MN

September 8-11 2019

THE MOST AWAITED C-STORE EVENT OF THE YEAR!

NAG 2019 at the beautiful Hyatt Regency Minneapolis Minneapolis, Minnesota

Committed to building profits and relationships!

The National Advisory Group (NAG) is an association of small, mid-sized and familyowned c-store chains and the executives that run them. This exclusive, member-driven group convenes annually to exchange ideas with the motivation to improve their business performance and ultimately their bottom line.

The setting of this conference encourages an extremely educational, yet highly social environment. The schedule consists of topnotch speakers, retail information exchanges, opportunities to address burning issues within your business, a chance to get to know your peers in similar size operations and much more!

FOR MORE INFORMATION: RETAILERS should contact John Lofstock 201.321.5642 • jloftsock@csdecisions.com

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SUPPLIERS should contact John Petersen 440.250.1583 • info@nagconvenience.com

7/23/19 3:31 4:25PM PM 7/23/19

SUNDAY, SEPTEMBER 8 1:00 PM – 7:30 PM Registration 1:00 PM – 4:00 PM NAG Hospitality Suite 4:00 PM – 5:00 PM NAG/YEO Board Meeting 6:00 PM – 7:00 PM NAG Networking Reception 7:00 PM – 10:00 PM NAG Opening Night Dinner Featuring Keynote Speaker Frank Siller, Tunnel to Towers Foundation 9:00 PM – 12:00 AM NAG Hospitality Suite MONDAY, SEPTEMBER 9 7:00 AM – 1:30 PM Registration/Info Desk Open 7:00 AM – 8:00 AM Breakfast 8:00 AM – 8:15 AM Welcome/Conference Overview, NAG Executive Director John Lofstock and incoming NAG Board Chairman, Doug Galli, Reid Stores Inc./Crosby's 8:15 AM – 9:15 AM GENERAL SESSION: BURNING ISSUE # 1 The Importance of Family Values in the Convenience Store Industry.

Family-owned small businesses are the backbone of our economy. They provide 55% of all jobs in the U.S. and 54% of U.S. sales, according to the Small Business Administration. Strong family values can prove extremely productive in business and this is evident in the convenience store and petroleum industries. Family businesses have left an indelible impression on convenience store chains across the country by providing outstanding leadership, innovation and stability in the communities they serve. In this session, we will hear how three unique chains have made their mark on the convenience store industry.

1:00 PM – 5:00 PM 1:30 PM – 5:00 PM 6:30 PM – 9:00 PM 9:00 PM – 12:00 AM

TUESDAY, SEPTEMBER 10 7:00 AM – 4:00 PM Registration/Info Desk Open 7:00 AM – 8:00 AM Breakfast 8:00 AM – 9:00 AM GENERAL SESSION: BURNING ISSUE # 3 Merchandising and Marketing Your Brand for Success: What are your customers looking for? From foodservice to the cold vault, customers see c-stores as a destination, but how closely do you track where they go once they enter your store? New technology, such as heat maps integrated with high-resolution cameras, allow retailers to see where customers are going, what they are looking at and how much time they spend in each area of the store. This data can help c-stores design integrated merchandising plans to drive sales.

MODERATOR: John Schaninger, President, The Schaninger Group SPEAKERS: • Ernie Harker, Brand Therapist, Ernburn Brand • Melissa Peterson, Merchandising Director, Bobby & Steve’s Auto World 9:00 AM – 9:15 AM

MODERATOR: John Lofstock SPEAKERS: • Margaret Dinneny, Chief People Officer, Wawa Inc. • Mathew Spackman, Vice President of Grow People, Kum & Go • Leo Vercollone, CEO, Verc Enterprises 9:15 AM – 9:30 AM

Break/Visit Sponsor Tables

9:30 AM – 10:30 AM GENERAL SESSION: BURNING ISSUE # 2 Local Lobbying: Why your voice matters more than ever. Whether it's increasing tobacco taxes, rising minimum wages, fuel regulations or credit card fees, convenience store owners need to make their voices heard on the important issues integral to store sales. Lobbying is an essential part of our democratic system and can help bring about change. This session will delve into how convenience store owners can make their voices be heard with lawmakers at the local and state levels to influence change that is good for business.

MODERATOR: Tom Briant, Executive Director, The National Association of Tobacco Outlets (NATO) SPEAKERS: • Jim Calvin, Executive Director, The New York Association of Convenience Stores (NYACS) • Clay Lambert, Co-Owner, Managing Director, Metro Petro Gas • Jerry Smith, Director or Retail Operations, Tobacco Central/Low Bobs 10:30 AM – 10:45 AM Break/Visit Sponsor Tables 10:45 AM – 12:15 PM Information Exchanges Part 1 12:15 PM – 1:15 PM Lunch

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Golf Outing – Shotgun Start NAG Retail Store Tours: The Best of Minneapolis.

Stops include Bobby & Steve’s Auto World, Holiday Stationstores and Metro Petro Gas. Dinner on Your Own to Explore Minneapolis NAG Hospitality Suite

Break/Visit Sponsor Tables

9:15 AM – 10:15 AM GENERAL SESSION: BURNING ISSUE # 4 Developing Your Digital Strategy: How artificial intelligence is impacting retail.

The hype around artificial intelligence (AI) has never been higher – and one industry where it has a chance to make a major impact on profits is retail. From interpreting data to predicting sales needs, artificial intelligence is redefining retail. This panel will discuss how a digital strategy ties into all aspects of the store including loyalty, the back-office and the POS system. It will also discuss how retailers can use AI to engage customers through communication and experiences, better manage inventory and price products optimally.

MODERATOR: Paul Roetzer, Founder and CEO, The Marketing Artificial Intelligence Institute SPEAKERS: • Doug Haugh, President, Parkland Fuel Corp.

• Pat Lewis, Partner, Oasis Stop N' Go 10:15 AM – 10:30 AM Break/Visit Sponsor Tables 10:30 AM – 12:00 PM Information Exchange Breakout Sessions: 1) New and Emerging Fuels.

MODERATOR: Bob O'Connor, President, Jetz Convenience Centers 2) HR: There’s an app for that.

MODERATOR: Sharif Jamal, Corporate Training Manager, Chestnut Petroleum

7/23/19 3:35 PM

HYATT REGENCY — Minneapolis

September 8-11, 2019 3) CBD, Vape and Tobacco: What the future holds for this growing category and how FDA regulations can impact sales.

MODERATORS: Paul Crozier, Category Manager for Cigarettes & Tobacco, Sheetz Inc. and Bradley Campbell, Category Manager for Tobacco, Sheetz Inc. 4) Foodservice: Forecasting demand.

MODERATOR: Kalen Frese, Food Service Director, Warrenton Oil Co. 5) How is Industry Consolidation Changing the C-Store Industry?

WEDNESDAY, SEPTEMBER 11 7:30 AM – 12:00 PM Registration/Info Desk Open 8:00 AM – 9:00 AM Breakfast 9:00 AM – 10:15 AM GENERAL SESSION: BURNING ISSUE # 6 How Cashier-less Sites Will Impact the Convenience Store Industry.

Amazon and other cashier-less concepts are no longer a novelty. They are fast becoming destinations in markets such as San Francisco, Seattle and Chicago, and they are challenging conventional convenience stores in the race for time-pressed customers. Beyond retail competition, the concept is also changing consumer behavior to expect a frictionless experience.

While some municipalities are passing laws to require stores to accept cash, convenience store owners must develop a strategy to compete with this emerging trend.

MODERATOR: Jonathan Ketchum, Vice President of Retail, Energy North Group 6) LEED Certification and Embracing the Green Movement.

12:00 PM – 1:00 PM

Lunch

1:15 PM – 2:30 PM GENERAL SESSION: BURNING ISSUE # 5 Equipped for Foodservice Success: How to execute a successful foodservice strategy in small spaces. Space limitations used to be the bane of convenience store operators who wanted a professional foodservice program. But now manufacturers are stepping up to the plate with equipment that serves multiple purposes and still fits nicely within the c-store footprint. Choosing the right equipment can often be an overwhelming task given the range of options available, so retailers must also focus on cost, machine life, maintenance and ROI considerations.

MODERATOR: John Matthews, President, Gray Cat Enterprises SPEAKERS: • Joy Almekies, Director of Food Services, Global Partners • Jon Cox, Senior Director of Food & Beverage, GetGo • Ted Roccagli, Director of Partnerships & Preferred Vendor Programs, Empire Petroleum 2:30 PM – 2:45 PM

MODERATOR: Richard Crone, President, Crone Consulting SPEAKERS: • Raymond Huff, President, HJB Convenience • Gus Olympidis, CEO, Family Express 10:15 AM – 10:30 AM Break/Visit Sponsor Tables

10:30 AM – 11:30 AM Ideas Boot Camp Best practices and conference wrap up with John Lofstock, Executive Director, NAG, and Brian Unrue, Vice President of Operations, Clark's Pump N Shop.

11:45 AM 12:00 PM

Conference Wrap Up and Takeaways Departures

Break/Visit Sponsor Tables

2:45 PM – 4:00 PM YEO BREAKOUT SESSION How Millennial Insights Can Connect Your Brand with Customers SPEAKER: Linda McKenna, Managing Partner, EPS Inc.

5:30 PM – 6:30 PM 6:30 PM – 9:00 PM 9:00 PM – 12:00 AM

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NAG Networking Reception Dinner & Awards Ceremony NAG Hospitality Suite

7/23/19 4:25 PM 7/23/19 3:35 PM

HOW TO REGISTER

Go to: www.nagconvenience.com. You will receive a confirmation email after completion.

HOTEL PRICING

A block of rooms has been reserved for the NAG Conference at these special rates: • Standard rooms at $199/night • Golf rate is $150 for golf and $25 for club rentals

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

YEO’s mission is to cultivate young talent in the convenience store and petroleum industry through implementation of education and networking. YEO accomplishes this mission by leveraging the experience of NAG members to help foster superior leadership skills.

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

Your hotel costs are NOT included in the cost of the conference and should be booked through the NAG Hotel Block at the Hyatt Regency (https://www. hyatt.com/en-US/group-booking/MSPRM/G-HARB).

Please make your room reservation by 8/16/19.

CONFERENCE REGISTRATION RATES

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

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

Membership in YEO is open to all NAG-member company employees at no cost. If you are not a NAG Member, join NAG now at www.nagconvenience.com. If you are a young executive or if your operations has a young up-and-coming executive please join us in 2020.

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

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The convenience store industry’s young executives and next-generation leaders face unique challenges as they grow their businesses in the fast-paced, competitive convenience store market. The National Advisory Group’s (NAG) Young Executives Organization (YEO) was formed specifically to addresses these challenges and help the industry’s leaders of tomorrow identify solutions with others in their age group. YEO exists to serve as an effective conduit for getting young professionals more involved and prepared for leadership positions both in their companies and in the broader convenience store industry.

Convenience store companies must identify their next-generation leaders and groom them for management positions. This is where YEO can help.

YEO membership offers next-generation leaders a network of other young leaders in similar positions. The group meets twice annually at an annual roundtable in the spring and the NAG Conference in September.

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

THANK YOU TO OUR 2019 SPONSORS:

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Category Management | Cigars

Will Regulations

Extinguish CIGAR

FLAVORS?

C-stores and manufacturers battle cigar restrictions as the industry awaits final regulatory direction from the Food and Drug Administration.

Anne Baye Ericksen • Contributing Editor

Cigars still sit in regulation purgatory, awaiting federal decisions on a number of other tobacco product (OTP) concerns including the future of flavors, while cities and states are moving forward with local ordinances on tobacco products.

Last month, Cumberland Farms announced a lawsuit against boards of health in six Massachusetts cities. The company, which operates more than 200 convenience stores in the state, alleges these municipalities have created a monopoly by adopting a business model, developed and pushed by a private organization, that bans sales of flavored tobacco products in any retailers other than smoke shops or smoke bars.

“We’re simply calling for a level playing field where we can continue to serve all of our customers without unelected local officials taking away their right to choose where to shop and what to buy,” Brian Glennon, Cumberland Farms general counsel, said in a statement.

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fast facts: • Cigar associations ask

As senior category manager for Duxgovernment to honor the bury, Mass.-based Verc Enterprises, August 2021 substantial Anna Bettencourt is all too familiar with the mercurial regulatory equivalence deadline. environment.

“Out of our 29 stores, 26 • Lawsuit alleges flavored are in Massachusetts, and out of those, 13 are within tobacco ban in c-stores cities with flavor bans. creates monopoly.

Right now, those 13 are allowed mint, menthol and wintergreen, but as of Jan. 1, 2020, one (store) will not be allowed those flavors either. That will be a vast product reduction for that site,” she explained.

“Also, when a store gets a new restriction, you see a significant decrease in store sales of all items, not just tobacco-related.”

FLAVORS THREATENED

Cities and states continue to propose and pass restrictions, but it’s what the Food and Drug Administration (FDA) may do on a national level that has the c-store industry nervous.

In March, the FDA announced a proposed compliance policy change to restrict the sale of flavored cigars, other than tobacco, mint and menthol, for any products on the market prior to Aug. 8, 2016. That poses a significant threat to the cigars segment, which derives at least half of its dollar sales from flavors other than menthol, according to data presented at the National Association of Convenience Stores (NACS) State of the Industry Summit.

Plus, the segment frequently is infused with limited-time offerings featuring unique flavors.

“We do bring in limited-edition flavors and we try to give them prominent shelf position and get our associates to push them,” noted David Collins, president of DC Oil Co. Inc., DBA Quick Shop. It owns and operates more than a dozen c-stores and truck shops in Alabama. “It will have a big effect on limited-time editions because we will never find out what the next hot flavor will be.”

“

There exists uncertainty about the particular direction the FDA will take on a number of (OTP)-related concerns being considered by the agency.

“

— Joshua Habursky, director of federal affairs for the Premium Cigar Association

cstoredecisions.com

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August 2019 • CSTORE DECISIONS

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Category Management | Cigars

Bad News, Good News Although dollar and unit sales of cigars in U.S. c-stores declined in recent weeks, the segment still posted overall gains compared with last summer.

Cigars

Dollar Sales

1-Year % Change

Unit Sales

1-Year % Change

Four weeks

$266 M

-3.4%

178 M

-4.5%

12 weeks

$794 M

-2.3%

531 M

-3.9%

52 weeks

$3.48 B

3.8%

2.35 B

1.8%

IRI, a Chicago-based market research firm, U.S. convenience store all scan data for the four, 12 and 52 weeks ending June 16, 2019.

There’s also a legal challenge regarding the substantial equivalence (SE) deadline. In 2016, the FDA decided cigars should be regulated the same as cigarettes, and ordered manufacturers to submit SE applications to demonstrate that their products exhibit similar characteristics to grandfathered products, those on the market prior to Feb. 15, 2007, or

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that their products do not present new public health questions. This is necessary to retain approval to be sold in the U.S. The former FDA commissioner pushed the deadline to August 2021, but in May, a Maryland judge ruled in favor of public health groups to push up that date and review products sooner. Then in July, three cigar associations filed suit, asking the government to adhere to the 2021 deadline.

This is in addition to a new commissioner coming onboard, which raises more questions about the future direction of regulatory matters.

“There exists uncertainty about the particular direction the FDA will take on a number of (OTP)related concerns being considered by the agency,” said Joshua Habursky, director of federal affairs for the Premium Cigar Association, one of the lawsuit plaintiffs. “(Acting Commissioner Ned Sharpless) has a lot of experience, and we hope he approaches any potential changes to current regulations and policies with caution and with an understanding that tobacco policy is very complex.” CSD

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Category Management | Packaged Beverages

Beverage Sales SURGE Consumers want “good-for-you” form and flavor variety while the lines blur between ready-to-drink coffee and energy drinks.

Thomas Mulloy • Senior Editor

As customers seek healthier beverage options, more shoppers are choosing to drink bottled water. In fact, customers are drinking bottled water more than any other ready-to-drink (RTD) beverage product in the U.S., according to industry consulting firm Beverage Marketing Corp.

(BMC). As water continues to gain steam, consumers seek to ride the wake of form, flavor and “good-for-you” combinations.

“I enjoy the trend of healthy beverages offered where they are striving for transparency in their recipes,” said Fuel City President Joseph Bickham, whose four locations in the Dallas-Ft. Worth Metroplex will soon be joined by a fifth.

“Ultimately, these options benefit the consumer.”

Sales of bottled water have been rising every year for the past decade, stealing share from the carbonated soft drink (CSD) segment. According to BMC, in 2008 per person CSD consumption was 46.7 gallons annually. It has dropped every year since, to 37.2 gallons in 2018. As CSD drinking fell, though, U.S. bottled water consumption rose from 27.2 gallons per person in 2009 to 42.3 gallons in 2018.

ENERGY BUZZ

The category as a whole, though, has been strong for the past few years. After slowing in late 2016 through the middle of 2017, non-alcoholic beverage sales rose around 4% in the first quarter of 2019, according to Wells Fargo Securities’ “Beverage Buzz” Survey, released in April.

The same report found that bottled water along with energy beverages and RTD coffee have driven the category forward. Beverage Buzz reported retailers are looking to the energy category to grow dollar sales by nearly 10% this year.

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fast facts: • CSD annual sales from June 2018 to June 2019 have increased 2.7%, according to Nielsen’s “Beverage All Channel Data” report.

• Energy drinks dollar sales are expected to grow 10% this year, according to Wells Fargo’s recent Beverage Buzz Survey.

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Category Management | Packaged Beverages

“

“

“We expect solid growth in ready-to-drink coffee and energy drinks,” said Gary Hemphill, managing director of research for BMC. “Bottled and canned coffees are growing from a small base; energy drinks continue to see solid growth because the demand for the functional benefit remains quite strong.”

Bickham said the energy drink segment is a year-round solid performer at his c-stores. “It is not subject to seasonality like other categories,” he said, “and the innovation in this category is peerless.”

Could it be that the definition of an “energy” drink in the eyes of consumers is changing?

Cold coffee makers are promoting new uber-caffeinated products as energy drinks — while energy drink makers have jumped into the canned coffee segment. Both have been busy in the form and flavor departments, too. The options seem limitless; among them are white chocolate mocha, salted

Bottled and canned coffees are growing from a small base; energy drinks continue to see solid growth because the demand for the functional benefit remains quite strong.

— Gary Hemphill, managing director of research for Beverage Marketing Corp.

caramel, draft latte, vegan protein shake cold brew, espresso triple shot, super espresso caramel or vanilla — you get the picture.

While the endless variety has blurred category lines, it’s also created more packaged beverage options for consumers.

Hemphill offered a caveat, though.

He said that new flavor innovation hasn’t always been able to show sustained growth. Retailers must continually assess how well new products are performing.

Bickham does just that. “We constantly add new products and examine our product mix to decipher our customers’ habits,” Bickham said. “We maintain a flexible area in our vault for piloting new products.”

CARBONATED SALES

Fuel City relies on customer feedback as well as market research to help with new product guidance, Bickham said.

Innovation isn’t limited to flavors, either. Packaging trends reflect an effort by beverage manufacturers to offer novel options.

“We’re seeing more smaller-size packages come to the market — especially for carbonated soft drinks,” Hemphill said. “As companies work to reduce caloric intake from their products, reducing serving sizes is one way to do this.”

And amidst all the new directions the RTD category is moving, carbonated beverages are holding their own. BMC reported in May that carbonated drinks continued to occupy four of the five top beverage brands by volume. While CSD sales volume was pretty much Overall Non-Alcoholic Beverage Sales Growth vs. Prior Year Period flat last year, it was the category’s best performance since 2005. While modest, CSD annual sales from June 2018 to June 2019 have increased 2.7%, according to Nielsen’s “Beverage All Channel Data” report through June 15, 2019.

As consumer tastes evolve, c-store operators are adapting their beverage sets to find the magic balance that’ll have thirsty customers grabbing more from the cold vault. CSD

Source: Beverage Buzz Surveys (April 2019), Wells Fargo Securities LLC

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August 2019

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Foodservice | Lunch & Dinner

Burgers, Brats Bolster Lunch and Dinner Sales

Grabbing a burger is synonymous among American consumers with picking up a lunch or dinner that is quick, easy and tasty. Retailers who offer this convenient fare — as well as brats for a change of pace — are making inroads in the afternoon and evening dayparts.

Marilyn Odesser-Torpey • Associate Editor

At Rutter’s, which has 75 locations in Pennsylvania, Maryland and West Virginia, burgers are so popular they have their own menu of more than two dozen variations. Customers can choose from a one-third-pound, 100% Angus beef patty, a one-fourth-pound chipotle black bean burger or a turkey burger, said Ryan Krebs, the York, Pa.-based chain’s director of food service.

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Foodservice | Lunch & Dinner

At Rutter’s , “Ultimate Burgers” are topped with snack or meat items featured elsewhere on the menu.

Some of the more novel combinations are burgers topped with snack items such as jalapeño poppers, mozzarella sticks and mac-and-cheese bites, as well as meatier items like barbecue short ribs, pastrami and pulled pork.

A traditional burger costs $3.39, and the price for a more elaborate “Ultimate Burger” can go to $6.89. Sliders are $1.49 each and can be ordered in quantities of one, three, six or 12.

The “Ultimate Burgers” are topped with snack or meat items featured elsewhere on Rutters’ extensive foodservice menu. Some of the more novel combinations are burgers topped with snack items such as jalapeño poppers, mozzarella sticks and mac-and-cheese bites, as well as meatier items like barbecue short ribs, pastrami and pulled pork.

A surprisingly successful recent addition was a burger sandwiched between sweet southern waffles.

“People are attracted to the combination of sweet and savory,” Krebs noted. “It also helped us to sell more burgers at breakfast.”

Another creative invention that has sparked a favorable consumer response is the over-the-top Route 30 Burger made with one or two burger patties, six slices of bacon and, instead of a bun, two grilled cheese sandwiches as the top and bottom.

Customers can build their own burgers at the ordering kiosk or grab them to go from the hot holder.

“We do a ton of grab-and-go as well as made-toorder burgers,” he said. “They’re one of our highest volume items.”

State College, Pa.-based Nittany Energy MinitMarts also do a brisk burger business, according to Angela Gearhart, food service category manager for the company that operates 27 convenience stores in the Keystone State. Like Krebs from Rutter’s, Gearhart pointed out that her stores sell “a ton of burgers,” whether as-is or topped with cheese, bacon or chili.

Sixty percent of the burgers are made to order, the rest grab and go. The burgers move particularly well when they are paired with fries for a $4 lunch or dinner. To upsell the bundle, the stores offer the addition of a fountain drink for $1.

At State College, Pa.-based Nittany Energy MinitMarts’ 27 c-stores, 60% of the burgers it sells are made to order, while the rest are grab and go.

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Foodservice | Lunch & Dinner

fast facts: • Create signature burgers with toppings gleaned from the rest of your menu.

• Bundle burgers and brats for meal appeal and higher rings.

• Brat varieties add interest to the roller grill.

BRATWURST BUSINESS

Bratwurst or ‘brats’ add interest to the roller grill for lunch and dinner at c-stores, explained Ted Roccagli, Empire Petroleum’s director of partnerships and preferred vendor programs. Empire Petroleum owns and operates 70 Fast Market stores in seven states and services 1,700 stores spanning 31 states.

“The traditional brat is usually the best-seller, but varieties such as spicy and cheese-filled featured as rotated or limited time offers keep the roller grill offering fresh and catch the attention of customers who might otherwise just walk by the grill,” he said.

Roccagli described brats as “comfort food,” particularly in the Midwest. He suggested that retailers accompany them with yellow or spicy mustard, relish and raw onions and, if possible, encourage customers to make them a heartier meal with a topping of sauerkraut.

The traditional brat is usually the best-seller, Brats can also be a versatile menu item, offered as is on a but varieties such as spicy and cheese-filled bun, split for topping a burger featured as rotated or limited time offers or as sliders for a snack, he said. Different types of buns keep the roller grill offering fresh and catch the can also vary the offerings. attention of customers who might otherwise just Deals such as a combo of a brat, walk by the grill. small chips and fountain drink for $5 have also been shown to — Ryan Krebs, Rutter’s director of food service effectively boost sales. CSD 54

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Foodservice | Chef’s Corner

Cooking Up

Quality Foodservice Being intentional about each aspect of the foodservice process, from selecting versatile equipment to testing recipes, adds up to a successful food program.

Nick Powell • QuikTrip

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Selecting the right cooking and holding equipment for your foodservice offerings can help improve product quality, save costs and expand your menu. This is especially true within the confines of a convenience store’s small footprint.

As the senior corporate chef for Tulsa, Okla.-based QuikTrip, which operates 800+ stores in 11 states, I can tell you that creating a complete menu of high-quality food products requires time and testing to determine the best combination of ingredients, equipment and packaging.

When I first got to QuikTrip, the only cooking platform was a large convection oven and there were no kitchens in any of the stores. With the introduction of our kitchens, we added both highspeed ovens and pizza ovens and have been using those for years to make the majority of our products. Today, we have 809 QT Kitchens.

In terms of holding, our grab-and-go selection uses an open front platform warmer with heating elements directed to the food from above and below.

What’s exciting right now, though, is that we’ve recently introduced some new equipment for our newest platforms, tacos and barbecue sandwiches. Adding this was a big redesign, since we’re using several pieces of equipment we didn’t have before: rethermalizers, hot wells to keep proteins hot and impulse steamers.

MANAGING CHALLENGES

A huge portion of our food business is grab and go, which is a different challenge than cooking everything to order.

We do a lot of made-to-order items, and pretty much anything that is grab and go can be made to order.

But for grab and go specifically, one of the main challenges is balancing how long we can hold something hot without reducing product quality. There’s an interplay between all of the different parts of cooking for a challenge like this: the ingredients, the cooking equipment, the holding equipment and the packaging. cstoredecisions.com

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Finding the best combination of all of those different components, testing multiple pieces of equipment, different ingredients, different packaging and so on, is where we spend a lot of time.

Everything we do is informed by consumer and sensory testing — from the idea to the finished product. Especially for grab-and-go items, we do a significant amount of sensory testing as we’re developing to determine those magic combinations that will create the best quality over time.

Working with our suppliers is crucial; being able to modify a piece of equipment to work in our stores, or adjusting the specifications and formulations of our ingredients, helps us give our customers high-quality food as quickly as possible.

We’re lucky we can rely on our equipment suppliers to help us with large pieces of that puzzle, like working with us on cook settings for a given piece of equipment. And again, we’re constantly doing sensory work on those ingredients, so we know how they stack up against each other. Good equipment suppliers are a great support to help split up some of the large volume of work that goes into developing our items.

KEY CONSIDERATIONS

My co-workers on the food team who test equipment and I are looking primarily at food quality, hold times and ease of use. We work with operations to help them figure out operational efficiency, and how easy or difficult something might be to clean and maintain. Even simple things matter up front, like, “Do we have the right power supply for this?”

The more versatility the equipment provides, the better. One of my big objectives as the chef is to figure out how much expansion a piece of equipment allows us beyond what we’re doing today. A piece of equipment that can not only help us out with some of the things we do today, but also open up years’ worth of menu innovation, is much more valuable than something that just is an incremental change to what we already have. CSD Nick Powell is the senior corporate chef at QuikTrip. He attended the Culinary Institute of America and has been working in culinary R&D for the past 15 years. He’s been at QuikTrip for 10 years, from the very beginning of the company’s move to made-in-store food and full-service kitchens.

August 2019 •

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Technology Column | Scan Data

THE EVOLVING

DATA REVOLUTION C-store retailers are taking a hard look at their data collection practices, updating their systems and working to gather more accurate data.

Ed Collupy • W. Capra Consulting Group

Not so long ago, scan data meant monitoring how many of which items sold. It gave category managers a new response to vendors using purchase data to allocate shelf space. It relieved store employees from taking a best guess at what to order and gave financial analysts added return on investment data points.

Scan data has been at the core of retail system transformation. Point of sale (POS) systems’ wider capture of transaction data (e.g. day of week, time of day, payment method) combined with back-office systems and data warehouses have provided a repository for a growing amount of data.

Add to this, data about loyalty members, weather and traffic — both on the street and in the store — and you have the start of big data. The cloud and business intelligence tools are driving important advances with how we use big data. Advancements are going to increase as this Information Age continues.

Today, c-store customers are using multiple devices, including in their cars, and shopping across different channels. This is the next shift in the retail data landscape.

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THE NEXT LEVEL

“At Casey’s, we are in the early stages of building out a more comprehensive data strategy,” Art Sebastian, vice president of digital experiences, told me recently. Headquartered in Ankeny, Iowa, Casey’s General Stores Inc. operates 2,100 convenience stores in 16 states throughout the Midwest and South.

Data accuracy is important and the Casey’s business intelligence team is charged with a process of resolving anomalies they find. The digital data efforts have the Casey’s team watching what happens online and following each customer’s path through its website to last click attribution. Although its customers may receive personalized segmented group offers, Casey’s goal is to make offers specific to each individual customer.

Next up will be the role of data scientists, which will allow the digital team to “get Ed Collupy to insights faster.” cstoredecisions.com

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7/23/19 10:17 AM

Technology Column | Scan Data

DATA STANDARDS

Karen Shunk, director, technology programs at Object Management Group (OMG), of which the National Retail Foundation’s Association for Retail Technology Standards (ARTS) is now a part, noted data standards were originally “built around the concept of the POS as the heart of retail.”

She said standards have “expanded over the years to accommodate the data required to understand the 360-view of the customer.” OMG has updates to their UnifiedPOS and the data model standards underway.

“These are intended to help retailers get (and keep) their data in order to support retail uses of the internet of things and artificial intelligence,” Shunk said.

ANALYTICS PLATFORM

In the Northeast, Nouria Energy is taking steps to review data differently using an analytics platform.

The Worcester, Mass.-based chain, which owns and operates more than 115 c-stores throughout New England, found its data analytics tools had limited functionality with its back-office system, and it was struggling to conduct effective analysis by moving scan data into spreadsheets.

Joe Hamza, chief operating officer, retail and marketing for Nouria Energy, said that as a result, the chain had been “reporting as in the past.”

“Unless you have an analytics platform to run insights, you just can’t do it,” Hamza observed.

Now, with a new analytics platform up and running, Nouria Energy is embarking on the next phase of its scan data journey by first providing scanning 60

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and POS transaction data into the platform. Then, as data from upcoming digital changes to its mobile app and loyalty program take form, the chain’s ability to collect data will grow.

Hamza’s vision includes using “business intelligence to identify issues and opportunities.”

NEW OPPORTUNITIES

Category managers, with the continued data transformation, are discovering new opportunities “to leverage the insight of their partners and wholesalers by sharing relevant data around sales, trip drivers and basket measures so their suppliers can help them localize stores, optimize promotions, and ensure priorities are aligned,” according to Jason Lobel, CEO & co-founder of SwiftIQ. Hamza noted that in data sharing, he expects the vendor relationship to be “reciprocal” and with some “sense of value they can agree on.”

Lobel noted, “trust is built over time, and retailers … can be selective with data sharing until suppliers prove value.”

When thinking about basic scan data that started the retail data revolution, Caseys’ Sebastian acknowledged knowing the basics of “what is selling is still important.”

Ed Collupy, executive consultant at W. Capra Consulting Group, can be reached at ecollupy@wcapra.com. Visit www.capraplus.com for more retail technology and business insights. Collupy has IT leadership and business team experience providing strategic, operational and project leadership to retailers, emerging businesses and technology companies.

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Operations | Negotiations & Inventory Management

NEGOTIATING SUPPLY AND DISTRIBUTION CONTRACTS

Maintaining a big picture view while simultaneously zeroing in on each part of the supply and distribution management process can position c-store retailers for success.

Howard Riell • Associate Editor

Managing supply and distribution from contract negotiation through inventory processing is no mean feat. But by following some basic guidelines and savvy advice, it can become a strong suit for any convenience store retailer.

A plethora of challenges are sewn directly into the fabric of contract negotiations, noted Ryan Mathews, the principal of Black Monk Consulting in Eastpointe, Mich.

The biggest obstacle can be creating and maintaining “a holistic sense of the process, rather than thinking about point solution victories.” At the same time, it’s necessary to focus on the individual pieces of the process to achieve the big picture goal of supply chain optimization.

“Of course, this means that your negotiating team has to understand all of the operational and communication nuances, and that’s a tall order,” Mathews said.

The biggest mistake in any negotiation is to assume there has to be a clear winner and a clear loser, “and that your job as a negotiator is to ensure you are always the former and never the latter,” warned Mathews. “You shouldn’t confuse short-term victories with long-term success.”

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Operations | Negotiations & Inventory Management

NEGOTIATING FOR SUCCESS

Greater success in negotiating can be brought about by following some best practices in supply and distribution management.

“Understand your basic sales at your locations through line-item scan data; (for example) what is really selling,” advised Mike Askwith, chief operating officer for PBD USA Inc. in Elmhurst, Ill., which includes 25 owned and franchised locations in Illinois, Georgia and Florida.

If you evaluate sales based on purchases instead of gathering pure scan data, results can be deceiving.

“A box of candy at 36-count looks like you sold one full box based on purchases. Scan data may show (you only sold) four candy bars,” Askwith said.

Next, remove inessential operating costs.

Askwith noted one thing he’s seen frequently is cstore retailers accepting services they think are free, such as allowing a wholesale distributor to bring in a person to handle orders for your store.

“Everything has a cost,” Askwith warned. “There is no such thing as a free lunch.”

One must also realize that credit terms always cost money. “The biggest thing is, if you get

You shouldn’t confuse short-term victories with long-term success.

— Ryan Mathews, principal, Black Monk Consulting

extended credit, you are always going to pay more,” Askwith noted, “and the problem is, you are paying more on every dollar, versus if you pay less on terms and pay on baseline. It’s a cash-flow business. Paying cash is king.”

Another important element is taking advantage of deals when they present themselves.

“There is a lot of money out there when these manufacturers have trade show programs,” Askwith said. “Some people say they don’t want to go to shows, but I will tell you, these deals are fantastic in a lot of cases. You can get a 50%-plus reduction in prices on some items. Take advantage of opportunities when they have trade shows and different deals.”

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• The biggest mistake in any negotiation is to assume there has to be a clear winner and a clear loser.

• Technology is transforming inventory management.

• Trade show deals can offer savings of 50% or more.

INVENTORY PROCESSING

Mastering inventory management is a key step along the path to supply chain optimization. It’s hard to negotiate for what you need when you’re not clear on what products you received and what’s selling.

Exact recordkeeping, Askwith said, is often overlooked, but is essential. “At the end of the day, when the product is delivered, scan every item in to make sure that you get the proper product at the proper time.”

Technology is transforming inventory management, Mathews said.

“Look, there is a mountain of inventory optimization technology out there that can help you process inventory,” Mathews advised. “Just remember two rules: customers hate out-of-stocks, and holding too much inventory is never a good idea.”

What’s critical to remember, he said, is that you aren’t moving from the old static-state models to new static-state models. Instead, you’re converting “from old, static systems to ‘smart’ flexible systems capable of ‘learning’ and modifying in real time,” Mathews said.

But a new inventory management system alone can’t carry your c-store business across the finish line. “Those systems are only as good as the people using them,” Mathews said, “and the organization models that information flows through.” CSD

“

“

When it’s time to negotiate, assets should be utilized fully, added Mathews.

“Know your assets — not always as easy as it seems — and leverage them to the hilt,” Mathews said. “Obviously, large chains can leverage scale, while smaller operators may leverage access.

Everyone that deserves to be in business offers some tangible benefit to their partners and their customers. If there isn’t one, shutter the stores.”

fast facts:

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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.

CStoreDecisions .com Making Connections that Drive Business

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Browse, bookmark, share and interact with the most relevant industry content and people in the market.

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PRODUCTShowcase

EV Charging Platform ChargePoint is enabling the future of e-mobility with an open, secure and robust electric vehicle (EV) charging platform. ChargePoint has more than 65,000 commercial charging spots installed in North America. The ChargePoint network allows station owners to set consistent policies and see data across all stations. Plus 24/7 driver support ensures drivers can and will use your chargers. And 24/7 centralized station monitoring allows for remote diagnosis, repair and upgrade of stations. The all-purpose CT4000 family of stations are Energy Star compliant and the right fit for dwell time longer than 30 minutes. The CPE250 is a fast charging solution for short dwell time parking and freeway corridor locations where drivers need to quickly recharge.

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Sparkling Water Flavors Inspired by the clouds, smartwater sparkling flavors provide additional choices for those seeking smartwater with a burst of refreshing flavor. smartwater sparkling flavor profiles are Strawberry Blood Orange, Fuji Apple Pear and Raspberry Rose. Each flavor has been designed using premium ingredients to create a combination that cannot be found in any other sparkling product on the market. smartwater sparkling flavors are available in 16.9-ounce bottles and are rolling out nationally at the end of this year.

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OpenClean Technologies introduces innovative hand-sanitizing door handles for public restrooms.

PullClean or TurnClean reminds your customers and staff that you care, every time they leave your restroom. By installing PullClean or TurnClean on your restroom doors, you provide a safe exit for customers and staff, make hand-sanitizing easy and intuitive and reduce the spread of germs among team members, resulting in fewer sick days. OpenClean Handles are easy to install in less than 10 minutes on any door.

Company: OpenClean Technologies

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PRODUCTShowcase

Better-for-You Snack Puffs Snackworthy has launched Simply White Cheddar Puffs and Simply White Cheddar Puffs with Jalapeño, a line extension of its best-selling, award-winning corn puffs, Snackworthy Simply Puffs. The uniquely delicious, light and crispy corn puffs are coated with real aged white cheddar cheese and white cheddar cheese with jalapeño, respectively. In step with the overall Snackworthy brand’s better-for-you positioning, both products are gluten free, baked not fried, have zero trans fats and are “Simply Free From 100+ Unworthy Ingredients.” The suggested retail price (SRP) is $2.99 to $3.99. Lehi Valley Trading Co. also offers Simply Puffs for private labeling with additional flavors: butter toffee, cinnamon roll, caramel, sea salted caramel and coconut.

Company: Lehi Valley Trading Co. www.lehivalley.com

Breakfast Sausage Flavors Tyson Foodservice is expanding its Jimmy Dean Breakfast Sausage line with three new, on-trend flavors: Maple, Chorizo and Barrel Smoked. Sausage is a breakfast staple among many consumers. The three new sausage flavor profiles from the Jimmy Dean brand highlight popular flavors among consumers. Chorizo sausage has seen a 37% increase in breakfast menu items since 2015, according to Mintel Menu Insights 2018. Maple has grown by over 27% in the past four years, and menu penetration for smoked flavor on breakfast menus is 43.7% across all segments, according to Datassential MenuTrends 2018. The fully-cooked format provides fast and easy preparation. Operators can save up to $500 by downloading a product rebate at JimmyDeanVariety.com

Environmentally Friendly Packaging Fischer Paper Products is launching its TruKraft line, the company’s new line of sustainable products that encourages operators to become environmentally conscious about their packaging offerings. Sustainable and commercially compostable, TruKraft products come in a variety of sizes designed for food items such as sandwiches, pastries, bread and french fries. All the products are made from paper that’s sourced from certified sustainable forests, and the line features several bags with clear panels made from bio-based PLA film.

These are environmentally friendly options that showcase the food within the packaging. French bread, artisan sandwiches and flatbreads can be clearly displayed without using petroleum-based materials.

Company: Fischer Paper Products www.fischerpaperproducts.com

Company: Tyson Foodservice www.jimmydeanvariety.com

Milk Chocolate Emoji Bars For the first time ever, the word Hershey’s on the Hershey’s Milk Chocolate bar’s iconic pips is changing to something different. The new Hershey’s Milk Chocolate Emoji Bar will feature 25 different connection emojis on the bar with six new emoji packaging designs.

The bar is available nationwide from July 2019, for a limited time, in standard 1.55-ounce bar (SRP 99 cents), 9.45-ounce snack-size bag (SRP $4.09) and a 2.25-ounce five-pack snack-size (SRP $1.06).

Company: The Hershey Co. www.thehersheycompany.com 68

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PRODUCTShowcase

Nut ButterCovered Nuts Justin’s is shaking up the snacking category with new Organic Nut Butter Covered Nuts. Available in two varieties — Almond Butter Covered Almonds and Cashew Butter Covered Cashews — this first-ever snack covers proteinpacked roasted almonds and cashews with the perfect amount of Justin’s nut butter for a sweet-and-salty snacking experience. Justin’s Organic Nut Butter Covered Nuts are made with USDA-certified organic ingredients and are Non-GMO Project Verified, gluten free, dairy-free and Kosher. Covered Nuts also contain two grams of plant-based protein per serving. They are available in three-ounce bags, made with a minimum of 25% post-consumer recycled content, for a suggested retail price (SRP) of $5.99.

Company: Justin’s www.justins.com

Chocolate-Dipped Marshmallows This is no ordinary marshmallow. This is SMASHMALLOW DIPPED. Each permissibly indulgent puff is made from the very best non-GMO ingredients, then dipped in sustainably sourced dark chocolate for an irresistibly smooth, guilt-free, every day, every time of day chocolatey treat for your taste buds. Available in Dark Chocolate Cold Brew and Dark Chocolate Raspberry.

Company: SMASHMALLOW www.smashmallow.com

Cryptocurrency ATM Bitcoin point-of-sale (POS) provider DigitalMint enables c-stores to sell cryptocurrency for cash.

Founded in 2014, the Chicago-based company has partnered with hundreds of brick-and-mortar businesses across the U.S. DigitalMint offers several POS options for businesses to generate a new revenue stream with bitcoin, including ATM Kiosk, an iPad Teller and API Integration. The stand-alone ATM Kiosk enables customers to autonomously conduct cash-to-bitcoin transactions.

Company: DigitalMint www.digitalmint.io cstoredecisions.com

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Ultra-Thin Rolling Papers Republic Tobacco LP has introduced JOB Virgin. The innovative new Virgin line represents the brand’s dedication to serving the discerning consumer of today by appealing to their desire to follow an eco-friendly, environmentally conscious lifestyle and a true taste experience. JOB consumers value brands with responsible harvesting practices, and that enhance their taste experience. JOB Virgin is tailored to meet the discerning needs of today’s market. JOB Virgin is vegan, GMO-free and made from responsibly harvested fibers that retain their native brown hue. JOB Virgin is made in France and uses natural, organic acacia gum. JOB Virgin is ultra-thin and slightly porous for comfortable, smooth rolling and a truer taste to please experienced and novice consumers alike. JOB Virgin Rolling Papers are available in 1-1/4, 1-1/2, Single Wide and Slim sizes, packed 40 boxes per case. A four-box counter display is available for merchandising and various POP are available to support the brand.

Company: Republic Tobacco

(800) 288-8888

info@rpbtob.com www.therepublicgroup.net

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PRODUCTShowcase

Infused Beverages

Limited-Edition Berry Cigarillo Optimo Cigars, a Swisher brand, continues its tradition of innovation by putting a fresh spin on its classic cigarillos with Optimo Berry, a limited-edition berry blend. Optimo Berry allows customers to step up their game and keep life interesting with its refreshing, sweet and ripe taste. Optimo Cigarillos are encased in first-class natural leaf wrappers that deliver a one-of-a-kind natural leaf smoking experience. Only available for a limited time, Optimo Berry Cigarillos are available in two-count, resealable foil pouches in ‘two for 99 cents,’ ‘save on two,’ ‘two for $1.29’ and ‘two for $1.49’ options.

Company: Swisher International Inc.

(800) 874-9720

https://swisher.com/cigars-cigarillos/?product=optimo

S&D Coffee & Tea introduces a new portfolio of infused beverages. Inspired by the traditional ‘agua fresca,’ the new line is made with real fruit juice, real cane sugar and natural flavors. Non-carbonated and caffeine-free, the S&D Infused Beverages align with demands for lighter refreshment in a variety of fresh, fun flavors. S&D Infused Beverages are available in eight on-trend flavors: Black Cherry Citrus, Blackberry Lemonade, Cucumber Lime, Ginger Pear, Mango Lemonade, Orange Passionfruit (reduced-sugar), Papaya Pineapple and Strawberry Watermelon. With shelf life between six and nine months, the new beverages are available now in half-gallon concentrates and come in six bottles per case.

Company: S&D Coffee & Tea

(800) 933-2210

www.sdcoffeetea.com

Stuffed Soft Pretzels J&J Snack Foods introduces the latest in on-the-go snacking. Pretzel Fillers Individually Wrapped Stuffed Soft Pretzels: hand-twisted soft pretzel with craveable cheese fillings, now individually wrapped in microwavable, bakeable and TurboChef-able film. This easy grab-andgo product has a shelf life of seven days when refrigerated and up to four hours in heated hold. With three delicious, crowdpleasing flavors proven to sell, they’re ideal for any daypart as a meal or an anytime snack and will keep customers coming back for more.

Company: J&J Snack Foods www.jjsnackfoodservice. com/segments/c-stores 70

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Cream Cheese Brioche St Pierre is excited to introduce its new Cream Cheese Brioche Twist — a light, buttery brioche loaf with a sweet, delicate cream cheese filling swirled throughout. The new Cream Cheese Brioche Twist has a suggested retail price (SRP) of $6.99.

The soft, subtly sweet brioche and creamy filling are the perfect contrast for a delicious snack any time of day. Whether enjoyed toasted with your morning coffee or as the ultimate base in your favorite french toast recipe, the new Cream Cheese Brioche Twist is a versatile, modern spin on the classic brioche loaf.

Company: St Pierre www.stpierrebakery.com cstoredecisions.com

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Classifieds/Ad Index ADD Systems

59

Growth Energy

Brakebush

15

Gulfcoast

Calico Brands

42

Cardtronics

72

800.922.0972 / www.go.addsys.com/build 800.933.2121 www.brakebush.com/cstore-burger 800.544.4837 / www.calicobrands.com 833.200.5250 www.cardtronics.com/CSDecisions

CB Distributors

5,7

Core-Mark

65

888.824.3256 / www.cbprices.com www.core-mark.com/food-service

Danone

24-25

888.620.9910 www.DanoneAwayFromHome.com

800.950.3683 / www.freshdelmonte.com

35

3

727.449.2296 / www.gulfcoast.com

Premier Manufacturing, Inc.

31 17

R.J. Reynolds

Inline Plastics

47

Swedish Match

JUUL

29

800.826.5567 / www.inlineplastics.com www.juul.com

Krispy Krunchy

48-49

800.290.6097 / www.krispykrunchy.com

Loomis

MasonWays

800.837.2881 / www.masonways.com

61 73 13

14 Hands Winery

2

National Retail Solutions

73

19

North American Bancard

71

$1187

34

www.pcbakery.com

53

800.453.3675 / www.huntbrotherspizza.com/CSD

McLane

888.426.3454

Prairie City Bakery

Hunt Brothers Pizza

11

FIJI Water

55

800.336.9876 / www.poultry.com

20-21

800.367.8325 / www.HomeMarketFoods.com

E-Alternative Solutions

877.373.0069 / www.LeapVapor.com

Pierce Chicken

Home Market Foods

www.loomis.us/SafePoint

Del Monte

75

www.GrowthEnergy.org/retailer

www.mclaneco.com/dsd 833.289.2767 / www.nrsplus.com 866.481.4604 / www.nynab.com

800.272.8656 / www.manitou.us.com www.engagetradepartners.com 800.367.3677 www.zyn.com www.nightowlcigar.com www.gamecigars.com

9 43 63

Swisher

76

Texas Pete

27

Tyson

51

800.874.9720 / www.swisher.com www.TexasPeteFoodservice.com www.TysonFoodservice.com

*

PLUS TAX

BOOTH #3617

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www.masonways.com 800-837-2881

August 2019 • CSTORE DECISIONS

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IndustryPerspective

The

Art of Engagement

Follow these tenets to take your c-store chain’s social media engagement to the next level.

John Schaninger • The Schaninger Group

Let’s get engaged! Most of us have heard or said these words at some time in our lives — some of us, more than once. However, what I am speaking of today is engaging with our customers.

Many retailers have social media accounts — typically Facebook, and perhaps Twitter or Instagram. But what is the purpose? Is it simply to convey promotional items, or do we have a strong, thoughtful plan to drive engagement with our fans?

Social media allows us to tell a story about our company, our culture — and yes, our products and promotions.

At the same time, it gives us an opportunity to have a conversation with our customers.

WHAT’S ENGAGEMENT?

Engagement is typically any instance in which someone reacts. This could be a ‘like,’ ‘share’ or an actual comment. If you think about your own personal life, occasionally we may become disengaged with another person or have a spat. Sitting down and having a conversation typically brings us together — closer — and creates a connection. So, engaging with someone through social media creates, or further deepens, a connection. The stronger the connection, the higher the chance that person will frequent your store. So, how can you best engage your customers through social media?

These are my 10 basic tenets for social media success.

SOCIAL MEDIA TENETS

1. Set a strong goal for likes per store, such as 1,000 per store. Then, develop an engagement goal.

2. Have a well thought out and developed plan that supports your company’s goals.

3. Develop posts that cause fans to react. Ask questions. Offer prizes. Incorporate local and national holidays and events. Hint: Everyone loves their pets, and people love to show pictures of their pets. Remember to have fun. How often does a friend or family member share a funny post or meme with you?

4. Tell stories. People are interested in your company.

They want to know your history, what is important to you

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and what your values are. Talk about how you are supporting the communities in which you operate.

Talk about your team. Brag about your uberachievers.

5. Tell stories about your products, too. What is the backstory on that great new coffee blend you launched? Do you have a new pizza or sub on the menu? There is a story there. Talk about it. Are you selling hand-breaded or antibiotic-free chicken? If so, let’s hear about it.

6. Use video. It doesn’t have to be expensive.

That smartphone in your pocket will help you create a great 15-second post.

7. Speak with your vendor partners. Many have funds directed for social media and will help support promotions specific to social to drive sales, traffic and profits.

8. Monitor posting at different times and determine, for your stores, what times drive the most views and engagements.

9. Read. Listen. React — or not. Social media must be monitored. A post is quite different from a comment that you might receive through email, app, website, phone call or old-fashioned snail mail.

Everyone sees a post and it spreads quickly. Very quickly. Develop a thoughtful plan detailing which types of comments to respond to, how to respond and which comments you will NOT react to.

10. Be consistent. Post daily or on a frequency that works best for your customers, but don’t overdo it. Multiple posts per day may annoy fans and cause them to unfollow you.

Remember, nurturing a relationship with your customers will help keep them happy, delighted and coming home for a long time.

I love talking foodservice, marketing and social media. Should you have a question or comment, please send me an email.

John Schaninger is the owner and marketing expert at The Schaninger Group. He can be reached at john@theschaningergroup.com.

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