CStoreDecisions Decisions
®
Solutions for Convenience Retailers
The 2022
Foodservice
Report
Convenience stores that commit to a foodservice-focused shift in 2022 and cement themselves as food and beverage destinations will be ready for whatever this year brings.
INSIDE
New-to-Market Curby’s Opens First Store 10 Brewing Up Hot Dispensed Sales 40 OTPs Still on Top 56 February 2022
•
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EDITORIAL
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EDITORIAL ADVISORY BOARD Robert Buhler, President and CEO Open Pantry Food Marts • Pleasant Prairie, Wis. Lisa Dell’Alba, President and CEO Square One Markets • Bethlehem, Pa. Raymond Huff, President HJB Convenience Corp. • Lakewood, Colo. Bill Kent, President and CEO The Kent Cos. Inc. • Midland, Texas Patrick Lewis, Managing Partner Oasis Stop ‘N Go • Twin Falls, Idaho Reilly Robinson Musser, VP, Marketing & Merchandising Robinson Oil Corp. • Santa Clara, Calif. Bill Weigel, CEO Weigel’s Inc. • Knoxville, Tenn.
NATIONAL ADVISORY GROUP (NAG) BOARD Doug Galli (Board Chairman), Vice President/General Manager Reid Stores Inc./Crosby’s • Brockport, N.Y. Mary Banmiller, Director of Retail Operations Warrenton Oil Inc. • Truesdale, Mo. Greg Ehrlich, President Beck Suppliers Inc. • Fremont, Ohio Derek Gaskins, Senior VP, Merchandising/Procurement Yesway • Des Moines, Iowa Joe Hamza, Chief Operating Officer Nouria Energy Corp. • Worcester, Mass. Brent Mouton, President and CEO Hit-N-Run Food Stores • Lafayette, La. Joy Almekies, Senior Director of Food Services Global Partners • Waltham, Mass. Vernon Young, President and CEO Young Oil Co. • Piedmont, Ala.
ACCOUNTS RECEIVABLE SPECIALIST Jamila Milton jmilton@wtwhmedia.com
YOUNG EXECUTIVES ORGANIZATION (YEO) BOARD Jeremie Myhren (Board Chairman), Chief Information Officer Road Ranger • Rockford, Ill. Daillard Paris, Director of Petroleum Supply and Trading Sheetz Inc. • Altoona, Pa.
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Caroline Filchak, Director, Wholesale Operations Clipper Petroleum • Flowery Branch, Ga. Cole Fountain, Director of Merchandise Gate Petroleum Co. • Jacksonville, Fla. Kalen Frese, Food Service Director Warrenton Oil Inc. • Warrenton, Mo. Alex Garoutte, Director of Marketing The Kent Cos. Inc. • Midland, Texas Sharif Jamal, Corporate Brand Manager Chestnut Petroleum Inc. • New Paltz, N.Y.
CSTORE DECISIONS does not endorse any products, programs or services of advertisers or editorial contributors. Copyright 2022 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. ©
4
CSTORE DECISIONS •
February 2022
cstoredecisions.com
CONTENTS February 2022
•
Number 2 •
Volume 33
CStoreDecisions
®
EDITOR’S MEMO
8 Building a Winning Corporate Culture FRONT END
10 Profile: New-to-Market Curby’s Opens First Store 16 Quick Bites: Foodservice Has a Lot on Its Plate 18 SNAP Decisions 22 Embedding a DEI Culture in the C-Store Workplace FOODSERVICE
40 Brewing Up Hot Dispensed Sales 44 Growing Hispanic Food Sales 48 Chef’s Corner: Building Foodservice Success CATEGORY MANAGEMENT
50 Cultivating Candy Sales 56 OTPs Still on Top TECHNOLOGY
62 What Do Delivery Services Really Deliver? 64 The Evolution of Loyalty: Rational vs. Emotional OPERATIONS
COVER STORY 24 The 2022 Foodservice Report
68 Loyalty Programs Get Personal
Convenience stores that commit to a foodservicefocused shift in 2022 and cement themselves as food and beverage destinations will be ready for whatever this year brings.
Cover photo by Cameron Sadeghpour Photography courtesy of Kum & Go
BACK END 72 Product Showcase 77 Ad Index 78 Industry Perspective: Is a Drive-Through Right for Your C-Store? 6
CSTORE DECISIONS •
February 2022
cstoredecisions.com
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Editor’s Memo
For any questions about this issue or suggestions for future issues, please contact me at jlofstock@wtwhmedia.com.
Building a Winning Corporate Culture If I asked your employees, “What’s it like to work at your company?” their answers would largely describe your company culture. How would your employees answer? Would you like what you heard? If not, a leader’s responsibility is to change that. This will be a key topic of discussion at the 2022 National Advisory Group (NAG) Conference next month in La Jolla, Calif. I will have the privilege of moderating a panel with three outstanding retailers whose companies are known for their great culture. The panel will feature Tony El-Nemr of Nouria Energy, Tom Robinson of Robinson Oil and David Simendinger of Champlain Farms. Before COVID, culture was the driving force behind the success at convenience store chains across the industry. The chains that weathered the COVID storm and continue to successfully navigate supply chain and labor issues, largely succeed because of the outstanding culture they have put in place. This is no accident, and it didn’t happen overnight. There are common traits in winning businesses that contribute to their unique nature: Clear values, caring, loyalty, humility and deep commitment to community are just a few of them. These characteristics often directly affect decision-making in the company and the way it treats its employees, customers and suppliers. However, some leadership teams attempt to create culture by acting as wordsmiths, spending untold hours carefully crafting vision, mission and values statements. That’s unfortunate because in the end, culture is not created by words plastered on the wall or carried around on laminated cards; but rather, culture is defined by actions on the ground. It’s what leaders do — what they inspect, what they reject and what they reward — that ultimately shapes company culture. A winning company culture is simple and emphasizes three areas: serving the customer, growing the business and developing employees. Culture can be consciously created by company leadership — and should be. As you work on your company culture, keep these five steps in mind: Outline three or four guiding principles that define who you are as an organization. It’s the job of senior leadership to define in simple terms what your organization is all about. 8
CSTORE DECISIONS •
February 2022
Use the principles to guide every business discussion and decision going forward. Words are meaningless unless they spur new behavior. Once you have defined your guiding principles, use them to guide all of your business discussions and decisions. Build the principles into all your people performance and management systems. The old rule is true: People tend to do what is inspected versus what’s expected. Simple words and good intentions are not enough. You need to make sure that your people and performance management systems measure and reward behaviors consistent with your guiding principles, and discourage if not punish the opposite. Leadership actions here are key: If employees see leaders act in accordance with principles, yet go unrewarded, or worse, see leaders defying principles and getting perks and promotions regardless, you will struggle. There must be consistency between what you say and what you do. Create a leadership development experience that reinforces the behaviors and values consistent with the principles, and insist all senior leaders attend. You have to constantly reinforce your words with action. One way to do this is to create an experience-based leadership development program that reinforces the values and behaviors consistent with the guiding principles. Expect resistance, but stay the course with passion and patience. Changing culture means changing people, and that takes time. Expect some cynicism, skepticism and resistance at first. With the NAG Conference, for example, over time, more and more retailers attended, including senior leaders, who came back to help facilitate later sessions, inspiring even more retailers to join future events. I hope to see you at the NAG Conference next month, where we will discuss this topic in greater detail. To register or see the full agenda, visit NAGConvenience.com or contact me at jlofstock@ wtwhmedia.com.
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FRONT END Profile
New-to-Market Curby’s
Opens First Store
Curby’s, a fresh-concept c-store, opened its doors for the first time in Lubbock, Texas, with a focus on speed and convenience, evidenced in all aspects of its design and menu. Emily Boes • Editorial Assistant
In a new initiative to offer a convenient, quick-service concept to the southern market, Lubbock, Texas-based Curby’s opened its first store on Feb. 1. Given that cases of the COVID-19 omicron variant have spiked, the on-the-go service is expected to be well-received. The grand opening celebration of the first Curby’s Express Market is projected for Feb. 5, but the company has ambitious growth plans. Curby’s has another two stores, currently being built from the ground up, scheduled to open this year, and it aspires to reach 20-35 stores by the end of 2024. 10
CSTORE DECISIONS •
February 2022
The Curby’s mission is to serve busier consumers with everything they like about the speed of convenience, with everything they crave in highquality food and drink, and with an unshakable commitment to be fast — all in a modern and progressive environment. The concept’s mission is all about enhancing the customer experience in traditional convenience retailing. “Our desire is to deliver craveable food and beverages, and obviously convenience items, to the customer — always in line with speed and convenience. That goes from the culture that we’ve tried to create to the people that we’ve hired,” said Grant Gafford, founder of Curby’s.
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FRONT END Profile The drive-through at Curby’s features two lanes. Customers are directed to one lane for smaller, lighter orders. For large or heavy orders, customers are directed to the second lane, where attendants will walk outside and place the order in the car.
DESIGNED FOR SPEED
NEW-TO-INDUSTRY CONCEPT
The Curby’s concept began when Gafford and his business partner, Brady Collier, who both have backgrounds in commercial real estate, decided to start their own operating business. Gafford had previously come across a vacant Starbucks with an attached drive-through that had been turned into a no-fuel convenience store. The busy store served as an inspiration and model for Curby’s. Gafford and Collier attended the National Association of Convenience Stores (NACS) show in Las Vegas in 2018, where they learned about the industry and met consultants who advised them and helped flesh out a business plan. Fast forward to today, and Curby’s is a no-fuel express market without interior dining, but with a laser focus on speed for the customer. “We’re next-gen convenience retailing, but we like to think about ourselves also as half quick-service restaurant (QSR), half traditional convenience,” Gafford said. The Curby’s name derives from the concept of the store itself. The idea of curbside service is at the crux of Curby’s appeal, especially with its drive-through. Curby’s decided on a simple design to be the face of its brand — a dog sticking its head out of the window of a car. The logo represents friendliness as well as the idea of catering to the customer. For example, if a customer arrives with a dog in the car, attendants will give the dog a special treat. The Curby’s branding initiative lends itself to sayings such as “curb your cravings” or “new breed of convenience,” according to Gafford. “We want to be able to be that solution for customers,” Gafford continued. “We want customers to see us as an opportunity to curb their cravings, and we want customers to know us as a better, more convenient shopping experience. We want to be all of that to our customers in the neighborhood.” The quick-service mission Curby’s promotes is expressed in everything from its name to its design and the types of food offered. 12
CSTORE DECISIONS •
February 2022
Curby’s planned its stores to be built from the ground up, with its layout spanning about 4,200 square feet. Its speedy, quick-service concept allows it to have a smaller parcel of land than traditional restaurants, Gafford said, with its retail label and lack of interior dining softening parking requirements. “Our first location was able to fit on a half-acre, and it has great room for a double lane drive-through and plenty of parking for people to come in and grab the things they need,” said Gafford. The exterior is designed with white stucco as the primary material, with wood elements as a complement to create a clean image. A vibrant green acts as an attention-grabbing accent color. “We really felt like green brought out the freshness aspect of everything that we’re doing,” noted Gafford. One of the major design elements of Curby’s is its drive-through, which begins as one lane and splits into two — customers will be guided to follow one lane or the other, depending on what they order. The digital menu boards and pre-sale board are at the forefront of the lane. A key and vital attribute of the drive-through is order flexibility, which allows customers to have a more personal order experience via pack members (which is what Curby’s calls its staff), using wireless ordering tablets or ordering traditionally through the order box. A temperature-modified canopy covers the drive-through, with heaters suspended on the underside of the canopy for colder days. This specialized drive-through services Curby’s goal of speed, convenience and enhanced experience, and Gafford stressed Curby’s desire to keep everything “very friendly and customer-oriented on the front side,” with a focus on speed on the back side. The Curby’s drive-through caters to all made-to-order food and beverage options, as well as convenience items. Customers are directed to the jet lane if their orders are smaller, with lighter and fewer items. With large or heavy orders — for example a 30-pack of beer and a bag of ice — the customers are directed to the second fast drive-through lane, where attendants will walk outside and place the order in the car. “That’s how we had to navigate that without anyone dropping anything or potentially even getting hurt, by having to handle heavy objects through a passenger
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Curby’s offers self-checkout as well as two traditional checkout stations.
window on a car,” explained Gafford. Wooden towers, one of which features the Curby’s dog logo, bookend the drive-through and serve as recognizable design features of the building. Self-checkout is also a notable feature available inside the store, complemented by two traditional checkout stations. CRAVEABLE MENU
Curby’s prides itself on its craveable food and beverages that can be consumed on the go. The team behind Curby’s chose the menu and equipment with speed in mind. “That’s just one thing that’s part of our mission that we just can’t compromise — speed for the customer,” said Gafford. “We just feel like that’s an expectation that people are going to have of us.” The menu consists of items that can be made quickly while still providing restaurant-quality food. The breakfast menu includes a breakfast burrito program, kolaches
cstoredecisions.com
and morning melts. Johnsonville, one of Curby’s culinary partners, developed a unique line of kolaches that are only available at Curby’s. The entire food menu and equipment package was developed in partnership with Jessica Williams, CEO and founder of Food Forward Thinking, a Kentucky-based culinary consulting company. Other contributing partners include Dess Elz, formerly with Starbucks, who created the Curby’s made-to-order beverage program; Chef Ronald Massaro, A.C.F.-certified executive chef; the culinary
February 2022 • CSTORE DECISIONS
13
FRONT END Profile Curby’s offers a robust beverage selection, including more than 30 varieties of iced tea in-store, plus a fountain drink program, a madefresh energy drink program and a high-end coffee program.
team of Ben E Keith; and celebrity chef Angie Ragan, who is currently performing on Gordon Ramsay’s television show “Next Level Chef.” The team created an egg muffin concept that combines three eggs, a secret muffin base, cheese and various toppings that include sausage, bacon, chorizo and herbs. “A handheld omelet is how we like to refer to it. They helped us develop that, which is going to be a unique product to us that nobody else will have out in the market,” said Gafford. Curby’s will also have a full beverage program, including custom-made energy drinks. The lunch menu includes pizza, melts, cold sandwiches, a salad program, and a hot dog program also designed by Johnsonville’s culinary team. Pastries from local bakeries are also available. All food items are prepared fresh inside the store using the fastest and most precise cooking equipment available. When referring to people’s habitual meal purchases, Gafford expressed his desire for Curby’s to be a regular spot for customers. He believes the store’s beverage program alone will set it apart and place it in people’s restaurant rotations.
“We have an awesome iced tea program with specialty iced teas, with over 30 varieties of iced tea in the store,” he said. “We’ve got a great fountain drink program, a unique made-to-order energy drink program and a firstclass coffee program, as well.” Curby’s dedicates a portion of its interior to a tea bar and offers an afternoon happy hour to capture the daily tea drinker. In Texas, retailers that specialize in iced tea are growing, along with freestanding locations with iced tea-only drive-throughs. This is the customer Curby’s will entice with its tea bar. The coffee selection at Curby’s is also extensive, with each cup made by the team’s baristas. Aside from a few dispensers that the customers can use themselves for regular drip coffees, each drink is made to order. Anything a traditional coffee house offers will be available at Curby’s. “It could be an espresso. It could be a latte. It could be an iced coffee. It could be an iced macchiato. Whatever it may be, we will make that drink for the customer,” explained Gafford. The food and beverage programs at Curby’s are wellresearched, with each supplier vetted and curated for the anticipated Curby’s clientele. FUTURE-FORWARD THINKING
Curby’s plans to open its first few stores in its local Lubbock market (home of Texas Tech University), and with its first location at the corner of 19th Street and Milwaukee Avenue recently opened, it can soon focus on its second and third stores: 50th Street and Quaker Avenue, and 114th Street and Quaker Avenue.
Curby’s chose both its foodservice menu and equipment with speed in mind.
14
CSTORE DECISIONS •
February 2022
cstoredecisions.com
Curby’s self-checkout stations promote speed and convenience, two of the retailer’s defining characteristics.
Gafford had previously purchased one of the locations with the intention to build a store — which then became Curby’s — and the second location was purchased specifically for Curby’s. “We really want to do a great job coming right out of the gate,” Gafford said. The Curby’s team wants to learn from each store the changes that can be made to improve future stores. “Making those adjustments within those first three or four stores, we want to keep all those here in our home market,” Gafford added. However, Curby’s does not plan to stay solely in the Lubbock area. It has ambitions to grow throughout Texas, as well as beyond the state borders. While its first three stores will be company-owned and operated, Curby’s is open to exploring both corporateowned and franchising models as it works to reach 20-35 stores by the end of 2024. The corporate-owned model would allow Curby’s to keep its culture consistent, and with franchising, it would be able to offer something one-of-a-kind to the franchising world. “We believe we would have a very, very unique franchise offering that’s unlike anything else available to anyone in the market,” said Gafford.
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quickBites FOODSERVICE HAS A LOT ON ITS PLATE Pandemic-wary and podcast-listening restaurant customers seem partial to digital delivery services, while younger adults are resisting digital menus when eating out. The omicron variant has others avoiding the public dining room, while nearly a quarter of U.S. adults say they are sensitive or allergic to certain foods.
LISTEN, I’M HUNGRY
DIGITAL DINER
Diners have embraced digital delivery service aggregators during the roughly 18-month span of the pandemic.
42% have used at least one aggregator 15% have used three or more
Source: PYMNTS.com, “The Digital Divide: Delivery Service Aggregators And The Digital Shift,” based on census-balanced surveys of 2,545 U.S. consumers who regularly purchase food from restaurants via dine-in, delivery and pickup, conducted between Oct. 20 and Oct. 25, 2021
Podcast listeners are twice as likely to order restaurant or other food delivery than non-listeners.
Podcast …
Listeners
Non-listeners
Restaurant delivery
28.2%
14.0%
Meal kit delivery
6.0%
2.3%
Grocery delivery
11.6%
5.7%
Source: Podcast Recontact Study (USA+), food delivery services household used past 30 days ages 18+, November 2021
WHAT'S ON THE MENU
Despite comfort with all things digital, a YPulse study found that younger diners seem to prefer printed menus.
OMICRON-PROOF YOUR PLATE Effect of omicron variant on use or visit of dining venues in near future: More mindful about eating leftovers at home
83%
72% Miss printed menus
Avoid shared food or self-service (buffets, soda fountains)
73% 65%
59% Have security
Prefer to dine inside — less in favor of drive-through, takeout, delivery Plan to use delivery apps more frequently
54%
Source: Datassential, “COVID-19: Omicron Rising,” Dec. 10, 2021
concerns about scanning QR codes
Source: YPulse survey of 632 Gen Z and Millennial consumers, ages 18-34, published January 2022
The “Big 8”
major allergens: Eggs Fish Milk
ON THE RISE Nearly one in four U.S. adults reports sensitivity or an outright allergy to certain foods.
Peanuts Shellfish Soybeans
CSTORE DECISIONS • February 2022
$686 million sales in 2021 +43% change vs. a year ago +143.4% change vs. two years ago
Tree nuts
Wheat/gluten 23% intolerant or sensitive to certain foods 14% have a food allergy Source: Packaged Facts, “Allergy Friendly Foods: Market Trends and Opportunities"
16
COCKTAILS IN A CAN
Ready-to-drink cocktails have shown strong growth over the past two years.
Source: Spins Product Intelligence, year end trends report, December 2021
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FRONT END SNAP News
SNAP DECISIONS Increased funding and bipartisan legislation seek to expand EBT foodservice options for recipients and c-stores. Anne Baye Ericksen • Contributing Editor
When the novel coronavirus hit in spring 2020, record numbers of people signed up for the federal Supplemental Nutrition Assistance Program (SNAP). In 2018, 39.7 million Americans were enrolled, and by 2021, that jumped to 42 million. Because convenience stores account for 45% of the approximate 248,000 SNAP-qualified retailers, these developments equated to more electronic benefits transfer (EBT) transactions. “Rutter’s realized an almost 64% increase in EBT sales dollars and 39% increase in EBT transactions in 2020 versus 2019. (And) 2021 saw an additional increase of almost 29% in EBT sales dollars compared to 2020,” noted Chris Hartman, director of fuels, forecourt and advertising for Rutter’s. Prior to 2009, the York, Pa., family-owned business had only a few sites accepting EBT sales, but since a rule change enacted that year, all 78 stores now participate. RaceTrac has been a SNAP provider for more than 10 years, and it, too, registered a significant increase of qualified purchases. “From March 2020 to March 2021, the percentage of EBT transactions at our stores nearly doubled. Moreover, stores saw a 18
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65% increase in EBT dollars used,” said Eva Rigamonti, associate general counsel and executive director of public policy for the Atlanta-based company, which owns and operates 558 stores. “Our presence in rural, suburban and urban areas throughout the Southeast allows us to play an important role in providing food to low-income families through SNAP,” she added. “For beneficiaries, our stores serve as critical locations to access competitively priced, SNAP-eligible foods during extended hours when other food retailers are closed.” SUPPLEMENTING SNAP
Established in 1975, SNAP falls under the purview of the U.S. Department of Agriculture’s (USDA) Food and Nutrition Service (FNS) directive. Beneficiaries may use cstoredecisions.com
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FRONT END SNAP News
the funds to purchase specific products, including but not limited to meat, dairy, produce, bread, cereal, snacks and nonalcoholic drinks. During the pandemic, emergency benefits were increased by 15%, but that program expired in September. However, Congress approved a $36.24 per person per month increase, or more than 25%, for fiscal year 2022, effective Oct. 1, 2021. This was the first non-pandemic-related raise since the program’s inception. Then in December, separate bipartisan legislation allowing SNAP dollars to be used to buy certain hot or prepared foods, which currently are excluded, was introduced. The SNAP Plus Act of 2021 sponsors reason that not only do many SNAP users work multiple jobs, limiting time available to cook meals from scratch, but that Americans have migrated toward more readyto-eat options. That’s also the direction c-store foodservice operations have been moving. “Under the current rules of the program, a SNAP individual can purchase a cold sandwich packaged to go at a convenience store, but if that sandwich is toasted or placed in a panini press, it can no longer be purchased using SNAP benefits. This makes no logical sense, and is especially burdensome to SNAP families and individuals who are elderly, homeless or disabled,” said Anna Ready Blom, director, government relations for the National Association of Convenience Stores (NACS). If passed, this new allowance would not only expand qualified items in c-stores, but also create more reasons for SNAP users to come inside. “It’s fairly common for EBT customers to have mixed EBT and non-EBT items in their baskets. As an example, a guest’s transaction may include pre-pay for fuel as well as a bottle of water and a piece of fresh fruit or a box of cereal — but only the water, fruit and cereal would be purchased with EBT; the fuel would be purchased with another tender,” said Rigamonti. What’s more, 7-Eleven Hawaii has begun fulfilling online orders for SNAP-eligible products and making them available for pickup or delivery. 20
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The c-store chain worked on the project with Vroom Delivery and FNS for the past year. C-stores must apply for and be granted authority to process EBT transactions by meeting one of two criteria. Criterion A demands retailers continuously carry three stocking units of three different varieties of staple foods in each staple food category: vegetables or fruit; dairy products; meat, poultry or fish; and breads or cereals. Additionally, businesses must stock at least one perishable item in two staple categories. Criterion B requires more than 50% of a store’s total gross sales be from staple foods. The online SNAP program demands a separate certification for e-commerce, also issued by FNS. “NACS is currently waiting on FNS … to finalize a new definition for which staple foods can count toward those requirements. NACS has met with officials at FNS about the critical access convenience stores provide to Americans relying on SNAP, and how any requirements need to be workable to ensure those stores can remain valuable partners in the program,” said Ready Blom. Still, for many retailers, the effort delivers a worthwhile return on investment, on many levels. “At Rutter’s, our goal is to provide the ultimate convenience to our customers,” said Hartman. “Accepting EBT purchases allows us to provide more ways, for more customers, to shop our store.”
Fast Facts • The fiscal year 2022 SNAP boost of $36.24 per person per month is the program’s first non-pandemic-related raise. • Convenience stores account for 45% of SNAP-qualified retailers. • SNAP Plus Act of 2021 would allow purchases of certain hot or prepared foods.
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Front End | DEI Corner
EMBEDDING A DEI CULTURE IN THE C-STORE WORKPLACE Learn to infuse diversity, equity and inclusion into the culture of your convenience store business. Jayson Council • Contributing Editor
The Black Lives Matter movement has brought a heightened awareness to systemic and institutional racism, and to the implicit personal biases that impact the workplace in far-reaching ways. By now, it has become clear that active anti-racism measures are critical to bring about much-needed change in the corporate world. To infuse diversity, equity and inclusion into an organization’s culture, leaders must commit to a long-term plan of action and ongoing, frank dialogue with their people. CREATE A ‘SEE SOMETHING, SAY SOMETHING’ POLICY
If you have ever spent any time in New York City and commuted via the subway, you’ve heard about the infamous ‘See Something, Say Something’ campaign. This message was developed by the Department of Homeland Security in 2010 to help civilians come forward to law enforcement if they witnessed suspicious activity. That being said, we encourage leaders to adopt a similar philosophy toward creating a culture of diversity, equity and inclusion. Talking about these issues may feel uncomfortable at first, but as leaders, we have to be courageous enough to foster an environment where ‘call-outs’ on workplace microaggressions and counterproductive behaviors are encouraged. If we don’t step up and express when a phrase or a decision was unfair or racist, then we can’t move forward and make better choices. 22
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INSIST ON A CULTURE OF TRANSPARENT LEADERSHIP
Consider conducting an internal survey of your employees to ask them how they would rate leadership’s authenticity and transparency regarding diversity issues. If the results are less than stellar, it’s time to make improvements. It’s important for companies to recognize the ongoing work that needs to be done in the area of diversity, equity and inclusion. Acknowledging where you are on your journey, including progress you’ve made and where there’s still room to improve, builds trust, courage and buy-in. This must be non-negotiable for all senior executives because authenticity and transparency starts at the top. Include voices from all levels of the organization, but make sure the c-suite takes the lead. In addition to courage and transparency, leaders need to include all voices as part of the discussion and allow constructive criticism into the conversation about company culture. It also means asking your team members for their opinions about how to adopt diversity, equity and inclusion best practices and how to communicate them effectively. This work can — and should! — be done at all levels. To make a real long-term impact, this work needs to be led from the top. HOLD PEOPLE ACCOUNTABLE, EVEN THE LIKEABLE ONES
One of the biggest mistakes many professionals make is trusting heart over mind. Here’s a great example: You have a high
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performing, senior level employee who has been with the company for a decade. Though your colleague is generally liked by others, they sometimes make comments that are racist or disrespectful in nature. Rather than addressing these microaggressions, you gloss over these incidents, giving your colleague the benefit of the doubt and assuming they have no malicious intentions. By not asking them to be more empathetic and self-aware, you are in fact reinforcing non-inclusive behavior patterns, which can have a damaging ripple effect throughout the organization.
“I use the word ‘diversity’ on purpose because diversity is the easiest to manipulate,” said one industry expert. “True equity and inclusion require more action and ideally more authenticity.” Do the hard work by assessing employee experience across the entire talent life cycle, from recruitment through retirement. Get honest feedback directly from your people so you can address the real experiences and opportunities available to employees from traditionally underrepresented groups.
CREATE A SAFE SPACE FOR HEALTHY DIALOGUE
Even if you don’t have formal diversity partnering guidelines in place, at a minimum, you should conduct a quick cultural competency audit among your business partners before you contract with them, to ensure that their practices are aligned with your values. Remember that diversity, equity and inclusion best practices should address everyone your company is associated with — from employees to clients and partners, to vendors and beyond. A cultural competency audit could include things like: • Evaluating the makeup of your board of directors and advisory groups. • Proactively seeking and selecting a diverse group of vendors to partner with, and ensuring they also value diversity, equity and inclusion (take note if they are silent). • Understanding clients’/customers’ histories around inclusion/exclusion and influencing their commitments to diversity, equity and inclusion.
Schedule regular events that focus solely on discussions around diversity, equity and inclusion in the workplace. Give employees the space to share their experiences, and work together to create diversity, equity and inclusion best practices that can benefit the entire company. Perhaps take a welcoming approach, such as a ‘Dessert + Discourse’ session, to minimize the pressure on participants and encourage attendance. MAKE REFERENCE MATERIALS AVAILABLE
In the heat of the Black Lives Matter movement in the summer of 2020, some organizations gave their employees pivotal, impactful books, like “White Fragility,” and provided a list of anti-racism resource materials for their people. Reference materials like these shouldn’t be a one-time show of solidarity with the movement. Rather, they should be part of a running, living list that employees can turn to when they want to continue learning. It can be something simple (and inexpensive), curated by the staff, or it could be a budget expenditure where the company book club focuses on these matters for a few months. The list should be updated frequently and include the latest thinking via a variety of media, including podcasts, articles, books and more. Ideally, managers can host follow-up discussion groups with their teams about the reading and research they are doing. MOVE BEYOND DATA POINTS
On paper, many companies appear to be doing well in their diversity efforts, with increasing numbers of traditionally marginalized community members in leadership positions, and a broader range of representation throughout the organization. But the truth is, employee experience may not match up to corporate data points, and many minority employees are still lagging in pay equity, opportunity and authority. In other words, the data can make a company appear to be much more accepting than it truly is. cstoredecisions.com
DON’T FORGET YOUR EXTERNAL STAKEHOLDERS
DON’T BECOME A PERFORMATIVE ALLY
Stay vigilant and aware of your own behaviors. And be on the lookout for leaders who are portraying themselves as an ally to people of color but not actually doing the hard work to be supportive in a meaningful way. You cannot reach your maximum leadership capabilities when it comes to diversity, equity and inclusion in the workplace with words alone. Although your heart may be in the right place, trust your mind to make a rational and emotionally intelligent course of action regarding how you show up, every day. The times we are living in are too volatile to create surface, non-sustainable relationships in both our professional and personal lives. Jayson Council has spent 20 years working to strengthen the social and educational sector through strategic development, DEI, relationship building, philanthropy and the power of opportunity. Today, he leads a consulting practice focused on guiding individuals and institutions through the complex and critical landscape of justice, equality, diversity and inclusion (JEDI); political, corporate and social responsibility (PCSR); and purpose-driven philanthropy. He can be reached at jaysoncouncil@gmail.com. February 2022 • CSTORE DECISIONS
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Foodservice Report
THE
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Foodservice Report
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e Convenience stores that commit to a foodservice-focused shift in 2022 and cement themselves as food and beverage destinations will be ready for whatever this year brings. Isabelle Gustafson • Associate Editor
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In 2022, the convenience channel is equipped to become the new quick-service restaurant (QSR), to take advantage of the foodservice sales opportunity with a distinct, high-quality offer for February the modern consumer. 2022 • CSTORE DECISIONS
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“The days of smokes and Cokes are coming to an end,” said Jon Siron, foodservice director for Gier Oil Co., with more than 50 Eagle Stop stores in Missouri. “C-stores are finally understanding that they aren’t just gas stations that sell food; they’re restaurants that sell gas.” For West Des Moines, Iowa-based Kum & Go, this meant a new, long-term strategy, for a world where “fueling is less and less relevant,” said Stuart Taylor, vice president of business insights and analytics at Kum & Go, which operates more than 400 stores in 11 states. Its made-to-order offer, currently being tested in select markets, includes grain bowls, sandwiches with premium meat and vegetables layered on fresh-baked bread, blended smoothies and cold-brew frappés. “We want the food to be as good as fast casual,” Taylor said, “but delivered at the speed of a QSR and on the footprint of a convenience chain.” Rhode Island-based Neon Marketplace, which recently opened its fourth convenience store, crafted a foodservice offer that caters to the “the trifecta,” as Neon’s Director of Operations Peter Rasmussen called it: essentially, the fuel consumer, the coffee consumer and the QSR consumer. “Although we don’t want to alienate your classic c-store consumer,” noted Neon’s Senior Manager of Product Development & Supply Chain Elise Babey, “we really wanted to grasp that consumer who’s going to fill up their gas in the morning, but then they’ll pick up their order from Starbucks for breakfast, and then maybe at lunch they’ll take a trip to Panera.” Neon’s menu features c-store classics — burgers, chicken sandwiches, pizza, breakfast — plus craft coffee. But there’s “so much room for innovation,” Babey said. “You might see things like avocado toast or açaí bowls or more elevated and upgraded items that are more traditional to a modern QSR than a standard convenience store. … I like to call our little area a ‘C-QSR’ rather than a c-store because I think of our foodservice program as more of a quick-service restaurant hybrid.” PIVOTAL DAYPART
In some ways, the pandemic really presented the convenience industry with an opportunity to level the playing field as stores remained open amid shutdowns.
Kum & Go’s new made-to-order foodservice menu features sandwiches made using premium meat and vegetables layered on fresh-baked bread, plus grain bowls, smoothies, frappés and more.
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Thorntons’ sausage, egg and cheese croissant started as an LTO back in 2020 and is now its most popular breakfast sandwich.
“We just kept going,” said Greg Ekman, director of fresh food acceleration for Louisville, Ky.-based Thorntons, “and our foodservice business grew dramatically. We finished 2021 up nearly 30% over the prior year in (fresh food) profit.” Breakfast in particular has really bounced back from initial dips early in the pandemic, he said, and is Thorntons’ biggest daypart today. “We’re starting to pick up more business in that pivotal daypart,” said Ekman. “It’s not to say that we aren’t planning things for the afternoon — because we absolutely are — but we really want to make sure that we take care of the guests when they’re most frequently in the store, which is that morning daypart.” Thorntons, which operates more than 200 c-stores in six states, offers breakfast burritos and sandwiches from 5-11 a.m. And its most popular breakfast sandwich — the sausage, egg and cheese croissant — is now available all day. Innovations over the past year included the launch of the Sunrise Sampler — sausage, Canadian bacon, egg and cheese sandwiched between French toast slices — updates to its breakfast burritos as well as the addition of the Sunrise Scrambler Burrito — peppers and onions, scrambled eggs, sausage and bacon, and a hint of Buffalo sauce. Morning menu additions in 2022 will include a breakfast burger limited-time offer (LTO) in March: a fried egg patty, bacon, burger and chipotle mayo, with two slices of French toast in place of buns. “That’s our M.O.,” said Ekman. “We’ll launch as an LTO, and if it does well, we’ll keep it in. The sausage, egg and cheese croissant was actually an LTO back in March of 2020, and it’s now our No. 1 selling item.” Coffee’s, of course, an integral part of morning sales, too. And some retailers are opting for a full coffee bar experience to further cement that QSR comparison. “We strive to do everything that you can get at a Starbucks but at a convenience level,” said Neon’s Babey, “and we’ve taken lots of time to really perfect our shot of espresso ... from not only the type of bean and the roast, but also how fine it’s grinding and the ideal drip to really make the perfect cup of espresso. cstoredecisions.com
When you come into our store, you can get anything from a latte to a cappuccino, macchiatos and fancy customizable coffee drinks.” Wally’s, a Pontiac, Ill.-based travel center, also offers a full coffee bar, in addition to an array of food options: a carving station, made-to-order sandwiches, fresh pastries, ice cream with homemade waffle cones, and proprietary jerky and popcorn. Nitro cold brew’s on tap, plus specialty drinks, as well as kombucha and 60 soda flavors. Wally’s Executive Chef Lute Cain has a background in fine dining and confirmed Wally’s is opening a second travel center in March in the St. Louis area, with further growth plans across the Midwest. Other c-stores have found success with beanto-cup coffee machines, which are a relatively lowmaintenance, smaller-footprint offer that still convey freshness to consumers. Thorntons worked to retrofit all locations, as has Ankeny, Iowa-based Casey’s, with over 2,300 stores. In addition to bean-to-cup coffee, Casey’s recently launched an all-new breakfast lineup, featuring its Loaded Breakfast Burrito and Loaded Breakfast Bowl, plus the newly renamed Toastwich, made using madefrom-scratch dough — the same dough used for its pizzas — wrapped around eggs, sausage or bacon, as well as two types of cheese, then baked fresh in Casey’s kitchens. Breakfast pizza sales have also accelerated, said Casey’s Chief of Merchandising Tom Brennan, and customers are even ordering breakfast pizza for delivery in the morning daypart. February 2022 • CSTORE DECISIONS
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Casey’s pizzas feature made-fromscratch dough, real mozzarella cheese, fresh veggies and highquality meats, baked fresh in-store. The c-store chain’s known for the classics like pepperoni and cheese, plus other customer favorites like its breakfast and taco pizzas.
PIZZA’S POTENTIAL
Casey’s has long been known for its fresh-made pizza, but the pandemic drove sales like never before, with growth in both slices (of which Casey’s sells several hundred a day in its stores), and whole pies, which account for about 25% of the chain’s total food and dispensed beverage dollars. “We saw significant growth (in whole pies),” said Brennan. “It’s probably the biggest growth we saw other than (the initial launch). And that really maintained over the course of the pandemic.” Eagle Stop’s seen success with pizza, too, and is adding a new format to its menu in 2022. After the initial launch of its On the Fly Market pizza program at the end of 2020, “sales increased dramatically at all locations and were holding steady for most of (2021),” Siron said. Gradually, though, he noticed a small decline in some markets. “We started to investigate, and we talked with our customers regularly and got feedback from our associates,” he said. “One constant from our clientele was that they don’t want a traditional pizza slice; they much prefer the mini personal pizzas — a smaller slice, easier to hold on to in the car, visually more appealing. And let’s face it: Who doesn’t love more of that delicious buttery crust like a little treat at the end of your slice?”
Missouri-based Eagle Stop launched its pizza program at the end of 2020. In 2022, at the request of customers, it will offer mini pizzas. 28
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Mini or extra-large, whole pie or slice, focusing on freshness and enabling customization are key to pizza in 2022, said Mike Kostyo, associate director and trendologist for Chicago-based market research firm Datassential. And alongside popular mashups like breakfast pizza and taco pizza, c-stores should explore regional styles and global ingredients. “A lot of operators experimented with and began offering pizza and flatbreads during the pandemic,” Kostyo said, “so c-store operators will need to work extra hard to stand out.” Neon’s newest stores feature artisan-style pizza with fresh-made dough, prepared in an 800-degree brick oven, which requires additional employee training, Babey said, but really sets it apart from other chains. Employees have to “learn the language of this oven,” she said. “We have some culinary-trained employees working in that area, and I don’t think you see that a lot in a convenience store.” DEMOCRATIZING HEALTHY
Kum & Go is known for its pizza, too, and that’s not changing, said Jac Moskalik, vice president of food innovation, Kum & Go. Alongside the more traditional c-store customer, however, Kum & Go’s identified a new shopper: “the healthy striver.” This customer is Gen Z, maybe millennial, Moskalik said. They don’t mind spending more for products they view as healthier or an overall better option for them. It’s important that the menu’s profitable, of course, but also sustainable and accessible. “Democratizing healthy” is the term Kum & Go uses. Crowley, La.-based Shop Rite/Tobacco Plus’ Bourbon Street Deli is not known for health food; it’s a destination in its communities for fresh, fried seafood and other local comfort foods like boudin balls: pork sausage made with rice and seasoning. Still, the 57-store chain’s Foodservice Compliance Director and Dietitian Angelle Cloud is passionate about making healthier options accessible, too.
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Foodservice Report
Cranston, R.I.-based Neon Marketplace recently opened two new stores, equipped with elevated classics like pizza, burgers and chicken sandwiches, plus craft coffee.
“We’ve expanded our grilled options, we’ve expanded our salads and brought in lower- or no fat-dressing,” she said. “We have fresh fruits, and we brought that in as a same-cost side to go with our meals. … In a lot of cases, we find that ‘healthier foods’ are more expensive. I feel like we’ve really done a great job at leveling the playing field; if someone wants to make those healthy decisions with us, it doesn’t necessarily cost more. I think that’s really important.” Cloud looks forward to the adoption of new food trends in the South. Plant-based foods, for example, aren’t yet mainstream in her area. But Datassential’s Kostyo foresees overall growth in this area in 2022, with 36% of consumers saying they want to increase their plant-based protein consumption this year. Prepare for “a lot more fragmentation,” too; plant-based chicken, in particular, is poised for growth. Still, not all plant-based consumers are seeking to replicate the taste and texture of meat. In fact, Kostyo said, 60% of consumers prefer plant-based foods that showcase fruits or vegetables as opposed to mimicking another food. Neon partnered with a local Rhode Island company called Plant City to offer an array of plant-based items — “essentially a plant-based store within a store,” Rasmussen said. “I don’t think that the plant-based category is strictly for vegan and vegetarian consumers anymore,” added Babey. “I think that your average Joe might grab a traditional burger from our touchscreen kiosk, but then also on his way out, grab a vegan hummus wrap and a vegan brownie.” The shift to made-to-order food and kiosk ordering enables customization, noted Kum & Go’s Director of Brand Marketing Matt Riezman, which in turn ensures an offer for any consumer, no matter their preference or dietary needs. It also conveys freshness. 30
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TECH-FOCUSED
Indeed, “the almighty power of the order kiosk,” Siron said. “Guests want to feel in control, reinforcing the importance of ‘fresh made.’ Many of us are working to change the ordering model and technology in locations to adapt to guests’ needs, and this is just one way we’re looking toward the future in improving our guest experience.” Technology enables innovation, customization — keeping your retail experience as seamless, or convenient, as possible — whether through online or mobile ordering, curbside pickup, drive-through, kiosk, self-checkout or autonomous checkout. “Consumer adoption and acceptance of new technologies is growing incredibly quickly, across every demographic group,” Kostyo confirmed. “When we asked consumers about various macro trends that would impact the food industry in 2022, they felt most positively about technology, with 73% saying they felt very or somewhat positive about tech in the year ahead.” At this point, he said, it’s not a question of if you should adopt a more tech-focused plan; it’s about determining which technologies to adopt for your particular operation. Thorntons, for example, offers self-checkout at 25 of its stores, and all new stores include this tech, equipped with a proprietary labeling system, which Ekman said will lead to made-to-order, customizable foodservice for the chain, and perhaps other forms of technology down the line. cstoredecisions.com
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Foodservice Report
“Right now, our team’s really focused on simplifying the operations of the current platform so that, as we start to layer in more complexities over time, we have an operations team that’s well-versed in how to make the current products,” he said. “That’s really what we look forward to, being able to deliver a consistent experience to the guests every time, even as technology continues to evolve.” 7-Eleven, with more than 14,000 stores in the U.S. and Canada, first launched delivery in 2018 but recently added a subscription option; similar to DoorDash’s DashPass, with ‘7NOW Gold Pass,’ customers can waive delivery fees in the app for a set $5.95 a month. Casey’s has offered delivery for over a decade, and it still uses its own drivers at about 450 stores, said Art Sebastian, vice president of digital experience for Casey’s. During the past year or so, though, it’s grown its business with DoorDash and Uber Eats, and it’s expanded delivery hours. Casey’s also identified a new need-state for delivery that Sebastian expects to grow: grocery fill-ins. “Our guests order from Casey’s for pizza delivery to meet their dinner needs, then they attach some grocery items to make it more convenient,” he said. “Now we’re observing they’re also using us to fill in a trip between driving to a grocer.” Further, the retailer’s rewards program is approaching 4.6 million members, more than 50% of which are active on a monthly basis — a percentage higher than “the best in the industry,” Sebastian said: Starbucks, Wendy’s, McDonald’s.
Casey’s launched curbside pickup via its app back in 2020. The c-store chain has since expanded its menu and its delivery options.
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“From a technology perspective, we’re paying attention to completely different sectors and industries,” he noted. “We’re starting to really observe what’s happening in the banking industry, in the fintech startup industry, because they’re setting pace for what users expect in these digital experiences.” Neon’s newest two stores feature drive-throughs, an area that’s especially challenging for c-stores, Rasmussen said. “We’re working to find a balance of how to limit the drive-through menu while not being too restrictive,” he said. “You might have a store with a great offer, but then you look across the street, and there’s a Dunkin’ or Starbucks with 20 cars in the drive-through line. We have to figure out how to start to capture some of that segment.” Neon’s drive-through will feature a limited menu, adjusted over time. But its app, which launches this quarter, will feature all of its SKUs to order for pickup in-store or at the drive-through. The retailer has also partnered with Uber Eats, DoorDash and Grubhub. “We’re going to roll out an app, and we’re going to put in all the effort in the world to be incredibly successful with it,” Rasmussen noted. “But let’s be real: People are only going to keep so many apps on their phone. When someone says, ‘I’m hungry,’ they open up DoorDash, or they open Uber Eats or whatever’s most prevalent in their market, and we want to be a part of it.” INSTAGRAM-WORTHY
Wally’s is “led by design,” said Andy Strom, its chief experience officer. That extends to every part of the business, foodservice included. The Wally’s concept is a nod to ‘80s family road trips, which is what the design aesthetic is modeled after and what makes it “Instagram-worthy,” Strom said — meaning it’s photogenic and encourages sharing on social media. “We have our main, featured, ‘shareable’ zones in the store — an old Winnebago Brave (RV) that we’ve converted to retail display, big murals upon entry, our main sign on the way into the store that says, ‘Wally’s: Home of the Great American Road Trip,’” Strom said. A Jeep Wagoneer is also parked in front of the travel center for customers to take photos with. “We have over 60 soda fountain flavors, and all of our badges and logos on all those sodas are the oldschool, ‘80s ones,” he added. “It’s just all those little details. At every turn, there’s just little quirks that are really fun, that people like to share (on social media).” Online or in-store, when it comes to communicating your brand — your offer to consumers — don’t underestimate the power of visuals. This is especially true for foodservice. cstoredecisions.com
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Pontiac, Ill.-based Wally’s plans to open its second travel center next month. The concept is a nod to ‘80s family road trips, featuring a barbecue carving station, among other innovative food and drink offers.
POST-PANDEMIC
“The use of photography is super important,” confirmed Kum & Go’s Riezman, “especially when we’re doing something new that might be a little bit unexpected or might be challenging norms that people have in their minds. … We’ll continue to use photography, especially on the exterior of our store and in advertisements online or on TV, to really showcase this food and help continue to introduce people to it who may not think of Kum & Go as their first thought for food.” It’s cliche but true: People eat with their eyes. If it looks good, customers are more likely to try it. If the food tastes good, they’ll return for more. “If you go into (Neon’s) stores, the first thing that will catch your eye is this amazing picture of a slice of pizza, and you see the pepperoni all curled up and filled with oil, and they look hot and sizzling, and then you see the cheese pull,” said Babey. “That is the image that we’re really going for, the fresh food in motion. … People want their food fresh. So that’s what we’re trying to depict in our imagery.” 34
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In 2022, consumers are feeling hopeful, Datassential reported, but we are still in a pandemic; operational challenges persist, from staffing to product shortages. “Twenty-four years in the industry, I’ve never seen anything like it,” said Eagle Stop’s Siron. “I think I’ve had to substitute 40% of my offerings.” Retailers are taking the opportunity to reassess their operations — and get creative with new menu items: Eagle Stop’s planning to use its existing, fresh-made pizza dough to add pizza rolls, calzones, kolaches and a few desserts. And Thorntons’ Sunrise Sampler breakfast sandwich was adapted to create its upcoming breakfast burger. “(In the past), the procedures in which we handled food did not always make it easy for our operations team to (keep items) in stock for our guests,” noted Ekman. “So we made a couple of key process changes. This enabled us to do a lot more menu development. Before, our settings were very specific to the products, but now, we have settings that are specific to ingredients, not finished products.” The goal is to enable innovation while still setting the operations team up for success. Thorntons even created a new field support position — four of them, actually — fresh food excellence coaches, whose jobs will be to help stores execute foodservice programs at a higher level. 2021 was about pivoting. 2022 will be about building on new programs. “We did a lot of development in the back half of 2021,” Ekman said. ”We’re really excited to see how things shake out.” CSD
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NAG Golf Outing at Torrey Pines Registration NAG Hospitality Suite NAG/YEO Board Meeting NAG Networking Reception NAG Opening Night Dinner NAG Hospitality Suite
MONDAY, MARCH 28 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 NAG Board Chairman Doug Galli, Reid Stores Inc./Crosby's 8:15 AM – 9:15 AM GENERAL SESSION: BURNING ISSUE #1: Culture as a Competitive Advantage Culture is at the core of many businesses no matter how large they are. There are common traits in winning businesses that contribute to their unique nature: clear values. Caring, loyalty, humility and deep commitment to community are just a few of them. These characteristics often directly affect decision-making in the company and the way it treats its employees, customers and suppliers. Many businesses quite rightly view a valuesbased culture as a competitive advantage and, as such, it is fiercely guarded. Hear how leading c-store chains are building their winning culture.
Moderator: John Lofstock, Executive Director, NAG Speakers: • • •
Tony El-Nemr, Founder & CEO, Nouria Energy Corp. Tom Robinson, Chairman, Robinson Oil Corp. David Simendinger, President, Champlain Farms
9:15 AM – 9:45 AM
Save the date for the LIVE event!
March 27-30, 2022
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Break/Visit Sponsor Tables
9:45 AM – 10:45 AM GENERAL SESSION: BURNING ISSUE #2: Loading Up for Breakfast As more commuters return to the office, the breakfast business continues to rise and shine at restaurants. With consumers typically rushed at breakfast time, it’s no wonder that quick-service restaurants and grab-andgo c-store items accounted for more than 80% of total restaurant morning meals pre-pandemic, according to NPD. Recapturing a strong breakfast business requires great food and outstanding service, but it’s important to conduct a cost-benefit analysis to make sure investing in the morning daypart makes sense for your brand and your customer base.
Moderator: Jessica Williams, Founder CEO, Food Forward Thinking LLC Speakers:
For additional information, contact NAG Executive Director John Lofstock at jlofstock@wtwhmedia.com.
• • •
Jerome Hunsinger, Fresh Food Marketing Brand Manager, Wawa, Inc. Brian Scantland, Vice President, Fresh Food Operations and Business Planning & Analytics, Thorntons Tony Sparks, Head of Customer Wow!, Curby’s Express Market
10:45 AM – 11:00 AM 11:00 AM – 12:30 PM 12:30 PM – 1:30 PM 1:00 PM – 5:00 PM 1:30 PM – 6:30 PM 6:30 PM – 9:00 PM 9:00 PM – 12:00 AM
Break/Visit Sponsor Tables Information Exchanges Part 1 Lunch Free Time/YEO Networking NAG Retail Store Tours Dinner on Your Own to Explore La Jolla NAG Hospitality Suite
TUESDAY, MARCH 29 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: Driving Targeted Business Outcomes Learn from leading convenience and fuel retailers about their approach to creating loyal customer behavior and the investments that drive targeted business outcomes. NAG has partnered with Stuzo to survey convenience store chains and convenience store customers to find out what is driving sales at convenience stores. Topics covered include: • Loyalty, Payment Systems and Cross-Channel Customer Experience Campaigns • Onsite and Offsite Engagement • CPG-Funded Offers • Security and Privacy
Moderators: John Lofstock, Executive Director, The National Advisory Group (NAG) and Steve O’Toole, Vice President of Sales and Business Development, Stuzo
Speakers: • • •
Sorin Hilgen, Group Chief Digital Officer and Chief Information Officer, EG Group Rachel Puepke, Vice President of Marketing, CEFCO Ieva Grimm, Chief Operating Officer, Jim Dandy Stores
9:00 AM – 9:15 AM
NAG 2022 at the beautiful HILTON TORREY PINES La Jolla, California
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!
Break/Visit Sponsor Tables
9:15 AM – 10:15 AM GENERAL SESSION: BURNING ISSUE #4: Lessons from COVID: How the Industry Is Recovering from a Pandemic The impacts of the COVID-19 pandemic on the retail sector and the nation's supply chains are still unfolding. Retail has experienced massive labor shortages, supply disruptions and price increases. It's impossible to predict the next pandemic, but retailers have learned quite a few lessons on how to deal with the next catastrophe. Hear from three convenience store retailers that embraced the unique challenges of the COVID pandemic, and learn about the leadership and stability they provided to guide their companies through those difficult days.
Moderator: Erin Del Conte, Executive Editor, CStore Decisions Speakers: • • •
Derek Gaskins, Chief Marketing Officer, Yesway Colin Dornish, Director of Operations, Coen Oil Co. Brian Unrue, Director of Operations, Clark’s Pump-n-Shop
10:15 AM – 10:30 AM Break/Visit Sponsor Tables 10:30 AM – 12:00 PM Information Exchanges Part 2 1) The Rise of Electric Vehicles: What This Means for Convenience Stores 2) HR: Unleashing the Power of Mobile Apps for Staffing Moderator: Laura Varn, Vice President, People & Culture and Communications, Parkland USA 3) What's Next for Tobacco, CBD and Cannabis 4) Foodservice: How to Cut the Partnership on Delivery Moderator: Brad Chivington, Senior Vice President, High's of Baltimore 5) How to Build a Private Label Business 6) The Business of Coffee: Is Bean to Cup for You? Moderator: Joy Almekies, Senior Director of Food Services at Global Partners/Alltown 7) Cryptocurrency and Bitcoin: What C-Stores Need to Know
12:00 PM – 1:00 PM
Lunch
1:15 PM – 2:15 PM GENERAL SESSION: BURNING ISSUE #5: Human Resources: Staffing, Recruiting and Retaining Personnel in a Labor Shortage A labor shortage exists, and it’s going to get worse before it gets better. The reality that it coincides with a growing skills gap makes for a very challenging time for retail executives and hiring managers. Experts recommend that HR leaders look to and build relationships with universities, recruiters and search firms, allow current staff to take part in external professional activities to help attract new talent, and look for potential employees on job boards and other social media outlets. Hear how top quartile chains are winning the labor battle.
Moderator: Jayson Council, Associate Faculty, Columbia University Speakers: • • •
Alex Olympidis, President of Operations, Family Express Corp. Peter Rasmussen, Director of Operations, Neon Marketplace Laura Varn, Vice President, People & Culture and Communications, Parkland USA
2:15 PM – 2:45 PM
Break/Visit Sponsor Tables
2:45 PM – 4:00 PM YEO BREAKOUT SESSION: Understanding the Future of Retail Payment Systems Online shopping has become easier through mobile and digital payments, but retailers are slow to see the benefits in brick-and-mortar stores. How can c-stores join the consumer demand for frictionless payment? In this session, experts on payments will discuss where digital payments are going and how the convenience industry can abandon cards for digital currencies.
Moderator: Jeremie Myhren, Chief Information Officer, Road Ranger Speakers: •
Gray Taylor, Executive Director, Conexxus
5:30 PM – 6:30 PM 6:30 PM – 9:00 PM 9:00 PM – 12:00 AM
NAG Networking Reception Dinner & Awards Ceremony NAG Hospitality Suite
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. 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@wtwhmedia.com.
WEDNESDAY, MARCH 30 7:30 AM – 12:00 PM Registration/Info Desk Open 8:00 AM – 9:00 AM WORKING BREAKFAST: NAG Custom Research: Expanding the Evening Daypart? The evening daypart has been elusive to convenience retailers seeking to sell dinner meals to consumers. While sites are busy with customers during “evening dinner prep” drive time, consumers do not seem to purchase dinner meals from convenience stores. Utilizing custom research fielded for the NAG audience, we will explore consumer needs and desired interaction with convenience locations for food and grocery products. Our retailer panel will then explore various data points, uncovering how they are adapting or plan to adapt to customer expectations.
10:30 AM – 11:30 AM IDEAS BOOT CAMP Best practices and a conference wrap-up with John Lofstock, Executive Director, NAG; Brad Chivington, Senior Vice President, High's of Baltimore; Joy Almekies, Senior Director of Food Services at Global Partners/Alltown.
Moderator: John Lofstock, Executive Director, NAG Speakers: • •
Brad Chivington, Senior Vice President, High’s of Baltimore Joy Almekies, Senior Director of Food Services, Global Partners/Alltown
11:45 AM 12:00 PM
Moderator: John Lofstock, Executive Director, NAG Speakers: • •
Gaurang Maniar, Executive Director, Marketing at Dash-In Joy Almekies, Senior Director of Food Services, Global Partners/Alltown
9:00 AM – 10:15 AM GENERAL SESSION: BURNING ISSUE #6: How to Build Customer Loyalty Through Engagement Convenience store loyalty programs are evolving, and they can present a treasure trove of information. Plus, new subscription-based models can help chains grow repeated sales from a captive audience. But as companies gather information on their customers, they must also be mindful of emerging data privacy laws. Learn how leading c-store chains are growing sales through loyalty engagement, while carefully navigating privacy regulations.
Moderator: John Lofstock, Executive Director, NAG Speakers: • •
Patrick Raycroft, Associate Director, W. Capra Consulting Group Shelley Coleman, Category and Merchandising Manager, Stinker Stores
10:15 AM – 10:30 AM Break/Visit Sponsor Tables
HOW TO REGISTER
Go to: www.nagconvenience.com. You will receive a confirmation email after completion.
Conference Wrap-Up and Takeaways Departures
Foodservice | Hot Dispensed
BREWING UP
Hot Dispensed
Sales As retailers look to grow hot dispensed beverage sales in 2022, sprucing up the coffee bar offering can help lure coffee and tea customers back. Howard Riell • Contributing Editor
Having weathered the dip in sales caused by the pandemic and concomitant withering of the morning daypart, hot dispensed beverages are staging a comeback.
The best-selling hot beverage items tend to be single-origin coffees, flavored coffees and syrups with a natural element such as honey. Interestingly, stores are seeing stronger sales behind decaffeinated varieties, suggesting a possible consumer movement away from caffeine, and/or that more consumers are choosing to consume hot beverages later in the day. Don Burke, senior vice president for Management Science Associates in Pittsburgh, has some unique advice. He believes that sales were down, in part, because consumers were less than fully confident when buying a beverage with self-service cups, lids and condiments 40
CSTORE DECISIONS •
February 2022
cstoredecisions.com
Foodservice | Hot Dispensed
fast facts: and self-dispensing during the first few waves of the COVID-19 pandemic. He recommended the more hands-on approach of Starbucks, which saw sales rise during the same timeframe. TWO TYPES OF CONSUMERS
There are two types of consumers for hot dispensed beverages, suggested Oliver Herting, category manager and buyer for FastBreak Convenience Stores. “The traditional one wants a basic coffee quickly and to maybe add some creamer,” he said, “and the other wants customization that only Starbucks and Dutch Bros. can offer.” FastBreak’s approach is to first satisfy its traditional loyal customers at its 33 c-stores in rural eastern and southern Oregon and Northern California. “They get their basic, quick coffee on a regular basis. (We) draw some of the Starbucks/Dutch Bros. customers to our stores by offering some customization, quality coffee with a bean-to-cup machine, convenience and better value,” Herting said. “Marketing, limited-time offers, flavors and ways to customize — sweeten — their coffee are crucial to get that customer into the store when they fill up on gas and/or get their attention by having a good-looking coffee corner.”
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• From bundling hot drinks with breakfast to offering spices and non-dairy creamers, retailers can make their coffee bar more enticing for customers. • Customers should be able to see the coffee bar when they enter the store, with a clear path to the area, to ensure the segment is a destination for shoppers.
• Offer dark, milk and spiced hot chocolates in a hot beverage dispenser with choice of marshmallows or flavored creamer. • Provide hot beverages in two or three sizes in branded, compostable cups with lids. • Include an app-based loyalty/frequency program — for example, “tenth cup on us.” • Implement order-ahead, with pickup service similar to Starbucks. • Sell ‘home sizes’ of whole bean/ground coffee as a retail upsell. • If traffic warrants, develop a barista program with the coffee supplier to supply equipment and training. • Bundle coffee, tea and hot chocolate sales with breakfast offerings.
RIPE FOR UPSELLING
PLACEMENT AND SIGNAGE
“C-stores are ripe for upselling specialty hot beverages,” said veteran foodservice consultant Arlene Spiegel, Foodservice Consultants Society International (FCSI), and president of Arlene Spiegel & Associates in New York City. “Customer counts are up, and it’s the perfect time to establish your brand as having premium products through beverage offerings.” Spiegel recommended a few simple steps: • Make the hot beverage section of the store visible, accessible and easy to make quick decisions in through clear signage and layout. “Make the customer journey special, easy and memorable,” she said. • Showcase the origins of the coffee beans, and describe the roast and flavor profiles. Display a sign on each dispenser. Provide dairy and nondairy creamers, ground cinnamon and syrups. • Showcase the blends of the tea selections, and offer fresh lemon wedges and ground spice.
“Merchandising for hot dispensed starts with the category’s placement in the store,” suggested Steven Montgomery, president of b2b Solutions LLC in Lake Forest, Ill. “Ideally, a customer should be able to see the hot dispensed offer two steps inside the store. The path from the front door should be easily traversed. The same is true from (the station) back to the cash register.” The signage, including traditional or electronic menu board, should be highly visible. Information should include not only the hot dispensed items but all the offers, such as a coffee/pastry combo. The pastry offer should contain the same information. “The condiment area should be close to but separate from the brewing area,” Montgomery added. “The layout should not require customers to backtrack for condiments or lids.” His company recommends its “Five C” layout for the customer’s path: cup, cover/lid, coffee, condiments, cashier. CSD
CSTORE DECISIONS •
February 2022
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Foodservice | Hispanic Foods
GROWING
Hispanic
Food Sales
Hispanic menu offerings are helping c-stores add the customization, fresh ingredients and portability that appeal to c-store shoppers. Marilyn Odesser-Torpey • Associate Editor
More convenience stores are introducing Hispanic menu items to tempt customers across demographics. With the portability of burritos and taquitos, and the customizability of nachos and tacos, Hispanic foods are the “ideal fit” for convenience customers, according to Ann Golladay, associate director at Datassential research firm. Hispanic or Hispanic-inspired specialties are key to many American convenience store foodservice programs, especially those frequented by Latinx populations and mainstream millennials, Golladay said.
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February 2022
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February 2022 • CSTORE DECISIONS
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Foodservice | Hispanic Foods
Freshly prepared Hispanic foods are both popular among consumers and profitable for retailers.
In a February Convenience Stores Keynote Report from Datassential, 74% of retailers said they offer burritos, 64% carried taquitos and/or tornados/roller burritos/“stix” and 56% featured nachos on their menus. The report also showed that over the past year, sales of burritos in the morning daypart have increased 46%. Sales of taquitos/roller burritos/“stix” have risen 41%. And, the report noted, opportunities for growth in the Hispanic category are significant. Eightyone percent of consumers polled said they liked tacos, while only 24% of convenience stores offer them. Seventy-nine percent of consumers said they liked nachos, while only 56% of stores include them on their menus. ON THE MENU
Kwik Stop Convenience Stores, which has 27 locations in Nebraska and Colorado, does a brisk business with its Mexi-Fresh program in the four
fast facts: • Mainstream millennials favor Hispanic foods.
• Growth opportunities in the category are great. • Made-to-order significantly reduces waste.
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CSTORE DECISIONS •
February 2022
stores in which it is offered, said M. David May, director of food services for Kwik Stop. One of the stores serves a largely Hispanic population, but the items sell very well in the three other locations, as well. The Hispanic menu at Kwik Stop, which accounts for 20% of total foodservice sales, features five varieties of tacos, six types of burritos, nachos and chicken, and beef taco salads. Potato rounds, called pesos, are topped with a propriety seasoning blend and are available as a side dish or crowned with beef, beans and queso as entrée-size mega and grande pesos. Most popular are the crispy and soft-shell tacos and grande burritos stuffed with everything from beef and beans to lettuce, onions and sour cream. The popular Mexi-Combo value meals pair the tacos and burritos with a small serving of pesos and a 24-ounce drink, May noted, and a Quick Six meal includes six tacos and two medium pesos. All items are prepared to order from housemade ingredients such as salsa and refried beans. “Because it’s all made to order, the program generates very little waste,” May stated. Customers go down the line and choose their ingredients, watching the assembly through a plexiglass shield. Cost of entry into the MexiFresh program is low because it requires only the purchase of a flat top to warm the tortillas, a steam table and a cold case, he explained. “Our gross profit margin on the program is 65%,” May said. CSD
cstoredecisions.com
Foodservice | Chef’s Corner
Building Foodservice
Success
Global Partners’ Dora Ocampo talks foodservice, from key equipment considerations to developing a breakfast sandwich program.
Erin Del Conte • Executive Editor
CStore Decisions caught up with Dora Ocampo, senior foodservice category manager for Waltham, Mass.-based Global Partners, to learn more about her approach to the foodservice category. Global Partners operates more than 300 stores across New England and New York with many different banners (Alltown, Xtramart, Jiffy Mart, Honey Farms, etc.). Of those 300-plus stores, 75% have some form of foodservice, whether made-to-order deli operations, franchises or commissary sandwiches. CStore Decisions (CSD): How long have you been the senior foodservice category manager for Global Partners, and what attracted you to the position? Dora Ocampo (DO): I’ve been a senior category manager for a little over two years but have been with Global Partners for almost seven years. During my time at Global, I felt the commissary foodservice category had an immense opportunity for growth and innovation. I was especially attracted to the position because I'm often the target consumer for the products we sell, which made procurement of products that much more exciting.
Dora Ocampo 48
CSTORE DECISIONS •
February 2022
CSD: Are you adding anything new to the foodservice offering, such as limited-time offers, etc., in early 2022? DO: I have been working on a proprietary breakfast sandwich program that we will launch in 2022. We’ve developed five different breakfast sandwich options to appeal to a variety of tastes. These sandwiches are intended to pair with our delicious bean-to-cup coffee that we successfully rolled out across the chain in 2021, so that we can become a destination for a great breakfast. CSD: What are some of the things you look for in convenience store foodservice equipment? DO: First and foremost, I look for performance. I ask myself (and the equipment experts), ‘Is this piece of equipment going to keep my products at a foodsafe temperature?’ Next, I look for equipment that is aesthetically pleasing, inviting and has opportunities for marketing messaging.
I’ve also been looking at the overall sustainability of equipment and opting for equipment with environmentally friendly call-outs, like environmentally friendly refrigerants and choosing LED lighting options. CSD: What do you wish you had known when you were first getting started in c-store foodservice? DO: There are a couple of things that I’ve learned along the way that would've been helpful to know when I first got started in this industry. One is that there isn't a cookie-cutter formula that will work everywhere. An Italian sandwich can be my bestseller almost everywhere, but if this one store or one geotype can't give it away, I need to be agile and pivot. I've also learned the importance of collaborating with cross-functional departments, such as operations and marketing. With their support and input, we've executed some great programs at Global. CSD
Category Management | Candy
CULTIVATING CANDY SALES Following strong candy sales in 2021, retailers prepare to capitalize on the momentum of the category in 2022. Howard Riell • Contributing Editor
The chocolate and non-chocolate candy categories are both expected to perform well in 2022, fueled by a desire for value, new product launches, a return to pre-pandemic shopping patterns and America’s enduring sweet tooth.
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Category Management | Candy
Chocolate candy should continue to increase market share, according to Rockville, Md.-based Marketresearch.com, with bite-sized and dark chocolates leading the way. Dark chocolate candies align with the current healthy-eating trend, and consumers are reaching for it because of its reported health benefits. Amid concerns over obesity and diabetes, more consumers are also reaching for sugar-free and low-calorie candies. IRI numbers for the 52 weeks ending Dec. 26, 2021, for the convenience store channel showed chocolate candy at $3.17 billion, up 8.9%. Box, bag and bar products under 3.5 ounces recorded sales of $2.61 billion, up 7.9%. The same products in packages above 3.5 ounces experienced sales of $441 million, up 15%. Sugar-free chocolate candy sales rolled in at $665,737, up 56.9%. On the non-chocolate side, c-store candy sales were $2.64 billion, a rise of 20.6% for the period. Sales of gum totaled $839 million, up 5.8%. Breath freshener sales were $177 million, up 6.2%. Non-chocolate chewy candy recorded sales of $1.88 billion, a 19.6% rise over the previous year. Sugar-free diet candy totaled $776,486, up 16% for the 52-week period. After some challenging sales months mid-pandemic, gum sales saw a rebound at the end of the year. With sales topping $701 million, sugarless gum saw a 6.6% increase, while regular gum, with sales of $139 million, saw a 1.5% uptick, for the 52 weeks ending Dec. 26, 2021, per IRI.
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CSTORE DECISIONS •
February 2022
BEST VALUE
Retailers are putting their best foot forward in 2022, catering to customer preferences in the candy category. Sam Odeh, president of Power Buying Dealers (PBD USA) in Elmhurst, Ill., said his stores, which include 25 owned and franchised locations in Illinois, Georgia and Florida, now feature the majority of candy in peg bags. “It’s the best value, for both consumers on quantity/value and for us retailers on margin,” he said. PBD USA’s executives see sour and hard candies as leaders given today’s market conditions. Combinations of chocolate and snacks have proven popular, Odeh pointed out. “Hershey has done a few, as has Nestlé, especially with chocolate pretzels,” he said. The price point that works best, Odeh added, is $2.99, with promotions offering two for $5 having proven most effective. He recommended bundling candy with fountain drinks or coffee. Candy buyer Heather Key of the Army & Air Force Exchange Service (AAFES), which operates more than 470 convenience stores, said that her convenience stores continue to see non-chocolate becoming a larger piece of the confection pie. “Fruity confections, gummy, chewy candy (were) nearly 40% of everyday candy unit sales in 2021, whereas in years past it has been a smaller percent, closer to 30-32%,” Key said. The most notable trend in the confection business in 2021 was the growth of natural,
cstoredecisions.com
Mentos Gum Paperboard_Ad_CStore_20211215_FA_OL.pdf
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Category Management | Candy
Candy Sales Climb in Q4
Candy sales soared during the Oct. 1, 2021, through Dec. 31, 2021, time period compared to the same time period one year prior. Gum rebounded with a 36.7% sales uptick over its Q4 performance in 2020, while total candy, gum and mints sales rose 29.4%.
February 2022 NRS Insights — Independent, Small-Format Candy, Gum & Mint Trends $ % Chg
$ Shr of category
Chg
Unit % chg
Units per store per week chg
% of times purchased only within category
Top purchase #1
Top purchase #2
Top purchase #3
Confection
31.9%
47.2
0.8
22.5%
11.0
19.8%
Soft Drinks
Fruit Drinks
Potato Chips
Chocolate
24.4%
38.8
-1.6
18.2%
7.0
18.4%
Soft Drinks
Potato Chips
Fruit Drinks
Gum
36.7%
10.9
0.6
27.4%
3.1
27.2%
Soft Drinks
Cigarettes
Fruit Drinks
Mints
35.3%
2.3
0.1
30.2%
0.8
25.1%
Soft Drinks
Cigarettes
Energy Beverages
Snack Mixes
46.5%
0.8
0.1
41.6%
0.4
11.4%
Soft Drinks
Potato Chips
Fruit Drinks
Total Candy, Gum, & Mints
29.4%
100.0
0.0
21.6%
15.9
Soft Drinks
Fruit Drinks
Potato Chips
Category
Source: National Retail Solutions (NRS) scan data of 10,820 stores selling candy, gum and mints. All change measures are same-store sales (6,800 stores) 10/1/21 - 12/31/21 vs. 10/1/20 - 12/31/20.
organic and low-sugar items, Key suggested, achieving sales growth of more than 100% vs. 2020. MORE NORMAL
The indications going forward are good. Don Burke, senior vice president for Management Science Associates Inc. (MSA) in Pittsburgh, cited InfoMetrics data indicating that the candy category has done very well over the past year. “The category grew nearly 5% in unit volume and, impressively, over 12% in dollars due not only to the growth in sales but also due to the benefit of increased pricing,” Burke noted. “Pandemic concerns that changed shopping and commuting activities over this past year had a significant effect on disrupting the typical candy-consumption patterns.” As pandemic fears lessened in early fall before the omicron surge, Halloween trick-or-treaters returned in numbers approaching a more normal year, Burke said. MSA executives expect consumer purchase patterns to return to a more normal pattern in 2022. “Retailers may need to adjust their product mix, slightly adjusting their selection to favor smaller package sizes,” Burke said. Contributing to this likely trend will be the 54
CSTORE DECISIONS •
February 2022
impact of inflation, which will also cause shoppers to look for lower-priced selections. As pandemic fears abate and consumers become more comfortable back in their typical daily routine, they may be more likely to try new products, which could present a stronger opportunity for new product introductions. Value will always be important. “The one tactic that has gone from a ‘needed to win’ to a ‘needed to play’ is two-fer pricing,” suggested Steven Montgomery, president of b2b Solutions LLC in Lake Forest, Ill. “Any c-store retailer that is not offering discounted pricing when you buy two candy (products) is at a pricing disadvantage to its competitors.” CSD
fast facts: • I nflation could drive value shopping in the candy segment. •G um sales rebounded at c-stores, up 6.6% for the 52 weeks ending Dec. 26, 2021, per IRI. •H ealth-conscious customers are reaching for sugar-free chocolate and non-chocolate candy.
cstoredecisions.com
Category Management | OTPs
OTPs
Still on Top A strong end to 2021 bodes well for other tobacco products, especially vape and reduced risk. Anne Baye Ericksen • Contributing Editor
Retailers, economists and parents worried the clogged supply
chain would depress the holiday spirit by limiting inventories last year, but other tobacco products (OTP) category sales remained strong through the end of 2021. And as convenience store tobacco/nicotine category managers will attest, supply issues have existed since the early days of the COVID-19 pandemic. Cigar distribution, for example, has been strapped for two years. Despite these challenges, cigar sales held steady, or at least benefited from price increases. 56
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Category Management | OTPs
According to Nielsen data from all retail channels, reported by Goldman Sachs, dollar sales for two-year stack trends were up for each period of two, four, 12 and 52 weeks ending Jan. 1, 2022. As noted, though, prices have risen by at least 12% over each time frame. By brand, price jumps varied greatly, from less than 2% for Swisher and to nearly 63% for Acid, also produced by Swisher International Inc. Supply issues, however, could finally be settling. “Cigars fared well this year, even with all the supply chain issues impacting the major cigar suppliers produced in the Dominican. Cigar business grew at +30% improvement to (last year),” said Jon Manuyag, director of marketing for Plaid Pantry. The Beaverton, Ore.-based retailer owns and operates 107 stores in the Pacific Northwest. “We are excited to see the continuous supply chain increase as manufacturers improve production, namely in the cigar categories. Cigar production and product availability continues to improve,” said Tim Greene, category director, GM and Tobacco for Smoker Friendly. Its parent company, The Cigarette Store Corp., based in Boulder, Colo., operates more than 160 retail 58
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stores across seven states, including Gasamat convenience stores in addition to tobacco outlets and cigar lounges. VAPE RISES
“The biggest surprise (was) the vapor category as we navigated the unknown following PreMarket Tobacco Applications,” Greene added. On the whole, Nielsen data reveals vape finished out 2021 with jumps in dollar sales, unit volume and price across two, four, 12 and 52 weeks. As has been the case for much of last year, Vuse keeps grabbing market and dollar share, with more than 36%, 39%, 47% and 57% growth, respectively, for each time period. Leading disposable e-cigarette brands Puff Bar, Bidi Stick and Blu saw declines in both dollar and unit sales across the time periods. “Our vape sales took a little bit of a punch in the mouth in 2021 due to the added Oregon vape tax in the beginning of the year, impacting unit volume in our market,” said Manuyag. “Customers that are overwhelmed with the sticker shock of the new 2021 vape tax imposed in Oregon have started to migrate back to smoking combustible and trying modern nicotine.”
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Category Management | OTPs
New Year Numbers
A closer look at reduced-risk oral nicotine pouches for the new year.
Product
Dollar sales ending Jan. 1
Unit sales ending Jan. 1
2 wks
4 wks
12 wks
52 wks
2 wks
4 wks
12 wks
52 wks
ZYN
39.2%
40.0%
38.9%
44.2%
33.9%
34.9%
37.4%
43.7%
Velo
50.6%
17.9%
60.4%
44.9%
71.9%
44.2%
89.6%
99.4%
On!
103.0%
103.1%
113.9%
195.8%
250.7%
245.5%
273.2%
300.2%
Source: Nielsen IQ xAOC including Convenience Stores, All-Channel Summary Data; Americas Tobacco. Nielsen Data through Jan. 1, 2022, as reported in “Total Nicotine Volume Continue to be Pressured, but Pricing Holds Strong,” Goldman Sachs, Jan. 11, 2022
POUCH POWER
Indeed, the oral nicotine section, often classified as reduced risk, remains the unabated category growth leader. Nielsen reports ZYN and Velo increased dollar sales by double digits for each period. On! outpaced the others by more than double, with an impressive 103% increase for two and four weeks, almost 114% for 12 weeks, and more than 195% for 52 weeks. “We continue to see dual use increase from our smokers and smokeless users as they turn to nicotine pouches when they can’t smoke or use traditional smokeless products,” said Greene. “We’re seeing improved take rates on customers purchasing bundle deals and even full roll sales in this segment. Also, we are heavily looking into CBD hemp sticks and CBD-infused pouches,” said Manuyag. “This could be an emerging segment for us in the future, especially with all the discussion around regulation with flavored vape and mentholflavored cigarettes.” Of course, the new year started with new regulations for tobacco/nicotine products. Oregon joined other states in prohibiting shipments of inhalant delivery systems directly to consumers. More cities, such as Bloomington, Minn., implemented bans on flavored tobacco/nicotine products. Moving forward this year, Colorado legislators have promised to reintroduce bills for statewide bans. “As it seems with every year,” said Greene, “2022’s biggest concern continues to be regulation at the local and state levels. In addition, we continue to wait for post-PMTA regulations and what effect that has on product offerings.” CSD 60
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fast facts: • On! nicotine pouches led dollar and unit sales. • Vuse keeps grabbing vape market and dollar share. • Colorado legislators promise to reintroduce bills for statewide flavor bans.
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Technology | Mobile Ordering & Delivery
WHAT DO DELIVERY SERVICES REALLY DELIVER? How do delivery services fit, or not, in a convenience store distribution strategy? Richard Crone • Crone Consulting LLC
Should your convenience store embrace third-party, aggregated delivery services? As the pandemic stretches on, it’s time to re-examine the pros, cons, risks and costs. Could the pros of paying others for delivery services, ostensibly justified in net-new incremental sales, be far outweighed by the cons of unknowingly donating your SKU-level sales data to thirdparty intermediaries that use it to their own gain? Understanding how they use this data is paramount to updating your own distribution strategy and reducing the risk and cost of supporting these services, if at all. As with home buying, the top three differentiators for convenience stores are timing purchase and traffic patterns with their ‘location, location, location’ (which is the alpha and omega for defining any distribution strategy). For the 81% of convenience stores supporting it, fueling is the driveway to their location advantage, 62
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putting potential customers less than 15 to 45 feet of a door-swing to their convenience store. A convenience store’s location advantage is further bolstered by the fact that their biggest competitors, such as restaurants, grocery and dollar stores, don’t typically offer fuel. Prior to the pandemic, the average consumer fueled their vehicle about once per week. Convenience stores have a long history of monetizing this touch point, with The National Association of Convenience Stores (NACS) reporting that 48% who fuel their vehicle enter the convenience store, and of those who enter the store, 53% buy at least one beverage. NACS also reported that “cumulatively, the U.S. convenience store industry alone serves nearly 165 million customers per day, and 58 billion customers every year.” Most convenience stores make more money on the slotting, placement and trade promotion revenues for the products they stock than they do in EBITDA, all premised on door-swings for their location.
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Third-party aggregating delivery services also get paid slotting, placement and trade promotion fees for the ads and offers activated in their apps. But because these apps are only accessed by known users with pre-authenticated payment credentials, they proactively command higher promotional rates because they also track the effectiveness of online to offline intent and charge for known purchase attribution. If location is so important to convenience store operators, why would they help third-party aggregators obviate their location advantage by putting them on equal standing with competitors offering the same, or more likely, deeper merchandising mix and SKUs? Especially when you consider that the third-party aggregating delivery services are preemptively also gaining slotting, placement and trade promotion fees from advertisers, consumer packaged goods (CPGs) and product manufacturers based on their Monetizable Daily Active Users (MDAU). INTEGRATING ORDER-AHEAD
C-stores can generate MDAU, too, by leveraging the fuel-SKU in their merchandising mix to drive store sales before and during the customer’s transaction at the pump, creating broader “self-service” in their own branded apps. You can stoke the MDAU potential of your location by adding order-ahead capabilities in your branded app, not just adding incremental store sales but using the data to increase your own slotting, placement and trade promotion revenue. Because the fueling customer is thinking about buying gas, and potentially other items, as they are driving, it’s important to enable voice-activated ordering in the app to maximize this potential. It was the lack of order-ahead capabilities in the fueling apps that forced convenience stores — as with restaurants, grocers and others — to turn in frustration to third-party delivery platforms such as Instacart, DoorDash, Grubhub, etc. Now is the time for franchisees, their trade associations and representing bodies such as NACS, American Petroleum and Convenience Store Association, Petroleum Marketers Association of America, Energy Marketers of America, etc., to collectively lobby the big petroleum companies to integrate order-ahead capabilities sourced from their
locally controlled convenience store inventory within the fueling app. Many c-stores are looking to increase the effectiveness of their limited staffing by considering implementation of autonomous checkout. But this is not an allor-nothing option. Before upgrading the whole store, equip the order-ahead pickup points with autonomous check-in and checkout using your app. In this way, the order-ahead pickup point can also be stocked with products known through SKU-level predictive analytics to increase add-on sales. The pickup point for orderahead is the easiest to install, minimum viable product (MVP) for proving the business case for autonomous checkout before converting an entire store. Ultimately, convenience stores that commit to inapp order-ahead and autonomous check-in and checkout using their own branded app will be the only ones protecting and enhancing their location advantage, avoiding the fatal distraction of delivering their SKUlevel data to interloping third-party intermediaries. Richard Crone is the CEO of Crone Consulting LLC, an independent advisory specializing in mobile strategy, autonomous check-in/checkout and personalized payments. Follow him on Linkedin.com/in/richardcrone/.
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Technology | Loyalty
THE EVOLUTION OF LOYALTY:
RATIONAL VS. EMOTIONAL Discounting is a race to the bottom and does not cultivate the brand love needed to create long-lasting customer loyalty. Kevin Rice • Hathway+Bounteous
In 1954, American psychologist James Olds and Canadian neuroscientist Peter Milner conducted an experiment to explore the psychological basis of rewards. They found that it’s not actually the rewards that motivate action, but rather it’s the anticipation of a reward, or the stress of desire that catalyzes action. Since then, as a result of predictability in most loyalty programs, brands have trained customers to wait for big sales. This discountcentric approach not only incentivizes the wrong behavior — and cannibalizes revenues — but also misses the bigger opportunity: deepening customer relationships. “The trap for c-stores is that many chains have loyalty programs that are not loyalty, but rather frequency rewards,” noted John Lofstock, editor-in-chief of CStore Decisions, in a recent article. “A true loyalty program recognizes individual purchase patterns and behaviors, and targets opportunities to improve value to the customer.” 64
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RATIONAL LOYALTY: TRANSACTIONS FIRST
This transaction-based form of loyalty is categorized as “rational loyalty,” where consumers make purchases due to logical considerations. With this type of loyalty, customers value the program benefits that play into extrinsic motivators — or external incentives — like rewards and discounts. An example would be the classic punch card with a “buy nine cups of coffee, get one free” type of offer. Of course, it’s no surprise that shoppers list monetary-based benefits as the ones that they care about most, but it’s also important
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Technology | Loyalty
to note that customers care almost as much about benefits that make them feel special and recognized. These more intrinsic motivators are what lead to the other category of loyalty — emotional loyalty. EMOTIONAL LOYALTY: A DEEPER CONNECTION
Emotional loyalty taps into the science of behavioral economics, moving beyond a transactional relationship to connect on deeper motivational factors. Brands earn customers’ emotional loyalty by making individuals feel seen, valued and understood. This form of loyalty creates a bond between the brand and the customer that results in customer advocacy or “brand love.” It lives beyond
a transaction and is cultivated through authentic, thoughtful moments. When a brand is able to accomplish these moments, it really ‘wows’ the customer — and it’s that sentiment that is amplified in stories that are shared with their friends, family, and in some cases, the world through platforms like social media. The Grants Pass, Ore.-based drive-through coffee chain Dutch Bros. Coffee brings emotional loyalty to life by focusing on “interactions over transactions.” As the 500-plus-location coffee shop digitized its rewards program and consumer relationship, it 66
CSTORE DECISIONS •
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found the key to success was keeping its friendly “broista” culture as a focus. In partnership with Hathway, Dutch Bros. amplified the instant human connection by having the customer’s name front and center on the app. The app also allows customers to show off their personality by featuring their favorite digital “stickers.” Broistas can then give customers additional digital stickers and celebrate customer milestones, creating moments that customers share with others, enhancing the human connection and building brand love. POWERING EMOTIONAL LOYALTY THROUGH DATA
To inform these strategies with actionable data, brands are delivering more customer satisfaction and sentiment surveys than ever before through scores like the Customer Loyalty Index. Algorithms are being used to turn responses into quantifiable data that help brands see the total value they’re delivering to customers both in-store and online. More progressive brands are adding more emotional components to their program by acknowledging members, not just for purchases, but also for their engagement with the brand. Focusing on emotional loyalty versus rational loyalty puts convenience retailers in a better position to avoid creating discount-based rewards programs that cannibalize revenue from purchases customers would have otherwise made at full price. Discounting is a race to the bottom and does not cultivate the brand love needed to create longlasting customer loyalty. Download the free e-book “How the Digital Experience Drives Customer Loyalty” to learn more about how you can adapt your current program to drive higher engagement, heightened personalization, and craft a customized experience for your customers at bit.ly/CStoreLoyalty. Kevin Rice is the executive vice president at Hathway+Bounteous, a digital growth partner for the restaurant and c-store industries that helps brands like Dash In, Domino’s and Raising Cane’s drive incremental revenue through digital experiences. Hathway joined Bounteous in November 2021.
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CStore Decisions is
proud to launch
Convenience store operators are generating strong revenue by selling car washes. Location, space, equipment and promotions are just some of the factors that drive car wash success, and when the fit is right, car washes can be extremely profitable. In 2020, annual car wash sales exceeded $48 billion, and with 65% of all car washes attached to convenience stores, there is a significant opportunity to drive new sales. To find the winning car wash designs and strategies, CStore Decisions is proud to launch Top Ranked Car Washes. Top Ranked Car Washes is intended to highlight innovations in car wash operations at convenience stores across the country. Top Ranked is open to all car wash programs. Our aim is to call attention to operational excellence. Car wash entries will be ranked by an independent panel of judges and the rankings will reflect the judges’ scoring of submitted entries.
Submit your entry at cstoredecisions.com/top-ranked-car-wash
CStoreDecisions
®
Operations | Omnichannel Marketing and Loyalty
LOYALTY PROGRAMS
GET PERSONAL As consumers demand more digital solutions, retailers are learning that the customer relationship is still about personalization. Thomas Mulloy • Senior Editor
It’s no secret that the number of consumers using omnichannel digital tools in their purchasing decisions is growing. C-stores today are responding, offering order-ahead and delivery through mobile apps and websites, and growing loyalty programs beyond punch or swipe cards to include a mobile interface that often features payment options as well as rewards tracking. There’s little doubt that those businesses not using digital means as part of their retail mix will find themselves left behind. 68
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The pandemic has accelerated the digital trend. “The Digital Divide,” a December 2021 report from financial site PYMNTS.com, found that 42% of consumers have used at least one digital purchase aggregator since California-based Anabi Oil recently launched its Rebel Coin mobile app for customers of its the pandemic, and 15% are “multiplatform users,” meaning Rebel stores. The company keyed on simplicity in its rewards system, focusing on frequency with its car wash and beverage rewards as well as fuel discounts tied to purchases. they’ve used three or more. An omnichannel approach to loyalty programs involves engaging customers across different touch points, earns cents off per gallon on the next fuel purchase. such as from the website to the mobile app to inside Rebel Coin also features a frequency reward for the store. beverage purchases as well as for car washes. Upland, Calif.-based Anabi Oil, with more than 300 “We have a car wash club. When you buy six company-owned and franchise stores nationwide, car washes, you get the seventh free. We have the recently launched its Rebel Coin loyalty program and fountain club, we have the coffee club. So if you buy mobile app at its Rebel stores. The program plays to six coffees, your seventh coffee is on us,” said Kwong. consumers’ desire for simplicity. There are no rewards Generating that customer frequency is vital. The points to calculate or to exchange for purchases. Deloitte survey found more than 35% of respondents When a member is close to a free reward item, the said they interact with a program weekly. That app lets the member know. engagement jumped another 35% when it came to “Let’s say, for example, when you buy a fountain interacting with a program on a monthly basis. drink, you would be able to see these rewards in The Deloitte study also noted that seven in 10 retail progress on our app, and you would be able to see loyalty program members engaged more frequently how many more fountain drinks you need to buy in with digital programs. Nearly as many (67%) spent order to get the seventh free,” said Wing San Kwong, more with those retailers. And around half said they senior financial analyst for Anabi Oil. modify what they buy and how much they spend, and Customers want that ease of access to their rewards are more likely to recommend that retailer. progress. According to market tracker Deloitte’s Still, won’t there be problems getting a new 2021 consumer loyalty survey, an overwhelming 80% program and digital tools up and running? of consumers said ease of use is a highly desired “I wouldn’t say problems,” Kwong said. “But we attribute of a retail loyalty program, and 60% want an certainly had different hurdles that we needed to get accessible, enjoyable digital experience. through in order to get the app operational. Because, again, this is our first loyalty app.” LINKING IN-STORE AND FORECOURT Plus, the California-based chain had the added Price discounts and free items tied to purchase challenge of launching the program in different frequency drive the Rebel Coin program. When markets and time zones. The program so far is registering, members automatically receive a five-cent active at Anabi’s 130 Rebel stores in Florida and the discount per gallon for their first five fill-ups. There’s Midwest, with plans for the Las Vegas market next and also a basket offer — spending $25 in store — which more of its stores to become operational soon. cstoredecisions.com
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Operations | Omnichannel Marketing and Loyalty
Casey’s philosophy is to bring digital convenience throughout all of its touch points, including its mobile app, website and in-store screens, extending personalization to guests, loyalty members and even its team members.
MAKE IT PERSONAL
Conversely, Ankeny, Iowa-based Casey’s, operating more than 2,300 stores across 16 Midwestern states, launched its app program a few years ago. Now, the company has moved forward with instilling digital customer convenience throughout the entire business. Casey’s Vice President of Digital Customer Experience Art Sebastian said that personalization is the key. Casey’s wants to anticipate its guests’ needs and add value to every interaction. “We’re looking at our guest journey,” said Sebastian. “How we interact with them to drive awareness, consideration, purchase loyalty and then create efficacy. And then we’re looking at our digital experiences: the website, the mobile app,
fast facts: • Customers want seamless interaction with digital retail tools. • Digitization trends include consumers, employees, suppliers. • Cross-marketing forecourt and inside store pays dividends.
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our loyalty program — essentially, any screen — and thinking through, ‘How do we personalize that for each individual?’” The company recently completed what Sebastian called a three-year digital transformation. Casey’s strategy illustrates how a high-tech approach is being used to elevate the customer experience. “When I talk digital transformation, we’re essentially reshaping how value is created and how we do business,” Sebastian said. “And that comes to life in technology, business models, hiring the right people, setting the foundation, etc.” It’s a holistic approach to elevating the company. Sebastian noted that other retailers looking to embark on a similar effort should understand that it’s a long-term process. There’s a lot of planning and logistics involved — much more than simply setting up a rewards program. “I always (tell other retailers) to lean into people and recruiting talent,” he advised. “Digital transformation’s sort of a longer-term game. It’s not a one-year, ‘Hey, I need to see all the benefit now.’ So they just need to plan for that in terms of financial planning, return on invested capital calculations, etc.” Whatever type of omnichannel marketing and loyalty strategy a retailer adopts, it’s essential that the digital approach leads to a personal touch. CSD
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CStoreDecisions.com is geared toward C-Store retailers, convenience store suppliers, and distributors looking to stay abreast of industry trends, new product offerings and category management best practices. We use the latest media technology, delivering content the way you want it: print issues, digital issues, enewsletters, and videos. Use CStoreDecisions.com to help you strengthen your peer network with social engagement through Twitter, LinkedIn, Facebook, YouTube, Pinterest, and Google+. Browse, bookmark, share and interact with the most relevant industry content and people in the market.
PRODUCTShowcase
Special-Edition Indulgent Series Lighters BIC recently released the new BIC Special Edition Indulgent Series Lighters. This new series is great for consumers with a sweet tooth. From rich brownies to creamy milkshakes, these designs have something for all tastes. The lighters in this series have a suggested retail price of $2.09 per lighter. BIC Maxi Lighters are long-lasting, reliable and 100% qualityinspected.
BIC USA www.us.bic.com
More Flavorful Snack Mix General Mills has introduced a new twist on the staple Traditional Chex Mix with more flavor added in each savory bite with Chex Mix: More Flavor. The snack is available permanently at retailers nationwide. The suggested retail price (SRP) for a 3.75-ounce bag is $2.19. An 8.75-ounce bag has a SRP of $3.37. The 15-ounce bag has a SRP of $4.35, and the 40-ounce bag has a SRP of $6.99.
Cookies and Creme Easter Bunnies Hershey brands are moving right into the 2022 holidays to introduce new treats for Valentine’s Day and Easter, while also bringing back past seasonal favorites. One Easter treat, the Hershey’s Cookies ‘N’ Creme Polka Dot Bunnies, comes in a 4.25-ounce box. From the bunny ears down to the tail, the cookies ‘n’ creme flavor is made with pink, purple and blue cookie pieces.
The Hershey Co. www.thehersheycompany.com
General Mills www.generalmills.com
Hemp-Infused Beverages Cann-Ade’s cannabis-infused beverages feature a hemp-derived formula that promotes overall well-being. Flavored and colored only with organic fruit juice, the Peach, Lemon and Strawberry-Lime varieties include key features such as: 20 milligrams of American-grown, broad-spectrum CBD per bottle; eco-friendly glass bottles and UV-resistant labels to maintain CBD quality; gluten-free, vegan and low-calorie; triple-filtered water and organic fruit juices; DEAapproved third-party lab testing on all products; no preservatives, artificial flavors or colors; and a two-year shelf life.
Cann-Ade www.cann-ade.com 72
CSTORE DECISIONS • February 2022
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PRODUCTShowcase
Toffee Crunch and Ultimate Chocolate Oreos Oreo recently launched two new cookie flavors nationwide — Oreo Ultimate Chocolate and Oreo Toffee Crunch, both with a suggested retail price of $4.29. New Oreo Ultimate Chocolate cookies feature three unique layers of white, milk and dark chocolate creme. The limited-edition cookie will be available while supplies last. Rich and chewy, new Oreo Toffee Crunch cookies feature toffee-flavored creme with sugar crystals for a cookie crunch. This cookie will be a new permanent addition to the Oreo family.
Mondelēz International www.mondelezinternational.com
Hard Soda and Sour Seltzers Bud Light Seltzer is debuting Bud Light Seltzer Hard Soda and limited-time-only Bud Light Seltzer Sour. The two new variety packs join Bud Light Seltzer’s portfolio of “Loudest Flavors Ever.” Bud Light Seltzer Hard Soda includes flavors Classic Cola, Cherry Cola, Orange Soda and Citrus Soda. Bud Light Seltzer Sour includes flavors Blue Raspberry, Watermelon, Lemon and Green Apple. Both packs will be available for purchase in 12-ounce slim can variety 12-packs.
Anheuser-Busch www.anheuser-busch.com
Buffalo Chicken Pizza LTO Hunt Brothers Pizza is bringing back its most popular limited-time offer, Buffalo Chicken Pizza. The muchanticipated offering combines Hunt Brothers Pizza’s original crust topped with a mixture of ranch dressing and buffalo wing sauce, a blend of 100% natural part-skim mozzarella and Monterey Jack cheeses, and a generous portion of 100% all-natural chicken breast. The finishing touch is a sprinkling of Hunt Brothers Pizza’s signature Just Rite Spice. Consumers can purchase the Buffalo Chicken Pizza as a large 12-inch whole pizza or a Hunk A Pizza (1/4 of a 12-inch pizza) while supplies last.
Hunt Brothers Pizza www.huntbrotherspizza.com
Limited-Edition Gummy Bears Haribo is celebrating the 100th birthday of its original sweet treat, Goldbears. Haribo will mark the Goldbears birthday celebration with new innovations and surprises, including a limited-edition mix of Goldbears with party hats, single-flavor bags and a sweepstakes getaway to Myrtle Beach, S.C. Haribo is unveiling several new varieties of Goldbears gummies for 2022, starting with a fun twist on the original Goldbears. For a limited time only, the original Goldbears will include blue raspberryflavored party hats. Haribo will also release limited-edition single-flavor varieties in Pineapple (clear) and Blue-Raspberry (blue).
Haribo www.haribo.com/en-us cstoredecisions.com
February 2022 • CSTORE DECISIONS
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PRODUCTShowcase
Twist & Mix Packaging Nerds has launched a breakthrough packaging innovation — Nerds Twist & Mix — at select convenience stores, along with other Nerds treats. Each Nerds Twist & Mix package allows consumers to twist the lid to mix and match their perfect combination of five favorite Nerds candies. Flavors include Strawberry, Orange, Watermelon, Cherry and Lemonade. They are available nationwide in 2.1-ounce containers with a suggested retail price of $1.99-$2.49.
Ferarra www.ferrarausa.com
Mac and Cheese Seasonings Kraft Macaroni & Cheese Dinner announced new Kraft Flavor Boosts seasoning mixes — pizza, ranch and buffalo. Flavor Boosts allow mac & cheese fans to combine the flavors of cheesy pizza, tangy buffalo and creamy ranch with the comforting, classic and cheesy flavor of Kraft Macaroni & Cheese Dinner all in one bowl.
Layered Potato Chip Bites
The Kraft Heinz Co. www.kraftheinzcompany.com
Lay’s introduced a brand-new product line, Lay’s Layers, which contain bite-sized, multidimensional potato bites with flavorful layers of crispiness. The new Lay’s Layers product line will feature two flavors fans know and love: Three Cheese, a tangy and cheesy blend of cheddar, parmesan and gouda; and Sour Cream & Onion, a savory blend of onion and sour cream. The two new offerings are available at a suggested retail price (SRP) of $4.09 per 4.75-ounce bag, a SRP of $1.99 per 1.75-ounce bag and a SRP of two for $1 per 0.5-ounce bag.
Mint Chocolate Brownie Ice Cream Chancelor Johnathan Bennett, known as Chance the Rapper, has created a new Ben & Jerry’s flavor — Mint Chocolate Chance, with a cool mint base and fudgy chocolate brownies. The flavor was inspired by Chance’s own favorite concoction growing up, when he would add his mother’s brownies to mint ice cream. The Ben & Jerry’s version is available as both ice cream and a sunflower butter-based nondairy dessert. A percentage of proceeds will benefit Chance the Rapper’s five-yearold nonprofit, SocialWorks.
Ben & Jerry’s www.benjerry.com
PepsiCo www.pepsico.com 74
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PRODUCTShowcase
Ranch Water Hard Seltzer Topo Chico Hard Seltzer launched its Topo Chico Ranch Water Hard Seltzer in select regional markets and its variety pack nationwide. Inspired by the taste of the popular cocktail recipe made famous by Texas bartenders, Topo Chico Ranch Water Hard Seltzer features real lime juice and a refreshing, crisp taste. The drink comes in a single-flavor, 12-pack of 12-ounce slim cans, with each can containing 4.7% ABV and 100 calories.
Molson Coors Beverage Co. www.molsoncoors.com
High-Capacity Oil-Dispensing System Frontline International is introducing a new, higher-capacity version of the EZ Fresh Oil Dispensing System, which will dramatically increase the amount of oil it can store. The new EZ Fresh Oil Dispensing System has three boxes of oil plumbed to an expanded reservoir, for a capacity of 280 pounds of oil tapped and ready to flow handsfree to the fryer. Plus, another 105 pounds of cooking oil store on the equipment makes for 385 total pounds of cooking oil at the ready. The expansion was accomplished without adding to the footprint of original EZ Oil.
Frontline International www.frontlineii.com
Eliminate Entry of Paper Invoices Success Systems has created the industry’s only artificially intelligent solution that allows all retailers to convert paper invoices into EDI ones in seconds — ItScans-AI. Retailers simply take a picture or scan an invoice using the app and ItsScans-AI will have it converted in an EDI format. ItScans-AI is compatible with most all back-office software. ItsScans-AI eliminates manually entering invoices, improves revenue, margins, inventory management and greatly reduces labor costs. Independents and chains can process all their invoices electronically for a very affordable price.
Success Systems www.success-systems.com/itscansai
CBN-Infused Gummies and Syrup CBD Living has upgraded its Sleep line to include cannabinol (CBN), a cannabinoid with sedative properties. CBD Living Vegan PM Gummies now boast 600 milligrams of broad-spectrum nano CBD, 150 milligrams CBN and 150 milligrams melatonin per bottle. CBD Living Vegan Sleep Aid Syrup (in both Cherry and Grape flavors) now contains 200 milligrams nano CBD, 40 milligrams CBN and 16 milligrams melatonin per bottle. The products are manufactured using 100% organic hemp grown on state-licensed hemp farms in Oregon and Colorado and contain zero THC.
CBD Living www.cbdliving.com
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February 2022 • CSTORE DECISIONS
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11
ADD Systems
79
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Altria Group Distribution Company Calico Brands, Inc. 800.544.4837 / www.calicobrands.com
Chesters Chicken
800.646.9403 / www.chesterschicken.com
E-Alternative Solutions
www.EalternativeSolutions.com/Forth
GSK C-Store
Scott.F.Breisinger@gsk.com
Gulfcoast
727.449.2296 / www.gulfcoast.com
2 13 35 57 7, 55 3
Home Market Foods
19
Hoshizaki
41
800.367.8325/ info@HMFfoodservice.com / www.HMFfoodservice.com
www.hoshizakiamerica.com
iDelta8
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Johnsonville C-Store
www.Cstore.Johnsonville.com
Krispy Krunchy Chicken
800.290.6097 / www.krispykrunchy.com
27 33 29
Mars Wrigley
51
Modern Store Equipment
43
Mondelez International North American Bancard
5 76
Perfetti Van Melle
53
Prairie City Bakery
15
www.mars.com
8 77.532.8433 / sales@modernstoreequipment.com modernstoreonline.com/cstore
866.481.4604 / www.nynab.com 800.283.5988
www.pcbakery.com
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newcustomers@ruizfoods.com / www.ruizfoodservice.com/tornados
47
Swedish Match
800.367.3677 www.zyn.com www.gamecigars.com www.generalsnus.com
9 17 59
Swisher International
80
TransAct Tecnologies
21
Trion Industries, Inc.
31
Vehicle Car Wash, Inc. (Regional Run)
61
800.874.9720 / www.swisher.com boha@transact-tech.com / www.transact-tech.com/cd 800.444.4665 / info@triononline.com / TrionOnline.com 800.344.8700 / washgo@rcn.com / www.washngo.com
SUNDAY, MARCH 8:00 AM 1:00 PM – 7:30 PM 1:00 PM – 4:00 PM 4:00 PM – 5:00 PM 6:00 PM – 7:00 PM 7:00 PM – 9:00 PM 9:00 PM – 12:00 A
MONDAY, MARCH 7:00 AM – 1:30 PM 7:00 AM – 8:00 AM 8:00 AM – 8:15 AM
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THE MOST AWAITED C-STORE EVENT OF THE YEAR!
TUESDAY, Moderator: 7:00 John AM –L Speakers: 7:00 AM – • • •
SUNDAY, MARCH 27 8:00 AM Save the 1:00 PM – 7:30 PM 1:00 PM – 4:00 PM 4:00 PM – 5:00 PM 6:00 PM – 7:00 PM 7:00 PM – 9:00 PM 9:00 PM – 12:00 AM
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MONDAY, MARCH 28 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 NAG Board Chairman Doug Galli, Reid Stores Inc./Crosby's
Developme Moderator: Jessica Speakers: Speakers: • Sorin •
For additional information, contact NAG Executive Director
cstoredecisions.com
8:15 AM – 9:15 GENERAL SESSION: BURNING ISSUE #1: JohnAM Lofstock at jlofstock@wtwhmedia.com. Culture as a Competitive Advantage Culture is at the core of many businesses no matter how large they are. There are common traits in winning businesses that contribute to their unique nature: clear values. 2022 Caring, loyalty, humility and deep February • CSTORE DECISIONS commitment to community are just a few of them. These characteristics often directly affect decision-making in the company and the way it treats its employees, customers and suppliers. Many businesses quite rightly view a values-based culture as a competitive advantage and, as such, it is fiercely guarded. Hear how leading c-store chains are building their winning culture.
Tony El-Nemr, Tom Robinson 8:00 AM – David Simend
• •
77
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IndustryPerspective
Is a Drive-Through Right for Your C-Store? Customers are using drive-throughs more frequently, but to implement one successfully, c-stores must be able to deliver speed of service at the window. Mike Kostyo • Datassential America has been a car culture since long before the pandemic, but the past two years have cemented that status. At a time when many consumers couldn’t go into stores and restaurants, they relied on their cars to pick up meals and groceries at unprecedented rates — or used third-party delivery drivers to do it for them. Now even casual restaurant brands across the country have introduced drive-through windows, while limited-service brands are investing in multilane drive-throughs complete with futuristic technologies. As the number of drive-throughs continues to explode, you may be asking yourself if it’s time to add one to your operation. To be sure, they aren’t a good fit for every operator. After all, even the quick-service restaurant (QSR) segment — the most likely to offer a drive-through — only has a 31% drive-through adoption rate (while 6% of c-store operators report having one). You probably already have a general idea if a drive-through is even an option based on your location, customer base and the number of drive-throughs at nearby competitors. DRIVE-THROUGH OPPORTUNITY
But the potential for drive-throughs is strong. According to data from late 2021, drive-throughs were the second most popular meal option for consumers after dining-in at a restaurant, with one out of five consumers reporting their last meal was ordered at a drive-through. And 40% of c-store customers said they would choose a c-store over another operation if it had a drive-through. Even if a drive-through makes sense on paper, they can be logistically demanding. Consider whether you can put the time, resources and labor force behind a successful drive-through. What is the most important factor for consumers? Speed. According to our data, 37% of consumers are only willing to wait five minutes or less for their 78
CSTORE DECISIONS •
February 2022
food at a drive-through (and 14% want the food immediately), while the top two factors that drive a customer to choose a drive-through are that the line appears to be moving fast and/or that there are no or very few cars in it. To be successful, c-stores can combine a drivethrough with other options that set the segment apart, like longer hours and the ability to mix and match consumer packaged goods and foodservice options. Missouri-based FastLane convenience stores, for instance, installed five cooler doors and fountain dispensers at windows adjacent to their drive-through, giving drive-through customers a selection that nearby restaurants just can’t match. C-store customers also reported that the top two options that make them more likely to choose a c-store over an alternative option are that food is prepared on the premises and made to order. C-stores that can market those options, or have separate high-quality food/restaurant brands, are going to be a lot more competitive. C-stores will also have to market themselves as a drive-through option more aggressively. C-stores with gas stations and car washes are already associated with a quick stop that consumers can complete from their car, but it may take time for consumers to also associate them with a drive-through food stop. Even if you don’t add a drive-through immediately, you should reconsider them as a strategy to stay competitive as they pick up steam across the industry. Of course, in the next decade or so, you may have to consider how a drivethrough will serve another growing trend — the rise of self-driving cars. Mike Kostyo is the resident trendologist and senior managing editor at Datassential, a market research company that helps food & beverage companies of all sizes and segments innovate, sell and plan for the future, backed by the best data in the industry. He can be reached at mike@datassential.com.
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