CStore Decisions July 2021

CStoreDecisions Solutions for Convenience Retailers

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2021 Chain to Watch Fav Trip leverages its data-driven strategy, social media and employee-centric culture as it prepares to break ground on its first new-to-industry store.

INSIDE Yesway Named 2021 Chain of the Year Chocolate Outlook Seems Sweet Forecourt Marketing Strategies Evolve

22 46 58 July 2021

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CStoreDecisions

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Solutions for Convenience Retailers

July 2021

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CStoreDecisions.com

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EDITORIAL

CREATIVE SERVICES

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

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.

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Derek Gaskins, Senior VP, Merchandising/Procurement Yesway • Des Moines, Iowa

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Greg Ehrlich, President Beck Suppliers Inc. • Fremont, Ohio

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

Brent Mouton, President and CEO Hit-N-Run Food Stores • Lafayette, La. Peter Tamburro, General Manager Clifford Fuel Co. • Marcy, N.Y. Vernon Young, President and CEO Young Oil Co. • Piedmont, Ala.

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Kalen Frese, Food Service Director Warrenton Oil Inc. • Warrenton, Mo.

CStore Decisions (ISSN 1054-7797) is published monthly by WTWH Media, LLC., 1111 Superior Ave., Suite 2600, Cleveland, OH 44114, for petroleum company and convenience store operators, owners, managers. Qualified U.S. subscribers receive CStore Decisions at no charge. For others, the cost is $80 a year in the U.S. and Possessions, $95 in Canada, and $150 in all other countries. Single copies are available at $9 each in the U.S. and Possessions, $10 each in Canada and $13 in all other countries. Periodicals postage paid at Cleveland, OH, and additional mailing offices. POSTMASTER: Send address changes to CStore Decisions, 1111 Superior Avenue, 26th Floor, Cleveland, OH 44114. GST #R126431964, Canadian Publication Sales Agreement No: #40026880.

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CSTORE DECISIONS does not endorse any products, programs or services of advertisers or editorial contributors. Copyright 2021 by WTWH Media, LLC. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, or by recording, or by any information storage or retrieval system, without written permission from the publisher. Circulation audited by Business Publications Audit of Circulation, Inc. ©

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D E C N A V D A N O I T A R D Y H FOR

N O I S A ANY OCC

R O F C N I WITH Z

E N U M IM

T R O P SUP

CONTENTS j u ly 2 0 2 1

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Number 7

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Volume 32

CStoreDecisions

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EDITOR’S MEMO

10 Controlling Your Brand Identity FRONT END

14 Providing Leadership in Challenging Times 20 Quick Bites: Pulse on Pandemic Recovery 22 Yesway Named CSD’s 2021 Chain of the Year 24 NAG Spring Leadership Series Brings Insights for Today’s Evolving Landscape

CATEGORY MANAGEMENT

40 Summer Flavors Heat Up Cold Vault Sales 46 Chocolate Outlook Seems Sweet 50 Sweet, Salty or Healthy: The Snack Aisle Is Busy FOODSERVICE

54 What Kind of Deli Program Is Right for Your Stores?

COVER STORY

OPERATIONS

58 Forecourt Marketing Strategies Evolve

30 Cover Story:

2021 Chain to Watch

Fav Trip leverages its data-driven strategy, social media and employee-centric culture as it prepares to break ground on its first new-to-industry store.

58 8

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July 2021

BACK END 64 Product Showcase 69 Ad Index 70 Industry Perspective: Shaping the Tobacco Back Bar cstoredecisions.com

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Follow us on Social Media

Editor’s Memo

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

Controlling Your Brand Identity For many years, decades really, your retail brand was defined by the products you offered, the people you hired, the design of your stores and your corporate values. These were difficult things to master, but they were manageable with hard work.

In today’s online-centric world, where social media and mobile messaging may be the only thing customers know about your brand, one slipup could spell disaster. Furthermore, one employee going rogue on their private social media account could present instant problems with long-term consequences.

These situations could lead to waves of protests, boycotts, reduced sales, employee defections and so on.

Transforming your businesses to meet the needs of mobile consumers while controlling your branding message is far more complex than it seems. Businesses must adapt and make changes right now to focus their messaging, so they can compete with more media-savvy retailers in the future.

While engagement with consumers is a big part of attracting new business and relating to the next generation of c-store consumers, simply liking the wrong post on Twitter or Instagram can alienate customers and employees alike. If you’re not a progressive chain on social issues, you will be at a disadvantage in landing talented employees, and customers will not look favorably upon your brand. If you post online about social issues, customers will want to see that you practice what you preach in your corporate policies and practices. Similarly, if you support certain causes that are not in line with the values of your customers and employees, you run the risk of severing relationships that will damage your business.

In short, while the internet offers many opportunities with online ordering and mobile apps, it’s also a minefield that you must learn how to navigate like an expert, so it doesn’t turn on you.

More than ever, your business’ online reputation weighs heavily on your skill as a marketer. Social media is the most engaging, two-way communication medium for customer relations. Because of this aspect, engaging your followers can make or break your brand’s reputation.

Retailers must remember that social media is a longterm investment due to the ever-changing and evolving world. Fortunately, there are tactics for building an 10

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audience and gaining credibility to avoid the pitfalls that damage other brands.

For example, while it’s important to post regularly, the quality of content will always trump a handful of meaningless posts. Take the time to find a piece of content that provides benefits, insights and value to your audience to ensure engagement. By publishing quality and engaging content, an appropriate audience will be sure to follow.

Other winning strategies include engaging followers with contests, questions and comments to get their input. Avoid volunteering information that could alienate customers. Everyone likes a winner, so showcase where you and your fans are winning, such as with fundraisers, social programs and in-store promotions.

Most importantly, plan ahead. Strategize about your audience and create a long-term social media plan to make sure you stay on track with your goals. Thinking of social media as a social gathering will greatly benefit your engagement and strategy. Experts say a healthy ratio for posting content is roughly 40% self-promotion (your products, services, events, news, etc.) and 60% interesting and engaging content from outside sources.

It’s not enough to just post content. Monitoring posts, comments and feedback from users will decide the fate of your brand. Customers love social media because it gives them a voice. And their voice can cause damage to your brand. A lot of it. Monitor your profiles and respond back to your followers. Don’t be afraid to take suggestions into consideration.

Engaging your audience and building a community is what it’s all about in the end. Too often, social media is treated as just another marketing outlet by businesses. But it’s also become a powerful weapon that can hurt you virtually without warning. By engaging your audience, listening to your audience and maintaining your profiles, you’ll have a social media presence that will lead to success.

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FRONT END Leadership Spotlight

Providing Leadership in Challenging Times Derek Gaskins, chief marketing officer for CStore Decisions’ 2021 Convenience Store Chain of the Year, Yesway, discusses the value of team members and connecting with consumers in the post-pandemic market.

Derek Gaskins, chief marketing officer, Yesway

John Lofstock • Editor-in-Chief

Yesway burst onto the convenience store scene in 2015, capitalizing on the real estate expertise of its founding firm Brookwood Financial Partners.

The private equity investment firm launched the company with the acquisition of Country Stores, a 10-store portfolio in western Iowa, in December 2015.

From there, it never looked back.

In 2016, Yesway established its regional headquarters in western Des Moines, Iowa, and immediately acquired 21 stores from Kum & Go. In the months that followed, Yesway expanded its store count to 38 locations in Iowa and Kansas with the acquisitions of the Wes-T-Go and Chillerz chains in Texas and Oklahoma, bringing its store total to 73.

In 2019, the chain bolstered its portfolio with the acquisition of 304 stores from New Mexicobased Allsup’s. Today, the chain is up to 402 stores and continues to drive innovation through its loyalty program, proprietary foodservice, private-label snacks and beverages, and rollout of the Allsup’s Market concept store. Over the next 18 months, Yesway plans to raze and rebuild 14

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27 locations, resulting in 5,500-square-foot prototype stores in Texas, New Mexico and Oklahoma, all of which will have expanded fuel and diesel platforms.

In addition to the raze-and-rebuild program, Yesway has commenced the remodeling of approximately 100 additional stores in Texas and New Mexico.

The extensive improvements include exterior upgrades to storefronts, parking lots and signage, the addition of LED lighting under the canopy and inside the stores, and upgrades to store interiors, fountain and beverage areas, and bathrooms. These improvements are being made to better serve its customers by providing

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FRONT END Leadership Spotlight an expanded selection of merchandise and growing the Allsup’s food and dairy lines.

While much of the company’s top-line growth will be fueled by expansion within the existing portfolio, the company is still actively looking at expanding its portfolio within its current geographic footprint.

What’s worth noting is that the capital improvements and expansion would be complicated during normal times. For Yesway, this impressive growth endured during the COVID-19 pandemic. Like many in the retail industry, convenience stores were challenged during COVID to provide outstanding leadership in order to keep the doors open, the shelves stocked and employees safe. All companies serve their customers, but in the convenience store industry, leaders must first serve their employees, who are the ones in a position to make a real difference on the front lines. This is a challenge Derek Gaskins and the Yesway leadership team took personally.

Gaskins, the chief marketing officer for Fort Worth, Texas-based Yesway, said the company learned a lot during the pandemic and will emerge smarter, focused and ready to serve its thousands of team members spread across nine states. “As we look forward, we see brighter days ahead,” he said. “Our chain and the industry in general learned a lot, and it will benefit all of us in the long run.”

For its exceptional work, Yesway has been recognized as the CStore Decisions 2021 Chain of the Year (see page 22). Gaskins, who is also a member of the National Advisory Group (NAG) board of directors, sat down with CStore Decisions to discuss this past year and Yesway’s vision for the future.

CStore Decisions (CSD): How has Yesway and the industry overall changed since COVID-19?

Derek Gaskins (DG): Yesway and the industry experienced tremendous change navigating through COVID-19. We focused on our people on the front lines and conducted our business in a purpose-driven manner. Protecting our people, customers and communities while maintaining operations was a true challenge.

The key for us was to be flexible and agile as change accelerated, and we had to be nimble to proactively stay relevant.

The leadership of Yesway also empowered and supported our Yesway CEO Tom Trkla people in ways that changed how we operate. Our CEO Tom Trkla and the entire leadership team put 16

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our people first in word, action and deed. Yesway launched a Hospitality Heroes program to positively reinforce the desired behaviors we wanted from our team members in the stores and delivered financial relief to team members caught in the act doing things “the right way.” This helped drive culture change and reduced the stress and tension in many stores from the pandemic.

CSD: What have you learned about your people and the convenience industry since COVID-19?

DG: I learned that our people and this industry are truly amazing. Collectively, we never wavered in the face of fear — and being declared essential businesses allowed us to provide service to many communities that were under the same stress and strain of the pandemic.

Our stores have always been beacons of the communities we serve. When it comes to how we operate in times of crisis, recessions, natural disasters and this recent pandemic, convenience stores in general, and Yesway specifically, have demonstrated directly the vital role we fulfill. We are proud to be a source of fuel, fresh food, groceries, beverages and essential supplies that our society needs.

CSD: You excel in the area of marketing and connecting with consumers. What have you learned about customers during this past year that surprised you?

DG: The humanity, patience and compassion of our customers is remarkable. Everyone focuses on the negative exceptions, but this past year, through millions of transactions, our customers showed true gratitude. The unsolicited positive feedback and encouragement that customers expressed to thank our teams for keeping stores open inspired me.

When the world closed around our customers, they

cstoredecisions.com

FRONT END Leadership Spotlight

Last year, Yesway launched its Hospitality Heroes program, which provided financial relief to team members who were caught in the act doing things “the right way,” said Yesway Chief Marketing Officer Derek Gaskins. The intiative helped drive a culture change and reduce pandemic-driven stress.

recognized that our stores did not, and they were appreciative to get a hot meal, fill-in essential or necessary supply item. Customers largely showed grace in the face of fear, and that was critical to maintaining operations.

I also learned the importance of listening as part of marketing. Listening to our team members in the stores, silencing consumer-facing promotions and focusing on what we were doing to help the situation became marketing tenets that will resonate with me long after the pandemic is over.

Over the next 18 months, Yesway plans to raze and rebuild 27 locations across three states, all of which will have expanded fuel and diesel platforms.

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CSD: The industry has moved toward mobile ordering, curbside pickup and even delivery.

Does this surprise you or do you think we were already headed in this direction?

DG: I think the pandemic accelerated trends that were already under way. I jokingly refer to it as the “acceleration age” because initiatives that were on most roadmaps moved forward to launch quickly.

While technology helps drive improved customer engagement, we also saw the importance of traditional retailing to consumers. Convenience is about making it easier for customers to do business with you, so anything that leverages technology, speed of service or traditional methods to simplify consumers’ lives will help drive business. The convenience industry is all about this, so it is no surprise many retailers are seeing success with technology that enables ease and simplicity of service.

CSD: Do you think the changes in retail are here to stay? And what do you expect over the next 12 months?

DG: Many changes will stick and change how we operate. Customers and our industry are resilient and resourceful. As they say, the only constant is change, and I expect to see continued change in retail over the next 12 months. More importantly, I expect to see the industry drive changes that will resonate and strengthen our role as pillars of the communities we serve.

cstoredecisions.com

Leading Together:

SPONSORED EDITORIAL

A conversation between CStore Decisions and Reynolds American Inc. Redesigning the Back Bar John Lofstock

CStore Decisions Editor-in-Chief

Mike Wilson

Reynolds American Inc. Vice President Consumer and Customer Activation

Consumers have shown interest in a wide variety of nicotine delivery systems. How is the tobacco category evolving and changing?

Will traditional cigarettes continue to drive tobacco sales in c-stores or do you see another nicotine delivery system making strong gains?

The tobacco category has been evolving throughout the 21st century at varying rates of speed. Capsule technology, originally launched with Camel Crush; and snus were the most exciting evolutions to hit tobacco in the USA in more than a decade. Next came electronic (e-cigarettes) with disposable, rechargeable and liquid formats launched by established tobacco companies as well as smaller startup companies. This category has evolved to mostly rechargeable devices with cartridge refills and consumers of traditional tobacco products are considering and switching to these products, and as a result, these products have landed in permanent positions on the back bar. The modern oral nicotine category has accelerated in the past 12 months and has achieved space on the back bar as well. New innovations, within and beyond the established categories, are likely to continue to emerge over the coming years.

Yes. However, implementing product assortment procedures with vendor partners will be critical to maximize space and profit for traditional categories and new nicotine products. High-quality, easy-to-use products with an acceptable entry price point have proven to be successful among adult nicotine consumers.

How should convenience store retailers adapt to these changes? I.e., do they need to consider how they market tobacco? Do they need to invest in new racks or redesign the back bar to market and promote new tobacco categories?

For the most part, the physical linear space on the back bar has been realized. The linear space and category allocation of that space for the back bar of the past will need to evolve to accelerate emerging higher margin/penny profit categories.

Looking beyond the traditional space, digital technologies and assets will complement the transition. How much of the linear and total space is dedicated to new categories today?

What is preventing you from making the change? Programs that dictate the minimum linear size of a particular category do not support transformation. Piloting programs will require collaboration through joint business planning between retailers and manufacturers.

*Reynolds American Inc. and its operating companies (collectively referred to here as “Reynolds”)

The FDA continues to regulate tobacco products in all forms. How do you see the tobacco category shaping up over the next year? Over the next five years?

We should anticipate lots of noise regarding regulation with action pending in the future. Local and state restrictions will amplify. Potential restrictions on where tobacco products may or may not be purchased (pharmacy, etc.) will likely continue to gain momentum. FDA approvals and denials on PMTA products will fill the newswire. Traditional categories will fight to maintain space but will remain a sizable contributor to instore profits and foot traffic in the store.

How can c-stores work with associations and tobacco companies to make their voices heard?

Reynolds continues to inform, align, and put our trade partners in a strong position to get engaged and voice their concerns when threats come their way. Working directly with customers and alongside various state and national trade associations and other stakeholders, we are able to stay in front of most issues, be it local, state, or federal legislation.

Another great resource we’ve launched is Own It Voice It Trade Partners, our digital grassroots platform that aims to help our trade partners when it comes to corresponding with elected officials, testimony, leveraging media, etc.

quickBites PULSE ON PANDEMIC RECOVERY NUTRITION AS SELF-CARE

WHAT RESTAURANTS ARE OFFERING TODAY:

Research firm Mintel found that COVID-19 has driven home the importance of a healthy immune system for customers, and nutrition is likely to be practiced as self-care for years to come.

95% Takeout 70% Delivery 30% Dine-in 21% Curbside pickup 13% Drive-through

78% of U.S. consumers say eating healthy is important for their emotional well-being.

Source: Datassential Firefly, January 2021

Source: Mintel, “The Future of Nutrition, Health and Wellness 2021” report. April 2021

ONLINE ORDERS CONTINUE

CONSUMER MASK SENTIMENT

Q: How long should restaurant and retail workers continue to wear masks?

30% Can stop now 22% Another three months 21% End of 2021 9% Into 2022 or longer 19% Forever/always Source: Datassential, May 2021

JET-SETTING CUSTOMERS

As the pandemic improves, will you shop Q: online for groceries/non-grocery items more often, less often or just as often as you did during the height of the pandemic?

7% More often 19% Less often 61% Just as often 13% Not sure

Last August, conservatives were almost three times as likely as liberals to have plans to fly within the month. As of May, this phenomenon has disappeared.

Do you plan to travel on an airplane in the next month? compared with political leaning August 2020 May 2021 Conservative 14%

86%

Moderate

78%

Moderate 19%

81%

91%

Liberal 24%

95%

Liberal 0

Source: CivicScience 2021, from 5/27/2021 to 6/01/2021, weighted by U.S. Census 18+

Conservative 22%

0

20

20 40

40 60

60 80

80 100 100

• Plans to fly in next month

0

0

20

76%

20 40

40 60

• Doesn’t plan to fly in next month

60 80

80 100 100

August: 24,714 responses weighted by U.S. Census 18+; Survey dates: 08/01/2020 to 08/31/2020 May: 9,987 responses weighted by U.S. Census 18+; Survey dates: 05/01/2021 to 05/31/2021 Source: CivicScience, June 2021

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MORE CHOICE FOR THEM M E A N S M O R E P R O F I TS F O R YO U MSA Share Recent 26 Weeks*

19%

3

MG

Brand A 14%

6

MG

49% Brand B 11%

Brand C 6%

LET YOUR CUSTOMERS CHOOSE

ZYN 3 MG or ZYN 6 MG CALL 800 - 367 - 3677 OR CONTACT YOUR SWEDISH MATCH REPRESENTATIVE FOR ADDITIONAL DETAILS *MSA NP Category Volume Recent 26 wks 4/11/21. For Trade Purposes Only. ©2021 Swedish Match North America LLC

FRONT END News • Chain of the Year

Yesway

Named CStore Decisions’ 2021 Convenience Store Chain of the Year With 402 stores across the U.S., the Texas-based chain is the 32nd winner of the most prestigious award in the industry for convenience retailing.

A CSD Staff Report

Continuing a tradition that began in 1990, CStore Decisions is proud to announce Yesway as its 2021 Convenience Store Chain of the Year.

What makes Yesway special is it continues to cement its presence as a retail leader by evolving to exceed customers’ expectations — and it’s one of the fastest growing chains in the c-store industry.

Over the past two years, Yesway has transformed its retail image with a new store design, a thriving proprietary foodservice program and a growing private-label food and beverage brand. Combined with vibrant community outreach programs, Yesway boasts the exceptional leadership and customer service to which many other c-store chains aspire. In recognition of its hard work, dedication to convenience retailing and its firm commitment to employees and the communities it serves, CStore Decisions is honored to name Yesway as the 32nd annual Convenience Store Chain of the Year.

“We are honored to be named CStore Decisions’ 2021 Convenience Store Chain of the Year,” said Tom Trkla, chairman and CEO of Yesway. “It truly is a tribute to everyone on the Yesway team — from our senior management team, 22

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July 2021

whose collective hard work and dedication have proven critical to our being able to grow our portfolio, to our Yesway and Allsup’s store team members providing outstanding service to customers in the communities we serve every day. Each of them has helped us to become the exceptional convenience store retailer we have aspired to be.”

Yesway will be honored at an awards reception on Oct. 6, during the NACS Show in Chicago.

“Yesway burst onto the scene in 2015 as a chain focused on retail excellence and growth, and it hasn’t looked back,” said CStore Decisons Editor-in-Chief John Lofstock. “With the acquisition of Allsup’s in 2019, Yesway tripled its store count and then raised $235 million of capital to invest in its raze-and-rebuild efforts. During the COVID-19 pandemic, the chain pushed through numerous retail improvement projects, all while promoting its Hospitality Heroes program to honor the commitment of its essential worker team members on the front lines, every day, in its stores.”

The Chain of the Year Award showcases the best of the best in convenience retailing, and Yesway is certainly deserving of a place in this rich tradition.

In six short years, Yesway has made itself a force in the competitive c-store industry. Today, the Fort Worth, Texas-based company operates 402 stores across nine states.

Brookwood Financial Partners, the Boston-based private equity firm that founded Yesway in 2015 to own, operate and grow its c-stores, looks forward to continuing to strengthen its brand.

“We are elated to receive such prestigious recognition from CStore Decisions, and our entire team will cherish this honor,” said Yesway Chief Marketing Officer Derek Gaskins.

“This recognition shines brightly on all the hard work and dedication our team members display every day to build the Yesway brand. We are grateful to be recognized and inspired to continue to achieve growth.”

Retailers interested in attending the Chain of the Year award ceremony can contact John Lofstock at jlofstock@wtwhmedia. com. Supplier companies interested in sponsorship opportunities should contact John Petersen at jpetersen@wtwhmedia.com.

cstoredecisions.com

FRONT END NAG Spring Leadership Series Roundup

NAG Spring Leadership Series Brings Insights for Today’s Evolving Landscape Five-session virtual webinar series dissected immediate concerns and long-term trends, addressing topics from COVID-19’s accelerating effects to harnessing tech to tobacco and fuel disruption.

Thomas Mulloy • Senior Editor

The National Advisory Group (NAG) Spring Leadership Series concluded its five-week run on June 16, after informative virtual sessions that discussed topics ranging from consumer trends to technology to fuel disruption.

Moderated by NAG Executive Director and CStore Decisions Editor-in-Chief John Lofstock, the series dissected some of the most pressing issues facing convenience store retailers today as we look ahead to an uncertain future with tech-savvy consumers and less dependence on fossil fuels.

The series kicked off May 19, exploring the topic “How Consumer Behavior Has Changed During COVID,” a presentation from Casey Taylor, vice president of client success for market analyst and consulting firm CivicScience.

Taylor outlined the changes wrought by a year and a half of pandemic lockdowns and safety precautions, and how that has changed purchasing habits — many of which will remain long after COVID-19 has passed.

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July 2021

The way we think about the workplace is permanently altered and put some distance between consumers and what Taylor calls “car culture” — meaning less demand for c-store fuel. Customers now expect to be served where they are — and more often, that will be at home.

DELIVERY & THE NEW FOOD CUSTOMER

Food delivery took center stage for the second session of the NAG Leadership Series, “The Impact of Delivery and Online Sales: How do we reach new food customers?”

Frank Beard, CStore Decisions director of special projects and director of Safe Shop, led the session with a trio comprised of Mike Kostyo, trendologist with Datassential, and a pair of convenience industry executives:

Dyson Williams, director of merchandising and food service for Dandy Mini Marts, which operates more than 60 locations in Pennsylvania and New York, and Kalen Frese, food service director with Warrenton Oil, which operates 36 FastLane convenience stores in Missouri.

Kostyo brought plenty of market insights and even more data to back them up. For example, he mentioned the downsides of partnering with third-party delivery services like DoorDash or Uber Eats, such as a loss of control of a store’s product.

Source: SNAP! Keynote, Food @ Home, Datassential, n=1162

cstoredecisions.com

FRONT END NAG Spring Leadership Series Roundup

Williams echoed that caveat, advising retailers to keep things simple. “We’re going to try to limit the menu to items that can be made in five minutes or under,” he said.

Meanwhile, Warrenton Oil’s Frese said FastLane opted out of delivery entirely and instead focuses on its drive-through and curbside offerings.

TOBACCO: RESHAPING THE BACK BAR

Three panelists tackled the third session’s topic, “The Future of Tobacco: Reshaping the backbar amidst legislative threats and PMTA.” Hutch’s Convenience Stores.

Carpenter stressed that tight seLofstock introduced panelists curity is paramount in today’s digital Grier Bailey, executive director of information era. Today’s technology the Colorado Wyoming Petroleum solutions can be highly customizable Marketers Association (CWPMA); and help make adjusting to situaRyan Faville, director of purchasing tions easier. with Saratoga Springs, N.Y.-based Beard provided insights into the Stewart’s Shops; and Cole Fountain, long-term outlook for convenience director of merchandising with Jackstores in anticipation of market shifts sonville, Fla.-based Gate Petroleum. in the fuel and clean energy arenas.

Bailey advised retailers to be involved with the legislative decision- C-stores won’t be able to rely on fuel or electric charging to draw custommaking. He said that he lets legislaers. Their future, he said, will be in tors know that he’s there to help and “winning small baskets.” is interested in solving issues and Hutchinson stressed operational overcoming hurdles. (For more on Bailey’s legislative advice for retailers, innovation while sticking to what your stores do best. The pandemic, he see this month’s Industry Perspective said, accelerated retailing trends that on p. 70.) were already brewing. Hutch’s turned Faville advised retailers to be active with their local and state industry to drive-through and app-based ordering to serve its customers. associations. Help from advocates is critical in navigating changes.

Fountain noted the importance of tobacco for every chain’s in-store sales, advocating that retailers know their sales numbers.

FUEL DISRUPTION

The series’ fifth and final session tackled the topic “Fuel Disruption: How a new administration will impact the fuel market by mandating electric vehicles and flex fuels.”

Lofstock welcomed John Eichberger, executive director of The Fuels Institute, and Jeremie Myhren, chief information officer for Road Ranger and chairman of NAG’s Young Executives Organization (YEO).

Eichberger stressed that the internal combustion engine (ICE) will have a long off-ramp, with battery electric vehicles now representing roughly 2% of light duty passenger vehicles.

By 2040, they’ll only be slightly more than a quarter of the passenger vehicles on the road. The convenience industry, he said, straddles the top two businesses where consumers prefer to see chargers: grocery stores (66%) and restaurants (37%).

With the market still in its infancy, Myhren advised c-stores to resist the hype. He stressed that the convenience industry should focus on protecting its relationship with the customer, offering five elements for an alternative fuels strategy.

All five sessions of the NAG Spring Leadership Series are available for viewing on-demand at the NAG Convenience Spring Leadership Series page at NAGconvenience.com.

NEXT-GENERATION STORE

Installment four of the series discussed “How to Create a NextGeneration Store.”

The panel consisted of Beard as well as Jeff Carpenter, director of education and training, Cliff’s Local Market; and Kurtis Hutchinson, director of wholesale operations for 26

CSTORE DECISIONS •

July 2021

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FAV TRIP FORGES ITS OWN PATH

Missouri-based Fav Trip is small but 900,000 strong on social media, with plans for expansion and a focus on data-driven technology and company culture.

Isabelle Gustafson • Associate Editor

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CSTORE DECISIONS •

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cstoredecisions.com

Kansas City, Mo.-based Fav Trip is data-driven across all aspects of the business, with a special focus on branding, social media, technology and ensuring the success of its employees. The two-store chain offers limited-edition merch drops, delivery and drive-through, and it’s currently building its first groundup location, which will be twice the size of its other sites and feature a proprietary pizza program.

cstoredecisions.com

CStore Decisions is recognizing Fav Trip as a Chain to Watch for its data-driven and tech-forward approach to convenience retailing, social media strategy and employeecentric culture.

Fav Trip President and CEO Babir Sultan doesn’t have a background in the convenience industry. Before Fav Trip, he worked in computer networking at New York’s JFK Airport.

“The first store, it’s always been near and dear to us. It was also accidental,” Sultan said. “My family and I went to Kansas City to visit some relatives. And they were in the convenience store business, so they encouraged us to look into it. We really fell in love with Kansas City, as well. It was a nice change of pace. So we started leasing one location and eventually bought it.”

Since then, Sultan’s been furthering his education and applying what he learns to the business. He recently graduated with his executive MBA degree from Rockhurst University.

July 2021

•

CSTORE DECISIONS

31

Chain to Watch / Fav Trip

Fav Trip is a small chain, but its brand is strong. Its YouTube channel has more than 44,000 subscribers and some of its videos have 2 million views. The chain’s social strategy is to focus on engaging content rather than promoting products with every post.

“I had the business first, and the education came later for me,” he said. “When I’m in class, I’m one of those students some might find annoying where I’m asking too many questions. … I still stay in touch with my professors, and whenever I run into an issue, I have great mentors and teachers that are more than willing to help out.”

SMALL CHAIN, BIG REACH

Fav Trip’s stores, its store count and its budget are small, Sultan said, but you wouldn’t know it based on its branding and online presence.

“A lot of customers think we’re some kind of big chain because our following is great,” he said.

Fav Trip will host competitions to create merchandise designs, which customers then vote on. Right now, its website features shirts, bags, phone cases, blankets, mugs, stickers and more. But the limited hoodie drops are especially popular.

“Before winter even comes, they always sell out,” Sultan said. “We’d usually start off with 25, 50, 100. Two-hundred, I think (will be) our next batch, and in winter, we plan on having a least 500.

Once they’re gone for the year, they’re gone. We don’t reorder.”

The chain reaches upwards of 900,000 customers monthly through social media. The strategy, Sultan said, is to focus on engaging content like memes 32

CSTORE DECISIONS •

July 2021

and videos, rather than trying to promote products with every post.

Fav Trip has a presence on most social media channels. With TikTok, Sultan started off by doing some research on the platform and even attended a social media-focused event for ideas before he decided to pass the baton.

“There’s only so much I can do, and it’s not necessarily my demographic,” he said. “One of our cashiers, we didn’t realize she’s very passionate about doing TikTok, and we had another cashier that was with us who, with a little guidance here and there, helped us reach 41,000 (followers).

That’s totally them — 41,000 on TikTok alone.”

But Fav Trip’s most infamous account is its YouTube, which features videos with a very distinct theme: shoplifting.

“We used to have a shoplifting problem, and there was nothing done about it,” Sultan said.

“Eventually, on Facebook, we posted a picture of somebody shoplifting, and it got so much engagement. We were like, ‘Okay. We’re onto something.’”

Sultan had some experience filming and editing videos for fun, so he started uploading shoplifting videos to the chain’s YouTube channel. Later, Fav Trip took the videos a step further by adding commentary — which Sultan records, edits and uploads himself every week.

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Now, the channel has more than 44,000 subscribers, and some videos have upwards of 2 million views. The YouTube channel is now monetized, too, and it features collaborations with Gas Station Encounters, a similar channel with 1.74 million subscribers.

“Our customers, our guests, they love the brand, and we just get a kick out of it and don’t take ourselves too seriously,” Sultan said. “I have some ideas to change up or diversify the content. But we’re trying to find a balance without losing our core audience. That is the challenge for sure.”

Fav Trip’s now in the process of hiring a social media manager so Sultan can focus on building the chain’s newest store from the ground up.

“I’m trying to take off some of these hats so I can focus on growing the business,” he said. “This is our biggest project, a passion project.”

AHEAD OF THE GAME

Offline, Fav Trip is set to embark on its first new-

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to-industry ground-up build in Grandview, Mo. Construction documents are currently being finalized, so there’s no opening date set just yet.

Designed by Paragon Solutions, it’ll be 4,000 square feet, roughly twice the size of the other two sites, and will have a more updated, modern design, all the way to the pumps and overall forecourt. Still, the core brand image and signature red color will remain, Sultan said, at the request of customers.

The store will also feature a new, proprietary foodservice offer, which Sultan sees as the next big challenge.

“The data shows that we need to be pizza-focused, so that’s something we are going to tackle,” he said. “We’re exploring different vendors — the sauce, the dough. ... This is all new to me, so I’m learning quite a bit. We’re trying to be as detailed as possible without losing our minds.”

When the store’s open, and the program’s in place, Fav Trip will be ahead of the curve, as it

cstoredecisions.com

Chain to Watch / Fav Trip

already offers delivery through Vroom Delivery at all locations — a concept it first began exploring roughly three years ago.

“A lot of people that we were talking to (back then) were like, no way in the world somebody would use a convenience store for delivery,” Sultan said. “That changed quickly.”

In fact, the Grandview, Mo., store already offers delivery as a sort of ghost warehouse, similar to DashMart, which is proving a great way to introduce customers in the area to the brand ahead of its opening.

Fav Trip’s stores also feature drive-throughs, which has been a “lifesaver” during the pandemic, Sultan said.

“There might be one or two customers inside, but 13, 14 cars waiting in the drive-through,” he said. “It’s been great for our business and for the customers.”

The new store will be “intensely focused on drivethrough, with everything available 24/7.”

In addition to drive-through and delivery, at one point, Fav Trip had a loyalty app — which Sultan founded himself. Ultimately, though, through data, Fav Trip learned that most of its customers preferred and could more easily subscribe to a text-based

loyalty program versus an app.

Today, Fav Trip’s text club is 10,600 people strong, Sultan said. The program offers five cents off per gallon, plus 10-15 cents on Fridays. It’s helped to increase inside sales, too.

“We noticed a lot of customers just buying gas and leaving. So now you have to come inside and show the text to get the discount. And we might offer some other deals on the text, too,” Sultan said.

“It encourages customers to walk in the store and buy other items instead of just (filling up and) leaving.”

As far as new technology goes, down the line, Sultan expects Fav Trip to implement automation.

“We’re not quite committed yet, and I don’t think we need to be there yet,” he said, “but we always like to plan ahead and be ahead of the game when it comes to technology.”

COMPANY CULTURE

Like all aspects of the business, Fav Trip approaches company culture in an intentional, data-driven way.

The team met with Zeynep Ton, a professor at the MIT Sloan School of Management and author of the book “The Good Jobs Strategy,” which focuses on four retailers — Costco, Mercadona, Trader Joe’s and QuikTrip — to demonstrate how high investment in employees translates into lower costs, higher profits and increased customer satisfaction.

The idea is that investing in employees, creating a good company culture, is a win-win for everyone.

“Our cashiers, if they’re not happy to be behind the counter, everything we do online or offline is a failure,” Sultan said.

A good company culture starts with hiring and training, both of which Fav Trip takes very seriously.

“A lot of companies say, ‘You’re not a good fit for us.’ Sometimes we tell (applicants) that we might not be a good fit for them, either,” Sultan said. “If they’re going to be part of the Fav Trip team, the Fav Trip President and CEO Babir Sultan (left) is pictured with his brother, Zabir training success team member has Sultan, in front of one of the Kansas City, Mo.-based chain’s stores. to sign off that they really think that they qualify.”

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CSTORE DECISIONS •

July 2021

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Chain to Watch / Fav Trip All of Fav Trip’s stores have a drive-through, which its president and CEO said was a “lifesaver” during the pandemic. Its newest store will be “intensely focused on drive-through, with everything available 24/7.”

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CSTORE DECISIONS •

July 2021

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From there, long-term initiatives for employees include monthly one-on-one meetings with Sultan himself, as well as opportunities for pay increases.

“We don’t pay minimum (wage),” Sultan said. “Once (employees) start off, we have a roadmap for them: Get crosstrained, do these things in two to three months, and we always allocate more and more money toward that.”

So far, it’s paying off. Unlike many retailers today, Fav Trip has not struggled with a labor shortage.

“Our employees have literally been offered more money (by other companies),” Sultan said. “If I’m paying somebody $13 an hour, and they’re offered $15 or $16 an hour, and they say they don’t want to leave, it tells us we’re doing something right.”

Moving forward, Sultan’s exploring different ways for Fav Trip to give back to its communities, such as through a scholarship program, inspired by Sultan’s own education journey.

“I have to thank my customers and employees because they supported me throughout my education,” he said. “I read a book, ‘StrengthsFinder,’ and one of my strengths is supposed to be ‘learner.’ So I’m a lifelong learner — and that’s one of the things I’m trying to encourage, as well.” CSD

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Category Management | Beverage

Summer Flavors Heat Up Cold Vault Sales As the country reopens and summer heat sets in, retailers are scrambling to keep favorite and trendy ready-to-drink beverages in stock.

Marilyn Odesser-Torpey • Associate Editor

Summer has arrived, and with it fruity and tropical beverage flavors to help customers celebrate the return to life as usual after a year of the COVID-19 pandemic.

De Lone Wilson, president of Cubby’s convenience stores with 37 locations in Nebraska, Iowa and South Dakota, knows what varieties of ready-to-drink (RTD) beverages his customers are seeking. His main concern is keeping enough supply on-hand to satisfy their demands.

“Our biggest issue is that the availability of product waxes and wanes every week,” Wilson explained.

“Whether we can get this pop or that energy drink is a moving target.”

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cstoredecisions.com

Category Management | Beverage

Oliver Herting, beverage category manager and buyer at FastBreak Convenience Stores, which has 32 locations in southern and central Oregon and northern California, agreed that since the pandemic hit, manufacturer out-ofstocks due to shortages in employees and drivers has been the biggest issue. For FastBreak, it is the summer flavors that are hardest to keep in stock.

“Though most of the volume comes from the main brands such as Coke, Pepsi, Red Bull and Monster, watermelon, dragon fruit and other tropical fruity flavors excite the customers and give them a nice variety,” Herting noted.

Watermelon is the hot flavor at The Hub Convenience Stores, which has six locations in western North Dakota, according to Managing Director Jared Scheeler.

“The success that we saw with the watermelon Summer Edition Red Bull led the way for the flavor,” Scheeler said. “Now we see it across all energy brands, and it’s also thriving in the alcoholic seltzer category.”

Herting is excited to see where spiked seltzers are going this summer, especially given supply uncertainties.

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July 2021

“There has been a lot of innovation with seltzers, and summer is the season in which they are a must-have,” he said. “Though the punches and iced tea seltzer versions have been taking off, I think the original variety packs will stay the main movers.”

At Cubby’s, the main beverage trend is customers replacing traditional soft drinks with healthier alternatives such as water and kombucha, Wilson said. Herting sees the same trend during the warm weather season with particular emphasis on zero-sugar drinks.

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Category Management | Beverage

fast facts: • Customers are reaching for healthier beverage options, including seltzers, water and kombucha, as well as zerosugar beverages.

• As retailers continue to contend with supply issues due to the COVID-19 pandemic, they’re working to keep trendy summer flavors in-stock, like watermelon, dragon fruit and tropical flavors.

ENERGIZING THE CATEGORY

At FastBreak, though energy drinks have been “stabilizing from the hype two years ago, and the innovation has slowed down as well,” volume is still strong, Herting said.

“Due to performance energy drinks, we have gained customers stopping at our stores before their workout sessions,” he noted.

Although energy has lost a bit of share within the packaged beverage category over the past 18 months at The Hub stores, it is still the largest subcategory in the cold vault when measured by dollar sales, Scheeler said. That is just ahead of carbonated soft drinks.

While Wilson explained that frappuccinos and other fancy coffee drinks do well at his stores, cold brew had its heyday two years ago.

Scheeler pointed out that the RTD coffee subcategory has been relatively flat for The Hub over the past two years despite the introduction of more flavor varieties and the larger stores carrying upwards of 55 SKUs. He attributed that lull to the “ubiquity of coffee shops and the evolving palate of the coffee drinker.”

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With consumers out and about this summer after a year of the pandemic, and assuming the predicted hot and dry summer across western North Dakota, Scheeler is anticipating “tremendous growth” in sports drinks, bottled water and packaged tea.

Customer response to cannabis-containing CBD beverages at The Hub stores has also been “very, very positive,” he added.

“We have big plans for growth in that area,” he said.

To promote its RTD products, Cubby’s offers two-for and three-for value promotions.

At Fastbreak, RTD beverages are merchandised with a two-for promotion throughout the year. For the four months of summer, more aggressive promotions are run on Powerade and water.

FastBreak PayDay Rewards Card members can get a free beverage when they buy a certain amount or earn extra points for their purchase.

All year, The Hub promotes a two- or three-pack on at least two lines of energy drinks and sells multi-packs at extremely low prices. CSD cstoredecisions.com

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Category Management | Chocolate

Chocolate Outlook

Seems Sweet Chocolate sales are on the upswing at convenience stores headed into summer, and retailers are optimistic for the months ahead as pandemic restrictions lift.

Erin Del Conte • Executive Editor

As we emerge from the COVID-19 pandemic, customers are looking to treat themselves with something sweet, and the chocolate category at convenience stores is reaping the rewards.

Chocolate sales at c-stores increased 8.5% to $2.76 billion for the 52 weeks ending May 1, 2021, vs. one year ago, according to NielsenIQ Retail Measurement Services, Total U.S. Convenience data. That’s up 4.15% from the end of 2020, when chocolate sales totaled $2.65 billion for the 52 weeks ending Dec. 26, 2020, per Nielsen Total U.S. Convenience data.

An uptick in traffic seems to be driving the trend. The c-store channel saw a 4.4% increase in chocolate buys during the 52-week period ending May 1, 2021, and the average amount of units purchased per trip grew 2.6%, while the average spend per buyer dipped by 1.3%, according to NielsenIQ Homescan Panel, Total U.S. Convenience + Gas. 46

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cstoredecisions.com

Category Management | Chocolate

fast facts: • Chocolate sales grew 8.5% to $2.76 billion for the 52 weeks ending May 1, 2021, vs. one year ago, per Nielsen.

• Tropical flavors and mixand-match combinations are among trends to watch in the candy segment, per the National Confectioners Association.

Innovation is continuing in the category. According to the National Confectioners Association, trends to watch include smaller pack sizes with 200 calories or less, tropical flavors with a focus on pineapple and coconut, and mix-and-match combinations — think sweet and salty or fruity and tart.

CHOCOLATE SALES CLIMB

At Cenex Zip Trip stores, Q1 of 2021 brought a 15% lift in sales on chocolate candy count on standard and king-sized items, noted Jon Fleck, merchandising manager for Cenex Zip Trip, which operates 39 convenience stores in seven states.

That’s a big difference than what the chain was seeing in the category mid-pandemic when traffic dipped and chocolate candy sales declined.

“Only part of last year’s first five-month numbers were COVID-19 impaired, so this dollar increase in chocolate is good news in a candy category that saw hanging bags and kids’ novelty lead the growth in candy sales for us last year,” Fleck said.

“Growth-wise, however, we still see non-chocolate candy outpacing our chocolate lineups this spring.”

Cenex Zip Trip stores have seen the recent launch of Snickers Peanut Butter Brownie selling well. “It has become our No. 11 selling chocolate candy SKU overall,” Fleck noted.

Fleck expects the chocolate candy segment to continue to grow as more states reopen post48

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July 2021

pandemic and more customers begin to travel again. “Trips mean treats, and the chocolate category will definitely see growth,” he said.

The chocolate segment is also trending positively at Worcester, Mass.-based Nouria Energy, which owns 163 locations, 146 of which are company-operated.

“We have seen a large shift back into immediate consumption for chocolate with sales above pre-COVID (levels),” said Nik DiMambro, category manager for Nouria Energy. During the height of COVID-19, Nouria Energy saw a decline in the sale of immediate consumption items, as customers opted for take-home options.

Today, recent launches of Kinder Bueno and Reese’s Big Cup With Pretzels are resonating with customers.

“Both performed extremely well from the moment we introduced them into the set,” DiMambro said. Nouria Energy is also debuting its own private-label line of candy bars through a partnership with Hebert Candies, that is expected to bring quality and value to guests.

Looking ahead, DiMambro is bullish about the chocolate candy segment for the remainder of 2021. “With the amount of innovation and quality we will be supplying our guests with,” he said, “I cannot see a scenario where the category does not continue to grow for us.” CSD cstoredecisions.com

Category Management | Snacks

Sweet, Salty o

The Snack A Retailers will continue to see form and flavor innovation as snack makers use both traditional and new flavor profiles as well as healthy options to entice snackers.

Thomas Mulloy • Senior Editor

Snack sales are soaring once again. Salty snack dollar sales for the past year grew 7.2%, according to Nielsen data for the 52 weeks ending May 29, 2021, and sweet snacks dollar sales saw a 4.8% bump for the same period. Those bigger numbers may balloon even more, judging from what retailers are seeing.

“For us, the snack category right now is just absolutely on fire,” said Tim Young, category manager for Bardstown, Ky.-based Newcomb Oil, which operates more than 80 Five Star Food Marts in Kentucky, Indiana and Tennessee.

Big movers in the sweet snack segment were cupcakes (with dollar sales up 13.2%), muffins (up 10.1%) and pies (up 12.2%). Those numbers don’t come as a surprise to Young.

“Really, from a sweet snack standpoint, Hostess is just crushing it right now,” Young said. “And I think that some of that has to do, clearly, with last year.”

Young pointed out that the pandemic curtailed fresh bakery sales, and many consumers turned to the snack aisle for substitutes.

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cstoredecisions.com

y or Healthy:

k Aisle Is Busy Look for that trend to continue. Young also pointed out that Hershey has invested in developing its Reese’s snack line and will up its game with a pair of products set for release later in the summer to go along with its snack cake release this past December.

Sweet and savory combinations are still grabbing consumers’ attention.

“Dark chocolate and salted dark chocolate are starting to pick up, I mean, in any category,” said Neal Frandsen, chief operating officer of S&G Stores, which has 63 locations in northwest Ohio and southern Michigan. “We noticed it a lot even in the bagged salty,” he said, pointing to sales of “Turtle” saltedcaramel flavored Chex Mix. While snackers are busy enjoying favorites, they’re looking for new tastes, too. After what seemed like a pandemicdriven lull in innovation, Young said that manufacturers are ramping up new flavor ideas. Frito-Lay is one of those, he said, with its flavor mashups for chips.

“So it’s a Lay’s chip that has the flavor of Cool Ranch Doritos,” said Young.

Frito-Lay is also doing it, he said, with Funyuns and Cheetos flavors.

For Frandsen and S&G, salty snack sales have increased around 20%.

He also noted strong performance by hot or fire flavors like habanero or chipotle across bagged salty snacks. Manufacturers are offering plenty of options, too. cstoredecisions.com

July 2021 •

CSTORE DECISIONS

51

Category Management | Snacks

“Everyone’s chasing each other with the hot flavor profile,” he said.

If any snack product says “hot,” it’s Takis chips. While Takis is doing well for Five Star, Young noted that Takis is also experimenting with innovation like cross-branding, having lent its chip flavor to Cattleman’s Cut meat sticks.

Another big seller for Young is the Quest Protein Chips line, which he moved from his breakfast/energy display to the standard chip set because its flavor options make it a better fit there.

“The one flavor was a nacho tortilla chip, and the other one was a loaded taco — which is absolutely great,” Young said. “It just made more sense to get it in line with snacks. It is doing exceptionally well.”

Young also offers Quest’s protein bars, which he said are also selling well.

“Health and energy bars right now are up for us,” said Young, citing a brand he brought in called Alani Nu, with protein bars he called “absolutely amazing.”

fast facts: • Pandemic-induced lull has renewed a flurry of snack innovation.

• Look for more form and flavor cross-branding.

• Healthy snack options are moving mainstream.

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There’s plenty of competition for that healthy bar space, too. And with good reason.

“The natural bars are selling 2:1,” Frandsen said, adding that he’s noticed consumers are starting to shy away from some of the higher-sugar products. “The ‘healthier-for-you’ nutrition bars are starting to pick up, and the high-protein bars are starting to pick up now, too.”

But with innovation in the pipeline in form and flavor, retailers would do well to keep some simple and familiar products on the healthy shelf, as well. Like popcorn.

“SkinnyPop is doing exceptionally well for us. The (Angie’s) Boomchickapop, too,” Frandsen added.

Still, as manufacturers search for new ways to please customer palates, retailers need to keep up with that activity by keeping snack sets up to date.

“You’ve got to always stay fresh in innovation,” Frandsen advised. “So you’ll always be doing pull-and-plugs on a weekly basis, or at least on a bi-weekly basis, where you pull out something that’s not moving and you plug in something with innovation.” CSD cstoredecisions.com

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* Based upon average 8’ run by 5’ high peg candy gondola installations. Your results may vary. ©2020 Trion Industries, Inc.

Foodservice | Branded vs. Proprietary

WHAT KIND OF DELI PROGRAM IS RIGHT FOR YOUR STORES? Foodservice programs give convenience stores a competitive edge. Retailers must decide if a branded or proprietary offering is right for their chain.

Frank Beard • Director of Safe Shop and Special Products

Renowned character Clark Griswold may not have held gas station sandwiches in high regard, but a lot has changed since he declared, “I’m so hungry I could eat a sandwich from a gas station,” in the 1983 movie “National Lampoon’s Vacation.”

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Scan to learn more

Foodservice | Branded vs. Proprietary

Some 38 years later, many convenience stores are now held in high regard as destinations for on-the-go meals.

The past few years have seen additional shifts in consumer perceptions. As Datassential Trendologist Mike Kostyo shared during a recent webinar for the National Advisory Group’s (NAG) Spring Leadership Series, 33% of consumers reported that they have increased their purchases of convenience store food from 2019 to 2021. A whopping 91% said they are satisfied to some degree with the prepared food at convenience stores, and 22% reported that they are “extremely satisfied”— a five-point increase in two years.

But when retailers are considering deli programs, should they create their own or partner with an established brand?

WEIGHING THE TRADEOFFS

Any investment comes at a cost of time and company bandwidth, but this is especially true of foodservice.

“Having our own deli program requires constant price checking, menu development and more,’’ said Angelle Cloud, the foodservice compliance director and dietician at ShopRite, which operates nearly 60 c-stores in Louisiana, some of which include Bourbon Street Delis. “If you had a branded program, they would offer most of that upfront.

They even set prices and provide marketing support.”

Challenges aside, Cloud does see benefits to creating a food program that is different and unique.

“It’s almost an issue of pride for our company. We’re able to buy from our communities and sell local food. All of our seafood is from Louisiana, and it becomes a marketing tool, as we can sell to people who respect local flavors,” Cloud said.

Dyson Williams agreed that today’s customers are looking for unique brands that can’t be found everywhere. As the director of foodservice at Dandy Mini Marts, which operates more than 60 locations in Pennsylvania and New York, Williams has experience with both branded and proprietary programs.

“We have multiple Subways that we got a few decades ago, and we worked with them because they were a big traffic driver,” said Williams. “They would pull drivers off the highway.”

But branded programs also come with challenges. One is giving up the control to set menu and pricing parameters. Some branded programs have raised prices in recent years, without increasing quality, causing customers to 56

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look to new brands and options.

Still, the name-recognition from established brands can be an asset — especially in markets where it contributes to an immediate sense of trust.

“Many of our stores are the only thing in town,” said Kalen Frese, the foodservice director for Warrenton Oil, which operates 36 FastLane convenience stores in Missouri. “For the longest time, I thought we needed to be different. But in our market, our stores are very rural and sell a lot of food from branded programs. They’ve been very well-received by customers, and they benefit us through ease of startup and ease of entry.”

According to Frese, branded doesn’t necessarily mean rigid or inflexible. In an effort to cut down on food waste and serve customers who pay with electronic benefit transfer (EBT), FastLane has been able to shred chicken that’s been in the display case too long and repurpose it into cold food that can be taken home.

THINKING TO THE FUTURE

Cloud cautioned retailers to be mindful of the challenges that come with scaling a deli program — especially when it comes to consistency.

“That’s one of the biggest challenges we face,” Cloud noted. “The goal should be for every product to be made and taste exactly the same across the board. This means everything from how long you toast the bread to how the shrimp is battered and how the lettuce is cut. We even want the onions sliced the same. As convenience retailers, that’s one battle we have to fight that our quick-service restaurant competitors might have already figured out.

But it’s an honorable fight, and it’s worth it.”

Whether branded or proprietary, Williams encouraged retailers to take action and not lose sight of the importance of foodservice to the overall channel.

“Gas and cigarettes are going away eventually,” he said. “If you’re not in the foodservice game in some way, then you really need to consider being part of it. We truly believe in foodservice and understand that it’s where our growth will come from. You need to get your senior management, the leadership team and everyone in your stores behind it.

“Spend the time and energy on the front-end and get buy-in, good products, and invest in marketing,” added Williams. “Don’t just start out with a big program like we have. Think about what you want to be good at and what you want to be known for. What are the needs in your marketplace, and how can you meet them?” CSD

cstoredecisions.com

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

CStoreDecisions .com Making Connections that Drive Business

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

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

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Operations | Forecourt Marketing

Forecourt Marketing

Strategies Evolve The past year proved an opportunity for c-stores to fine-tune their marketing strategies and find new ways to bring fuel customers in-store.

Isabelle Gustafson • Associate Editor

C-stores continue to evolve to attract and retain customers from the forecourt to the store, starting with a clean, welcoming exterior and a distinct brand identity. Video displays and offers encourage in-store visits, and loyalty programs and mobile payment options keep customers coming back for a better, more seamless experience.

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Spicewood, Texas-based Texas Born (TXB), rebranded from Kwik Chek this past year. The idea was to emphasize the c-store chain’s Texan roots and values, said TXB Marketing Brand Manager Anna Felz — authenticity, hospitality and integrity.

It also provided an opportunity for enhanced branding and identity across the entire business, with a particular focus on its food offer — better-for-you options and fresh foods like handmade tacos, sushi and salmon — as well as proprietary offers, like its new TXB soda flavors made with pure cane sugar.

“We are super proud of these elements that differentiate us in the industry,” Felz said, “and we want to market that to our guests. … Of course, it’s always a challenge to get that ‘fuel only’ customer to come inside the store to check out everything we have to offer, so therein also lies a huge opportunity.”

A clean and welcoming environment is the first step for TXB, Felz said. After all, the forecourt reflects a brand’s standards and, ultimately, its in-store offer, including its foodservice.

But newer TXB locations go a step further with electric vehicle charging stations, outdoor seating options outfitted with misting systems and fans, as well as landscaping and greenery surrounding the forecourt. Plus, fuel canopies

cstoredecisions.com

are equipped with bright LED lighting to ensure a welcoming and safe environment.

PUSHING THE ENVELOPE

McDonough, Ga.-based Royal Seven, which operates eight stores in the state, is constantly pushing the envelope to create a better customer experience, down to the smallest details, said Chief Operating Officer Mit Patel. The chain took a significant step forward, he said, when it began upgrading its pumps to the Dover Fueling Solutions (DFS) Anthem UX platform.

The platform, which features a 27-inch touchscreen display, provides retailers with information and data to maximize customer interactions through targeted advertising and promotions, as well as integrated loyalty apps.

The new, updated pumps coincided nicely with Royal Seven establishing a more cohesive brand identity, Patel said, which, like TXB, includes a greater focus on foodservice and proprietary, private-label offers.

Coupled with its partnership with APEC Media to display personalized ads on the dispenser before, during and after fueling, Royal Seven is better able to market its updated in-store offer to its customers at the pump, with a focus on marketing by daypart. In-store sales have increased, Patel said — despite the pandemic.

July 2021 • CSTORE DECISIONS

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Operations | Forecourt Marketing

A c-store’s forecourt reflects its standards and ultimately its in-store offer. A clean, bright and and welcoming environment is a vital first step.

“The media capabilities are pretty extensive; you can even schedule the ads that are running on the gas pumps,” Patel said. “So during the morning, we’re advertising our breakfast. During the afternoon, we’re advertising snacks in-store. In the evenings, our dinner deals are being promoted to target the timeframe.”

ExxonMobil, too, has been focusing on creating a seamless forecourt experience, as well as an enhanced loyalty program to better market its fuel and in-store offers alike.

Through ExxonMobil’s rewards app, customers can pay for fuel from inside the car — while earning rewards, tracking their points and using them for savings during their visit. Specifically, Exxon Mobil Rewards+ members earn three points per gallon at the pump and two points for every $1 spent in the store or on a car wash. Every 100 points equals a dollar in savings.

To date, said Eric Carmichael, Americas retail fuels sales and marketing manager, members have saved over $100 million through the program.

“We know that, during the pandemic, customers really appreciated our contactless payment options, including innovative ways to pay for gas,” said Carmichael, “such as through the Exxon Mobil Rewards+ app, an Alexaenabled device by saying ‘Alexa, pay for gas,’ or through digital wallets on their smartphone to tap and pay at the pump with Apple Pay or Google Pay.”

“

Staying engaged with customers, meeting them where they are, using their preferred channels and providing information and incentives that are helpful and streamline their routine ultimately help us stay connected.

“

- Eric Carmichael, Americas retail fuels sales and marketing manager, ExxonMobil

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For TXB, the rebrand from Kwik Chek meant updating its loyalty app to reflect its new identity and design. For the most part, though, the app’s features remained the same, said Felz. “ ... We still have contactless, pay-at-the-pump capabilities and offer rewards points that guests can use for savings off gas or to purchase items in-store,” she said. “Although, we are now offering even more digital coupons within the app to our loyalty members as we highlight our new menu items.”

This includes TXB’s annual 100 Days of Summer campaign that is currently live through Sept. 8, which guarantees participating customers one prize per day through a scratchand-win game within the app, ranging from free gas for a year to coupons for a variety of fresh-made food items.

The c-store chain’s also in the process of adding mobile ordering and order-ahead to the app’s capabilities, with a projected rollout planned for later this year. Once that’s up and running, Felz said, TXB “will offer dedicated parking spaces for mobile orders.”

ExxonMobil’s Carmichael cites keeping up with everchanging customer habits among the biggest challenges in marketing right now. At the same time, he said, he does expect pandemic-driven technologies to continue to be the standard for consumers going forward.

“Staying engaged with customers, meeting them where they are, using their preferred channels and providing information and incentives that are helpful and streamline their routine,” he said, “ultimately help us stay connected.” CSD cstoredecisions.com

VehicleWash Systems Inc

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Clean and safe

shouldn't be a secret Much of the hard work keeping stores clean and safe happens behind the scenes, and it isn't always apparent to customers. Communicate better with Safe Shop Assured™ certification.

Strategize for the new normal! info@safeshopassured.com www.safeshopassured.com

PRODUCTShowcase

Mac and Cheese Wedges McCain’s Golden Crisp Mac & Cheese Wedges give operators the opportunity to offer up comfort, indulgence and convenience to their customers. These wedges are stuffed with creamy mac and cheese and can be fried or baked until golden brown — a fun twist on a kids’ favorite. Made to travel, these wedges can be enjoyed on the go or as an add-on to any lunch or dinner offering.

McCain Foodservice

www.mccainusafoodservice.com/channels/c-store

EMV-Compliant Island Payment Terminal Dover Fueling Solutions (DFS) announced the launch of OPW Fuel Management Systems’ Petro Vend 300E (PV300E) fuel island terminal, the industry’s first EMVcompliant island payment terminal for fleet in the U.S. that delivers secure, accurate and reliable fuel tracking for 24-hour unattended fueling operations.

The PV300E offers secure EMV processing direct from the terminal and is built to handle today’s EMV chip cards, as well as older magnetic stripe cards. The PV300E also includes Tap-n-Pay options for contactless cards and Apple Pay/Google Wallet transactions.

Windshield Service Centers MasonWays Dual and Single Windshield Service Centers come with optional, easyto-change slide-in signage poster frames for advertising and promotional sales. Posters create advertising visibility for traffic passing your site as well as those fueling their vehicles.

These durable, economically priced units are designed for locations requiring a complete all-in-one valet for the customer’s convenience to clean their windshields while filling up and refuse disposal. Units hold 58 or 116 gallons of refuse, come with large-capacity water buckets and towel dispensers for convenience at your pump islands. Optional advertising frames for posters to grab the attention of customers while filling up drives additional sales in-store.

Dover Fueling Solutions

www.doverfuelingsolutions.com/fleetproducts

To-Go Packaging Products Widely recyclable in paper streams, each ProAmpac product strives to remove avoidable plastics and use the least amount of materials possible. In addition to the sustainability benefits, ProAmpac’s fresh-foodto-go packaging offers modified-atmosphere options in a sleek and unified design with various customization options.

ProAmpac

www.proampac.com

MasonWays Indestructible Plastics

(800) 837-2881 info@masonways.com

www.masonways.com 64

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PRODUCTShowcase

Chicken Bacon Ranch Pizza Hunt Brothers Pizza is bringing back one of its most popular limited-time offers (LTOs), Chicken Bacon Ranch Pizza. Beginning July 26 and for a limited time, store partners can offer this specialty pizza option — a unique combination topped with a ranch sauce, all-natural chicken breast, a blend of 100% natural part-skim mozzarella and cheddar cheeses, bacon pieces and a sprinkling of the company’s signature Just Rite Spice.

Hunt Brothers Pizza

www.huntbrotherspizza.com

New Lineup of Snacks With a New Look By expanding the Takis brand to new snack categories and subcategories, the brand looks to capitalize on Takis’ signature intensity by offering new products that fit a variety snacking occasions, while continuing to provide consumers with bold, crunchy and intense flavors. New packaging design will feature a bigger emphasis on the Takis logo and signature purple color. Each bag also has a color-blocking window featuring a flavor tornado effect that showcases the ingredients that come together to create that flavor. The packaging also highlights the return of Takis Heat-O-Meter to help consumers understand how intense the product is.

Hard Seltzer Brand Dos Equis is launching Dos Equis Ranch Water Hard Seltzer, the latest innovation to join the popular Mexican Import portfolio, inspired by the flavors of the classic West Texas drink: tequila, sparkling mineral water and lime. Dos Equis Ranch Water will be available in the classic lime flavor in six-pack 12-ounce cans at 90 calories, 4.5% ABV and zero grams of carbs, as well as 24-ounce single-serve cans at 180 calories, 4.5% ABV and zero grams of carbs.

Dos Equis

Barcel USA

www.dosequis.com

www.barcel-usa.com

Limited-Edition Packaging and Contest Swisher Sweets announced the launch of an exciting contest, Life is Sweet, along with limited-edition Swisher Sweets Red packaging. From June 21 through Aug. 27, adult consumers can enter the Life is Sweet contest by uploading a photo or video with a caption describing why they are the No. 1 Swisher Sweets fan. There will be five bi-weekly prizes of $2,500, and the Grand Prize winner will be awarded a 2021 luxury sports utility vehicle, $25,000 cash and the title of Swisher Sweets’ No. 1 fan.

Swisher Sweets Cigar Co.

(800) 874-9720

www.swisher.com

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PRODUCTShowcase

Hard Seltzer and Iced Tea Variety Packs Bud Light Seltzer has introduced its Bud Light Seltzer Iced Tea Variety Pack and limited-edition Bud Light Seltzer Mix Pack. The Bud Light Seltzer Mix Pack is available in 12-ounce slim can variety 24-packs, with each can coming in at 100 calories, less than one gram of sugar and 5% ABV. New Bud Light Seltzer Iced Tea will also be sold separately in 12-ounce slim can variety 12-packs and 25-ounce single cans (Peach flavor only).

Bud Light

www.budlight.com

Limited-Edition Packaging CRUNCH, Butterfinger and Baby Ruth announced “Raising the ‘Bar’ to Help Kids,” a new campaign that aims to positively impact kids’ health through a partnership with Children’s Miracle Network (CMN) Hospitals. To kick off the campaign, all three Ferrero brands are reimagining their classic bar wrappers with limited-edition packaging designed by CMN Hospitals Champions, who are child ambassadors that advocate for the charitable need of children’s hospitals across the U.S. Through Aug. 13, the brands will donate a percentage of the retail purchase price from all participating products, up to $350,000, to CMN Hospitals.

Summer Poems on Packaging Coke is celebrating summer rituals with its Coca-Cola and Coca-Cola Zero Sugar 20-ounce bottles. Each bottle features a poem and the words “Open for Summer.” With 24 poems in total, the bottles inspire unique summer moments.

Six of the 24 poems can also be found on fridge packs and on 24-ounce, one-liter and two-liter bottles. Available everywhere Coca-Cola products are sold, the new packaging launches alongside a new radio spot centered around the “Summer Tastes Better with Coca-Cola” tagline.

Ferrero

www.ferreronorthamerica.com

The Coca-Cola Co.

CSTORE DECISIONS •

After launching in January 2020 as a limited-edition item, McCormick For Chefs has announced the return of OLD BAY Hot Sauce as a permanent product in its foodservice portfolio. This iconic condiment is available in three sizes: five ounces, 64 ounces and 1.5-gallon dispensing pouch.

OLD BAY Hot Sauce is tangy with just the right amount of heat and seasoned with a distinctive blend of 18 herbs and spices.

McCormick & Company Inc.

www.coca-colacompany.com 66

Tangy Hot Sauce in Three Sizes

www.mccormickcorporation.com July 2021

cstoredecisions.com

PRODUCTShowcase

All-New Chicken Sandwich Broaster Co.’s Genuine Broaster Chicken Sandwich boasts an all-white meat chicken breast coated and marinated with Broaster’s signature recipe, and it provides the same flavorful crunch that can be expected from any Genuine Broaster Chicken (GBC) menu item. Broaster’s pressure-frying equipment and process is what makes this new sandwich more tender and juicier. Operators will be able to capitalize on the chicken sandwich trend with the help of Broaster-recommended recipe builds — like pickles with mayo and a deluxe option or adding bacon, cheese, avocado or a fried egg to create a customized item for customers.

Broaster Co.

www.broaster.com

Egg-Based Breakfast Bars Releasing this August, Vital Farms Breakfast Bars are warm, egg-based bars in four savory flavors: Uncured Bacon & Cheddar Cheese with Hashbrowns; Broccoli & Cheddar Cheese with a Pastry Crust; Sausage & Cheddar Cheese with a Cheese Crust; and Southwest Fire Roasted Corn with Sweet Potato. Made with Vital Farms pasture-raised whole liquid eggs, pasture-raised cheese, humanely raised meat and vegetables, with no added sugar, preservatives or fillers, each three-ounce Breakfast Bar has seven to 14 grams of protein and is under 200 calories per serving.

Vital Farms

www.vitalfarms.com

Chili Lime Chicken Egg Rolls Van’s Kitchen, a certified women-owned and minority-owned egg roll manufacturer, is launching the newest flavor in its signature line — Chili Lime Chicken Egg Roll. Available nationwide this summer, the new Chili Lime Chicken Egg Rolls will be available in the brand’s four-packs and will feature white meat chicken, fresh thinly sliced cabbage, sweet carrots and aromatic onions with zesty chili lime seasoning in a crispy, crunchy wrapper.

Ready-to-Drink Rum Canned Cocktails Following the successful launch of BACARDÍ Real Rum Canned Cocktails last year, BACARDÍ Rum is expanding its range of canned cocktails with three new flavors and the first-ever variety pack.

The new flavors are BACARDÍ Bahama Mama, BACARDÍ Mojito and BACARDÍ Sunset Punch (Sunset Punch exclusively available as part of the new variety pack).

BACARDÍ Real Rum Canned Cocktails are made with natural flavors, real ingredients and no artificial sweeteners.

These convenient, gluten-free, ready-todrink cocktails are crafted with BACARDÍ Superior, as opposed to a malt base.

BACARDÍ Rum

www.bacardí.com

Van’s Kitchen

www.vanskitchen.com

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Classifieds/Ad Index 5-Hour Energy

www.5hourEnergyRetailer.com

Abbott

linnea.solbrook@abbott.com

CB Distributors

888.824.3256 / www.cbprices.com / www.hempbombs.com www.naturesscript.com

71 5 6-7

Click It Inc.

39

Commercial Fire

34

E-Alternative Solutions

23

Essentia Water

41

GSK C-Store

27

www.clickitinc.com 904.990.4372 / www.commercialfire.com EalternativeSolutions.com/Forth 877.293.2239 / www.essentiawater.com Scott.F.Breisinger@gsk.com

Gulfcoast

727.449.2296 / www.gulfcoast.com

Helix Innovations LLC Hussmann

800.592.2060 / insidesales@hussmann.com / Hussmann.com

Jet Brands

877.822.2214 / JetBrands.net

3 2 55 9

Kooler Ice Vending Machines

33

Krispy Krunchy Chicken

17

Liggett Vector Brands

35

800.858.3025 / www.kookerice.com/fixmyice 800.290.6097 / www.krispykrunchy.com 877.415.4100

www.masonways.com cstoredecisions.com

Loomis Armored US, LLC

37

M-PACT

43

MasonWays Indestructible Plastics, LLC

69

North American Bancard

68

Perfetti Van Melle

49

Premier Manufacturing, Inc.

15

Reynolods American Inc. Ruiz Foods

25

www.loomis.us/SafePoint www.m-pact.org

800.837.2881 / www.masonways.com 866.481.4604 / www.nynab.com 800.283.5988

www.gopremier.com

19

www.RuizFoodservice.com/TornadosResources.com

Safe Shop Assured

62-63

www.safeshopassured.com

SPC Retail

38

Swedish Match

21

800.523.6899 / www.SPC-Retailcom 800.367.3677 / www.zyn.com

Swisher International

Cover, 11, 72

Trion Industries, Inc.

53

Vehicle Wash Systems, Inc.

61

800.874.9720 / www.swisher.com 800.444.4665 / info@triononline.com / TrionOnline.com 800.344.8700 / washngo@rcn.com / www.washngo.com

Vitamin Energy

12-13

800.420.3106 / Sales@VitaminEnergyLLC.com

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IndustryPerspective

Shaping the Tobacco Back Bar C-store retailers need to become proactive in advocacy to protect tobacco and nicotine sales.

Erin Del Conte • Executive Editor

Last month, in a National Advisory Group (NAG) webinar titled “The Future of Tobacco: Reshaping the back bar amidst legislative threats and PMTA,” Grier Bailey, executive director of the Colorado Wyoming Petroleum Marketers Association, shared key advocacy goals and considerations for convenience store retailers.

“We have to protect — to the degree that we can — our core industry product categories that drive inside sales,” Bailey said. “As most operators know, traditionally, the tobacco and the nicotine category can be anywhere between 25% up to 45% — depending on the types of communities that you’re in — of that inside sales product category.”

Bailey shared how c-store operators can become more engaged in “the most responsible and productive way possible” when it comes to advocacy and government relations.

He noted a lot of retailers look at advocacy as a one-off event — something to do when an issue comes up that might impact your business.

While ongoing government relations can seem superfluous, “I can tell you definitively that government relations and operators engaging in political advocacy can have as much or a greater impact than almost anything else that you do on your bottom lines,” he said.

CONTROL THE CONVERSATION

With the rise of vaping, the need for government advocacy has grown.

Vaping has a lot of benefits compared to cigarettes. “But what’s also a very definitive fact and something every tobacco or nicotine policy discussion has to start with is that kids are more attracted to vaping prod70

CSTORE DECISIONS •

July 2021

ucts than to traditional products,” he said. “Any step forward that reduces access to kids or the kids’ use of vaping products is something that has a very good chance of passing at whatever level of government.”

C-store operators have a chance to turn the conversation. “It is much better to be proactive in this space than it is reactive because what the tobacco control people are going to propose is going to be more than detrimental to your businesses,” Bailey said.

“Coming to the table initially, especially in progressive environments, buys you credit with the people who see you then as somebody who’s willing to help solve problems.”

He offered a strategy: “If you have to accept the tax increase or licensing, make sure the money is going to something that makes further regulation harder.”

For example, if the tax increase on tobacco is going to fund pre-K, then future legislation could hurt that funding.

COMPLIANCE IS KEY

Retailers must also acknowledge existing issues. “If your community has a Center for Tobacco Products, Food and Drug Administration-compliance violation rate of anything more than 10%, you have a problem, OK?” Retailers must have a good compliance record to be effective in the tobacco control space.

“The best, most clever, most highly paid people and government affairs advocates in the country can’t do anything for you unless you and your competitors and whatever environment you’re operating in are compliant,” Bailey said.

The most effective people at

Grier Bailey, executive director of the Colorado Wyoming Petroleum Marketers Association

defending a c-store’s compliance record are the people charged with enforcement.

“In our experience … state tobacco enforcement folks would come to the committee … and when the actual cop guys say, ‘Hey, based on all our records, this is a very compliant industry,’ that is more effective … than any amount of retailers saying, ‘I’ve never sold to kids.’”

Begin the conversation by recognizing legitimate policy problems, starting with the increase in kids using vaping products, and then focus on the solutions that the c-store industry brings, Bailey recommended.

Understand the overriding policy goal a municipality is looking to achieve — if it’s a small licensing fee, it could be in your best interest to support it to avoid more punitive legislation.

“You should walk into any office with your hands wide open and saying, ‘What problem are you trying to solve and how can I help?’”

You won’t always be able to help, and you won’t always agree, Bailey acknowledged. “But if you can recognize the problem, not only will that door be open for potential changes to whatever legislation they’re going to propose, but they’ll actually provide you a better opportunity to propose legislation and proactively try to direct the conversation or direct an agenda item to actually try to fix it.”

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