CStore Decisions June 2020 by WTWH Media LLC

CStoreDecisions

Solutions for Convenience Retailers

tobacco’s

2020 Trajectory Rising sales are boosting retailer optimism across the category, but regulatory hurdles loom.

INSIDE Time for a New Approach to CBD

Ever-Changing E-Cig Environment

COVID-19 Accelerates Digital Momentum

68 June 2020

•

CStoreDecisions.com

3435_ThankYouAd_CSD_MECH.indd 1

5/15/20 1:44 PM

Get control of your CASH MANAGEMENT COSTS Key benefits of the SMARTtill™ Intelligent Cash Drawer: Reconciles cash to sales made

Identifies and flags errors by shift, time, cashier and transaction

Save up to 15 minutes a day per till reconciling

Reduce your cash losses up to 90%

Cash Management Solution

SMARTtill™ Automation is a revolution in cash management. It enables retailers to reduce cash-loss, decrease the time and cost of cash-handling, while improving customer service. With APG’s SMARTtill™ Technology, all cash handling activities are recorded with a date and time stamp as well as information on the cashier responsible, providing full accountability for every transaction. The APG SMARTtill™ Solution alerts store managers of any discrepancy immediately after the incident has occurred allowing the error to be resolved on the spot.

Gulfcoast Software Solutions, LLC 300 S. Madison Ave. Clearwater, FL 33756 Telephone 727.449.2296 information@gulfcoastsoftware.com www.gulfcoastsoftware.com

CONTENTS june 2020

•

Number 6

•

Volume 31

CStoreDecisions ®

EDITOR’S MEMO

8 Leading in Uncertain Times

FRONT END

10 Front End Profile: Refuel Doubles Down on Growth 18 Quick Bites: Sizing Up CBD & Cannabis Demand 20 Time for a New Approach to CBD 24 Courts Extend FDA PMTA Application Deadline CATEGORY MANAGEMENT

36 Selling Cigarettes Responsibly 40 RYO: Steady as She Rolls 44 Ever-Changing E-Cig Environment 48 Cigars Are Smokin’ 52 Shoppers Stock Up on Accessories 54 Loose or Snus: Smokeless Stays Strong 58 Products at Work: Swisher Rises to the Occasion

COVER STORY 26 Tobacco’s 2020 Trajectory

Rising sales are boosting retailer optimism across the category, but regulatory hurdles loom.

FOODSERVICE

60 Food Focus Builds Baskets TECHNOLOGY

68 COVID-19 Accelerates Digital Momentum BACK END 72 Product Showcase 77 Ad Index 78 Opportunities for CBD in Convenience Stores

SPECIAL ANNOUNCEMENT:

Due to COVID-19, the Young Executives Conference (YEO) — formerly scheduled for May — will run in conjunction with the 2020 National Advisory Group Conference, set for Sept. 13-16 in Charlotte, N.C. 4

CSTORE DECISIONS •

June 2020

cstoredecisions.com

Phone: 888-824-3256 | www.cbprices.com www.hempbombs.com | www.naturesscript.com

the CSD Group www.cstoredecisions.com

CStoreDecisions .com CStoreDecisions CStoreDecisions

CStore Decisions

Convenience Store Decisions • EDITORIAL VICE PRESIDENT, EDITOR-IN-CHIEF John Lofstock jlofstock@wtwhmedia.com EXECUTIVE EDITOR Erin Del Conte edelconte@wtwhmedia.com SENIOR EDITOR Thomas Mulloy tmulloy@wtwhmedia.com ASSOCIATE EDITOR Isabelle Gustafson igustafson@wtwhmedia.com ASSOCIATE EDITOR Marilyn Odesser-Torpey CONTRIBUTING EDITOR Anne Baye Ericksen COLUMNISTS Tom Briant Don Burke Virginia Lee

REGIONAL SALES MANAGER Jake Bechtel jbechtel@wtwhmedia.com (216) 299-2281

CREATIVE SERVICES

DIGITAL MEDIA/ WEB DEVELOPMENT

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

VICE PRESIDENT, DIGITAL MARKETING Virginia Goulding vgoulding@wtwhmedia.com

CREATIVE DIRECTOR Erin Canetta ecanetta@wtwhmedia.com ART DIRECTOR Matthew Claney mclaney@wtwhmedia.com DIRECTOR, AUDIENCE DEVELOPMENT Bruce Sprague bsprague@wtwhmedia.com

CUSTOMER SERVICE

ADVERTISING VICE PRESIDENT, GROUP PUBLISHER Tom McIntyre tmcintyre@wtwhmedia.com

CUSTOMER SERVICE MANAGER Stephanie Hulett shulett@wtwhmedia.com CUSTOMER SERVICE REPRESENTATIVE Jane Cooper jcooper@wtwhmedia.com

(216) 533-9186

EVENTS

PUBLISHER John Petersen jpetersen@wtwhmedia.com

EVENTS MANAGER Jen Osborne josborne@wtwhmedia.com

VICE PRESIDENT, SALES Tony Bolla tbolla@wtwhmedia.com

VIDEO SERVICES

(216) 346-8790

(773) 859-1107

REGIONAL SALES MANAGER Ashley Burk aburk@wtwhmedia.com

(737) 615-8452

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

ACCOUNTS RECEIVABLE SPECIALIST Jamila Milton jmilton@wtwhmedia.com

VIDEOGRAPHER Bradley Voyten bvoyten@wtwhmedia.com VIDEOGRAPHER Derek Little dlittle@wtwhmedia.com

FINANCE

SENIOR MANAGER WEBINARS/VIRTUAL EVENTS IN MARKETING Lisa Rosen lrosen@wtwhmedia.com DEVELOPMENT MANAGER Dave Miyares dmiyares@wtwhmedia.com SR. DIGITAL MEDIA MANAGER Pat Curran pcurran@wtwhmedia.com

Leading Through Innovation

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

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

EVENT MARKETING SPECIALIST Olivia Zemanek ozemanek@wtwhmedia.com DIGITAL PRODUCTION MANAGER Reggie Hall rhall@wtwhmedia.com DIGITAL PRODUCTION SPECIALIST Nicole Lender nlender@wtwhmedia.com DIGITAL PRODUCTION/ MARKETING DESIGNER Samantha King sking@wtwhmedia.com

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 Reid Stores Inc./Crosby’s • Brockport, N.Y. Mary Banmiller, Director of Retail Operations Warrenton Oil Inc. • Truesdale, Mo.

SOFTWARE ENGINEER DJ Bozentka dbozentka@wtwhmedia.com WEBINAR COORDINATOR Halle Kirsh hkirsh@wtwhmedia.com WEBINAR COORDINATOR Kim Dorsey kdorsey@wtwhmedia.com

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. Peter Tamburro, General Manager Clifford Fuel Co. • Marcy, N.Y.

CONTROLLER Brian Korsberg bkorsberg@wtwhmedia.com

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

YOUNG EXECUTIVES ORGANIZATION (YEO) BOARD WTWH MEDIA, LLC 1111 Superior Ave., 26th Floor, Cleveland, OH 44114 • Ph: (888) 543-2447 EDITORIAL AND NAG 1420 Queen Anne Rd., Suite 4, Teaneck, NJ 07666 • Ph: (201) 321-5642

Jeremie Myhren, Board Chairman Road Ranger • Rockford, Ill. 2011 - 2019

SUBSCRIPTION INQUIRIES To enter, change or cancel a subscription, please go to: http://d3data.net/csd/indexnew.htm or email requests to: bsprague@wtwhmedia.com

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. CSTORE DECISIONS does not endorse any products, programs or services of advertisers or editorial contributors. Copyright© 2020 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.

CSTORE DECISIONS •

Ryan Faville, Director of Purchasing Stewart’s Shops Corp. • Saratoga Springs, N.Y. Caroline Filchak, Director, Wholesale Ops Clipper Petroleum • Flowery Branch, Ga. Cole Fountain, Category Manager Gate Petroleum Co. • Jacksonville, Fla.

Garet Bishop, Chief Financial Ofﬁcer BFS Cos. • Morgantown, W.Va.

June 2020

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.

cstoredecisions.com

Editor’s Memo

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

Leading in Uncertain Times As the COVID-19 pandemic continues to dominate our daily lives, we’re all being impacted in various ways, many of them pretty dramatic. Everyone is feeling more than a little fear and anxiety about the future. But when you are a business leader, your team is looking to you for guidance, and you have a responsibility to help those around you cope with the uncertainty. Quint Studer, author of “The Busy Leader’s Handbook: How To Lead People and Places That Thrive,” warned we all struggle with the same emotions during challenging times. However, we can’t just think of ourselves and our immediate families. We have employees, co-workers and customers to consider as well. “They’re our family, too, and right now, more than ever, they need us to truly lead,” he said. “As leaders, we can have a positive and immediate impact on the employees who count on us. This is both a human responsibility and a privilege.” So, what should leaders do in times like these? First and foremost, get focused and intentional about how you respond to this pandemic. How you behave now will stay with your employees for a long time to come. Studer offered several tips to guide your team through this crisis: Communicate often and well. Bring everyone together by video chat or phone and communicate the plan. Hold a daily meeting if necessary. When employees hear nothing, they expect the worst. They’d rather hear the truth, even if it’s bad news, than live in uncertainty. Keep the lines of communication open, and make it clear you are always available to talk. Read up on what’s going on. Make sure you have a good grasp on the virus, your customers, the industry, the supply chain and the economy in general. You don’t have to be an authority, but you do need to know enough to help give perspective. Encourage people to know the facts, but not overload on the news. Explain that constant exposure to bad news affects our psyche. It keeps us distracted and unable to concentrate. It feeds anxiety and fear. This is not good for job performance; but even worse, it feels bad. It keeps us from enjoying our lives. 8

CSTORE DECISIONS •

June 2020

Equip store managers and district managers with answers to frequently asked questions from employees and customers. Relieve anxiety where you can, even if it’s not work-related. This pandemic has far-reaching implications. It doesn’t just impact people’s work lives; it impacts their health, ﬁnances and families. As much as you can, know what is important to each employee in his or her personal life. This will help you calm them in a way that truly resonates. Build up your emotional bank account. What you do to make people’s lives easier really counts right now. Some employees may have trouble with kids as schools shut down. Others may need to care for elderly parents who get sick or who just need extra help with shopping and chores because they’re staying at home. Be sensitive to individual needs and accommodate where you can, Studer said. It’s a good time to build personal relationships with employees. Think about what your company already does that could help those impacted by the virus. For example, some pharmacies are waiving home delivery fees for prescriptions for the elderly and others at high risk. Some cable companies are offering free Wi-Fi for students who need online learning, and some restaurants are delivering meals to high-risk people. Finally, one of the best things a leader can do is to remind people that the coronavirus won’t last forever. Things will get better. “Tough times make great leaders,” Studer said. “People have long memories. Reputations are often built during times like these. Once this pandemic has passed and life returns to normal, employees, co-workers and partners will remember how you behaved. We owe it to ourselves and to those we lead to choose wisely.”

k c o t s f o L n h Jo

cstoredecisions.com

CONTACT YOUR SWEDISH MATCH REPRESENTATIVE OR CALL 800-367-3677 FOR ADDITIONAL DETAILS

FRONT END Profile

Refuel

Doubles Down on Growth

With its latest Double Quick acquisition, Refuel is rapidly approaching its goal of becoming a 100-plus-store chain. It’s also piloting its mobile app for curbside pickup and delivery, while enhancing its foodservice program. Erin Del Conte • Executive Editor

In a little over a year, Mt. Pleasant, S.C.-based Refuel has grown from a five-store chain to a fleet of 84 convenience stores across three states, and its aggressive growth trajectory is only picking up steam. In April, Refuel, a portfolio company of private equity firm First Reserve, closed on the acquisition of Indianola, Miss.-based Double Quick, expanding its footprint beyond South Carolina to Mississippi and Arkansas. The acquisition included 48 c-stores — 41 in Mississippi and seven in Arkansas — more than doubling the company’s c-store count to 84 locations. The transaction represents the fifth acquisition for Refuel since establishing its partnership with First Reserve in May 2019. 10

CSTORE DECISIONS •

June 2020

cstoredecisions.com

FRONT END Profile

The acquisition of Double Quick allows Refuel to capitalize on its fried chicken program expertise and integrate it into its own proprietary chicken program, which it launched in the fall of 2019.

Flash back to the beginning of January 2019, and Refuel was a small chain of five c-stores in South Carolina.Then in May 2019 it closed two acquisitions alongside First Reserve, immediately increasing its store count more than sixfold — from five to 33 c-stores. Those acquisitions were of Hartsville, S.C.-based West Oil and Bishopville, S.C.-based Bishopville Petroleum. Last fall, Refuel also announced plans to invest $50 million in new-to-industry c-stores throughout the Charleston, S.C., market, with a goal of becoming a 100-plus-store chain in less than two years through acquisitions and new builds. With the addition of Double Quick, it’s already well on its way to that goal. “We’re an acquisitions company now, and a lot of deals are presented to us, and we look at them all. But this one really caught our eye,” said Mark Jordan, founder of Refuel. “We visited the (Double Quick) stores. They’re very food-forward in their thinking, and the stores really fit us well.” Refuel’s business model today remains focused on growth. “We originally had a 100-store plan, and we hit almost to that in less than a year,” said Travis Smith, chief administrative officer and general counsel of Refuel. “And now we’re going to grow bigger than that.”

FOOD FORWARD Double Quick appealed to Refuel because it had scale within its market areas. Plus it featured a strong back-office department and a quality foodservice operation — two areas where Refuel was seeking further development. Some 34 of the Double Quick stores offer a proprietary fried chicken concept. The acquisition also included 12 Church’s Chicken franchises, five of which are stand-alone quick-service restaurants, and two Krystal burger franchises. Jordan was impressed by Double Quick’s foodservice operations. “They execute well on it,” he said. “They’ve got good products. They’ve got good procedures. They understand food very well. We’ve been working on food for a long 12

CSTORE DECISIONS •

June 2020

COVID-19 Response When the COVID-19 pandemic began, Refuel saw consumer demand spike for big package items like beer, as well as a big increase in demand for tobacco products. Sales of toilet paper, paper towels and hand sanitizer also skyrocketed. The chain has been seeing strong sales on the items it’s known for like cigarettes, snacks, cold beverages and beer. “We’ve been able to source enormous quantities of hand sanitizers since the beginning, which we sold,” said Mark Jordan, founder of Refuel. It also provided hand sanitizer for employees to take home and use at work. The chain also installed plexiglass barriers between customers and store associates and has been disinfecting stores throughout the day.

cstoredecisions.com

Get treated like the big chains Communication

Attention independent store owners Communication

You already know that 5-hour ENERGY is one of the most profitable brands Freebies in your store. You want to sell more. That’s why you should sign up for the Freebies advantages 5-hour ENERGY Retailer Rewards program. You’ll get the enjoyed by the big chains – promotional programs, merchandising programs, Price Promotions and more – all designed to help you sell more 5-hour ENERGY and make Price Promotions you more money. Plus, you’ll get freebies! Who doesn’t love freebies? ®

New Flavors

Here’s what you’ll get: Communication Communication

Communication Communication

New Flavors

Communication: You’ll receive emails telling you about new flavors, displays, marketing programs, and promotion programs. That way you’ll know about them at the same time the big chains do, so you can compete on the same level. You’ll also get simple tips to help you sell more bottles of 5-hour ENERGY and make more money.

Marketing Promotions Marketing Promotions

New displays: See the hottest trends in 5-hour ENERGY counter racks, end caps, power wings and floor displays. As soon as it’s available, you’ll know about it!

Freebies: Why should the big guys get all the good stuff? As a member of the 5-hour ENERGY Retailer Rewards program you’ll have access to freebies year-round. It might be a branded counter mat, or clock, or even something you can sell in your store.

Freebies Freebies

Price Price Promotions Promotions Price Promotions Price Promotions

Promotion programs: Periodically, you’ll receive information about money-saving promotions you can pass on to your customers. So, when the big chains offer 2 for $6, or buy-2-get-1-free, you can, too.

Marketing promotions: Every year 5-hour ENERGY launches multiple national marketing promotions, and we want you to participate! Being a member of the Retailer Rewards program gives you the chance to jump on board right away.

New Displays New Displays

Get your free merchandising kit!

New flavors: When new flavors of 5-hour ENERGY are released, consumers buy them. As a member of the Retailer Rewards program you’ll find out about new flavors, release dates and availability at the same time the big chains do. ®

New Flavors New Flavors New NewFlavors Flavors

Marketing Promotions Marketing MarketingPromotions Promotions

Marketing Promotions

Sign up today at www.5HErewards.com Mailings and promo items are subject to change. You may opt out of mailings and messaging at anytime. ©2020 SI Online, LLC. All rights reserved. SI Online, LLC is an independent distributor of 5-hour ENERGY® products.

New Displays New Displays

New Displays

FRONT END Profile Refuel is nearing its goal of becoming a 100-plus-store chain through acquisitions and new builds. Refuel’s Daniel Island c-store in Charleston, S.C., pictured here, opened in December 2016.

time, and we found a chain that thought a lot like we did.” Refuel rolled out its own proprietary fried chicken program in fall of 2019. Jordan recognized that Double Quick’s fried chicken program, including its side offerings and breakfast program, provided a more refined foodservice package compared to Refuel, which was dabbling in chicken and pizza. Refuel now has the opportunity to draw on Double Quick’s expertise to further improve its chicken program. “Double Quick focuses very hard on chicken, almost to the exclusion of everything else, and we liked that,” Jordan said. “We liked the results that they’ve gotten out of that, and that’s the direction we’re going to go.” Now that the company is also a franchisee of both Church’s and Krystal, it may leverage those food programs in Refuel highway locations to

CSTORE DECISIONS •

June 2020

Listen to CStore Decisions’ podcast with Refuel Founder Mark Jordan and Chief Administrative Officer and General Counsel Travis Smith: cstoredecisions.com/2020/05/18/podcast-refueldiscusses-double-quick-acquisition/ better appeal to interstate travelers. “We’re looking at opportunities like that right now,” Jordan said. Refuel also continues to prioritize its coffee offering. The chain introduced bean-to-cup coffee dispensers in late 2019 and immediately saw positive results. “We tested in the Charleston stores, and we started looking at rolling it out everywhere,” Jordan said. “But we did hit pause on that because of COVID-19.” The chain plans to continue with the program when the pandemic is over and self-service coffee returns.

cstoredecisions.com

EXTRAORDINARY CHALLENGES. REMARKABLE PEOPLE. IMMEASURABLE GRATITUDE. TOGETHER, WE WILL GET THROUGH THIS. McLane’s teammates are working diligently to do our part to keep our grocery and foodservice supply chain flowing, while prioritizing the health and safety of our teammates, customers, suppliers, and communities. We could not do it without all the unsung heroes that keep our industry moving, and we thank them for their hard work, bravery, and dedication. mclaneco.com

FRONT END Profile

Refuel plans to keep the Double Quick banner given the chain’s “incredible brand presence” in Mississippi and Arkansas, said Mark Jordan, founder of Refuel. Double Quick employees were also retained as part of the acquisition.

INTEGRATING DOUBLE QUICK The West Oil and Bishop Petroleum sites acquired last year were reimaged to the Refuel design and converted to the Exxon gas brand last fall. “In stores that we build from the ground up, we have a trademark canopy that kind of looks like two airplane wings fit together,” explained Jordan. Refuel had the added challenge of rebuilding the canopies of the West Oil and Bishop Petroleum sites to also look like the Exxon canopy. But the newly acquired Double Quick stores won’t be converted to the Refuel brand. “Double Quick has an incredible brand presence in the Delta, and in Mississippi and Arkansas, and an incredibly loyal customer base,” Smith said. “We just felt that it was not the right move to come in here and change everything to Refuel.” “We’ll probably change their signage a little bit,” added Jordan. “But they’ve got a great brand down here, and for the most part it’s going to look the same.” All Double Quick employees who wish to remain have been retained, including office and store-level employees. “For the most part, even customers didn’t know there was a difference as best as I can tell,” Jordan said. “Overnight the switch happened, and they just switched to our ownership.” TECH CONSIDERATIONS As Refuel looks forward, it’s keeping an eye on technology. It launched its new smartphone app in the middle of the COVID-19 crisis this spring, pulling back on its original plan to include mobile payment and loyalty with the initial rollout. “We decided to pivot with our app and focus it more on curbside pickup — which we’ve rolled out in all locations in South Carolina — and delivery, which is in a few locations already,” Jordan said. 16

CSTORE DECISIONS •

June 2020

So far, the pilot is bringing good results. Refuel still plans to add mobile payment to its app in the future but has put that step on hold while it first navigates the pickup and delivery launch. Refuel is also continuing to innovate with its car wash program. The chain operates seven single-bay automatic car washes under the Refuel brand. “We’re rolling out license plate recognition and payment stations so that customers can join a car wash club at one location and go to any other location. It just knows who they are by their license plate,” Jordan said. Refuel plans to continue to innovate on the technology front where and when it makes sense for the chain. “Contactless payments may make more sense in the not-so-distant future, and we’re spending a lot of time and energy on tech,” Jordan said.

LOOKING AHEAD Despite the COVID-19 pandemic, Refuel is proceeding with plans for expansion. Navigating the red tape of acquiring permits in a municipality that is locked down due to the pandemic is just another challenge to overcome. “It’s not impossible, but it has slowed some things down,” Jordan said. “We’ve closed on a lot of the sites that we had already planned to close on. Still, it’s business as usual for new growth opportunities. It’s something we did our homework on upfront, and we still stand by it. I think that you’ll see us roll out the same amount of stores we already planned to. It just may go a little bit slower.”

cstoredecisions.com

quickBites U.S. CBD CONSUMER SNAPSHOT

SIZING UP CBD & CANNABIS DEMAND

57% Male

WHY USE CANNABIDIOL (CBD)/CANNABIS? Important Reasons for Using According to Customers TOP 5 MOST IMPORTANT REASONS

Source: Management Science Associates Inc. Data from balanced survey of over 100,000 legal adults across 54 markets with multiple waves conducted in Q1 2018-Q1 2020

% WHO RATED IT

Treat Temporary/Minor Pain

20%

Help Depression, Anxiety, Stress, & Other Mental Health Issues

20%

Treat Chronic/Recurring Pain

19%

Help Sleep

19%

Form of Relaxation When Alone

18%

42% Aged 26-35 40% Single

40% Consume CBD ﬁve or more times per week 69% Use CBD edibles like gummies, beverages Source: Brightﬁeld Group CBD Consumer Insights

ADULT MIS-EDUCATION

U.S. Adults 21 and Older…

56% Do not understand difference between THC and CBD 59% Are confused about the effects of hempderived products

BEAUTY & PERSONAL CARE LOOKING GOOD Across 40 North American markets, cannabis-related (CBD, hemp) beauty & personal care SKUs saw the following one-year increase in 2019.

568% CBD 135% Cannabis 161% All cannabis-related

Source: BDS Analytics Consumer Insights, 2019

CBD FOR

FURRY FRIENDS $50 Average Price for CBD Pet Product of Any Kind

Source: Euromonitor International, “Cannabis in Beauty and Personal Care: Prospects, Opportunities and Challenges,” November 2019

CSTORE DECISIONS •

June 2020

Source: Leafreport white paper, “Research: A Guide to Become a Smart Consumer,” March 2020

cstoredecisions.com

solarihemp.com | (8 8 8) 384 -7333 WARNING: Keep out of reach of children. Consult your healthcare provider before taking if you are pregnant or nursing or have other medical concerns. This product is not a substitute for professional medical advice and care. This product has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease.

Front End | CBD Column

Time For A New Approach To CBD Reorienting the CBD product mix toward topical items may help drive sales at c-stores post-pandemic. Don Burke • Management Science Associates

As the cannabidiol (CBD) category grapples with unusual circumstances, retailers must implement new tactics when selling CBD products. CBD sales were rolling along until two unusual circumstances caused a blip. First, the illegal tetrahydrocannabinol (THC) vaping crisis of late 2019 practically eliminated sales of CBD vaping items and negatively impacted sales of other CBD products. Then, just as many c-store retailers were adding the CBD category, the COVID-19 pandemic struck, minimizing store traffic and the potential for their shoppers to be exposed to this new line of products. Nonetheless, Management Science Associates (MSA) is starting to find revived consumer interest in CBD, most recently evidenced by an uptick in Google search trends. Typically, this increase in search precedes purchase intent, so as the stay-at-home orders start to recede, it will be a good time for c-store retailers to capitalize on sales of CBD, with the realization that their current product mix and marketing approach may not maximize sales. 20

CSTORE DECISIONS •

June 2020

C-STORES HAVE AN EDGE

An MSA analysis of Consumer Research Around Cannabis data shows consumers purchase CBD items for health-related reasons — relief from pain, reducing stress and assisting sleep. These top reasons for purchase

are fairly ubiquitous and suggest a broad audience for these products. In addition, this Consumer Research Around Cannabis data shows the demographics of the most-likely CBD purchaser is a younger, blue-collar, self-employed person, which closely

Source: MSA, Distributor Shipment to Retail data w/e 1/5/2019 - 3/28/19

cstoredecisions.com

LET’S BUILD GATHER YOUR PIECES

SOFTWARE SOLUTIONS to make your vision a reality. You can see it. ADD Systems can help you build it. Our software solutions give you the tools to reshape and grow your business. From the office to the field, from delivery operations to your stores, our staff of industry specialists has the expertise to help you gain a competitive advantage. Take a closer look at ADD Systems at go.addsys.com/build

PETROLEUM DISTRIBUTION

C-STORES

HVAC

800•922•0972

addsys.com

Front End | CBD Column

matches the profile of the most likely c-store shopper. Further evidence that c-stores have a strong opportunity with the CBD category, the average tobacco consumer is far more likely to have an interest in purchasing a CBD item as compared to the general population. These advantages for the c-store retailer do not mean that this category is a sure win given the current retail climate — but do suggest a strong potential if the category is managed appropriately. BY THE METRICS

Looking back at Q1 of 2019 prior to the illegal THC vaping crisis, MSA’s InfoMetrics data shows the top-selling CBD item in c-stores was gummies, with a 31% share of all CBD dollar sales. This item served as a trial-generating product, was typically sold at a lower dollar amount and offered a convenient way for consumers to try CBD. The second-highest-selling item, with a 22% share of all CBD dollar sales, was the CBD vape, which provided a significant enhancement to c-stores’ vapor lines. The vape items were closely followed by sales of tinctures as

Source: MSA, Distributor Shipment to Retail data w/e 1/5/2019 - 3/28/19

the third-best-selling CBD item. Notably, CBD pills and topicals (body lotions and rubs) were tied for the fourth-best-selling items. When consumers were looking to purchase a CBD item in early 2019, they were most interested in items they could ingest or inhale for a more immediate benefit. The illegal THC vaping crisis of fourth quarter, 2019, changed all that — as shown in the bar chart below — the CBD items selling

during first quarter of 2020 are very different than those selling just one year ago. The THC vaping crisis appears to have generated consumer concern around inhaling and even ingestion of something unfamiliar and caused consumers to be more cautious in the trial of new items. This significantly affected the sales of nearly all ingestible CBD items. Topicals (lotions and body rubs) are now No. 1 in c-store sales by a large margin. Gummies, the bestselling item prior to the vaping crisis, has fallen to No. 3 in sales, and CBD vape items now account for less than 2% of CBD dollar sales. A further complicating factor for c-stores, MSA has seen online sales of CBD products grow during the pandemic as consumers are in stay-at-home mode and adjusting their preferred purchase location to online vendors. So what do c-stores do? CHANGING TACTICS

Source: MSA, Distributor Shipment to Retail data w/e 1/5/2019 - 3/28/19

CSTORE DECISIONS •

June 2020

A new approach for c-stores is key. Topical items have recently started to top the list of items being ordered by c-stores.

cstoredecisions.com

Retailers need to reorient their product mix so the largest number of SKUs are in those items that can be applied externally to the body to meet this new consumer preference. These topicals need to be featured front and center in the CBD section. Make certain there is an entry-level price point to the topical products to re-invigorate the trial purchases that used to occur with gummies. C-store retailers also need to re-position their CBD category for maximum shopper visibility and employ signage to re-educate shoppers as they return to the store. This visibility and re-education will be critical to changing the online ordering behavior shoppers have developed over the past few months. While fears over the THC vaping crisis will eventually fade, and consumers will again return to in-person shopping, the retailer that adjusts their product mix and CBD marketing approach to this current reality will be best-positioned to capitalize on robust CBD sales in the more normal times to come.

CBD Knowledge On Demand Check out our CBD Retail Trends Conference On Demand. Join speakers Don Burke, of MSA; Paul Crozier, of Sheetz; Kay Tamillow, of Brightﬁeld Group; Arie Paup, of CivicScience; and Mike Vercollone, of VERC Enterprises, for this special virtual event hosted by CStore Decisions Editor-In-Chief John Lofstock. Learn more about the difference between hemp, cannabis and CBD products, which customers are buying those products, what new products and trends are on the horizon, plus how to navigate the ﬂedgling industry and shifting regulatory landscape. Register and watch on demand at:

Don Burke is the senior vice president of Management Science Associates (MSA). He can be reached at DBurke@msa.com.

1. 2. 3.

www.CBDRetailConference.com.

EASY STEPS

To 60% Profit* Per Square Inch 8”

Stock Popular Legal Lean Products:

With an average gross profit of 60% on Lean products, selling one Legal Lean product returns more profit than selling 3 competitive products!

Product Placement With Eye Catching Displays:

Our highly visible, eye catching, 8 inch footprint displays produce massive sales returns when placed near registers, end cap areas, and high traffic shelf space. Customers know our brand has a pulse on alternative and urban culture needs.

Value Added Products Customers Really Want:

Move the sales needle when you utilize our free value added products. These products truly compliment the Legal Lean products you sell.

www.legalleanstore.com | 408-883-5326

16”

Let’s Get Things Started. Contact us Today! Legal in All 50 States!

* Average gross profit on Lean products

cstoredecisions.com

June 2020 • CSTORE DECISIONS

Front End | P M TA D e a d l i n e C o l u m n

courts Extend FDA

PMTA Application Deadline Due to COVID-19, the pre-market tobacco product authorization (PMTA) application filing deadline moves to Sept. 9, 2020. Thomas Briant • National Association of Tobacco Outlets

As previously reported in CStore Decisions, the U.S. Department of Justice, on behalf of the Food and Drug Administration (FDA), submitted letters on March 30, 2020, to the U.S. District Court for the District of Maryland and the U.S. Circuit Court of Appeals for the Fourth Circuit with a request for a 120-day extension of the court-ordered May 12, 2020, premarket tobacco product authorization (PMTA) application filing deadline. The FDA sought the 120-day extenNew cigarettes, smokeless and sion due to the exceptional circumroll-your-own (RYO) tobacco products stances presented by the COVID-19 introduced between Feb. 15, 2007, outbreak. The new filing deadline, if and March 22, 2011, were required to allowed by these courts, would be file marketing authorization submisSept. 9, 2020. sions by March 22, 2011. Products In response, the U.S. Circuit Court which did so are referred to as of Appeals for the Fourth Circuit and “provisional” and may continue to be the U.S. District Court for the District marketed unless the FDA issues an of Maryland issued orders approving order otherwise. the FDA’s 120-day extension request New cigarette, smokeless and RYO and changing the May 12, 2020, products introduced after March 22, PMTA filing deadline to Sept. 9, 2020. 2011, must receive a marketing order The FDA will now enforce the new from the FDA prior to being offered Sept. 9, 2020, marketing authorization for sale. requirement based on product type “Deemed” products — includand date of availability in the market. ing cigars, pipe tobacco, electronic cigarettes, vapor products, hookah, IN GENERAL alternative nicotine products and All tobacco products on the marheated tobacco products — ket on or before Feb. 15, 2007, are introduced into the market between “grandfathered” and exempt from Feb. 15, 2007 and Aug. 8, 2016, filing premarket authorization must now have either a Substantial applications. Equivalence (SE) or a PMTA 24

CSTORE DECISIONS •

June 2020

application filed with the FDA by Sept. 9, 2020. Since there were no electronic cigarette, vapor or alternative nicotine products on the market as of Feb. 15, 2007, all of these products will need a PMTA filed with the FDA by the Sept. 9 deadline. Then, the FDA may allow these products to remain on the market for up to one year, or potentially even longer, during the agency’s application review period. For any new tobacco product that manufacturers planned or plan to introduce into the market after Aug. 8, 2016, the manufacturer must first file a PMTA with the FDA and receive a marketing approval order from the FDA before selling the product to the public. This means that retailers and wholesalers will need to rely on manufacturers to inform them of whether they have submitted timely SE or PMTA applications and whether the FDA issues a marketing approval order authorizing the sale of the products in the marketplace. Thomas Briant is the executive director of the National Association of Tobacco Outlets (NATO). He can be reached at info@natocentral.org.

cstoredecisions.com

COMING THIS SUMMER

19SWM2022 WO Firework LTO Trade Ad_v1-CSD.indd 1

5/1/20 5:26 PM

heartwarming the world.

Countries

16,500

Founded in 1909, the

Milton Hershey School

remarkable

prepares kids in need for

success in life.

PEOPLE AROUND THE WORLD

Bringing Goodness

to the world -SINCE 1894-

80+ BRANDS

26 26

CSTORE DECISIONS DECISIONS •• February June 2020 CSTORE 2020

cstoredecisions.com cstoredecisions.com

Tobacco’s 2020 Trajectory Rising sales are boosting retailer optimism across the category, but regulatory hurdles loom. Erin Del Conte • Executive Editor

Tobacco sales have proved a bright spot for many convenience stores during the COVID-19 pandemic, but while c-stores anticipate robust tobacco sales for the remainder of 2020, retailers are bracing for the potential chill of regulatory headwinds. As the pandemic ﬁrst hit the U.S., many customers began hoarding tobacco products — particularly cartons of cigarettes — ahead of shelterin-place rules, according to data from the InfoMetrics database managed by consulting services ﬁrm Management Science Associates (MSA). “As the stay-at-home situation has continued, there has been increased consumption of all types of tobacco items with the exception of vape, possibly because consumers are at home and not in locations where there are restrictions on its use,” said Don Burke, senior vice president of MSA. A poll by consumer intelligence research platform CivicScience found that from April 28 to May 11 — at a time when most areas of the country were still experiencing stay-at-home orders — 31% of cigarette cstoredecisions.com

users reported smoking more frequently, and 28% of e-cigarette/vape users reported vaping more frequently. Some 44% of cigarette smokers and 34% of smokeless, e-cig and cigar users reported buying their tobacco product at a c-store most often during the same period. Research ﬁrm IRI’s Convenience All Scan data found smokeless tobacco dollar sales grew 7.8%, with spitless up a whopping 80.6% for the four weeks ending April 19, 2020. Tobacco accessories dollar sales were up 33%, and cigars climbed 13.1%, while cigarettes dropped 2.4%, and e-cigs dipped 1.1% for the same period. Nielsen data showed e-cigs down 8.5% and cigarettes down 5% for the four weeks ending April 25, 2020, but similar upticks in other tobacco products, with cigars up 11.3%, pipe tobacco up 14.1% and “shag” or rolling tobacco up 28%. June 2020 • CSTORE DECISIONS

Tobacco 2020 Trajectory

Nielsen Total U.S. Convenience Channel Tobacco Data

for Eight & Four Weeks Ending April 25, 2020

Depending on location, c-store retailers are seeing various realities and differing surge/decline timelines when it comes to tobacco sales.

$ Sales 8 Weeks Ending 4/25/20

Product

STORE-LEVEL VIEW

1-Year % Change 8 Weeks Ending 4/25/20

$ Sales 4 Weeks Ending 4/25/20

1-Year % Change 4 Weeks Ending 4/25/20

Doug Galli, vice president and general Cigarettes $7.57 B -2.3% $3.74 B -5.0% manager for Reid Stores and Crosby’s, $254 M 11.3% Cigars $488 M 7.4% said sales of other tobacco products $6.39 M 12.3% $3.38 M 14.1% Pipe Tobacco (OTP) including cigars, snuff and ecigarettes climbed at the company’s 82 $545,000 28.8% $277,000 28.0% Roll-Your-Own Tobacco c-stores in New York and Pennsylvania, $952 M 6.9% $464 M 3.4% Smokeless Tobacco ahead of shelter-in-place rules. $616 M -7.1% $310 M -8.5% Electronic Cigarettes Year over year through April, “cigars are up 7%, e-vape is up 29% and the ZYN/Velo Source: Nielsen category that was non-existent last year has shown some legs. That category is 50% of the lift over last year,” Galli said. He added ex-smokers to relapse and less adult current smokers to that moist snuff was down slightly for the same period. attempt to switch over.” On Feb. 6, 2020, the Food and Drug Administration The growth seen at Crosby’s c-stores is “in spite of the (FDA) ruled that c-stores and other retailers can no longer (federal) flavor ban in (non-disposable) e-cigs and vape carry display cartridge-based e-cigs or vaping pods in products, along with the addition of the ZYN/Velo prodflavors other than menthol and tobacco, but flavored ucts,” Galli added. disposable e-cigarettes are still legal. The cigarette segment, meanwhile, has been down “The FDA attempted to strike a balance between 10% at Crosby’s c-stores through April, a slump Galli protecting adult access to flavored vaping products and attributed to the purchase age for cigarettes increasing discouraging youth from vaping,” noted Gregory Conley, from 18 to 21 on Nov. 1, 2019, in New York state. Shortly president of the American Vaping Association. “Unforthereafter, on Dec. 27, 2019, the FDA officially changed tunately, this move has undoubtedly led some adult the minimum tobacco purchase age at the federal level from 18 to 21. The new nationwide Tobacco-21 law was effective immediately and applies to all tobacco products, including e-cigarettes and vaping cartridges. Across the country, Cenex Zip Trip 4-Week Dollar Sales 52-Week Dollar Sales saw a different trajectory at its 36 cProduct stores in Montana, Wyoming, North Current 1-Year % Current 1-Year % Change Change Dakota, South Dakota and Minnesota. “While early March and April saw a Cigarettes $4.17 B -2.4% $55.9 B -0.2% small decrease in tobacco sales during $628 M 7.8% $7.99 B 8.3% Smokeless Tobacco the heart of the stay-at-home orders in $556 M 2.5% $7.22 B 4.4% Chewing Tobacco Snuff the states we serve, in the past three weeks, we’ve seen them rise back $71.7 M 80.6% $762 M 68.4% Spitless Tobacco similar to what we sold during the same $300M 13.1% $3.55 B 1.3% Cigars time span a year ago,” said Zip Trip $350 M -1.1% $4.87 B 34.7% Electronic Smoking Devices Merchandising Manager Jon Fleck. Montana — where the majority of Zip $28.8 M 33.6% $293 M 4.3% Smoking Accessories Trip’s stores are located — is now transi$12.4 M 29.5% $124 M 0.6% All Other Tobacco Products tioning into the next phases of loosening $8.51 M 35.7% $81.8 M 2.6% Pipe Tobacco stay-at-home restrictions, but during the lockdown, despite decreased customer $3.93 M 17.9% $42.5 M -3.1% Roll-Your-Own Tobacco traffic, the tobacco category held its Source: IRI Total U.S. Convenience All Scan Data for the four and 52 weeks ending April 19, 2020 own, Fleck said.

Tobacco Sales at U.S. Convenience Stores For the Four & 52 Weeks Ending April 19, 2020

CSTORE DECISIONS •

June 2020

cstoredecisions.com

PREMIUM NICOTINE PRODUCTS

THE MODERN TAKE ON NICOTINE The oral nicotine category is estimated to grow at approximately 70% annually as adult tobacco consumers expand beyond traditional tobacco. VELO is the simple, convenient choice with the RIGHT STYLES, the RIGHT STRENGTHS, and the RIGHT FLAVORS. Nearly 9 out of 10 VELO consumers would recommend VELO to other adult smokers, vapers, and dippers.

Talk to your RJRV rep about how to grow your business with VELO.

Tobacco 2020 Trajectory

Fleck noted tobacco companies are offering bigger buydowns and providing them earlier than planned. “With advertising these deals with outdoor signs and matrix reader boards, we have seen some (sales) come back,” Fleck said. At the end of 2019, a temporary ban on flavored vape products — including menthol — went into effect in the state of Montana. “We did a tremendous business in Montana with flavors prior to the ban,” Fleck said. The ban on menthol, however, expired in mid-April, and the chain is now bringing in some flavored disposable e-cigs. Given the Montana flavor ban, Zip Trip has seen a 20% drop in e-cig sales. Although the e-cigs/vaping segment is down significantly because of flavor bans, Fleck noted, “the category is doing well as a ‘comfort product’ along with beer during this pandemic.” Meanwhile, chew, snuff and cigars are down slightly — “which isn’t bad considering the drop in customer counts (due to the pandemic),” said Fleck. “We categorize tobacco alternatives with these products as well. ZYN, Dryft, etc., have been a pleasant surprise that has picked the overall category up.” At Zip Trip, tobacco customers are asking for specials, and seeking “the bigger, better deal.” “Similar to beer, cigarettes are comfort products, so while we did a small decrease in business during this time versus the prior year, we attribute most of that to the smoking age increasing to 21 as opposed to COVID-19,” Fleck said. Meanwhile, in Texas, Irfan Tejani, CEO and president of Tejani Holdings, the parent company of Charge Up c-stores, said COVID-19 had a big impact on tobacco sales. “Sales were down all across the board by double digits as customers did not know how to react to the entire situation, and then we started to get momentum back,” he said. Headquartered in Sugar Land, Texas, Charge Up operates 40 c-stores in Texas and Louisiana. “Louisiana stores specifically had to adapt to operating during a strict lockdown,” Tejani said. Overall, he noted that “despite the ongoing restrictions, the cigarette category remains the highest grosser all across (our stores).” Smokeless tobacco has been stagnant to growing at Charge Up, depending on the location, while cigarillos are “very strong,” particularly the single sticks, which Tejani noted offer good profit margins. What’s more, he sees cigarillo sales growing — “especially the singles and promo packs like 3-for-1 and 4-for-1 packs,” Tejani said. Charge Up is also testing the oral nicotine category. Nicotine toothpicks are sold at select stores. “It’s a special category that doesn’t sell across the board,” he said. “Nicotine gums seem to be doing good where this category is sold.” Tejani, Fleck and Galli all anticipate strong sales for tobacco for the rest of 2020. 30

CSTORE DECISIONS •

June 2020

One headwind c-store retailers need to be aware of is the potential for tobacco tax increases as states look to fix budget issues due to the pandemic.

“Tobacco in our New York stores is about to grow. Effective May 18, if your retail location has a pharmacy, you will not be allowed to sell tobacco products,” Galli said. Crosby’s stores in Erie County, N.Y., experienced a lift in their tobacco sales when an identical rule went into effect there around a year ago. Tejani said he believes the tobacco category will continue to stay strong and consistent over the coming years — unless regulations become even stricter — with e-cigs slowly taking over a bigger portion of the category. Despite ongoing regulations, customer needs drive the market, and customers continue to demand tobacco sales, he pointed out. “We see tobacco numbers increasing the rest of the year, as many uncertainties lie ahead with COVID-19,” Fleck said. “Once again, for tobacco users, it is a comfort that they rely on during these times.” WHAT’S AHEAD?

One headwind for retailers to watch is potential for tax increases on tobacco products due to the pandemic. “COVID-19 is creating serious budget issues that we’re only just now starting to calculate. States that had started to grow accustomed to having large surpluses now have huge deficits that may surpass what states dealt with during the 2009 recession,” Conley pointed out. “As a result, tax increases on all tobacco and nicotine products are absolutely going to be considered in dozens of states over the next year. On the plus side for retailers, budget deficits will make it more difficult for state legislators to justify banning flavored vaping or tobacco products due to the tax revenue and jobs they provide.” Another is how the premarket tobacco authorization (PMTA) will impact the category. At press time, the new date when PMTA applications are due to the FDA is set for Sept. 9, 2020. “In theory, this would mean that after the September

cstoredecisions.com

Tobacco 2020 Trajectory

deadline, only products with pending or approved PMTAs before the FDA can continue to be sold by retailers across the U.S. Those selling JUUL, NJOY, Vuse, blu, etc. have little or nothing to worry about in terms of potential dead stock, but some of the more fly-by-night companies that make disposable vaping products seem likely to exit the market in September,” Conley warned. For a while, the shelf space for vaping products in c-stores seemed to be increasing by the month, he said. But now that some products are likely exiting the market ahead of the PMTA deadline, “the opposite appears to be occurring.” Conley believes states will begin to police the market more aggressively than the FDA. “We are going to see attempts at the state level to make selling products without a pending or approved PMTA a crime. Of course, this will not stop the black and gray markets, but will just drive them further underground,” he said. As things stand now, Burke expects that vape sales could rebound by the end of the year and finish out 2020 on a positive note, “but showing a lower level of growth than what has been seen in the past few years.” MSA has found that vape success requires retailers to offer a selection of products “not just the market leader,” Burke said. “The varying products offered by the different vapor brands appeal to different vapor consumers,” he said. “If you are not carrying an item your shopper wants, they will find a store that does carry it.” One possible silver lining is that the upheaval in the vape category could have benefits for cigarette sales. Conley said one Big Tobacco manufacturer reported cigarette sales in America are not declining as fast as they were when JUUL and its flavors were freely available because many consumers are switching to lower-priced cigarettes. “One of the questions facing the vapor category in 2020 is if dual-usage consumers — those that both smoke and vape — and those smokers that mostly converted to vapor, and who now appear to have decreased their

use of vapor and possibly increased their use of combustibles, will eventually resume their prior level of vapor consumption,” Burke said. Based on MSA’s research, Burke predicts cigarettes will have a better-than-average year, the cigarillo cigar segment will remain steady and the modern oral category will continue its upward climb, while vape continues “to suffer from the illegal tetrahydrocannabinol (THC) vaping crisis and the loss of flavors that occurred in 2019.” Conley concurred, “This rise in discount cigarette use coincides with the American public being grossly misinformed by government agencies and the media about ‘vaping-related lung illnesses,’ which we now know were caused by illicit THC products, not nicotine vaping products.” The key to success for cigarette sales will be carrying a broad selection of brands at the various price tiers, Burke advised. “Although the (cigarette segment) typically shows a unit sales decline, two sub-segments — the super-premium and deep-discount categories — have shown growth. And while these are the two categories that are growing, it is still the premium category (Marlboro, Camel, Newport) that accounts for the bulk of cigarette sales, emphasizing the need for a broad selection of brands and prices.” The future of menthol cigarettes remains uncertain after the U.S. House passed H.R. 2339 on Feb. 28. The bill calls for a nationwide sales ban of all flavored tobacco — including menthol — and flavored vaping products, with few exceptions. The bill would also end remote or online sales. The bill is not expected to pass the Senate — for now. “If the composition of the U.S. Senate changes in the November elections, the flavor ban fight absolutely will start up again at the federal level,” Conley said. Menthol represents approximately one-third of cigarette sales, according to MSA. “So a significant level of revenue for the tobacco retailer and billions of dollars in tax revenue each year,” Burke pointed out. “Cigarettes hands down are the most powerful segment in the tobacco category,” said Charge Up’s Tejani. “I don’t see any other (segment) taking over anytime soon, unless it was to be stopped completely and customers were Nearly one-third of a survey of 755 self-reported e-cigarette smokers are smoking them more as of late. forced to buy (tobacco) without Over the past few weeks, have you been smoking e-cigarettes more, less or the same as usual? that option.” > All respondents in my account The unpredictability is Tejani’s > Weighted according to U.S. Census figures for gender and age, 18 and older biggest concern when it comes to the state of tobacco today. He compared it to a game of cat and mouse. “It’s just getting intense. The c-store industry Margin +/-7% 755 responses from 4/28/2020 to 05/10/2020 relies on the cigarette category Percentages do not sum to 100 due to rounding Source: CivicScience® on May 11, 2020 heavily. It doesn’t provide good

Recent use of e-cigs

CSTORE DECISIONS •

June 2020

cstoredecisions.com

Tobacco 2020 Trajectory

Cigarette Use

margins — not at all — but (reOver the past few weeks (i.e., during lockdowns), 31% of cigarette users reported smoking them more mains) one of the top three drivers often, while 19% reported smoking them less. of customers to the c-store. If the Over the past few weeks, have you been smoking cigarettes (not including ecigs) more, less or the same as usual? cigarette segment is banned or > All respondents in my account heavily restricted, it could have > Weighted according to U.S. Census figures for gender and age, 18 and older a devasting impact on sales for many c-stores as they wait for customers to adapt by switching to new tobacco segments.” Margin +/-7% 755 responses from 4/28/2020 to 05/10/2020 For Zip Trip’s Fleck, flavor bans Percentages do not sum to 100 due to rounding have been a big concern over the Source: CivicScience® on May 11, 2020 past few years and hit his chain hard in 2019. “The tightening of flavor bans to include menthol, especially with cigarettes, toothpicks, are also picking up steam. Retailers are missing would be a major concern,” he said. an opportunity if they are not adding this category to their As Galli and Fleck both noted, the effects of Tobactobacco section. The relatively small footprint and escalatco-21 caused an immediate jolt to sales, but it’s a blip ing sales in this segment provide an incremental revenue already in the rearview mirror. opportunity with strong growth potential,” Burke said. “Most national chains and many local businesses began enforcing the (Tobacco-21) law immediately after it was STOCKING CBD enacted,” Conley said. Consumer interest in cannabidiol (CBD) is strong, evidenced by MSA’s tracking of Google search levels on the product. GROWING THE NICOTINE BUSINESS “C-store retailers need to realize that many of their Last fall, MSA found that 43% of c-store retailers were sales will be to first-time purchasers, so it is critical to ofbusy growing their nicotine business, a trend expected to fer a selection of lower-priced items that encourage this continue in 2020. trial,” Burke said. “One key finding was that these retailers expanded Charge Up is selling various products across all the their tobacco category (growing their items by more different segments of CBD. “The response is good,” said than 10.5%) to carry the right selection of SKUs that Tejani. “It not only offers higher dollar margins but prowould appeal to a broad tobacco audience,” said Burke. vides high-ticket-item sales in the stores. Customers tend “Retailers need to regularly review their SKU selection to draw towards it more (as time goes on), and it will be a and instead of just removing (products) that are not sellvery strong category very soon.” ing, judiciously replace those SKUs with items that have For Zip Trip, it depends on the market. While CBD has the potential to appeal to their shoppers.” done well in some of the chain’s stores, it has also pulled If a c-store has a strong selling tobacco item, and very it from shelves in other markets. few similar alternative items, this may be a good place to From February to March, CivicScience observed an add an additional SKU, Burke pointed out. “Most tobacco uptick in the percentage of U.S. adults who have used consumers are fairly loyal to the brands they prefer, and CBD products (increasing from 21% in February to 24% in if they are not available at one store, they will find a store March), which has remained consistent through April. that does carry their preferred item,” he said. “As the Meanwhile, reported cannabis use increased three pertobacco consumer typically purchases additional items centage points in April compared to February and March, while in a c-store, and typically visits the store several with 20% of U.S. adults polled saying they used cannabis times a week, this is a lucrative customer.” in April, according to CivicScience. At press time, cannaAnother way retailers are growing their tobacco sets is bis was legal in 11 states, plus Washington, D.C. It offers by increasing space devoted to the modern oral category, another potential segment to c-stores in those states. which Burke called “the strongest growing category in Typically, MSA’s data has shown that lotions, gummies tobacco, yet currently a smaller category when compared and tinctures are the better selling CBD items. to cigarettes or cigars or moist.” “Many purchases of CBD are conducted online curMuch of the growth rate, Burke said, is due to new rently, so for the retailer to capture these purchases and distribution, but MSA is beginning to track a strong level encourage trial, their CBD items need to be near or at the of repeat purchase. front register to maximize shopper visibility,” Burke said. “The top-selling items with the strongest distribution In the pages that follow, CStore Decisions drills down are the pouches, but the other category items, such as into the top c-store tobacco categories. CSD 34

CSTORE DECISIONS •

June 2020

cstoredecisions.com

Category Management | C i g a r e t t e s

SELLING CIGARETTES

RESPONSIBLY With the legal smoking age now 21, retailers are urged to have a well-documented training program in place to avoid fines and penalties. John Lofstock • Editor-in-Chief

CSTORE DECISIONS •

June 2020

cstoredecisions.com

The Food and Drug Administration (FDA) issued a directive in December 2019 stating, “It is now illegal for a retailer to sell any tobacco product — including cigarettes, cigars and e-cigarettes — to anyone under 21.” The ruling had an immediate impact on convenience stores. Selling tobacco to underage customers will result in ﬁnes, penalties or a loss of license to sell tobacco products. C-stores saw cigarette sales of $55.9 billion for the 52 weeks ending April 19, 2020, a dip of 0.2% over last year, while unit sales fell 4.3%. Many retailers attributed the decline in sales to the onset of the Tobacco-21 rule. “Retailers need to fully understand that tobacco is an age-restricted product. As a result, selling an age-restricted product is not a right, but rather, a privilege — a privilege afforded to retailers who will adhere to and enforce the laws, federal and local, associated with age-restricted products,” said Terry McKenna, a principal and founder of Employee Performance Strategies Inc. (EPS). “Additionally, retailers have a responsibility to the communities they serve, in particular to their customers, to be a responsible retailer, a retailer that can be trusted not to sell a restricted product to their customers’ minor children. When a retailer loses the trust of their customers, they have lost everything.” Retailers need to prepare their employees for how to manage the sale of restricted products to their customers. This preparation includes: Training: Employees need to understand federal and local laws, how to read a minor’s body language when attempting to make a

cstoredecisions.com

purchase, what types of IDs are acceptable, what to look for in the IDs, how to know if the ID has been forged or altered, how to be aware of their own body language when declining a sale, and most importantly, how to keep the transaction safe from escalating. Coaching: “When formal training ends, coaching begins, and coaching never ends,” McKenna said. “Provide corrective feedback in private and praise in public (if the employee is comfortable with public praise). Coaching requires a watchful eye for the desired performance behaviors — reinforce the right behaviors and correct and coach up the wrong behaviors.” Reward and Recognition: Reward and recognize the right behaviors. This requires retailers to be on the lookout for the right behaviors (coaching). “What gets recognized and rewarded, gets repeated,” McKenna said. “Reward and recognition aren’t always about, nor should they be about, money. A simple, ‘Thank you for a doing a great job. I really appreciate it. It means a lot,’ goes a long way and has a long-term intrinsic value to the employee versus soonforgotten extrinsic rewards.” Celebrate: Celebrating successes is a great way to reinforce the right behaviors and sends a strong message to all employees that these are the types of behaviors the company needs to be recognized as a responsible retailer.

June 2020 •

CSTORE DECISIONS

Category Management | Cigarettes

total u.s. nicotine share – servings TRAINING & COMPLIANCE

Share of Nicotine 52 weeks ending Q1-2020 vs. 52 weeks ending Q1-2019 Share Q1

Share Q1

Still, a lot can go wrong, so managers and 2019 2020 Change corporate human resources managers need Cigarettes 81.1% 79.3% -1.8% to stay on top of training and compliance. Among the biggest mistakes McKenna has Moist 7.1% 7.3% +0.2% seen in his decades of retail guidance is comVapor 4.3% 5.5% +1.2% panies not following up and holding employPapers/Tubes/Wraps 3.3% 3.4% +0.1% ees accountable for the training. “Just because an employee tells you they Large Cigars 2.5% 2.7% +0.2% viewed the online training program or read Little/Filtered Cigars 1.2% 1.2% 0% your company policy manual on the sale of Modern Oral 0.1% 0.4% +0.3% restricted products doesn’t mean they actually did it,” he said. “Anyone can check off a Snus 0.3% 0.3% 0% box or write their initials after a paragraph. Pipe Tobacco 0% 0% 0% Just because your assistant manager says they trained your new hire, how do you know they Roll Your Own 0% 0% 0% didn’t fly through the training or take short• Volume in serving units cuts? Hold employees accountable by testing Source: Management Science Associates, 2020 their knowledge.” Another proven tactic for managers to practice with employees is role-playing. For example, McKenna advocates role-playing various easier for the c-store retailers. “Now the major inillegal sales transactions with employees, so they store products such as tobacco, vape and alcohol are experience what to do and what to say during the part of the same policy: no sales under 21,” he said. sale of tobacco products. Practice builds confidence. The big issue Maiellano warned against is sting “If there is one aspect of the cashier’s job where they operations at both the federal and local levels. need to feel confident, handling restricted sales is “For any retailer selling tobacco, I recommend it,” he said. “Understand that this is by no means an having a written carding policy in place,” he said. easy job, and one mistake can be costly.” “Make sure employees know the policy and docuLou Maiellano, president of TAZ Marketing & Conment it. Conduct monthly compliance shops to sulting Group, who spent more than 20 years overensure your entire staff is following the company seeing tobacco sales at Sunoco, Wawa and Mobil, carding policy and asking for ID for anyone who said the federal regulations should actually make it looks 27 and under. This could help you during a sting operation.” McKenna agreed that preparation is the key for selling tobacco responsibly. “The biggest piece of advice I can give to retailers is to focus,” McKenna said. “Focus on employee training and ongoing coaching, and focus on the importance of this product category. Even though sales and gross prod•A s of December 2019, it is illegal to sell tobacco uct margin are down compared to years past, tobacco remains a viable business-building catproducts to anyone under 21 years of age. egory. If a retailer lost the right to sell tobacco, •R ole-play with employees as part of training to but was given the opportunity to earn that right help them know what to say and do if they back, what actions would they take to earn it back? Then take those actions now before you encounter an illegal sales situation. lose the right.” CSD

fast facts:

CSTORE DECISIONS •

June 2020

cstoredecisions.com

MEET YOUR NEW

BEST SELLER

When you put your name on a product, it's got to be better than good. Premier provides high-quality, U.S. tobacco at a value price: everything your customers want. Plus everything you want: great margins and exceptional service. When you our products and marketing put ou support to work - you and your customers will never have to compromise. That's quite a first impression.

GoPremier.com SURGEON GENERALâ&#x20AC;&#x2122;S WARNING: Cigarette Smoke Contains Carbon Monoxide.

CIGARET TES I CIGARS I PIPE TOBACCO I RYO I TUBES

Category Management | R o l l Yo u r O w n

RYO:

Steady as She Rolls First quarter roll-your-own smokers fired up nearly 7% growth during pandemic sheltering while cones and tubes show innovation. Thomas Mulloy • Senior Editor

Roll-your-own (RYO) tobacco sales lit up in the midst of the COVID-19 sheltering, with c-store sales jumping 17.9% the four weeks ending in mid-April compared to the same period last year, and rebounding from a drop off of 3.1% for the preceding year, according to IRI Convenience All Scan data. Elaine Annis, retail operations coordinator at Richmond Master Distributors, which owns 55 Low Bob’s tobacco stores in Indiana, can attest to that growth. Her stores have recently seen doubledigit growth in RYO. “It’s doing pretty good for us,” said Annis. “I don’t know if just with people being at home more right now, they have more time to (smoke).” The long-term outlook for RYO is optimistic. 360 Market Updates’ “Global Roll-Your-Own-Tobacco Products Market 2020-2023” report found RYO is projected to yield a compound annual growth rate (CAGR) of 7.14% through 2023, in large part due to its steady consumer base, competitive pricing, as well as taste and diversity of offerings. Low Bob’s serves a dedicated tobacco lover, carrying a variety of large 16-ounce bags as well as six-ounce bags, which are most common. In many stores, Low Bob’s boasts a 16-foot RYO display, Annis noted. All stores feature at least 12 feet devoted to RYO. Most c-stores don’t have the 40

CSTORE DECISIONS •

June 2020

space to carry that much stock, so tobacco category managers like Dandy Mini Marts’ Jessie Dix must be strategic about their RYO display. “Some of the stores do carry the larger 16-ounce,” Dix said, “but it’s mostly just the six-ounce bags.” Some Dandy stores have the demand to stock larger bags, and he’ll certainly match that with a stronger display. RYO innovation, Annis said, is in the accessories. She sees strong activity lately with cones — the wide-mouthed, stuffable pre-rolled papers. Cone and tube makers

tout papers that are vegan and GMO-free; made with fibers that are unbleached, chlorine- and dyefree, and responsibly harvested, among other traits. “Vendors are increasingly offering innovative, eco-friendly products such as treeless cigarette rolling papers and filter tips due to the rising environmental concerns among consumers,” according to the 360 Market Updates RYO Report. Annis said manufacturers have been active promotional partners. “We work with vendors, and they’ll either do a promotion on our loyalty program, or they’ll run a buydown on the product for a month or two,” she said. That lets Low Bob’s pass the savings on to its RYO customers. It also keeps the RYO sales burning. CSD

ROLL-YOUR-OWN TOBACCO U.S. Convenience Channel Dollar Sales Products

Unit Sales

Current

1-Year % Change

Current

1-Year % Change

Latest 4 weeks ending 4/19/2020

$3.9 M

17.9%

483,000

7.0%

Latest 12 weeks ending 4/19/2020

$10.5 M

6.9%

1.33 M

-0.4%

Latest 52 weeks ending 4/19/2020

$42.5 M

-3.1%

5.76 M

-7.7%

Source: IRI Convenience All Scan data for the four, 12 and 52 weeks ending April 19, 2020

cstoredecisions.com

WARNING: This prod uc Nicotine is an ad d

Summer Promotion MSRP Starting at

$14.99 Slate JUUL Device

Silver JUUL Device

d uct contains nicotine. d dictive chemical. % 35 Increase in incremental device sales from Fall & Winter Promotion.

1 in 5

JUUL Devices are purchased by a new JUUL customer.

On average, each new JUUL customer purchases 52 4-Pack Refill Kits each year.

$830

Each additional JUUL customer generates approximately $830 in revenue each year. Source: Nielsen AOD, Weeks ending 11/30/19. JUUL talks internal survey data JUUL Churn Tracker Report for March.

2020

Global â&#x20AC;&#x201D; Brand Guidelines

Contact your JUUL representative to Age restriction symbols learn more about promotional opportunities.

The sale of tobacco products to minors is prohibited by law. This is an age-restricted product and age verification is required at sale. CALIFORNIA PROPOSITION 65 WARNING: This product contains chemicals known to the State of California to cause cancer and birth defects or other reproductive harm. May not include state, local, or excise tax. TM and ÂŠ 2020 JUUL Labs, Inc. All rights reserved.

Category Management | E - C i g s & Va p i n g

EVER-CHANGING E-CIG ENVIRONMENT New deadlines, new state regulations and new consumer habits all affect how c-stores manage the popular vape segment. Anne Baye Ericksen • Contributing Editor

CSTORE DECISIONS •

June 2020

cstoredecisions.com

Since the Food and Drug Administration (FDA) deemed electronic nicotine delivery systems (ENDS) as tobacco products in 2016, it’s moved the premarket tobacco authorization (PMTA) application deadline multiple times, confounding manufacturers and convenience store operators. Initially, it was set for August 2018, then extended to August 2022 before being moved to August 2021. Then last year, a federal court commanded the government change the deadline to May 12, 2020. As that date approached, the FDA requested and received an extension due to the demands COVID-19 placed on its resources. Now, manufacturers have until Sept. 9, 2020 to complete applications. “For those manufacturers planning on submitting their PMTAs in May, all this delay has done is allow them more time to perfect or improve their submissions,” said Gregory Conley, president of the American Vaping Association (AVA). “Similarly, we are concerned about whether the FDA will have the capacity and resources to quickly review all the applications filed in September given the agency’s rightly focused attention on COVID-19 testing and research,” added Tony Abboud, executive director for the Vaping Technology Association (VTA). While PMTAs affect manufacturers, the FDA’s evolving attitude toward interim ENDS regulations impacts what stores stock. With growing outcry over underage use, the agency has suggested a number of guidance changes, culminating earlier this year with

the directive to restrict retailers from selling cartridge-based e-cigarettes or vaping pods in flavors other than menthol or tobacco. Notably the national ban exempted disposable e-cigarettes and open vaping systems. “Like other retailers, we’ve been focused on and working toward preserving postban category performance and are pleased that our e-cigarette category is still showing strong year-over-year sales and profit growth,” said Adam Long, senior category manager for Rutter’s. The York, Pa.-based c-store chain operates 77 sites in three states. Not all c-stores have weathered the transition as smoothly. Last June, market research firm IRI reported a 174% increase in dollar sales for all electronic smoking devices in U.S. convenience stores over 2018 performance. And recent numbers revealed a much slower growth rate for 2020, only 34.7% in dollar sales. What’s more, some lawmakers assert the FDA ban falls short and have sought to broaden it with legislation prohibiting the sale of menthol tobacco products as well as

Year in Review

Implementation of new regulations, including raising the national tobacco age to 21, plus a drop in price per unit, have softened c-stores’ e-cigarette sales. Electronic Smoking Devices

Dollar Sales

1-Year % Change

Unit Sales

1-Year % Change

Price Per Unit

2019

$3.40 B

174.0%

241 M

101.0%

$14.11

2020

$4.86 B

34.7%

348 M

37.4%

$13.98

Source: IRI, a Chicago-based market research firm, U.S. Convenience Store data for 52 weeks ending March 24, 2019, and April 19, 2020

cstoredecisions.com

June 2020 •

CSTORE DECISIONS

Category Management | E-Cigs & Vaping

Consumer Preferences during Coronavirus

While most in-store categories registered losses during stay-at-home orders, other tobacco products prospered. Per Store, per Day by NACS Category Other Tobacco Products

Total Dollar Sales

Dollar Sales

Units

Transactions

Average Price

Dollar per Transaction

Unit per Transaction

Amount

% Change

$420

12.5%

13.7%

-1.2%

-1.0%

13.9%

15.0%

Source: PDI Insights Cloud Feature: COVID-19 Impact on Consumer Behavior, PDI Report: Week Ending May 3, 2020, downloaded May 14, 2020

flavored disposable e-cigarettes and e-liquids. Since Massachusetts passed its total flavor ban in December, Rhode Island followed suit, and most recently, New Jersey and New York made it illegal for retailers to sell ENDS in any flavor other than tobacco. “Now, we stand to lose a sizeable portion of income due to the recently enacted federal restriction and the more restrictive measures that came into effect on April 20. We have reconfigured shelf positioning to prompt CBD products,” said Aref Assaf, owner of Denville Mart in Denville, N.J. “Very few menthol e-cigarette customers have switched to unflavored tobacco e-cigarettes; they’ve just stopped coming to my store altogether,” said Martin Gallagher, president of Martin J. Gallagher Inc., owner of Chestnut Ridge Exxon Tigermarket in Montvale, N.J. “We worked with our partners and suppliers to find out who was going to support us in getting products out of the stores and giving credit (for unsold product). Still, that might not impact sales as much as the ban of other flavors, espe-

cially in stores located in college towns,” said Doug Galli, vice president and general manager for Reid Stores and Crosby’s, which operates 82 retail sites in New York and Pennsylvania. New York lawmakers, however, did provide the possibility for products to re-enter the market after receiving PMTA approval. “Theoretically, some flavored e-cigarettes could come back in the future,” said Conley. UNPRECEDENTED TIMES

Although regulations may dampen e-cigarette profits, it appears the coronavirus has not. In mid-April, Nielsen reported the difference between e-cigarette sales before and during restricted living totaled $33 million. NACS/PDI data also reflect an uptick: other tobacco products (OTPs) total dollar sales per store per day for the week ending May 3, 2020, increased by 12.5%, and unit per transaction rose 15%. “We observed a spike in e-cigarette consumer demand similar to that seen in other tobacco categories when shelter-in-place guidance was issued in our operating areas as consumers felt the need to stock up in the face of uncertainty. Since then, volumes have returned back to levels which are more reasonable,” said Rutter’s Long. “I’m scratching my head why it would lift PMTA deadline is extended to Sept. 9. sales in some categories,” added Galli. “Maybe this has something to do with N ew Jersey and New York implement environments because people are home menthol bans. and not dealing with as many usage C OVID-19 spurs increased tobacco spending. restrictions.” CSD

fast facts: • • •

CSTORE DECISIONS •

June 2020

cstoredecisions.com

Category Management | C i g a r s

Cigars

ARE SMOKIN’ Pandemic buyers lift the category as shortterm sales far outpace annual trends. Thomas Mulloy • Senior Editor

While the COVID-19 health crisis has hindered the nation’s economy, it seems to have lit a fire in the cigar market, at least in the short term. “Within the cigar category, I am seeing about a 10% increase in volume year-to-date versus the same period last year,” said Mark McCarty, director of category management with Clark’s Pump-N-Shop, which operates 67 stores in Kentucky, Ohio, West Virginia and Florida. “Much of this increase occurred within the last six to eight weeks during the COVID-19 outbreak.” National numbers bear that out. Data from Chicago-based market research firm IRI showed dollar sales of cigars in U.S. convenience stores for the 12-week period ending April 19, 2020, were up 7.2% compared with the same time last year. And the previous four weeks were nearly double that, at 13.1%. That increase dwarfs the 52-week dollar growth of just 1.3%. Besides the presumption of smokers stocking up, small cigars are driving those big sales. “It’s mostly cigarillos that is the bulk of the business right now — the pre-price products of two for 99 cents, two for a $1.49, depending on what the taxes are in specific states,” said Jeremy 48

CSTORE DECISIONS •

June 2020

Weiner, cigar category manager for Smoker Friendly, which operates 105 stores across Colorado, Wyoming, Montana, Nebraska and Florida. “But, yeah, it hasn’t changed much over the past few years, that’s for sure.” The classic cigar is still a reliable seller, as well, with some customers purchasing by the box. “We sell the 60-count Perfectos and things like that, but that’s more of the traditional cigar smoker,” Weiner said. “And I think the flavors and things like that are more for the crowd that’s anywhere from about 21 to 35.” Weiner noted that the COVID-19 pandemic put the damper on some promotional efforts and delayed others. Nevertheless, cigar makers are still busy putting ideas together. “Some of the limited-time offers, I think, will be affected, but Swisher’s coming out with a summer celebration — a foil pouch for the red (classic Swisher Sweet) that’s going to be like a collector series,” Weiner said. “I think it’s going to have four different packages for that same product.”

cstoredecisions.com

AVAILABLE IN 3 FOR $1.29 & SAVE ON 3 POUCHES FOR MORE INFORMATION CONTACT YOUR SWEDISH MATCH REPRESENTATIVE 800-367-3677 • CUSTOMERSERVICE@SMNA.COM

GAMECIGARS.COM

Tight on time?

Category Management | Cigars

cigar sales Rise At C-Stores Dollar Sales Products

Unit Sales

Current

1-Year % Change

Current

1-Year % Change

Latest 4 weeks ending 4/19/2020

$301 M

13.1%

195 M

11.4%

Latest 12 weeks ending 4/19/2020

$838 M

7.2%

550 M

6.3%

Latest 52 weeks ending 4/19/2020

$3.5 M

1.3%

2.4 B

0.6%

Source: IRI Convenience All Scan data for the four, 12 and 52 weeks ending April 19, 2020

“

It will be interesting to see over the next six to 12 months if the talks of additional legislation in regards to ﬂavors, etc., will be put on the back burner. Hopefully the states and federal government will be focused on things to help the economy and small business, and not adding additional ways to hurt us.

“

As for display, Weiner explained that all of Smoker Friendly’s sets are planogrammed and uniform, with either a four-foot or eight-foot domestic cigar set. His stores try and keep most of the product out on the ﬂoor so the consumer can interact with the merchandise. That’s a luxury most c-stores don’t enjoy. Smoker Friendly outlets are 21-and-over establishments. Other retailers, like McCarty, have to approach display strategy differently. Clark’s displays its tobacco products on top of the backbar counters with all of the categories of other tobacco products (OTP) at eye level to make it easier for customers to view the product in the short amount of time they’re at the checkout. But McCarty praises suppliers for their merchandising help, too. “In regards to manufacturers, I have some great partnerships with Swisher and R.J. Reynolds, who go above and beyond to help me in resets and planograms for the categories,” he added.

– Mark McCarty, director of category management, Clark’s Pump-N-Shop

“A lot of these different counties are taking it upon themselves to put bans in place as they see fit,” he said. “And it makes it difficult for us as a retailer just because we get products from a disREGULATION WOES tributor and now they have to lock those products All retailers and suppliers, though, must continually down, so they’re not shipped to that location.” adjust to new local regulation. Weiner cited a Smoker But McCarty added the COVID-19 pandemic Friendly outlet in a small Colorado mountain town may play an unexpected role in easing those tothat last summer handed down a flavor ban. bacco flavor restrictions. “It will be interesting to see over the next six to 12 months if the talks of additional legislation in regards to flavors, etc., will be put on the back burner,” he said, citing the large losses of state and local tax revenue due to the pandemic’s economic downturn. “Hope• Q1 dollar sales see a double-digit jump. fully the states and federal government will • Post-pandemic promos could keep sales rolling. be focused on things to help the economy and small business, and not adding ad• A cool economy could slow new restrictions. ditional ways to hurt us.” CSD

fast facts: 50

CSTORE DECISIONS •

June 2020

cstoredecisions.com

Stake your claim on a unique snuff that is “A Cut Above.” Gold River is a longer cut, easier to pack and a bold tobacco blend that is sure to satisfy. Stock up today and experience sales that are as good as gold. If you like “Awesome,” rush to Gold River!

800.874.9720 | swisher.com

Category Management | To b a c c o A c c e s s o r i e s

SHOPPERS STOCK UP

ON ACCESSORIES

Even with a steady increase year over year, tobacco accessories see a clear boost in sales in recent months. Isabelle Gustafson • Associate Editor

Tobacco accessories are soaring amid the COVID-19 pandemic. Dollar sales grew 4.3% for smoking accessories, with unit sales up 2.4% for the latest 52 weeks ending April 19, 2020, according to market research ﬁrm IRI’s Total U.S. Convenience data. And in the latest four weeks ending April 19, 2020, dollar sales climbed a massive 33.6%, with unit sales close behind at 29.2%. That’s a clear upward trend, with a huge bump in March and April, likely due to consumers stocking up ahead of shelter-in-place rules during the COVID-19 pandemic. While total store trips are down 4%, according to the IRI CPG Demand Index, published April 27, 2020, basket size is up 22%, even after the panic shopping peak of mid-March. In addition to stocking up on food and other essential items like toilet paper, a OnePoll survey commissioned by crowdsourced shopping platform Slickdeals found that the rate of impulse spending was up by 18% in April. Mike Jones, director of marketing & food service for Indiana-based Good Oil Co., which operates 15 Good to Go stores in Indiana and one in Illinois, has seen this trend at his stores, alongside an overall “change or alter in typical buying patterns and habits.” “Despite our customer count being down, we still were seeing some good trafﬁc on the tobacco and tobacco accessories categories,” he said. “There are certain items that people are afraid they will run out of or not have access to.” Wisconsin-based Kwik Trip, with more than 600 locations, has “seen an increase in lighters,” which Category Manager Kim Jenks also attributes to customers stocking up during the pandemic. “That usually goes hand in hand with the trend for cigarettes, which are up as well,” she said. Matt Burton, associate category manager for Whitehouse, N.J.-based QuickChek, which operates 160 c-stores, has another theory for the increases they’ve seen. “Cigarette consumption levels are likely to remain strong during this time as consumers in quarantine may be experiencing other factors of stress,” he said. “We are seeing a higher demand of lighter purchases with pack and carton sales.” 52

CSTORE DECISIONS •

June 2020

cstoredecisions.com

Smoking accessories sales

Smoking accessories dollar and unit sales saw a big boost this spring as consumers stocked up on products. SMOKING ACCESSORIES

Dollar Sales

Dollar Share of Category

Unit Sales

Price per Unit

Current

1-Year % Change

Current

1-Year % Change

Current

1-Year % Change

Current

1-Year Change

Latest 4 weeks ending 4/19/20

$29 M

33.6%

100.00

0.00%

15 M

29.2%

$1.88

$0.06

Latest 12 weeks ending 4/19/20

$74 M

16.1%

100.00

0.00%

40 M

13.7%

$1.85

$0.04

Latest 52 weeks ending 4/19/20

$293 M

4.3%

100.00

0.00%

161 M

2.4%

$1.83

$0.03

Source: IRI, a Chicago-based research ﬁrm, Total U.S. Convenience Data for the 4 weeks, 12 weeks and 52 weeks ending April 19, 2020

TRENDS TO WATCH

Pandemic aside, accessories are poised for additional growth as cannabis becomes legalized in additional states and cannabidiol (CBD) use increases. “I believe accessory sales will see a trend to the upside as marijuana becomes legalized, especially with the current landscape of the e-cig industry,” said QuickChek Senior Category Manager James McElroy. For now, this will depend on the state. Cannabis is fully legal for adult use in just 11 states — Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, Washington — and Washington, D.C. But the number will continue to grow as support for legalization picks up steam among young voters especially. But Jones is skeptical about the timeline in Indiana, where Good to Go is based. Currently, the state has some of the strictest cannabis laws in the nation, with cannabis fully banned and criminalized and CBD oil allowed for medical use only. “I don’t know if, and certainly don’t believe that, in Indiana, legalization of marijuana is coming anytime soon,” said Jones. But he does see this as the natural progression down the line, though he adds that a potential increase in accessories sales would also depend on the type of cannabis products offered. “There’s a lot to be said about marijuana or cannabis in general because obviously smoking is not the only form of taking it,” Jones said. “That may drive things just in terms of which direction we’ll gravitate — more toward the edibles and other variations other than just the typical smoking.” As it stands, lighters are the top tobacco accessory at Good to Go. And Jones doesn’t expect this to change anytime soon. “There’s really not a lot new out there, for us at least,” he said. “Lighters are the No 1. There are the individual cartridges and things like that, but typically, (the top seller) is going to be lighters.” Lighters are the top seller at QuickChek as well. Much like the convenience industry as a whole, Burton said they’re “proving to be resilient during the COVID-19 pandemic.” CSD cstoredecisions.com

June 2020 •

CSTORE DECISIONS

Category Management | S m o ke l e s s

Loose or Snus:

Smokeless Stays Strong

From loyal dippers to flavor seekers, steady sales growth keeps smokeless tins rolling. Thomas Mulloy • Senior Editor

That strength is due to the bread-and-butter smokeless consumers: the brand loyalists. They’re unwavering tobacco lovers. They know what they like, and they stay with it. Most often, according to Dandy Mini Marts Tobacco Category Manager Jessie Dix, they’ll be asking for long cut in classic or wintergreen flavors. And make sure that your stock is fresh, too. “Those are the guys … they walk into the store, they check the bottom of the tin,” Dix said. “If the cardboard is two weeks out, they don’t buy it.” But manufacturers still make an effort to draw in more adventurous customers. Depending on the store, a glance at a smokeless set would reveal flavor innovation the likes of spearmint, citrus, cherry and others.

Smokeless tobacco sales trends are like a good dip — strong and steady. Convenience store dollar sales in the U.S. have grown 8.3% for the 52 weeks ending April 19, 2020, according to Chicago-based research firm IRI.

CSTORE DECISIONS •

June 2020

cstoredecisions.com

CMY

Category Management | S m o ke l e s s

“

They have apple, they have berry, they have peach, in addition to their wintergreen and their mint lines. They don’t do quite as well as the mint and wintergreen, but they can hold their own in the market.

“

– Danny Rodriguez, operations manager, Square One Market

“They have apple, they have berry, they have peach, in addition to their wintergreen and their mint lines,” said Danny Rodriguez, operations manager for the Square One Market chain with 10 stores in Pennsylvania. “They don’t do quite as well as the mint and wintergreen, but they can hold their own in the market.” Dix’s Dandy Mini Marts, a Sayre, Pa.-based chain that operates 65 stores in New York and Pennsylvania, tells a similar story. “They’re steady,” Dix said. “Those dippers, they bounce around (trying ﬂavors). They do peach one week. They’ll go to apple for their next can … .” SMOKELESS LANDSCAPE

While the tobacco-filled pouch snus product is just a fraction of all smokeless tobacco sales — usually hovering around 10% — the subcategory has shown some quiet muscle lately. The IRI data shows an annual dollar sales increase of 68.4% for the 52 weeks ending April 19, 2020. That figure jumps to 89.5% growth from a year ago for the 12 weeks ending April 19, 2020. As for merchandising, there’s not a lot of wiggle room for the smokeless set behind the c-store counter. Lisa Dell Alba, Square One president and CEO, said she’s still trying to home in on the perfect way to display smokeless. “Where you’ve got a customer standing in front of the counter, it’s not necessarily something that catches your eye from a merchandising standpoint, but it’s never had to,” she said. “People kind of just come in and know what they want.” Something retailers and manufacturers want is a more consistent regulatory landscape. Already facing shifting ground of state and municipal bans on product, flavor and purchase age, recent U.S. House efforts to ban flavors for all tobacco, while unsuccessful, could be a portent of things to come. But that’s not the only signpost of what may be 56

CSTORE DECISIONS •

June 2020

over the regulatory horizon. Lyle Beckwith, vice president of government relations for the National Association of Convenience Stores (NACS), said the recent European Union (EU) ban on menthol-flavored tobacco products got his attention. “Menthol is now illegal in the EU,” he said. “That’s always something to watch here, to see what the Food and Drug Administration does with menthol.” In the short term, though, Dell Alba doesn’t see much happening soon, especially considering the upheaval in so many corners of society due to the coronavirus pandemic. “I think there’s just so many other conversations taking place,” she said. “I don’t see anything major taking place in the next few months. I just think everyone’s trying to sort out so many other things from a (COVID-19) health crisis standpoint.” And what kind of effect has the pandemic had on sales? “Spiked,” said Dix, adding that Dandy saw smokeless take a “pretty sizable jump” in the early goings. “We had to limit our consumers to five rolls and five cartons per transaction just to try and spread it out,” he said. While that heavy tobacco basket may not be the “new normal,” for the time being, smokeless tins just keep rolling on. CSD

fast facts: • Fresh product matters. • Flavor dippers like variety. • The European Union recently enacted a menthol ban. cstoredecisions.com

Products at Work | Swisher

Swisher Rises to the Occasion Finding the right supplier partners is crucial to convenience store retailers, especially during this ultra-competitive era. That’s why trusted partners like Swisher are stepping up to help Hit-n-Run Food Stores grow tobacco sales. A CStore Decisions Staff Report

Shoppers come to convenience stores to get their needs met. But if retailers don’t fully understand what shoppers want, efforts to capture more of their business will probably miss the mark. This has been one of the biggest challenges facing c-stores over the past couple of years, especially as retail is changing so dramatically. 58

CSTORE DECISIONS •

June 2020

cstoredecisions.com

Retail is evolving at such a pace that it’s almost impossible to predict where it will end up. We have entered a retail phase where customers can get all these things without ever leaving their couches, and that has the industry’s attention. These are times when c-store owners really find out who their friends are in the supplier community. The relationship between suppliers and c-stores has never been stronger, and for both sides to succeed, this relationship needs to be strengthened during Louisiana-based Hit-n-Run Food Stores has enjoyed an outstanding partnership with Swisher, who has helped the 11-store chain serve its loyal customer base these unprecedented times. by avoiding out of stocks, swiftly addressing concerns and providing solid So when supplier partners like marketing data — all through the same Swisher rep for 16 years. Swisher step up their game, retailers are quick to notice. “When we look at vendor partners, we are looking for partners we can trust,” said Larry Hogue, vice president of operations for Hit-n-Run Food Stores in Broussard, La. “We are looking for partners who understand that our success warehoused in Jacksonville, Fla., to distribute is their success, and someone who is ready to step up across the U.S., so their sales with us have into help us grow the business. Very few companies have creased double-digits because they have been in understood this better than Swisher.” stock the whole time.” According to Hogue, his chain has dealt with the The ability to maintain a loyal customer base same Swisher rep for 16 years, and they treat him as requires customer-centric strategies in collaboraa member of the Hit-n-Run family. “I can walk into any tion with suppliers. It’s no secret that when store of our 11 locations, and if I see a problem, Swisher is sales increase, everyone wins. To underscore guaranteed to have it fixed within 24 hours,” he said. how important this has been for Hit-n-Run Food “Our relationship makes me feel confident about our Stores, Hogue said he has been able to maintain tobacco sets and about Swisher as a company because margins and grow other tobacco product (OTP) they care about our business. They know how to take and cigar stick sales because Swisher provided care of the convenience channel.” customer demographic analytics and exclusive sales data relative to each store. CUSTOMERS FIRST “We have stores near each other, but each The Pareto Principle states that 80% of a store’s sales one has a different demographic, and Swisher come from 20% of its customers. This means, to keep has armed us with the market data to set customers returning, operators must take all the neceseach store based on the most popular items,” sary steps to keep this core group of customers loyal to Hogue said. “This has allowed us to maximize their stores. profitability, grow our business and compete For convenience stores, this means giving the loyal more effectively with the big boys.” customers what they want and avoiding out of stocks. These are the little details that make great “Even during these challenging times, Swisher has mainpartners, Hogue said. “We are a small guy, but tained stock levels because of how well they began to they treat us like a big fish, and that leads cusplan back in December,” Hogue said. “They had product tomers to a great shopping experience.” cstoredecisions.com June 2020

•

CSTORE DECISIONS

Foodservice | Dayparts

FOOD FOCUS

BUILDS BASKETS For forward-thinking convenience retailers, foodservice offerings — from chicken to pizza to roller grill and more — can be a powerful profit generator that gives their stores an edge. Marilyn Odesser-Torpey • Associate Editor, and Isabelle Gustafson • Associate Editor

Across the industry, c-stores are working to add or improve foodservice options to ensure they are a destination for customers across breakfast, lunch and dinner. Among its initiatives, Savannah, Ga.-based Enmarket hired c-store foodservice veteran Ryan Krebs as its director of food and beverage at the start of 2020. Enmarket, which operates 125+ stores in Georgia, South Carolina and North Carolina, is known in part for Southern-style foodservice, including its fried chicken, which is breaded and cooked on-site, as well as fresh biscuits. Krebs sees an opportunity to build upon the chain’s foundation and cement Enmarket as a foodservice destination for all dayparts. “The goal will be to bring speciﬁc brand recognition to Enmarket that really differentiates us from what other operators are doing,” said Krebs. 60

CSTORE DECISIONS •

June 2020

cstoredecisions.com

Foodservice | Dayparts

Clark’s Pump-N-Shop has a drive-through window at 46 locations, which has been an asset for its foodservice as well as overall business, especially during the pandemic.

“And certainly the baseline of that, regardless “It’s a great position as a passionate food guy of what items you bring in, has to be quality to be in, to be proud of where they’ve already and consistency of product.” come, but be able to continue to elevate them The chain’s foodservice game is strong, to the next level of foodservice,” he said. “The thanks to a wide variety of options. Along with baseline is strong, so now it’s thinking beyond Southern staples, as well as roller grill and that and saying, ‘Okay, what may be missing?’ fresh bakery items, Enmarket stores include a or ‘What can we piggyback off to capture a proprietary restaurant, The Eatery, which feanew customer or keep a customer returning tures sandwiches, salads, pizza and more. more days than they already do because we’ve In addition, Krebs said the chain has done a added more to the portfolio?’” lot lately with the cold grab-and-go space to Breakfast in particular has massive potential provide additional healthy options and alterna- for all retailers. According to NPD Group’s tives for its customers. “The Future of Morning” study, Americans ate 102 billion breakfasts last year. And Eric Richard, education coordinator, for the International Dairy Deli Bakery Association (IDDBA), said he’s seen “tremendous growth in breakfast over the past few years” — close to 40% year over year. At Clark’s Pump-N-Shop, which operates 68 locations in Kentucky, West Virginia, Ohio and Florida, the breakfast menu is available all day due to its popularity among customers. To ensure freshness, outside of regular breakfast hours, breakfast items are made to order. “There may be a small wait as we will make several items fresh per order to provide the same

Clark’s Pump-N-Shop’s breakfast menu is available all day. To ensure freshness, outside of regular breakfast hours, items are made to order. 62

CSTORE DECISIONS •

June 2020

cstoredecisions.com

SWEET AND CREAMY FLAVORS FOR ICED COFFEE LOVERS

Introducing canned iced coffee from International Delight. Whether your customers are all about OREO® or creamy caramel macchiato, now you can give them the flavors they love from the #1 creamer brand in C-store1.

Contact your sales representative or visit our website to learn more.

888-620-9910 | DanoneAwayFromHome.com

1 IRI Total US Conv – Latest 52 Weeks ending 6/30/19 OREO and the OREO Wafer Design are trademarks of Mondelez International group, used under license.

Enmarket, headquartered in Savannah, Ga., is known in part for its Southern-style foodservice, including its fried chicken, which is breaded and cooked on-site, as well as fresh biscuits.

quality as we serve during the breakfast hours,” said Food Service Director Jessica Russell. She said the sausage biscuit is the most popular item at Clark’s Café, which sees the most traffic during breakfast, followed by lunch. “We have a hard time capturing the ‘going home’ traffic,” said Russell. “We are working toward new ideas to hopefully grab their attention to stop and see us on the way home.” One thing in Clark’s favor for all dayparts: drive-throughs. Forty-six Clark’s locations have a drive-through, which Russell sees as a “great advantage” for foodservice and overall business, especially during the COVID-19 pandemic. FRESH BAKED SALES

Pump N Pantry Convenience Stores increased fresh bakery sales by 200% in October of last year through a partnership with Pillsbury, according to Wade Robinson, the

fast facts: • Adding or improving foodservice offers can help c-stores ensure they are a destination for customers across all dayparts. • Breakfast in particular has seen a rise in popularity among customers.

CSTORE DECISIONS •

June 2020

c-store chain’s food service supervisor/digital marketing manager. Pump N Pantry operates 15 stores in six northeastern Pennsylvania counties. Fourteen of those stores sell foodservice items. Stores vied for gift cards as incentives for increasing sales of fresh baked items. “After the contest, our challenge is to keep our bakery products in the forefront,” Robinson said. Having the items customers want whenever they want it is part of what makes Pump N Pantry a foodservice destination. Whether it’s a Buffalo chicken pizza at four in the morning or a customized breakfast stromboli at four in the afternoon, the entire menu is available all the time. To attract customers specifically during the lunch and dinner dayparts, the stores offer a variety of entrees such as mac and cheese, meatloaf, lasagna, pierogies, stuffed shells, and chicken and biscuits with gravy and mashed potatoes. A newer item, chicken waffle fries, has quickly become a customer favorite across dayparts, including breakfast, Robinson noted. Boneless wings in applewood smoked and Nashville hot flavors also sell well through the afternoon and evening. Robinson credits his manufacturer representatives and brokers for helping to keep Pump N Pantry’s menus tempting and on-trend. CSD

cstoredecisions.com

Lette • PC LAM DESIGN • 06.04.15

you’re there for your

customers We’ re here for you

We’ll help you safely serve the RollerBites® your customers crave We know safety is the #1 priority for both you and your valued customers during this challenging time. That’s why we’ve created resources to help you easily and confidently serve RollerBites® safely from your merchandising warmer—with the bold flavor your customers demand. It’s just one example of our commitment to helping you create memorable taste experiences. Today, and every day.

Get alternative heating instructions, secure merchandising labels and a warmer equipment rebate offer at www.HMFfoodservice.com/resources

Lette • PC LAM DESIGN • 06.04.15

COMBINED WITH

YEOconference.com

SUNDAY, SEPTEMBER 13 1:00 PM – 7:30 PM Registration 1:00 PM – 4:00 PM NAG Hospitality Suite 4:00 PM – 5:00 PM NAG/YEO Board Meeting 6:00 PM – 7:00 PM NAG Networking Reception 7:00 PM – 10:00 PM NAG Opening Night Dinner 9:00 PM – 12:00 AM NAG Hospitality Suite MONDAY, SEPTEMBER 14 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 Leadership for a New Generation: How Family Businesses Prepare for the Future: Growth and profits are the primary goal for retail chains of all sizes. But the convenience store industry rose to prominence on the backs of the family-owned businesses. Many of these chains have been successfully passed on from one generation to the next, but it takes a lot of planning, training and persistence. In this session, learn how family-owned business are grooming leaders, tracking trends and preparing for the future of convenience retailing. 9:15 AM – 9:45 AM

BREAK/VISIT SPONSOR TABLES

9:45 AM – 10:30 AM GENERAL SESSION: BURNING ISSUE #2 Employee Recruiting and Retention Strategies: No matter the industry, staffing turnover is a naturally occurring part of the business world. However, excessive employee turnover can affect the efficiency of a company. The costs of recruiting and retraining new employees can have a severely negative impact on your overall bottom line. Learn how leading retailers are finding great employees and going the extra mile to keep them.

10:30 AM – 11:00 AM 11:00 AM – 12:15 PM 12:15 PM – 1:15 PM 1:00 PM – 5:00 PM 1:30 PM – 5:30 PM 6:30 PM – 9:00 PM 7:00 PM – 8:30 PM 9:00 PM – 12:00 AM

Break/Visit Sponsor Tables Information Exchanges Part 1 Lunch Golf Outing – Shotgun Start NAG Retail Store Tours: The Best of Charlotte Dinner on Your Own YEO Networking Reception NAG Hospitality Suite

TUESDAY, SEPTEMBER 15 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 Data Privacy Requirements: What Convenience Stores Need to Know: States across the country are introducing privacy laws, which are focused on consumers’ data protection rights. These laws give customers the right to opt out of having their personal information stored by businesses. Retail companies must also be transparent with the kinds of data they collect from customers including things like address, email, driver's license number, telephone number and much more. These will impact how convenience store companies collect and store data. This session will help retailers navigate the changing laws. 9:00 AM – 9:30 AM

Break/Visit Sponsor Tables

9:30 AM – 10:15 AM GENERAL SESSION: BURNING ISSUE #4 Micro Stores and Non-Traditional Locations: Is This Strategy Right for Your Brand? Micro marts offer a limited SKU mix compared to traditional convenience store, but they come with several distinct advantages. They’re usually cashier-less locations that allow for autonomous check-in/checkout using a credit card and they can fit into as little as 300 square feet. More convenience store retailers are considering adding micro marts to their store portfolio in specific areas. In this session you will hear from convenience store chains that are already investing in this smaller retail concept. 10:15 AM – 10:45 AM Break/Visit Sponsor Tables 10:45 AM – 12:00 PM Information Exchanges Part 2 1) Fuels 2) Technology/Loyalty Programs 3) Finance and Real Estate 4) Foodservice 5) Human Resources 6) Leadership for Young Executives

YEOconference.com

THE WESTIN — Charlotte, NC

September 13-16, 2020 10:45 AM – 12:00 PM YEO BREAKOUT SESSION 1: What is Blockchain and How Will it Affect You? Blockchain is a continuously expanding list of digital information called ‘blocks’ that are linked and stored in a public database (the chain), and secured using cryptography that can be accessed using the internet. It has huge implications for loyalty programs, customer data management and more. This session will detail how blockchain works and what retailers need to know.

12:00 PM – 1:00 PM

Lunch

1:15 PM – 2:30 PM GENERAL SESSION: BURNING ISSUE #5 Foodservice: Executing a Safer Foodservice Program: The COVID-19 pandemic changed the way convenience retailers sell food items and will have a lasting effect on foodservice employee training. The big question is what did retailers learn during this crisis about selling safer food and what steps are experts recommending in the event of another pandemic. 2:30 PM – 3:00 PM

Break/Visit Sponsor Tables

3:00 PM – 4:00 PM YEO BREAKOUT SESSION 2: Effective Leadership: The Best Ways to Manage People: Today’s convenience store chains face a unique challenge. Despite recognizing the value of improving their leadership pipelines and making investments in leadership development, nearly 30% of them still describe their candidate pool as “weak” or “very weak.” The session will examine the characteristics of great leadership and what young professionals can do to get ahead in their careers.

SPEAKER: David Caruso, Director, Stewart's Shops

5:30 PM – 6:30 PM 6:30 PM – 9:00 PM

NAG Networking Reception Dinner & Awards Ceremony Honoring Mary Banmiller 9:00 PM – 12:00 AM NAG Hospitality Suite WEDNESDAY, SEPTEMBER 16 7:30 AM – 12:00 PM Registration/Info Desk Open 8:00 AM – 9:00 AM Breakfast 9:00 AM – 10:15 AM GENERAL SESSION: BURNING ISSUE #6 Emerging Trends in Foodservice: Foodservice gains have led many c-store operators to boost their store footprints with open kitchens, ordering kiosks and dining space. Now many chains are getting into delivery and mobile ordering. C-store foodservice programs seem to have unlimited possibilities but only those who understand what customers are looking for will be successful. Our expert panel will outline what retailers can expect over the next three years. 10:30 AM – 11:00 AM Break/Visit Sponsor Tables 10:30 AM – 11:30 AM IDEAS BOOT CAMP Best practices and a conference wrap up with John Lofstock, Executive Director, NAG, and Brian Unrue, Vice President of Operations, Clark's Pump N Shop.

11:45 AM 12:00 PM

Conference Wrap Up and Takeaways Departures

Technology | P O S

COVID-19 ACCELERATES

DIGITAL MOMENTUM As retailers step up rollouts of frictionless payment, delivery and order-ahead services, the call for integration intensifies. Erin Del Conte • Executive Editor

As the COVID-19 pandemic rolled across the U.S., convenience stores with frictionless checkout or order-ahead options found themselves ahead of the curve in adapting to social distancing requirements while still providing timely service to customers. When the pandemic hit, Baltimore, Md.-based High’s was already offering Skip frictionless checkout at the majority of its locations, as well as its proprietary Carroll Pay program at all stores. To pay with Carroll Pay, customers can use a card — similar to other private-label debit card programs with perks — or the High’s mobile app. “When the customer utilizes the High’s app, it greatly reduces the amount of ‘contact’ the customer has with high-traffic surfaces,” explained Noah Sanders, senior implementation and analytics manager for High’s, which operates 49 c-stores. For example, customers who want to avoid touching surfaces during the pandemic can use the High’s app to activate the pump without touching the customer PIN pad. Inside the store, customers can enter their PIN on their smartphone, and the phone 68

CSTORE DECISIONS •

June 2020

can be scanned with a barcode scanner, eliminating the need to insert or swipe a card at the PIN pad. Both at the pump and in-store, customers can opt to receive their receipt in the app or via email. Or, they can scan and pay for everything themselves using the Skip app. Due to the pandemic, High’s has also rolled out “an ‘old school’ order ahead with curbside pickup” option at a few locations, but the chain has also been working with Skip to create an order-ahead platform that is set to launch soon. DIGITAL ACCELERATION

The pandemic has accelerated and reprioritized how people consider the digital experience, said Ed Collupy, executive consultant at W. Capra Consulting Group. “What the pandemic has shown me is

this need to get to market faster with things,” he said. “I think we’re seeing a number of changes and implementations that have come along very quickly.” He pointed to Altoona, Pa.-based Sheetz’s new “SHcan & Go” feature in the Sheetz app that allows customers to scan and pay for purchases, as well as several convenience retailers that have added delivery using third-party services. Having the frictionless checkout technology via Skip available in the middle of a pandemic proved a major asset for Chapel Hill, N.C.based Cruizers c-stores, a division of Holmes Oil Co. “It has been extremely helpful,” said Mike Wilson, chief operating officer of Holmes Oil. Cruizers created additional signage and ran a social media campaign to help educate new users

cstoredecisions.com

fast facts: • C-stores push for open APIs to better integrate new technology like order ahead to the point of sale. • Visa extends EMV liability shift deadline at the pump to April 17, 2021.

about the frictionless technology and saw the user-rate grow 5% over its previous rate of growth. Wilson had been hopeful the use of Skip would have skyrocketed even higher during COVID-19, but he pointed out that customer counts were down during the pandemic, and its biggest Skip users are from local universities that were closed or operating remotely. “Losing that type of customer drastically affected us when it came to using Skip. Many essential workers and ﬁrst responders tended to use cash for their purchases,” he said. Cruizers ﬁrst launched Skip in January 2019, later expanding it to its entire chain of 27 c-stores in North Carolina by April 2019. Now, a little over a year later, the company continues to see an upward trend in the number of new transaccstoredecisions.com

tions each month using Skip, even before the pandemic. “As that trend continues to grow, the number of customers that come back and use Skip again is about 70%,” Wilson said. Cruizers uses the Passport pointof-sale (POS) system with PDI back ofﬁce. “Skip uses tablets to notify employees in the front of the house and communicates with our Pricebook through the back ofﬁce,” Wilson said. Cruizers is currently developing a Cruizers App that will integrate Skip. “The largest challenge that we have had is getting customers to download the Skip app,” Wilson said. “Once we get them past that hurdle, things go extremely smooth. We believe that having customers access Skip through our own app will drive the user count to much

higher levels as it would be easier to drive promotions.” As c-store retailers seek the ﬂexibility to add and integrate new solutions from frictionless checkout and delivery to order ahead and curbside pickup, Collupy sees a push in the industry to use APIs — application programming interfaces that allow software to communicate — to make POS systems more open. “The touch point is typically at a mobile device, but you want integration to the POS so you don’t have disjointed systems,” Collupy said. As c-stores roll out order ahead and pickup in store, if those programs are not integrated into the POS system, retailers have the burden of maintaining them separately. “That’s not going to be the best for retailers,” Collupy said. “So they’ll put pressure on the legacy June 2020 •

CSTORE DECISIONS

Technology | P O S

At High’s, shoppers can use the Skip app to pay for their products right on their smartphone. The system is especially useful during COVID-19 when many shoppers are trying to social distance. Frontline employees are notified of customer Skip activity via a tablet.

POS vendors to say, ‘Hey, we need integration.’ And then that brings you back to API and (the question of) how we get these integrations done.” This shift could open the door to startups looking to emerge with new solutions in the market, he added. While the pandemic has inspired more customers — and therefore retailers — to seek out contactless payment options, c-stores tend to have a higher-than-average percentage of cash sales on in-store purchases compared to other channels, said Perry Kramer, managing partner, Retail Consulting Partners. “This makes it more challenging to achieve a ROI on improvements they make to the payment experience in a reasonable time,” he said. As a result, retailers with orderahead or loyalty programs in place have typically been the early adopters of mobile wallets and apps that support contactless payment. But the pandemic is inspiring more retailers to take the plunge. “It is important for retailers to realize that, for most of these technologies, they need to start the journey 18 months or more before they expect to have them deployed in production and operating smoothly,” Kramer said. “To be realistic, if a retailer is starting from scratch in this area and expects to have some of these new payment technologies operating smoothly in 70

CSTORE DECISIONS •

June 2020

the year 2021, they need to start the planning and budgeting now.” EMV EXTENSION

Also due to the pandemic, Visa has delayed the EMV liability shift deadline for automatic fuel dispensers (AFD) to accept chip cards from Oct. 1, 2020, to April 17, 2021. Collupy predicted Mastercard would make a similar adjustment. Indeed, by press time both Discover and Mastercard had followed suit. Both moved their EMV liability shift deadlines for AFD to April 16, 2021, a day before Visa’s deadline. “While we were already on track, the extension helps us, in regards to giving some of our dealers additional time,” said Cruizers’ Wilson. For High’s, the extra time is less helpful. The chain is already “mostly compliant” with the new EMV requirements and was scheduled to finish ahead of the previous deadline, noted Sanders. Despite the extension, the takeaway for retailers is to continue pushing ahead with EMV integration at the pump. “There are still the same demands that require planning and that require decisions to be made on time,” Collupy said. “If retailers haven’t been in the mode of planning and making decisions, they should be doing that now,” he said.

Retailers who have been moving forward can still execute what they can. For c-stores with POS vendors who are ready with software updates, Collupy advised creating a plan for testing and rollout. He urged retailers with POS vendors who are not ready to push the stakeholders — whether it’s the POS company or processor acquirer — for action. Nonaction has consequences for retailers. “If you don’t do it, you’re going to get chargebacks, and those will mount up,” Collupy said. “The shift in liability waits until the new deadline, but other chargebacks continue.” While EMV compliance at the pump brings a significant financial strain to c-stores, Kramer urged operators to see the move as a “once in a decade opportunity for change.” “The introduction of this new technology should result in reduced security risk, reduced interchange fees and provide a hardware platform that should support contactless and all types of mobile wallets,” Kramer said. “It is important that retailers addressing EMV at the pump and other AFD changes do not short-change themselves by limiting these changes to the forecourt.” 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. 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.

Thank you to our Key Partners:

PRODUCTShowcase

Cigarette Filter Tube Dispenser Non-Slip Social Distancing Floor Sign This non-slip floor sign stays down and sends the message to customers to maintain social distancing while they wait. Unlike vinyl floor decals or tape, this adhesive backing won’t leave residue or damage floors upon removal. Grippy material has been proven in years of commercial and retail use to withstand full foot traffic, floor scrubbing and disinfectant use. Leave in place and sanitize with mop or floor scrubber; it can be scrubbed, vacuumed or swept off frequently without affecting performance. Sticks to most commercial floor surfaces including concrete, VCT, linoleum, ceramic tile, quarry tile and laminate flooring.

New Pig Corp.

Republic Tobacco presents a new patented technology for dispensing cigarette filter tubes with newly designed E-Z Dispenser gravity feed cartons for King and 100MM sizes. The E-Z Dispenser box design allows cigarette filter tubes to be dispensed one at a time without damage. Consumers will find the mechanism convenient and simple while enjoying savings from less waste. This new technology will be available in Gambler, Tubecut, TOP and Premier brands. The filter tubes for each brand are unchanged, maintaining the same high-quality product as in the past.

The Republic Group

(800) 288-8888 • info@rpbtob.com • www.therepublicgroup.net

Energy Spray OnGo was founded by a former Olympic athlete who set out to create the most efﬁcient energy supplement that combined safety, efﬁcacy and convenience — which ultimately took over a year and a half and more than 60 iterations. Each bottle contains 20 servings, each with 75 milligrams of natural caffeine plus Vitamins B3, B6 and B12. And it’s sugar- and calorie-free.

OnGo Energy Spray

www.ongoenergy.com

1-800-HOT-HOGS

www.newpig.com

Quarter-Pound FlameGrilled Chicken Burger Brakebush’s new Quarter Pound Flame Grilled Chicken Burger is a slightly larger version of the original “craveable, raveable” 3.25-ounce Flame Grilled Chicken Burger. As a Quarter Pound burger, it beautifully covers a larger bun; plus it’s all natural, gluten free and ﬂame grilled with visible char marks. It’s also juicy, tender and coarse ground to ensure a classic burger bite. Easy to menu, this Flame-Grilled Chicken Burger is a great addition to any burger section.

Brakebush Company

www.brakebush.com 72

CSTORE DECISIONS •

June 2020

cstoredecisions.com

PRODUCTShowcase

Hand Sanitizer VP hand sanitizer is an 80% alcohol antiseptic-based formula that is consistent with World Health Organization (WHO) recommendations and guidance from the Food and Drug Administration (FDA). Available in quarts, gallons, drums, 325-gallon totes and large volume supply.

VP Racing Fuels cpinfo@vpracingfuels.com

www.vpracingfuels.com

Flood Lights

Individually Wrapped Snacks St Pierre On the Go range features individually wrapped European-inspired snacks like Chocolate & Hazelnut Rolled Crepes, Chocolate Covered Belgian Wafﬂes and Caramel Wafﬂes. From its unique product range to its bright, eye-catching packaging, St Pierre On the Go products can help retailers differentiate their snack offerings while satisfying consumers’ growing demand for convenient and delicious options.

St Pierre

www.stpierrebakery.com

Butter Pecan Bar ONE Butter Pecan has more — more than just the delicious taste of your ice cream shop favorite, it’s packed with 20 grams of protein and just one gram of sugar. So dig in and power up your workout, morning, afternoon slumps or evening binge-watching. This is ice cream done as nice cream, no cup or cone required.

ONE Brands

www.one1brands.com

LSI Industries launched a new line of high-performance commercial flood lights for pole and surfacemount applications. The company’s new TFL fixtures are manufactured in America and designed to illuminate parking lots, walkways, building facades and outdoor signage. LSI’s TFL flood lights are available in five sizes with outputs ranging from 1,000 to 50,000 lumens. The optics can distribute illumination in wide (6X6) and very wide (7X7) uniform patterns at 3K, 4K and 5K color temperatures that improve visibility, attract attention and enhance safety. In addition, the new products can be configured with photocell sensors that automatically switch the light off during daylight hours — conserving energy and minimizing associated energy costs.

LSI Industries Inc.

www.lsi-industries.com

cstoredecisions.com

June 2020 • CSTORE DECISIONS

PRODUCTShowcase

Remote Cash Deposit SafeDEPOSIT provides full scope smart-safe and currency recycler provisional credit and Armored Carrier managed services: electronic same-day credit of day total deposits to bank accounts of the client’s choice, any bank in the country; sourcing and management of the Armored Carriers necessary for scheduled cash pickups and change order deliveries; insurance on the validated deposit cash contents of the smart-safe or recycler; management of smart-safe or currency recycler hardware service and maintenance programs for term of agreement; standard and customized reporting tailored to client needs; online access for safe network reporting and safe user management; and 90-day risk-free test in any site.

SafeDEPOSIT Company Inc.

www.safedeposit.company

Hard Seltzer Line Vizzy Hard Seltzer is launching as the first hard seltzer made with antioxidant vitamin C from acerola superfruit and comes in four flavors: Pineapple Mango, Black Cherry Lime, Blueberry Pomegranate and Strawberry Kiwi. Each 12-ounce serving contains 100 calories, one gram of sugar and 5% alcohol by volume (ABV). With bright orange packaging designed to stand out on retail shelves, Vizzy is sold in 12-ounce variety 12-packs or single-flavor six-packs of Pineapple Mango.

Molson Coors Beverage Co.

www.molsoncoors.com

Herbal Lemon Hemp Beverage LIFEAID CBD contains fast-acting Ojai Energetics CBD and has just 40 calories and 20 miligrams of hemp extract per 12-ounce can, with a suggested retail price (SRP) of $5.98. The refreshing Herbal Lemon flavored drink contains ingredients like adaptogens, lemon balm and rosemary, which help balance your mind and body to promote harmony in everyday life. LIFEAID also has zero sodium, zero caffeine and no artificial sweeteners or flavors.

Anti-Pathogenic Packaging InvisiShield platform technology is a ﬁrst-of-its-kind anti-pathogenic packaging solution seamlessly integrated into sealed packages to protect fresh-cut produce from harmful pathogens like bacteria, fungi and viruses. Easy to incorporate into existing or new produce packaging lines, the technology mitigates pathogen growth without negatively impacting the product. InvisiShield leverages 3-Phase Activ-Polymer technology, patented by Aptar CSP Technologies, a division of AptarGroup with more than 20 years of expertise in material science. The 3-Phase Activ-Polymer technology is used to extend shelf life, maintain freshness and improve efﬁcacy in industries such as pharmaceuticals, medical devices and food safety.

AptarGroup Inc.

www.aptar.com

LIFEAID Beverage Co.

www.lifeaidbevco.com

CSTORE DECISIONS •

June 2020

cstoredecisions.com

PRODUCTShowcase

Sparkling Vodka Soda CANTEEN brings together vodka and sparkling water into a singular product that offers consumers portable canned vodka and sodas with authentic and bold ﬂavor — no carbs, no sugar, no sodium and gluten free. The initial lineup of all-natural ﬂavors includes Watermelon, Lime, Black Cherry, Grapefruit and Cucumber Mint. Each can is 99 calories. While most hard seltzers are made with malt beer or fermented white sugar as their alcohol base, CANTEEN intends on educating consumers that vodka and soda beverages taste better and are worth the switch.

CANTEEN Spirits

www.drinkcanteen.com

Baked Snack Flavors Calbee North America is relaunching a fan favorite, Harvest Snaps Popper Duos. The already delicious kid-centric snack has been modified to fit consumers’ craving to make mindless munching a more enjoyable and healthier experience. The new featured flavors include: Yellow & White Cheddar, BBQ Ranch, and Salsa & Cheddar. Made from green peas or red lentils, Popper Duos are always baked, never fried. The brand has revamped its packaging and combined the duo of flavors into a single puff.

Calbee North America

www.calbeena.com

Countertop Water DispenseR Hoshizaki America’s newest award-winning product, the MODwater dispenser is a 147/8-inch wide countertop water dispenser that instantly delivers chilled, hot, sparkling or alkaline water. The DWM-20A , or MODwater, features a patented in-line carbonation technology that delivers up to 20 gallons of sparkling or chilled water per hour. Customers not only anticipate cost savings by no longer having to buy or deliver bulky dispenser bottles, but also a drastic reduction in plastic water bottle waste.

Hoshizaki America Inc.

www.hoshizakiamerica.com/modwater

High-Efficiency Pressure Fryers Broaster Co.’s E-Series, a new line of energy-efficient pressure fryers, allows operators to more easily manage back-of-house labor while providing customers with notable moist and flavorful chicken. The gas-fueled E-Series 18G boasts the highest-level energy efficiency offering a 50,000 BTU/HR efficient burner system. Additional E-Series 18G attributes include an advanced technology oil filtration between cycles, one-touch cooking cycle activation and an onboard oil replenishment system. The higher cook yields for longer potential hold time and less waste, speed of cooking to generate more sales, and reduction in oil usage compared to regular frying make the E-Series pressure fryer a must have piece of equipment for any foodservice operation.

Broaster Co.

www.broaster.com cstoredecisions.com

June 2020 • CSTORE DECISIONS

Classifieds/Ad Index 5-hour Energy

www.5HErewards.com

Home Market Foods, Inc.

RJRV

Smokey Mountain

Solari Hemp

800.367.8325/www.HMFfoodservice.com

ADD Systems

ITG Brands

Altria Group Distribution Company Apter Industries

2 17

JUUL

Calico Brands, Inc.

800.290.6097 / www.krispykrunchy.com

CB Distributors

5,7

408.883.5326 / www.legalleanstore.com

Chester's International

800.922.0972 / www.go.addsys.com

800.441.7146 / www.apterindustries.com 800.544.4837 / www.calicobrands.com 888.824.3256 / www.global-widget.com

800.646.9403 / www.chestersinternational.co

Cheyenne International, LLC

866.254.6975 / contactus@cheyenneintl.com

Danone North America Away from Home 63 888.620.9910 / DanoneAwayFromHome.com

E-Alternative Solutions

877.373.0069 / www.Ealternativesolutions.com

Gulfcoast

727.449.2296 / www.gulfcoast.com

Due to COVID-19, the Young Executives Organization (YEO) Conference — previously scheduled for May — will run in conjunction with the 2020 NAG Conference.

www.itgbrands.com www.juul.com

www.smokeymountainsales.com

42-43

Krispy Krunchy

Legal Lean

Liggett Vector Brands

MasonWays Indestructible Plastics

McLane Company, Inc.

North American Bancard

OCB USA / Virgin Cone

Premier Manufacturing, Inc.

877.415.4100

800-837-2881 / www.masonways.com mclaneco.com/technology

866.481.4604 / www.nynab.com 844.908.1100 / www.hello@ocbusa.com www.gopremier.com

www.velo.com

888.384.7333 / www.solarihemp.com

Swedish Match

800.367.3677 www.zyn.com www.whiteowlcigar.com www.whiteowlcigar.com www.longhornsnuff.com

Swisher International

800.874.9720 / www.swisher.com

Tyson Convenience

9 25 49 57 51, 80 11

tysonfoodservice.com/your-channel/convenience

THE WESTIN

CHARLOTTE September 13-16 THE MOST AWAITED C-STORE EVENT OF THE YEAR!

Outdoor Signs Keep Customers Informed

2020 Many Options Available

www.masonways.com 800-837-2881 cstoredecisions.com

June 2020 • CSTORE DECISIONS

IndustryPerspective

Opportunities for CBD

in Convenience Stores

C-stores can benefit from CBD’s popularity by marketing a range of CBD options for customers looking to relax and de-stress. Virginia Lee • Brightfield Group As cannabidiol (CBD) moves into the mainstream, convenience stores are in prime position to benefit from the product’s rapid growth. U.S. sales of hemp-derived CBD products reached $4.2 billion in 2019, a 562% increase over 2018, according to Brightfield Group. While few consumers had heard of CBD prior to 2018, the signing of the Farm Bill in December 2018 — which removed hemp from the legal definition of marijuana and the Schedule 1 Controlled Substances list — helped usher in exponential growth through extensive media coverage, expanded product availability including in drug stores and pharmacies, and widespread word-of-mouth through social media. Sales of CBD products through convenience and gas stores grew by 2,276% in 2019 to reach $122 million. CBD in the form of drinks, tinctures and topicals present growth opportunities in the c-store channel. CBD drinks, valued at $52 million in c-store sales in 2019, are highly popular among new consumers and skew younger, with millennials as the largest consumer group. Demand for CBD-infused drinks remains high despite the Food and Drug Administration (FDA) stating that CBD cannot be sold as a dietary supplement or used as a food additive. New innovations in CBD drinks ranging from sparkling waters to ready-to-drink (RTD) teas to sports drinks and sleep shots offer c-store 78

CSTORE DECISIONS •

June 2020

shoppers a familiar way to try CBD. Tinctures, also called CBD oil, via c-stores are worth $17 million and reach a broad consumer base as the most popular CBD format. By selling smaller-sized bottles of tinctures at under $30, c-stores can reach tincture users — 50% of whom use the format five or more times per week. Topicals, worth $15 million through c-stores, offers a way for c-store operators to sell CBD products without worrying about the FDA’s restrictions on the sale of ingestible CBD. Products such as CBD sticks and CBD lip balms provide a low-priced, easily transportable way to try CBD. MARKETING CBD

CBD products offer opportunities to reach busy shoppers who are looking to de-stress and relax. The top five medical conditions reported by c-store and gas station CBD consumers are anxiety (55% of respondents), depression (40%), insomnia (29%), chronic pain (24%) and PTSD (18%), according to Brightfield Group’s consumer insights. Two of the top desired product effects among cstore CBD users are relaxation (86% of respondents) and athletic (69%). CBD drinks offer multiple positioning opportunities as they can address consumer desires for relaxation, sleep enhancement, athletic endurance and recovery, as well as an afternoon pick-me-up and as a substitute or supplement to alcoholic beverages. Tinctures can be marketed to

consumers looking for daily anxiety relief, while topicals like CBD balms and roll-ons can be targeted toward individuals seeking to relieve chronic or post-workout pain. Among CBD product types, c-store CBD consumers are very open to edibles. Some 69% of c-store CBD buyers use edibles such as drinks and gummies. Young men comprise the majority of c-store CBD consumers, with 57% of c-store and gas station CBD buyers being male, and 42% between the ages of 26-35. Among c-store CBD consumers, 40% are single, and 40% are heavy users (who use CBD five or more days per week). While the COVID-19 pandemic has led to economic pressures for consumers and less foot traffic for retailers, CBD consumption habits have stayed strong. A March 2020 Brightfield Group survey of 2,638 CBD consumers found that 37% of CBD consumers planned to use CBD more frequently, with 47% of Gen Z and millennials saying that they plan to use it more frequently. As the U.S. economy begins to reopen, c-stores can market small grab-and-go CBD products such as drinks, trial-size packs of gummies and tinctures as affordable luxuries for consumers looking to de-stress and relax. . Virginia Lee, CBD research manager for the Brightfield Group in Chicago, works closely with Brightfield’s Analyst, Data Science and Business Development teams to develop platform offerings and custom research across the U.S. CBD market. For information, visit www. brightfieldgroup.com.

cstoredecisions.com

SWEETEN UP YOUR SUMMER SALES Everyoneâ&#x20AC;&#x2122;s favorite, Swisher Sweets Original Red, is getting dressed up for summer. With four unique designs, these collectible pouches will help your customers put the fun in their summer. Donâ&#x20AC;&#x2122;t miss out on the opportunity to stock these hot designs that are destined to be in high-demand. Order today and make your summer sweet.

800.874.9720

swisher.com