CStore Decisions March 2022 by WTWH Media LLC

CStoreDecisions Solutions for Convenience Retailers

The 2022 category Management

Handbook CStore Decisions examines data and emerging trends across 38 core c-store categories.

INSIDE Huck’s Market Elevates Food Category Management Leaders Salty Snack Sales Rise as Habits Evolve

10 24 73 March 2022

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EDITORIAL

CREATIVE SERVICES

MARKETING

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

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

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

EXECUTIVE EDITOR Erin Del Conte edelconte@wtwhmedia.com

CREATIVE DIRECTOR Erin Canetta ecanetta@wtwhmedia.com

DIGITAL MARKETING MANAGER Taylor Meade tmeade@wtwhmedia.com

SENIOR EDITOR Thomas Mulloy tmulloy@wtwhmedia.com

ART DIRECTOR Matthew Claney mclaney@wtwhmedia.com

ASSOCIATE EDITOR Isabelle Gustafson igustafson@wtwhmedia.com

DIRECTOR, AUDIENCE DEVELOPMENT Bruce Sprague bsprague@wtwhmedia.com

ASSOCIATE EDITOR Emily Boes eboes@wtwhmedia.com

CUSTOMER SERVICE MANAGER Stephanie Hulett shulett@wtwhmedia.com

CONTRIBUTING EDITORS Anne Baye Ericksen Howard Riell

CUSTOMER SERVICE REPRESENTATIVE Jane Cooper jcooper@wtwhmedia.com

COLUMNISTS Jayson Council John Matthews

EVENTS

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

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REGIONAL SALES MANAGER Ashley Burk aburk@wtwhmedia.com

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EVENTS MARKETING SPECIALIST Olivia Zemanek ozemanek@wtwhmedia.com

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

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ASSOCIATE EDITOR Marilyn Odesser-Torpey

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FINANCE

VICE PRESIDENT, STRATEGIC INITIATIVES Jay Hopper jhopper@wtwhmedia.com

CONTROLLER Brian Korsberg bkorsberg@wtwhmedia.com

CStore Decisions is a three-time winner of the Neal Award, the American Business Press’ 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 Patrick Lewis, Managing Partner Oasis Stop ‘N Go • Twin Falls, Idaho Reilly Robinson Musser, VP, Marketing & Merchandising Robinson Oil Corp. • Santa Clara, Calif. Bill Weigel, CEO Weigel’s Inc. • Knoxville, Tenn.

NATIONAL ADVISORY GROUP (NAG) BOARD Doug Galli (Board Chairman), Vice President/General Manager Reid Stores Inc./Crosby’s • Brockport, N.Y. Mary Banmiller, Director of Retail Operations Warrenton Oil Inc. • Truesdale, Mo. Greg Ehrlich, President Beck Suppliers Inc. • Fremont, Ohio Derek Gaskins, Senior VP, Merchandising/Procurement Yesway • Des Moines, Iowa Joe Hamza, Chief Operating Ofﬁcer Nouria Energy Corp. • Worcester, Mass. Brent Mouton, President and CEO Hit-N-Run Food Stores • Lafayette, La. Joy Almekies, Senior Director of Food Services Global Partners • Waltham, Mass. Vernon Young, President and CEO Young Oil Co. • Piedmont, Ala.

ACCOUNTS RECEIVABLE SPECIALIST Jamila Milton jmilton@wtwhmedia.com

YOUNG EXECUTIVES ORGANIZATION (YEO) BOARD Jeremie Myhren (Board Chairman), Chief Information Ofﬁcer Road Ranger • Rockford, Ill. Daillard Paris, Director of Petroleum Supply and Trading Sheetz Inc. • Altoona, Pa.

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2011 - 2020

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 Copyright 2022, WTWH Media, LLC 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.

Caroline Filchak, Director, Wholesale Operations Clipper Petroleum • Flowery Branch, Ga. Cole Fountain, Director of Merchandise Gate Petroleum Co. • Jacksonville, Fla. Kalen Frese, Food Service Director Warrenton Oil Inc. • Warrenton, Mo. Alex Garoutte, Director of Marketing The Kent Cos. Inc. • Midland, Texas Sharif Jamal, Corporate Brand Manager Chestnut Petroleum Inc. • New Paltz, N.Y.

CSTORE DECISIONS does not endorse any products, programs or services of advertisers or editorial contributors. Copyright 2022 by WTWH Media, LLC. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, or by recording, or by any information storage or retrieval system, without written permission from the publisher. Circulation audited by Business Publications Audit of Circulation, Inc. ©

CSTORE DECISIONS •

March 2022

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CONTENTS march 2022

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Number 3

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Volume 33

CStoreDecisions

EDITOR’S MEMO

8 The NAG/Ken McMullen Memorial Scholarship Is Open FRONT END

10 Huck’s Market Elevates Food 20 QuickBites: Customers Demanding Digital 24 Category Management Leader: Bolger Thrives at Thorntons 28 Category Management Leader: Greene Goes the Distance With Smoker Friendly

34 DEI Corner: Now That I Am Aware of DEI — What’s Next?

2022 Category Management Handbook FOODSERVICE 40 Chicken 42 Pizza 44 Sandwiches 46 Roller Grill 48 Hispanic Foods 50 Bakery 52 Hot Dispensed BEVERAGES 54 Carbonated Beverages 56 Cold & Frozen Dispensed 58 Juices & Teas 60 Bottled Water & Sports Drinks 62 Energy Drinks 63 Energy Shots 64 Beer & Wine 66 Hard Seltzer & RTD Cocktails SNACKS 72 Meat Snacks 73 Salty Snacks 74 Sweet Snacks 75 Nuts & Seeds

80 HEALTH & BEAUTY AIDS 82 DAIRY: MILK & ICE CREAM TOBACCO

84 Cigarettes 86 Roll-Your-Own 88 Smokeless 92 Cigars 94 Vape 96 Accessories 98 HEMP & CBD TECHNOLOGY 100 Loyalty 101 Prepaid Cards 102 POS & Back Office 104 Security 106 Electronic Payments OPERATIONS 108 Fuel & Fuel Alternatives 110 Car Wash 111 LED & Energy Efficiency

CSTORE DECISIONS •

38 The 2022 Category

Management Handbook

CStore Decisions examines data and emerging trends across 38 core c-store categories.

BACK END 112 Product Showcase 117 Ad Index 118 Industry Perspective: Achieving Operational Excellence

CONFECTIONS 76 Chocolate 78 Non-Chocolate, Gum & Mints 6

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Editor’s Memo

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

The NAG/Ken McMullen Memorial Scholarship Is Open We all understand the value of a well-educated workforce and the convenience store industry is certainly no exception. The National Advisory Group (NAG) scholarship fund was developed to help qualified individuals offset some of the costs of higher education. Among NAG’s core mission is to help cultivate and ready the c-store leaders of tomorrow. In keeping with this theme, I am extremely proud to report NAG will once again award five $1,000 scholarships to employees and dependents of NAG member companies in 2022. Thanks to the generous contributions of NAG’s dues-paying members, we have a healthy scholarship fund to ensure NAG members and their dependents will receive financial assistance to pursue their goals of becoming the leaders of tomorrow. This program was started in the late ’90s and to date has distributed more than 125 scholarships totaling more than $144,000 to deserving students. The college scholarship program is a key benefit of NAG membership. The 2022 NAG Scholarship has also been renamed in honor of Ken McMullen, CEO of Weigel’s, who passed away July 29, 2021. The Weigel’s team has been active in NAG for three decades. Ken’s affinity for, dedication to and support of NAG has been a key reason for our success. In showing our appreciation for Ken’s friendship and efforts, we are humbled that the 2022 scholarships will be given in his honor. Ken began his career at Weigel’s in 1981 as operations manager. He was a driving force in the expansion and growth of the company with his innovative sprit, servant leadership and expertise. He was the first non-family member to serve as president when he took on the role in 2001. In 2017, the company promoted Ken to CEO. Through his leadership, drive and perceptive ability to see forthcoming trends, Weigel’s was named CStore Decisions’ 2019 Convenience Store Chain of the Year. Ken also helped propel Weigel’s charity efforts — specifically, the Weigel’s Family Christmas, through his dedication in wanting to make a difference in the lives of East Tennessee’s community. When Ken’s wife Lana passed away in 2019, the annual NAG Scholarship for 2020 was dedicated in her honor. “We are very honored to have this scholarship named after Ken,” Bill Weigel, chairman of Weigel’s, told me. “Ken was a great man who did great things in and outside of the 8

CSTORE DECISIONS •

March 2022

convenience store industry. We are glad to present these scholarships to deserving individuals in his honor. Thank you, NAG, for giving these awards in Ken’s name.” To apply, visit: learnmore.scholarsapply.org/nationaladvisory-group. Here’s a look at the program’s particulars: THE PROGRAM

The NAG Scholarship Fund is managed by the NAG Board of Directors, CStore Decisions and Scholarship America, and it’s sponsored by the retailer and supplier members of NAG. Awards are not renewable, though students may reapply to the program each year they meet eligibility requirements. Applications must be postmarked by April 28, 2022. ELIGIBILITY

Applicants who work in the c-store industry must be employees or children of employees who have a minimum of one-year employment with a NAG member company. Applicants must plan to enroll in a full- or part-time undergraduate course of study at an accredited two- or four-year college, university or vocational-technical school. Applicants who are current students or who have attended school within the past three years must have maintained a minimum 2.5 GPA on a 4.0 scale. I hope you’re able to take advantage of this program and honor Ken’s memory by becoming a member of NAG. To learn more about NAG or ﬁnd more information on the scholarship, visit Nagconvenience.com. And please be sure to mark your calendar for the 2022 NAG Conference in La Jolla, Calif., March 27-30. Should you have any questions, please contact me at (201) 321-5642 or via email at jlofstock@wtwhmedia. com. For information about Scholarship America, contact program manager Kelly Anderson at kanderson@ scholarshipamerica.org or (507) 931-8368.

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FRONT END Profile

Huck’s Market Elevates Food

Huck’s is remodeling stores to its new design that highlights foodservice, while integrating technology for a seamless shopping experience. Erin Del Conte • Executive Editor

Following its rebrand as Huck’s Market in 2020, Huck’s has been busy redesigning stores, growing its foodservice menu and investing in new technology, including selfcheckout and frictionless payments. Carmi, Ill.-based Huck’s can trace its roots to 1960 when founders Frank Bayley and Bob Martin partnered to open Big John supermarkets. They grew the business from southern Illinois into Kentucky and Tennessee. 10

CSTORE DECISIONS •

March 2022

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FRONT END Profile

Huck’s is adding bean-tocup coffee to its new and newly remodeled locations.

“After they got started with Big John’s, they realized that Walmart and other bigger retailers were going to be main players in the grocery business,” said Brittany Bayley, vice president of marketing at Huck’s and a third-generation member of the family business. That inspired the founders to evolve and open the first Huck’s convenience store in Grayville, Ill., in 1974. Today, Huck’s operates 125 c-store locations in five Midwest states — Illinois, Indiana, Kentucky, Missouri and Tennessee. Huck’s most recent new-to-industry store opened last month in Hannibal, Mo., the hometown of Mark Twain, who wrote “The Adventures of Huckleberry Finn,” for which Huck’s is named. Twain published the renowned book on Feb. 18, 1885. By coincidence, the Huck’s team planned the store opening Feb. 17, just one day shy of the publication’s anniversary. “It was just a cool fact that we found out after we were getting ready to launch the store,” Bayley said. Huck’s operations area is positioned within the vicinity of its warehouse, Carmi Wholesale Distributors, which delivers to its c-stores twice a week. “I would say 85% if not more of our items that you see in the store retail-wise are delivered by our warehouse,” Bayley said. That includes foodservice products and ingredients — such as the breading for its chicken program — and tobacco items, cold vault and freezer products, and more. 12

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March 2022

“We are our distributor, except for a handful of direct store delivery suppliers,” Bayley said. FAMILY BUSINESS

The second and third generations of the Martin and Bayley families are active in the company today. “My grandfather was Frank Bayley,” Bayley noted. Her father, Mark Bayley, is currently the chairman of Huck’s parent company, Martin & Bayley Inc. Her brother Landon is the company’s vice president of fuel. Charles Martin, Bob Martin’s son, serves as vice-chairman. His son Lance Martin is a regional director at Huck’s. Brittany Bayley started with the company in 2009. Each member of the third generation — Brittany, Landon and Lance — started out working in the c-stores after college, training at the associate level, managing stores and working their way up through the company. “We like to ensure that all of us have a good idea of how our stores work and what our associates and our managers go through each and every day,” Bayley said. “So, that’s kind of the base training for anybody you would see at our position, or even at the field level. We like to promote from within. That’s really part of our culture.” That applies even to Martin & Bayley’s CEO Murat Tokad, who joined Huck’s in 2004 as division manager and worked his way up through the company, holding roles as regional director, vice president of operations, executive vice president and president before taking the helm as CEO in May 2019.

cstoredecisions.com

Huck’s Market at a Glance In March 2001, the families turned the company into an Employee Stock Ownership Plan (ESOP), an employee benefit plan that gives workers ownership interest in the company. “That decision empowered the associates to be more than just an employee. They’re an owner. We went along that trail to empower them to think more as running their own business and not someone else’s,” Bayley said. “The ESOP acts as an additional retirement plan that doesn’t require any contribution from the associate, other than their time.” The ESOP helps employees see firsthand how their work makes a critical impact on the business’s success, Bayley noted, and helps to grow their retirement account. REBRANDING INITIATIVE

Huck’s introduced a prototype store in January 2020 in Seymour, Ind., featuring a fresh design with

Headquarters: Carmi, Ill. Founders: Frank Bayley and Bob Martin Parent company: Martin & Bayley Inc. Location and date of first Huck’s store: Grayville, Ill., in 1974 Current store count: 125 Current area of operation: Illinois, Indiana, Kentucky, Missouri and Tennessee Foodservice: Godfather’s (more than 70 locations), proprietary Cluck’s Chicken (72 locations), developing its Huck’s Kitchen program, which includes Bigg Fresh, Bigg Bakery and Bigg Breakfast offerings Second generation of the family business: Mark Bayley, chairman of Martin & Bayley Inc.; Charles Martin, vice-chairman, Martin & Bayley Inc. Third generation of the family business: Brittany Bayley, vice president of marketing; Lance Martin, regional director; and Landon Bayley, vice president of fuel CEO: Murat Tokad Vice president of foodservice: David Grimes

FRONT END Profile

Huck’s design incorporates the legacy Huck’s feel, but evolved to emphasize foodservice and the market approach to convenience.

CSTORE DECISIONS •

March 2022

“

We’re in the process of developing our Huck’s Kitchen brand underneath the Huck’s Market umbrella. The development of the Huck’s Kitchen logo is complete, and we continue to evaluate and enhance our offers. - David Grimes, vice president of foodservice

“

updated branding reﬂecting a name evolution to ‘Huck’s Market.’ “We saw things evolving and other retailers changing around us. We felt like there was a need for us to center ourselves and position ourselves with a new look,” Bayley said. Huck’s partnered with GSP on the store’s design to incorporate that legacy Huck’s feel and evolve it into something fresh and new that emphasized the market approach to convenience, emphasizing foodservice. “A big part of the redesign was not only branding the Huck’s Market, but better focusing and showcasing our food programs, which had always been there, but we wanted to bring them to the forefront because we know food is our future,” Bayley said. The updated color scheme fades out the previous red and yellow with a modern, woodgrain look. Huck’s has since completed several remodels on legacy stores and is continuing its remodel and rebranding initiative in 2022, with a goal of rolling the design out to its entire ﬂeet of stores in the next three years. Huck’s also has plans to roll the new look out to new-to-industry stores in the future. “We have several properties that are secured for the new look,” Bayley said. New-to-industry stores will measure over 6,000 square feet, up from the 3,000-4,200 square feet of legacy stores. Most of Huck’s stores feature Huck’s branded gas and six to 14 gas pumps in the forecourt. It’s also testing electric vehicle charging at its

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Premier Manufacturing: Brands Built on Integrity Owned by a cooperative of proud American farmers using the best U.S.-grown tobacco blends among their competitors, Premier provides high-quality, value-priced cigarette brands for the adult consumer. C-stores across the country are buying in.

Commitment to Quality Premier Manufacturing, Inc. is the consumer products division of U.S. Tobacco Cooperative Inc. (USTC), an American grower-owned marketing cooperative based in Raleigh, NC.

500+ member farmers throughout the Southeast

Members maintain GAP Connections Trackable process includes all aspects of manufacturing under one roof Certification Standards Ensures sustainable, ethical agricultural practices Tobacco processing & stemmery Primary blending / Cigarette finishing

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A Cut Above the Rest

Premier’s support staff prides itself on meeting customer goals with seamless execution in achieving the highest regulatory standards.

Premier products use only top-end tobacco blends.

• Provides sales/service support across the U.S. • Develops POS materials for high visibility • Creates custom sales & merchandising programs • Maintains strong relationships with top distributors

• Partners with top national and regional retail chains

The finest flue-cured tobacco in the world • All U.S. grown • Environmentally sustainable • Compliant with every regulation The best blend among competitors • Highest concentration of flue-cured tobacco • Vibrant color • Blends provide exceptional aroma and flavor experience Manufactured on industry-leading equipment • Laser perforation • Inked code dating • Latest high-tech advancements

Your Trusted Premier Brands Choose the brand that suits your loyal consumers. Each brand features a variety of styles to satisfy every taste. Contact PremierManufacturing today! www.gopremier.com/contact

FRONT END Profile

Beaver Dam, Ky., location, where it’s encouraging customers to spend time in-store while they charge up. ELEVATING FOOD

Huck’s features grab-and-go, proprietary and co-branded foodservice, with plans to expand into made-to-order in the future. “We are partnered with Godfather’s at over 70 locations. We also offer our proprietary brand of chicken, the Cluck’s Chicken brand, at 72 locations,” said David Grimes, vice president of foodservice for Huck’s. Grimes has been with Huck’s for nine years. He served as a district manager and regional director before stepping up to the plate to direct foodservice initiatives. “We’re in the process of developing our Huck’s Kitchen brand underneath the Huck’s Market umbrella,” Grimes said. “The development of the

CSTORE DECISIONS •

March 2022

Huck’s Kitchen logo is complete, and we continue to evaluate and enhance our offers.” As part of the Huck’s Kitchen program, the chain is offering new foodservice concepts including Bigg Fresh, Bigg Breakfast and Bigg Bakery. Bigg Fresh features several wrap varieties, including Crispy Buffalo Chicken, Crispy Ranch Chicken, a Caesar wrap, turkey and ham wraps, as well as sub sandwiches on both traditional and pretzel buns. The program also includes several different salads. The Bigg Breakfast program includes sausage and bacon offerings on bagels, biscuits, croissants or burritos. Offers also include Texas Toast sandwich varieties, breakfast steak and biscuits, and gravy. Customers can ﬁnd Bigg Breakfast items in the hot hold and Bigg Fresh items in 48-inch deli cases. Huck’s also features a smaller ‘Snack Attack’ case that includes grab-and-go items such as meat snacks, cheeses and healthy options.

cstoredecisions.com

Huck’s stores feature its Bigg Swigg fountain program, plus a Fresh Blends smoothie unit with milk, fruit and coffee-based smoothies at its newest locations.

“Bigg Bakery includes several doughnut varieties, to include long johns, ring donuts, Persians and a variety of delicious muffins and cookie offers,” Grimes said. The chain’s proprietary Cluck’s Chicken program includes hand-breaded chicken. “We proudly sell a marinated chicken tender with our proprietary breading blend that we use to handbread our products. Other category offers include potato wedges, bone-in chicken, honey-battered wings, and livers and gizzards,” said Grimes. “Our proprietary blend of seasoning is something that we are super proud of. We think it’s just a great product. It gives a great flavor profile to our tenders, our wedges, our bone-in chicken.” Huck’s features a coffee section branded Daybreak Café. As it remodels stores and opens new locations, it’s adding bean-to-cup coffee. “At this point, I would say we’re pretty happy with it,” Grimes said. When it comes to cold dispensed, Huck’s features its Bigg Swigg fountain program and also offers a Fresh Blends smoothie unit featuring fruit, milk and coffee-based smoothies at its newest locations. The chain is also delving into catering. cstoredecisions.com

FRONT END Profile

Huck’s foodservice offer includes grab-and-go and roller grill items, plus Godfather’s pizza and a proprietary chicken offer at select locations. Beverage options include fountain drinks, smoothies and bean-to-cup coffee at new or remodeled locations.

TECH FOCUSED

Huck’s provides food and product delivery with the help of third-party apps. “In every area where we can be, we’re partnered with the third-party delivery services Grubhub, Uber Eats and DoorDash. At our Godfather’s locations, we have Godfather’s Online,” Grimes said. While the chain offered curbside pickup as an option during the height of the COVID-19 pandemic, there wasn’t a significant demand for it in Huck’s market area. Huck’s is currently integrating online ordering and third-party delivery into its Huck’s Bucks Bigg Rewards app. The Huck’s Bucks Bigg Rewards app features its near-five-star-rated loyalty program. Huck’s is currently testing self-checkout kiosks and preparing to expand that to more locations. The chain also features bitcoin kiosks and bitcoin ATMs in several sites. And it has a gaming section in several of its Illinois stores. Huck’s also features frictionless payment through the Skip app at all locations. Customers open the Skip app, scan the items and pay within the app. Huck’s is now working to 18

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March 2022

integrate the Skip frictionless payment with its Huck’s Bucks app, so customers only need to open the Huck’s app to both pay and receive loyalty rewards in the future. “We are also building out alternative payments (ACH, PayPal, Venmo, etc.), online ordering and digital fuel pump activation,” Bayley noted. “Currently, we are working on integrating all of these features into a single-app ecosystem to streamline the customer’s experience and be able to engage with the Huck’s brand inside, (in the) forecourt or from home.” LOOKING AHEAD

Huck’s is eager and ready for growth in 2022, Bayley noted. “At the end of the day, we want to be peoples’ first choice for convenience. And we want to be the first choice for food offerings. We want to be considered a viable alternative to the quickservice restaurant,” Grimes said. “We are here to stay,” added Bayley. “We are growing. We are excited for a new year and the years to come.”

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quickBites CUSTOMERS DEMANDING DIGITAL From dining to groceries and everything else on retail shelves, pandemic-savvy consumers now expect the option of ordering pretty much everything via their computers or handheld devices. Subscription services, curbside pickup, home delivery and even in-vehicle payment have empowered customers to have it their way — however, whenever and wherever.

ITEM OF THE MONTH CLUB

Responses from a proprietary shopper community via online surveys between Jan. 25-27, 2022, found that, for a variety of items like beverages, meal kits, clothing, pet products and more …

22% of consumers use online subscription services

CURBSIDE CONVENIENCE

Estimates say the global in-vehicle payment services sector will show a compound annual growth rate (CAGR) averaging around 45% for the next several years as automakers invest more in the technology that makes it easier for motorists to purchase everything from fuel to french fries. IN-VEHICLE PAYMENT SERVICES MARKET IN… 2021 exceeded $600 million 2028 is expected to grow to $10 billion

Source: Acosta, “The Lingering Impact of COVID-19 on U.S. Shoppers,” Feb. 16, 2022. Source: Global Market Insights, “In-Vehicle Payment Services Market,” February 2022

KEYBOARDING FOR CULINARY

Absent from consumers' radars a few short years ago, online grocery shopping is now used by nearly seven out of 10 consumers.

THE HANDHELD GROCERY CART

68% Share of consumers who at least occasionally are shopping online for groceries

Source: Acosta, “The Lingering Impact of COVID-19 on U.S. Shoppers,” Feb. 16, 2022

DIGITALLY DELICIOUS

While pandemic fears and falsehoods may divide many consumers, digital ordering from restaurants will be a normal customer expectation moving forward, regardless of stereotypes attached to vaccination status.

Which features restaurant customers say would encourage them to spend more on food orders: Vaccinated

Very, Extremely Likely to Be Vaccinated

Somewhat Likely to Be Vaccinated

Slightly, Not at All Likely to Be Vaccinated

Online payment ability

32.4%

43.9%

41.3%

35.3%

Online ordering ability

29.8%

41.3%

33.8%

33.2%

Source: PYMNTS.com/Paytronix, “Delivering on Restaurant Rewards,” survey of a census-balanced panel of 1,984 U.S. consumers, April 2021.

CSTORE DECISIONS • March 2022

Online grocery market total sales continue to grow, according to estimates from Coresight Research. The COVID-19 pandemic drove total sales to nearly double from 2019 to 2020, yielding a 94% jump. While that trend has since slowed, projections say it will continue. Year

Projected Food and Beverage Online Sales

1-Year % Change

2021

$67.1 B

17.9%

2022

$88.9 B

32.4%

2023

$110.7 B

24.5%

2024

$134.4 B

21.4%

2025

$159.7 B

18.8%

Source: IRI E-Market Insights/Coresight Research, “Market Outlook: US Grocery Retailers – Channel Stickiness to Persist,” February 2022

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Front End | Category Management Leaders

Bolger Thrives at Thorntons As senior category manager of fuel pricing for Thorntons, Shaun Bolger’s competitive spirit leads him to outperform internal KPIs — and the competition. Isabelle Gustafson • Associate Editor 24

CSTORE DECISIONS •

March 2022

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As the senior category manager of fuel pricing for Louisville, Ky.-based Thorntons, Shaun Bolger’s primary objective is optimizing retail pricing within the fuel space for the c-store chain’s more than 200 stores in six states: Florida, Illinois, Indiana, Kentucky, Ohio and Tennessee. “Digging deeper,” he said, “this branches into a number of subcategories to include rationalizing pricing decisions, competitor benchmarking, brand and product strategy, guest experience and fuel loyalty, demand forecasting and P&L (profit and loss) management. This all entails a strong emphasis on analytics and product management.” No two days are the same, Bolger said, noting that the role requires a certain personality. “The fact that every day is different, along with the notion that you can be very ‘entrepreneurial’ within this space, have been key drivers,” he said. “Additionally, I’m very competitive with myself, so there’s always a constant desire to outperform internal KPIs (key performance indicators) as well as the competition.” cstoredecisions.com

March 2022 • CSTORE DECISIONS

Front End | Category Management Leaders

Louisville, Ky.-based Thorntons has seen consecutive record years in profits, said Senior Category Manager of Fuel Pricing Shaun Bolger. “ ... the restless ‘need to know’ that’s in Thorntons’ DNA, along with in-house capability, has spurred business agility,” he said.

This sense of outperforming even his own goals extends to his personal life, too. The former college crosscountry and track athlete aims to get back into competing in 5k and 10k races this year. “I’ll also admit I’m frightened of marathons,” he said, “but would love to say one day that I was able to complete one!” CStore Decisions is recognizing Bolger as a 2022 Category Management Leader for his commitment to optimizing retail fuel pricing, his competitive spirit and his continuous drive to take performance to the next level. THORNTONS DNA

In addition to his bachelor’s degree, Bolger has a Master of Entrepreneurship in applied technologies from the University of South Florida and a Master of Business Administration from Bellarmine University. He began his career at a large health insurance firm, where he worked in clinical outcomes and analytics. In 2014, he joined Thorntons as an assistant category manager in merchandising/marketing. 26

CSTORE DECISIONS •

March 2022

“As a local to Louisville, Ky., Thorntons’ reputation preceded itself,” Bolger said, “so when I was contacted by a recruiter, it was an easy decision.” After a few years of hard work, he moved over to retail fuel in 2016 as a senior category manager, where he works today. “Whether it’s helping a team member resolve a price sign issue to forecasting the impact of electric vehicles on fuel five years from now, I’m accountable for the performance of a business line,” he said. “However, that performance really becomes amplified and sustainable when the guest and teamwork become the central focus.” Bolger noted the pandemic redefined demand as it relates to sales volume and created subsequent ripple effects on both the supply chain and labor, which caused both shortand long-term pricing challenges for retailers nationwide. Despite this, he said, Thorntons has “enjoyed consecutive record years in profits.” “... the restless ‘need to know’ that’s in Thorntons’ DNA, along with inhouse capability, has spurred business agility,” he said.

Bolger also cited his relationships — personally and professionally — as keys to his success. “I’ve been lucky to have some tremendous people both in my professional and personal life,” he said. “Professionally, I couldn’t have asked for a more authentic, considerate and knowledgeable leader. Jamie Wohner (Thorntons’ director of fuel sales) lives our company’s values every day, is a wellspring of business knowledge and truly cares about me as a person. On the personal side, my father has been my hero in life. As an educator, coach and community pillar, I often felt I was on the shoulder of a giant who brought me up on the mantra of, ‘Be humble, work hard, and be a good person.’ I try to live out those words daily.” There’s much to look forward to in 2022 and beyond, Bolger noted. “As we begin to unlock new ways of understanding our guests using big data and new technologies, there are huge synergies to be gained in retail pricing,” he said. “I’m also very excited about the growth of our business and look forward to how the convenience space will continue to evolve.”

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Leading Together:

Category

$ % Chg

$ Shr of Category

Soft drinks

17.7%

32.1

-1.3

9.0%

11.0

31.8%

Energy beverages

23.1%

21.3

0.1

17.4%

9.6

37.0%

Fruit drinks

21.7%

13.5

-0.1

13.8%

7.5

25.6%

Sport drinks

43.4%

7.2

1.1

30.6%

7.1

23.5%

Fruit juice

20.0%

4.7

-0.1

17.8%

2.4

26.3%

Water

26.8%

4.5

0.2

21.2%

3.6

29.8%

Liquid tea

17.4%

3.8

-0.2

11.0%

2.2

24.8%

Value add water

33.5%

3.6

0.3

26.3%

3.8

24.8%

RTD coffee

25.3%

2.7

0.1

17.1%

1.4

25.7%

Chg

Source: National Retail Solutions (NRS) data scan of 12,069 stores selling non-alcoholic beverages. All change measures are same store sales (7,559 stores) Nov. 1, 2021-Jan. 31, 2022, versus Nov. 1, 2020-Jan. 31, 2021.

CSTORE DECISIONS •

March 2022

“Anything watermelon is on fire! A few years ago, it was mango everything; today, it’s watermelon. We’ve seen good success with Mt. Dew Major Melon, Watermelon Monster and Watermelon Red Bull,” he said. He also pointed out Pepsi’s successful strategy with Mountain Dew limited-time offers. NEW BRANDS AND INNOVATION

Hemphill expects to see new innovation surrounding CSDs and other sparkling beverages, particularly functional innovation. “One example is the increasing numbers of pre- and probiotic sparkling drinks that have emerged on the market,” he said, referring to recent innovation. He also anticipates seeing an increased blend between traditional refreshment brands and alcohol, provided the combinations already in the market are successful. Patterson noted that innovation can be successful, particularly for consumers in more densely populated areas who “are more apt to try something new.” Additionally, Patterson suggested that carrying new brands would help boost the category. Beacon & Bridge plans to add brands to its portfolio with the hopes that consumers who typically lean toward cold dispensed beverages might convert to refrigerated beverages, especially because Patterson expects cold dispensed beverage sales, which have been down at his stores since the start of the pandemic, to continue to trend downward. “With all the pipeline disruptions we’ve seen,” he said, “I really think this is going to be the time for ancillary brands to shine.”

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Beverage | Cold & Frozen Dispensed

FLAVORS, PANDEMIC PRECAUTIONS BOOST DISPENSED BEVERAGE SALES Growth is expected for the cold and frozen dispensed beverage category in 2022. While the segment saw dips due to the COVID-19 pandemic, health precautions in the self-serve section of c-stores are giving customers the confidence to return to the segment. “Once customers saw that we were taking extra precautions, it really made them feel comfortable to make those purchases,” said Nicolette Jaeger, director of merchandising & loyalty at Warrenville, Ill.-based The PRIDE Stores, which operates 15 c-stores in the Chicagoland area, one in Indiana and 93 Octane Brewery. Precautions include offering customers tissue paper and/ or gloves to dispense drinks, plus additional cleaning and disinfecting of the dispensers. Jim Rastetter, category manager at Richmond, Va.-based GPM Investments, believes that COVID protocols will remain for the foreseeable future. “COVID protocols are a critical element to any successful beverage program today, as customers expect clean and sanitized beverage areas,” he said. At GPM Investments, which has approximately 1,400 company-operated stores, dispensed beverage sales haven’t yet returned to pre-pandemic levels, particularly due to consumers working from home. However, the frozen dispensed segment, specifically, has grown even during the pandemic, and Rastetter expects that growth will continue. This summer, GPM is launching an exclusive Frazil flavor in the category. “With fewer restrictions in place, 2022 should really be a standout year for this category,” Jaeger said. FLAVOR ROTATION

“When customers enter our stores in 2022, our goal is for them to find their favorite beverage flavor,” said Rastetter. His advice to other retailers is to continue offering new flavors year-round to drive excitement in the category. GPM brings new and classic flavors to the cold and frozen dispensed beverage category, as traditional flavors continue to do well at its stores. “Mountain Dew, for example, represents more than 15% of all fountain sales,” said Rastetter. 56

CSTORE DECISIONS •

March 2022

Flavor Preferences by Region

Flavor preferences vary across the country. Insights from Coca-Cola Freestyle dispensers in U.S. c-stores for the 52 weeks ending Feb. 15, 2022, show the following flavor preferences based on volume per dispenser:

• Vanilla and Blueberry Pomegranate are most popular in Utah. • Cherry and Cherry Vanilla are most popular in Missouri. • Fruit Punch and Grape are most popular in Minnesota. • Ginger is most popular in New York. • Lemon is most popular in Florida. • Lemonade is most popular in Maryland. • Lime is most popular in Hawaii. • Orange is most popular in Iowa.

Insights from Coca-Cola Freestyle dispensers in U.S. c-stores for the 52 weeks, ending Feb. 15, 2022

In terms of frozen dispensed beverages, Tiger’s Blood — a combination of watermelon, strawberry and coconut — is the most popular flavor at GPM. “GPM will be rotating five different frozen slush flavors in 2022, including a GPM exclusive during (our annual promotion) ‘100 Days of Summer,’” Rastetter noted. GPM designs its fountain assortments to match consumer interests in different geographical regions. For example, the company supplies the Big Red dispensed flavor to its stores in the Texas market, as that flavor is popular there. GPM plans to extend its frozen dispensed beverage program to additional stores in 2022. Jaeger also remarked on the importance of flavor variety. The PRIDE Stores will see more innovative flavors as well as brand collaborations for the cold and frozen dispensed beverage category. She expects that there will soon be a demand for nostalgic flavors. The PRIDE Stores has tap handles of all-natural craft sodas, free of artificial sweeteners, made in-house. Pineapple and watermelon are its most popular flavors. “Making the sodas in-house allows us to rotate flavors often and create new and innovative flavors quickly,” Jaeger said.

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Beverage | Juices & Teas

JUICES & TEAS TREND UPWARD Consumers who want to wet their whistle on the run will continue to make juices and teas big sellers at cstores. Increasingly, shoppers are targeting healthy and functional options when reaching for teas and juices.

shoppers are looking for more healthful options, such as lower sugar, as well as more functional options, such as collagen-increasing, cleansing and probiotic products,” said Melissa Kitchen, buyer III for the Army & Air Force Exchange Service (AAFES), which includes 589 Express convenience stores and 122 main stores. “For teas, the trend is more holistic, less sugar and freshly brewed,” Kitchen added. For both product categories, the AAFES is seeing successful brands promote mental and emotional well-being and celebrate shoppers’ identities. AAFES has seen success with ‘twofor’ and ‘three-for’ discounts to build the basket and increase purchases. “Cross-promoting functional juices with breakfast items has been beneficial, as has cross-promoting tea with other items such as water, energy drinks and hot food items,” Kitchen said.

Canned and bottled tea notched sales of nearly $1.6 billion in the convenience channel for the 52 weeks With such a large percentage ending Dec. 26, 2021, up 2.8% versus of juice sold being consumed for the previous year’s period, according breakfast at home before leaving for to IRI. Refrigerated teas saw sales of work or school, convenience stores more than $203 million, a 7.8% rise. need to focus on selling and promotLeading canned and bottled tea ing smaller pack sizes in 2022, said brands included Lipton at $640 million, Carmen Bryan, a spokesperson with up 6.2%; Arizona, with more than $275 GlobalData. million in sales, up 4.4%; Gold Peak, “The hope is capturing the 14% of with sales exceeding $194 million, a people who consume breakfast while gain of 1.4%; Monster, whose sales traveling or at work, according to the were just over $155 million, a dip of same consumer survey,” she said. 5.7%; and Snapple, at more than $86 “The use of meal deal promotions at million in sales, down 2.6%. lunchtime may also help stimulate Bottled juices should the demand for these beverages.” remain just as popular in 2022 as they were in 2021. According to IRI, for the same period, sales of bottled Boxed juices and kombucha set the pace in dollar sales growth, while consumers juices totaled $1.68 billion, continue to overwhelmingly favor bottled juices and teas. a 7% increase. Top brands Dollar Sales Unit Sales Price Per Unit included Snapple at nearly $122 million, up 7.1% year to 1-Year % Current 1-Year % 1-Year Product Current Change Change Current Change year; Minute Maid, with more than $80 million in sales, up Aseptic juices (boxed) $44.5 M 22.9% 15.0 M 20.7% $2.97 $0.05 15.8%; private label, at more Bottled juices $1.68 B 7.0% 881 M 1.3% $1.90 $0.10 than $60 million, a gain of Canned juices $328 M -9.3% 217 M -9.5% $1.51 $0.00 3%; Bai, at close to $60 mil$726 M 18.2% 286 M 14.8% $2.54 $0.07 lion, down 4.7%; and Arizona, Refrigerated juices/drinks with sales of more than $48 Canned and bottled teas $1.58 B 2.8% 948 M -2.6% $1.67 $0.09 million, up 23.9%.

Juices and Teas Brew Up Refreshment

HEALTHY & FUNCTIONAL

“For juices, Army & Air Force Exchange Service 58

CSTORE DECISIONS •

Kombucha

$1.75 M

28.3%

586,487

26.1%

$2.98

$0.05

Refrigerated teas

$203 M

7.8%

106 M

5.8%

$1.93

$0.03

Refrigerated kombucha

$28.5 M

1.6%

7.30 M

-0.6%

$3.91

$0.08

Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021 March 2022

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N O I T A R D Y H T S FA Y T I N U T R O P P O BIG

* Nielsen Connect Total US Convenience L4W ending 07/03/21 Pedialyte sales +163% vs LY, Total Category sales +15% vs LY.

Beverage | Bottled Water & Sports Drinks

FUNCTIONALITY DRAWS CONSUMERS TO

BOTTLED WATER, SPORTS DRINKS With health becoming a priority for many consumers, added wellness benefits in bottled water and sports drinks will see a growing popularity in 2022. According to research firm Mintel, non-flavored still bottled water sales increased by 8.2% in 2021. “Basic private-label brands represent the bottled water’s foundation and remain a growing segment of (the) bottled water market, but premium lifestyle brands (e.g., Fiji, Evian) and alkaline waters (e.g., Essentia) are the fastest-growing brands within the unflavored still water segment,” said Caleb Bryant, associate director, food and drink analyst at Mintel. For c-stores specifically, Nielsen reported total sales of unflavored single-serve water increased by 12.1% to reach $1.81 billion for the 52 weeks ending Jan.1, 2022. Flavored water saw an even larger growth at an estimated 17.9% increase in 2021, per Nielsen. “The growth of flavored still waters such as Hint demonstrates the market potential for still waters that deliver a superior flavor experience,” added Bryant. FUNCTIONALITY AND COMBO FLAVORS THRIVE

Enhanced function seems to be a key preference for consumers when choosing a ﬂavored water beverage. Products that “blur the lines between water, juice drinks and sports drinks” indicate interest in water that serves a purpose beyond hydration, Bryant noted, citing Propel, Vitamin Water, Smartwater and Lemon Perfect as examples. 60

CSTORE DECISIONS •

March 2022

BottleD Water and Sports Drinks See Sales Rise Total water bottle sales increased by 11.2% in the 52 weeks ending Jan. 1, 2022, whereas they decreased by 5.4% the previous year. Sports drink sales increased by 21.2% to reach $3.61 billion in the 52 weeks ending Jan. 1, 2022.

Latest 52 Wks - W/E Jan. 1, 2022

Latest 52 Wks YA W/E Jan. 2, 2021

Product

Dollar sales

1-Year % Change

Dollar Sales

1-Year % Change

Beverages

$32.1 B

10.5%

$29.0 B

3.7%

Sports drinks

$3.61 B

21.2%

$2.98 B

9.8%

No calorie

$398 M

17.9%

$337 M

21.8%

Regular calorie

$3.01 B

18.8%

$2.53 B

7.2%

Reduced calorie

$205 M

87.0%

$109 M

47.8%

Water

$2.16 B

11.2%

$1.94 B

-5.4%

Total unflavored single serve water

$1.81 B

12.1%

$1.61 B

-6.6%

Artesian water single serve

$185 M

7.5%

$172 M

0.9%

Distilled water single serve

$1.25 M

23.2%

$1.01 M

-47.9%

Drinking water single serve

$982 M

11.5%

$881 M

-5.7%

Spring water single serve

$641 M

14.4%

$560 M

-9.7%

Source: NielsenIQ, Total U.S. Convenience data for the 52 weeks ending Jan. 1, 2022, and Jan. 2, 2021

Samantha Overmohle, category manager at Des Moines, Iowa-based Kum & Go, which operates 400-plus stores in 11 states, also noticed a growing trend toward functional drinks. “Brands like Voss and Smartwater continue to innovate within their lines by offering added beneﬁts like collagen or ‘immune support,’” said Overmohle. In a response to the rise of reusable water bottles in younger generations, Bryant predicted there will be increased opportunities for powdered and liquid water enhancers in 2022. Currently, 32% of consumers of water enhancers use them for beneﬁts such as added electrolytes and energy boosts.

Sports drinks are also thriving in the market, with a 21.2% increase, according to Nielsen. Many of them offer additional caffeine and vitamins. “Taste and flavor will continue to be top priorities for consumers within this category,” added Overmohle in reference to sports drinks. Combination flavors specifically are predicted to expand in 2022. Mintel Global New Products Database sees herbal, spice and floral flavors paired with common flavors as a leading trend in packaged water product launches. Bryant listed examples of this from the database, such as Rethink Water’s Watermelon Mint Flavored Water. cstoredecisions.com

Beverage | Energy Drinks

ENERGY DRINK SALES SURGE AS INNOVATION CONTINUES Energy drinks is among the fastest-growing beverage segments, as evidenced by its strength throughout the pandemic.

EYE ON INNOVATION

2020, wants to garner younger and “Energy is through the roof right female customers with the launch, now,” said Erin Breeden, merchandiswhich includes a multimedia marketing manager for Evansville, Wyo.-based ing campaign titled “Turn Up Your convenience store Hat Six Travel Center. Mood,” to do just that. “So many companies are coming out “During the pandemic, there has As many of the major brands with new names and brands and giving been a significant decline in selfrefined their strategies in response Monster, Red Bull and Rockstar a run service beverage sales,” noted to consumer adjustments, energy for their money. Ghost, Uptime, Zoa, Don Burke, senior vice president for drinks are experiencing a wider Celsius and Alani Nu are all coming Management Science Associates in reach than ever before. Thus, energy into the scene hard and heavy.” Pittsburgh. “It appears that some cofdrink consumers looking for funcThe proliferation of brands suits Hat fee consumers concerned about the tional energy will continue to find it Six’s management just fine, Breeden self-service area of the convenience in c-stores in 2022. said. “I have found that having a large store turned to the packaged beverSales of non-aseptic energy drinks in variety is the answer to so many of the age section, choosing an energy c-stores totaled $10.6 billion, a 14.0% outage problems. People will choose drink for their caffeine consumption.” year-to-year increase for the 52 weeks something else if there are more As the pandemic winds down in ending Dec. 26, 2021, per IRI. Leading choices. We say ‘yes’ to new products.” 2022, Burke said, the question is, brands included Red Bull, which saw As for new products, the category “How many of these potentially new sales rise 17.8% to $4.7 billion; Monster, figures to get a boost during 2022 energy drink consumers will return to whose sales of $3.17 billion reflected thanks to PepsiCo’s recent addidispensed coffee?” a 13.6% increase; VPX, with sales of tion to its Rockstar energy drink line, “We predict another strong year for just over $973 million, up 12.1%; and Rockstar Unplugged, which feaenergy drink sales,” he said, “albeit Rockstar, whose nearly $487 million in tures hemp seed oil and B vitamins. at a more moderate pace, likely in sales reflected a 12.7% drop. PepsiCo, which acquired Rockstar in the 7% to 12% range.”

Energy Drinks Stay Active

The category’s dollar sales grew by 14%, with Red Bull and Monster maintaining a solid hold on the energy drink consumer, capturing a hair under three-fourths of the category dollar share and double-digit sales growth along with VPX. Reign held relatively steady, while Rockstar and NOS saw significant drops in dollar sales.

Dollar Sales

Dollar Share of Category

Unit Sales

Price per Unit

Product

Current

1-Year % Change

Current

1-Year Change

Current

1-Year Change

Current

1-Year Change

Energy drinks (non-aseptic)

$10.6 B

14.0%

100.0

0.00

3.94 B

11.4%

$2.70

$0.06

Red Bull

$4.70 B

17.8%

44.2

1.45

1.53 B

17.1%

$3.07

$0.02

Monster

$3.17 B

13.6%

29.8

-0.11

1.23 B

12.5%

$2.57

$0.02

VPX

$973 M

12.1%

9.14

-0.15

380 M

11.9%

$2.56

$0.01

Rockstar

$487 M

-12.7%

4.57

-1.40

236 M

-15.3%

$2.06

$0.06

NOS

$322 M

-9.1%

3.02

-0.77

127 M

-10.7%

$2.54

$0.04

Reign

$320 M

-1.1%

3.00

-0.46

126 M

-4.7%

$2.54

$0.09

Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021

CSTORE DECISIONS •

March 2022

cstoredecisions.com

Beverage | Energy Shots

ENERGY SHOTS BOUNCE BACK Energy shot sales are up, but competition in the segment remains fierce from a bevy of new product innovations as well as from energy drinks.

Despite new entries into the market, traditional energy shots remain popular with consumers, but the segment has been overshadowed in recent years by energy drinks, which are showing greater growth, Hemphill said. Indeed, last October Living Essentials launched its own carbonated energy beverage in a 16-ounce can, a move that CEO and founder Manoj Bhargava referred to as a ‘natural progression.’ The line is available in three flavors: berry, grape and watermelon. Energy shot sales have been flat at Baltimore-based High’s, which operates more than 54 c-stores in Maryland and Pennsylvania. “We think many customers have switched to energy drinks,” said Mike Jackson, category manager for High’s. “We are expanding on other energy shot-type items that have more of a focus on actually providing something other than energy that could help in 2022, such as sleep aid and vitamin supplements.” The Hartman Group’s health, wellness and functional ingredient research found that interest in emerging ingredients that are seen to enhance energy, such as nootropics, ashwagandha, maca and others, skews younger, reflecting a more exploratory approach to functional solutions among Generation Z and millennials. Among consumers overall, 44% said they were interested in trying nootropics in their diet, the Hartman Group found. In addition, 43% said they were interested in ashwaghanda, and 46% expressed an interest in trying maca.

Energy shots had a strong year in 2021, and while their growth in sales should continue in 2022, that pace is expected to slow to the 4-8% range, according to Management Science Associates InfoMetrics data. The convenience store channel saw sales of energy shots of nearly $641 million, an 8.8% rise for the 52 weeks ending Dec. 26, 2021, according to IRI. That’s a strong rebound after last year when the pandemic caused energy shots in convenience to fall 12.2% for the 52 weeks ending Dec. 27, 2020, per IRI. Living Essentials Marketing LLC’s 5-hour Energy brand accounted for the lion’s share of energy shot sales in 2021, with sales just under $578 million, a gain of 10.5%. The next-largest brands in sales were Tweaker at just under $25 million, down 4.5% year to year, and VPX at $17 million, up 18.9%, according to IRI. CATEGORY EXPANSION

“The non-alcoholic shots category has begun to splinter,” said Gary Hemphill, managing director of research for Beverage Marketing Corp. in New York City. “Energy is the dominant shot, but we’ve seen more coffee, juice and tea shots in recent years. While some shots offer an energy boost, others offer health and wellness.”

Healthy Growth for Energy Shots With 5-hour Energy far outpacing the rest of the category, Red Dawn boosted its dollar sales by 62%, followed by VPX with an 18.9% dollar sales lift.

Dollar Sales

Dollar Share of Category

Unit Sales

Price per Unit

Product

Current

1-Year % Change

Current

1-Year Change

Current

1-Year Change

Current

1-Year Change

Energy Shot

$641 M

8.8%

100.0

0.00

202 M

6.3%

$3.17

$0.07

5-hour Energy

$578 M

10.5%

90.2

1.38

167 M

9.7%

$3.47

$0.03

Tweaker

$24.9 M

-4.5%

3.89

-0.54

20.7 M

-5.5%

$1.20

$0.01

VPX

$17.0 M

18.9%

2.66

0.23

4.93 M

16.3%

$3.46

$0.08

Red Dawn

$4.67 M

62.0%

0.73

0.24

679,282

55.2%

$6.87

$0.29

Vital

$4.05 M

-3.0%

0.63

-0.08

2.64 M

-6.6%

$1.53

$0.06

Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021 cstoredecisions.com

March 2022 • CSTORE DECISIONS

Beverage | Beer & Wine

QUALITY, CONVENIENCE DRIVE

BEER AND WINE SALES Spurred by pandemic lifestyle changes, more Americans are drinking increasing amounts of beer and wine.

For the same period, sales of wine totaled $1.1 billion, up 1%, according to IRI. Leading brands included Sutter Home, with just over $147 million in sales, a year-to-year gain of 6.3%, and Barefoot, with sales of nearly $121 million, down 8.4%.

The flip side, however, is that customers have come to expect a high level of convenience in terms of online ordering and delivery options that c-store operators may consider integrating as competition grows. The convenience store channel saw sales of beer reach $24.2 billion, a 2% gain, for the 52 weeks ending Dec. 26, 2021, per IRI. Leading brands were Bud Light, Modelo Especial, Michelob Ultra, Corona Extra, Coors Light, Budweiser, Miller Lite, Busch Light, Natural Light and Heineken. Of those, the greatest gain for the period belonged to Modelo Especial, whose sales grew by 16.1% to just over $2 billion.

CATEGORY EVOLUTION

Quality is a top consideration for consumers in 2022 when it comes to beer and wine sales. Some 26% of U.S. customers claim a high level of spending on wine either because they purchase it in large portions or because they opt for high-end, premium brands, according to Ethan Elliott Maddison, a beverage specialist with GlobalData. With beer, 33% reported the same. Meanwhile, one in five (19%) consumers said they often purchase alcoholic beverages in convenience stores.

Beer Sales Balance

Following 2020 sales highs, with beer sales growth of 13.7%, beer saw a more modest increase of 2% at convenience stores for the 52 weeks ending Dec. 26, 2021, per IRI. Bud Light led the category, with dollar sales of $3.18 billion, down 6.3%, followed by Modelo Especial at $2.02 billion, up 16.1% for the period.

Dollar Sales

Case Sales

Price Per Case

Product

Current

1-Year % Change

Current

1-Year % Change

Current

1-Year Change

Beer

$24.2 B

2.0%

865 M

-3.0%

$28.01

$1.38

Bud Light

$3.18 B

-6.3%

132 M

-8.8%

$24.00

$0.66

Modelo Especial

$2.02 B

16.1%

56.9 M

11.9%

$35.45

$1.28

Michelob Ultra

$1.67 B

8.3%

56.1 M

6.2%

$29.78

$0.56

Corona Extra

$1.34 B

9.4%

35.6 M

6.3%

$37.68

$1.06

Coors Light

$1.32 B

-1.0%

54.2 M

-3.7%

$24.30

$0.66

Budweiser

$1.16 B

-5.7%

47.4 M

-8.3%

$24.50

$0.66

Miller Lite

$1.16 B

-4.4%

48.5 M

-7.0%

$23.84

$0.65

Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021

CSTORE DECISIONS •

March 2022

“Perhaps unsurprisingly, sales are driven by the convenience of these stores, which are often open during later hours and at closer proximity to homes than large supermarkets, allowing people to ‘pop’ out for a bottle of wine or case of beer,” Maddison noted. “For this reason, most convenience stores are able to charge more for these products compared to hypermarkets and online.” Given the growth of online shopping, companies like Drizly and Uber Eats, and the emerging trend of quick-commerce, more Americans are coming to expect doorstop delivery within 60 minutes of ordering. This trend is predicted to grow as more players enter the market. “Beer is definitely a category in transition,” said veteran convenience store retailer Amer Hawatmeh, the longtime president of St. Louis-based St. George Oil. Hawatmeh divested his 52 Coast to Coast c-stores, moved operations to California and introduced his Coast to Coast Bodega concept in Santa Clarita. He noted the beer market has shifted, with an increased interest in craft beer. “People are willing to pay for quality,” he said. “You give them something unique and hip, and they will pay for it.” As for wine, Hawatmeh said, c-stores need to make room in 2022. “I always said (wine) is something retailers should be getting into,” Hawatmeh said. “Get rid of the wasted square footage in your stores, and bring in the Barefoot (brand) and the two-for-$14 pricing.”

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Beverage | Hard Seltzer & RTD Cocktails

RTD COCKTAIL, HARD SELTZER CONSUMERS THIRSTY FOR NOVELTY C-stores face the old conundrum with both hard seltzer and ready-to-drink (RTD) cocktails: Consumers want old favorites, but they also want exciting new brands and line extensions.

Hard Seltzer Continues Climb

IRI numbers for the 52 weeks ending Dec. 26, 2021, show the hard seltzer category at c-stores with sales of more than $2.1 billion, an increase of 25.9% year to year. Within that category, White Claw was the leading brand, with sales just topping $1 billion, up 9.6%. Truly followed at nearly $529,000, a 56.2% gain. Bud Light Seltzer recorded sales of just over $199 million, a jump of 13.5%. Corona Hard Seltzer notched sales of almost $53 million, a decline of 16.8%. “Single-serve cans will explode in volume this year,” said Bump Williams, the founder, president and CEO of Bump Williams Consulting in Shelton, Conn. Key for growth will be a balance of what he called big, successful legacy brands like White Claw. “Be selective on any and all new

products and line extensions,” Williams warned. “Ask the question, ‘Where will these volumes be coming from? Brand switching or incremental business?’”

CSTORE DECISIONS •

March 2022

Hard seltzer sales at convenience stores grew 16.8% for the 52 weeks ending Jan. 15, 2022, per NielsenIQ.

Segment

Dollar Sales

1-Year % Change

Hard seltzer

$1.76 B

16.8%

Beer/flavored malt beverage (FMB)/cider

$22.7 B

-3.2%

Source: NielsenIQ, Total U.S. Convenience data for the 52 weeks ending Jan. 15, 2022

RTD COCKTAIL SALES UP

According to NielsenIQ, Total U.S. Convenience data for the 52 weeks ending Jan. 15, 2022, showed total spirits sales were $3.04 billion, up 9.8%. Within that category, preparedcocktail sales were slightly over $167 million, a dramatic 62.4% rise. “I’m seeing increases in our stores in both hard seltzer and ready-todrink cocktails,” said Thelma Seguin, director of store operations for Fabulous Freddy’s Car Wash, which owns and operates five convenience stores in Las Vegas. While RTD cocktail sales rose slightly for the chain in 2021, this

year is already bringing larger-scale increases in business, she said. “The industry, I think, is coming up with some new innovation,” Seguin added. “We’re always trying to bring in what’s new, and people are just trying more things. People have been home more.” Consumers also appreciate the flavor profiles of some of the newer RTD cocktails, Seguin has found. “They are fruity. It’s almost like everything is fruity and sweet,” she said. Young adult consumers are the age group gravitating toward the RTD cocktails, she noted. Freddy’s dedicates a full shelf to RTD cocktails, as well as space in its cooler. The chain’s top seller is Monaco Cocktails, of which it stocks four varieties. Like a great many c-store operators around the country, Freddy’s plans to present shoppers with lots of variety in RTD during 2022. “Bringing in some of the new items that are coming out; that’s pretty much what the plan is,” Seguin said. In a segment like RTD cocktails, Seguin stressed, newness is key. “Consumers are always looking to try something new,” she said. “They do have their favorite, but you know, I have my favorite pizza, and I always want to try something new.”

cstoredecisions.com

THE MOST AWAITED C-STORE EVENT OF THE YEAR!

SUNDAY, MARCH 27 8:00 AM 1:00 PM – 7:30 PM 1:00 PM – 4:00 PM 4:00 PM – 5:00 PM 6:00 PM – 7:00 PM 7:00 PM – 9:00 PM 9:00 PM – 12:00 AM

NAG Golf Outing at Torrey Pines Registration NAG Hospitality Suite NAG/YEO Board Meeting NAG Networking Reception NAG Opening Night Dinner NAG Hospitality Suite

MONDAY, MARCH 28 7:00 AM – 1:30 PM Registration/Info Desk Open 7:00 AM – 8:00 AM Breakfast 8:00 AM – 8:15 AM Welcome/Conference Overview, NAG Executive Director John Lofstock and NAG Board Chairman Doug Galli, Reid Stores Inc./Crosby's 8:15 AM – 9:15 AM GENERAL SESSION: BURNING ISSUE #1: Culture as a Competitive Advantage Culture is at the core of many businesses no matter how large they are. There are common traits in winning businesses that contribute to their unique nature: clear values. Caring, loyalty, humility and deep commitment to community are just a few of them. These characteristics often directly affect decision-making in the company and the way it treats its employees, customers and suppliers. Many businesses quite rightly view a valuesbased culture as a competitive advantage and, as such, it is fiercely guarded. Hear how leading c-store chains are building their winning culture.

Moderator: John Lofstock, Executive Director, NAG Speakers: • • •

Tony El-Nemr, Founder & CEO, Nouria Energy Corp. Tom Robinson, Chairman, Robinson Oil Corp. David Simendinger, President, Champlain Farms

9:15 AM – 9:45 AM

Save the date for the LIVE event!

March 27-30, 2022

LA JOLLA CALIFORNIA

Break/Visit Sponsor Tables

9:45 AM – 10:45 AM GENERAL SESSION: BURNING ISSUE #2: Loading Up for Breakfast As more commuters return to the office, the breakfast business continues to rise and shine at restaurants. With consumers typically rushed at breakfast time, it’s no wonder that quick-service restaurants and grab-andgo c-store items accounted for more than 80% of total restaurant morning meals pre-pandemic, according to NPD. Recapturing a strong breakfast business requires great food and outstanding service, but it’s important to conduct a cost-benefit analysis to make sure investing in the morning daypart makes sense for your brand and your customer base.

Moderator: Jessica Williams, Founder CEO, Food Forward Thinking LLC Speakers:

For additional information, contact NAG Executive Director John Lofstock at jlofstock@wtwhmedia.com.

NAG22_housead_2spread_1-22_Vs4.indd 2-3

• • •

Jerome Hunsinger, Fresh Food Marketing Brand Manager, Wawa, Inc. Brian Scantland, Vice President, Fresh Food Operations and Business Planning & Analytics, Thorntons Tony Sparks, Head of Customer Wow!, Curby’s Express Market

10:45 AM – 11:00 AM 11:00 AM – 12:30 PM 12:30 PM – 1:30 PM 1:00 PM – 5:00 PM 1:30 PM – 6:30 PM 6:30 PM – 9:00 PM 9:00 PM – 12:00 AM

Break/Visit Sponsor Tables Information Exchanges Part 1 Lunch Free Time/YEO Networking NAG Retail Store Tours Dinner on Your Own to Explore La Jolla NAG Hospitality Suite

TUESDAY, MARCH 29 7:00 AM – 4:00 PM Registration/Info Desk Open 7:00 AM – 8:00 AM Breakfast 8:00 AM – 9:00 AM GENERAL SESSION: BURNING ISSUE #3: Driving Targeted Business Outcomes Learn from leading convenience and fuel retailers about their approach to creating loyal customer behavior and the investments that drive targeted business outcomes. NAG has partnered with Stuzo to survey convenience store chains and convenience store customers to find out what is driving sales at convenience stores. Topics covered include: • Loyalty, Payment Systems and Cross-Channel Customer Experience Campaigns • Onsite and Offsite Engagement • CPG-Funded Offers • Security and Privacy

Moderators: John Lofstock, Executive Director, The National Advisory Group (NAG) and Steve O’Toole, Vice President of Sales and Business Development, Stuzo

Speakers: • • •

Sorin Hilgen, Group Chief Digital Officer and Chief Information Officer, EG Group Rachel Puepke, Vice President of Marketing, CEFCO Ieva Grimm, Chief Operating Officer, Jim Dandy Stores

9:00 AM – 9:15 AM

NAG 2022 at the beautiful HILTON TORREY PINES La Jolla, California

The National Advisory Group (NAG) is an association of small, mid-sized and familyowned c-store chains and the executives that run them. This exclusive, member-driven group convenes annually to exchange ideas with the motivation to improve their business performance and ultimately their bottom line. The setting of this conference encourages an extremely educational, yet highly social environment. The schedule consists of topnotch speakers, retail information exchanges, opportunities to address burning issues within your business, a chance to get to know your peers in similar size operations and much more!

Break/Visit Sponsor Tables

9:15 AM – 10:15 AM GENERAL SESSION: BURNING ISSUE #4: Lessons from COVID: How the Industry Is Recovering from a Pandemic The impacts of the COVID-19 pandemic on the retail sector and the nation's supply chains are still unfolding. Retail has experienced massive labor shortages, supply disruptions and price increases. It's impossible to predict the next pandemic, but retailers have learned quite a few lessons on how to deal with the next catastrophe. Hear from three convenience store retailers that embraced the unique challenges of the COVID pandemic, and learn about the leadership and stability they provided to guide their companies through those difficult days.

Moderator: Erin Del Conte, Executive Editor, CStore Decisions Speakers: • • •

Derek Gaskins, Chief Marketing Officer, Yesway Colin Dornish, Director of Operations, Coen Oil Co. Brian Unrue, Director of Operations, Clark’s Pump-n-Shop

10:15 AM – 10:30 AM Break/Visit Sponsor Tables 10:30 AM – 12:00 PM Information Exchanges Part 2 1) The Rise of Electric Vehicles: What This Means for Convenience Stores 2) HR: Unleashing the Power of Mobile Apps for Staffing Moderator: Laura Varn, Vice President, People & Culture and Communications, Parkland USA 3) What's Next for Tobacco, CBD and Cannabis 4) Foodservice: How to Cut the Partnership on Delivery Moderator: Brad Chivington, Senior Vice President, High's of Baltimore 5) How to Build a Private Label Business 6) The Business of Coffee: Is Bean to Cup for You? Moderator: Joy Almekies, Senior Director of Food Services at Global Partners/Alltown 7) Cryptocurrency and Bitcoin: What C-Stores Need to Know

2/24/22 10:23 AM

12:00 PM – 1:00 PM

Lunch

1:15 PM – 2:15 PM GENERAL SESSION: BURNING ISSUE #5: Human Resources: Staffing, Recruiting and Retaining Personnel in a Labor Shortage A labor shortage exists, and it’s going to get worse before it gets better. The reality that it coincides with a growing skills gap makes for a very challenging time for retail executives and hiring managers. Experts recommend that HR leaders look to and build relationships with universities, recruiters and search firms, allow current staff to take part in external professional activities to help attract new talent, and look for potential employees on job boards and other social media outlets. Hear how top quartile chains are winning the labor battle.

Moderator: Jayson Council, Associate Faculty, Columbia University Speakers: • • •

Alex Olympidis, President of Operations, Family Express Corp. Peter Rasmussen, Director of Operations, Neon Marketplace Laura Varn, Vice President, People & Culture and Communications, Parkland USA

2:15 PM – 2:45 PM

Break/Visit Sponsor Tables

2:45 PM – 4:00 PM YEO BREAKOUT SESSION: Understanding the Future of Retail Payment Systems Online shopping has become easier through mobile and digital payments, but retailers are slow to see the benefits in brick-and-mortar stores. How can c-stores join the consumer demand for frictionless payment? In this session, experts on payments will discuss where digital payments are going and how the convenience industry can abandon cards for digital currencies.

Moderator: Jeremie Myhren, Chief Information Officer, Road Ranger Speakers: •

Gray Taylor, Executive Director, Conexxus

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

NAG Networking Reception Dinner & Awards Ceremony NAG Hospitality Suite

NAG22_housead_2spread_1-22_Vs4.indd 4-5

As the convenience store and petroleum industry continues to evolve, training the leaders of tomorrow is more important than ever before. To help young executives have a group that is solely focused on exchanging personal experiences with peers in their age group, the National Advisory Group (NAG) is proud to announce that it has relaunched the Young Executives Organization (YEO). YEO’s mission is to cultivate young talent in the convenience store and petroleum industry through implementation of education and networking. YEO accomplishes this mission by leveraging the experience of NAG members to help foster superior leadership skills. YEO members are industry leaders who are approximately 40 years of age or younger. Members are entrepreneurs, leading top businesses and actively pursuing a higher level of professionalism in the convenience store and petroleum industry. Membership in YEO provides young convenience store and petroleum industry executives with an opportunity to network with other NAG members and influential industry leaders. It also gives young executives a platform to express their idea, leadership abilities and vision for the future of convenience retailing. Membership in YEO is open to all NAG-member company employees at no cost. If you are not a NAG Member, join NAG now at www.nagconvenience.com. If you are a young executive or if your operations has a young up-and-coming executive please join us in 2020. For additional information, contact John Lofstock at jlofstock@wtwhmedia.com.

WEDNESDAY, MARCH 30 7:30 AM – 12:00 PM Registration/Info Desk Open 8:00 AM – 9:00 AM WORKING BREAKFAST: NAG Custom Research: Expanding the Evening Daypart? The evening daypart has been elusive to convenience retailers seeking to sell dinner meals to consumers. While sites are busy with customers during “evening dinner prep” drive time, consumers do not seem to purchase dinner meals from convenience stores. Utilizing custom research fielded for the NAG audience, we will explore consumer needs and desired interaction with convenience locations for food and grocery products. Our retailer panel will then explore various data points, uncovering how they are adapting or plan to adapt to customer expectations.

10:30 AM – 11:30 AM IDEAS BOOT CAMP Best practices and a conference wrap-up with John Lofstock, Executive Director, NAG; Brad Chivington, Senior Vice President, High's of Baltimore; Joy Almekies, Senior Director of Food Services at Global Partners/Alltown.

Moderator: John Lofstock, Executive Director, NAG Speakers: • •

Brad Chivington, Senior Vice President, High’s of Baltimore Joy Almekies, Senior Director of Food Services, Global Partners/Alltown

11:45 AM 12:00 PM

Conference Wrap-Up and Takeaways Departures

Moderator: John Lofstock, Executive Director, NAG Speakers: • •

Gaurang Maniar, Executive Director, Marketing at Dash-In Joy Almekies, Senior Director of Food Services, Global Partners/Alltown

9:00 AM – 10:15 AM GENERAL SESSION: BURNING ISSUE #6: How to Build Customer Loyalty Through Engagement Convenience store loyalty programs are evolving, and they can present a treasure trove of information. Plus, new subscription-based models can help chains grow repeated sales from a captive audience. But as companies gather information on their customers, they must also be mindful of emerging data privacy laws. Learn how leading c-store chains are growing sales through loyalty engagement, while carefully navigating privacy regulations.

Moderator: John Lofstock, Executive Director, NAG Speakers: • • •

Patrick Raycroft, Associate Director, W. Capra Consulting Group Shelley Coleman, Category and Merchandising Manager, Stinker Stores Brenda Elsworth, Chief Operating Oficer, Pete’s Corp.

10:15 AM – 10:30 AM Break/Visit Sponsor Tables

HOW TO REGISTER

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

2/24/22 10:23 AM

Snacks | Meat Snacks

High Hopes for Meat Snacks Despite Price Increases Meat snack growth prospects look high for 2022. According to Packaged Facts, retail sales of meat snacks will rise by 12% in 2022. In the 52 weeks ending Jan. 1, 2022, meat snack dollar sales soared by 19.5% to $1.96 billion, based on Nielsen Total U.S. Convenience data, which is a jump from the previous year’s 11.4% increase. Price increases will play a role in 2022 due to continued supply chain issues hitting meat snacks and most food categories as they did in 2021, noted Cara Rasch, research analyst, food & beverage at Packaged Facts. At Beaverton, Ore.-based Plaid Pantry, which operates 107 locations, large bags of meat sticks are growing in popularity despite price increases. “These retails are increasing as well,” said Mike Nelson, senior category manager at Plaid Pantry, in reference to the meat stick large bags. “But we seem to be able to price those a little lower than their jerky counterparts.” However, based on Nielsen data, meat-andcheese combo sales saw the biggest boom in the category at c-stores overall, with sales reaching $111 million at a 26.1% increase over last year.

CSTORE DECISIONS •

March 2022

Meat Snack Sales Soar

Total meat snack sales at convenience stores increased by 19.5% to $1.96 billion in the 52 weeks ending Jan. 1, 2022. Meat-and-cheese combo sales saw the largest increase of the meat snack category.

Description

Latest 52 Wks W/E 01/01/22

Latest 52 Wks YA W/E 01/02/21

Current

1-Year % Change

Current

1-Year % Change

Meat snacks

$1.96 B

19.5%

$1.64 B

11.4%

Jerky

$766 M

23.2%

$621 M

15.3%

$111 M

26.1%

$88.0 M

18.4%

Nuggets + tenders

$14.3 M

9.4%

$13.1 M

-0.4%

Remaining form

$6.23 M

17.4%

$5.31 M

-24.7%

Meat and cheese combo

Remaining meat combo

$745,058

-20.3%

$934,585

-48.5%

Sticks

$773 M

17.1%

$660 M

12.4%

Steak + kippered + bar

$294 M

15.1%

$255 M

0.9%

Source: NielsenIQ, Total U.S. Convenience data for the 52 weeks ending Jan. 1, 2022 and Jan. 2, 2021

Nelson saw price increases in large bag sizes, which has slowed their growth, though they continue to sell. However, this has given the chance for small-sized bag sales to receive a boost. “We’ve done very well with Stryve Biltong and Vacadillos Carne Seca during the second half of last year. I’m hoping that will continue growth this year,” Nelson said, citing additional popular items. According to Rasch, better-for-you meat snack sales have been growing at a faster rate in the market than overall meat snacks. “Better-for-you and premium meat snacks such as grassfed, clean label, paleo/keto, plant/meat blends and plant-based meat alternatives are seeing a number of new product introductions,” she said. However, not every c-store sustains a market for better-for-you products. “I don’t think meat alternatives will work too well in our market. At least, I haven’t seen any of them really work yet,” said Nelson. He remains positive that some healthier options could become popular in the future, nevertheless. Nelson believes that if prices can maintain for a length of time, anything is possible for the meat snack category in 2022. Despite price increases, supply issues and no promotional funding, “the category didn’t move backward,” Nelson said. “The sky is the limit!” cstoredecisions.com

Snacks | Salty Snacks

Salty Snack Sales

Rise as Habits Evolve Salty snack demand has rebounded at convenience stores after facing sales dips early in the pandemic when store visits declined. Indeed, total salty snack sales rang in at just over $6 billion, rising by 12.1%, for the convenience store channel during the 52-week period ending Dec. 26, 2021, per IRI. Within the salty snack category, potato chip sales topped $1.8 billion, an 11.7% rise for the period, with leading brands including Lay’s, Ruffles, Pringles, Herr’s and Utz. Tortilla/tostada chips saw sales of just under $1.3 billion, a gain of 14.8%. ‘Other’ salted snacks saw sales rise to nearly $894, up 9.4%. Pretzel sales topped $285 million, a 19.4% increase. Ready-to-eat popcorn/caramel corn saw sales of just under $249 million, up 10.1%. Pork rind sales totaled almost $212 million, a 3.5% increase, per IRI. “Sales continue at a decent pace,” noted Mike Jackson, category manager with Baltimore-based High’s stores. Sales of take-home-size packages, which were popular at the height of the pandemic, have slowed slightly for the 54-store chain. With vendor supply issues and service levels varying, Jackson advised, c-stores must stay on top of issues with out-of-stocks from both their wholesalers and direct-store-delivery vendors. “Make sure you try to rotate products, and if a particular item continues to have supply issues, that you substitute another item in its place,” Jackson recommended. “You cannot sell a product that is not there. Make more

frequent adjustments to planograms to keep up with issues arising from prolonged out of stocks.” EVOLVING SNACK HABITS

Snacks now play a central role in most consumers’ daily lives, but they are less culturally rooted as a type of occasion compared to meals, which are defined by strongly established ideals, norms and rituals, according to David Wright, senior manager of marketing for The Hartman Group Inc., a food and beverage strategy firm based in Bellevue, Wash. “With the continuing health crisis brought about by the COVID-19 pandemic, snacks have taken on a more visible and prominent role in consumers’ lives, as many stay at home more often and adjust their consump-

tion habits,” Wright said. “Changes brought about by the pandemic have led to evolving snacking habits for consumers over the past year that involve more careful planning and stocking of snacks to have inside the house.” Salty snacks top the list of all snack types consumed, he noted, with 76% of consumers reporting they consume them at least weekly, followed closely by consumption of fresh fruits and vegetables as snacks. Roughly 71% said they consume those at least weekly. “Among consumers who say they’ve changed how they snack today compared to a year ago,” Wright explained, “33% say they are seeking out salted snacks more often, and 50% say they are seeking out fresh fruits and vegetables as snacks more often.”

Snack Sales Rebound

The salty snack category saw large gains with dollar sales of $6.09 billion, up 12.1% for the 52 weeks ending Dec. 26, 2021, per IRI. Potato chips led the category with $1.85 billion in dollar sales during the same period, up 11.7% compared to the previous year.

Dollar Sales Description

Unit Sales

Price Per Unit

Current

1-Year % Change

Current

1-Year % Change

Current

1-Year Change

Salty snacks

$6.09 B

12.1%

2.72 B

6.6%

$2.24

$0.11

Potato chips

$1.85 B

11.7%

861 M

6.5%

$2.14

$0.10

Tortilla chips/tostada chips

$1.29 B

14.8%

534 M

8.7%

$2.42

$0.13

Other salted snacks (no nuts)

$894 M

9.4%

397 M

5.5%

$2.25

$0.08

Cheese snacks

$856 M

9.4%

381 M

3.4%

$2.25

$0.12

Corn snacks (no tortilla chips)

$452 M

18.9%

195 M

13.9%

$2.32

$0.10

Pretzels

$285 M

19.4%

128 M

12.6%

$2.23

$0.13

Ready-to-eat popcorn/ caramel corn

$249 M

10.1%

112 M

2.0%

$2.23

$0.17

Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021

cstoredecisions.com

March 2022 • CSTORE DECISIONS

Snacks | Sweet Snacks

Packaged Sweet Snacks Offer Safety, Indulgence Americans catered to their sweet tooths during the pandemic, and that — along with their learned preference for packaged items rather than fresh — will stand sweet snacks and granola bars in good stead in 2022. Cakes, pastries and sweet pies account for a sizeable portion of sales in the convenience store channel, expected to reach $3.3 billion by 2025, according to Khalid Peerbaccus, senior innovations researcher for GlobalData. Cookies are forecast to reach close to $1 billion by 2025. According to IRI, for the 52-week period ending Dec. 26, 2021, in the convenience store channel, the overall snack bars, granola bars and clusters category totaled $760 million, up 14.7%, with granola bar sales specifically rolling in at $65.1 million, a dip of 2.6%.

Meanwhile, packaged sweet snacks grew by more than 12% in dollar sales in 2021, according to InfoMetrics data from Management Science Associates. The pandemic not only moved consumers to look for comfort snacks but had them reaching for packaged baked goods for sanitary reasons — both habits that consumers have retained in 2022. Retailers reported that sweet snacks was a growing category through 2021, with more consumers shifting from fresh options to packaged options. Joseph Bortner, center store category manager for York, Pa.-based Rutter’s, which operates 79 stores in Pennsylvania, Maryland and West Virginia, said he sees the two categories of fresh and packaged baked sweet snacks blurring as time goes on. In the wake of COVID-19, Bortner suggested, a fortunate scenario for retailers and consumers has developed as a result of that blurring.

Snack Bar Sales See Strong Growth Snack bar sales in the convenience store channel rang in $760 million in dollar sales, up 14.7% for the 52 weeks ending Dec. 26, 2021, per IRI. Nutritional bars saw the biggest increase for the period, up 17.3%, while granola bars dipped 2.6%.

Dollar Sales Description

Unit Sales

Price Per Unit

Current

1-Year % Change

Current

1-Year % Change

Current

1-Year Change

Snack bars/ granola bars/clusters

$760 M

14.7%

385 M

6.8%

$1.97

$0.14

Nutritional/intrinsic health value bars

$498 M

17.3%

196 M

13.4%

$2.54

$0.09

Breakfast/cereal/ snack bars/clusters

$196 M

14.6%

121 M

7.5%

$1.63

$0.10

Granola bars

$65.1 M

-2.6%

68.0 M

-9.7%

$0.96

$0.07

Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021

CSTORE DECISIONS •

March 2022

“That gap between fresh and packaged has narrowed significantly as suppliers continue to develop and increase the quality of products offered,” he said. “Consumers perceive the (packaged) products as being free from any contamination. Utilizing these products in high-trafficked areas helps drive impulse and baskets.” Implementing cross-promotions and cross-merchandising for packaged baked items with beverage and foodservice — merchandising by coffee, queue lines and checkouts — will also stimulate sales, Bortner added. GUILT-FREE INDULGENCE

Health remains a factor in customers’ approach to sweet snacks. According to GlobalData’s 2021 consumer survey, 43% of consumers said they are actively trying to reduce their consumption of sugar, and 35% said they are trying to reduce their intake of calories. “Furthermore, 40% admit they are reducing their consumption of fats,” Peerbaccus noted. “These figures indicate consumers would be receptive to snacks that provide a guilt-free opportunity to indulge and are low in sugar, calories, fat or all three as consumers demonstrate a proactive desire to curb unhealthy eating habits.” A quarter of respondents said they were interested in reducing their intake of artificial sweeteners, and 29% are doing the same with artificial flavors/colors, highlighting a desire for fewer processed foods in favor of those that contain a higher number of natural ingredients.

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Snacks | Nuts & Seeds

Nuts and Seeds Demand, Pricing Increase Nuts and seeds both typify and reﬂect Americans’ growing obsession with health, which positions them for success throughout 2022 and beyond.

Nuts and Seeds Trend Upward

Nuts & seeds dollar sales surged 9.4% to total $910 million in the 52 weeks ending Dec. 26, 2021, though unit sales saw a slight dip of 2.4%. Toasted corn nut snacks saw the biggest year-over-year gains in the category, up 12.7% for the period.

Dollar Sales

Unit Sales

Price Per Unit

Description

While prices have risen due in part 1-Year % % Current 1-Year Current Current 1-Year Change Change Change to the pandemic, and will likely continue to rise, consumers are expected Snack nuts/seeds/ $910 M 9.4% 495 M -2.4% $1.84 $0.20 corn nuts to adjust to the increases, given their demand for the category. Snack nuts $591 M 9.6% 315 M -1.7% $1.87 $0.19 Snack nut sales totaled almost Sunflower/ $267 M 8.2% 149 M -5.7% $1.80 $0.23 $591 million, a 9.6% increase for pumpkin seeds the 52 weeks ending Dec. 26, 2021, Toasted corn $51.8 M 12.7% 30.4 M 8.4% $1.71 $0.07 according to convenience channel nut snacks data from IRI. Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021 Leading brands were Planters, just shy of $155 million, up 11.9%; Wonderful, nearly $118 million, up 33.3%; PRICE POINTS RISE items such as nuts to go even higher Blue Diamond, over $49.5 million Koroghli said both lines of products in 2022 and beyond. in sales, up 15.3%; and Nut Harvest, are growing more expensive in Las “Increasingly, nuts production may with sales of $42.3 million, down 8.8%. Vegas as they are around the country. come into focus, and with higher tarSunflower/pumpkin seed sales Price points have risen since the paniffs on water, producer countries may topped $267 million and rose by demic to $1.99 and even $2.29. change,” Kruse said. “As an example, 8.2% for the period. Leading brands “There is nothing we can do; that’s almond production in California is included David at $92.3 million, a gain the way of life right now,” he said. a high water-intense production. If of 13.2%, and Bigs, with sales of $70.5 “Eating healthy is so expensive.” drought becomes an issue, consummillion, up 25.6%. Toasted corn nut Caitlin Campbell, media relations ers may turn away from too-intensive snacks saw sales of just under $52 mil- specialist for Love’s Travel Stops & production. The overall increase in lion, a gain of 12.7%. Country Stores, said that despite the the use of nuts may, however, swallow Nissan Koroghli, a 7-Eleven franchihigher prices, Americans’ desire to up any decline, so the net result of see with one store in Las Vegas, said eat healthier snacks is here to stay. the two trends evens out.” he finds success with the chain’s pro“Love’s thinks customers will conprietary nut line, as well as traditional tinue to demand fresh and healthier favorite Planter’s. food options in 2022,” Campbell said. “More people are buying them “We’ll also continue to listen to cusbecause people are trying to eat tomers’ feedback and add products healthy,” Koroghli pointed out. they want.” Peanuts, pistachios and cashews all Martin Kruse of the Copenhagen move briskly from the four-foot wall Institute for Futures Studies sugsection devoted to nuts. Sunflower gested that the impact from climate seeds are also popular, led by Spitz’s change may be slowly changing conDill Pickle seeds. sumer habits and causing prices of cstoredecisions.com

March 2022 • CSTORE DECISIONS

Confections | Chocolate

Chocolate’s FutureLooks Sweet for 2022 The $3.1 billion chocolate candy category showed healthy growth across dollar sales, units sold and volume for the latest 52 weeks ending Dec. 26, 2021, according to IRI. Category total dollar sales were up 8.9%, and units increased 4.7%.

to combine with chocolate. Tied for fourth place were mint and coconut. In its “Global Candy Market 20212026” report, Mordor Intelligence research firm noted that several trends support the growth of the chocolate candy industry, including frequent snacking, indulgent tastes, unique and attractive design factors and infusions, like fruits, nuts and seeds. Additionally, continued innovation in packaging and flavors by chocolate candy manufacturers, such as sweet and salty flavor-based candy, is anticipated to drive the market’s growth in the coming years.

Bigger sizes (greater than 3.5 ounces) were the clear winners, with dollar sales up 15% and units 7.6%. Smaller sizes (less than 3.5 ounces) also rose 7.9% and units 4.5%. “Chocolate has always been a consumer favorite, accounting for 60% of all confectionery sales in the U.S.,” said John Downs, president and CEO of the National Confectioners Association (NCA). “Preferences for type and format vary widely based on consumers’ age, income and lifestyle.” While traditional branded milk chocolate still sells best, NCA’s report “Sweet Insights: Getting to Know Chocolate Consumers 2021” showed that the preference for dark chocolate rises with age. In an almost neck-andneck ranking, almonds edged out peanuts/peanut butter and caramel/toffee as the top ingredients consumers like

INNOVATION SPURS INTEREST

At FriendShip Stores’ 29 Ohio locations, January 2021 to January 2022 unit sales increases conﬁrm the experts’ optimism about the present and future growth of the chocolate candy category. While the traditional brands continue to sell best, innovation in the category helps to maintain consumer interest and spur trial, explained Aaron Hirt, the chain’s category manager and business analyst. When it comes to packaging, king size still reigns supreme, he pointed

out. This especially applies to buytwo-get-one-free promotions. Chocolate candy is such a big category at FriendShip that Hirt is currently going through a reset of the displays with his wholesalers. He is expanding the inline display to 12 feet, showcasing king-size bars and other top sellers of regular-size packages at queue stations under the checkout counters and using shippers as power wings next to the end caps. De Lone Wilson, president of Cubby’s convenience stores with 36 locations in Nebraska, Iowa and South Dakota, said he has not seen much change year-to-year in his chocolate sales, though manufacturers are constantly putting out new products. “They are trying to come up with different ﬂavors and combinations,” he said, “and although we carry the new products, it’s always the old standards that make up the majority of sales.” In addition to the candy aisle, Wilson strategically places shippers throughout the store. He also frequently includes chocolate as one of the stores’ ‘suggested sale’ items for a week or month at the checkout counters and on Cubby’s app.

Chocolate Candy Stays Sweetly Steady Chocolate candy as a whole rose just under 10% to $3.17 billion, with sugar-free chocolate outperforming itself with a jump of 56.9% compared to a year ago, and gift box chocolate seeing gains of 31.4%. Novelty chocolate showed the largest annual drop at nearly 23%, followed by snack sizes, which dropped by 13.7%.

Dollar Sales

Unit Sales

Price Per Unit

Product

Current

1-Year % Change

Current

1-Year % Change

Current

1-Year Change

Chocolate candy

$3.17 B

8.9%

1.64 B

4.7%

$1.93

$0.07

Chocolate candy box/bag/bar < 3.5oz

$2.61 B

7.9%

1.42 B

4.5%

$1.84

$0.06

Chocolate candy box/bag/bar > 3.5oz

$441 M

15.0%

161 M

7.6%

$2.74

$0.18

Chocolate candy snack size

$1.27 M

-13.7%

295,226

-18.6%

$4.32

$0.24

Novelty chocolate candy

$745,732

-22.9%

326,726

-18.9%

$2.28

-$0.12

Sugar-free chocolate candy

$665,737

56.9%

188,559

44.5%

$3.53

$0.28

Gift box chocolates

$646,558

31.4%

132,231

-40.4%

$4.89

$2.67

Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021

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March 2022

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Confections | Non-Chocolate

Candy Consumption Climbs Non-chocolate candy continues to trend upward for the convenience industry, driven by innovation in the subcategory.

“(We) saw great growth from nonchocolate in 2021,” he said, “even in spite of the supply constraints from some of the largest brands in the segment for us.”

Non-chocolate candy dollar sales hit $2.64 billion, up 20.6%, according to market research ﬁrm IRI Total U.S. Convenience data for the 52-week period ending Dec. 26, 2021. Mints, gum and breath fresheners saw sales gains, too. According to IRI data, mints were up 12.1% in dollar sales for the year, gum grew 5.8% and breath fresheners rose 6.2%. Data from the National Confectioners Association (NCA) indicates that, while chocolate remained the biggest contributor, holding 58% of sales, non-chocolate was the fastestgrowing segment in 2021, as consumers look for fun and unique ways to celebrate the seasons and treat themselves. NCA Senior Manager of Public Affairs Carly Schildhaus said the organization expects this momentum to continue well into 2022. “After a year of record-setting sales across the confectionery industry,” she said, “we anticipate that consumer enthusiasm for chocolate and candy will continue to remain strong.” Gier Oil Co.’s Eagle Stop stores, with 50-plus locations in Missouri, saw success with non-chocolate candy in 2021, said Nick Lepper, the c-store chain’s director of retail operations.

CANDY CATEGORY INNOVATION

Lepper cited new products as key to candy’s continued success. “A lot of great innovation is being focused on the subcategory — with great reason,” he noted. “Through appropriate SKU rationalization and better supply chain results, we are expecting the growth to continue.” Indeed, the non-chocolate candy subcategory is rife with new product innovation. Morinaga’s Hi-Chew brand recently released ‘Fantasy Mix,’ with ﬂavors rainbow sherbet, blue Hawaii and blue raspberry. Haribo’s Goldbears packages now come with blue raspberry-ﬂavored party hats for its 100th anniversary, plus limited-edition

single-flavor varieties in pineapple and blue raspberry. Mars Wrigley’s Skittles brought back its lime flavor after an eight-year absence. Plus, Starburst Airs hit the scene, with a brand-new, inflated texture. Non-chocolate candy packaging innovation abounds, too. Ferrero’s Tic Tac launched limitededition packs featuring positive messages. Ferrara’s Nerds Twist & Mix packaging allows consumers to twist the lid to mix and match their favorite combination of flavors. And Perfetti Van Melle’s Mentos Pure Fresh Gum now comes in an innovative new bottle that’s 90% paperboard and certified recyclable. Not to mention, c-stores like Casey’s, 7-Eleven and Love’s are offering an increasing selection of proprietary items, including candy, to provide increased value for customers, while setting themselves apart with a distinct product offer.

Non-Chocolate Candy Sees Gains

Overall non-chocolate candy dollar sales grew 20.6% to $2.64 billion in 2021, and novelty non-chocolate candy saw massive 45.5% growth.

Dollar Sales

Unit Sales

Price Per Unit

Product

Current

1-Year % Change

Current

1-Year % Change

Current

1-Year Change

Non-chocolate candy

$2.64 B

20.6%

1.51 B

11.2%

$1.75

$0.14

Non-chocolate chewy candy

$1.90 B

19.6%

1.02 B

10.5%

$1.84

$0.14

Novelty non-chocolate candy

$329 M

45.5%

186 M

30.7%

$1.77

$0.18

Licorice box/bag

$139 M

12.3%

59.4 M

7.2%

$2.34

$0.11

Specialty nut/ coconut candy

$108 M

4.5%

66.3 M

-4.2%

$1.62

$0.14

Hard sugar candy/ pkg & roll candy

$92.8 M

10.7%

120 M

4.8%

$0.77

$0.04

Plain mints

$76.9 M

12.1%

50.0 M

8.5%

$1.57

$0.05

Sugar-free diet candy

$776,486

16.0%

336,163

7.2%

$2.31

$0.18

Caramel/taffy apples/ kits/dips

$358,530

5.7%

188,335

0.6%

$1.90

$0.09

Gum

$839 M

5.8%

428 M

-3.6%

$1.96

$0.17

Breath fresheners

$177 M

6.2%

81.2 M

3.5%

$2.17

$0.06

Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021

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March 2022

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Healthy & Beauty Aids | Makeup & Medicine

Health & Beauty Sales

Bring Mixed Results Last year marked another year with less-than-normal daily commuting to and from offices, and that resulted in mixed reviews for convenience stores’ health and beauty aids (HBA) category. “With a lot of customers working from home the last couple of years, they’ve had access to their own medicine cabinets, which has hurt purposeful trips to stores to shop our HBA set to meet their needs while on the go,” said David Cole, category manager for Plaid Pantry. The Beaverton, Ore.based retailer owns and operates 107 stores in the Pacific Northwest. Cosmetics sales lost major ground in both dollar and unit sales despite price per unit increases nearly across

the board. Facial beauty products incurred the greatest drop-off — nearly 80% in both dollars and units, per IRI data collected from U.S. convenience stores for the 52 weeks ending Dec. 26, 2021. Eye makeup fell by 57% in dollar sales, and lip cosmetics lost more than one-third of dollar sales. On the other side of the HBA aisle, items like analgesics, cold remedies and vitamins posted double-digit dollar sales growth for the same time period, according to IRI. Price increases pushed some of that momentum — more than $1 per unit for vitamins — as volume for each product line only moderately improved. Over-the-counter weight-control formulas turned out to be last year’s biggest gainer, registering more than +48% for both dollar and unit sales.

Health Product Sales Climb While Beauty Sales Decline Dollar sales of internal analgesics (up 10.6%) and upper respiratory products (up 13.8%) grew, along with vitamin and shampoo dollar sales, while cosmetic sales fell with the exception of nail products, which grew 12%, for the 52 weeks ending Dec. 26, 2021, per IRI.

Dollar Sales

Unit Sales

Product

Current

1-Year % Change

Current

1-Year % Change

Internal analgesics

$403 M

10.6%

130 M

2.0%

Upper respiratory products

$300 M

13.8%

88.4 M

4.6%

Vitamins

$360 M

16.3%

41.2 M

0.0%

Shampoo

$5.48 M

13.0%

1.22 M

6.0%

Cosmetics - eye

$19,233

-57.0%

6,015

-60.7%

Cosmetics - facial

$13,017

-79.6%

4,542

-80.3%

Cosmetics - lip

$81,319

-34.4%

17,872

-53.3%

Cosmetics - nail

$7.29 M

12.0%

3.37 M

7.5%

Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021

CSTORE DECISIONS •

March 2022

SUPPLY CHAIN WOES

Cole’s main concern for the entire HBA category this year is maintaining appropriate inventory levels. “We’ve experienced supply chain issues across multiple HBA segments since 2020, from analgesics and cold medicines.” John Archer, owner of the Shell Food Mart in Hinsdale, Ill., concurred. A February restock order for his single site contained “manufacturer delay” notifications for approximately 15 brands. “Toothpaste came in. Clippers came in. But many of the pain relief and cold/flu products did not,” he said. “I hope things in that category rebound. If in two months we’re not getting what we need, I’ll have to look for alternative (products).” Archer noted that the HBA category consumes approximately six feet of tall shelving in his store. Even with current supply shortfalls, he has no intention of reconfiguring the layout. “Our HBA section is probably larger than most convenience stores, but I wouldn’t rethink the size. We’ve always done well with that category,” he said. All things considered, Cole remains optimistic about HBA, too. What excites him the most is the possibility of a back-to-the-office trend: “I’m excited to see customer commuting and shopping habits return to normal for this set.”

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Dairy | Milk and Ice Cream

Alternatives, Flavors

Add Excitement to Milk Category “The story for milk in c-stores is the same for dairy across the industry — alternatives, alternatives, alternatives,” said Mike Kostyo, trendologist for Datassential. “All of the fastest-growing milks across the industry are alternative and plant-based milk options.” C-stores are noticing and testing the trend. High’s, with more than 54 c-stores in Maryland and Pennsylvania, is seeing more households that use both traditional milk and plant-based milk. Flavored milk sales are also growing for the chain, noted Noah Sanders, senior analytics and implementation manager for High’s. “We’re offering primarily traditional milk products for take-home consumption,” Sanders said. “We have ventured into plant-based milk in single-serve sizes. Takehome sizes have proven to be difﬁcult to source for us and keep reasonably priced.” Dairy milk sales lead the category at c-stores, totaling $1.39 billion, up 1.6% for the 52 weeks ending Dec. 26,

Plant-Based Milk Sales Surge

While dairy milk came in flat, up 1.6% for the 52 weeks ending Dec. 26, 2021, plant-based milk sales soared 35% for the same period. Oat milk saw the biggest increase, up 193%. Meanwhile, the ice cream/sherbet category held steady, with ice milk and frozen dairy dessert sales up 50.2%.

Dollar Sales Product

Current

1-Year % Change

Dairy milk

$1.39 B

1.6%

RFG whole milk

$987 M

-2.2%

RFG skim/low-fat milk

$408 M

12.1%

$4.87 M

35.0%

RFG almond milk

$3.70 M

24.2%

RFG oat milk

$899,316

193.0%

RFG soy milk

$147,577

-31.2%

RFG coconut milk

$103,286

18.9%

Ice cream/sherbet

$685 M

2.4%

Ice cream

$659 M

1.6%

Ice milk/frozen dairy dessert

$18.5 M

50.2%

Sherbet/sorbet/ices

$3.42 M

-10.7%

Plant-based milk

2021. Plant-based milks surged 35% to $4.87 million for the period, with refrigerated oat milk up 193% over the previous year, per IRI. “The c-store segment actually needs to play catch-up here — we didn’t see nearly as many oat milk launches from major c-store brands compared to other segments last year,” Kostyo said. “Oat milk, in particular, is becoming a default alternative milk variety.” The trend toward alternative milk is driven by younger demographics. Datassential found 41% of Gen Z said they drink alternative milk either daily or weekly, making it likely the trend will grow. Kostyo noted the c-store channel was doing a better job compared to other channels on offering flavored milks, which are also a growing segment, up 12.1% for the period. Whole milk is another opportunity for c-stores, and it’s growing on menus. “Consumers don’t necessarily equate whole milk with being unhealthy anymore,” he said. Looking ahead, High’s plans to grow milk loyalty with competitive pricing and promoting its Milk Club (buy five, get one free), where applicable, while also working with its wholesaler on plant-based milk options and with its dairy to introduce seasonal flavored milks, Sanders said. ICE CREAM

When it comes to ice cream, High’s is seeing more take-home packages featuring new and unique ﬂavors, plus classic ﬂavors with premium/fresh ingredients, said Sherryn Diamond, food service director for High’s. “Ice cream sales continue to experience double-digit sales growth over the prior year. We expect that trend to continue as we continue our expansion of the ‘ice cream shoppe’ where we combine a nostalgic look and feel of our hand-dipped ice cream and our takehome selection,” Diamond said. Datassential found fresh-scooped and soft serve ice cream are opportunities for c-stores. “Frozen yogurt and hand-scooped ice cream was the second most popular trending offering we tested with c-store consumers, with over half wanting to see them offered at c-stores, yet it’s still not common in the segment,” Kostyo said.

Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021

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March 2022

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Tobacco | Cigarettes

Are Cigarettes Back to Normal? The Food and Drug Administration (FDA) appears intent on moving ahead with revoking market authorization for menthol cigarettes. Next month, the agency is expected to release a proposed rule on the tobacco product standard to eliminate menthol cigarettes from convenience stores and other tobacco retailers.

cated the segment is slowing even more. Dollar sales in all channels, including c-stores, posted losses for both the two- and four-week periods ending Jan. 29, -6.3% and -5.7%, respectively.

“(The National Association of Convenience Stores) is on record opposing menthol bans, as we believe illicit vendors will quickly source and begin selling foreign and counterfeit menthol cigarettes,” said Lyle Beckwith, NACS senior vice president of government relations, in a recent public statement. What’s more, menthol makes up 37% of the c-store cigarette category, which fires up approximately 28% of all in-store sales, per the 2020 NACS State of the Industry report. A hit to menthol certainly would further dampen sales. According to IRI convenience store data, cigarettes finished out 2021 with a 52-week gain in dollar sales of less than 1% in a year-to-year comparison for the week ending Dec. 26. More recent data from Nielsen indi-

UPDATING THE BACK BAR

Dips in cigarette sales prompted Scrivener Oil Co. leaders to reconfigure back bars at its 12 Signal Food Stores in southwest Missouri. “At some locations, cigarette spacing decreased in order to make room for more smokeless and other tobacco products (OTPs),” said Sean

Bumgarner, Scrivener vice president. “We replaced all of our cigarette, smokeless and OTP shelving with new shelving from Harbor Industries during 2021. Not only does it look nicer than our old shelving, it is more flexible in the layout of our products.” Of course, planograms will change again if the federal menthol restriction takes effect, but that’s sure to be at least a year out. Federal regulations must follow a specific path that typically takes several months; however, states have more agility, and they continue to contemplate menthol prohibitions. “States that introduced flavor ban legislation (including a ban on menthol cigarettes) in 2021 and carried the legislation over to the 2022 state legislative sessions since the bills did not receive action (or were not passed in 2021) include: Hawaii, Maine, Minnesota, Vermont and Washington,” noted Thomas Briant, executive director and legal counsel for the National Association of Tobacco Outlets (NATO). On a more positive note, in late December, the FDA approved a modified-risk classification for 22nd Century’s VLN King and VLN Menthol King, which contain 95% less nicotine than traditional cigarette formulations. This is the first modified-risk approval for combustible cigarettes.

Cigarette Dollar Sales Remain Flat

Cigarette dollar sales were flat (up 0.8%), while unit sales dipped 5.2% for the 52 weeks ending Dec. 26, 2021.

Dollar Sales

Unit Sales

Price per Unit

Product

Current

1-Year % Change

Current

1-Year % Change

Current

1-Year Change

Cigarettes

$57.3 B

0.8%

7.00 B

-5.2%

$8.18

$0.48

Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021

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March 2022

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Tobacco | Roll-Your-Own

RYO Has Niche Appeal For generations, the rollyour-own (RYO) tobacco segment’s major competitor for consumers’ cash was massproduced cigarettes, cigars and moist chew or snus.

Pipe tobacco sales have struggled as well. IRI registered even greater falls in both dollar and unit sales: -24.2% and -27.2%, respectively. The two-year difference is equally stark. There was a falloff of 8.3% in dollar sales between 2019 and 2020, and -15% in unit sales. These product subcategories face so much competition, some convenience store operators give them very little shelf space or pull RYO and pipe tobacco from shelves altogether.

In recent years, competition in the tobacco sector has increased, as the category today also includes vape and modern oral nicotine items. There’s also increased competition from the cannabis market. Some 18 states have legalized recreational cannabis use by adults, and voters in another 18 have approved medical marijuana use. As the number of cigarette smokers declines, the number of marijuana smokers is going up. Global analytics and advice firm Gallup reported nearly half of surveyed adults have tried cannabis, and 12% smoke it, up from 7% in 2013. Sales of RYO, which had already begun to slack, appear to feel the hit. RYO experienced losses of 15% in dollar sales and more than 22% in unit sales for U.S. convenience stores for the 52 weeks ending Dec. 26, 2021, according to IRI. This is a big dip compared with the 2019-2020 evaluation, which showed a one-year change of +0.5% in dollar sales and -8.2% in unit sales, per IRI.

RYO OUTLOOK

Despite declines, RYO tobacco still brought in $43.6 million in sales in c-stores for the period, and pipe tobacco brought in $74.5 million, per IRI. These products continue to enjoy a niche following of loyal customers and can be an opportunity for c-stores that position themselves as a destination for RYO. The Cigarette Store is seeing just that. “The RYO category continues a positive upward trend versus same store (sales) a year ago, 3.5% growth driven by Value Pipe,” said Tim Greene, category director, general merchandise and tobacco, for Boulder, Colo.based The Cigarette Store, operating more than 180

locations including Gasamat convenience stores, Smoker Friendly and Tobacco Depot retail outlets and lounges in eight states. “We are excited with the growth of Value Pipe, as it remains a vital segment of the category.” But even with the encouraging numbers, Greene understands RYO and pipe tobacco cater to a very select customer niche. “We are concerned with the continuous decline of cigarette RYO and will look at strategies to reverse the trend with these brands,” he noted. And as with all other product families within the tobacco category, RYO and pipe tobacco suffer the effects of increasing regulation and tax bumps. “As always,” Greene said, “we monitor the legislative climate at a local, state and federal level and the effects tax increases will have on all tobacco segments, including the RYO category.”

Roll-Your-Own Tobacco Sales Decline Roll-your-own tobacco dollar sales dropped 15%, with unit sales down 22.5% for the 52 weeks ending Dec. 26, 2021. Dollar Sales

Dollar Share of Category

Unit Sales

Price per Unit

Product

Current

1-Year % Change

All other tobacco products

$118 M

-21.0%

100.0

0.00

12.7 M

-25.5%

$9.31

$0.53

Pipe tobacco

$74.5 M

-24.2%

63.1

-2.64

7.92 M

-27.2%

$9.41

$0.38

RYO tobacco

$43.6 M

-15.0%

36.9

2.64

4.77 M

-22.5%

$9.14

$0.81

Current

1-Year Change

Current

1-Year % Change

Current

1-Year Change

Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021

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March 2022

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Tobacco | Smokeless

Modern Oral Nicotine Drives

Smokeless Tobacco Sales Most market research ﬁrms combine traditional smokeless tobacco products, such as moist, loose chew and snus, with the more recent newcomer segment of modern oral nicotine, including the highly popular nicotine pouches. From an analysis point of view, that appears to be a beneﬁcial pairing because it makes the segment a strong leader among the collection of all other tobacco products (OTPs). Per IRI convenience store data for the 52 weeks ending Dec. 26, 2021, dollar sales for the overall smokeless subcategory grew by almost 6% in U.S. convenience stores. Plus, Nielsen noted the combination accounts for 11% of the total tobacco/nicotine category. When separated, the division between traditional chewing tobacco and modern nicotine becomes very apparent. The spitless segment, which includes nicotine pouches, lozenges and toothpicks, jumped more than 42% for the period, per IRI. On the other hand, chewing tobacco/snuff fell short of even 1% in dollar sales growth. The volume breakdown was even more disparate: chewing tobacco/ snuff fell by 6.1%, and spitless climbed by 52.3%. Modern oral nicotine products certainly pushed sales for Tri Star Energy, according to Rick Staley, merchandising manager. Based in Nashville, Tenn., the company owns and operates more than 70 Twice Daily c-stores along with White Bison Coffee and Sudden Service retail sites.

“Our smokeless tobacco, including nicotine, had high double-digit growth in 2021. I am excited about the nicotine growth for 2022 after two years of strong double-digit growth. We’ve been adding more nicotine brands and expanding on the back bar space,” said Staley. “(However, I’m) always concerned about the government increasing taxes on OTP and nicotine.” LEGISLATIVE OUTLOOK

Indeed, that’s the general sentiment among most tobacco/nicotine category managers throughout the industry. In addition to taxes, the National Association of Tobacco Outlets (NATO) reported state flavor bans are still a hot topic. Indiana and New Jersey are the latest to join the crowd of states introducing legislation to restrict sales of flavored tobacco products, including menthol. Those all-encompassing regulatory actions could impact both traditional smokeless options and pouches. However, there may be some favorable regulations coming down the road, too. “On the policy front, we’re tracking state legislation that would allow for a 25% to 50% tax discount on tobacco/ nicotine products that receive a modified-risk order from the U.S. Food and Drug Administration,” said Alex Clark, CEO, Consumer Advocates for Smoke-free Alternatives Association. “While the modified-risk authorization process is expensive and arduous, we’re hoping to see more applications for smoke-free products going forward.”

Spitless Tobacco Leads Smokeless Growth

Smokeless tobacco sales grew 5.9% for the 52 weeks ending Dec. 26, 2021, led by spitless tobacco, which saw dollar sales increase 42.3% and unit sales climb 52.3%. Dollar Sales

Dollar Share of Category

Current

1-Year % Change

Current

1-Year Change

Smokeless tobacco

$8.68 B

5.9%

100.0

Chewing tobacco/snuff

$7.26 B

0.8%

Spitless tobacco

$1.42 B

42.3%

Product

Unit Sales

Price per Unit

Current

1-Year % Change

Current

1-Year Change

0.00

1.43 B

2.0%

$6.09

$0.22

83.6

-4.20

1.13 B

-6.1%

$6.42

$0.44

16.4

4.20

295 M

52.3%

$4.83

-$0.34

Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021

CSTORE DECISIONS •

March 2022

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Tobacco | Modified-Risk Tobacco Products

MRTP: Tobacco Products for the Future The first authorized modified-risk tobacco product (MRTP) was General Snus by Swedish Match, which was authorized in October of 2019. In July 2020, the Food and Drug Administration (FDA) authorized the marketing of the IQOS tobacco heating system by Philip Morris with reduced exposure claims, but as of late, due to patent litigation, it is no longer available on the U.S. market. In late December, the FDA authorized a modified-risk marketing order for 22nd Century Group’s VLN King and VLN Menthol King, which contain 95% less nicotine than traditional cigarette formulations. This is the first, and likely only, modified-risk authorization for a combustible tobacco cigarette product. To date U.S. Smokeless Tobacco Company is in substantive review of its Copenhagen Fine Cut product, as is R.J. Reynolds Tobacco Co. with its Camel Snus product. In addition, Philip Morris has also submitted its IQOS 3 System to the FDA as a modified-risk product, and it is also currently in substantive review. WHAT IS AN MRTP?

In order to reach a decision to authorize marketing of a proposed MRTP, FDA must consider under section 911 of the Federal Food, Drug, and Cosmetic (FD&C) Act: • the relative health risks to individuals of the tobacco product that is the subject of the application; • t he increased or decreased likelihood that existing users of tobacco products who would otherwise stop using such products will switch to the tobacco product that is the subject of the application; • the increased or decreased likelihood that persons who do not use tobacco products will start using the tobacco product that is the subject of the application;

• the risks and benefits to persons from the use of the tobacco product that is the subject of the application as compared to the use of products for smoking cessation approved as medical products to treat nicotine dependence; and • comments, data and information submitted by interested persons. In March of 2019, the acting FDA Director of the Center for Tobacco Products Mitch Zeller hosted a Ted Talk titled “The Past, Present, and Future of Nicotine Addiction.” Zeller started the presentation with how, “the work that we are doing is to create the cigarette of the future, one that is no longer capable of creating or sustaining addiction.” With 22nd Century Group’s landmark modified-risk tobacco product authorization, tobacco companies like 22nd Century Group understand the FDA’s direction and how they plan to reduce the harm caused by smoking. “FDA has it within its regulatory reach to use the tools of product regulation to render cigarettes as we know them minimally or non-addictive,” Zeller said. “We’re working on this. The generational impact of this nicotinereduction policy is profound.” It appears the FDA’s intentions are clear when you combine the Ted Talk in 2019 and the landmark decision for 22nd Century Group’s VLN products, which include the following four authorized claims: • Helps you Smoke Less • Greatly Reduces your Nicotine Consumption • Helps reduce your Nicotine Consumption • 95% Less Nicotine.

MRTP Potential Equals Non-Alcoholic Beverages Segment Why should convenience stores embrace modifiedrisk products? The answer is simply the enormous sales potential. In fact, MRTP is projected to be the largest new category in tobacco since vape and modern oral. Further, data provided by NielsenIQ and IRI showed that modified-risk tobacco is following the general wellness trends seen in other categories and could rival non-alcoholic beverages in U.S. sales. Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021

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March 2022

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Tobacco | Cigars

Cigars Aim

for Stability in 2022 Cigars hold steady Cigar dollar sales in the convenience store channel climbed 3.3% for the 52

Now that cigar supply chain issues have begun to find steadier ground since the early days of the pandemic, c-store tobacco category managers wonder if more inventory reliability will stoke sales.

Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021

IRI convenience store data shows cigar dollar sales grew moderately, at 3.3% for the 52 weeks ending Dec. 26, 2021. However, year-ago changes in unit sales dropped by more than 3%, which indicates price increases probably support the sales increase. Nielsen reported similar dollar sales for cigars in all retail channels, including c-stores, at 2.1% for the 52 weeks ending Jan. 29. In terms of unit sales, Nielsen’s findings were a bit more encouraging, with a positive 0.7%. It also revealed a 1.3% price increase for that year-to-year comparison. Of course, store-level experiences don’t always reflect national trends. At The Cigarette Store (TCS), cigar sales have traveled an upward trajectory for a while. TCS is the largest

licensee of Smoker Friendly International and operates more than 180 stores including Gasamat convenience stores as well as tobacco outlets and cigar lounges in eight states. “We are still experiencing supply issues; however, during the past few months, it has gotten much better. Over the past six months, we have experienced a 5.6% increase over the same time frame for the prior year,” said Jeremy Weiner, category director, cigars and premium products, Smoker Friendly. He’s also optimistic about anticipated varieties set to come out. “A few of the cigar manufacturers plan to market some limited-release items this year,” said Weiner.

CSTORE DECISIONS •

March 2022

weeks ending Dec. 26, 2021, per IRI, while unit sales of cigars dipped 3.1%. Dollar Sales

Product

Current

1-Year % Change

Cigars

$4.03 B

3.3%

Unit Sales

Price per Unit

Current

1-Year % Change

Current

1-Year Change

2.39 B

-3.1%

$1.69

$0.10

REGULATORY CONCERNS

Tamping down that enthusiasm, however, is the news the Food and Drug Administration (FDA) plans to begin the process of a proposed rule on the tobacco product standard to remove authorization to sell and market flavored cigars. Action could get underway as soon as next month. C-stores in certain states have been battling these types of prohibitions for years on vape and e-cigarettes, but more recently, the spotlight has shifted to flavored cigars and cigarillos, which continue to be targeted for tax increases, too. For example, in New York state, cigars were levied with an excise tax of 75% of wholesale value, prepaid a couple of years ago. Last July, California bumped up its cigar tax by 11.5%, reaching nearly 64%, which is slated to run until the end of June. “Who knows what else they’ll throw at us,” said Jim Calvin, president of the New York Association of Convenience Stores. “(I’m watching for) another attempt to ban all flavored tobacco statewide, another attempt to ban flavored alternative nicotine products statewide.”

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Tobacco | Vape

Vape Keeps Beating the Odds Despite a challenging 2020, vape sales have persevered. The National Association of Convenience Stores (NACS), in conjunction with several other retail associations, has called on the federal agency to release the list so c-stores can be in compliance by pulling the MDO products. At the moment, the FDA cites confidential commercial information concerns as reason for not disclosing the information. Rather, it recommends retailers confer with manufacturers for their MDO specifics. “The FDA’s repeated bungling of vaping product regulation has made it incredibly difficult for industry transformation to be anything more than a tagline,” said Gregory Conley, president of the American Vaping Association. He also expressed concerns that healthy state budgets could embolden more lawmakers to push for flavor bans because coffers aren’t as reliant on tobacco tax revenue right now. “Congress has allocated more than $500 billion to state and local governments in the last year because of COVID-19, with little in the way of restrictions on how that money can be used,” said Conley. “As a result, total bans on the sale of all flavored tobacco and nicotine products, including menthol cigarettes, could take further hold in the Northeast and states like Colorado and Oregon.”

SALES TREND UPWARD

of marketing for Englefield Inc. The While legislators and industry family-owned company runs 119 leaders battle on these issues, stores Duchess c-stores throughout Ohio continue to appreciate the fact that and West Virginia. this nicotine subcategory keeps post“We followed customer trends and ing gains. IRI recorded nearly $6 bilintroduced some new brands and lion from sales of electronic smoking options for our customers,” he added. devices in c-stores for the 52 weeks “New introductions, like BIDI Sticks, ending Dec. 26, 2021, representing an contributed to 3% of the sales growth almost 18% gain. Volume also posted in this category.” double-digit growth. For now, category managers find “While the cigarette category themselves in the all-too-familiar may be declining, vape and OTP is position of waiting to see if additional increasing due to a myriad of tobacco federal regulation will disrupt the options for the customer. For instance, vape/e-cigarette segment again. Until we saw a 54% increase in Vuse in then, they hope vape sales will follow 2021,” said Nathan Arnold, director the current profitable pattern.

Vape Sales Soar Dollar sales of electronic smoking devices increased 17.9%, and unit sales grew 13.7% for the 52 weeks ending Dec. 26, 2021. Dollar Sales

Product Electronic smoking devices

Unit Sales

Price per Unit

Current

1-Year % Change

Current

1-Year % Change

Current

1-Year Change

$5.93 B

17.9%

434 M

13.7%

$13.65

$0.48

Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021

CSTORE DECISIONS •

March 2022

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Tobacco | Accessories

Lighting Up Accessories The natural pairing of cigarettes and cigars with items like lighters, matches and ashtrays would seem to have dwindling appeal with consumers as the smoking population continues to shrink. But recent data suggests something else is taking place in convenience stores where smoking accessories, including pipes, jumped nearly 10% in dollar sales and 5.5% in unit sales over the 52 weeks ending Dec. 26, 2021, per IRI. And lighters, always a perennial favorite, recorded a 7.4% gain in dollar sales, with a minimal dip of 0.4% in unit sales. “Lighters have held pretty steady for us,” said Mike Clifford, category manager for Clifford Fuel Co., which runs 19 Cliff’s Local Market stores throughout central New York state. “Papers, however, were up around 20% over the past year. Most people were interested in hemp papers.” ACCESSORIES EVOLUTION

Consumer interest in pipes and rolling papers probably has more to do with the expanding number of states legalizing recreational cannabis for adults aged 21 and older than individuals preferring to roll their own combustible cigarettes or traditional pipe tobacco. IRI reported that roll-your-own and pipe

tobacco dollar and unit sales all fell by double digits. That said, it’s probably not what’s been driving the uptick noted at Clifford’s stores. Although New York legalized recreational cannabis last fall, the law didn’t take effect until this year. Rather, he suspects the statewide ﬂavor ban made a bigger impact. “I think, over the past year, there’s been a shift from vape to paper products,” he said. However, not every c-store has experienced such resilience. Lance Klatt, executive director for the Minnesota Service Station & Convenience Store Association, said members have observed drops in tobacco accessories and other basket items, apparently correlated with slowing tobacco transactions. “A member in Bloomington mentioned cigarette sales are down 6%, and overall store sales are down 22.5%,” he said. Later this year, though, that shift for items like lighters, pipes and papers could really pick up momentum. Not only is the environment friendlier — two out of three Americans favor legalization of recreational cannabis, per a Gallup poll last fall — but Democrats in both the U.S. House and Senate have announced intentions to introduce federal bills to decriminalize marijuana. If national laws are changed, c-stores across the country could see traditional tobacco accessories regain favor with cannabis consumers.

Sales of Smoking Accessories Rise

Smoking accessories rang in at $427 million, up 9.8% for the 52 weeks ending Dec. 26, 2021. Lighters totaled $637 million in dollar sales for the same period, up 7.4%. Dollar Sales

Unit Sales

Price per Unit

Product

Current

1-Year % Change

Current

1-Year % Change

Current

1-Year Change

Smoking accessories (pipes, etc.)

$427 M

9.8%

218 M

5.5%

$1.96

$0.08

Lighters

$637 M

7.4%

327 M

-0.4%

$1.95

$0.14

Matches

$323,550

-17.3%

200,947

-11.2%

$1.61

-$0.12

Source: IRI Market Advantage - TSV Total U.S. Convenience data for the 52 weeks ending Dec. 26, 2021

CSTORE DECISIONS •

March 2022

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CBD | Hemp & CBD

Consolidation Impacts CBD Market C-stores are seeing success with cannabidiol (CBD) in 2022, despite overall dollar sales dips around 20%, according to IRI U.S. convenience data for the latest 52 weeks ending Dec. 26, 2021. “What we saw in 2021 was not as explosive of growth in the market compared to years past,” noted Brightfield Group Senior Insights Manager Brian Maclver. “There was a lot of consolidation. … At the peak, (there were) 3,500 brands in the CBD space. That’s cut down to roughly 2,000 now, and more consolidation is coming in the year ahead.” Brightfield Group projects the convenience and gas station CBD market will hit roughly $221 million for the 2022 year and $449 million by 2026. At Waltham, Mass.-based Global Partners’ stores, topical CBD is “down significantly,” said James Bryan, the convenience chain’s category manager of HBC, CBD and grocery. But edible/ingestible CBD is growing in the states where Global Partners sells it: currently Connecticut, Rhode Island and Vermont, with New York planned for 2022. Overall, the company operates approximately 1,700 locations, primarily in the Northeast. Best-sellers for Global Partners’ Alltown convenience stores are gummies. “And what I’ve found,” Bryan said, “is a price point anywhere between $5 and $10 is the sweet spot. … I think it’s just very much impulse-driven.”

CSTORE DECISIONS •

March 2022

U.S. CbD Market Size Overview

Source: Brightfield Group, US CBD Market Industry Update, 2021

FAMILIAR FORMAT

Following the U.S. Postal Service’s ban on vape shipping, CBD electronic smoking device dollar sales were up a massive 500% at c-stores, according to IRI data. Still, Brightfield Group’s MacIver noted that the overall CBD space is trending more toward gummies. “The bulk of the growth is in the edible sector right now,” he said. MacIver attributed this trend in part to the familiar format of gummies, plus the overall move toward wellness. “Some of the main reasons (people) consume CBD is for physical relief, relaxation and sleep,” MacIver noted. “Just under 50% (of CBD consumers) are daily users. And what that tells me is that people are integrating these CBD products into their daily wellness routines. If you look at, for example, the vitamin space, a lot of those are soft chews now, with those fruit flavors. So a CBD gummy is something (consumers are) familiar with because they have those products in the vitamin space.” Another form of CBD primed for growth in 2022 is drinks, which is expected to take up about 10% of the c-store CBD market size this year. “(Brightfield Group is) projecting that at $44 million for 2022,” MacIver said, “and we’re looking at $1.3 billion (overall) by 2026, with convenience and gas stations capturing roughly $151 million of that market.”

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Technology | Loyalty

Understanding the Value of Loyalty Across all retail segments, including convenience stores, loyalty programs are big business, and it’s no wonder. They’re proven to boost growth, they are not expensive for the retailer to implement, and they enhance your relationship with your customers. U.S. consumers have 3.8 billion memberships in consumer loyalty programs, according to Hubspot’s “Loyalty Marketing Trends for Convenience Stores” report. Today, loyalty programs are all about the customer experience — creating personalized, choice-driven programs that will meet and exceed consumers’ everheightening expectations. In addition, today there is greater access to more (and more personalized) customer preference data than ever before as a result of technology-based loyalty programs. It allows retailers to offer personalized, customized rewards, and offers experiences to customers, which enhances their engagement. Like Netflix and Amazon, it gives the customer the feeling that retailers know them and offer what they want even before they know what that is. It’s a gold mine of data for retailers.

C-STORE BENEFITS

The challenge for convenience retailers has expanded from catering to brand loyalty to how they can engage customers beyond everyday transactions. For a growing number of c-stores, the answer is personalized loyalty rewards programs. According to the “C-Store Shopper Profile” by Excentus, a PDI company, 43% of shoppers visit c-stores because they belong to the retailer’s loyalty program. Plus, 51% of c-store shoppers admit to frequenting retailers more often if they belong to a loyalty program. However, motivations have changed. Whereas point accumulation once may have been enough to drive action, that alone is insufficient in today’s COVID environment. Customers are now demanding more than just instant rewards. Numerous studies indicate consumers desire loyalty programs that cater to their individual shopping habits. In fact, Oracle research revealed that 87% of shoppers are comfortable with having their buying habits tracked and monitored, if that information is used to personalize a loyalty program.

To make the most of its loyalty program, the program has to be a top priority from the executive suite to each individual store. Consider Stinker Stores, which operates 103 stores across Idaho, Colorado and Wyoming. Company President and CEO Charley Jones led the charge to develop a loyalty solution that includes an app, gamification and rewards. It partnered with Liquid Barcodes to roll out a new app-based loyalty program that features an engaging way for customers to earn digital stamps every time they buy coffee, doughnuts, fountain drinks or energy drinks. With engagement at its heart, the Stinker program is completely frictionless to use, with just one scan needed to pay and enjoy the program benefits and rewards. “We’ve made it our mission to delight our customers and exceed their expectations, while keeping things super simple,” Jones said. “This app is the best way we have found to give our customers the discounts and rewards they deserve and help them have some fun every day, too. Even our employees love it.”

Younger Generations More Open to Sharing Information for a Personalized Experience To what extent do you agree or disagree with the following statement? “I am happy to share more information about myself with brands if it leads to more personalized and relevant content.”

Source: “The Loyalty Paradox,” a market research report from Edit and Kin + Carta, January 2022

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Technology | Prepaid

Prepaid Shows Promise Prepaid card sales are on the rise, and digital or ‘virtual’ prepaid cards continue to trend. The U.S. prepaid card market grew at a compound annual growth rate (CAGR) of 8.6% from 2017-2021, according to Researchandmarket.com’s report “United States Prepaid Card and Digital Wallet Business and Investment Opportunities Databook – Market Size and Forecast, Consumer Attitude & Behaviour, Retail Spend.” The report estimated that, from 2022 to 2026, the market would rise from $542.26 billion to $826.96 billion, a CAGR of 11.1%. The report further noted that, as more customers adopt digital payments, digital wallet providers are launching virtual prepaid card solutions. Mario Spina, CEO of The PRIDE Stores, with 15 stores in the Chicagoland area and one in Indiana, predicted prepaid card sales will be up at his stores this year, and he expects customer demand to be primarily in restaurant gift cards. Indeed, Paytronix’s “Restaurant Gift Card Sales Report 2022” noted restaurant gift card sales grew 22% in 2021. Family dining card sales were up 106%, ﬁne dining cards were up 57%, and QSR cards were up 7%. Third-party sales of restaurant gift cards climbed 24%. “The PRIDE Stores offers its own PRIDE gift cards, which is a great way to build brand awareness and retain loyal customers, as well as gain new customers,” Spina said. “They can be redeemed at any PRIDE Store, The PRIDE Beer Wine and Spirits Liquor Store, afﬁliated restaurants such as Urban Counter and Taco Urbano, plus our 93 Octane Brewery.” The company also features a branded 93 Octane Brewery gift card that it sells out of its tap room. Gift cards are available in $25 and $50 denominations. APP INTEGRATION

“Prepaid cards are a very important part of the convenience store’s payments mix,” said Richard Crone, CEO of Crone Consulting. “Of all of the gift cards they might sell, the most important to promote is their own private-label prepaid card. And that should be aggressively promoted. It should be accessible through their own branded mobile app.” “Of all the different tenders they might accept, it’s the lowest cost — lower than cash, especially if they are their own program manager,” Crone said. Private-label prepaid cards have built-in loyalty. “It’s like their own cryptocurrency,” he said. cstoredecisions.com

Prepaid Snapshot

• In 2021, restaurant gift card sales were up 22% from 2020 but down 13% from 2019, and digital sales were at their highest ever, per Paytronix’s “Restaurant Gift Card Sales Report 2022.” • The global prepaid cards market is expected to reach $2.7 trillion by the year 2026, according to ReportLinker’s October 2021 report “Global Prepaid Cards Industry.” • Some 36% of surveyed shoppers ran into out-of-stocks or shipping delays during holiday shopping in 2021, requiring them to purchase an alternate gift. Nearly 40% purchased a gift card instead. Some 30% of consumers reported buying more gift cards this holiday season compared to last, according to Blackhawk Network’s “2021 Post-Holiday Shopping” study.

C-stores with a mobile app should consider selling their store-branded prepaid cards digitally, as well. When you enable the loading of your private-label card into your chain’s mobile app, it triggers a repeat spend, which is not only an important source of ongoing revenue, but also a contact point with the customer, noted Heidi Liebenguth, managing partner at Crone Consulting. “It brings value far beyond the physical card,” she said, “because in letting someone check their balance, upload more funds, there’s a recurring contact point that can be used for marketing, that can be used for all kinds of customer engagement, that wasn’t possible before.” March 2022 •

CSTORE DECISIONS

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Technology | POS & Back Office

C-Stores Integrating

Frictionless Checkout As technology evolves, the point of sale (POS) is transforming also. POS systems are becoming more lightweight, and the overall hardware cost is decreasing, with many of the newer POS systems using cloud technology, said Perry Kramer, managing partner with retail consulting firm Retail Consulting Partners. “The use of cloud technology, in most cases, reduces total cost of ownership and the time needed to develop and deploy new features. However, multiple outages this fall at cloud service providers resulted in significant POS and payment outages across all retail spaces, including c-stores,” Kramer said. “This has retailers looking at cloud POS systems through a slightly different lens. Support for offline has moved from ‘nice to have’ to ‘must have’ for most major retailers.” Many POS systems today have moved their architecture to a microservice-based technology, Kramer added. “This will be critical in the long run for c-stores, which have many more peripherals than other retail verticals,” he said. Typical POS integrations for c-stores today include things like digital ordering, kiosks for ordering prepared foods, car washes, digital signs, loyalty, fuel dispensers, storage tanks and more. Upgrading newer architecture will help pave the way for c-stores’ long-term success by lower costs and reducing time to market when it comes to making changes, Kramer explained. 102

8% 7%

CSTORE DECISIONS •

March 2022

Kramer advised c-stores to remain focused on eliminating friction and improving speed at the POS by using contactless, mobile payments and prepayments. “These advancements must include the traditional checkout touch points and the expanding digital and mobile checkout touch points,” he said. A FRICTIONLESS APPROACH

Delek US is one such c-store chain offering a frictionless checkout experience. Delek has 250 company-operated c-stores throughout Texas and New Mexico and is in the process of rebranding all of its locations under the DK banner. In the summer of 2020, DK was the first c-store chain to pilot touchless checkout powered by Mashgin technology, and in 2021, Delek rolled the technology out to 25% of its DK stores. It plans to continue to integrate the technology, which it calls “DK Touch-less” into additional stores

this year and beyond. “DK Touch-less is an artificial intelligence-driven checkout experience that uses computer vision to instantly recognize consumer products, including packaged goods, dispensed beverages and food items,” said Darshan Gad, senior vice president of retail sales, marketing & innovation, Delek US. “Consumers simply place their items on the unit to begin a transaction and use the adjacent pin pad to complete the process in as little as 15 seconds.” Each store features one to two checkout units featuring the technology, which has reduced checkout times by 67%. Customers have responded, with 30% of store transactions going through DK Touch-less. “Delek began exploring the future of checkout as early as 2014 when we

Source: CivicScience

cstoredecisions.com

nience stores (especially independent chains or mom-and-pop businesses) to consider as a new POS option,” said Richard Crone, CEO of Crone Consulting. “The customer doesn’t even have to have an iPhone to do this,” added Heidi Liebenguth, managing partner

for Crone Consulting. “Customers could be using any number of mobile wallets, and so the merchant … can take payments with their own iPhone, potentially out at the pump, at the curb or in the shop. They don’t need to be tied to a point-of-sale device any longer.”

owned MAPCO. Our vision has been to fundamentally transform the retail checkout experience by driving speed and eliminating friction,” Gad said. One benefit to customers is there’s no need to find or scan barcodes. DK Touch-less sits alongside the chain’s legacy POS, with data flowing through to its backend systems, Gad explained. “The success of DK Touch-less has been driven by extremely strong in-store execution and the amazing focus and support of our store associates,” he added. Frictionless options are continuing to grow. In early February Apple announced plans to introduce Tap to Pay on iPhone. The new feature will allow U.S. merchants of all sizes to use their iPhone to accept Apple Pay, contactless credit and debit cards, and other digital wallets through a tap to their iPhone with no additional hardware or payment terminal required. The feature will be available for payment platforms and app developers to integrate into their iOS apps and offer as a payment option later this year. Retailers will be able to unlock contactless payment acceptance through a supporting iOS app on an iPhone XS or later device. At checkout, the retailer will simply prompt the customer to hold their iPhone, Apple Watch, contactless credit or debit card or other digital wallet near the retailer’s iPhone and the payment is completed using NFC technology. “This is something for conveMarch 2022 •

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CSTORE DECISIONS

Company: Vibenomics

Company Contact: Michele Oger

Ad Type: Half Page Island Publication: March 2022

CSD Contact: Jake Bechtel

103

(704) 771-5262 // Michele.O@Vibenomics.com

Technology | Security & Cash Management

Seeking a Proactive

Approach to Security The COVID-19 pandemic brought an increase in crime alongside economic uncertainty, and retailers are still grappling with the effects today. According to the National Retail Federation’s (NRF) 2021 National Retail Survey, more than two-thirds of retailers said the pandemic increased risks for their organization, with workplace violence (61%) and organized retail crime (57%) topping the list. These days more than ever, establishing proactive measures is key, from new technology to advanced training efforts and community engagement. TRAINING IS KEY

Larry Carroll, vice president of asset protection for Ankeny, Iowa-based Casey’s, which operates 2,400-plus stores in 17 states, has been working in loss prevention for more than 30 years. When he joined Casey’s a year and a half ago, he was tasked with implementing the retailer’s first formalized asset protection program. It all starts with employee training, he said. And it leads to the guest experience. “You not only have to have a good training program,” Carroll explained, “but it has to be one that’s engaging. … We’re doing on-site training with team members, and that’s happening every day in our organization. It has quite a good effect upon team members when they can see something in action.” Casey’s is also making sure that team members understand the ‘why’ behind the chain’s actions. 104

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Pandemic Saw Uptick in Retail Risk

Percentage who reported the COVID-19 pandemic resulted in an increase in fraud, crime and overall risk to their company:

Total Overall

48.6%

Workplace violence

20.8%

33.3%

Organized retail crime

34.7%

Shoplifting

33.3%

Employee theft

33.3%

Cargo theft 13.9%

27.8% 22.2% 16.7% 11.1%

6.9%

69.4% 61.1% 56.9% 50.0% 44.4% 20.8%

■ Slight increase ■ Significant increase Source: National Retail Federation (NRF) 2021 National Retail Survey

“Why are we training this way? And why do we do things this way? Our philosophy is, once they understand the ‘why,’ we get better engagement, and you get a top-notch guest experience out of that,” he said. Security expert Sean Sportun sees training as vital to successful loss prevention and security, too. Sportun’s spent about 18 years in the convenience store world, 15 of those with Circle K, leading the company’s Central Canada Loss Prevention Department. At Circle K, he worked to redevelop the employee training program: “made it very hands on, used videos to our advantage … made it more of a robust training mechanism than just, ‘here’s what happens in case of a robbery or a theft,” he explained. But Sportun’s most known for his proactive, community-centric loss prevention initiatives, like the now-famous positive ticketing and mural programs. Today’s approach must be proactive, Carroll agreed. It’s vital to be in tune with things happening in the world — and in your communities. “If asset protection folks are not proactively understanding the communities that they’re in, they’re behind the eight ball,” he said. “You have to have your hand on the pulse of everything that’s happening out there; when you think it’s not relevant now, at some point it becomes relevant to your organization.”

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2/15/22 4:48 PM

Technology | Electronic Payments

C-Stores Embrace Electronic Payments C-store technology is rapidly expanding, and nowhere is that more evident than in the realm of electronic payments. “There are several trends that we have seen accelerate over the last year,” said Perry Kramer, managing partner with retail consulting firm Retail Consulting Partners. “One of the largest accelerations we have seen is in the use of contactless EMV transactions. Additionally, many are implementing the use of quick chip for EMV.” C-stores, over the past 18 months, have been continually expanding EMV in the forecourt and adding additional payment options, Kramer noted. He pointed to a significant increase in digital accounts for ordering online and stored payments for recurring and subscription payments. “C-stores continue to invest in digital payment systems, order management systems and mobile applications,” Kramer said. “These are then blended with the use and promotion of private-label payments, which continue to show large cost savings and interchange fee eliminations. These areas should continue to be a focus of payments in the store, at the

forecourt and in any digital/mobile application.” MOBILE PAYMENTS

Enmarket, which operates 129 c-stores in Georgia, South Carolina and North Carolina, offers customers multiple payment options. “At the fuel dispensers, they are able to authorize pumps and process payment through the Enmarket mobile app,” said Brett Giesick, president of Enmarket. “Payment options include card-on-file or our proprietary ACH program called enPay, which debits the money directly from the customer’s checking account.” Inside the store, Enmarket features Skip technology through the Enmarket app, allowing customers to scan

Global Sentiment on Digital Payments

“Visa Back to Business Global Study, 2022 Small Business Outlook,” conducted by Wakefield Research in December 2021; surveyed 2,250 small business owners and 5,000 consumer adults in Brazil, Canada, Germany, Hong Kong, Ireland, Russia, Singapore, UAE and the U.S.

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items and pay in-app. “If a shopping trip requires a visit to the register, customers can still use mobile pay on the Enmarket app with a quick scan of a QR code, or by using Apple or Google Pay. And for customers that are more comfortable using PayPal or Venmo, we’re now accepting those forms of payment inside our stores, as well,” Giesick said. When it comes to Skip, Giesick said it’s especially appealing to regular customers who purchase the same products on repeat visits. “Customers can save their favorite items and select them before they even walk into the store,” he said. In the past five years, Giesick has had dozens of companies approach him about mobile payment technology, and he expects to see even more mobile payment options become available in the market as customers become more comfortable using their phones to pay. “Customers have different preferences and many different options to choose from,” Giesick noted. “As an industry, we have to adapt to those preferences and invest in the technology that will allow customers to transact with us on the platform of their choice.”

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Keep up with the convenience distribution industry through CDA events and industry reports A REPORT ON CONVENIENCE DISTRIBUTORS’

IMPACT ON THE U.S. ECONOMY CONVENIENCE DISTRIBUTORS directly employ nearly 59,000 PEOPLE 173,000 JOBS nationally

and support over

CONVENIENCE DISTRIBUTION ACTIVITIES supported $102 in TOTAL BUSINESS SALES in 2017

The CONVENIENCE

billion

DISTRIBUTION SECTOR contributes billions in economic and

fiscal activities throughout the U.S. economy, including:

$30+ billion in TOBACCO EXCISE TAX COLLECTED

$13+ billion Economic Impact Report in TOTAL

OUTPUT from indirect suppliers and induced consumer spending

$8.2 billion in NEW ECONOMIC ACTIVITY (GDP) in the sector

With$4.5 over 173,000 billion LABOR INCOMEsupported TAX REVENUE jobs$2.3 inbillion the U.S. alone, and more than $102 billion in total business impact, the convenience distribution sector has an enormous overall impact on the U.S. economy. in

including salary, wages, and benefits

for federal, state, and local governments

With over 173,000 supported jobs in the U.S. alone, and more than $102 billion in total business impact, the convenience distribution sector has an enormous overall impact on the U.S. economy as a whole.

2022 | September 12–15 Chicago, IL

2023 | February 27– March 1

Woodlands, TX

The Convenience Distribution Business Exchange (CDBX) is a member-only business exchange which aﬀords distributors and their top trading partners with one-on-one, top-to-top meetings over the course of three days: the industry’s most powerful business-building event.

The Convenience Distribution Marketplace is a memberonly event bringing together distributors, manufacturers, brokers and others allied to the industry to network, learn, share solutions and do business on the Marketplace trade show ﬂoor.

For more information, visit www.CDAweb.net/CDBX.

For more information, visit www.CDAweb.net/Marketplace.

For the full report on the economic impact of convenience distributors, make sure to visit our website, CDAweb.net/EconReport. Research supported by the

Distributors Education Foundation, Inc. (DEF)

For the full report on the economic impact of convenience distributors, visit www.CDAweb.net/EconReport.

To learn more about the beneﬁts of CDA membership, visit www.CDAweb.net/Membership. CDA is the trade association working on behalf of convenience products wholesale distributors in the United States. Convenience distributors represent more than $102 billion in annual sales.

Ad-CDA CStoreDecisions FP 0222.indd 1

CONVENIENCE DISTRIBUTION ASSOCIATION 11250 Roger Bacon Drive, Unit 8 | Reston, Virginia 20190 703.208.3358 | www.CDAweb.net

2/14/22 11:27 AM

Operations | Fuel & Fuel Alternatives

Fuel Customers Seek Savings While keeping an eye to electric vehicle charging (EVC) and other alternative energy solutions, convenience retailers are finding new ways to keep fuel customers happy in 2022, as gas prices remain high. Temple, Ariz.-based Circle K has rebranded close to 3,000 sites to its Circle K fuel brand in the past three years — about half of its U.S. stores, said Melissa Lessard, head of North American marketing at Circle K. To celebrate, the retailer announced a new promotion: Through April 25, customers can enter to win free fuel for a year, with one winner every week. In addition, it’s offering cents-off-gallons coupons via mobile for customers who enter to win the grand prize. Other fuel offers include Circle K’s Easy Pay card that gives customers a 10-cent-per-gallon rebate on every fill, Lessard said, as well as its ‘Premium Thursday’ promotion. “Circle K premium fuel offers double the cleaning detergents, which means you’ll clean your engine while you drive, boost your engine performance and lower emissions,” she said. “We know customers are curious about our Premium Fuel in general, and we are happy to make it easier to try our best fuel each Thursday by offering 20 cents off per gallon at participating stores.” Westborough, Mass.-based EG America also offers fuel savings to customers across its Loaf ‘n Jug, Certified Oil, Fastrac, Kwik Shop, Minit Mart, Quik Stop, Tom Thumb and Turkey Hill c-store locations. Last month, SmartPay app users received an extra 10 cents off per gallon of fuel, for a total of 20 cents off per gallon, which EG America Director of Brand Strategy and Advertising David Heilbronner said led to an increase in enrollments of SmartPay as well as an increase in the average number of gallons using SmartPay.

Future of Fuel Prices

As the economy recovers, fuel prices remain high. Still, the U.S. Energy Information Administration (EIA) expects gasoline and diesel prices to lower in 2022 and 2023 as demand growth slows.

SmartPay Rewards mobile app users also receive additional gallon rewards, flash sales and more. The rewards program recently reached over $4 billion sold in fuel and $200 million saved by its users. Heilbronner said the retailer is now considering another savings program for the summer months and notes an overall fuel industry trend: “Gas discount programs appear to be growing.” In 2022, consumers are hyper-aware of not only what the fuel they’re using costs, but also what types of fuel they’re selecting at the pump. “Customers are more and more interested in what they are putting in their cars,” confirmed Lessard, “so we established a quality guarantee customer journey.” For Circle K, this means a guarantee to customers that its fuel is of “a highgrade quality that meets all U.S. Environmental Protection Agency (EPA) standards.” “We only use fuel sourced from responsible refineries and terminals that use quality cleaning detergent additives,” Lessard said. “This means lower vehicle emissions and maintenance of optimal engine performance.”

Source: U.S. Energy Information Administration, Short-Term Energy Outlook, 2021

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Operations | Car Wash

Car Wash Offers a Growing Revenue Stream for Retailers Consistently across the U.S., car wash construction is currently at a historic pace, according to Eric Wulf, CEO of the International Carwash Association (ICA), and “the performance of the industry amidst the pandemic was nothing short of remarkable, with estimated sales upwards of $13 billion — a record high in 2021.” “We estimate that 600 new (car wash) stores are being built annually,” he continued. “The reasons all relate to consumer preferences and proliferation of the subscription model, whether monthly or annual.”

Car Wash Market Size Expanding Domestically and Globally

U.S. MARKET TRENDING UP • The U.S. car wash service market size was valued at $14.21 billion in 2020. • T he U.S. car wash service market is projected to grow at a compound annual growth rate of 4.8% from 2021-2028. • More than 72% of U.S. drivers opt to use professional car wash services. Source: Grand View Research’s “U.S. Car Wash Service Market Size, Share & Trends Analysis Report By Type (Tunnels, Roll-over/In-bay, Self-service), And Segment Forecasts, 2021 - 2028”

GLOBAL GROWTH CONTINUES • The global car wash services market size is expected to reach $37.6 billion by 2028. • The global car wash services market is predicted to grow at a CAGR of 3.8% from 2021 to 2028. Source: Grand View Research’s “U.S. Car Wash Service Market Size, Share & Trends Analysis Report By Type (Tunnels, Roll-over/In-bay, Self-service), And Segment Forecasts, 2021 - 2028”

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Benny’s Car Wash & Oil Change has nine tunnel car washes in Louisiana, three of which are co-located with its three B-Quik convenience stores. Benny’s Owner Justin Alford credited several factors that helped his car wash business successfully navigate the pandemic. “People drove around more and stayed local on their vacations,” said Alford. “The average age of the cars on the road is 12 years, so people are, more than ever, taking care of their vehicles.” Ride share drivers also accounted for a good share of the business because many wash their cars frequently, he continued. Contactless pay stations made customers feel safe. TECHNOLOGY ADDS AN EDGE

The transition from identifying unlimited plan customers by scanning an RFID code on the windshield to snapping a photo of the license plate and comparing it with membership information is a good move for car washes and has the potential to increase plan sales, Alford said. “We can track how many times customers go through the car wash and target non-members with offers to enroll in an unlimited plan,” he said. Alford said he would like other technology to catch up to the needs of car wash owners. “In some ways, we’re lagging,” he noted. For unlimited plan customers, Alford said he would like to have the membership information saved to the cloud rather than the older, big databases that are available now, so they could be accessed on iPads or other wireless pads. Also on his wish list is the technology that would allow customers to purchase car washes from their cell phones. To promote car washes at Benny’s, Alford used to do a lot of paper couponing in newspapers and Valpak mass mailings. Now, he said, nobody reads their mail, so he relies on digital and social media avenues such as Google, Facebook and geofencing, which makes an ad pop up when the consumer enters a particular geographic area. “Digital has its downside, too,” he pointed out. “In the ‘90s, if we would send out 1,000 coupons and get 500 back, we knew our promotion was working. It’s harder to track digital marketing efforts.” Car washes are also suggested at the gas pump at the company’s B-Quik Convenience Stores.

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Operations | LED & Energy Efficiency

Renewable Energy, LED Upgrades Abound Renewable energy plans and the continued turn toward LED lights marks an ongoing shift for retailers toward a higher focus on lighting and energy efficiency goals. Jackson, Ky.-based Go Time, which operates seven stores in Kentucky, has built six new stores since 2016, all of which incorporate LED lights. Go Time is currently building its eighth store in Corbin, Ky. “We want the highest efficiency lights we can buy,” said Scott King, owner of Go Time. Go Time’s new builds use narrow, long LED lights in the interior suspended ceilings. LED lights are also used in the exterior soffits and in the canopies. Additionally, pole lights with double or triple LED heads are used at Go Time. The original store also uses LED bulbs in the interior, with “CFL (compact fluorescent lights) around the exterior soffit, and the old metal halide lights in the canopy,” King said. Two advantages to the store’s energy efficiency initiatives are its financial savings and that, with LED lights, “you can replace the drivers, and the lights are not out, as in a bulb fixture.” Go Time uses the highest Seasonal Energy Efficiency Ratio-rated HVAC units along with gas heat and gas appliances. It also provides a high R-value — which is the level of resistance to heat flow of an insulating material — by using spray insulation in all stores. COMMITMENT TO RENEWABLE ENERGY

Altoona, Pa.-based Sheetz, which operates over 640 stores in Pennsylvania, West Virginia, Virginia, Maryland, Ohio and North Carolina, has also taken the initiative to focus on energysaving solutions. As with Go Time, LED lighting has been implemented at Sheetz locations. Sheetz also uses high-efficiency HVAC units, alternative refrigerants and advanced Building Automation Systems at new and existing locations. Recently, in an effort to power 70% of its Pennsylvania facilities with renewable energy,

LED Facts

ACCORDING TO THE U.S. DEPARTMENT OF ENERGY: • The majority of lighting installations are expected to use LEDs by 2035. • Energy savings from LED lighting could surpass 569 Terawatt-hours (TWh) annually by 2035. That would equal the annual energy output of more than 921,000 megawatt power plants. • A good-quality LED bulb lasts longer. LEDs can last three to five times longer than a compact fluorescent light (CFL) and a whopping 30 times longer than an incandescent bulb. • LED performance is improving, and prices are dropping. Today, LED lamps can affordably replace 40, 60, 75 or 100 Watt incandescent bulbs. • LEDs emit very little heat compared to other bulbs. Incandescent bulbs release 90% of their energy as heat, while CFLs release about 80% of their energy as heat. Source: U.S. Department of Energy, “Energy Saver,” via Energy.gov/energysaver/led-lighting

Sheetz entered into a long-term renewable supply agreement with Constellation, a supplier of power and energy services. The company’s commitment to renewable energy supports Pennsylvania solar projects, which will provide a total of 55 megawatts of renewable energy. Of this, Sheetz will receive approximately 110 million kilowatt hours of energy per year. Sheetz will avoid nearly 78,000 metric tons of carbon emissions that are associated with its energy use annually. Neon Marketplace, which currently operates four stores with 20 more under development and 150 opening within the next five years, also attests to the growing popularity of LED lights. It is using LED technology in both the interior and exterior of its stores, including ceiling lighting, emergency lighting, canopy lighting and area lighting fixtures. Additionally, Neon is working with TPG Construction to use products that have earned the Energy Star by complying with EPA Regulations. Neon has realized over $3,000 in Energy Star rebates.

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PRODUCTShowcase

Special-Edition Space-Themed Lighters BIC launched its new BIC Special Edition Out of This World Series Lighters. The special-edition series of lighters features new designs, from alien spaceships to celestial views. Designs in this series capture all of the hype surrounding the world unknown. The lighters in this series have a suggested retail price of $2.09 per lighter. BIC Maxi Lighters are long-lasting, reliable and 100% quality inspected.

BIC USA www.us.bic.com

Bite-Sized Fudge Stripes With Marshmallow Dip Keebler’s latest innovation, Fudge Stripes Dip’mmms, features bite-sized versions of Keebler’s iconic Fudge Stripes cookies in a single-serve, portable tray, along with marshmallow dipping frosting. This cookie and marshmallow dip combination instantly evokes the playfulness of s’mores. But it’s the interactive dip style that transforms Keebler Fudge Stripes Dip’mmms from just a snack into a fun experience. Keebler Fudge Stripes Dip’mmms are available in single packs for a suggested retail price (SRP) of $1.79-$2.29 and four-count multipacks for an SRP of $6.99.

Double Mocha and Salted Caramel Hard Coffee Flavors

The Ferrero Group www.ferrero.com

Twelve5’s Rebel Hard Coffee expanded its product portfolio and launched another ﬁrst-to-market hard coffee innovation under the BOLDER platform. BOLDER is the latest addition to the growing Twelve5’s Rebel Hard Coffee lineup that includes 8% ABV in convenient, 16-ounce, singleserve cans. The ﬂavors in the BOLDER Hard Coffee lineup include the rich and smooth Double Mocha BOLDER Hard Latte and the salty and sweet Salted Caramel BOLDER Hard Latte.

Zero-Carb Light Beer Bud Light NEXT hit store shelves across the country at the same time as Bud Light’s Super Bowl commercial. The commercial marked a milestone for the brand’s recent entry into the NFT space, showcasing the new Bud Light N3XT NFT Collection. Bud Light NEXT is brewed for today’s consumers who have long desired a beer that breaks the barriers of a traditional lager and offers the sessionability and stats of a seltzer. In addition to offering zero carbs, the new super crisp, light beer boasts 80 calories, 4% ABV and offers a clean and refreshing taste.

Twelve5 Beverage Co. www.rebelhardcoffee.com 112

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Anheuser-Busch www.anheuser-busch.com March 2022

cstoredecisions.com

PRODUCTShowcase

PMTA-Accepted Tobacco and Menthol Pods MYLE Vape can now claim PMTA Accepted product status for its Gold Leaf Tobacco and Blue Leaf Menthol pods. The MYLE V4 pods feature anti-leak magnetized technology that allows for secure anti-leak insertion of the pod into the device. MYLE Gold Leaf Tobacco and Blue Leaf Menthol pre-ﬁlled pods are available in 0.0-milliliter and 2.4-milliliter salt nic and have a suggested retail price of $14.99.

MYLE Vape www.mylevape.com

Ready-to-Drink Spiked Lemonade Lineup Molson Coors Beverage Co. developed a brand of full-flavor alcohol beverages inspired by the chilled juice brand Simply. This summer, Molson Coors will start by launching the Simply Spiked Lemonade variety pack, inspired by some of Simply’s non-alcoholic products, including Strawberry Lemonade, Watermelon Lemonade, Blueberry Lemonade and Signature Lemonade. The bold flavors of the Simply brand mix seamlessly with alcohol for cocktails, which inspired the ready-to-drink lineup. Simply Spiked Lemonade will be sold in slim-can 12-packs as a variety pack, and 24-ounce standalone cans of select flavors.

Molson Coors Beverage Co. www.molsoncoors.com

Plant-Based Cheeses Rich Products expanded its broad portfolio of plant-based offerings with its new Plant-Based Cheese. A vegan, non-dairy alternative to traditional cheese, Rich’s new Plant-Based Cheese is naturally cultured to deliver the melt, flavor and texture consumers expect. It is made without the top eight allergens and contains no artificial flavors or colors. The versatile cheese is available in two varieties — mozzarella-style shreds and American-style slices. New PlantBased Mozzarella Shreds come with four per case at 2.5 pounds each. New Plant-Based American Slices come with six per case at 1.5 pounds each.

Rich’s Foodservice www.richsconvenience.com

All-in-One Checkout Device With EMV Pump NRS Petro is offering an affordable Pump-EMV retroﬁt solution for fuel pumps that ensures EMV-compliance at the pumps for prevention of fraud. NRS Petro’s EMV EZ Pump device can be installed within a few hours without requiring any messy renovations, pump replacements or business downtime. This EMV solution is different than other options in that it can be installed easily into existing pumps. This saves gas station owners many thousands of dollars. NRS Petro also offers its powerful POS with gas pump integration and NRS Pay credit-card processing.

NRS Petro www.nrspetro.com

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PRODUCTShowcase

Margarita-Inspired Hard Seltzers Truly Hard Seltzer announced the launch of its new Margarita Style Hard Seltzers. Putting Truly’s spin on the traditional margarita, the line features four new flavors, including Classic Lime, Strawberry Hibiscus, Watermelon Cucumber and Mango Chili. All will be available nationwide in the Margarita Style Mix Pack. These margarita-inspired flavors deliver a crisp, refreshing hard seltzer taste with the bold, zesty flavors of a margarita. Each flavor is made with real ingredients, including lime juice concentrate, agave nectar and sea salt, and is 5.3% ABV, 110 calories, with one gram of sugar and gluten-free.

Boston Beer Co. www.bostonbeer.com

Sugar-Free Raspberry Lemonade Mountain Dew

Striped Gummy Candies Building off the growth and heritage of Fruit Stripe Gum, Fruit Stripe is launching its ﬁrst-ever gummy candy with three ﬂavors swirled into a striped gummy candy version of the Fruit Stripe Mascot, Yipes the Zebra. Flavors include Tangerine, Lemon and Cherry. The candy is available in 3.25-ounce peg bags. The suggested retail price is 85 cents per peg bag.

MTN DEW released MTN DEW SPARK Zero Sugar. The new raspberry lemonade ﬂavor with zero sugar is the latest addition to a growing list of MTN DEW sugar-free offerings. MTN DEW SPARK Zero Sugar follows MTN DEW SPARK, which was introduced a year ago and rolled out to convenience stores in limited quantities. Both MTN DEW SPARK and the new MTN DEW SPARK Zero Sugar can be found nationwide in 20-ounce single bottles, 12-ounce single cans and 12-packs, among a variety of other single and multipack sizes.

Chobani released its new plant-based coffee creamers, made with a blend of plant-based ingredients that are vegan-friendly; dairy- and lactose-free; and contain no artificial flavors, sweeteners or preservatives. Chobani Plant-Based Creamers are available in Sweet & Creamy, French Vanilla, Chocolate Hazelnut and Caramel Macchiato. Chobani also announced the launch of a fan-inspired and fan-picked coffee creamer flavor called Sizzlin’ Brown Sugar. Chobani brought the flavor to life using fresh cream, adding only milk, cane sugar and a touch of natural flavoring to make this salty and sweet coffee complement.

PepsiCo www.pepsico.com

Chobani www.chobani.com

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Ferarra www.ferrarausa.com

Plant-Based Coffee Creamers

CSTORE DECISIONS • March 2022

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PRODUCTShowcase

Coca-Cola With Coffee Mocha Coca-Cola with Coffee Mocha hit shelves in February. Since launching in January 2021, the hybrid innovation has given consumers a reset to their daily routines with a pioneering proposition that “sips like a Coke and finishes like a coffee.” All Coca-Cola with Coffee flavors are available in single-serve 12-ounce cans. The brand will now debut its latest offerings through a fleet of self-driving robotic delivery vehicles, and each robot in the fleet will be individually wrapped to showcase the new Coca-Cola with Coffee Mocha flavor.

The Coca-Cola Co. www.coca-colacompany.com

Liquid Supplement With IV Rehydration Therapy Benefits BIOLYTE is offering the ﬁrst liquid supplement that has the same beneﬁts as IV rehydration therapy but in drinkable form. One bottle yields nearly six times the amount of electrolytes of leading sports drinks, with only one-third of the sugar. It is packed with vitamins C, B12, B5, B6 and B3, alongside ginger root and milk thistle. These ingredients effectively hydrate, boost energy, rid the liver of toxins, ease stomach illness and reduce muscle cramps.

Kit Kat Strawberry and Dark Chocolate The Kit Kat brand has launched the new Kit Kat Duos Strawberry + Dark Chocolate, a flavor spin on the classic light, crispy treat. The Kit Kat Duos Strawberry + Dark Chocolate flavor combines the sweet, fresh taste of strawberry with the rich, decadent flavor of dark chocolate in the Kit Kat Duos third-generation bar. This fruit-inspired Kit Kat bar tastes like a chocolate-covered strawberry and will be available in both standard and king size. The item is available at retailers nationwide and is a permanent addition to Kit Kat’s lineup.

The Hershey Co. www.thehersheycompany.com

BIOLYTE www.drinkbiolyte.com

Non-Dairy and Gluten-Free Ice Cream Flavors Ben & Jerry’s added two more core flavors to its extensive collection of certified vegan, non-dairy choices. Non-Dairy Boom Chocolatta is a mocha and caramel frozen dessert with fudge flakes, gluten-free chocolate cookies and a gluten-free chocolate cookie core. Non-Dairy Bananas Foster has a banana and cinnamon base with almond toffee pieces and a salted caramel core. Boom Chocolatta and Bananas Foster bring Ben & Jerry’s non-dairy options to a total of 18 in the U.S. The new flavors will be on store shelves soon for a suggested retail price of $4.49-$5.79.

Ben & Jerry’s www.benjerry.com cstoredecisions.com

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© 2022 North American Bancard, LLC (NAB). All rights reserved. NAB is a registered ISO of BMO Harris Bank N.A., Chicago, IL, Citizens Bank N.A., Providence, RI, The Bancorp Bank, Philadelphia, PA, and First Fresno Bank, Fresno CA. American Express may require separate approval. *Durbin regulated Check Card percentage rate. A per transaction fee will also apply. **Some restrictions apply. This advertisement is sponsored by an ISO of North American Bancard. Apple Pay is a trademark of Apple.

Classifieds/Ad Index Abbott

GSK C-Store

ADD Systems

The Hershey Company

linnea.solbrook@abbott.com 800.922.0972 / www.ADDsys.com

Altria Group Distribution Company Apter Industries 800.441.7146 / www.apterindustries.com

Biolyte

2 36-37 61

customer.service@drinkbiolyte.com www.drinkbiolyte.com

Home Market Foods

Hunt Brothers Pizza

800.367.8325/ info@HMFfoodservice.com www.HMFfoodservice.com

800-453-3675 / www.huntbrotherspizza.com/csd

iDelta8

888.636.4670 / www.delta8vapeoil.com

blu Calico Brands, Inc.

95 32

Krispy Krunchy Chicken

Candy Dynamics

Lancer Worldwide

Charleys Franchise

Cheyenne International, LLC

www.blackbuffalo.com

800.544.4837 / www.calicobrands.com 888.400.7606 / www.toxicwastecandy.com 800.43.STEAK / www.charleysfranchise.com 866.254.6975 / www.cheyenneintl.com

Convenience Distribution Association E&J Gallo Winery E-Alternative Solutions

www.EalternativeSolutions.com/Forth www.EalternativeSolutions.com/Leap

Forte Products

816.813.3337 / www.forteproducts.com

Frazil

801.845.4840 / conversion@frazil.com

www.HersheySolutions.com

Black Buffalo

703.208.3358 / www.CDAweb.net

7, 81

Scott.F.Breisinger@gsk.com

107 67

22-23, 99

109 57

Cover

Invenco

119

877.515.0939 / www.invenco.com/s/csd 800.290.6097 / www.krispykrunchy.com www.lancerworldwide.com/CSD

North American Bancard

116

Perfetti Van Melle

Prairie City Bakery

Premier Manufacturing, Inc.

Republic Brands

Reynolods American Inc. Swedish Match

866.481.4604 / www.nynab.com 800.283.5988

www.pcbakery.com

www.gopremier.com

www.republicbrands.com

800.367.3677 www.zyn.com www.whiteowl.com www.gamecigars.com

55 THE MOST AWAITED C-STORE EVENT OF THE YEAR! Swisher International

Liggett Vector Brands

877.415.4100

Loomis Armored US, LLC

105

www.loomis.us/SafePoint

Mars Wrigley

www.mars.com

McLane Company, Inc.

www.cvpproducts.com/info

Modern Store Equipment

8 77.532.8433 / sales@modernstoreequipment.com modernstoreonline.com/cstore

800.874.9720 / www.swisher.com

9 51 33, 93

120

Texas Pete

TransAct Tecnologies

TexasPeteFoodservice.com/SimpleAs

boha@transact-tech.com / www.transact-tech.com/cd

Trion Industries, Inc.

800.444.4665 / info@triononline.com / TrionOnline.com

VLN

TryVLN.com

Vibenomics

SalesTeam@Vibenomics.com

11, 91 103

Mr. Vapor

Welbilt Beverage

National Tobacco

Xcalibur International, Ltd.

248.621.4433 / www.mrvapordisposable.com 800.331.5962

877.375.9300 / www.welbilt.com

SUNDAY, MARCH 8:00 AM 1:00 PM – 7:30 PM 1:00 PM – 4:00 PM 4:00 PM – 5:00 PM 6:00 PM – 7:00 PM 7:00 PM – 9:00 PM 9:00 PM – 12:00 A

MONDAY, MARCH 7:00 AM – 1:30 PM 7:00 AM – 8:00 AM 8:00 AM – 8:15 AM

8:15 AM – 9:15 AM Culture as a Comp Culture is at the cor 10:45 are. There are AM comm to their 11:00 uniqueAM natu commitment com– 12:30toPM often directly affect 1:00 PM – its employees, cust 1:30 PM – view a values-based 6:30 PM – it is fiercely 9:00guarded PM – winning culture.

THE MOST AWAITED C-STORE EVENT OF THE YEAR!

TUESDAY, Moderator: John–L 7:00 AM Speakers: 7:00 AM – • • •

It's All Abou Learn from to creating 9:15 AM – 9:45 AM targeted bu convenienc 9:45 AM – 10:45 A is driv Loadingwhat Up for Bre Loyalt As more• commuters Campa to rise and shine at breakfast it’s n • time, Onsite go c-store items acc • CPG-F meals pre-pandemi • Securi business requires g to conduct a cost-b Moderator daypartGroup makes(NAG sens Developme Moderator: Jessica Speakers: Speakers: • Sorin • Jerome Hunsi Office Inc. • Rache • Brian Scantla Business Plan 9:00 AM –H • Tony Sparks,

SUNDAY, MARCH 27 date for theatLIVE 8:00 AM Save the NAG Golf Outing Torreyevent! Pines 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 – 9:00 PM NAG Opening Night Dinner 9:00 PM – 12:00 AM NAG Hospitality Suite

March 27-30, 2022

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cstoredecisions.com

8:15 AM – 9:15 GENERAL SESSION: BURNING ISSUE #1: JohnAM Lofstock at jlofstock@wtwhmedia.com. Culture as a Competitive Advantage Culture is at the core of many businesses no matter how large they are. There are common traits in winning businesses that contribute March 2022 • CSTORE DECISIONS to their unique nature: clear values. Caring, loyalty, humility and deep commitment to community are just a few of them. These characteristics often directly affect decision-making in the company and the way it treats its employees, customers and suppliers. Many businesses quite rightly view a values-based culture as a competitive advantage and, as such, it is fiercely guarded. Hear how leading c-store chains are building their winning culture.

Tony El-Nemr, Tom Robinson 8:00 AM – David Simend

117

9:15 AM – Lessons fro The impacts nation's sup labor shorta predict the on how to d store retaile pandemic, a

IndustryPerspective

Achieving

Operational Excellence Becoming operationally excellent requires careful planning in the areas of training, marketing and customer service, among others. John Matthews • Gray Cat Enterprises

Managing a retail store is tough work. Between operations, merchandising, marketing and facility upkeep, retail business owners have their hands full. Managing the details of retail is the difference between making it or not. All too often, retail owners become lax in their operation and put themselves at an unnecessary disadvantage with their customers. It may seem elementary, yet so many retailers miss the little things — the details that customers notice. They miss the chance to be operationally excellent. Being operationally excellent enables your employees to transcend beyond “employees” to become “ambassadors” of your store. When employees become ambassadors of the store and its personality, they become an extension of the brand image. Operational excellence will require you to think through every detail of your c-store operation and develop a plan for each area in advance of the customer interaction that allows for friendly and successful customer service. In the end, your employees and customers will benefit if you provide the following: Train Your Team: Detailing your expectations in advance for your team is one way to ensure that each employee is cross-trained and aware of their role in the store. All too often, managers leave too many procedures to “chance,” and the employee will take the path of least resistance, often shortcutting the customer. Make Your Marketing More Powerful: Investing money on marketing is critical to any successful business. If you are like any retailer, making your local marketing more efficient is paramount to the overall success. There is nothing more frustrating in retail than communicating a motivating marketing campaign to drive in customer traffic, then dropping the ball operationally. Deliver Better Customer Service: Customers are busy people. While one would like to believe that customers enjoy standing in line or waiting for a sales associate to greet them, the truth of the matter is many would rather 118

CSTORE DECISIONS •

March 2022

buy and go. Having your operation in tip-top shape not only delivers the best service to each of your customers but also enables it to increase the number of customers you can reach. Improve Operational Throughput: Creating a work environment that is focused and organized provides the opportunity to take advantage of incremental sales that come your way. In a disorganized retail setting, customers will become impatient and seek other options — i.e., your competition. Your goal is to capture every sales opportunity that comes into your store. Build Energy & Focus: Employees that have clear direction and roles will channel their energy toward greater customer service rather than spending time trying to figure out what is expected of them. In my experience, operational teams have always been able to take on significantly more — if the expectations were fair and focused. Provide Balance: Let’s face it, we work because we must. Given the choice between scrubbing baseboards or lying by the pool, almost all of us would choose the latter. Creating an operationally excellent work environment enables you to surpass the expectations of your operations while providing for a healthy balance of life. In retail, it is the little items that add up — operations is about preparation first, then execution. Having your store buttoned-up from top to bottom not only puts your best foot forward to your customers but also ensures that your entire staff is in alignment to your executional expectations. John Matthews is the CEO of Gray Cat Enterprises. He is responsible for the management of all consulting activities for the firm, which include retail consulting for multiunit operations, interim executive management and project management. Prior to founding his own company in 2004, Matthews held senior management positions as president of Jimmy John’s Gourmet Sandwiches and as vice president of marketing, merchandising, facilities, corporate communication and real estate at Clark Retail Enterprises Inc. Additionally, Matthews worked for nine years in marketing management as the national marketing director of the Little Caesars Pizza Corp.

cstoredecisions.com

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CStore Decisions March 2022

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Category Management Leader: Bolger Thrives at Thorntons

QuickBites: Customers Demanding Digital

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DEI Corner: Now That I Am Aware of DEI — What’s Next?

Huck’s Market Elevates Food

Roller Grill