Convenience Store Decisions February 2019 by WTWH Media LLC

Volume 30 • Number 2 • FEBRUARY 2019 Business Solutions for Retail Decision Makers

Special:

2019 Foodservice Trends Report

Cream of the Crop

Byrne Dairy Stores is part of a growing group of convenience chains that are becoming foodservice destinations.

INSIDE:

Raising Chicken Sales New Year for Vapor

Getting Connected with IoT

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38 52 66

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February 2019

Vol. 30 • No. 2

CONTENTS 26 COVER STORY Cream of the Crop

Springing from pastoral roots, Byrne Dairy has grown to be a household name in this part of Upstate New York. Now with an aggressive expansion plan in full swing, the homespun convenience chain is adding a robust foodservice platform to the menu.

EDITOR'S MEMO

TECHNOLOGY

8 Editor’s Memo: YEO Preparing Leaders

62 Rewarding C-Store Loyalty

FRONT END

70 How Robotics and AI are Changing Retail

10 Frontend Proﬁle: Farm2Counter Champions

Local Fare 16 CSD’s Quick Bites 18 Industry News 20 Convenience Store Solutions: Safety is a Business Virtue 22 Foodservice Frontrunners: Mahoney Inspires MFA’s Push for Excellence 24 Foodservice Frontrunners: GetGo’s Cox Committed to Convenience

SPECIAL TREND REPORT Foodservice Trends Report: From delivery and breakfast all day to sustainable, plant-based and healthy, trends around food are evolving and c-stores are adapting to own the marketplace.

32 2019

66 IoT: Getting Connected, Staying Aware

OPERATIONS 72 Offering Healthier Hispanic Choices 74 Designing Food Destinations

BACK END 76 Product Showcase 80 Quick Stop 81 Ad Index

82 Industry Perspective: Advantages of Foodservice

Technology

FOODSERVICE 38 Raising Chicken Sales

42 Hot Dispensed Evolves with Times 46 Meeting Equipment Needs

CATEGORY MANAGEMENT 48 Cigars Hot for Now

52 New Year for Vapor

56 Reaping Proﬁts from Chocolate

60 Sweet Snacks Roll Up Proﬁts

4 Convenience Store Decisions February 2019

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THE CSD GROUP Convenience Store Decisions • Leading Through Innovation www.cstore de ci si ons.com Convenience Store Decisions

CStoreDecisions ecisions .com

EDITORIAL

Vice President, Editor-in-Chief John Lofstock jlofstock@csdecisions.com Senior Editor David Bennett dbennett@csdecisions.com Senior Editor/News & Online Erin Del Conte edelconte@csdecisions.com Associate Editor Howard Riell hriell@csdecisions.com Associate Editor Marilyn Odesser-Torpey mot@csdecisions.com

EDITORIAL ADVISORY BOARD

Robert Buhler, President and CEO Open Pantry Food Marts Pleasant Prairie, Wis. Jim Callahan, Director of Marketing (Retired) Geo. H. Green Oil Inc. • Fairburn, Ga. Brad Call, President Colour Du Jour • Salt Lake City Bill Kent, President and CEO The Kent Cos. Inc. • Midland, Texas Greg Lorance, Dispensed Category Manager Cumberland Farms • Framingham, Mass. Billy Milam, President RaceTrac Petroleum Inc. • Atlanta Patrick J. Lewis, Managing Partner Oasis Stop 'N Go • Twin Falls, Idaho Scott Zaremba, President and CEO Zarco 66 • Lawrence, Kan.

OFFICE LOCATIONS

Headquarters 1111 Superior Ave., 26th Floor, Cleveland, OH 44114 888-543-2447 Editorial and NAG 1420 Queen Anne Rd., Suite 4 Teaneck, NJ 07666 201-321-5642 http://twitter.com/CStoreDecisions www.facebook.com/CStoreDecisions www.linkedin.com/CStoreDecisions 6 Convenience Store Decisions February 2019

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Contributing Editors Anne Baye Ericksen Scott McKinney Brad Perkins Jeffrey Steele

ADVERTISING

Columnists Jim Callahan Sylvia Klinger John Matthews

Publisher John Petersen jpetersen@csdecisions.com 216-346-8790

Creative Director Erin Canetta ecanetta@csdecisions.com

Vice President, Sales Tony Bolla tbolla@csdecisions.com 773-859-1107

Production Manager Barbra Martin bmartin@csdecisions.com

Group Publisher Tom McIntyre tmcintyre@csdecisions.com 216-533-9186

Digital Operations Manager Nicole Lender nlender@csdecisions.com

NATIONAL ADVISORY GROUP (NAG) BOARD

Robert O’Connor, Board Chairman O’Connor Petroleum Co. • Hales Corners, Wis. Mary Banmiller, Director of Retail Operations Warrenton Oil Inc. • Truesdale, Mo. Greg Ehrlich, Chief Operating Officer Beck Suppliers Inc. • Freemont, Ohio Doug Galli, Vice President, General Manager Reid Stores Inc./Crosby’s • Brockport, N.Y. Joe Hamza, Chief Operating Officer Nouria Energy Corp • Worcester, Mass. Brent Mouton, President and CEO Hit-n-Run Food Stores • Lafayette, La. Peter Tamburro, General Manager Clifford Fuel Co. • Utica, N.Y. Vernon Young, President and CEO Young Oil Co. • Piedmont, Ala.

SUBSCRIPTION INQUIRIES

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

YOUNG EXECUTIVES ORGANIZATION (YEO) BOARD

Bart Stransky, Board Chairman RaceTrac Petroleum Inc. • Atlanta Garet Bishop, Chief Financial Officer BFS Cos. • Morgantown, W.Va. Caroline Filchak, Director, Wholesale Ops Clipper Petroleum • Flowery Branch, Ga. Kalen Frese, Food Service Director Warrenton Oil Inc. • Warrenton, Mo. Alex Garoutte, Director of Marketing The Kent Cos. Inc. • Midland, Texas Sharif Jamal, Corporate Training Manager Chestnut Petroleum Inc. • New Paltz, N.Y. Lindsay Lyden, Vice President, Development Truenorth Energy • Brecksville, Ohio Jeremie Myhren, Vice President, IT Road Ranger • Rockford, Ill.

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

Convenience Store Decisions (ISSN 1054-7797) is published monthly by WTWH Media, LLC., 1111 Superior Ave., Suite 2600, Cleveland, OH 44114, for petroleum company and convenience store operators, owners, managers. Qualified U.S. subscribers receive Convenience Store Decisions at no charge. For others, the cost is $80 a year in the U.S. and Possessions, $95 in Canada, and $150 in all other countries. Single copies are available at $9 each in the U.S. and Possessions, $10 each in Canada and $13 in all other countries. Periodicals postage paid at Cleveland, OH, and additional mailing offices. POSTMASTER: Send address changes to Convenience Store Decisions, 1111 Superior Avenue, 26th Floor, Cleveland, OH 44114. GST #R126431964, Canadian Publication Sales Agreement No: #40026880. CONVENIENCE STORE DECISIONS does not endorse any products, programs or services of advertisers or editorial contributors. Copyright© 2019 by WTWH Media, LLC. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, or by recording, or by any information storage or retrieval system, without written permission from the publisher. Circulation audited by Business Publications Audit of Circulation, Inc.

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EDITOR’S

Memo

YEO Preparing Leaders

for Real-World Challenges

ANY YEARS AGO, WHEN THE National Advisory Group (NAG) was preparing to relaunch the Young Executives Organization (YEO), I reached out to John MacDougall, the venerable founder of Nice N Easy Grocery Shoppes in New York, and asked him for advice. John was an excellent source for NAG because he believed in the association and had a keen way of cutting right to the heart of the issue. “Do you see a need for this and can you provide members a reason to get involved?” he asked. “If you can’t, then don’t bother because everyone is busy and you will just be wasting their time. But if you can provide value, resources and give members an opportunity to learn and grow, then everyone wins and we will support it.” YEO followed his lead and John was true to his word. He allowed Jared Sturtevant, Nice N Easy’s director of marketing, to join YEO and become board chairman. Peter Tamburro, another Nice N Easy executive, went on to become the NAG board chairman and remains a current board member. I’d like to think John would be happy with the work we are doing.

Developing a solid foundation for “young executives is a cornerstone of NAG and it is YEO’s core mission. ” The YEO mission marches forward in May with our 6th annual conference, which will be held at McLane’s stateof-the-art distribution center in Springfield, Mo. The agenda for this conference is heavily focused on artificial intelligence, robotics, data analysis and how technology is changing retail. Following up on the successful roundtables we’ve had at Family Express, RaceTrac Petroleum, Maverik and Cumberland Farms, I’m sure our members will have a wonderful experience that will help them grow personally and professionally. In addition to a world-class educational agenda, attendees at the YEO Conference will get a firsthand look at McLane’s Ozark distribution center, which features cutting-edge robotics and artificial intelligence to bring products to market. The second day will feature a tour of convenience stores in the Springfield market. For the third consecutive year, YEO has partnered

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

with Habitat for Humanity for a preconference team-building project that will allow members to work on the construction of a new home in Springfield. I can’t think of a better way for the convenience store industry’s next generation of leadership to bond and network than joining together in the service of others for such an important cause. A Home for Emerging Leaders Developing a solid foundation for young executives is a cornerstone of NAG and it is YEO’s core mission. YEO membership provides the ideal opportunity to become actively involved in developing real-time solutions for convenience retailers. By participating, YEO members are afforded networking opportunities with prominent and accomplished industry leaders. The familial nature of the c-store industry and the countless relationships that have been formed are the backbone of the industry, but it’s our next-generation leaders that will ensure that convenience stores continue to thrive, and it is time to recognize just how important they are to the future of the convenience store and petroleum industry. Successfulcompanies have understood the importance of investing in the development of next generation business leaders for quite some time, Greg Ehrlich, president of FriendShip Food Stores in Ohio, told me recently. “Now, more than ever, with rapid changes in globalization, technology and communication, developing these future leaders is directly correlated to long-term success. What worked just 10 years ago, is no longer effective in engaging and inspiring future leaders,” Ehrlich said. “The 20-35-year-olds today look for work that has meaning, and it’s up to today’s leaders to codify and communicate the purpose and meaning of their work. Those able to cross this chasm will enjoy both short-and longterm engagement and success.” YEO shares these beliefs and has created a foundation to inspire next-generation leaders. Register for the 2019 YEO Conference at www.nagconvenience.com. We look forward to seeing you in Springfield.

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FRONTEND

Profile

Farm2Counter Champions Local Fare

Celebrity Chef Austin Merath at Veggies Please in Fairgrove, Mo., which does hydroponic gardening, with Farmer David Bauman from Possum Creek Produce.

Photo courtesty of Camera Time

In Springfield, Mo., Farm2Counter is offering customers fresh, local and healthier food and product options, and even teaching them how to cook. By Erin Del Conte, Senior Editor

ARM2COUNTER IS CONNECTING LOCAL FARMERS to customers’ kitchen counters as it brings local, fresh foods to shoppers in a food desert, teaches new recipes and wows with a selection of organic options and local craft beer. In an era where most convenience retailers are trying to decipher how to bring local food and beverage options to customers, this Springfield, Mo.-based c-store retailer on Dec. 27, 2018 celebrated its one-year anniversary. Owner Paul Allen and his wife Ashley Allen, the store’s chief financial officer, would like to expand the concept, seeing how Farm2Counter is already filling a unique niche.

FRESH & LOCAL Allen previously sailed the globe as a private yacht chef and his experiences inspire his outside-the-box cstore concept, housed in a 2,400-square-foot store. “When I was off the coast of Naples, Italy, I would get porcini mushrooms that only grow fresh there. Here in Missouri we get some of the best tomatoes,” Allen said. Allen said it’s easy to tell the difference between a meal made from fresh, local foods, and any other type of meal—even organic. When off the yacht, Allen would often spend the entire day shopping—visiting multiple locations from an Amish village for produce to a cattle farm for beef. The experience gave him the idea to create a location that could connect local farmers with customers eager to purchase convenient fresh, local foods. Farm2Counter looks to offer everything a c-store provides but with a better option, such as healthy or organic alternatives. It doesn’t offer fuel, but it boasts the only organic soda fountain and the only organic slushes in the state of Missouri. The beer cooler provides only craft beer from small Missouri breweries, and features an impressive 120 local beer options.

But, perhaps its biggest calling card is the weekly meal-kits compiled in the store, featuring fresh produce and goods from local farmers, complete with recipes. About 80% of the ingredients are from the local area with a few global products—like truffle oil—mixed in. When it comes to produce, Farm2Counter offers locally-sourced first, organic second. Currently, in the winter season, Farm2Counter includes items from an array of local farmers including tomatoes, kale, spring onions, and herbs including rosemary and thyme. Customers can also find fresh fruit and avocados that are certified organic. One local farmer with whom Allen partners uses hydroponics—a way of growing plants in a water-based, nutrient-rich solution rather than soil. “He’s going six kinds of spicy peppers, including ghost peppers, Habaneros and chili peppers,” Allen said. The farmer provides Farm2Counter with everything from Boston Bibb lettuce to broccoli—right in the middle of winter. “That’s unheard of for this area, especially in a convenience store.” PACK IN THE BOX While customers can select their own produce, Farm2Counter makes it convenient by also offering three

Farm2Counter aims to provide the same fare as a normal c-store, but with healthier, higher-quality options and local food.

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FRONTEND

Profile

differently-sized meal-kit options for $49, $99 and $149. All three meal-kits are intended for use over an entire week. The smallest includes produce for a week. The middle-sized box includes bread, cheese,

more produce and canned items. The largest adds multiple meats, cheeses, and additional fun items, such as a locally-sourced Bloody Mary Mix. While Farm2Counter delivers to more than 13 cities, local customers

can also pick up their boxes at the store. Boxes are delivered every Friday, and customers can opt for weekly, every-other-week or monthly options. In addition to local produce, the boxes include local eggs and dairy, such as goat cheeses, and milk with the cream on it. Local canned goods and spices are also part of the package. Most recently, the box included the fixings for crockpot cassoulet. “It’s a French recipe that includes beans and meats. A perfect cassoulet recipe takes about six to eight hours. Well, we did a crockpot cassoulet, so you just take all the ingredients, put them in a crockpot, turn it on and come back after your day of work, and it’s ready for you,” Allen said. “Our customer is someone that enjoys cooking. They have some kind of passion for it.” Given the target customer, the box is designed to help novice cooks make upscale meals easily and successfully, without any additional shopping beyond the food kit. Perhaps what’s most impressive is Farm2Counter operates in a food desert, providing and teaching about healthy food on the northside of Springfield where there’s a dearth of healthy food venues. C-STORE PLUS The commitment to better options— which includes local, organic, upscale and healthy products—throughout the c-store is not without challenges. “We do no high-fructose corn syrup (HFCS) in our entire store, which when we first got this store was a huge challenge. I couldn’t use any regular purveyor that a normal c-store uses; they laughed at me. So we have about 28 purveyors, where most stores have about four,” Allen said. When it comes to the organic slushes, the store also has to think outside the box. “There’s not a quick, easy thing where you can just throw in organic syrup and it’s good.” In addition to craft beer, the store offers top-shelf liquor and wine. It

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WE KNOW YOUR MISSION IS TO PROVIDE FRESH, SAFE PRODUCTS TO YOUR CUSTOMERS. SO IS OURS. As a convenience store operator, nothing is more important than ensuring fresh, safe products for your customers. That’s why we’ve invested over $1 billion in an end-to-end cold chain solution with a multi-step monitoring process that constantly validates product temperatures from the time they arrive at our distribution centers until they’re delivered to our retailers. It’s why we’re a member of IFDA and GS1— organizations dedicated to foodservice supply chain integrity and traceability. And, it’s why all of our facilities undergo independent audits by Mérieux NutriSciences, a leading certification body and auditing provider for the global supply chain. To learn more about our custom cold chain solution, visit mclaneco.com/coldchain

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OUR #1 SELLING SNACK ITEM carries only one brand of cigarettes: American Spirit. As for vape and smokeless, “I think I’m just going to leave that to the specialty shops here in town,” Allen said. Customers can find an array of organic and local snacks and HFCS-free chocolate. Kids even get a free piece of fruit while they shop. Its cheese section rivals the selection at Whole Foods, and its meat selection includes 100% local meat. “We also have a lot in the frozen section that comes from the local area that customers can throw in the oven and go,” Allen said. The store also offers sandwiches, salads and wraps, all made in house using locally-made breads and nitrate-free meats. Sandwich ingredients such as tomatoes and lettuce are placed on the side to ensure the sandwich doesn’t get soggy. The trade-off for fresh, locally-made in-house food is a shorter shelf life—another challenge to overcome.

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COMMUNITY FOCUS New for 2019, Allen constructed a kitchen set in his store where he plans to demonstrate how to cook each week’s recipe on Friday nights. “When customers get the box Friday they can tune into my (YouTube) channel and I will make the box with them,” he said. He’ll even respond to cusFarm2Counter sources fresh, local tomer questions in real produce for its weekly meal-kit boxes. time during the hourlong cooking episode. Allen hopes after a year or two of the meal-kit service, customers grow from average chefs to great chefs, and when friends ask where they got their ingredients they’ll point them to Farm2Counter. Allen is considering ways to make the “food experience” store demonstrations value-added, including potential multi-course meals, where guests can either watch or buy a ticket to enjoy the finished meal in the store. He’ll use folding chairs that can be removed after each event. The kitchen set is on caster wheels, so it can move around. “So they’re going to get a show, they’re going to get dinner, and they might get a little champagne…We’ll make it a total experience,” Allen said. While Allen wants to expand, it would take an investor to grow beyond the current location. If a chain wanted to change their c-stores to the Farm2Counter model, Allen would love to work with them. For now, Allen is focusing on making the Springfield Farm2Counter the best it can be for the local community.

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QuickBites TOP ENGAGEMENT PRIORITIES 53% of retailers indicate that personalization is one of their top customer engagement priorities.

When it comes to choosing healthy food and beverages, healthy eaters are most likely to look for options that: 50

80 70 60

Healthy eaters aged 18-34 are most likely to look for food and beverages based on:

67%

50 40 30

51%

45%

43% vs

39%

overall

10 0

are fresh have low/ are all no sugar natural

uniﬁed commerce platform within three years, up from 81% last year.

28%

experience is one of their new top customer engagement priorities.

94% of retailers have or plan to implement a single

37% overall

49% of retailers indicate that the customer mobile

19% vs 12%

overall

protein product is product content organic is plantbased

61% of retailers have implemented end-to-end

encryption to offer customers greater security of their personal and payment data. Source: BRP 20th Annual POS/Customer Engagement Benchmark Survey.

Source: Mintel, 2019.

Chew On This Businesses Feel Optimistic

$4.1 billion: 2018 total retail dollar sales for U.S. chewing gum market. DOLLAR SALES PERCENTAGE: 85% Better-for-you sugar-free gum 15% Regular (sugared) gum Source: Packaged Facts’ “Chewing Gum: U.S. Market Trends and Opportunities.”

84% of c-store retailers said in-store sales increased in 2018. 62% reported fuels gallons sold increased. 85% of retailers are optimistic about their prospects for the first quarter, the highest percentage for the first quarter in the past five years. 62% are optimistic about the economy, the lowest percentage in 11 quarters.

Top concerns cited by retailers for 2019 include:

59% Labor issues 47% Regulations/legislation 41% Economic concerns 39% Competition from other convenience stores 29% Competition from other formats 19% Potential decrease in driving/increase in gas prices

Source: NACS Retailer Sentiment Survey, December 2018.

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INDUSTRY

News

BP Partners with GetUpside App

Rutter’s Selects Video Gaming Operator

BP is teaming with GetUpside to provide real-time, personalized offers to GetUpside app users allowing them to save money on BP and Amoco gasolines with Invigorate. The GetUpside consumer app uses real-time data to understand consumer purchase behaviors and offers personalized, cents-off-per-gallon savings at

Rutter’s is partnering with Marquee by Penn LLC, an affiliate of Penn National Gaming Inc., as its Terminal Operator for Video Gaming Terminals (VGTs) in Pennsylvania. Twenty Rutter’s establishments in the Commonwealth are expected to initially qualify to host VGTs. Under the gaming expansion law signed by Pennsylvania Governor Tom Wolf in 2017, establishments that meet certain criteria are eligible to host up to five VGTs inside their stores. VGTs are similar to slot machines, and the law sets maximum bets at $5 with a maximum payout of $1,000.

participating BP and Amoco stations across the U.S. BP and GetUpside have agreed on a unique approach that gives BP and Amoco- branded marketers the first right of refusal to join the GetUpside platform. With this new partnership with BP, GetUpside expects to double its growth in the gas station category. The program is set to launch this spring.

Wawa Kicks Off Hiring Campaign in Florida Wawa Inc. is launching a hiring campaign with the goal of hiring up to 1,000 new associates across Florida, with all of Wawa’s 160 stores in Florida looking to add new talent. The hiring campaign will span the first quarter of 2019, focusing on customer-service positions. It is part of Wawa’s overall commitment to provide job opportunities for community members in the areas Wawa serves in the Sunshine State.

Wilbur Curtis Bought by Groupe SEB Groupe SEB has acquired Wilbur Curtis, the second largest American manufacturer of professional coffee equipment. The transaction is subject to customary regulatory clearances and is expected to be finalized in February 2019. Founded in 1941, Wilbur Curtis manufactures and markets equipment for the preparation of hot and cold beverages, specializing mainly in filter coffee and cappuccino machines. “Following the acquisition of WMF in 2016, Groupe SEB confirms its determination to pursue expansion in the professional coffee industry, which offers great development opportunities worldwide,” said Thierry de La Tour d’Artaise, chairman and CEO of Groupe SEB. “As a special-

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ist in filter coffee machines in the U.S., Wilbur Curtis represents for the Group—that is already present in this market with Schaerer and WMF full-automatic espresso machines—a very valuable strategic complement to its product offering and customer portfolio.” As a result of the acquisition, de La Tour d’Artaise explained Groupe SEB now becomes one of the leaders in the professional coffee business, in the U.S.

Parker’s Gains New Region Manager Parker’s Convenience Stores has hired Jeremy Kanagy as the company’s new region manager, leading the operations of 54 stores throughout southeast Georgia and coastal South Carolina. The industry veteran most recently served for more than a decade as a region manager for the South Atlantic Division of retail giant Circle K. In his new role at Parker’s Kanagy’s responsibilities include overseeing retail operations and supporting the company’s district managers through professional mentoring in areas ranging from strong leadership development to exceptional customer service. “Jeremy is a driven, experienced leader who is eager to contribute to the growth of our culture of excellence at Parker’s,” said Parker’s CEO Greg Parker. “We’re thrilled Jeremy has joined our team and have every confidence that he will help us set the bar even higher for our customers in the future.”

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CONVENIENCE STORE SOLUTIONS

Safety is a Business Virtue Concerns over safety risks are a natural part of the convenience store industry. Implementing common-sense solutions can go far in securing your operation. By Jim Callahan

HERE ARE FEW WORDS THAT go together as well as safety and security. Those concepts make people feel good when they are at work, and uneasy when they are compromised. It is risks to safety within a store environment that must be guarded against: emergency situations, negligent behaviors and robberies are threats a convenience store operator hopes never creeps up, but must be prepared to stem to protect people and property. In the November 2018 issue of Convenience Store Decisions, I touched upon a few points regarding theft and suggested prevention measures. This month, store safety is the topic. Safety is a very broad subject indeed, but broken down, with a clear focus in mind, it’s an issue that can be managed properly—with the right strategies in place. RESOURCES AVAILABLE Luckily, there are many resources to take advantage of to bolster your safety programs. Some safety policies and processes you might want to consider can include these: • Make sure that you have a thorough training program for all your employees. If you currently don’t have training videos, put it near the top of your to-do list. If you don’t have training videos or related materials, you can contact a representative from the National Association of Convenience Stores (NACS) or a vendor and make the right investment. • Today’s security systems are light-years ahead of anything that existed just a few years ago and are indispensable in recording events. If you are still using outdated technology, run—don’t walk—to your supplier. The newer digital systems are truly worth their weight in gold. The bottom line is you can’t hope to survive and be competitive in 2019 using 1990’s technology. • Arrange to have your local law enforcement agencies come in and review your safety and security procedures and talk with your people. Safety and security needs to be an ongoing discussion with a constant review process. Standard operating procedures are needed so employees know what to do in case of an emergency, whether it’s a ﬁre, a storm threat or some other situation. Staff

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Jim Callahan has more than 40 years of experience as a convenience store and petroleum marketer. His Convenience Store Solutions blog appears regularly on CStoreDecisions.com. He can be reached at (678)485-4773 or via email at jfcallahan1160@ gmail.com.

members must have access to emergency numbers and should be trained on how to react when they need to react. • If you are running your store or travel center 24 hours per day, give serious consideration to bolstering your security measures during slow periods. In my opinion, the most critical times are usually at the end the dead of night or in the early morning hours when it’s the darkest and quietest. It is also a criminal’s favorite time because he has less fear of being seen, it’s easier to get away undetected and harder for witnesses to accurately describe the culprit or a getaway vehicle. In those hours, customers and your employees also present an easier target as they leave a well-lit store environment of business and venture toward a dark parking lot or begin the walk to a bus stop because they can’t see what lurks in the shadows. People looking to rob a store also prefer these slower times because there are less customers to possibly interfere with their criminal acts. • In the scenarios outlined above, a c-store operator open around the clock needs to be diligent about protecting people and property. There are simple solutions that don’t cost a lot, but can make a big impact. Ensure that you have adequate exterior lighting, set on timers that come on at a certain time. Also, make sure that parking lots are clear of potential obstacles where would-be criminals can hide. Even if they aren’t always available, you increase your safety odds by availing yourselves of local authorities. One way is to ask them to attend a local community event at your location. Lastly, don’t forget the free coffee angle to boost police presence. Always remember to “walk a mile” in your employees’ shoes and work some hours, or just be there for a portion to feel and soak up the atmosphere of the second and third shift. You will gain vital knowledge of what is going on in their lives, and be in a better position to make educated decisions. cstoredecisions.com

1/24/19 4:13 PM

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1/19/19 3:02 PM

FOODSERVICE FRONTRUNNER

Mahoney Inspires MFA’s Push for Excellence As the Food Services Development Manager for Break Time Convenience Stores, Mahoney’s clear and concise training skills give each store she touches a competitive edge. By John Lofstock, Editor

tephanie Mahoney brings a wealth of food and beverage experience to the leadership team at Break Time Convenience Stores, a division of Columbia, Mo.-based MFA Oil. With more than 25 years in the foodservice and hospitality industries, Mahoney’s background spans from managing quick-service restaurants (QSR)’s and large grocery retail foodservice programs to directing sales and catering revenues for Hilton. Mahoney joined Break Time in 2015, with responsibility for developing, implementing and training all food programs, commissary operations and food safety initiatives. The company operates 74 stores in Missouri and Arkansas. Throughout her career, Mahoney has been recognized for creating programs that are effortless to launch, simple to train and efficient to operate, all while maintaining a high level of food-quality excellence. She brought her wealth of knowledge to a growing convenience store chain eager to continue developing its foodservice program, and that’s why Convenience Store Decisions is proud to name Mahoney a 2019 Foodservice Frontrunner. “At Break Time, we believe it only takes a moment to make your day better,” Mahoney said. “Our foodservice programs are a very important piece to creating those memorable moments, which keep our customers coming back time and time again. Consumer eating habits are ever-changing. We have focused our food programs to deliver unique, quick and delicious offerings making our stores a destination for foodservice.” Busy lifestyles often don’t allow time for meals cooked at home, so offering consumers a variety of fresh and affordable food options is critical for success. With this in mind, Mahoney has helped perfect fresh food options. The company’s proprietary programs include: • Breakfast. This program was designed to provide customers with a hardy value, using freshly-cooked eggs, thick cut bacon or sausage, served on a buttermilk biscuit or Texas Toast. Fresh-baked cinnamon rolls and biscuits and sausage gravy round out the breakfast offering. “By making this leap into the fresh sandwich area we have increased daily breakfast sandwich units from 40 per day company-wide to more than 1,600 per day,” she said. 22 Convenience Store Decisions February 2018

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Stephanie Mahoney Food Services Development Manager MFA Oil Co.

• Smokestack Bar.B.Q. This program features slowsmoked meats, such as pulled pork, ribs and brisket, paired deliciously with classic sides dishes such as smoked baked beans, potato salad and unique offerings like cheesy corn and fresh-baked cobblers. Menus were built around sandwiches, combo meals, plates and even large family meals to take home to help build those elusive dinner daypart sales. “The simplicity and versatility of this program allows our larger locations to offer a fast-casual model,” Mahoney said. “For stores with smaller footprints, this program is able to be condensed to an ‘express’ model, offering grab-and-go sandwiches and side dishes from countertop merchandisers.” • Dashboard Diner. This program includes a wide variety of freshly-made sandwiches and car cup snacks, all of which are prepared in in the company’s commissary kitchen in Missouri. • Fresh Doughnuts. In several Break Time stores, customers will find associates baking and decorating fresh doughnuts and apple fritters. “Associates love the creativity allowed with this program, and we often find doughnuts adorned with local school colors or holiday themes,” Mahoney said. “Offering the specialty-topped doughnuts allows them to not only be enjoyed in the morning, but also as an afternoon sweet indulgence.” Break Time’s national partnerships include Hunt Brothers Pizza, which is available in 25 locations, and Krispy Krunchy Chicken in five locations. For 2019, the chain has a number of building and remodeling projects planned that will help grow the foodservice offering. Additional marketing efforts will center on creating new menu items and multiple limited-time offers (LTO). “We are also exploring delivery opportunities, and continue to focus energies on growing our MyTime loyalty program,” Mahoney said. Mahoney’s commitment is evident in her passion to provide the ultimate customer experience. “We have worked diligently to create a culture focused on foodservice, and understand you must invest time and resources to build these programs,” she said.

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1/19/19 10:57 AM

FOODSERVICE FRONTRUNNER

GetGo’s Cox

Committed to Convenience Jon Cox is excited about the business growth GetGo has experienced with its fresh food offerings. Jon Cox Senior Director of Food and Beverage GetGo

By David Bennett, Senior Editor

on Cox began his food journey working in a grocery shatters all of those misconceptions. With an overarching commitment to taking the cons out store through high school and college. His varied supermarket experiences brought him to Giant Eagle of convenience, GetGo strives to be the place where cusInc. five years ago, where he’s spent the past 18 months tomers can have it all. It’s obvious after one taking one look interrupting the convenience store space by leading all at their expansive, customizable menu. Originally known food and beverage efforts for the company’s GetGo chain. as a place to get a great sandwich, throughout the past “Coming up through the supermarket business provided 18 months, Cox and the GetGo team have made serious me with an appreciation for the need for quality and fresh- strides in ensuring that the menu has something for everyness in everything that you do,” said Cox, the senior director one regardless of dietary restriction or preference. In addition to exciting and seasonally relevant “Limited of food and beverage for GetGo. “My hope is to apply those principles to the amazing fresh food growth being experi- Time Offer” subs that deliver unique flavor profiles like the Captain, the Pilgrim and the General, customers can enced by GetGo and other convenience store operators.” So far, 2019 is off to a unique start for Cox and Pitts- find everything from salads to burgers and antibiotic-free burgh-based GetGo, as the 200-store convenience chain chicken options. Continually refreshing the made-fresh-tois now joining the GetGo and Ricker’s brands as the com- order menu and grab-and-go offerings keeps customers engaged and coming back for more. pany recently completed its acquisition of Ricker Oil Co. GetGo’s unparalleled commitment to fresh, delicious For Cox, the new endeavor means one thing—a chance to merge the better of these two great brands to deliver food was solidified by the company’s acquisition of Rickan even better fresh food experience for more consumers. er’s in late 2018, making GetGo the No. 2 player in the With a penchant for leadership and motivation to blaze Indiana market. With strategic locations, passionate team new trials, Convenience Store Decisions is happy to in- members, a strong customer base and well-executed menu items, there is no doubt that the Ricker’s integraclude Cox as a 2019 Foodservice Frontrunner. tion will serve to benefit GetGo customers across the RECIPE FOR SUCCESS banner’s footprint. As the GetGo menu continues to evolve, customers Cox is excited about the growth the GetGo business has experienced with its fresh food offerings, attributing it can expect to find some new item categories as GetGo and Ricker’s harmonize offerings—think burritos and queto two main drivers: •Innovation: Through developments like self-checkout, sadillas to start. a mobile application that enables GetGo mobile ordering, and an extremely rewarding fuelperks! loyalty program, WHAT’S TO COME It’s pedal to the metal for GetGo, and looking five years GetGo utilizes technology to make the customer experiforward, that’s not going to change. Cox plans to continence as frictionless as possible. •Differentiation: Operating within an intensely competi- ue to focus on menu innovation to stand out as the hightive landscape, GetGo aspires to be the food quality leader in quality player in the space. As he homes in on what upits operating markets. Cox and the banner’s dedicated prod- and-coming generations expect, it becomes increasingly uct development chef work tirelessly to bring customer pref- important that GetGo is able to compete in the digital and erences and food trends together to differentiate the menu in delivery space, while still being recognized as a destination for made-fresh-to-order food and grocery offerings. a way that’s both unique and delicious. As the convenience space evolves, Cox suggested that BELIEVABLY BETTER the chain may leverage the resources of its parent comThe traditional convenience store stereotype is not one pany, regional grocer Giant Eagle, to explore an increased of a speedy in-store shopping experience, or of time-saving presence in ready-to-eat and ready-to-cook meal solutions mobile ordering technology let alone of customizable, made- that could establish GetGo as a one-stop-shop for breakfresh-to-order meal solutions. The GetGo concept proudly fast, lunch and dinner. 24 Convenience Store Decisions February 2019

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2/5/19 12:48 PM

Cover Story

Byrne Dairy

Cream of the

Crop

ark Byrne, CEO and president of Sonbyrne Sales Inc., watched a customer move to the register to purchase three containers of milk. Sonbyrne is the retail arm of Byrne Dairy, a fourth-generation family business based in Syracuse, N.Y. Area residents are probably more familiar with its convenience brand: Byrne Dairy Stores. This day, the customer was shopping at one of the company’s new prototypes—a 4,400-square-foot store that opened July 2018 in the town of Geddes, near the western border of Syracuse and a short distance from the Great New York State Fairgrounds. Shifting his gaze to store employees who were busy at the store’s deli counter, Byrne explained the woman represents a typical customer of the convenience chain. “We’re a destination,” Byrne said. “Some people might drive 10 miles to get our ice cream or our milk products. That’s our biggest advantage: our dairy products. A lot of the schools have our milk, so kids grow up on it. Not to mention, our stores have been around for more than 50 years.” 26 Convenience Store Decisions February 2019

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Whether you are coming off a highway in greater Syracuse, or visiting one of the smaller communities located around the Finger Lakes region, most people can direct you to one of the company’s 59 store locations—many of the newer stores are topped off by striking green roofs, making them appear like farm buildings. The new stores—the interiors and floor plans are often laid out by the CEO himself—reflect the proud local industry that thrives here. According to the Greater Rochester Chamber of Commerce, agriculture is a crown jewel for the Finger Lakes regional economy in particular. There are nearly 1.5 million acres of farmland in the region, where farmers produce approximately a quarter of New York’s total agricultural output. Moreover, the stores amplify the partnership that Byrne Dairy enjoys with area farmers. Some of the biggest farms in the region supply milk to the company’s expansive dairy operation. In turn, farm workers frequent Byrne Dairy Store locations to fill up on the various flavors of ice cream made locally, or the meaty sandwiches that are constructed in cstoredecisions.com

1/24/19 4:47 PM

Byrne Hollow Farm is part of the company’s expansive dairy operation. Founded in 1933 by Matthew Byrne, the dairy business eventually fostered the opportunity for the family business to launch a successful convenience chain.

one if its growing number of delis, or just to pick up a carton of eggs. Byrne agrees there’s a happy synergy at work. Perhaps more importantly, this same synergy has made the family business a profitable enterprise. As the chain develops a more robust foodservice model, growth is in the cards. It appears to be a winning hand. As more c-stores are trying to attract customers to their foodservice and category offerings with buzzwords such as fresh-to-table, eco-friendly and locally-sourced, these same concepts are natural commodities for Byrne Dairy Stores, generating a loyal customer base over the decades. The result? “Our foodservice percent of sales is constantly going up,” Byrne said. “We plan on building 10 stores in the next 12 months.”

retail customers in 35 states. Expansion has dictated wholesale changes in the last 86 years, including: • The first offering of Byrne’s products in a convenience setting happened when the company launched its first convenience store in Central Square, N.Y. in 1954. • Byrne Dairy in 1977 underwent a major expansion of its product line by developing its own line of quality ice creams. This addition would expand the business dramatically—both for the dairy business and on the convenience side.

DAIRY BEGINNINGS Byrne Dairy is a fourth-generation, family-owned company that has been operating since 1933, when it was founded by Matthew Byrne. With a focus on homegrown quality, the plant started out bottling and delivering milk to New York State families by horse-drawn wagons. The company is run jointly by Mark Byrne, who oversees the convenience segment, and his brother, Carl Byrne, CEO and president of Byrne Dairy and Byrne Hollow Farm. The company provides dairy products to approximately 9,000 cstoredecisions.com

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The family business is a tight knit group. Mark Byrne, president and CEO in the black jacket, stands with nephew Peter Elliott (left). On the right is his wife, Karen Byrne, and Steve Briggs, a general manager and Mark’s son-in-law with his daughter and 5th generation member, Sophie Briggs.

February 2019 Convenience Store Decisions 27

1/21/19 8:48 PM

Cover Story

Byrne Dairy

Over the last few years, the convenience chain has replaced older, legacy sites with stores with newer, expanded models. As a result, the chain’s business has grown dramatically. Typically, after a new model store has been operating for a while, Byrne Dairy has quadrupled its inside sales compared to the former c-store operation.

• Just 11 years later, in 1988, the company launched an DOING DELI extensive expansion and modernization to meet growing Nearly every full-service Byrne Dairy Store location has a customer demand. The expansion ultimately increased the window where customers can walk up in the spring, summer company’s milk production capabilities by 25%, enabling or fall to purchase a hand-dipped cone or another ice cream Byrne to manufacture its own plastic bottles. treat. Considering the company’s organic roots, this seems • Byrne Dairy in 2009 invested $28 million to expand a natural complement to its operation. Another aspect that its Ultra Dairy plant production as well as its technological required more trial and error has been its expanding foodcapabilities. The expansion included commissioning a new service program. Sidle Precis PET single-serve line for milks and creams with To bring more light on its food offerings, Byrne Dairy crea 140-day shelf code. ated its own deli concept. Today, 44 store locations have • Just recently, further investment and expansion been reconfigured to include its deli, offering fresh sandresulted in the construction of a 75,000-square-foot plan wiches, salads, pizza, wings, hamburgers and other items. in the town of Cortlandville. This facility is dedicated priAll the meats are locally sourced and Byrne holds supplimarily to the manufacture of Byrne ers to the highest standards. Hollow Farm yogurt and to promot“We buy the best quality meats you ing agri-tourism. can buy and we freshly slice them in the • Now, with several Byrne famstore daily, so we don’t buy them preily members filling vital roles at the packaged or pre-cut, which is a much dairy complex, the company recently better product,” Byrne said. “One of broke ground on a $24 million expanour typical deli sandwiches have eight sion of its Ultra Dairy plant. ounces of meat. We buy the best. However, its basic blueprint We’re not going to be the cheapest remains with local suppliers. sandwich, but we’re going to be the “Our Byrne Dairy milk tanker best.” trailers pick up milk from more than The sandwiches are piled high with 100 local, independent family farms, fixings and meats harvested from local many of which have sold exclusively producers. Its deli slogan, “Because It’s to Byrne Dairy for more than 50 Fresh” speaks to customers when they years,” said Carl Byrne. “The relacome inside. tionship is based upon quality dairy While the deli concept has taken a and trust.” foodservice front seat, other offerings Today, Byrne dairy makes its own remain a driving force when it comes Byrne Dairy Stores have worked to develop a Greek yogurt, conventional yogurt, to foodservice sales. Included is baksingular deli strategy, from the meats it sources sour cream, milk, cream products, ery offerings. Shelby’s Donuts is another to the employees the retailer hires. ice cream and even cheesecake. Byrne Dairy creation, with many stores 28 Convenience Store Decisions February 2019

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1/21/19 6:08 PM

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1/19/19 10:51 AM

Cover Story

Byrne Dairy

now carrying fresh donuts and cookies made in its Syracuse bakery. Mark Byrne named the bakery and its line of products after his daughter, Shelby, more than 20 years ago. Ken Cooper, director of foodservice for Byrne Dairy Stores, has been with the company about 12 years. Over that period he and the executive team have ensured that quality is part of the overall operational equation. “Consistency is our top priority,” Cooper said. “Making sure that every employee gives every customer, whether you are in this location in Lafayette or over across in Rochester, the same exact sandwich, the same slice of pizza—even down to the coffee—so everyone is getting the exact same product.” To ensure that level of consistency, Byrne Dairy Stores employs retail district managers and foodservice district managers who work in each store to train store managers and employees. Every manager—and even maintenance workers must be ServSafe certified. ServSafe is a food and beverage safety training and certificate program administered by the National Restaurant Association. To further their training methodology, Byrne and his executive team devised the “Mighty Fine Challenge,” a six-month contest to determine the top managers in terms of foodservice and store excellence. It recently honored and awarded several store and foodservice managers with prizes for their participation in the event meant to grow sales, increase gross profits and control labor hours. Damon Fitzgerald joined Byrne Dairy 10 years as an assistant manager. Now a foodservice manager, he was recently named foodservice manager of the challenge contest. Evaluators looked at his store, which was judged on things such as store cleanliness and other operational areas. “The biggest challenge in making sure everyone is doing what they should be doing,” Fitzgerald said. Lisa Ward, general manager, was named the top store

Byrne Dairy has become adept at assessing the needs of local communities and then planning and designing their stores to best fit those needs. 30 Convenience Store Decisions February 2019

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Dairy products are a popular staple at Byrne Dairy Stores. Besides various varieties of milk, the company makes and sells yogurt, cream products and a host of ice cream offerings.

manager after all the scores were tallied. As the top managers, Fitzgerald and Ward received new Jeeps.

SPACE RACE As sales have grown and the c-store chain is expanding; plans to grow are ongoing. Byrne Dairy Stores doesn’t typically buy older locations because of the unique store footprints the retailer often requires to double the cooler and freezer spaces to accommodate its wide array of dairy and ice cream products. A prominent example is the store at 5829 Route 20, Lafayette, which at 7,000 square feet might be considered a large neighborhood market. Featuring an expansive kitchen, fresh produce, eggs, and of course, dairy products, the store space is larger than a typical Byrne Dairy Store. There was a grocery store in this town, but it closed, Byrne said. “When we built this, we decided to build it a little bigger.” Legacy sites are being updated or replaced with refurbished stores, which offer some version of its deli space. “This past year we closed five stores, but we don’t close very many—that we take out of the market,” Byrne said. “We usually replace a store with a new model, so our business has grown, but not so much our store count. In the stores we replace with a newer model we typically quadruple our inside sales.” The company is constantly putting money back into its store operations. Not only is the retailer upgrading its stores, it’s tweaking customer-service programs including a revised company app and loyalty program. One program that’s popular is the Byrne Dairy Debit Pay, which works like a debit card. Whether you’re in the store or at the pump, the card is securely linked to a customer’s checking account and payments are automatically deducted with no fees. CSD

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1/22/19 2:25 PM

Trend Report

Foodservice

2019

Foodservice

Trends

Report From delivery and breakfast all day to sustainable, plant-based and healthy, eating patterns are evolving and c-stores are adapting to own the marketplace. By: Erin Del Conte, Senior Editor

019 has arrived and the drive competition by benefiting the peotoward a “convenience econ- ple behind food systems as well as the omy” is in full swing, impacting environment. As foodservice estaball areas of business, especially lishments struggle to retain talent amid high labor costs and shortages, foodservice. Foodservice customers want higher- operators are expected to focus on quality items faster and customized employee well-being and giving back on their terms. They’re also seeking to the communities they serve. Meanwhile food operators are foods that are healthy, high-protein, plant-based and easy to eat on the go. leveraging technology to own ‘conHowever, that’s just a part of the picture. venience.’ Customers increasingly According to market intelligence employ mobile apps and/or touchagency Mintel, this year the foodser- screen kiosks to order food on site and vice landscape is set to experience big opt for delivery more often. In fact, changes, with customers demanding food delivery trends are impacting increased awareness and responsibility restaurant traffic numbers overall. At from foodservice operators on social the end of last year, research firm Q1 and environmental issues, as well as Consulting LLC saw sales increased in innovation in technology-enabled cus- traditional restaurants, but traffic fell. Food delivery caused the difference, tomer service. Food customers want to align explained Julie Heseman, principal themselves with brands that fit their with Q1 Consulting. Heseman expects more upscale lifestyle and values, Mintel indicated. They want to support companies that c-stores with robust foodservice consider ‘the greater good’ above the programs in urban areas will begin con32 Convenience Store Decisions February 2019

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sidering delivery in 2019, if they’re not already offering it. “Those more forward-thinking foodservice convenience stores are definitely going to be looking into partnering with the Grubhubs and Uber Eats of the world,” Heseman said. Regardless of how they order, customers are seeking high-quality eats with “either higher-end ingredients or unique flavor profiles,” Heseman said. C-stores are responding by increasingly providing more traditional restaurant sections, often with made-to-order foods, in addition to cold-case grab and go. Breakfast, healthy foods and grab and go continue to grow as trends c-stores are in prime position to capitalize on in the new year. Meanwhile packaging, food safety and technology are areas cstoredecisions.com

1/21/19 8:49 PM

Protein bowls are a big trend in 2019, and the new Alltown Fresh convenience store, which debuted in January in Plymouth, Mass., includes them among its vast fresh food menu. One of the many bowl options at Alltown is the ‘Teriyaki Tease,’ which offers steak strips, roasted broccoli, sautéed mushrooms, shredded carrots and three-grain brown rice in a teriyaki sauce. Alltown selected brown rice for its better-for-you proﬁle.

where savvy c-stores are upping their game to stand out in a crowded marketplace with an overabundance of options.

BREAKFAST BLUR Daypart rules have flown out the window in 2019. Customers want breakfast all day, and they crave dinner for breakfast. Jackie Rodriguez, senior project manager for research ﬁrm Datassential, pointed to “PM flavors in breakfast foods” as one trend expected to exhibit staying power. Examples of PM Breakfast include positioning a burger—a traditional lunch or dinner daypart item—as a breakfast burger by adding an egg; or adding egg, chorizo or maple pork sausage to pizza to create a breakfast pizza. cstoredecisions.com

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“The addition of an egg is a simply adding a butterscotch or caragood factor for success, or at mel sauce to an existing breakfast item, least getting consumers’ atten- such as French toast sticks, can be a tion across dayparts because quick on-trend addition. Rutter’s, which operates 73 locaeverybody is so interested in high protein,” Rodriguez said. tions in Pennsylvania, West Virginia Customers overwhelmingly per- and now Maryland, rolled out a new ceive “high-protein” as healthy. waffl e program at the end of January. An egg provides a quick, easy, The program is on-trend in that it fi ts cost-effective way to add the PM breakfast, dessert-inspired breakfast and daypart blurring trends. protein. “It’s a sweet Southern waffl e, by a Breakfast foods are also appearing across dayparts. “The company owned by legendary football biggest reason why customers player, Herschel Walker,” said Ryan choose breakfast foods later in the Krebs, director of foodservice for the day is because they have a specific York, Pa.-based chain. “We’re incorporating it in all dayparts. It’s kind of a craving for them,” Rodriguez said. Ethnic flavors also continue to entice. collision course in how to incorporate Mexican flavors have become a standard a waffl e in every possible way so it hits breakfast flavor. Foodservice operators breakfast, lunch, dinner and dessert.” are further enticing adventurous palates with complex or less well-known versions of INDUSTRY STANDINGS salsa like Salsa Verde, or more Convenience store customers were asked: obscure Mexican-style cheeses. “Compared to last year, are you using c-stores more, less or the same for the following items?” Middle Eastern fare is growing as a trend, leading to MORE LESS DIFFERENCE new opportunities. Labneh, a 19% 14% +5 Beverage soft cream cheese made from 20% 16% +4 strained yogurt, represents Hot Coffee the next trend forward step 20% 18% +2 Prepared Foods/ after Greek yogurt, Rodriguez Meals said. Labneh is thicker than 18% 19% -1 Packaged Snacks Greek yogurt making it less messy and therefore possible 16% 17% -1 Grocery Food for to include as an ingredient Use At-Home in handheld items. Calling it 15% 18% -3 In-Store Bakery “Middle Eastern-style yogurt” 14% 17% -3 on a menu makes it approachPizza able and intriguing. 9% 20% -11 Roller Grill Dessert-inspired breakfast 19% 12% +6 Overall Usage is another big trend: think red Source: Q1 Consulting LLC, “2018 C-Store Customer Survey” velvet pancakes with cream cheese frosting. For c-stores, February 2019 Convenience Store Decisions 33

1/21/19 6:11 PM

Trend Report

Foodservice

The waffle is available solo with 2019, including plant-based syrup and butter, or as a carrier for foods becoming a major breakfast sandwiches, burgers, and movement. Plant-based alterchicken and club sandwiches, perfectly natives for everything from meeting both PM breakfast and break- burgers to milk to yogurt have fast anytime trends. Rutter’s also offers now achieved mainstream chicken and waffles with a choice of appeal and the trend will syrup so guests can make the dish be “significant” in 2019. sweet or savory. It can also be ordered Gen Z and Millennials are as a dinner basket complete with sides. driving a demand for authentic In addition, those seeking a des- regional fare including regional sert-inspired breakfast can order the cuisines of Africa, South Asia and waffle with chocolate syrup, cinnamon Latin America. CBD-infused products, thought to relieve anxiety and manand sugar or caramel sauce. Rutter’s also captures the PM break- age pain, are trending also. Among Whole Foods’ annual list fast trend with its breakfast pizzas, which debuted two years ago and fea- of top food trends for the new year, is the rise of keto, paleo, grain-free and ture eggs and bacon or sausage. Krebs said breakfast for dinner rep- even “pegan” (paleo and vegan) diets, resents a massive trend with staying which are shifting mindsets around power, which retailers can satisfy with healthy fats, which more customers an item as simple as waffles that can are demanding. If you imagine such trends don’t be used in a myriad of ways. “By cross-utilizing one item (waf- matter at c-store level, keep your eye fles) across all dayparts, plus as a on the new Alltown Fresh that just dessert item, we’ll see a huge suc- opened in Plymouth, Mass. in January. Global Partners’ Alltown operates 74 cess,” Krebs said. COCO Alltown sites in New England. This is the first Alltown Fresh, but LOCAL & HEALTHY The Specialty Food Association’s the chain has plans to grow the (SFA) Trendspotter Panel outlined a concept. The new site features a cus0 set to impact 20 40 60 of healthy 80 100 tomizable menu on-trend number of major trends

WHAT TIME OF DAY? What time of day do you typically purchase prepared food/grab-and-go meal items? Afternoon meal/snack, 2pm - 3:59pm

32% 25%

Lunch, 11am - 1:59pm 14%

Breakfast, 5am - 8:59am Late morning meal/snack, 9am - 10:59am Dinner, 4pm - 7:59pm

12% 9%

Late night meal/snack, 8pm - 11:59pm Overnight Midnight - 4:59am

7% 1%

Source: Source: Q1 Consulting LLC, “2018 C-Store Customer Survey”

34 Convenience Store Decisions February 2019

32-36_Fdsv TREND Report.indd 34

In January, Rutter’s introduced wafﬂes as a meal as well as a carrier for hamburgers and other sandwiches. It can even be paired with sweet sauces. The item meets the PM breakfast, dessert-inspired breakfast and breakfast anytime trends.

items from organic produce, local fare, vegan and vegetarian options, PM breakfast options like a Green Smash avocado toast with an egg; and even Colossal Falafel salad, which fits with the growing Middle Eastern flavor trend—and that’s just to name a few. “We want to make sure our guests feel like they can stop into our convenience market place and get healthy, clean, natural, organic, gluten-free, vegan, vegetarian, locally-sourced food items,” said Eric Slifka, CEO of Global Partners LP. Protein bowls are among the many healthy food options at Alltown Fresh. “Customers want protein bowls and bowls in general...we wanted to allow consumers to order clean, wellthought-out, great-tasting food in a bowl, if they didn’t want (a traditional sandwich),” Slifka said. One of the many bowl options at Alltown is the ‘Teriyaki Tease,’ which offers steak strips, roasted broccoli, sautéed mushrooms, shredded carrots and three-grain brown rice in a teriyaki sauce. Alltown selected brown rice for its better-for-you profile. Datassential confirmed bowls are soaring in the grab-and-go space. “It’s not necessarily something you would eat on the run, but depending cstoredecisions.com

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Trend Report

Foodservice

on the ingredients, it’s going to retain a lot of product integrity on the go,” Rodriguez said. She noted when it comes to bowls as a platform “the sky is the limit” from breakfast bowls to mac-n-cheese. Altoona, Pa.-based Wawa, for example, introduced a hoagie bowl so customers avoiding carbs or gluten could still participate in the hoagie experience. “Adding that sandwich experience without the carrier in bowl form, ensures you don’t miss customers who don’t eat bread, and it allows you to maximize sandwich ingredients already on hand in another platform,” Rodriguez said.

C-STORE PREPARED AND GRAB-AND-GO MEALS THAT TRAVEL WELL Convenience store customers were asked: “For the prepared food/grab-and-go meal items below indicate which items travel in their current packaging:”

Cold Sandwiches Bakery items Hot Sandwiches Roller Grill items Chicken items Wraps French Fries Pizza Mexican Food items

ON THE GO

66% 62%

60%

58% 56%

42%

0 20 While the trend toward small bites is plateauing in restaurants, it’s still Source: Q1 Consulting LLC, “2018 C-Store Customer Survey” alive and well in c-stores where the grab-and-go trend reigns. “Certainly, doughnut holes or mini C-stores without a hot sandwich (cinnamon rolls) have really proven program might consider cold-case popular. Not just for breakfast, but sandwiches that can also be microagain throughout the day. I don’t think waved. Sliders, are also trending for they’re going away,” Rodriguez said. their “poppability” on the go. Customers at Marcy, N.Y.-based The big focus for 2019, she noted, is on handhelds. Empanadas are cur- Clifford Fuel’s 19 Cliff’s Local Market rently on trend—they’re easy to eat on stores are demanding healthier, the go, incorporate global influences on-the-go items—from salads to hardand can be savory or sweet, baked— boiled eggs. “We also have customers on the Keto diet, and they have been considered healthier—or fried. Krebs sees big demand for small buying our deviled eggs and pepbites at Rutter’s across all dayparts. peroni-and-cheese cups,” said Derek Recently the chain added handheld, Thurston, director of foodservice operfried apple pies, which fits the empa- ations for Clifford Fuel. “We also focus nada-style trend while meeting on local products. We have done great with cheese curds, a regional favorite.” dessert-inspired cravings. The chain partners with local dairies Rutter’s hot grab-n-go bags of snackable sides are a big hit with customers. that supply the cheese curds. “We buy 0 5 10 Customers Overall it has about 85 hot-hold options in bulk and bag it ourselves. from mozzarella sticks to chicken ten- love the local angle. Sales of this prodders. “We found that the more diversity uct have been outstanding,” Thurston we had into our hot hold, the more the said. Edible cookie dough cups are also a big grab-and-go hit. sales are driven,” Krebs said. Hot sandwich varieties are king for 2019, especially the croque mon- SAFE, AUTHENTIC, sieur—a baked or fried boiled ham SUSTAINABLE and cheese sandwich—and the Monte All experts agree sustainable packCristo—a fried ham and cheese sand- aging is trending.Customers are wich, according to Datassential. starting to care about what packag36 Convenience Store Decisions February 2019

32-36_Fdsv TREND Report.indd 36

84% 83%

50%

100

ing is made from. Experts expect to see more plant-based packaging and packaging made from ‘upcycled’ ingredients in 2019. “Research is advancing the use of tomato peels, kelp, and mushrooms into sustainable alternatives, coatings and other packaging materials,” according to SFA’s 2019 report. The concept of “food safety” and the danger of food recalls have permeated consumer consciousness. Following December’s Romaine lettuce E. coli outbreak, The U.S. Food and Drug Administration is working on a labeling system for leafy greens that shows harvest date and growing region, Q1’s Heseman said. Retailers can reduce the spread of 15 20 30 35 foodborne illnesses25by implementing programs that ensure employees practice food safety best practices. Meanwhile, a demand for authentic flavors is impacting equipment trends. For example, customers want coal-fired pizzas, and while it’s not accessible to every operator, one could use such an oven as a differentiator, Rodriguez pointed out, even in a convenience store. CSD

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Foodservice

Chicken

Raising

Chicken Sales Whether it’s the product of a full, fried bone-in program, offered as tenders with sauces or featured in sandwiches, salads or as a pizza topping, chicken’s menu-spanning versatility and affinity for countless flavor profiles make it a natural for convenience stores. By Marilyn Odesser-Torpey, Associate Editor

hen it comes to mealtime spicy honey, curry, mole and even proteins, chicken still gets chimichurri. In its monthly SCORES report testhigh marks from c-store customers looking for on ing new menu items and limited time offers (LTOs) from major chains and the-go offerings. According to Datassential’s 2019 c-stores with consumers, Datassential SNAP report, 89% of consumers said found that purchase intent was high they liked or loved chicken, which they for fried chicken (bone-in and tender) enjoy throughout the day from chicken combos with sides with intent to purand waffles or chicken sausage on chase in the upper 90s out of a top breakfast menus to chicken salad and score of 100. Some chicken-based entrees that sandwiches at lunch to chicken parmialso tested well were an apple harvest giana and stuffed chicken at dinner. As of January 2019, chicken fla- chicken salad with dried cranberries, vors that have become familiar to and sliced almonds, bleu cheese crumbles, embraced by consumers in restaurants, ciderhouse dressing and cornbread convenience stores and grocery stores, croutons; warm bacon and spinach included jalapeño pepper, teriyaki, salad with sliced chicken and a chicken salsa, chipotle, parmigiana, buffalo, ciabatta sandwich with Monterey jack bleu cheese, Alfredo, lemon pepper cheese, lettuce, tomatoes and pesto mayonnaise. At convenience stores, and Cajun. Finding favor in chain restaurants buffalo-chicken mac-and-cheese and mainstream grocery stores were at QuickChek scored high, as did piccata, sriracha, smoky and honey the chicken chimichanga at Holiday barbeque, marsala, mandarin, jerk, Stationstores. garlic parmesan, Dijon, bourbon, chili lime, poblano and habanero pep- MENU BUILDING per. And making their appearance in At nine Kwik Trip and Kwik Star trendy restaurants and specialty gro- stores with cafés in W isconsin, cers, popular ﬂavors include tequila, Minnesota and Iowa, chicken is no cranberry, harissa, Korean barbecue, Johnny-come-lately to foodservice. Nashville hot, tikka masala, Thai chili, They have been serving up bone-in

38 Convenience Store Decisions February 2019

38-40_Fdsv_Chicken.indd 38

Fast Facts: » Datassential found that purchase intent was high for fried chicken (bone-in and tender) combos. » Chicken’s afﬁnity for ﬂavors and preparations make it a natural menu builder. » Retailers who sell chicken see incremental sales.

pieces and boneless tenders as combos and meals for more than 20 years, said Paul Servais, the chain’s retail food service director. “Chicken accounts for one-third of our hot grab-and-go sales,” Servais said. “In our café markets, we have a great reputation built on chicken.” On weekends, the stores get a lot of catering jobs with big orders for family parties and other events. Every day, two-piece and three-piece cstoredecisions.com

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Foodservice

Chicken

meals with two sides are particularly popular, especially around lunch time. Traditionally, bone-in pieces have been the big sellers for the stores, but Servais predicts that will change as customers look for more portable options they can easily eat in their cars. Servais attributed the increasing sales of chicken in the stores at least partially to the healthy halo it has, even if it’s fried. It is also relatively inexpensive to purchase compared with red meat proteins. Chicken is also a win for the stores because it encourages incremental sales, Servais noted. “Tenders paired with potato wedges—it’s a no-brainer,” Servais said. While only nine of the total 625 stores operated by Kwik Trip and Kwik Star have the on-site fried chicken program, all of the locations offer a variety of chicken-centric meals and snacks as part of their Hot Spot program: A rotating selection of six hot subs such as chicken tender melt with cheese and bacon, spicy chicken and garlic and herb chicken. Five soup options may include chicken dumpling, chicken tortilla and chili soup with beans and chicken. There are three chicken toppings for specialty pizzas such as Buffalo, carbonara and barbeque. And chicken is featured in a variety of roller grill items such as roller bites, egg roll and empanadas.

SALES DRIVER N o u r i a E n e r g y ’s L i l ’ M a r t , which operates 116 locations in Massachusetts, Maine, New Hampshire,

Photos courtesy of Broaster Co.

40 Convenience Store Decisions February 2019

38-40_Fdsv_Chicken.indd 40

accounts for one-third “Chicken of our hot grab-and-go sales. ” - Paul Servais, retail food service director, Kwik Trip

Rhode Island and Connecticut, offer is prepared and replaced every two the New England regional branded hours. Customers can choose from threeRoadies Chicken in ﬁve of its stores. For these stores, the fresh, fried chicken, six-, nine- or 12-piece tenders or which is marinated and double-bat- bone-in chicken. Customers can build tered on site, is a big category driver their own meals with a variety of sides. for foodservice sales, said Joshua Clark, Most pair their chicken with Jojo potathe company’s category manager, fresh toes at the Roadies stores and French fries in the other stores. foods. “We don’t bundle our chicken into The stores without the on-site fried chicken program use pre-prepared meals because our customers want to chicken for its tenders and fries offer- create their own meals their own way,” ing as well as for a varied selection of Clark said. Sales are growing, particularly durmenu items including chicken wings and nuggets appetizers, barbeque ing the late morning to early evening chicken pizza, wraps ﬁlled with regular “extended lunch,” he said. Sales of its proprietary Cluckers or cranberry walnut chicken salad and Chicken Cordon Bleu, Blazin’ Buffalo chicken program are also increasing, and Chicken Teriyaki classic and oven- especially at lunch time, at Portland, Ind.-based Pak-A-Sak, according to baked hot subs. “In many of our stores, chicken is Linda Cavanaugh, the company’s our No. 2-selling item, right after pep- director of foodservice. The program peroni pizza, which nothing can beat,” has been part of Pak-A-Sak’s foodserClark said. “Tenders are the staple and vice category for at least 10 years. For the program, fresh chicken wings always rank in our top 10.” Among the most popular items strips, legs, livers and gizzards are are fresh-sauced tenders on a stick for marinated, battered and breaded with easy portability and eating on the go. a “western” style of breading that is As many as eight sauces are available flavored with mild spices. Generally, including sweet chili, Buffalo, bar- customers order potatoes wedges that are also marinated, coated and fried, beque and ranch. At the Roadies stores, chicken is to accompany their chicken. “We tried a chicken-strip sandwich available from the full-service counter and from the warmer a while back, but it didn’t take off,” for grab-and-go conve- Cavanaugh said. “Most people just nience. Most of the want strips and dipping sauces.” Cluckers offers a choice of four sales are from the warmer, he sauces—honey mustard, sweet and explained. To sour, ranch and barbeque. Cavanaugh e n s u r e t h a t noted chicken sales continue to grow, the chicken is especially during the lunch daypart. “Chicken is a comfort food that, if always fresh, it is labeled it’s done right and served fresh, always with the time it sells well,” Cavanaugh said. CSD cstoredecisions.com

1/21/19 8:52 PM

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Foodservice

Hot Dispensed

Hot Dispensed Evolves with Times With the abundance of ready-to-drink, cold brew and nitro varieties of coffee and tea trending today, and consumers looking for more varieties and customization, convenience store operators must continually adjust their hot dispensed beverage programs to maintain maximum proﬁtability. By Marilyn Odesser-Torpey, Associate Editor

hile the motivators for beverage consumption remain the same as always—a boost of energy in the morning and a pick-me-up in the afternoon— consumers, especially younger ones, are always looking for new products to satisfy their needs, according to Mark DiDomenico, director, client services for Datassential research firm. For some, that could be switching from hot dispensed beverages to ready-to-drink (RTD) from the cooler. For others it might be a new exotic brew or limited time offer (LTO) creamer to add a different flavor to their coffee. As Millennials and Gen Z consumers take over the primary age demographics, their preferences in food and drink are increasingly driving sales, DiDomenico pointed out. “These younger consumers are looking for beverage options that combine flavor, authenticity, functionality and a sense of adventure,” DiDomenico said. “That could be anything from kombucha to herbal teas.” When it comes to coffee, 100% Colombian has been around for a long time, but now a growing number of

Fast Facts: » Young consumers are looking for new and different beverage options. » Special deals can spike awareness and trial. » Bean-to-cup equipment conveys freshness. 42 Convenience Store Decisions February 2019

42-44_Fdsv_Hot Dispensed.indd 42

retailers are becoming more specific, highlighting different geo-specific regions of counties or even specific farms, he explained. “There’s a mystique about taste and quality that goes along with these coffees similar to wines,” DiDomenico added. At the same time, some things have stayed the same. For example, French vanilla has been the No. 1 favorite coffee flavor, and hazelnut No. 2, for at least 20 to 30 years. And, people like to experiment with flavors through LTOs. DiDomenico said that as a nod to the preferences of younger consumers, operators may want to add some plant-based milks and natural sugars such as turbinado sugar and Stevia to their coffee bars.

SERVING UP PROMOTIONS Special deals on coffee can also increase customer awareness and sales of hot dispensed beverages. At Big 10 Mart, which has 15 locations in Iowa and Illinois, hot dispensed beverage sales were down 14% during the ﬁrst three quarters of 2018 versus 2017, reported Jacque Hager, director of retail operations for the chain. “We attributed this to more competition and a hotter summer,” she explained. To try and combat those declining sales, the company implemented a 99-cent price point on any size coffee on Mondays. As a result, Big 10 Mart saw a 15% increase in hot dispensed beverage sales during the fourth quarter versus the previous year. The promotion also seems to encourage higher hot dispensed sales during the rest of the week and Big Mart intends to continue the offer for the foreseeable future. cstoredecisions.com

1/21/19 12:57 PM

“

These younger consumers are looking for beverage options that combine flavor, authenticity, functionality and a sense of adventure. That could be anything from kombucha to herbal teas.

”

- Mark DiDomenico, director, client services, Datassential

Bundling also works well for Big 10. On a regular basis, the stores offer coffee-and-doughnut, coffee-and-fruit and coffee-and-breakfast-sandwich or burrito specials. At the same time, dispensed iced coffee sales increased 24% in 2018 versus 2017 and the stores saw a 10% lift in RTD cold coffee sold out of the cooler. Hager attributed the higher cooler sales to the addition of Dunkin’ Donuts, McCafé and more Starbucks selections. To continue to capture more cold coffee sales during this trend, the stores will be moving the RTD products away from the milk door and placing them with the energy drinks. The company is also planning to add STōK cold brew coffee shot singles to its offerings. While Hager acknowledged that there may be some loss of hot dispensed customers to the cold beverage category, she is also convinced that the cold beverages are appealing to new customers as well.

BEAN-TO-CUP

technology, the program has been a success. “When customers come in and see fewer pots of brewed coffee, they might automatically think we’re not committed to our coffee program later in the day,” Frese said. “Our staff has to explain that the technology is there to provide a fresh cup any time of day.” For the dominant brewed drip program, the stores start with four or five pots in the morning, then scale back as the day progresses. Cappuccino machines have been reduced from eight heads to six or five, depending on the individual store’s sales. Last year the FastLane hot dispensed areas received a fresh new look and image, Frese said. In some of the stores, the area was given a wood-grain background with tiling. The coffee itself has been given more personality and appeal with creative descriptions. The regular blend, for example, is described as “not too light, not too dark, just good old-fashioned hot coffee.” “The new look advertises our hot dispensed area and overall stores better,” Frese said. From October through March, promotions pair hot dispensed beverages with other products such as granola bars, cookies and fruit at special prices.

Big 10 offers four flavors of hot dispensed coffee— Classic, Premium, Dark Roast and Decaf—along with five flavors of Lipton tea bags. To satisfy customers’ desire to customize their coffee, the bar features eight flavors of International Delight creamers including LTO varieties that are rotated in and out throughout the year. BUNDLING UP To maintain freshness, coffee is replaced on a strict threeAt its 10 Long Island, N.Y. locations, Busy Bee hour schedule. For three of the stores where coffee sales Convenience Stores keeps its Chock Full ‘O Nuts coffee are historically slower, the company is looking at replacing prices low to encourage customers to come in every day, existing equipment with bean-to-cup machines. said general manager Mark Coner. In some of the stores, RTD and dispensed cold coffee beverages haven’t any size coffee (12-, 16- or 20-ounce) costs only 99 cents. had an impact at the 35 FastLane convenience stores in Bundles also add value to the offering. For example, an Missouri, but, said Kalen Frese, food service director, cus- egg sandwich that would cost $2.79 alone goes up to only tomers are looking for “fancier and exotic” varieties and $2.99 when bundled with a cup of coffee. customization of hot dispensed beverages with a variety of “When they come in for their coffee the likelihood is that sweeteners and creamers. they’re going to also purchase other items,” Coner said. “We’re offering more single-origin coffees and changed “We generate a lot of sales from coffee and those sales conthe breakfast coffee we had offered for years with one from tinue to grow from year to year.” Costa Rica,” Frese said. “In 10 of our stores we installed The number of varieties offered varies according to store bean-to-cup units to assure that customers will always get size, but may include, in addition to the regular blend, the a fresh cup of regular or decaf during the afternoon and standard favorites French vanilla and hazelnut. There is usuevening.” ally also a seasonal LTO such as pumpkin spice or cinnamon For the stores that have embraced the bean-to-cup crumb cake. CSD cstoredecisions.com

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February 2019 Convenience Store Decisions 43

1/21/19 12:57 PM

Foodservice

Equipment

Meeting Equipment Needs Meeting the growing demands for a solid foodservice program means having the right equipment in your store. By David Bennett, Senior Editor

ecause foodservice has become a prominent segment of the convenience store industry, such a boon to most bottom lines has also spurred expansion in the foodservice equipment industry. Good food delivered fast is the quickest way to a loyal customer’s heart and wallet. So, any equipment that can speed up production is worth assessing. Dependable brands of high-speed ovens on the market can add a toasty crunch to your sandwiches in less time than it takes a traditional oven. Alto-Shaam Cres Cor, Hatco and Hoshizaki are brands that have become industry standards. Whether a retailer’s foodservice needs include baking, frying or grilling, logic dictates that the better the equipment, the better the food quality. However, ﬁguring out

Fast Facts: » Good food delivered fast is the quickest way to a loyal customer’s heart and wallet. » Some of the key considerations we assess when it comes to foodservice equipment include programming ability and versatility. » Maintenance of any foodservice equipment is another important consideration. 44 Convenience Store Decisions February 2019

44-46_Fdsv_Equipment.indd 44

what works best for a speciﬁc c-store operation requires strategic planning, in addition to considering maintenance and service requirements, food quality, labor efﬁciency and other needs.

PUBLIC TRADE When it comes to food offerings, c-store customers don’t want to trade quality for convenience, nor do they want to sacrifice convenience for quality. Meeting the growing demands for a solid foodservice program means having the right equipment in your kitchen. There are times when upgrades and higher-dollar purchases can improve your food quality, boost your overall efficiency and help you carve out a unique niche in the marketplace. Plus, old cooking equipment can impact your business in more ways than one. In addition to repairs being a financial drain, malfunctioning equipment can bring down food quality and reduce your store’s overall efficiency.

CHICAGO STYLE Launched four years ago, Foxtrot Market currently operates four stores in Chicago. Its business model blends e-commerce, on-demand delivery and a striking brick-andmortar experience to meet consumers’ shopping needs for quick, quality items and foodservice. The last platform is being reﬁned by Brad Alexander, Foxtrot’s executive chef and a veteran of Chicago’s culinary scene. Alexander said the right kitchen equipment makes a world of difference when preparing quality menu choices. “We looked at concepts with similar heat and serve offerings as a reference point, but I primarily used my 15 years cstoredecisions.com

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Foodservice

Equipment

it will meet your needs. Work with a vendor who will provide support regarding menu development for the equipment and offer training during the testing phase.” Of course, new foodservice equipment options aren’t just relegated to behind the counter. For example, modern hot dispensed machines are making it easier for c-stores to brew up new hot beverage options. Teazzers recently introduced its new patent-pending SmartBrew Machine. The new offering is IoT (Internet This oven from Ovention is one example of how manufacturers are of Things)-enabled with capacreating equipment solutions that are transforming foodservice in bilities to communicate the channel. information about each brewing event to a cloud database. The machine is equipped with of restaurant experience to choose equipment I was famil- an eight-inch touchscreen disiar with and knew would suit the type of food we wanted to play, recipe management and offer at Foxtrot, and developed our menu with the capabil- freshness timers. ities of those pieces in mind,” Alexander said. One important factor when deciding equipment needs SMALL STEPS is available space. Anymore, finding a multi-functional unit Stop-N-Go of Madison, can take the place of two pieces of cooking or baking gear. Inc. owns and operates 35 With all of the new cooking technology, there’s likely c-stores in Wisconsin and a single piece of cooking equipment that can cover most Illinois. Though some of the or all of your needs,” Alexander said. “I’ve found that the locations are equipped with sales reps of these companies are great resources if you’re just roller grills, the familyunfamiliar with an item—most will let you bring menu items owned c-store chain based in Even hot beverage equipment, in to test before you purchase to make sure the equipment Madison, Wis., is looking to like this Teazzers machine, is will be a good fit.” expand its foodservice progoing high tech. gram in adequate locations, said Megan Ziegler, foodserSOUTHERN STYLE Heather Davis, director of food service at Savannah, vice manager. Today, Stop-N-Go operates full-service stores that offer Ga.-based Parker’s Convenience Stores agrees, saying the more multi-purpose a cooking unit is the better. The sandwiches, pizza programs, fried chicken and made-tochain of 54 stores Georgia and South Carolina in the last order burritos. To expand its menu, the company is looking two years has been expanding its Parker’s Kitchen con- at Ovention ovens for certain locations. “When we are looking at equipment we take a bunch of cept, built around Southern-inspired favorites like fried factors into consideration,” Ziegler said. “First is space, since chicken and mac ‘n’ cheese. Some locations offer a breakfast bar with fresh-made we are limited on space in our backrooms we need to find a egg casserole, bacon, sausage, cheese grits and biscuits. piece of equipment that doesn’t take up too much space but also has the capability to do a number of different things.” Of course, a good meal starts with good equipment. Because efficiency is paramount, Ziegler looks at all “Some of the key considerations we assess when it comes to foodservice equipment include programming ability and aspects of a potential equipment purchase. “We also look at the maintenance for the machines—are versatility,” Davis said. “Can the equipment cook multiple items that may require different temperatures and different they easy to clean. When they break down is there somecook-times simultaneously? How easy is it for the employee one qualified to work on them in the area and how quickly do they complete the work? Lastly, are there any rebates to initiate the cooking process?” associated with the equipment? A few of our vendors are Of course, there are other questions to ask. “Testing is critical,” Davis said. “Many companies will nice enough to give us free product when we purchase new provide a test unit to use in your operation to determine if equipment.” CSD 46 Convenience Store Decisions February 2019

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cstoredecisions.com

1/24/19 4:14 PM

CSD_Ad_Template.indd 14

1/19/19 11:00 AM

Category Management

Cigars

Cigars Hot for Now Looming regulations may threaten growth. By Howard Riell, Associate Editor

he cigar category continues to see solid growth in the face of looming threats of additional regulation aimed squarely at popular ﬂavored varieties. Less-expensive cigarillos continue to move fastest, though premium cigar manufacturers have upped their game by releasing new flavors that have gained in popularity. To maximize sales, it remains important for retailers to keep making the most of flavored items and limited time offers, as well as regional preferences and popular price points.

Fast Facts: » For the 52-week period ending Dec. 2, 2018, c-stores saw sales of cigars reach nearly $3.5 billion, an increase of 11.04%. » Cigarillos grew in share of the nicotine delivery category to 19.3% in third quarter of 2018. » Cigarillos are expected to grow by 5-8% in 2019. 48 Convenience Store Decisions February 2019

48-50_CM_Cigars.indd 48

According to data providerIRI, for the 52-week period ending Dec. 2, 2018, the convenience store channel saw sales of cigars reach nearly $3.5 billion, an increase of 11.04%. In comparison, cigarette sales for the same period rose by just .08%. More than half of cigar sales are to white males between the ages of 25-44. The strongest sales continue to come from pre-priced pouch cigarillos and Black & Mild singles. Multi-pack deals provide great value for the consumer by offering additional product for a small increase in cost. “While total nicotine category sales overall declined by 1.9%, large cigars were the strongest growing traditional tobacco category at 7.1%, and achieved an even greater growth of 9.6% in the convenience/gas channel,” said Don Burke, senior vice president of information management solutions for Management Science Associates Inc. (MSA) in Pittsburgh. On a share basis, Burke continued, cigarillos grew from a share of 17.7% of the nicotine delivery category in third quarter of 2017, to a share of 19.3% in third quarter of 2018. “In contrast, the little cigar category (packaged similarly to a pack of cigarettes) declined by 2.7% in 2018, due to tax increases in parts of the country making the tax rates on small cigars more aligned to that of cigarettes.”

Burke, who presented the webinar “Trends & Insights in the Nicotine Delivery Category” to members of the Convenience Distribution Association in November 2018, said cigarillos are selling best, particularly those either pre-priced or marketed at popular price points. On the other hand, he added, “The little cigar category performed worse than the large cigar category in 2018.”

NAVIGATING CHALLENGES “The cigar business is a difficult business to navigate,” said Jonathan Ketchum, vice president of retail for Energy North Group Inc., which owns and operates about 20 c-stores in Massachusetts, New Hampshire and Maine. “There are constant changes in laws that vary by state, along with new and innovative products that are introduced throughout the year.” With the implementation of new planograms from its category captain, Energy North grew its cigar sales by 13% in 2018. According to Ketchum, his company began working with a category captain this year—Swedish Match—to improve its product selection and navigate the unique challenges it was facing in each state. “Having stores located in Massachusetts, we are dealing with both flavor bans and pricing restrictions,” Ketchum pointed out. “Our cstoredecisions.com

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Category Management

Cigars

financial impact of losing flavored- lengthy process,” Briant said. “We product sales—and then the lost haven’t seen anything official.” excise tax revenue—acts as a deterrent to state action,” Briant said. MILITARY MOVEMENT Though no action appears to be Mass-market cigar sales at AAFES imminent, Briant still urged conve- (Army & Air Force Exchange Service) nience store retailers to be alert and Express convenience stores, located get ready to take action. at multiple Army and Air Force instal“They should watch for when the lations, are down 6.3% compared to regulations are issued, and then they the year-ago level, according to buyer will have the opportunity to sub- Greg Moore. John Middleton Black & mit comments to the FDA,” Briant Mild is a bestseller, with sales up 5.1% said. “We always encourage retailers year to year. that they have a voice, and the com“Sales of Swisher International ment process is the way to use that Brands were down 25% over the voice. Let the agency know what this previous year, and Swedish Match will mean to your retail business. But Brands (White Owls) were down 24%,” MENTHOL MEASURES At the end of last year, Thomas that’s down the road sometime in Moore said. Sales of mass-market cigars, which Briant, executive director of the 2019, we just don’t know the exact currently represent less than 2% of National Association of Tobacco timetable yet.” the Exchange’s tobacco sales—are Outlets (NATO), was part of a group— expected to remain flat for 2019, together with NATO President Frank Moore added. “The Exchange drives Armstrong; Kevin Taylor, NATO sales at its Express locations by keepboard member and director of ing up with new products and current marketing for Circle K; as well as trends, ensuring that the assortment representatives from the National stays refreshed and innovative.” Association of Convenience Stores In New England, Ketchum noted (NACS) who met with U.S. Food and Backwoods cigars are his No. 1 prodDrug Administration (FDA) commisuct line, making up over 20% of retail sioner Scott Gottlieb, FDA Center dollars in the cigar category. for Tobacco Products Director Mitch “There is constant innovation in the Zeller and other FDA staff members. cigar category, and it is important to They discussed, among other things, regularly update our planograms to the FDA’s plan to eliminate the use of account for trends in the category,” menthol in cigarettes, and cigars. he said. “From the FDA’s regulatory standKetchum said that Energy North point, the agency does plan to issue a executives expect to continue to grow proposed regulation that would likely As for menthol, Briant and col- the category in 2019 by carrying the prohibit the use of flavors in all cigars, including little cigars,” said Briant. leagues did respond to that issue top-selling products and bringing in “Now, the important thing to under- briefly. “We told them that would have seasonal and limited-time-offer flavors. stand is that the regulations process a major financial impact on the retail- “The consumer is looking for these, takes time; probably a year to two ers because a significant portion of and in addition to initial distributions years to go from beginning to end. So daily sales is with menthol cigarettes we need our managers to continue to it’s not going to happen soon, but the or even menthol-flavored little cigars,” reorder these items as long as they are available.” FDA has pledged to issue that kind of Briant said. Overall, the issue of menthol as yet The most important advice for any regulation.” c-store operator or chain, Ketchum On the state level, Briant and oth- has no timeframe attached to it. “That, again, must go through the concluded, is to work with a category ers have not yet seen any significant effort to ban flavored tobacco prod- regulatory process, which is a nine- captain in the cigar category, and to ucts. “There are generally a couple of step process. They did not say when remain on top of new and limited-time states that consider it, but I think the it would start, but it is a somewhat products. CSD category captain has designed separate planograms for towns with no restrictions, towns with only flavor restrictions and towns with both restrictions.” Pre-priced cigarillo packages, while not popular with retailers, are driving much of the growth in the category, Burke confirmed. “While a retailer does not have to carry pre-priced merchandise, it should be made clear to their customers that the retailer carries products that compete at the popular price points, most often 99 cents to $1.29.”

50 Convenience Store Decisions February 2019

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1/8/19 11:30 AM

Category Management

E-Tobacco

New Year for Vapor Pod vaping systems and e-cigarettes face a new round of federal intervention. By Anne Baye Ericksen, Contributing Editor

ews of JUUL ruled 2018. First, sales of the pod vaping system delivered unheard of growth. In fact, it ended 2018 with a 304% year-over-year increase in dollar sales for the four weeks ending Dec. 29, according to Nielsen and Wells Fargo Securities data from all retail channels. The 52-week period concluded with a whopping 590% increase in dollar sales and nearly 674% in unit sales. Those figures cast an enormous shadow over the competition. NJOY was a very distant second with dollar sales for the same four weeks posting 40% and unit sales reaching 34.5%. Other brands, including former frontrunner contenders blu and Vuse, either reported single-digit growth or losses. However, JUUL’s dominating performance boosted the category for many convenience store chains. “We ﬁnished ahead of the previous year, up double digits for the category as a whole. We were fortunate that when JUUL was at its hottest, they could not open new [retail] customers, and because of that, it solidiﬁed us as a chain for them in our region,” said Anna Bettencourt. As senior category manager for VERC Enterprises, Bettencourt oversees the category for the company’s 24 c-stores in Massachusetts and two in southern New Hampshire. 52 Convenience Store Decisions February 2019

52-54_CM_ETobacco.indd 52

FEDERAL OVERSIGHT Of course, JUUL dominated the headlines for other reasons, too. Throughout the year, the brand was in the crosshairs of multiple anti-tobacco/ vaping groups with news of its popularity among underage users. “Going into 2018, I expected it to be the year of JUUL hysteria, but even by my expectations, the amount of vitriol directed at the industry has been a bit surprising. Certainly, it was a whirlwind toward the end of 2018,” said Gregory Conley, president of the American Vaping Association. In September 2018, the U.S. Food and Drug Administration (FDA) requested JUUL and all major electronic nicotine delivery systems (ENDS) manufacturers submit detailed plans to curb youth access to their products, including limiting advertising aimed at younger demographics, or face possible removal from the market. JUUL responded by deleting its presence on social media. “[That] was a shame because its Twitter and YouTube accounts housed some great stories of adults who switched to their products,” said Conley. “In fact, the vast majority of marketing in this industry is completely appropriate. JUUL was not a product that caught on because of marketing. It went viral without the involvement of the company.”

T h i s p a s t N o v e m b e r, F D A Commissioner Scott Gottlieb announced a proposal to restrict ﬂavored e-cigarette and vaping products other than mint, tobacco and menthol to 21-plus retail outlets, such as vape shops, excluding convenience stores. The National Association of Convenience Stores (NACS), said, “NACS does not support the FDA’s proposed restriction because it represents a government agency choosing winners and losers in the marketplace. NACS believes convenience store retailers should be allowed to

Fast Facts: » JUUL experienced nearly 674% year-over-year growth in unit sales for 2018. » FDA proposal would restrict most ﬂavored e-cigarette and vaping products to 21-plus retail outlets. » JUUL now has access to Altria’s network of 230,000 retailers. cstoredecisions.com

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Category Management

E-Tobacco

Branded by the Numbers JUUL continues its reign as the No. 1 brand in all retail channels, including convenience stores for period ending Dec. 29, 2018.

JUUL

Vuse

MarkTen XL

MarkTen

blu

Logic

NJoy

4 weeks

304.0%

6.5%

-15.1%

3.9%

-33.0%

10.4%

40.2%

12 weeks

400.2%

7.7%

-16.3%

7.9%

-30.7%

5.4%

48.8%

52 weeks

590.2%

6.1%

1.6%

28.9%

-14.7%

-8.3%

64.9%

JUUL

Vuse

MarkTen XL

MarkTen

blu

Logic

NJoy

4 weeks

368.4%

-8.3%

-12.7%

5.4%

-29.0%

13.5%

34.5%

12 weeks

488.3%

-6.3%

-17.2%

6.1%

-27.0%

15.1%

37.4%

52 weeks

673.7%

-3.3%

-8.5%

15.1%

-13.6%

23.8%

70.4%

DOLLAR SALES Y/Y

Source: Nielsen XAOC Including C-store and Wells Fargo Securities, LLC; Jan. 8, 2019

“At the time JUUL pulled its flavors, continue selling flavored e-cigarettes as long as they are legal products on I wish I’d had more inventory than what I did because of the demand,” the market.” The industry intends on complying observed Bettencourt. By mid-December, Altria indicated with the current law. “We have and will continue to it was discontinuing its MarkTen and comply with manufacturer guide- Green Smoke brands. “MarkTen had struggled to gain or lines on 21-plus, flavors and purchase quantities,” said Tim Greene cate- even hold market share in 2018, so it’s gory director of general merchandise not surprising Altria ultimately looked and tobacco of the Cigarette Store to go in another direction,” said Corp. “Through our point-of-sale sys- Greene. According to Nielsen and Wells tem and signage, we immediately implemented 21-plus and quantity Fargo Securities research, MarkTen restrictions on flavors. We are posi- hadn’t breached 15% in dollar share tioned and prepared to take the next since 2014, experiencing steady steps when the FDA or any manufac- declines all of last year. “We do a good job of educating turer implements further policy.” Having the technology to electroni- staff about the products, and they cally age verify and implement policies will help redirect MarkTen customquickly, the chain feels well positioned ers to another product that might to meet these restrictions to “serve suit them, such as Vuse, blu or Logic,” the adult vaping community and have Bettencourt said. “Also, we are fortunate that we can transfer inventory a successful 2019,” Greene said. The Boulder, Colo.-based com- between stores if we know one store pany operates more than 100 Smoker has loyal MarkTen customers.” Friendly, Tobacco Depot stores and Gasamat c-store sites in five states. INDUSTRY CONSOLIDATION JUUL announced it was ceasing sale As if that wasn’t newsworthy of its four flavors at more than 90,000 enough, Altria closed out the year by stores. Fontem/Imperial Tobacco, purchasing a 35% stake in JUUL for maker of blu, confirmed it would $12.8 billion. Under the agreement, tighten its flavor segment but would JUUL remains an independent entity, not concede to complete removal. but now has access to the tobacco 54 Convenience Store Decisions February 2019

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manufacturer’s sales infrastructure. That new relationship grants the pod system, and its nicotine salts, access to valuable shelf space next to the company’s combustible cigarettes in its 230,000 retail locations. Additionally, JUUL can tap into Altria’s logistics and distribution resources, and work with its regulatory affairs experts to advance product development. “We weren’t necessarily surprised by either move, but more so at the speed of which everything happened,” said Greene. “Altria’s interest in JUUL has been rumored for a few years, things obviously accelerated this fall and the two were able to find an agreement.”

SHORT-TERM STRATEGY Although it’s too early to assess how 2018’s tumultuous ending will impact this year’s category performance, convenience store owners and operators cautiously await future fallout. “I feel like we had everything settled in the category, but things change quickly, now more so than ever,” said Bettencourt. “I plan to change my planograms this month, but it’s far from a long-term plan because so much is pending whether it’s at the manufacturer level or from the FDA.” CSD

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Category Management

Chocolate

Reaping Profits from

Chocolate Even though 20% of all chocolate sales come from convenience stores, a 32% increase in year-over-year growth ﬂowed from the convenience channel. By Jeffrey Steele, Contributing Editor

Fast Facts: » C-stores deliver better growth for chocolates than do retailers in general, tallying a 1.1% increase. » Sugar-free chocolate candy represents less than a 1% share of market, but grew 14.4% year-over-year to $126.9 million in the U.S. » Halloween is a time associated with bite-sized or “funsized” chocolates, but Mintel has found Americans want the smaller-sized portions year round.

hen Americans get a yen for chocolate bars, they find no better source for their craving than convenience stores. In fact, recent sales data gathered from retail channels indicate convenience stores accounted for even a bigger share of chocolate candy sales in 2018. Moreover, by adhering to popular trends toward bite-sized, premium and uniquelyflavored chocolates, convenience retailers have an opportunity to reap even sweeter profits from their sales of chocolate. The growth in the overall candy sector is in non-chocolates, not chocolates, said Larry Levin, candy expert with IRI Worldwide in Chicago. But convenience retailing seems to be one area where chocolate candy is retaining a steady market. “Look at the overall market,” said Levin, who noted the confections market in general is up 1.3% on a year-over-year basis. “The growth is coming from non-chocolates, but the c-store channel is doing better in delivering growth for chocolates than retailers in general.” Chocolate sales in convenience stores rose 1.1% to $2.86 billion—part of a $11.2 billion basket attributed to all retail channels. “So growth in chocolate is being sparked by c-stores,” Levin said. It’s important to note that even though 20% of all chocolate sales come from convenience stores, 32% increase in year-over-year growth came from the c-store channel, Levin said. “Trips to c-stores are rebounding,” he added. “People are coming back to the channel. And as part of the passion for grab-andgo, chocolate is winning and non-chocolate is also winning in c-stores,” Levin said. “We’ve seen for a while chocolate candy is making a resurgence.” At Boise, Idaho-based Stinker Stores, category and merchandising manager Shelley Coleman said king-sized candy bars are outselling regular single-serve sizes “hands down.” Customers are also displaying increased interest in discounted multiple-item offers. In general, the store chain’s sales of chocolate benefit from its customer base being comprised of large numbers of chocolate-loving young male construction workers. Stinker, which operates more than 100 locations in Idaho, Colorado and Wyoming, positions chocolate candy on the top shelf of low-profile shelving displays. The stores also use counter units at the register to attract impulse purchases. Counter units and/ or shippers are used for Hershey’s and Mars products. The chain runs two-for-one promotions a couple months at a time, leaving single prices unchanged.

56 Convenience Store Decisions February 2019

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Category Management

Chocolate

Busy Bee, based in Florida, operates some large travel centers, boasting floor plans that accomodate display cases in which patrons can look over various fudge options.

The store contracts with major manufacturers to run a specified number of shippers. “So it’s driven a lot by contracts, where we’ll back-end money quarterly,” Coleman said.

BRANDS, TRENDS Ferrero’s Kinder Joy has made the biggest splash in chocolate candies this past year. Long sold in Europe under the Kinder Surprise banner, Kinder Joy is still new to the U.S. Prior to Kinder Joy’s launch, Levin said, U.S. household chocolate novelties penetration was 1.5%. With Kinder Joy on the market here for more than a year, penetration now stands at 15-16%. “It’s really turned the market on its ear,” he added. Also faring well are such brands as Hershey Gold and M&M’S Caramel, Levin said. “These have been pretty well accepted across the market.” Mintel research indicates that about 49% of U.S. chocolate buyers would like to find more mini-sized bars or bites of chocolate. That may go hand in hand with the 63% of chocolate buyers who believe limiting chocolate consumption is important, Mintel researchers observed. Three-quarters of U.S. consumers believe single-serving or bite-sized chocolate is a great way to limit consumption. Another Mintel report revealed that 63% of buyers reach for the same chocolates they did in their youth, meaning nostalgia plays a part in brand popularity. Buyers also are willing to pay a bit more for premium chocolates, with more than three quarters (76%) willing to fork over additional cash for quality. Chocolate lovers would also like to see more chocolate products with unique sweet flavors (31%), savory flavors (29%) and functional benefits like added protein and good fats. Also important to customers is transparency, according to John Downs, president and CEO of the National Confectioners Association. A five-year commitment to the Partnership for a Healthier America has resulted in the industry pledging 90% of its best-selling treats will include calorie information on package fronts, and half of individually-wrapped products will come in 200-calorie or fewer packages. “Our member companies have analyzed and mapped 58 Convenience Store Decisions February 2019

56-58_CM_Chocolate.indd 58

their supply chains to better understand their social, environmental and economic footprints,” Downs said. Part of that is Millennials in general prefer non-chocolates over chocolates. Non-chocolate has therefore become a formidable competitor to chocolate. Levin said preferences by many consumers for nonchocolates have eroded shelf space given to chocolates, because retailers must stock what customers demand. “But both chocolate and non-chocolates are punching above their weights in c-stores,” he said. If there’s a niche worth watching, it may be the category of sugar-free chocolate candy, Levin said. Sugar-free chocolates are up 14.4% year on year to $129.6 million in the U.S. The category is an exceptionally miniscule 92 basis points, “But it’s large in terms of growth,” he added.

CHOCOLATE LOVERS Meantime, across the country in the Sunshine State, Live Oak, Fla.-based Busy Bee, which includes 18 stores and travel centers across Florida and Georgia, has found a niche in fresh chocolates. “At Busy Bee, we are known for our fresh fudge made in house daily,” said Megan Forcey, director of advertising and e-commerce. “Our guests travel out of their way to pick some up. We always try to accommodate our guests. They know they can call ahead anytime [for] a specific flavor they are looking for.” Busy Bee’s gourmet truffle cases also let guests build their own chocolate boxes, Forcey said. The chain focuses on supporting local businesses, teaming with a local gourmet chocolate shop that hand dips and boxes chocolate candy for Busy Bee. “We find our guests love this sense of community, and it has built a real following,” Forcey said. As for packaged chocolate bar offerings, Busy Bee promotes the newest flavors on the end caps and at registers, offering at them a special buy-one-get-one deal or packaged price. Busy Bee’s Forcey works closely with its vendor team to ensure sets are constantly being refreshed to stay current and competitive. “Our vendors are continually staying on top of the latest trends and as a company, we rely on these relationships to be as successful as possible,” she said. CSD

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Category Management

Snacks

Sweet Snacks Roll Up Profits

From mufﬁns to snack cakes, hand pies, cereal bars and more, sweet snacks, powered by strong brands, are enticing customers looking for on-the-go satisfaction, especially during the breakfast daypart. By Howard Riell, Associate Editor

ome industry veterans expect a continued shift away from packaged sweet snacks in 2019 as consumers more fully embrace healthier and alternative snacks. Hostess products continue to be strong sellers, as do organic Clif Bars, Nature Valley items and others. Still, category growth continues, albeit modestly. According to data from IRI Worldwide, for the 52-week period ending Dec. 2, 2018, the convenience store channel saw sales of bakery snacks top $833 million, an increase of .4%. Brands like Hostess, McKee and Bon Appetit led the way, with private label spiking 4.7%.

Fast Facts: » For the 52-week period ending Dec. 2, 2018, c-store bakery snack sales topped $833 million. » For the same period, private-label sales rose 4.7%. » Leading brands in the convenience channel include Hostess, McKee and Bon Appetit. 60 Convenience Store Decisions February 2019

60-61_CM_Sweet Snacks.indd 60

Many point out that sweet snacks are not selling well because the consumer is making a shift to alternative snacks. Some c-store chains have seen the category in decline for several years in some locations, compared to strong gains in alternative snacks. Some convenience stores have had temporary difﬁculty keeping the full line of Little Debbie items in stock at certain locations, as the parent company made a recent switch to a franchised route service. Some c-stores have been successful temporarily using their distributor to ﬁll the gap on these products during the transition and it remains a highly sought after brand. Executives at McLane Co. Inc. in Temple, Texas, anticipate seeing continued growth in the sweet snack category, fueled in part by more advertising and limited time offers.

COUPLING SALES The top items are Hostess cupcakes, chocolate and powdered bag doughnuts, said Kirk Bailey, product director of grocery and snacks for McLane. Hostess is an iconic name, and after being out of the market for a while they have made a strong push the last ﬁve years. C-stores can continue to market and advertise indoors and outdoors to drive sales, Bailey suggested, including bundling sales of sweet snacks with hot or cold beverages. “Promoting items in two-fers will also help drive sales cstoredecisions.com

1/21/19 6:13 PM

reflect better-for-you options through in the category. We have seen energy its BE FIT program.” drinks do this for a while, and it would Category management key: Beck’s also work in the sweet snack category,” management sees the sweet snack catBailey said. egory continuing to grow through 2019, Retailers must also be sure to have Campbell said. good representation of core brands in “I see the healthier choices certhe sweet goods set, and have taketainly continuing, as more products home bag items on the bottom shelf. are flooding stores with more options According to Kevin Campbell, direcand innovation,” Campbell said. “I tor of marketing for Beck Suppliers Inc., see the category continuing to which operates 26 FriendShip c-stores, do well. Obviously, with the overthe sweet snacks category is slightly all trend of people eating less more down across his chain, but manageoften, daily, I think it is just going to ment has a pretty good handle on why. continue with sweet snacks straight “It is 100% because in our food-focused The lines between indulgent sweet through salty snacks.” stores—17 of our 26 locations—we have snacks and better-for-you options grow thicker. For consumers looking for someswitched to a David’s Cookies program, thing different, c-stores aid the category. which our deli department bakes daily.” “We have seen good results on new Muffins are a big slice of the same items, and any product that we put bonus points on gets program. “We enhanced the fresh bakery and in all of those loca- a nice lift,” Campbell noted. “Our everyday customers are tions, and I know that David’s is being implemented—if not tuned into looking for the items that feature additional already, then very soon—in all but three of those stores,” points in order to increase their overall balance.” CSD Campbell said. “The big play for us was to go with this concept, a frozen cookie that we bake, and it has been extremely successful. If I was to factor in those deli sales for the sweet items, we would be up considerably. That’s definitely the trade-off you have with a higher-markup item, and supporting our deli program is always a good thing.” He likened the growth of healthier-for-you snacks to the challenge faced four or five years ago with craft beer.

READINESS, RESILIENCY “The shift toward healthier eating has affected the sweet snacks category,” said buyer Randy Demster for AAFES, or Army & Air Force Exchange Service. “Sales in bakery items declined 6.1% in 2018 over the previous year.” Exchange shoppers, which include active-duty service members, their families and military retirees—are focused on readiness and resiliency, Demster added, and expect to find products that help them meet their nutrition goals. AAFES expanded its “BE FIT” assortment by 21% in 2018, with plans to expand even more this year. All BE FIT items must meet a set listing of nutritional standards set by the staff dietitian. Sales for the BE FIT program are continuing to grow and now make up 20% of dollar sales in retail food. AAFES operates a total of 334 Express convenience stores. AAFES’ Express locations devote four- to eight-foot sections to sweet snacks, depending on the size of the store. The products are displayed close to their Snack Avenue sections. Demster reported that doughnuts, both fresh and prepackaged, are among the bestsellers because of graband-go convenience. “However, the Exchange buying team has made a conscious effort to shift the assortment to cstoredecisions.com

60-61_CM_Sweet Snacks.indd 61

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Technology

Loyalty

Rewarding C-Store

Loyalty

Recognizing and rewarding personalized shopping styles is the new focus of loyalty programs. By Anne Baye Ericksen, Contributing Editor

rom an industry research perspective, consumer preferences traditionally indicated brand selection. Then the term started to describe where and how consumers spent their dollars, such as at brick-and-mortar stores versus online retailers. Today, customer preferences include not just what they buy and where they make purchases, but how they pay and what rewards they expect to come from their choices. 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 convenience stores, the answer is personalized loyalty rewards programs. “Shifts in shopping and consumption habits mean most retailers have accepted that total loyalty to one store or brand is unrealistic,” said Simon Johnstone, director of retail insights for Kantar Consulting. “Successful loyalty initiatives will be those that increase total share of shopper wallet by either rewarding, personalizing or incentivizing the digital shopper. As a result, many retailers will continue to bring traditional loyalty card schemes to the digital age.” 62 Convenience Store Decisions February 2019

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INSTANT GRATIFICATION

tion once may have been enough to Customer loyalty programs cer- drive action, that alone is insufﬁcient in tainly are not a new concept. They’ve today’s environment. According to an been around for decades, beginning Oracle study reported by Retail Dive, with the straightforward promotion nearly three-quarters of shoppers preof buy-10-get-one-free punch cards. fer to receive immediate beneﬁts from While those cards have been replaced loyalty programs rather than accumuwith smartphone apps, most con- lating points for future redeeming. All sumers still respond to reward offers. Business also reports that the No. 1 According to the “C-Store Shopper reason people abandon loyalty proProfile 2018” by Excentus, 43% of grams is that it takes too long to earn shoppers visit convenience stores enough rewards to make membership because they belong to the retailer’s worthwhile. Businesses now are exploring techloyalty program. Plus, 51% of c-store shoppers admit to frequenting retail- nology that allows members to redeem ers more often if they belong to a points as soon as they’re earned. For example, Shell-branded fuel retailloyalty program. H o w e v e r, m o t i v a t i o n s h a v e ers, in partnership with Excentus and changed. Whereas point accumula- FIS, a financial services technology

Fast Facts: » Per Excentus, 51% of c-store customers frequent retailers more often when belonging to a loyalty program. » Nearly 75% of shoppers wish to receive immediate loyalty beneﬁts. » Also, 87% of consumers are okay being tracked and monitored for a personalized loyalty program.

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Technology

Loyalty

“During the initial investigation of VISIBLE & CURRENT the Kwik Rewards project, we realized Marketing experts insist complathere were a lot of different elements cency is one of the deadly sins for and features that would be impor- loyalty programs. Regular and meantant for different users. Capturing all ingful promotion is critical to keeping KEEPING IT PERSONAL But customers demand more than of these elements and implement- members engaged for a high return just instant rewards. Numerous stud- ing them within the rewards program on investment. In an All Business post ies indicate consumers’ desire loyalty was one of the areas we felt some pro- describing the biggest loyalty proprograms that cater to their individ- grams struggled with,” said David gram mistakes, Adela Belin asserted it ual shopping habits. In fact, Oracle Jackson, digital marketing and loyalty can be five to 25 times more expensive to attract new members than to research revealed that 87% of shop- manager for Kwik Trip. “We believe the Kwik Rewards pro- retain existing loyalty customers. pers are comfortable with having their “Now it’s not as much about a buying habits tracked and monitored gram has excelled in implementing if that information is used to personal- many of these important elements business program, but how you seamlessly and creating value for communicate about it. You have to ize a loyalty program. “Many chains have ‘loyalty pro- every user in different ways based on give them the content customers grams’ that are not loyalty, but rather what’s important to them,” he contin- want and through a relevant channel, whether that’s push notification frequency rewards. A true loyalty proor social media,” said Art Sebastian, gram recognizes individual purchase vice president, digital customer expepatterns and behaviors, and targets riences for Casey’s General Stores Inc. opportunities to improve value to The c-store chain, based in Ankeny, the customer,” said John Schaninger, Iowa, operates more than 2,100 locafounder and owner of c-store consultions throughout 16 states. Currently, tancy The Schaninger Group as well as Sebastian is leading efforts to design a partner of b2b Solutions LLC, based a new mobile app and loyalty proin Lake Forest, Ill. gram, set to debut later this year. “This allows the retailer to have Multi-channel connections have insights into purchase behaviors, and proven to be highly effective in keepthereby, the ability to target items and ing customers invested. Sebastian offers that complement the needs confirms Casey’s initiative will include and desires of both the customer and messaging through the store’s website, retailer,” added Schaninger. “This additional [information] provides ued. “Whether it’s visit rewards where social media channels, text messaging insights into what type of customer a user can select their own reward or notifications and more direct commueach individual person is, from ‘cherry exclusive coupons and fuel discounts nications such as emails to serve as these members have access to, each prompts of special deals or reminders picker’ to a ‘strong loyalist.’” Thanks to technological advances, member will find unique value with of membership benefits. Buying online and pick up in store more and more convenience stores Kwik Rewards for different reasons.” Loyalty personalization shouldn’t is already an accepted practice at are seeking ways to engage customers through multiple platforms be limited just to affirming existing department and big box stores, but for that more personalized connec- habits. It could be a mechanism to could be a service c-stores adopt in tion. La Crosse, Wis.-based Kwik Trip introduce new products and promote the future and use to enhance or add launched Kwik Rewards one year ago items members may not normally bonus rewards. “I would not limit the conversaand reached 1 million members within reach for on a routine visit. “This form of personalization tion to order online, but rather mobile a few months. In addition to traditional offerings, was one of our key goals with Kwik ordering and online. Mobile ordering such as earning rewards for in-store Rewards as it generates some excel- is the future and if one can develop an and fuel purchases, members have a lent results at a very effective cost easy-to-use foodservice ordering sysdigital punch card and receive exclu- compared to one-size-fits-all offers,” tem, as example, it allows for larger sive coupons through a proprietary said Jackson.“Challenging them to do baskets for the retailer and speed of app that can be used at the compa- something different to earn a reward service for the customer, especially ny’s more than 650 Kwik Trip/Kwik Star encourages a habit we’d like [mem- if able to pay through the app,” said bers] to adopt.” Schaninger. CSD locations. organization, have developed a program that will institute real-time redemption savings.

64 Convenience Store Decisions February 2019

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1/21/19 6:14 PM

Take the 2019 CSD/Humetrics Human Resources

Benchmarking Survey Now!

Staffing is one of the biggest investments in the convenience store industry. To help convenience store retailers better manage their workforce and understand what employees are looking for in an employer, Convenience Store Decisions and human resources expert Mel Kleiman, president of Humetrics, are collaborating for the 11th consecutive year to provide insight into the industry’s human resources practices. This key benchmarking survey, will enable chains of all sizes to evaluate their recruiting, hiring and retention performance to enhance their competitive viability. https://www.surveymonkey.com/r/2019HRSurvey The survey closes March 1, 2019. ▶ Be entered into a drawing to receive one of three $100 gift cards or a $100 donation to the charitable organization of your choice.

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1/22/19 2:49 PM

Technology

Internet of Things

Getting Connected, Staying Aware The Internet of Things is helping to better connect the c-store world, saving time and money for operators. By Brad Perkins, Contributing Editor

t’s 3 a.m., and your phone beeps And it can save thousands of dollars in or rings. Dread sets in. But it’s not time and inventory. “If you start getting a freon leak in a clerk telling you something is wrong or the police telling you a cooler, then your temperature goes the store has been robbed. It’s your up gradually, so you might not recogbeer cooler, and it’s letting you know nize it right away,” said Michael Meyer, facility operations ofﬁcer at Meyer Oil it’s warm. It’s not the future. It’s the Internet Co., which operates 18 Mach 1 stores of Things (IoT), and it can bring faster in Illinois and Indiana. “When those response times, cost savings, inventory units go down, it takes a short time control and real-time asset manage- for dairy products and perishables to ment in ways that go beyond cameras, spoil, or you’re not offering the cold pump shutoff devices or security tape. beer and soda that you want to offer.”

Fast Facts: » International Data Corp. predicts that by 2030, 30 billion objects will be connected to the Internet. » IoT devices have three main beneﬁts: awareness, autonomy and action. » IoT can aid with cost savings, inventory control and more in real time. 66 Convenience Store Decisions February 2019

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Relying on people to notice means notification doesn’t always happen immediately. Temperatures rise slowly. Leaks drip unseen. Managers and clerks are too busy to see a door left open. Digital sensors can tell you when the cooler is warm, or when a pipe is leaking, or even when a product has been moved. “In the convenience retail world, IoT—and more speciﬁcally, a web of sensors—provides the potential for a paradigm shift in the way we manage our facilities and leverage our daily labor investment,” said Jeremie Myhren, chief information ofﬁcer for Road Ranger, a Rockford, Ill.-based chain of travel centers, truck stops and convenience stores. International Data Corp. predicts that by 2030, 30 billion objects will be connected to the internet. The opportunity is there. For Meyer, it became an opportunity to experiment with sensors from Monnit—that monitor coolers and back doors—after hearing about the possibility from peers. “They had temperature control sencstoredecisions.com

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Technology

Internet of Things

“

reacting to it, allowing owners and operators to save cost and time. “As we start seeing the manufacturers or suppliers that provide all of the things you sell in the store adding sensors to all of those products and that all being linked to the front of the store, you’ll have much more intelligence, so you can restock; for - Jeremie Myhren, chief information officer for Road Ranger example, if something is getting low,” Burrus said. “It can let you know automatically you only have one left and sors that will email, text—start alerting They can send alerts, give directions we can automatically place the order the proper individuals that your reg- and even order replacements. And for you.” There is also the potential for IoT istration is not at the temperature it they don’t break the bank. “These tools and sensors are becom- devices to offer additional services, wants to be,” he said. “It is also programmable to account for defrost time. ing increasingly inexpensive and like adding an Amazon Alexa to a So, if the temperature starts climbing increasingly realistic to implement,” kiosk so people can ask for directions up, but doesn’t reset, you are notified.” Myhren said. “Basic temperature and or inquire whether a product is in stock. Eventually, it will grow into preAnd it’s not just coolers. Sensors door sensors with internet/database and technology can do everything connectivity can be implemented for diction and prevention. So instead of from sense a spill at the pump to alert less than $1,000 total per site, with getting the notice at 3 a.m. that something is wrong, you will instead get the you about a leaky pipe or overflowing effectively no ongoing carrying cost.” notice that something needs servicing, toilet, as well as regulate temperatures allowing time to fix the issue before it and even stop crime. MACHINE TO MACHINE escalates. “We’re using GPS-tracking technolWhat is IoT, exactly? When combined with blockchain ogy inside tobacco products,” said “IoT has two elements to it,” said Sean Sportun, manager of security and Daniel Burrus, CEO of Burrus Research benefits from suppliers and vendors loss prevention for Circle K’s Central Associates, which monitors global that help track shipments, make payCanada Division. “When it comes advancements in technology. “One ments, lower costs, increase security to armed robberies, we’ve seen that is machines talking to machines. The and increase transparency, it all adds those are the main target over the past other is sensors that are monitoring up to a more connected, leaner and few years.” things and you can sense many differ- more fluid environment, freeing up It’s similar technology to what ent things—the position or presence employees to do their jobs more effecbanks use to track the money stolen in or proximity of something, velocity tively. This, in turn, will lead to greater a bank robbery. It can let police know and motion, temperature, humidity, customer satisfaction. And the best part is that getting where the criminal is heading and has moisture, sound, gas, force or load, been a rousing success. leaks, electromagnetic, acceleration, started is easy. With so many options, it pays to look at what’s available, what “We’ve had 100% success rate. the movement of an object.” We’ve had 47 incidents in Central IoT devices, Burrus said, have three your needs are and how you can use it. “It starts with awareness,” Burrus and Western Canada where they’ve main benefits: awareness, autonomy been deployed during a robbery, and and action. The tools are aware of said. “You don’t have to do everything we’ve been able to support local law what’s happening, they are autono- at once. Pick one thing you want to do enforcement in locating these individ- mous in that they can send alerts and that doesn’t cost much and gives you uals and prosecuting them.” can be set up to do what the owner a big result; maybe it’s a sensor in a cooler or maybe it’s a water detector Sportun’s team combines sensors wants them to do. with video to give police almost real“It’s connecting an asset to any- that you put underneath all the toilets time video of the criminals. Knowing thing,” Burrus said. “And when it’s or wherever else you might be worwhen a crime occurs could help spare connected, data is automatically sent ried about a leak that you might not a second store from the crime. to you without you having to tell it notice real fast. Those are easy to do, There are countless stories and uses to do that, so you can get a warning they are already available, they’re inexfor sensors that can talk to each other about something.” The actionable pensive and they can save you a lot of and to the people who need to know. piece comes with seeing the data and time and a lot of money.” CSD

In the convenience retail world, IoT—and more specifically, a web of sensors—provides the potential for a paradigm shift in the way we manage our facilities and leverage our daily labor investment.

”

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The convenience store industry’s young executives and next-generation leaders face unique challenges as they grow their businesses in the fast-paced, competitive convenience store market. The National Advisory Group’s (NAG) Young Executives Organization (YEO) was formed specifically to addresses these challenges and help the industry’s leaders of tomorrow identify solutions with others in their age group. YEO exists to serve as an effective conduit for getting young professionals more involved and prepared for leadership positions both in their companies and in the broader convenience store industry. Convenience store companies must identify their next-generation leaders and groom them for management positions. This is where YEO can help. YEO membership offers next-generation leaders a network of other young leaders in similar positions. The group meets twice annually at an annual roundtable in the spring and the NAG Conference in September.

For information on joining YEO or NAG, contact NAG Executive Director John Lofstock at jlofstock@csdecisions.com. THANK YOU TO OUR 2019 SPONSORS:

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1/18/19 3:45 PM

Technology

Robotics & AI

How Robotics and AI

are Changing Retail

From robots in the aisle to customer service bots and simulation modeling across the supply chain, a new “Industrial Revolution” is upon us. Are you ready to embrace this robotic culture? A CSD Staff Report

he convenience store industry continues to evolve and where it ends up as robotics and personalized delivery gain traction is anyone’s guess. With the likes of Bill Gates and Elon Musk talking about the potential of artiﬁcial intelligence (AI) to change the world for better or for worse, the fourth industrial revolution is coming and cognitive automation is its flag bearer, according to a report by KPMG. You may think that this is not relevant to retail or certainly not for the next 10 years. Well, think again! Technologies that can think, learn and adapt will increasingly be part of our lives and sooner rather than later, according to KPMG’s report “Robocalypse: Now? What the ‘Fourth industrial revolution’ means for retail.” This AI and robotic technology can also transform retail by streamlining labor, improving customer service, upselling new items and yielding a treasure trove of data that helps you sell more, both to new and existing customers. Big-name retailers such as Walmart and Giant Food Stores have been working toward employing robots to reduce 70 Convenience Store Decisions February 2019

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costs and improve customer service. Amazon has already opened six Amazon Go locations—three in Seattle, one in Chicago and two in San Francisco—where customers scan an app to enter, select items and leave without checking out. Ceiling cameras monitor the selection process and customers’ credit cards are automatically billed. Amazon plans 3,000 of such locations by 2021.

intelligent robots that work alongside humans to find and retrieve stored items, high-speed packing and sorting machines that shorten the time it takes to process inbound and outbound loads, and software programs that provide complete visibility and tracking of shipments and products held in storage. McLane’s Ozark distribution center features cutting-edge robotics and artiﬁcial intelligence and is changing the way products are brought to market. BEYOND RETAIL Vendors are responding by offer- This is such an important issue that the ing a range of technologies, including Young Executives Organization (YEO)

Fast Facts: » Technologies that can think, learn and adapt will increasingly be part of our lives and sooner rather than later. » Amazon, Walmart, Giant Foods and Target are just a handful of retail chains using artiﬁcial intelligence and robotics to improve customer service. » Wholesalers and vendors like McLane are using robotics to bring products to market across the convenience store industry. cstoredecisions.com

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has partnered with McLane, who will host the 6th annual YEO Conference The 370,000-square-foot at its Springfield, Mo. facility. YEO McLane Ozark Distribumembers will get a firsthand tour of tion Center distributes the distribution center and learn how groceries and merchandise robotics and AI are transforming how to retailers in Missouri products are brought to market. and Kansas and parts of The 370,000-square-foot McLane Arkansas, Nebraska and Ozark Distribution Center distributes Oklahoma. groceries and merchandise to retailers in Missouri and Kansas and parts of Arkansas, Nebraska and Oklahoma. The facility also incorporates other technologies, such as wrist-held scan- is used by a variety of institutions. ners to identify products and machines ‘She’ can answer calls and handle simthat automatically take apart inbound ple requests, such as for an address pallets or put stretch wrap around out- or store hours. Most importantly, she knows when to bring in a human to bound loads. As a result, workers at the auto- respond to more complicated inquires. mated warehouse are 20-25% more In one study, Martin told NAG attendproductive than workers in McLane’s ees, she cut down 80% of the calls that other distribution centers. The facil- wasted employee time. Of Amelia, Forbes magazine wrote, ity also scores better in terms of safety and order accuracy. A second auto- she will inevitably cause “mass dismated warehouse opened in Findlay, ruptions that will require workforce Ohio in 2017, and some facilities may retraining.” Those are strong words that be retrofitted to accommodate auto- should have garnered retail attention. mated features in the future.

ANTICIPATING CHANGE Robotics are set to revolutionize retail, and not in some distant future scenario, but within the next 10 years. Not only will robots begin to handle more physical tasks, but they’ll also begin to manage more cognitive tasks by learning algorithms that allow them to make decisions on our behalf. Paul Martin, head of retail, UK KPMG and the lead author of the “Robocalypse: Now?” report, was a guest speaker at the 2018 National Advisory Group (NAG) conference in Florida. He said a San Francisco-based pilot by Target used an inventory-control robot called Tally, built by Simbe Robotics, to browse aisles and scan 20,000 to 30,000 SKUs per hour, focused on taking inventory. Tally did in one hour what humans could do in four. Meanwhile, Amelia, an advanced chatbot that is considered the most human AI, was created by IPSoft and cstoredecisions.com

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PREPARING FOR CHANGE

According to KPMG, the pace of change is fast and multiple consumer demands mean you’re likely to be stretched several ways at once. That’s when data and fact-based insights can be used to prioritize. When trends change so quickly, organizations have to be able to respond accordingly. The biggest challenge facing organizations will be creating alignment among

Increasingly, grocers and other retailers are using robotic solutions to handle tasks such as taking inventory and answering questions.

senior leadership about what to do, why and how to fund these changes. Agreeing on what you are setting out to achieve is only the first step. Setting a vision that is right for your organization about where you want to play and why will leave the not so small challenge of actual implementation. The key to integrating the right tech into your business model is a staggered approach. KPMG recommended a six-step strategy: • Evaluate what is or will soon be available. • Investigate what competitors and other industries are doing. • Identify where AI is applicable in your business. • Develop a strategy for adoption. • ‘Experiment’ with high priority opportunities. • Develop and implement a change management strategy. There’s no doubt that the current technological revolution is a time of great innovation. But, for many, it may also paint a more worrying picture of the future where armies of unemployed drift from one menial task to the next. In the same way that the Industrial Revolution transformed society, so robotic technology has the potential to change the face of retail. The bottom line, according to KPMG is that the robots are coming. “It can sound like a frightening future, but it doesn’t need to be. Change for any organization is always challenging, but when the rewards are many and various, it makes no sense to stand still,” Martin said. CSD February 2019 Convenience Store Decisions 71

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Operations

Column

Offering Healthier Hispanic Choices

Sylvia Klinger is the founder of Hispanic Food Communications Inc., a nutrition and food communications consulting company. She is a leading expert in cross-cultural Hispanic food and culture as it relates to nutrition and health.

As convenience retailers are changing up their menus to include healthier food offerings, there’s an opportunity to expand the menu, which will make Hispanic consumers surely take notice. By Sylvia Klinger

reviously, Texas and California were the states most associated with large Hispanic demographics. But as internal migration and natural population trends advance, other states have seen their Hispanic communities grow as well. Because a significant number of Latinos visit convenience stores daily—and because foodservice has become an integral category for convenience retailers, the opportunity to offer something unique is a possibility. Moreover, the opportunity to provide enticing, tasty and better-for-you food choices can be profitable. As Hispanics become the fastest-growing ethnic group in the U.S., their purchasing power grows even stronger. According to recent marketing data, Hispanics spend more than $94 billion on consumer packaged goods per year. Within that total, Hispanics spend about $25 million on general food and about $13.3 million on refrigerated food. So how can retailers get a larger slice of that purchasing power pie, while maintaining sensible, nutritious menu options that can carry over into their regular foodservice program. First look at the foods and ingredients that will likely entice your Hispanic customers and see if they aren’t so far off of what you are already doing in terms of menu planning. In many cases, adding a piece of produce or a different meat can broaden your menu considerably. The great variety of ingredients found in typical Latino meals is actually healthier than one might assume. Below are some suggestions of healthy food selections that can make patrons take notice. Seafood & Fish. Packed with Omega-3 fatty acids, fish such as salmon, herring and mackerel are discussed because they provide protective benefits for the heart. However, some of these seafood choices don’t always translate into a regular convenience store menu. With a little preparation and planning, fish and some seafood options liven 72 Convenience Store Decisions February 2019

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up any lunch or dinner menu. Latino classics dishes: Fish tacos, shrimp cocktails, ceviche, etc. Grains. Healthy grains are an essential part of a good diet so making them available can produce positive results. Latino classic dishes: Hot oatmeal, hot Mexican chocolate, corn on the cob, whole wheat sandwiches and whole wheat tortilla enchiladas are high in health and might translate to other customers looking to trade calories for a more nutritious option. Seeds & Nuts. As every Latino knows, a day is not complete without las meriendas (snacks). As the experts say, when you opt for seeds and nuts, in moderation, you are taking in good fats and avoiding bad fats which can damage your heart. Latino classic dishes: Peanuts, pistachios, walnuts and almonds are considered “high quality nuts.” Eat them straight-away, sprinkled with chili powder or on yogurt or a favorite soup or salad to spice up the regular convenience store offering. Fruits and Veggies. This should be obvious, but fruits and veggies are king when it comes to protecting our bodies from many chronic diseases. Fruits and vegetables provide vitamins, minerals and all types of essential nutrients to keep consumers healthy. Latino classic dishes: Add bell peppers and mushrooms to egg omelets, incorporate cactus (nopales) with scrambled eggs or bean dishes; snacks of sliced mangos, guava or papaya are sure to ring a popular note for Hispanic customers hoping to shun the indulgent lines of snacks and food choices. Below is a list of suggestions that may appeal to your Hispanic consumers. The trick is to promote them the same way popular indulgent items are promoted in the same space. Fresh Produce. Most Americans don’t eat enough produce, but more people are interested in where their pro-

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duce comes from. When devising how to introduce more produce into your foodservice program, consider incorporating items from farmer’s markets and other local sources. Some items that can attract Hispanic consumers include: • Bananas; • Mangos; • Avocados; • Corn in the cup with crema and queso fresco; and • Chopped fruit (offer chili powder on the side). Other Protein Items. Although meat, including beef, poultry, pork, fish and seafood, is an excellent source of this essential nutrient, there are plenty of healthy alternatives to meat protein. Below are some other non-meat and meat options that can be incorporated into a Hispanic menu. • Spicy nuts and seeds (peanuts) such as cacahuates con chile (Sabritas Japoneses Cachuates Estilo Japones is a favorite peanut snack). Also, pepitas or pumpkin seeds; • Tuna fish; and • Tamales with pork filling.

Beverages. Hispanics and Latinos are big on beverages. Who isn’t? Look at some options with an authentic flair to further entice this demographic. • Drinkable yogurts with Latino flavors, • Horchata, and • Low fat strawberry and chocolate milk. Dairy. Because dairy foods are big in Hispanic culture, offering just a few options can be profitable. • Queso fresco, and • Crema (Mexican style sour cream). Snacks. Lastly, what is a day without a snack? And, there are healthy options to choose from. • Fruit popsicles with favorite/familiar flavors such as watermelon, coconut, tamarind, tangerine, lime, etc.; • Low-fat flan; • Pan Dulce in small sizes; and • Baked chips such as baked plantains, yucca chips and other baked vegetable chips.

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February 2019 Convenience Store Decisions 73

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Operations

Store Design

Designing Food Destinations Retailers are using design to support the image of c-stores as a destination place for food. By Scott McKinney, Contributing Editor

shift to foodservice is dominating convenience store strategies as retailers work to counter declining cigarette sales. Retailers are using design to support the image of c-stores as a destination place for food. “Many new convenience stores in the U.S. are being designed— and many existing ones are being remodeled—to reﬂect that consumer foodservice sales are more integral of the channel than ever before,” said Bob Hoyler, research analyst at Euromonitor International. “For example, one increasingly common design aspect of convenience stores is the

inclusion of a limited amount of seating, which allows shoppers to sit down in the stores and eat hot food while it is still fresh.” Hoyler said convenience stores have capitalized on this trend by placing a greater emphasis on their consumer foodservice operations, rolling out an expanded selection of hot takeaway meals.

SHOWCASING DIFFERENCES When considering the design of new stores or remodels, it’s important to consider your stores’ key differentiator, what draws people to it over the competitors, and center the design

Fast Facts: » Foodservice is increasingly dominating the industry as c-stores look to counter falling cigarette sales. » Millennials and Gen Z are dominating the conversation about design. » Industry insiders see design as being in a support role in building trust in c-store foodservice, with food quality and customer service being at the centerpiece. 74 Convenience Store Decisions February 2019

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on that area, according to John Schaninger, founder and owner of the Schaninger Group. “The biggest difference today is with the changes in cigarette and fuel visits, there has been an increased focus on foodservice,” said Schaninger. “As younger consumers delay or forego purchasing cars, and cars become more fuel efficient, fuel gallons are also declining, and overall c-store food sales have grown by 43% over the past 10 years—that’s the big differentiator for many operators.” Schaninger noted stores don’t have to be huge to attract food customers. “It is important to understand flow— you want to provide a clean, open, easy flow for the customers.” A few elements of stores he sees that are important in terms of design and function might include a place where customers can enjoy food and linger, areas for self-checkout and kiosk ordering as customers become more technologically adept.

SUPPORTING ROLE Joe Bona, founding partner at Bona Design Lab, sees design taking a support role for convenience stores, with customer service and food quality being the centerpiece. cstoredecisions.com

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More convenience store chains are designing sites to emphasize and often upgrade their foodservice programs. This modern kitchen that adorns this Sun Stop store is a striking example.

“C-stores are becoming a destination place for food, and they are trying to communicate that they are legitimate and competitive,” Bona said. “In the old days, you used to have imposing, in-your-face designs saying ‘beverage area’ or ‘food area,’ but now it’s more about emphasizing quality and customer service.” Today, Bona is seeing more neutral colors and less graphic imagery work well. Lighting is important, along with technical design, and parts that are improved by digital technology such as digital menu boards and signs.

SUNNY DESIGN Sun Stop’s internal design team recently partnered with a design group to develop a new design, for its 80 stores in southern Alabama, southwest Georgia and northern Florida. “The new image features bright colors—yellows, reds, and blues—that really pop. We wanted to reflect our geographic location so we incorporated features, such as a sun halo over the cashier, that really add dimension and make a good feeling for our customers,” said Spencer Thomas, brand manager at Southwest Georgia Oil, which operates Sun Stop. The retailer includes three differcstoredecisions.com

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ent c-store concepts under the name: “Building trust with consumers that Sun Stop, Sun Stop Market and Sun we are offering restaurant quality food Stop Urban Market. All three of these requires integrating best practices concepts differ in size, offering and from quick-service restaurants and fast location, but have similar design and casual design trends,” Ehrlich said. color to create brand recognition. “In addition to making stores larger, “We are in the process of getting we are also incorporating colors and out this new image to all of our com- building materials more often associpany-operated stores and creating this ated with the food industry.” brand recognition with our customers, He emphasized the importance of and in 2019 we’re working on getting the store teams in fulfilling this mission. this image out to our owner-operated “Anyone can build large, beautiful stores,” Thomas said. stores, and stock them with product. The chain recently opened a new True, long-lasting success begins and on-campus store and deli at Florida ends with our talented store teams, State University (FSU). who are led by a blend of new and “It isn’t your traditional c-store, as seasoned retail and food division manit’s located on FSU’s campus. Probably agers and trainers.” 95% of the customers of that store The company incorporates a blend are college students on their way to of static and electronic signs in its or from class or game day, and we’re design, Ehrlich said. “Static signs are learning a lot about what kind of used to drive key messages for profoods they like and how they like to be grams and promotions while digital marketed to,” Thomas said. “We’re signs help garner attention and drive learning more about the Millennial emotional impulse with the use of and Gen Z customer, then expanding enhanced imagery.” that to our other stores.” Ehrlich emphasized the role He noted that the store doesn’t sell Millennials are playing in influencfuel, but is selling significantly more ing store design. “We value all of beer than initially forecasted. our customer relationships, however, Sun Stop stores average 3,000- our most recent design changes are 4,000 square feet, but the company geared to meet the unique expectarecently acquired three, 12,000-square- tions of Millennials. They’re looking for foot Walmart Neighborhood Markets customization and instantaneous gratto convert. ification. They’re impulsive, they want “These are bigger than c-stores, it now and they want it their way. It’s a offer a convenience section, deli sec- tough group to serve, but if you figure tion and grocery section, along with them out, they’re very rewarding.” fuel outside,” Thomas said. He also reiterated the c-store company’s commitment to a customer-centric design perspective. DESIGNING FOR TRUST Fremont, Ohio-based FriendShip “We observe customer behavior and Food Stores is utilizing store design conduct customer intercepts to drive as part of its effort to transition its 26 future design enhancements. What stores into one-stop destinations for worked 10 years ago, does not work food, fuel and convenience, said Greg as well today, and what works today Ehrlich, president of Beck Suppliers, will surely not be as relevant five years from now.” CSD which operates the FriendShip chain.

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PRODUCTShowcase New Candy Mix

Vegan Breakfast Cookie Gourmet Treats is introducing its Vegan Breakfast Cookie, currently available in three varieties: Cranberry Almond, Banana Date Coconut and Peanut Butter Cocoa Nib. The cookies are specifically designed for people who live a lifestyle where their schedule is often unpredictable, and is dictated by multiple priorities. Like all of Gourmet Treats’ baked goods, these cookies are egg- and dairy -free (vegan), and are made with 100% whole grain wheat flour, nothing artificial and non-GMO ingredients. They have 12 grams of protein from natural food sources (no added powder or supplement), and 10 grams of fiber. The cookies also use Energy Smart, a source of sustainable energy, with an optimized ratio of slowly digestible carbohydrates and grain dextrin. The 3.5-ounce cookies come 12 per box with a 120-day ambient shelf life and a MSRP of $2.25.

Company: Gourmet Treats www.gourmettreats.com

Trolli, a Top 10 Non-Chocolate brand and the original inventors of the Gummi Worm, are launching Sour Brite All-Star Mix in 2019, which includes the most original shapes in a single bag with ﬁve of the greatest All-Star Sour Brite shapes: Crawlers, Sloths, Octopuses, Llamas and Tiny Hands. Three of these shapes drove 40% of Trolli brand growth in 2018 (Crawlers, Octopus and Sloths)! The new candy mix will be available in the ﬁrst quarter of 2019 in the following sizes: 4.25-ounce peg (SRP: $1.25), 6.3-ounce peg ($1.75), 8.5-ounce stand up bag (SUB) ($1.98) and a 25.5-ounce SUB ($4.99).

Company: Ferrara Candy Co. www.ferrarausa.com

Specialty Dessert Dippers are dippable pairings of shortbread cookies and indulgent icing packaged to satisfy on-the-go customers. Each 5.1-ounce container includes 16 cookies and an icing, available in three ﬂavors: Chocolate Buttrcreme – chocolate shortbread cookies with chocolate buttrcreme for dipping; Vanilla Buttrcreme – vanilla shortbread cookies with vanilla buttrcreme for dipping; and Cookies ‘n Creme Made with OREO Whipped – chocolate shortbread cookies with cookies ‘n creme whipped icing made with OREO cookie pieces. There are 18 per case, and the suggested retail price is $2.99.

Company: Rich’s Foodservice www.richsfoodservice.com

Sweet, Shareable Treats Add Pop Satisfy the sweet cravings of shoppers looking for a portable, shareable treat with Kellogg’s new, Rice Krispies Treats Snap, Crackle Poppers. They’re the same ooey, gooey Rice Krispies Treats your customers know and love, now in an unwrapped, bite-sized snack dipped in a smooth chocolatey coating—in a stand-up, perfectly sharable bag. Available in Chocolatey and Cookies ‘N’ Creme ﬂavors, these new Rice Krispies Treats Snap Crackle Poppers are made for munching in a six-count case and ﬁve-ounce, stand-up, resealable bag—the format candy lovers have made one of the fastest growing ways to get their sweets. Add the eye-catching shipper to display this new offering in style.

Company: The Kellogg Co. www.kelloggsspecialtychannels.com

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On-The-Go Dessert Satisﬁes

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PRODUCTShowcase Natural Energy Boost Push Beverages is reviving a regional favorite, Liquid Lightning Energy Drink. Liquid Lightning began well over a decade ago and was out of production for several years when Push Beverages acquired the trademarks and formulations with the intent to take the beverage nationwide with its existing distribution network. The revival includes can redesign and resizing (from 8.4- and 16-ounce to 12-ounce) along with replacing the highfructose corn syrup with pure cane sugar. Regular and zerocalorie versions are available. Liquid Lightning boasts a wide array of “energy boosters” including D-Ribose, caffeine, insositol, taurine, glucuronolactone, and panax ginseng extract, along with high doses of B vitamins known to help the body deal with stress and eliminate the “crash” that often occurs after the energy boost. This combination of ingredients, most of which are found naturally in the body, is currently unavailable in the mainstream energy market. Unlike most energy drinks, guarana is not used due to possible side effects of everyday usage and drug interactions. At 120 calories and only 15-milligrams of sodium per 12-ounce can, it is by far the lowest amongst the leading regular energy drinks. Liquid Lightning uses natural ﬂavoring to obtain its light berry ﬂavor.

Company: Push Beverages www.pushbeverages.com

Wagyu Beef Jerky Perky Jerky is introducing new paleo-friendly wagyu beef jerky. Marinated in coconut aminos and coconut sugars, the new, first-to-market wagyu beef jerky line is now available in three unique flavors: Sea Salt & Pepper, Truffle & Thyme and Chimichurri. Wagyu beef is known for its tenderness and extensive marbling, which delivers incredible taste and texture. Perky Jerky’s humanely-raised, vegetarian-fed wagyu beef without antibiotics or hormones, combined with the brand’s proprietary handcrafted recipe results in a beef jerky experience unlike any other. All three new flavors are soy-free, gluten-free and have no artificial preservatives, added nitrites or nitrates. They also contain up to 12 grams of protein, just two grams or less of sugar and 220 milligrams or less of sodium per serving.

Company: Perky Jerky www.perkyjerky.com

Valentine’s Day LTOs Hershey’s is introducing a new Valentine’s Day limited-time-only (LTO) item in the c-store channel: Reese’s stuffed with Reese’s Pieces Hearts. Reese’s has done it again, they stuffed the seasonal hearts with Reese’s Pieces candy. Reese’s stuffed with Reese’s Pieces Hearts are available in ﬁveounce (SRP $3.99), King Size 2.2-ounce (SRP $1.29) and six-pack packaging (SRP $4.29). All Reese’s brand packaging is new for the Valentine’s Day season. Company: The

Hershey Co.

www.thehersheycompany.com cstoredecisions.com

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Tomato Juice Blend Coca-Cola’s Minute Maid Tomato Juice Blend is the company’s first 100% vegetable juice blend of tomato, carrot, celery, cucumber and beet juices. Each 12-ounce bottle has 70 calories, 100% daily value of Vitamin C, and 140% daily value of Vitamin A. Minute Maid Tomato Juice Blend will be available in 12-fluid-ounce bottles in the first quarter of 2019. With this addition to the Minute Maid lineup, Minute Maid now has a comprehensive single-serve juice portfolio that includes 100% fruit juice, 100% fruitjuice blends, juice beverages and a 100% vegetable blend.

Company: Coca-Cola Co. www.coca-colacompany.com February 2019 Convenience Store Decisions 77

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PRODUCTShowcase Bacon Jalapeño Bar DNX Foods is introducing the Grass-Fed Beef & Uncured Bacon Jalapeño Bar, which is perfect for keto dieters. Fortified with the powerful benefits of grass-fed beef collagen, the gold-standard of collagen known to reduce joint pain, decrease inflammation and protect tendons, ligaments and bones, this new whole-food protein bar features 14 grams of protein and nine grams of healthy fats from high-quality animal sources. With no sugar or sugar alcohol added and only one gram of net carbs, this is the only truly natural keto bar on the market today. Made with certified-organic spices, grass-fed beef from New Zealand and Australia, and uncured bacon, the bar’s meaty, savory and perfectly spicy taste profile is sure to satisfy hunger cravings.

Company: DNX Foods sales@dnxbar.com

Alcohol-Free Malt Beverage HEINEKEN USA is launching Heineken 0.0, an alcohol-free malt beverage brewed with a unique recipe for a distinct balanced taste, containing only 69 calories per bottle. The brand’s iconic label has been turned blue to match the color associated with the alcohol-free category globally. Heineken Master Brewers created the new zero-alcohol brew, made with natural ingredients, resulting in a drink brewed for beer lovers, by beer lovers. In a category where building occasions and meeting shifting consumer tastes is critical, Heineken 0.0 introduces a versatile brew for a variety of drinking occasions and connects with the discerning tastes of a wide range of drinkers. Heineken 0.0 is on sale now in sixpack cans and bottles.

Company: HEINEKEN USA www.heinekenusa.com

Craft Energy Drink MATI Healthy Energy, the all-natural, craft-brewed energy drink, has now achieved full organic certification by the California Certified Organic Farmers organization (CCOF), becoming the first craft-brewed, organic energy drink on the market. All existing natural flavors are now certified organic and in early 2019, MATI is introducing three new, zero-calorie flavors, including raspberry mint, lemon ginger and grapefruit. In addition, MATI is unveiling a colorful and energetic new look for its packaging and branded materials that aligns with the brand’s heritage as an innovative leader in delivering healthy, focused energy in the beverage space. All current MATI certified organic flavors will be available for retailers and distributors to order through their existing accounts. Prospective distributors, retailers and office managers may complete a business application online. The new zero-calorie flavors and branding will hit the market in early 2019.

Company: MATI Healthy Energy www.drinkmati.com

Infused Coconut Bites Weller, a pioneer in CBD-infused food and beverage products, has launched of its first product line: CBD Coconut Bites, available in Dark Chocolate, Caramel and Original flavor varieties. Weller is on a mission to bring ground-breaking products to the market that will change the way consumers can access the power of CBD through simple, delicious, functional foods suitable for any occasion. Headquartered in Boulder, Colo., which is well-known as a hub for innovation and expertise in both natural foods and hemp, Weller is excited to be one of the country’s first clean lineage CBD food companies to emerge during the monumental decision and approval by legislation for the Farm Bill, which now legalizes the cultivation of industrial hemp. Delivering a lightly-sweet taste and delightfullycrispy crunch, all three flavors of Weller’s CBD Coconut Bites offer a snacking experience that consumers will crave. Available in single-serving (five bites) and multi-serving (20 bites) packaging, each bite is infused with five milligrams of CBD (cannabidiol) from full-spectrum hemp extract and made with clean, simple and sustainably-sourced ingredients.

Company: Weller www.welleryou.com

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PRODUCTShowcase Protein Shakes Pure Protein has launched its newest ready-to-drink (RTD) innovation, Pure Protein 30-gram Shakes. In delicious Rich Chocolate and Vanilla Milkshake flavors, the convenient new RTD shakes have a whopping 30 grams of protein, less than one gram of sugar, four grams of fiber and 24 vitamins and minerals per serving. The new protein shakes are available nationwide, and at 140 calories, make it easier than ever to fuel your fitness goals on the go.

Unique Snack Kits

Company: Pure Protein www.pureprotein.com

Mobile Oil Containment

Conagra Brand’s Duke’s brand is driving growth in a new snacking demand space—snack kits—by launching two ﬂavors of one-ounce Shorty + Cheese Crisps: Original Shorty + Cheddar and Hatch Green Chili Shorty + Asiago. In the underdeveloped snack kits category, introducing these products by Duke’s, which is a premium meat snacks brand, is expected to further grow the segment.

Company: Conagra Brands www.conagrabrands.com

Storm-Rated Generator Enclosures KOHLER is introducing new hurricane-rated enclosures for its comprehensive lineup of industrial generators. The durable aluminum enclosures meet the most stringent and widely recognized Testing Application Standards (TAS) within the Florida Building Code for wind load and projectile impact—TAS 201, TAS 202 and TAS 203. As an added benefit, the new hurricane-rated enclosures are factory designed and built, allowing KOHLER to deliver the units within the company’s standard lead times. The new hurricane-rated enclosures are an ideal option for a broad range of KOHLER gas and diesel industrial generators. The entire enclosure was subjected to severe wind and impact testing and received TAS 201 Level E Certification, the highest available designation for projectile/missile impact. The testing was completed at a TAS accredited test lab and certification letters for the product were issued by a certified Florida P.E. The hurricane-rated enclosures are available now on qualifying new KOHLER aluminum enclosure orders.

Company: KOHLER www.kohlerpower.com cstoredecisions.com

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When Frontline International released its Waste Cooking Oil Containment Caddy three years ago, it was revolutionary. Now it’s even better, with the addition of its own pump and wand to draw oil into the tank. Nicknamed the “Tank Tank” because it’s an oil tank and also mobile and rugged like a military tank—the Model 74SS-NA caddy with the extralarge 74-gallon tank is perfect for operations with numerous fryers dispersed at various locations within a building. Think of mall food courts, with their multiple restaurants, individual kitchens and limited access for a central collection system. The Tank Tank easily wheels to each location, its extra-large capacity accepting multiple deposits before needing to be emptied. Now, the onboard motor and pump make oil collection completely hands-free. Plus, once oil is housed safely inside, it can be transported with no hazardous sloshing. It’s locked in!

Company: Frontline International www.frontlineii.com

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INDUSTRY

Perspective

Advantages of

Foodservice Technology

John Matthews is the founder and president of Gray Cat Enterprises Inc., a strategic planning, operations and interim general management firm that specializes in helping businesses grow in the restaurant, convenience and general retail industries. With more than 25 years of senior-level experience in retail and a speaker at retail-group events throughout the U.S., Matthews has recently written “Game-Changing Strategies For Retailers,” which is available on Amazon. For more information, visit www. graycatenterprises.com.

Technology is continuing to change the face of foodservice in convenience stores. By John Matthews

• Marketing ith every passing day, month and year, better• Technical Experts and for-you foodservice options continue to infilSupport Desk trate the convenience store industry. • Installers Slowly but surely, the c-store industry is broadening • Store Staff & Ambassadors its foodservice options for customers in a way that rivals • Facilities restaurants. • Financial In fact, according to Nation’s Restaurant News “Wawa, • Legal Sheetz, Casey’s General Store, 7-Eleven and Circle K” Operational Process. Next up have now made its “2018 Top 100” restaurants report. is to identify how things will work That’s quite the achievement for the c-store industry. It is only a natural progression that technology is con- in a store, the logistics of the optinuing to change the face of foodservice in c-stores as eration. Each of these items must well through the implementation of touchscreen kiosks be vetted to seamlessly integrate and mobile ordering. Much like the restaurant industry, the technology option into today’s convenience store operators are embracing technology operations: • Current order/make/buy process mapping; to help them achieve the following concepts: • Future order/make/buy process mapping; Speed of Service. The use of technology to manage • Receipt as order confirmation vehicle; the repetitive task of order taking is one of the best ways • Device placement; kiosks and kitchen production system; to speed the process. This allows you to focus on produc• Price book coordination; ing a high-quality product in a shorter amount of time • Customer messaging; while delivering great service to the customer. No one • Store staff messaging; and likes to wait—a faster process means happier customers. • Facilities considerations: placement, power and networks. Order Accuracy. The possibility for miscommunicaTechnical Processes. Once the operational processes tion between you and the customer is eliminated. Customers can review their order as they place it and make have been mapped, identifying the technical connectivany changes before the order is submitted to the kitchen. ity items to support these activities is next. The customer Not only do inaccurate orders lead to waste, but they will be front and center in this discussion to ensure that whatever path they take—whether on an in-store kiosk or also annoy the customer. Choice. Touchscreen kiosks and mobile apps clearly through their mobile device—is accounted for. • Current store technology platform; communicate all available options and specials in an eas• Store connectivity—capacity and timeline; ily understood, step-by-step process. In addition, after • Vendor connectivity; placing their order, customers can browse the store or • Item/Item Description/PLU list; mobile device for additional items. • Integration point with POS; That being said, going from here to there when it • Art file list/transfer; and comes to implementing new technology platforms can • Hardware and software support process. be a daunting task. The convenience store industry has made tremendous Here is an outline of the key steps to implementing an strides in the past decade and is poised to continue to in-store kiosk and/or mobile device platform: Identify the Team. It all starts with executive sponsor- prosper with foodservice. Better-for-you items combined ship (buy-in is critical) then the project management team with a technology platform such as in-store kiosks or mobile device ordering will continue to attract more customtakes it from there. Included on the team should be: ers—especially from quick-service restaurants. • Store Operations/Process The race for “share of stomach” is on. • Food Services

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