Nye Reaching New Heights at Holiday

In his 41 years at Holiday Cos., Robert Nye has been critical to bolstering the workforce programs that have made Holiday Stationstores a major convenience store player.

By David Bennett, Senior Editor

A human relations specialist plays a critical role in determining adequate levels of employee satisfaction, resolving staffing conflicts, maintaining workforce management costs and devising plans to measure individual performance.

Convenience Store Decisions is honoring Robert Nye as a leader in human resources (HR) as part of its 2017 Human Resources Awards.

In his 41 years at Holiday Cos., headquartered in Bloomington, Minn., Robert Nye has been critical to helping implement programs that have accomplished all of the aformentioned tasks. For the last 31 years, Nye has led the company’s human resources department, a vital generator that drives the chain’s success.

Company subsidiary Holiday Stationstores operates 522 convenience stores in 10 states including Michigan, Washington and Alaska.

For the first decade of his career, Nye worked in retail operations.

“I started in an entry-level management position in a retail division of Holiday, which is no longer part of our business,” Nye said. “I worked my way up through store management and became the head of operations for that division before moving into human resources.”

CULTURALLY SPEAKING
Often, it’s a joining of traditional values, guiding principles and modern workplace concepts that help a company’s culture achieve success. So it is at Holiday Stationstores.
Since Nye took the HR helm at Holiday, the retailer has worked to nourish its company culture. The result has been a business that’s more productive and operates more efficiently. Within its geographic footprint, that culture has given the company a leg up on the competition.

“A respectful environment with opportunities for growth and competitive wages all add to the likelihood of an employee choosing to stay,” said Nye. “Through the years, countless employees have landed at Holiday at various points in their working life and have chosen to make us their career destination. Employee turnover is simply part of the c-store industry, but our tenure rivals the best-of-breed companies and we have many employees with over a quarter-century with the company; in fact, we have had several who have exceeded the 50-year mark.”

To support its company culture, Holiday boasts rigorous-hiring processes. Once an individual is on board, training commences.

TRAINING DAYS
Early on, employee training at Holiday Stationstores was achieved largely through paper-based workbooks, accompanied by a series of proprietary training videos.
“In 1997, we launched our computer-based training ‘Holiday University,’ which covered most of the skills needed to perform work in the stores,” said Nye. “At that time, keeping training programs current was a challenge, especially given the frequent changes in (point of sale) systems.”

The company in 2014, implemented a Learning Management System (LMS), utilizing a blended learning approach similar to those earlier learning strategies.

“The LMS-generated reporting is used to identify opportunities and strategize solutions, especially as it relates to store turnover and employee satisfaction,” Nye said.
Store managers are also afforded educational opportunities. Holiday has a staff of certified-training managers who work with new managers upon promotion or hire.

“Manager training consists of multi-week in-store training with a mix of live coaching, video training, reading material, classroom and knowledge quizzes,” said Nye. “This is all hosted in the LMS and reportable from the corporate office. Following in-store training, a field trainer spends time with the new manager helping implement what has been learned.”

During his long tenure at Holiday, Nye can point to many accomplishments.

“The growth of our benefits plans to enhance our employees’ security, well being and preparedness for retirement, is among the most significant contributions we have made to our team members,” said Nye. “Also, I am very pleased we have managed to reach a truly paperless employment process, from application, assessment, onboarding, training and ultimately paperless payroll for 100% of our employees.”

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Boosting Your Beverage Business

Whether it’s a modest combination deal or full promotional blowout, c-stores are finding the best methods to churn cold and frozen dispensed beverage sales.

By David Bennett, Senior Editor

A March 2016 survey by Mintel Group Ltd. showed that convenience store visitors want a wider variety of fresh food and beverages as part of their shopping experience.

As part of the report, 912 internet users aged 18 or older were asked: “Which of the following made-to-order or fresh foods/beverages have you purchased at convenience stores in the last three months,” 48% of respondents said fountain beverages, which was the top choice among food and beverage offerings.

Some years ago, the fountain category and the concept of fresh appeared contradictory. C-stores were known for a limited dispensed drink selection, with few promotions to push product. Frozen beverages often came out of a 7-Eleven Slurpee machine. However, convenience retailers today provide U.S. consumers a vast selection of cold and frozen dispensed beverages including fruit-infused slushes, milkshakes, iced coffees, novelty soft drinks and frozen beverage concoctions. The result is a category that continues to provide momentum when it comes to in-store sales.

EXTENDING FOODSERVICE SALES
C-store foodservice programs generated more than one-third of in-store gross-profit dollars in 2015, with cold and frozen dispensed beverage sales being key contributors, according to the National Association of Convenience Stores (NACS) 2015 State of the Industry report. By gross margin sales, cold beverages per store, per month grew to 50.86% in 2015. Frozen beverages weren’t that far behind with a gross margin percentage of 46.05%.

NACS’ preliminary State of the Industry report for 2016 will be out soon. When it is published, cold and frozen beverages will likely be strong performers again.

Arguably, the c-store channel has already earned the title as the cold dispensed beverage destination champ. Now, convenience retailers are adding some polish to the title in the form of new product offerings and flavorful deals to keep customers coming back—and not just to the cold vault.

“The thirst occasion is one of the primary reasons customers come to a c-store and a cold beverage is a great way to quench that thirst,” said Steven Montgomery, president of b2b Solutions LLC, a convenience store consultancy based in Lake Forest, Ill. “The question is: are they going to buy a beverage from the cooler or a dispensed beverage. The answer lies in the consumers’ personal preferences and how they perceive the retailer’s dispensed offers.”

Steve Magestro, president of Saukville, Wis.-based Mad Max Convenience Stores, counts dispensed beverages as a significant contributor to the company’s in-store profits and is looking to extend its advantage. Mad Max at the beginning of 2017 began installing a new generation, Pepsi Spire machine that offers consumers multiple drink selections at the touch of a button.

The chain operates 12 locations in Wisconsin, which in the winter, can be natural barrier to cold and frozen dispensed beverage sales. With the new machines, Magestro anticipates a big uptick in category sales when the weather begins to get warmer.

“Cold and frozen beverages always increase for us from April through September,” Magestro said. “Because of the temperature difference in our region, cold and frozen slow way down because of the cold weather. I think it will be flat from previous (winters).”

QSR COMPETITORS
However, for the upcoming summer season, which is often marked by road trips and consumers on the go, convenience stores also benefit from the high margins produced by salty snacks in the bag, or fresh and healthy snacks in grab-and-go portions. And where there are snacks, there are cold drink purchases.

“An advantage the c-store maintains is the tremendous selection of snacks that we offer that can be bought to go with the beverage,” said Montgomery.

Though snacks provide a natural boost to c-store dispensed beverage sales, the channel will continue to experience pressure from quick-serve restaurants (QSRs), which in the last few years, have positioned hot and cold dispensed beverages as stand-alone sales generators.

“Their strategy has shifted from being focused on selling the protein with the accompanying drink being an ancillary sale to one that understands that drinks can be a destination driver,” Montgomery said. “An example from the hot beverage category is shown to be McDonald’s emphasis on coffee. To date the only QSR that has already made the change for cold dispensed drinks is Sonic.”

Sonic Drive-In in the last few years has successfully marketed itself as premium place for dispensed beverages, where consumers can mix and experiment with drink combinations between its fountain drinks and slushes. Currently, the fast-food chain is promoting half-price shakes and ice slushes after 8 p.m.

That’s not to say the c-store channel isn’t concocting its own beverage strategies.

Anymore, c-store channel surfers can find popular beverage options such as Jolly Rancher Frozen Beverages, Hershey’s Freeze Frozen Beverages and Sour Punch Slushes.
Chilly coffee drinks have also gained traction in a growing number of c-stores.

PROMOTING SODA
Still, carbonated soft drinks continue to generate a bulk of cold and frozen dispensed beverage sales in the c-store channel.

For instance, Atlanta-based RaceTrac Petroleum offers up to 30 fountain options including Coca-Cola, Dr. Pepper and Pepsi products, plus another 18 frozen offerings. The retailer also has a private label frozen beverage brand, Numb Skull.

The c-store chain has expanded upon the model of a destination with its annual promotion known as Sodapalooza. Sodapalooza is RaceTrac’s most popular annual summer fountain and frozen marketing event. Customers who purchase a reusable Sodapalooza cup receive unlimited free refills on a variety of fountain drinks, teas and energy drinks at nearly 450 stores in the southeast.

Sodapalooza has become a favorite among RaceTrac promotions because of the timeliness of the promotion, as well as the exclusive access it provides, said Marianne Simpson, promotions manager for RaceTrac. 2016 was the fifth year RaceTrac has hosted Sodapalooza.

“Our guests are able to come into a RaceTrac like a VIP and refill their cup for free during the hottest months of the year, no questions asked,” said Simpson. “Additionally, in recent years, the cups have included general and regionally-specific coupons that add even more value to their refillable cup (e.g. all cups include Coca-Cola coupons while Atlanta guests may have a buy one, get one free Braves ticket, and Orlando area guests could receive discounted Sea World tickets). Finally, our store teams look forward to this promotion each year we have executed it, and team member engagement drives increased guest excitement.”

While the success of the beverage campaign is measurable, the planning that the annual promotion entails is demanding.

“It’s not always a guarantee that Sodapalooza will occur each year,” said Simpson. “Once a campaign ends, our marketing team works closely with our fountain category team to determine if the promotion was successful from a sales and brand-building perspective. If our internal teams determine the year’s campaign was a success, we will begin planning for the next year’s campaign in September, with plans to launch in the April or May of the coming year.”

Last year’s campaign ran from May 4-July 31, 2016.

Accompanied by clever advertising and social media campaigns, the beverage promotion has been a boon to RaceTrac in terms of attracting new customers.

“Social media is an integral part of the Sodapalooza promotion, as it allows us to leverage paid and earned tactics to increase awareness and drive purchase of the cups while engaging with our guests with channel-specific activities,” Simpson said.

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Mach 1: Breaking Barriers

This convenience chain is making cool things cooler and old things newer—all the while expanding its presence in the communities it serves.

By David Bennett, Senior Editor

Like many convenience retailers that pour over the details until they have a sure course of action, Mach 1 Stores contemplates its future steps carefully.

The result has been a progressive c-store operation with enviable locations and a growing reputation for stellar offerings and satisfied customers.

Part of Teutopolis, Ill.-based Meyer Oil Co., Mach 1 operates 17 locations throughout central and southern Illinois and Indiana. The retail business began in 1989.

Meyer Oil is a branded supplier for Marathon and ConocoPhillips.

The company prefers to make life comfortable for patrons, to include providing cavernous retail space that allows patrons to buy a six-pack of beer, a hot pizza or time at the gaming booth.

Mach 1’s flagship location in Harrisburg, Ill., was designed by Paragon Solutions. At more than 8,000 square feet, the retail space is adorned with lively graphics, easy to distinguish service areas, large bathrooms and an expansive forecourt.
Alan Meyer, chief operations officer of the second-generation, family-owned business, said the convenience chain is slated to grow even larger with two new locations, which are in the planning phase.

“Yes, we are starting construction on a site in Benton, Ill. and will soon begin the design of what will be the company’s 19th store in Clinton, Ill.” Meyer said. “We plan to be operating 20 stores by the end of 2018.”

BETTERING BEVERAGES
In the last few years, the company strategized that dispensed beverages—a high margin and profit earner—should be a more predominant focal point.

The Mach 1 Café features Ronnoco Handcrafted Coffee, provided by the St. Louis-based coffee roasting and distribution company.

The c-store also offers an array of cappuccinos. There are flavors such as French vanilla, pumpkin spice, gooey butter cake, caramel macchiato, chocolate fudge brownie, chocolate caramel pecan and white chocolate caramel.

Not only has Mach 1 keyed in on coffee, the c-store has developed the Mach 1 Chill Zone, which has an array of drink selections including freshly-brewed tea with flavors such as peach mango, raspberry and berry green.

Patrons can also choose from f’real milkshakes, Caribbean Crème smoothies, Flavor Burst frozen carbonated beverages and frozen sodas.

Meyer explained that establishing Mach 1 as a beverage destination was reasonable, but required a company commitment to ensure its success.

“First, the fountain and coffee demographic is one of the most loyal and finicky groups to capture. These people have high expectations with their purchases and once you’ve overcome that they will travel a long way to give you their business,” Meyer said. “Second, this space is one of the most visible aspects to a convenience store that we can differentiate from our competition. When people walk into a store they are directed to the equipment inside so the biggest and best versions of this will help you stand out. It is difficult to show someone that your company is better because you have the best gondola shelves or cooler doors.”

Fresh doughnuts, deli-style sandwiches and a popular roller grill program bolster the bevy of beverage offerings.

Mach 1 also offers Champ’s Chicken products and Hunt Brothers Pizza. Patrons can avail the Mach 1 Rewards loyalty program, where members receive two points per gallon at the pump and one point for every dollar spent inside the store. Customers can use points to purchase fuel or in-store items.

In addition, Mach 1 has a company app in which customers can track their loyalty points and promotions.

OPERATIONALLY SPEAKING
Through trial and error, Mach 1 has implemented effective upgrades and initiatives that helped streamline the retail business as a whole. The improvements have been varied, but effective:

• The company purchased headsets for all the employees. “This has resulted in customers receiving immediate service at the drive-through while at the same time allowing us to maximize the productivity of our employees,” said Meyer. “As our employees are addressing issues on the sales floor or on the lot they can be notified at a moment’s notice that they need to return to the checkout areas to assist customers waiting in line.”
• Company executives hired a third-party partner to visit all store locations regularly and report back on the quality of appearance and timeliness of service.
• The retailer uses a program that allows it to internally track a store’s appearance and identify any operational issues. “Site managers as well as operational management utilize this software program daily to make improvements as needed,” Meyer said.
• Mach 1 changed its point-of-sale system to NCR and a service called Pulse.

“Pulse gives us the ability to remotely monitor issues with the dispensers, receipt printers and car washes. With this technology, we have increased our efficiency in response to these issues.”

• The c-store is using analytics more to maximize productivity in addition to bolstering worker incentives. “We raised our wages and began offering sign-on bonuses to increase the quality of our staff. To offset this cost, we are tracking customers per payroll hour and adjusting hours where needed.”

In addition, Mach 1 is relying more on technology to boost internal operations.

“There are so many tools available today to track performance indicators such as productivity, sales performance, market share, etc. Of these areas, our priority has been to increase sales. Mach 1 achieved annual same-store sales increases of 9% in gallons and 7% on convenience items in 2016,” Meyer said. “The source of this success was being able to analyze areas we need to price competitively as well as areas we need to focus our marketing on.”

With each success, the company has grown even more aware of its customer needs and works hard to see how they can best be implemented.

Everything first starts with an idea and then, some discussion.

“I think family businesses allow the opportunity to have more open conversations,” Meyer said. “There are times when our passion spills over in the office and these conversations can get heated, but I think that it is how it should be. My entire life has been built around this company and I will do anything to make sure it succeeds and I know the other family members would do the same.”

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Mach 1: Breaking Barriers

This convenience chain is making cool things cooler and old things newer—all the while expanding its presence in the communities it serves.

By David Bennett, Senior Editor

Like many convenience retailers that pour over the details until they have a sure course of action, Mach 1 Stores contemplates its future steps carefully.

The result has been a progressive c-store operation with enviable locations and a growing reputation for stellar offerings and satisfied customers.

Part of Teutopolis, Ill.-based Meyer Oil Co., Mach 1 operates 17 locations throughout central and southern Illinois and Indiana. The retail business began in 1989.

Meyer Oil is a branded supplier for Marathon and ConocoPhillips.

The company prefers to make life comfortable for patrons, to include providing cavernous retail space that allows patrons to buy a six-pack of beer, a hot pizza or time at the gaming booth.

Mach 1’s flagship location in Harrisburg, Ill., was designed by Paragon Solutions. At more than 8,000 square feet, the retail space is adorned with lively graphics, easy to distinguish service areas, large bathrooms and an expansive forecourt.
Alan Meyer, chief operations officer of the second-generation, family-owned business, said the convenience chain is slated to grow even larger with two new locations, which are in the planning phase.

“Yes, we are starting construction on a site in Benton, Ill. and will soon begin the design of what will be the company’s 19th store in Clinton, Ill.” Meyer said. “We plan to be operating 20 stores by the end of 2018.”

BETTERING BEVERAGES
In the last few years, the company strategized that dispensed beverages—a high margin and profit earner—should be a more predominant focal point.

The Mach 1 Café features Ronnoco Handcrafted Coffee, provided by the St. Louis-based coffee roasting and distribution company.

The c-store also offers an array of cappuccinos. There are flavors such as French vanilla, pumpkin spice, gooey butter cake, caramel macchiato, chocolate fudge brownie, chocolate caramel pecan and white chocolate caramel.

Not only has Mach 1 keyed in on coffee, the c-store has developed the Mach 1 Chill Zone, which has an array of drink selections including freshly-brewed tea with flavors such as peach mango, raspberry and berry green.

Patrons can also choose from f’real milkshakes, Caribbean Crème smoothies, Flavor Burst frozen carbonated beverages and frozen sodas.

Meyer explained that establishing Mach 1 as a beverage destination was reasonable, but required a company commitment to ensure its success.

“First, the fountain and coffee demographic is one of the most loyal and finicky groups to capture. These people have high expectations with their purchases and once you’ve overcome that they will travel a long way to give you their business,” Meyer said. “Second, this space is one of the most visible aspects to a convenience store that we can differentiate from our competition. When people walk into a store they are directed to the equipment inside so the biggest and best versions of this will help you stand out. It is difficult to show someone that your company is better because you have the best gondola shelves or cooler doors.”

Fresh doughnuts, deli-style sandwiches and a popular roller grill program bolster the bevy of beverage offerings.

Mach 1 also offers Champ’s Chicken products and Hunt Brothers Pizza. Patrons can avail the Mach 1 Rewards loyalty program, where members receive two points per gallon at the pump and one point for every dollar spent inside the store. Customers can use points to purchase fuel or in-store items.

In addition, Mach 1 has a company app in which customers can track their loyalty points and promotions.

OPERATIONALLY SPEAKING
Through trial and error, Mach 1 has implemented effective upgrades and initiatives that helped streamline the retail business as a whole. The improvements have been varied, but effective:

• The company purchased headsets for all the employees. “This has resulted in customers receiving immediate service at the drive-through while at the same time allowing us to maximize the productivity of our employees,” said Meyer. “As our employees are addressing issues on the sales floor or on the lot they can be notified at a moment’s notice that they need to return to the checkout areas to assist customers waiting in line.”
• Company executives hired a third-party partner to visit all store locations regularly and report back on the quality of appearance and timeliness of service.
• The retailer uses a program that allows it to internally track a store’s appearance and identify any operational issues. “Site managers as well as operational management utilize this software program daily to make improvements as needed,” Meyer said.
• Mach 1 changed its point-of-sale system to NCR and a service called Pulse.

“Pulse gives us the ability to remotely monitor issues with the dispensers, receipt printers and car washes. With this technology, we have increased our efficiency in response to these issues.”

• The c-store is using analytics more to maximize productivity in addition to bolstering worker incentives. “We raised our wages and began offering sign-on bonuses to increase the quality of our staff. To offset this cost, we are tracking customers per payroll hour and adjusting hours where needed.”

In addition, Mach 1 is relying more on technology to boost internal operations.

“There are so many tools available today to track performance indicators such as productivity, sales performance, market share, etc. Of these areas, our priority has been to increase sales. Mach 1 achieved annual same-store sales increases of 9% in gallons and 7% on convenience items in 2016,” Meyer said. “The source of this success was being able to analyze areas we need to price competitively as well as areas we need to focus our marketing on.”

With each success, the company has grown even more aware of its customer needs and works hard to see how they can best be implemented.

Everything first starts with an idea and then, some discussion.

“I think family businesses allow the opportunity to have more open conversations,” Meyer said. “There are times when our passion spills over in the office and these conversations can get heated, but I think that it is how it should be. My entire life has been built around this company and I will do anything to make sure it succeeds and I know the other family members would do the same.”

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Turner Making Waves at RaceTrac

Because of his body of work at RaceTrac, CSD recognizes Steven Turner as a Front-runner in Foodservice for 2017.

By David Bennett, Senior Editor

During his tenure at McDonald’s, Steven Turner saw waves of food trends shake the industry. Some rolled in like tsunamis and some quickly sunk below the surface.

“I was at McDonald’s for a long time—just over 11 years,” Turner said. “Back then, the conversation was about Wendy’s and Burger King. Five years into my time at McDonald’s, the new discussions were about Dunkin’ (Donuts) and Starbucks, the battle over breakfast and all these other things. And, at the end of my time—and what gave me greater awareness—the discussion was about the emerging threat of c-stores. The name of RaceTrac would come up a lot.”

It was in 2012 the opportunity to move up within McDonald’s also meant an expected move to Chicago. Looking to stay in the Atlanta area, Turner again scouted RaceTrac Petroleum Inc., which was making its own foodservice ripples in the industry.

Now the director of food & beverage for the Atlanta-based c-store chain, Turner explained that RaceTrac’s growing reputation for quality programs and strong customer engagement is what intrigued him.

“The more I learned about it and became exposed to the senior leadership and seeing the plans for growth and development with the business, it became a real easy decision to let go of McDonald’s and join the team over here,” said Turner, who is responsible for foodservice, dispensed beverages, quality assurance and food safety at RaceTrac.

RaceTrac operates more than 600 stores nationwide, some of which are under the RaceWay brand, in 12 states.

During Turner’s tenure, RaceTrac integrated its new store prototype featuring Swirl World frozen treats, an expanded coffee bar, salads, sandwiches, fruits and bakery items delivered fresh daily.

CHANGES IN STORE
Under Turner’s guidance, the c-store chain is zeroing in on its strongest offerings to drive differentiation. One of the programs that RaceTrac sees great promise in is its evolving made-to-order (MTO) platform, with a focus on take-out offerings that emphasize fresh, quality ingredients set at a budget-friendly price point.

The chain’s first MTO concept called The Speedy Avocado Southwest Grill was a good testing ground for RaceTrac’s broader MTO program that is being expanded, said Turner, who has a MBA from Georgia Tech. The Speedy Avocado, launched three years ago, is being replaced with RaceTrac’s large-scale rollout of its MTO program, which started last May, when RaceTrac began the launch of a deli program comprising customizable sandwiches.

A select number of RaceTrac stores currently provide the new made-to-order offering, which allows patrons to create their own sandwiches, pizzas and specialty beverages, which include everything from milkshakes made with real, hand-scooped ice cream to espresso-based lattes, mochas and cappuccinos.

Patrons can build custom-made creations or choose from a list of options that include ham, egg and cheese croissants, meatball subs and pepper jack chicken wraps.

RaceTrac is working towards offering made to order at approximately 200 stores by the end of 2017.

MEETING DEMAND
Like other successful c-store operations, RaceTrac is leveraging its brand to build customer loyalty. To this end, it’s adapting its foodservice programs to meet customer preferences.
Breakfast is a good example.

After studying store purchasing patterns, RaceTrac found its top sellers from 5 a.m-10 a.m. aren’t typical breakfast items. In fact, patrons purchase a wide range of items during the early morning including energy drinks and hot dogs. In fact, three of five RaceTrac customers prefer hot dogs over doughnuts for breakfast.

As Turner has refined the growing foodservice programs for RaceTrac, he also stresses that every foodservice venture begins with some basic fundamentals.

“If it doesn’t taste good and we’re not using quality ingredients and those basic things, we’re not going to be able to grow to the level that we want to, and expect to,” Turner said.

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Solar-Powered Store Design

More convenience stores are taking on green energy initiatives, designed to cut costs while reducing their carbon footprint.

By David Bennett, Senior Editor

When it comes to designing and powering new stores, convenience retailers are always looking for measures to lower electrical bills. Even retrofitting existing locations with energy-efficient equipment is routine.

There’s a much smaller group of retailers that are connecting to alternative energy providers—a list of providers that continues to grow partly because of state-sponsored incentives.

Techniques and technology developed to harness solar energy have reached new levels of efficiency and affordability, resulting in more budget-conscious businesses switching over to solar energy. However, such energy options remain largely unknown within the c-store industry.

That is slowly changing, however.

HALFMOON RISING
Saratoga Springs, N.Y.-based Stewart’s Stores is the biggest c-store chain arguably to incorporate a significant solar energy program. The company today operates 337 shops, 17 of which are supported by a remote net-metering system powered by solar technology in the town of Halfmoon, N.Y. The Halfmoon Project, completed in 2016, includes a solar array of more than 1,700 panels.

Panels were installed on the roof of the company’s 17 store locations, and are powered by a dedicated solar plant.

The 582-kilowatt Halfmoon Project, undertaken by Colorado-based Clean Energy Collective and New York City solar developer, EnterSolar, is the first-ever shared solar farm in the state of New York—under new policies approved by the state’s Public Service Commission.

Maria D’Amelia, Stewart’s spokesperson, said there are a few reasons why the retailer chose to diversify its power capabilities with solar. In addition to battling the volatility of rising gas prices, the project offers Stewart’s an opportunity to engage in a cleaner energy solution.

“The rooftop project has been particularly effective as our plant’s peak demand is when solar output is at its greatest; resolving power distribution problems of the grid,” D’Amelia said. “We are continually tracking how much energy we’re generating and can say our expectations have been met. So, you could call our solar projects a shining success.”

The U.S. leads the North American solar market. New solar hotspots in the nation include the growing market in the Northeast region, which includes the states of New York and New Jersey.

Stewart’s isn’t the first c-store chain in New York to employ solar.

Crosby’s convenience store chain, based in Lockport, N.Y., a few years ago installed two solar-powered systems, including a 110 panel, 29-kilowatt solar energy pilot in the city of Amherst.

With 66 panels on the gas pump canopy and another 44 on the store’s roof, the green initiative has reduced the convenience store’s energy consumption by at least 15% yearly.

Over the next five years, New York—home to Stewart’s and Crosby’s—is expected to install more than 3,000 megawatts of solar electric capacity, ranking the state fifth in the U.S. over that time span. This is enough to power 492,000 homes and more than six times the amount of solar capacity installed in New York State over the last five years.

Graham Smith is the founder and CEO of Open Energy, a provider of debt financing solutions for commercial solar projects. Open Energy, which provided the financing for the Halfmoon Project, is part of a new breed of companies helping drive the U.S. solar market, which is gaining added support via state legislation in states such as New York.

Considering that businesses can save 10-20% on their electrical bills, solar is a sensible option, if the return on investment is there,” Smith said.

“It’s a huge, growing trend. Smith said. “It’s a no-brainer.”

GREEN AMBITIONS
Stewart’s Shops is committed to making many of its store locations greener, when the opportunities come along.

“For us, one of the most noticeable initiatives may be the continuous upgrades to LED lighting inside and outside of our shops. We also have an extensive recycling program to minimize waste,” said D’Amelia. “More than four and a half million pounds of cardboard, office paper, plastic, metal and light bulbs are recycled annually. We are using reusable containers to transport product, offering a number of reusable coffee mugs in our shops, and our to-go cups are made from paper rather than Styrofoam.”

Stewart’s is likely on the right track, especially since energy sustainability has become a consumer consideration of younger Americans, said Rebekah Matheny, an assistant professor of interior design within the Department of Design at the Ohio State University.

“When we look at research on Millennial and Gen Z consumers, we uncover that those generations put their spending power behind their personal beliefs, of which environmental and social consciousness of brands leads the way,” Matheny said. These generations are smart and responsible consumers. They do their homework, they know where and how the products they are purchasing are manufactured and they care about fair trade, living wages, child labor issues, working conditions, materiality and the generosity of the brand. In other words, they care how the retailer is participating in the greater good of the environment and society, from a local to global impact.”

SUNNY NOONER’S
Other states such as Texas are also providing companies financial incentives to go greener.
San Antonio-based Nooner’s has installed solar panels at eight c-stores. With two more locations currently under construction, Sean Nooner, president of Nooner Holdings Ltd., said its commitment to solar power has shaved off an average of $900-$1,000 from its monthly electricity costs.

“Our investigation and desire to install green energy is what led us to solar,” Nooner said. “We have been installing solar since 2012. All of our current stores have solar and the next two stores have already been contracted to have solar installed as part of the ground up construction. We even have solar on our office building.”

At most locations, Nooner’s has installed solar panels on the roof and the canopy.

The average cost of each complete solar add-on is $260,000. However, because of authorized tax abatements and other incentives granted by the state of Texas, the final cost of each project has ended up being approximately $65,000, Nooner said.

It’s a long-term investment that should address electrical costs, going forward.

“Energy prices are only going to go up, so saving a block of kilowatts each month will pay back more over time,” Nooner said.

KEEPING WATCH
The U.S. Energy Department said in a 2016 report that the cost of getting power from wind fell more than 40% from 2008 to 2015, and solar panel prices dropped more than 60% during that period.

Renewable energy accounts for about 15% of the electricity generated in the U.S.

President Donald Trump also has called for reviving the coal industry, which has struggled in part because of the rise of renewable energy. Still, the growing momentum of renewable energy keeps retailers such as Stewart’s scouting for greener prospects.

“We continue to seek potential sites for remote net metering projects as long as a reasonable return is determined, both financially and environmentally,” said D’Amelia. “We have looked at a remote hydro system that would allow us to put charging station in a few dozen shops, but we have encountered some regulatory resistance.”

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Shuffling the Deck: What the Trump Administration Means for C-Stores

C-store operators are betting that a Trump administration will usher in a more business-friendly environment.

By David Bennett, Senior Editor

In the world of New York real estate, Donald Trump earned a reputation as a self-publicist and an assertive schemer. Now, as the soon-to-be leader of the free world, President-elect Trump is still viewed by many as a self-publicist and an assertive schemer.

He’s also projected as a likely pro-growth leader, heading an administration with an agenda that prioritizes big tax cuts for business and a regulatory rollback not seen in the country since former President Ronald Reagan labeled ketchup a vegetable. President-elect Trump has stated that, after his inauguration, he intends to press forward with his goals to overhaul the tax code, healthcare and immigration laws.

Though it’s too early to forecast what is going to happen under the new administration, the moves the president-elect has made so far should give convenience retailers an idea of what’s to come. First are his cabinet selections. Among the choices are Rep. Tom Price, tapped to run the Department of Health and Human Services, and Andy Puzder, president and CEO of CKE Restaurants Inc., chosen to head the U.S. Department of Labor.

However, proponents insist the important thing is not the industries the nominees represent, but the fact they know about business and what makes businesses work.

Robert Griffith is the president of Golden Pantry Food Stores Inc., a convenience chain of more than 40 stores based in Watkinsville, Ga. Like others in the c-store community, Griffith is quietly optimistic.

“This entire election cycle has been very interesting, but also unpredictable, based on President-elect Trump’s campaign promises and now, cabinet appointments, said Griffith.

“However, I do feel as though the incoming administration will be more favorable for business in general.”

For c-stores to match up with bigger and more resourceful retail competitors, they must be able to operate in a more nimble environment. Insisting he would drain “the swamp,” once elected, some in the c-store industry say the incoming president can help by slaying a few authoritarian alligators.

BETTER TIMES
Doug Galli, vice president and general manager of Reid Stores, who participated in our wages article, said the next president should make way for businesses to operate efficiently—a path currently choked by tons of bureaucratic red tape.

“The real problem is the entire government bureaucracy,” Galli said. “They write rules and regulations that are stifling business growth. We have layer upon layer of government agencies with oversight that is nearly impossible with which to comply. The insanity has to stop.”

Of course there are many other issues with which c-stores must contend going forward including the probable repeal and replacement of the Patient Care and Affordable Care Act (ACA). In addition, the minimum wage is set to rise in 21 states in 2017. This is aside from the federal minimum wage hike proposed under the President Obama’s administration.

As a new administration takes the helm, Convenience Store Decisions looks at some of these issues. How the next four years plays out is up for debate, but many convenience retailers do seem optimistic as they wait to see what happens.

Download the full article here.

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Pipeline Problems Reveal Regulatory Flaw

Two separate occurrences that interrupted operations of the Colonial Pipeline also forced states to declare emergencies, which in turn spurred a wide-spread run on fuel.

By David Bennett, Senior Editor

Two recent, high-profile incidents that struck the Colonial Pipeline in Shelby County, Ala. were exacerbated by a federal transportation policy that inadvertently caused a run on gas in North Carolina and other southern states that are supplied by the enormous pipeline.

The initial 12-day interruption in gasoline supply occurred in mid-September and was the result of a pipeline leak about 30 miles south of Birmingham, Ala. The second incident, which took place on Oct. 31, was an explosion tied to a worker hitting a nearby section of the pipeline with excavation equipment.

The Colonial network is the largest petroleum product pipeline system in the country. It runs continuously at or near full capacity, delivering about 2.6 million barrels per day via a 5,500-mile system that connects 29 refineries and 267 distribution terminals.

After the September leak, Colonial used one of two main lines to move gasoline as it made repairs, but it still led to days of dry pumps and higher gas prices in Alabama, Georgia, Tennessee and the Carolinas while repairs were made.

STATES OF EMERGENCY
It was only a few hours after the September rupture that Alabama Gov. Robert Bentley and Georgia Gov. Nathan Deal each issued executive orders to declare states of emergency over concerns about gasoline shortages in areas served by the pipeline.

Such emergency orders are necessary to waive existing transportation rules and allow fuel delivery truck drivers in each state to exceed maximum hour limits established by the U.S. Department of Transportation and prevent gasoline outages. The orders apply only to trucks that are transporting fuel. Essentially, a state of emergency has to be declared before officials can get the waiver to place more fuel tankers on the road.

After the September service break at Colonial, regional gas stations and convenience retailers who sell fuel were forced to obtain gas from the most dependable sources, in the timeliest manner to keep gas pumps operating. During that period, many more tanker trucks were on the highways hauling fuel from locations as far away as Texas to keep stations in places like Tennessee and North Carolina supplied with gasoline.

Large operators who deliver their own fuel such as Knoxville, Tenn.-based Pilot Flying J were able to withstand the fuel shortage during the September incident. However, if the Colonial Pipeline had been down longer, the more difficult it would have been to “maintain our supply of gasoline,” said Brad Jenkins, vice president of petroleum supply and distribution for Pilot Flying J.

Gary Harris, executive director of North Carolina Petroleum & Convenience Marketers, said most of the fuel used by gas stations in the Triangle area comes from the pipeline. When North Carolina Gov. Pat McCrory declared a state of emergency after the rupture of the pipeline, the immediate results were dramatic.

“Many stores, especially independent-branded stations were drained dry after the governor declared a state of emergency and the press panicked the populace,” Harris said. “Supply and allocation were severe and before the announcement of the repair, supply was incredibly tight, down to at least a one-third of the regular supply in the state. Most branded marketers did the best with the allocation they could get.”

A SECOND TIME
The Oct. 31 explosion happened a few miles from where the Colonial pipeline sprang a major leak. Gasoline price futures in North Carolina spiked on Oct. 31 by as much as 15% after the explosion.

Again, state governors issued emergency orders before gas prices rose.

Emily LaRoy, executive director of the Tennessee Fuel and Convenience Store Association, said such a state of emergency was also levied in Tennessee this past September, causing a run on gas in the Volunteer State similar to what befell North Carolina station operators.
“That’s what happened here too and we’re having discussions on it,” LaRoy said. “Because a state of emergency has to be declared before you can get the waiver, it’s sort of a Catch-22. I think we would have asked for one a lot earlier in the week, but you have to declare a state of emergency, which can cause a panic and make (a public rush to the pumps) a lot worse.”

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Giving Back Year Round

colorado-build-2016There’s no doubt that the convenience industry is generous when it comes to providing for charitable causes. However, two retailers—Kum & Go and QuickChek—are examples of companies that go out of their way to make a difference.

By David Bennett, Senior Editor

Almost all convenience stores are engaged in charitable activities during the holidays. Some are special events that are scheduled in conjunction with Thanksgiving and Christmas. Others are planned for throughout the year.

Since the holidays are upon us, CSD chose to profile two companies that go the extra mile—figuratively and literally—to assist those in need.

HELP FOR HABITAT
West Des Moines, Iowa-based Kum & Go L.C., which operates more than 400 stores in 11 states, has crafted a tradition with its work with Habitat for Humanity in states such as Colorado, North Dakota and South Dakota.

“We have associates who have volunteered on several home builds in many locations,” said Kristie Bell, spokeswoman for Kum & Go. “In addition to the home we sponsor each year that local folks work on, we also have GMs who volunteer to work on a build the day after each of our three division meetings, held annually.”

Habitat for Humanity makes houses affordable by giving eligible families a mortgage with no interest rate and capping their payment at 25%.

“Last year, we raised more than $600,000,” Bell said. “Our generous customers donated about $370,000 and we sponsored a home build in Story City, Iowa.” This house is still to be completed.

Most Habitat homes are around $100,000. The remainder of the funds Kum & Go generated goes toward other Habitat projects—some of which stay in local communities and some goes to Habitat for Humanity International.

HOPE FOR WARRIORS
Known for its annual balloon festival, QuickChek, based in Whitehouse Station, N.J., is dedicated to serving its communities both in and out of store, having raised millions of dollars to support a variety of causes that benefit children, families and military veterans.

This is the third year of QuickChek’s partnership with Hope for the Warriors, a national nonprofit that enhances the quality of life for post-9/11 service members and their families.

QuickChek, which operates 143 stores in New Jersey and New York, was a sponsor of the 6th Precinct Cops Who Care charity bicycling tour to raise funds for local military veterans on Long Island, N.Y. More than 300 riders, including the QuickChek ride team, consisting of seven company executives and store personnel, took part in either a 25-mile ride or a 50-mile ride throughout parts of Long Island on April 24, 2016.

QuickChek also supplied riders with bottled water at stations throughout the route.
The c-store chain was also a sponsor of the 9th annual Long Island Run for the Warriors in Lindenhurst, N.Y. for the second year in a row. Suffolk County is home to the largest population of veterans in New York State.

Because this cause is special to QuickChek, expect more miles to be ridden and more veterans to receive help in the future.

“Many of our team members are veterans who have served our country,” said QuickChek CEO Dean Durling. “The Run for the Warriors is an event that provides our veteran employees with hope and further motivation in wanting to be the best they can be and adds to the personal connection we strive for in being a great place to work and a great place to invest.”

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Alternative Energy Drinks

Energy drink conceptEnergy drink producers are banking on convenience store customers’ growing interest in better-for-you beverage products to energize sales.

By David Bennett, Senior Editor

Against a towering LED backdrop at The NACS Show this past October in Atlanta, singer CeeLo Green had showed up to greet onlookers at the +RED Elixir exhibit. In an opposite corner, Michael Ball, founder and CEO of the fledging beverage company, explained that +RED Elixir-brand beverages differ greatly from the general energy drinks sold at convenience stores.

The product, introduced this summer, is a functional drink, naturally caffeinated by green coffee bean extract and not weighed down by excessive sugar, he explained.
Ball is probably onto something. Today’s health-centric market has consumers on the search for better-for-you versions to their favorite products, and energy drinks and shots are no exception.

TESTING THE MARKET
It’s not surprising that the demand for performance drinks made with natural, healthy ingredients are on the rise, said James van der Valk, owner of Fast Lane Motor Fuels, based in Simi Valley, Calif.

The c-store owner had heard about +RED Elixir early on, testing the beverage at one of his four stores. The overwhelming response from patrons prompted Fast Lane to try the new functional beverage at the rest of its locations. The response, overall, was positive.

“That’s when I noticed people were looking for something different,” van der Valk said.
U.S consumers in the last few years have been drifting away from the high-caffeine, high-sugar formulas. The energy drink market continues to hold its own in light of declining soda sales, despite the fact that energy drinks have come under fire over consumer health concerns.

In a survey of 2,000 internet users aged 18 and older conducted by the Mintel Group this past summer, approximately a quarter of respondents said they would be more comfortable drinking energy drinks/shots made with all-natural ingredients and view natural versions as safer than regular ones.

This supports the growth of natural category offerings, but may challenge leading companies of regular energy drinks and shots by adding to the number of products in the space and appealing to top consumer trends, the Mintel report stated.

According to U.S. convenience store sales data from Chicago-based market research firm IRI, energy drink dollar sales for the 52-week period ending Oct. 2, 2016 rose 4.87% to slightly more than $9 billion, compared to the same period last year.

Changing some consumers’ perception that energy drinks aren’t as healthy as they could be is difficult, but not impossible, said Alex Beckett, global food and drink analyst for the Mintel Group.

“Competitively, it’s extraordinarily tough in energy drinks that claim to be better-for-you, so knowing which brand to stock is likely to be tough for c-store owners,” Beckett said. “Healthy energy is a trend that is well suited for on-the-go occasions though, so it should prove lucrative for the c-store channel.”

PROTEIN SHAKE-UP
Another energy beverage option resonating more with consumers on the go is protein-enriched energy drinks. Virginia Lee, senior beverages analyst at Euromonitor International, said one enticement could be that protein acts as a meal replacement for consumers on the go, which also applies to the convenience store patrons—especially Millennials.

“We are seeing the convergence of caffeine/energy plus protein,” Lee said. “Busy U.S. consumers are looking for energy-plus. They want the functional benefits of an energy drink, RTD (ready-to-drink) coffee, or energy shot but they also increasingly want the benefit of protein.”

One popular product line that typifies this growing thirst for protein in a can is Muscle Monster Energy Shake, which is designed to be a convenient two-in-one product for consumers who like both protein shakes and energy drinks.

“Muscle Monster Energy Shake contains 25 grams of protein and proprietary Monster Energy blend per 15-ounce can,” Lee said, referring to the instant dose of protein that consumers pick up with the Monster line.
Monster’s line extensions in coffee (Monster Java), tea (Monster Rehab) and protein (Muscle Monster) account for a sizable stake of the company’s sales.

“Protein-enhanced energy drinks tick the box for those active people who want an energy hit during a workout or recovery,” Beckett said. “The concept is a modern take on energy drinks, serving a 21st century consumer that is always demanding more from products.”

CONSUMER BASE
The current energy trends at the Army & Air Force Exchange Service (AAFES) show that energy drinks that are diet and or sugar-free are among the top sellers year to date. Monster Energy’s Ultra Sub-Brand is up 2.1%, and Red Bull’s Sugar-Free energy drinks are up 7.6% in dollar sales at AAFES, through September 2016.

Millennial-age Solders and Airmen are significant customers of the energy beverage segment at AAFES.

“Studies show that Millennials are the fastest growing market for energy, and extra protein ranks high on the list of influencers when purchasing more energy drinks,” said Dragana Ilic, non-alcoholic beverages buyer for the AAFES. “We have noticed trends that consumers who drink protein-based energy drinks are looking for extra protein. The current trend for energy shakes with protein is moving towards a drink with higher protein content.”

Trends show that chocolate and vanilla are still the most requested flavors among military members. AAFES has 700 stores on U.S. military bases throughout the U.S. and abroad, which include Exchange Express convenience stores.

As major brands such as Red Bull, Monster and Rock Star, which boasts more almost 20 different flavors, continue to adapt to meet changing consumer tastes, demand is expected to remain high.

“We believe overall, energy drinks are likely to have solid growth in the coming years because the category delivers on a very large consumer need-state, which is energy,” said Gary Hemphill, managing director of research for Beverage Marketing Corp. “The challenge for the category is to broaden its demographics beyond its core of youthful males.”

If companies do expand demographic reach, it will eventually lead to additional c-store sales.

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