Hello, I am Melissa Travers, Director of Community here at BevNET & NOSH.
I am here with Jackie Brugliera, Director of Marketing and co-host of Taste Radio.
Jackie, so great to have you here as always.
How are you doing?
I'm feeling warm right now, because I just recorded an episode of Taste Radio.
So I'm ready to go.
Well, that's music to my ears.
Things are cooling down here in New England, but things heating up is always good news.
And if we're going to talk about heating up, I have to talk about our Slack community, because things are heating up in there with some of the great questions we're getting in.
Can you point out any?
As a matter of fact, I can.
We had Amy Bett from DrinkMellow Sparkling Cava.
She wanted to know if she needs to use corrugated trays or if shrink wrapping would be better when building palettes, which I thought was such a good question.
And by the way, the DrinkMellow cans are adorable.
She put a screenshot in there to sort of illustrate her question.
And they're so cute.
Have you tried this beverage before?
I'm a fan of the beverage.
It's really tasty.
And I do agree that it's quite cute.
So thanks, Amy, for that.
And then we had Ali Olivier ask about the redemption side of beverage.
So things like registering with the state, the cost involved, the legality, regionality.
And we're still looking for some more answers on both of those.
So for any folks listening, if you've got answers, we need answers.
You can head over to slack.bevnet.com and we would love to hear any answers that you have and have you join in the conversation.
And if you have more questions, that's the place to ask them.
So head to Slack, ask your questions, see other questions that you might even not be thinking about yet that are getting answered.
Slack is the place.
We also are heating up the conversations that we're having on Community Call.
We're working on more script flips where we have a brand talk about a certain piece of business that they're working on and then bring in some other folks as a round table.
And I do want to invite any founders out there who are especially in an emerging phase and working through whatever piece of business it is.
It could be deductions, it could be pack size, it could be trade spend, whatever it is.
I would love to hear from you and we could talk about how we might be able to include you in Community Call.
The best way to reach out is either in the Slack community that's slacked up, bevnet.com, or you can hit me up the good old fashioned way, mtraverse, T-R-A-V-E-R-S-E at bevnet.com.
Those script flips are some of my favorite episodes.
It's just the genesis of the community.
It is just the best thing to watch, just founders helping founders in different stages of their business.
It's been really fun to see where this show has gone.
It really is by and for the community.
And I think we'll be doing a lot more of those script flips and really turn things in that direction because it seems to be the most helpful for our community.
And like you said, it's just so much fun.
I think one of the best things is having people either meet on one of these community calls and in that sort of pre-show banter, watch folks get to know each other and meet each other and then make plans to chat after the show or reuniting folks who haven't chatted in a long time, which is certainly the case for this upcoming episode of Community Call that we're talking about right now, How to Score in C-Store.
Yeah, and who was on this episode?
It was Vanessa and Andy, I believe.
Exactly right.
We had Andy Steele and Vanessa Walker.
Andy was a category manager in the C-Store channel.
He met Vanessa while she was running sales at a beverage brand.
So they met that way and they both hopped on Community Call to talk about how to succeed here.
Now, Vanessa went on to La Croix, Celsius.
She's now the president of New You Brands.
And then Andy is at Ollipop now after years of BODYARMOR, Glaceau Vitamin Water, that kind of thing.
So they really, really know their stuff.
They've been doing it for a long time, but it was just so nice to watch them kind of catch up on the banter before the Community Call.
Yeah, you get to see the behind the scenes.
You gotta record some next time so we can get a look.
Ooh, that's a great idea.
A little behind the scenes action never hurt anybody, right?
Mm-hmm.
They have years and years of experience and you could just tell from the conversation.
I mean, Sea Store is definitely different than traditional retail.
It's, I think, a little bit more finicky.
You really need to know what you're doing because you get in and you either succeed or you fail.
And not to, like, you know, be doom and gloom, but it's just very specific.
And if you know the strategy and you know how to approach it, you're gonna do well.
But I think you just can't approach it like traditional retail.
You got it.
It's so competitive.
And it is really expensive.
The slotting is really hefty.
So to be able to get it right the first time and to start planning now makes a ton of sense.
Andy was talking about how Ollipop has, of course, expanded widely into retail grocery and is now approaching C-Store, which it sounds like isn't always the case.
And he says that having that great story to tell from retail is really helping their case in C-Store.
Yeah, and they also talked about just how it's changed a bit and now there's just more room for food.
Beverage used to be the main CPG products sold at C-Store and now people are looking for healthy on-the-go snacks.
So they're creating space for those brands.
He listed off some of the specific chains that are new and up and coming, which is really cool.
Then Vanessa gave a really fun case study from when she was at La Croix about how she launched and how she built out that brand on a regional basis.
And she also gave a really great tip on how she sailed right into 7-Eleven with a brilliant scrappy trick that helped her figure out exactly what the leadership team was looking for.
Again, not something that happens every single day, but I love hearing these sort of like little pieces of magic that folks have figured out that truly unlock a door.
And while it may not be something that will work for everybody at this moment in time, it might just trigger something that will help you do the same thing in your own business.
Just helps you think outside the box a little bit.
And even at an established brand, you can still get crafty and you can still think of other ways to get the attention because you're gonna zig while other people are zagging, you know what I mean?
And that's what's gonna stand out.
Jackie, do you shop in C stores?
I do, I do shop in C stores.
I usually buy like a healthy snack on the go or I honestly buy Celsius sometimes for like a quick hit of energy.
Or I've been seeing more iced teas, which I really love tea.
So I've been trying to drink more of that and I grab it.
I have a 7-Eleven right on the corner near my apartment.
So that's kind of my go-to.
Good stuff.
I'm trying to think about what I buy in C stores.
Usually they're on road trips, I think.
And it's usually some kind of beverage, usually a meat stick.
I'm a big meat stick person, some nuts.
And then I think, I don't know, I would say I afford myself maybe two diet cokes a year.
Sometimes they're just so good.
And once in a while, there's nothing like a diet cherry coke.
I know it's ripping my insides apart, but what are you gonna do?
I mean, my guilty pleasure is sprite.
So that's when I wanna cheat a little bit.
Everything in moderation, right?
Exactly.
Well, I hope you all enjoy this upcoming Community Call.
Please do like and subscribe us on your listening platform of choice.
If you could give us a rating, that would be fabulous.
And without further ado, we hope you enjoy.
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Let us know.
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Hello, and thank you so much for joining us today on Community Call.
I am Melissa Travers, Director of Community here at BevNET & NOSH.
Today, we are talking about how to score in the C-Store channel, which is as hard to penetrate a channel as you might imagine, and certainly different than traditional retail groceries.
So we have the experts here today to talk about their findings, discuss best practices and answer all of your questions.
Thank you so much, Vanessa Walker and Andy Steele for joining us.
It's such a pleasure to have you here.
We're gonna get started with a couple of quick introductions.
Vanessa Walker, thanks for joining us.
You are the Chief Strategy Officer of Great Health Works and the President of New You Brands.
You have spent so much time in this channel and this industry.
Please give us a rundown of what your experience has been like working in the industry and in CSTORE.
Thank you first for having me.
It's a pleasure.
Wow, it's been a long career.
And I met Andy Steele actually back in the day, in the late nineties.
Started my career at Target Stores, wound up at the buyer.
And then I started my beverage career after that time at Target.
And one of the things that occurred was, I started calling on CSTORES.
Selling in children's drinks.
And then from there, I moved on to Big Red.
Been eight years leading the turnaround of the La Croix Parkland Water Brand.
And I also was leading the marketing and sales, the rebrand for Celsius.
I was there for under three years, just under three years.
And then I wound up consulting with startup that we're all trying to get into the CSTORES channel more recently.
And then I am here now at New You Brands and Great Health Works.
Andy Steele, I think it would be easier to talk about which brands you haven't worked with.
Vitamin Water, Glass O'Coke, Chef's Cut, BODYARMOR, Ollipop.
Have you always focused on C-Store at all of these organizations that you've worked with?
I'd say primarily yes.
Similarly to Vanessa, I started my career as a buyer, worked for a chain called Calador, which is now defunct.
They are kind of like a regional target chain.
That was my first buying job.
Then I worked for Staples before anybody kind of knew what an office supply store was in that day.
And then got involved in the community store business, worked for Store 24 as a merchant there.
We sold that business.
Then I went to work for Shell and kind of ran all their beverage and snack business.
And then along the way, I said, I've seen so many of these brands that have called to me on beverage and snacks and said, I really want to get involved in one that I think is going to take off.
So that's when I joined Glaceau with Vitamin Water.
Eventually we sold that to Coke and started my own consulting company to help some snack brands get going.
And then I got a call from Mike Rapoli and he said, it's time to come back.
And so I got involved with BODYARMOR and obviously we sold that to Coke.
And now I'm involved with Ollipop, which I'm thrilled about and happy to just chat about whatever people want to talk about about SeaStore.
Couldn't ask for two better people to tackle this topic.
So let's do just that and dive in.
Why don't we start with what the SeaStore landscape looks like?
Both of you said that it's a very difficult area to penetrate.
Can you talk a little bit about what the landscape looks like and how that makes it a more difficult channel to get into than others?
Well, sure.
Yeah.
I mean, if you looked at the convenience store business, like it was a puzzle, certain puzzles are 100 piece puzzles.
This one is 150,000 piece puzzle, right?
So many points of distribution, so many stores to go after.
If you look at the top 50 chains, that's 30% of the store count, so extremely fragmented.
If you look at top 200 chains, that's 36%.
So even if you knock it out of the ballpark, in all those top chains, you still are only about a third of the way there.
It's a bit like herding cats.
There's certainly some key corner pieces that you have to get authorization at.
So to me, that's the biggest difference between a C store versus drug versus grocery, where there's some very big players.
There's certain big players here, but at the end of the day, it's just a ton of small, single store, five store operators that you got to go after.
And I would add a phrase going into the C stores, you can think of it as turn or burn, because if you can't turn, you're going to burn.
They're going to push you right off the shelf.
And part of, and I know we'll get into the distribution channel, but part of it also has to do with the fact that a lot of these distributors, all of their people are on commission, commission by case.
So if your flavor or your skew isn't working and they have something else that will, and they're going to get paid with the turn on that case, they're going to remove you themselves.
So it's a cut road, dog eat dog, distributor to distributor.
The planograms of the major national chains will help you stay aligned in your channel strip, your space, but distributors will come in, they'll pull that sticker right off and in goes their hot seller.
Oh my goodness, that makes perfect sense.
So you set the stage on why it's such a difficult channel to get into and to increase your presence in.
And a quick question about that.
So if the large chains make up about 30% of the available doors, are you leaning on your distributors to get into the remaining stores or how do you typically tackle that?
I think you have to, right?
Because you don't have the people power to touch to all those people.
You can't have one-on-one conversations, right?
So a really good strategy that's worked for a number of brands is focus on a region and focus on a, call it a super regional account there, right?
The anchor chain, if you want to call it that.
And then, assuming you get distribution there, you can reference that when you go sell to 10 store, 20 store, 30 store chains in and around that area.
So you're kind of building a base.
And the good thing about convenience stores is we're very approachable, very low ceiling in terms of barrier to entry, where you can literally walk up to the operator and talk about the business and you can be on shelf that same day.
Now that's a hard thing to do a thousand times over, but if you wanted to get your brand into distribution, you can kind of do that yourself for a period of time, but eventually you're gonna need a distributor that's gonna be in there week in, week out trying to grow your business.
That's a great point.
I agree with everything that Andy just said, absolutely, because if you can get to a key regional account, let's say, or someone that has enough horsepower to command enough turns off the truck for your distributor to stop the truck, then you have enough space on the truck to get them to take you to all the other stores.
So it's about that truck space is finite.
You have to compete to get on the truck.
If you land an account for them, then they say, okay, that's easy.
I've got a customer built in, so it's gonna be on the truck anyway.
So if I stop at 10 other places today, I might as well offer that product with a spiff, a sell sheet, et cetera, and see if I can get it cut in.
I would combine that with also some regional selling shows.
So if there's regional trade shows, depending on your route to market, let's say you're going with wholesale first, and you wanna build a base through a wholesaler network and then flip it over to DSD.
The wholesaler is not gonna love you, but many brands have done that before.
And those wholesalers offer buying shows.
You could stand at one show, like a McLean, a Foremark, et cetera.
Now they have virtual trade shows that you can get in to a variety of the stores in that area so that you can create some values.
So if you sit down with the distributor, you say, I already have 26 independent stores and one small chain of 30 stores.
And I say, okay, I'll consider me bringing you on the truck.
What's the best way to find out when and where those shows are?
I mean, there's a couple of ways really.
I mean, you'd have to have a wholesaler.
So let's say that you get on board with a wholesaler, you present it to the wholesaler and they take you on their truck or you're going on their website.
I know they've modernized it.
Back in the day, we used to actually know they would publish dates.
It was like a tri-state show.
You would show up and people would drive in.
As well, some of those wholesalers would have key accounts.
People, they would call on the key accounts because they want that throughput through their warehouse, but they didn't have the same horsepower that a distributor did.
You'd have to partner with your local wholesaler.
If you can get on board with a large enough wholesaler, then they're really throwing spits and they're trying to get the volume moving through their wholesale warehouse into those larger chains.
They have large contacts at those chains as well.
And just to clarify, when you say wholesaler, are you talking about the convenience store chain?
The convenience store wholesaler.
So there's Cormark, McLean, there are smaller regional ones.
Vanessa, you mentioned if you don't turn, you burn, which dovetails perfectly into Emily Martinez's question.
Emily wants to know, how do you drive engagement with owners and operators of independency store accounts and galvanize them around your brands and initiatives?
How do you do that?
Is there a way to kind of build buy-in with the owners of those stores?
Yeah, that's tough.
I mean, you could almost answer that in two ways.
One is, are these owners or operators franchisee owners and operators of a larger national chain?
And if that's the case, then you're presenting to the large national chain, they give you an authorization.
That franchisee owner for a certain percent of their plan a grand set has to carry what's nationally authorized.
They have a sliver percent percentage negotiated into their annual contracts, like at 7-Eleven, let's say, that they can decide for themselves, 11% of the store I can buy on my own or 6% of the store I can buy on my own.
Otherwise, you need to present to the national account manager or the regional account manager or buyer of those particular chains.
And when they give you an authorization, you're in.
There are franchisee owner operator shows that you can go to as well.
You can sponsor things there.
You can call on the franchisee president or the state up.
And they typically have a treasury board and other activities.
So it would start at a larger level.
When you get into the onesie-toosie like Andy was talking about, it's tough.
You have to rely on a wholesaler key account person or your distributor.
And hopefully you're offering an accretive dollar ring.
You're pushing the price point up, the flavors or the gross margin.
You're giving someone some added value and reason to rally behind your brand on shelf.
Certainly because of the expected velocities and the nature of the C-Store landscape, I think a really important question to ask is, when is the right time for a brand to start pitching C-Store and to find themselves on C-Store shelves?
When is the right time for a brand?
What kind of distribution do they need to have in place?
And what other resources and pieces of business do they need to have in place to be successful?
I would say it's a little chicken and the egg scenario, right?
Distributors are always going to say, what retailers do you have on board?
The retailers are going to say, well, are you already authorized in my wholesaler?
What distributor do you already have, right?
So building that base is super important.
There's no perfect time.
There is a cycle to it.
We're actually in the selling season right now.
Typically once August hits, retailers start to look at brands for next year.
I'm talking specifically for beverages.
Look at brands for next year.
They're going to run that process through the end of November.
They're going to go to Naxx.
Obviously Naxx is a big trade show for the channel.
See what new brands are there, make their decisions by the end of the year, and then start to physically implement new planet grams January all the way through the end of April.
Then the summer happens and it all starts all over again.
So ideally, if you're a brand, you're ready to go right now.
You've got your selling story, you've got your samples, you've got everything you need to do to sell, and you go sell.
Again, chicken and the egg, either got to have your distributor network built out, or you could have enough demand that that distributor wants to carry you.
Remember, if you're a new brand and you're going through a DSD network, that distributor has got 20 other brands, not just like you, but that they're outselling.
You've got to be special.
There's got to be a story.
First and foremost, the liquids got to be great, the labels got to be great, your support programs got to be great.
So very, very competitive landscape.
I mean, and it's an expensive one too.
Slotting in this world is a very real thing.
And there's a reason why brands lose money.
They have to be able to lose money for a few years to be able to kind of develop that enough mass for their brand to grow.
So you're working on Ollipop C-Store presence right now.
Are there certain velocities that they were seeing that made it clear that they had the exposure in consumer awareness so that it's the right time to jump into such a competitive channel?
Yeah, it's an interesting one because typically it's the reverse.
A lot of beverage brands go to C-Store first because you get trial, single can trial that way.
Ollipop's the reverse of that where we've gone large format first and the velocity story is incredible.
I've honestly never seen anything like it in my 20 plus years, but so it's a really good story to tell where I can say, hey, here are the velocities in a Walmart, in a Target, in a Kroger, in a Whole Foods.
They're not apples to apples, but there's enough data there that you can make an educated guess on how it's gonna do at C-Store.
It's nice to have.
And a lot of brands don't have those hard data numbers yet where it's a guess and a little bit of faith.
And it's always, in my opinion, to have good fact-based selling for any brand, regardless of category.
Yeah, I was gonna just dovetail on that.
I think that's critical right there.
And exactly what Andy said, some brands try to show up at C-Store first, thinking you can get that single trial.
You may not be able to do that, depending on the geography.
And I see that Landis actually has a question about that out on the chat.
Why don't I read it off?
If you wouldn't mind, would you take that?
Landis, thank you for the question.
So John Landis wants to know, are there any specific regions that you consider to be more favorable to emerging brands or that you think brands should avoid to start?
So is it easier to work the large metropolitan areas or regions with much greater distances between stores?
That's a great question, depending who your targeted demographic is for the product.
So what kind of a drink is it?
Is it an energy drink?
Is it like an Ollipop?
Are we talking about a milk item?
Is it a bottle of water?
Depending on where the suburbs are.
If the suburbs are where those convenience chains are and that's where your targeted demographic is, then it might be easier for you to start in those states with those wide open spaces in terms of convenience.
You're really gonna have to have payroll and manpower to support the five boroughs of New York City.
So when somebody says, oh, I'm gonna get started in New York City, I cringe because I had a brand at La Croix that was a grocery.
And when we went to the five boroughs, I went to Gotham and we sat down with Trent.
La Croix was Gotham's very first brand, really.
We got them up and rolling.
Because I said, if we don't have someone to babysit and that cooler space, even at Whole Foods there, that's elbow space.
You're butting other people out to make sure you're there every day.
So you have to look at your stack.
You have to look at the targeted demographics before you can say, I'm just gonna go to this area.
And I would caution brands from spreading themselves out all over the United States.
We talked about this previously in our pre-call.
You need to think of the word adjacent area and not new frontier.
So where is your brand already known now?
Are you picking up steam?
Have you done regional marketing events?
Have you attended some trade shows?
You're telling your story.
If you're telling your story in Texas and Austin, don't go to Boston as your next place.
Boston and Austin are not twins.
So you need to actually step back and say, if I went to Boston next, who's going to be there to babysit the brand?
Do I have someone calling on the distributor?
Who's going to create Brownswell so I can turn or I'm going to burn in the C store?
That'd be out.
We have a question from Amy.
Amy wants to know what margins by category are you seeing at C stores?
Andy, I know we talked a little bit about this.
What are your thoughts on margin?
Yeah, I think anytime you talk beverages, it's going to be 40 plus.
When you talk water, probably 50 plus.
Always caution folks, anything over 2.99 a unit is a hard sell outside of energy.
I mean, with inflation creeping up, you kind of see that, but margin-wise, if you're a new brand, that's something you can play.
You've got to offer some additional reason for them to carry your brand.
And I spoke a little bit about slotting earlier.
There's certain large chains that it's required at, and certain ones, it's year over year, and that's not the norm, but you got to be prepared for that.
And that goes into the margin equation for those chains as well.
Both of you have a retail grocery background as well.
Would you say that slotting expectations in free-fill mirror retail or are they higher in the C-store?
In terms of grocery, I don't think it's as common.
I think grocery, it's kind of a prerequisite, right?
Not so much for C-store, but I think they're always looking for a deal.
I think you have to have an intro deal, and then you've got to probably have a quarterly deal of some sort.
So, you've got to get a promo.
You got to get a two-fer.
And certain chains, it's kind of required 52 weeks out of the year.
Other folks, you're probably going to focus on on the summertime.
But yeah, you got to be prepared to have an everyday margin that's reasonable and then promotional dollars and slotting dollars in certain cases.
And then, you can also throw executional dollars for floor displays and contests at store level.
There's a whole host of trade spend that you can spend at.
And what did the deal structures look like?
You just mentioned a few different numbers, three for seven, two for five.
What are the deal structures?
And then also, who do you arrange those with?
Are they the retailer, your distributor?
Well, it's going to be both, right?
So large chain accounts, you're going to talk directly with them, right?
You're going to set the promo calendar and the funding for distributors, you know, for the, we'll call it the all other, you know, chains.
You're going to have to have some sort of discount.
It could be a buy three, get one type of deal that's run quarterly.
And you're never really going to know if that promo ran, you're really trying to just get added distribution or added floor space, you know, some sort of display out of that.
You got to work it at the corporate chain level and then you got to work it at the distributor level.
Yes, I would agree.
And I would just make one little caveat for somebody starting out with the brand.
Let's say that you did gain authorization in a chain like Racetrack and it was in four or five states.
You take that, you go back to a set of distributors and you wind up garnering distribution on their trucks because you've got this authorization.
But those distributors, Racetrack is their customer.
So you're selling to the distributor, the distributor is selling to the retailer.
So if you say, hey, we're gonna go on a deal for three for seven.
And the distributor says, well, I'm not gonna participate at that level of margin.
In order for you to get the deal done with the retailer, three out of your five distributors may play ball, the other two may not.
You have to go back to the retailer and say, for those two distributors, I'm gonna pay for that.
So that you can have the same margin through all five distributors, we can actually go on sale, we can make that deal happen.
So parent companies wind up spending above and beyond a promo at times when their distribution channel will not participate.
Yeah, kind of a floor and a ceiling in terms of investment levels.
And that's pretty common.
Typically, most of those investments are split 50-50 with the distributor.
And although it does depend if we're talking promos or if we're talking polled equipment, signage, all that sort of stuff.
And so all those things have to be worked out and negotiated upfront.
So there's a clear understanding because when there isn't, things can go sideways.
Certainly something similar to retail grocery is that there are a lot of moving pieces here as well.
We have a great question from Adam Bryan.
How do you see retailers carving out space for better for you items when large beverage companies, they really dictate so much of the opportunity and shelf space?
Yeah, I'm living in that world right now.
It's a difficult one because there are, and I've worked for those large companies as well, where those contracts exist.
There's space there because every year there's brands that have come in that have not performed, whether they're on the big company trucks or the little company trucks.
The question is, is it adjacent to where you want to be merchandised?
Like we talked earlier, if your product turns, if your product has the right margin and the right story, it should get space.
You're going to get three to four facings, right?
Typically, if you're a new brand and that's a win, you're not going to get a shelf, shelf and a half out of the gate.
So you've got to make that space turn as best as you can.
So you got to be focused, be in the right spot in terms of the region where your brand's going to do best.
And then it's a negotiation.
Everything you're going to, you're going to have to fight for everything with your brand with the landscape that we're in.
The reality is that there are some very big contracts out there.
I would try not to go head to head.
If you're a juice brand, you want to be in the juice store.
If you're a soda brand, it's really hard to get into the so-called the quote unquote soda door.
You got to create the selling story that says, this is different and you need to create a separate section in your cooler for our brand.
Vanessa, you had some great points about this.
It's such a cutthroat channel.
You were talking a little bit about some of the tricks of the trade that you've seen work in pitching and you were talking about how to center the conversation, not around what your brand proposition is and your selling story is, but what's in it for the retailer.
Can you tell us a little bit about that?
Yeah, so I've always worked in underdog places.
At least when I've started, I've been in an underdog situation.
I had someone tell me one time, and these are kind of like direct to video, if you would make an analogy brand that I was working on.
I never saw my role as going in to sell you my product.
I saw my role as going in to talk to the buyer about how I can be creative to their category as a whole.
And I had a sales trainer one time who told me, look online and if they're publicly traded, go to the CEO's last quarterly earnings report and see what the CEO said.
And I did that one time with 7-Eleven, and he had said that they were targeting millennial Hispanics, millennial Hispanics, and he kept going over millennial Hispanics.
So when we walked in the door, we pitched a new flavor and we said, we're targeting millennial Hispanics with Kiwi Guava.
We believe it's gonna sell to millennial Hispanics.
And the buyer said, you're authorized.
And we were like, wow, we didn't even have the product there to taste.
We had a picture of the product, you knew what the other product tasted like, but it was way out of the box.
So when you approach the buyer, you have to talk about what you could do for the category.
Just like Andy said, Ollipop is adding to the category.
For people who are wanting soda, maybe, but they want something new in their soda, they're gonna try us instead.
So if you're under contract in that door, give me an alternate space.
So when I met Andy and I was pitching a kids brand at the time, I said, you have kids brand.
You have Kool-Aid bursts.
There were a bunch of different little things.
There was a bug juice at the time.
There's a bunch of popular things.
I said, why don't you bring them together and make a kids shelf?
And we'll actually go to the bottom where nobody wants to go because the kids are small, they're lower.
So let's put us on the bottom shelf and make it a kids zone.
And we'll sticker it on the outside of the door and we'll call attention to the kids.
So in doing that, we were able to create strength and numbers.
You can't be number one if there's no number two, right?
So you have to have competitive oils.
So bring those brands together that are trying to be better for you.
Bring them together if they're trying to be kids' brands.
No matter where you are, find that commonality.
And with regard to Adam's question, I do see it other than the doors, the cold vault doors, when you walk into some of these stores now, they have alternate refrigerated rounds where they're putting little Sargento snacks for the car or better for you, vegetables cut up and curated or yogurt, granola cups.
You can't get cut into your door, even though that would be your first choice because that's where people are going for that category that they're shopping for.
Go to a better for you alternative destination in the store that you might be able to get cut into there and just get some prime time because then you can drive traffic to the store, but at least you're in the store, you're on the floor.
You painted a scenario a little bit earlier with a new flavor.
Do you find that exclusive flavors and different pack sizes make a big difference when you're pitching C-Store?
Yes, huge.
And I'll let Andy, you take that one.
There's a definite desire for exclusivity.
It started with 7-Eleven.
Since Casey's, Circle K, they're A and PM, you can get preferential treatment if you've got an exclusive flavor.
I've seen it in the sports drink category, seen it in the soda category.
I mean, you'll get preferential treatment and it does take a long planning for that type of thing.
It's not just, they're just not gonna throw you out there and which is probably a good thing.
You get better execution.
And typically, you know, I'm going back in time here, right?
But if you did something special, we'll say in the 7-Eleven universe, you would probably get 50 to 60% execution 10 years ago.
They've really improved that.
Whereas if you've got something special, you'll probably get 85 to 90% execution.
So that's how special it is that you can get franchisee operators all marching in the same direction.
If you've got something special and you can create an exclusive for somebody, great.
Double-edged sword, because if you do it for one, and you don't do it for somebody else, that can have some negative repercussions too.
So you've got to choose wisely, choose your partner and choose the right opportunity.
Are you saying that if you have an exclusive flavor for 7-Eleven, you need a different exclusive flavor for AMPM?
Very likely, very likely, which is, it's hard operationally.
It's hard to do.
And, you know, I can think back to the vitamin water days, which we did something there that was unique, that was kind of exclusive, but it wasn't.
You know, we put, we had all these great athletes, right?
We had David Ortiz in Boston, we had Erlacher in Chicago, we had Tracy McGrady in Houston.
We put their numbers on Power C, which was our number one flavor.
And so really hard to, not hard, but there took a lot of coordination to get that right and get it to the right distributor, you know, operationally.
And it wasn't, it was a quasi exclusive.
It was something unique we did that was unique to each region.
And we had some early launches in certain retailers with that, which, you know, creates buzz and, you know, used our athletes and our assets in a way that hadn't really been done before.
So if you've got something special, whether it's, you know, an athlete, an asset, something social media-wise that's unique, you really need to exploit that and get it out there and make sure you get the most for it.
The pressure is certainly on with the C-Store.
What are the velocity expectations for beverage?
Yeah, that's, you know what?
You have to have a 1.0.
I mean, you really have to have a 1.0.
So what we're talking about there is every SKU, every store, every day.
So if you have four facings, each one of those facings, presumably a SKU, but for every facing you have, you should be turning one unit per store per day at a bare minimum.
And that's to stay on the shelf.
And sometimes buyers will believe in your brand and they'll say, I see the concept, you're a creative to the category, love what you're doing here.
And I hang in with you for a while while we build this platform and build this message, but it's a short while.
And then even if the buyer will hang in with you, again, you go back to the distributor and if your own distributor doesn't take you off the shelf, then somebody else could potentially rip that tag off and use that space, especially if it's not a national planogram and it's more of a regionalized or some of the mom and pops out there, which are a high percentage of overall C-Store chains.
So the wolf is always at the door.
You really have to turn.
We talked a little bit about who the C-Store customer is and at face value, it seems like an obvious answer to that question.
It's people who are on the go.
You were both talking about how there are some obvious characteristics of a product that work like it has to fit in the cup holder of a car.
What else should we know about who's shopping at C-Store and the kinds of products that are successful in that channel?
Andy, I know you had a few thoughts about that.
Do you want to take this one first?
Ideally, the core customer is kind of a habitual shopper, right?
They're there, you know, multiple times a week.
They've got their routine.
That's kind of the core shopper, but really it's an on-the-go person, right?
So it could be, you know, someone getting there late at night that needs cough syrup, right?
Because CVS or Walmart or whoever is closed.
So it runs the gamut.
I mean, I think the stereotypical Bubba, right, consumer, I think that overgeneralizes it.
I think people use convenient stores for whatever they need.
The offering in the store has got to be wide enough that you're servicing all those needs.
So in the morning, it's gonna be coffee, it's gonna be energy.
Middle of the day, that routine changes a bit.
So we're looking for food items and beverage items that pair well with food later in the day.
And again, then you got the going home from work crowd that is looking again for a pick me up, maybe a quick snack before dinner.
So it really runs the gamut.
I don't think you can paint a broad brush anymore because we're such an on the go society.
Food is the one thing that I think everybody's talking about in C-stores.
Retailers want to get more in-depth in food.
Quality of food wants to go up, which means that you're gonna sell more drinks if you're selling more food, which is good news.
So that's the thing that I think retailers are struggling with the most is how do I get a better food offering so I can get more people in the door buying food.
It's a great margin products as well.
So not something you would think about 10 years ago, but people going to C-Store for food items other than a roller grill or something like that.
Excellent.
I think we've got time for just one last question.
The landscape of the C-Store channel is changing like everything else in the industry, certainly.
You have the AMPM market 7-Eleven, which we're all certainly used to, but then Foxtrot is a channel that's described as convenience.
Andy, I also heard you mention Refuel, Yesway, and it sounds like there are a lot of tired assets being reimagined and reinvested into.
I would love to hear from you both.
Are there any special opportunities for better for you brands where there may not have been before?
Is there anything we should all make sure to have on our radar?
Vanessa, if you wanna start off with that one, that'd be great.
Yeah, I think that those reimagined and the gentrification process for some of these older chains, I think that they're bringing you in and they're promising you some different delicacies and different quality of food.
They're giving you different reasons to come at different day parts.
They're trying to match that food for the consumer on the immediate consumption, transitory consumer base that they have.
But in doing that, they're creating some new ways to shop and discover within the store and that leads to new space.
And that new space leads to emerging brands, shelf space.
And that's really, again, giving themselves an opportunity as a chain to break out of that contract for that door and bring in what's new, because they know if they're going to track an upscale consumer or the frequency of people, they're going to have to have new things.
They can't have just everything that's always set in stone.
They're going to have to have those flavors that trade out by season.
They're going to have to have what's new and trending.
And then they're going to have to be able to expand on new entrants that are trending.
So I think the winner there is anybody with an emerging brand, any of those re-drenchified, re-imagined store concepts are going to target those up and coming brands or so.
Andy, what do you think?
Are there certain retailers that you're approaching with Poppy because it is a better for you beverage that might offer more immediate opportunity than a more traditional convenience chain?
Absolutely.
Ollipop is a brand that isn't right for every C-store.
So we're selective in the chains we're approaching, the ones that are more progressive, more upscale.
And I think that's a lesson for any brand.
There are certain chains that are known to be, hey, I want to be first to market with this type of thing.
So you obviously want to talk to them first, do them the courtesy of that.
But like you said earlier, I think there's a bit of consolidation happening in the industry.
Everybody's aware of that.
The bigger chains are getting bigger.
They're looking for more acquisitions.
And then there's kind of another group that have come out of, I won't say nowhere, but the last five or six years, they had 30 stores and now they're a 250, 300 store chain, you know, five years later.
And what they're doing is they're investing in these stores and making some really nice stores.
That takes time.
Obviously it takes a lot of money investment.
I think of Nori, I think of Yesway, I think of Refuel.
And there's a few more out there as well that those are on the list or should be on the list for anybody that has got a better for you brand because they're not only have the cooler space, but they also have the ancillary space that Vanessa talked about earlier.
They're creating these open air displays, that QT has done a great, just a phenomenal job with, KT has done a nice job with.
So there's a list that the usual suspects will call them that you need to go after if you're a better for you brand.
And then once you get in there, there's kind of this amplifier effect that, oh, that brand is in these retailers, then it kind of the light bulb goes on.
It's like, we should really consider carrying that brand.
Makes perfect sense.
Thank you both so much for joining us today.
Just so much information has been shared here and I appreciate both of you.
Vanessa Walker, Andy Steele, if folks wanna get in touch is LinkedIn the best way?
Absolutely.
Excellent.
Thank you again so much for your time and your information.
This has been fantastic.
Thank you so much for joining and I'll see you next time.
