Enough dancing around, it’s time to look ahead at the future of cars because an electric reality is coming quickly – very quickly if you live in places that mandate it soon like the UK. We’re talking about what the future might hold for cars, customers and travel.
Carolyn Schnare, Director Strategic Initiatives, NACS and John Eichberger, Executive Director, Fuels Institute
About our Guest
Dan Munford, Executive Director, InsightResarch
Dan Munford is a recognized expert on the European and international convenience and fuel retail markets.
He has unrivalled knowledge of and connections into European convenience & fuel retail operators at the highest level. As Managing Director at Insight Research, Dan originated the NACS relationship that has been an important part of the Insight and NACS international business for more than a decade.
He has worked as a consultant on retailer strategy projects at main board level for many years for diverse convenience & fuel retail businesses globally.
Dan is a Special Advisor to NACS International Board and NACS Regional Representative for Europe.
Convenience Matters Music (00:05):
You’re listening to convenience matters brought to you by NACS, whether it’s for food, fuel drinks or snacks, about half of the us population shops at a convenience store every day. We’ll talk about what we see at stores and what the future may hold for our industry today.
Carolyn Schnare (00:22):
Take proverbial trip across the pond and talk with an expert in convenience, retail in Wales, but we’re not stopping there. We’re going to talk virtually about everything in the whole wide world of convenience. We’re going to talk a little bit about electric vehicles and how they fit in the broader picture of retail evolution and a bit more. Welcome to Convenience Matters. I’m Carolyn Schnare with NACS!
John Eichberger (00:41):
And I am John Eichberger with Fuels Institute and NACS. Carolyn’s great to be on the program with you again,
Carolyn Schnare (00:46):
You again, I mean, I was saying earlier, this is one of the few times you and I get to host together so good times!
John Eichberger (00:52):
And I was afraid we’re scraping the bottom of the barrel every once in a while, I guess.
Carolyn Schnare (00:57):
Well, in addition to us today, we’re going to talk with my good friend, Dan Munford. Who’s the Executive Director of Insight in the UK, as well as the NACS European Partner. Hello, Dan,
Dan Munford (01:05):
Hello, Carolyn, John, how you doing? Nice to be with you.
Carolyn Schnare (01:10):
Good to talk to you. It’s been quite a while, even longer since we’ve last seen each other, but I love to hear your voice. And, um, I know you and I can talk for hours, but in the interest of our short time, I wanted to hone in first on the evolution of retail, but especially in light of 2020 all that’s happened. And one of the things that you’ve been talking a lot about lately, at least on your LinkedIn, I’ve seen some really interesting posts is electric vehicles, especially in the UK, which I know has been announced recently that they’re propelling ahead further and faster than ever before. And I know that’s, uh, an interesting topic for you and especially for John. So at a high level, can you tell us, and this is probably too broad of a question, some of your thoughts on consumer EV adoption and retailer adaption.
Dan Munford (01:55):
Well, it’s a fascinating topic. I mean, maybe best to start off with a sound bite and then try and justify it. Um, I suppose, you know, with the, with the regards to the adoption and consumer behaviors, it’s early days, but we know some things I think is a soundbite, um, early days, because if you think about the fuels value chain, it took a hundred over a hundred years for that to develop and it’s still developing isn’t it. Um, but if we look at the EV charging, uh, value chain, um, it’s, you know, very immature and mistakes are being made. Um, good things are being done. Um, things are moving forward, but it’s still very early days. And I think maybe just assessing, you know, assessing the scene for a brief discussion on this. It’s just good to recognize it’s immaturity. And I think you have to look at individual markets and, and think about that their uniqueness in order to overlay, um, you know, how this is going to develop in those markets.
John Eichberger (02:56):
You know, Dan, a lot of people point to the Norwegian example . They’re ahead of almost every other country in the world in terms of EV evolution, but it’s also a very unique market. It’s a small market, it’s a very homogenous market. I think it’s difficult to draw parallels from Norway and say, well, we can just follow their model and that’s the path of going forward. And you take a look at the U.S. – completely different model. You cannot draw apples to apples, the UK, maybe it’s a little different. One of the things I find interesting about the UK, because we’ll talk, we’ll talk about charging in a second, but your Prime Minister started off a couple of years ago. UK announced where we’re going to go no more combustion engines by 2040. Then last year Prime Minister, Johnson said that we’re going to do it by 2035.
John Eichberger (03:40):
Then you fast forward into last year, I got California saying, we’re gonna do 2035. Quebec says we’re gonna do 2035. And Johnson goes, no, no, no, no. We’re going to do a 2030. So the timeline, and at least in the political world, the timeline for pushing EVs and getting rid of combustion is accelerating yet. The market has not really kept pace with that. So, I mean, open that up here at your thoughts and musings on those kind of those commentaries, because I see a lot of, a lot of disconnect between the hype, the coverage, the announcements, and the reality on the ground.
Dan Munford (04:14):
Well, maybe start by sort of tackling the, the, the UK political question and then just respond on, on some of the Norwegian, why, how is Norwegian relevant? I’m just taking that, your point on that. I think, you know, obviously the UK has got a very, as you say, the UK has got a very aggressive 20, 30 timeline on ending, you know, diesel petrol vehicle, passenger vehicle sales is very aggressive. Um, why has that happened? Is it serious? You know, should we be, should we base our planning, uh, for our business decisions on, on that timeline? You know, they’re all very big questions. It’s really difficult to answer them all. But, you know, I suppose what I’d say is that, you know, these companies are already taking big decisions in the UK on the basis of that decision, because really, if they want to be responsible to their shareholders, it’s very difficult not to be.
Dan Munford (05:08):
Um, now whether that target is entirely realistic or not is another matter, but, you know, I suppose if you’re a big company and a government, you know, whatever, you know, whatever the sort of, um, history to, to decision-making on this subject comes out with that 2030 target. Then, um, you have to start, it’s not very far away and you have to start making, making decisions. So I think the other thing that I’d say, you know, really sort of broadening the discussion out at best and relating it to, you know, which markets are gonna move quicker on this. Um, and which markets are going to move slower on this. I think you have to look at the de-carbonization timetable in different national markets. Uh, you know, and this is something obviously you can find out quite easily. I mean, if you look at the UK, why is the UK being so aggressive on transportation for decarbonization?
Dan Munford (06:03):
And in many ways, the reason is because, you know, we don’t get our power from coal fired power stations anymore. It’s only 2% of the total here. They’re almost, factional entirely. So if the UK, the UK has done some stuff, in other words, if the UK is actually going to going to meet its targets, it’s legally mandated targets for decarbonization. It has to look at transportation, um, or this is how the government feel. You know, they have to look at transportation and they have to look at home heating. Other countries are in different positions, you know, Germany, I think 24% of that power is still generated through coal power, coal path stations, U.S., I think is slightly more than that, about the same, about the same level. So, you know, there are, there are, there are ways that as an example, those, those countries can get to, you know, can, you know, meet that targets without necessarily dealing so aggressively with transportation. So, I mean, it’s not oppressed. I mean, obviously governments come out with, with statements and press releases all the time. And sometimes there’s not a lot of thought goes into them, unfortunately for that, for the business world. However, I think perhaps it, you’ve got to take this this quite seriously, if you, if you, if you look at where the UK is on decarbonization, generally,
Carolyn Schnare (07:25):
Dan, what do people think? What are the consumers, the drivers, the, um, people who maybe yet haven’t purchased those cars. Cause as I understand it, and then you can correct me if I’m wrong that the, um, this applies and at least in the UK to only electric vehicles, no combustible engine and hybrid, I wasn’t quite able to figure it. I think they were either banned from the list or they had to be like primarily, um, battery powered. I don’t know if there’s like a percentage of battery versus combustible engines, but, um, fully electric. So where are the customers on this debate?
Dan Munford (08:01):
Well, you know, I, I suppose the customers, um, you know, want something that works for them, don’t they, I mean, they’re just thinking it, they’re thinking about, um, nice, shiny, shiny cars that work, um, and get them, you know, from A, to B in a, in an efficient manner, you know, and, and as, as, as, as stylish away as possible, you know, all these, all these things, they don’t, I guess they see things differently to, to us, um, in our industry, um, and to, to politicians as well. I mean, I think one thing has changed, um, and that is the availability of attractive, more affordable, uh, models coming into the market. And obviously we’re seeing that in lots of different markets around the world, and we’re seeing the Tesla Model 3, making inroads, we’re seeing VW with it’s ID.3, and then soon the ID.4. ŠKODA’s coming onto the market in Europe, which are much, which are quite a lot more affordable than some of the models we’ve seen out there.
Dan Munford (08:56):
So, I mean, again, I think it’s all about trying to find the right balance, but what we have to say is that Norway has grown to about 12% of Norway’s passenger vehicle, car park is now full EV that’s not counting plug-ins right. And Norway got got there and, you know, what, 10 years or so took to get to that level. During that period that the cars were the electric vehicles weren’t very attractive for many of those years, they were, you know, not great choices. What we’re seeing now, and this will have a factor in lots of markets is that electric vehicles are much better and in many cases, highly attractive vehicles. So, you know, I think just, I guess it may be sort of expanding, expanding your point. You have to think about how attractive these consumer products are and they have got a lot more attractive.
John Eichberger (09:48):
Well, that got played out last year. I mean, the global market for light duty vehicles got hammered by the pandemic, but in Europe, I believe EVs actually increased sale units by like 20% over the year prior. And the United States, they lost 3%, but the overall market lost 15%. I think the type of vehicle Europeans typically buys very different from the one we buy in the United States. United States, we like big vehicles and in the European Union and much more akin to smaller compact cars, which early on fit the EV model very well in the U.S. The projection is by the end of 2020, 75% of the EVs produced here will be light trucks and utility vehicles. So they’re coming into the, they have to, we have to put the powertrain in the vehicle that the customers want to buy. In Europe, they’ve already done that. And the United States started getting to that point. The next couple of years, there’s going to be a much different market over here. So, I mean, I can see the EU and the UK going a lot faster than the U S just because the market dynamics and the consumer preference for vehicle type is so different.
Dan Munford (10:48):
I, I think you’re right, right, John, I mean, just getting back on the Norway point, just to, to some of your earlier points. I think I, I agree with you. I, I don’t think anyone who looks at Norway and says, okay, we’re going to have the Norwegian experience is, is, is, is simplifying things massively. Having said that, um, Norway is the best we’ve got. And therefore there’s a lot, a lot of learning. Um, anyone who doesn’t look at Norway is really missing a trick. There’s a lot of learning to be had from there. I mean, we’ve spent, I spent more time in that market than any other market. Um, I’ve traveled to over the last three years for that reason, and I’ve learned an awful lot, but I’ve also learnt, I mean, I’ll give you two examples. I mean, I’ve also learned how it’s different, how it’s similar.
Dan Munford (11:31):
I mean, one of the things I think we’re going to see in the UK is a lot of frustration around, um, charging anxiety, um, because we’ve found that we’ve seen us in Norway, a lot of, um, experience with charging queues, uh, according to the, uh, EV Association, in Norway, 47%, um, of, uh, of, of drivers in Norway experience queues for charging and 39%, uh, experienced charges that don’t work. So all those experiences will be true, maybe more, um, possibly in, in, in markets like the UK. So that, and how we respond to that, how we plan that that’s incredibly useful learning, uh, for, for the UK. So that’s, I guess, you know, positive for, for really focusing on Norway. I mean, a negative may be that, um, you know, UK is power grid, um, is, is quite weak, you know, potentially for, for what it, what it’s going to, what is going to be asked of it.
Dan Munford (12:31):
So what about that? How much will that impact and how, you know, this is a tight deadline. So, you know, some of these that there’s some big, big difference differences there, and also how many people are going to be able to charge at home. Um, in Norway, I mean, again, according to the association in Norway, um, 78% charge at home, 9%, only 9% fast charge, which is obviously if you just, you know, put that on to the UK, it’s not very attractive proposition for roadside retailers. Having said that, you know, will that be different in the UK because of the unique characteristics in the UK market, in terms of the availability, um, you know, of, of, of the right power connection and you know, how people live in the UK, wherever they have, um, onsite charging at home. So, you know, I think you, you have to, again, just summarizing, you have to learn, you can really learn a lot from the Norwegian example, and then you have to overlay your unique market characteristics to make that make sense and help you create your strategy in whichever market you’re in.
John Eichberger (13:39):
So Dan, you raise a great, a ton of great points. There’s so many elements that go into successfully bringing electric vehicles to the market, whether it be the charging infrastructure, the grid reliability, you look at the reliability in California, Texas, you know, here in the United States. It’s just, there’s so much that goes into it. And unfortunately the EV advocates sometimes say, we can just do this. We just have to make it happen. But if we don’t all work together to build the infrastructure, to build the reliability, it’s going to be a failed experiment. And, you know, in the UK, you guys got nine years to get this stuff together. It’s going to be an interesting to watch the sprint within your community, because it’s going to be a very big challenge. The United States, we have much longer on ramp, I think, but globally, man, it’s, it’s a big, big lift and we can’t underestimate the lift. That’s going to take to be successful on this
Dan Munford (14:26):
Very fair point.
Carolyn Schnare (14:29):
So, Dan, um, you, you said something earlier about how you used to travel to Norway and probably took a lot of pictures and really great video. Uh, you had a fantastic video series and still have one, um, Retail Vision where you interviewed CEOs and really just brilliant minds within the retail and convenience industries. Um, but obviously that has probably not been able to happen for almost a good year now. Um, we’re in 2021, but it’s been one hell of a year. So given that you were able to just completely pivot your business model, um, to the point where you have been, it’s almost like you never stopped. You just kept traveling the globe talking to really smart people. Um, but this time using the magic of the internet, and I know you’ve spoken with John, um, at least once, and it’s really been amazing to just see retailers and how they’ve pivoted. I hate using that word, um, over this last year. So with that, how, how has this changed the way you see retail and, um, how has this changed the way you adapt an interview and find new, cool ideas out there?
Dan Munford (15:34):
Yeah, well, I mean, I guess like everybody else, I really miss seeing people and seeing countries and so on. Um, but you know, um, that great phrase, you know, it’s not a problem. It’s an opportunity I think is really true for business. And obviously this is, this was a big challenge, uh, for us we’re a big part of our business was events which involve travel. Um, but luckily, you know, Shop Talk LIVE has, has been, you know, just a absolute roller coaster, well, exciting journey, really. Um, and, um, you know, uh, I, I absolutely love it. You know, I love, obviously I’d like to go to the markets, but physically, I mean, you know, we’re in the middle of we’re in Dubai last Thursday, we’re in Australia next Thursday. I mean, I just couldn’t physically do that. Um, if we, if we’re running events, but we can do it virtually.
Dan Munford (16:22):
So I think, you know, a lot of what we’ve learnt over the last year will still apply after COVID. Um, and it can help, you know, join up the world’s our particular industry very, very effectively, you know, so, you know, we’ve got to take the positives from this. And, um, you know, for us, obviously Shop Talk LIVE was, has been a big positive. I mean, we’ve done 23 shows. We call them shows even though they’re webinars, because we treat them like shows, we’ve put a lot of research into them. And, um, you know, we just try, we try very hard to make them very punchy and, um, you know, it’s, as a result, we get some, you know, we’ve, uh, because of some great guests, you know, there’s a lot of learning available there for the global industry. And that’s why, that’s why I guess that, you know, they’ve been popular. And, um, you know, if we keep putting all that effort in, then I think we’ll continue quite nicely with Shop Talk LIVE.
Carolyn Schnare (17:15):
Its not often you can get three retail leaders in the same spot, in the same call or the same show, I should say, um, to talk about things that they’re doing. Um, as honestly as possible, there was one that I watched, um, a couple weeks ago and, um, it was in Puerto Rico in a store and there’s customers. I, at the timeframe, I think it must’ve been morning rush hour, and it was amazing just to see people moving along. Um, and, uh, the guest was just talking as if nothing was happening behind him. It was so cool.
John Eichberger (17:46):
Now he’s smooth. Rodrigo is a smooth, smooth operator.
John Eichberger (17:50):
I think we all are looking forward to getting together again, but at the same time, you know, I was before the pandemic got on them, I was on an airplane every week, if not every other week, multiple airplanes go in to visit people. And I think this idea that, you know, in order to prove that you care about a relationship, you have to get on plane and go see them. I don’t think that’s the case anymore. I’m not going to do six hour round trip flights for an hour meeting. Again, I think we’ve established, you can have a relationship and be productive on video. We need to get together in some circumstances, but we don’t need to do it exclusively because we’ve experienced this opportunity to make us a lot more nimble. And quite frankly, hopefully improve our quality of life. I haven’t been sick in a year because I haven’t been on an airplane and, you know, that’s never happened. So, you know, this is, I’m not sure I’m not going back the way it was before. There’s no chance.
Dan Munford (18:39):
No, it’s a, it’s a great, great point, John, you know, and I, you know, I think the, you know, the reality was, I mean, I used to have a life a few years ago where I’d, I’d consider going to Australia for a couple of nights. It’s complete madness when you think about it, you know, in terms of your body. But I mean, I I’ve been there and done that a few too many times to be honest. And, uh, you know, I think it’s a, it’s not something that you can do much into your fifties. I don’t think. And, you know, realistically, I think that’s, that’s probably gone. I mean, just looking ahead. So what’s, what’s what normal is going to be like after COVID, you know, for our industry and, and for us personally, you know, I think, I think a lot of talking to a lot of retailers, they do want to go to some, you know, they do want to travel regularly, but they, they realize they’re not going to be traveling as much.
Dan Munford (19:27):
So when they go, there’s got to be some big events as part of that trip, there’s gotta be a lot of meetings and they’re going to be, uh, going for a little bit longer. Um, I think on each of their trips, I mean, let’s say it the example of the NACS Show. So I think, you know, quite a lot of European retailers actually will want to go to the NACS Show, but they’re going to extend that trip, um, either before or after the next show. And they’re going to be doing a lot of other things in the, perhaps the U S market, um, as well. And then they won’t be going back to the U S for a while, you know, and they, they probably need to put more planning into that trip than they would have done in previous years pre COVID. They still need those regular trips because they will lose track. They will lose connection, um, with, with what’s going on and, and contacts. And we’ll, we’ll all do that if we just keep on, you know, stay on Zoom or Teams. So I think it’s going to be, you know, it’s going to be a different world, but we will have some physical events. Um, it just be slightly different. I think when we, when we plan those events.
Carolyn Schnare (20:30):
So Dan, to that point, I know I always really enjoyed coming over across the pond, over to the UK for store tours, whether it was an NACS event or an Insight event, or, or just to say hi, and I know we’ve chatted offline to say that you’re going to be one of the first people I visit. I can get on an airplane though. And I’m sure it’ll be a little while before we’re, as Americans are allowed back out of the country. But, um, but that said, what’s some ways that our listeners can, can find you maybe where they also can find more about Shop Talk LIVE and then if you want to close out with maybe some crystal ball insights as to when the next time we can have a store tour together over there.
Dan Munford (21:09):
Well, um, you know, Shop Talk LIVE is, uh, you can find it on the Global Convenience Store Focus website. We, we always, um, uh, feature the recordings – we like people to join us live. But if they can’t, we’ll always play the recording, you know, within a 24 48 hours of, uh, of doing it. So you can find those on the Shop Talk LIVE website, or if you follow me on LinkedIn, I’ll post about them. So that’s easy. Um, just in terms of what’s next. Um, well, I mean, it may well be that, um, you know, the NACS Show is, is the next big thing that we, we all see a lot of each other out. I think, you know, realistically I think a lot of, a lot of, a lot of people will start traveling over the summer, but it kind of depends where your country is on vaccination, eh? You know, um, the UK will be pretty vaccinated by July. Um, but I think a lot of people be taking summer holidays and the big business trips will be planned, you know, September, October time. And, and that’s going to be incredibly busy, you know, from a attending physical events perspective. So I think, you know, the, in a way you’re not going to have to travel very far Carolyn to, to see me. It will be at the NACS Show event. And I’ll see you there too. John.
Carolyn Schnare (22:20):
Certainly once, October, 2021. So, uh, I really appreciate that we are able to connect like this, um, whether it’s through our podcast, whether it’s in Shop Talk LIVE, I can see you and your team working hard across things. Whether it’s Fuels Institute, you guys have a ton of daily or weekly and monthly updates and video chats. So, you know, this is our normal for a little while, and I think we’re all making the best of it. So I really appreciate your time with us today, Dan and John, it was really fun. Let’s do this again. And, thank you all for listening to Convenience Matters.
Convenience Matters Closing Music (22:54):
Convenience Matters is brought to you by NACS and produced in partnership with Human Factor. For more information, visit convenience.org.