Convenience Matters Introduction:
[Music] You’re listening to Convenience Matters brought to you by NACS, whether it’s for food, fuel, drinks, or snacks, about half of the U.S. 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.

Carolyn Schnare:
Grabbing gas or a candy bar doesn’t scratch the surface when it comes to modern convenience store offerings. Consumers’ needs have shifted profoundly in the past few years, especially now after experiencing an ongoing pandemic. Shoppers are now seeking a greater sense of fulfillment, whether through products, use of shopping, store cleanliness, or interactions with employees and today we’re going to talk about that with a retailer about keeping up with customers through modern store design. Welcome to Convenience Matters. I’m Carolyn Schnare with NACS.

Jeff Lenard:
And I’m Jeff Lenard with NACS. And today Carolyn and I are joined by Akhtar Hussain. He is Director of Refined Fuels Marketing with CHS. And I think most of you know, CHS’ energy brand – it’s Cenex. They have about 1,450 locally owned and operated C-stores. And we’re going to talk about what Cenex is doing related to three major trends out there in the industry, local image and new, and those are three issues that we continually talk about in our podcasts. And how is Cenex attacking these in creating the best possible atmosphere at these nearly 1,500 stores? Now, I started with new, but I also should reference old in that CHS is now celebrating its 90th anniversary. So Akhtar, you don’t look 90, congratulations on looking so good. Your brand goes back quite a bit. Can you give us a little background on the company and your role there?

Akhtar Hussain:
Absolutely. I’m glad to be with you today. I’m Akhtar Hussain, as you mentioned, Director of Refined Fuels Marketing at CHS. I’ve worked for CHS for about 15 years now. And in all of those 15 years, I have been connected very closely to the Cenex brand throughout all my roles. CHS is the nation’s largest farmer owned cooperative and it’s very invested in agriculture. I mean, it’s an, it’s an agricultural cooperative owned by owned by its farmers. We market our energy products through the Cenex brand. And so we’ve had a storied history in the energy sector under the Cenex brand. And the brand has really had a goal through several evolutions over the past you know, 40, 50 years, and so we are at one of those evolution points right now.

Carolyn Schnare:
So expanding on that, like Jeff said, I think you said old was of the new and old things we were talking about. So I think one of the things I’ve noticed when, when looking into Cenex is one of the initiatives that you’ve got out there, which is the LIFT Initiative I’ll let you tell the cool acronym with that, but can you tell us a little bit more about, about what that means and then how that’s evolving with some of your stores?

Akhtar Hussain:
Absolutely. This year we were really excited to announce a four-year initiative called LIFT and LIFT stands for lighting image and facility transformation. And it’s designed to revamp Cenex c-stores through a series of exterior and interior updates. and as you mentioned earlier in the business of convenience, we’re really talking about the customer experience and what is going to bring people back to Cenex stores the next time they’re considering stopping at a convenience store. And so what our LIFT Initiative does is provides Cenex retailers with freedom and flexibility to renovate their stores, how they see fit. Part of being local is understanding that the types of stores that serve these local communities are very different. We, aren’t a cookie-cutter sort of convenience brand that puts up certain size boxes everywhere and has a very standardized footprint. We vary in size, we vary in scope. And so we needed to come with a program that allowed us to maintain forecourt brand consistency, but gave folks some flexibility as to how they went about improving the in-store experience. And that really is what the two components of LIFT focuses on our brand new forecourt image, which is called Halo and our in-store loan program that addresses that flexibility and need to update the interiors of our stores.

Jeff Lenard:
I think that local really fits in with what we’ve seen in the industry. I’ve been at NACS 20 some years now. And in thinking about the Cenex brand, the intersection that, that I first noticed is about a decade ago NACS sponsored the Capitol Christmas tree, and this is something where they chop down a tree and take some time to drive it across the country. And then it’s beautifully decorated and set up and celebrates a state right in front of the {U.S} Capitol. Now they never picked it in Arlington, Virginia and drive it five miles and it’s done, it’s coming from far away. And I remember at least two years there was one in Colorado and there was another year in Wyoming. And so we plan all this and we try to find as part of the journey when next data, because convenience stores sell 80% of the fuel in the country. We wanted to pay for the fuel along the way for this truck. And in these very small communities, you need to find two things. You need to find a convenient place to fuel that tied into them, not spending a lot of time. And there needed to be a of open space because to carry a 90-foot tree or whatever the size is, takes the truck bigger than that. So you need a nice lot that they could fuel. And it invariably seemed in some of these small towns in Colorado, in Wyoming and Utah, and some of these other places, it always was the Cenex where we found the stop. It was the local store and it was really cool to feel the connection with the brand when you’re just asking around, you’re trying to find the best place. So certainly you hit across all those local elements, but then how do you customize to the local environment? So it doesn’t feel like something’s being brought into the community by somebody who may not understand the community that well. And that’s the element that I think really sets apart your initiative from previous initiatives and how, how to rebrand in that you’re giving the local area, the ability to make it as local as possible beyond how they already feel in that community.

Akhtar Hussain:
Yeah. That’s a really interesting story. That’s a cool story. Thanks for sharing that. And that’s really what we love to hear about the nature of the stops that folks have when they, when they visit the Cenex, there’s something familiar about it, but there’s also a lot of uniqueness to it. And again, that was the challenge that we were really looking to solve for, with this, with this LIFT Initiative. Again, making sure there’s familiarity through that consistent forecourt branding and consistent signage, but understanding that the needs of community really dictate the sort of offerings that the store provides. And so we need to we need to honor that and be flexible.

Jeff Lenard:
And it does start with the outside. I know when, like I said, going back to the Capitol Christmas tree, you don’t need to design every store so that you can accommodate a 90 foot long truck. That’s not going to keep you in business long-term. It’s the local community and thinking about how the forecourt just makes the customer want to come inside the store, want to experience what the brand offers. So what are some of the cues that, that Cenex is looking at in, in outside, whether it’s a canopy or the forecourt itself. So it just makes you – you never want to force somebody to go inside – but it makes that fuel customer say, I need to know more. I want to buy more.

Akhtar Hussain:
The outside of the store and how we presented sort of this, this opportunity to modernize our forecourt image is where the project began. And so we started by taking an inventory of some of our competitors images – what are they focusing on these days? You know, what’s changed from the color palette point of view? And really try to understand what sort of changes we needed to make with the Cenex forecourt image, did we need to start from ground zero and build a completely new image? Were there elements that we just needed to adjust and everything in between. And, really where we landed was we had the opportunity to modernize the image through the addition of lighting. And that is really the core difference between the Halo image and the previous image called the generation image that we’re replacing. And as I mentioned, the Halo image is the exterior portion of the LIFT Initiative and focuses on the forecourt and where we’ve added lighting is a 360 degree LED light band to the top of the canopy. We’ve added a three-dimensional backlit blue arch, and we’ve also added three dimension and LED to our Cenex logo on the canopy. These upgrades have started already. We began last June, sort of in a beta phase, September, started the official start to the program, and we’ve moved through with some great consistency over those months and getting the Halo image into the network. All of the Cenex branded stores are going to receive this exterior refresh over the next four years. And so we’re on a pace of about 300 to 325 sites per year over the next four to accomplish getting the entire network upgraded to that brand new Halo image. Yeah, we’re very excited about it. It’s adding that illumination that really makes the image pop at night and grab the attention of those consumers on the street. And again, we hope that that drives them in the store as well. So not only do we want to capture from outside and have them have a great experience in the forecourt, but we really hope that that leads them inside the store as well.

Carolyn Schnare:
Well, enlightening is so important. I mean, it’s a good outdoor lit store is attractive to females to those traveling on their own, especially at night, but anybody really that’s looking for a safe place to go. It makes you want to go in that store that it’s brightly lit, you’re going to be safe. You’re going to be taken care of. It deters people fromnot that they aren’t coming there for that reason as well. So you like to see lights and just, the color sound awesome. And a previous podcast that we had a few weeks ago was all talking about red and blue and how those are important, strong colors. So, so I like, I like what you picked there. So pivoting a little bit, you said that working on…I can’t stop using that word pivot! After this pandemic, hopefully that just dies out of my vocabulary.

Jeff Lenard:
No, it’s going to be the new normal.

Carolyn Schnare:
Anyway. So moving away from the outside of the store, I know you’re probably doing some things inside the store as well, too. So are there any plans for those, those thousands of stores to get in there with that upgrade once a day? Of course,

Akhtar Hussain:
Right. Yeah. So we did, we are mentioning or I’m sorry, we’re focusing on both interior and exterior. And so the interior component of LIFT is what we feel is very differentiating from what other brands are offering today. We are offering our Cenex marketers 0% financing for five years on qualifying in store improvements for qualified applicants. And so that, that really is how we’re providing that flexibility of having our customers have a say in the scope and the size of the interior investment they want to make. We aren’t requiring interior an investment in the interior interior upgrades at this time. But we certainly hope that by improving the exterior to the extent that we are by making some free financing available for those in-store improvements, we’re hoping that really drive some engagement in this program. And we have the opportunity to not only improve the customer experience outside the store, but that also follows them inside the store.

Jeff Lenard:
And the key to making this all work is getting the retail network bought in because you can have a great concept. It can be focus group. It can be market tested. It can be all those things that need to be done to roll out an innovative new program and you can have the customer want it, but the key is to get the retailer to not only say, “yep, let’s, let’s do this,” but “I want to be among the first. And, I also want to be an advocate for it” because and we all know what it’s like when something new happens and it’s like, “Oh yeah, it’s new. I was told to do this.” And then when you just see that enthusiasm and that excitement. So I imagine that you’re hearing from the retail network those who are jumping on board, they’re saying some of them are first, first adopters. They they’d love to be first adopters. They love the idea of new, and then there are others that say this totally hits what I’ve always wanted to do. Are you finding all these different stories as retailers sign up to be in that first group that goes through these, this new program?

Akhtar Hussain:
Yeah, we’re, we’re seeing a lot of excitement out of the gate on really both facets of the program, both Halo and in store, but I think it’s important to back up just a minute on that whole idea of optimism and really what the sentiment is of our, of our Cenex branded retailers out there. As you may remember, last September when we launched this program, we were even in the more in the middle of the throes of this pandemic in New York City, there were a lot of forces against really coming out with a program of this magnitude at a time where there were a lot of challenges in the sector. And we thought about it. And at the end of the day, we decided to move forward and move forward at the same pace that we had previously intended to, for that reason alone, we needed to provide something for our marketers to focus on that was positive. That was uplifting, that showed that even at a time, that was difficult that we wanted to reinvest. We wanted to invest in the stores we wanted to invest in these communities, because that’s really what this investment is an investment in helping our Cenex stores succeed is really an investment in that local community. And we couldn’t have gambled better. The reception of our customers has been extraordinarily positive. They love the image of the way that it looks at night. They’re really excited about that. They have a lot of pride in the stores that they run and that is part of the beauty of the local ownership. And so if you couple that, that pride of owning their Cenex store and the ability to make this investment and make this improvement at this time it really worked out to our favor.

Carolyn Schnare:
Yeah, it’s been a year that’s for sure. It’s been a tough, almost going on more than a year, definitely more than a year now, but so I, I appreciate that what you said about creating the optimism with the employees, because that’s important and not only the employees, the customers that are visiting often too, but, but the employees, the marketers the owners who have every right, theoretically to be down on, on what’s happening. But but I like how you said that, how you’re giving them that optimism, how you’re moving them forward and reinvesting in the brand and, and the way the brand looks and feels. So I would imagine that you have been on the road more than many of us, for sure, out to some of these stores, or at least have been talking to some of the owners, have you come across any stories that are just so cool that you want to share?

Akhtar Hussain:
Yeah. You know, there’s been, there’s been a lot of great stories really, and so, yes, and I have been on the road a bit albeit in a mask and six feet away from everyone. There’s been some great some great projects that have taken place already. One of those has been in Roseau, Minnesota our business partner with Northern Resources Cooperative. And they’re they had been talking about a, either an improvement to the store, a vast remodel or raise-rebuild for, for a number of a number of years. They already had some plans underway. And when they learned about the LIFT Initiative and the opportunity for the in-store loan funding, I think it really sealed the deal for them. They did a really large scale project which includes a self-checkout, touchless bathrooms, all new countertops and cabinetry reach-in coolers. They did a really cool old-fashioned soda tap wall and so they just, they, they did such a great job of refreshing what they had, but doing so in a manner that was consistent with the look and feel of their local community. And so that was just one terrific project that happened in Roseau that comes to the top of my mind. Another one was in Minot, North Dakota with Enerbase Cooperative and the CEO of that Cooperative worked with his team in Minot to do a refresh of that store. So that wasn’t a full ground-up facility, but it was it was a large renovation. And so in that renovation, again, they, they expanded their, their kitchen, they put in all new coolers and freezers, they updated their restrooms and their entryway brand new countertops and cabinetry again. And so again, just a really great store for the folks in Minot to visit and one that Enerbase takes a lot of pride in and I guess the third example is I’m thinking kind of my recent travels here. There is one in Audubon, Minnesota, where that that customer also did a pretty large scale project, tearing down walls. They’re building a whole new store, has a great beer cave excellent food service concepts – two different food service concepts in that one – all new restrooms. So again, just the type of investment that when we were all sitting around the table back at CHS, trying to figure out how we come out with this program I don’t know that we would have envisioned such perfect projects that align with what we were trying to do so well. These happened to be some bigger projects, but I also just want to point out that that’s not the only type of project that this program supports really it’s for projects, large and small. So even if we’re just remodeling a bathroom or two, or putting in some new countertops all the way to “let’s raise this whole building and build something brand new,” so there is a lot of scope and scalability that that we can take advantage of with the in-store loan portion of the LIFT Initiative.

Carolyn Schnare:
Well, Jeff and I separately have both undergone house renovations in the last, I don’t know, a couple of months, some longer than others, right. Jeff, and just even minor things in like in a house that you’re living in are a pain to deal with and get around and change your way of being. So I can imagine that even, like you said, small or big renovations, it always has some kind of effect on the people working within those four walls of assuming those four walls stay there and they don’t go away too. And then you build home new four walls. Right, Jeff?

Jeff Lenard:
The the thing that is magical about convenience stores is you don’t have a three-week project that takes six weeks. It’s, it’s almost the opposite. It’s, it’s one of these things where they did that overnight? Or, they did that under that timeframe? Because you never want to, well, in retail overall, you, you want to keep people involved in routine and, as you do these refreshes, or even the raise and rebuilds you want to do them as fast as you can because you don’t want to give anybody a reason to go somewhere else because they’ve been slightly inconvenienced. So yeah, it’s one thing to deal with bathroom and kitchens at home. It’s an entirely new level of complication. And, and thinking through the customer when you’re looking at these, these types of store refreshes. So,there were two words and I just used one of them there that really struck me that, that I just want to go back to, I know we started by talking about local in new image. And as you were talking, there are two more words that really struck or stuck with me. One is refresh. And that, that is, that’s the name of the NACS image campaign that we started seven years ago when we wanted to look at our image and is it where we want it to be? And if not, how do we get it to where we want it to be? And we settled on the name of the initiative was ReFresh because we sell refreshments, refresh conveys fresh, and people like fresh because fresh tastes good. And, we refresh stores on a regular basis. So the idea of using that phrase it just, it struck us as something that we love that phrase and in our image campaign. But the other one that relates to everybody that has stores is the, the word investment that you used a few times. When we also at NACS, when we talk about what we contribute to the local economy, one of the numbers we use is how much it costs to refresh a store. And we put that in these documents that we share, whether it’s with elected leaders, et cetera, because it says, look, we care about the community. Look, this is how much we pay in taxes. This is how much we spend on stores, because we intend on being here a while. And another, another quick example of, of investment and you hear about IBM was just one of a whole bunch of electronics companies back in the {nineteen} thirties and when the Great Depression hit, they didn’t cut back their research budget. They, they kept it the same and expanded it. And I know that the last year has been tough. It’s not been great depression tough, but it’s been tough. And, and showing that you’re continuing this investment because when we get in better times, it’ll play out so much better because people will be in the mood to shop, they’ll be in the mood to experience something new. So, I feel this is all well positioned. And I guess the last remaining key is how do you make it work for all of the store operators, whether, whether they feel it’s in their budget, or you need to tell them that IBM story or something like that, so they can get it in their budget. Is there anything you’re looking at to tell everybody, yeah, you really will find value at all this?

Akhtar Hussain:
Well, I think one of the primary ways the Cenex brand, again, differentiates itself from competition is this idea that we enter into partnerships. We are all about the partnership with our, with our retailers and part of how we make that partnership come to life is by providing resources outside of where another major oil might provide them. So we have a, a whole host of retail consultants that help folks help retailers through these sorts of investments. They do, they assist with feasibility studies, they assist with optimizing point-of-sale. They assist with loss prevention, all these, all these things that can be challenging. We provide expertise and consulting services to help through that. Not the least of which is how do I work through a remodel? How do I work through a forecourt transformation? So between the expertise that we can provide at the corporate level, and you add that to the retail consultants we have on the street, our salespeople that assist our customers face to face on a day-to-day basis and help them with these challenges. You know, that is that to me the primary way that we talk through this and we make folks feel comfortable with it. The other thing I would add is the LIFT Initiative is really it’s a one-stop shop. So from having an in-house image department that works with the third parties that provide all of our image materials to the fact that even the in-store loan portion and the lending arm of this is all through CHS capital. So we’re able to rely on kind of the breadth of services CHS provides to put together a well-rounded, cohesive program that makes it really easy for our customers to work through because they’re not having to talk to multiple entities. There’s not a lot of third parties involved. And so the common understanding of the program, how it works what’s eligible is, is all very helpful to customers as they call in with questions or want to move forward with projects.

Carolyn Schnare:
That’s really cool. Hey, easy right there. That’s convenient. Right? Those are the things that we stand for. Can you, as I mentioned earlier, I watched a video of…I think I mentioned earlier…That I watched a video of your some of the stores and some of the LIFT program and some of the things that you’re doing to see the cool image that you described in the beginning. Can you tell our listeners some, some places they can find that, whether they’re interested to see what we’ve been talking about this whole episode, as well as if they want to get involved with Cenex in partnerships?

Akhtar Hussain:
Absolutely. They can visit us at Cenex.com/LIFT that has got a lot of information about the LIFT Initiative, about the Halo image, about the in-store loan program. For folks that are listening that are already maybe inside the Cenex family, and just want to learn more, they can reach out to their local sales person and have, have all their questions answered. So really we’re, we’re very excited about both prospects here. We’re really excited about the excitement that this is generating within the existing footprint of Cenex retailers, but we also hope to draw people into the Cenex family with the LIFT Initiative, because let’s face it. There’s, there’s a lot of independent operators out there that need to make some investments in their stores. And we hope that through coming out with this brand new Halo image, which is striking and very appealing to consumers, as well as giving them the ability to take this no-interest loan, to make some of those interior improvements, we’re really hoping to conjure up a lot of interest in the Cenex brand and use that to our advantage in the years moving forward.

Jeff Lenard:
[Music] Well, it sounds like you make it convenient to stay convenient. Carolyn and I’s jobs, as I said earlier, are to enhance the industry’s image. So anytime we can talk about programs that advancing industry’s image we’re in our happy place. So thank you, Akhtar, for joining us today and talking through your new programs. And thank you all for listening to Convenience Matters.

Convenience Matters Closing:
Convenience Matters is brought to you by NACS and produced in partnership with Human Factor. For more information, visit convenience.org.