Akhtar Hussain:
Thank you, Jeff.

Jeff Lenard:
Let’s start out with the basics because people may not know. Tell us about CHS and Cenex, how they operate together and what is your role in that company?

Akhtar Hussain:
CHS is the nation’s largest farmer-owned cooperative. They’re involved in many different facets of agriculture and they own two refineries and they also own the Cenex brand. The Cenex brand has a whole suite of energy products, including lubricants, refined fuels and propane. My role specifically at Cenex is within refined fuels and I am the director of marketing there. So I work with the Cenex retail brand, first and foremost. And so the Cenex footprint is about 1,450 stores through 19 states, most heavily centered in the Midwest and through the Pacific Northwest.

Jeff Lenard:
You mentioned farmers, for a lot of companies that’s in their roots: Cumberland Farms, Swiss Farms, Wawa were dairies before they were convenience stores. So I like the connection when we talk about farmers and convenience stores, because it’s about food. It’s about working hard in a community. Now related to that is the the whole initiative that Cenex is undergoing right now called LIFT. And that’s all capital letters. L. I. F. T. Can you talk about that initiative? Because at the beginning, I had mentioned the idea being welcoming. How do you appeal to customers to get them to come to your stores? And the first thing you gotta do is when, when they’re driving by at 30 to 60 miles an hour, it’s inviting, it pulls you in and then the rest just sells itself. Hopefully.

Akhtar Hussain:
That’s correct. With the Cenex brand, we’ve been continually attempting to modernize that brand for consumers and continue to have a really relevant, c-store brand that meets the needs of the communities that we serve. And so, as it relates to the LIFT initiative, it really goes with exactly with what you were saying. We had the opportunity to make our stores more attractive and more inviting from the forecourt perspective. And as we’ll talk a little bit more about, we also recognize the need to really improve the interior experience as well. So we see this as a necessary combination, right? It has to be inviting outside or that that consumer is gonna drive right by, but if they stop, they need to have a good experience at your store. And what we are attempting to improve upon with the LIFT initiative. So LIFT stands for lighting image and facilities transformation. So it’s not just about improving the four core image. It’s also again about providing resources, capital, and expertise to help our Cenex marketers improve the in-store experience for their consumers

Jeff Lenard:
So a lot of people think the most welcoming thing we can do outside is have a great gas price and, yes, that’s important, but what are the other components to, to make the forecourt welcoming?

Akhtar Hussain:
Well had introduced a new look for the Cenex retail brand, a pretty dramatic change in 2008. And so when we looked forward here, we really, we started with, well, what does the image need to look like? Are we talking a complete change, a complete dramatic do over, so to speak, or do we have a good solid foundation just need to modernize and tweak some things? And after doing a pretty extensive inventory of some of the other forecourt images that were out there, as well as looking into consumer trends, we came to the decision that we really didn’t need an exhaustive redo of our image, but we had the opportunity to modernize that the image and the look through exterior lighting. So we’ve incorporated a whole suite of LED illumination to both the canopy and the price sign to really give that attractive, modern look to our forecourt.

Akhtar Hussain:
And so part of the LIFT initiative again, is going out there and refurbishing all 1,400 forecourts with all new, canopy fascia, a three dimensional light bar that goes around the canopy, our blue arch back-lit portion of our logo, as well as our LED illuminated logo signs. As well as paint, pump graphics, the whole nine yards on the forecourt. And so that is a four-year program. We just completed year one of that program. And so in that first year, we’ve, we got about 300 of our locations upgraded. So moving right along nicely in our four-year plan.

Jeff Lenard:
So basically a store a day over four years, which either makes it sound really easy or makes it sound really hard because a store a day, that’s some work that goes into to managing all of that. What kind of feedback are you getting from folks who have been part of that first year’s program?

Akhtar Hussain:
We’ve had really pretty overwhelming praise from our, from our customers and consumers alike. They really are taking to the new forecourt image. They enjoy the illumination, and I’ve gotten that feedback again, both from Cenex marketers, as well as consumers driving by. So I think we struck the right balance between sticking with what works in terms of our brand identity and the core image components, but again, doing a good job of modernizing them and, and really just making our forecourt look attractive, bright, and welcoming.

Jeff Lenard:
And that’s particularly important for today’s consumer. I know that sounds cliche, but, uh, female customers, as you grow that customer base, that’s essential for them and, and the younger customers, because, I’m old enough to remember you went to a gas station because they had 25 cent coffee. Well, you know what 25 cent coffee tastes like? 25 cent coffee! But it’s about that experience. It’s about, they’re gonna keep on their old routine until something strikes them. And, and that could just be the refurbished, the beautiful store that says, ‘Hey, I’m gonna come here today.’ And then you have a chance to get them as a loyal customer. What are the things are you hearing from, from those who have joined the program in terms of what do they need to do in terms of modernization and what is part of that package?

Akhtar Hussain:
So in terms of the forecourt, the remodel portion of it, we’ve got a four -year plan. All the sites are essentially scheduled at some point throughout those four years. We’ve communicated that schedule out to our marketers. And so from perspective, we are just gonna continue to march and execute our plan to get all 1,450 of our stores done, uh, within the next three years. So we’ve taken some of the guesswork out of it at least as much as we can, and we’re supported by some fantastic vendors, construction companies, the image providers, the image vendors. So thankfully, there’s been quite a bit of supply chain, disruption, and quite a bit of delays with certain products. Thankfully, we’ve been able to avoid that. I think through both having some real solid industry partnerships, but also just buying things at the right time, making sure that we’re looking forward and avoiding any of these delays that we’ve seen in the marketplace.

Jeff Lenard:
It’s difficult for a lot of retailers to compare year to year given what the last two years have been like. And then you throw in other things, like you mentioned, the supply shortage of everything, including labor. But I would imagine that once a store goes through the transformation that it also addresses some of the challenges that, that everybody faces, which is, you know, labor shortage, that, that when you’re in one of these newly LIFTed stores, that it lifts spirits within the store, including people who wanna work there.

Akhtar Hussain:
I couldn’t agree with you more. One core tenant of the Cenex brand is that our stores are locally owned and operated. So they’re owned by people who live in those communities. And there’s a lot of pride of ownership of Cenex locations because they know that there are places where the community can count on them. And throughout the pandemic, we saw even more consumers relying on their local store for things that maybe they didn’t otherwise. And so for us to come out of the pandemic with sort of momentum, I think really serves us and our community as well.

Jeff Lenard:
You hear some stories. One of the ones they teach in business class is how IBM, when the Depression hit, spent more on R&D, they doubled down. And when they came out of the Depression in the thirties, forties, IBM was, was more of a force to be reckoned with. They kept moving and they saw their vision and they went for it. And it reminds me of what you’re talking about here, where, you know, it, it has been a difficult couple years on, on a lot of levels, but moving through with a four-year plan, I think shows a commitment to the communities, shows a commitment to the customers, and it shows a commitment to the stores that are part of the operating network. What are the kind of stories that you’re hearing from folks who have gone through the remodels, the LIFT initiative?

Akhtar Hussain:
We’re hearing great stories. I mean, all the way from, you know, consumers sending messages saying that they’re enjoying their new stores and their communities to local press when these new stores open up. The local newspapers and radio stations have been involved in some of these grand openings that are occurring. And so, you know, we really are delighted with, again, the energy that we’ve been able to generate in a positive fashion, through some really challenging times, some really challenging times for communities. And so if this can be one of the positive things that occurs in the communities and Cenex can be a part of that, we are all for that. And, we’re really excited to share the, those stories and to share in their excitement.

Jeff Lenard:
And when you go through a remodel, change is, sometimes not embraced, particularly if there are costs associated with change. So how do you work with those who are a little reluctant to move along with your vision of the future, what sort of incentives or, or partnerships do you create to, to help them go through the change?

Akhtar Hussain:
We’ve talked quite a bit about the halo image and what we’ve done on the forecourt, but part, the other part of the LIFT initiative is support for in-store improvements and in-store remodels. And I think really that’s where our LIFT program differentiates from other programs that are out there. So we offer 0% financing for qualified interior improvements in our c-stores. And that has generated a variety of different projects, from their scope, right? Some projects are complete store rebuilds, where they’re literally knocking the previous store to the ground and constructing a whole new building, um, to more minor upgrades, like maybe a bathroom remodel or putting in some reach-in coolers. But at the end of the day, I think it goes back to one of the comments I made at the beginning, which is it has to be more than a forecourt.

Akhtar Hussain:
It, it can’t just be that it has to be that it has to be attractive, appealing, modern, but you have to follow that up with a solid in-store experience. And so I think that’s what the interior portion of the LIFT initiative allows our marketers to do. Capital is tough to come by, the cost of borrowing money while it may be relatively low, that’s still a big hurdle for many small business owners to cross. And so by, by offering 0% interest financing, and also controlling that whole loan from start to finish, that all happens at CHS. We think that we’ve created a really simple to follow process for our customers to follow. And, also think that by providing them these interior remodel resources that not only are we gonna be improving the exterior and the forecourt, but really delivering on that in-store experience that we know that today’s consumers are craving.

Jeff Lenard:
One what I stress when I talk to reporters is the good news is the value of convenience has never been higher. And that is absolutely what convenience retailers sell and have hopefully perfected and will continue to perfect, but the downside is everyone else also wants to be in convenience too. So it really is about how do you continue to move forward because the customer will never say, ‘I want less convenience.’ And when you have a customer looking for more and more and more, you gotta keep evolving. And, I think the LIFT program is an example of how the industry is moving forward to continue to meet all the needs that customers want. Not just products, not just great service, but the whole experience because that’s where you see that customers want to spend their money when they have a great experience. So, anything else you want to suggest for retailers who are looking at looking at the program or getting more involved with CHS and Cenex?

Akhtar Hussain:
Yeah, absolutely. I think that these programs, the LIFT initiative, the, the halo remodel on the, forecourt, as well as the in-store loan program are available to not only existing Cenex marketers, but also marketers who are new to the brand. So, absolutely would love to encourage anybody out there who is a store owner, who is considering switching brands to look at some of the resources that come with the Cenex brand. And not only in relation to the LIFT initiative, but also our staff of c-store consultants. We really feel like we want to partner with our Cenex marketers and really make them successful. You know, Cenex is a brand that owns refineries and we sell gas and there’s other brands out there with that same model, but our commitment to making sure that our marketers are successful inside and outside, I think is what sets us apart. And so again, certainly would encourage, any store operators out there that are looking for another brand to, to really investigate Cenex and look into how we can help them succeed.

Jeff Lenard:
So if there’s one thing that people like to see before they join something, is they like to see, wow, this was successful. This is reality, this isn’t theory. So can you share any case studies or examples where we’ve seen success in the market with LIFT, and it is lifting sales, it’s lifting spirits, it’s lifting profits?

Akhtar Hussain:
Absolutely. We’ve got so many examples to share. But one that comes to mind was a rather large-scale project that our business partner Synergy Cooperative underwent in Cumberland, Wisconsin. And so the CEO of Synergy Cooperative was thinking about doing a remodel for some time and trying to figure out what the right solution was. Was it remodeling? What was there, was it tearing it down and build a totally new store? And they decided to do a complete rebuild after quite a bit of investigation. And so again, completely rebuilt store with new large bathrooms. The countertops were redone, really nice modern cabinetry, open-air coolers, a nice seating area for customers. So that to me would be a great example of a large-scale project that was financed through our 0% in store loan program.

Akhtar Hussain:
But it’s not all large projects either. That’s not what this is limited to. There was another example of a store of ours in, in Walker, Minnesota, that did a little bit smaller renovation. So they, they redid some countertops and, you know, kind of redid the schema inside the store. But they kept the existing footprint. And they just made some, some adjustments inside. And so our stores are not cookie cutter. We’ll be the first to admit it. And for us, that could be a challenge. But that’s why we designed this program with the type of flexibility that we have, because we know that the types of projects our operators are going to want to pursue are going to vary because our stores vary. And so we think that this program gives the flexibility to our marketers to perform the sort of upgrade that best suits them.

Jeff Lenard:
And we do know that every demographic you talk about demographic, whether it’s age, whether it’s some other makeup, there are so many variations within there, and they may vary by a mile or two, depending upon the market where the store is. So I would imagine that the challenge opportunity is to allow the customization because it really allows somebody to totally buy in, because they’re able to, to as much as possible say, this is my store, because I know my market.

Akhtar Hussain:
That’s exactly right. And there is so much difference in the markets that we’re in. And part of this also has to do with these kind of blurring channel lines that we’re seeing in our industry. So we talked a little bit about that before a convenience store is not just selling convenience items those lines again have been blurred. And so I think it allows our marketers to take a look at their competitors, whether those are coffee stores, whether those are quick-serve retail businesses, whether there’s a hardware store in town or not. All these things can be considered and our stores can be tailored to best meet the needs of their community.

Jeff Lenard:
And also there have been a lot of changes in how people perceive convenience in terms of looking at curbside, looking at delivery, looking at online, ordering for maybe in-store pickup or things like that. But also when you look at a program and modernizing your offer kind of sets you up as well as you can be set up for that future, because when people are looking at things that are changing the game, there’s a whole big aspect of what do you look like? How do you act like, and does that image look like something that could deliver on something that is very new or forward looking? So is, is there a way to take and not to scare you because I know a store a day is a lot, but as you go through this process for the next three years, you’re also setting these stores up to a certain extent for how they can continue to evolve as customer demands evolve.

Akhtar Hussain:
That’s absolutely correct. And I think that that’s our ongoing challenge is to support the Cenex network and in helping them understand what is coming next. What is that next opportunity for consumers, whether that’s self checkout inconvenience stores, or whether that is integrating some sort of mobile-order platform. Those are all things that we have the expertise to consult on. Not only that, but we have a lot of third-party relationships and partnerships throughout the industry that we can leverage to really help provide our stores with fantastic service

Jeff Lenard:
Well, thank you. What’s important is not just knowing what the program’s all about on a theoretical basis, but learn about how it’s actually being implemented out in the field. And for that conversation, we’re joined by Kyle Knutson, who is CEO of Synergy Cooperative, and he has a store in Cumberland, Wisconsin, and they’re using the LIFT program and it is yielding big benefits right now. So welcome, Kyle.

Kyle Knutson:
Hello.

Jeff Lenard:
Can you describe the store in Cumberland, what it was like before and how it transformed as part of this revitalization?

Kyle Knutson:
You know, our Cumberland store, we were in the community for several years in a lease in a store that we had outgrown and it didn’t really fit the vision of where we wanted to go in the future. It was a branded store, however, it was not branded Cenex. We were at the point of making a decision, do we, do we renew our lease and renew the brand agreement with a different brand, or do we renew our lease and do we brand it with Cenex or do we just walk away from this facility and start brand new and brand it Cenex? So, that was the tough decision we made the choice to build new and brand with cynic and take advantage of the LIFT initiative.

Jeff Lenard:
And I’m sure that’s the type of thought process that thousands of retailers go through when, when a lease comes up or something like that, what were some of the priorities that you looked at in making this decision to go forward with Cenex LIFT program and how did they manifest themselves in the new-look store?

Kyle Knutson:
You know, we were really focused on trying to make sure if we were gonna make a sizeable investment in any one of our locations, that, we wanted it to be what the customers are looking for today. And, with the LIFT initiative, offering 0% financing for five years on some of the things, we were able to take advantage of that and build it maybe bigger and better and nicer than we typically would have.

Jeff Lenard:
And what were some of the things that were going through your head in the process? Obviously change can be terrifying, but when you see change and how are so much more modern, so much better, it’s gotta be invigorating, but what was the thought process as this was going on?

Kyle Knutson:
We started thinking about if we were gonna build a new store, what would we do? What would it look like? Where would it be? How big does it need to be? It was gonna be drastically different than the current facility we were operating. And, not only was it gonna be drastically different with, just the footprint of the store, the square footage, the multiple canopies for fueling, large bathrooms. We just wanted to make sure we did everything right. And we didn’t want to be in a remodel phase two years from now because we missed something.

Jeff Lenard:
Earlier, there was discussion about local and the importance of local, the importance of feeling like part of the community. And when you’re working with a national brand, there are ways to also feel like you’re part of a national brand yet feel like you’re part of the community as well. Do you have any examples of how customers really embraced the community feel of the new renovation?

Kyle Knutson:
The customers really embraced the transition from the brand we had to the Cenex brand today. The community of Cumberland had a Cenex brand station there several years ago and it is part of our cooperative. And our members are a lot of farmer roots, if you will. And the Cenex brand is important to them and patronage is important to them and the cooperative system’s important to them. So it just really fits well. And we are in total control of how we merchandise the store and what products we sell. And we really focused on local, local meat and cheese vendors, down to maybe the guy that has his local honey business. So there’s just honey maple syrup, just plenty of local options there in our store.

Jeff Lenard:
Now, I don’t want you to give any trade secrets or anything like that. But do you have any broad metrics you can share about what it’s done for your business in terms of the lift, and that pun is intentional, to sales, both inside the store or at the pump?

Kyle Knutson:
You know, that’s a good question. We’re comparing two different facilities, although same road, two blocks down, maybe four blocks down from where the old store was. But we’re seeing strong growth in fuel sales, whether it’s gasoline or diesel, and gallons sold. The biggest difference between our former store to the current store is we have a branded food concept now where we did not have food in the former store. So that is growing at a far rapid pace, farther than our gallon growth at this point. But it’s really not even comparable to where our old location was.

Jeff Lenard:
And this grew growth is happening at a time of a pandemic. When there’s headwinds all around, you have fewer people driving, at least for extended periods of time. You had fewer people getting grab-and-go food. So any type of growth… we heard when in the early days of the pandemic, that flat is the new up. So when up is up,, so much better,. Any pieces of advice that you would have folks … what should they look at if they’re looking at doing something like you? What, what one, two or three tips would you say, look at these things when you make your decision?

Kyle Knutson:
I think one of the most important things that we did is, is, number one, we focused on curb appeal. You know, you, you’ve gotta get them to want to turn into your driveway. And, that’s from a thousand, 1,500 feet away. That was our number one goal was to make it attractive from a distance to make, them want to say, “Let’s check that out.’ Because if you can’t get them to turn in your driveway, they’re not going to buy that gallon or spend that dollar.

Jeff Lenard:
Absolutely. Well, thank you for joining us today, Kyle, and continued success in the store in Cumberland and at your other stores.

Kyle Knutson:
You’re welcome. Thank you.

Jeff Lenard:
And let me throw it back to Akhtar for the last word. Where do you learn more about Cenex and the LIFT program?

Akhtar Hussain:
If folks are already part of the Cenex brand family, they are free to contact their sales representative with any additional questions that they have. But if you’re not part of the Cenex family today, and you’re interested in joining, please visit us at cenex.com/lift to find out all about the Cenex brand and LIFT initiative and how it can help serve your business.

Jeff Lenard:
Well, thanks for joining us today, Akhtar, and for those who are regulars of Convenience Matters, if you wanna subscribe, please do so. You’ll get our news weekly, and we love more fans. So thanks for listening today and see you soon or better yet, hear you soon.

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

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