Brought to you by BUNN.

Coffee has long been a leading beverage at many c-stores. However, with increased interest in new formats and styles of coffee, some consumers are seeking out specialty coffees. Cold-brew and nitro coffee in particular are rising in popularity—according to Technomic’s 2017 study, Convenience-Store Refreshment: Opportunities and Challenges for Packaged and Dispensed Beverages, 32% of c-store customers not knowledgeable of cold-brew coffee and 41% of consumers not knowledgeable of nitro coffee say they are interested in trying or learning more about the drinks.

While these numbers may not seem too impressive right now, they’re something retailers should pay attention to—because as awareness of these two types of coffee grows, interest will certainly rise even more.

Nitro coffee: The next big thing

According to Technomic, younger consumers are particularly likely to order iced or cold beverages. Additionally, younger consumers are more likely than older consumers to change their beverage preferences seasonally, so a wider variety of cold beverages can help drive traffic during summer months.

While cold brew has been building a following for a few years already, nitro cold brew is relatively new on the scene. Companies such as BUNN have introduced equipment that makes serving nitro coffee operational friendly. BUNN’s Nitron2 Cold Draft, for instance, requires no keg to change out and features a slim design that’s capable of dispensing two beverages—such as cold brew and nitro coffee, for example.

Nitro coffee is unlike other coffee drinks in that it’s served straight from a tap and infused with nitrogen bubbles, with the resulting beverage looking a lot like a pint of Guinness. Nitrogenated coffee is ultra-smooth with a silky mouthfeel, making for a luxurious coffee experience.

A brewing opportunity

In some foodservice locations, nitro coffee is served directly from kegs, but this can prove to be a bit unwieldy within c-stores. Some newer equipment, like the BUNN Nitron₂ Cold Draft, uses concentrate in BIBs or caddy packs instead, which c-store staff is already familiar with. Each pack produces between five and 23 gallons of finished drinks. This nitro coffee machine uses an in-line gas infuser that produces the signature cascading-bubble appearance and velvety taste, and because it takes up little space, it’s easy for c-store retailers to incorporate nitro coffee into the coffee-bar offerings.

According to Technomic’s 2016 Snacking Consumer Trend Report, 61% of consumers purchase coffee beverages as a snack at least occasionally, so offering an upgraded coffee option—such as cold brew or nitro cold brew—can be a great way to appeal to those consumers who are looking for a little indulgence.

Consumers can try out the new coffee options as an alternative to their regular coffee, or during an additional stop during a different daypart. And, because cold-brew and nitro coffee are specialty drinks, they can be sold for a higher price than standard coffee offerings—great for retailers’ bottom lines.

RALEIGH, N.C. — Sageworks, a financial information company that specializes in the financial analysis of privately held companies, will make CashSage, its cash-flow solution for business owners, available for free to all U.S. small businesses, including convenience stores, bars and restaurants.

CashSage provides a dashboard in which business owners use sliders to immediately discern how changes in performance indicators can increase or decrease cash. These indicators include sales growth, overhead growth, net profit margin, accounts receivable days, accounts payable days and inventory days. CashSage also provides automated reports with industry-specific recommendations for improving each, including for c-stores.

“From the beginning, Sageworks’ mission has been to help businesses succeed by giving them information they can use and understand,” said Alex Pan, product manager for Sageworks. “For years, we have been achieving this goal through our relationships with accounting firms, who rely heavily on Sageworks’ ProfitCents solution to consult small businesses on their financial performance. Now, with the free release of CashSage for business owners, we’re fulfilling this mission directly by providing small businesses a solution that shows them how much additional cash they could generate by making small changes in their financial metrics and how to go about doing that in their specific industries.”

With CashSage, business owners can:

• Automatically sync monthly financials from QuickBooks online to quickly analyze cash flow.
• View and adjust six financial metrics to immediately see how possible changes in these business drivers can impact available cash.
• Benchmark the company’s performance against Sageworks’ industry database.
• Receive monthly industry-specific recommendations on how to improve each metric.

Raleigh, N.C.-based Sageworks is a financial information company that provides risk management, financial analysis and business valuation solutions to accounting firms, financial institutions and privately held companies.

CHICAGO — As diesel demand is forecast to grow, a new turnkey biodiesel program is debuting for convenience-store and fuel retailers.

The biofuels division of Targray is launching a program that aims to make biofuel procurement as straightforward as buying standard diesel. Chains and independent c-stores could see a return on investment with their first biodiesel order, according to Targray, with typical savings ranging from 3 to 10 cents per gallon (CPG) of diesel sold, depending on local market conditions and state and federal program eligibility.

The new program is launching after a two-year pilot and as forecasts call for increased demand for diesel. The most recent Short Term Energy Outlook from the U.S. Energy Information Administration (EIA) forecasts distillate fuel consumption to “accelerate” in second-half 2017, with an average annual growth of 2.2% in 2017 and 2.6% in 2018. The government cited increases in on-road, oil and gas drilling activity and industrial fuel use for the strong outlook.

Targray will feature the new biodiesel program at the 2017 NACS Show, with biodiesel trader and analyst Zackary Rocha available to discuss the company’s regional programs.

Targray, Kirkland, Canada, is a provider of commercial solutions for the biofuels, energy storage and solar photovoltaic sectors. It is said to be one of the largest biodiesel suppliers in the United States, serving fuel retailers, distributors and fleet operators with rail cars and storage in California, Florida and the Chicago, Cincinnati and New Orleans markets.

OKLAHOMA CITY — The Oklahoma Supreme Court has declared the state’s $1.50-per-pack fee on cigarettes unconstitutional, sparking a reported $215 million budget shortfall and forcing the governor to suggest legislators reconvene to address the matter, according to Reuters.

Signed into law June 1 by Gov. Mary Fallin, the fee would have gone into effect in early fall.

On Aug. 10, the state’s highest court cited faulty lawmaking practices as the reason for declaring the law in violation of the state’s legislative process. According to its rules, the legislature could not pass revenue-raising measures in the last five days of its session.

Denying opposition claims of blatant revenue motives, attorneys representing the state said the main purpose of the fee was to reduce smoking rates and, as a result, did not have to follow the constitutional process.

In a statement following the court’s decision, Gov. Fallin said invalidating the fee would cause a $215 million budget shortfall. She said the agencies that would have received funding from the fee “and the people they serve cannot sustain the kind of cuts that will occur if we do not find a solution. My belief is we will have to come into special session to address this issue.”

Lawmakers were attempting to make up for an $878 million shortfall.

Oklahoma has a balanced-budget requirement. Its fiscal-year 2018 budget totaled about $6.8 billion, Michael McNutt, a spokesperson for Fallin, told the news agency.

CHICAGO — In the race to replace gasoline and diesel as a fuel for passenger vehicles, electric currently has the edge against natural gas—and it’s only expected to grow.

A combination of issues is preventing natural-gas vehicles (NGVs) from gaining greater traction in the passenger segment, according to Bloomberg. Andrew Littlefair, president and CEO of Clean Energy Fuels Corp., Newport Beach, Calif., a natural-gas fueling-station provider, told Bloomberg he was “not sure America is set up” for a broad rollout of natural-gas-powered passenger vehicles, considering the lack of fueling infrastructure.

“There are a lot of reasons it would make sense to look at that again, but I don’t know that I’m ready to say that’s going to happen,” he said.

The United States has 1,828 natural-gas fueling stations, according to government and industry data. These include sites operated by convenience-store chains such as Kwik Trip, Holiday Stationstores, Wawa, Love’s Travel Stops, Family Express and OnCue Express.

Meanwhile, there are more than 8 times as many public charging stations for electric vehicles (EVs), and close to 70 times as many gasoline stations.

Natural gas is still relatively inexpensive, but its use as a transportation fuel is “not something that has taken off” in the passenger market, said Salim Morsy, an analyst for Bloomberg New Energy Finance. And while gasoline and diesel currently have the lowest total cost of ownership, the number of passenger EVs should at least double as battery costs fall and the vehicle technology improves, he said.

Tesla has about 455,000 reservations for its Model 3 mass-market EV, which went into production this summer. This figure is nearly 20 times more than the number of NGVs that were on the road in 2015.

The number of pure EV registrations, meanwhile, has grown from 14,000 in 2012 to 78,000 in 2016, according to data from Edmunds and IHS Markit. The number of passenger NGV registrations fell from 3,000 in 2012 to 337 in 2016.

However, natural gas does have growth opportunities in the fleet business, said Littlefair. For example, municipalities and businesses may favor it for lowering their operating costs and tailpipe emissions. Dallas Area Rapid Transit and the cities of Los Angeles and Fresno, Calif., are just a few that have fleets of NGVs, as do companies such as AT&T and Ryder System.

WALTHAM, Mass. – Master limited partnership Global Partners LP will “remain active” on the mergers and acquisitions front and “continue to focus on investments we believe will contribute to the partnership’s future organic growth,” said Eric Slifka, president and CEO, on the MLP’s latest earnings call.

“That investment opportunity could be an M&A acquisition, that investment opportunity could be raze-and-rebuilds and NTIs [new to industry]. So there are good uses for the capital to grow the business,” he said.

But the company is also pruning its network. With 1,443 locations in the Northeast, Global is one of the largest regional independent owners, suppliers and operators of gas stations and convenience stores. It has 239 company-operated locations, 269 commissioned agents, 237 lessee dealers and 698 contract dealers. Its family of c-stores includes Alltown, Alliance Energy and Xtra Mart.

“On the retail side, we continue our program to sell nonstrategic sites,” said Slifka.

As part of a planned sale of nonstrategic retail locations, Global Partners put 86 convenience stores with gasoline in the Northeast and mid-Atlantic on the auction block in April 2016 through Chicago-based NRC Realty & Capital Advisors LLC.

“Since the start of this divestiture program, we have sold approximately 50 of the NRC-listed properties for a total value of approximately $30 million, yielding a high-single-digit EBITDA multiple,” he said. “In many of these sales, we have retained term supply contracts that increase the multiple. So while the divestiture program is generating additional capital to reinvest in the business, we are also maintaining fee-based recurring revenue that drives volume and margin.”

“One of the main drivers of business at retail is that we feel we really have the best locations in the markets that we are in,” Slifka said. “I’m not saying that’s every single location. But the portfolio of the assets that we bought over the years from the major oil companies in many instances are in fact the best corner strength. … It’s really a combination of the assets, plus some of the capital expenditure that we put into the sites, plus our marketing ability.”

“Looking ahead, we are focused on making investments that further enhance the value of our asset portfolio, increase our operational efficiencies and drive long-term profitability,” he said.

Financial results

Net income in second-quarter 2017 was $2.4 million, compared with a net loss of $7.3 million in second-quarter 2016.

“Our second-quarter results underscore our ability to leverage our retail expertise and our position as a leading wholesale fuel supplier and terminal operator,” Slifka said. “Given the successful execution of strategic initiatives over the past year, the partnership is positioned with increased financial flexibility to pursue organic growth opportunities and M&A.”

Earnings before interest, taxes, depreciation and amortization (EBITDA) in second-quarter 2017 was $51.3 million compared with EBITDA of $41.3 million in the comparable period of 2016.

Distributable cash flow (DCF) in second-quarter 2017 was $21.8 million compared with DCF of $14.2 million in the same period of 2016. For the three months ended June 30, 2017, DCF includes a $2.4 million net loss on sale and disposition of assets. For the comparable period of 2016, DCF includes $2.2 million in impairment charges and a $0.4 million net loss on sale and disposition of assets.

Gross profit in second-quarter 2017 was $135.4 million, compared with $129.3 million for the comparable period of 2016. Combined product margin, which is gross profit minus depreciation allocated to cost of sales, was $157.8 million and $154.5 million for second-quarter 2017 and 2016, respectively.

The gasoline distribution and station operations (GDSO) segment product margin was $122.5 million in second-quarter 2017 vs. $116.3 million in the comparable period of 2016 due to stronger fuel margins, as wholesale gasoline prices declined during second-quarter 2017. By contrast, in the first two months of last year’s second quarter, wholesale gasoline prices increased.

Wholesale segment product margin was $31.2 million in second-quarter 2017 vs. $32.8 million in second-quarter 2016. This decrease was primarily due to less favorable market conditions in gasoline and related products, partly offset by other revenue.

Sales were $2.1 billion in both second-quarter 2017 and 2016. Wholesale segment sales were $944.7 million vs. $1.1 billion in second-quarter 2016. Sales in the GDSO segment were $947.6 million in second-quarter 2017 vs. $916.7 million for the same period in 2016.

Wholesale segment volume was 638.6 million gallons in second-quarter 2017 vs. 758.2 million gallons for the same period of 2016. The decrease was primarily due to lower volumes of crude oil, gasoline and gasoline blendstocks.

Volume in the GDSO segment was 405.4 million gallons in second-quarter 2017 vs. 403.6 million gallons in second-quarter 2016.

Waltham, Mass.-based Global Partners is a midstream logistics and marketing MLP that owns, controls or has access to one of the largest terminal networks of petroleum products and renewable fuels in the Northeast.

Brought to you by Ruiz Foods.

When it comes to grabbing a quick meal, stopping at a fast food restaurant is the go-to for many diners, but for others, convenience stores reign supreme. Particularly during the week, many consumers seek out meals—lunches especially—that offer a good value and that are quick and convenient. According to Technomic’s 2017 Value & Pricing Consumer Trend Report, powered by Ignite, 79% of consumers say that value is important or extremely important when deciding when to dine. Thanks to the roller grill, those consumers can find that value at c-stores.

Convenience, value and great taste

When customers stop in to grab something quick to eat, they’re doing so because they want something even faster than the drive-thru. Thankfully, the roller grill and c-store grab-and-go options have this covered. Roller-grill options like hot dogs, sausages, taquitos and Tornados—a snack comprised of bold ingredients wrapped in a seasoned tortilla—provide a quick satisfying option. Roller grill items are convenient and ready to take on-the-go, and are an affordable option for consumers as well—and according to Technomic’s 2016 Lunch Consumer Trend Report, convenience and affordability are the top two reasons for increased lunch purchases at c-stores.

Moving past made-to-order options

While made-to-order foods are trending in c-stores, many consumers are looking for tasty options that they can pick up quick and eat on the go—between classes, on the way to a job, etc. Roller grill options are key to driving foodservice growth.

These self-serve, ultra-fast options are perfect for the “in and out value seeker” consumer, and because there are new flavors and items released regularly, they’re ideal for people looking for variety. In Technomic’s Lunch report, 55% of consumers say that a wide variety of menu items is the number one lunch traffic driver. With unique and delicious flavors like spicy cheesesteak, cheese and pepperoni, chicken teriyaki, ranchero steak and cheese and breakfast options including egg, bacon, cheese and salsa or French toast and sausage, roller grill items offer consumers the variety they want for any mealtime. And because they’re so affordable, consumers can try out more than one flavor at a time.

Additionally, according to the Technomic Lunch report, 28% of consumers say that frequent new or limited-time offers are important to them—roller grill items are easily adaptable and ideal for creating new flavors or limited time offers.

In order to keep bringing new and repeat customers into c-stores for quick, grab-and-go meals they love, make sure that the options available—particularly roller grill items—are quick and ready to eat, offered at a great value and available in many flavors.

NEW YORK — In a tobacco triple play, New York City lawmakers passed legislation that would raise taxes on cigarettes and other tobacco products, cut the number of retailers who can sell tobacco and ban pharmacies from selling the category altogether, according to the New York Daily News.

In the bill passed Aug. 9, city council members raised the minimum price of a pack of cigarettes to $13 from $10.50, and tacked on a 10% tax increase on tobacco products other than cigarettes.

The move was the next step in a plan that Mayor Bill de Blasio outlined earlier in the year; the city’s health department said the plan would cut the number of smokers by 160,000 by 2020. De Blasio is expected to sign the legislation, which would go into effect about nine months after his signature, according to Addison, Texas-based halfwheel.com.

The law would also ban cigarette sales in pharmacies and cut in half the number of retailers licensed to sell tobacco products—a number the news source placed at 9,000—over the next 10 years through attrition. The Daily News said the legislation would also extend to electronic cigarettes.

“As bargain cigarettes are forced to increase prices, we speculate that premium brands may increase their prices too to maintain separation from the lower tier of the market,” Department of Health spokesman Christopher Miller told the newspaper.

James Calvin, president of the New York Association of Convenience Stores, Albany, N.Y., said the new regulations miss some major points about tobacco retailing. “These measures will destroy the business investment of retailers who have been leading the effort to prevent youth access to tobacco products,” he said. “The result will be lost revenue, lost jobs and an increasing number of sales in unregulated and illegal settings.”

DENVER — Private-equity firm Western Alta Holdings, the parent company of Pester Marketing/Alta Convenience Stores, has expanded to the West Coast, acquiring five c-stores in a joint venture with R.H. Smith Distributing Co. Inc., Yakima, Wash.

The stores—in Yakima, Ellensburg and West Richland, Wash.—will continue to operate under the Smitty’s name but will be managed by Pester Marketing/Alta Convenience Stores as of Aug. 1. The locations offer Conoco and 76 fuel.

The companies did not disclose the terms of the transaction.

This acquisition increases the size of Western Alta’s retail division to 66 Alta Convenience locations throughout Colorado, Kansas, Nebraska, New Mexico and Washington.

Western Alta General Partner and CEO Phil Zaccaria and President Rich Spresser said they will continue to expand the retail network. In July, the company acquired six Loco Convenience Stores in Grand Junction, Fruita and Glenwood Springs, Colo., through a joint venture with Grand Junction, Colo.-based Loco Inc.

“We are very excited about the opportunities these five stores and our partnership with R.H. Smith Inc. bring to our company,” said Zaccaria. “The R.H. Smith management team has been in business in this area of Washington for over 70 years, and they have developed many valuable relationships that will bring other opportunities for us to evaluate. Rich Spresser’s many years in this business makes these types of growth opportunities available to Western Alta.”

R.H. Smith has three main lines of businesses: retail, wholesale and fuel transportation services. It has 60 wholesale accounts, including Phillips 66, Tesoro, Conoco and 76 branded dealers; unbranded sites; cardlocks; and commercial and farm accounts.

Pester Marketing was formerly led by Jack Pester, who founded the company in 1955. Western Alta Holdings is based in San Antonio; Pester Marketing/Alta Convenience Stores is based in Denver.

Brought to you by Keurig^®.

Millennials have a reputation for being difficult to market to, but when it comes to drinks, they’re not too hard to figure out.

According to Technomic’s 2016 Consumer Brand Metrics, 67% of millennials prioritize the ability to customize their hot beverages, so when planning different ways to attract millennials to convenience stores for coffee, that’s one important thing to keep in mind.

But customization isn’t the only thing they’re looking for. Retailers can also attract millennials by offering seasonal flavors and limited-time offers—for coffee and other non-alcohol beverages alike.

Making it their own

When it comes to customizing their drinks, millennials aren’t just looking for small, medium, and large cups. Seasonal blends of coffees and teas are also popular, as are flavored syrups and sugar-free flavored syrups. And according to Technomic’s 2016 Center of the Plate: Seafood & Vegetarian Consumer Trend Report, 21% of young consumers follow less traditional diets including vegan and vegetarian diets, which means they may be looking for dairy alternatives for their drinks. Retailers can help boost interest by offering a selection of flavored creamers and syrups, as well as almond, coconut, or soy milk to appeal to consumers who don’t eat dairy.

Changing seasons, changing drinks

About 39% of consumers ages 18-34 say that their flavor preferences for beverages change depending on the season, according to Technomic’s presentation “Driving Traffic with Seasonal Promotions.” Additionally, 69% of millennials say they are more likely to buy items that are “seasonal.”

To take advantage of that inclination, c-store operators can offer options such as pumpkin-spice coffee drinks in the fall and peppermint-mocha drinks during winter. Seasonal flavors can also include toffee syrups, apple cider, and salted caramel. And since 33% of millennials say they’re willing to pay more for seasonal items, this can even be an opportunity for retailers to increase item prices a bit for a boost in sales.

Get it while you can

According to Technomic’s 2016 Beverage Consumer Trend Report, about a third (29%) of consumers ages 18-34 say that new and unique beverage flavors are very important when choosing where to purchase a beverage. Retailers can offer LTO beverages that feature emerging flavors to test how well they sell — younger consumers are more likely to be driven by unique flavors, so LTOs featuring those flavors can be particularly appealing to them.

According to Technomic’s MenuMonitor, some up-and-coming flavors in the non-alcohol-beverage category include peppermint, grape, carrot, blood orange, lavender, lemon verbena, and beet.

Appealing to millennials doesn’t have to feel like a puzzle—these younger consumers want a beverage that they can customize, as well as one that matches what they’re craving throughout the year, including seasonal beverages and other limited-time offers.