WWW.NATS O.

C O M

MAR C H /APR I L 2 014

THE MEMBER MAGAZINE OF NATSO, REPRESENTING THE TRUCKSTOP AND TRAVEL PLAZA INDUSTRY

Increase Beverage Sales Carriers, Shippers Boost Efciency

How Do You Get Customers to Come Inside?

The NATSO Show

Kat Cole, president of Cinnabon, shares her branding expertise with attendees at The NATSO Show.

2014 RECAP
Appealing to Pets in Virginia

CHAIRMANS LETTER

I
TOM HEINZ CHAIRMAN OF THE BOARD

humbly accept the privilege of again serving as your Chairman in 2014! And borrowing a lyric from a Bob Dylan song, were either born to live or were born to die. Im here to tell you in 2014 NATSO is born to LIVE! As in 2013, Im looking forward to working with you as we join together to protect the Throughout 2013, we continued fertilizing the seeds of growth for the truckstop and

interests of our highway-based businesses both today and well into our future. travel plaza industry, NATSO and especially The NATSO Show. As NATSO moves into 2014, the association will continue to protect the interests of interstate-based businesses. We must not shy away from the challenges 2014 will bring. Staying hungry was a mantra of Steve Jobs, and new challenges do just thatkeep us hungry. As an industry, we scored several major victories during 2013, particularly on the issue of tolling of existing interstates. Despite these recent wins, tolling remains a threat. NATSO and the Alliance for Toll Free Interstates will be working to ensure that existing interstates remain free of tolls and will advocate for the repeal of the tolling pilot program. In the past, discussions on Capitol Hill over highway funding have opened the door for conversations on rest area commercialization. Now, I know some of you feel toll roads or commercialized rest areas will not happen or impact your markets. I thought that, too, until I heard the State of Washington talking about tolling I-90 within that state. The lights went on. I-90 and I-94 are main east/west arteries running through Wyoming, South and North Dakota merging at Billings, Mont. Then, both interstates run together through Montana and Idaho into Washington. So, if Washington is allowed to begin tolling its likely to negatively impact our markets in the Dakotas and Wyoming. Glaringly, no ones markets are void the negative impact of tolling! Please make plans now to attend NATSOs Day on the Hill to share your own personal stories. It is our duty to educate lawmakers as to the true costs that tolling and rest area commercialization will carry. NATSOs members have always been and continue to be the driving force behind the organization and together we can pool our collective efforts, time and resources to generate signicant returns for our individual business and our industry as a whole. I Best regards,

Tom Heinz Coffee Cup Fuel Stops & Convenience Stores, Inc. NATSO 2014 Chairman
*Excerpted from the Chairmans speech at The NATSO Show 2014 in Nashville, Tenn.
www.natso.com 3

Convenience
in unique places

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WWW.NATSO.COM

MARCH/APRIL 2014

THE MEMBER MAGAZINE OF NATSO, REPRESENTING THE TRUCKSTOP AND TRAVEL PLAZA INDUSTRY

C OVE R STO RY
12 The NATSO Show 2014 Recap
Highlights from Nashville

FEATU R E S 08
CARRIERS, SHIPPERS SHIFT ROUTES AND EXPAND TRANSPORTATION OPTIONS TO BOOST EFFICIENCY

16

OPERATORS INCREASE BEVERAGE SALES WITH THE RIGHT PRODUCT MIX

25

APPEALING TO PETS IN VIRGINIA

Chairman Tom Heinz President & CEO Lisa J. Mullings

Editor Amy Toner Associate Editor Mindy Long

D E PARTM E NTS 03
Chairman's Letter

21

Stop Watch is published bimonthly by the NATSO Foundation, 1330 Braddock Place, Suite 501, Alexandria, VA 22314 Copyright 2014 by the NATSO Foundation. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without written permission of the publisher. All editorial materials are acceptable and published by Stop Watch on the representation that the supplier is authorized to publish the entire contents and subject matter. Such entities and/or their agents will defend, indemnify and hold harmless Stop Watch and the NATSO Foundation from and against any loss, expense or other liability resulting from claims or suits for libel, violation of privacy, plagiarism, copyright or trademark infringement and any other claims or suits resulting from the editorial materials. Periodicals postage 024-723 paid at Alexandria, VA and other mailing ofces. POSTMASTER: Send address changes to Stop Watch, 1330 Braddock Place, Suite 501, Alexandria, VA 22314

06

Great Ideas! HOW TO CALCULATE THE BREAKEVEN POINT ON A TRUCKSTOP PROMOTION ESSENTIALS OF SUCCESSFUL TRUCKSTOP RETAIL AND FOOD SERVICE MERCHANDISING

Foundation Update HOW DO YOU GET CUSTOMERS TO COME INSIDE FROM THE FUEL ISLANDS?

26

Operator 2 Operator WHAT IS THE ONE OPERATIONAL THING YOU CHECK EVERY DAY?

22

Fuel Up on NATSO Benets

We Want to Hear From You!

Do you have comments, ideas or suggestions? Dont hesitate to contact us. The NATSO Foundation 1330 Braddock Place, Suite 501, Alexandria, VA 22314 Email: editor@natso.com / Phone: (703) 549-2100 http://www.facebook.com/NATSOInc / www.natso.com

DARRENS GREAT
Darren Schulte, NATSOs vice president of membership and a retail expert, writes a biweekly retail column on NATSOs blog. We feature the best here in Stop Watch magazine. Join Schulte on NATSOs website at www.natso.com/great-ideas to read his digestible retail tips every other Thursday.

HOW TO CALCULATE THE BREAKEVEN POINT ON A TRUCKSTOP PROMOTION

SAMPLE NORMAL MARGIN STRUCTURE
Lets say you normally buy bottled water for $1.00 and sell it for $1.99. This is a 49.75 percent gross margin and $.99 prot per unit. If you sold 100 units per day, you would gross $99.
Retail Cost Gross Margin Percent Single Unit Margin Dollar Production Average/Normal Unit Sales* Typical Margin Dollars $1.99 $1.00 49.75% =(Retail Cost)/Retail x 100 $0.99 =Retail Cost 100 =Single Unit Margin Dollar $99.00 Production x Average/Normal Unit Sales)

*Our example is for daily sales, but it could also be monthly or yearly.

Do you ever wonder if a promotion you run is protable or if a promotional opportunity being offered by a vendor is going to drive sales and/ or protability? Do you wonder if you can you sell enough at the reduced price to make up for lost retail sales of prot margin dollars? I receive a lot of questions from NATSO members on this issue. Last fall I was asked during a travel plaza visit by a perplexed operator, How do I know if I am doing the right thing when discounting an item for a promotion? To help shed some light on this quandary, Ive created an example of how to calculate the breakeven point on a promotion. I've also created a downloadable Gross Margin Breakeven Worksheet with formulas to assess your own promotions. Download the worksheet at http:// www.natso.com/en_us/templates/ breakevenworksheet. Here is how to calculate the breakeven point on a promotion using a sample promotion on bottled water.

SAMPLE PROMOTIONAL MARGIN STRUCTURE

Now, if a vendor offered to sell you bottled water for $.90 to retail at $1.50, you might wonder how many units you need to sell to breakeven.
Retail Cost Gross Margin Percent Per Single Unit Margin Dollar Production $1.50 $0.90 40.00% =(Retail Cost)/Retail x 100 $0.60 =Retail Cost

BREAKEVEN ANALYSIS
Total Average/Normal Prot Dollars Proposed Per Unit Margin Dollars Breakeven Units $99.00 $0.60 = Total Typical Margin Dollars 165 divided by Proposed Per Unit Margin Dollars

So, for this example, you need to sell at least 165 units of bottled water at the lower retail price to break even. If you thought you could sell 200 units at the reduced price, it would be a success with more units, more sales and more prots. But remember, every promotion is different and more sales are not always the measure of success. Sometimes the desired outcome is to bring more customers in the door to generate sales in other categories. If you need me to help walk you through with some examples, please give me a ring at (703) 739-8562 or shoot me an email at dschulte@natso.com and I would be happy to help you. I

Please note: The prices and margins used in the examples above are purely hypothetical and are not meant to state or suggest the prices you should charge or the margins you should realize for any item of merchandise in your store.

March/April 2014

HAVE A RETAIL MERCHANDISING, MARKETING OR OPERATIONS QUESTION? Reach out to Schulte

at dschulte@natso.com or (703) 739-8562 and hell answer your question in the next Darrens Great Ideas! for Independent Operators.

ESSENTIALS OF SUCCESSFUL TRUCKSTOP RETAIL AND FOOD SERVICE MERCHANDISING

In the meantime, keep these 11 key essentials top of mind when considering new operations and/or remodeling areas within your operation:

Store location Product offering, product lines and product services Store design and layout Product placement and display Signage, messaging, advertising and promotion Product availability and inventory management Receiving, pricing and stocking touch points Selling prices Suggestive selling, selling of product and customer service Employee expectations, morale, appearance and conduct Curb appeal, customer experience, housekeeping and sanitation I

Ready to remodel? Reach out to Chairmans Circle member Paragon Solutions for a free consultation.
We are seeing a lot of new independent and small regional operations coming into the marketplace. Many of these locations could be considered non-traditional or hybrid travel plaza and travel center operators. They offer limited services for overthe-road drivers with robust, modern, crafted food-to-go programs, which equates to a low cost of operation compared to traditional truckstops. This model offers a potentially stronger net operating capital (NOC). Additionally, many operators are expanding and/or remodeling their locations, specically focusing on the retail and food segment areas. In this uncertain economic recovery, it seems to me that operators are feverishly pushing to maximize their capital improvement investments and create differentiation from their competitor. From my travels to truckstops, Id say this push is stronger now than ve years ago. Unsure how extensive your new build and/or remodel plans should be? NATSO members should reach out to Chairmans Circle member Paragon Solutions for a free consultation. (NATSO members can set-up a free consultation to learn more about the services Paragon Solutions offers by contacting Michael Lawshe or Bud Moore at (817) 927-7171.)

www.natso.com

!"##$%#&'(&)$**%#&(
SHIFT ROUTES AND EXPAND +#",&*-#+"+$-,(-*+$-,&(+-(.--&+(%//$!$%,!0
As carriers and shippers navigated the weak economy, they worked to increase efciencies. For some this meant shifting distribution patterns, while for others it meant turning to intermodal and private eets.
BY MINDY LONG

DECREASES IN THE LENGTH OF HAUL

Over the past few years, the average length of haul for dry vans has fallen to 550 miles from roughly 900, said Bob Costello, chief economist for the American Trucking Associations. This is the result of many factors, including more distribution centers by big box retailers, resulting in shorter hauls into and out of those distribution centers and some shifting of long-haul freight to intermodal, Costello said. However, Costello said the trend towards the shorter length of haul has attened out. In other words, there are still some reductions, but not at the rate as in the past, he explained.
8 March/April 2014

Gary Petty, president of the National Private Truck Council, said he thinks long-haul runs will change when the expansion of the Panama Canal is complete in 2015. Youre going to see more trafc routed away from Long Beach to Jackson and Charlottesville. That will take pressure off of long-haul runs going eastward from the west coast, he explained. Jonathan Starks, director of transportation analysis for FTR Associates, said that while there are eets that are shifting their lengths of haul and getting shorter, more regional plays, the eets making the shift tend to be large, public

eets. They get more play and have more information available, he said. Starks said trucking is on the rise and FTR Associates breaks information down by length of haul. He said, Short haul right now, which is anything less than 120 miles, is growing around 2 to 4 percent. Medium haul, which is 125 to 300 miles, is growing at about 6 percent. Long haul, which is anything going 300 to 550 is growing 6 percent. Then we have the super-long haulanything over 550 miles1,000 miles to 1,500 milesand that is also growing around 6 percent per year. Although there is some movement into the regional market, Starks said it is more specialized and isnt as overarching as some people make it out to be.

The driver shortage is shifting some network designs for some shippers, said Brent Beabout, senior vice president of supply chain for Ofce Depot. He said Ofce Depot is mitigating risk by turning to more intermodal shipments. Weve also been going to more dedicated eets in major metropolitan markets, Beabout said, adding that the company is also using more 3PLs and cross-docking. Costello said any movement to intermodal as a result of a pending driver shortage is on a very, very limited basis.

GROWTH OF INTERMODAL
Intermodal freight is on the rise, but several industry experts said they expect that growth to level out. Intermodal is growing 4, 5 and 6 percent a year, but it cant grow a whole lot more than that before it runs into capacity concerns, Starks said, adding that intermodal has made improvements on the service levels and time of delivery. It is a much more viable option. We just

THE PENDING DRIVER SHORTAGE

The driver shortage is expected to increase to 115,000 drivers by 2016 from 30,000 drivers today, said Rosalyn Wilson, author of the 24th Annual State of Logistics Report. Driver turnover is approaching 100 percent in the truckload space, which has high recruitment and retention costs associated with it, Costello said. To nd and keep drivers, carriers are increasing pay, Costello said [see sidebar on right]. Some eets may be going after more regional freight to help get drivers home more often, though it isnt a major factor in the shift, Costello said. Much of the reduction in dry van retail freight is due to the shippers, not the carriers. As big box retailers built more distribution centers, the average length of haul fell, he explained.

have to remember there is still a lot that is going to move by truck. There are several factors that determine whether trucking freight is a good t to switch to rail intermodal, including the distance the freight is traveling and the time sensitivities of that freight. Costello said, Generally, the freight must be going over 500 miles before it might be possible to move that freight to rail intermodal, but it might have to go at least 750 miles. Costello said the delivery window of that freight also comes into play. If it has a fairly tight delivery window, say a day or less, the freight wont move to intermodal, he said. Dan Murray, vice president of research for the American Transportation Research Institute, said ATRI's recent study on the operational costs of trucking show that costs are skyrocketing. He added, Our cost opportunity data seems to justify the movement of longhaul off the road. However, Murray told Stop Watch that while large companies are

-,%(/1%%+2&(#%"!+$-,(+-(+)%(3#$4%#(&)-#+"5%
Steve Branch, director of recruiting and advertising for C.R. England, a refrigerated carrier based in Salt Lake City, said recruiting can be a challenge. To help attract drivers, the company has recently
launched a new $7,500 SIGN-ON BONUS PROMOTION for new team drivers joining the company.

We are always looking for new and innovative ways to boost our recruiting reach, Branch said. Many of our recent methods have included increasing our presence in printed publications in order to reach experienced drivers, veterans and others seeking a professional driving career. The company also has created a new department to assist drivers with virtually anything they need, Branch said. It provides the driver with a better overall experience. It also provides them regular access to our company executives who themselves are actively involved in this department.

www.natso.com

6",7/"!+7#%#&'(( &)$**%#&(+7#,(+-(( #%5$-,"1(3$&+#$.7+$-,

A growing number of manufacturers and shippers are changing their distribution networks in order to move products to consumers faster. For many, that means an increased number of regional distribution centers, which is changing trafc patterns and lengths of haul. Learn more about the top distribution center trends in an online-only article available at WWW.NATSO.COM/ DISTRIBUTIONCENTERS.

On the other hand, with the driver situation that we expect to be emerging, there could be more play towards that if carriers think it does help them with the driver environment

moving long-haul loads to rail, he doesnt expect medium and small carriers to take freight to the rails. Starks estimates that intermodal freight accounts for about 10 percent of long-haul freight movements. There is still 90 percent moving by truck, Starks said. Petty said intermodal is a minuscule amount of the total spend on transportation. Petty said private eets are growing capacity and creating more assurance with their own equipment and drivers. Many shippers that have private eets are making sure that theyre ne-tuning all of their routes and

delivery cycles to optimize that capacity, and are outsourcing small amounts or in lanes where there are peaks and valleys of demand. They certainly are looking for other modes of transportation, including intermodal, Petty said. Petty said the shrinkage of truckload and the trend to shorter hauls will create a bigger dynamic of more components, whether it is intermodal or private or dedicated working in a more dynamic fashion toward more optimization. Companies are looking for the best value and efciency, whether it is long-haul, intermodal or private eets.

10

March/April 2014

+)%(1"+%&+(+#7!B$,5(+#%,3&
The American Trucking Associations tracks key data about the trucking industry. Truckstop and travel plaza operators can dig into this data to anticipate their customers future needs and stay ahead of the curve.

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TRUCKLOAD VOLUMES WILL GROW 3.2 PERCENT THROUGH 2018 and 1.1 percent annually between 2019 and 2024. Less-thantruckload volume should grow 3.5 percent annually through 2018 and by 2.4 percent until 2024.

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OVERALL FREIGHT REVENUE WILL GROW BY 63.6 PERCENT TO $1.3 TRILLION ANNUALLY IN 2024, and trucking will see its share of that revenue rise to 81 percent from 80.7 percent in 2012.

ANEMIC GROWTH FOR RAIL CARLOADS OF JUST 1.5 PERCENT THROUGH 2018 and 0.4 percent from 2019 through 2024 will contribute to a decline in market share to 14.2 percent from 14.8 percent in 2011. INTERMODAL RAIL WILL CONTINUE TO BE THE FASTEST-GROWING FREIGHT MODE, growing an average of 5.1 percent a year until 2018 then slowing moderately to 4.8 percent annually through 2024.

OTHER MODES OF TRANSPORTATION, INCLUDING AIR FREIGHT, waterborne transportation and pipelines will see moderate volume and revenue growth.

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TRUCKS MOVED 9.4 BILLION TONS OF FREIGHT IN 2012, or 68.5 percent of all domestic shipments, up from the previous year.

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IN 2012, TRUCKING GENERATED $642.1 BILLION IN GROSS FREIGHT-RELATED REVENUES, or 80.7 percent of the nations freight bills, an increase from 2011.

THERE ARE 6.9 MILLION PEOPLE employed in trucking-related industries.

THE MAJORITY OF TRUCKING COMPANIES ARE SMALL BUSINESSESWITH 90.5 PERCENT OPERATING SIX OR FEWER TRUCKS. Only 2.8 percent of eets operate more than 20 trucks.
www.natso.com 11

@NATSO_Inc

The NATSO Show

12

March/April 2014

2014 RECAP

2.5 days

25+ sessions

750+ attendees

www.natso.com

13

NATSO Thanks Our Sponsors for their Support of The NATSO Show 2014
Platinum:

Thank You to Everyone that Supported the NATSO Foundation Fundraiser at the Ryman Auditorium in Nashville!
Gold:

Gold:

CAT
SCALE

!"#$%&'%()%"*+,-+ ./%"01# !"#$%&''()*(+,

Copper:

Copper:

Sponsor:

NATSOS FUTURE LEADERS PROGRAM WAS PROUDLY SPONSORED BY

NATSO thanks the North American Truck Stop Network (NATSN) for co-locating the NATSN Board of Directors meeting with The NATSO Show 2014.

14

March/April 2014

STOP. GO. STOP. GO. HARD ON YOU. HARDER ON YOUR ENGINE.

Sometimes your engine works hardest when youre hardly moving. Make sure your engine is protected with Shell Rotella heavy duty diesel engine oils. Whether you prefer the wear, deposits and emissions protection of Shell Rotella T Triple Protection, the improved fuel economy of Shell Rotella T5 Synthetic Blend Technology, or the excellent high/low temperature protection of Shell Rotella T6 Full Synthetic, rest assured your engine can stand up to the most demanding conditions even while standing still. www.rotella.com

THE ENGINE OIL THAT WORKS AS HARD AS YOU.

BY MINDY LONG

hether they come from the cooler, the fountain or the coffee bar, beverages make up a signicant portion of travel plaza and truckstop sales. Stocking the right mix and the latest offerings not only keeps customers happy, it also increases sales. To ensure they have desirable products, operators can monitor trafc patterns, get to know their customers and stay current on the latest trends.

UNDERSTANDING THE CONSUMER

Darren Schulte, NATSO vice president of membership, said the key to determining any beverage offering is for operators to know exactly who is passing through the doors each day. You might have four truckstops on a corner and every single one of them might have

different customers, he said, adding that one location may skew more to owner operators while another attracts company drivers or a greater number of passenger vehicles. Just because someone across the street is doing something different than you, it doesnt mean it is the right thing for you.

16

March/April 2014

To get to know their customers, operators can spend time on the oor talking with shoppers. The obvious customer is the truck driver, but who are the non-obvious customers? Take time to ask them a question. You can get some feedback and start drawing some assumptions that can assist you in determining if you should expand a particular product, category or xture, like your coolers, Schulte said.

PERFECTING THE COFFEE BAR

Coffee remains a staple for both the travel plaza community and the nation. The National Coffee Association reported that American coffee consumption continues to increase with 83 percent of the U.S. adult population now drinking it, a vepoint uptick compared with last year. Whats more, a growing number of coffee consumers have sophisticated taste. The coffeehouse has taught a generation that there are better coffee choices and now with the preeminence of quick-service-restaurant coffee, that coffee has gotten really good and lower grade coffee is no longer acceptable, said John Buckner, a spokesman for NATSO Chairmans Circle member S&D Coffee. The National Coffee Associations latest trend report showed that nearly one in three consumers drink gourmet coffee, and older Americans are drinking more coffee. The coffee association said daily consumption of coffee among those 60-plus rose to 76 percent, up from 71 percent in 2012, and daily consumption for those 40 to 59 rose to 69 percent, up from 65 percent last year. Ericka Schapekahm, director of human resources and special projects, Coffee Cup Fuel Stops and Convenience Stores, Inc., said she

is seeing a demand for premium coffee, and the companys addition of a Caribou Coffee self-serve kiosk to one location has created a coffeehouse experience for customers. Caribou is strategically located at the front of the stores and the sound, smell and look of premium coffee is the rst thing the guest experiences as they enter, Schapekahm said. The coffee and bean smell drifts outside as well and creates a great smell it/sell it moment at the gas islands. Even better, the coffee additions have resulted in regular guests. Schapekahm said their Vermillion, S.D., location is a 14-mile round trip for residents of the town, so the company wanted to nd something to bring them out more regularly. What we have found is that offering a premium coffee, and creating an area for them to sit and study or have a meeting, has made them change their coffee drinking habitsthem coming all the way out hereand travel habits by making sure they get their coffee and gas on the way out of town, she said.

THE COFFEE ASSOCIATION SAID DAILY CONSUMPTION OF COFFEE AMONG THOSE 60-PLUS ROSE TO 76 PERCENT Tricia Howell, store manager for Truck N Travel TA, Eugene, Ore., said her coffee area has grown and become more sophisticated. Coffee is cool and there is a lot you can do with it now. You can get a better cup of coffee, better coffee brews and avored creams, she said. Knowing who is drinking what can help operators determine the ideal offerings. The important thing here is to get the assortment right, Bruckner said, adding that suppliers can help with category analysis. S&D Coffee provides analysis based on zip codes because people in different regions have different tastes. Consumers, particularly women, are favoring avored coffees, Bruckner said, citing pumpkin, French vanilla, hazelnut and mochas as the top coffee avors.
www.natso.com 17

YOU MAY WANT TO OFFER AN ASSORTMENT WITH AS MANY AS SIX COFFEES..." JOHN BUCKNER, A SPOKESMAN FOR S&D COFFEE

When it comes to younger consumers, iced coffee and iced-blended coffee drinks are popular. Bruckner said, People want to increasingly enjoy iced coffee not only in the morning but also as a pick-me-up at snack time in the afternoon. Bruckner added that sometimes millenials start drinking iced coffees before becoming habitual, hot coffee drinkers in the morning. Offering iced drinks is easier than ever, he added. Youll see the iced dispensing equipment has gotten better so the quality is better and can be self-served by the customer, he said. The National Coffee Association reported that consumers age 18 to 39 consume more espresso-based beverages than other age groups, and Hispanic Americans exhibit stronger consumption habits than other groups. Bruckner recommends operators show an assortment in the coffee area. You need to have a variety of coffees for different demographics and the different needs in a truckstop, he said. You may want to offer an assortment with as many as six coffees. Each of the items needs to have a purpose. For example, some people are looking for a functional coffee because they need to wake up. They need an extra caffeinated coffee. We have one called Juva Roast, and the energy doesnt come from extra caffeine, it comes from antioxidants and cellular availability, he explained. Mark Russell, director of operations at Russells Travel Center, Glen Rio, N.M., has a four-unit coffee dispenser and offers three varietiesan extreme

caffeinated blend, a dark roast and the house blend. Our house blend sells so well we have two of them that we have to keep going all the time, he said, adding that he plans to add a self-serve cappuccino machine. A multi-nozzle cappuccino machine can offer a variety of avor options. Those seem to be very, very successful, Schulte said, adding that the newer machines dont seem to require a tremendous amount of labor for upkeep as long as manufactures cleaning instructions are followed. Eco Travel Plaza, Crossville, Tenn., has had success with its self-serve Concordia machine that allows customers to make coffeehouse-style espressos, lattes, cappuccinos and mochas, said Chris Smith, general manager of the location. Russell offers bulk cream and half-and-half and has installed a bulk dispenser with eight different sweeteners and powdered creamers. The dispenser offers a wide variety of options while also cutting costs. We did that because customers, especially drivers, would come by and grab a handful of the packets. It gets expensive, he said. Schulte said, The locations that carry a wide variety of coffees that meet their customers needs in a very small but shopper friendly area seem to be the ones that are very successful. Locations that add a premium coffee should take time to train their team so they learn to love and sell the drinks, Schapekahm said. With this emphasis, weve even converted our most hardened cup of mud loving professional drivers who swore theyd never drink a premium coffee beverage, she said.

18

March/April 2014

MAXIMIZING THE COOLER

The cold vault is an important area in travel plazas and the product mix inside the coolers is changing. In the past, as an example, you may have had three to four doors for soda and now you have two doors or one door based on need, and two to three doors of energy drinks and one complete door of tea, Schulte said. As with coffee, knowing the customer will help operators determine what products to carry. Truck drivers traditionally will drink a lot of Mountain Dew. That may not be the case for a passenger driver. If you have a particular ethnic community visiting your store, you may want something unique for them, Schulte said. Looking at customer counts and sales can help operators with product selection. If you have a lot of customers and signicant cooler space, having a broad product selection is probably helpful, but I think the reverse is when you have a smaller customer count and smaller available cooler space, you cant give too many choices or you give the ability to trade down, Schulte said, adding that the labor required to keep the best sellers stocked can be signicant. Russell is evaluating his cooler offerings and is preparing to make some changes to improve prots and customers shopping experience. Instead of branding doors, were going to integrate our doors, so Coke and Pepsi might be on the same shelf, he said. All the orange juice, no matter who makes it, will be in one door instead of being spread out. In the past, Russell has assigned four doors to Coke and three to Pepsi. Whatever they carry is on there, he

explained, adding that he anticipates some pushback from beverage manufacturers. I talked to some people that have made the change and they said at rst the companies didnt give them special pricing, so they raised the retail price to make the same margin. Once that company lost sales to another brand, they came back with a lower retail price. Schulte said operators often have to determine their own needs rather than letting the beverage vendor select the product mix. He suggests operators work with their vendors to nd out what theyre seeing and what the local market is doing, then combine that data with their customer knowledge and sales data. Energy drinks continue to increase in number, and manufacturers are adding more options and avors. Red Bull has added two avors. Monster has added at least ve new offerings and Five-Hour Energy has at least three, Smith said. Howell said energy drinks are taking up more space in her coolers and some of the soda companies are resistant to giving up space. It turns into a big ne-

TRADITIONALLY WILL DRINK A LOT OF MOUNTAIN DEW. THAT MAY NOT BE THE CASE FOR A PASSENGER DRIVER. IF YOU HAVE A PARTICULAR ETHNIC COMMUNITY VISITING YOUR STORE, YOU MAY WANT SOMETHING UNIQUE FOR THEM. DARREN SCHULTE, NATSO VICE PRESIDENT, MEMBERSHIP

www.natso.com

19

MAXIMIZING COOLER SPACE

In an effort to increase cooler space, Howell agreed to position reach-in coolers throughout her location, but she is phasing them out. Before you know it you get all of these things on the oor and it starts to look junky and is just too much. I have eight doors and would love to have more, but thats what I have and it can work, she said. Eco Travel Plaza has also added coconut waters, higher-end fruit juices and protein drinks, such as Muscle Milk and Core Power. Smith said hes found success by changing the actual cooler. The best thing we did is go with LED lighting and black shelves when we upgraded our coolers. This really makes the drinks standout and they almost look wet, he said. Schapekahm said their soda coolers recently received a facelift, which included creative signage that spreads the message cool down, and new lighting designed to grab customers as they enter the location. Coffee Cup Fuel Stops has even taken their beverage offerings further and added a wide selection of wines. It appears that our premium coffee drinkers also love wine. Weve built a great business as a last minute gift shop with our coffee and wine section, Schapekahm said. We create gift baskets or wine and coffee bean pairings.

gotiation, but everybody has to compromise a little bit, she said. Howell has found that some companies are willing to pay for shelf space to get more exposure for their energy drinks. It is usually the heavy hitters that will pay, she said. She is also seeing more fruit drinks from local manufacturers. Some of those are starting to take off and Id like to give them space, she said, adding that she is trying to pull the slow sellers within her coolers to make more space. You really have to be on top of your numbers to gure that one out. Russell is also looking at his sales to determine which products to carry and plans to cull some of the slower selling products, even within the growing energy segment. The top energy drinks out there are Red Bull and Monster, but were carrying the other energy drinks and theyre really not where the big sales are, he said.
20 March/April 2014

FOCUSING ON THE FOUNTAIN

Fountain offerings have remained fairly consistent over the years, Schulte said. However, some operators are nding success with Coca-Colas Freestyle machine, which provides a wide variety of options and lets customers add avorings to their drinks.

Schulte said some operators are opting to go with either Coke or Pepsi fountains instead of offering both. However, he said operators run the risk of losing sales when going this route. I think the smarter decision is to go with a major contract with one of them and carry Diet Coke and Coke if you go with Pepsi, or Pepsi, Mountain Dew and Diet Pepsi if you go with Coke, he said. If anything you want to drive business to your fountain because the fountain is your most protable area of your store. Schulte said he is seeing expanded tea programs with a variety of avored sweet teas. In the old days they may have had an urn of iced tea, but now some have a tea fountain and there are four to six avor choices. It is all bag in a box but gives an impression of freshbrewed tea, he said. Frank Paci, president of McAlisters Deli, said iced tea, sweet tea and lemonade make up 70 percent of their beverage sales even though they also offer a variety of Coca-Cola products. Weve added green tea to some of our restaurants looking to increase sales, and weve created specials, Paci said. McAlisters Deli offered a peach tea with pure peach puree and a slice of peach on the glass and is experimenting with tea bars in some stores where customers can add avorings, such as strawberry or peach, to their tea to suit their tastes. Paci has found customers also like to mix tea and lemonade. The guests love to personalize their drink. We have guests that will do one-third lemonade and twothirds iced tea, he said. I

HOW DO YOU GET CUSTOMERS TO

FROM THE FUEL ISLANDS?
BY DARREN SCHULTE

FOUNDATION UPDATE
ADD FAST FOOD GOURMET Look into the trend popping up in major cities where gas stations are combining fuel and gourmet fast food programs, such as Indian, Chinese or Italian. While they are not exactly inside the store, it does get them to your store front where it gives you a chance to display the feature and benets of your operation. FOOD PROMOTIONS Create food promotions that are tied to fueling, such as purchase ten cups of coffee to get eight cents off a gallon of gas. HEALTHY OPTIONS Ensure your busy female customers know you offer light fare food products, fast nutritional meals to go and other time saving services and offerings. SEASONAL LOSS LEADER PROMOTIONS Add a coffee and pastry promotion during the morning winter drive to work or a fountain soda and bag of popcorn package during the summer afternoon. MESSAGING Ensure that messaging is consistent from the billboards to the high rise, street sign, pump toppers and the building messaging. Drive home your message with frequent touch points.

COME INSIDE

PRICE LEADER If you are the price leader in any price-sensitive categories, such as beer and cigarettes, ensure customers at the gasoline pump clearly know you are.

BULK DISPLAYS Display items in professional bulk stack displays with the appropriate collateral in front of your store during key drive times. A case of soda on Friday evenings and Saturday and Sunday mornings, or fresh owers on Monday or Friday evenings, for example.

ADD HELPERS During cold months or rainy days, deploy helpers at the gasoline islands on your two busiest fueling days of the week. Give them directives to offer help and suggestive sell, essentially bringing the store to the customer. For example, ask, Can I get you a cup of coffee while you are fueling? Our premium roast is on saletwo creams and a sugar?

hen it comes to increasing customer counts, most travel plaza and truckstop operators have a good understanding of what it takesclean operations, great curb appeal, competitive fuel prices, a destination offering and great customer service. While most of over-the-road (OTR) customers have to come in to pick up their fuel ticket, that is changing as well, so focusing on ways to move customers inside is taking on more importance every day. In the vast majority of the travel plaza and truckstop industry, customer counts and total transactions are driven by your gasoline purchasing customers. Unlike the OTR professional driver, the gasoline customer doesnt have to come into your location. When they do, many are driven inside for restroom and food needs. Most operators estimate that fewer than 20 percent of all customers come inside. To increase the likelihood that fueling customers will make the 100-foot trek into the main building from the gasoline islands, try these helpful hints to help increase the chances your gasoline customers will come in and buy.
www.natso.com 21

FUEL UP ON NATSO BENEFITS

WE KNOW NATSO MEMBERS dont have tons of time to research
all the knowledge resources and business solutions NATSO offers. It is a good thing we are experts in all things NATSO. Read on to learn about just one of the many resources NATSO provides.

BY AMY TONER

DISCOUNTED PAYMENT CARD MERCHANT PROCESSING

Did you know NATSO has partnered with First Data Merchant Services to offer NATSO members a cost effective, competitive solution for processing credit card transactions? The program gives NATSO members group purchasing power through the association. That means signicantly reduced processing rates for those who participate. The NATSO/First Data program includes a cost+ rate structure with numerous reduced fees that include a $0 chargeback fee. Utilizing the vast payment industry experience of First Data coupled with direct oversight of NATSO industry experts, the program supports practically all forms of electronic payments including eet, credit and pin debit cards plus customized gift and e-loyalty programs. Program highlights include: No chargeback fees; Improved cash ow with quick access to funds from the bank of your choice; Competitive cost+ rate structure; and Free online reporting and account information anywhere, anytime to easily manage your transaction data. You may use First Data now, but that doesnt mean you are covered by the remarkable NATSO/First Data program. I
To take advantage of the NATSO member benet, contact Dan Hudson at (703) 398-5831 or Dan.Hudson@FirstData.com.

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March/April 2014

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NEW MEMBERS
NEW TRAVEL PLAZA MEMBERS 730 TRUCK STOP (FLYING J DEALER #462)
2085 Shanly Rd. Cardinal, ON K0E-1E0 PHONE: (613) 657-3155 CONTACT: Ken Rattan

ROYAL CURRY TRUCK STOP (FLYING J DEALER #833)

6115 4 Line Rd. Banisville, ON K0C-1E0 PHONE: (613) 347-2433 CONTACT: Ajay Parmar

DUNKIN BRANDS
130 Royall St. Canton, MA 02021 PHONE: (781) 737-3432 FAX: (781) 737-4432 CONTACT: Pam Gore EMAIL: pgore@dunkinbrands.com WEBSITE: www.dunkinbrands.com

KENTS KORNER #18

P.O. Box 1249 Wagener, SC 29164 PHONE: (803) 564-5944 CONTACT: Chad Ingram

VILLAGE FUEL STOP

31858 Castaic Rd. #207 Castaic, CA 91384 PHONE: (661) 295-7256 CONTACT: Sarkis Khrimian

FORTE PRODUCT SOLUTIONS

4800 Main St., Suite 300 Kansas City, MO 64112 PHONE: (816) 741-3000 ext. 103 FAX: (816) 741-3008 CONTACT: Yasmina Dhimes EMAIL: dhimes@forteproductsolutions.com WEBSITE: www.forteproductsolutions.com

LICHTI BROS. OIL COMPANY

301 N. Market Shickley, NE 68436 PHONE: (402) 627-2235 CONTACT: Tim Lichti

NEW ASSOCIATE MEMBERS BAIN & COMPANY, INC.

131 Dartmouth St. Boston, MA 02116 PHONE: (617) 572-2428 CONTACT: Beth Poisson

LEER, INC.
3014 E. Ivanhoe St. Gilbert, AZ 85295 PHONE: (602) 318-7944 FAX: (608) 562-7091 CONTACT: Ben Albregts EMAIL: balbregts@leerinc.com WEBSITE: www.leerinc.com

PASS LAKE TRUCKSTOP (FLYING J DEALER #866)

3200 Hwy. 11/17 Shuniah, ON P0T-2M0 PHONE: (807) 977-2121 CONTACT: Carol Parcher

C & R DISTRIBUTING, INC.

140 S. Prado Rd. El Paso, TX 79907-6136 PHONE: (915) 860-4480 CONTACT: Keith Kirkpatrick

CAL CENTRE DEVELOPMENT

201 New Stine Rd. #350 Bakerseld, CA 93309 PHONE: (661) 303-3810 CONTACT: Phil Rudnick

NJOY
15455 N. Greenway-Hayden Scottsdale, AZ 85260-1886 PHONE: (480) 305-7950 ext. 104 FAX: (480) 305-7955 CONTACT: Daniel Davis EMAIL: ddavis@njoy.com WEBSITE: www.njoy.com

WESTMOR INDUSTRIES
3 Development Dr. Morris, MN 56267 PHONE: (320) 349-0824 CONTACT: Kevin McCormick

PIVOTAL LNG
10 Peachtree Place Atlanta, GA 30309-4497 PHONE: (404) 783-3550 CONTACT: David Jaskolski EMAIL: djaskols@agileresources.com WEBSITE: www.pivotallng.com

NEW ALLIED MEMBERS CRESTMARK BANK

800 Crescent Center Dr. Franklin, TN 37067 PHONE: (615) 620-3536 FAX: (615) 620-3536 CONTACT: Jack Roper EMAIL: jroper@crestmark.com WEBSITE: www.crestmark.com

TROPICEEL PRODUCTS, INC.

2141 N.E. Airport Road, Suite 13 Roseburg, OR 97470 PHONE: (541) 680-7856 FAX: (541) 672-3933 CONTACT: Merrilyn Jovin EMAIL: tropiceel@gmail.com WEBSITE: www.tropiceel.com

DIESEL PUMP TOPPERS

1800 Vernon St., Suite 5 Roseville, CA 95678 PHONE: (916) 786-2577 FAX: (916) 786-9313 CONTACT: Tom Sanford EMAIL: tom@cap-companies.com WEBSITE: www.cap-companies.com

24

March/April 2014

APPEALING
TO PETS IN VIRGINIA
BY MINDY LONG

Davis Travel Center in Stony Creek, Va., has gone to the dogsor at least part of it has. The location has added a dog park to its offerings, and travelers are responding. General manager Bill Decker said he was unsure of the dog park at rst, but said the number of visitors is proof of its popularity. I knew we had a lot of pets come through here but looking at that park on a nice day, its like a bunch of kids in a playground, Decker said. We are being told that it is a great place for people to let their dog run. We have had very positive results. Davis Travel Center advertises the dog park on its high-rise and reader board. Word-of-mouth marketing is also helping to draw customers in. Customers are asking for our address so they can inform there neighbors of our location, Decker said. The park, which consists of a fenced grassy area that features a re hydrant in the center and benches along the side, measures 48x48x48x48. The total cost for the addition was $7,300, with fencing making up the largest portion of the expense$6,500. The Travel Industry Association of America reports that about 30

In addition to its dog park, Davis Travel Center, located off of Exit 33 on I-95 in Virginia, offers customers free wi-fi, 16 fueling positions, six showers and certified CAT Scales, among its many amenities. The location also has a Dennys, Starbucks and Subway.

million people travel with pets each year. Decker said, Were trying to be a one-stop location for all travelers coming through Virginia. We are a pet friendly location. Davis Travel Center provides bags inside the dog park so travelers can pick up after their dogs. While most people do clean up after themselves, Decker said staff does sometimes have to clean the area. Having the dog park can also help spur inside sales. Decker said customers are often willing to spend more time inside the location since they know their dog has had some exercise before they put him back inside of their vehicle. Davis Travel Center also offers a selection of dog treats that travelers can purchase for their pets.

www.natso.com

25

OPERATOR 2 OPERATOR

What is the one operational thing you check every day?

BRIAN COUCH, DONNAS TRAVEL PLAZA
I check to be sure we have a good inventory of bags of ice to sell every day. It is one of our most protable items and we sell a lot of them, especially on a big weekend. Weve already bought the machine to bag our own ice, so it is a sunk cost.

CHRIS HEINZ, COFFEE CUP FUEL STOPS & CONVENIENCE STORES INC.
I review a pro forma matrix daily. Basically it's a set of metrics (sales, estimated prot/ loss, pool margins, estimated expenses, transactions, etc.) used to measure and manage our stores, consisting of previous day sales data and is compiled monthly. This daily pro forma allows us to keep our nger on the pulse of the business. Some of the data is used for the labor matrix we are developing. The monthly compilation gives us an estimated EBITDA prior to our monthly nancial reports being issued. There is nothing unique about either 'matrix' as they are just Excel spreadsheets."

RICHARD TULLO, TULLO TRUCK STOP LLC

The rst thing I check every day would be the fuel prices and margins. After checking fuel prices and gallons sold in last 24 hours, I will walk into store and check to see everything is in order while getting a cup of coffee. I also have a talk with some of the driver regulars. I make sure my cleaning person has the area and bathrooms cleaned. I ask my fuel managers if they had any problems and make sure everything is working normally. Then I go to my other truckstop and do the same thing. Finally, I go into my ofce to see my secretaries and resolve any questions or issues before sitting down at my desk to go over my paperwork.

WANT TO BE FEATURED IN THE NEXT OPERATOR 2 OPERATOR? Our next question to discuss is What is your favorite business book?
Submit your answers to Darren Schulte at dschulte@natso.com by April 15, 2014.

26

March/April 2014

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2014 Ashland Inc. TM, Trademark, Ashland or its subsidiaries, registered in various countries.