By John Lofstock, Editor

Phillips 66 yesterday wrapped up its 2013 Marketing Conference & Trade Show in Las Vegas with a flurry of new announcements and marketer awards.

The Houston-based oil company, which operates the Phillips 66, 76 and Conoco retail brands, said its new programs were designed to address the current challenging marketplace by helping drive traffic to sites, reduce costs and improve operating efficiencies.

This year’s New Energy, New Possibilities Conference celebrated the spirit of the new Phillips 66 Co., emphasized the role of branded marketing and shared new opportunities, ideas and ways to support its customer’s success. It is the first marketers conference for the company, which was formed last April following a spinoff from ConocoPhillips. The company operates a network of 7,000 branded retail sites and 15 refineries.

“With our industry continuing to change at a rapid pace, we’re focused on developing programs that help our customers compete in the new world of convenience and petroleum retailing,” said Andy Viens, president of global marketing at Phillips 66.

At a reception last night, the company honored three marketers–one each from its fuels, lubricants and aviation divisions–with lifetime achievement awards.

The honorees included:
* Fuels: Sutey Oil Co. in Butte, Mont., operator of 14 Thriftway convenience stores. The company has been in business since 1945.
* Lubricants: Arguindegui Oil Co., which operates 11 Pump n Shop stores, based in Laredo, Texas. The company was founded in 1942.
* Aviation: Showalter Flying Service, in Winter Haven, Fla.

The company also introduced several new marketing programs which will begin rolling out later this quarter.

Convenience Store Alliance (CSA): After completing a successful test run, Phillips 66 is unveiling a new program with CSA this month focused on providing national buying power to branded sites. The goal is to help sites lower operating costs, improve margins and better compete in today’s challenging marketplace.

KickBack Points Program’s KickBack TV: KickBack Points, Phillips 66’s exclusive loyalty program partner, announced the addition of KickBack TV, an in-store television network that sells advertising space to companies—most of whose products are available in branded c-stores. The network is designed to provide an additional revenue stream for participating sites and increase consumer and vendor engagement in the store. The program is free for retailers and will begin rolling out in the fourth quarter.

Phillips 66 Proprietary Card Program: Phillips 66 and GE Capital announced a proprietary credit card program that provides cardholders with a five cents-per-gallon discount on all fuel purchases. The program is free to all branded retailers and will be available beginning in the first quarter of 2014 and is free of interchange fees for Phillips 66 marketers.

Brand Image Central (BIC): To simplify and streamline site branding for customers, Phillips 66 is offering a new one-stop-shop process called Brand Image Central. Brand Image Central will be the single point of contact for site imaging and also provides additional technical support. The improved efficiencies from centralization will allow Phillips 66 branded customers to benefit from these enhanced image services without adding cost. The new program will be available in the third quarter. The programs will be complimented by investments in technologies targeted at reducing costs, improving efficiencies and meeting consumer expectations.

BizLink Mobile Apps: To meet the needs of busy and on-the-go customers, Phillips 66 is bringing its web portal, BizLink, to customers’ pockets with mobile apps. The initial use is focused on providing real time pricing information for Apple devices. Additional functionality will be rolled out later this year to include supply information, alerts and Android compatibility.

* Merchant Customer Exchange (MCX): Phillips 66 has joined MCX, a merchant-owned network focused on developing mobile payment solutions that will better serve merchants and consumers. MCX offers unmatched scale, representing merchants with more than 80,000 stores who collectively process $1 trillion in payments each year. In fact, eight of the top 15 retailers in the U.S. are already members of MCX.

“We know our future success depends on the strength of our customers’ businesses, and we’re deeply committed to responding to their needs and enhancing our marketing programs,” Viens said. “We think these programs are a great first step in strengthening our branded offering and are very excited about the new possibilities they offer to both customers and consumers.”

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By John Lofstock, Editor

Hundreds of Phillips 66, Conoco and 76-branded marketers descended on Las Vegas this week for the Phillips 66 2013 Marketing Conference & Trade Show.

The theme of the conference is New Energy, New Possibilities, which celebrates the establishment and spirit of the new Phillips 66. ConocoPhillips spun off its downstream assets to form Phillips 66 last April. Today, the Phillips 66 retail network spans some 7,000 stores under the Phillips 66, Conoco and 76 brands and it operates 15 refineries with a crude oil capacity of 2.2 million barrels per day

Attendees yesterday heard from a host of Phillips 66 leaders about the direction of the company, trends in the industry and plans for mutual growth. Marketers also had the opportunity to learn from subject matter experts on how to optimize their businesses and boost their bottom lines with a variety of breakout sessions that focused on key areas such as alternative fuels, loyalty programs, fleet management, attracting new customers and how to compete effectively with big-box operators.

In addition, the trade show featured a packed exhibit hall with nearly 100 technology, fuel, operations and foodservice suppliers.

As retailers look to drive traffic to the convenience store, Phillips 66 CEO Greg Garland told attendees that a loyalty program can help tilt the playing field in their favor. Loyalty programs are increasingly influencing where consumers purchase fuel, how much they spend and which brands they purchase. To assist Phillips 66, Conoco and 76-branded marketers in their efforts to drive sales and grow customer visits, Phillips 66 has partnered with KickBack Rewards Systems to build brand loyalty across its entire network of stores.

Phillips 66 joined the Kickback Points Coalition Loyalty Program in 2011. This program offer Phillips 66, Conoco and 76-branded retailers a turnkey and cost effective loyalty solution. Participating consumers can earn and redeem points instantly for fuel and merchandise purchases at participating Phillips 66, Conoco and 76-branded sites as well as other participating coalition sites.

KickBack’s innovative solutions are currently deployed in nearly 1,000 Phillips 66,Conoco and 76-branded sites. KickBack’s unique approach to loyalty marketing quickly provided results for these stores which includes marketing, payment technology, forming coalitions, customer relationship management through using transaction data more effectively and even social media integration.

“Getting a better understanding of customers’ habits while purchasing their individual values and preferences will lead to the differentiation increased ticket averages and frequency and overall sales lift,” said Pat Lewis, CEO of KickBack Rewards Systems.

Furthermore, when this loyalty sales data is collected and analyzed, it can yield analytics and metrics to provide a better understanding of customer shopping habits, best-selling products and seasonal favorites creating exciting growth opportunities.

The conference continues today with sessions on The Politics of Fuel, Optimizing Pricing, Effective Brand Imaging and much more.

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The Pantry Inc. announced that Boris Zelmanovich is joining the executive leadership team as senior vice president and chief merchandising officer.

Zelmanovich joins The Pantry from Big Lots effective June 3 and will lead merchandising. He served as vice president of merchandising strategy at Big Lots, an international value store chain with 1,500 stores in the U.S. and Canada. Zelmanovich was responsible for the development of strategic merchandising plans and repositioning the merchandising portfolio to drive market differentiation.

Prior to Big Lots, Zelmanovich held various vice president positions in merchandising at Family Dollar where he was responsible for food, beverage, candy, general merchandise and household products categories. He has additional experience in supply chain management, management consulting and running his own business.

“Boris is a proven leader who possesses a depth of merchandising experience,” said The Pantry’s Chief Executive Officer Dennis Hatchell. “He has a track record of growing sales, gross margin and market share.”

Zelmanovich earned his bachelor’s of science degree in Logistics & Transportation / Marketing and his MBA in Supply Chain Management & Information Technology from the University of Tennessee.

The Pantry operates 1,567 stores in 13 states under select banners, including its primary operating banner Kangaroo Express.

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The 2013 Sweets and Snacks Expo, presented by the National Confectioners Association (NCA) took place in Chicago at McCormick Place May 21-23.

The show brought together more than 15,000 manufacturers, buyers and industry leaders from 70 countries. More than 600 companies debuted treats, and more than 150 businesses displayed candy or snacks for the first time. The 2013 Expo marked the largest in both floor size and number of exhibitor’s in the show’s history.

New and unusual spices and flavors, comfort foods, and little tastes emerged as the 2013 trends to meet the ever-evolving appetites of consumers.

“In 2013, confectionery and snacks are spicing up life,” said Larry Graham, president of the National Confectioners Association. “We’ve seen tangy flavors in sweets and snacks before, but the variations are becoming more daring each year. Consumers are excited by new flavors and formulas, and the confectionery and snack industries have obliged. We’re looking across borders and cultures for inspiration, we’re borrowing flavors historically not found in the category, and we’re taking consumers along for a wild and satisfying ride.”

 Top Consumer Snack Trends 2013:

Feeling Hot, Hot, Hot— Chipotle, picante and jalapeño – consumers can’t get enough spice when it comes to candy and snacks this year. Candy and chocolate products like American Gourmet Group’s Chipotle Dark Chocolate Bar, Seth Greenberg’s Authentic Southwest Jalapeno Crunch from Brownie Crunch or Jelly Belly Candy Company’s Tabasco-flavored Jelly Belly jelly beans combine the tastes of sweet and spicy. Snack foods often take a more traditionally spicy route as seen in products like Rocky Mountain Popcorn’s Chile Picante Poplets and Perky Jerky’s Hot and Bothered Turkey Jerky.

Get Comfy— Comfort foods have taken over the food industry in recent years, with traditional offerings becoming more innovative. This trend toward comfort has invaded the candy and snack categories combining comfort foods like honey and cake with more traditional items. Hammond’s Milk Chocolate Red Velvet Bar from Hammond’s Candies, Ardené Cookies’ Butterscotch Peanut Butter cookies, Bobi Bee Sweet USA’s Bobi Bee Manuka Honey Sweet Treat and Haute Buttered Rum Brittle from Too Haute Cowgirls Popcorn Confections are all sure to leave you feeling warm and cozy inside.

Bits and Bites—When you want just a small taste of chocolate or your favorite snack, nothing else will do. This year, a bounty of bites hit the market with products like Perfetti Van Melle USA’s Airheads Bites in fruit and berry flavors, barkTHINS snacking chocolate from Ripple Brand Collective, Bonomo Chocolate Covered Vanilla Nibbles from The Warrell Corporation, The Hershey Company’s Kit Kat Minis, and Starburst Minis from Wm. Wrigley Jr. Company. Mars Chocolate North America is introducing SNICKERS Bites and MILKY WAY Bites.

Everything Old Is New Again—Candy makers in particular love to put a new spin on classic products. Fun and novel Ring Pops get a new life in Bazooka Candy Brand’s Ring Pop Gummies, traditional marshmallows are re-invented with Campfire Marshmallow’s Mallow Bursts in flavors like key lime and lemon meringue, candy corn takes on all new form and function in the Charms Company’s new Candy Corn Pops, and even Just Born’s Marshmallow Peeps got in the act with bubblegum and birthday cake flavors.

Alternatreats—Nontraditional ingredients have increasingly found their way into the confectionery and snack aisles, taking advantage of global tastes and expanding palates. Products like Flamous Brand’s Sprouted Mulitgrain Zatar Chips, I Heart Keenwah’s Chocolate Sea Salt Quinoa Clusters, Love Your Health’s soynut, pumpkin seeds and cranberry Soy Mix, and Rickland Orchard’s Greek on the Go! Mango Granola Bites made with Greek yogurt encourage consumers to think ‘outside the bag’ when it comes to snacking.

Decidedly Decadent —Treat yourself to the rich and decadent tastes coming out of this year’s Sweets & Snacks Expo with products ranging from those that are a feast for the eyes like Cosijns Chocolatier’s Sushi Dessert Garden Party to candies that will bring back memories of childhood campfires like Russell Stover’s S’more Big Bite Bar to treats that will allow you to indulge in new tastes like DOVE Chocolate’s new Cookies and Crème and Mint and Dark Chocolate Swirl bars.

Tantalizing Tastes—Candy and snack makers let their imaginations run wild when it comes to developing new flavors for treats. This year, consumers can expect to indulge in a huge variety of taste sensations including Van Holten’s Big Papa Dill Pickle Popcorn, BLK Corporation’s Caoni Milk Chocolate with Passion Fruit and Torie and Howard’s Organic Hard Candy in flavors like D’Anjou Pear and Cinnamon and Pink Grapefruit and Tupelo Honey.

* Product examples from among those submitted for NCA’s Most Innovative New Product Awards

State of the Industry

    The confectionery industry contributes $33 billion+ to U.S. retail sales and employs more than 70,000 workers.

    Confectionery retail sales have grown steadily since 2007, increasing from $27.4 billion to $32.8 billion in 2012+.

    Major holidays like Valentine’s Day, Easter, Halloween and Christmas/Hanukkah generate more than $7 billion+ in seasonal sale items.

    Confectionery (chocolate, candy and gum) ranks as the fourth largest product category in overall food sales.*

Snacks also contribute impressively to the U.S. economy:

    Total sweet and savory snacks, including chips, cookies, snack bar and nuts, contribute $40 billion to U.S. retail sales.~

    Sweet and savory snacks sales have increased 22.6% since 2007, climbing from $32.7 billion to $40.1 billion in 2012.~

    The biggest holiday driver for snack sales differs from confectionery with events like the Super Bowl taking the top spot. Some 46% of consumers report indulging in salty snacks for the big game.^

Dollar sales are climbing across the board for candy and snacks*:

(Dollar sales change 2012 v 2011)

Snack Nuts / Seeds / Corn Nuts              +10.9%

Snack / Granola Bars               +6.9%

Crackers:                  +6.7%

Non Chocolate Candy               +5.8%

Cookies                  +4.9%

Salty Snacks               +4.2%

Chocolate Candy               +4.1%

Sources:

+ NCA estimates, 2013

* IRI data, 2013

~Euromonitor, 2013

^ Nielsen, 2013

2012 Product Launches

Candy and snack items accounted for 26% of all new CPG introductions in the past year. In 2012, thousands of new confectionery and snack products debuted to meet consumer demand. These included:

  •  765 new confectionery products:

        Chocolate: 423

        Sugar Confectionery (non-chocolate): 302

        Gum: 40

    • 2,183 new snack, cookie and cracker products:
        Cookies: 310

        Crackers: 188

        Potato chips: 283

        Popcorn: 102

        Nuts and seeds: 178

        Cereal bars: 451

        Other savory snacks (pretzels, tortilla chips, puffed snacks, fruit snacks, meat snacks, etc.): 522

        Processed Snacks (tortilla chips, corn chips, other non-potato chips): 149 

Source: Datamonitor Consumer’s Product Launch Analytics online database of new U.S. products SKUs 2012.

Consumers and Snacking

    • 32% of consumers like to eat candy and other snacks that add excitement to the daily diet.*

    • 27% of consumers feel gourmet products are worth paying extra for.*

    • 49% of consumers look for confectionery and snacks that appeal to multiple people in the household.*

    • Snackers are loyal people with 79% of consumers saying they usually seek out their favorite candy and snacks brands and 43% noting that these brands are often the ones they loved as children.+

    • 50% of after-dinner snackers say they chose items that “delight” them.+

Sources:

* IRI

+ The Hartman Group

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The National Retail Federation announced it will formally oppose a proposed settlement of a federal antitrust lawsuit over credit card swipe fees charged by Visa and MasterCard, and urged retailers to carefully consider their own decisions before next week’s deadline set by the court.

“The proposed settlement does nothing to bring swipe fees under control and would give Visa and MasterCard a legal blessing to continue their abuse of merchants and consumers indefinitely,” NRF Senior Vice President and General Counsel Mallory Duncan said. “No settlement at all would be better than this one-sided ‘agreement’ written by the card companies for the card companies that would tie retailers’ hands for decades to come.”

While many retailers have already filed paperwork with the U.S. District Court in Brooklyn, N.Y., opposing the settlement, many small retailers have yet to act because they lack the legal expertise and resources to fully assess the complicated proposal.

Retailers who oppose the plan have until May 28 to say whether they will opt out of the money offered and accompanying restrictions on future legal action, object to proposed injunctive relief that comes with additional restrictions, or—as NRF plans —do both. Under the class action terms of the proposed agreement, retailers who do not opt out by the deadline will automatically be considered to have accepted the settlement and will give up the right to file future lawsuits over the fees and other restrictive rules.

NRF opposes the settlement because it fails to reform the price-fixing system under which Visa and MasterCard set the schedule of swipe fees followed by the thousands of banks that issue their credit cards, or to introduce transparency that would lead to competition to lower the fees. Rather than lowering the fees, the card companies have proposed that the fees be passed along to consumers in the form of a surcharge, even though most major retailers have rejected surcharges as the opposite of what they have sought during the years-long fight over swipe fees.

Retailers who do not opt out—and thereby become fully bound by the restrictions of the agreement—will be eligible for a share of $7.25 billion. But the figure amounts to less than three months’ worth of swipe fee charges, and the small retailers hit hardest by the fees would give up their rights for as little as a few hundred dollars.

The suit was brought in 2005 by 19 trade associations and individual retail companies, but a majority—including all six trade associations—rejected the settlement when it was proposed last summer. NRF, like most retailers, is not a party to the lawsuit, but has led the retail industry’s opposition to the settlement because NRF member companies would be dragged into its terms as part of the class action.

Averaging about 2%, swipe fees are a percentage of the transaction taken by banks each time a consumer swipes a credit card to pay for a purchase, and total about $30 billion a year nationwide. The fees have tripled over the past decade, and drive prices up for the average household by more than $250 per year.

As the world’s largest retail trade association and the voice of retail worldwide, NRF represents retailers of all types and sizes, including chain restaurants and industry partners, from the United States and more than 45 countries abroad.

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The 2013 National Restaurant Association Restaurant, Hotel-Motel Show (NRA Show), took place Saturday, May 18 through Tuesday, May 21, at Chicago’s McCormick Place.

The show is the most comprehensive trade show for the restaurant, foodservice and hospitality industry in the U.S. and abroad. This year’s 94th annual NRA Show offered cutting-edge products, services, and key learnings from more than 1,800 suppliers to tens of thousands of industry professionals visiting Chicago from all 50 states and 100+ countries, while more than 60,000 attendees visited their booths.

This year’s NRA Show addressed hot-button topics, such as a sustainability advancements and health care reform with new feature areas of a fully-functioning hydroponic garden and expert advice at the Health Care Knowledge Center.

Trends such as food safety, new flavor combinations, healthy foods and kid-friendly healthy foods, where among trends dotting the show floor.  Beverages especially are testing new flavor combos, including adult themed flavors like pina colada, and flavorful iced teas. Spices pepped up products and sauces, and booths boasted snacking options to appeal to the rise in snacking occasions among consumers.  This year NRA offered an Alternative BiteStyle section of the show floor to showcase items that respond to dietary needs, from gluten-free, to nut allergies.

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Graham previously worked at NACS, serving as marketing coordinator from 2011 to 2012. Most recently, she served as manager of global marketing & communications at the Association of Corporate Travel Executives. Earlier, Graham worked for Double Eagle Promotions & Giant Ideas, Pittsburgh, Pennsylvania-based marketing agencies.

Graham earned an M.S. in integrated marketing communications and a B.S. in journalism from West Virginia University. She is a resident of Burke, Virginia.

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For More Information From BNY Mezzanine Partners L.P.

www.gmcw.com

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Family Express announced that it has chosen 3xLOGIC, Inc., a developer of intelligent video solutions, as its provider of video surveillance solutions beginning May of 2013.

This is another innovative way that Family Express uses technology to enhance overall operational efficiency and deliver outstanding customer service.

The 3xLOGIC’s VIGIL Video Management System (VMS) provides the ability to monitor the store from the home, backroom office, or mobile device of authorized Family Express Associates. The ability to access live video through a mobile device on the go is an advantage Family Express had not been able to capture before.

“Our people are our competitive advantage; we want to use 3xLOGIC to catch them in the act of doing the right thing,” said Alex Olympidis, director of operations for Family Express. Enhanced line-item audit trails and custom search options provide the ability to find areas of strength and weakness more quickly than ever before.

By using 3xLOGIC’s Cloud Application, 3xCLOUD, Family Express was able to eliminate nearly sixty personal computers in the homes of store managers, allowing them to access video feed on the device of their choice.

“3xCLOUD gives Family Express the ability to easily access video from any of their stores on a laptop, smart phone, tablet, or desktop PC,” said Dave Nieweg, vice president and general manager of 3xLOGIC Inc. “With 3xCLOUD, Family Express is able to further extend their operational leadership and effectiveness by allowing key personnel to view live and saved video anywhere that they have internet access. As a result they are able to make smarter and more timely decisions about their business, their assets and their employees.”

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Pictured are (left to right) Tim Quinn, vice president of trade development for Mars Chocolate North America and chairman of the 2013 NCA Sweets & Snacks Expo; David Tracy, executive director of Habitat for Humanity Chicago South Suburbs; and Larry Graham, president of the NCA.

Donation to help fund the construction of homes in Chicago’s south suburbs.

To show appreciation to Chicago for being home to the NCA Sweets & Snacks Expo and to honor the tradition and history of the confectionery industry here, Mars Chocolate North America presented a check to Habitat for Humanity Chicago South Suburbs during the trade show on May 21.

The $5,000 donation will help a local Chicago family secure a safe, affordable home.

The National Confectioners Association’s Sweets & Snacks Expo attracts 15,000 industry professionals from around the globe and has called Chicago home since the first show in 1997.

The donation is an extension of a cause-related marketing partnership between M&M’S Brand and Habitat For Humanity International designed to make “America Better With M.” M&M’S Brand will donate $500,000 to Habitat for Humanity International to help fund the construction of homes through a series of programs in 2013.

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