Consumers Seek CBD Products for Health Benefits
July 16, 2019
With the inclusion of hemp in the 2018 Farm Bill, CBD products have hit the marketplace in waves. The 2018 Farm Bill legalized the production of hemp as an agricultural commodity, removing it from the list of controlled substances. Although it allows the production of hemp products, it does not allow producers to grow it freely like other crops. Producing plants with a THC content of 0.3%+ or cultivating hemp without a license is still illegal under the 2018 Farm Bill. Hemp plants with a THC content les than 0.3% are accepted and legalized. The 2018 Farm Bill outlines what is legalized at the federal level, and what states must do to be within the law. From there, states have their own regulations that producers and retailers must abide by.
WHAT’S THE BIG DEAL?
CBD products have been a hot topic the last few years. But why is it such a sought-after product among consumers?
Consumers seek CBD products because of the various health benefits that they reportedly have. Consumers report pain relief, being able to sleep better, and coping with anxiety and other mental health issues when using CBD products. There are also claims that CBD may help with physical health beyond pain relief, such as a reduced incidence of diabetes, and the prevention of tumors spreading.
With an ease of access to the CBD products, consumers are eager to purchase them to help with their mental and physical health, without having to go explicitly through a doctor.
DOESN’T CBD GET YOU “HIGH”?
CBD does not produce the “high” that marijuana does. Cannabis plants are composed of two different species: marijuana and hemp. Hemp is the component that has been added to the 2018 Farm Bill, whereas marijuana is still illegal for production and sale (unless it is medical marijuana, in which case, producers and purchasers must have a license to interact with it.)
THC is the part of the cannabis plant that produces the “high”. The hemp portion of the cannabis plant has little to no THC in it, making it legal in the 2018 Farm Bill. Marijuana has higher levels of THC, making anything with a percentage above 0.3% THC illegal.
Above all, it is important to check with your local and state laws regarding hosting CBD products in your store. While at the federal level, hemp and CBD products are legalized under specific guidelines, not every state has allowed for the production and sale of these products. To check the legal status in your state, check out https://disa.com/map-of-marijuana-legality-by-state
FDA Approves Tobacco-Heating Device
July 2, 2019
Philip Morris International has waited two years for the Food and Drug Administration (FDA) to approve their IQOS (EYE-kose) device in the United States. The “heat not burn” tobacco device is alleged by the company to be safer than traditional cigarettes. Although the FDA doesn’t put in writing the same concept, the agency does believe the heated tobacco-stick could help people to quit smoking.
IQOS is a pen-like device that comes with a battery pack which resembles a cigarette case. The device has an electronically controlled heating blade that warms up a tobacco stick, which then releases a tobacco-tasting vapor. Fewer harmful chemicals are being released in the vapor than in traditional cigarette smoke. Instead of liquid nicotine, like e-cigarettes already in the marketplace, the IQOS contains tobacco, while still delivering the same amount of nicotine as traditional cigarettes.
In the limited research done in other countries where IQOS has already been approved, so far it appears the device is not popular among minors. This is a crucial component for IQOS’s release, since the FDA continues to discus the ban on flavor and menthol cigarettes.
Because the FDA still considers the IQOS device to be a cigarette product, Philip Morris International must abide by the same laws and marketing as cigarette producers do. This includes the packaging, advertising, and any other marketing the company may produce to promote the device. In the same regard, Philip Morris International must report regularly to the FDA with information regarding products on the market.
The IQOS device is predicted to hit the U.S. marketplace by the end of the year.
Building the Loyal Customer: Cashing in on Customer Rewards
Move over traditional punch card, there’s a new loyalty program in town. Loyalty apps are hot in the market right now, enticing consumers to become repeat, loyal customers. Tracked by phone number, email address, or unique code, consumers are proud and eager to pull out their phones to snag extra points and be rewarded for customer loyalty.
C-stores can gain the confidence and loyalty of customers simply by providing a loyalty program, and a mobile app makes them more inclined to join because they don’t have to hunt for a card in their wallet. With convenience being their goal, c-stores are primed to be their number one spot to cash in on their rewards and come back to earn more.
Rewarding customers for purchases breaks down into two generalized forms: any purchase they make at the store, or specific category purchases. The benefits of “any purchase” rewards are being able to capture just what type of products customers are coming in for, and customers are more impulsive with their purchases in order to rack up more reward points. But that can also be the downfall of “any purchase” rewards; customers may impulsively purchase things they do not want or intend to use, and this can mess up data received from loyalty apps. Rewarding only “specific purchases” drives customers towards a particular category: gas, candy, beverages, etc. This can either increase sales in these categories or keep them on their normal baseline because customers don’t care for what “specific purchase” they must buy to gain reward points.
Even if customers aren’t necessarily using the loyalty program app, most customers impulsively download it and sign up because of the opportunity to cash in on reward points and earn free products. This is an opportunity to grab customer data without asking the customer directly.
Capturing consumer data is one of the biggest benefits a c-store owner can have from providing a loyalty app to customers. Whether it’s to track what’s being bought in the store or grabbing contact data (such as phone number or email address), c-store owners have the opportunity to maximize on loyalty programs as much as customers do. Utilizing the contact information allows owners to send out email blasts about new products and bring customers back for more. Tracking what’s being purchased allows owners to cash in on products they should be buying more of and saving money on products that aren’t selling as well as they were intended.
Future of CBD in C-Stores
Beauty products, beverages, candy, snacks, and over-the counter medical remedies are now adding CBD products to their categories. The rise in popularity of CBD and hemp products has become something the market is taking notice of, despite the fact marijuana is still considered illegal on a federal level. However, ten states and the District of Columbia have gone ahead and made cannabis and its compounds fully legal. It is projected that many states will be following suit in the next few years as consumer demand continues to grow. With states controlling their regulations in a legal grey area, retailers are preparing for the surge of CBD products hitting the market and an increase in sales. According to Nik Modi, an analyst with RBC Capital Markets, CBD consumer sales have the potential to reach $2 billion by 2020.
Products containing or infused with CBD are hitting the shelves in waves: lollipops, energy drinks, facial creams, protein bars, candy gummies, pet treats, straight CBD liquid oil and so much more. So far, the range of CBD products has proven to be limitless, and there doesn’t appear to be a slowdown in product innovation.
Wait… isn’t that illegal?
CBD and marijuana are not the same, though they come from the same plant. Here’s a breakdown of the terms to help you better understand just what is going on in the “world of weed”:
Cannabis: The plant and genotype for both hemp and marijuana. Cannabis contains a variety of different compounds called cannabinoids, including cannabidiol (CBD) and tetrahydrocannabinol (THC).
CBD: The compound found primarily in extractions from the help plant. CBD does not contain any psychoactive properties – therefore, the user does not get high.
Hemp: The fiber of a cannabis plant. Hemp products are now legal in the U.S., if they contain less than 0.3% THC.
Marijuana: The psychoactive buds and leaves of the cannabis plant. (This does get the user high.) Although many states have legalized recreational and medical use of it, it is still illegal federally. Unlike hemp, it contains high rates of THC – 15% to 40%. It is used for both medical and recreational purposes.
THC: The main psychoactive compound in the marijuana plant, responsible for the high users get from use.
It is imperative to check your state, county and city regulations when it comes to the sale of CBD products.
Even a popular product in the c-store industry has been making the switch to a CBD-friendly model: slush drink machines. Diamond CBD Inc. has just launched their “Brain Chill Slushy Machine”, a slush drink machine where the contents are infused with CBD. Not only does it appeal to the c-store slush drink enthusiast, but it brings in customers who are seeking out the CBD products, or want to try them for the first time.
It is important to note that CBD and marijuana are not the same, but do come from the same plant, which is why at a federal level its sale is still considered illegal. CBD products do not get consumers “high” but do share some of the calming effects of the THC found in marijuana. CBD products are typically sought out after from consumers looking to relieve anxiety and minor pains, and/or seeking sounder sleep. This isn’t limited to just adults seeking a quick remedy – pet owners are also using CBD products to relieve the anxiety for their pets during thunder storms, fireworks, or separation anxiety.
C-stores looking to jump in on the industry are better primed than most retailers. As tobacco and alcohol sales are high sellers in convenience stores, carding for CBD products will be no different when assuring consumers are of legal buying age. But where to put the product? As CBD products are such new territory, it is better to place these products in their own section with proper labeling. This prevents children grabbing candies with CBD oil in it, and parents accidentally purchasing the CBD products for them.
Not all states, counties, or cities have allowed CBD products to be made for sale yet. When considering these products, it is important to check what regulations are in place in your state before making the decision to carry CBD products in store. To check the legal status in your state, check out https://disa.com/map-of-marijuana-legality-by-state.
Skim, Scan, Scammed
Preventing Skimming at Your Store
More than half of U.S. adults fear having their financial data stolen from them at fuel pumps when paying with a debit or credit card. YouGov and ACI WorldWide reported that 62% of adults believe the security of their finances can be compromised simply by paying at the pump, as opposed to paying at the in-store register. And their fears are not without justification. “Skimming devices at gas pumps are frequently used to steal customers’ financial data, hence the high level of concern with data security at gas pumps,” states Benny Tadele, vice president of Merchant Solutions at ACI WorldWide.
Consumers, for the most part, are unaware of the power they hold in their pocket: mobile payment. Mobile payments are faster, easier, and more secure, Tadele explained. Only about 10% of customers utilize mobile payments, and those that do are typically more satisfied with their transaction.
But for those consumers who still prefer to use their debit or credit card for payment, there are ways to help stop their financial data from being stolen from them. Identifying the types of skimmers is the first step in the process.
There are two different types of skimmers: external skimmers and internal skimmers. External skimmers are placed on top of the card reader and keypad. What is called a “shimmer” is a skimming device that places a sleeve inside the card reader and is nearly undetectable. Internal skimmers are placed inside the fuel dispenser and are far more difficult to detect. They are installed by opening the fuel dispense door and hardwiring the existing electrical components.
To help prevent either type of skimming from happening, here are a few tips to not only protect your customers, but protect your store’s reputation:
• Installing video cameras to record any illicit activity will both capture anything that happens to the fuel dispensers and deter potential offenders from installing skimming devices – especially if there are notices that state all activity is being recorded.
• Employees should check fuel dispensers multiple times per shift for any signs of tampering.
• Enhance outdoor lighting to help deter potential criminals from installing skimming devices and to help employees monitor the fuel dispensers for any activity.
• they have successfully installed a skimmer at a fuel dispenser like yours, there is a chance they know how to get into the dispenser. Customizing locks on dispensers will prevent potential offenders from tampering with the lock.
• Invest in anti-breach kits offered by manufacturers specifically for fuel dispensers.
Calorie-Counters Rejoice
Low-Calorie Adult Beverages on the Rise
As more of Generation Z enters the legal drinking age, alcoholic beverage companies are facing a higher demand of low-calorie, wellness-conscious drinks. As Vox.com states, “Young people suddenly care way more about their health… it’s more difficult to justify a 300-calorire pint of hazy IPA when it essentially amounts to eating a loaf of bread”.
This trend is not limited to the newly legal alcohol drinkers; Vox.com also reports that individuals between 25 and 39 years old are also making the switch to low-calorie “healthier” alcoholic beverages. “They seek lower-alcohol, simple beers and lower-calorie hard seltzers that are prevalent in the channel,” Eric Schmidt, director of alcohol research for Beverage Marketing Corp. said in a C-Store Decisions article.
Beers and hard seltzers are not the only ones being targeted by this new push for “healthier” adult drinks. Hard liquors are also jumping on the trend. Diageo, the manufacturer behind the popular vodka brand Ketel One, has launched a range of premium, flavored spirits called Ketel One Botanical. Although the new Ketel One Botanical has a lower alcohol by volume percentage (30% ABV as opposed to the normal 40% ABV produced vodkas), it is promised by Diageo to make low-calorie drinks more “interesting”. As Lisa Ronayne, European senior brand manager for Ketel One, explains, “It’s kind of that perfect mix between ‘I want something tasty but most things that are tasty are higher calories. I want to be well-behaved but well-behaved often doesn’t taste that interesting’.”
Along with the low-calorie trend, consumers are seeking higher quality ingredients. Brewbound.com reports that bee pollen, quinoa, and pink Himalayan sea salt are among ingredients popping up in craft beers and their constituents. Consumers view these “unconventional” ingredients to be healthier than the normal calorie-dense, barrel-aged stouts and high-octane IPAs that breweries produce. Breweries are attempting to find the perfect balance between low-calorie beverage options and high-quality flavor. Some have sacrificed flavor for the low-calorie trend, while those who continue to produce only their usual options find their sales are declining.
Packaging is also seeing the effects of these new trends. Health-conscious consumers, while seeking low-calorie, high-quality ingredient beverages, are also looking to make as minimal of a carbon footprint as possible. Wines are being packaged into recyclable cans, and producers are finding more ways to reduce their use of plastic.
With the growth in calorie-counting health-conscious consumers, convenience store owners should take note when it comes to stocking their cold vaults. There appears to be no shortage of new low-calorie, high-quality ingredient adult beverage hitting the market in 2019.
“Window shopping” is not limited to just the windows – customers browse aisles in c-stores just as often. Displaying your store’s goods on shelves is not only for convenience, but a way to market products to your customers. While they wait for their food to be ready or while they’re searching for a specific category item, products can market themselves on the shelves, if displayed right.
DISPLAY WITH CONFIDENCE
1. Make sure products are displayed on shelves that fit their sizes. If the product is small and displayed on a large, open shelf, it can make the shelf looks bare and unappealing. But if the product is too big for the size of the shelf, customers can have issues retrieving it. This can lead to their frustration, or to other products falling off the shelves. Larger items that might cause problems should be displayed on shelves without a shelf above it. Smaller items should be compacted together to avoid looking sparse.
2. If a product can only lay flat, place the items in an overlapping fashion. This allows customers to still see other products, without being difficult to grab.
3. Place large products behind smaller products. If the customer can’t see a product because another is in the way, there is a chance you may have just lost a sale. If space allows it, make sure products are as spaced out as possible, without making the shelves look bare.
4. Products you want to sell should be placed on eye-level shelves. These items could be high-profit merchandise or perishable products you want to get sell quicker. If it’s products that children are more inclined to want, place them on a shelf about their eye-level.
Americans are increasingly demanding plant-based foods, regardless of their preference in diet. According to the NPD Group, 4 in 10 U.S. consumers increased their consumption of meat alternatives and/or substitutes in 2017 alone, and the number is predicted to continue to rise. But this does not necessarily mean that vegans and vegetarian diets are on the rise – consumers are choosing plant-based foods because of the perception that these foods are better for them and for the environment. There is a growing interest in health and weight management, sustainability, and environmental ethics that is taking this once niche market into the mainstream. More and more consumers are considering themselves “flexitarian” – a diet that consists primarily of plant-based foods and meals, which occasionally features meat or fish. It is the flexitarians that are driving the market towards plant-based food and milk alternatives, such as nut milks made from almonds, hazelnuts, and cashews. These consumers who once had meat as a consistent part of their diet are choosing the meat-alternatives more frequently, causing for the shift. Convenience is playing a huge role in the plant power movement. Consumers who aren’t confident in their cooking abilities, have medical conditions, or are dieters seek out establishments that provide meat and dairy alternatives. Having to request alternatives or changes to their meals is much less appealing than walking in and knowing their diet choice is available. These establishments are more likely to see that customer again, having gained their confidence in knowing they can purchase meat and dairy alternatives there. Companies that have traditionally been “meat providers” are making the switch over to the plant powered world as a result of this new market push. Tyson Foods Inc., a company that primarily provides chicken products, has reported they will be making the shift to alternative proteins, according to Bloomberg Businessweek. Cargill Inc. and Hormel Food Corp. are also joining in on the animal-free trend as well, with meatless products projected to release later this year. Adding meat and dairy alternatives to the c-store menu not only will bring more flexitarian-, vegan-, and vegetarian-diet consumers in, but let consumers know the store is conscious of the changing times. Healthy lifestyle trends aside, consumers find the plant-based products to be better for the environment. The increase in awareness for the environment and animal-welfare has changed how consumers are viewing foods – and stores who pay attention to consumers’ interests are the ones who will gain their trust the quickest.
If a potential customer’s first impression of your store includes grungy tiles, messy displays, and dust on the counter tops, there’s a good chance you won’t be see them again. Keeping your store clean is important, not only because of health and safety, but also because customers come back to stores they know are clean. Think about it – would you want to go back to a store with a bakery display case covered in cobwebs?
To keep customers coming back to YOUR store, here are a few tips for keeping your store in tiptop shape:
1. A Welcoming Entrance: an entrance area that has clean floors, mats, and windows invites customers in. It’s your store’s first impression to the customer – if the mat is in a crumpled, messy heap, the windows are smudged, and the floors are slick with spilled sodas, they most likely will avoid entering at all. In rainy/snowy weather, keeping mud off the floor is key. Shake off mats if dirt is piling up, and make sure there’s some window cleaner nearby to rid windows of smudges!
2. Displaying Confidence: display cases and shelving units are your chance to entice customers to spend a couple extra dollars. Dusty shelves that feature candy next to dead bugs aren’t going to be making you money. Keep a dust rag on hand to ward away any unwanted dead bugs. Display cases with merchandise scattered all over the place aren’t pleasing either. Make sure products are displayed neatly to ensure customers can pick what they want quickly, instead of having to pick through all the items available.
3. Avoiding Sticky Situations: food and beverage stations tend to get messy quicker than other areas in your store. Accidents happen, food and drinks fall, and the place soon becomes a gross, sticky nightmare. Customers associate clean service stations with better quality food. If the floor, counter, and equipment feature spills, there’s a good chance the customer deciding on a last-minute beverage is going to walk away.
4. One Word – Bathrooms: some customers beeline it right for the bathroom when they’re filling up their gas tank. If they didn’t notice the dusty displays or the messy doormat, they’ll notice a grimy bathroom for sure. Customers tend to believe that if the bathroom is mess, the management must be as well. Wiping down surfaces, and mopping, scrubbing, and disinfecting toilets are VERY important for both impressions and health and safety. Upon exiting a clean bathroom, a customer will be more likely to shop around on their way out the store
