4 Insights From the Execs at the Eby-Brown Core-Mark Expo

CLEVELAND — There have been some changes at Performance Food Group Co. (PFG) since it completed its acquisition of Core-Mark Holding Co. Inc., creating a new convenience business within PFG that includes both Core-Mark and Eby-Brown Co.

The two distributors serve more than 50,000 convenience stores across the United States, offering them innovation in foodservice, technology, center store and more.

During the Eby-Brown Core-Mark Expo, held in March in Cleveland, company executives sat down with CSP Daily News to talk about the new strategies.

Scott McPherson, CEO of Core-Mark, and Tom Wake, president of Eby-Brown, were competitors for more than 20 years.

Now, the two are working together under the convenience division of PFG and taking the best of both worlds from each company to create a stronger one. The companies serve more than 50,000 c-stores combined.

“You’ll start to see all of us leverage each other’s skills,” McPherson said. “We really prioritize convenience first, but if you walk into the show, you’ll definitely see influences around food and foodservice that clearly are influences coming from the broader PFG company, which is exciting for us. …That was a big catalyst in the sale. They’re going to have to diversify in our industry, and food is going to be the driver.”

Foodservice in c-stores is not a “build it and they will come” operation though, McPherson said. The companies encourage retailers to work their way into the space. 

“No matter what level of foodservice they’re in, I think the pressure on the retailer is to execute to the best level of whatever they’re doing,” Wake said.

When c-stores know their customers, meet their needs and execute what they’re doing well, then the customers will trust the retailers enough to try something new, he said. 

The combined Core-Mark Eby-Brown is making it as easy as possible for c-stores to implement a foodservice program.

“We’ve put together turnkey programs that are meant to be very component-based for the convenience industry. So whether you’ve got a store that’s got a full kitchen in the back, or whether you got a store that literally wants to work out of a table-top convection oven, we can customize a program for them on very popular kinds of food that they can have inside their store,” said Sharon Kuncl, senior director of foodservice strategy for Core-Mark Eby-Brown.

There are several national c-store foodservice brands to choose from:

• Contigo Taqueria: Provides a menu of authentic Mexican and Southwest products, the companies said. It can be designed as a build-to-order experience for the customer or assembled in-store and packaged for grab-and-go. Menu items may include burritos, tacos, bowls, nachos and more.
• Deli 55: Consists of made-to-order or grab-and-go deli items such as meatball subs, soups, salads and hot dogs.
• Perfectly Southern: Fresh fried chicken with seasoned, crispy breading that can be complemented with a variety of sides and sauces. The brand’s Waffle Dust, a maple-flavored powdered sugar, can also be shaken over the chicken to give a chicken and waffles-like flavor.
• The Red Seal: This program allows c-store operators to quickly open a full-service, made-to-order pizzeria in their stores, according to Core-Mark Eby-Brown. “This is where we’ve really leveraged the PFG relationship,” Kuncl said. “PFG holds about a 45% share in the Italian market.”

C-stores can implement an entire foodservice program in their stores, or just take an element of it. Core-Mark Eby-Brown also works with c-stores to build a menu and give them training tools to make the process easy, Kuncl said.

These programs are an upgrade from what was previously offered, she said, which was national brands.

“That didn’t create a lot of stickiness with our customers, because if they walked away from us, they would get those exact same items from someone else,” she said, adding that being able to harness the PFG relationship and private-label items creates the stickiness the distributors want with customers.

Working on improving supply chain problems is the focus now for Curt O’Rourke, vice president of merchandising at Core-Mark Eby-Brown.

“Innovation, I honestly think, is limited this year,” O’Rourke said. “A lot of vendors are focused on supply chain. They’re just trying to produce their core items.”

Core-Mark Eby-Brown suppliers are at about 80% fill rates this year, when they’re usually expected to be higher than 90%, he said.

“Really this year for us is all about can we get better at supplying, get our fill rates up, working better in conjunction with the vendors,” O’Rourke said.

Because of supply chain problems, one of the biggest problems he’s seeing in c-stores now is they have holes in their sets. His recommendation is usually to double-face the top selling item or add the next best seller that’s not in a set already that is available.

This can be hard for retailers to execute, though, with labor shortages and spotty fill rates. But Core-Mark Eby-Brown have tools for retailers to use to help and get retailers’ plan-o-grams and stores back where they need to be, O’Rourke said.

Naperville, Ill.-based Eby-Brown’s SmartProcess, for example, is the company’s proprietary category-management solution. It gives customers plan-o-grams based off of multiple data points and category insights and then executes those plans in stores. The program is free to the stores the distributors serve, he said.

“Doing that for more and more customers is a service that we’re really looking to provide for them,” O’Rourke said.

Where c-stores stand with technology varies greatly, especially when it comes to independent and smaller operators, said Sandra D’Asaro, vice president of analytics at Core-Mark, West Lake, Texas.

“It’s almost an unfair fight out there when you compare just the level of resources and technological capabilities of the larger operators to the smaller,” she said. “You can now see that there’s a growing divide in those two segments. The 'those who can' are winning, and those who are struggling with this are not winning the fight.”

That’s why D’Asaro and her team created a loyalty app, free to operators, called Top-Off Rewards, made in partnership with Professional Datasolutions Inc. (PDI), based in Alpharetta, Ga.

Larger operators, which Core-Mark Eby-Brown considers to be chains with 20 or more stores, can have an app under their own brand name, while smaller and independent operators can use the Top-Off app. The app offers customizable features like a fuel program, merchandise reward program and more.

Different from some other loyalty programs, Top-Off prioritizes the retailer, D’Asaro said.

Rewards earned at a retailer’s location can only be redeemed at that retailer, whether it’s a single site or a chain.

“So as a consumer, I’m drawn back to the places that I’m loyal to,” she said, which helps build customer loyalty and spend.

On the app, retailers also get access to vendor-funded offers from some of the biggest brands in industry, and all offers are initiated through Core-Mark and PDI. The retailer can choose the right ones to pass along to their consumers.

Seven sites are live using the application now, D’Asaro said, and more than 150 are under contract to use the app.