Episode 122 – Innovation in Convenience

 

 

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Joe: On this episode of the "CPG & CBD University Podcast," innovation in the convenience and grocery store industry, where it's been, where it is now, and where it's going. From technology to products, catering to the changing demands of consumers, meet one of the companies behind the innovation on this episode of the "CPG & CBD University Podcast," and it starts right now.

I'm Joe Agostinelli, host of the "CPG & CBD University Podcast," we continue our look at the convenience store and grocery industry and the innovation that is helping reshape retail to meet the ever-changing demands and shopping behaviors of consumers.

Joining me on this episode of our podcast is Melissa Vonder Haar. She is the marketing director for iSEE Innovations and a journalist in her spare time. So a unique perspective on the industry. Welcome, Melissa.

Melissa: Thank you for having me. Always happy to talk about two of my favorite things, cannabis and convenience.

Joe: And let's talk about both of those things. And first of all, your family, you know, it's been a long history of experience in the convenience store industry. So how did it all begin?

Melissa: Yeah. So I'm kind of the rare bird where within the convenience industry on the retailer side, there's a lot of families that grow up within convenience. However, my family grew up in the supplier side. So my father, Joe Vonder Haar, worked for Anheuser-Busch back in the '80s through to the mid-20...close to 2010.

And he worked his way up there as a salesman, but really found his footing representing the convenience industry. His first big customer with AB was 7-Eleven. So my sisters and I would grow up on road trips stopping at every convenience store so my dad could check out the beer section and we could go check out the candy and the taquitos.

And when I graduated college with a writing degree looking for work, through my dad's connections, I ended up covering the convenience industry for CSP, a B2B publication that some of your listeners might be familiar with and spent many, many years covering the tobacco category, as well as broader industry issues.

In the meantime, my dad retired from the brewery and decided he wasn't quite ready to hit the golf course just yet. So he ended up founding iSEE Innovations on the premise that the convenience industry really needed unique displays designed for that channel.

There are specific challenges when you have so many products in such a small space and so many customers going through there. And in his career, he had found very often manufacturers, suppliers would try to take those huge displays that you see in grocery in big box and kind of try to shove them into a convenience store.

So iSEE was founded on the principle of creating displays that really factor in that retail reality, especially for small format retailers like convenience. In the meantime, I ended up with an opportunity to come work for the family business and jump from journalist to supplier back in 2016. So I came to iSEE, I've been handling the marketing efforts since then and got to really get involved in an industry I had only observed for most of my life.

Joe: And you can check out their website at iseeinnovation.com leading the charge, as we mentioned, on reshaping the look and feel of convenience. And you talked a little bit about that with the display, but how is the company doing that?

Melissa: Yeah. So we kind of start with the foundation of retail reality, meaning that something can look great and look really slick from an agency or from a displayed perspective, however, if it doesn't work at retail in the challenging retail environment, specifically of convenience, it's not gonna work.

So we create displays based on retail challenges and kind of work with retailers to vet to say, okay, what are the needs on your end? What are the needs on the supplier end? Let's come up with a theory of the case and how do we make this actually work at retail.

So, for example, one of the things our company has long been known for are suction cups. And that started with the premise of suction cup displays are great for the cold-vault door. It's a really prime piece of real estate for the convenience channel and anything you can do to kind of expand that footprint is of value to both manufacturers, to brewers, to CBD companies that are making beverages and to retailers.

The issue was for a very long time, it was the cheapest displays that you could find. And these things would fall off the door because you're talking 75,000 door slams on average a year for a convenience store. And so if those things don't work and they spill soda all over the store, nobody's very happy. Not the soda manufacturer, not the retailer, and certainly not the clerk that has to go clean it up.

So our company was proposed to find one that worked better. And we actually looked outside of the standard industry and discovered how the technology that's used to move car shield windows when they're being built, that kind of suction technology. We patented that and made it work for convenience, but also discussed kind of how do we make holders that actually work and hold these better.

How do we protect this in climates like Florida where it's really humid? So we do a ton of testing to make sure it really, really works, and then we launch the product and we vet it through our retail contacts. And it has resulted in over a million of our suction cup displays sold and some very happy retailers and supplier partners.

Joe: And with the ever-changing shopping habits of consumers, how hard is it for stores to stay innovative with products, technologies, and services?

Melissa: Absolutely. One of the biggest challenges really of any retailer, but especially convenience, where people come in there and they spend an average of three minutes, I think. So they have very little time to browse, but at the same time, we all know consumers are interested in new, exciting things. If you look at the chip section, it's no longer just plain barbecue sour cream and onion. There's hundreds of flavors there.

So there's that challenge of, A, how do you make room for all of these products in really small footprint? And even if you do manage to get placement, how do you grab consumers' attention for all of these new products? And really I think in the pandemic, we've only seen that escalate, right?

So it's an ongoing challenge, especially again, within convenience where you don't have the same luxury as other channels where you might have a store clerk who can actually...who is dedicated to that one section and can talk about a product, educate the consumer, draw attention to it. They are in and out of there.

So it's something that we're always looking at. We're always trying to meet kind of how do we easily catch the consumer's eyes and make these products available, where and when, and how consumers want to consume them?

Joe: And one of the industries on the product side, you've seen the growth of the cannabis industry. Why is cannabis and convenience such a natural fit?

Melissa: Yeah. I'm really happy you asked that question. Having covered tobacco for convenience, I kind of claimed cannabis is my beat back in 2012 when Colorado and Washington went legal, even though now looking at it, there's not a ton of overlap between the tobacco consumer and the cannabis consumer. It's more in beer, right?

However, even back then, having grown up in the convenience industry, I saw and knew firsthand, one, just how great convenience retail are at vetting and verifying age and selling age-restricted products responsibly. And I remember in 2012 when Colorado proposed legalizing marijuana, they said treat it like alcohol and tobacco, I believe was the case for it.

And so I looked at that and said, if we're gonna treat marijuana like alcohol and tobacco, there is no better place than the convenience channel. One of my dad's favorite statistics to cite was that 7-Eleven sells more beer than any retailer in the world. That happens within convenience.

And that's true. Convenience sells more beer than any other channel. And same with tobacco, nobody's surprised about that fact. But so if we're slating cannabis into that space, the consumers are there and the retailers are prepped to sell it responsibly.

So I have long, long, long believed that someday we are gonna see not just CBD and hemp, because that wasn't even something that was in my vocabulary in 2012, which I'm happy to say has changed and is really exciting to see convenience in this space a lot sooner than I would've thought, but I do think as this becomes more mainstream, we're gonna see the full breadth of cannabis at convenience.

Joe: And how has iSEE Innovations entered the cannabis space to help with the growth and aid retailers and their ability to sell?

Melissa: Absolutely. Obviously, I came to iSEE and was still covering cannabis almost exclusively cannabis for the convenience industry for NACS and for CSP. And so I've long been an advocate. It's long been something of interest for our company. But as they really started to see it take off within convenience, we started to hear it from retailers too that there was a need for merchandising innovation in this space.

Especially with CBD so frequently going on the front counter, you talk about valuable real estate. As I mentioned the cold vault before, there is no more valuable real estate in convenience than that front counter. It is front and center for consumers. It is the one place that you are guaranteed that somebody's gonna see something. And it is also a place where you have the luxury of age restricting if you want to. So we slowly started looking at that.

And then in the meantime, we also started to see growth in CBD hemp beverages really take off. So that's just a natural fit for us. And especially with CBD beverages being single-serve and with convenience being a channel of immediate consumption. Another favorite statistics of my father's was that pre-pandemic at least, 96% of beer sold at convenience was sold cold.

And that figure is pretty standard within soda, within water, and I would bet money within CBD beverages. So as you're looking for placement in that cold vault, we had a group of products that were ready and people that know the cold vault know convenience retailers.

So our sales team is very, very excited and has been excited to partner with retailers interested in cannabis, as well as manufacturers and really looking at a breadth of, you know, cold vault, floor displays, and counter displays and kind of creating space where there is none, which especially for a new category, like cannabis, is necessary within convenience.

Joe: And you mentioned one of the largest organizations out there in the industry is NACS, an organization you do some work with. You serve on their Convention Content Committee, always a lot of great education there. When is this year's show?

Melissa: This year's show is the first week of October in Las Vegas, which is always a very, very popular event. And this year it actually starts on a weekend. So people looking to have some Vegas fun will be delighted about that.

Joe: And usually by then, the heat is escaped Vegas. So it shouldn't be too bad by the end of September, early October.

Melissa: Not too bad.

Joe: All right. Before I let you go, couple of things outside of the industry we need to talk about. When I was getting some info from the website, a couple of things I noticed in your bio. You're a homebrewer, excited to see that, and an award-winning chili chef. So what's the go-to kind of chili?

Melissa: Well, so I live in Brooklyn and I quickly discovered that if you're gonna compete in Brooklyn chili competitions, you gotta market. You can't just go out there and throw a really great chili out. So actually, my husband and I have been doing this together since before we lived together. So over a decade now, and we have done a different chili every year.

But the one constant that we have done is first we pick kind of a theme. So we've done Korean taco-inspired chili, Nashville hot chicken-style chili. One of my favorites was a pork white chili that we did with queso on top. And that is my go-to is always when in doubt, top it with queso and Fritos.

But the one constant is we designed a ghost pepper hot sauce that we make every year. And that is kind of the secret ingredient to slow-burn really spicy chili. And for a chili competition, since people are eating little samples of it, hotter, the better.

Joe: Yeah. And with my...see, I can't do the hotter the better because of my acid reflux, but that all sounded amazing.

Melissa: Yeah. For a little one. And also usually, we would try to make it medium hot spicy, and then have the hot sauce on the side so people like you could still enjoy it as well.

Joe: Awesome. I did not know, you mentioned Brooklyn. I'm from Upstate New York. Are you a baseball fan at all since it is April or...?

Melissa: I am from St. Louis. So I am a Cardinals fan, however, my husband and son, my son is fourth-generation Brooklyn. My father-in-law actually grew up rooting for the Dodgers because they were still in Brooklyn. They broke his heart and my husband is a Mets fan. So we have a little bit of conflict between Cardinals and Mets there, but we're surviving.

Joe: Just let the husband know there's nothing wrong with being a Mets fan. So I was hoping it was gonna be Mets and not Yankees. So I didn't know that.

Melissa: Yes, yeah, we are diehard National League people in this house. That is the one rule for our son. He can root for whoever he wants, National League.

Joe: There you go. And we don't wanna cheer for any of the American League, especially the New York teams.

Melissa: No.

Joe: I mean, Tampa, you know, down where we're located now, but I'm from Upstate New York. So still a diehard Mets fan.

Melissa: Great.

Joe: And we both share some past TV experience, but your first internship, Saturday Night Live. What was that like?

Melissa: I will say it prepared me very well for a career in cannabis. It was fantastic. I worked for the writing room, so I got to see everything really firsthand. I was there the night they would write the show. So we would go out for Starbucks runs at 2 in the morning. And then I was there for the full day of the show.

I would arrive at 11:00 a.m. and one of our jobs was distributing the afterparty tickets. So we got to go to that too. So it was 11:00 a.m. on Saturday till about sometimes 6:00 a.m. on Sunday at the party, not working.

Joe: Yeah. No.

Melissa: But it's really talented people, really nice people. I was there during the heyday of the ladies. So Tina Fey and Maya Rudolph and Amy Poehler who were just some of the nicest people. And it taught me...it reminds me a little bit of convenience in that I had a professor who told me, don't start out trying to write a movie or even a TV show, if you can get it done in the frame of a sketch, you're gonna be golden.

And that's how I feel about convenience. If you can make it work in that tinier footprint, moving it up to grocery or big box or restaurant, easy. Convenience is where the cream of the crop come to shine.

Joe: I took some great advice and great analogy there. That's awesome. So Melissa Vonder Haar from iSEE Innovations, great having you on the podcast, that was a lot of fun. I hope we get to do it again sometime soon.

Melissa: Absolutely. Anytime.

Joe: And Melissa's the marketing director of iSEE Innovations, my guest on this episode, and don't forget hit that subscribe button wherever you get your podcast and catch video episodes on the Global Widget YouTube channels.

I mentioned earlier in the podcast, you can visit their website at iseeinnovation.com. I'm Joe Agostinelli, host of the "CPG & CBD University Podcast," thank you for tuning in.

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