Adapting to Changing Palates and Production

GCVG May 6, 2025 Meeting Transcript

Meeting Facilitator

• Christian Warning, Geschäftsführer / Owner, The Retail Marketeers GmbH

GCVG Member Participants:

• Joe Boyle, CEO, FreshStop
• Edwin de Graaff, Global Head of Shop Format & Innovation at Shell Mobility & Convenience, Shell
• Brian Donaldson, CEO, The Maxol Group
• Mert Dunder, Head of Operational Technology, Petrol Ofisi Group
• Santiago Ferreccio, Head YPF FULL, YPF SA
• Theo Foukkare, Chief Executive Officer, Australian Association of Convenience Stores (AACS)
• ZsuZsa Hordai, Head of Strategic Projects, SPAR International
• Jesper Ostergaard, CEO, Reitan Convenience Denmark A/S
• Sergio Padilla Navarro, Global Networks Director, Sergio Padilla Navarro
• Claudio Reboredo, Partner – Owner, FGC Fuels Marketing
• Caroline Rowan, Head of Retail Operations, Musgrave Retail Partners
• Jennifer Schmidt-Brekenfeld, Geschäftsführerin Tank & Rast GmbH, Autobahn Tank & Rast Gruppe GmbH & Co. KG
• Patrick Schnell, General Manager, Petro-Center SA / PC-Tank Sàrl
• Sandra Schutte, Head of Mobility, Westfalen AG
• Kelly Tracey, General Manager, Vantage Fuels Pty Ltd trading as Bowser Bean
• Roger Vogt, CEO Retail, Valora Schweiz AG

Presenter

• Tilo Hühn, Food Architect, ZHAW / ILGI
• Roger Vogt, CEO Retail, Valora Schweiz AG

Guests

• Richard Poye, COO, Food Trends Think Tank

Vision Group Network Founders

• Myra Kressner, Founder, Kressner Strategy Group
• Eva Strasburger, President, StrasGlobal
• Roy Strasburger, CEO, StrasGlobal

Meeting:

Christian Warning:

Hello! I want to welcome everyone to this second virtual meeting of the Global Convenience Vision Group.

A quick look at our agenda today. To begin, I want to go around the group and ask that you each provide a little brief presentation about yourselves because we have some fresh blood on the table, those who couldn’t make it the first time. Then we’ll have a presentation from Roger Vogt, the CEO of retailer Valora in Switzerland. Roger, it’s great that you volunteered as the first member of the group to present his business in more depth together with his personal presentation as a starting point.

We’ll also hear a guest presentation from one of the leading food architects in the world, Professor Dr. Tito Hühn, who will discuss the effect from Ozempic and other new medicines in use by many, many around the world. Tito will also cover some other impacts of how the world is changing food production and what that means for convenience retail and our businesses.

Then we will jump into the second hour to discuss the presentations and discuss topics for future meetings and some closing comments. You are all invited to participate. This is more than a presentation and insights. We’d like to have some discussion, and that’s the most valuable part. Thank you for your contribution at the last session. The report from that session has been published and is available to read or share.

Now, let me hand over to Myra, Eva and Roy to present some housekeeping rules, as well as the general idea of the Vision Group Network.

Roy Strasburger:

Thank you, Christian. Hello everyone. Good to have you with us today.

VGN, The Vision Group Network, is very pleased to be working with Christian on the Global Convenience Vision Group. And it’s wonderful to have everybody here from every different time zone. The slide that you see on the screen at the moment is the document that you signed when you signed your membership form, or as a presenter, or as a guest. It states that this meeting will be recorded, and the contents of it will be transcribed into our digital publication known as the Vision Report.

You do have the opportunity to go off the record at any time. Please just let us know if what you’re about ready to say needs to be taken off the record, or after you’ve said something and you would like to have it off the record, please let us know that as well, and we will accommodate you.

The second thing is that some of you may compete with each other in different markets. We take antitrust and anti-competition policies very seriously with our group. So please do not discuss anything today about market segmentation, price controls, or price fixing, or anything else that might be considered to be anti-competitive or fixing markets of any type. If somebody is doing that, one of the VGN members will ask you to please stop talking about that. And if you do not stop talking about that, we will very politely escort you out of the meeting. So those are the main two bits. Myra, do you want to talk about just general meeting etiquette aspects today?

Myra Kressner:

Oh sure, I can do that. Because we are on this virtually and from all parts of the world and in different environments, please do keep your camera on as much as possible. Conversely, please do keep yourself on mute so that we don’t hear any ambient noise because we do want as much dialogue as possible and engagement. Please do use the raise-hand icon so that we can make sure everyone gets a chance to say what they want to say and ask questions or answer questions among the members or our presenters. And if for any reason you do need to leave the meeting briefly, or leave the meeting, just send us a chat to let us know that you’re doing that.

Regarding chat, some people like to use that to contribute to the discussion, and we actually prefer that you make those comments live with us. So rather than commenting on something in chat, just do it verbally when you’re called upon. That way we can capture everything within the transcript.

On a different note, Global Convenience Vision Group is a part of The Vision Group Network. We do have several other vision groups that have been in place for a couple of years. And it is great to see the cross section of the conversation among our Convenience Leaders Vision Group, our Technology Group, our Foodservice Group, and our Electric Vehicles Vision Group, and the cross section of the discussion as it relates to health and wellness, and foodservice, and technology, and electric vehicle infrastructure.

We encourage these groups to follow what you are doing, as well as we would encourage you to check in on the Vision Reports and the content that comes from our other Vision Groups.

From there, I’ll turn it over to Eva.

Eva Strasburger:

Welcome to everybody and especially those who are on this in the middle of the night. There are a few people on the screen who you cannot see their faces. They are our support staff who work for Vision Group Network, and they produce the reports for us, if you’re wondering who they were. And we also have two of our other facilitators on, and we’ll be introducing them to you as the others are introduced. Thank you.

Christian Warning:

Thank you very much. We may want to share, Eva, the overall vision of Vision Group Network for those who are participating for the first time, with those two nice taglines you have invented for the vision. I think it’s important to frame that meeting again.

Eva Strasburger:

The mission of Vision Group Network is Sharing Today to Shape Tomorrow. And the concept and idea of the Vision Group Network began during COVID when we discovered that our usual ways of communicating at trade shows and conferences were not available. We found that the ability for those who are used to getting information from each other, especially the smaller operators who didn’t have the ability to just pick up a phone and call somebody, was really missing.

We began our first group by saying, let’s meet virtually, discuss the challenges and opportunities that are happening during the COVID times. And we found that to be so successful that we then began to make it more formal, and started with the Convenience Leaders Vision Group, and then the Convenience Tech Vision Group, and found that the best way to share what we were doing was through our Vision Reports, which are published and distributed free so anyone can download them. They are now distributed all over the world and through trade magazines and associations and through a subscription list. That is the way that we’re choosing to share the information that people are happy to provide on calls like this. We believe a rising tide lifts all boats and helps the entire industry. That’s basically the mission.

Christian Warning:

Thank you very much. Great.

And now let’s go around the table and really make a short self-introduction to all the other members. Last time we ran a bit out of time in certain presentations about yourself and your businesses. That’s why we came up with the idea to use some extra time to make a deep dive into each business at every meeting. I’d like to start with Brian, if you have just a few words about yourself and Maxol Group, please.

Brian Donaldson:

Okay. I am Brian Donaldson, CEO of The Maxol Group in Ireland. We have about 252 service stations on the island. We have our own proprietary coffee brand, our own foodservice brand, and we’re continuing to grow through acquisition and continuing to learn through groups such as this. That’s it. Short and sweet today, Christian.

Christian Warning:

Super. Thank you very much. Claudio, you are the next on my list.

Claudio Reboredo:

Thank you. I’m Claudio Reboredo. I’m from Argentina. I previously had a corporate life in ExxonMobil for almost 27 years when I decided to start my own venture in Argentina. We have about 20 service stations under multiple brands, and we have a very successful foodservice operation under one of the concepts that was named Lion Place. I am also the NACS relationship partner for Latin America. I’m very happy and delighted to be part of this group.

Christian Warning:

Thank you very much, Claudio. Edwin?

Edwin de Graaff:

Hi, everybody. Edwin de Graaff based in Amsterdam, working for Shell. We operate direct and indirect and licensed models totaling 44,000 sites. We are focusing a lot on rolling out our own coffee brand at the moment, especially in the countries where we don’t have this yet. And we’re actually transforming our retail. We have a new retail CEO. István Kapitány left after many years. David Bunch stepped in. So we are making some changes, which we can announce hopefully rather sooner than later. I’ll leave it at that for today, Christian.

Christian Warning:

Thank you very much, Edwin. Santiago?

Santiago Ferreccio:

Hello. My name is Santiago Ferreccio. I work for YPF. At YPF, we’ve got 1,700 fuel stations in the 24 provinces of Argentina, and I’m in charge. I’m the head of YPF Full, that’s the convenience brand. We’ve got 1,100 convenience stores around Argentina. We are the biggest seller of coffee in Argentina, and number two in hamburgers. I’m very delighted to share with a lot of colleagues that I have known for more than 25 years, to share interesting ideas for improving our business. It’s a pleasure being here, Christian.

Christian Warning:

Thank you very much, Santiago. Joe, you’re the next on my list.

Joe Boyle:

Good afternoon, everyone, from South Africa. I’m Joe Boyle, the CEO of FreshStop. I’m also the executive director of Food Lover’s Market, a chain of grocery stores, which is a group that owns 40 liquor stores. We also own VetsMart, which is a pet food store. We’ve got two roasteries, one producing nuts and the other one producing coffee beans. We’ve also got 300 Seattle Coffee Company shops in South Africa, and 120 Food Lover’s Markets. We’ve got a footprint also in Namibia, Zimbabwe, Zambia and Botswana. Great to be with everyone again.

Christian Warning:

Great, Joe. Thank you very much. Kelly from Australia, in the middle of the night.

Kelly Tracey:

Yes, we’re about to tick over midnight shortly. Good evening, everyone. Kelly here from Vantage Fuels; we prefer our customer facing name, which is Bowser Bean. We operate a suite of, I think we’re at 38 service stations in Australia, predominantly regional. And the cafe component of our brand makes up 40% of our overall shop sales, which doesn’t leave a lot for fuel by the time you add the shop. My background has been 25 years in hospitality, so I like to be able to bring the food element to what we do here and really nail the execution and operations.

Christian Warning:

Thank you very much, Kelly, great. Mert?

Mert Dunder:

Hi, everyone. This is Mert from Istanbul. I work for Petrol Ofisi Group. Regarding c-stores, we have more than 2,700 fuel stations. And in these stations we have more than 100 c-stores that our company operates. And in these stores we have two different types of category markets. And in these markets we create clean and relaxing spaces at the stations where our customers can meet their personal and vehicle needs, as well as safe and quality shopping. Inside of all those, we have car wash, Western Union sponsorships, and we have Tchibo and Migros, also, through some type of negotiations with them. And that’s all from Petrol Ofisi for now. Thanks.

Christian Warning:

Thank you very much. Sergio, you are the next.

Sergio Padilla Navarro:

Hi, everyone, my name is Sergio Padilla. I’ve been learning about retail for 18 years now. I work for FEMSA, which is a Mexican company that runs retail and Coca-Cola bottling businesses in 17 countries. I’m eager to keep learning from you guys.

Christian Warning:

Thank you very much. Patrick from Luxembourg.

Patrick Schnell:

Hello, everybody. My name is Patrick Schnell. I’m the MD of Petro-Center in the small country of Luxembourg. We have 26 stations, 25 as a brand of Esso as a big reseller in Luxembourg, and with our own brand for wash tunnels, food and shop. I’m happy to be with you.

Christian Warning:

Thank you very much, Patrick. Richard?

Richard Poye:

Good morning, good evening, good afternoon to everybody. My name’s Richard Poye. I help advise and facilitate the Convenience Foodservice Vision Group. And separately, my own business is Food Trends Think Tank. I’m based out of Nashville, Tennessee. I support retailers in their foodservice programs, but I also advise retailers and business-to-business as far as merchandising of the center store.

Christian Warning:

Robert, you’re next.

Robert Hampton:

Good day, everyone. Robert Hampton. I’m from Boise, Idaho, and this is my second stint in the convenience industry. I worked for Texaco for a number of years, and then most recently worked for Jackson’s Food Stores. I was the CIO for about six years, and then also in charge of innovation for about two years. I’ve worked with NACS and Conexxus. I was chairman of the board of advisors for Conexxus. Now I’m working with the Vision Group Network with Roy, Eva and Myra, helping to develop some new content. And we’ll be talking about that maybe a little bit later. I was on the Convenience Foodservice Vision Group call yesterday with Richard. Fascinating stuff, and I’m really looking forward to learning about what’s going on in the other parts of the world. So, thank you.

Christian Warning:

Thank you, Robert. Caroline?

Caroline Rowan:

Hi, everyone. I’m Caroline Rowan. I’m head of retail operations for Musgrave in Northern Ireland. It’s part of the wider Musgrave Group. We operate over 850 SuperValu Centra stores across the island of Ireland, and we also then operate a premium foodservice business in Great Britain. We operate a retail and wholesale business in Spain under the Dialprix and the Dialsur brands, and we also run an alcohol business, as well. Great to be back with everyone. I look forward to today’s discussions.

Christian Warning:

Zsuzsa, please introduce yourself to the audience.

Zsuzsa Hordai:

First of all, thank you, Christina, Eva, Roy and Myra, for having me. My name is Zsuzsa. I look after international strategic project at Spar International. We are food retailers with over 50 countries and approximately 49 billion euro turnover.

Christian Warning:

Theo, could you please share some words about yourself, briefly?

Theo Foukkare:

Hi, everyone. Theo Foukkare. I’m the CEO at the Australian Association of Convenience Stores, similar to what NACS does, but in Australia. We represent all of the retailers. We have about seven and a half thousand petrol and convenience retailers in Australia. We also have about a hundred manufacturers or service providers that are members. I’m fortunate enough to have a lot of information coming in and talking to retailers and suppliers on all of the areas that affect convenience retail, both locally and wider. I appreciate the invitation to this group. I wasn’t able to make the first meeting, and already, this one has been quite valuable just in terms of learning to be able to take back to our own market. So, thank you.

Christian Warning:

Thank you very much. Last but not least, Sandra.

Sandra Schütte:

Thank you. Yes, hello, everybody, from Germany. Sandra Schütte is my name. I work for Westfalen. This is a family-owned company headquartered in Münster. It’s in the middle west of Germany. We do have 260 sites, and our strategic pillars are, of course, convenience, foodservice, EV and digital services. From my background, I have worked for Westfalen for six years. Before that, I spent 10 years with BP in different roles, always in the convenience and foodservice section. And as I’m a foodie, I started my career with 10 years in a food agency, specialized on product and concept development. I’m looking forward to discussing with you the future and shaping tomorrow.

Christian Warning:

Super. Thank you very much, Sandra. Thank you very much, everybody.

[Slide 3: Valora + avec image] And now we are coming to Roger Vogt. I will start with a little overview before I hand over to him.

[Slide 4: video][Video plays, providing a tour of Valora’s various convenience store concepts with comments from a number of corporate and store employees.]

Roger, thank you very much for joining us.

Roger Vogt:

[Slide 5: Valora Retail Facts and Figures] Thank you for having me here today. I was not able to join the last time because I was on holiday in the mountains and the connection was very difficult. I am again on a holiday, but this time in Paris. I don’t know why Christian chooses all the dates when I’m on holiday. I take too many holidays, maybe. [Laughter] It could be the reason for this circumstance.

For more than three years, Valora has been part of the FEMSA group. A little bit about this group. We are the branch of FEMSA Group’s European arm. And I’m responsible for the Valora Retail part. I’ve been doing that for eight years. I’m originally born in Switzerland, and I’m working now already 30 years in the retail, mostly in the convenience sector and the supermarket sector a little bit. I started my career as a store manager, so I can really say I did everything in the stores, and I did every station in my career. Now, I’m responsible for the retail part and you see the numbers.

We run more than 2,000 retail convenience stores in four different countries. Switzerland is still our home country. We have close to 1,200 stores in Switzerland. Then we have close to 900 stores in Germany, then about 70 in Luxembourg and 10 stores in Austria. Overall, in our network are 2,100 stores, with close to 15,000 employees.

So what is my focus? What Valora tries to do, and I would say is one of our strengths, is that we have divisions in both retail and foodservice. It gives our company both views of the business. We have convenience retail, which is our Avec stores, but we also have a lot of foodservice concepts in our business. We have BackWerk, or Brezelkonig, or Ditsch.

What we are trying is to bring these two different worlds together. So the world of traditional foodservice, food, convenience, retail, and the world of foodservice. We try to bring that a little bit closer to each other and also combine that in our formats. I will show you a video afterwards of what we are trying to do to enhance, or I would say to create, more value for the customer.

In my 30-year career, I was very often responsible for developing new concepts. So, for example, I was working for Co-op more than 20 years. It is one of the biggest retailers in Switzerland. I developed their new convenience concepts, like Co-op To Go or Sapori, and so on. And it’s very interesting for me always to try to increase the value for the customer, not only in the concepts, but also in helping them with additional digital futures to really improve the value for the customers.

Strategy What you see here are the different brands that I’m responsible for. k kiosk is a very modern convenience format, but it still sells a lot of tobacco products, and still has a share of newspaper in the assortment. In Switzerland, we have close to 800 stores. We are by far the market leader with this format. So if you go to Switzerland, believe me, you can’t go or drive through Switzerland without seeing a k kiosk because we covered the whole Switzerland with this format. Io’s a very famous format, and we are very proud to run that.

And this is a format that adapts to the customer’s needs. Io’s a very old format, more than 100 years old already. And we adapted the format. In the past, the best-selling products in this format were newspaper, game of luck [lottery] and tobacco. Newspaper was decreasing, and now we are selling much more food, but still tobacco and still a little bit of lottery. So we adapt the format always to the customer needs.

Then avec is our leading convenience format in Europe and in Switzerland with 350 stores. We are market leader in terms of stores in Switzerland. avec was the fastest-growing convenience concept in Switzerland over the last five years. Five years ago, we had 150 stores, and now we have more than 350 stores. We also opened already our first avec stores in Germany. We already have eight there. By the end of the year, I hope we will achieve more than 100 avec stores also in Germany because we signed the contract with the Deutsche Bahn to refurbish all our stores on the main station and rebrand them to avec.

Then we also have Press & Book, which I would say in Switzerland this format is similar to the others as the importance of selling newspaper has dwindled in Switzerland. Newspapers are not really a huge business. But still in Germany on the main station [train hubs], Press & Book is a very famous format. We have 150 stores on the main station, and we are still market leader in this sector. We are very proud of this format. We also have 10 Press & Book stores, or nine present bookstores in Austria. And then we will open our completely new concept in Wien in the next two or three weeks. Next slide, Christian.

Christian Warning:

Let’s see how you explain the famous avec format.

Roger Vogt:

[Slide 6: Avec image] Yes, exactly. This location is unbelievable. I would say it’s the service station in Switzerland with the best view of Lake Zurich. It’s unbelievable. This store is very close to a motorway but also very close to the local community. We refurbished the store about one and a half years ago. And we are quite satisfied with how the store is developing so far. We serve more than 1,300 customers per day. We sell close to 80 items from the kitchen every day.

[Slide 7: Horgen BP Gas Station]

Foodservice The kitchen, the assortment, you saw that a little bit in the video. The menus includes spaghetti, pizza or pasta, or also bratwurst with hummus and so on. And we really sell that because of the space we have in the store and also the space in the front of the store; the parking space is quite good for people with huge cars to park there and come in our store and enjoy a lunch there.

What we see is that we have 63% of our net revenue coming from food and beverage, which is, I would say, if I compared it with an average service station in Switzerland, which is really above the share we have here in food. And we generate close to 50% of this net revenue from the fresh product: the kitchen, the convenience, the bakery and the coffee we sell there. And the other driver is cold beverages, which is always important in all our service stations. It really shows that we try to combine foodvenience with the classical retail convenience, creating value. The success of these service stations shows that’s something the customer really, really appreciates and likes.

[Slide 8: Zurich Inner City Location] The first avec store with the integrated kitchen concept where we combined this foodservice know-how with the classical retail was in the middle of Zurich. It’s a location which I would say is really unbelievable. It’s a completely local store in a local community, but in this local community around the stores are a lot of different universities. And you see that here. It’s seeing 1,600 customers per day on average. On a Sunday, we serve 300 customers per day, and during school holidays, the store is empty. So we serve a little bit above 1,000 customers. At peak times, we serve close to 2,500 customers per day, which is really an impressive number. And what we are seeing is that most of the customers are coming during lunchtime because then the school is done and they have a break to really buy something. So the number of people around the store is unbelievable, amazing.

Here, we sell about 200 items from the kitchen, as I already mentioned, pizza, pasta. And what we also have in this store is one of our best running products, a fresh produced kebab and hot dog and so on. This store is far above the average we have. The food share is close to or above 90%.

In this store, tobacco is really a minor category. Fifty percent of revenue is generated from the fresh product. Kitchen, convenience, bakery, and coffee and beverage is still 25% of the stores. After we opened this first store, we saw there is really a potential to create additional value for the customer, to add foodservice concepts in the convenience stores.

The second store like this was opened in Horgan, and now we have also added some different clip-ins in our store. So you saw we also have Ditsch or BackWerk or Brezelkönig in Switzerland. And we have two stores where we have a clip in from BackWerk or a Brezelkönig clip-in in our store.

We opened a few weeks ago our completely new service station on the motorway in Bern, which has an integrated Brezelkönig in the store. And we will soon open our first store that has two clip-ins on a service station. It will have the kitchen concept and the Brezelkönig concept. We really believe this adds value to the customer and also shows the competence we have in this foodservice and also in the convenience retail market.

Christian Warning:

Thank you very much for that look into such a nice store, Roger.

Roger Vogt:

Thank you very much.

Christian Warning:

Any questions from you guys? Richard?

Richard Poye:

Menu Development We had an interesting conversation yesterday on the CFVG call about menu development and different generational acceptance of certain menu items and those types of things. And I’m wondering when you’re developing new menu items or a menu for a new concept, maybe if you could just give us a top line of the process that you walk through and your menu development, that would be helpful.

Roger Vogt:

Thank you for this question. As I mentioned, foodservice is a competence in our house. What we did was say, okay, what are the good-selling products we already have in our foodservice concept? We tried to move them in our retail stores. And the other consideration was how many products we can produce during a very short time. So what is already pre-produced or only needs heating up, and what can we produce? What is worth the effort to produce on site.

For example, we decided to say: Okay, we have to produce our sandwich fresh, but not the hot panini. Because for a hot panini, we thought it doesn’t make a difference, It’s already fresh prepared and produced in the store but it only needs to be heated up when it is ordered. And in this case, we decided an assortment, and we started to sell that. And then we adapt as needed. Already, a lot of the things you saw in the video are discontinued, a lot of things are added. So we really try to develop that further and also involve the customer feedback always.

Richard Poye:

Thank you.

Christian Warning:

Sandra?

Sandra Schütte:

Yes. First, thank you. Very interesting. You do have these two sides with the same opening hours of the kitchen, and you have this peak in the morning at the petrol sites. And you open the kitchen at 11 a.m. Have you managed to increase transactions at lunchtime? And how do you manage the breakfast offer? That would be interesting.

Roger Vogt:

Strategy The inner-city location is really a completely different location. We serve a lot of students. So on the service station there is really a peak time in the morning because it is a service station, and we tried to create an offer. You saw that also a little bit on the pictures. So it’s eggs with bacon and so on for a very good price. But I would say that the Swiss customers are really boring customers. They only eat croissant and coffee in the morning and take a sandwich with them. So we sell a lot of sandwiches, a huge number of sandwiches in the morning, because we have a lot of people which are going to work and buy something for lunch. But we didn’t really create an offer for them to eat during the morning in our kitchen. And then we reduced the opening hours for the kitchen only for the lunchtime. And what we saw is that we increased the value of the kitchen, because we really earn money now with this type of adapting by changing the operating hours a little bit.

Christian Warning:

It’s a very interesting question, Sandra. We hear that a lot and discuss that a lot. The solution in the morning is grab and go. They produce very nice sandwiches on site using the staff, but it was necessary to reallocate the staff where it’s needed. And then, really put some extra sales on the bottom line in lunch or afternoon or evening even, at certain sites, I think.

Mert?

Mert Dunder:

Roger, thanks for the presentation. It’s impressive. I have a question about the technology that you are using. I’m wondering how do you manage different type of payment technologies in different countries in terms of regulation?

Roger Vogt:

Yes. Do you mean the payment options or the technologies we use?

Mert Dunder:

The payment technologies. I saw two different ones. I wonder do you guys have any mobile payments also?

Roger Vogt:

Payment Systems What you saw in the video, the SOT payment option will disappear in the next few weeks because we developed our own solution on the self-checkout terminal. You also saw that in the video. We are working quite well with our own developed self-checkout technology, and we’re replacing the SOT terminal. So imagine you enter a convenience store, you buy the Coke, you buy your sandwich, you go to the self-checkout, and you can order your freshly prepared kebab at the same desk. We will introduce it in the next two weeks or so, and then all the SOT equipment will disappear. What we really managed to achieve is that we will have the same cashier desk across the whole of Europe, except the service station.

At the service stations, we have a different cashier desk than in our ordinary stores. But in all the other countries we have exactly the same cashier desk, which helps us unbelievably because then we also can develop some services and some additional features on the cashier desk. We plan to roll that out through the whole European countries, yes.

And yes, we have an app. You can download the app. You can scan the products, and you can pay also on the app. So we also have this solution but it is not so successful. Not that the development was not successful. I think that the app is quite seamless for the customer. But really the Swiss people, they love a cashier desk. They go there and scan their products and pay on the terminal. They like that.

Christian Warning:

Brian?

Brian Donaldson

Thanks, Christian. Roger, great looking stores. Just a couple of questions. I see you’ve moved to closed door refrigeration in both your models, both in terms of the offer attached to a forecourt and also one which is standalone. What kind of savings are you achieving with that in terms of your energy consumption? That’s the first question. And the second question, you’ve started to answer part of it, which is to do with your self-checkouts. Do you see the time when self- checkouts will also be able to facilitate the fuel customer to pay for fuel, as well as in-store goods within your forecourt model? Those are the two questions, Roger.

Roger Vogt:

Thank you, Brian, for your question. So the first question, so I really have to admit I can’t answer that. Because we have really to put the doors on our fridge. That is like a law in Switzerland. So it’s impossible to put the fridge in the store, so a small fridge, yes, which is maybe 2 meters, but not a fridge above 10 or 12 or more meters. So you always have to put these doors on the fridge. It was annoying when that became the law about 10 years ago. We had to train the customer that they could open that door and reach into the refrigerator. They said, “Oh, that’s really something which is in my way to buy a beverage or to buy a sandwich,” because the sandwich is behind the door. And now we see there that the customer learned a little bit to open this door, but still you saw that also in the video. The daily fresh produced products, we place that on the open shelves close to the entrance that the people see and can grab without opening something or so they only can pick the products.

And the other question, sorry, was about?

Brian Donaldson:

What do you see in terms of self-checkout use? Will it ever apply to fuel payment?

Roger Vogt:

Self-Checkout In the second store I showed you, it’s unbelievable. The share of people who use self-checkout is above 60%. So, it’s unbelievable how they use that. And now we have a queue on the self-checkout, not on the cashier desk. And we will add now additional self-checkout. So, we already tried to run one self-checkout cashier desk on the service station, but we have to admit we failed because it was not integrated to also pay for fuel. And there is another service station in Switzerland which tried to introduce self-checkout where you also can pay the fuel there. But as far as I know, they failed. So, I really can provide you with the proper answer there, but I think it’s still a journey, and everybody is learning how we can serve the customer with self-checkout in the service station.

Brian Donaldson:

Thanks, Roger.

Christian Warning:

Zsuzsa, your question?

Zsuzsa Hordai:

Roger, a great presentation and amazing stores. And my question was going to be around retail media. It’s a really hot topic nowadays with retailers, and you’re operating in multiple markets across multiple brands. And I was going to ask you, what is your view or what’s your strategy in terms of unlocking that revenue stream? Or have you had any headways into it?

Roger Vogt:

Yes. There are, I would say, two answers. The first answer is: Our mother company FEMSA is already doing that quite well with Retina Media. So maybe Sergio can some time present something about retail media in the future. They are doing quite well. We tried that in Switzerland to increase our income with retail media. But what we saw is that it was better to sell a package and a promotion to our suppliers.

If we sell them a space on our shelf and say you have additional time on the screens we have in the stores, then we sell that combined much better than we only sell you have here space or time for the retail media. So we don’t proceed further in this case, but we will discover that because there is a lot changing in Switzerland that it’s not allowed anymore to advertisement for tobacco products in the store and overall. The screens we have now in the stores most time was occupied with tobacco advertisement. Now this will disappear. So we should really try to move those into a retail media strategy. But at the moment, we are doing not so much on that one.

Zsuzsa Hordai:

All right. Thank you, Roger.

Christian Warning:

Kelly, you have a question?

Kelly Tracey:

Yes. Thank you for your presentation. It was awesome to hear about your kitchen that’s been placed in. I’m wondering what kind of square meterage you require for these kitchens. So what footprint are you needing to place these into for existing sites?

Roger Vogt:

Facilities It depends. It’s close to 10 square meters, not more. And we put all the devices and everything we need in this 10 square meters. What we need is a huge fridge. And this fridge does not have to be very close to the kitchen. It can be somewhere else. But for the kitchen itself, we need close to 10 square meters.

Kelly Tracey:

And would it be a fair assumption to make that you’re going to scale this model across the rest of your stores?

Roger Vogt:

Yes.

Kelly Tracey:

And then my other question to that then is how are you going to ensure consistency of that food offer so that everyone is trained the same? How are you going to replicate that in the multiple stores that you have under your banners?

Roger Vogt:

<> We have online education for all the store members. And we have introduced what we call [inaudible]. It’s a person who takes care only of the process and the quality of the products. And with the increasing number of stores, maybe we have to add an additional person, but at the moment it’s one person who takes care only of the processes and the quality of the product.

What I try to do when we introduce a new product or something new in the kitchen is I say it has to be very easy, so not complicated and not difficult. Otherwise, I can’t roll that out. So it has to be very, very easy that the people in the store really understand that very quickly, and it’s easy to replicate and to roll out. Otherwise, in my opinion, it’s very difficult to do a proper rollout when it’s too difficult, and I have to do a lot of education for the people. So then it’s probably going to fail. We try to keep that very, very simple.

Christian Warning:

I was expecting that we discuss a lot about this case. I’m happy that we only asked one group member to present this time so that we have a chance to jump to our main topic as well.

Robert, you have a final comment and question?

Robert Hampton:

Yes, thank you. Roger, great presentation. I really enjoyed seeing everything you’re doing and the food just looked delicious. One quick comment was the greater than 60% usage of your self-checkout. That’s amazing. Congratulations on that. Few retailers here in the U.S. can get there. I did pick up on one thing you mentioned though. You said you had an app and that the customers have the ability to pay on the app. Just to clarify, is that a method of payment that you still have to go to the register and use the app as the method? Or can they just go in, scan something on the app and just walk out?

Roger Vogt:

Yes, it’s exactly that one.

Robert Hampton:

Fantastic.

Roger Vogt:

Customer Behavior We introduced this app a few years ago. It was more intended to run some kind of hybrid store. The store has regular opening hours and after that you can scan the app in the front of the store. Then the door opens at 11 o’clock or at midnight, and you scan the products and pay directly on the phone. I don’t know why, but the customer didn’t like that. They still go to the self-checkout cashier desk. So that is something which I would say if they learned how to use that, they would be interested to do that.

Robert Hampton:

That’s fantastic. Thank you.

Christian Warning:

Theo?

Theo Foukkare:

Thank you, Roger. One point I’d make on the app. It’s quite interesting. 7-Eleven in Australia has tried to get that working. They have an integrated app where you can just walk in, scan a product and walk out; they just can’t get customers to use it yet. So I think whilst the technology is there, the challenge is getting this transfer to feel comfortable because it’s different to a completely autonomous store. They put a lot of resources into the technology. So I’m interested to hear that it hasn’t worked for you either. I know they’re going to persist with it, just trying to remove that friction. I appreciate sharing your insights on that.

Roger Vogt:

Thank you very much.

Christian Warning:

Thank you, Theo.

Thank you very much, Roger, again, for your commitment. Jumping in and within your holiday, I really appreciate that. Thank you very much.

Roger Vogt:

Thank you.

Christian Warning:

Now we are coming to our guest presenter. We will cover four questions around foodservice that are in different stages of their lifecycle in different markets, but happening in many, many countries, especially in the U.S. We’ve researched also some impressive numbers already. The effect of pharmaceuticals and then mirroring that with economic pressure on food consumption is an effect we have to have an eye on. It means a down trend in food consumption. We’re looking at how that affects convenience retailing, and how there is a continued health shift on the horizon. And to food production, what’s the latest, what’s hot, what’s the trend? This is where our guest speaker Dr. Tilo Hühn can bring us up to date and explain where the theory and the practical parts are going. So a big applause and welcome to Tilo. Please introduce yourself.

Tilo Hühn:

[Huhn presentation Slide 2: The Sustainable Plate] Myra, Eva, Roy and Christian, thank you very much for the invitation. It’s a pleasure to speak to you all. Hello everybody. My name is Tilo. I’m almost 59 years old. I’ve worked in Switzerland since I was 28. I have two daughters. I grew up on a little farm where my mom had a small kiosk store close to a hospital. So I have some experience in retail too from helping my mother. My focus today is on development of food processing, for the smallest retailers, for the biggest, all those in between.

[Slide 3: Impact zhaw] That is how I met Christian. He invited me to talk today a bit on our new developments and the impact of different things happening to us. We published some papers, my dear partner, Gisela and myself, in the last two years. If you want, these are active links, you can click on them and find some information of what’s going on in our mind when it comes to food processing.

[Slide 4: Advantages of the cold extraction] It’s every day in the media. Sustainability is there, but there are some other points. Sugar is bad, not from my point of view, but some people are claiming that. Alcohol is very bad. Salt is bad. Many things are bad. So self-optimization and the impact one makes on the environment, all the things around longevity, these are coming up in let’s say ripe environments where people can spend some money on their personal health and on their wellbeing, and for sure on their indulgence.

Some foodstuffs are really pure indulgence products, like chocolate. You can ask yourself, is it necessary to have chocolate? Some of the people in Switzerland, and not only in Switzerland, eat more than 10 kilograms per head, per year of chocolate. But when it comes to chocolate, the question, how much sugar is in there?

We developed a cold extraction process in 2007 when there was a big investment, over 50 million Swiss francs. In Freienbach, we have a factory up and running. Dieter Meier, perhaps you know him from Yello. This techno music band was the business angel. And now there is a second investment from other people around that and even from a company from Japan. And we are rolling out that technique to Asia.

I’ll begin by reflecting on the history of chocolate as a product in the past. The Mayas, they processed cocoa beans. Early on, they could only use the cocoa beans for some rituals. As far as we know, they put the beans on a hot stone over a fire. They grind it by stone milling. This was invented, the stone milling, 35,000 years ago. The Mayas used it for milling the cocoa beans. And because of the high concentration of fat, it sticks to the stone. They mixed water with it, and they drank it. And therefore they called it “xocoatl.” “Xoco” stands for cocoa, and “atl” stands for water.

Originally chocolate, xocoatl, was a drink. In our factory, we remember that and process the cocoa beans by milling them with water at low temperatures. This is very important because we save all the aroma of the chocolate. We get some extract powder that contains flavonols. In the usual process, those flavonols were destroyed by heat.

Our extract powder is used today. There will be a launch in September from a Swiss company the name is Oro de Cacao as a special cardiovascular effect to human health. And the powder is 50 times more valuable than the usual cocoa powder, which is extracted from the original nibs and then the usual process destroys them. There’s another effect by washing the cocoa beans we do there, we reduce the sour impact. We reduce the sour impact of the cocoa beans. If you taste chocolate with 80% or more cocoa, it’s sour and bitter. And by washing it with water, we can reduce the sour and bitter impact. So, we can offer 80% chocolate, which is expensive for sure, but with only 20% of the sugar, which is a very important effect if you want to reduce the sugar content.

[Slide 5: Cellular Agriculture] Besides that, we developed strategies to produce some plants and cultures in a reactor. The first chocolate ever made with this process on the planet were made in Wädenswil by us, my colleagues Regine and Dieter Eibl. If you come around Horgen, Switzerland, to see Roger’s wonderful store, close to it in Kilchberg there is the home of chocolate. And you can see our project is presented there.

It takes two weeks to three weeks to produce cocoa cells in a bioreactor, and there’s no sour impact from that. We can also produce cultured meat in the reactor. This is possible for other cultures, too. Now we start to commercialize it, and we have patents on both processes with big benefits to health.

There are challenges recently in the cocoa market. One year ago, cocoa prices were around $2.50 a kilogram, then it went up to $30, and now we are back at $10 a kilogram. So crop failure is a big challenge in the raw material production. That is worldwide, and not only for cocoa. Coffee is the same. Other crops are the same. Beyond that, we have seen that we have different compositions in the raw materials. So it will be a challenge for the future to have the right raw materials producing the foodstuff. And here is a solution. Produce it in a controlled environment like a bioreactor to have the sources for foodstuff.

[Slide 6: Unleashing the full potential …] This is our newest development, and I think this could be very interesting as an application facing the reality that some people have changed their consumption behavior. Here we produce almonds or hazelnuts with the shell. In Central Valley, California, 80% of the world’s almond production is made. And today they waste the hard shells for animal beddings or burn it to get some energy. And we, you hear it right, we use the whole nuts with the hard shell. This expands the usable product, depending on the variety, by 50%.

We provide the same impact that you get from agrochemicals, fungicides, pesticides, herbicides, and fertilizers, and we double the amount of the raw material, which is high fiber. Then we go a step further. If you take the whole almond, which is a stone fruit with a fruit flesh, you have quadrupled the mass because it’s again 50% more if you use the fruit flesh. And that is high protein. These are the products people are looking for: less fat, less sugar, no alcohol. Perhaps we can develop some drinks here. This is the first step in producing almond or hazelnut drinks or whatever nut drink you want by mixing it with water. We mill it one to four parts of water. And then you get a plant-based drink and a solid which is high in fiber. You can use it for production of ice cream or you can dry it to produce some bakery products or use it in chocolate, and so forth.

And this is a continuous working process like I’ve shown you with the chocolate. But here we have doubled the mass or quadrupled the mass without planting any more trees. This is really big. Fifty-five million tons is the overall nut production. Almonds are only 1.3 million tons, but imagine the potential that lies behind it.

[Slide 7: The introduction of GLP-1] These glycogon-like peptides—GLP-1—these were first observed in the 1980s. For people, they help to control their insulin production and so on. Today, they are used for weight loss. You see the use in the U.S. and elsewhere. The problem with them is they have to inject themselves every day with the product. They are expensive, $900 to $1,300. And if you start, you can’t stop.

How they work is, you have a different consumption profile of food and beverage for sure, because some get a little bit stomach-sick, some have no appetite. And this is the goal to reduce weight. And then those users become a new consumption profile. I heard from Ypsomed, they are developing a new type of injection applicators, and some groups are working on pills. Some groups are working on daily pills, some monthly pills. Today we count, it depends on the sources, perhaps 6 million people are using GLP-1’s in the U.S., and they estimate that around the end of the decade it could be 40 million or more. And this will have a heavy impact on the consumption profile of different foodstuff we find at the market.

[Slide 8: Shift Towards Healthier Options] We put that slide there to give you some additional information. You can read it later on.

[Slide 9: In conclusion, the available …] Christian thought we could talk about that different customer behavior. This new behavior is embracing a healthy lifestyle. In a healthy lifestyle, people will change their behavior as customers.

[Slide 11: Brief overview of the importance …] On this slide, you can find some literature we put together for you.

[Slide 12: By adopting sustainable practices …] I showed you only some processes we’re working on. We developed it for cocoa processing. We developed it for coffee processing. We developed it for spice and herb processing. We can deliver way more of the good of the natural material. So this is the environmental side and the ingredient side. But this contributes, too, to a more healthy lifestyle by the natural composition extracted and saved from this raw material when it comes to secondary plant metabolism products like flavonols or others. And at the end I’m sure it’s not only being more healthy, but also having less negative impact on the environment. It’s important to note these things to establish price points and availability. And we are delivering such solutions.

[Slide 13: Innovation in Products] Today, I’m in Dusseldorf. I’m at the airport. We will meet some colleagues from North America. We are on the way to commercialize our processes, and we’ll have the first process line most probably in Toronto in 18 months to produce this plant-based drink and combine it with the production of a flower for the chocolate and bakery industry.

[Slide 14: Risk Mitigation] On this risk mitigation slide, we have some other references you can look into if you want.

[Slide 15: Ferments, Non-Traditional…] I should mention something about fermentation. We do collaboration with different colleagues from the field of individualized nutrition. If you talk about such things, it is really local. It’s not only local food; it’s about your DNA. One of the best examples: Look at the lactose intolerance in Asia. Most of the people can’t drink milk or digest it. So there is a reason that there is this really well-known quote from Austrian businessman Peter Brabeck, “Food is local.”

Fermentation is really interesting. Kimchi and all these alcohol-free kombuchas and such products, this is pre-digestion. We live together with other beings on the planet. We call it the holobiome. The microbiome is directly around us. This is touching epigenetics, gene activity. We are all socialized under special conditions. We have the DNA, we socialize with different foods and so on, and our microbiome in the gut is adapting to that. So using fermentation products is pre-digestion and adapting at the end to the microbiome we have. And one of my colleagues said to me, “If you want to lose weight, Tilo, the next diet is the best diet,” because your microbiome has to adjust to the food you eat. There is an interaction between microbiome and food. Through fermentation, there are some organisms in the environment which are the same those that live in our intestinal system. They can improve digestion.

[Slide 16: The Sober Surge] Christian, you contributed some of this data, perhaps you want to say something about this Sober Surge slide?

Christian Warning:

Yes, when we discussed the topic, we came up with different trading-down effects caused by this healthier trend. The highest numbers we could find is a trend for younger generations to drink less alcohol than the older generations did. That affects our business dramatically in many markets and will continue to. We as retailers are at the end of the value chain of those food processes. And I wanted to give you the opportunity to discuss with someone who at the start of the process in developing new ways to produce food, to have a totally different view than our own view on new things will happen.

[Slide 17: In summary, by re-engineering…] We’re seeing food companies invest in product innovation to meet these trends. We’ve seen it in products from Nestle and others in the U.S. They say, “Hey, that’s good for your new trend.” And so, there is an effect. And we as convenience retail have always been on the forefront in the past for innovative products. And this is why I think it’s important for us to discuss and to really look at those developments and discuss with Tilo about it.

I’d like to start the discussion now on what’s striking you as important here and take the opportunity that we have Tilo for this meeting. Please, feel free to offer your thoughts. Roy?

Roy Strasburger:

Tilo, thank you very much for the presentation. Very, very interesting and a wide range of topics. Starting at the end of your presentation, you were talking about fermentation and the trading down by the consumer. Are the results that you’re seeing that people are buying less products or less expensive products as opposed to it being a brand extension where there’s more products for them to choose from, so they’re actually adding those to the basket as an addition, as opposed instead of what they would normally buy?

Tilo Hühn:

Customer Behavior I read a publication from the U.S. wine industry and they said that Generation Z, if that exists, trains them to make a new positioning of the whole wine sector. I was over there in California, and I’ve seen miles and miles where grapes are not harvested. We estimate that in the next five years, the world wine market could go down by 40%. This is a disaster. But this is happening because young people decide not to drink alcohol anymore. We have studies here in Switzerland from the University of Zurich that they consume other drugs, but alcohol is really under pressure. It is really under pressure.

So the behavioral change of our customers is there, and we have to take that into account that these topics will have longevity. One of my ideas around that is that we all, the little kids and the old humans, realized during this Coronavirus crisis that life has an end. Usually the older elderly people, they realize that there is sooner or later the end of my life. But because of the pandemic, young people, kindergarteners, for example, had to stay at home in isolation or wear masks. Their grandfathers or fathers or mothers died alone in a hospital, and there was no funeral because people are not allowed to go there.

So everything takes, let’s say the reflection in the direction, what can I do to live a long healthy life? And this changed behavior. I like french fries very much and I will continue drinking wine, but I observe with my two daughters that they behave in another way. They still like wine because we have our own vineyard, but I can’t go away if I see french fries. They are really controlled not to eating such things. And I think it’s really important. Environment, it’s a little bit going down, but longevity is really for the people who have some money. For sure, sometimes food and sugar is a temptation. But it’s perhaps a temptation some people only want to have on special occasions, not every day.

And this leads to another behavior. I think that impulse buying will change, as well as what you offer in your stores. Why not offer healthy products? I remember Christian, you know all the companies who invested in this big trend of vegetarian food and partly vegan food. And yes, this created some resonance. It’s not in every place, not every country, but I think you should look for it.

And let me comment on what Roger said about Switzerland. I’ve lived there for 28 years now, and I know that these people there, they are behaving in another way. They are very health-conscious, most of them. They are really adaptive to digitization. If you compare that to Germany, forget about it. They are still paying at the cashier, and we are going for the self-checkout because we were trained in Switzerland to do so.

So there is absolutely different behavior around the world. You are the specialists in that, but we can deliver systems where we build in sustainability. Regeneration is built in new products, which increasingly means clean labels. We don’t want to add anything that is not needed. In our processes with a whole nut processing and so on, there is no additive. We need no additive for the plant drink, even of barista quality. This is all built in from the natural fruit. And the only thing what we do is continuous processing with water. Full stop. And I think these are the products these new generation of consumers are looking for.

Roy Strasburger:

Thank you. And that’s a very interesting perspective because in the United States, broadly speaking, I think we are behind in the convenience industry in our foodservice and our healthy food offerings as compared to what happens in Europe, Australia and in South America. And our convenience retailing has turned more into snacking and immediate impulse items, by and large. So, the shift toward more of a healthy product perspective is going to be a big question in the United States in regards to shelf space, product extension, being able to provide that because we’re so geared toward a very specific impulse aspect of what we’re doing.

I know that Richard’s very involved in the foodservice side of that. So I’m going to let him take over from here. So go ahead, Richard.

Richard Poye:

I was able to see parallels between actually the first and the second presentation. In the challenges of servicing different people, when we really begin to think about it from in the U.S., convenience is more challenged because we have convenience stores, we have quick-service restaurants, we have fast-casual restaurants, and we have fine dining. And so what happens is people, I think, go to convenience for different reasons than say, when I lived in Germany, it was a very different experience. The convenience stores are, in many cases at the train stations, were more elevated and more high-oriented offer. So there may be a perception around what people believe that you can get in a convenience store. Going back to how people think about their diets and things like that. I always begin to think about, I draw a Venn diagram and I think there’s going to be people that will consume the GLP-I type of drugs to manage their diet. There’ll be people that will want to be contrarians and do that complete opposite and they’ll want to go and do something like the fermentation types of food or fermented types of foods. You’ll have people that will always be chasing the next new thing. So a new diet, a new trend, and they won’t have much discipline to it, but they’re always trying something new. And then you’re going to have people that won’t even diet at all. They’re maybe oblivious to the prolonged effects of eating certain foods.

Not to come to any immediate conclusions here, but how do we focus on who we’re really serving? And it’s complicated on this call because we’re all around the world. But even within a country, there can be different types of guests that you’re serving and what are their immediate needs? And then how do we think long-term and more strategic in how we begin to pivot our menus to be more effective and service the guests?

So as I reflect on what both presenters have talked about, one is more short-term, it’s the menu and the developments of the menus and serving people and learning and being very agile, and the other’s talking about how do we change our supply chain and the perceptions of certain foods. It’s fascinating. I don’t have an immediate conclusion, but I think that it opens up more questions that we can explore.

Christian Warning:

Theo, you want to chip in?

Theo Foukkare:

It’s a really interesting conversation because I think absolutely in every market it’s very different. If I look at 7-Eleven in Australia, they’re the only retailer in Australia within convenience retail that currently has a daily fresh supply chain, seven days a week. And through that, they’ve been able to execute very targeted ranges in targeted areas within different states, to be able to have that healthy food for that Gen Z customer and for that healthy conscious customer. The biggest challenge for them is, as customers continue to be more mobile and moving around in different parts of the country, where I was concentrated in one area, now this customer’s moving into other areas and they don’t have the same range, becomes a real challenge. And that’s what they’re currently working through.

But conversely, 7-Eleven now in Australia have never been sold products that Kelly and her team and other regional operators sell well, in burgers and pizza and fried chicken and these types of things, which aren’t necessarily, let’s say, healthy. But they’re getting into that as they start to understand how do you operate with different customers at different times. And the supply chain’s the key to be able to unlock that. So, I just thought I’d contribute that.

The other point is I was at a confectionary conference today in another state and the topic of Ozempic and Wegovy came up. They are flagging this as a very significant concern more broadly for the overall confectionary industry, and so to hear it today just around what they’re doing to be able to manage that. Predominantly their focus is on portion control or snacking, smaller sizes, still being able to indulge but have a smaller indulgence in their luxury. And I wonder if we’ll see that as this progresses, don’t know. The other question I had, and probably open to everyone, is clearly, the younger consumer today is a lot more health conscious than the majority of us were when we were at that same stage in our life. Has there been any research on will that change as they progress, or will they maintain their views as they change [through] different stages of their life? I don’t know if anyone has any insight into that.

Christian Warning:

Thank you, Theo. Great question, everybody can think about why. Joe, with your double-hatted function of having a supermarket view on it and one of the freshest I have experienced in my life to be honest, in South Africa, as well as the convenience store chain. What’s your view on that?

Joseph Boyle:

Thanks for that Christian. And Tilo, thanks for a magnificent presentation. One could say food for thought. And it brings me to my point where I love the aspect of neutralizing products and making them much healthier and easier to get to. And if they’re linked to where we are, probably South Africa, maybe South America, we talk about how we get to it. And we say we’re not that healthy, but if I look in the streets; we’re picking up avocados on street markets, we’re picking up bananas on street markets.

If I look at our differential and our supermarkets, it’s a theater of food. So we’ve got the butchery, we’ve got plenty of meat around. I must be honest, every time I leave South Africa and I eat a steak in Europe, I think, well, I can’t wait to get back to South Africa and have our braai and have our decent pieces of steak. In my mind, that’s the theater of food. And my question to you is, do you see what you’re doing to be able to keep that theater, and not lose that fun aspect of food and include the healthy part along with it? And also third world, to be able to add ways to be able to maximize the qualities of the food that we have around? So there are probably two questions there.

Tilo Hühn:

Indulgence is absolutely important, yes. When it comes to food price parity, if you develop new food, price parity is important, and besides price, taste is absolutely king. And every one of us is a specialist, so everyone is judging and have their own expectations. We apply it to the final judgment. With our processes, this is built in. You can trust me, we do not develop only so-called healthy foodstuff which doesn’t produce some signature taste also. This is absolutely clear.

In the case of chocolate, originally I’m an enologist, a wine maker. Like wine, you can really differentiate the origin of the cocoa beans in the final product, the vintage and so on. So it’s really leveraging the expectations of high quality food, and beside that we can do something for a contribution in the direction of health and longevity. Could you please repeat your second question, Joe?

Joseph Boyle:

My second question was around more of how do we make it a healthier, maximize the health out or something? And I’ll use an example, if we take a banana, we take the peel off it. You use the same concept with the almond, using the skin. Is there much more opportunity for that? Especially for Third World countries where we can maximize those type of things, to say help with the nutrient value of specific products?

Tilo Hühn:

If you look a little bit back, let’s say 50 years, only rare side streams appear because all the side streams were processed in a way. Then we industrialized. There was a lot of tailoring, and we concentrated on the value chain, make it really, really valuable to specialize it on a value chain. Now I think we are looking is more in the direction of a holistic view on it. We are valorizing all streams as mainstream. So this is our idea, to make it usable for human consumption as much as we can.

Joseph Boyle:

Thank you, and again well done on your presentation.

Tilo Hühn:

Thank you.

Christian Warning:

If I follow those discussions, we’re always looking for new opportunities for us more as a convenience retailer because of our one-stop shopping position. We are not concentrating on those five in and out SKUs they sell as a burger chain, and we have the options for consumers; and that’s globally. And sometimes I think we forget that if a new trend comes up, like healthier food, that it does not mean that we need to stop a well established business. We have that discussion a lot in Germany in terms of percentage of sales of tobacco; let’s make money with tobacco as long as we’re allowed to. Let’s make money with burgers and pizzas, of course, but the consumer is changing, and we have to add on new opportunities to win new target groups. And we don’t have to compete so much, and especially compare each other, with the next c-store or a gas station. There are the other options such as a home market for people on the move. I think that’s an important view in the discussion also, to be faster in becoming relevant to a set of consumers more as a channel when it also comes to healthier food options. I think we are far behind that in many countries. Supermarkets or other fresh chains are in front of us.

Zsuzsa, looking into 50 countries or whatever SPAR is operating in. What’s your view on that discussion here?

Zsuzsa Hordai:

It’s fascinating to listen to. Tilo, thank you so much for the presentation. It is always great to hear about the latest and greatest in food innovation, especially when it comes to healthier options. I can concur what you’re saying around wines and wine consumption. We see that across all markets where we are allowed to sell alcohol. There’s a huge dip regardless of where you look, whether it’s in Europe, whether it’s even in the Stan countries, so in the Central Asian countries where alcohol consumption has been historically strong. The younger generations are moving away from that.

When it comes to food innovations and healthy eating, we do see also a big push from the customer’s side demanding these products on one side. At the other end, still we are seeing, unfortunately, in most markets the cost-of-living crisis and the aftermath of that. Wallets are being squeezed.

So it’s a very interesting equation because there is a demand, but who is willing to pay for it? And who can afford those products, which are usually pricier than the mainstream, the less healthy options? It’s an ambiguous one, so we have to offer it. And we would like to offer it in a mass way, but the demand is not always there from the customer’s side in terms of affordability at this stage. So I would say it’s a mixed bag, Christian.

Christian Warning:

Thank you very much. Tilo, when it comes to scalability and what’s behind reducing costs for products, and we as retailers, we like to have large margin and that means buy low, sell high, but sell in a competitive way. What’s your view on new food production and new ways of production?

Tilo Hühn:

We started in the food industry with batch production, and if you remember me and my group, we focused on continuous working systems. So this chocolate factory starts with 4,500 tons a year. It’s small; it’s really scalable. This was a challenge for us to find a pilot setup because we have to minimum run 200 kilos an hour. Now these larger installations run 4 tons an hour. Scalability is not a question for that technology.

We started with this factory, we call it “labtory.” It’s a combination between a laboratory and the factory. There are more than 6,000 data points. This is pharmaceutical standard, and we started to do machine learning to start self-optimizing strategies to deal with different compositions in crop composition to optimize the final product. It’s human working with the machine, working on what so-called AI can deliver, or as call it, automated thinking. So when it comes to scaling up, no worries. We will now build the next generation, and these main parts of our process lines are … built up to a capacity of 80 tons an hour, so it is really scalable.

And when it comes to coffee, for example, we make the fat out of the coffee beans even usable. This is the product that comes out of the system. The big difference between coffee and chocolate is the fat content, and we have around 15% mass by mass fat in a coffee bean. If you process it like I’ve shown you, it looks like there’s milk in it because there’s an emulsion from the fat from the coffee. It’s in the original bean. So you can have a vegan coffee if you want. It tastes and looks like milk. It’s marvelous because the fat takes all the aroma. [We can] save it and therefore you have a product which is without cow milk, and it looks and tastes like products with milk.

Christian Warning:

Tilo, thank you very much. Big applause from us all. You gave us a very inside view and deep dive into new ways of food production and what that means for us as convenience retailers here.

I would ask now to move into a round to discuss future topics for the next meetings. I still have on my list labor as a global issue in terms of labor shortage, also labor hiring, training and coaching as a topic. I will bring that to you at one of our next meetings.

I was carefully listening to the comment about retail media networks earlier today. Is that a topic that we should have a closer look at in one of our next meetings from your perspective? Any comments on that or any additional ideas will be welcome.

Myra Kressner:

Yes, I just want to comment that Sergio did put up earlier in the chat about your FEMSA retail media network, which is Retina Media. Thank you for doing that.

Sergio Padilla Navarro:

Thanks for mentioning. My intention was just to provide an additional note to Roger’s point that FEMSA does have a significant retail media operation, which has been a successful business on its own with an independent P&L, and to put that at your disposal.

I think that could be on your list, Christian.

Christian Warning:

Perfect. Thank you very much. Yes, in other channels, it’s the fastest growing division of Walmart’s business. They’re making $5 billion U.S. this year on their retail media network. And I see many of the convenience retailers also starting, having a look into it. Many grocery retailers are doing it. Theo, what’s your Aussie view on that?

Theo Foukkare:

Yes, I would support that. Woolworths is our largest supermarket retailer, and they’re excelling in it and leaving everyone behind. The other major supermarket player is catching up, but within convenience retail, I think we are seeing a continual implementation or execution of digital displays, from external to the front door to inside. I’m not aware of anyone doing it well in Australia, so I think it could be an interesting topic.

Christian Warning:

Thank you. Any additional topic which you’re challenged with at the moment with and you’d like to get us a guest speaker on in one of the next meetings. Joe?

Joseph Boyle:

Yes, we mentioned digital displays. We do a lot of national campaigns for our 300 convenience stores and our 120 supermarkets. But maybe touching on what would a fuel retailer do? They build on marketing local to this area, and we hear all these ideas, Twitter, TikTok, Instagram or those areas. [I’d like to hear] someone’s different angle of what they’ve done to succeed for a small unit or even a supermarket down to a small unit. Because the national campaigns, especially in South Africa because we’ve got such a wide demographic and a living standard measurement from 1 to 10, it could be vast. So how would you do that for a small convenience store with maybe 400,000, 300,000 liters [of fuel sales] per month? And I’ll say it in Rands, probably about 1 million rand a week turnover. Divide that by 20, 20 Euros and 20 dollars.

Christian Warning:

[You’re interested] in terms of marketing perspective and how to bring them in, so to say, bring the customers into the shop. Whereas we see it at the moment more trading up and using the digital signage or the traditional POS advertising, sales promotion to trade them up. Now we are talking about, bringing them in or bringing them back faster?

Joe Boyle:

Yes.

Christian Warning:

Okay, yes. Nice ideas.

Zsuzsa?

Zsuzsa Hordai:

Yes, I would say to Joe’s point that I would also support the idea of having a hyperlocal marketing session, and then having the retail media one probably as the next one or alongside it. That could be an interesting one. We also work with a hyperlocal [marketer], so Christian, I will send you some links to some of the suppliers that you could maybe reach out to.

Christian Warning:

Hyperlocalization, that’s in so many markets. In Germany, 85% of consumers of a convenience gas station are loyal customers. So that’s a different CVP (customer value proposition). There’s definitely one-size-fits [approach] all in our industry. But with differing CVPs, for communication requires using different language. And then it comes to AI and that topic. It can get to recognizing customers by the number plate, the type of car, the brand, the driver or the co-driver is using. Once they enter the store, the necessary information comes together by using cameras, which you’ve installed for different reasons. But that allows you to give a personalized offer opportunity when it comes into the store. We’ve discussed that a lot with convenience retailers around. It’s an interesting topic to have an expert discussion, I think.

Other topics from you guys?

Eva Strasburger:

Christian, we’re very focused with our groups in the States on the tariffs, the economic instability in the United States and supply chain disruptions. Is that something that internationally people are focused on?

Christian Warning:

We ignore that effect at the moment. [Laughter] No, I’ll bring it up. Joe has thumbs up. Theo, what’s your view?

Theo Foukkare:

It’s interesting. I don’t think you can attend a session and not have a discussion on the potential impacts of the Trump Administration and tariffs and flow-on effect. I think some countries are going to be more affected than others. I think it would be a very interesting topic for perspective, and I would support that.

Christian Warning:

Let’s recognize that Vision Group Network is U.S.-based, so we invite Donald Trump himself. So Roy, could you please put that on your agenda? [Laughter]

Kelly?

Kelly Tracey:

I second the idea of discussing the supply chain. I think having a topic that covers those risk issues and how we can maybe mitigate that in the future, would be a really relevant topic at the moment.

Christian Warning:

Great. My list is full for the next meetings. So well done on the homework from you guys. As our time nears an end, any closing comments from anyone?

Eva Strasburger:

Christian, before people disappear, can we have Robert Hampton make an announcement about the virtual summit we’re hosting?

Christian Warning:

Yes, of course. Robert, the floor is yours.

Robert Hampton:

Great, thank you. We’re planning a virtual global summit in November, the week of November 17th, where we’re going to have all of the Vision Groups participate. So, it’ll be an opportunity for this Group to hear report-outs from all the other six groups that we’ve been doing throughout 2025. And then it’ll give an opportunity for this Group to present to the other six. as well. It’s virtual, so no travel. We’ve got a time that will hopefully work for most people around the globe. And we’re going to have a keynote speaker and possibly a panel discussion at the end. We’re still developing that, looking forward to it. It’ll be great to have all the Groups and to be able to share and cross pollinate all the great information that we’ve had throughout the year. It’ll be about three hours, and more details to come. So, look for a save-the-date coming shortly.

Theo Foukkare:

Sounds like a good initiative. Will you open it up to non-Vision Group members?

Robert Hampton:

No, not initially. It’ll just be the folks in the Vision Group Network, which will be about a hundred people.

Theo Foukkare:

Okay.

Eva Strasburger:

But there will be a VGN Global Summit Vision Report coming out of it that we’ll be able to distribute. And we’re thinking that we might be able to allow people later to download it. Those are some of the ideas under discussion.

Robert Hampton:

Yes, or possibly a rebroadcast so that people could tune in.

Christian Warning:

I hope to see many of you in person at the next Convenience Summit Europe in Copenhagen in three weeks.

Myra Kressner:

In addition to Christian, Eva, Roy and I will be there. So we look forward to seeing as many of you as possible.

Christian Warning:

A big thank you to Tilo again. Big thank you Roger for presenting your business. I will reach out to all of you. Please volunteer who will be the next one at our next meeting. And I’ll talk to you all soon. Take care. Thank you very much for your contributions.