Playing the Long Game
The convenience channel is an industry where many teenagers turn for a first job. They may be looking to earn some spending money or save for college, but either way, they’re only thinking of that job as a steppingstone to their next chapter.
Others grow up in the industry, sweeping floors and stocking shelves in their family’s store, thinking of it as the first step to eventually leading that company.
For a few, like Brian Hannasch, president and CEO of Laval, Québec-based Alimentation Couche-Tard Inc. (ACT), the journey to — and through — the industry is completely unintentional. At 16, Hannasch took a job in a convenience store, which he describes as a traditional two- to three-bay repair facility that sold candy and beverages out of a few coolers. Fast forward to today and he now leads one of the largest convenience and mobility companies in the world.
For his dedication and commitment to the industry, Hannasch is being honored as the 2022 retailer inductee into the Convenience Store News Hall of Fame. He was previously recognized as the 2019 Retailer Executive of the Year.
Finding the Right Path
As he told CSNews, a career in the c-store industry was never the game plan. He was the first in his family to go to college and after earning a finance degree from Iowa State University, he took a job with a big company. His next step was to earn a Master of Business Administration (MBA) degree from the University of Chicago with his eye on Wall Street.
“I was lucky that as I continued working and doing my MBA at night, I realized I liked the operations side more than the finance side. I liked building things. I liked solving problems, and I liked working with people,” he recalled. At the time, he worked for Amoco and had the chance to pivot into an operations role on the convenience and fuel side.
“I loved that piece and I never looked back at the finance side,” he said. “It got me on the right path.”
After approximately 12 years with Big Oil, Hannasch left for a smaller, more entrepreneurial environment. Nine months later, that company was acquired by “four guys from Montreal.” The 2001 acquisition of 225 Bigfoot stores from Johnson Oil Co. Inc. marked ACT’s entry into the United States.
“That was a big piece of luck,” Hannasch said. “The company wasn’t very big at the time — less than a thousand stores — and it’s been a great journey to help build ACT into what it is today.”
Were it not for his pivot to the operations side, Hannasch would have taken a swing at Wall Street and likely would not have liked it, he admits. “I would have probably done ‘big company’ stuff and while we are a big company today, I like to think we have retained our entrepreneurial roots,” he explained. “Four guys started the company with one store in the early ‘80s and we try to keep some of those values and culture intact.”
Wall Street’s Loss Is the C-store Industry’s Gain
Since moving into the chief position at ACT in September 2014, the company has grown to be the largest in Canada in terms of revenue, and one of the largest convenience store groups in the world, operating in 25 countries. Under Hannasch’s watch, ACT has expanded through multibillion-dollar acquisitions, including Cary, N.C.-based The Pantry in 2015, and San Antonio-based CST Brands and Midwest-based Holiday Cos. in 2017.
On the international front, ACT grew through its purchases of Statoil Fuel & Retail of Scandinavia and Eastern Europe in 2012; Topaz Energy Group Ltd. of Ireland in 2016, and 279 Esso-branded fuel and convenience sites in Ontario and Québec from Imperial Oil Retail later that year; and the acquisition of Circle K franchise stores in Hong Kong and Macau from Convenience Retail Asia in 2020.
It has also been under Hannasch’s watch that Couche-Tard’s global Circle K brand has taken shape and begun making its unified mark around the world.
“It’s been rewarding to be on this side, even though we have turned into a bigger company and all the good and the bad that goes along with that,” he said. “It’s been a good journey to try to make sure some of those things that were important to me when I shifted from a big company to a small company are still alive in the company today.”
With growth comes the responsibility to stay true to the needs of existing employees and customers while expanding the network — something Hannasch acknowledges is a balancing act.
“I really think we have been thoughtful about how we structure the company. We are not as decentralized as we once were, but we still have very self-sufficient business units that stay close to their customers and their employees,” he pointed out.
While pursuing merger and acquisition (M&A) opportunities, there are ACT associates running the day-to-day aspects of the business. It’s “a very small piece of the organization that is focused on that M&A and integration,” according to Hannasch.
“If we were a very centralized organization, I think the risk of getting distracted would be much higher,” he said. “That has been one of our recipes for not only doing M&A, but integrating people well. We have people that can focus on both sides: welcoming people into the company and, at the same time, people staying focused on our customers and our employees.”
With growth also comes the concern of becoming too big. “I fear it every day. It’s no secret that internally, my biggest fear is protecting our culture. It’s what has made us successful,” Hannasch shared. “We try to be humble, and we try to do the right thing. We try to believe that people get up and come to work wanting to do the right thing every day.
“As you get bigger, there is a risk that politics can enter the conversation, bureaucracy can slow you down, and you can lose sight of the customer and the store — which is why we are all here,” he continued. “It is a fight. We have a lot of conversations, and having those conversations is very important to making sure the friction stays there. It’s way up there on the things I think about.”
The key is not getting caught up in the short term. “We are good at not being short-term focused. We try to play the long game and stay focused on our people, focused on the customers and understand that there is short-term volatility in the business,” he explained. “That has enabled us to make the right investments over time toward a strategic environment.”
The retail and mobility businesses, though, are hard and not without challenges, as they are both fast-paced and high-volume industries.
“It’s a lot going well every day, and it’s a certain percentage of things going wrong every day. Whether that is people getting injured on the job. Whether it’s a robbery. Whether it’s the challenge of hiring and retaining people in our industry at the wage level that is traditionally paid,” Hannasch said.
Yet despite the challenges, the convenience business offers many rewards.
“For us, the growth and financial success has been great but, as I look back now, what I find rewarding is building a better company, a better brand and at the heart of that is the people,” the new Hall of Famer said. “Seeing people grow within their careers in the company over the 20-plus years I have been here, seeing them raise their families and put their kids through college. All of those things will be what I look back on and value through the years.”
The convenience store concept has changed a lot since Hannasch’s first job at 16 years old, and he has had a front-row seat to the channel’s evolution.
“To look at where we are today within the industry is just amazing. You look at the development of the offer. You have great companies like Wawa, Kwik Trip, QuikTrip, Sheetz. They have really innovated on the food side and given our industry some legitimacy as a place to stop and grab a quick meal. They set a high bar for the industry. The industry is gaining respect and gaining consumers’ stomach and heart, which has been great,” he said.
The chief executive also points to the proliferation of brands inside the store — from Coke, Diet Coke, Pepsi and Mountain Dew to energy drinks, waters and isotonics. “There are hundreds and hundreds of brands in that space,” Hannasch noted, adding that the pivot to better-for-you quick snacking has also been great for the channel.
“Ultimately, what it boils down to is we sell time to people. I think the industry has done a great job of evolving over time and making sure we are fulfilling that need and giving customers a little bit of time back in their day,” he told CSNews. “There is not much we sell that Walmart doesn’t have, but our ability to do it in a friendly, fast way continues to be our differentiator.”
The business is going to continue to change, he predicts, and people will continue to try to disrupt or redefine what convenience means. The imperative is to adapt.
“It’s important for us to remember that we sell time to people, and we have a challenge to give our customers what they want from us when and where they want it, and that is not going to look the same as it does today,” Hannasch explained.
For this, he sees ACT’s size playing a pivotal role. With the benefit of scale, the company can utilize its data and its talent to really differentiate its offer. This includes having the right products at the right price and a very local business, to having a good food offer, deploying technology to get customers in and out of its stores quickly, communicating with customers the way they want to be communicated with, and M&A.
“M&A has been a part of our company’s DNA since we started, and we like to play offense. If you are not playing offense, you are not playing to win,” Hannasch said. “We are blessed to have a very strong global footprint with some great markets that have a lot of growth opportunities for us. We will continue to look at opportunities and pull the trigger when we think it is a good value for our shareholders and us."
Words of Wisdom
So, what would the newest retailer Hall of Fame inductee tell a 16-year-old who is starting an afterschool job in a convenience store today?
“People that I look at who have been successful — either financially or raising families or having a lot of friends — tend to have very good communication skills and very good people skills regardless of the job,” Hannasch said. “It’s a tremendous environment to hone your people skills and to try to figure out what the customer wants, why they want it, what mood they are in, and how you can make it a little bit better. I think that is a skill set that will serve any young person very well in their life’s journey.”