IRI COVID-19 Thought Leadership

Part October COVID-19 The Changing Shape of the CPG Demand Curve 20 2020

POWERING THE FUTURE OF CONVENIENCE RETAIL EXECUTIVE SUMMARY During the COVID-19 pandemic, the convenience channel has been negatively impacted: consumers are opting to shop large format stores and the employed are working from home more, resulting in fewer commutes. Representing $166B of IRI’s $1.1T total tracked sales, convenience represents a valuable channel in CPG retail. For many manufacturers, this channel represents meaningful growth year-over-year. This report provides insight into recovery of the convenience channel and strategies for manufacturers and operators to reinvent and connect with shoppers seeking convenience for success in a post-pandemic world.

Road to Recovery for Convenience & Gas • Convenience channel growth is cyclical and tied to macro-economic trends, including gas prices and housing starts. Today, it’s also dependent on pandemic recovery and full consumer mobility. • Some high-growth categories pre-COVID-19 (e.g., salty snacks, pastry/doughnuts) have decelerated as on-the-go occasions eroded. • Beverage alcohol sales have increased dramatically as on-premise consumption remains constricted. Implications for Manufacturers Implications for Retailers • As the channel bounces back, re-evaluate • Adapt and communicate the key value proposition of the channel: assortments (e.g., larger packs, multi-serve packs). convenience. Invest in omnichannel technology for pre-ordering, • Partner with convenience retailers to bring excitement curbside pickup and home delivery. Expand assortment for curbside to your categories; support cross-promotion with pickup and home delivery as consumers shop for more in-home products associated with trip drivers. consumption occasions, especially with foodservice offerings and • Growth of suburban/rural units and loss in urban other meal and snack solutions. Encourage pairing with essentials markets indicates an opportunity to review assortment like milk and paper products. and reframe for changing needs of shoppers; for • Tailor assortment and pack sizes to drive additional growth in urban markets especially, promote convenience of categories such as beverage alcohol, non-alcohol drinks, and others. purchasing meal solutions with essential products. • Leverage “trip driver” categories such as beverage alcohol to • Offer products that fit both cash-strapped consumers promote complementary items, such as snacks, refrigerated entrées, and premium products for those not impacted by and foodservice items. unemployment or financial constraints. • Urban markets are suffering with de-densification; operators should • Boost assortment of healthy options that support both shift support to later dayparts such as mid-day, late night vs. pandemic and flu season. morning.

© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 2 The U.S. Economy -4.3% Economic Growth Is Following the Q3 2020 Global Trend of Shrinking $2.18 1.3% Economies in the Average Price Inflation per Gallon of Gas September 2020 Third Quarter 2020 September 2020

7.9% 330.4MM Unemployment Rate Population In the U.S., modest 12.4% Underemployed October 2020 employment gains September 2020 1.0% 0.6% Annual Growth result from easing of Retail Sales pandemic restrictions. September 2020

Source: U.S. Census Bureau © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 3 Convenience Channel Growth Occurs in Cycles, Often Linked to Macro Trends, Including Disposable Income, Gas Prices and Housing Starts

Convenience Channel Edible Sales % Change vs. YA Dollars Volume 12 10 COVID-19 Great 9 8 Recession 8 6 6 6 6 5 5 4 4 4 3 4 3 3 4 3 3 3 3 4 3 3 4 3 3 3 3 3 3 3 3 2 2 2 1 1 1 2

-1 0 -1 -2 -2

-3 -3

Q3 2008 Q3 2011 Q2 2013 Q2 2015 Q2 2018 Q1 2020 Q1 Q4 2008 Q4 2009 Q1 2009 Q2 2009 Q3 2009 Q4 2010 Q1 2010 Q2 2010 Q3 2010 Q4 2011 Q1 2011 Q3 2011 Q4 2012 Q1 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q3 2015 Q4 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q2 2020 Q3

Macro Drivers % Change vs. YA

Disp. Income 4 2 0 -1 -1 1 3 3 4 5 6 5 5 4 5 5 4 7 0 0 1 -1 4 5 6 6 6 5 4 3 3 3 3 3 4 5 5 5 6 6 6 6 5 4 3 3 3 12 10

Gas Prices 34 -22 -39 -38 -33 14 42 20 6 10 19 34 34 17 10 -1 0 4 0 -3 -2 -6 -4 2 -2 -12 -32 -27 -25 -23 -16 -15 -14 2 23 7 9 13 10 17 15 3 -9 -2 -6 -1 2 -29 -13

Housing Starts -33 -43 -50 -47 -32 -15 17 13 -1 -4 -6 -5 6 23 21 28 26 36 35 18 13 11 -2 14 17 4 4 17 13 7 17 1 -1 10 8 1 2 1 7 8 5 -6 -8 -1 4 22 24 -17 -11

Note: Macro indicators are Total U.S. disposable personal income per BEA, all grades retail gas prices per EIA, and housing starts per U.S. Census.

Source: IRI POS data Convenience channel for edible scan products. Includes archived data. Moody’s Aug 2020 baseline © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 4 C&G’s 2020 Sales Dipped Dramatically with Mobility and Gas Prices in April-May; Even in Late Sept., Restricted Mobility Continues to Hold Convenience Sales Back C&G Total Store Weekly $ % Change vs. YA Weekly U.S. All Grades All Formulations Retail Gasoline Prices (Dollars per Gallon) % Change vs. YA

$ % Chg 15 Gas Prices % Chg vs YA 10 Mobility % Chg 5 0 -5 -10 -15 -20 -25 Gas Buddy reports a rebound of gas -30 station visits in third-quarter 2020, -35 back in line with pre-COVID-19 -40 levels and up 17% from the previous -45 quarterly footfall index report. -50 01- 01- 01- 01- 02- 02- 02- 02- 03- 03- 03- 03- 03- 04- 04- 04- 04- 05- 05- 05- 05- 05- 06- 06- 06- 06- 07- 07- 07- 07- 08- 08- 08- 08- 08- 09- 09- 09- 09- 05- 12- 19- 26- 02- 09- 16- 23- 01- 08- 15- 22- 29- 05- 12- 19- 26- 03- 10- 17- 24- 31- 07- 14- 21- 28- 05- 12- 19- 26- 02- 09- 16- 23- 30- 06- 13- 20- 27- 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20

Source: IRI TSV; https://www.cspdailynews.com/technologyservices/signs-c-store-foot-traffic-rebound; Gas Price Source: U.S. Energy Information Administration; Note: Mobility - Google Mobility Report, based on Retail and Recreation % Chg from pre-COVID-19 baseline (Jan 3-Feb 6, 2020); https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMM_EPM0_PTE_NUS_DPG&f=W © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 5 After Rebounding in Summer, Late September Reflects Increased Incidence of COVID-19, Resulting in Lower Volume and Flat Sales in the Convenience Channel

Sales and Price / Mix Trends: Total Store / Edibles / Nonedibles Total Store Edibles Nonedibles % Change vs. YA, C&G Pre-COVID 52 Weeks March – April 2020* May – August 2020 Latest 4 Weeks 3/3/19 to 2/23/20 3/1/20 to 4/26/20 5/3/20 to 9/1/20 Ending 9/27/20 4.9 3.8 4.3 3.6 3.0 2.2 2.8 2.0 1.1 0.2 DOLLAR SALES -0.2 -3.0

4.5 4.3 4.3 4.9 4.8 5.0 3.6 3.1 4.2 3.2 4.2 PRICE / MIX* 2.0

0.6 0.0 0.5 ESTIMATED -0.6 -0.6 -1.6 VOLUME SALES -1.9 -2.7 -3.3 -3.6 -4.9 -4.5

0.7

-1.0 -0.6 -1.2 -1.9 -3.0 UNIT SALES -4.4 -4.1 -5.8 -6.4 -9.1 -12.3

Source: IRI TSA; * Mar – April 2020: Excluded from remaining slides; *Dollar sales-weighted price per volume and volume change across categories © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 6 Throughout 2020, Large Format Stores Are Viewed as Easier and More Convenient to Shop than C-Stores; Shoppers Value One-Stop-Shopping and Physical Distancing

Sales and Price / Mix Trends: Total Store / Channels Conv MULO Grocery % Change vs. YA, C&G Pre-COVID 52 Weeks March – April 2020* May – August 2020 Latest 4 Weeks 3/3/19 to 2/23/20 3/1/20 to 4/26/20 5/3/20 to 9/1/20 Ending 9/27/20 35.5 25.6 17.3 DOLLAR SALES 12.5 10.7 14.4 3.0 1.9 1.4 4.3 1.1 -0.2

4.5 5.4 6.1 4.9 3.6 2.3 2.9 3.2 2.9 4.3 4.1 4.3 PRICE / MIX*

29.7 22.0 ESTIMATED 10.6 9.7 6.7 6.3 VOLUME SALES 0.0

-0.6 -0.4 -1.5 -3.3 -3.6 27.5 21.7

UNIT SALES 6.0 8.7 5.8 7.7

-1.0 -0.6 -1.7 -3.0 -5.8 -9.1

Source: IRI TSA; * Mar – April 2020: Excluded from remaining slides; *Dollar sales-weighted price per volume and volume change across categories © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 7 High-Growth Categories Pre-, During-COVID-19 Include Bev Alcohol, Energy, Sports Drinks; Salty Snacks, Pastry/Doughnuts Decelerated as On-the-Go Occasions Eroded Top 21 Total Store Categories with Sales of $1B+ // C&G // % Change vs. YA Category Dollar Sales Growth Above Total Store Growth

Dollars Volume

Pre-COVID 52 Weeks Pre-COVID-19 Pre-COVID-19 Ranked by C&G May – Aug 2020 Latest 4 Weeks May – Aug 2020 Latest 4 Weeks $ (MM) 52 Weeks 52 Weeks Pre-COVID-19 $ 5/10/20 to 8/30/20 Ending 9/27/20 5/10/20 to 8/30/20 Ending 9/27/20 3/3/19 to 2/23/20 3/3/19 to 2/23/20 3/3/19 to 2/23/20 TOTAL STORE $160,280 3% 4% 1% -0.6% 0.0% -4 EDIBLE $82,751 4% 5% 2% 0.6% 0.5% -3 NONEDIBLE $77,529 2% 4% 0.2% -2% -0.6 -5 CIGARETTES $55,595 -0.9% 2% -1% -5% -1% -6% BEER/ALE/ALCOHOLIC CIDER $20,586 5% 17% 11% 1% 12% 6% ENERGY DRINKS $9,694 8% 3% 2% 7% 2% 2% CARBONATED BEVERAGES $8,597 0.3% 3% -0.3% -4% 0.9% -4% SMOKELESS TOBACCO $7,663 6% 7% 4% 0.9% -0.5% -4% SALTY SNACKS $5,740 5% -7% -5% 0.7% -12% -11% ELECTRONIC SMOKING DEVICES $4,680 52% -8% -0.4% 44% -12% -6% BOTTLED WATER $4,548 3% -4% -6% 5% -9% -12% CIGARS $3,504 -0.1% 16% 8% -1% 10% 2% TEA/COFFEE - READY-TO-DRINK $3,399 -0.4% 0.3% -1% -5% -5% -8% SPORTS DRINKS $3,135 8% 10% -3% 0.1% 4% -10% CHOCOLATE CANDY $2,860 1% 2% 3% -2% -4% 0.4% NON-CHOCOLATE CANDY $2,104 4% 6% 8% 1% 0.0% 2% PASTRY/DOUGHNUTS $1,760 4% -8% -6% -2% -13% -10% DRIED MEAT SNACKS $1,665 4% 10% 9% 6% 1% -4% BOTTLED JUICES - SS $1,536 -0.8% 2% -3% -3% -1% -7% ENTREES - RFG $1,451 -0.4% -8% -9% -3% -5% -8% MILK $1,351 -6% 2% 2% -9% 0.9% -1% SPIRITS/LIQUOR $1,350 15% 43% 33% 13% 33% 22% WINE $1,162 5% 13% 10% 3% 8% 6% GUM $1,046 2% -27% -27% -0.7% -29% -28%

Source: IRI TSA © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 8 Major C-Store Pre-COVID-19 Growth Contributors Under-Indexed During Summer Months, Including Energy Drinks and Salty Snacks; Beer / Wine / Spirits Over-Indexed

Top 25 C&G // C&G // % Contribution to $ Change

Pre-COVID-19 Pre-COVID 52 Week $ Sales May – August 2020 Ranked by C&G % Contribution 52 Weeks 3/3/19 to 2/23/20 5/10/20 to 8/30/20 Pre-COVID-19 $ (MM) % Contribution to $ Change Index % Contribution to $ Change Index Electronic Smoking Devices* $4,680 34% 1178 -6% -207 Beer/Ale/Alcoholic Cider $20,586 20% 155 53% 359 Energy Drinks $9,694 16% 268 5% 76 Smokeless Tobacco $7,663 9% 197 7% 161 Salty Snacks $5,740 6% 166 -6% -187 Sports Drinks $3,135 5% 244 6% 222 Spirits/Liquor $1,350 4% 453 8% 735 Bottled Water $4,548 3% 112 -3% -106 Non-Chocolate Candy $2,104 2% 139 2% 145 Pastry/Doughnuts $1,760 1% 121 -2% -213 Dried Meat Snacks $1,665 1% 123 3% 222 Wine $1,162 1% 155 2% 274 Chocolate Candy $2,860 0.8% 47 1% 57 Carbonated Beverages $8,597 0.5% 9 4% 81 Gum $1,046 0.4% 60 -4% -884 Cigars $3,504 -0.1% -3 8% 340 Entrees – Rfg $1,451 -0.1% -14 -2% -220 Bottled Juices – Ss $1,536 -0.3% -29 0.5% 52 Tea/Coffee - Ready-to-drink $3,399 -0.3% -13 0.1% 7 Milk $1,351 -2% -217 0.3% 40 Cigarettes $55,595 -11% -33 19% 58 All Other $13,383 9% 86 4% 39

Source: IRI TSA; Index: % $ Contribution/% $ / *Flavor bans and other restrictions on electronic smoking devices have negatively impacted the category. © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 9 4 WE Jul-12-2020 4 WE Aug-09-2020 BEVERAGE ALCOHOL CASE STUDY 4 WE Sep-06-2020 Convenience Benefits from Elevated Beverage Alcohol Dollar Growth, Aided By Increased Trip Frequency, Spend per Trip vs. YA

Alcohol trip frequency has improved across MULO+C, but still posting negative YA growth, except in Club and C-Store; Liquor channel trip frequency has shifted negative vs. YA in latest period

2.0 % HHS BUYING CHANGE VS. YA DOLLARS PER BUYER % CHANGE VS. YA 1.9 38.7 35.8 1.8 1.4 1.1 1.2 0.4 16.3 23.5 0.9 20.4 17.8 18.0 16.3 0.6 0.2 12.6 10.6 0.4 0.3 9.8 8.5 5.7 10.0 8.8 0.2 0.1 0.2 1.0 4.9 3.5

-0.1 0.0 -0.2 0.0 0.0 -0.3 -1.9 -0.4 -7.1 GroceryX Walmart Liquor Club Drug MassX C-Store GroceryX Walmart Liquor Club Drug MassX C-Store

TRIPS PER BUYERS % CHANGE VS. YA DOLLARS PER TRIP % CHANGE VS. YA 6.8 7.8 33.2 3.7 4.1 28.6 2.8 0.9 26.0 12.3 17.1 15.3 16.2 10.2 16.7 14.3 13.7 -1.5 -1.1 -1.2 -1.2 -1.3 -0.7 -0.3 9.8 11.1 11.9 10.4 11.4 -3.7 -4.0 8.9 9.5 -2.2 -5.1 -4.1 5.1 4.8 -9.1 -7.9 0.9 -15.6 GroceryX Walmart Liquor Club Drug MassX C-Store GroceryX Walmart Liquor Club Drug MassX C-Store

Source: IRI CSIA, Rolling 4 Weeks, Total US All Outlets © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 10 BEVERAGE ALCOHOL CASE STUDY Assortment of Spirits and Wine Is Expanding and Their Contribution to Sales Is Also Growing

Ranked by C&G % Contribution – Pre-COVID-19 With Access to Bars and Restaurants Still Pre-COVID-19 May – August Latest 52 Week $ Sales 2020 4 Weeks Ending Limited, Focus Is On 3/3/19 – 2/23/20 5/10/20 – 8/30/20 9/27/20 Consuming at Home % Contribution to $ Change Operators and manufacturer Beer / Ale / partners have a great 20% 53% 127% Alcoholic Cider opportunity to cross-promote categories that are Spirits / Liquor 4% 8% 22% complementary to beverage alcohol, including salty snacks, snack nuts, refrigerated Wine 1% 2% 6% entrées, soft drinks and more.

Source: IRI TSV © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 11 BEVERAGE ALCOHOL CASE STUDY Beverage Alcohol Sales Growth Is Up Across Channels Compared to Pre-COVID-19 Growth Contribution Levels; Latest Completed Latest Completed Rolling 52 Weeks Convenience 26 Weeks Ending 4 Weeks Ending Ending 02-23-20 10-04-20 10-04-20 Channel Lost Total U.S. Its Growth 46% 37% 32% Convenience Lead During Total U.S. 54% 63% 68% the Pandemic Multi-Outlet

Total U.S. – Food 33% 51% 55%

© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 12 Several Categories That Declined in C&G in Summer Grew Significantly in Large Format and Online Channels, Including Salty Snacks, Ref. Entrées, Pastry/Doughnuts Top 21 C&G Categories // % Change vs. YA by Channel // May to Sept 2020

$ % Change vs. YA Ranked by C&G Pre-COVID-19 52 Weeks $ C&G MULO Grocery eComm w/POS Beer / Ale / Alcoholic Cider 16.0% 17% 20% 127% Spirits / Liquor 41.0% 23% 27% 109% Wine 12.0% 17% 18% 158% Energy Drinks 3.0% 16% 19% 37% Carbonated Beverages 3.0% 16% 18% 123% Bottled Water -5.0% 8% 10% 101% Tea / Coffee RTD 0.0% 14% 15% 101% Sports Drinks 8.0% 15% 19% 70% Bottled Juices – SS 1.0% 15% 18% 112% Salty Snacks -7.0% 14% 16% 106% Dried Meat Snacks 10.0% 18% 17% 79% Chocolate Candy 3.0% 11% 17% 101% Non-Chocolate Candy 7.0% 4% 14% 79% Pastry / Doughnuts -8.0% 11% 13% 104% Gum -27.0% -23% -21% 52% Entrées – RFG -8.0% 14% 15% 45% Milk 2.0% 9% 11% 139% Cigarettes 2.0% -14% 1% N/A Smokeless Tobacco 6.0% -16% -1% 90% -7.0% Electronic Smoking Devices -93% -18% N/A 15.0% Cigars -6% 3% N/A Source: IRI TSV; E-Market Insights; May-Sept 2020: 05-10-20 to 09-27-20 © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 13 Major C-Store Growth Contributors Such as Beer/Wine/Spirits Also Drove Growth in Large Format, While Tobacco Products Were a Growth Driver Primarily in C&G Top 25 C&G Categories // % Contribution to Dollar Growth by Channel // May to Sept 2020 Ranked by C&G $ % Contribution % Contribution – Dollar Change May to Sept 2020 C&G MULO Grocery Beer/Ale/Alcoholic Cider 55% 4% 5% Cigarettes 15% -2% 0% Spirits/Liquor 8% 2% 2% Cigars 8% 0% 0% Smokeless Tobacco 8% -0.1% 0% Sports Drinks 5% 1% 0.8% Energy Drinks 5% 1% 0.6% Carbonated Beverages 4% 4% 4% Dried Meat Snacks 3% 0.4% 0.2% Non-chocolate Candy 2% 0.2% 0.4% Wine 2% 2% 3% Chocolate Candy 1% 1% 1% Milk 0.4% 2% 2% Bottled Juices – SS 0.3% 1% 1% Tea/Coffee - Ready-to-Drink 0.0% 1% 0.5% Bakery Snacks -0.6% 0.1% 0.2% Cookies -1% 1% 0.7% Electronic Smoking Devices -2% -0.4% 0% Entrées – RFG -2% 0.4% 0.4% Pastry/Doughnuts -2% 0.5% 0.5% Snack Nuts/Seeds/Corn Nuts -3% 0.4% 0.4% Snack Bars/Granola Bars -3% -0.6% -0.5% Bottled Water -4% 1% 2% Gum -4% -0.6% -0.3% Salty Snacks -6% 4% 3% All Other 11% 78% 73%

Source: IRI TSV; May-Sept 2020: 05-10-20 to 09-27-20; Index: % Sales Contribution / % Sales © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 14 De-Densification of Cities Is Hurting Sales in Urban Markets, While Suburban/Rural All Stores Suburban Are Driving Growth; Shifts Indicate a Need for Retooling Assortment Rural Urban Performance by Store Location // Non-Alc LRB + Snacks // 2020 YTD // C&G Comp Stores* // All Shoppers

Dollars, % Change Trip, % Change Dollars per Trip, % Change Suburban and rural clusters have led sales Trip traffic continued to be a weakness Despite fewer trips, shoppers are spending growth in 2020, while struggling urban across all clusters as work commutes are more on each trip across all stores; a sign of stores continue to face work-from-home disrupted and “pantry stocking” behavior avoidance to store exposure and elements disruptions, gov’t restrictions and civil unrest remains popular in other channels of stock-up behavior / seeking large packs

4.6 -0.6 5.2 4.7 -0.4 5.1 L52 WE 022320 L52 WE 022320 L52 WE 022320 5.0 -0.2 5.2 3.8 -1.4 5.3

3.6 -7.8 12.3 3.9 -7.4 12.2 May-Aug 2020 May-Aug 2020 May-Aug 2020 6.1 -6.0 12.8 -0.6 -11.0 11.8

3.5 -7.7 12.1 5.2 -6.1 12.0 4 WE 092720 4 WE 092720 4 WE 092720 4.5 -7.2 12.5 -0.6 -10.9 11.6

Source: C&G Retail data thru 09-27-20; *Store universe excludes “unassigned” clustered stores within scope of rural, suburban, & urban classification © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 15 Construction Strength in Recent Months Is Increasing Optimism for Economic Recovery; Shifts to Suburban Living, Work-From-Home Hours Will Drive C-Store Foot Traffic in New Ways 2020 Housing Starts % Change vs. YAG

28 25 Strong Home Sales and New Construction 11 8

April May June Jan Feb March July August

-10 -13

-22 In Addition to Housing Boom, Construction Projects Drive Traffic, Both Indicators That Convenience Channel Is in Recovery

Source: Wall Street Journal articles Aug-Oct 2020. © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 16 With Flexibility of Work-From-Home, Convenience Is Seeing Increased Weekday Sales, But Fridays Are the Busiest; Even in Recovery, Many Workers Will Stay Home

Day of Week % Chg, Non-Alcohol LRB + Snacks L52 WE 022320 May-Aug 2020 4 WE 092720 Dollars, Comp Stores*, All Shoppers ALL DAYS WEEKDAYS (Monday – Thursday) WEEKENDS (Friday – Sunday) May-Aug 2020 May-Aug 2020 May-Aug 2020

$382MM; +3.6% $222MM; +5.4% $160MM; +1.2%

6.0

5.9

5.6

5.1

4.9

4.7

4.6

4.2

4.1

3.9

3.8

3.6

3.5

2.4

1.1

0.5 - All Days Monday Tuesday Wednesday Thursday Friday Saturday Sunday

Total $MM (May-Aug) $53 $55 $56 $58 $62 $54 $44

Dol % Shr of Total Wk (May-Aug) 13.9% 14.3% 14.7% 15.1% 16.1% 14.2% 11.6%

Pt Chg vs. YA (May-Aug) 0.3 0.3 0.2 0.2 -0.7 -0.3 0.0

Source: C&G Retail data thru 09-27-20; *Store universe excludes “unassigned” clustered stores within scope of rural, suburban, & urban classification © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 17 Mornings Continue to Struggle Even in Recent Periods; Mid-Day, Afternoon, and Evenings Are Growing and Taking Share From Other Day Parts

Time of Day % Chg, Non-Alcohol LRB + Snacks L52 WE 022320 May-Aug 2020 4 WE 092720

Dollars, C&G Comp Stores*, All Shoppers

11.8 11.7

9.3

6.4

6.0

5.2

5.0

4.7

4.6

4.4 4.4

3.6

3.5

3.4 3.4

3.0

1.1

0.2

0.8

1.3

2.7 - Total Day Early Morning Morning Mid Day Afternoon Evening Late Night (2a-6a) (6a-10a) (10a-2p) (2p-6p) (6p-10p) (10p-2a)

Total $MM (May-Aug) $42.8 $83.9 $87.3 $83.4 $60.9 $23.5

Dol % Shr of Total Day (May-Aug) 11.2% 22.0% 22.9% 21.8% 15.9% 6.2%

Pt Chg vs. YA (May-Aug) -0.5 -1.4 0.6 0.3 1.2 -0.2

Source: C&G Retail data thru 09-27-20; *Store universe excludes “unassigned” clustered stores within scope of rural, suburban, & urban classification © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 18 Once a Traffic Driver, Operators Must Invest to Rebuild Valuable Foodservice Operations; Focus on New Daypart Solutions, Technology Solutions for Ease

High margin offerings including fountain sales, coffee, and baked goods took a hit during pandemic due to temporary suspensions to implement new safety protocols and dip in visits / traffic. Operators can fight back by boosting customer service, including hiring additional personnel to staff fresh food offerings; supporting in-store cleanliness; offering curbside and drive-through fulfillment. Operators should consider adopting new technologies to accommodate online orders, curbside pick-up and even delivery. Shift focus away from morning commute to different day parts to accommodate work-from-home breaks and school-from-home breaks; evening. For urban areas, factor in lost commuter traffic and focus on urban dwellers; in suburban / rural markets, cater to larger populations working and studying from home. Standout foodservice items should be available all day. Convenience built its reputation on “all hours” operation, and even limited, but high-quality foodservice items will drive traffic. Promote complementary items and even household essentials. Pre-package food items into kits and bento boxes support in-home and on-the-go dining. C&G stores have an opportunity to reignite America’s love of road trips with signature offerings.

Even if fewer commuters are driving to work, C&G operators can promote lower gas prices and the pleasures of a car outing. Find inspiration from newly opened Wally’s, Home of the Great American Road Trip, Pontiac, IL, which recaptures the upside of family road trips of years past with all the amenities desired today, including ample space and social distancing. • “Experience stations” of foodservice, fountain drinks and popcorn • Varying fuel types, including diesel and EV charging • Wally’s-branded and Route 66-branded t-shirts, hats and other merchandise • General merchandise • Social media fun • Winnebago HQ – everything for an RV road trip and camping

© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 20 Specifically in Convenience, Midsize Chains Are Disappearing as Larger Firms Buy Them Up to Build Scale; Independents Dominate by Number of Stores Convenience Store Industry Consolidation

Convenience Channel M&A Activity Store Counts by Chain Size

154,535 153,237 In 2017, 7-Eleven acquired 1,108 145,119 148,126 Sunoco stores 19,252 19,969 26,629 34,786 Large Chains (13%) (13%) (17%) (22%) (>500 Stores) In 2015 / 2016 / 2017, Circle K parent 35,910 34,948 30,402 18,045 Small & Alimentation Couche-Tard acquired 1,800 (25%) (24%) (20%) (12%) Midsize Chains (2-500 Stores) The Pantry stores, 1,146 Valero stores, and 522 Holiday Stations Independents

Acquired 1,500 HESS / Wilco HESS stores 89,957 93,209 97,504 100,406 and in 2018 / 2019, 1,100 Andeavor stores (62%) (63%) (63%) (66%)

In 2018, EG Group acquired 1,000 Kroger Convenience stores, 225 TA stores, 75 Certified Oil stores, and 600 Cumberland 2006 2011 2016 2020 Farms locations

In August 2020, 7-Eleven entered an agreement with Marathon Petroleum Corp. to acquire the 3,900 store Speedway chain. The addition of Speedway would lift 7-Eleven to 14,000 units.

Source: NACS 2020 Factbook. IRI Growth Consulting secondary research. IRI Growth Consulting Analysis; https://www.supermarketnews.com/retail-financial/7-eleven-buying-3900-speedway-stores-21-billion-deal © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 21 Top Trip-Driver Categories Hold Potential for Assortment Optimization vs. MULO; Especially With Shift in Urban and Suburban Markets, It’s Time for Review MULO’s advantage over convenience is often based on greater variety and the right pack size. As operators and their manufacturer partners revisit traffic and shopper patterns, a fresh look at pack size and assortment will reveal pockets of growth.

Total U.S. Total U.S. Bottled Water Example Convenience Multi-Outlet Among top 25 ranked Dollar Sales Dollar Sales seltzer items based on % Change vs. YA % Change vs. YA average weekly dollars Energy Drinks 2.8% 12.9% per $MM ACV, convenience Salty Snacks -4.0% 11.9% has very low distribution, meaning that most c-stores Bottled Water -4.1% 9.1% are not carrying this item. Sports Drinks 6.4% 15.2% Major brands Bubly and Pastry / Doughnuts -4.6% 7.8% La Croix do not rank in the top 25 because they are Milk -1.0% 9.2% mainly sold in multi-packs. Entrees - Rfg -6.3% 13.9%

© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 22 Example Single Serve Seltzer and Sparkling Water Have High Average Sales per Store Carrying Top 8 Items Could Potentially Bring $8,400 Profit per Store Annually

Top Items Ranked on Average Weekly $ per $MM ACV in MULO+C

Average Weekly $14.55 $13.90 $14.91 $11.70 $12.62 $7.78 $7.20 $4.89 $ per $MM ACV Average Weekly $29.48 $20.50 $16.94 $19.51 $12.81 $18.60 $13.63 $8.94 $ per Store Average Weekly $14.74 $10.25 $8.47 $9.75 $6.41 $9.30 $6.81 $4.47 Profit $ per Store

Source: IRI Unify, Sales Latest 26 Weeks Ending 10/04/20 © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 23 Example Wider Selection of Seltzers in Convenience Is an Area of Opportunity MULO has had double-digit growth in the top 5 brands of seltzer; however, the convenience channel has not had the same trend due to carrying mostly single serve. As with all carbonated beverages, shoppers are purchasing more multi-packs since the crisis began.

% of Sales

Pack Conv MULO Sparkling Ice La Croix Bubly Polar Perrier Count Conv 0.0% Conv -8.0% Conv +6.4% Conv -18.9% Conv -13.4% MULO +29.2% MULO +22.6% MULO +33.1% MULO +25.4% MULO +1.9% 1 97.7% 32.2%

8 0.5% 26.3%

12 0.8% 27.2%

24 0.1% 6.1%

TOP 5 SELLING SELTZER BRANDS IN MULO

Spending Impact by Channel if Extra $600 Weekly Spend More Unemployment Benefit Is Reduced to $300-$400 Spend Less

Net Difference -29% -27% -27% -22% -11%

12% 10% 4% 6% 3%

34% 33% 37% 32% 30%

Grocery Drug Convenience Mass Dollar Merchant

[If extra unemployment payments are reduced from $600 to $300-$400, how will it impact where you shop for groceries, healthcare, and other HH essentials? BASE:= Receiving Unemployment : N = 159 ‘About the same’ and ‘Do not shop this type of retailer’ answers not shown

Source: IRI Survey of Primary Grocery Shoppers 8/21-8/23 © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 25 Opportunity Forecasting the Convenience Channel’s Rebound • Continued and/or increased restriction Total Store – U.S. Convenience Channel – Sum of Index on eating & drinking out drives more alcohol and foodservice trips in convenience and other channels. Optimistic 107.4 107.6 Scenario 105.8 • Holiday travel more likely by car vs. 103.6 airplane, bringing road-stop traffic. • Shifting assortment to appeal to changing needs for convenience (e.g., health items, late night indulgence, food delivery, last-minute 103.7 102.8 103.7 103.0 103.0 holiday gifts, etc.).

Headwinds • COVID-19 resurgence and/or cold Conservative winter weather can further limit Scenario 101.6 100.0 102.3 98.4 consumer mobility and likelihood to stop at convenience. 13 WE YTD YTG 2020 2021 12-13-20 2020 2020 Ending Ending • Greater loss of low-wage jobs. 12-27-20 12-26-21

Source: IRI CPG Demand Index Forecast; Note: Forecast results based on data available as of 10/14/20. Mobility rates, additional federal stimulus, and economic recovery will impact forecast moving forward. © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 26 Convenience Retailers Focus Investments on Core Value Proposition: Greater Convenience for Shoppers NACS Retailer Member Pulse Survey* Provides a Glimpse of What’s in Store for Convenience Operators

21% 21% have added added curbside pickup contactless payment 14% 14% focusing more have added on drive-thru delivery The 7NOW delivery app aims to make life easier and convenient for shoppers. Enhanced Cleaning Protocols 7-Eleven customers can order-in their favorite comfort foods at any time. Will Be a Part of Every Successful Store Operation • Offered in 1,300 cities • Supports 60MM households and Survey Respondents • Delivery in 30 minutes Indicate They’ll Make Cleaning • October offers a “Free Hot Pizza” promo Efforts More Visible to Patrons

Source: https://www.cspdailynews.com/company-news/c-store-retailers-continue-see-mixed-results-2020; *Survey conducted in October 2020 among 72 NACS members companies representing 1,762 stores © 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 27 C-Stores Accelerate Tech Innovation to Fight the Effects of COVID-19 Convenience stores have pivoted to a technology-forward strategy that has sparked innovative new ways to attract customers to a traditionally small and not-so-socially distanced format.

CURBSIDE PICK-UP DELIVERY CASHLESS PAYMENT Curbside pick-up is quickly becoming a DoorDash partnered with 7-Eleven, Minimizing the interaction at checkout is c-store standard, allowing customers to Wawa and others to launch a digital essential to keeping customers remain in the car and socially distant convenience store that delivers in 45 comfortable during the pandemic. Many from others. Casey’s, QuikTrip and minutes or less with an option for c-stores have introduced alternatives to Cumberland Farms have fully contactless delivery. Some c-stores still cash and cards, like Apple Pay and integrated curbside pick-up within their offer their own delivery services, like 7- Google Pay. However, Circle K is taking mobile apps. Alltown Fresh offers a call- Eleven, which delivers through its frictionless checkout to another level by ahead option, while Kum & Go 7NOW platform. With that, 7-Eleven piloting Mastercard’s AI-based payment launched a full-service fueling and has now joined Casey’s in the c-store technology, Shop Anywhere, and curbside pick-up pilot. pizza delivery game. announcing plans to open a cashierless store, similar to Amazon Go, in 2021.

© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 28 C-Stores Accelerate Tech Innovation to Fight the Effects of COVID-19 (cont’d) Convenience stores have pivoted to a technology-forward strategy that has sparked innovative new ways to attract customers to a traditionally small and not-so-socially distanced format.

CONTACTLESS FUEL PAY DRIVE-THRU VIRTUAL COLLABORATION Sheetz and Kum & Go both offer The customer journey is changing, and Casey’s General Stores, Kum & Go and contactless payment at the pump. drive-thrus are an opportunity to offer Yesway have partnered with RangeMe, While Sheetz uses Apple Pay, greater convenience and efficiency, an online product discovery platform Kum & Go enables customers to fuel especially for the combination of that connects retailers with more than up using their mobile app. Activating foodservice with other purchases. Most 175,000 suppliers. These c-stores hope the pump through the app eliminates current c-store locations cannot to leverage virtual collaboration with the number of contact points, keeping accommodate drive-thrus, but this will suppliers by tailoring assortment to customers safe and even rewarding be a consideration for new stores and what customers want. In a period in them in the process. remodels moving forward. which consumer behavior is constantly changing, keeping shelves stocked with the right products is crucial.

Implications for Reinvigorated Convenience Channel RETAILERS

• As the channel bounces back, re-evaluate assortments • Adapt and communicate the key value proposition (e.g., larger packs, multi-serve packs). of the channel: convenience. Invest in omnichannel • Partner with convenience retailers to bring excitement technology for pre-ordering, curbside pickup and to your categories; support cross-promotion with home delivery. Expand assortment for curbside pickup products associated with trip drivers. and home delivery as consumers shop for more in- home consumption occasions, especially with • Growth of suburban/rural units and loss in urban foodservice offerings and other meal and snack markets indicates an opportunity to review assortment solutions. Encourage pairing with essentials like milk and reframe for changing needs of shoppers; for urban and paper products. markets especially, promote convenience of purchasing meal solutions with essential products. • Tailor assortment and pack sizes to drive additional growth in categories such as beverage alcohol, non- • Offer products that fit both cash-strapped consumers alcohol drinks, and others. and premium products for those not impacted by unemployment or financial constraints. • Leverage “trip driver” categories such as beverage alcohol to promote complementary items, such as • Boost assortment of healthy options that support both snacks, refrigerated entrées, and foodservice items. pandemic and flu season. • Urban markets are suffering with de-densification; operators should shift support to later dayparts

such as mid-day, late night vs. morning. MANUFACTURERS

© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 30 Vivek Sankaran Ram Krishnan Brian Cornell President & CEO, Albertsons Companies Global Chief Commercial Officer, PepsiCo CEO of Target August 25, 2020 August 17, 2020 July 16, 2020

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