LAVAL, Quebec — Alimentation Couche-Tard is expanding its reach beyond more than convenience stores.
The Laval, Quebec-based owner of the Circle K chain has recently made investments in technology and delivery through its Circle K Venture Fund and given funding to adult-use cannabis retailer Fire & Flower Holdings Corp.
- Alimentation Couche-Tard is No. 2 on CSP’s 2022 Top 202 ranking of U.S. convenience stores by store count.
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Exploring the ‘Future of Convenience’
Couche-Tard has invested more than half of the initial $100 million of its Circle K Venture Fund in startup companies that are “shaping the future of convenience,” the retailer announced in February.
Through the fund, which started in 2020, Couche-Tard has secured equity stakes in several entrepreneurial companies including Food Rocket, Farmstead, Pensa Systems and Jackpocket.
“The evolution of our customers’ convenience needs has accelerated over the past two years since the start of the pandemic, and these investments and partnerships allow us not only to participate in the growth of these innovative teams, but also to explore ways to add real value for our customers, shareholders, and team members,” said Claude Tessier, Couche-Tard’s CFO.
The companies serve a variety of needs: Both Food Rocket and Farmstead offer delivery services, Pensa Systems is an innovator in the automated use of computer vision and artificial intelligence (AI) for retail-in-store data and Jackpocket is a licensed-third party app that provides a secure way to order official state lottery tickets.
Backing Grocery Delivery Service Food Rocket
While Couche-Tard has 7,103 brick-and-mortar stores in the United States, it’s also looking to expand beyond physical retail outlets. The company was the lead investor in a round of funding for 15-minute grocery delivery service Food Rocket.
The $25 million series A investment round will be used to expand the service in Chicago and other cities, as well as reinforce its AI-enabled software and enhance the team.
Through the partnership, Palo Alto, Calif.-based Food Rocket is working with Circle K to explore ways in which the c-store chain can extend its brand experience and offerings to customers beyond its physical stores through e-commerce and delivery. Meanwhile, Food Rocket expects to benefit from Circle K’s size and scale, consumer insights, marketing expertise, procurement network and supply chain efficiencies.
Food Rocket is also considering going public. And on June 14, it announced that Guillaume Leger has joined its board of directors to contribute his expertise in mergers and acquisitions (M&A), finance and initial public offerings (IPOs).
Leger has been vice president and controller at Couche-Tard for nearly two years, overseeing the company's financial reporting and supporting the company's investments in M&A activities around the world.
”I’m happy to join the Food Rocket board as I believe in the team, their contagious positive energy, and in the brand's further expansion," Leger said. "Vitaly [Alexandrov, CEO and founder of Food Rocket] runs a unique business model, and I want to contribute, offering expertise and helping Food Rocket access Couche-Tard’s global network in ways that can support Food Rocket’s development plans and help Couche-Tard shape the future of convenience."
Investing in Cannabis
Fire & Flower Holdings Corp., Toronto, borrowed $30 million from investor Couche-Tard at the start of 2022 to further develop its consumer digital platform and for general corporate purposes.
Fire & Flower owns and operates the Fire & Flower, Friendly Stranger, Happy Dayz and Hotbox brands. In 2019, Couche-Tard made a strategic investment in Fire & Flower Holdings Corp., investing about $26 million for a 9.9% ownership interest.
Now one of Couche-Tard’s leaders will head up the cannabis company. Fire & Flower in June appointed Stéphane Trudel, who previously worked as senior vice president of operations for Couche-Tard, as the company’s new CEO.
Trudel was senior vice president of operations for Couche-Tard from January 2018 to June 2022, leading its operations in Canada as well as its investments in the cannabis industry.