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New Kum & Go Leader Outlines His Vision for the Chain

Tanner Krause looks to fine-tune products and services, invest in associates

WEST DES MOINES, Iowa -- Tanner Krause took the reins as president of convenience-store retailer Kum & Go LC on June 1. The third family member to lead the c-store chain, Krause succeeds his father, Kyle Krause, who has transitioned to chairman and CEO.

In this new role, 30-year-old Tanner Krause, previously senior vice president of human resources, will oversee marketing, operations and human resources functions for the West Des Moines, Iowa-based company, which has more than 400 c-stores in 11 states. It is No. 21 in CSP’s 2017 Top 202 ranking of c-store chains by number of company-operated retail outlets.

CSP talked with Tanner Krause about his lifetime of industry experience and his vision for Kum & Go.

Q: Tell us about your background, education and experience.

A: I started working in Kum & Go stores at the age of 9. I wanted to start sooner, but 9 was when we started in my family. That was mopping, sweeping, stocking the cooler, picking up the lot, and when I was lucky, I’d get to run the register.

I continued working in our stores all through middle school and high school. When I got into college, I spent four summers in our store support centers doing internships. I did two years in our real-estate department and two years in our business intelligence analytics department.

When I graduated from Loyola University in Chicago, I got into E. & J. Gallo Winery’s management development program and spent two years in sales in Chicago. Gallo then promoted me to territory sales manager in New York City.

Q: Kum & Go owns two wineries in Italy. Was your training with Gallo planned?

A: I didn’t know how beneficial working for a winery would be later on in the family businesses. At that point, we had a wine cellar but not a winery. Working for Gallo was an experience I thoroughly enjoyed. They have a great culture, they focus on internal promotion, heavy on the training and mentorship side. It’s a real stand-up organization, a multigeneration business similar to Kum & Go. I loved my time there. They taught me quite a bit about sales and marketing, about HR, about family succession.

We serendipitously and coincidentally got into the wine business ourselves, and when we first made the acquisition of Enrico Serafino in 2015, my dad asked me to move to Italy to lead the transition from Gruppo Campari’s ownership to our family’s ownership, at which point I moved to Italy, and for approximately six months led the winery through that initial harvest and growing season. I also tried to make the culture more associate-friendly and impart some of our retail wisdom to their shop in Canale, Italy.

Q: Your grandfather, Bill Krause, co-founded Kum & Go in 1959. Your father, Kyle Krause, took over leadership of the company from him. How did the Krause family legacy help determine your career path?

A: In 2013, my grandfather, Bill Krause, got terminally ill, and I wanted there to be overlap between his time on earth and my returning to Kum & Go. I wanted there to be a physical connection between us while he was still alive, so I came back to Des Moines, and I became a district supervisor overseeing 15 stores.

I’m excited for the new position [of president]. For me it represents the next step in my lifelong mission, and I’m very fortunate to have the support of my father in this process.

Q: How did you get into human resources?

A: I got back into the operations of Kum & Go and got a clearer vision as to what the future looked like for myself and our business. I understood that to be best prepared for that challenge, I would benefit from a higher level of education, so I moved back to Chicago to get my MBA. Two years later, I graduated with a master's in business strategy from DePaul, where I developed a love and curiosity for the field of HR.

In 2016, I became the director of operations for Kum & Go. About six months into that role, our senior vice president of “grow people” opened up, and I was asked to simultaneously lead that department as well as our marketing department. So we developed this new organizational design in which we created this role of president of Kum & Go.

Q: What is your vision for Kum & Go?

A: It’s a two-part vision. On the one hand, you have the associate side, and we’re going to continue to invest in our associates. We want to win on experience with our customers, and we’ll do that via our associates. And we’ve made some very incredible investments on the associate side in the last couple years that I’m very proud of, and we understand that we’re going to continue to make further investments, specifically at the store level. For as hard as they work, they deserve more and more, and we’ll continue to support them in that way.

On the customer side, we’ll continue to fine-tune our understanding of our core customer and continue to deliver more than she’s expecting. And we have a fantastic loyalty program. More than one in four of our transactions are currently through the platform, so more than 150,000 times per day our customers are talking to us through our loyalty platform (not total company). We need to do a better job of listening and responding to what they are saying.

We’re continuing to collect mountains of data daily, and we have the opportunity to fine-tune our products and services offering based on what they are telling us.

Q: What are the challenges as you take the reins?

A: Every day I wake up I hope that this day might provide me 25 or 26 hours to get all my work done, and for 30 years, I’ve only come across 24-hour days. So as I’ve progressed in my career, I’ve learned to do a better job of saying “no” and delegating to and empowering my teams to make more decisions, and for me to focus on the things that are more important, both personally and professionally.

Q: What is your growth plan for Kum & Go?

A: Right now, my No. 1 emphasis is growing the well-being of our associates. And I’m not focused on a total number of stores or a total amount of revenue. I believe that if our 5,000 associates can continue to grow and develop, personally, professionally and financially, then that’s going to be the No. 1 marker of our success. If they’re growing and developing, so will our business.

Q: What are your views on the state of the c-store industry today?

A: Consumer preferences are constantly evolving. Our industry needs to continue to evolve. We can’t be too focused on getting good at our current product mix, because someone will eventually disrupt us and beat us at our own game. So we need to be constantly looking ahead and figuring out what the trends are, what our customers are eating and drinking and fueling, and evolve our product mix to fit their needs and not get too focused on selling our current mix at a higher velocity or a higher margin.

Q: What are your views on the c-store industry mergers-and-acquisitions climate?

A: We grew for decades through M&A, and it really helped Kum & Go achieve a place where we were positioned to start making longer-term investments, such as investments in training and investments in our people. I would just put a word of caution out there to those that are active in M&A: You can buy assets, but you can’t buy culture. And ultimately in our business, I believe that culture and experience are what differentiates the shopping experience. But proceed with caution, because you may fall in love with a certain chain’s asset buildup or distribution network, but you can’t necessarily guarantee that their magic will be recreated under new leadership.

Q: Given your human resources background and your focus on your associates, what did you think of Starbucks recently closing its doors for an afternoon for training?

A: I give Starbucks a lot of credit for what they did. It’s a hard decision to shut down 8,000 locations and forgo an estimated $12 million. One thing Starbucks does very well—they understand it’s a long game in retail, and to go slow today and to shut down and focus on the training concepts they’re trying to deliver around “unconscious bias” is going to set them up for success in the long term. This conversation is actually another example of how when played smartly, they may be picking up an equivalent or greater value in PR relative to their loss of sales. That move is extremely savvy, and they’ll be able to put that incident behind them and reduce the likelihood that it occurs again in their stores.

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