Ian White, Parkland’s senior vice-president of strategic marketing and innovation
Ian, why does this acquisition make sense for Parkland?
White: “We already had a successful partnership with M&M through the Express program [Parkland’s On the Run banner currently hosts more than 100 M&M Express locations], we had seen the customer reaction to that and we’ve seen our productivity improve at the 100-plus sites we’ve got today. We’d seen an improvement in average basket size, and we really liked the brand and what we saw from Andy and the team.
A lot of times in these situations, partners like to take each other to the next level for a bit of a test drive. As we learned more about their vision and their transformation, their team and where they wanted to take the business, we saw an opportunity to bring two great Canadian brands and champions together to ultimately be an international powerhouse in the food space.”
How well suited do you think this brand is to travel?
White: “Well it’s frozen, so it can travel a long way. All kidding aside, I think irrespective of the geography, we want to create convenience destinations, [and] we want to create stronger connections to consumers. We are going to focus on the white space we have in Canada to get it right, so that when we’re ready to move into new geographies for the M&M brand, we’ve had a chance to test some concepts to ensure we’re successful.
Is there a timetable for when an international move might take place?
White: “I think there’s a significant opportunity in Canada, so I’d say we’re 18 to 24 months away.”
O’Brien: “I think that’s probably the right timeframe. We have significant opportunities to grow in Canada with our existing stores, with new stores, and new [markets], which is definitely our primary focus.
With that said, we conducted some massive research of our brand and concept in the U.S., to see whether there was space for M&M in that marketplace, and the results were outstanding. Now it’s a matter of [determining] what is the right time to go in there, and sequencing those events to make sure we don’t take our eye off the ball here in Canada.”
M&M had undergone an extensive transformation process prior to this. Is that why you felt the time was right for this deal?
O’Brien: “Yes and no. When [Searchlight] acquired the company back in 2014, we knew we had to transform every aspect of this business and that’s what we did—from remodelling the stores to evolving the product portfolio, to launching new loyalty programs. [It got] to the point where, in 2020, it was a completely different brand: Way better, way more relevant, and every year we were growing and thriving.
The reason I thought it was the right time to put it on the market was because we’re now in a position where I believe we are poised for significant growth—in Canada and internationally. There is no brand like M&M in North America; no other CPG company has a brand with over 450 branded products in 10 different categories. It’s a very unique brand. We have a great brand that we’re ready to grow significantly, and I was looking for a partner that saw the same thing.”
One of On the Run’s primary competitors, Circle K, also has a deal in place with M&M to host M&M Express locations. Does this deal impact that arrangement?
O’Brien: “We did reach out to our Express partners to make sure they understood what the transaction was all about, and they were all comfortable. Over time we’ll probably develop proprietary products for the Parkland stores. I do see both businesses, Express and traditional, continuing to grow and develop.”
What is Parkland’s vision for the brand going forward?
White: “This fits squarely in our convenience as a destination ambition—creating quality food options for customers, [as well as] brand extensions and better connections. [We’ll be looking to] Andy and his leadership group to help us build out and bolster our food strategy.
The loyalty programs are a significant opportunity for both organizations to convert the millions of customers in our program [Journie] to M&M customers and vice versa, and ultimately merge those programs into what I think will be one of the best programs in the country in terms of relevancy and stickiness.
Do you have a timetable on that?
[We’re looking at] 12-18 months to run cross-promotional programs and get the engine started. We are in the process of pulling together a broader platform that would include electrification, pick-up and delivery, payment, etc. that will all come together over the next 24 months or so.
Any other business objectives you can speak to?
White: “We indicated at our investor day our commitment to growing our standalone business, so we think there’s an opportunity to co-locate and bring the M&M brand and product mix into On the Run, and vice versa.
There are natural adjacencies [between] people looking for meal solutions, which usually comes with some type of snack or beverage opportunity, and we think there are some really interesting opportunities to bring the two concepts together.
As part of that extension, we also believe there’s an opportunity to [use the M&M innovation kitchen] to deploy a fresh-from-frozen concept that gives us the ability beyond our branded offers and prepared on-site fresh offers. There are lot of extensions that don’t exist today that we’re looking at.”