Arroyo Shell didn’t start out life as a destination for craft beer in Pasadena, California. “My father ran the gas station and convenience store on this site in the 1970s, eventually buying the land and business in the 1990s,” said current operator Shibli Haddad, whose family owns the business. When his father died when Haddad was a child, his mother leased the business for nearly two decades until Haddad was old enough to take over.
“In April 2016, I ended up stepping away from my other career to do what my father did,” Haddad said. “I didn’t know him growing up, and running this station and store gives me some insight into his life.”
His own background in accounting and business management gave him a “good foundation for running a business day to day. I didn’t know anything about convenience stores or gas stations, but I did have a good helping hand with our fuel distributor, Anabi Oil,” Haddad said.
The Shell fuel distributor worked with Haddad prior to opening, connecting him with vendors and buyers. Within eight months, he had the business open and employees hired, giving him a chance to consider the merchandise more closely.
Brewing Up Customers
Haddad’s sister initially gave him the idea to add craft beer, and he got connected with the local craft beer scene through Stone Brewing’s tap room. Arroyo Shell started with a single cooler of craft beer in January 2017.
It took two years of tinkering with the [cooler] mix before I saw good returns on my investments in craft beer.
One thing Haddad did that was different from other retailers was sell single bottles of craft beer without a steep markup. “You shouldn’t be punished for experimenting with craft beer, which is what my system encourages,” he said. “I could have 25 different six-packs, or I could have 80 different kinds of beer in a single door. By breaking apart the packs, I’m able to offer a wider selection of beer.”
Now he has five doors of craft beer with two of those for single cans. He has a cooler door for craft kombucha, nitro tea and seltzer, plus two doors for four-, six- and 12-packs and two doors for domestic beers. “It took two years of tinkering with the mix before I saw good returns on my investments in craft beer,” Haddad said. “It’s more than doubled five years later.”
His craft beer inventory turns over two to three times per week. When new shipments arrive, extra staff is on hand to break apart packs, individually price the cans and photograph them for Instagram. “There can be a huge difference in price per can,” he said. “I have some that cost $2 per can and some that cost $10 per can.”
“It’s a lot of work, but we’ve got our system down and can do it in two to three hours now,” he said. Because he often buys very small quantities of craft beer, he’s resetting his coolers weekly, with turnover 50-75% from week to week.
As many retailers can attest, it’s the employees who make his store a success. “Most of my employees don’t know much about craft beer, so I’ve set up methods to help them sell it,” Haddad said. For example, he marks his personal recommendations on each new shipment.
“For me, customer service is No. 1. It doesn’t matter if you’re super knowledgeable. If you treat customers correctly, they are more likely to come back,” he said. “I love my staff.”
Haddad does more than praise his workers. When the local minimum wage hit $15 an hour, he raised wages to $16.50 an hour. He gives them a Christmas bonus every year and a paid week off as well. “If you want to make your customers happy, make your staff happy,” he said. “You need to take care of your employees first before your customers.”
For Arroyo Shell, it comes down to this: “What separates me from other convenience stores is that I found a niche market, and that helps to attract people to my store,” Haddad said.
Shibli Haddad, owner of Arroyo Shell in Pasadena, California, built his craft beer business by talking to customers and employees. Anytime a customer opened the craft beer cooler door, Haddad introduced himself and asked what kind of beer they liked. “I needed the feedback to know how to better my selection,” he said. “Pretty much everything I do now is because I took the time to talk to customers and employees. Anyone’s capable of a good idea, and I’m willing to try implementing it to see if it’s successful or not.”
He emphasized the importance of getting honest feedback from customers and staff. “The main thing is you have to do something that sets you apart from other convenience stores, but to get there, you have to not get discouraged early on in the process,” Haddad said. “Get feedback and keep working on it. If I can get people to come in and spend hundreds of dollars on craft beer at a gas station, what you want to do is possible, too.”
Ideas 2 Go showcases how retailers today are operating the convenience store of tomorrow. To see videos of the c-stores we profiled in 2021 and earlier, go to www.convenience.org/ideas2go.