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.”

Top and Middle: Customers have asked why owner Shibli Haddad has not switched to opening a bottle shop. He replies that his customers still like the convenience aspect of his store. They can fill up on gas, pick up snacks and find a new brew to go. Bottom: Data from NACS Convenience Voices indicate that 25 to 34 year-olds make up the largest share (47.5%) of craft beer purchasers in the convenience store channel.

“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.

Crafting Employees

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.