FRAMINGHAM, Mass. & SOMERSET, Ky. -- Gulf Oil LP's announcement last week of its return to Kentucky through a rebranding agreement with Southern Petroleum Inc. is the first of many such deals Gulf expects will add to its expanding geographic footprint in the coming weeks and months. Its current push to expand the brandsomething it has long desiredwas triggered by Chevron's pullout in the East, Rick Dery, senior vice president and chief marketing officer for Gulf Oil LP, told CSP Daily News.
(Click here for previous CSP Daily News coverage of Gulf's expansion.)
After review of its U.S. portfolio, San Ramon, Calif.-based Chevron decided to withdraw its downstream operations in some areas of the eastern United States, requiring the debranding of about 1,100 independently owned and operated retail stations.
(Click here for previous coverage of Chevron's withdrawal.)
"We had approached Chevron about extending the license without even a thought of an opportunity to acquire flat-out title and interest in the Gulf mark," Dery said. "Chevron obviously owned the Gulf mark, but they were very gracious and complementary to us on how well we've been managing the mark and the business, and frankly, weren't interested in competing with us. So on December 4, when they made the announcement on withdrawing from this market, we reached out to them and said we'd certainly like to re-open the discussions regarding expanding our license rightsand they had an appetite for something more."
Gulf's deal with Southern Petroleum was directly related to Chevron's decision to withdraw from the Kentucky market and the other markets, said Dery.
And more will follow. "We have close to 75 offers on the table with various distributorsand not just distributors affected by the Chevron and Texaco announcement.... [Southern Petroleum] was the first official deal, but we're confident that many will follow in the coming weeks."
Dery said he just returned from visiting with distributors in Georgia, a state not affected by Chevron's withdrawal. "We were incredibly warmly received," he said.
"Gulf has a long, strong legacy," Dery said, relating how he met with a distributor who showed him a 60-year-old, black-and-white photograph of a man standing in front of a Gulf station holding a little boy wearing a Gulf station attendant uniform and hat"and it was the distributor, the guy I was speaking to. It was a photo his father had taken when he was just a little boy."
He added that at every meeting, he has heard stories about how distributors had Gulf in their portfolio, how they grew up with Gulf, "and how excited [they] are to part of this re-emergence of this brand."
Although he could not release the details yet, Dery said they are "close to penning a couple sponsorships that are tied directly to the geographies" of the brands expansion. He added that an announcement on the media campaign could come as soon as next week.
"Chevron made the announcement December 4 around 10:00," he said "At 10:02, I was on the phone with Chevron about acquiring these rights. We actually closed on January 12, and on January 13, we had people on the ground" in several markets. "We've been knocking on doors in Virginia, West Virginia, Kentucky, Tennessee, North Carolina, South Carolina, Georgia and Maryland, right from January 13."
Dery outlined Gulf's expansion strategy: "We're going to focus primarily, initially on contiguous states; we're going to come down the East Coast and start making our way toward Texas. We want smart growthit's not just about getting everywhere as quickly as we can."
He added, "We've worked really hard over the last four years really investing in the Gulf mark, positioning Gulf in our existing markets as a premium option, so we want to be careful and choose the right partners, the best partners. We want those that are not only committed to the mark, but committed to growing it."
Jonathan Arnett, president and CEO of Somerset, Ky.-based Southern Petroleum Inc., told CSP Daily News that he is "excited about the opportunity to partner with Gulf. Gulf used to have a really strong presence in the state of Kentucky. We felt that was beneficial to usit's not an unknown name. It's well-recognized and well-respected; therefore, we felt like it would be a good fit following the Chevron pullout."
Several of the nine stations that are being rebranded (five Chevron and four flying other flags) will get upgrades with multi-pump dispensers (MPDs) and card readers. The facilities will also be refreshed with new paint. Amenities will probably not be affected by the rebranding, he said.
Arnett added that other Sothern Petroleum Chevron stations will be rebranded, some to BP and Marathon, and some will be unbranded.
Gulf Oil, Framingham, Mass., is one of the Northeast's largest wholesalers of refined petroleum products. It distributes motor fuels through a network of more than 2,000 gas stations, 12 proprietary oil terminals and a network of more than 50 other supply terminals. It is an affiliate of Cumberland Farms.
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