JACKSON, Miss. -- In November 2011, Capital Oil Inc. of Jackson, Miss., signed on with Valero Energy Corp., converting 10 locations in Mississippi to the brand's distinctive teal and yellow colors.
When the deal was announced, Capital Oil president G. Stanley Roberts cited Valero's business model and aggressive plans for growth as key considerations for adopting the brand. "Valero places a high premium on building strong relationships with its distributors," he said.
Roberts shared with CSP Daily News the rest of the rebranding story, adding that this aggressiveness included the willingness to make the transition as effortless as possible.
Capital had been a major-oil distributor for 20 years. When its three-year contract came up for renewal, the distributor began receiving several of inquiries from competing brands, interested in their business. Valero was one of them.
While he declined to compare the two offers, Roberts did highlight the novelty of being the first Valero-branded distributor in a state that is "overhosed and underpopulated" for his decision to sign on with the San Antonio, Texas-based refiner-marketer.
"Whether good or bad, we knew the brand would be ours to expand without having any conflicts," he said. "That couldn't happen when you have an area that is concentrated with a lot of one brand--whether it's Shell, BP, Chevron, etc. You do run into conflicts. Maybe I'm a little adventurous; who knows? And we haven't been disappointed."
Bill Day, spokesperson with Valero, told CSP Daily News that beyond its established footprint in the Southwest, West and Midwest, the company has expanded into 40 states, with southcentral Mississippi being a recent growth area, in addition to the Great Lakes, Mid-Atlantic and Southeast regions. "Valero has been successful in rebranding stations that had been branded with major integrated companies and with picking up new sites," he said.
While he could not offer growth projections, Day added that Valero plans to continue to expand by offering a roster of benefits that include assistance with signage, a proprietary credit card, point-of-sale incentives and other marketing programs. It's a lineup that many mid-tier suppliers have built to win over major-oil contracts, whether the business opens up through market withdrawals or contract expirations.
See the cover story, "Mining for Opportunities," of the May issue of CSPmagazine for more on the race by regional brands to grow their national footprint.
Of course, because Valero's name recognition was not as widespread as other brands in Mississippi, this was a concern for Capital Oil. "Some people had the inability to pronounce Valero," said Roberts. "Then once they got it pronounced, they said it must be some foreign company. Yes, it was a concern. Any change is always difficult to do, and you wonder if you did the right thing or not. However, I believe customers have accepted the brand and like the image."
Part of Valero's winning offer was ease of re-imaging. "It was a turnkey job for us," said Roberts. "We had no imaging expense. That's no deep, dark secret; that's part of their program that perhaps makes them a little more palatable than others on some things. You don't have to procure signs."
Since rebranding, Capital has not discounted the street price at any of its sites, and is treating Valero as a premium brand. While volumes have not picked up since rebranding, Roberts said this reflects the national decline in fuel consumption and a longer-term downward trend that began before he rebranded. From here, the distributor is focused on building sales inside its Cappy's stores, with a foodservice offer that includes a proprietary breakfast program--biscuit, egg and sausage sandwiches--and a branded pizza offer.
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