Effective Tuesday, Gulf Oil, a whole owned subsidiary of Cumberland Farms Inc., acquired all rights, title and interest to the Gulf gasoline brand in the United States. Specific details of the deal are not [image-nocss] being released, but Gulf Oil can now expand its brand throughout the United States for the first time since it first acquired certain rights to the brand in 1986.
For the last 20 years, Gulf-branded gasoline in the continental United States has only been available in an 11-state region in the Northeast through a licensing agreement between Gulf Oil's parent company and Chevron USA Inc. Dery said Gulf Oil has been speaking with Chevron since 2005 to negotiate an expansion of its existing licenses, and now with a much larger area available to it, the company will proceed carefully.
"We're going to expand smartly, work hard to establish Gulf and reinvigorate the Gulf mark as something very, very special," he said. "We're hoping to partner with the best partners and the best distributors in every market."
The deal follows word from San Ramon, Calif.-based Chevron, aspreviously reported in CSP Daily News, that it is withdrawing motor-fuels operations from some areas of the eastern United States, opening the door for branding opportunities at approximately 1,100 independently owned and operated retail stations.
"The No. 1 one goal is to get into the Mid-Atlantic States where Chevron has announced its withdrawal," said Dery, who along with Gulf Oil president and chief operating officer Ron Sabia will be leading the expansion. [Watch for more on the Chevron opportunity in part 2 of this story tomorrow.]
Joe Petrowski, group CEO of Cumberland Farms/Gulf Oil, agreed with Dery, even as he noted he'd like to add "as many sites as possible" to the Gulf Oil fold.
"I think our industry is under assault from many fronts," he told CSP Daily News. "Certainly the growth of fuels is at best going to stay flat, and we're probably going to see a shrinking amount of sites nationwide. And so our job as a provider of branded fuel is not just fuel and colors and a catchy logo, but a whole array of services that make our distributors and dealers the most competitive they can possibly be."
What might this mean for the Cumberland Farms convenience-store chain? Dery said that's to be determined, noting that the company never had the limitations that Gulf Oil did. "The core markets for Cumberland retail operations are right here in New England," he added.
Petrowski added, "I think the fact that Cumberland Farms possesses a tremendous amount of expertise in real estate, construction, environmental and convenience retailing allows us to have a platform to start to leverage those capabilities onto the Gulf side to develop those products for Gulf across the nation."
The company is "very excited" about its prospects, he said
"We really do think this allows us to expand our operations nationwide, and brands are always more valuable if they're not bound by geography as Gulf was," he said. "But most important, brands develop value because of what they stand for.... We now have the ability to go nationwide, but that alone will not ensure success. We'll really have to deliver on service and show distributors that being part of our network brings value to them."
Gulf Oil, based in Framingham, Mass., distributes motor fuels through a network of more than 2,000 branded gasoline retail centers, 12 proprietary oil terminals and a network of more than 50 other supply terminals.
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