FRAMINGHAM, Mass. -- Just seven months after attaining the rights to use its brand name beyond an 11-state territory, Gulf Oil LP has gone from bringing on about 100 new locations a year to a projected 400 in 22 states for 2010.
The sites, either already rebranded or on contract, reflect both the company's newfound vigor to expand and the good fortune of a major-oil pullout, that of San Ramon, Calif.-based Chevron and its departure from 12 states and parts of Tennessee.
Rick Dery, senior vice president of branded sales and chief marketing officer for Gulf, gave [image-nocss] CSP Daily News an exclusive update on the company's progress:
Q: What strides have you made to expand the Gulf brand?
A: As you may already know, Chevron owned the [Gulf] mark and had it in perpetuity. We had the rights in 11 states in the Northeast...[Chevron's pullout] initiated our ability to acquire the rights to the mark [nationwide]. We focused initially on the Chevron pullout in Maryland down to South Carolina and as far west as Kentucky and Tennessee.
Q: How does your growth in 2010 compare to other years?
A: Since 2005, Gulf has adopted a renewed commitment towards the resurgence and revitalization of the brand...and each year we've added about 100 sites. Since January, we've gotten commitments for just under 400 sites.
Q: How has the reception been?
A: The most exciting part for us has been how wonderfully receptive branded distributors have been outside our original 11 states. They've been waiting for Gulf to make a return.
Q: What do you think is behind their excitement?
A: We've really done a good job working with CSP and the trade associations and making long-term marketing commitments, like to the Baltimore Orioles and Atlanta Braves. We're creating excitement for the brand. And for many distributors, it's a legacy. Their fathers and grandfathers flew the flag, so their intensity matches ours. I spoke to a distributor in Virginia who pulled out a black-and-white photograph of a man holding a little boy outside a Gulf station. The boy had his little Gulf uniform with a Gulf hat, and he said "That little boy is me."
Q: Are there other trends or circumstances contributing to your success?
A: I don't want to speak ill of competitors, but I get [multiple] calls a day from BP retailers. It's a reaction to the [oil] spill. The other factor is that our singular focus is downstream. Our attention and service to distributors is second to none. We have double the staffing of most suppliers...several account managers in a geography where others may have one or a half a person.
Q: What do you offer distributors to switch brands?
A: The theme of Gulf is flexibility. We have traditional rack supply, the rack price with the appropriate discount or rebates. But more than that, we have index deals tied to Platts and Argus. And we also have what we call our "fusion" program, where some distributors might not be comfortable with an index deal, we'll merge it with the rackso 50% Platts,50% rack. Whatever the appetite or tolerance for more or less traditional [deals], we can incorporate that into a mechanism to meet certain needs.
Q: Do you have branding incentives?
A: 99% of the time, we provide all upfont monies for rebranding. Branded monies get rolled into an economic model based on volume.
Q: Do you have volume minimums?
A: In a mature market, we're hoping for distributors with 10 million gallons a year, minimum. We also have "Wave." It's our value brand. There aren't any volume hurdles. There aren't any facility requirements. No need for a canopy or multi-product dispensers.
Q: Where do you see things headed with regards to rebranding?
A: The primary thing I would hope that our current partners or future partners think about is what's behind the orange disk [the Gulf logo], what's there, who's there and is their focus truly downstream? We don't have upstream distractions. I believe branding decisions will begin and end with the people behind that company marketing the brand.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.