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ACE Goes the Distance for Ethanol Market Development
by Lacey Dixon

If you were a fuel retailer in 2009, you heard that blender pumps help retailers expand their business by expanding consumer choice.

If you missed that message, you probably didn’t attend one of more than 20 ethanol forums and trade shows that the American Coalition for Ethanol’s market development program participated in last year. Those events reached tens of thousands of petroleum marketers representing all 50 states. The blender pump message was hard to avoid, as it was also carried by petroleum industry trade publications and national media outlets.

The result is a growing interest in renewable fuels infrastructure, which is good for motorists, marketers, and the availability of ethanol – especially ethanol blends beyond 10 percent.

Establishing a program

Ten years ago ACE established a market development program because the organization’s leadership recognized that communicating with petroleum marketers as ethanol customers is the key to connecting ethanol production and use. Ron Lamberty was selected to lead the new department based on his extensive experience in the fuel marketing industry.

According to ACE’s Executive Vice President Brian Jennings, the market development program was initiated to serve what ACE leaders identified as a missing link between the efforts to expand ethanol use and the petroleum marketers.

“Instead of embracing the industry’s history of fighting against the wholesalers and jobbers, ACE decided to establish the sort of relationship with these customers and users of ethanol that would result in petroleum marketers taking more ownership in blending ethanol because they could identify with the economic benefits of doing so,” Jennings said.

Today, the approach continues to work. Lamberty’s career now spans 29 years in the convenience store and petroleum wholesale distributing business. Plus, as owner and operator of two convenience stores in South Dakota, he understands the perspective of retailers.

Developing a game plan

Since its inception, the focus of the ACE’s market development program has been to blend the possible and the practical. Lamberty said that this approach has made a significant difference in the understanding of how and why to offer ethanol-blended fuels.

“We represent the ethanol industry to the petroleum marketer while representing the petroleum marketer to the ethanol industry,” Lamberty said. “It is important to understand the goals and concerns of each party and recognize how merging the two interests results in greater ethanol use.”

Conversations at petroleum marketer trade shows and speeches at industry events have tackled the topics of tax credits, splash blending laws, Underwriter Laboratories certifications, and blender pumps – all with the goal of increasing awareness of the advantages of ethanol.

For example, when retailers began to recognize the value of VEETC, the blenders credit of 51 cents per gallon from 2005-2009 and 45 cents per gallon after 2009, many took it upon themselves to take advantage of the benefit by becoming blenders of record.

Additionally, market development and consumer education efforts have helped retailers take control of the fuel supply in a positive way. For example, in 2008, several oil companies purchased ethanol at bargain prices for blending with gasoline and sold only pre-blended E10 at a much higher price.

ACE’s market development leaders recognized that the resulting lack of competition in the ethanol market would mean higher prices for consumers, so they prompted retailers to “do the math” on their fuel purchases and sales. As a result, many retailers banded together in support of a law that would protect splash-blending, ensuring that they would still be able to purchase ethanol separately, blend it into gasoline, and capture the available tax credits.

Through its new splash blending law, marketers in South Carolina received greater discounts for themselves and consumers saw these discounts reflected in their fuel prices. North Carolina soon followed with the passage of an identical law demonstrating that a greater access to information protects and promotes ethanol availability.

Jennings points out that working with petroleum marketers on a variety of issues is an important part of ACE’s mission.

“ Market development remains an area which makes ACE particularly unique among biofuel groups, and the combination of our board’s vision and Ron Lamberty’s experience and expertise has yielded many concrete results ,” he said. “We have established meaningful relationships with marketers and marketing associations across the country.”

The program’s main focus today is communicating with retailers about the advantages of blender pumps for both flexibility and profitability. “ACE has worked with current policies and connecting retailers to those policies, and has explained benefits, logistics, and value to the consumer,” Lamberty said.

The value of blender pumps to today’s fuel retailer is growing. With federal and state infrastructure incentives, new pump technology requirements, and uncertainty over future ethanol blends, it is important to explain to retailers that blender pumps benefit marketers, marketers, ethanol producers, farmers, and more.

Approaching a decade of market development

During 2009, the ACE market development program reached petroleum marketers representing all 50 states at eight regional events to address the many reasons to take advantage of blender pumps.

In February, ACE attended the Western Petroleum Marketers Association (WPMA) convention, the Gulf Coast Food and Fuel Expo, and the Petroleum and Convenience-Store Exposition of Mid-America (PACE).

WPMA is made up of seven separate state associations, including Hawaii, Idaho, Montana, Nevada, New Mexico, Utah, and Washington.

The 2009 Gulf Coast Food and Fuel Expo, held in Biloxi, Mississippi, is the result of a partnership between the Petroleum and Convenience Stores of Alabama and the Louisiana Oil Marketers. The Alabama group represents more than 325 in the state, supplying more than 5,200 retail outlets and more than 2,800 convenience stores. The Louisiana group represents more than 300 members who own and operate more than 2,500 convenience stores and service stations.

PACE represents Missouri Petroleum Marketers and Convenience Stories, and the PMCA of Kansas. ACE’s market development focus at the group’s 2009 event, held in Branson, Missouri, was how to increase the presence and use of blender pumps in the Midwest.

Throughout March and April, the ACE event schedule included the Southeast Petro-Food Marketing Expo, Midwest Petroleum and Convenience Trade Show (MPACT), and Michigan Petroleum Association and Michigan Association of Convenience Stores spring trade show.

The Southeast Petroleum Expo annual trade show connects exhibitors to a membership base of 1,200 that operates more than 10,000 convenience stores. The event represents North Carolina and South Carolina Petroleum Marketers and Convenience Stores, as well as the South Carolina Association of Convenience Stores and the Virginia Petro, Convenience and Grocery Association.

In April, ACE spoke with attendees at the Wisconsin Petroleum Marketers and Convenience Store Association trade show. In May, ACE exhibited at the Atlantic Region Energy Expo which brought more than 4,500 attendees to Atlantic City to learn about what’s new in the energy industry.

As the year progressed and the knowledge of the E15 waiver request became more widespread, retailers wanted to learn more about renewable fuels infrastructure and began considering changes for future fuel blends. The timing for an expansive campaign to educate fuel retailers on the use of blender pumps was ideal.

“Blend Your Own Ethanol”

[include the BYO logo]

In May 2009, an unprecedented new partnership was formed to reach petroleum marketers, communicating a consistent message to them about ethanol blends and how to select equipment for providing blends beyond 10 percent.

Through the generous support of several leading corn-growing states and the National Corn Growers Association, ACE and the Renewable Fuels Association (RFA) created a campaign to widely communicate the benefits of blender pump infrastructure and propel the nation toward having 5,000 blender pumps in three years.

“BYOethanol” campaign partners:

Kansas Corn Commission

Kentucky Corn Growers Association

Missouri Corn Growers Association

Nebraska Corn Board

South Dakota Corn Utilization Council

National Corn Growers Association

Ohio Corn Board

Michigan Corn Growers Association

Iowa Corn Growers Association

Jennings explained that the cooperative campaign effort with RFA commits a larger team to a single goal, allowing for an even greater impact.

“ We’ve make a strategic decision to adjust our market development priorities now to focus more on flexibility and choices – flexibility through blender pumps to dispense E85 and other midlevel blends, and the ability for consumers to choose what works best in their cars ,” Jennings said. “Much of this is taking place through our successful and cooperative BYO campaign with the corn growers and RFA.”

Lamberty said that it has always been important to not assume that there is widespread knowledge of the existence or implementation of state and federal incentives, and the same applies today. He said it is key to connect people with information and to serve as a resource for them as they take steps toward bringing greater consumer choice to their retail stations.

“This year, the BYO program has become an extension of a tested market development program,” Lamberty said. “Retailers recognize the ethanol industry leaders that provide information and look to us for how they can bring higher blends of ethanol to their stations.”

During the first six months of the BYO campaign, staff members developed a new Blending Fuels magazine, a nationally recognized website at www.byoethanol.com, and a series of print advertisements in national petroleum industry publications. Additionally, the group prepared kits containing blender pump incentives, tips, and checklists to distribute to retailers, planned for a comprehensive 2010 trade show schedule, and represented the campaign at six 2009 trade shows.

The 2009 trade show schedule was an excellent opportunity to promote the announcement of the campaign and the availability of a comprehensive source of ethanol information, plus to talk to retailers about considering blender pumps.

In July, BYO exhibited at the Texas Food and Fuel Expo, presented by Texas Grocery and Convenience Store Association, a chance to talk ethanol in oil country. During the event, BYO staff met with leaders from the Petroleum Marketer Associations of America (PMAA) and from the National Association of Convenience Store (NACS) to discuss the campaign.

More than 1,700 attendees participated in September’s Pacific Oil Conference held in Reno, Nevada. It gave access to retailers from the West Coast and was one of the first trade shows to feature the new BYO booth and other materials.

The National Association of Convenience Stores (NACS) trade show in Las Vegas featured more than 22,000 attendees and 1,200 exhibitors. Known as the world’s largest trade show, it provides the perfect setting for fuel marketers and convenience store owners to attend workshops and speak with vendors that can help expand their businesses.

BYO staff fielded questions on blender pump incentives and advantages for businesses across the country and countries including Brazil, Columbia, Mexico, and more. In the weeks following NACS, BYO staffers further spread the campaign information at state shows in Iowa, Michigan, and North Dakota.

2010 “BYO Ethanol” Trade Show Schedule

Location

Dates

Gulf Coast Food and Fuel Expo

Biloxi, MS

Februrary 2-4

Renewable Fuels Association -National Ethanol Conference

Orlando, FL

February 15-17

Western Petroleum Marketers Association

Las Vegas, NV

February 16-18

Petroleum and Convenience-Store Exposition of Mid-America

Branson, MO

February 19-20

SE Petro-Food Marketing Expo

Myrtle Beach

March 3-4

Commodity Classic

Anaheim, CA

March 4-6

Nebraska Petroleum Marketers & Convenience Store Association

La Vista, NE

March 16-17

Michigan Petroleum Association/Michigan Association of Convenience Stores

Grand Rapids, MI

March 23-25

Arkansas Oil Marketers Association

Hot Springs, AR

March 31-April 1

Minnesota Petroleum Marketers Association

St. Paul, MN

April 6-8

Wisconsin Petroleum Marketers Association

Madison, WI

April 20-21

Atlantic Region Energy Expo

Atlantic City, NJ

April 27-29

Midwest Petroleum and Convenience Trade Show

Indianapolis, IN

April 28-30

New England Convenience Store Association

Worcester, MA

April 28-30

Alternative Fuel Vehicles Institute

Las Vegas, NV

May 9-12

Montana Petroleum Marketers Association

Billings, MT

June 9

World of Food and Fuel Expo

Sevierville, TN

June 10-12

Florida Petroleum Marketers and Convenience Store Association

Tallahassee, FL

July 18-19

Texas Food and Fuel Expo

Grapevine, TX

July 25-27

American Coalition for Ethanol -Annual Ethanol Conference and Trade Show

Kansas City, MO

August 2-4

Pacific Oil Conference

Reno, NV

September 20-22

Pennsylvania Petroleum Marketers

Gettysburg, PA

September 21-23

National Association of Convenience Stores Show

Atlanta, GA

October 5-8

[Can this chart be a map with “thumb tacks” marking where we will be heading in 2010?]

The 2010 trade show season will include visits to communities already familiar with ethanol-blended fuel, as well as meetings in markets with great potential for offering new and more ethanol blends.

“Regardless of the location’s ethanol availability, the BYO campaign offers retailers a long list of reasons for upgrading to new infrastructure ,” Lamberty said.

And that long list of reasons is good news for retailers planning to upgrade their sites and for those looking for more ethanol at the pump.

 
© American Coalition for Ethanol, all rights reserved.
The American Coalition for Ethanol publishes Ethanol Today magazine each month to cover the biofuels industryís hot topics, including cellulosic ethanol, E85, corn ethanol, food versus fuel, ethanolís carbon footprint, E10, E15, and mid-range ethanol blends.
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