These days, the true identity of the “Mad Scientist” at VP Racing Fuels Inc., could be debated. While the persona had its origins in VP founder Steve Burns’ passion and talent for formulating performance fuels to maximize horsepower, the moniker could just as easily apply today to VP’s president, Alan Cerwick, who is intent on stirring up a new formula for success in the c-store industry.
Based on extensive experience in the downstream business during 19 years spent first at Koch Industries and later Valero Energy, Cerwick sees the VP Racing Fuels brand as key to the game-changing business model that will accelerate vital changes needed in the fuel industry. “The industry needs to evolve to enable distributors and c-store owners to be more successful. That’s exactly what our program is designed to do, but at its heart is the VP brand which provides the foundation that enables every aspect of the program.”
Now in its 40th year of providing industry-leading performance fuels for all forms of motorsports, VP is an internationally recognized brand with tremendous customer loyalty among performance enthusiasts. This loyalty isn’t surprising given a vast amount of market research indicating race fans are by far the most brand-loyal among all sports, including the NFL, NBA and MLB. This brand loyalty translates to a strong preference for products from companies that support racing.
Distributors and c-store owners across the country have signed on with its brand program in the belief that VP’s customer loyalty will transfer to other consumers outside the performance industry. That has, in fact, played out in terms of sales wherein every station that has converted from a major oil company’s brand to VP Racing Fuels to date has seen an immediate and sustained increase in street gas sales volume as well as demand for VP apparel and other VP-branded products.
In addition to a strong brand, VP’s retail partners point to substantial reductions in expense and new revenue streams as the most compelling aspects of VP’s program. Expense reductions stem from VP’s credit card fees, which are the lowest in the industry. In addition, station owners are free to source unbranded supply to reduce fuel expense.
Neal Do, president of Oklahoma City-based Excel Fuels LLC, was quick to grasp the advantages of VP’s branding program. “The first thing that caught my attention was the option to buy fuel on the open market, which saves us $.08-.10 per gallon and makes us much more competitive. At the first station we converted to VP, these savings enabled us to match the price of a super independent we compete with and we’ve already seen a 30% increase in gallons. Not only are we making more money per gallon, we’re selling more gallons. The other big factor was VP’s low credit card fees, which saved one of our stations more than $2,000 per month.”
The new revenue streams offered by VP’s program come in the form of several VP-branded products, starting with race fuel. While each VP-branded station sells conventional regular and premium pump gas, most have opted to stock a variety of VP’s off-road race fuel blends as well. It’s part of a program designed around a “Fuel Cube”—a heavy metal cage similar to propane tank cages but stocked with 5-gallon pails of VP’s leaded and unleaded race fuels. In any conversation with a local drag racer or dirt bike rider prepping for weekend competition, the need for convenient access to quality fuel is a recurring topic.
Some VP stations also offer VP101, VP’s street-legal 101-octane unleaded fuel, dispensed at the pump. This fuel appeals to drivers with performance cars, exotics, muscle cars or street rods, and together with VP’s off-road blends offer substantially higher margins than regular or premium street gas. “VP’s brand helps differentiate our sites from the competition with a premium look, a premium reputation, and race fuels that are the fuel of choice for performance enthusiasts,” Do added. “VP’s race fuel blends represent an additional profit center for our dealers and are something no other brand can offer.”
Other new revenue streams for VP-branded stations come from new packaged consumer products launched in conjunction with VP’s retail program. These include VP Madditives, performance chemicals for gasoline and diesel engines; VP Small Engine Fuel for 2- and 4-cycle outdoor power equipment such as string trimmers and chain saws; VP PowerWash cleaner; and five-gallon plastic VP Sportsman’s Containers. Each has been designed to be best-in-class, held to the same exacting standards as VP’s industry-leading race fuels. VP-branded apparel is also part of the mix.
Because VP is not an oil company, but rather a race fuel company, it stands apart in the c-store space. Far from conservative and free of the negative baggage typically associated with large oil refiners, VP is known instead for leading-edge fuel technology, “MAKIN’ POWER” and having fun, an attitude exemplified by its “Mad Scientist” icon which adorns each VP-branded station and all VP-branded products.
“The significance of this brand positioning can be illustrated with one question: How many people would you expect to buy a t-shirt with the logo of a major oil brand?” said Chris Wall, VP’s chief marketing officer. “Yet more than one VP c-store owner has called in a panic to order VP apparel to appease passionate race fan customers who expect to find it at their store!”
VP’s partners also benefit from its marketing prowess. Through its affiliation with more than 60 racing series, VP’s brand is exposed to millions of customers every weekend of the year at live events and via race broadcasts on major networks including Fox Sports, ESPN2, NBC Sports, CBS Sports and other media outlets. VP’s nontraditional edginess also enables social networking and viral marketing programs that its conservative competitors could not even contemplate.
After converting nine stations in Dallas, Texas to the VP brand, Mike Frank, owner of TMT Inc., is sold on VP’s program. “I just have to say ‘Wow,’ I had no idea there were so many customers looking for race fuel and VP performance products. Sales are up at every store we branded VP, but what really amazed me was the extremely loyal following of the people looking for VP products. This has opened up an entirely new revenue stream that no other company in the industry has any idea about. What’s exciting from a retailer’s point of view is the combination of high ring and high margin. Plus, the products pretty much sell themselves.”
“In terms of sales one of our stores has actually doubled its volume while the smallest sales increase we’ve seen is 10% at two locations where each had new Quik Trips open just down the street,” Frank added. “Now my biggest concern is staying on top of the stores’ inventory so they don’t run out of product.”
Doug Coziahr, retail sales manager for Sapp Brothers Inc., has seen a similar increase. “At a BP site that we purchased in Lincoln, Neb., I saw the opportunity to create more of a destination instead of a typical c-store by branding with VP Racing Fuels. We developed large window clings, murals and other materials to market the brand throughout the store, then we brought in five-gallon pails of race fuel and VP-branded apparel.”
“The site had been moving around 24,000 gallons per month and within the first few months after converting to VP, the site has doubled its gallons,” said Coziahr. “The VP products created more profit centers and consequently a higher ROI for the store. Many new customers inquire about local races and pick up a VP shirt or hat and some snacks before they go to the track. I would strongly encourage people to consider branding with VP Racing Fuels.”
“It’s a pleasure to team with a brand that is hip, innovative and different,” Frank added. “The idea that a brand is actually interested in helping us make money and not just acting like the gas gestapo is refreshing. It’s a pleasure to hear from my VP rep, as I know he’s calling with ideas and suggestions as opposed to complaints and nitpicking. I’ve been in and around this business my whole life and these guys get it.”
VP’s program has clearly been gaining momentum. It has now partnered with distributors that collectively service more than 3000 retail locations in 40+ states. Stations have been converted to the VP brand in 14 states spread from Oregon to Georgia and Vermont to Arizona, with many more in the pipeline.
“VP’s partners see the coming changes in the fuel industry and understand the importance of partnering with an organization like VP Racing Fuels and our game changing brand program,” said Cerwick. “Their buy-in validates the strength of the VP brand and our ability to deliver the biggest competitive advantage to date.”
For more information about VP’s Retail Brand program, visit VPRacingFuels.com/Branding or contact:
Ted Tritt – 210-510-8409 or [email protected]
Matt Schuster – 210-784-6708 or [email protected]
Bryan Noonen – 210-289-6000 or [email protected]