ALON Arrives, Creating A FINA Finale

Marketer is repositioning at retail with a new name, look and attitude

It's a little change. It's a huge difference.

Three years after Alon Brands Inc. was chartered as a freestanding company and charged with revitalizing refiner Alon USA Energy's network of nearly 1,000 branded gasoline locations, President and CEO Kyle McKeen and Senior Vice President of Wholesale Marketing Judge Dobrient are overseeing a transformation that will mean the end of the 51-year-old FINA name and the introduction of the ALON brand.

Alon Brands, marketer of gasoline in eight states and the largest 7-Eleven licensee in North America with 302 company-operated stores, will begin a comprehensive two-year investment to relaunch the company's operations in January, starting with the conversion of every site to the ALON trade brand.

The change will be a small, phonetic one — the four letters of FINA will be replaced by the four letters of ALON — in a new graphic treatment that retains the current red, white and blue graphic imagery. While not dramatic, the change signals a significant shift in philosophy and direction, one that began when Alon Brands was formed.

“This process signals change to our retail consumers, better aligns us to our dependable source of supply and builds on existing brand equity,” McKeen said in an exclusive interview. “Unlike many reinventions, our future will be built on core values that have been central to our organization for years — a partnership to success mentality, focus on relationships, dependability and strong, solid lines of supply, while delivering a fresh, new focus on innovation, service and support that we provide c-store operators. The brand change will give people a reason to take a look — or second look — at us. But it’s not so dramatic as to create confusion among current customers.”

Customer engagement has already started with use of the new advertising tagline, “Along the way,” priming the public on the correct pronunciation of ALON (Uh-lon, not Aay-lon or Ale-On).

In west Texas, where Alon's Big Spring refinery has a major business and employment presence, the renaming will align the new retail gasoline brand with its source of supply. Consistency between the refinery's name and the retail trade name started back in the 1930s when the refinery bore the Cosden logo, named for oil magnet Joshua Cosden, and Cosden was the brand that people throughout the Southwest saw on their corner service station.

“People throughout Alon have historically prided themselves on being good neighbors, delivering on a strong, active commitment to local communities and customers in and round our core geography of west mTexas and New Mexico. The result of this strong community involvement is a highly visible and trusted reputation,” McKeen said. “It just makes good sense for all our stakeholders for Alon Brands to build on this inherent brand equity, looking to geographic opportunities and marketplaces where we can further leverage existing Alon refining synergies, such as Louisiana and southern California.”

EXCEPTIONAL CUSTOMER EXPERIENCES

The 2008 decision by Alon USA Energy's leadership to form Alon Brands untied the retail and wholesale business' future from the longtime oil industry practice of treating retail sites as an afterthought and putting retail and marketing profits back into refinery upgrades and other non retail-related capital improvements. The team at Alon Brands took the opportunity to invest in a program they hoped would build an underlying consistency of brand — one focused more on customer satisfaction through cleaner stores and better service. The program, dubbed Clean TEAM, was developed in Alon Brands' own 7-Eleven locations and is now moving out to its branded distributor locations.

Clean TEAM, a program of cleanliness and service standards and quarterly inspections by an outside firm, replaces a once-a-year somewhat punitive approach to store inspections and brand positioning. “Old branded fuel programs would focus on things that were technicalities, penalizing operators for transgressions such as having an octane sticker on the wrong side of the nozzles — something that might be important to the brand, maybe, but not important at all to the c-store customer,” McKeen said. “In the Clean TEAM program, we work with our branded distributors and operational leaders in our own 7-Eleven outlets to focus on criteria that drive exceptional customer experiences.”

The other significant change: most of the Clean TEAM standards measure the in-store experience, not forecourt operations. While the FINA, soon to be ALON, trademark and brand standards are included in marketer's Image Excellence Survey, and the canopy and dispensers must be well maintained, the bulk of the Clean TEAM program focuses on the store's exterior, interior and customer service. To become Clean TEAM certified, a store must be up to standard on at least 90 percent of the program's inspection points. Those points include items such as properly maintained facilities and landscaping; cleanliness and condition of the front doors, windows, floors, walls and shelving; cleanliness and readiness of restrooms; stock levels throughout the store; and more.

“The Clean TEAM program addresses several key measures of c-store success by delivering a superior in-store customer experience,” said Dobrient, who is responsible for marketing at Alon Brands. “We know if the customer has a great experience in the store, merchandise and fuel sales will both benefit. We are building loyalty by improving brand consistency, which of course will benefit both ALON distributors and our company-owned operations.”

Since the program began, average monthly fuel volumes going to FINA distributors have increased more than 40 percent per site. But beyond pushing profitability and driving overall gasoline sales, the program “really is about being a better partner,” Dobrient said. “Alon's goal is to provide branded distributors with a highly valued relationship that goes beyond just fuel supply.”

To that end, store managers and associates benefit directly from the Clean TEAM initiative. The program rewards employees in both branded locations and Alon 7-Eleven stores for meeting new benchmarks.

Rewards for associates start at $100 and can increase to $700, depending on their store's performance throughout the year. The store manager with the highest scores each year receives a new car. Program awards for 2011 were budgeted at $250,000.

“We put a great deal of thought into the program and its rewards,” Dobrient said. “At one point, we thought about building the top rewards around unique vacation experiences. But for some of our employees, a travel-oriented prize could be more of a headache than a reward. So we decided on cash bonuses for all and a new car for the top store manager — we pay the taxes and any other costs — something store employees can really use.”

Since its launch, the Clean TEAM survey has been adjusted to ensure it includes only standards that employees can control or influence.

“Nearly all Clean TEAM standards for managers and associates now are completely focused on tasks and responsibilities that are a part of their job descriptions, but we also know that leaders at every level of the organization look for ways of gaining an edge for their stores,” said McKeen. “For instance, a store manager who isn't expected to personally fix damage to a canopy over a fuel island can take extra steps to make sure that maintenance associates follow through on a repair as quickly as possible.”

For a smaller operator like FINA distributor Mike Frank, owner of 15 Whip In stores based in Dallas, Clean TEAM has been a valuable program.

“The Clean TEAM program has helped our stores focus on definable issues that are so important from the customer viewpoint,” Frank told Convenience Store News. “It's easy for us to get caught up in the day-to-day concerns of operating the business. This program has helped us to look at ourselves with a different set of eyes. Our managers who have won cash prizes are even more aware of the program's value.”

The new graphics package will be the most identifiable aspect of the new ALON brand, Frank said,adding that he expects the name change from FINA to ALON to be “seamless.”

“The customer has become used to these types of rebrands over the last decade or so. Mobil stations became Exxon sites, Texaco stations became Shell, and perhaps most noticeable in the Texas market, Diamond Shamrock stores were branded Valero,” said Frank. “The important issue in our business is the quality of people at Alon who stand behind us as distributors. On that score, we couldn't be happier.”

Even as most of the company's distributors embrace the new standards, Alon Brands is honing in on underperforming operations, with the expectation that ties will be cut with retailers who don't share the company's renewed commitment to a strong customer experience.

Those efforts are paying off. At Alon Brands' 7-Eleven stores, the emphasis on solid retailing basics and a strong focus on addressing lower-performing stores have led to significant performance increases per store in the last two years.

“We've experienced average increases of 5 percent in merchandise sales and 10 percent in motor fuel volumes in our own operations since the Clean TEAM program began,” said McKeen. “When our branded distributors hear about the growth in our stores, it reinforces their decision to embrace the program.”

THE RETAILER PERSPECTIVE

Consistency of the ALON network is being driven, in part, by the company's own c-store operations experience.

“Alon is a better supplier to the convenience stores we serve because we're a retailer,” McKeen said. “Our stores enable us to test and refine new concepts, products and services, and monitor and address retail customer responses to these offerings. Often, we are able to use our experiences to better understand opportunities and challenges that our licensed partners are encountering.”

Already a provider of traditional media support, credit card services, operational and other services, Alon Brands is looking to leverage the success of the Clean TEAM program by providing additional value to current and future ALON-branded retailers. Among the areas it would like to venture are: financial services, in-house point-of-sale technical support, enhanced group buying opportunities and compliance support.

“With the mass exodus from the old integrated model the industry has seen, we think that part of expanding our new trade name is presenting a compelling set of offerings to distributors at different levels of scale,” McKeen said. “Alon's goal is to fill the void that exists today for support in the wholesale segment and add value to our branded distributors by helping eliminate major pain points, such as PCI compliance.”

The credibility of ALON is enhanced by its executives' own experience. Each has participated in training programs on the sale of alcohol and tobacco and ALON-specific store operations. This training is backed up by working experience in the company's stores.

“Being on the front line provides an eye-opening experience on the complexity of working in a convenience store,” McKeen said. “You get a very good appreciation of what a new program will mean to a store associate or store manager who is serving customers, checking IDs, reconciling lottery sales, stocking a cooler and more, all at once.”

On another front, the name change opens up additional opportunity for growth. When Alon was formed — after Alon Israel Oil Co. Ltd., the largest Israeli-based fuel company, purchased the FINA retail network, an oil refinery, pipelines and terminals from Total SA in August 2000 — the deal restricted the FINA name to Arizona, Arkansas, Colorado, Louisiana, New Mexico, Oklahoma, Texas and Utah.

The new ALON trade name has no geographic limitations, enabling the gasoline marketer to better support its existing customers and reach out to other store operators.

“We see clearly that the time is now to go to market with a branded retail service offering that delivers unmatched support to distributors. Our new trade name and brand program makes ALON that offering,” McKeen said.