Five Nuggets of Wisdom From the FUELS2018 Conference
CHICAGO — More than 150 fuel industry experts, retailers, manufacturers and other insiders gathered recently to discuss the present and future of fuel retailing at the Fuels Institute's annual conference.
Founded in 2013 by NACS, the Association for Convenience & Fuel Retailing, the Fuels Institute is a nonprofit organization dedicated to evaluating issues affecting the vehicles and fuels markets.
Held May 22-24 in Chicago, the FUELS2018 event highlighted a number of pressing issues, current trends and future predictions for all aspects of the fuel industry.
New Technology & Infrastructure
Improved fuel mileage isn't the only ongoing advancement in fuel technology. Promising initiatives include start-stop technology, which turns off the engine rather than idling it and boosts fuel efficiency; and forced induction technology, which raises an engine's efficiency by increasing compression of air blended in the cylinder. Additionally, gasoline direct injection technology enables an ultra-lean burn to boost fuel efficiency.
Changes at the Forecourt
Between the rise of foodservice at retail, improved fuel efficiency and significant changes in the way consumers shop in general, convenience stores have an opportunity to rethink the fundamental design of a store and its fueling station. The ratio of in-store sales to fuel sales has grown much closer to equal over the last decade, and today's consumers are much more open-minded about purchasing food and beverages from c-stores. This brings up a basic, but potentially momentous question: Why do fuel pumps have to be positioned in front of the store? In the design of the future, they might not need to be.
Preparing for Disruption
In this age of disruption, due to technological advances and changing consumer trends, c-store operators can remain competitive by taking multiple steps. First, they must recognize signs of a mature industry being disrupted, such as competition that is too willing to offer discounts; an erosion of margins, profits and returns; consolidation; and cost-cutting as a method of getting ahead of margin erosion.
Next, they must consider solutions, which may include growing in size or stepping up to be a leading provider of customer value via cost, price and volume. They can also identify and capitalize on overlooked or emerging needs in order to carve out a niche for themselves. For c-stores, this might include meal kits, alternative fuels and charging stations, and fresh foodservice.
Finally, they could opt to sell, as all other solutions require a commitment to making real capital investments in order to thrive.
Biofuels & Old Equipment
A fuel storage system is only as sound as its weakest component, and the average system has 60 components. Making a system compatible with biofuels is a challenge retailers can overcome by constructing a new facility or fueling system, but that is not an option for everyone. In some cases, retrofitting is the only option.
FUELS2018 attendees were cautioned to be mindful of higher equipment costs and functionality differences based on the product being stored and dispensed. Proper upgrades should be undertaken carefully and include a thorough survey by a qualified third party before any work begins. All components and equipment should be identified and documented with photographs.
Electric Vehicles Today & Tomorrow
The current population of electric vehicles (EVs) on the road is split approximately 50/50 between battery electric and plug-in hybrid electric. Data shows that EV sales are better than sales of fully hybrid cars at a similar stage of deployment, but the EV market is hampered by higher prices and limited model availability. Additionally, drivers are leasing rather than buying, with leases accounting for 30 percent of all new vehicles, 55 percent of plug-in hybrid EVs and a whopping 80 percent of battery EVs.
Primarily, people are charging EVs at their residences, and bringing the battery up to 75 percent to 80 percent of the total charge. Outside the home, usage of EV charging infrastructure at "planned" locations was up to 90 percent higher than at "unplanned" locations. In other words, EV drivers are planning ahead rather than looking for the closest charging location.