Gulf Oil Growth: First Stop, Mid-Atlantic

FRAMINGHAM, Mass. -- With Gulf Oil supplying roughly 10 percent of the retail fueling stations in its 11-state market region, and successfully growing its network with the help of Gulf Sunrise, an image refresh program, the petroleum marketer and subsidiary of Cumberland Farms Inc. was approaching saturation -- and feeling some constraints.

"We've done a good job at culling out sites that didn't meet the new Gulf image and working with our branded partners at re-establishing and reinvigorating the Gulf mark. And as a [result], we're bringing in really great sites that wouldn't look at the Gulf brand before," Rick Dery chief marketing officer for Gulf, told CSNews Online. "We truly became geographically constrained in [the 11] states."

Ron Sabia, president of Gulf, added: "As we got more sites, we had conflicts with some new sites. Our universe was reduced to roughly 25,000 stations in the markets we're active in."

But with the acquisition earlier this week of all rights, title and interest to the Gulf brand in the U.S. from Chevron Corp., the fishbowl just became much larger for the company.

"Now there's about 170,000 stations we can market to," Sabia noted in an interview with CSNews Online.

For the last 20 years, Gulf-branded gasoline in the continental U.S. has only been available in an 11-state region in the Northeast through a licensing agreement between Gulf Oil L.P.'s parent company and Chevron U.S.A. Inc., CSNews Online reported yesterday. The new deal, effective Jan. 12, between Chevron and Gulf gives the Massachusetts-based company the right to market the brand throughout the United States and its territories, enabling Gulf Oil to expand its use of the Gulf brand throughout the U.S. for the first time since it first acquired certain rights to the brand in 1986, the company stated.

While Gulf Oil wanted the rights to the mark when it began an overhaul of the brand in 2005, it wasn't until Chevron decided to pull out of 10 mid-Atlantic markets in late 2009 that the pieces fell into place for Gulf to expand its agreements with the major oil company. Gulf wanted to purchase the rights to market the brand in the states where Chevron had announced it was pulling out, and "one thing led to anther, consistent with Chevron's operational direction at this time, which led us to the full rights" to market the Gulf brand nationwide, Sabia said.

In the immediate future, Gulf is looking to pick up stations that lost the Chevron brand in those mid-Atlantic states.

"We're six weeks behind the eight ball. Retailers have had six weeks to try to decide their next best option. We weren't a thought before. Now we are," explained Dery. "We're getting the notice out that the brand is available and … focusing on this geography without any interferences."

Sabia added: "Those first 1,100 sites Chevron is withdrawing from are our obvious targets. They are free agents today, and in the last 24 hours, the communication activity we've seen in the area shows they are thirsting for banded alternatives."

While Gulf has no terminals in that region currently, the company would be open to one in the future, according to Sabia. Primarily, it will focus on the distribution channel in the area to fuel its network growth, rather than real estate or company-operated locations, he added.

But the growth Gulf is planning will be well thought out, the executives noted.

"More important than quick growth is maintaining the level of service people have been accustomed to," said Sabia. "Our differentiation is a focus on downstream -- it's the primary business and all we do. We provide a high level of service and can react quickly to customer needs."

Dery added: "Growth will be smart. We'll choose the right partners and the best partners in the various markets, who will proudly fly the [Gulf] mark."

Gulf is seeking well established, tenured distributors in the markets, and has a volume objective of 10 million gallons a year, but will work with those that are not at the mark, but have a desire to grow, he said.

Related News:

Gulf Oil Acquires Brand Rights for Entire U.S.

Gulf Oil Launches "Get Spotted" Promotion
This ad will auto-close in 10 seconds