A Legend Returns

After decades of absence, Gulf Oil comes home to new markets on its quest to become a national brand

During the summer of 1985, in a sleepy Virginia town, college- bound Mark Anderson peeled the orange and blue Gulf Oil stickers from the fuel pumps serviced by his father’s company, Anderson Oil, and replaced them with new Chevron imaging.

The seemingly innocuous change was a result of something much bigger — the acquisition of Gulf Oil, one of the noted Seven Sisters oil companies, by a smaller company that would later be called Chevron. It also marked the sunset of the Gulf disc on gas canopies in all but 11 U.S. states.

“We hated to lose the Gulf brand,” recalled Anderson, now president and owner of the company his father founded in 1976. The legacy Gulf jobber began when the senior Anderson purchased a company-owned Gulf distribution business covering the rural Fredericksburg, Va., market. “I grew up in the business. I can remember going to meetings and the [Gulf representatives] were never put off by that. They were a very cordial group of guys,” said Anderson.

While the iconic logo departed the region roughly 25 years ago, the more than century-old Gulf brand is returning to Anderson’s now-suburban market, complete with revamped, and appropriately named, Gulf Sunrise imagery.

The homecoming is thanks to the acquisition from Chevron of all rights, title and interest to the Gulf mark by Gulf Oil LP, a wholly owned subsidiary of Cumberland Farms Inc. Cumberland’s involvement with the Gulf brand dates back to the 1985 Gulf Oil acquisition and subsequent asset divesture, when it won an auction of Gulf Oil’s Northeast assets and the right to market the brand in 11 U.S. states.

The new agreement signed in January 2010 allows Gulf Oil LP to exclusively market the Gulf brand in the entire U.S. and its territories. Gulf Oil LP initially targeted the Mid-Atlantic U.S. for its first expansion phase, as it was also the area where Chevron was simultaneously withdrawing its brand from 1,100 sites.

And Anderson, along with dozens of other former Gulf customers, are accepting the brand with open arms as the Gulf disc re-enters markets, in some cases two decades later, and begins a journey to become a national brand once again.

“I was rather taken aback,” Anderson said of when he found out the Gulf brand was returning to his market. “We haven’t had it here for roughly 25 years.” The Gulf brand never left Anderson’s consciousness during that quarter-century, though, since he makes frequent visits to its Northeast market. While he didn’t let his company’s past as a Gulf distributor influence his decision-making process when it came time to choose a new brand, Anderson knew the opportunity to bring it back to the marketplace would go over well at his company.

“I didn’t want that to influence the decision, because we were Gulf at another time, but because it made the best business sense,” said Anderson. “When [Gulf] visited me, we talked for several hours on why Gulf would make any sense for us. The thing I could never get past was their enthusiasm. These guys were excited and thought they were onto something.” He added: “I decided I wanted to be a part of that.”

Echoing the sentiment was Rick Dery, senior vice president and chief sales and marketing officer for Gulf Oil LP.

“In new markets, we are touching many distributors who cut their teeth in the business with Gulf. Their grandfathers and fathers were Gulf retailers and distributors,” he said. “The enthusiasm for bringing the Gulf brand back is overwhelming.”

To date, signed commitments will bring the Gulf disc to approximately 400 sites in 11 new states, bringing Gulf Oil’s network to a total of 2,500 sites across 22 states. Included in these figures is Anderson Oil, which converted 30 of its locations to the Gulf brand. Anderson said there has been “tremendous feedback” from dealers seeing the new Sunrise imaging at stores, because it is unlike anything else in his market, which is dominated by major oil brands such as Exxon, Shell and BP.

“When Chevron and Texaco left, it was difficult. The big brands were well represented, and we had options, but the Gulf brand in my mind had such an opportunity to grow that we wouldn’t have elsewhere,” said Anderson.

The response from consumers — both those who remember the brand and those who are new to it — has also been positive.

“We had customers coming into our stations, saying they couldn’t wait for Gulf to come,” said Anderson. “It’s not just older customers or people over 40 who remember the brand. It’s the way Gulf presents itself on the street — my kids call it ‘bright and happy.’”

And while it is still very early into the conversion, the brand’s impact on some stations’ sales to date has Anderson encouraged for the future.

“I’m hoping we’re able to grow the brand in Virginia. We have no limitations on where we can go,” said Anderson. “I’ve gotten a number of calls from people who are looking for something else than what’s on the street. I think there’s a growth potential for us that we didn’t have before.”

THE SUNRISE CONTINUES

An additional eight states in the Midwest and South are planned to have agreements signed before the end of the calendar year, and stretch from Florida to Texas, as well as the four states west of Ohio, Dery said.

“The inquiries are coming in from all over. I responded to a call from Michigan last week, and from Arkansas and Alabama,” said Dery. “The inquiries are coming in, and many are from gulf states. They are very eager to investigate a new brand in those states.”

Long term, the company has a desire to be national again, but it will come from smart development.

“Like any other person, I have visions of grandeur. My personal objective is to be a national player,” said Dery. “But the development will be structured, and not rushing into markets just for the sake of being in the market.”

Part of what is fueling the excitement is the reinvigorated Gulf brand. Millions were spent in promotional, advertising and development activities since 2005 to revamp the company’s network to the new Gulf Sunrise standard, Dery said.

Today top-tier distributors and sites are calling Dery for business. “It says to us that the investment was worth it. There were branding requests throughout these years, for stations typical to our portfolio, and I said no more times than yes. It’s a challenge to say no to a sales opportunity,” he said.

To date, almost 50 percent of the Gulf Oil portfolio features to Sunrise imagery, and it is on track to reach 100 percent within the 36-month timeline originally given. Ensuring a consistent marketing message is portrayed in these new markets is a challenge, Dery noted. “It’s the zoning requirements from community to community. Many don’t allow canopies or don’t allow branding on the canopy, while some allow colors but no lights,” he explained.

There has also been some hesitation in the markets due to withdrawals from other major oil companies.

“They don’t want to have to be rebranded again. We made the determination that to show we were committed to the markets in terms of advertising, we cut a [sponsorship] deal with the Atlanta Braves. We signed that deal without a single contract signed.” He added: “Weeks later, we signed a multi-year deal with the Baltimore Orioles without a branded contract gallon sold.”

Elsewhere, the company is heralding its return to the Southeast with a billboard campaign. The message is simply the Gulf Sunrise logo and the tagline: “The Legend is Back.”

“What Gulf is today, and what it means for existing distributors and new customers is beyond the orange and blue disc,” said Dery. “It is the people behind it, and the relationships we develop. We’re not just a fuel supplier.”

For comments, please contact Mehgan Belanger, Associate News Editor, at [email protected].

The Makings of a Legend

Gulf Oil can trace its roots to 1901, when it began as Gulf Oil Refining Co. In its nearly 110-year history, much has changed since the orange and blue disc first appeared. Here are highlights of the company’s storied past:

• Gulf Oil’s downstream business didn’t begin until a reportedly sunny Saturday in 1912, when the company opened its first gas station on Baum Ave. in Pittsburgh. On the grand opening day, the station sold a total of 17 gallons of gas, priced at less than $1 per gallon.
• Gulf Oil expanded quickly in its early years, and was considered one of the Seven Sisters of global oil entities.
• In the early 1980s, the company was a takeover target by T. Boone Pickens, then of Mesa Petroleum.
• In 1985, to thwart Pickens’ unsolicited bid, Standard Oil of California acquired the company, later changing the merged entity’s name to Chevron. As part of the deal, it was required to spin off a certain number of Gulf Oil assets due to antitrust laws. Its Northeastern assets were won at auction by Cumberland Farms and included real estate, supply contracts, terminal assets and exclusive rights to market the Gulf brand in 11 U.S. states.
• In 2005, Cumberland Farm’s subsidiary, Gulf Oil LP, began an effort to overhaul the marketing and business strategy of the Gulf brand.
• In 2007, Gulf Oil revamped the Gulf brand, rolling out new “Gulf Sunrise” imagery at stations on the Massachusetts Turnpike.
• In December 2009, Chevron announced it was withdrawing from the Mid- Atlantic U.S. This opened the door for Gulf Oil LP to expand its marketing rights of the Gulf brand, which was granted in January 2010.
• In March 2010, Gulf Oil signed agreements with Southern Petroleum, marking its entrance into Kentucky, its first state outside of the 11 to which it was previously restricted.
• As of September 2010, the Gulf Oil banner is now present at 2,500 locations across 22 states, with plans to be added to eight additional states by the end of the year.