Taking Alternative Fuels by Storm

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Taking Alternative Fuels by Storm

10/12/2015

Considering the level of success it has achieved, such as being named Brand of the Year in the 2015 Harris Poll EquiTrend study and one of STORES Magazine’s 2015 Hot 100 Retailers, it would be easy for Sheetz Inc. to maintain the status quo.

But the fast-growing convenience store chain, which celebrated the opening of its 500th location earlier this year, is a true innovator that always enhances the options it offers customers. These efforts are especially evident at the forecourt, a robust effort led by Michael Lorenz, executive vice president of petroleum supply for Sheetz.

Lorenz’s decision to offer E15, a blend of 15 percent ethanol and 85 percent gasoline, at 60 North Carolina Sheetz stores by spring 2016, is an impressive undertaking that’s earned him the 2015 Convenience Store News Alternative Fuels Leader of the Year award.

Lorenz is the second c-store executive to win this award, following Zarco USA President Scott Zaremba, who took home the trophy in 2014. Coincidentally, Lawrence, Kan.-based Zarco USA was the first U.S. retailer to sell E15 at the pump after the alternative fuel received Environmental Protection Agency approval in 2011 for use in 2001 and newer vehicles.

Considering gas prices have been quite low this year compared to prior years — with the exception of the Midwest due to the Whiting, Ind., refinery disruption — Lorenz’s continued dedication to E15 is notable, as public outcries for alternative fuels are often much more pronounced when prices at the pump are high vs. today’s environment.

Sheetz began selling E15 in early August. It is currently sold at three North Carolina locations.

“We wanted to give the consumer as many choices as possible,” Lorenz said. “If you look at our in-store product selection and mix, we have more than 400 beverages in the cooler and a wide variety of food choices from ready-to-eat to having it made-to-order. We wanted to make sure we offer choices at the pump as well. There will be five grades of gasoline to choose from: the three typical grades of E10 (87, 89 and 93) plus E15 and E85.”

Lorenz noted that the decision to offer E15 was made even easier thanks to financial funding Sheetz received from Prime the Pump to aid with its store conversions.

“That was an impetus to get us to move forward with E15 at the pump,” he said. “Receiving those third-party funds really got the ball rolling.”

Considering Sheetz is only selling E15 at three locations thus far, the company has not initiated any marketing blitz to promote the alternative fuel. But once E15 is sold at enough sites, the c-store chain will commence a large marketing campaign, confirmed Lorenz.

Even without strong promotional efforts, though, E15 is being noticed by Sheetz customers. The alternative fuel, which carries an 88 octane, is being sold for 10 cents per gallon cheaper than 87-octane E10 at the pump at the three North Carolina stores.

“Consumers definitely notice the price difference,” relayed Lorenz. “We also have brochures that explain what E15 is and even what E10 is. Even though pumps often say that gasoline can contain up to 10 percent ethanol, [consumers] never use the E10 vernacular. We begin the brochure by talking about E10 because once a consumer understands that, they tend to understand E15 and E85.”

With Sheetz now on board, 134 U.S. convenience stores were offering E15 at the pump in 19 states as of late August, ranging from Nebraska to Florida, according to Growth Energy, which represents the producers and supporters of ethanol. Approximately 200 more convenience stores will soon sell E15 at the pump, the trade group reported.

OTHER ALTERNATIVES

While it is new to E15, Sheetz is no stranger to alternative fuels. The chain has offered E85 at the pump since 2006 and now has nine locations selling the alternative fuel, seven of which are in Pennsylvania, and one each in Virginia and North Carolina. At the 60 aforementioned sites in North Carolina, Sheetz will sell E85 at all of them in addition to E15.

According to Lorenz, the Altoona, Pa.-based operator of 500-plus stores decided to offer E15 and E85 specifically in North Carolina because the retailer’s marketing effort is simpler in a more concentrated area.

“It’s much easier to get the message out,” he said. “If we took the other extreme and scattered [alternative fuel offerings] throughout our six-state geographic footprint, it would be difficult to market it to consumers. This way, we will have critical mass. Consumers can then expect to find E15 at our North Carolina stores instead of having it as a hit-or-miss proposition.”

Even back in 2006, Sheetz knew E85 may not be the only alternative fuel it would offer in the future, and so the company prepared its underground infrastructure, Lorenz explained. “We could see on the horizon that offering higher blends of ethanol were a strong possibility in the future.”

In addition to ethanol, Sheetz also has electric charging stations at five locations. In the future, Lorenz said Sheetz will consider offering compressed natural gas (CNG) at the pump, although nothing is imminent.

Lorenz will accept the Alternative Fuels Leader of the Year award on Dec. 7 during the Convenience Store News Fuels & Tech Summit in Riviera Beach, Fla.