You are here
By Renee Covino
You can't call Diamond Oil LLC a diamond in the rough anymore. The Florida-based fuel distributor and convenience store operator is being polished for strategic growth -- with branding and expansion plans well under way.
From seven company-owned stores in 2005, Diamond Oil has grown to 46 company-owned units in Tennessee and Florida (eight just recently purchased from Kwik King, based in Ocala, Fla.) and supplies fuel to another 45 locations in Florida and Tennessee.
But that count won't hold for long. The company is currently awaiting the close of three contracts: one to acquire 11 new properties in the Savannah, Ga., area, one to acquire an additional 11 properties in southern Florida and a third for a fuel supply agreement for 53 locations in southern Georgia. (As of presstime, it was unclear how many stores will be fuel-supplied and how many will be company-owned.) All acquisitions are expected to be announced at the end of March. Diamond Oil also expects to complete more store acquisitions by the end of the year.
"Our plan is to continuously grow our market and our reach, with Ocala as the home base," said Jayesh Patel, president of Diamond Oil. "But we're being careful about what we're buying."
"We're trying to buy only what fits into our company -- we want to create synergies with the current structure of Diamond Oil," added Neil Patel, management consultant for Diamond Oil. "Ultimately, we want to grow slowly, but steadily. By the end of March, we should reach almost 69 stores."
Growth at Diamond Oil will not be achieved just for growth's sake. "We want to acquire as much as possible, but also in an environmentally responsible way," Neil Patel explained.
The company is looking for acquisitions that are already "clean," but even for those that aren't, such as the Kwik King stores. For these, the company has begun the process of making all fuel tanks environmentally compliant with 2009 standards, which includes "double-walled tanking," Neil Patel said.
In time for the debranding of the Kwik King stores in January, and in preparation for the company's continued growth, a new Diamond Oil logo was created in red, white and blue, featuring a big faceted diamond with an oil drop suspended from the bottom point.
"This new diamond symbol will bring us more awareness," Neil Patel maintained. "We are an unbranded fuel supplier, but this will give us a branded image for the future."
Future and existing stores will be marked with the striking banner.
As an unbranded fuel supplier, one of the company's hooks is its "best price" gas, according to Jayesh Patel. "In our main marketing area of Marion County, we are much cheaper than the competition -- anywhere from 1 to 3 cents," he said.
The company is also looking at the future of E10 fuel, which Jayesh Patel said should potentially drive prices down further.
"E10 can affect the price on the street from 3 to 6 cents a gallon," explained Christine McCoy, Diamond Oil's operations director. "We're preparing our locations now -- there's some work to be done before we can carry it. But, once we hit this market hard, I believe the competition in the area will have to do something to stay afloat with the Diamond Oil prices."
That's not to say that Big Oil competition won't catch up eventually. "They'll do it in sweeps," Jayesh Patel offered. "It's the difference between converting 50 locations versus hundreds. So it's not to say that we're way ahead, but overall, we will wind up with a timing difference of about a few weeks.
The Store Side
Diamond Oil's new business priorities do not stop at the fuel pumps. The inside operations of its stores are just as important to the company as selling fuel.
"Our business is a direct combination of the two, and they greatly support one another," Neil Patel maintained. "It's all about making the facilities a one-stop shop for our convenience customers."
Prepared foods are expected to be a "big focus for the future [of Diamond Oil stores]," McCoy told Convenience Store News. This includes expanding the deli area, as well as bringing in different franchises. The company is reviewing a number of ventures -- including Dunkin' Donuts, Starbucks, Wendy's and Burger King -- to make one or more available in stores by the end of the year, she said.
Locales are being studied to help make the determination. Some of Diamond Oil stores are in college areas, where the company is looking to incorporate something with chicken, McCoy said.
"We look at our demographics, and while overall, we don't have a huge percentage of college students, we do have some," she explained. "Others are 'interstate stores' where we see a lot of people just passing through. So we would absolutely tailor our food offerings to those differences."
Specified product offerings go beyond prepared foods and franchises. Neighborhood stores, for instance, are stocked with more milk and bread than interstate stores, which have more snacks and packaged beverages. However, both types of locations do equally well with energy drinks, McCoy said.
The company plans to get even better at meeting convenience needs and going above and beyond its customers' expectations with its available products.
"Having the right breadth and width of merchandise is very important to us," Neil Patel said.
To find the right mix, Diamond Oil sales support has been gathering one-on-one feedback from customers at acquired stores, including Kwik King. According to Neil Patel, the team has "typically been asking customers, 'What do you look for when you come into this store that you tend not to find?' If it's something we can get, we will," he said. So far, typical requested items include cold and sinus products, as well as beverages such as mineral waters and green teas -- which were added recently to please customers.
For comments, contact Renee Covino, Contributing Editor, at [email protected].