You are here
SAN ANTONIO -- Looking to seize the opportunity to build on its reputation in the car and racing worlds, locally based VP Racing Fuels is acclerating its retail branding efforts.
Currently, VP Racing Fuels -- which is well-known among car enthusiasts and racing fans across the world -- has some retail sites in Florida and California that have been established over the years at the request of individual distributors, but not as part of a formal company rollout, explained President Alan Cerwick, adding that it was "done haphazardly" and not the ideal way to build a retail brand.
Cerwick, who joined the company two weeks ago from Valero Energy Corp., has reached an agreement with current company owner Steve Burns to buy Burns' interest in VP. Pending the sale, Burns will remain as CEO and continue to direct all research and development for race fuel products, while Cerwick will serve as president and be behind the wheel as the company moves forward with its branding plans.
"This is a real milestone in the history of VP Racing Fuels and I'm pleased to bring aboard someone with Alan's depth and breadth of experience in the industry, which will prove invaluable as he undertakes new initiatives to grow the VP brand," Burns said in a release.
Cerwick's experience as vice president of wholesale operations at Valero Energy and that company's retail rollout make him the perfect fit for VP's plans, said Steve Scheidker, director of marketing. "This is Alan's primary goal," he added. "He has 'been there, done that,' so if anyone can make this happen for the VP brand, Alan can."
As Cerwick told CSNews Online, with retailers under constant pressure to make margin spreads, the time is right to seize this opportunity. "We can offer a branded program with an unbranded supplier mechanism," he said.
In its efforts, VP is looking for sites than can benefit from the brand to sell fuel and drive volume. The search will most likely focus on existing locations with convenience stores since it is rare to find ground-up opportunities in the industry, although Cerwick said the company is not ruling that option out.
Initial testing of the retail brand will begin on the West Coast and in Texas. Ultimately, the brand could go around the country and internationally, said Cerwick. The program will kick off officially in November; however, VP is already in discussion with several big distributors, he told CSNews Online.
While no specific dollar amount has been attached to the retail brand rollout, Cerwick explained that the efforts will "take advantage of the marketing capabilities of VP that would cost about $20 million a year to replicate." For example, the company's logo appears on ESPN, Speed Channel and ABC. In addition, "Rusty Baker's Outdoors" television show is presented by VP Racing Fuel's SEF Small Engine Fuels.
"We already have the marketing dollars in place and we will leverage those dollars," he noted.
Cerwick's initial target is 300 retail locations within the next year, but it could be more, he said. "The reality is that the way deals are done with the networks out there, [300 stores] can theoretically be done in one deal," he said. "Three hundred stores is the minimum, but it could easily be a 1,000."
The rollout's objective is to make VP Racing Fuels a consumer brand, according to Cerwick, with gas stations, lubricants and specialty fuels. Case in point, its SEF Small Engine Fuels can be important to a c-store operator for capturing the lawn and landscape professionals. In addition, VP 100, a street legal 100 octane unleaded fuel blended by VP, will be offered at some of the VP-branded locations. This fuel will make those sites a destination location for performance enthusiasts with muscle cars, sports cars and sports compacts, according to Scheidker.
VP also plans to have dispensers capable of dispensing performance additives, like octane boosters, with the standard gasoline grades for those customers who want a performance gain but either choose not to pay the price for VP 100 or do not have VP 100 available at their locations.
In addition, there are several other key factors in VP's bid to enter the retail brand arena. For example, the company's credit card program does not charge premium fees, saving retailers money by aggregating costs. In addition, VP does not have a private label credit card, so it is "POS (point-of-sale) agnostic," Cerwick explained. And coming down the pike will be a loyalty program. "The loyalty program is unique to the industry," he said, declining to detail the program at this time.
In addition to the retail brand efforts, VP inked a deal on Aug. 1 with Integrated Distributors Network, which consists of seven national distributors to distribute its SEF Small Engine Fuels. The pact will bring VP's SEF94 to the outdoor equipment market, and home and garden stores. The company's expectation, Cerwick said, is to integrate SEF into the c-store format as well.