Nate Marsh is the Chief Revenue Officer at GreenPrint based in Atlanta, GA. He will be speaking at the Handelsblatt Annual Conference on Trade and Change in Gas Stations and Convenience Shops 2019. In his keynote address he will talk about the disruption we are seeing relative to the forecourt and what retailers, particularly in the United States, are doing to bridge the gap between where we are today and the future.
We hear all the time about “disruption” and everything that is changing the convenience industry inside of the store, but there are significant changes that we have seen as it relates to petrol and on the forecourt. What do you see as the key drivers to this change?
Change is everywhere. You mention the change we are seeing inside of the store and in some ways those changes are seen as enhancements and evolutions in an industry that has always been at the forefront of innovation. We see really exciting and innovative solutions coming in food service with new restaurant concepts in store and on the other end of the spectrum we see folks beginning to experiment with self-checkout and stores without employees.
When it comes to the changes we are seeing on the forecourt and as it relates to petrol specifically – this change is really being driven by two core segments. Governments that have begun to legislate change to address climate change and consumers who are demanding that change over the same concerns. In 2017, the PEW Research Center conducted a worldwide survey of that determined 61% of people worldwide said climate change was their number one concern. The only thing that was ranked higher was concern over terrorism. This concern from the general public has begun to shape government policy around the world. We are seeing the majority of the world’s governments begin to plan and implement policy that drives mandates around renewable transport, fuel efficiency standards, and electric vehicles. As these mandates are implemented and some already have, we will certainly see an impact on both the demand for traditional fossil fuels and by consequence, the number of customers visiting convenience stores.
What are the long-term impacts of the changes that you mentioned?
First and foremost, I think the impacts of the changes we are seeing will take time to fully develop. Despite the changes that I mentioned, 2018 saw record margins for a lot of petrol retailers in the United States and the rest of the world. That being said, if you look at things like fuel efficiency standards and light duty vehicle sales, the trend points to a lower demand for petrol in the future. Between 2005 and 2015, average fuel economy standards were improved drastically worldwide while we saw an increase in light duty vehicles being sold with the improved standards. As these cars replace older vehicles that require more fuel – the need for traditional fossil fuels is decreased on average and will continue to decline. Additionally, biofuels programs are the number one strategy countries are planning to be able to comply with transport related Paris Climate Change Agreement commitments. There are certainly ongoing debates about the effectiveness of biofuels as an alternative, but ethanol and biodiesel production are expected to grow through 2026.
What about electric vehicles?
Everyone has probably heard the doom and gloom around what electric vehicles are going to do to the petrol industry, but the reality is that EVs only make up around 1% of the total vehicles on the road today. That being said, EVs will be a significant disruptor, as many are predicting. In fact, although EVs are a small percentage of the total vehicles on the road today, that reality is changing quickly. In the first quarter of 2019 alone, more EVs will be sold than the combined totals of the previous 7 years.
So how can we continue to drive store visits?
The convenience store industry has always been at the forefront of meeting changing customer needs and I have no doubt that we will continue to see them be innovative in meeting the challenges ahead. In many ways, we are already starting to see them address the shift. In Europe especially, we see really great food concepts inside of convenience stores that get customers to enter the store with food in mind. You are also starting to see EV charging stations side by side with traditional pump dispensers and in the United States – we have seen tremendous growth with Reduced Emission Fuel Programs. Each of these solutions addresses the challenge in its own way and continues to give customers a reason to feel good about their interaction with their convenience store of choice.
What is a Reduced Emission Fuel Program and how does it work? Are retailers able to see any measurable benefits?
Reduced Emission Fuel Programs are something that GreenPrint started in 2014. Designed to specifically help convenience stores and fuel retailers differentiate themselves from competitors and provide a more sustainable fuel solution to customers while addressing their concerns over climate change. These programs have grown rapidly and in 2018 alone, our programs were responsible for offsetting emissions on nearly 6 Billion liters of fuel and we planted more than 140,000 trees with more than 20 different partners throughout the United States, Canada, and Europe.
The programs are easy to implement and the best part is that there isn’t any capital expense as we aren’t introducing a new fuel type or installing any expensive software. This makes it simple for our partners to launch a program and more importantly, easy for their customers to take advantage of reduced emissions fuel. Every time a customer fills up at a participating location, GreenPrint offsets the emissions onn every liter of fuel they pump by investing in certified carbon offset projects. Additionally, we plant trees in local and national forests and run community projects with local non-profits in and around our partners stores to ensure the program is both local and has a real, tangible effect on tailpipe emissions. The programs are all exclusively branded for our partners and we market the program to their customers on the forecourt, inside the stores and in digital, tv, and other media through fully integrated marketing campaigns. Best of all, the programs are all certified and validated by Ernst & Young to ensure that we are having a real impact on climate change and avoid any customer concerns over “green washing”.
Partners have seen a wide range of benefits from the programs. Nearly all partners have seen increased fuel volume and incremental margin gains as consumers become aware of the program and begin making partner stores their store of choice due to the value placed on the offset emissions. Additionally, because of the hyper local impact of the community projects with local non-profits, partners see increased consumer loyalty, employee engagement and community goodwill. Customers report an increased willingness to promote the partner brand and locations over competitors as a direct result of the program and its benefits.
At GreenPrint, it’s our goal to help our partners reach their environmental impact goals and support their local communities and serve as a bridge to the future.
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