Doug Finkbeiner thought the sky might fall when a couple of big boxesopened up in Lapeer, a small town north of Detroit, last year. To counter thepresence of a new Meijer supermarket/fuel center and a Wal-Mart Supercenterwith a Murphy Oil-operated gas station on the same pad, the owner of Booth Enterprisesgave his fullservice gas station a bit of a facelift.
Finkbeiner’s station has been pumping gas in Lapeer for more than 30 years, and the station had been a member of the BP/Amoco network until April of this year. That’s when it switched to the FAST STOP® brand from GROWMARK, a regional farm supply and grain marketing cooperative based in Bloomington, IL, that helped pioneer pay at the pump and unattended fueling in the early 1980s.
“Our volume and profitability have increased [since making the changeover],” says Finkbeiner, who also runs a conveyor carwash circa 1970 on the same lot. “I think that’s a real achievement with the big boxes opening here in the last 12 months, especially since we projected those two stores are doing 3 million to 4 million gallons each [per year].”
Finkbeiner attributes the improvement to good fuel pricing, the clean and professional FAST STOP image and unflinching assistance from GROWMARK’s support staff. He says the store has benefited from an “extremely agreeable” contract and a strong credit card program dubbed the Home Grown Values network, which he says “isn’t Mobil or BP” but still offers “a competitive rate” that enables a decent profit margin. (FAST STOP, which accepts all major credit cards, also offers a proprietary Visa card with a processing fee of just 1%.) He’s considering expanding his partnership with GROWMARK by adding a FAST STOP convenience store to match the brand on the canopy.
“For us to switch to FAST STOP was a major decision, and everything had to be right,” he says. “The main thing we were concerned with regarding the big boxes was if we were going to be able to compete [on price]. FAST STOP offered the type of market pricing that allowed us to be competitive.”
Marion Ertmer, manager of retail operations for GROWMARK Retail Energy, has spent 33 years in the GROWMARK system, most of it with a member cooperative based in Illinois and Iowa. He’s also spent time as a recruiter and a marketing manager in the organization’s fertilizers and agronomy division. His experience managing a member cooperative in rural Illinois, in which he helped develop a new store, helped him better understand the value that GROWMARK brings to marketers.
“We created an unattended store in Monticello [IL], and we sent out a surveyto residents in the small town asking, ‘Are you interested in this type of afacility?'” he recalls. “Even though we had four or five other c-stores in town,we sent out invitations to get a Fuel 24 card based on the results. We had 50%of residents in the town getting the card, and they were very loyal to it.”
GROWMARK’s roots stretch back to the the 1920s, when Farm Bureau members in Illinois formed local cooperatives as a means of ensuring reliable supply and gaining more control. In 1927, nine local cooperatives formed Illinois Farm Supply Co., GROWMARK’s predecessor. Through a series of mergers in the 1960s, FS Services Inc. was formed. In 1980, FS Services and Illinois Grain Corp. consolidated to form GROWMARK.
Driving GROWMARK’s expansion is the nation’s thirst foralternative fuels. Approximately 70% of all gasoline marketed by GROWMARK memberscontains 10% ethanol.
Today, GROWMARK’s network consists of roughly 200 FAST STOP stores, which itservices using a combination of a private fleet, dedicated contract carriersand common carrier operations. Ertmer expects GROWMARK to add roughly 30 moresites within the next year but believes the cooperative has interest in almostdoubling the size of the current network by bringing in new retailers in theMidwest with fuel volumes of 60,000 gallons per month or better. (Marketerswithin the GROWMARK system pump anywhere from a low of 40,000 gallons per monthto a high of 250,000 gallons per month.)
Presently, GROWMARK has FAST STOP stores in Illinois, Iowa, Kansas, Michigan, Nebraska and Wisconsin. The cooperative hopes to one day soon branch out into Indiana, Missouri, Ohio and Oklahoma to pursue new growth opportunities.
Driving this expansion is the nation’s increased thirst for alternative fuels, which are at the very core of GROWMARK’s mission and capabilities. Since it has a strong concentration of marketers in the “Farm Belt,” the cooperative sells a massive amount of soy-based biodiesel and cornbased ethanol.
GROWMARK has become the largest rural supplier of ethanol fuels in Illinois;approximately 70% of all gasoline marketed by members contains a 10% ethanolblend (E-10), and the company continues to market 85% ethanol-blended fuel (E-85)in its nine-state marketing territory. While E-85 had been maintaining a 20′to 25′ per gallon price advantage over premium gasoline, according to Ertmer,increased demand for the corn-based fuel has narrowed that gap to 10′ to15′ per gallon.
“Because the cooperative is owned by farmers, there’s a lot of political interest in promoting these kinds of fuels,” says Ertmer. “In the last six months, we’ve seen a surge in our locations either changing from premium [gasoline] to E-85 or changing their dispensers to accommodate new fuels. Now, as new sites are being built, we put in the tanks and dispensers equipped to sell these fuels.
“When I was manager of Stephenson Service Co. in 1995,” he continues, “we tried B-20 (20% soy, 80% diesel) and they just loved the product. It kind of fell dormant from there because it needed incentives to help it along. Now that those incentives are taking off, many of our locations are offering biodiesel at the pump and the curve is catching up to us.”
Scott Wiedman became affiliated with GROWMARK more than three years ago. Althoughhe and his business partner had no prior knowledge of the convenience storebusiness when they decided to open a store in Henry, IL, Wiedman had 50 yearsof retailing experience to his credit.
Even so, he needed some guidance and support from the very beginning. Barringsome frustrations with a thirdparty retail operations system Wiedman refersto as “the brains of the store,” he feels that GROWMARK has delivered.
“We work in the Farm Belt and we live in the Farm Belt, so we thought [ partnering with GROWMARK] was the best way to grow,” says Wiedman. “Our customer base consists of rural people, and they are very loyal to the brand.”
GROWMARK offers a branded fuels program through an arrangement with ConocoPhillips, giving marketers the option to fly the Phillips 66 flag, if desired. That option was offered to Wiedman, but he felt customers would respond more positively to the FAST STOP brand; the Henry FAST STOP has one “corporate” competitor nearby, and Wiedman says customers shy away from that site in favor of his. In addition to the credit card program, Wiedman says the biggest benefit has been the FAST STOP image since it’s so well-received in his farming community.
“We’ve had the one little glitch [with the system], but we’re getting goodsupport,” he says. “FAST STOP’s support, knowledge and equipment have reallyhelped grow our business.”