Convenience Store News

MAR 2017

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HOW TO 58 Convenience Store News | MARCH 2017 | WWW.CSNEWS.COM Gasoline + Diesel + Ethanol + LNG/CNG + Electric MOTOR FUELS T he future looks bright for alternative fuels, but to capitalize on the available opportunities, suppli- ers and retailers alike need to keep a close eye on market conditions and consumer demands. This was just one of the issues discussed at the third-annual Con- venience Store News Alternative Fuels Summit, held Dec. 6-7 in North Carolina. The event, sponsored by Growth Energy, included tours of the Richard Childress Racing Museum and the NASCAR Sprint Cup Shop, and brought together convenience store retailers from across the country that offer alternative fuels for a roundtable discussion. During the keynote presentation on the future of fuels, speaker Van Tarver, former CEO of Kroger Convenience Stores, noted that following a period of negative growth in fuel demand, the past four years have seen an increase in demand — even reaching all-time highs — and gross margins per gallon are also up. He cited research from Lundberg that projects fuel demand growth for the foresee- able future — barring severe recession or extreme crude oil price increases. Factors driving the demand are job growth, an expanded motor- ist pool, and rising sales of trucks, vans and SUVs. Additionally, Tarver pointed to data from the United States Census showing that the number of Americans in their peak driving years will increase between 2015 and 2030. There are other factors, however, that could dampen demand, such as lifestyle changes by millen- nials who practice ride-sharing, downtown living and telecommuting; senior citizens cutting back on driving; pump price increases; and moves by the U.S. Energy Information Administration. "Which assumptions are right, and what is the future?" Tarver posed to the group. His take is that everyone in the fuel retailing industry must stay flexible and monitor the market in regards to where customers are going and what they want. Today, competitors in the market have consider- ably increased access to analytics that cover customer data, generational trends, and how customers get and pay for what they do want. Discussing specific alternatives to traditional gaso- line, Tarver stated that: • Compressed natural gas (CNG) and hydrogen face major equip- ment challenges. • Electric vehicles are not likely to be a game changer for at least 10 years due to price, range, recharge time and other factors. Disruptors in this segment include the small share vehicle population; the feder- ally-backed electric vehicle charg- ing network; and Elon Musk, who is trying to redefine transporta- tion both on Earth and in space. • E15 is more likely to do well because it is profitable and many consumers see using it as a way to What's Forthcoming for Fuels? Convenience Store News Alternative Fuels Summit talks market demand, innovation By Angela Hanson & Don Longo

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