Propel Fuels serves largest US E85 market in California
Propel Fuels, the nation’s leading retailer of E85 Flex Fuel, welcomed the 2017 National Ethanol Conference to California, America’s largest E85 market. Having cracked the code to high volume E85 sales, Propel sells more than 500 percent above the national average through innovation in fuel brand and consumer engagement.
“Over the past decade, Propel has demonstrated strong and growing demand, and we’re confident E85 can be a huge national success story if the ethanol industry focuses on scaling up winning strategies,” said Rob Elam, CEO of Propel Fuels. “E85 is America’s fuel, with benefits the vast majority of Americans support including great value, high performance, domestic jobs and clean air.”
Brand powered and data driven, Propel utilizes the most effective modern retail techniques to engage consumers with a compelling alternative to fossil fuels. With customer loyalty exceeding even Starbucks Coffee, Propel’s retail brand significantly outperforms major oil brands including Chevron and Shell, and has earned the company a 70 percent share of the E85 market in California, one of the largest and most dynamic consumer fuel markets in the world. Propel’s retail customers are valued over 10X lifetime value compared to fossil fuel customers of major branded retail.
“People who buy fuel are the same people who use products and services from Apple, Google and Starbucks. They have brand and experience expectations that traditional fuel retailers have not even attempted to meet. Propel is a brand and data powered company because it works. We know who the customers are, where the flex-fuel Vehicles (FFVs) are, how to launch sites, engage and retain high value customers,” continued Elam. “Propel’s E85 customer demographic represents the largest and most lucrative consumer category – average Americans. This is the demographic that new technology and growth companies aspire to reach. We’re already solidly here, and scaling into the opportunity.”
Propel’s innovation in customer experience, mobile communication and retail technology is connecting with consumers. Millennials are Propel’s fastest growth segment, and the company’s mobile app has an extremely high utilization rate with over half its customers using it every month.
“The ethanol industry needs to rapidly improve downstream customer engagement. Gasoline is a long-term monopoly product. E85 is not gasoline and can’t be sold the same way. The industry keeps believing the ‘build it and they will come’ myth, resulting in poor performance at retail and underinvestment in the long term,” Elam continued. “Unbranded and unsupported E85 is not a viable retail growth product, in part, because it doesn’t have a branded counterpart in most markets. These are basic retail and product brand marketing issues that most E85 retailers haven’t been able to figure out.”
This is a critical time for E85. Facing unfriendly EPA appointments and emboldened fossil fuel corporate lobby pressures against the Renewable Fuels Standard (RFS) on one side, and highly speculative Electric Vehicle (EV) and hydrogen hype technologies on the other, the ethanol industry needs to scale E85 infrastructure successfully in the near term. FFV availability is a foundational component to fuel choice for average consumers. With 21 million FFVs in the U.S., as compared to 500,000 EVs, E85 is the only current alternative fuel vehicle technology that is affordable and scalable today. Low carbon liquid fuels are responsible for 85 percent of the greenhouse gas reductions achieved by the California’s Low Carbon Fuel Standard (LCFS). Without FFVs, emissions and carbon reduction targets will not be met.
E85 margins are projected to remain robust in California. It is estimated fossil fuel corporations spent over $542 million on LCFS compliance in 2016 alone. With LCFS and Cap and Trade compliance curves rapidly steepening to 2030 and beyond, California will remain a market of high value customers.
“The compliance value of the winning low carbon brand can’t be underestimated,” said Elam. “Successfully executed consumer strategies will be worth billions of dollars.”
Propel’s research and development lab, The Silicon Valley Workshop, has released important white papers detailing E85 consumer behavioral data. Including the 2016 consumer study revealing new data about mass-market low carbon fuel adoption in California. Propel’s Low Carbon Fuels in California: Motivators and Barriers to Use illustrates the compelling demographics of the E85 consumer base.