Opinion: Building the Bioheat Bridge - keys to playing offense
It seems obvious; building the Bioheat Bridge is simply the act of blending ASTM D6751 biodiesel with ASTM D396 heating oil. What is not as obvious or simple is recognizing the opportunities and various bridges that can be successfully built through biodiesel marketing. Over the past 10 years terminal operators and oilheat marketers have found increasing value within the biodiesel gallon and have been committed to making biodiesel a constant and integral part of their respective business plan. Those biodiesel marketers who came into the space early were entities that had a genuine entrepreneurial spirit and enthusiasm for rebranding their companies within their communities and biodiesel was the opportunity to do just that. Since then, and I would suggest over the past five years, it has been the emergence of organizations which recognized that biodiesel was not a fleeting movement and embraced the true benefits from the consumer marketing perspective, company public relations and most importantly on the profit and loss side.
Biodiesel awareness has grown dramatically since the National Biodiesel Board began measuring consumer awareness over the last decade. When consumers were sampled in June 2004 regarding their overall awareness of biodiesel only 24 percent of consumers had heard of biodiesel, contrasting with 73 percent of those consumers having not heard of biodiesel. Fast-forward to October 2013—of those registered voters asked of their overall awareness of biodiesel, 81 percent had heard of biodiesel and only 19 percent had not. Over a consistent 10-year survey sample, the growing awareness of biodiesel should provide distributors with added confidence regarding the consumer’s increasing understanding and acceptance of biodiesel-blended fuels. Another startling and supportive takeaway from the recent National Biodiesel Board survey, to better illustrate the impact of biodiesel consumer attitudes, is that there is nearly a 10:1 positive vs. negative opinion of biodiesel with registered voters surveyed in 2013.
The growth of the biodiesel industry over the past 10 years has been nothing short of meteoric. The U.S. produced somewhere in the neighborhood of 20 million gallons in 2003. The year 2013 saw the U.S. biodiesel industry produced close to 1.8 billion gallons. Although the oilheat industry was never considered a huge target market by many in the biodiesel industry 10 years ago, the fact is that oilheat has significantly contributed to the biodiesel industry’s growth curve. Looking inside the numbers, we see more than just increasing production, truth be told what Bioheat distributors are finding is the growing value inside the biodiesel gallon over this period of time.
Bioheat success over the long haul requires having a plan, grabbing all of the low hanging fruit available and being aggressive—or as I like to suggest to my sporting clients, playing offense. Over the past five years, through my work with the National Biodiesel Board and with Amerigreen Energy, I have had the pleasure of meeting and working with hundreds of oilheat marketers. Recently, it has become obvious to me that many of the distributors who are not evolving with the times find themselves in positions where they are seeking to sell their companies, and those organizations that have adapted to the changing landscape are in fact on the purchasing side of many of those companies. This might seem a little callous, but it’s true. Biodiesel might not be the cure-all or silver bullet in every instance for every marketer, but what I can tell you is that currently our clients are in full acquisition mode. Whether they are full service oilheat companies or HVAC companies, the Bioheat marketer is making investments into their future. What’s their secret? They have a plan for the future that they are successfully executing.
The successful independent Bioheat energy marketer has already crossed several hurdles that their competitors continue to struggle with. That main hurdle is the need to change and evolve the oilheat business model. It breaks my heart to sit across from a good family business and hear all the reasons not to become a Bioheat marketer:
“I heard that there are quality issues with that stuff from the supply house.”
“It’s more expensive! Isn’t it?”
“Our customers are not asking for it.”
“We’ve been in business for 75 years, we must be doing something right.”
Look, we all know that oilheat gallons are contracting across the Mid-Atlantic and into the Northeast. This unfortunate reality requires real business solutions, not nostalgia and what ifs.
The keys to play offense
-Building the Bioheat Bridge does not require an engineering degree. It’s about recognizing the long-term benefits of making a commitment to biodiesel marketing as a new face for your franchise. Working with the right strategic partners to determine the right biodiesel blending balances based on terminal blending infrastructure and the economic movements within the heating oil and biodiesel markets.
-Building the Bioheat Bridge allows those marketers who are in the game the opportunity to take advantage of biodiesel blending economics when the present themselves.
-Building the Bioheat Bridge requires a fundamental understanding and attention to product quality by sourcing the appropriate biodiesel feedstock, based on cold flow characteristics, to maximize the performance benefits of biodiesel blends.
-Building the Bioheat Bridge is about providing positive consumer messaging and enabling your customers to purchase a domestically produced renewable energy, creating a word of mouth conversation in neighborhoods and a buzz within your community.
-Building the Bioheat Bridge is about creating a sustainable business plan that will attract the attention of new young homebuyers who are often encountering oilheat for the first time.
-Building the Bioheat Bridge allows the oilheat marketer to go on the offensive, make the case against natural gas, highlight the greenhouse gas emissions reductions, and provide a cleaner, more efficient fuel that increases system performance.
-Building the Bioheat Bridge means educating your employee base so they are empowered to take your revitalized message out to the market, cultivating more productive customer relationships and becoming lead generating tools.
-Building the Bioheat Bridge allows for a new conversation at Chambers of Commerce, Rotary and community events.
The value of the biodiesel gallon is increasing steadily because it is becoming widely accepted as the best new product innovation for the heating oil distributor by the consumer. Amerigreen Energy works hand-and-hand with our distributors, developing biodiesel brand marketing and supply relationships, individually crafted to the specific needs, opportunities and target markets of our clients. Taking the opportunity to build these bridges will create a new model that can withstand the outside forces pressuring your customer base on a daily basis and in the end will provide the ultimate bridge: an ongoing, secure relationship with your customers and a business looking to grow again and evolve in these very challenging times. The time has come and the ball is in your hand. Are you going to shoot it or turn it over and go back on the defensive?
Author: Michael Devine
New England Sales & Marketing, Amerigreen Energy Inc.