New Name, But Gas the Same
As Hawaii's Chevron gas stations rebrand as Texaco, the fuel and services will remain the same, owners say.
Hawaii consumers can be loyal shoppers, so it’s a risk when a company changes from a popular brand to a new one. But Island Energy Services LLC took the plunge, and its third-party research indicates customers will keep coming.
“Chevron has had the leading market share in Hawaii for a long time. And we’re looking to maintain that leading market share as we transition from Chevron to Texaco,” says Jon Mauer, the company’s president and CEO.
In November, Chevron’s refinery, its distribution network and gas stations were acquired by a New York-based private-equity company, One Rock Capital Partners LP, which formed Island Energy to manage Chevron’s former businesses in the state. Island Energy is now rebranding its 56 gas stations across the state to Texaco. “It’s a great opportunity for us to continue to provide to Hawaiian motorists a premium fuel,” Mauer says.
When Island Energy took over Chevron’s Hawaii assets, it couldn’t use the Chevron brand – the global energy company reserves that for its own operations – so Island Energy picked Texaco, a Chevron subsidiary.
The stations’ rebranding began in February with new signs and logos overhead, on the pumps and everywhere else, and Island Energy has been completing about two each week, Mauer says. The work started with the handful of Oahu stations that are owned and operated by Island Energy.
“We wanted to practice on them so the crews could learn how to get the rebranding done efficiently,” Mauer says. It takes about three days to rebrand each station. Construction crews are only on site for a portion of each day, so when they leave, stations are able to reopen for business the same day.
Other former Chevron stations are classified as either company-owned, retailer-operated, meaning the company owns the property but a separate business operates the station, or retailer-owned, retailer-operated, meaning it’s an independent business. Six stations are owned and operated by Island Energy, 28 are company-owned, retailer-operated, and 22 are individually owned and operated. Regardless of the category, Island Energy is paying for the rebranding.
Island Energy says research conducted by an outside company indicated 98 percent of Chevron’s core customers in Hawaii said they would patronize the new Texaco stations.
While the exterior of the stations may look different, Mauer says, the stations will provide the same fuel – with Techron, an additive that eliminates engine buildup – the same service, the Safeway reward program and use of existing Chevron/Texaco credit cards. He says, “The message they should see is, ‘Okay, it’s Texaco now, it’s not Chevron, but I can expect the same quality of fuel and service I’ve always appreciated.’ ”
Station operators are echoing that message. Colin Ching, who runs the Pearlridge Texaco station on Kamehameha Highway, says he and his customers are excited about the new brand. The station has been run by his family for three generations and, when it was rebranded, the name changed from Fuji Chevron to give potential customers a better sense of the station’s location.
Barney Robinson, who operates the Waialae and Nuuanu stations as Waialae Petroleum Inc., compares the rebranding to the facilities getting new clothes, though his station is one of nine that is receiving diesel as an added service. Born and raised in Hawaii, he grew up with the Chevron brand and began operating its stations in 1985. “We’re disheartened to see the Chevron brand go away, but we’re encouraged because Texaco is a subsidiary of Chevron, and so a lot of things are going to be very similar,” he says.
Mauer and Carl Bonham, executive director of the Economic Research Organization at UH, agree that the rebranding will not affect Hawaii gas prices, which are largely driven by the global market for oil.
Mauer says the demand for gas in Hawaii is only growing slowly. When gas prices are lower, people tend to drive more than if, say, crude oil is over $100 a barrel, he says. There’s the challenge of people using electric vehicles, he says, but the company doesn’t see it as having a huge impact on business in the near term.
Bonham adds that, as gas prices went down over recent years, more consumers bought larger vehicles that usually use more gas per mile, and that could have offset the reduced demand for gas caused by the small number of electric vehicles in Hawaii. “The bigger factor is just overall growth of the economy, growth in tourism, number of people living here – those are the primary drivers (of demand) – and then, in the short term, the type of vehicles that they’re buying,” he says.
Retail gas is not Island Energy’s only operation. Its Kapolei refinery makes fuel for Hawaiian Electric for electricity generation on Oahu and the Neighbor Islands – about 15,000 to 16,000 barrels a day – plus aviation, marine and diesel fuel, and propane.
The company has about 325 employees and is looking to grow. Prior to the sale, Chevron had been evaluating its Hawaii business for about 10 years, trying to decide if it wanted to stay, sell or strategically do something different. “Because of that, they lost some focus and opportunities to grow the business in Hawaii,” Mauer says.
Take West Oahu: There are few Chevron stations in the area, despite its growth. That’s an opportunity to locate a Texaco outlet, Mauer says.