Biodiesel Pays Off for Travel Center, Wholesaler

“Biodiesel has opened a lot of doors for us.” That’s what the vice president of Sapp Bros., Inc. says of the renewable fuel’s effect on his company’s travel center and fuel wholesale businesses.

The Economic Advantage of Biodiesel

Sapp Bros., Inc. has experienced the benefits of biodiesel with two different businesses.

One is Sapp Bros. Travel Centers, which operates 17 travel centers stretching from Salt Lake City to Pennsylvania, many of them along Interstate 80. The other is a fuel wholesale business, Sapp Bros. Petroleum, which sells petroleum diesel, biodiesel, biodiesel blends, and other fuels and lubricants.

“Economically, biodiesel is a good thing to do,” says Kevin Cassidy, Vice President of both the petroleum and travel center businesses. “It’s also a sustainable fuel. It’s made us more competitive.”

Biodiesel economics spur interest

The company’s travel center in Peru, Illinois, offers a case study in these benefits. Located 100 miles west of Chicago on I-80, Sapp Bros. Peru is a full-service travel center that sees 750,000 customers a year.

It was one of the first travel centers in the state to offer biodiesel blends when it introduced the alternative fuel in 2005, according to Cassidy.

“The state of Illinois established a sales tax exemption on blends of B11 and higher that still stands, and it made sense to do it,” he says. “The B100 was priced attractively, below what our petroleum diesel cost. And we were able to offer a B11 blend at 8 cents per gallon below our No. 2 ultra-low sulfur diesel (ULSD). It went over very well with our customers.”

The infrastructure changes needed to introduce biodiesel were relatively simple. Sapp Bros. Peru converted a 12,000-gallon underground storage tank to hold straight biodiesel, or B100. Then as now, biodiesel is piped over to a loading station where petroleum fuel trucks come in, and Sapp Bros. uses splash blending by loading the B100 into the top of a truck’s tank. The truck then unloads the blended fuel into tanks that feed the diesel islands.

“To get started with biodiesel, our infrastructure upgrades were minimal,” Cassidy says. “It was around an eight-month payback on the cost.”

Utilizing B20

Cassidy is able to easily adjust the blend level and frequently goes up to a B20 blend.

“The blending economics make B20 a smart choice for us,” Cassidy says. “And I’ve had drivers say it’s cleaned up their fuel systems, cleaned their fuel injectors, and they actually get better mileage with biodiesel blends versus a regular No. 2 ULSD because of the clean injectors.”

The Peru travel center and the wholesale business run out of the location use B11 throughout the winter, and on milder winter days will move up to B20. Cassidy says by using a good cold weather additive, they’ve had no issues in storage tanks, at dispensers or with customers.

No matter the weather, he advises other travel centers to do their homework on producers and to purchase quality fuel.

“REG produces a quality product, they stand behind it, and they have the supply to meet our demand,” Cassidy says.

Biodiesel has made Sapp Bros. more competitive both against other travel centers and as a fuel distributor.

“Because we took the step and handled biodiesel, it opened up a lot of doors for us as a wholesaler,” Cassidy says. “And at our travel centers, having a diverse lineup of fuels attracts a bigger customer base. Besides filling up with fuel, they’re inside your stores. They’re shopping, maybe getting something to eat. There are benefits to bringing in new faces.”

The Bottom Line

Economics

Sapp Bros. pays less for biodiesel.
They can price biodiesel blends lower at the pump than ULSD, making them more competitive.
Helps drive in-store sales.

Infrastructure

Quick ROI on blending system.
Easy to switch blend level.

Watch: Sapp Bros. Explains Biodiesel Benefits

Biodiesel has made Sapp Bros. more competitive in the crowded travel center market. See the results.  

A Convenient Sustainability Solution for C-stores

Kum & Go has embraced biodiesel as sustainability rises in importance for it and its customers.

As one of the largest chains in the competitive convenience store industry, Kum & Go must stay on top of trends. In recent years, environmental sustainability has emerged as perhaps the biggest trend around.

The West Des Moines, Iowa-based company has turned to biodiesel to help it meet both its own and its customers’ environmental goals.

“I think the sustainability factor is very important,” says Jim Pirolli, Vice President of Fuels at Kum & Go. “Reducing carbon emissions and replacing fossil fuels with something that’s more environmentally friendly is a message that a lot of people can get behind, whether they’re fleets or individual drivers.”

When Pirolli talks about giving customers the products they want, he’s talking about a lot of customers. Kum & Go has more than 400 stores in 11 states that serve about 480,000 customers daily.

Biodiesel boosts performance

Kum & Go has a long history with biofuels, first offering an ethanol blend in the late 1970s. About a decade ago, it introduced biodiesel and now blends biodiesel into nearly all of its diesel fuel. That varies from 5 to 20 percent (known as B5 and B20), and it offers biodiesel year-round — even in the middle of winter at its stores in the upper Midwest and mountain regions.

Kum & Go has found that, above all else, customers value performance and want a fuel that they can be confident in and one that provides good fuel economy.

"Everything we do on fuel is based on customer demand and quality, foremost,” Pirolli says. “With biodiesel, the fuel has some unique performance characteristics. There are a lot of BTUs available in biodiesel. That means more power and better fuel economy. It also has a high lubricity ratio. So, when we can use more biodiesel, that’s going to provide better performance for customers, and also potentially lower our diesel retail price.”

It’s important, he says, that a c-store purchases high-quality biodiesel. Kum & Go is an REG customer.

“We choose to partner with upstream players and go directly to our fuel suppliers and producers of the product, whether that’s petroleum or biofuels,” Pirolli says. “A partnership with a company like REG that can supply a large quantity of product, from multiple locations, with a very consistent quality is extremely important for our program.”

Sustainability as a core value

For Kum & Go, sustainability is not only about meeting customer demand. It also has become a core piece of the company’s culture. That’s demonstrated not only in the fuel lineup but also in the more than 100 LEED-certified stores they’ve built, the availability of recycling at fuel dispensers and other initiatives.

“Kum & Go sees biofuel blends fitting into our sustainability goals in a couple of different ways,” Pirolli says. “First of all, we’re located in one of the highest-producing regions for corn and soybeans, and that means that, by promoting biofuels at our stores, we’re helping farmers achieve a better corn or soybean price and are supporting domestic production of biofuels. And then we’re offering customers in the local regions a better economic value on their fuel.”

"A partnership with a company like REG that can supply a large quantity of product, from multiple locations, with a very consistent quality is extremely important for our program."
Jim Pirolli Vice President of Fuels at Kum & Go