Founded in 1981 and headquartered in New Paltz, N.Y., Chestnut Petroleum Distributors (CPD) Inc. has established a significant footprint of gas stations and convenience stores. Among the leading petroleum distributors and marketers in the Northeast, CPD’s portfolio has been built on several go-to-market methods, including company-operated and commission agent sites.
“Our goal is to double in size every five years, and we’ve been achieving that,” CEO Mickey Jamal says.
Today, CPD has a network of nearly 400 sites in New Jersey, New York, Connecticut, Massachusetts and Rhode Island. Some are full convenience stores or snack shops. Others are kiosks or bay operations.
“Some locations lend themselves to a convenience store environment, and our vision is to grow our c-store brand,” General Manager Rick Theilig says. “Currently, they are Mobil Marts and Shell Food Marts. We are working toward establishing our own brand.”
CPD determines the right kind of store based on market conditions like the type of competition in the region. Whether a location is in a commercial zone or a neighborhood setting is another consideration.
The organization has developed its technological infrastructure, putting in place what it believes are first-class back office systems. It uses the S2K management system, which was specifically designed for the gas station c-store and jobber environment. CPD also has a software solution to manage maintenance, dispatch, control and environmental compliance, and it is rolling out a CPD university training website.
“That will be offered to dealers, managers and commission agents,” Jamal says. “It will be a site where they can train on many issues, and it will help keep us up with regulations and stay organized.”
The gasoline sales side of the business can fluctuate due to external factors. “Although we base budgets on certain market conditions, volatility requires adjustments to determine if we should accelerate or hold back,” Jamal says. “If needed, we can add to our product mix or bring in seasonal products to bridge gaps. We’re also looking at green investment, bringing in solar energy and more efficient equipment to cut expenses.”
Another way to combat volatility is through loyalty programs. CPD partnered with Shell on a Stop & Shop loyalty reward program. Similar rewards programs exist on the ExxonMobil side of CPD’s business.
“We are trying to help consumers save on gasoline, and we plan to move forward with major brands because of the value of their flags,” Theilig says.
“We look at all options to enhance sales and keep customers,” Jamal adds.
Gasoline sales also leads to facility upgrades, especially after acquiring older assets. The company often invests in environmental upgrades, sometimes taking advantage of down time to convert bays into full convenience stores.
“The first concern for sites is environmental, so we look at tanks and dispensers to be sure everything is up to date and meets requirements,” Jamal says. “In many cases, we upgrade tanks, lines and dispensers. We also upgrade POS systems and determine what kind of location best suits the market. We’ve built stores and renovated others.”
In c-stores, CPD determines the right merchandising and product mix. Some traditional categories remain strong; others are declining or emerging. The company understands that the focus can no longer be on lottery and tobacco. On the other hand, foodservice is an area primed for growth.
“Categories constantly change, and we try to accommodate new products wherever it makes sense,” Jamal says.
“We’ve partnered with Dunkin Donuts in some locations, and we are looking at Subway and other fast feeders,” Theilig adds. “We are also developing our own commissary systems and doing more food prep on our own.”
The company offers its own branded products, too. These include Lotta Java, the company’s CPD-branded coffee, and Chestnut Ridge Natural Spring Water, a CPD-branded bottled water.
CPD will continue to focus on folding in assets from several major acquisitions since the beginning of 2011. This is part of the company’s goal to be a best-in-class operator. CPD is also likely to continue to grow.
“We will continue to grow our footprint and attract a strong range of dealers, allowing us to provide quality products and services,” Jamal says.