Lance Klatt, executive director for the Minnesota-based fuel-station brand Minnoco, is tired. During his time as the executive director of a fueling retail chain, he’s heard countless arguments back and forth, from both the oil and ethanol industries, about how one fuel is superior and how the other fuel is a detriment to his business, consumers, and the country.
A little under two years ago, he’d finally heard enough. He decided he was going to let his customers choose what fuel was best for them and added ethanol blends like E15, E30, and E85 to the menu of choices at Minnoco’s stations.
“I said, Y’know what, let’s just do this, let the consumer speak their mind how they want to,” Klatt explained, “not the oil companies, or the ethanol companies. Let’s let the consumers pick and choose what they want to buy — use the free market.”
And that’s exactly what Minnoco has done, with 18 of its 21 independently run stations now carrying E15, E30, and E85 alongside the more traditional choices of diesel and E10 gasoline.
The verdict? People love the cheaper, higher-octane ethanol blends, and they appreciate Minnoco for offering it to them. What’s more, the ethanol Minnoco uses is produced entirely within the state, giving Minnesotans an opportunity to support their local economy.
“A lot of people have tried the gasoline — or the E15, which I’ll call gasoline because it’s only 15 percent ethanol — and they’ve been more apt to try it because it’s local and helps the economy,” Klatt said, “We think it’s a great fit.”
By positioning Minnoco as a company that offers consumers multiple choices and supports in-state jobs, Klatt has filled a previously unoccupied niche in the Minneapolis/St. Paul area, resulting in increased on-site foot traffic. This in turn boosts in-store sales at Minnoco stations, improving their overall profitability. So much so, that Minnoco has plans over the next few years to more than double the amount of Minnoco-brand stations to 50.
Other fuel retailers who decide to offer fuel choice might go about it in piecemeal fashion, adding a higher ethanol blend option here or there. But Minnoco has brought the concept to almost all of their stations in the span of less than 18 months. While this would usually be cost-prohibitive for a small, independent retailer like Minnoco, Klatt explained that he’s able to keep costs down just by converting some underground fuel storage tanks that previously contained mid-grade gasoline, which is not a hot seller. This means all Minnoco had to buy were new dispensers, and that cost was offset by the benefit of being able to advertise as a retailer that puts consumers first and lets them choose the fuel they want.
“It’s been a great opportunity for our retailers, but even better for the consumers,” Klatt said. “Everybody wins because it brings a lower price point out on the street … and we get all of our ethanol through Minnesota farmers.”