2006 Executive Leadership Conference at Winter Management
Breckenridge, Colorado

David and Grace Atwater try their hand at dog sledding during the 2006 Executive Leadership Conference.

(Left to right) Bob Merz of HotStuff Foods, Don Endres of VeraSun Energy Corporation and Todd Phillips of Fuel Managers take part in the Executive Roundtable.

SIGMA collaborated with National Petroleum News (NPN) and Oil Price Information Service (OPIS) to offer the 2006 Executive Leadership Conference at Winter Management (formerly known as the Winter Management Conference) in Breckenridge, Colorado.

“This year’s conference was an absolute success,” said Conference Chairman Todd Phillips. “It was the best ever.”

Just under 200 people — a greater number than in years past — attended the conference, where motor fuel marketers and vendors alike learned about the upcoming issues within the industry via educational sessions and the 2006 Exposition. Breckenridge experienced record setting snowfall this year, making for some great skiing. In fact, it was one of the best “snow years” since the ‘70s and conference attendees took advantage! The skiing was unparalled... and a great way to have fun after participating in the intensive educational sessions of the morning.

EDUCATION
Industry executives predicted an increase in alternative fuel use and better category management in the first segment of education entitled ”The CEO Roundtable Series,” made popular at last year’s Winter Management Conference.

According to SIGMA marketers, the favorite in this year’s Roundtable Series goes to Don Endres, CEO of VeraSun Energy Corporation, who said that ethanol is particularly popular among independent marketers. “ninety-one percent of independent marketers sell the fuel today,” Endres said. “It tends to resonate with them.”

Endres also received the most questions in the session following the CEO’s presentations, including a tough one presented by SIGMA Counsel Greg Scott about alternative fuel mandates. As discussed in the Legislative Committee meeting in Denver, SIGMA traditionally opposes mandates and supports incentives — particularly when it comes to adding more mandated fuels to the load marketers already face in today’s boutique fuel initiative.

“We think mandates are good early in industry development,” Endres responded, “but it’s not the long-term answer.” Endres also mentioned that ethanol manufacturers support various state legislation (most of which include mandates) to create stronger support at the federal level. “We’re having a hard time passing it at the federal level when states aren’t passing it first,” he said.

This is where attendees also learned that:

Installing a car wash onsite will increase their gas volume by at least 10 percent — and in some cases as much as 30 percent — from Ryko Manufacturing Company President and CEO Scott Clawson.

Knowing their store with added guidance from technology, key employees’ insight, and demographics is the key to category management — from Michael Zielinski, president and founder of Royal Buying Group, Inc.

Upgrading their POS will save them on average $6,000 by reducing thefts, cashier training costs, price errors in back offices, and costly site downtime — from Martin Gafinowitz, president of Gilbarco Veeder Root.

Installing a foodservice component onsite will increase top-margin delivery by 20 percent — from Bob Merz, vice president of Hot Stuff Foods.

THANK YOU, SIGMA SPONSORS! SIGMA extends its most sincere thanks to those companies that made some of the special events possible, or those contributions which allowed SIGMA to upgrade functions beyond what registration fees covered. We couldn’t throw a signature SIGMA meeting without your help! Please let these sponsors know how much we appreciate their continued support. Advanced Digital Data, Inc. American Express ATS Environmental Boyd Coffee Company CITGO Petroleum Corp. ExxonMobil Corporation FCStone, LLC Gilbarco Veeder-Root Mark VII Equipment Matrix Capital Markets Group, Inc. McLane Company Miller Brewing Co. Nestlé Waters USA PDI Pur-Clean Ryko Manufacturing Company Subway® TelaPoint, Inc. TransMontaigne Product Services VeraSun Energy Corporation Wright Express LLC

A brave group poses for a photo during the Snowmobile Tour.

Jack Pester (left) and Tom Robinson take part in the 2006 Marketer Outlook during the second day of education.

Several attendees enjoyed the Apres Ski Party during the conference.

The tabletop show runs throughout the entire convention, giving attendees a relaxed atmosphere to browse exhibitor products.

Prizes were awarded during the show. Joanne Greinke (left) won a PNY 512 memory stick.

Joe Leto addresses the audience during the third day of the conference.

The second segment of education featured SIGMA’s own in a ”CEO Best Practices Marketer Panel,” where Rick Clark, Mike Coulson, Jack Pester, Tom Robinson and Carl Boyett shared what they plan on tackling in 2006.

Each marketer told a different story with a different strategy on how to tackle the challenges that lie ahead. Rick Clark, for example, predicts that product in his area will be available only at high prices because of volatility in the marketplace. Therefore, his company decided to build a relationship with a vertically integrated supplier, allocating them with almost 95 percent of their total product. “Since we don’t know a lot about hedging,” Clark said, “we’re going to let them use their expertise for us.”

Mike Coulson addressed things from a different angle: that of a dealer. “I see the future as having three types of marketers: hypermarts, chain retailers and dealers,” he said. “I grew my stores from 125 to 210, 80 of which we own in real estate.”

Since his recent company growth, Coulson needed more from his dealer reps, so he created a service matrix as an incentive in 2006. The matrix included seven items he thinks each site needs to achieve before being at its best — from automatic tank gauges to engaging more stores in their co-op program. If the dealer rep completes all seven items for their stores, he/she will receive a bonus.

Tom Robinson, on the other hand, is strictly a company-operated entity. He gets generally adequate supply from five sources (both rack and pipeline product) and he freely admits that he is not a dealer or a wholesaler. He shared with everyone in the audience something that fits onto one piece of paper: his company’s strategic plan.

Robinson got the one-page strategic plan idea from Bill Shipley and noted the importance to supply
the plan to everyone in the company so he/she can see how they fit into the overall picture. “Having it on one page also makes it easily accessible,” he added. “That way we don’t get sidetracked by everyday tasks — we always have our eyes on the big goal.”

Carl Boyett and Jack Pester both discussed operational tasks their companies will face in the new year: “moving.” Boyett described steps his company took that will propel it into the 21st Century with technology, automating many processes that will cut costs by reducing human error in product pricing. Pester’s company, on the other hand, is physically moving its headquarters from Des Moines, Iowa to Denver.

Pester, in true SIGMA style, best summed up the CEO Best Practices Marketer Panel by saying, “I’ve gone through all the cycles, but change has always gone to my advantage.” SIGMA’s members thrive on opportunities in the market presented by volatility and unknown factors like hurricanes Katrina and Rita. The 2006 consensus is cyclical, where market opportunities will go to those who risk change.

Ben Brockwell from OPIS also weighed in on the 2006 predictions. He foresees higher prices due to: (1) oil investors who expect the best return for their money and brokers who know it; (2) global economic growth; and (3) increased volatility because of a shallow inventory system, sulfur spec changes, phasing out MTBE and refinery installations. He also predicts that diesel prices will remain high.

Lewis Adam of ADMO Energy countered by explaining a perception of perpetual shortage because of low inventory levels, rising demand, an array of fuel grades, concentration of supply sources, increased volatility and an increase in absolute price level, margin and requirements. He went onto describe a number of risk management tools marketers can use to minimize the affects of this volatile market and encouraged SIGMA’s members to compete on value, not price.

In the final installment of education, Joe Leto from Energy Analysts International (EAI) outlined the U.S. fuels business with respects to hypermarts in retail. Leto sees a growing trend in hypers teaming up with retailers, like Giant teamed up with Eagle. He also said national drug store chains probably do not have the capacity to put in fuel, thus not a risk like Home Depot, who will open four pilot sites in Tennessee later this year. Leto thinks offering diesel fuel could be key to Home Depot’s success and noted the cardlock customer threat.

Leto warned that Wal-Mart still has lots of room to grow in the fuel business, with plans to ramp up throughout the Northeast and West coast in 2006. He also pointed out that many hypermarts entered the ancillary businesses during the past couple of years (car washes in particular, with Costco being the latest entrant) and he expects this trend will continue as well.

2006 EXPOSITION
The 2006 Expo created a fun and relaxing atmosphere for SIGMA members to socialize and network. On Monday night at the Apres Ski Party, Chloe Thomas Phillips drew the names of three “Passport Sticker” winners, including: Joanne Greinke, who won a PNY 512 memory stick; Josh Beamsderfer, who won a Lexar 1GB flash drive, and Brandi Phillips, who won the grand prize of an iPOD.

SIGMA extends a big thanks to all of our exhibitors for making this year’s Expo an event to remember!

EXHIBITORS:

Advanced Digital Data, Inc. (ADD Systems)
ATS Environmental
Boyd Coffee Company
CBE, Inc.
CitiCapital
DM2
Dresser Wayne
DTN
Executive Leadership Solutions
Fleet One
FuelQuest
Herron Companies
Husky Corporation
Mark VII Equipment
MPSI Systems Inc.
PDI
The Pinnacle Corporation
Pur-Clean
Radiant Systems
Simmons
Skyline Price Displays
Subway®
TelaPoint Inc.
Wright Express Corporation