Reap what you sow

As the domestic market tails off over the summer months, for many distributors, it is their agricultural business that picks up speed. Below Liz Boardman looks at this market’s seasonal peaks and troughs and asks whether agricultural shows are still the best place to do business.

A changing market?

An important sector for Fuel Additive Science Technologies (FAST), agriculture accounts for 15% of its overall business.

FAST manufactures a number of agricultural products including fuel upgrade, Gas Oil Extra; fuel soluble biocide, Anti Bug; fuel stabiliser, Fuel Store Plus; and online injector and fuel system cleaner, Diesel Power Restorer.

Neil Ryding, FAST’s managing director, believes that the market has seen a significant shift in the last few years: “In January 2011, the market changed hugely as the sulphur content of red diesel was reduced to a level matching white diesel, and the allowable biodiesel content was increased. This has had a knock-on effect on fuel performance in modern engines and fuel storage conditions.”

“The market has changed dramatically,” agrees Consols Oils managing director, Kevin Bennetts. “Fewer of the larger farms are using bigger volumes, whilst very aggressive competition has degraded margins and service levels. Good service is paramount and is winning the war of attrition – treat customers fairly and most will reciprocate.”

In Cumbria, however, the market has been relatively static, as Carrs Billington’s Derek Wallace reports: “I don’t think the market has changed too much; although an increasing number of agricultural contractors are doing more of the seasonal work. With bigger equipment, they can get the job done within a day or two of fine weather.”

Managing peaks and troughs

Whilst traditionally summer and autumn are the busiest times for the farming community, FAST supplies product all year round; although there is a marked increase in demand from July to October.

With five depots spread across the north of England, Carrs Billington experiences demand at different times, in different areas. ”Our Hexham depot supplies more gas oil at harvest time due to the number of arable farms and better harvest conditions, whilst Cumbria’s better suited to growing grass and is busiest at silage time in late May and June, and again at the end of summer,” explains Derek.

At Cornish distributor Consols Oils, volumes peak at harvest times. “Service levels are crucial, but fuel is always being used so life goes on. Fortunately there’s usually a very clear division between peak gas oil volumes and heating oil demand,” adds Kevin.

As part of the company’s investment into its fuels business in Devon, Linton Fuel Oils took part in the Mid Devon show at the end of July – taking the opportunity to introduce a new vehicle livery design

As part of the company’s investment into its fuels business in Devon, Linton Fuel Oils took part in the Mid Devon show at the end of July – taking the opportunity to introduce a new vehicle livery design

Showing off this summer

Carrs Billington is a big supporter of local shows and is the Cumberland Show’s main sponsor for the next three years. “We also take a stand at a number of smaller shows around the county and have done for many years, offering refreshments at them all. We know it’s appreciated by customers and show organisers alike,” says Derek.

“We participate in a considerable number of agricultural events, mainly as part of our ongoing education and training activities for the industry,” explains FAST’s Neil Ryding.  “These range from informal events for farmers organised by our fuel distributor customers and attendance at county shows, to formal technical presentations alongside machinery manufacturers.  As a route to market these events tend to raise awareness of issues rather than increase the volume of additive sold, but we still think that they’re time well spent.”

On the look out for new business – Web Oil.co.uk exhibits at the Cheshire Show in June

On the look out for new business – Web Oil.co.uk exhibits at the Cheshire Show in June

Growing the business

Owned by Nicholl Fuel Oils and UK Fuels and based in Ellesmere Port, Web Oil.co.uk launched just under a year ago. Deputy editor of Fuel Oil News, Liz Boardman met marketing team member, Lisa Stockton at this year’s Cheshire Show. The company also attended shows in Staffordshire, Nantwich and Denbigh and Flint.

“The show went well and we were really busy; lots of people said that they’d already heard of us,” said Lisa. “As well as domestic and agricultural customers we were also looking to pick up new commercial customers with a view to expanding in to areas such as the Lakes.”

 A busy show for Ingoe Oils

A busy show for Ingoe Oils

Also attracting new business at the same show was Rochdale-based Ingoe Oils. The company, which has expanded significantly since the start of the year, took on sales manager, Stephen Gommersall with a view to extending its reach into Cheshire.

Managing director, Jordan Ingoe, who set up the company in 2009, reported that the show had been extremely busy, with lots of interest, new leads and enquiries.

Offering both Carbery and Harlequin tanks, Oswestry-based Oil Tank Installation Service (OTIS) was the only tank supplier at the aforementioned show.

Seen here at the Cheshire Show, the OTIS team also attended the Royal Welsh Show

Seen here at the Cheshire Show, the OTIS team also attended the Royal Welsh Show

“We’ve exhibited for a number of years,” company owner Andy Middleton told FON. “We need to have a presence at the agricultural shows – it’s a good opportunity to see our regular customers and pick up new business amongst the farming community.”

“It’s important not to judge your success by what you sell at the show,” he added. “A week before last year’s Royal Welsh Show, we sold two tanks to a customer we’d first met at the show in 2011.”

Gravitas or gimmick?

As demonstrated above, many distributors reported that their presence at county shows was still a very important part of their marketing and PR strategy. Having gone down this route in the past, Consols however now believes that the ‘best route to market is a smart, well-liveried truck, competitive price and good service.’ “It’s that simple – gimmicks are history,” said Kevin.

 

Distributors are invited to send their opinions and/or photographs to liz@fueloilnews.co.uk.

 

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