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From Ethanol Producer mag-

Foreshortened

 

Producer supports 2 installations

By Kris Bevill | December 27, 2010

 

Executives at all 27 plants in the Poet LLC family have been challenged to pursue blender pump installations in their respective areas. Poet Biorefining-Caro, a 53 MMgy plant located about two hours north of Detroit, recently contributed $50,000 toward blender pump installations at stations owned by

 

Cooperative Elevator Co.

Ignash Petroleum Inc.

 

Very few ethanol plants have been successful in getting blender pumps installed in their areas."

 

In exchange for the $25,000 per-pump contribution, Cooperative Elevator and Ignash have agreed to purchase ethanol directly from the Caro plant.

 

The cooperative began purchasing E100 from the plant earlier this year and hopes to increase its demand to more than 10,000 gallons per month, says Tim Sielaff, vice president of petroleum for the co-op.

 

Ignash will purchase E85 and has a goal of selling more than 800 gallons of E85 per day at its new site.

 

-end

 

This is an attractive distribution model. For producers to first contract with local retail fueling stations utilizing the blender pumps. Sure would propel profitability if transportation cost minimized and supply chain simplified. Note the Cooperative is purchasing E100 directly from producer.

Both producer and retail tied up with mutual interest of promoting ethanol fuel.

 

Market penetration of new product that cannibalizes existing product sales of mostly a satisfactory, respected, commodity a very tough uphill slog. Double so if the product merely a commodity. Meaning most consumers see little difference or reason to change, other than bottom line costs or perceived quality enhancement for their vehicle. Sure, some altruistic motives, but most are shopping the pumps to purchase quality fuel that will maintain their expensive auto investment. Others primarily concerned of cost. Note: competing upon low price is a losing strategy as quality perception will take a hit….remember cheap gasohol. Once establishing quality within minds of consumers, better to offer promotional prices for loyal customers. 

 

Marketing ploys to disrupt current king place holders….think how the Japanese auto industry successfully eroded entrenched American Auto industry. One dealership at a time. Establish your product within a local geographical zone with maximum success and best in class quality. Work a new generation with open mindset to adapt a new “not your fathers” vehicle sales. Utilize retail tied to your product and committed to success. How would Honda and Toyota market penetration develop if they adapted the E85 distribution model? Utilize cheap other people’s money at a cost of taxpayer anger. Utilize politics to regulate your product down the throat of consuming public at another cost of consumer anger. Then attempt to put one Toyota in the GM car lot with a subsidized artificial discounted price and wait until the GM salesmen push your product.

 

http://www.ethanolproducer.com/articles/7337/paying-for-pumps

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From Ethanol Producer mag-

Foreshortened

 

Producer supports 2 installations

By Kris Bevill | December 27, 2010

 

Executives at all 27 plants in the Poet LLC family have been challenged to pursue blender pump installations in their respective areas. Poet Biorefining-Caro, a 53 MMgy plant located about two hours north of Detroit, recently contributed $50,000 toward blender pump installations at stations owned by

 

Cooperative Elevator Co.

Ignash Petroleum Inc.

 

Very few ethanol plants have been successful in getting blender pumps installed in their areas."

 

In exchange for the $25,000 per-pump contribution, Cooperative Elevator and Ignash have agreed to purchase ethanol directly from the Caro plant.

 

The cooperative began purchasing E100 from the plant earlier this year and hopes to increase its demand to more than 10,000 gallons per month, says Tim Sielaff, vice president of petroleum for the co-op.

 

Ignash will purchase E85 and has a goal of selling more than 800 gallons of E85 per day at its new site.

 

-end

 

 

 

Now we are talking..you are right flee ..that's  an "attractive" distribution model.

 

That is how it should have been from day one..the Ethanol Industry Itself building out it's own infrastructure..or at least contributing to it.  50k isn't much ..what is that 2 maybe 3 E85 pumps?  at least the right direction

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I sure hope Poet can pull it off and get the ball rolling. Two mornings ago I was talking to the manager of a plant I'm in and he thinks what happens to the ethanol industry is going to be in government decisions. We both agreed that next Jan. 1st the blenders credit is history. Sounds like he(manager) is taking a wait and see attitude which is kind of disappointing.

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if EVERY ethanol plan had a "mini-network" of 4-5 blender pumps in a short radius of the plant that they directly supplied... this would be AWESOME!  As Dan stated... is what they should have been doing from day 1!  Build plants to fill in the gaps in the distribution network... Saturate the entire midwest with blender pumps all supplied by local ethanol plants... as different feedstocks come on line, there will be new geography to carve up with additional local networks of blender pumps...

 

I hope POET keeps this up, and other producers follow suite

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