Ultramar: The No 1 Gas Brand In Quebec

Gas is gas, we often hear. But then, if so, does the brand play a role and if so, does it have an effective appeal and loyalty effect over consumers?

The answer: of course! The gasoline brand as well as the convenience store banner play a major role and that is why it occupies such a prominent position in the market.

The brand does a lot of things: it attracts consumers, reassures them about the quality of the products and services offered and distinguishes the proposed offer from the competition.

And the brand is not just aimed at consumers: it also targets operators and owners!

If you had to invest hundreds of thousands of dollars in a gas station, would you go with a known or unknown brand?

In a recent public communication to its shareholders to highlight the benefits of its new CST asset acquisition in Quebec (which can be found on the Internet here), Parkland Fuel Corporation presented some interesting facts about the notoriety and popularity of gasoline brands in Quebec and how these can represent a significant competitive advantage in the marketplace.

There are four major brands in Quebec, all of which belong to major oil companies: Ultramar (Valero Energy), Esso (Imperial Oil), Petro-Canada (Suncor Energy) et Shell (Shell Canada). Of these brands, two are international (Esso and Shell), one Canadian (Petro-Canada) and the last, but not the least (Ultramar), is found only in eastern Canada (Ontario, Quebec, Maritimes) .

As indicated in the following table, this brand portfolio contains the most popular and well-known brands in Quebec. However, of all the brands, it is Ultramar that stands at the number one brand, the one that enjoys the strongest notoriety.

The notoriety of these brands naturally goes hand in hand with the number of points of sale.

According to the DepQuébec gas brand ranking dated March 2017 (and which will be updated shortly), the number of gas stations (excluding garages) by brand in Québec is as follows:

• Ultramar: 424
• Petro-Canada: 335
• Shell: 285
• Esso: 272

Thus, a very obvious and intuitive correlation emerges between the number of branded point-of-sales and the brand notoriety. The more they are found, the more they are known.

When consumers are asked which brand they prefer, the majority, 63% of respondents, point to one of the four major brands. Why? Because their answer goes with their notoriety because how to love a brand that we do not know?

 

This means that in highly competitive markets such as cities and suburbs where one, two or even several service stations are side by side or face-to-face, having a strong brand represents an undeniable competitive advantage.

But these brands cost money: the operator has to pay royalties to their owner for the right to use them.

Hence the interest of creating new brands in a market where the gas offering is less competitive, in the countryside for example. The use of local, regional or marginal brands is then much more frequent.

With the acquisition of CST assets by Parkland Fuel Corporation — a formidable franchisor and convenience stores operator — it is safe to assume that Ultramar‘s dominance will continue for a long time in Quebec.