SIGMA: Committed to ExcellenceAudio version
Publication: Petroleum Equipment & Technology Archive
Issued: July 2000
Author: Kammerzell Jaime
Society of Independent Gasoline Marketers of America is a national trade association that was founded in 1958 to give the independent petroleum marketers a voice in government, the petroleum industry and the public. SIGMA also informs, explains and interprets laws and rules to its members. Jaime Kammerzell looks to the past, present and future of SIGMA.
SIGMA Executive Vice President, Kenneth Doyle has lead the organization since 1980
The Society of Independent Gasoline Marketers of America (SIGMA) was formed in 1958. Its mission is to help independent petroleum marketers compete in the marketplace. SIGMA helps independent marketers find and resell fuel at more competitive prices. Ken Doyle, SIGMA Executive Vice President, spoke with Jaime Kammerzell about SIGMA’s history, activities and future outlook.
Who founded SIGMA?
SIGMA was founded by a small group of men who were private brand marketers, mostly from the middle part of the country. The initial Board of Directors consisted of Phil Siteman, Harold Johnson, R. J. Peterson, Jerome Glassman, D. G. Herbert, Harold Martin, T. B. Murphy, and Calvin Houghland.
What was the original membership?
I believe there were seven companies to start with and they were all independent private branders. Most of those brands have disappeared over the years, but some are still around. Site Oil, Martin Oil Marketing, and Kocolene Oil, for example, were all founding members or joined within the first year.
The downstream petroleum industry is made up of a number of different types of companies. Besides the major oil companies and independent refiner-marketers, there are independent marketers and “jobbers” and then there are dealers. SIGMA was initially founded for people who were private brand independent marketers. In some cases that meant “no brand,” but at minimum it meant they were not distributing under a major oil company brand. They owned a lot of gasoline stations and sold gasoline to the public under something other than a major oil company brand name.
What is the structure of SIGMA?
From the beginning, SIGMA has been a “direct membership” association. That means that companies join SIGMA directly. They don’t join indirectly through membership in another organization. Today’s Petroleum Marketers Association of America (PMAA), which was called the National Oil Jobbers Council (NOJC) back in 1958, was and still is a national federation of state associations, so jobbers joining a state association automatically become a member of PMAA. SIGMA is different in that petroleum marketers join SIGMA directly. Even at the beginning, most of SIGMA’s members were multi-state operators. Their competitors were the major oil companies and the independent companies that flew major oil company brand-name flags. So they formed an organization that would represent their interests separate from the interests of the major branded competitors.
In 1958, a major oil company provided a lot of things to its customers. It provided a brand name to sell products and services, and it provided a lot of support and guidance on how to operate a business. SIGMA tried to perform the same functions for the private brand segment. It tried to help members operate their businesses. It actually offered a line of goods and services such as tires, batteries and accessories, and it tried to perform other trade association functions. One of the most important was networking—helping members learn from other members who do the same things. Another big issue, because SIGMA members did not have branded contracts, was the need for contact with lots of different suppliers to try to persuade those suppliers to sell them fuel.
SIGMA didn’t and doesn’t try to be everything for everybody. The main benefits of being a SIGMA member are: access to fuel supply, the ability to network with other top-level marketers for idea exchange, and representation in the legislative arena. In the beginning, there were also SIGMA- brand tires, batteries and accessories available to members, but the need for that kind of service has long since disappeared.
|Sparky Hauck (left), New Lenox Oil and Gas, New Lenox, IL, and Dick Bell (right), Marathon Petroleum, take a break at the convention||
How has the membership grown since the inception?
SIGMA had seven members to start with. We currently have about 270 Regular Members, who are independent petroleum marketers, not refiners. In addition to that, SIGMA now has 48 Fuel Supplier Associate Members (including virtually every significant domestic refiner), 25 Financial Service Supplier Associate Members, and five Fleet Card Provider Associate Members. So we’ve grown quite a bit over the last 40 years.
How have the member companies changed over the years?
In the beginning, SIGMA members were entirely private branders. They mostly sold gasoline, but also some tires, batteries and accessories. They had their own brand names. We still find that most SIGMA members sell some gasoline and diesel under private brands, but the vast majority also sell major brand products. In the old days, anybody who sold anything under a major brand name would have been thrown out of the organization. Now, 77 percent of our members sell some of their product under a major brand name, and 11 percent have no private brand at all. That’s a big change.
Many of the independent refiners that used to be the main suppliers of SIGMA members don’t even exist any more, largely because of all the environmental rules and regulations. But SIGMA members have adapted, and they buy a lot of product from large, independent refiners and from major oil companies. They also import product, which, of course, probably nobody did 30 years ago. Their businesses have also changed. Instead of the lonely kiosk or the very small building behind a set of pumps, almost all of our members are also involved in convenience stores.
At the beginning of SIGMA’s time, gasoline stations were full-service. There was somebody out there who pumped the gasoline for the customer. Now the vast majority of SIGMA’s product is sold on a self-service basis. In fact, SIGMA members were leaders in the self-service movement back in the 1970’s. Our members have branded up, have expanded into convenience stores, and have branched out into fast-food—what’s called QSRs (quick-service restaurants).
Now, a lot of our members are operating in many different ways. Many SIGMA members are still chain retailers, but some own a chain of stations operated by dealers that are served by the SIGMA member as a fuel supplier. Other SIGMA members are not in the retail end of the gasoline business at all—they’re in what’s called “fleet fueling,” operating through card locks or unattended fueling or even mobile refueling. We represent most of the largest truck stop chains as well.