Back to the drawing board
Michael Verdon
Techron has launched a new marine fuel additive that it claims will dominate the current additives category. At a press conference at the Miami International Boat Show, Techron officials said the product launch followed an extensive market study of existing additives and more than a year of R&D on a formula that can beat them.
"We always look at market opportunities across different segments and had been aware of the recreational marine industry, particularly with issues related to ethanol," Joe DeFina, business manager of fuel additives for North America, told Trade Only today. "We did extensive testing and found that there wasn't a comprehensive product that excelled across the board that was commercially available."
Techron now plans a "go-to-marketing strategy" based on those performance tests.
After realizing there was an opportunity in the marine market, Techron finalized its business plan at the end of 2016 and began to formulate its additive. "With the evolution of the engines, the major gaps we found across the board were in saltwater corrosion protection and an inconsistency in detergency," says DeFina. "We found that many of the formulas were spotty."
At the same time Techron was studying the market, DeFina's team discovered an industry group of engine manufacturers and oil and additive suppliers were also trying to "rally the industry" to raise the standards of marine fuel additives. The evolution of engines with direct and fuel injection prompted engine builders to want to keep "everything clean," says DeFina, possibly to help with warranty issues.
"What we found in our research was just what they were finding from industry feedback," said DeFina. "There were gaps across the market. Some products had good fuel stability while others offered detergency. No one additive delivered on full specifications."
DeFina said his company could've entered the marine segment a year earlier with additives designed for other industries.
"We asked ourselves if we wanted to lead or be a me-too? We wanted a best-in-class product that provide high performance for the marine industry," DeFina said. "Another division of our business was participating in the industry working group. We realized that the group might issue a specification and we knew we would need to formulate above it. The last thing we would want to do was reformulate a brand-new product."
Techron spent more than a year developing the formula. "We went through the formulation process and didn't like the performance levels, so we went back and reformulated," he says. Our original formula was fine, but we knew it could be much better. You're not just launching a product in the marine industry, but you're launching a reputation."
DeFina says Techron is an established brand in other industries, so it was not difficult to get distribution with Walmart.com, AutoZone and West Marine. "A lot of our dealers will be looking for distributors, so we'll see channels opening up," he says. "This is a comprehensive product that could take the place of another SKU or two.
The brand's strategy is to go forward with proof of performance, or providing data on all the available additives on the market, including their strengths and shortcomings. The Techron teams believes that its superior numbers will quickly lift its reputation among distributors and boat owners.
"We're going to show how our performance is superior compared to our peers and that will help us right away with credibility," says DeFina. "Companies that have done that in the past have been very successful."
But it won't happen overnight. DeFina expects a "two-year build" for the new Techron brand. The retail placements that are on shelves now were sold to retailers nine months ago, he says. Achieving brand recognition will take another six to nine months going forward.
Techron, a division of Chevron, has also launched other additives for the marine powersports and snowmobile segments. "Those markets are also dealing with harsh environments and intermittent operator use," he says.
DeFina's team is "excited" about the proof of performance strategy. "It's something we can get behind because it's consistent with our business," he says. "Fuel additives sometimes have the reputation of being snake oil. But we'll be able to show through testing that our product will perform across the board as we said it would. It's the foundation of our go-to-market strategy."
And the industry working group of engine makers and suppliers? It dissolved last year without issuing any new sets of recommendations for fuel additives.