Let me take you back to a small convenience store in an unassuming San Ramon, Calif. neighborhood. That's where Valero's retail operations began in earnest seven years ago.
There was no fanfare, and hardly any press coverage, save for one reporter from New York making the cross-country trip to get the story. In retrospect, I'm glad Valero gave me the opportunity to be among the first to tell its story.
That was a full head of hair and two children ago. But as my hairline slowly receded, Valero's retail operations sprouted to unforeseeable levels, and that's why I am so proud to have come full circle to honor them as Convenience Store Decisions' 2006 Chain of the Year.
CSD's Chain of the Year award is the oldest honor of its kind in the industry. Since we launched the award in 1990, CSD has honored some of the most revered companies in the industry, including Sheetz, ExxonMobil, QuikTrip, Wawa and last year's winner 7-Eleven.
Incidentally, Valero is no stranger to the Chain of the Year award. In 2001, it acquired Ultramar Diamond Shamrock, our Chain of the Year winner in 1995.
So who is the company we are honoring? Talk to employees and members of the communities where Valero operates and you'll hear terms like "honorable," " compassionate," "committed" and "a wonderful company to work for." Such adjectives have typically eluded Big Oil companies through the years.
But this is not a typical Big Oil company. The San Antonio-based marketer is a modern-day American success story. A virtual unknown in the downstream petroleum business in 2000, Valero has grown into the largest refiner in North America. Today, it operates 18 refineries with a throughput capacity of 3.3 million barrels per day, a branded marketing network of more than 5,500 convenience stores and gas stations, and it boasts assets of more than $33 billion. Combined, the company generates more than $80 billion annually in revenues.
Valero's rise to the top began in 2000 when it was the winning bidder for Exxon's Benicia refinery in California, along with a network of convenience stores and supply contracts in the San Francisco market.
Acquiring those assets wasn't nearly enough; it was a springboard for a much bigger marketing strategy. Under the watchful eye of Chairman and Chief Executive Bill Greehey, Valero pushed forward with the Diamond Shamrock acquisition and added a dozen more refineries over the next five years, culminating with the acquisition of Premcor in 2005. Along the way, the company developed the Valero retail brand, a proprietary credit card network, gift cards and a commercial network of fleet services.
What stands out most to me about Valero's growth is not that they were able to pull it off so quickly, but that they were able to do it with remarkable precision. There were few hiccups along the way.
Then there are the heart-warming stories about Valero's corporate culture. For example, as Hurricane Katrina was bearing down on New Orleans, it became obvious that its St. Charles refinery was in the line of fire. Mr. Greehey called a meeting with his top management and said, "I don't care what it costs the company financially, we are going to take care of all the needs of our employees."
The company had mobile homes on-site within days and quickly moved families to safety. From its company-owned distribution center in Texas, trucks daily delivered fresh food, water and supplies, along with generators to power the mobile homes, and cooks to prepare three square meals a day. When refinery employees reported for work, each was immediately given $500 in cash because the banks were closed, no questions asked.
For any damage to the employees' homes, Valero hired on-site adjusters who doled out up to $10,000 free money for on the spot for repairs. Plus, the company gave employees, residents of the surrounding communities and emergency personnel all the free gas they needed to help maintain some semblance of normalcy. Within days, residents throughout the community also came to rely on Valero's makeshift kitchens to feed their children and themselves. This example of altruism is the rule at Valero, not the exception.
While the final cost for the company's humanitarian efforts at St. Charles was about $5 million, it confirmed a belief already shared by Mr. Greehey and his executive team: When you take care of your employees, they take pride in reciprocating and showing their appreciation.
During Katrina it was no different. Employees had the St. Charles Refinery back online in eight days. It would be another three weeks until the refinery across the street was up and running. "If you look at what Valero did," Mr. Greehey told me recently, "We accomplished for our refinery what FEMA could not."