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Письмо президента VP RACING FUELS

Подведение итогов 2021 и планы на 2022

President’s Letter

The Christmas season is upon us, and fast approaching is the end of what is turning out to be an outstanding year for VP Racing Fuels. Oustanding for many reasons, first and foremost for what is promising to be our best sales year ever. Despite the challenging year that supply chain interruptions presented, our team kept the product flowing to you and our end customers. As a result, more customers than ever are using VP products. Whether they are consumers, tracks, drivers, individual retailers, major chains, or manufacturers, more VP products are in their inventories.

Race Fuel and Consumer Products have led our sales momentum, as our sales opportunities expanded to new race series and extra shelf space at retailers across the country. Likewise, all other VP divisions, Branded Retail, International, and Specialty Chemicals, continue on an upward trajectory.

To fulfill all of these new opportunities, production records have continued to be broken throughout the year, so much so that we find ourselves needing to expand once again. To prepare for 2022 and beyond, we recently announced the acquisition of a new production facility in McKenzie, Tennessee, so that the momentum will continue into next year!  Production at this new facility is expected to be online in the Spring/Summer of 2022. Still, we encourage you to maintain higher than expected inventories so that you can service your customers with uninterrupted supply.

As mentioned before, VP’s performance in racing this year continues to lead the field in sales volume and brand visibility in an expanding presence. That leadership position continues to feed us more opportunities for new and renewed sponsorships, most as the official fuel for the series. For example, this year, we signed up with one of the premier race series across the land, the exciting Porsche Sprint Challenge North America. Plus, recapturing one of the best series in the U.S. is looking better than ever after the VP Race Fuel team saved a race weekend from disaster for SRO Motorsports, delivering fuel just in time when their sponsor could not!

Branded Retail continues to expand in numbers of stores and geographic footprint, opening VP’s first location in Puerto Rico this October. This opening takes the retail brand beyond the shores of North America for the first time, and there is more to come.

Consumer Products, constantly exploring new opportunities for bundled sales, is again hitting the market with an innovative new product, Get Bent™, a partner product to our highly successful Motorsports Containers®. This new product will not only add to your sales but give your customers a much-improved product use experience. Get Bent was showcased at the recent AAPEX show and at the Green Industry and Equipment Expo, where Consumer Products had a major presence.

While the 2021 news continues to be a big positive for VP and its distributors and dealers, the US Energy Information Administration continues on its cautionary course of uncertainty in its November forecast highlights for the oil markets. We should all closely monitor these marketplace developments and be ready to react accordingly.

Oil markets have fully recovered, with RBOB trading above $2 all summer. However,  the future outlook of the oil markets is very mixed. My expectation is that we have not seen the highest prices yet. One of the unexpected factors is the government’s aggressive position to print money and push it to the economy through spending and social programs. I expect this to cause the dollar to fall, which will cause oil prices to increase.

Furthermore, this policy stance is increasing demand for goods while not increasing production (in fact, possibly even disincentivizing production), which is and will continue to drive inflation. We are going to have to crack open some history books to gain some perspective of what we might expect. I doubt we will see an exact repeat of the late ‘70s, but I’m sure there will be some parallels.

Another factor putting upward pressure on oil prices is the hype around electric energy which is causing capital investment in oil to wane. The lack of investment in the industry will likely have mid-term consequences and probably even long-term consequences. 

I expect to see a price decline through the winter, but spring could see a rapid spike and even hit prices not seen in recent years.

Additionally, there doesn’t appear to be any decline in inflation of pails, drums, or transportation. The takeaway is that as a distributor or retail dealer, you should make sure to maintain above normal inventory and be thoughtful about when to stock up for your period of high demand. Overall, I anticipate ongoing price increases through next Fall.

You obviously need to develop your own opinion of the market and act accordingly, but I assure you that VP makes every effort to manage costs to keep prices stable. 

In closing, while the future of the oil markets over the next six months is difficult to predict, it’s always good practice to be aggressive in your sales efforts to grow your business. VP has and continues to expand its product offering, yet nearly all of our distributors have gaps that, if filled, would provide opportunity for growth. 
Looking forward to the new year, the Sales and Marketing teams have developed the framework to increase both customer awareness and purchase. We have comprehensive new year plans designed to help you be successful along with VP as your partner.

We appreciate and value all of our customers and consumer patrons and look forward to a bright 2022 together. 

The best is yet to come!
— Alan 

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