As ethanol production intensifies, challenges mount for educating and enticing the public
Ford and GM are promoting ethanol as a clean fuel that cuts dependence on foreign oil. The campaign is in line with President Bush's message on "oil addiction" and recent photo-ops at automotive suppliers delivering hybrid and fuel-cell technology. But if ethanol is ready for consumers, are consumers ready for ethanol?
Bill Honnef, VP of marketing at VeraSun, the third-largest ethanol producer in the US, which is also a promotional sponsor of both Ford and GM's campaigns for E85 (85% ethanol, 15% gasoline), says yes, but mostly in the Midwest. VeraSun has promoted its E85 blend since last May, first in South Dakota, where it converted 35 pumps to E85 and introduced the blend.
"We've built consumer awareness and availability," he says. "What you see in partnerships with Ford and GM is an attempt to do that in other areas, as well."
Andrew Eldib, an engineer and consultant, says PR efforts should target the Midwest for logistical reasons. "Most ethanol is now produced in the corn belt, so they can ship it easily from the ethanol-producing plants to gas stations," he notes. Typically, the way ethanol is blended, the alcohol goes into tanker trucks, is shipped to stations, and blended there. Now, however, producers are making ethanol beyond the corn belt, with other organic matter, a fact alluded to by the President when he mentioned switchgrass as a source in his State of the Union address.
Eldib adds that the communications challenge will be educating the public. He thinks talking about pollution might be a way to do that, since ethanol releases about 15% of the volatile organic compounds gasoline generates when burned.
Tom Slunecka, director, Ethanol Promotion and Information Council (EPIC), notes several other marketing challenges. First, many people still recall "gasohol," a post-embargo casualty that, along with GM's early efforts to make diesel-powered cars, damaged diesel and ethanol. EPIC is countering that with press materials that stress the message that ethanol is safe for engines, reduces tailpipe emissions, and helps keep some engine systems cleaner.
Another issue, he says, is that there are simply too many kinds of ethanol, which is why EPIC has launched a promotional campaign with the Indy Racing League, partly to talk up the performance aspects of ethanol with a "Burns cleaner. Burns rubber" message, but also to promote the use of a generic "E" logo.
"There are at least 14 brands of ethanol fuel," he says. "It's hard for people to accept the quality of a product [with] so many different labels. One of our fundamental efforts is to bring a uniform logo to the industry for E10 [10% ethanol, 90% gas]."
The E logo was launched in ads last summer and fall in Kansas. "We are choosing marketplaces strategically where ethanol is available, but not being used because of consumer perception," adds Slunecka.
Still, much of the pomp and circumstance is for effect, given the lack of availability of the E85 blend that GM and Ford are touting. Currently there are only about 600 pumps serving the E85 ethanol cocktail.
But EPIC reports that production is rising at a rate of over 1 billion gallons per year. There are 95 operating ethanol plants in the US and 30 more on tap, such as an ADM-Cargill joint venture pilot facility that recently broke ground in Iowa. It is designed to use corn bioengineered by Monsanto for swine feed and ethanol. Doug Rushing, a spokesperson for Renessen, which is building the plant, said there will be outreach in the Midwest, where the pilot plant will be followed by commercial production, touting corn's value as swine feed.
Archer Daniels Midland Company in September also announced plans to expand ethanol capacity by 500 million gallons with two new plants, the first in Columbus, NE.
Ethanol, especially E85, remains, for now, a Midwest phenomenon, and costs more at the pump than gas. While that does present a marketing challenge, Eldib doesn't think that will last.
"The price of crude oil is $65 a barrel," he reports. "I forecast that it will keep going up, not come down." Perhaps the same can be said about ethanol's popularity.