Z Energy is a petrol retailer in an increasingly unwelcoming world. And as fossil fuels fall further out of favour, it's looking to car-sharing start-ups and parcel collection in its next evolution.
The company readily admits that its industry is, in the medium term, in decline. In its annual report for 2018, released in March, it said it can "see the sunset coming", though it will benefit from watching how the decline plays out in other markets across the world before it happens in New Zealand.
At Z's annual shareholder meeting in Wellington yesterday, chief executive Mike Bennetts was keen to talk about where the company's heading. Z is selling assets which don't deliver a big enough return and has picked three markets it thinks it could move into in the future: low-carbon fuels; car-sharing and future mobility in New Zealand; and using its sites as part of a delivery and sales network.
Z has invested $250,000 in Wellington-based electric car-sharing start-up Mevo, and is running a parcel collection trial with New Zealand Post at 10 service stations in Auckland, Wellington and Christchurch. Some 80 percent of New Zealand's population live within 5 kilometres of a Z-owned site, Bennetts says. And with the "last mile" of delivery often considered the most expensive and difficult, it makes sense to leverage the company's network.
"We've got people looking at things in the US, particularly at how Amazon is doing some stuff, where you either have lockers you access through your smartphone or some other electronic device. You even have a situation with Amazon where you can earn credits for picking up your neighbour's parcel.
For some communities not everybody is mobile... so their neighbour could pull into a service station and pick up a parcel for the pensioner next door and deliver it to their home," Bennetts says. "We are experimenting with both things we can do today, as well as trying to understand things we can do in the future."
The company isn't looking at international expansion, and Bennetts shot down the suggestion Z might look at Woolworths' petrol station chain across the Tasman after BP today walked away from a A$1.8 billion deal. Z's more interested in adjacent markets in New Zealand, he said.
"We think that's a sensible thing to do for our shareholders, given potential disruptions, and if anything those disruptions may happen faster in more sophisticated markets than New Zealand," Bennetts said. "Electric vehicles are a really good example of that - there are about 8,000 electric vehicles in New Zealand out of 3.7 million light passenger vehicles.
That penetration's way lower than somewhere like California or Norway, where around half the new cars sold every year are electric vehicles. At the moment in New Zealand it's something like 1 percent." Still, Z is facing immediate local concerns. It has the regional fuel tax in Auckland to implement, along with the Commerce Commission conducting a market study into the industry when those powers are conferred on it.
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