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Vitus Energy Expands through Reinvestment in Anchorage Gas Stations

by Jun 1, 2022Magazine, Transportation

Vitus Energy

Yellow stripes on former Shell gas stations in Anchorage gave way in 2022 to a new color scheme: the gray and orange logo of Vitus Energy. The name evokes the sea: not just Vitus Bering, the Danish navigator who put Alaska on European maps in 1741, but Vitus Energy, the company formed in 2009 to transport fuel to Western Alaska villages by barge.

Yet here is Vitus Energy at Tudor Road and Arctic Boulevard, as of January, and then at Northern Lights Boulevard and Minnesota Drive in March—far from shore. Though the company is a newcomer to Anchorage drivers gassing up their cars and trucks, Vitus Energy is no stranger to retail fuel after steadily growing through a decade of wholesaling.

“We have eight stores in what I call the road system and four stores in Western Alaska,” says co-founder and CEO Mark Smith.

The company’s overall strategy is that instead of building new stations and competing with older stations, it picks up older stations and renovates them. That gives the old owners good value and comes with an existing base of customers. “These two stations were struggling and needed a lot of reinvestment, and the owners decided that instead of reinvesting they would sell the locations,” Smith says. “Purchasing these legacy stations allows the previous owner a way out and puts us into an existing facility that we can reinvest in.”

When the time came for Vitus Energy to expand into the state’s largest population center, “Two legacy properties provided an economical starting point for urban expansion,” Smith explains. Both midtown locations offer fuel and convenience store items, and the Northern Lights shop came with a liquor license.

“Vitus has been growing since inception but is just getting more visible with opening the Anchorage locations,” says Smith.

Growing in Alaska

Born in Oregon while his father was attending law school, Smith grew up in Aleknagik, inland from Dillingham. He worked for his father and uncle’s company (originally Smith’s grandfather’s company), Smith Lighterage Company, which provided tug and barge services. Smith bought the company in the ‘80s and ran it until 1999, when it joined the Northland Group under the Yukon Fuel Company subsidiary, which was later purchased by Crowley Marine in 2005. Smith and two former Yukon executives—Justin Charon and Shaen Tarter—then formed Vitus Marine, which changed its name in 2013 to Vitus Energy.

Vitus Marine remains the name of one of the company’s three main branches, providing fuel and freight to communities along Western Alaska’s coast and tributary rivers. Another branch is Central Alaska Energy, which is developing a 7 million gallon petroleum storage facility and plans to market wholesale gas and diesel products to industrial customers. And Vitus Terminals, the company’s shore-based operations, distributes fuel to commercial and retail customers.

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“Vitus purchases fuel at various points around the Pacific Rim and locally here in Alaska,” says Smith. “We provide unique buying and transportation solutions for our wide variety of customers.” Routine delivery methods include retail sales, truck delivery, tanker shipping, and even air freight. “This year we’ve probably flown a quarter million gallons out to rural locations,” says Smith.

In 2011, the Vitus team made history with a chartered ice-class tanker making a mid-winter delivery to the ice-bound port of Nome. Over the years the Vitus boat fleet has grown to more than eighteen vessels as the company has served more difficult-to-reach areas. And Smith says the company has reset benchmarks for safety, speed, and weather tolerance.

The company’s biggest selling item is diesel fuel in Western Alaska, where its largest customers are electric utilities. With its marine services, the company delivers gasoline and diesel to more than 100 different stops from the Arctic to the Aleutians and up the tributary rivers in between. “Our retail customers are found in Kotzebue, St. Michael, Bethel, Dillingham, Sterling, Anchorage, Chugiak, Trapper Creek, Cantwell, Healy, and Tok,” says Smith. “Initiated in the last two years are home and commercial delivery services along the highways between Talkeetna and Tok and in the general Fairbanks area.”

All Stations Go

Vitus Station

Vitus Energy

Vitus began to expand into retail sales, home, and commercial truck deliveries several years ago, mainly to increase sales and diversify from summer-only barge deliveries.

“We’re literally frozen in,” says Smith. “Getting into winter distribution of fuel and gas stations was a way to have year-round business.” Adding the distribution of winter fuel and retail gasoline sales has allowed the company to operate—and profit—all year long. “We subsequently expanded our retail distribution in both western and central parts of the state,” he adds.

While Vitus has been distributing wholesale fuel in Alaska since 2011, the company purchased its first convenience store/gas station in Dillingham in 2014. The store had been for sale for some time. Upon purchasing the station, Vitus was able to quickly lower the price of gas by $0.75 per gallon.

A few years later it acquired a store in Sterling, which it finished renovating in June 2019 with a full remodel of the store, including new fuel pumps and hot food service. Stores in Trapper Creek, Tok, and Healy—along with several other locations—have followed. In general, the stores include convenience grocery items, diesel, and gasoline. The Healy store sells heating fuel oil and propane, houses a laundromat, and serves as the company’s hub for truck deliveries from Cantwell to Fairbanks. The Tok location has fuel trucks for local deliveries. The Trapper Creek location has a bulk terminal for a local fuel truck.

Vitus has also expanded fuel storage capacity and introduced it in some places. In November 2021, the company added 1 million gallons of diesel and unleaded storage in Bethel to further its vertical integration and keep costs down. The month before that, the company added 270,000 gallons of unleaded storage in Kotzebue and secured a deal with the electric utility to rent excess diesel storage. In June 2021, the company began providing fuel to the greater Fairbanks area, with 100,000 gallons of fuel and propane storage, a six-bay truck shop, and numerous new fuel trucks. And in May 2021, the company expanded its fleet of boats with the addition of a 200,000-gallon barge.

Vitus Station

Opened in March, the Vitus station at the corner of Northern Lights Boulevard and Minnesota Drive (most recently a Shell station) faces a Chevron Denali Express across one street and a Carrs Fuel Station across the other.

Vitus Energy

Smith says Vitus Energy is always looking for opportunities to expand its footprint and will add more retail stations as they become available.

Vitus’ presence has offered financial benefits to the communities it serves. For example, when the company began servicing Kotzebue, offering commercial and residential services along with a gas station, gas prices dropped by $1 per gallon. And when Vitus began operations in 2011, there was a 15 percent drop in the marine transportation rate.

Smith’s upbringing means he cares about protecting the state and its people, and he says Vitus’ commitment to renovating older gas stations is a part of that. “When we commit to serving an area, we aim to deliver an economical choice, whether it’s gasoline, propane, diesel, and—as vehicles evolve—electric power,” notes Smith.

The company is also proud of its heritage and the part it plays in the local economy. Its focus is on going local for everything possible—from its employees to its vendors and the products it purchases. “Alaska has often been served by outside interests who come up and drill for oil or fish and take the profits back home, but we are an Alaskan group trying to serve Alaskans, and we believe in hiring local and using local vendors to the best of our abilities.”

Alaska Business Magazine June 2022 cover

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