Z safety, wellbeing and employee relations manager Rupali Patel (Photo: Dean Zillwood)
Z safety, wellbeing and employee relations manager Rupali Patel (Photo: Dean Zillwood)

PartnersMarch 24, 2022

The view from the forecourt of NZ’s biggest fuel supplier

Z safety, wellbeing and employee relations manager Rupali Patel (Photo: Dean Zillwood)
Z safety, wellbeing and employee relations manager Rupali Patel (Photo: Dean Zillwood)

Z says it wants to be a different kind of energy business. Jihee Junn looked back at the company’s history to find out where it’s going.

This content was created in partnership with Z.

When Dutch oil giant Shell decided to sell its retail arm in New Zealand more than a decade ago it was widely assumed another massive off-shore company would eventually be the ones to take over. So it was a surprise when, in 2010, Shell announced it had in fact sold its assets to New Zealand company Greenstone Energy – a newly formed venture jointly owned by local investment firm Infratil and the Guardians of New Zealand Superannuation.

Shortly after the deal was finalised, Greenstone leaned into its new status as a New Zealand company with a head-to-toe rebrand. It ditched the iconic Shell logo and updated its 226 service stations across the country with a brand new take on the company’s orange and yellow hue, eventually adopting the “zed” in “NZ” to become Z Energy. From the beginning, CEO Mike Bennetts has been at the helm, guiding the transition from Greenstone to Z Energy. 

“We had all of the excitement of being a startup without the usual concerns startups have around ‘where does the revenue come from?’ because we were a company with 99 years’ worth of prior revenues,” Bennetts recalls about those early years. “But everything else about the company was up for grabs: the strategy, the brand, the employee propositions, the customer offers. So it was a really nice mix between the two.

Z chief executive Mike Bennetts (Image: Supplied)

Today, Z is worth almost $2 billion with 500 employees and 1,500 retail staff across Aotearoa. It’s part of the everyday lives of millions of New Zealanders as the biggest fuel retailer in the country. From the forecourt the company has a front row view on the forces affecting New Zealand society and the way the country has changed since 2010. From the increasing diversity of the population to the rising cost of living and the intense pressures of two years of Covid-19, the last decade has seen Aotearoa – and the world – changing fast. 

As an essential part of New Zealand’s transport infrastructure with a nationwide footprint, Z believes it has an essential role in shaping the future of the country. And as encapsulated by its new campaign called Moving With the Times, Z recognises it needs to represent where New Zealand wants to go. The campaign underlines the responsibility Z has to evolve its business to be at the centre of New Zealand’s development and part of the solution to its biggest challenges.

That responsibility feels most pertinent as climate change continues to progress rapidly. While the company fuels our ability to move around New Zealand, Z is also responsible for 9% of New Zealand’s total emissions. As New Zealanders – and the planet – demand a move away from fossil fuels, Z says it wants to be a leader in that transition. But can it happen fast enough?

A vision into the future at an electric vehicle charging station at a Z Energy station. (Photo by Fiona Goodall/Getty Images)

The sustainability challenge

When taking up the position as CEO, Bennetts says there were two key driving forces behind his vision for Z. The first was an ambitious one: to become a “world-class Kiwi company”, a mission Z started undertaking with a months-long survey of almost 17,000 consumers across Aotearoa. The second was an even bigger, and more existential mission: for Z to become a key player in ushering the country’s transition to a lower carbon future. 

With the energy sector representing the single largest source of global greenhouse gas emissions and nearly 50% of New Zealand’s emissions, transitioning away from fossil fuels is one of the most important things we can do for our planet today. Bennetts had left BP wanting to run a different sort of company with Z – one which acknowledged how its core business was contributing to the problem, but would also work to become part of the solution. 

“We released our first sustainability policy in November 2010 and in there, we set ourselves goals to reduce New Zealand’s reliance on fossil fuels and to lower the carbon intensity of the products that we sell,” he says. “It was recognising that companies like ours could either be an important part of the transition to change or be a barrier to change, and we obviously fell into the former camp.”

Over the next few years, Z began implementing a number of initiatives to promote a more environmentally sustainable New Zealand, such as rolling out electrical vehicle charging stations, partnering with conservation charity Trees That Count, investing in power company Flick Electric, and spending more than $50 million building New Zealand’s first commercial scale biodiesel production plant. Eventually, the goal for Z will be to move away from its reliance on selling fossil fuels and become a true “transport energy company”, which Bennetts argues Z is uniquely positioned to do compared to others in the industry.

Prime Minister Jacinda Ardern views the Z Energy biodiesel plant in Wiri on January 28, 2021 (Photo by Phil Walter/Getty Images)

“Our two largest competitors, Mobil and BP, are in the business of exploring for oil and gas so they have to sell oil and gas to keep the exploration part of their businesses going, whereas Z doesn’t. Z isn’t tied to any upstream activity. We’re simply selling energy to customers, which could be biofuels, electrons, or hydrogen. It doesn’t need to be petrol or diesel.”

However, when it comes to the significant and meaningful change Z committed to making 12 years ago, Bennetts admits the company has fallen “well short” of its goals. He says part of that comes down to overestimating the pace at which customers and the government would respond to the need for radical change. He also concedes the company has made some mistakes, most notably with its biodiesel production plant in Auckland. After just 18 months in operation, the plant was forced to cease production in May 2020 which led to around 15 employees becoming redundant. Tallow (the key ingredient in its biofuel) had pretty much doubled in price due to global demand from suppliers selling into subsidised biofuel markets, while the international diesel price had dropped significantly due to Covid-related lack of demand. Running the plant was no longer economically feasible, and Z had no choice but to close its doors for the foreseeable future. 

“Certainly, at a personal level, I’m frustrated I haven’t been able to make the difference that I was committed to. And I think that frustration is shared by the hundreds of people who work at Z as well.”

Despite these setbacks, Bennetts remains committed to Z’s ambition to create a more sustainable future for New Zealand transport. The headline of the Moving With the Times campaign is a provocative challenge to the organisation to live up to its promises: “Z is in the business of getting out of the petrol business”. Biofuels are a key part of that transition.

Bennetts believes the domestic production facility was a key catalyst for moving public policy and the market forward faster towards biofuels as an alternative renewable fuel source. With the government’s new Biofuels Mandate set to take effect in 2023, Bennetts says Z is well placed to play a key role in bringing biofuels to the domestic market.

An essential service

Meanwhile, Covid-19 has presented a different and more immediate set of challenges in the last few years. As pandemic-related lockdowns forced most of us to travel less and stay at home more, service stations saw a decrease in demand for fuel while, conversely, an increase in demand for its convenience store products. 

“With consumers working from home a lot more across all industries, combined with the increase in fuel prices, people are electing to spend a little bit more time at home which means they’re not commuting and not being out and about as much as usual,” says Z general manager for retail Andy Baird. 

“At the same time, a different change we’ve seen is more people shopping at our stores, especially as a ‘top-up shop’ for things like milk or bread for customers who might’ve felt uncomfortable going into supermarkets as usual.”

Z general manager for retail Andy Baird (Image: Supplied)

Even before Covid, Z’s convenience stores have been playing an increasingly important role for the company in the last few years. Its stores now account for approximately a third of its operating profits (the other two-thirds being made up by fuel).

“We get that we’re kind of like a destination between destinations. People use us on their way to somewhere, whether that’s going to work, going home, or going to social events,” says Baird. 

“Going forward, we know our real opportunity lies in being focused on what we call ‘Mobility 10’, which is to serve those customers that are mobile and want to consume most of the things they buy from us within 10 minutes, whether that’s a drink, a snack, or milk and bread for when you get home in a few minutes time. That’s where we think the opportunity is for us to best serve our customers.”

On the frontline of that growth, there are currently more than 1,500 people working at Z service stations across Aotearoa. Z says it is committed to investing in their ambitions by better representing what New Zealand stands for in 2022.  

Rupali Patel, a safety, wellbeing and employee relations manager working across 15 service stations in the Wellington region, started out as one of these workers she now looks after, back in 2013. She’d come to New Zealand from the UK to study business management and was looking for a part-time job. 

“Back then I thought ‘oh it’s a service station, what am I gonna learn here?’ but I needed some money so I thought I’d try it,” Patel recalls about her first role as customer service representative. 

“When I started, I didn’t even know how to pump petrol because I didn’t drive a car! I didn’t know anything about making coffee or anything about food safety, but the training and support was good, and most importantly, mistakes were allowed.”

Since then, she’s gone on to be a site leader, taken on an operational role, before arriving at her current position two years ago. She says she never imagined she’d still be working at Z Energy nine years later, but what’s encouraged her to stay have been the opportunities given to her to grow within the organisation. 

Rupali Patel (Photo: Dean Zillwood)

To further her career, Patel recently started studying for a postgraduate diploma in occupational health and safety from Massey University, a course she’s currently juggling between work (and family) and is paid for by Z Energy. There’s often a misperception about the long term potential a role at Z offers and the development that comes with it, says Baird. 

“The people who work on retail sites are really talented people. They do customer service, make coffee, prepare and serve food, merchandise, and take tank dips. If you put them against most other retail staff I think they’d have a really broad range of skills to offer,” he says. 

“I know our retailers work really hard to make sure that the people who work on our retail sites develop those skills because for many of them, it’s a transitory role to something else. So they might be there for a few years and then move onto a different role and grow within the organisation.”

For many employees on the frontline during the pandemic, however, things haven’t always been easy. Incidents of racism and verbal abuse have spiked in the last few years, with many of Z’s immigrant workforce, unsurprisingly, copping the worst of it

“We used to say that ‘the customer is always right’, but I don’t really believe that now,” says Patel. “We [the staff] stand up for what’s right, so if a customer’s being abusive, it’s important we support each other.”

Z has implemented a number of initiatives, such as its Mutual Kindness programme, to address such abuse as well as provide staff with support and advice on immediate steps they can take. In 2020, Z also joined the NZ Retailers Against Racism pledge, making a commitment to protect its people from racism and abuse in the workplace, together with its ongoing commitments to promote diversity and inclusion across the Z community. 

Embracing tikanga Māori

In its most recent annual report, Z emphasised its commitment to becoming a more diverse organisation, but also recognised it still had a long way to go in reaching many of its goals, such as having a 50:50 gender split (currently it has a 62:38 male to female ratio) and having more ethnic diversity across the organisation (currently just 3% identify as Māori and 1% as Pasifika against a national population of 16.5% and 9% respectively).

For the last few years, Z has been working to make progress on these gaps with initiatives like its partnership with the TupuToa internship programme which gives young Māori and Pacific students exposure and experience of working in corporate, government and community organisations. In 2019, Z also engaged consultant Te Kurataiaho Kapea to help the company include more te reo Māori and tikanga throughout the organisation. 

Kapea, who also teaches te reo at Te Wānanga o Aotearoa and works as GM for culture at Ngāti Whātua Ōrākei Whai Rawa, was initially contracted by Z’s innovation team to help with translations for some of its products. Shortly afterwards, Kapea was brought in to work with Z on a deeper level, sharing his knowledge on Māoritanga with Z Energy executives and helping to embed those values into the company’s leadership framework. 

“From the levels of engagement I’ve had, especially on the leadership front and with the heads of different departments and projects, it’s clear to me that Z values and prioritises te reo and Māori philosophy in its day-to-day business,” says Kapea. 

“I believe change comes from leadership and to me, the leadership is sincere in its journey. Every person I’ve met while working with Z I’ve felt that sincerity, so it’s easy for me to work with them. I always feel excited, and most importantly comfortable, because of that.”

As a company that values itself on serving all New Zealanders, Z recognises that means reflecting the diversity within its communities. In order to achieve this, Z has committed to sharpening its focus in accelerating progress in female, Māori and Pasifika representation, a commitment which starts with meaningful engagement from those most powerful, and most visible, at the top. 

Rapali Patel and a crew of Z employees (Photo: Dean Zillwood)

The future with Ampol

But the existential challenges for Z – and its purpose as “being for New Zealand” – face further challenges. After more than a decade of New Zealand-ownership, Z announced last year it had accepted a proposal from Ampol, Australia’s biggest fuel company, to be acquired for just under $2 billion. This month, the deal took one step closer to becoming a reality when the Commerce Commission approved Ampol’s bid to acquire Z (the sale is still subject to Ampol selling its existing New Zealand operation, Gull Petroleum). 

It’s the end of an era for Z Energy, but Bennetts believes the deal is the best outcome for the company’s pursuit of its macro ambition. He says it will not only help improve fuel supply security but also allow it to scale up its ambitions around transitioning to a low carbon future.

“Ampol has similar ambitions and a similar strategy to Z, so our two companies will be better together as a result,” says Bennetts. “We’re obviously able to better manage risks because we could do something in New Zealand and learn about it, scale it up and transport the idea to Australia, and vice versa. So it should enable us to engage in more experimentation, learn quicker, and scale up on both sides of the Tasman.

“And obviously, larger company, larger balance sheet, larger access to funding. So when big opportunities come along – provided they’re the right set of economics – Ampol will be able to make those sorts of investments whereas perhaps Z on its own would’ve had to think twice or required a partner to make a billion dollar-plus investment.”

On the surface, Bennetts says Z will likely continue business as usual but with “greater ambition and a stronger balance sheet”. The plan is to keep the Z Energy brand and name, and that when it comes to management and decision-making, the local way of working will be here to stay.

“The big decisions will still be taken in New Zealand. There’s probably nothing any customer or stakeholder could ask me that I’d have to say ‘oh I don’t know, I’ve got to go and ring head office’. So I don’t think any of that will change. We’ll do the best thing we can for our new owners, but we’ll always be responsible and committed to New Zealand.”

This content was created in paid partnership with Z.

New Zealanders are feeling the pinch at the pump, but Z is here to help you pay a little less to refuel. With Sharetank and the free Z app, find and purchase the lowest priced Z fuel within 30km of your location. Then refuel at any Z location across the country using your balance.

 

Mad Chapman, Editor
Aotearoa continues to adapt to a new reality and The Spinoff is right there, sorting fact from fiction to bring you the latest updates and biggest stories. Help us continue this coverage, and so much more, by supporting The Spinoff Members.Madeleine Chapman, EditorJoin Members

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