Case Study Golden Meniscus

Yokayo: a case study

By Kumar Plocher

More in the Summer 2009 issue

You could say that Yokayo Biofuels is a product of being in the right place at the right time. We got started in 2001, right before the biodiesel industry really started to blossom.

Unlike a lot of biodiesel companies, we haven't really done much marketing at all (our current marketing budget is around one hundred dollars/month), nor do we do any kind of sales calls.

On the grease side of things, we have done a decent amount of cold calling to sign up restaurant accounts, and we dressed up our company car to make it attractive for that purpose.

On the biodiesel side, marketing is a real conundrum for us. Almost none of our attempts to go beyond "preaching to the choir" have netted us new customers.

Thankfully, we don't really have all that much competition anymore, as all the petroleum jobbers that used to sell biodiesel now just sell low blends. Still, it irks us that one of them painted a propane delivery truck pink, covered it in ribbons, and brags about all they are doing to stop breast cancer, when they are really doing quite a lot to increase the amount of carcinogens in the environment, by not focusing more on cleaner renewables.

Yokayo Biofuels is dedicated to responsible and equitable production and distribution of locally-sourced fuel into a local market.

Operating out of Ukiah, CA, we follow something akin to the "100-mile diet."

Our biodiesel market is completely based around the concentration of environmentalists in our little section of Northern California. Farmers, businesses, individual drivers, or wholesale customers, they are all paying more for their fuel because it is better for the planet, the same way that a shopper will pay more for local organic produce at the farmer's market.

I would say that at least 80% of the fuel we sell gets used as B95+. Aside from the kerosene that we put in at 5% by volume in the cold season, we don't actually sell any blends. A lot of our customers are pretty hardcore, I suppose. It helps that we have always made it a priority to educate them.

I think there are two secrets to success for any new B100 user: first, they need to be willing to continually be informed about the nuances of using biodiesel. Second, they need to have a basic understanding of supply and demand, so that they don't have any unrealistic expectations about biodiesel magically being cheaper than petroleum diesel.

For years now, I've really been wanting to get our fuel into the local public transit system, and into school buses, and I haven't succeeded. Price seems to be a big issue. I'm still searching for the right approach.

While the whole operation started, in our case, with distribution, the fact that we are vertically integrated (we grew to also collect the grease and produce the fuel) has really made us viable. It always amazes me that there aren't more vertically integrated biodiesel companies out there, but again, that may go back to location and market.

Another thing that has really helped us survive in tough times is our adaptability. This is dependent on three things: our size, our management style, and our support network.

While most plants are sized to handle millions, if not tens of millions of gallons of fuel per year, we are excited about making the jump in the next year or two from  300,000 gallons up toward one million. Our entire county uses around eight million gallons of diesel per year, so we see it as a fine size.

Additionally, the fact that we have a very open-minded and innovative management team, with very little of the traditional top-down autocratic approach, has helped us address problems cooperatively from multiple angles. It doesn't hurt that we have proponents of both capitalism and socialism on the team, as we often seem to find ourselves halfway between "marketable commodity" and "community service."

Finally, we wouldn't exist at this point without the support of the various biodiesel distributors whom we helped get started over the years. We never made enough biodiesel to supply all of them during good times, but when the shit hit the fan in the last quarter of 2008, we had a nice outlet to put fuel into, enabling us to temporarily shift resources from retail sales to wholesale sales. That was a lifesaver.

Concerning the theme of this issue of biodieselSMARTER, a lesson that I've learned over the years is that safety on a commercial scale requires a level of specialization that do-it-yourselfers may not always be able to take on themselves.

I used to think that I could use smaller trucks, and do double duty as a delivery driver. Then I got into an accident with one of our trucks that a professional driver may have avoided.

I used to think that we could design safety into every process without engineers. That was before a couple of fires caused by spontaneous combustion of discarded rags taught us the value of industry standard good housekeeping.

I used to think that the internet was a fine substitute for paid consultants, thanks to incredible websites like the "infopop" forum and biodieselcommunity.org. Now, our management team has learned to recognize when we are in over our heads (well, at least a good deal of the time).

I wish that every B100 distributor/retailer would take the time to educate others in the industry about what they know. There's such a steep learning curve, and there's still not a very good, compact library of information. Unfortunately, this means that a lot of folks fall back on inappropriate assumptions rooted in other industries.

If we were all more up-to-speed, it would be a lot easier to make progress as an industry.

Kumar Plocher is founder and president of Yokayo Biofuels in Ukiah, CA. He blogs at ybiofuels.livejournal.com