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Ever wonder how many types of products and packages it takes to be a big hitter in the U.S. lubricants business? Well hang on to your hats. The truly big hitters typically have over 1,500 SKUs (stock keeping units) and nearly 750 lubricant types and grades in their product portfolio. And if you think thats a lot, read on.

To start, its important to understand what it means to be a big hitter in the business, and to do that one has to take a look at the overall lubricant sales volume of each of the players. Based on this data, it quickly becomes evident that there are three truly big hitters in the U.S. Market.

Shell and ExxonMobil are the biggest and nearly tied for first with U.S. branded sales estimated at close to 350 million gallons each, or 12.5 percent apiece of the total U.S. lube market in 2006. Although still very impressive volume-wise, Chevron is the smallest of the U.S. big three with branded lubricant sales accounting for roughly 8.5 percent of the total. From there the numbers drop precipitously, with BP in fourth place with an estimated 5.3 percent share.

Aggregate volume alone, however, does not paint a complete picture of who the big hitters are. This is because some players focus on specific market segments, and within their chosen segments they are the big hitters. One example is BP. Although it is a distant fourth in aggregate volume, BP will likely be the second-largest player in the consumer automotive segment at the close of 2007, thanks to strong sales of its Castrol brand in that sector. Similarly, although Valvoline ranks seventh in overall volume, it has reached second place in consumer automotive a number of times over the years. (And with some of Valvolines new initiatives in 2006 and 2007, it will come down to the wire to see if BP actually can stave off Valvoline from claiming the No. 2 spot in 2007.)

But regardless of how one defines a big hitter in this business, one thing for certain is that the market leaders offer a very diverse array of products and packages. One of the big three for example maintains a stable of just over 1,800 SKUs. And no, we are not talking about a different SKU for products produced at different blend plants. Instead each SKU represents a specific product type, grade and package. For this major (who has two primary brands), if package size is taken out of the mix, its product portfolio still includes nearly 750 types and grades. Although some of these products may be no more than the same lubricant rebranded, it still means a large number of discrete products to manage and inventory. And this major is not alone; each of the big three has a similar number of SKUs and products in its portfolio.

The industrial market segment accounts for the largest number of SKUs, lubricant types and package styles. The leading major in this segment maintains a product list of nearly 950 SKUs and just under 400 industrial lubricant product types and grades. This represents roughly 60 percent of the majors total product portfolio, for both SKUs and products.

Shell is by far the leading player in the consumer automotive market segment, and between its Pennzoil and Quaker State brands it has nearly 175 SKUs representing close to 70 different products and grades of passenger car engine oils alone. And its numbers get even bigger when Shell Formula is included in the mix. Similarly, the number of consumer automotive SKUs and products in ExxonMobils portfolio expands greatly when one includes the genuine oils of OEMs such as Acura, Goodwrench, Honda and Toyota produced by ExMo.

Although a much smaller number than the SKUs and lubricant types, the number of package styles offered by the big hitters in the business is also very impressive. Depending on the major, this number is typically in the range of 40 to 50 package styles. These include bulk, drums, bottles, jugs, kegs, pails, IBCs, cartridges and others, in metal and plastic and often both English and metric sizes.

So these are the big numbers that speak to the scale of operations at the big hitters in the business. But there are even bigger numbers to think about when one looks at multi-branded lubricant distributors. Take for example a distributor representing Shell, Chevron, Castrol and its own private-label products. It likely maintains a product portfolio that includes over 3,500 SKUs and over 1,000 products in lubricants alone. And for a distributor marketing such hard parts as filters, wipers, and others, the numbers can reach several thousand more.

And the final number to ponder: the size some of these multibranded distributors have attained over the last five years. One, for example, now sells more lubricant than the smallest major, and clearly has its sights set on becoming as large as two others.

Now those are some big numbers to think about.

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