John Stotz joined Valvoline in September of 2000 and currently serves as the director of global brands. In his present position, Stotz manages the company’s lubricants portfolio among retail auto parts, mass and warehouse distributor channels and most recently was responsible for the launch of NextGen motor oil, the brand’s latest category innovation. Previously, he served as the director of marketing for Europe, Middle East and Africa at Valvoline, senior brand manager for the MaxLife brand and new products development manager. A native to Kentucky, Stotz received his bachelor of science from the University of Kentucky. Additionally, he obtained his MBA from Miami University.

In this week’s Executive Interview, Stotz tells us all about Valvoline’s new NextGen 50 percent recycled motor oil and how recent changes in consumer consciousness made the timing just right for this revolutionary new product.

Valvoline unveiled its newest product, NextGen 50 percent recycled motor oil, in April. How’s it going so far? Tell us about the product.

We launched Valvoline NextGen as the culmination of a few changes in both the marketplace and in our category.

The first change is in the processes and the investment used oil refiners have made over the past few years. Years ago, used oil was called “recycled” with a much more rudimentary process – it was actually called a passive clay filtration, so it didn’t have as many steps. Today, used oil refiners have invested in all the same technology that crude oil refiners have, and now use the same process to refine used oil. It is producing high-quality, 100 percent new base oil from used oil.

The second important change is that consumers have a high interest in the environmental discussion and have a desire to make choices that reduce their environmental impact. Consumer preference to buy products that are better for the environment has increased significantly in the past 23 to 36 months. The events in the Gulf were like a six-month infomercial for why people should care what happens to the environment. The whole country watched and the media raised our awareness on the topic. Additionally, the effects of the economy and consumers’ overall attitude of trying to do more with what they have has been important to the rise in interest.

I also think education around the importance of our actions and its affect on the environment has really come of age. Even my own daughters, who are in first and third grade, come home talking about CLF light bulbs because of a project, or they remind me that I should shut the water off when I’m shaving. Environmental education is becoming more ingrained into all aspects of our lives.

We launched NextGen because of these changes. NextGen is better for the environment and great for your engine. It’s better for the environment because creating new oil from recycled oil has a smaller environmental footprint than refining crude oil. There are a couple reasons for that, which might be a little surprising.

What do you mean exactly?

When you think about making motor oil, used oil actually starts out in a much better place; it’s a much better material to build new oil with than crude oil – which is pretty surprising to some people.

If you look at a typical barrel of crude oil, only about 15 percent of that material is usable for making motor oil. That usable material must go through the refining process including a step to remove the jet fuel molecules, the diesel fuel molecules and the gasoline molecules. Not to mention all the other nasty things like asphalt, saltwater and sulfur. Compare that to used oil, of which 75 percent is usable for making motor oil and already has the jet fuel, diesel and gasoline molecules removed. It eliminates a step and provides a larger pool of usable material, and the amount of energy it takes to process used oil (with the same processes) vs. the amount of energy it takes to process crude oil is less. It really does have an environmental impact.

It’s also great for your engine. At Valvoline, we are only using the very best of those base oils, which are just as good as those made from virgin crude refining, with our additive technology. What you get is a motor oil that is brand new. In fact, we’re saying that NextGen is better than new. It’s absolutely new oil that’s also better for the environment and significantly exceeds all the latest specs and is as good as our regular Valvoline motor oil, which is made from crude refining.

We feel really good about the environmental impact and we certainly wouldn’t put our Valvoline name on it if we didn’t feel good about the performance.

Is this product at an average price point? How do you draw attention to NextGen beyond the environmental aspect to convince consumers to give it a try?

There are a lot of products in the market that claim to offer environmental benefit. A lot of those are premium priced, compared to their non-environmentally friendly counterparts. The way we wanted to approach the market to really make an impact was to provide consumers with a simple proposition: absolutely no sacrifice in engine protection and motor oil performance, and absolutely no difference in price. Not a small increase in price, but the same price you’d expect from Valvoline and not a small decrease in performance but absolutely no difference in performance. Those were really the two mandatory elements for us to move forward with this project.

We don’t think it’s fair to ask people to pay more because we know that not a whole lot of people would do that and therefore we wouldn’t have a whole lot of impact on the environment. Plus, we know that our customers care passionately about their engines and work meticulously to properly maintain them. To ask them to make any sacrifice in protection would have been unacceptable. So, we priced NextGen at the same price as our regular motor oils.

At some Valvoline Instant Oil Change centers there is a $5 premium due to the supply and demand. The most cost-effective way to buy motor oil is in bulk. Currently, NextGen is being delivered by drum and because of the delivery mechanism, there is a higher cost to get oil in-drum versus in a bulk tank. Until it becomes large enough to deliver via bulk tank, it’s in a drum. Therefore, there is a cost increase for an installer to perform that NextGen oil change, so you are seeing some installers price NextGen a little bit higher.

That leads into my next question. I believe the initial test launch of NextGen at Valvoline Instant Oil Change locations took place in April. How did it go?

We continue to be very excited about the early results we see with NextGen. Both at Valvoline Instant Oil Change locations where they are using the $5 premium as well as the markets where it’s priced the same as a regular oil change, the results at both locations are really exciting. In fact, they are ahead of our expectations.

On the DIY side, we’ve already seen hundreds of thousands of NextGen triers so we’re really excited about that. We know the more people try NextGen and see that there’s absolutely no difference, the more people will adopt it. There are some people who are sitting on the sidelines right now and it’s our hope that with more education, more people will learn how NextGen quality is better than new oil.

You talked about how dramatically consumers have caught on to the green message in the past several years. When did Valvoline realize the time was right for NextGen? When did Valvoline begin planning for it and how long did it take to bring that plan to fruition?

One thing worth noting is that we are an independent oil company. Unlike our large competitors, we don’t have a parent company that drills or refines oil. We are unique in that way. We kind of think of ourselves as team owners. We can go out into the independent market and find the best players. We buy base oils on the open market and we can seek out the best. We don’t have to buy something that our parent company is making.

For many years we looked at oils that had been re-refined. Of course, for a long time, the quality was not acceptable. We had been looking at the opportunity and development for well over five years. It’s something we’ve been tracking annually since around 2006. Only now is the quality acceptable and the consumer ready.

How long did it take to develop the product?

Once the base oil fell into place, in terms of being able to get new base oil from used oil refining, our technology group was able to work relatively quickly. I believe the official timeframe was about nine months. The driver behind that was that during the time NextGen was being developed we went from GF4 to GF5 and that always requires a lot of technical work and testing. So the timeline is probably not all because of the NextGen formula, but also related to the specs being updated overall in the marketplace.

Tell us about the “Let’s Do M.O.R.E.” program.

The challenge we face in the marketplace is that while recycling today has a lot of good connotations and it means a lot of good things to consumers, there are still many who have a misconception of what today’s recycled oil is.

The opportunity for us is to educate the marketplace on the fact that recycled motor oil is really new oil. That’s why we’ve launched a program called “Let’s Do M.O.R.E.” M.O.R.E. stands for Motor Oil Recycling Education and asks people to recycle their oil and use recycled oil while educating themselves on the importance of proper disposal. While many people do properly dispose of used oil, just one gallon of used motor oil can contaminate up to one million gallons of water. We want to make sure people understand how important it is to properly dispose of used oil. If every American switched to NextGen, it would save 400 million gallons of crude oil. That’s enough barrels to stretch from New York to Los Angeles and back – every year.

Any final comments you’d like to make?

Motor oil is our core business, and because of that, we are very particular about what we choose to put the Valvoline name on. Our opportunity, with 800 million gallons of oil being used every year, is to cut that in half and every bit we can cut out of that the better. Reducing our need for new crude oil and reducing our need for drilling – that’s a good thing.

We sat back and asked, “Can a motor oil company really care for the environment?” And we realized, when we can make great quality motor oil that reduces environmental impact, it’s an obvious choice to do it.

Whether you’re DIY or DIFM, if you care about the environment and you want to do things right and with NextGen, taking good care of your engine is also taking good care of the future.