Suburban Propane Partners, L.P. (SPH): Business Model Canvas [Dec-2025 Updated]

You're looking to see how a company with nearly a century of history, Suburban Propane Partners, L.P. (SPH), is structuring itself for the next decade, and honestly, the FY2025 data is telling. We're not just talking about delivering fuel; this Canvas shows how they managed US$1.43 billion in revenue by moving 400.5 million gallons of propane while simultaneously making strategic acquisitions totaling about $77 million and investing in things like renewable propane. It's a fascinating blend of hyperlocal service across 700 locations and a serious push into low-carbon alternatives. Dive in below to see the precise building blocks that hold this dual strategy together.

Suburban Propane Partners, L.P. (SPH) - Canvas Business Model: Key Partnerships

You're looking at the core relationships Suburban Propane Partners, L.P. (SPH) built or maintained through fiscal year 2025 to fuel its growth and transition strategy. These alliances are critical, especially when you see the company posted revenue of US$1.43 billion and net income of US$106.57 million for FY2025. The partnerships here fall into strategic growth, clean energy development, and core commodity sourcing.

The M&A activity is a key partnership driver, consolidating the core business. Suburban Propane Partners advanced its expansion by completing strategic propane acquisitions totaling about US$77 million over the past year. This wasn't one big deal; it was targeted growth.

The math is clean: $53.0 million plus $24.0 million equals the reported $77 million in acquisitions supporting market share consolidation. The $53 million deal alone added over 14,000 customers.

On the renewable side, Suburban Propane Partners uses its subsidiary, Suburban Renewable Energy, LLC, to hold equity stakes in future-facing energy technologies. This is where you see the commitment to low-carbon alternatives in action.

• Equity stake in Oberon Fuels ('Oberon'): 39 percent interest, originally acquired in September 2020. Oberon develops renewable dimethyl ether (rDME).
• Equity stake in Independence Hydrogen, Inc.: 25 percent interest, purchased for $30.0 million. Independence Hydrogen supplies gaseous hydrogen solutions.

For the core business, Suburban Propane Partners functions as a nationwide distributor and marketer, meaning they rely on deep supplier relationships for their primary products. While specific supplier names aren't public in these filings, the commodities they manage through these partnerships include propane, renewable propane, fuel oil, and refined fuels. They also actively market natural gas and electricity.

The development of Renewable Natural Gas (RNG) involves strategic alliances for growth platforms. The primary partnership here is with Equilibrium Capital Group ('Equilibrium'), which Suburban Renewables acquired an RNG asset platform from and formed a partnership with for future project development. This joint venture is designed to accelerate growth in the waste-to-energy economy. Furthermore, Suburban Propane Partners is advancing capital projects for RNG facilities in upstate New York and Columbus, Ohio, expected to complete construction toward the end of calendar 2025.

Perhaps the most visible partnership is the one struck in early 2025 with the motorsports world. Suburban Propane became the Official Propane of NASCAR and Speedway Motorsports through a multi-year agreement, announced when the company was valued around $2.38 billion. This deal is about clean energy marketing and operational support.

The tangible elements of the NASCAR partnership include:

• Supplying propane for new, propane-powered track dryers debuting in February 2025 to improve track drying efficiency.
• Providing propane for in-stadium concessions and on-site services for campers during event weekends.
• The partnership covers numerous major venues, including Daytona International Speedway, Talladega Superspeedway, Charlotte Motor Speedway, and Las Vegas Motor Speedway.

Finance: draft 13-week cash view by Friday

Suburban Propane Partners, L.P. (SPH) - Canvas Business Model: Key Activities

Retail distribution and marketing of propane and fuel oil is the core engine for Suburban Propane Partners, L.P. The company moved 400.5 million retail propane gallons in fiscal 2025, which was a 5.9% increase year-over-year, helped by colder weather and post-storm demand. This activity generated revenue of $1.43 billion for the full fiscal year ending September 27, 2025. The company serves approximately 1 million residential, commercial, governmental, industrial, and agricultural customers across 42 states from about 700 locations. The focus on unit margin expansion also helped, with propane unit margins increasing by 2¢ per gallon or 1% for fiscal 2025, excluding mark-to-market adjustments. The annualized distribution rate remained steady at $1.30 per Common Unit.

Executing strategic growth through market-consolidating acquisitions is a major ongoing activity. For the fiscal year 2025, Suburban Propane Partners completed acquisitions totaling about $53.0 million. This followed a Q1 fiscal 2025 acquisition in New Mexico and Arizona for $53.0 million. Furthermore, the company announced subsequent acquisitions in California for $24.0 million after the fiscal year end. The overall strategy is to expand the geographic and segmented footprint through disciplined, accretive deals.

Investing in and developing renewable energy projects is a clear strategic focus, positioning Suburban Propane Partners for cleaner energy alternatives. Total capital spending for fiscal 2025 reached $72 million, which was $12.5 million higher than the prior year, with over $25.5 million specifically deployed for growth capital expenditures to advance construction activities at Renewable Natural Gas (RNG) production facilities. These facilities include projects in Columbus, Ohio, and Upstate New York. However, in fiscal 2025, the average daily RNG injection was approximately 13% lower compared to the prior year due to downtime for operational improvement projects and extreme weather impacts on anaerobic digestion.

Managing nationwide logistics and a large delivery fleet underpins the entire operation. The infrastructure supports servicing approximately 1 million customers across 42 states via roughly 700 locations. This scale requires constant management of the delivery network to meet demand, which saw Q2 fiscal 2025 retail propane gallons sold jump 15.5% to 162.0 million gallons due to cooler temperatures.

Multi-year technology modernization for system consolidation is an investment reflected in operating costs. Combined operating and general and administrative (G&A) expenses for fiscal 2025 rose 4.2% to $590.5 million. This increase was attributed to higher payroll, variable operating costs to support increased customer demand, and specific cost related to the technology initiative that Mike mentioned earlier. The partnership raised $23.5 million net from an At-the-Market (ATM) equity program during the year, which was used to fund acquisitions, growth projects, and repay debt.

• Consolidated Leverage Ratio improved to 4.29x at the end of fiscal 2025, down from 4.76x at the end of the prior year.
• Net proceeds of $23.5 million were raised via the ATM program in fiscal 2025.
• Net borrowings under the revolving credit facility in Q1 fiscal 2025 were $91.7 million to fund acquisitions and growth capital expenditures.
• The quarterly distribution rate was maintained at $0.325 per Common Unit for the quarter ended September 27, 2025.

Suburban Propane Partners, L.P. (SPH) - Canvas Business Model: Key Resources

The Key Resources underpinning Suburban Propane Partners, L.P.'s business model as of late 2025 are substantial, built on physical infrastructure, financial flexibility, and strategic positioning in evolving energy markets.

The physical distribution backbone is extensive, supporting the hyperlocal operating model across the United States.

• Nationwide distribution network of approximately 750 locations across 42 states.
• Serving approximately 1.0 million residential, commercial, industrial, and agricultural customers.
• The hyperlocal model is supported by this extensive physical footprint.

Tangible assets include significant propane storage and transportation capabilities, evidenced by the scale of throughput and recent capital deployment.

The partnership has actively managed its balance sheet, securing access to capital to fund growth and deleverage.

• Launched an At-the-Market (ATM) equity sales program to sell up to $100.0 million of newly issued Common Units.
• Raised net proceeds of $23.5 million from the sale of 1.3 million Common Units during fiscal 2025.
• Deployed nearly $53 million for propane acquisitions during the year.
• Consolidated Leverage Ratio improved to 4.29x for fiscal 2025, down from 4.76x the prior year.

Suburban Propane Partners, L.P. is also investing in future-facing assets and intellectual property related to low-carbon fuels.

• Producer of and investor in low-carbon fuel alternatives, including renewable propane and renewable natural gas (RNG).
• Equity stakes in Independence Hydrogen and Oberon Fuels.
• Announced acquisition of RNG production assets from Equilibrium Capital Group on July 24, 2025.
• Advancing capital projects at RNG facilities in Columbus, Ohio and Upstate New York.

Here's a quick look at the scale of operations and recent financial strength:

The field personnel are integral to maintaining service across the established hyperlocal network, which is a key differentiator for Suburban Propane Partners, L.P.

Suburban Propane Partners, L.P. (SPH) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Suburban Propane Partners, L.P. (SPH) over competitors. It boils down to deep history, broad reach, and a pivot toward cleaner energy, all while keeping service local.

Reliable, dependable energy supply with a nearly 100-year legacy.

Suburban Propane Partners, L.P. anchors its value proposition in its longevity. The company has been in the customer service business since 1928, giving it a nearly 100-year legacy of dependability. This history translates into operational experience, especially when handling high-demand periods. For instance, retail propane gallons sold for the full fiscal year 2025 reached 400.5 million gallons, a 5.9% increase year-over-year, showing sustained customer reliance on their supply chain.

Diversified product offering: propane, fuel oil, natural gas, electricity.

The value isn't just in one fuel; it's in the variety of energy sources Suburban Propane Partners, L.P. can deliver and market across its footprint. The Propane segment remains the largest revenue driver, but the diversification mitigates risk from single-commodity price swings. Here's a look at the scale and the primary revenue source for fiscal year 2025.

Suburban Propane Partners, L.P. serves approximately 1 million customers through about 700 locations across 41 states.

Commitment to low-carbon alternatives (renewable propane, RNG).

The company is actively positioning for the energy transition by investing in cleaner fuels. This commitment is backed by capital deployment and specific project milestones. Suburban Propane Partners, L.P. is an investor in low-carbon fuel alternatives, including renewable propane and renewable natural gas (RNG).

• Fiscal 2025 capital spending for RNG projects was expected to range between $35 million to $45 million.
• The Upstate New York RNG facility is positioned to qualify for an Inflation Reduction Act Investment Tax Credit at a 30% rate, potentially yielding $7 million to $9 million in tax credits.
• New RNG facilities in New York and Ohio were expected to come online later in 2025.
• However, average daily RNG injection at the Stanfield facility was approximately 13% lower in fiscal 2025 compared to the prior year due to maintenance and weather impacts.

Personalized, hyperlocal customer service model.

The value proposition emphasizes local service delivery, which is critical for energy distribution. This is reinforced by community engagement efforts, showing a commitment to the areas they serve. The company has over 3,300 full-time employees dedicated to this service. The 2025 SuburbanCares initiative involved over 150 employee volunteers contributing approximately 600 hours of service across 20 communities nationwide. This local focus supports customer retention, which is key when propane volumes sold increased by 5.9% in fiscal 2025.

Emergency and post-storm demand fulfillment (e.g., Hurricanes Helene and Milton).

Suburban Propane Partners, L.P. highlights its operational readiness during crises. The company's personnel were noted for their tireless execution in response to surging demand. Specifically, Q1 2025 saw strong demand in the Southeast region following Hurricanes Helene and Milton, which helped offset warmer-than-normal weather impacts elsewhere. Furthermore, sustained colder temperatures in Q2 2025 led to propane volumes increasing by 15.5% year-over-year, with January 2025 delivering the highest propane volumes since 2018. This demonstrates the ability to scale up rapidly when customers need it most.

Suburban Propane Partners, L.P. (SPH) - Canvas Business Model: Customer Relationships

You're looking at how Suburban Propane Partners, L.P. keeps its massive customer base engaged and loyal; it's a mix of deep local presence and structured corporate support. The foundation of this relationship strategy is its nearly 100-year legacy in the customer service business, dating back to 1928.

Dedicated local customer service and field support.

Suburban Propane Partners, L.P. focuses its service delivery in areas where the primary alternative, natural gas, isn't easily accessible-namely, suburban and rural locations. The company services approximately 1.0 million propane customers across 42 states, utilizing a nationwide retail distribution network of approximately 750 locations as of September 27, 2025. This physical footprint is key to local support, though you should note that most of its customer service centers compete with five or more other marketers at any given time. To maintain this physical presence, the company leases about 25% of its customer service centers under operating leases.

Here are the key operational metrics defining the customer base as of fiscal year-end September 27, 2025:

High-touch, personalized relationship model for retention.

The relationship model is anchored by the Suburban Commitment to Excellence pillar, which emphasizes dependability, flexibility, and reliability. While specific personalization metrics aren't public, the company explicitly ties customer base growth and retention initiatives to its operational results; for instance, Q1 fiscal 2025 results noted contributions from these initiatives, even as unseasonably warm temperatures impacted demand. The focus on local service centers inherently supports a more direct, high-touch interaction than a purely centralized model. If onboarding takes 14+ days, churn risk rises, so local field support is defintely critical here.

Community engagement through the SuburbanCares initiative.

Community goodwill is actively managed through the SuburbanCares corporate initiative, which reflects a commitment to the local communities where employees live and work. For the 2025 calendar year, the results of this engagement were quite specific:

• Engaged over 150 employee volunteers.
• Logged approximately 600 hours of volunteer service.
• Supported initiatives across 20 communities nationwide.
• Maintained an ongoing national partnership with the American Red Cross.

This effort is designed to strengthen community connections, which indirectly supports customer trust and retention in those local markets.

Contractual arrangements for scheduled deliveries and price protection.

Suburban Propane Partners, L.P. manages customer commitment through structured service agreements, though the exact terms of price protection programs are proprietary. The core relationship is solidified by the recurring nature of propane delivery, which is managed through scheduled delivery programs. The company's overall financial health supports these commitments; for fiscal 2025, Total Revenues reached $1,432.5 million, and Net Income was $106.6 million, allowing for consistent service delivery and the ability to manage commodity price risks for customers through various contract structures. Furthermore, the company declared a quarterly distribution of $0.325 per Common Unit for the period ending September 27, 2025, signaling stability to its investor base, which underpins the long-term reliability offered to its customers.

Finance: draft 13-week cash view by Friday.

Suburban Propane Partners, L.P. (SPH) - Canvas Business Model: Channels

You're looking at how Suburban Propane Partners, L.P. (SPH) physically gets its product-propane, renewable propane, RNG, and fuel oil-to its customers. This is all about physical footprint and direct interaction.

The backbone of the distribution channel is the physical network. As of late 2025, Suburban Propane Partners, L.P. services its customer base through approximately 700 locations, though the November 2025 10-K filing announcement mentioned approximately 750 locations across 42 states. This extensive physical presence is key to reaching the roughly 1 million residential, commercial, governmental, industrial, and agricultural customers.

Here's a quick look at the scale of the physical channel as of the Fiscal Year 2025 reporting:

Direct-to-customer delivery is managed via a proprietary fleet. This is how they move the product from those local distribution centers right to the customer's tank, which is critical for reliability, especially during peak heating demand. The operational success of this channel is reflected in the 5.9% increase in retail propane gallons sold for fiscal year 2025.

Sales and service personnel are the human interface for both commercial and residential accounts. These teams handle the direct sales, service calls, and relationship management that keep the customer base stable. The company is focused on customer base growth and retention initiatives, which rely heavily on these personnel executing well.

Digital channels support the physical network for account management and service requests. The management team mentioned advancing technology initiatives during fiscal 2025, supported by total capital spending of $72 million for the year. This investment helps modernize how customers interact digitally, even as the core business remains physical delivery.

• Digital use supports account management.
• Digital partners use tracking technologies on Sites.
• Technology modernization is a stated focus area.

The overall channel strategy is supported by strong financial performance, with Adjusted EBITDA for fiscal 2025 reaching $278.0 million, which helps fund the maintenance and modernization of this extensive physical and digital infrastructure.

Suburban Propane Partners, L.P. (SPH) - Canvas Business Model: Customer Segments

Residential customers are the core base for Suburban Propane Partners, L.P. (SPH). The partnership serves approximately 1 million total customers across its operational footprint.

Commercial, industrial, and governmental entities form a significant part of the customer base, contributing to the overall retail propane volume. The partnership noted margin expansion across all customer categories in fiscal 2025.

The agricultural sector is a distinct user group, though its demand can be variable. For instance, in the first quarter of fiscal 2025, lower agricultural demand for crop drying was cited as a factor contributing to a slight decrease in retail propane gallons sold for that period.

Wholesale customers are served through bulk sales arrangements. In the first quarter of fiscal 2025, average wholesale propane prices, based on Mont Belvieu, saw a notable increase of 15%, reaching $0.77 per gallon compared to the prior year.

The overall performance of the propane distribution business, which serves these segments, is summarized below for the fiscal year ended September 27, 2025:

The growth in retail propane gallons sold for the full fiscal year 2025 was driven by several factors impacting demand across the segments:

• Sustained widespread cold temperatures during critical heating months.
• Increased demand for backup power generation in the Southeast following hurricanes.
• Continued growth in the counter seasonal national accounts business.
• Incremental volumes from recent propane acquisitions.

Suburban Propane Partners, L.P. (SPH) - Canvas Business Model: Cost Structure

When you look at the Cost Structure for Suburban Propane Partners, L.P. (SPH), you see a business heavily weighted toward the cost of the product it sells, which is typical for a distributor. The variable costs are significant, but fixed and semi-fixed operating expenses also demand close attention, especially as the company invests in new areas like renewable energy.

The single largest component of cost is the procurement of the fuel itself. Cost of products sold, which includes the purchase of propane and related activities, totaled $493.6 million for fiscal 2025. This cost directly scales with sales volume and wholesale commodity prices; for instance, higher average wholesale propane costs during much of fiscal 2025 contributed $29.1 million to the increase in this cost line item alone.

Beyond the direct cost of goods, the overhead required to run the distribution network and corporate functions is substantial. Combined operating and general and administrative expenses for the full fiscal year 2025 reached $590.5 million. This represented a 4.2% increase year-over-year, driven primarily by higher payroll and benefit-related expenses, overtime to support increased customer demand, and costs tied to the multi-year technology modernization initiative.

The company is actively spending capital to secure future revenue streams, which adds to the cost base through depreciation and interest on financing. Capital expenditures for Renewable Natural Gas (RNG) growth projects were significant, with over $25 million deployed; specifically, growth capital expenditures to advance construction activities at RNG production facilities totaled $27.0 million in FY2025. This investment is part of a broader strategy to build out the renewable energy platform.

The financing structure also contributes to the cost base through interest expense. Net interest expense for fiscal 2025 was $76.3 million, an increase from the prior year, largely due to a higher average level of outstanding borrowings under the Revolving Credit Facility. Managing this debt load is key, as evidenced by the reported Consolidated Leverage Ratio, which stood at 4.29x for the fiscal year ended September 27, 2025.

Distribution and logistics costs are embedded within the operating expenses but represent critical, ongoing cash outflows. These costs are directly tied to maintaining the physical infrastructure needed to serve customers. Here are the key elements that make up these operational costs:

• Fleet maintenance for the extensive distribution network.
• Payroll for drivers, logistics coordinators, and field personnel.
• Vehicle fuel costs, which can fluctuate.
• Costs associated with maintaining storage terminals and delivery equipment.

To give you a clearer picture of the major cost categories for Suburban Propane Partners, L.P. in fiscal 2025, here is a quick summary of the largest reported figures:

Finance: draft 13-week cash view by Friday.

Suburban Propane Partners, L.P. (SPH) - Canvas Business Model: Revenue Streams

You're looking at how Suburban Propane Partners, L.P. (SPH) actually brings in the money, which is key to understanding its valuation, especially given the weather and commodity price sensitivity we see year-to-year. The revenue streams are quite focused, but they do have a few supporting pillars.

The primary engine, without question, is the retail sale of propane. For the full fiscal year 2025, which ended September 27, 2025, the company moved a solid volume, reporting that retail propane gallons sold reached 400.5 million gallons, marking a 5.9% increase year-over-year. This volume growth, supported by colder weather and post-storm demand, directly fueled the top line. Overall, total revenue for fiscal 2025 was reported at US$1.43 billion. That's the big number that captures everything for the year.

Here's a quick breakdown of the core components that make up that total revenue:

• Retail sales of propane, the largest driver.
• Sales of other fuels like fuel oil and natural gas.
• Revenue generated from electricity sales.
• Income from emerging renewable energy ventures.
• Fees collected from equipment sales and services.

To give you a clearer picture of the non-propane energy sales, while the full-year breakdown isn't always public, we can look at the segment performance from the second quarter of fiscal 2025 to see the relative scale of these other streams. Honestly, they are smaller but provide diversification.

The push into cleaner energy is a definite strategic focus for Suburban Propane Partners, L.P. The company has been advancing the buildout of its renewable energy platform, utilizing cash flows to support this growth. This includes ventures in Renewable Natural Gas (RNG) and renewable propane. For instance, management noted progress on an anaerobic digester system in upstate New York and equipment upgrades at an existing facility in Columbus, Ohio, as of August 2025. While specific full-year revenue figures for these nascent streams aren't broken out separately in the top-line reports, they represent a material area of capital deployment and future potential revenue diversification.

Finally, you can't forget the steady, recurring revenue from services tied to their existing customer base. This stream comes from equipment sales and service fees. Think about tank rentals, routine maintenance contracts, and the sale of related hardware. This service component helps smooth out some of the volatility inherent in weather-dependent commodity sales. If onboarding takes 14+ days, churn risk rises, so keeping service smooth is defintely important for retaining that recurring fee base.