KWIK TRIP

About KWIK TRIP

Midwesterners who need to make a quick trip to get gas or groceries, cigarettes or donuts, race on over to Kwik Trip stores. Kwik Trip operates more than 400 Kwik Trip and Kwik Star convenience stores throughout Iowa, Minnesota, and Wisconsin. The company also runs more than half a dozen Hearty Platter restaurants and cafes, about 40 Tobacco Outlet – more... Plus (TOP) cigar stores, and car washes at some Kwik Trip store locations. All Kwik Trip stores built since 1990 are owned by Convenience Store Investments, a separate company, which leases the land and stores to Kwik Trip. Kwik Trip, which opened its first store in 1965 in Eau Claire, Wisconsin, is owned by the family of CEO Don Zietlow.

Operations

To supply its stores with baked goods and other foods, Kwik Trip operates a 60,000-square-foot commissary and research facility at its headquarters in southwestern Wisconsin. The company is building a new 65,000-square-foot dairy facility in its hometown of La Crosse to supply its own stores (and those owned by others) with ice cream, yogurt, and other dairy products. Longer term, the company hopes to develop its own plastic bottle manufacturing plant. Foodservice currently accounts for about a third of the company's annual profit, ahead of fuel. 

Kwik Trip vertically integrates by processing its own gasoline and producing and packaging products to be sold in its convenience stores. The company's bakery produces the Kwickery Bake Shoppe line of bagels, buns, cookies, donuts, muffins, and more, and its dairy packages the Nature's Touch brand of fresh milk, ice cream, orange juice, and water.

Strategy

Kwik Trip is growing quickly. The convenience store chain expects to add about 2,000 jobs companywide by late 2013, to staff and supply its growing number of stores. Kwik Trip is testing a new 5,000-square-foot store format designed to appeal to soccer moms and other female customers. The new, more upscale look includes wood fixtures and subdued florescent lighting combined with accent lighting. To supply its larger store base the company is building a new 65,000-square-foot dairy facility in its hometown of La Crosse.

To compensate for shrinking fuel and tobacco margins, the regional convenience store chain has been expanding its food offerings --  adding soup and chili to its menu of pizza, tacos, salads, and other hot and fresh items --and plans to enter the take-home meals market with entrees such as lasagna, chicken, beef, pork, fish, and meat loaf. Indeed, over the past several years the company has greatly expanded its food production activities and has begun selling food on a wholesale basis to other retailers, including noncompeting retailers and school districts. The company estimates that by 2030 the wholesale business could account for as much as half of the food that Kwik Trip produces.

Company Background

The John Hansen family founded Kwik Trip in Eau Claire, Wisconsin in 1965. In 2000, the Hansens sold their interest in Kwik Trip to the Zietlow family for $120 million. The two families had jointly owned Kwik Trip since 1972. – less

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