LA CROSSE, Wis. --Kwik Trip Inc., which owns and operates convenience stores in Wisconsin, Minnesota and Iowa, has initiated a $300 million capital investment project that will enable the growing company to meet its ongoing capacity needs.
La Crosse, Wis.-based Kwik Trip, founded in 1965, operates 621 c-stores and employs more than 20,000 workers. The stores receive daily deliveries of fresh baked goods, dairy products, soups, salads, fruit, produce and sandwiches, and they sell grocery products, general merchandise, gasoline and related petroleum products.
- Kwik Trip is No. 15 in CSP’s Top 202 c-store chain ranking for 2017. In October, it completed the acquisition of Middleton, Wis.-based PDQ Food Stores Inc., No. 174 on the Top 202 list.
A vertically integrated company, Kwik Trip operates its own bakery, dairy, water bottling line, kitchens, food-safety lab, distribution center, ice plant, LP plant, blow mold facility, transportation company and health clinic. The company makes, ships and sells 80% of its own branded products.
Plans call for investing $113 million in a new 200,000-square-foot bread and bun production facility and multimillion expansions and improvements in Kwik Trip’s dairy manufacturing facility, kitchen operations and transportation fleet, according to an announcement by Wisconsin Gov. Scott Walker.
“With more than 380 stores and 12,000 employees in Wisconsin, Kwik Trip has already shown a strong commitment to our state, and that commitment is being solidified with this expansion. Kwik Trip is the latest example of companies seeking to expand in Wisconsin because of our pro-business policies and dedicated workforce,” said Walker.
The company expects construction of the new bakery to be completed by late fall 2018. It expects the project to create more than 300 jobs in the La Crosse area over the next five years.
“The multimillion-dollar capital expenditures in Kwik Trip’s bakery, dairy, kitchen and transportation facilities will generate a significant return on investment for the state of Wisconsin and the city of La Crosse in the form of new and expanded tax base, job opportunities for our co-workers, construction contractors, subcontractors and suppliers,” said John McHugh, director of corporate communications and leadership development for Kwik Trip. “This will result in the purchase of additional fleet vehicles and the construction of more efficient production plants that will create higher capacity, productivity and cost savings which will allow Kwik Trip to better accommodate the needs of our guests in the 621 stores and numerous communities we currently serve.”
The company is building 56 new stores in 2017, including 36 in Wisconsin. The projects will support the family-owned company’s plans to open 40 to 50 new stores annually, including a significant number in Wisconsin. In order to reach the goal, the company needs to make significant investments in its buildings, equipment and employees at its La Crosse support center and production facilities. Otherwise, the company projects that its production facilities will run out of capacity over the next five years, it said. Kwik Trip’s production, distribution, transportation and corporate support facilities currently include more than 1 million square feet on the company campus of more than 120 acres.
Expanding its own food production operations enables the company to continue to control food quality, food offerings, food safety and company efficiencies. As a result, Kwik Trip can control its costs and continue offering quality products and low prices, it said.
The largest component of the project is the investment of $42 million in new facilities and $71 million in new equipment for the bread and bun production facility. It will include two new lines that will enable Kwik Trip to significantly increase its production of bread and buns. As a direct result of moving bread and bun production into a new plant, the company plans to make a significant investment into the existing bakery to enhance the capabilities for sweet-goods production.
To help secure the company’s investment in Wisconsin, the Wisconsin Economic Development Corp. (WEDC) has authorized Kwik Trip to receive up to $21 million in state income tax credits over the next five years.
The actual amount of tax credits the company will earn is contingent upon the number of jobs it creates, the level of capital investment and the amount it spends on purchasing equipment, goods and services from Wisconsin companies through 2022. Kwik Trip met all of the required criteria and standards in the tax credit application, review and approval process.
In addition to the more than 300 jobs expected to be created by Kwik Trip over the next five years, an economic modeling study projects that the project will indirectly generate 235 additional jobs in the region. The direct and indirect jobs could generate up to $1.1 million annually in additional state income tax revenue.
“Kwik Trip’s decision to expand is great news for the La Crosse region as well as the entire state,” said Mark Hogan, secretary and CEO of WEDC. “Kwik Trip currently purchases over $900 million each year in goods and services from Wisconsin companies, and this expansion will further increase opportunities for statewide supply chain.”