Kwik Trip Reveals Plans for $300M Facilities Expansion
LA CROSSE, Wis. — Kwik Trip Inc. is plotting a $300-million capital investment project aimed at meeting the needs of the growing company.
As part of its expansion plans, the convenience retailer will invest $113 million in a new 200,000-square-foot bread and bun production facility, plus multimillion-dollar expansions and improvements in its dairy manufacturing facility, kitchen operations, and transportation fleet.
The project is expected to create more than 300 jobs in the La Crosse area over the next five years. Construction of the new bakery is expected to be completed by late fall of 2018.
"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," said Gov. Scott Walker. "Kwik Trip is the latest example of companies seeking to expand in Wisconsin because of our pro-business policies and dedicated workforce."
La Crosse-based Kwik Trip owns and operates more than 600 retail convenience stores in Wisconsin, Minnesota and Iowa. The company is building 56 new stores in 2017, including 36 in its home state.
"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," he explained.
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.
Without the investment, the company projects that its production facilities will run out of capacity over the next five years. Kwik Trip's production, distribution, transportation and corporate support facilities currently comprise more than 1 million square feet on the company campus of 120-plus 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.
Economic Development
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. The new facility 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 in 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 are contingent upon the number of jobs created, 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 R. 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."
Kwik Trip was founded in 1965 and opened its first store in Eau Claire. The company currently operates 621 stores and employs more than 20,000 co-workers in three states, including 380 stores and more than 12,700 co-workers in Wisconsin.
As 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 percent of its own branded products.