The Kent Cos. Sets Sights on New Market Growth
The Kent Cos. Sets Sights on New Market Growth
The Kent Cos., based in Midland, Texas, is aggressively growing through acquisitions and new-to-industry stores, venturing out from its home base in the Southwest to expand in Tennessee and the Carolinas. It’s also moving into new industries, including the urgent care business, as it targets $1 billion in revenue.
Today, The Kent Cos. operates 72 convenience stores, including 61 Kent Kwik stores in Texas, Oklahoma, New Mexico and Tennessee, and 11 Bountyland locations in South Carolina and North Carolina. The company also supplies fuel to more than 200 dealer sites, including in Louisiana, Texas and Alabama.
Kent Kwik stores primarily offer Chevron-branded fuel, while the Bountyland stores feature Exxon-branded gas.
In a little over two years, the company has nearly doubled its footprint.
In late 2020, the company entered the Tennessee market with the purchase of Buy Fast stores in Fayetteville, Tenn. The acquisition included branded and unbranded dealer supply accounts, a commercial lubes and fuel distribution business, and a bulk plant and office. The move marked the first time the company expanded outside its Southwest roots. It also gave Kent a strategic foothold to support its plans for growth in central Tennessee.
“It’s been a journey,” said Bill Kent, CEO of The Kent Cos. “We’ve been bidding on acquisitions for six to seven years. We’ve seemed to always be second or third and found a lot of public companies, in our opinion, that were overpaying for companies. We just kept swinging, and we got an opportunity to buy into Tennessee.”
In March 2021, The Kent Cos. expanded in the Texas market, acquiring six stores from Connel Oil Co. dba Mr. C’s convenience stores in Mineral Wells and Weatherford, Texas, along with branded and unbranded dealer supply accounts and a bulk plant.
In October 2021, The Kent Cos. purchased 11 Bountyland convenience stores, 51 dealer locations and commercial accounts from Bountyland Petroleum and Bountyland Food Service, based in Seneca, S.C. The acquisition allowed Kent to grow into the South Carolina and North Carolina markets.
“We really made a connection with the owner of Bountyland, David Land, and I think he felt like we were similar to their philosophy, and we certainly thought he was to ours. We were impressed with the operation, the caliber of the people, the facilities and everything,” Kent said.
While Buy Fast and Mr. C’s locations are converting to the Kent Kwik name and image, Kent decided to leave the Bountyland name in place for the time being. “We feel like they have a good name in the South Carolina market, and we want to try to leverage that,” he said.
Part of The Kent Cos. strategic vision is to reduce its dependence on west Texas and the Permian Basin because of the volatility of the oil and gas market in that region.
“Our headquarters and most of our stores are in the Permian Basin, which is the largest oil field in North America and one of the largest in the world, and with that comes some good things, but with it comes a lot of bad things,” Kent said. “One of those is that you have extreme ups and downs. Prices go up, and things are great, but you can’t find employees because the oil field and the service companies overpay people so egregiously that you can’t even compete.”
“Then the oil industry will collapse with price collapse,” he added. “Then you have people wanting jobs, but the pay rates are distorted, and if you’ve chased those salaries up there, you’re in trouble because the industry changes. So it’s a challenge. It’s a difficult market.”
Because of that volatility, Kent decided to evaluate additional areas of operation outside the Southwest.
Kent was attracted to Tennessee, South Carolina and North Carolina as markets of operation because they are similar to Texas in terms of business policies, including low taxation and regulation.
“We look for areas where we think we can grow that share a similar political environment and regulatory environment to what we’re used to in Texas,” he said.
As The Kent Cos. continues to set its sights on future growth, it’s open to additional operating areas.
“We have no desire to be in the Northeast,” Kent said. “We have no desire to be on the West Coast. Pretty much everything in between there is fair game.”
While it keeps an eye on further acquisitions, The Kent Cos. is also growing via new-to-industry (NTI) locations. It opened two NTI stores in west Texas in 2021, including a truck stop in Odessa, Texas. It also opened one new truck stop in San Angelo, Texas, in 2022 and it has two more sites currently under construction — a truck stop and a c-store, both in Midland, Texas.
“We’ve dramatically, over the last 15 to 20 years, changed the footprint of our stores,” Kent said. “Our new typical store is about 4,500 square feet. Our travel stops range from 7,000 square feet to 12,000 square feet. It depends on what kind of facility we’re building.”
The exterior of the convenience stores features two brick columns flanking the entrance and a brick façade above the entryway, above which a glass light-up sign features the name Kent Kwik.
Inside, the store features open ceilings, beige tile on the floor, wood elements on the cabinets and red tile along the walls.
“We tile most everything in the store for long-term maintenance. There’s a lot of white, a lot of wood treatments to kind of warm it up,” Kent said. “It’s pretty colorful inside.”
The chain’s immediate focus is upgrading existing sites. It remodels stores each year to keep locations up to date. This year it plans to re-image 10-12 stores to the Kent Kwik brand. Some of the locations are recently acquired sites, while others are legacy locations in need of facelifts. It also plans to raze and rebuild one of the Bountyland stores, a Tennessee store and a truck stop.
Meanwhile, Kent plans to continue building NTI sites, including in the Fort Worth area near the Connel acquisition, as well as in west Texas.
Kent Kwik dates back to 1957, when Kent’s father, the late Buck Kent, founded the company, which began as Kent Oil and Kent Distributors in west Texas.
Bill Kent’s oldest brother ran the business for years, and then his middle brother joined the company and spearheaded the move into the Kwik Lube business. Kent joined in 1979, and his brothers moved on from the business shortly after.
Kent bought the business from his father in 1984. At the time, the company had 12 stores, three lube centers, 30 dealers and around 75 employees.
Time will tell if the third generation takes the reigns. Kent’s daughter Alli Brinker is involved with the business part-time, and his son Buck is 14.
“I don’t know how much family I’ll have in the business, but I’m structuring the company so that if they want to be active in the business, there’ll be opportunities. If they don’t want to be, they’re going to have to be good owners, good investors and good stewards of the business and make sure there’s a process to hire good quality leadership to run the company. And I think we have that now.”
Growing Food Concepts
Foodservice is an important focus for The Kent Cos. It operates seven Huddle House franchises and three Baskin Robbins franchises. It features three Rustic Cafés, a proprietary concept, at its truck stops, and its first freestanding Rustic Café is currently under construction.
“The (Rustic Café) concept was born out of the truck stop business,” Kent said. “It’s really the kind of food you would expect, if you went into a truck stop; that would be just good old comfort food.”
The offering includes fried chicken, chicken-fried steak, steak fingers and burgers.
“If it’s fried, we’re selling it,” Kent said. “Our goal is to have the best chicken-fried steak we can of anybody in the market.”
Rustic Café also serves breakfast 24 hours a day, making it a popular spot for breakfast customers.
The Kent Cos. also runs its own centralized commissary that supplies its stores in west Texas. “It doesn’t cover everything in every market,” Kent explained. “We’re trying to address that in each new market we’re moving into, which we haven’t done as of yet.”
Kent Kwik’s newer stores feature a proprietary concept called Kwik Eats. Customers order food via touchscreen kiosks, and the food is made to order in the store. The offering includes items such as chicken, burgers and fries.
New builds without a Kwik Eats feature open air coolers and food warmers with grab-and-go food supplied by the commissary.
The Kent Cos. has also been rolling out bean-to-cup coffee dispensers to its entire fleet of stores over the past two years. The high-quality coffee and virtually zero waste that bean-to-cup offered sold Kent on the switch.
“The no waste would’ve been a non-starter, if the product wasn’t good, but in testing the product, everybody really liked the product better. We had more blends. We had more options for guests. We felt like it was a better option for our guests,” he said. “We think we’re making good coffee, and it’s really made a difference in our coffee sales too.”
Kent Kwik has operated drive-throughs since the 1980s. “There are a lot of people that think it’s a new concept for them, but we did our first one in 1988, and we’ve been doing them ever since,” Kent said. “Now we don’t have them everywhere. We don’t think they necessarily work everywhere, but our drive-throughs do really well.”
Customers can purchase anything through the drive-through except lottery.
Foodservice customers can order ahead via phone and pick up the order in-store. The Huddle House and Baskin Robbins locations offer delivery, and while The Kent Cos. has yet to extend delivery service to its Kwik Eats program, it’s actively looking into delivery options for the convenience stores.
The Kent Cos. is in the early stages of testing self-checkout kiosks at five locations.
“So far we’ve been very pleased with that, and it seems to be going pretty well,” Kent said.
Kent expects the program will begin rolling out to its entire fleet of stores by the end of 2022.
Customers who wish to use mobile payment can use the Chevron- or Exxon-branded fuel apps in the forecourt. They can also pay for products in-store or at the pump using Apple Pay.
While The Kent Cos. hasn’t moved into other forms of frictionless checkout yet, Kent experienced the technology up close in March, during store tours that were held as part of the National Advisory Group (NAG) Conference in La Jolla, Calif.
“Based off the NAG visit, we saw some frictionless retail that has got our attention and is making us think about what additional options we can bring to our stores,” he said.
Kent’s goal for the future is for The Kent Cos. to reach $1 billion in revenue.
“We may get there this year,” Kent said. “That’s been my personal goal to take a business I bought in 1984 that was very small and from my family, and if I could get to $1 billion in revenue, I would feel like I’ve made some progress.”
Today, the company has about 1,300 employee positions, quite a jump from the 75 employees when Kent acquired the business.
As it looks to grow, Kent plans to take the acquisitions as they come.
“We don’t have anybody beating the bushes saying, ‘We have to be here. We have to be there.’ We’re not doing that,” Kent said. “We’re letting the market come to us to tell us, ‘Hey, would you be interested in this group of stores here?’ And we can say yes or no. We have looked at a lot of acquisitions that we’ve not pulled the trigger on. We’re willing to look at just about anything, but it needs to fit with our culture and everything else.”
New stores and acquisitions will fly the Kent Kwik banner in most of its operating area. If it expands in the Carolinas, time will tell if the stores will be branded Bountyland or Kent Kwik.
The company is also growing beyond c-stores. In 2020, The Kent Cos. bought Prince Signs, signage company in Houston. It also operates 15 Mr. Payroll check cashing locations, two Kent Tire stores and nine Kent Car Washes.
Last year, The Kent Cos. entered the urgent care market when it acquired WesTex Urgent Care, which operates three urgent cares in the Texas market.
“We bought into the urgent care model with a doctor, who’s a friend of mine, named Terry Beck. We want to build a quality urgent care brand with him and the doctors,” Kent said. “We don’t have anything to do with the medical care, but we think we can help with the brand development, with the locations and with the consistency of it. That’ll be a separate part of what we do, but it’s another growth vehicle for us.”
Kent divested its Kwik Lube business to Valvoline Inc. in 2020 but kept the real estate. Today it operates one NTI Kent Lube Fast Oil Change Center in Midland that was an exception to the non-compete agreement.
Now that Kent Kwik is moving into new parts of the country, Kent hasn’t ruled out moving into the lube business again in new regions.
The Kent Cos. also operates Express Petro Transportation, hauling fuel with its trucking fleet that has grown to 24 trucks in the last five years. “That has grown tremendously,” he said. “Every one of these acquisitions we’ve made, we’ve bought the hauling assets that the companies have.”
The trucking fleet proved to be a game changer during COVID-19 given driver shortages among common carriers. “It made a world of difference to us because we stayed in product when others didn’t have product,” Kent said.
The Kent Cos. is also a shipper, shipping fuel from the Gulf Coast to west Texas.
“The company’s grown a lot and I’m very proud of that,” he said. “I’m very proud of my people, my management team and my staff. We want to create opportunities for people. We’re going to continue to grow. We’re going to do a lot of it organically. We’re going to keep building sites.”