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VOL. 42 | NO. 6 | Friday, February 09, 2018

Innovation, risk drive Weigel success

From 1 drive-through milk stand to 89 stores with more innovation coming

By Mike Blackerby

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The view down memory lane and back is all encompassing as Bill Weigel looks out the window of his modest, neatly cluttered office at Weigel’s Stores, just off Emory Road in Powell.

Corporate headquarters, appropriately situated at 3100 Weigel Lane, offer a confluence of the past, present and future for the 80-year-old convenience store pioneer and chairman of Weigel Stores Inc.

Amiable William Browder Weigel, commonly called Billy by those who know him, has a healthy embrace for the past but is always looking to the future with a keen eye.

Corporate headquarters, which features the company’s landmark vintage white-cross style English red-roof barn, is situated on the former 600-acre family farm that was founded in 1918.

Weigel grew up on the farm, known as Broadacre. “I had 580 acres, and I couldn’t get into trouble,” Weigel recalls. “When I was growing up, we grew all our feed, corn and silage. We were farmers. We were a dairy farm.”

Weigel’s father, William Walter Weigel Jr., and uncle, Lynn B. Weigel, oversaw transformation of the former vegetable farm into a thriving dairy farm.

In 1931, the four-cow dairy farm began selling raw milk for 9 cents a gallon and delivering 10-gallon cans to Avondale Dairy. In 1936, Broadacre Dairies was one of the first dairies in East Tennessee to distribute pasteurized milk.

Weigel says the war-time boomtown of nearby Oak Ridge proved a blessing for the young and struggling dairy.

“When Oak Ridge popped up 13 miles from us it really saved the company,” he explains. “All of a sudden you had 60,000 people who needed milk quick.”

It was the perfect example of a burgeoning business being in the right place at the right time, Weigel adds.

Located in Powell, Broadacre Dairy has been a staple of the Knoxville community since 1931. Formerly a vegetable farm, the Weigel family pivoted to producing dairy products in order to survive the Great Depression. The nearly overnight creation of Oak Ridge some 13 miles away rescued the struggling dairy operation. Today, the company owns 89 convenience stores in the East Tennessee area.

-- Adam Taylor Gash | The Ledger

“I really think, in any business, if you don’t have a lucky break along the way it’s very difficult to make it.’’

Ice cream and cottage cheese production was added in 1947, and Broadacre experienced a robust home-delivery boom. Home deliveries were the way most people received their milk and dairy products at the time, but that changed in the late 1950s when milk started to be sold in stores as women began to enter the work force.

“When the home delivery went out, we were still milking the cows,” Weigel recalls. “Our volume was gone because we lost all of our home delivery business it just wasn’t profitable, and we sold the herd.”

Times were changing.

‘Be a doctor’

Less than a mile down the road from company headquarters, construction is ongoing at the site of Weigel’s 89th convenience store, projected to open in the spring on Clinton Highway.

“It’s a new prototype,” Weigel says. “It’s going to have a drive-through window. We’re going to test a lot of things in it.

“We’re going to have doors at each end where you park on each side and the front. It will have a full kitchen for pizzas, paninis and breakfast biscuits. We’ll be in the food business.”

Bill Weigel shows a letter he received from his father from 1958 urging him to study hard but tinged with a hint of persuasion to join the dairy business. At the time, he was studying to be a doctor at Vanderbilt.

-- Adam Taylor Gash | The Ledger

Store No. 89, he adds, will be the largest in the Weigel’s chain. “It’ll be about 5,800 square feet. We started with about 2,400 (square) feet years ago.”

Weigel’s, which has about 950 employees, operates 66 stores and stretches from Crossville to Greeneville. The company store site expansion is ongoing, with a business plan that calls for four new stores a year.

Weigel wonders what his father would think now considering what has transpired in the last 45 years. “He never really got to see us make it (big).”

William Walter Weigel, Jr., 63, died of a heart attack on July 2, 1974.

Signs were posted in the windows of all Weigel’s Jug-O-Milk Farm Stores that the businesses would be closed 1-4 p.m. on Friday, July 5, in respect for the death and funeral of the company’s co-founder.

At the time of his death, Weigel’s, as East Tennesseans know it now, was just getting started.

Weigel still has a framed, handwritten letter on Broadacre Dairies stationary written by his father, dated Dec. 10, 1958, warning his son of changing times in the industry.

Weigel says his dad’s note had an ominous tone. “He said, we’re not going to make it in the dairy business. You should be a doctor.”

A convenience store pioneer

Weigel reaches for an antique milk jug that rests atop a shelf in his office, which is laden with company memorabilia.

-- Adam Taylor Gash | The Ledger

To counter the fast-fading home-delivery side of the business, Broadacre, now named Weigel’s Inc., introduced prototype milk stores in the late 1950s. The first Weigel’s store, a single-bay, one-lane drive-through, opened on Dec. 9, 1958 at 2910 Sanderson Road in Knoxville. A gallon of milk sold for 79 cents, plus a deposit of 25 cents for the jug on the first trip.

After graduating from Vanderbilt University, Weigel entered the family business in 1960 during a difficult transitional time. The tiny, 800-square-foot stores he introduced that year were called milk depots. The drive-through service and sold jug milk as its principle product, as well as staples such as bread and chips.

It didn’t take Weigel long to realize there was no future in the limited options available for customers at the handful of milk depots he opened in the Knoxville area.

“You can’t make a living selling just milk and ice cream,” he says. “I added bread and I added potato chips and this and that, but I couldn’t make them profitable. I finally figured out that the model wouldn’t work.”

So, Weigel moved on to his next endeavor. He learned on the fly, opening the first convenient store in the state without even knowing it.

Weigel’s initial walk-in type store opened for business in 1964 on Oak Ridge Highway at Cumberland Estates. The new concept store included increased consumer options such as a dairy case, ice cream case, grocery department, candy department and miscellaneous items located at the check-out counter.

He stumbled into the convenient store business before he even heard the term.

The precursor to the modern-day convenience store started in 1927 with the advent of the Southland Ice Company, which operated several open-air store fronts in Dallas. “They had an ice house and started selling eggs and bread,” Weigel recounts. “That morphed into the 7-Eleven chain. They were the first convenient store in the nation.”

Weigel adds he learned a lot when he attended the third annual National Association of Convenient Store convention in 1964.

“I had never heard the word, ‘convenient’ store, until then. They were out west. East of the Mississippi there was no such word. And they weren’t exactly called a convenient store back then. They were called bantam markets.”

Weigel recalls that the information he gleaned at the convention proved invaluable during those early days when he was building the walk-in stores from the ground up.

“That’s where I learned their stores were open from 7 in the morning to 11 at night. I had already put groceries in my walk-in milk stores in 1964, but I was open from 10 a.m. to 10 p.m. I at least kind of had a feeling for what I was doing – I just didn’t know what I was doing. Hackney (H.T. Hackney Company) put in my first groceries, and they didn’t know what they were doing. They put in those big tall cans of sweet potatoes and stuff.”

Weigel acknowledges he learned something new every day as he was building his business.

“I didn’t know what I was doing until I got to that convention which was about four months after I opened it (his first store). I realized I was doing it all wrong. My hours we wrong, I wasn’t selling cigarettes. I didn’t know anything until I got to that convention. I was one of the early pioneers in the convenient store business. We were learning and sharing together.”

‘I’ll take 10 ….’

Two antique milk crates grace the lobby of Weigel’s office.

-- Adam Taylor Gash | The Ledger

As his convenience store concept gained financial traction, Weigel added stores at sites such as in Oak Ridge near the old Atomic Energy Museum and on Northshore Drive in Knoxville in the late 1960s.

Astute decisions outweighed frequent wrong turns as Weigel began to wrap his head around the fledgling business model for his newfangled convenience stores.

In 1967, at a national convenience store convention, he was introduced to a machine that produced a refreshing frozen, carbonated drink in volume. “I sat at a table with the ICEE people who had just invented this new machine,” he recalls.

“I sat and talked to them and said, ‘I tell you what, I’ll take 10 of those.’ I was the first east of the Mississippi to have ICEE. It was a big deal. The kids had their ICEEs, and they grew up and then their kids had their ICEEs. ICEE was a huge, huge draw for us. I had a handshake exclusive for almost 40 years.”

More innovation followed.

“I had the first self-service pump in Knoxville,” Weigel says.

“I opened a store right here in Powell in 1969, and a guy from Texas came in my office and said, ‘if you’ll let me put tanks and pumps in your parking lot I’ll give you half of all the profit.’ He said it will pay your utility bill.”

Weigel was hesitant before finally pulling the trigger on the novel concept. “I said, ‘I don’t really want pumps in front of my store, that’s where I park.’

“I finally said, ‘I’ll do it if you’ll agree to dig those up, repave my lot, and take it away if I don’t like it for any reason. I said, ‘well, he’ll never come back,’ but dang if he didn’t. It was a Texas firm where the 7-Eleven people were. I said, ‘OK.’ They brought me a contract and put it in.

“After about three of those, I figured out they were paying for their equipment pretty quick. I had watched them put them in, and I got my plumber and said, ‘I think we can do this.’ We started putting our own (gas pumps) in.”

Weigel’s was on its way.

Looking ahead

According to 2017 data from Convenient Store Petroleum, an industry news provider, Knoxville is headquarters for two of the top 100 convenient store chains in the nation. Pilot Flying J, which was started by Jim Haslam in 1958 and has expanded into a national brand of convenience stores and travel centers, is ranked No. 12 with 735 stores.

Industry giant 7-Eleven ranks first with a whopping 8,303 stores. Weigel’s comes in tied for 95th place.

Weigel says he was a friendly competitor with Haslam in the early days. “We’ve been good friends and really grew up together,” Weigel adds.

“Big Jim came in through the gasoline business and got into the convenience store business. I came into it in the convenience store side of the business and got into the gasoline business. We came into it from two different ends and kind of met.”

Weigel says he never has had designs on expanding nationally like Pilot Flying J. “They separated themselves from us a long time ago.”

Weigel says business is as challenging as ever. It’s what keeps him reporting for work each morning.

“It’s very competitive, particularly gas and your personnel. Our people are critical and they serve the customer. Our success is only as good as the people serving the customer. That’s who they shop with. They don’t shop with Weigel’s, they shop with that person at the store. We’ve got to keep going, and we’ve got to have good people to keep it going.”

Still, Weigel says he sometimes yearns for those days when the convenience store industry was in its infancy.

He enjoyed finding his own way.

“It was much more fun when I wasn’t making any money, really,” he says. “Learning is the fun part. You’re never too old to learn. We’re still making changes every year. I enjoy all the people and enjoy every bit of this. I’m not retiring.”

Mike Blackerby is a freelance writer living in East Tennessee