Casey's General Stores: The Midwest's Pizza-Powered C-Store Empire

I. Introduction & Setup

Picture this: It's 3 AM in small-town Iowa. The nearest McDonald's is 45 miles away. The local diner closed at 8 PM. But there, glowing like a beacon on Main Street, is Casey's General Store—and inside, fresh pizza is coming out of the oven. Not reheated frozen pizza. Not something trucked in from a commissary. Real, made-from-scratch pizza with hand-tossed dough, prepared by someone you probably went to high school with.

This is the paradox that has captivated Wall Street for decades: America's fifth-largest pizza chain isn't Pizza Hut or Papa John's—it's a gas station from Iowa. With over 2,600 locations across 16 states and a market capitalization hovering around $17 billion, Casey's General Stores has built an empire by doing everything the MBA playbooks say not to do. They target towns other chains actively avoid. They make food from scratch in convenience stores. They stayed stubbornly independent through hostile takeover attempts. And somehow, they've turned filling up your gas tank into a $13 billion annual revenue business. Today, Casey's has a market cap of $19.19 billion with current revenue (TTM) of $15.54 billion, making it the third-largest convenience store chain in the United States and the largest that is wholly American-owned. But here's what makes this story extraordinary: while 7-Eleven battles with Couche-Tard for global dominance and Circle K expands into megacities, Casey's has quietly built a fortress in America's forgotten towns—places with populations under 5,000, where the nearest Walmart might be an hour away and where Casey's isn't just a gas station, it's the town square, the pizza place, and sometimes the only source of prepared food for miles.

The central question isn't just how a convenience store became a pizza powerhouse—it's how a company founded on the radical idea of serving rural America has consistently outmaneuvered some of the world's largest retail chains, fought off hostile takeovers, and created a business model so unique that Wall Street analysts still struggle to find proper comparisons. Is it a gas station? A pizza chain? A rural real estate play? The answer, as we'll discover, is that Casey's is something entirely different: a masterclass in finding opportunity where others see only limitations.

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II. The Origin Story: Donald Lamberti's Vision (1959-1968)

The summer of 1959 was a turning point in the life of Donald Lamberti, a 22-year-old Iowan who had just taken over his father's modest service station on East 14th and Broadway in Des Moines. His father's health was failing, and young Donald suddenly found himself running a small corner gas station with an attached general store—the kind of business that dotted America's landscape in the pre-interstate era, when filling up your tank meant pulling into a full-service station where someone pumped your gas, checked your oil, and knew your name.

In 1959, Donald Lamberti leased a service station in Des Moines, Iowa, from his father. For nine years, Lamberti ran this modest operation, learning the rhythms of retail, the importance of relationships, and the delicate balance between serving a community and turning a profit. But it was a chance friendship with a gasoline salesman that would transform this small-town story into one of American retail's most unlikely success stories.

In 1967 Kurvin C. Fish, a salesman who sold Lamberti his gasoline, persuaded him to buy an Ames, Iowa oil company, which owned four Square Deal service stations. Fish wasn't just any salesman—he was known throughout Iowa as both shrewd and scrupulously honest, a combination that had earned him respect in an industry often marked by sharp practices. "People always knew he was telling them the truth," Lamberti would later recall. "He wouldn't oversell. He always pointed out the good and the bad and let people make the decision."

The deal Fish proposed was substantial for a young man running a single station: $40,000 down on a total cost of $200,000, plus a $40,000 equipment loan from a local bank. But Fish saw something in Lamberti—perhaps the same methodical attention to detail, the same understanding that in small-town America, reputation was everything. Fish agreed to become Lamberti's partner, and in a gesture that would define the company's culture of loyalty and recognition, Lamberti named the new venture after his mentor. "Casey's" after Fish, using his initials K.C.

The first Casey's convenience store was one of the four properties, a converted three-bay gasoline station in Boone, Iowa. It opened in 1968 and was, according to Lamberti, "a hit from day one." The Boone store exceeded all projections—in its first year the store attained profit margins the partners had projected for the third year. But what happened next would establish the blueprint for Casey's revolutionary approach to American retail.

The Boone store (located in a town of only 12,500) did well, so Lamberti decided to see if he could duplicate his success. He built another store in Creston, Iowa (population 7,000), and that store did well also. Then came the pivotal decision: Lamberti became more ambitious and decided to open a store from scratch in the even smaller town of Waukee, Iowa (population 1,500 at the time).

The Waukee experiment was counterintuitive to everything the emerging convenience store industry believed. While 7-Eleven was targeting busy intersections in Dallas and Circle K was expanding through Phoenix suburbs, Lamberti was betting on a town so small it barely registered on most maps. The Waukee store proved to be the most successful of the three, so Lamberti decided to purchase and open more stores, concentrating on towns of less than 5,000 population.

This wasn't just a business strategy—it was a philosophy born from deep understanding of rural America. "We didn't call it a convenience store early on," Lamberti later recalled. "We called it just a general store with gasoline." In those small towns, Casey's wasn't competing with supermarkets or fast food chains—it was filling a void, becoming the modern incarnation of the general store that had once anchored every American small town.

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III. Building the Foundation: From One Store to IPO (1968-1983)

The early expansion of Casey's reads like a comedy of constantly revised ambitions. According to Fish, "After we had four or five stores, we thought if we built 15 that would be all we'd want. And then after we had 15 built, we thought, well, there are 90 counties in the state and if we put 90 stores in Iowa that would be about all we could eve[r hope to develop]." This pattern of conservative projections shattered by actual demand would become a Casey's trademark—each milestone revealing not the limits of their model, but its unexpected scalability.

By 1970, however, the young company faced its first existential challenge. After Fish's refinery was taken over by Ashland Oil in 1970, financing growth became more difficult, so Lamberti and Fish took two more partners. The loss of their direct fuel supplier relationship forced them to get creative. When they needed more money to expand further, they started franchising stores. This franchising model would prove crucial—it allowed Casey's to expand rapidly without massive capital requirements, while ensuring that each store maintained the local ownership feel that resonated in small communities.

In 1980, Casey's established a profit-sharing and stock-ownership plan for employees who had worked at Casey's for 12 consecutive months and were at least 21 years of age. This wasn't just a benefits package—it was a radical reimagining of retail employment. In an industry notorious for high turnover and minimal benefits, Casey's was offering stock ownership to cashiers and pizza makers in rural Iowa. Fish sold his share of the company to the plan shortly afterward.

Then came 1979, a year that should have destroyed Casey's. The second oil crisis sent gas prices soaring, consumer confidence plummeting, and gas stations across America closing by the thousands. Major oil companies were abandoning rural markets entirely. It was precisely the moment when conventional wisdom said to hunker down, preserve capital, and weather the storm.

"We decided to grow as long as the wheels didn't fall off the buggy," Lamberti told a Des Moines Register reporter. "We built a lot of stores when everybody else was sitting on their hands. Some people were closing down." In that year, Casey's nearly doubled its outlets, growing from 119 stores to 226. The financial results vindicated this contrarian bet: Net sales rose from $58.6 million in fiscal 1979 to $188.5 million in fiscal 1983, and net income from $418,000 to $1.8 million. In 1982, Casey's opened its first Distribution Center in Urbandale, Iowa—a 55,000-square-foot facility furnished with a state-of-the-art computer system. This was more than just a warehouse; it was a statement of intent. While other convenience store chains relied on third-party distributors, Casey's was building the infrastructure to control its own destiny. The company owned its own trucks and trailers and hired its own drivers.

Casey's became a publicly traded company in October 1983, with an initial public offering of 700,000 shares, priced at $15 per share. Proceeds from the offering enabled the company to fully purchase three subsidiaries engaged in the operation of its stores. Casey's also decided it would not issue any more franchises, although existing franchisees could continue building and opening new stores.

At the end of 1983 there were 191 company-owned and 215 franchised stores in 8 states. Net sales came to $188.5 million and net income to $1.8 million. But the most revealing insight came from analyzing the profit margins: while gasoline was the chief sales item, its profit margin was far lower than that for grocery and general goods, reflecting Casey's strategy of drawing customers first to the pumps, then into the stores to buy higher-profit goods.

This understanding—that gas was the hook but not the profit center—would drive every strategic decision Casey's made for the next four decades. They weren't really in the gas station business at all. They were in the business of being the only option in town, and that exclusivity commanded premium margins on everything except the fuel that brought customers to their door.

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IV. The Pizza Revolution: Finding the Crown Jewel (1984-1996)

The year was 1984. Ronald Reagan was cruising toward reelection, Apple had just launched the Macintosh, and in a Casey's franchise store in Corning, Iowa (population 1,600), a funeral director turned convenience store franchisee named Jim Larkin was about to make a decision that would transform American retail.

The creator of the first Casey's Pizza was Jim Larkin. The Register reports that Larkin was a Creston, Iowa native who worked as a funeral director in the 1970s. During the 1980s Larkin also became Casey's largest franchisee. One of his stores was located in Corning, Iowa. After a local pizza restaurant closed Larkin began making pizza in his small Casey's kitchen and the rest, as they say, is history.

But here's what made this moment revolutionary: In 1984 Casey's began making and selling fresh carry-out pizza in a small number of its stores. By the end of 1985 pizza was available in 85 stores, and the following year the stores started selling by the slice as well. This wasn't pre-made pizza trucked in from a commissary. This wasn't frozen pizza reheated in a convection oven. This was actual, made-from-scratch pizza, with made-from-scratch dough, real mozzarella cheese, fresh veggies and quality meats, prepared fresh in each store's kitchen.

Everyone thought they were insane. Pizza in a gas station? Made from scratch? In towns of 1,500 people? Wall Street analysts were skeptical. Competitors laughed. Even some franchisees worried about the complexity and cost. Linda Sandler of the Wall Street Journal wrote in 1985 that some predicted "indigestion" from Casey's pizza ambitions.

But Lamberti understood something fundamental about rural America that the coastal elites missed: in a town with no Pizza Hut, no Domino's, no local pizzeria, Casey's wasn't competing with other pizza chains. They were competing with nothing. And something beats nothing every single time.

The recipe was never changed, and by the end of 1994 Casey's was, according to one reckoning, the nation's seventh largest retailer of pizza. About 4 million pizzas and 40 million doughnuts were being made a year by 1990. The numbers were staggering for what was ostensibly a convenience store chain.

Then came September 14, 2001—a date that would live in Casey's infamy (or fame, depending on your perspective). Though Casey's started making our homemade pizza back in December of 1984 in Corning, Iowa, it wasn't until September 14, 2001 when our famous bizza was first introduced in our stores. Now it's one of our best seller pizzas, with over 2.5 million orders per year! "Bizza"—breakfast pizza—was born. Eggs, cheese, bacon or sausage on a pizza crust, available at 5 AM in rural Iowa. It was either genius or madness.

The taco pizza followed—seasoned beef, lettuce, tomatoes, and cheese on a pizza crust, essentially turning a taco into a shareable format. These weren't just menu items; they were cultural statements. Casey's was saying: we understand you. We know you need breakfast at 5 AM before heading to the farm. We know you want something different for Friday night but don't want to drive 45 minutes to the nearest sit-down restaurant.

Casey's 1,000th store opened in Altoona, Iowa, in 1996, the same year Casey's exceeded US$1 billion in annual sales. The pizza strategy had transformed the company. Prepared foods, while producing just 8 percent of sales, yielded 26 percent of total gross profits—a margin profile that would make any restaurant chain envious.

What Casey's had discovered, almost by accident, was that in America's small towns, convenience wasn't just about being open late or having gas pumps. It was about being the only place in town that could provide a hot, fresh meal. And once you've established that position, you don't just have customers—you have a captive market.

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V. The Small Town Moat: Strategy & Execution (1990s-2000s)

Drive through small-town America—real small-town America, not the suburbs masquerading as rural—and you'll notice something peculiar. In towns of 3,000, 1,500, even 500 people, there sits a Casey's General Store, often the brightest lit building on Main Street, sometimes the only business still open after 8 PM. This isn't accidental. It's the result of one of the most counterintuitive retail strategies in American business history.

Nearly 60 percent of stores operate in towns with populations of fewer than 5,000. Let that sink in. While Walmart was abandoning these markets as unprofitable, while Dollar General was setting its floor at towns of 20,000, Casey's was deliberately targeting places so small they often don't appear on interstate highway signs. In fact, 57% of its stores are located in communities with populations below 5,000 people; 82% are in towns smaller than 20,000.

The genius wasn't just in going where others wouldn't—it was in understanding why these markets were defensible. The company understood from the start that its business model focused on familiarity with its local customers, and that a presence in larger towns inevitably meant more competition. In a town of 1,500 people, you don't compete with 7-Eleven, Circle K, or Wawa. You compete with driving 30 miles to the nearest supermarket. You compete with nothing.

"If you think about our business model, we locate most of our stores in small rural Midwestern communities with populations as low as 400 to 500 people," Walljasper points out. "Over 50 percent of our locations are in towns of 3,500 population or less." This wasn't market segmentation—it was market creation. In these towns, Casey's wasn't just a convenience store. It was the de facto restaurant, the grocery store, the social hub, and sometimes the only place to buy milk within a 20-mile radius.

The distribution challenge alone would have deterred most retailers. How do you efficiently serve stores scattered across rural America, some in towns so small that a delivery truck might drop off supplies to just one or two locations in a day? Casey's answer was radical: build your own distribution network.

Casey's distributes an estimated 90 percent of the products it sells in its stores on its own trucks from its two distribution centers. "We're one of the few convenience stores in the industry that self-distributes a good share of its products," Walljasper maintains. "The rest of the products would be direct store delivery products like pop, beer, chips, bread and milk."

This self-distribution model created multiple competitive advantages. First, it allowed Casey's to order in quantities that made sense for tiny markets. "Our managers have the ability to order singles of products. If they need one can of soup or one box of cereal, they can order that. If we went though a larger warehouse, we may be forced to buy a larger quantity." Try getting that flexibility from a third-party distributor serving Kroger and Walmart.

Second, it captured margin that would otherwise go to middlemen. "We deal directly with the manufacturers, so in many cases we cut out that middleman," Walljasper emphasizes. "Because of that, we buy differently than most of our competition. That's one of the reasons why margins inside our store are higher than the industry average."

But perhaps the most powerful element of the small-town strategy was the community integration. The company combines features of general and convenience stores, while doubling as a restaurant in locations where residents have little or no dining alternatives. This strategy enables it to create a local monopoly, of sorts, in the small town markets where it operates.

This wasn't just about being the only game in town—it was about becoming part of the town's identity. Casey's sponsored Little League teams, donated pizza to school events, and employed local teenagers. In many small Midwestern towns, working at Casey's was a rite of passage, your first job before heading off to college or starting at the local factory.

The financial implications were staggering. For comparison, Murphy USA (MUSA), a convenience store practically famous for its proximity to many Walmarts, has a gross profit margin of 7.6%, whereas Casey's comes in at 30.8%. These margins trickle down to the bottom line, where Casey's holds a 4.1% profit margin versus Murphy's 2.7%.

The numbers revealed an inconvenient truth for the retail establishment: the least desirable markets in America were actually some of the most profitable—if you knew how to serve them. Around two thirds of its stores are in towns with 20,000 people or less, where it is "less expensive to build, buy, and operate units". Lower real estate costs, minimal competition, and captive customers created a margin profile that urban convenience stores could only dream of.

By the 2000s, Casey's had effectively invented a new category: the rural convenience store empire. They weren't competing with other c-stores—they had transcended the category entirely. In their markets, the question wasn't "Should we stop at Casey's or 7-Eleven?" It was "Should we stop at Casey's or drive to the next town?"

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VI. Defending the Castle: The Hostile Takeover Attempts (2010)

The spring of 2010 started quietly enough in Ankeny, Iowa. Casey's had just crossed 1,500 stores, its stock was trading around $30, and the company was methodically executing its rural expansion strategy. Then came the phone call that would trigger one of the most dramatic hostile takeover battles in convenience store history.

In March 2010, Alimentation Couche-Tard offered $1.9 billion for control of the company, and later announced a proxy fight for control. The Canadian giant, which operated Circle K stores across North America, saw Casey's as the perfect complement to its Midwest network. Well managed, well maintained, profitable and debt-free, it had more than 1,500 corporate stores in the Midwest.

"We strongly believe that our $36 per share all-cash proposal is compelling for Casey's shareholders as it offers them the opportunity to realize full and immediate value for their investment," Alain Bouchard, president and CEO of Couche-Tard, said in publicly announcing the takeover bid.

Casey's board wasn't impressed. Robert Myers, Casey's president and CEO at the time, countered, "Your proposal significantly undervalues Casey's and is not in the best interests of the corporation." The board then approved a poison pill—a shareholder rights agreement that would kick in as soon as any one shareholder obtained 15% of the company.

But the drama was just beginning. While Casey's and Couche-Tard were battling for company control, in September 2010, 7-Eleven offered a $2 billion bid for control of the company. The surprise offer of $40 per share caught everyone off guard—including Couche-Tard. Casey's management said the offer was attractive enough to enter into negotiations, which lasted up until the last offer from Couche-Tard expired.

What followed was a masterclass in defensive corporate strategy. Casey's rejected Couche-Tard's offer and was successful in September 2010 in retaining its board of directors against Couche-Tard's nominated slate. They then turned around and rebuffed 7-Eleven's advances, even when the offers became more generous. The takeover battle cost Casey's more than $27 million, plus a $500 million debt restructuring that allowed it to buy back 25% of its own stock.

But the real story wasn't in the boardroom—it was in the heartland. The attempted takeover became a rallying cry across rural Iowa. Local newspapers ran editorials defending their homegrown company. Customers organized boycotts of Circle K stores (there weren't many in Iowa anyway). Employees wore "Casey's Strong" buttons to work. The thought of a Canadian company—or even Dallas-based 7-Eleven—taking over their beloved Casey's struck a nerve.

"The thought of an overseas company taking over a venerable Midwestern company like Casey's with a rural niche was offensive and over the top," said Mitch Morrison, vice president of retailer relations for CSP parent company Informa Connect Foodservice.

Looking back, Bouchard would later reflect on the failed acquisition with surprising equanimity. "Casey's is a very good operator," Bouchard said. "They were very respectful about what they did. I think we helped them when we tried to acquire them. We helped them to realize how good they were."

The takeover attempts revealed something fundamental about Casey's value that even its own management may not have fully appreciated. This wasn't just a collection of gas stations in flyover country—it was an irreplaceable network of stores in markets that no one else knew how to serve. The hostile takeover attempts had inadvertently validated Casey's strategy: they had built something so unique, so deeply embedded in rural America, that the world's largest convenience store chains were willing to pay billions to acquire what they couldn't replicate.

The failed takeovers also had an unintended consequence: they awakened Casey's to its own potential. If Couche-Tard and 7-Eleven saw this much value in the company, perhaps Casey's had been thinking too small. The defensive maneuvers had loaded the company with debt for the first time in years, but they had also given management a new mandate: prove that independence was the right choice. The next decade would be about showing that Casey's best days weren't behind it—they were just beginning.

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VII. The Digital & Brand Transformation (2018-2020)

By 2018, Casey's faced an existential question disguised as a technological challenge. The company had just celebrated its 50th anniversary, but as management surveyed the retail landscape, they saw a troubling pattern. Amazon was devouring traditional retail. DoorDash and Uber Eats were redefining food delivery. Even in rural America, customers expected the same digital conveniences they saw everywhere else.

With the commemoration of its 50th anniversary in 2018, Casey's General Stores Inc. reflected on its first 50 years in business and questioned what it would take to be successful for the next 50 years. The answer was to be a bigger, bolder, more contemporary version of itself. The problem? While Casey's had multiple factors working in its favor, such as a high store count, great products and famous pizza, the brand did not have a well-established digital footprint.

Art Sebastian joined Casey's in the fall of 2018 to lead what would become one of the most ambitious digital transformations in convenience retail. When he arrived, the digital team consisted of exactly two people. "We were very much operationally driven—stack-it-high watch-it-fly in the store, serve your guests, keep the store clean. We were that type of company, and really weren't leaning into digital much at all," Sebastian would later recall.

In 2018 Casey's announced under increasing pressure from outside investors to adopt a range of new digital initiatives including a new Fleet Card, mobile app, and loyalty program for Casey customers. The CEO announced in late 2018 the initiative would be complete by Quarter 1 of 2020. This wasn't just a technology upgrade—it was a fundamental reimagining of how Casey's would interact with its customers.

The centerpiece of the transformation was Casey's Rewards, which launched in January 2020. But this wasn't your typical punch-card-goes-digital story. Casey's designed something uniquely suited to its rural customer base: Members earn points for every $1 spent and they have the option to turn that into Casey's Cash, which works like currency, take it as a fuel discount or donate those points to a local school of their choice. More than 35,000 schools are currently embedded in the app.

The school donation option was genius. In small towns where Friday night football games are the social event of the week and everyone knows which kids made the honor roll, supporting local schools wasn't just a nice gesture—it was community integration at its finest. "Cash for Classrooms," as it became known, turned every pizza purchase into potential support for the local elementary school.

When we announced in January of 2020 and had our first investor day that same week, we were up to a million people registered within that first week of the program. The timing couldn't have been more fortuitous—or terrifying. Two months later, COVID-19 shut down the world.

"I think we launched that program in January and then March things fell apart," Mike Templeton would later recall. "But if you were on our side looking at the numbers behind this program, you wouldn't have known anything else was happening in the world. The uptick in terms of enrollment, the participation rate increasing inside of the store, the number of mobile app downloads, the transition into more digital ordering."

Before the loyalty program launch, about 20 percent of Casey's orders came through digital channels. Within months, that number would double. The pandemic, which could have been a disaster for a company dependent on commuter traffic and in-store purchases, instead accelerated Casey's digital adoption by years.

In October 2020, Casey's announced a rebranding, including a new logo and dropping 'General Stores' from its signage. The research showed that the "General Store" was unclear for younger customers, and the logo, representing a big barn with the company's name in serif fonts and a weathercock on the top, looked old-fashioned. The new logo—a simplified red barn silhouette with "Casey's" in a handwritten style—managed to be both modern and nostalgic.

Casey's Rewards surpassed 6 million members by December 2022. More than 50 percent of those members are active on a 30-day basis. By industry standards—where most retailers measure on a 90-day basis—Casey's 64 percent active rate was industry-leading.

But perhaps the most impressive statistic was this: More than a third of Casey's transactions come from its loyalty members. In an industry where loyalty programs often struggle to achieve 20% penetration, Casey's had created something its rural customers actually wanted to use.

The digital transformation wasn't about abandoning Casey's small-town roots—it was about giving rural America the same digital conveniences available in cities, but tailored to their specific needs. You could order pizza from your tractor, earn points that supported your kid's school, and still walk into Casey's and be greeted by name. It was high-tech meets high-touch, Silicon Valley innovation with Iowa values.

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VIII. The M&A Playbook: From Builder to Buyer (2020-2024)

For fifty years, Casey's had grown almost entirely organically—one store at a time, one small town at a time. But as the company emerged from the failed takeover attempts and the digital transformation, a new strategic imperative became clear: the convenience store industry was consolidating rapidly, and Casey's could either be a buyer or eventually become a target again.

The shift began modestly. In November 2020, Casey's announced it was acquiring Omaha-based Bucky's Convenience Stores, a 94 store chain, in a $580 million deal. This wasn't just Casey's largest acquisition to date—it was a statement of intent. The company that had fought so hard to remain independent was now ready to become a consolidator.

The Bucky's acquisition revealed something crucial about Casey's M&A strategy. Small operators are ideal acquisition targets due to a variety of factors. Generally, many of these retailers are struggling to stay afloat amid rising operating and maintenance costs and credit card fees. These retailers often don't have a "meaningful" foodservice offering, nor do they have the money to improve their stores by installing kitchens or doing general maintenance.

What Casey's offered these struggling chains wasn't just capital—it was a proven playbook for rural success. They could install kitchens and introduce made-from-scratch pizza. They could implement the loyalty program and digital ordering systems. They could leverage Casey's distribution network and purchasing power. In essence, Casey's could take underperforming assets and transform them into the Casey's model.

Between April 30, 2023 and April 30, 2024, Casey's acquired 112 convenience stores, marking one of the company's most active growth years on the M&A front. But these weren't random acquisitions—each deal followed a careful pattern. Target stores in rural or semi-rural markets. Look for operators struggling with the economics of small-town retail. Focus on regions adjacent to existing Casey's territories to leverage distribution efficiencies.

Then came the game-changer. On July 26, 2024, Casey's announced it had agreed to acquire Temple, Texas-based Fikes Wholesale Inc., owner of CEFCO Convenience Stores, in an all-cash transaction for $1.145 billion. The deal included 198 retail stores—148 in Texas, with the other 50 scattered across Alabama, Florida, and Mississippi.

"During our Investor Day presentation in June of 2023, we outlined our business strategy to achieve top-quintile EBITDA growth. One of the core pillars of the plan is to grow the number of units," said Darren Rebelez, Board Chair, President and CEO of Casey's. "This acquisition will allow Casey's to accelerate our unit growth plan with high-quality assets."

The strategic logic was compelling. CEFCO's large-format stores average more than 4,800 square feet, comparable to the new stores that Casey's builds today. This would give Casey's the ability to add kitchens to 85% of the stores "fairly easily as we eventually expand our pizza offering to Texas and the South." Twenty-five of the sites even had car washes.

The net investment of $980 million represents an approximate multiple of 11 times CEFCO's pro forma adjusted 2023 EBITDA. Casey's expects to achieve approximately $45 million in annual run-rate synergies upon the completion of kitchen installations in the acquired stores. For a company that had never made an acquisition larger than $580 million, this was a massive bet.

But perhaps the most interesting aspect of the CEFCO deal was what it revealed about Casey's evolution. The company wasn't just buying stores—it was buying a platform for Southern expansion. Texas alone has thousands of small towns that fit Casey's target demographic. Alabama, Mississippi, and Florida opened up entirely new geographies where Casey's small-town playbook had never been tested.

"The acquisition by Casey's, especially given its reputation and shared values, is an exciting development for Fikes and our employees," Raymond Smith, president of Fikes and CEFCO, said. "I am happy that the CEFCO stores will join a top convenience retailer that will reinvest in the stores and eventually bring Casey's pizza to many of our customers."

The transformation from builder to buyer wasn't just about growth—it was about timing. The convenience store industry was experiencing unprecedented consolidation pressure. Electric vehicles threatened long-term fuel demand. Rising labor costs and technology requirements favored scaled operators. Small chains that had survived for decades suddenly found themselves unable to compete.

Casey's positioning was perfect. They had the balance sheet strength from years of consistent profitability. They had a proven model for making small-market stores profitable. They had the technology platform and loyalty program that smaller operators couldn't afford to build. And critically, they had maintained their reputation as good operators who respected local communities and existing employees.

By the close of the CEFCO acquisition on November 1, 2024, Casey's had grown to approximately 2,900 stores across 17 states. The company that had once thought 90 stores in Iowa would be "about all we could ever hope to develop" was now one of the largest convenience store chains in America, with the scale and sophistication to compete with anyone—while still making pizza from scratch in towns of 500 people.

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IX. The Business Model: Pizza, Fuel, and Community

To understand Casey's, you have to understand that it's not really a convenience store company at all. It's three distinct businesses operating under one roof, each with radically different economics, that together create a nearly unassailable competitive position in rural America.

The Three-Legged Stool

The first leg is fuel—the hook that brings customers to the property. In FY23 fuel had an 11% gross profit margin, but it represents about 66 percent of Casey's revenues. This is the loss leader, the reason customers stop at Casey's instead of driving past. But here's the genius: in a town of 2,000 people, there might only be one or two gas stations. Casey's doesn't need to have the cheapest gas—they just need to be competitive. The real profit comes once customers are out of their cars.

The second leg is grocery and general merchandise, with a 34% gross profit margin. In many of Casey's markets, they're not just a convenience store—they're the only grocery option without driving 20+ miles. This gives them pricing power that urban c-stores could never achieve. Our private label program has great momentum, exceeding 5 percent of the grocery and general merchandise penetration, providing guests with high-quality, cost-effective products.

But the crown jewel—the third leg that transforms the entire business model—is prepared food, with a staggering 57% gross profit margin. With a profit margin of around 60%, it's easy to understand why the chain's managers love pizza. It actually is the second highest gross profit contributor to the company as a whole, representing roughly 28% to 30% of the overall gross profit.

This means that while fuel might drive 66% of revenue, the gross profit is evenly balanced across the three main categories, with roughly a third coming from each segment. It's a portfolio approach to convenience retail that no one else has successfully replicated at scale.

The Pizza Economics

Let's drill into why pizza works so brilliantly for Casey's. In urban markets, a Domino's or Pizza Hut has to compete with dozens of alternatives. Their marketing costs are enormous, delivery logistics are complex, and price competition is fierce. Casey's faces none of these challenges.

It encompasses roughly about 65% of the revenue of the prepared food program. We start with flour and water, make the dough at the store and then we have pizza rollers at the store. The vegetables are shipped out whole and chopped up at the location. This level of quality would be economically impossible for most convenience stores, but in Casey's markets, they can charge premium prices because they're often the only pizza option.

One of the most profitable segments for Casey's is its prepared food and fountain drinks. The high-margin nature of prepared foods significantly boosts Casey's profitability. By focusing on quality and convenience, Casey's has been able to differentiate itself from competitors and drive frequent repeat business in this category.

The Liquor License Arbitrage

Here's a statistic that stops people in their tracks: Casey's is the fourth-largest holder of liquor licenses in the United States. In small-town America, liquor licenses are often restricted and valuable. Casey's has systematically acquired these licenses, making them one of the few places in many towns where you can buy beer, wine, and spirits.

This creates another layer of defensibility. Even if a competitor wanted to enter Casey's market, getting a liquor license might be impossible. And in rural America, being able to buy beer with your pizza on Friday night isn't just convenient—it's essential.

The Distribution Advantage

Casey's operates from three company distribution centers, enabling delivery of 70% of in-store products and 60% of fuel. This self-distribution model is critical to serving small markets profitably. When you're delivering to stores in towns of 500 people, third-party distributors would either refuse to serve you or charge prohibitive fees.

But Casey's distribution centers do more than just deliver products—they enable the company to maintain consistent quality across their network. The pizza dough is made fresh at each store, but the recipe and ingredients are standardized. The prepared food programs are supported by centralized training and quality control. This is how a store in a town of 1,000 people can produce pizza that rivals urban chains.

The Network Effects

In urban markets, convenience stores compete on location—the best corner, the easiest access, the most traffic. In rural markets, Casey's competes on something else entirely: community integration. Once Casey's becomes established in a small town, they become nearly impossible to dislodge.

They employ local teenagers. They sponsor the Little League team. They donate pizza to school events. They know their customers by name. When everyone in town has the Casey's app, earns rewards points, and has their kids' school linked for donations, switching to a competitor isn't just inconvenient—it's almost antisocial.

The Unit Economics

The brilliance of Casey's model becomes clear when you look at store-level economics. Total inside gross profit increased 12.0% to $619.7 million in Q2 2025, achieving a margin of 42.2%. For comparison, urban convenience stores typically achieve inside margins in the low 30s.

This margin advantage comes from multiple sources: less competition allowing for better pricing, lower real estate costs, lower labor costs (though Casey's pays competitively for rural markets), and critically, a much higher mix of prepared foods sales. While an urban 7-Eleven might do 5-10% of sales in prepared foods, Casey's routinely exceeds 25%.

Why Others Can't Replicate This

The question investors always ask is: if this model is so profitable, why doesn't everyone copy it? The answer reveals the depth of Casey's moat.

First, it requires massive upfront investment in kitchens, training, and distribution infrastructure before you see returns. Second, it requires deep operational expertise in prepared foods—something most c-store operators lack. Third, it requires patience to build community relationships over years or decades. And fourth, the best markets are already taken by Casey's.

When 7-Eleven or Circle K looks at a town of 2,000 people in rural Iowa, they see a market too small to matter. When Casey's looks at the same town, they see a captive market where they can earn 40%+ margins on inside sales, become the community gathering place, and face zero competition from national chains.

It's not a convenience store business model. It's a rural monopoly business model, disguised as a convenience store, powered by pizza, and protected by community integration so deep that competing against it would be like competing against the town itself.

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X. Leadership Transitions & Strategic Evolution

In June 2019, Casey's stood at a crossroads. Terry Handley, who had worked his way up from store-set specialist to CEO over 38 years, was retiring. The board's choice for his replacement would signal whether Casey's intended to remain a regional Midwest chain or had larger ambitions.

Their selection was revealing: Darren Rebelez, president of IHOP and former COO of 7-Eleven. Here was someone who had run one of America's largest restaurant chains and helped operate the world's largest convenience store company. The message was clear—Casey's wasn't thinking like a rural Iowa convenience store anymore.

Mr. Rebelez will succeed Casey's President and CEO Terry Handley, who will retire from the Company and Board, after a 38-year career with Casey's. The transition marked the end of an era—Handley had been with Casey's since 1981, working his way up from store-set specialist through marketing, foodservice, and operations. He was named president in 2014 and CEO in 2016.

"I would like to sincerely thank everyone at Casey's for their support and partnership throughout my career," said Handley. "I have great pride in our many accomplishments and the hard work and dedication of all Casey's employees. It has been a privilege to lead and be part of such a talented team."

But what made Rebelez's appointment fascinating wasn't just his resume—it was his unique combination of experiences. Prior to joining IHOP in 2015, Rebelez spent nearly eight years with 7-Eleven Inc., where he served as executive vice president and chief operating officer. Before that, he held numerous management roles within ExxonMobil and at Thornton Oil Corp. He was even an Army Ranger and Gulf War veteran, a graduate of West Point.

"Darren brings a remarkable combination of leadership experience in the convenience store, fuel and restaurant industries, and he has an impressive track record of driving performance and innovation," said H. Lynn Horak, chairman of the board.

Rebelez understood something fundamental: Casey's wasn't really a convenience store company competing with 7-Eleven—it was a restaurant company that happened to sell gas. His IHOP experience gave him insights into food service operations, customer loyalty, and brand building that traditional c-store executives might miss.

Almost immediately, Rebelez began assembling a new leadership team. Since you took over as CEO from Terry Handley, Casey's has been through some major leadership changes, adding Adrian Butler as CIO; Steve Bramlage as CFO, succeeding the retiring Bill Walljasper; Ena Williams as COO; Michelle Wickham as vice president of foodservice; and Tom Brennan as chief merchandising officer.

"It's a combination of things," Rebelez explained about the leadership changes. "We've had a few people that have retired. In the case of [CMO and CIO], those roles didn't exist here. For a company of our size, I felt it was appropriate to have those roles, and so we filled those, and that was really to help us accelerate execution of our strategic plan."

The creation of new C-suite roles was telling. Casey's had operated for decades with a lean management structure appropriate for a regional chain. But Rebelez was building an executive team for a national player. The CIO role signaled serious digital ambitions. The CMO role suggested brand building beyond rural Iowa. The COO role—which Handley had held before becoming CEO—indicated operational complexity that required dedicated leadership.

Under Rebelez' leadership, Casey's has undergone a remarkable transformation, including several significant milestones: a brand modernization/reimaging, closing several significant acquisitions (including the largest in the company's history), a digital transformation including the first rewards platform that currently boasts over 6.5 million members, launching a new e-commerce platform, relaunching the company's private brand business, and publishing the company's first ESG report.

But perhaps most importantly, Rebelez understood the delicate balance required. "One of the things that I would say that has stayed consistent is our brand purpose, and that's to make life better for our communities and guests every day," he noted. "It's pretty rare to be able to come into a company that's 50-plus years old and still be able to have lunch with the founder and pick his brain on what was behind the brand and how we got to where we got."