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Yukon Express Services: Fairbanks grocery firm is coming up fast.

Nestled in the back of an industrial complex in south Fairbanks, Yukon Express Services Inc. does not boast the appearance of a booming business, nor is its name a household word for the many thousands of people who are among the end-users of the groceries the company distributes. But, based on revenues posted in the three short years the company has existed, YES Foods has made its mark on the industry and is a player with which to reckon.

What allowed the company to thrive, according to its owners, and key to survival at a time when even established businesses were folding, was its primary commitment to customer service, on par with good-value pricing and product quality considerations. Making that commitment was a core staff with extensive experience and connections in the Fairbanks wholesale grocery industry. Add a hard-working crew and a no-frills facility, and the net result has been a profitable "lean and mean" operation that has grown significantly.

The 100 percent Alaskan-owned wholesale grocery distribution corporation, in the hands of president David Kilbourn, doubled its gross revenues from just more than $9.34 million in 1990 to nearly $18.78 million last year. "We've been more successful than we anticipated when we started out," Kilbourn says.

The four-man corporation includes Kilbourn, brother Randy, Charles Rex, and Jerry Maloney.

"YES" is a nickname for Yukon Express Services but oddly, the proper nomenclature evolved only after the fact. "If you want to know the truth, we thought of "YES Foods" first and we kind of had to go backwards," Kilbourn says.

The company has operated from its Van Horn Road address since startup. Two years ago, having already expanded its Fairbanks warehouse space from 10,000 to 13,000 square feet, YES expanded into Anchorage with a similar-size facility. Last year, the firm established an 8,000-square-foot freight-forwarding and consolidation facility in Tacoma, Wash.

The Beginnings

Company president Kilbourn, 44, has lived in Fairbanks for more than 30 years, working 17 of those years for a wholesaler that is now one of his competitors.

In 1989, the Lathrop High School and University of Washington graduate decided to venture out on his own, a move that -- given the state of the Alaska economy at the time -- was risky at best. But Kilbourn believed he could carve out his own niche in the industry, and called on the talents and resources he had discovered over the years to nurture the fledgling firm.

"Our business is primarily food service," says Kilbourn although he declines to quantify his company's reach. He says only, "We do have a significant share of the market."

"We're in the food distribution business," he says. "We're basically wholesale and provide logistical support to end users in the food business, whether they're institutional users, such as hotels, restaurants, hospitals or construction camps, or small retail stores."

Structure and Success

YES services virtually all points in the state except Southeast and the Kodiak area. With a fleet of 11 local delivery trucks and 35 trailers, the company schedules regular runs from Ketchikan to Prudhoe Bay. Three trailers are assigned specifically to Haul Road transport. The company employs between 55 and 60 people in Fairbanks, Anchorage and Tacoma, with the work force peaking in summer, when business is most brisk.

Kilbourn attributes YES Food's early success to several factors.

"Besides the fact that we had pretty conservative aspirations when we started, we have as good people and dedicated people as anybody," he says. Many are highly experienced; a number of his more senior staff worked with or for him earlier in his career. For example, the Kilbourns, Rex and Prudhoe Bay supervisor Chuck Bisbee total more than 100 years experience in the Fairbanks wholesale grocery industry.

"It's a people business, with a real sound nucleus of people that have been here for years and years," Rex says. "That has enabled us to manage rapid growth, which can be difficult."

Charley Rex, who handles food service sales for the company and has 20 years experience in the Fairbanks meat and grocery business, echoes that observation. "We had people that basically understood the needs of Fairbanks and the business, from A to Z. Really, when we opened our doors we had certain expectations and goals. We figured it would take a year to meet those goals; it would up taking three months."

Reputation Building

Building a good reputation over the years augurs well for YES Foods. "We've had a lot of support from our customers and our vendors, and those are equally important," Kilbourn says. "A lot of those relationships were established before we ever stared here. Customers, vendors and bankers were willing to do a little extra for us. I don't want to underemphasize that just lots of people had a whole lot of faith in us. We started this warehouse and there was nothing here. We beat on doors and told our customers we could do it," he says.

They believed him, but it was not blind faith, according to Kilbourn. "When we got started, I think there was a healthy amount of skepticism for a company doing what we were doing in Alaska."

Being locally based, he believes, was a plus. But Kilbourn refuses to use that selling point as a crutch. In the past, some businesses have used their local ties as an excuse for higher prices and less service. "And when they felt competition coming, they would scream about outside competition," he says. "I think that local guys do as good a job as anyone else in our business. The fact that you're local does not and, I think, should not entitle you to anything.

Healthy Perspectives

Rex notes that some companies fell into bad habits during boom years. "During the pipeline, businesses were spoiled because people came to them. They didn't have to bang on doors. Customer service was non-existent. They were doing as much business as they could. The customers were going to be there anyway. That attitude carried on."

Bisbee, YES' grocery buyer and the man in charge of the firm's Prudhoe Bay accounts, says working conditions at YES are conducive to productivity. "Everybody just pitches in and does what it takes to get the job done and take care of the customer. It's interesting and I think we have a good company. There's never a dull moment around here," he adds.

Low overhead plays a role in the company's profitability. YES offices, for instance, are tucked into an upstairs corner of the warehouse.

"There's nothing elaborate about this place," Rex says. "It's that way intentionally. Because every time you build something, add something, you pass those costs on to the consumer. We run lean and mean."

YES' Future

Kilbourn's long-term plans for YES Foods include continued growth, though not likely at the rate experienced between 1990 and 1991. We've slowed down some," he says. "Obviously, you don't double your business every year." Yet he looks forward to building patronage both in Fairbanks and to the south. "The No. 1 goal I think right now would be to solidify our position in the market."

There is one underlying, basic financial goal. "To stay out of debt," Kilbourn says. "That will entail planning for the next boom-and-bust cycle."
COPYRIGHT 1992 Alaska Business Publishing Company, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:The New 49ers; Yukon Express Services Inc.'s food distribution services in Fairbanks, Alaska
Author:Martin, Ingrid
Publication:Alaska Business Monthly
Article Type:Company Profile
Date:Oct 1, 1992
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