Performance Food Group Co Stock

Performance Food Group Company, through its subsidiaries, markets and distributes more than 250,000 food and food-related products from 142 distribution centers to over 300,000 customer locations across the United States.

The company serves a diverse mix of customers, from independent and chain restaurants to schools, business and industry locations, hospitals, vending distributors, office coffee service distributors, retailers, convenience stores, and theaters. The company sources its products from various suppliers and serve as an important partner to its suppliers by providing them access to its broad customer base. In addition to the products the company offers to its customers, it provides value-added services by allowing the company’s customers to benefit from its industry knowledge, scale, and expertise in the areas of product selection and procurement, menu development, and operational strategy.

Segments

The company operates through three segments: Foodservice, Vistar, and Convenience.

Foodservice

This segment offers a broad line of products, including custom-cut meat and seafood, as well as products that are specific to the company’s customers’ menu requirements. Foodservice operates a network of 78 distribution centers, each of which is run by a business team who understands the local markets and the needs of its particular customers and who is empowered to make decisions on how best to serve them. This segment serves over 175,000 customer locations.

This segment markets and distributes food and food-related products to independent restaurants, chain restaurants, and other institutional food-away-from-home locations. Independent customers predominantly include family dining, bar and grill, pizza and Italian, and fast casual restaurants. The company seeks to increase the mix of its total sales to independent customers because they typically use more value-added services, particularly in the areas of product selection and procurement, market trends, menu development, and operational strategy and also use more of its proprietary-branded products (Performance Brands), which are its highest margin products. As a result, independent customers generate higher gross profit per case that more than offsets the generally higher supply chain costs that the company incurs in serving these customers. Chain customers are multi-unit restaurants with five or more locations and include fine dining, family and casual dining, fast casual, and quick serve restaurants, as well as hotels, healthcare facilities, and other multi-unit institutional customers. The company’s Foodservice segment’s chain customers include regional businesses requiring short-haul routes, as well as national businesses requiring long-haul routes, including many of the most recognizable family and casual dining restaurant chains. Sales to chain customers are typically lower gross margin but have larger deliveries than those to independent customers.

The company offer its customers a broad product assortment that ranges from ‘center-of-the-plate’ items (such as beef, pork, poultry, and seafood), frozen foods, refrigerated products, and dry groceries to disposables, cleaning and kitchen supplies, and related products used by its customers. In addition to the products it offers, the company provides value-added services by enabling its customers to benefit from its industry knowledge, scale, and expertise in the areas of product selection and procurement, menu development, and operational strategy.

The company’s products consist of Performance Brands, as well as nationally branded products and products bearing its customers’ brands. The company’s Performance Brands typically generate higher gross profit per case than other brands. Nationally branded products are attractive to chain, independent, and other customers seeking recognized national brands in their operations and complement sales of the company’s Performance Brand products. Some of the company’s chain customers, particularly those with national distribution, develop exclusive stock keeping units (SKU) specifications directly with suppliers and brand these SKUs. The company purchases these SKUs directly from suppliers and receive them into its distribution centers, where they are mixed with other SKUs and delivered to the chain customers’ locations.

Vistar

Vistar is a leading national distributor of candy, snacks, and beverages to vending and office coffee service distributors, retailers, theaters, and hospitality providers. The segment provides national distribution of candy, snacks, beverages, and other items to over 75,000 customer locations from the company’s network of 25 Vistar distribution centers.

Vending operators comprise Vistar’s largest channel, where the company distributes a broad selection of vending machine products to the operators’ depots, from which they distribute products and stock machines. Additionally, Vistar is a leading distributor of products to theater chains, as well as in the office coffee service channel. Vistar has successfully built upon the company’s national platform to broaden the channels it serves to include hospitality venues, concessionaires, airport gift shops, college bookstores, corrections facilities, and impulse locations in various brick and mortar big box retailers nationwide. Merchant’s Marts are cash-and-carry operators where customers generally pick up orders rather than having them delivered. Vistar’s scale in these channels enhances the company’s ability to procure a broad variety of products for its customers. Vistar distribution centers deliver to vending and office coffee service distributors and directly to most theaters and various other locations. The distribution model also includes a ‘pick and pack’ capability, which utilizes third-party carriers and Vistar’s SKU variety to sell to customers whose order sizes are too small to be served effectively by its delivery network.

Convenience

This segment is one of the largest foodservice and wholesaler consumer products distributors in the convenience retail industry. Convenience offers a full range of products, marketing programs and technology solutions to approximately 50,000 customer locations in the United States and Canada. This segment's customers include traditional convenience stores, drug stores, mass merchants, grocery stores, liquor stores and other specialty and small format stores that carry convenience products. Convenience's product offering includes cigarettes, other tobacco products, alternative nicotine products, candy, snacks, food, including fresh products, groceries, dairy, bread, beverages, general merchandise and health and beauty care products. Convenience operates a network of 39 distribution centers in the U.S. and Canada (excluding two distribution facilities it operates as a third-party logistics provider). There are 35 distribution centers located in the U.S. and four located in Canada.

Trademarks and Trade Names

The company has numerous perpetual trademarks and trade names that are of significant importance, including Core-Mark, West Creek, Silver Source, Braveheart 100% Black Angus, Empire’s Treasure, Brilliance, Heritage Ovens, Village Garden, Guest House, Piancone, Luigi’s, Ultimo, Corazo, Assoluti, Peak Fresh Produce, Roma, First Mark, and Nature’s Best Dairy.

Regulation

The company’s operations are subject to regulation by state and local health departments, the U.S. Department of Agriculture (the USDA), and the U.S. Food and Drug Administration (the FDA), which generally impose standards for product quality and sanitation and are responsible for the administration of bioterrorism legislation affecting the foodservice industry. These government authorities regulate, among other things, the processing, packaging, storage, distribution, advertising, and labeling of the company’s products.

The company’s seafood operations are also specifically regulated by federal and state laws, including those administered by the National Marine Fisheries Service, established for the preservation of certain species of marine life, including fish and shellfish. The company’s processing and distribution facilities must be registered with the FDA biennially and are subject to periodic government agency inspections. State and/or federal authorities generally inspect its facilities at least annually. The Federal Perishable Agricultural Commodities Act, which specifies standards for the sale, shipment, inspection, and rejection of agricultural products, governs the company’s relationships with its fresh food suppliers with respect to the grading and commercial acceptance of product shipments. The company is also subject to regulation by state authorities for the accuracy of its weighing and measuring devices. The company’s suppliers are also subject to similar regulatory requirements and oversight.

The company’s operations are subject to a variety of federal, state, and local laws and other requirements, including, employment practice standards for workers set by the U.S. Department of Labor, and relating to the protection of the environment and the safety and health of personnel and the public. These include requirements regarding the use, storage, and disposal of solid and hazardous materials and petroleum products, including food processing wastes, the discharge of pollutants into the air and water, and worker safety and health practices and procedures. The Surface Transportation Board and the Federal Highway Administration regulate the company’s trucking operations.

History

Performance Food Group Company was founded in 1885. The company was incorporated in Delaware in 2002.