“There’s a lot of fragmentation in the industry that I think gives us a chance to add local scale,” said CEO Flitman. — Reuters
CHICAGO: US Foods Holding Corp, which supplies American restaurants and hotels with everything from pastries to burgers, is seeking to expand its food service distribution business via acquisitions.
The company aims to follow the template it set when it recently bought Renzi Foodservice, a distributor in upstate New York with more than US$180mil (RM829.3mil) in annual revenue.
It was US Foods’ first acquisition in more than three years and gave it a presence in a region where it lacked a distribution centre.
The idea is to shorten the supply chain by expanding the company’s distribution network.
“You can think about us doing acquisitions that fit that bill, that help us get more efficient,” chief executive officer Dave Flitman said during an interview at the company’s headquarters in Rosemont, Illinois.
“There’s a lot of fragmentation in the industry that I think gives us a chance to add local scale.”
The company has 70 distribution hubs across the United States in cities including Houston, Tampa and Las Vegas.
“This industry is still very fragmented – if you look at ourselves and Sysco and Performance Food Group, we have about 40% of the market combined,” Flitman said. “There’s still a lot of opportunity to roll up the industry.”
The expansion plans come as the pandemic’s impact continues to fade away. Covid-19, which forced which restaurants, schools and public venues to close their doors amid lockdowns, took a temporary bite out of US Foods’ revenue.
The US dining industry, including US Foods, has rebounded, but persistent inflation is pinching shoppers’ wallets and could be stealing the momentum.
Traffic at US restaurants declined in March, April and May, according to the latest data from Black Box Intelligence.
Same-store sales have been holding positive, though, driven by higher menu prices. — Bloomberg
