Performance Food Group Company Barclays 19th Annual Global Consumer Conference
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Good morning, everyone. Thank you for joining us. Hope everyone had a chance to grab breakfast in the room. Hello to everyone out in the webcast. My name is Jeff Bernstein, I am the restaurant and foodservice distribution analyst here at Barclays. To be clear, I do have plans to retire at the end of actually this month after 25-plus years in the role. I am officially the outgoing analyst, with the next analyst to be named hopefully shortly. I did want to welcome all to day three of the 19th Annual Global Consumer Conference. We have had 14 restaurant and foodservice distribution companies here with us between Tuesday, Wednesday, Thursday. We had BJ's, The Cheesecake Factory and Chuy's on Tuesday. Bloomin' Brands and Dine Brands, First Watch Restaurant Group, Restaurant Brands International, Sysco, Texas Roadhouse, Inc., The Wendy's Company, US Foods, Yum! Brands, and Wingstop yesterday.
We are excited to have one company today, which is Performance Food Group. We hope you have found the conference a good use of time. At this point, I would love to introduce our final presenting company for the day, at least for me, which is Performance Food Group. With us this morning from Richmond, Virginia, we have Scott McPherson to my immediate right. He is the CEO. Patrick Hatcher to his right, who is the CFO. By way of background, for those not familiar, bless you, Performance Food Group is one of the largest foodservice distributors in North America. They have 150-plus locations. They deliver food and related products to 350,000 or more locations, including independent and chain restaurants, schools, business and industry locations, vending and office coffee service distributors, retailers, convenience stores and theaters.
Clearly a very broad swath of foodservice distribution. We want to thank Performance Food Group for joining us this morning. I have got a slew of questions on the broader consumer and industry, then lots of specifics on Performance Food Group. With that said, again, we want to thank Performance Food Group, and specifically Scott and Patrick and Bill in the front row. With that said, we will kick it off. Thank you again. Very good.
Thank you. We wanted to start with just a few higher-level questions about the consumer, since you see presumably a lot of them across the country.
Maybe you could start by just providing your thoughts on the state of the food away from home operating environment more broadly.
Yeah, certainly. You mentioned the consumer. The consumer's been, I'd say, on a little bit of a roller coaster over the last handful of years when you think about tariffs and inflation and fuel price. But for us, I think the consumer's been very resilient. We have a great vantage point on that. We obviously look at Black Box when we think about the consumer, and that traffic is in pressure, but fairly consistently. We look at Circana data, which is all transaction data, which gives us really good insight. Then obviously we have a great handle on the independent consumer as well. For us, we really focus on the controllables. For us, it's been growing share and really excited to be in all three of our segments growing share, as we actually did this year, and have really good momentum.
As far as the broader food away from home space, I think it's been a bit of an evolution. Food away from home has been growing for a couple of decades. Certainly coming out of COVID, there was some interesting trends. You saw coming out of COVID, food inflation went kind of crazy. We saw menu prices kind of hold. Coming out of COVID, the consumer was flooding to restaurants. Over time, those menu prices crept up and food away from home got a little pricey. Now I think we've reached that equilibrium, and I think that's really good for us. We're looking forward to the future.
Being that we're at a staples conference, well, staples and discretionary now, we're proud to have merged, but there are a lot of staple peers right on the other side of this wall who would say that food at home is primed to be taking share. We have had a thesis for decades that food away from home, like you said, continues to take share.
I am just wondering, do you feel like the more recent restaurant industry's return to a little bit more aggressive value will allow the food away from home segment to retain the upper hand? How do you believe the restaurant industry is positioned as they do battle food at home?
Sure. Well, I think you hit the key word. I think it is value. I think when you have a pressured consumer, they are looking for value options, and I think about the food away from home space. I think about the independent restaurant, which from our perspective has been outperforming for some time. And I think the reason they have been able to accomplish that is really their flexibility. They can shift on a dime, whether it be shifting their menu, shifting the menu pricing, and the offer that they have. So they can create value. They really understand their customer well, and I think that is how they have been very successful.
We see it in the convenience store space as well, where we see shifts in how people are pricing in store and the food offer that we see in convenience and that we bring to convenience, that we think brings great value to the consumer. So, I feel really good about the food away from home space being able to fight for that consumer share of wallet.
Yep. Right. As you sit through investor meetings, and you will do lots of those today, but in recent months, what questions do you get from investors that will either surprise you that you are getting the question or surprise you that you are not getting the question that perhaps they should be asking?
Sure. Patrick, you want to Jeff, why don't I jump in?
First of all, I just want to say congratulations on your retirement.
Yeah, absolutely. It's been a pleasure to work with you.
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