−Removed: We are a premier distributor of specialty food and center-of-the-plate products in the United States and Canada.
−Removed: We are focused on serving the specific needs of chefs who own and/or operate some of the leading menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores in the United States and Canada (collectively, our “core customers”).
+Added: We are a premier distributor of specialty food and center-of-the-plate products in the United States, the Middle East, and Canada.
+Added: We are focused on serving the specific needs of chefs who own and/or operate some of the leading menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores in the United States, the Middle East, and Canada (collectively, our “core customers”).
We believe that we have a distinct competitive advantage in serving these customers as a result of our extensive selection of distinctive and hard-to-find specialty and center-of-the-plate food products, our product knowledge and our customer service.
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When marketing our products to our customers, we focus our efforts on chefs, and we believe that, by offering a wide selection of both distinctive and hard-to-find products, together with center-of-the-plate proteins and staple broadline food products, we are able to differentiate ourselves from larger, traditional broadline foodservice distributors, while simultaneously enabling our customers to utilize us as their primary foodservice distributor.
−Removed: Additionally, we market certain of our center-of-the-plate products directly to consumers through our mail and e-commerce platform of Allen Brothers, Inc.
−Removed: (“Allen Brothers”) and through our direct-to-consumer e-commerce platform by launching our “Shop Like a Chef” online home delivery platform in several of the markets we serve.
+Added: Additionally, we market certain of our center-of-the-plate products directly to consumers through our Allen Brothers, Inc.
+Added: (“Allen Brothers”) mail and e-commerce platform.
+Added: We also market a broader variety of our products directly to consumers via our “Shop Like a Chef” online home delivery platform which operates in several of the markets we serve.
Since our formation in 1985, we have expanded our distribution network, product selection and customer base both organically and through acquisitions.
Our net revenues have increased from approximately $1.3 billion for the fiscal year ended December 28, 2018 to $2.6 billion for the fiscal year ended December 30, 2022.
−Removed: Our historical sales growth and our ability to manage through the material adverse impacts of the COVID-19 pandemic (the “Pandemic”) on our business are the result of an increase in the breadth and depth of our product portfolio, our commitment to customer service, the efforts of our experienced and sophisticated sales professionals, the increased use of technology in the operations and management of our business and our ongoing consolidation of the fragmented specialty foodservice distribution industry.
−Removed: Since December 29, 2017, we have completed twelve acquisitions which have increased our penetration in existing markets, expanded our footprint into new markets and/or enhanced our product capabilities.
−Removed: The up-front cash purchase prices for these twelve acquisitions resulted in aggregate up-front cash consideration of more than $112.7 million, which we funded with cash generated from our operations, borrowings under our then existing indebtedness and the proceeds of our common stock offerings.
−Removed: Excluding our direct-to-consumer business, we currently serve more than 35,000 core customer locations in our nineteen primary geographic markets across the United States and Canada, including New York, Washington, D.C., Los Angeles, San Francisco, New England, Las Vegas, Miami, Portland, Columbus, Cincinnati, Chicago, Vancouver, Edmonton, Toronto, Seattle, Sacramento, Philadelphia, Texas, and Denver.
−Removed: By leveraging an experienced and sophisticated sales force of approximately 570 sales and customer service professionals, we maintain collaborative relationships with thousands of chefs while also acting as a critical marketing arm and route-to-market for many of our suppliers.
+Added: Our historical sales growth and our ability to manage through the material adverse impacts of the Pandemic on our business are the result of an increase in the breadth and depth of our product portfolio, our commitment to customer service, the efforts of our experienced and sophisticated sales professionals, the increased use of technology in the operations and management of our business and our ongoing consolidation of the fragmented specialty foodservice distribution industry.
+Added: Since December 28, 2018, we have completed sixteen acquisitions which have increased our penetration in existing markets, expanded our footprint into new markets and/or enhanced our product capabilities.
+Added: The up-front cash purchase prices for these sixteen acquisitions resulted in aggregate up-front cash consideration of more than $294.5 million, which we funded with cash generated from our operations, borrowings under our then existing credit facilities and the proceeds of our common stock offerings.
+Added: Excluding our direct-to-consumer businesses, we currently serve more than 40,000 core customer locations in our twenty-three primary geographic markets across the United States, the Middle East, and Canada.
+Added: We maintain collaborative relationships with thousands of chefs while also acting as a critical marketing arm and route-to-market for many of our suppliers by leveraging an experienced and sophisticated sales force of approximately 720 sales and customer service professionals.
We operate 44 distribution centers and provide service six days a week in many of our service areas, utilizing our fleet of delivery trucks to fill our customers’ orders.
−Removed: Effect of the COVID-19 Pandemic on our Business
−Removed: The Pandemic has had and continues to have an adverse impact on numerous aspects of our business and those of our customers including, but not limited to, demand for our products, cost inflation and labor shortages.
−Removed: Despite these challenges, we continued to provide our core customers with high touch service, executed on our cost control measures and returned to profitability during the second quarter of fiscal 2021.
−Removed: Furthermore, as of December 24, 2021, we had $157.8 million of working capital, including cash and cash equivalents of $115.2 million, on our balance sheet and $109.5 million of availability on our asset-based loan facility.
−Removed: Our liquidity position, puts us in a strategic position to invest in growth and take advantage of business development opportunities as we continue to recover from the Pandemic.
−Removed: The extent to which the Pandemic will impact our financial condition or results of operations in the future is uncertain and will depend on future developments, including new information that may emerge on the severity or transmissibility of the disease, new variants, government responses, trends in infection rates, development and distribution of effective medical treatments and vaccines, and future consumer spending behavior, among others.
Competitive Strengths
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Based on our management’s industry knowledge and experience, we believe we are the largest distributor of specialty food products, as measured by net sales, in the New York, Washington, D.C., San Francisco and Los Angeles metropolitan markets.
−Removed: We believe these markets, along with a number of other markets we serve, including Las Vegas, Miami, New England, Portland, Columbus, Cincinnati, Chicago, Vancouver, Edmonton, Toronto, Seattle, Sacramento and Texas, create and set the culinary trends for the rest of the United States and Canada and provide us with valuable insight into the latest culinary and menu practices.
+Added: We believe these markets, along with a number of other markets we serve, including Las Vegas, Miami, New England, Portland, Columbus, Cincinnati, Chicago, Vancouver, Edmonton, Toronto, Seattle, Sacramento, Texas, Dubai, Abu Dhabi, and Qatar create and set the culinary trends for the rest of the United States, the Middle East, and Canada and provide us with valuable insight into the latest culinary and menu practices.
Furthermore, we believe our established relationships with many of the top chefs, culinary schools and dining establishments in these key culinary markets have benefited us when we entered into new markets where we believe that chefs at our potential customers were generally knowledgeable of our brand and commitment to quality and excellence from their experience working in other markets which we serve or through their personal relationships throughout the culinary industry.
Expansive Product Offering.
−Removed: We offer an extensive portfolio of high-quality specialty food products, ranging from basic ingredients and staples, such as milk and flour, to custom-cut steaks, seafood, produce and pastries, as well as delicacies and specialty ingredients sourced from North America, Europe, Asia and South America, which we believe helps our customers distinguish their menu offerings.
+Added: We offer an extensive portfolio of high-quality specialty food products, ranging from basic ingredients and staples, such as milk and flour, to custom-cut steaks, seafood, produce and pastries, as well as delicacies and specialty ingredients sourced from North America, Europe, Asia, Australia, and South America, which we believe helps our customers distinguish their menu offerings.
We carry more than 55,000 SKUs and we constantly evaluate our portfolio and introduce new products to address regional trends and preferences and ensure that we are on the leading edge of broader culinary trends.
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We currently distribute products from more than 2,500 different suppliers.
−Removed: Our suppliers are located throughout North America, Europe, Asia and South America and include numerous small, family-owned entities and artisanal food producers.
+Added: Our suppliers are located throughout North America, Europe, Asia, Australia, and South America and include numerous small, family-owned entities and artisanal food producers.
We are the largest customer for many of our suppliers.
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Our breadth and depth of product offerings coupled with our highly regarded customer service has allowed us to develop and retain a loyal customer base that is comprised of chefs who own or work at more than 40,000 of the nation’s leading menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores.
−Removed: Our focus on product selection, product knowledge and customer service has rewarded us with a number of long-term customer relationships, which often begin when chefs are introduced to us while attending the nation’s leading culinary schools, including The Culinary Institute of America which has been a customer of ours for more than ten years.
+Added: Our focus on product selection, product knowledge and customer service has rewarded us with a number of long-term customer relationships, which often begin when chefs are introduced to us while attending the nation’s leading culinary schools.
Based on our management’s industry experience and our relationships and dealings with our customers, we believe we are the primary distributor of specialty food products to the majority of our core customers.
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We have built a first-class, scalable inventory management and logistics platform that enables us to efficiently fill our customers’ orders and to profitably meet our customers’ needs for varying drop sizes, high service levels and timely delivery.
−Removed: With 40 distribution centers located throughout the United States and Canada, we are able to
−Removed: leverage our geographic footprint and reduce our inbound freight costs.
+Added: With 44 distribution centers located throughout the United States, Middle East and Canada, we are able to leverage our geographic footprint and reduce our inbound freight costs.
This scale enables us to maintain a portfolio of more than 55,000 SKUs, and through the operation of our sophisticated information technology, inventory management and logistics systems, we believe we provide our customers with some of the highest levels of customer service and responsiveness in our industry.
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Our Growth Strategies
−Removed: We believe substantial organic growth opportunities exist to recover our sales volumes to pre-Pandemic levels in all our current markets through increased penetration of our existing customers and the addition of new customers, and we have identified new markets that we believe also present opportunities for future expansion.
+Added: We believe substantial organic growth opportunities exist in our current markets through increased penetration of our existing customers and the addition of new customers, and we have identified new markets that we believe also present opportunities for future expansion.
Key elements of our growth strategy include the following:
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Expand our Customer Base Within our Existing Markets.
−Removed: We serve more than 35,000 core customer locations, excluding our direct-to-consumer business, in the United States and Canada.
+Added: We serve more than 40,000 core customer locations, excluding our direct-to-consumer business, in the United States, Middle East, and Canada.
We plan to expand our market share in the fragmented specialty food distribution industry by cultivating new customer relationships within our existing markets through the continued penetration of menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores.
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We believe we have the opportunity to capitalize on our existing infrastructure and expertise by continuing to selectively pursue opportunistic acquisitions in order to expand the breadth of our distribution network, increase our operating efficiency and add additional products and capabilities.
−Removed: Since our initial public offering (“IPO”), we have completed twenty-three acquisitions, which have increased our penetration in existing markets, expanded our footprint into new markets and enhanced our product capabilities.
+Added: Since our initial public offering (“IPO”), we have completed thirty-one acquisitions, which have increased our penetration in existing markets, expanded our footprint into new markets and enhanced our product capabilities.
Our Markets and the Customers that We Serve
−Removed: Excluding our direct-to-consumer business, we distribute our specialty food products to over 35,000 distinct core customer locations from distribution centers located in our primary markets, which include New York, Washington, D.C., Los Angeles, San Francisco, New England, Las Vegas, Miami, Portland, Columbus, Cincinnati, Chicago, Vancouver, Edmonton, Toronto, Seattle, Sacramento, Philadelphia, Texas, and Denver.
−Removed: We believe that many of these markets set the culinary trends for the rest of the United States and Canada and provide us with valuable insight into the latest culinary and menu trends.
+Added: Excluding our direct-to-consumer business, we distribute our specialty food products to over 40,000 distinct core customer locations from distribution centers located in our primary markets, which include New York, Washington, D.C., Los Angeles, San Francisco, New England, Las Vegas, Miami, Portland, Columbus, Cincinnati, Chicago, Vancouver, Edmonton, Toronto, Seattle, Sacramento, Philadelphia, Texas, Denver, Dubai, Abu Dhabi, Oman and Qatar.
+Added: We believe that many of these markets set the culinary trends for the rest of the United States, Middle East and Canada and provide us with valuable insight into the latest culinary and menu trends.
We have established collaborative professional and educational relationships with some of the United States’ and Canada’s most demanding chefs, which allows us to anticipate the needs of, and offer cost-effective food product solutions to, our customers while allowing our customers to locate ingredients that will enable them to create unique and differentiated menu items.
Our target customers include menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores.
−Removed: We have no meaningful customer concentration as our top ten customers accounted for less than 7.5% of total net sales for our 2021 fiscal year.
+Added: We have no meaningful customer concentration as our top ten customers who accounted for less than 6.5% of total net sales for our 2022 fiscal year.
Our Allen Brothers subsidiary markets certain of our center-of-the-plate proteins directly to consumers through a mail and e-commerce platform.
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Denver Denver 2021
+Added: Middle East Dubai, Abu Dhabi, Qatar, and Oman 2022
We extend credit to virtually all of our core customers on varying terms.
−Removed: Most of our customers have payment terms from 14 -60 days.
+Added: Most of our customers have payment terms from 14 to 60 days.
We complete a formal credit assessment of all significant new core customers, and our Credit and Collections Department regularly evaluates credit terms for each such customer based upon several factors, including order frequency, average order size, the types of products purchased and the length of the relationship.
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Our Gourmet Food Products
−Removed: We strive to be the primary food source solution for our customers, and, to this end, we offer our customers a comprehensive product portfolio that ranges from basic ingredients and staples, such as milk and flour, to custom-cut steaks, seafood, produce and pastries, as well as delicacies and specialty ingredients sourced from North America, Europe, Asia and South America.
+Added: We strive to be the primary food source solution for our customers, and, to this end, we offer our customers a comprehensive product portfolio that ranges from basic ingredients and staples, such as milk and flour, to custom-cut steaks, seafood, produce and pastries, as well as delicacies and specialty ingredients sourced from North America, Europe, Asia, Australia, and South America.
We carry more than 55,000 SKUs and we are fully committed to utilizing our sourcing relationships and industry insights to procure products that we do not regularly carry but that our customers specifically request as they seek to create unique and innovative menu offerings.
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Our Operations and Distribution Centers
−Removed: Operating out of 40 distribution centers of varying size and, despite the impacts of the Pandemic, providing service six days a week in many areas, we utilize our fleet of delivery trucks to fill customer orders, usually within 12-24 hours of order placement.
+Added: Operating out of 44 distribution centers of varying size and providing service six days a week in many areas, we utilize our fleet of delivery trucks to fill customer orders, usually within 12-24 hours of order placement.
We have invested significantly in sophisticated warehousing, inventory control and distribution systems, as described in more detail below.
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We maintain an advanced information technology platform that enables us to manage our operations across our various markets, as we seek to drive our growth and profitability and ensure that the needs of our customers are met in an accurate and efficient manner.
−Removed: Over recent years, we have made significant investments in distribution, sales, information and warehouse management systems and are in the process of implementing a fully-integrated ERP system.
+Added: Over recent years, we have made significant investments in distribution, sales, information and warehouse management systems and are in the process of implementing a fully-integrated Enterprise Resource Planning system.
Our systems improvements include the implementation of route optimization software, a warehouse management system at all specialty warehouses that integrates with pick-to-voice and directed put-away systems.
−Removed: We are driving increasing sales volume through our ecommerce platforms and a new mobile ordering tool which we believe will enable a much more seamless online customer experience.
+Added: We are driving increasing sales volume through our e-commerce platforms and a new mobile ordering tool which we believe will enable a much more seamless online customer experience.
We also leverage a reporting and analytics platform that provides our sales team and management with the information required to drive efficiency and growth.
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Intellectual Property
−Removed: Except for the Spoleto, Bel Aria, Grand Reserve, Provvista, Argonaut, Praml, Black Falls, Michael’s, Chocoa, Crescendo, Matisse, Qzina, Coccinelle, Allen Brothers, The Great Steakhouse Steaks, Del Monte, Fells Point, Bassian Farms, Sid Wainer & Son, Cambridge Packing, Foley Fish, Silver State Meats and The Chefs’ Warehouse trademarks, we do not own or have the right to use any patent, trademark, trade name, license, franchise or concession, the loss of which would have a material adverse effect on our business, financial condition or results of operations.
+Added: Except for the Spoleto, Bel Aria, Grand Reserve, Provvista, Argonaut, Praml, Black Falls, Michael’s, Chocoa, Crescendo, Matisse, Qzina, Coccinelle, Allen Brothers, The Great Steakhouse Steaks, Del Monte, Fells Point, Bassian Farms, Sid Wainer & Son, Cambridge Packing, Foley Fish, Silver State Meats, Sid Wainer & Son, Alexis Foods, Chef Middle East, and The Chefs’ Warehouse trademarks, we do not own or have the right to use any patent, trademark, trade name, license, franchise or concession, the loss of which would have a material adverse effect on our business, financial condition or results of operations.
The foodservice distribution industry is highly competitive.
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We offer attractive compensation and benefit packages, and we believe our relationship with our employees is satisfactory.
+Added: Environmental, Social and Governance
+Added: We are committed to upholding ethical, socially responsible and environmentally conscious business practices, consistent with
+Added: our corporate values, to promote long-term and sustainable change.
+Added: In 2022, our board of directors formed an Environmental,
+Added: Social and Governance Committee (the “ESG Committee”) to oversee our environmental, social and governance activities and
+Added: Among other things, the ESG Committee reviews and evaluates:
+Added: our progress towards meeting our diversity goals
+Added: and compliance with our responsibilities as an equal opportunity employer;
+Added: our workplace safety, employee health and
+Added: wellness, inclusion, employee training and skill improvement and other human capital management initiatives;
+Added: programs and activities relating to environmental sustainability, product quality and quality assurance, social and community
+Added: relations (including labor relations) and other related economic and regulatory compliance requirements.
Workforce Health and Safety
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This includes, but is not limited to, instructing our employees to practice social distancing on our premises and those of our customers, frequent sanitation of our work environments, truck fleet and equipment, supplying personal protective equipment to our workforce and allowing our administrative employees to work from home.
+Added: Professional Development
+Added: Providing career development opportunities for our employees is a top priority.
+Added: As an investment in the professional growth of
+Added: our employees, professional learning and development courses are provided for all employees.
+Added: Our employees can readily
+Added: choose to take courses in categories such as safety, leadership, management, sales and business acumen, and courses may also
+Added: be assigned to our employees based on job function.
Social and Environmental Responsibility
−Removed: We are committed to upholding ethical, socially responsible and environmentally conscious business practices, consistent with our corporate values, to promote long-term and sustainable change.
−Removed: In 2021, we adopted or amended corporate policies intended to further strengthen and promote our commitment to social and environmental responsibility with our directors, employees, leaders and business partners.
+Added: Our corporate policies, overseen by the ESG Committee, are intended to further strengthen and promote our commitment to social and environmental responsibility with our directors, employees, leaders and business partners.
Our policy on salient human rights risks identifies key human rights issues related to our business activities and business relationships, including promoting a safe and healthy work environment, providing a fair and inclusive work environment and combating forced and underage labor.
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The USDA imposes standards for product quality and sanitation, including the inspection and labeling of meat and poultry products and the grading and commercial acceptance of produce shipments from vendors.
−Removed: The products we distribute in Canada are also subject to regulation and inspection by Health Canada and the Canadian Food Inspection Agency.
+Added: The products we distribute in Canada are subject to regulation and inspection by Health Canada and the Canadian Food Inspection Agency.
+Added: Our distribution operations in the Middle East are subject to regulation by municipal and local regulatory agencies including the Abu Dhabi Food Control Authority, the Ministry of Health in Qatar, the Centre for Food and Safety and Quality in Oman, and the Department of Food Safety in Dubai.
Our suppliers are also subject to similar regulatory requirements and oversight.
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Our facilities are generally inspected at least annually by federal and/or state authorities.
−Removed: These facilities are also subject to inspections and regulations issued pursuant to the Occupational Safety and Health Act by the
+Added: These facilities are also subject to inspections and regulations issued pursuant to the Occupational Safety and Health Act by the U.S.
Department of Labor, which require us to comply with certain manufacturing, health and safety standards to protect our employees from accidents and to establish hazard communication programs to transmit information about the hazards of certain chemicals present in certain products that we distribute.
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Our trucking operations are regulated by the Surface Transportation Board, the Federal Highway Administration, Transport Canada and Canadian provincial transportation authorities.
+Added: We are also regulated by the Dubai Road and Transport Authority, Abu Dhabi Transport Authority and the Ministry of Transport in Qatar and Oman.
In addition, interstate motor carrier operations are subject to safety requirements prescribed by the U.S.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.