Performance Food Group Company (PFGC) Business Profile

What it does

Performance Food Group markets and distributes food and related products to businesses that sell or serve food away from home. It buys products from suppliers, stores them in distribution centers and delivers them to customers ranging from restaurants to convenience stores and theaters. Scott E. McPherson is president and chief executive officer.

The company offers more than 300,000 food and food-related products and serves over 350,000 customer locations across North America. Its assortment includes meat, seafood, frozen food, groceries, snacks and beverages, as well as cleaning supplies and other products used in customers’ operations. It also distributes cigarettes and alternative nicotine products.

The business has three segments. Foodservice supplies restaurants and institutions with food and operating supplies. Convenience serves convenience stores and other retailers with food, nicotine products and general merchandise. Specialty distributes snacks, beverages, perishables and other items to customers such as vending distributors, retailers and entertainment venues.

The company also helps customers with product selection, purchasing, menu development and operating strategies. Its Specialty business can assemble small parcels and use third-party carriers to reach consumers or customers whose orders are too small for delivery by its own fleet.

How it makes money

Performance Food Group earns revenue by purchasing products from suppliers and selling them to customers through its distribution networks. It sells national brands, products carrying customers’ brands and its own Performance Brands. Gross profit is net sales less the cost of goods sold, which primarily includes inventory costs, inbound freight and excise-tax remittances. Inventory costs are recorded net of supplier rebates and promotional incentives.

In Foodservice, independent restaurants typically buy more services and Performance Brands than chain customers. Those products and services generate higher gross profit per case, which more than offsets the generally higher supply-chain cost of serving independents. Chain customers generally have lower gross margins but receive larger deliveries. Convenience sells a mix that includes cigarettes, alternative nicotine, food and beverages; Specialty serves channels including vending, office coffee, retail and entertainment.

Customer prices can be set by contract or agreed when an order is placed. Contracts may specify a percentage markup over cost or a fixed markup per case or pound. For orders priced at the time of sale, prices are typically based on product costs that can change weekly or more frequently. Under fixed per-unit contracts, customers bear cost fluctuations during the contract; under percentage-markup contracts, the company typically bears the risk of deflation or benefits from inflation.

Sales depend on case volumes, product price changes, customer and product mix, and acquisitions. The company also receives supplier rebates and promotional incentives, and its Convenience business earns income from manufacturers for distribution and related services. Operating cash flow was over $1.4 billion for fiscal 2026; net income was $162.3 million in the fourth quarter of fiscal 2026.

Customers and how it sells

Performance Food Group serves independent and chain restaurants, schools, healthcare facilities, business and industry locations, retailers, convenience stores, theaters, and vending and office coffee service distributors. Its Foodservice customers include both local restaurants and multi-unit chains. Specialty also delivers directly to retailers and entertainment venues, and uses small-parcel fulfillment for some smaller orders.

The company serves customers across North America. Convenience operates distribution centers in the United States and Canada, while Specialty distributes nationally. Foodservice’s local business teams make decisions about how to serve their markets, including customers with short-haul and long-haul delivery needs.

No customer accounted for more than 10% of consolidated net sales in fiscal 2026. The company added Loves and Racetrack to its national convenience accounts during fiscal 2026. It also expects to expand its relationship with Jersey Mike’s in the second half of fiscal 2027.

In Foodservice, independent customers include family dining, pizza, Hispanic and fast-casual restaurants. Chain customers include restaurants with five or more locations. The company seeks to increase its mix of independent sales because those customers typically use more of its services and higher-margin proprietary products.

Suppliers and costs

The company buys from a range of suppliers, principally large corporations selling national brands, Performance Brands or both. It also buys from smaller regional suppliers, particularly those specializing in produce and other perishables. Some suppliers sell to all three segments; others serve only one. Suppliers may provide sales materials and support for sales calls.

Costs include purchased inventory, inbound freight, personnel, fuel, insurance and the operation of warehouses and delivery networks. In fiscal 2026, Foodservice operating expenses increased partly because of higher personnel, fuel and insurance expenses and expenses associated with acquisitions. Specialty also incurred higher outbound freight expense, primarily from small-parcel volume.

The company generally does not hedge commodity or other goods costs, except in certain customer contracts where the customer bears cost fluctuations. It typically passes cost changes through when prices are set at the time of order. Its inventory turns, on average, every three to four weeks.

Diesel fuel prices affect delivery costs. The company uses customer fuel surcharges and derivatives to manage exposure; surcharges generally follow fuel-price changes with a one-month lag. The net impact from higher diesel expense was approximately $16 million in the fourth quarter of fiscal 2026.

Competitive position

The food-away-from-home distribution market includes national, regional, local and specialty distributors. No individual competitors are named. Smaller distributors can join purchasing cooperatives and marketing groups to expand their reach, purchasing power, private-label offerings and delivery networks. Some competitors have greater scale or resources in particular markets.

Customers commonly choose distributors based on product quality and price, complete and accurate orders, and timely delivery. Performance Food Group often lacks exclusive service agreements, so customers can switch for lower prices, different products or service they consider better. The company lost some convenience customers to prices it chose not to match.

The company believes its purchasing scale helps it offer a broad assortment and proprietary products at competitive prices. Its distribution network provides geographic coverage, while shared logistics and procurement support its segments. Our reading: The network and purchasing scale provide a meaningful advantage in serving a wide range of customers, although competitors can assemble broader reach through cooperatives.

Performance Brands typically produce higher gross profit per case than other brands, and independent restaurants also use the company’s menu and purchasing services. Our reading: Proprietary products and services support customer relationships, but their protection is limited by customers’ ability to switch distributors without an exclusive agreement.

Growth opportunities

Performance Food Group’s strategy includes winning independent restaurant business, expanding its Performance Brands, adding customers across its three segments, entering new geographies and pursuing acquisitions. It also plans to use its infrastructure and technology to improve operating and purchasing efficiency.

Foodservice net sales increased $2.9 billion, or 8.7%, from fiscal 2025 to fiscal 2026, primarily because of acquisitions, organic case growth and higher selling prices. The Cheney Brothers acquisition contributed to that growth. Organic independent case growth was 5.9% in fiscal 2026, supported by new independent customers and expanded business with existing ones.

Convenience sales growth in fiscal 2026 came primarily from case growth associated with new chain customers and an acquisition, as well as higher selling prices. Specialty sales increased as prices rose and its channel mix changed, although cases sold declined. Vistar began shipping to specialty grocery customers in late fiscal 2026 after working with the Foodservice organization.

For fiscal 2027, the company expects growth across all three segments and a sales range of $72.5 billion to $73 billion. That guidance includes the benefit of a 53rd week. The company also expects its procurement initiatives to contribute to profit growth and is investing in sales capabilities, technology and distribution infrastructure.

Structural risks

• Demand and competition: Economic uncertainty can reduce consumer spending and confidence. Customers may also switch distributors for lower prices, different products or service they consider better; the company often does not have exclusive service agreements.
• Costs and fuel: Product-cost changes affect purchasing and pricing, while prolonged high fuel prices could hurt results if surcharges and derivative gains do not offset them. Fuel surcharges generally follow price changes with a one-month lag.
• Debt: Indebtedness can reduce operating and financial flexibility, require cash for debt payments and limit financing or acquisitions. Debt agreements also contain covenants restricting specified transactions.
• Labor and operations: The company faces risks involving labor relations, labor costs and the availability of qualified labor. Its distribution operations depend on warehouse and delivery personnel.
• Technology and regulation: Cybersecurity incidents or technology disruptions could harm the business and its relationships. Food safety, transportation and other regulations can impose compliance costs, and non-compliance could result in costs or claims.

Bottom line

Our reading

Our reading: Performance Food Group is a distribution business built on purchasing, warehousing and delivering a wide product range, with proprietary brands and services adding to the economics of its independent restaurant business. Its scale and network support that model, but customers can switch distributors, while fuel, labor and debt constrain the benefits of growth.