Despite Leading Positions, We Believe the Top Three Food Distributors Boast Lofty Valuations
Although we believe narrow-moat Sysco, no-moat US Foods, and no-moat Performance Foods hold leading positions in the $300 billion foodservice industry, we see a competitive environment constraining profitability. As such, we don’t view current valuations as attractive and believe investors should wait for a better margin of safety. We estimate that the three leading companies hold around 31% of the market, but the industry is locally competitive and fragmented, with around 15,000 domestic distri...Performance Food Group is a holding company. Through its subsidiaries, the company markets and distributes food and food-related products. The company's products include frozen foods, such as meats, appetizers and entrees, fruits, vegetables, and desserts; canned and dry foods; fresh meats; dairy products; beverage products; imported specialties; fresh produce; and candy, snack, and other products. The company also supplies non-food items including paper products such as pizza boxes, disposable napkins, plates and cups; tableware such as china and silverware; cookware such as pots, pans, and utensils; restaurant and kitchen equipment and supplies; cigarettes and other tobacco products; and cleaning supplies.
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