Performance Food Group Co (PFGC) Business

Item 1. Business

Performance Food Group Company, through its subsidiaries, markets and distributes more than 250,000 food and food-related products to customers across North America, from our 155 distribution centers to over 300,000 customer locations in the food-away-from-home industry. Our approximately 43,000 employees serve a diverse mix of customers, from independent and chain restaurants to schools, business and industry locations, hospitals, vending distributors, office coffee service distributors, retailers, convenience stores, and theaters. We source our products from various suppliers and serve as an important partner to our suppliers by providing them access to our broad customer base. In addition to the products we offer to our customers, we provide value-added services by allowing our customers to benefit from our industry knowledge, scale, and expertise in the areas of product selection and procurement, menu development, and operational strategy.

On October 8, 2024, the Company acquired Cheney Bros., Inc. (“Cheney Brothers”), expanding our Foodservice operations in the Southeastern portion of the United States. Refer to Note 4. Business Combinations within the Notes to Consolidated Financial Statements included in Part II, Item 8. Financial Statements (“Item 8”) for additional details regarding the acquisition of Cheney Brothers.

Our Segments

The Company regularly monitors for changes in facts and circumstances that would necessitate changes in its determination of operating segments. In the third quarter of fiscal 2025, the Company updated its operating segments to reflect the manner in which the business is managed. Based on changes to the Company’s organizational structure and how operating results are reviewed and decisions about resource allocations are made, certain operations and administrative and corporate costs previously reported in Corporate & All Other are now included in the Foodservice segment. In the third quarter of fiscal 2025, the Company also renamed the segment formerly known as “Vistar,” which, going forward, has been referred to as “Specialty.” There were no changes to the operations reported within the Specialty (formerly Vistar) segment.

The Company continues to have three reportable segments: Foodservice, Convenience, and Specialty. Corporate & All Other is comprised of corporate overhead and certain operating segments that are not considered separate reportable segments based on their size.

Foodservice. Foodservice offers a broad line of products, including custom-cut meat and seafood, as well as products that are specific to our customers’ menu requirements. Foodservice operates a network of 89 distribution centers, each of which is run by a business team who understands the local markets and the particular needs of its customers and who is empowered to make decisions on how best to serve them.

The Foodservice segment markets and distributes food and food-related products to independent restaurants, chain restaurants, and other institutional food-away-from-home locations. Independent customers predominantly include family dining, bar and grill, pizza and Italian, Hispanic, and fast casual restaurants. We seek to increase the mix of our total sales to independent customers because they typically use more value-added services, particularly in the areas of product selection and procurement, market trends, menu development, and operational strategy and also use more of our proprietary-branded products (“Performance Brands”), which are our higher margin products. As a result, independent customers generate higher gross profit per case that more than offsets the generally higher supply chain costs that we incur in serving these customers. Chain customers are multi-unit restaurants with five or more locations and include fine dining, family and casual dining, fast casual, and quick-serve restaurants, as well as hotels, healthcare facilities, and other multi-unit institutional customers. Our Foodservice segment’s chain customers include regional businesses requiring short-haul routes as well as national businesses requiring long-haul routes, including many of the most recognizable family and casual dining restaurant chains. Sales to chain customers are typically lower gross margin but have larger deliveries than those to independent customers.

We offer our customers a broad product assortment that ranges from “center-of-the-plate” items (such as beef, pork, poultry, and seafood), frozen foods, refrigerated products, and dry groceries to disposables, cleaning and kitchen supplies, and related products used by our customers. In addition to the products we offer, we provide value-added services by enabling our customers to benefit from our industry knowledge, scale, and expertise in the areas of product selection and procurement, menu development, and operational strategy.

Our products consist of Performance Brands, as well as nationally branded products and products bearing our customers’ brands. Our Performance Brands typically generate higher gross profit per case than other brands. Nationally branded products are attractive to chain, independent, and other customers seeking recognized national brands in their operations and complement sales of our Performance Brand products. Some of our chain customers, particularly those with national distribution, develop exclusive stock keeping units (“SKU”) specifications directly with suppliers and brand these SKUs. We purchase these SKUs directly from suppliers and receive them into our distribution centers, where they are mixed with other SKUs and delivered to the chain customers’ locations.

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Convenience. The Convenience segment is one of the largest wholesale consumer products and foodservice distributors in the convenience retail industry. Convenience offers a full range of products, marketing programs and technology solutions to customer locations including traditional convenience stores, drug stores, mass merchants, grocery stores, liquor stores and other specialty and small format stores that carry convenience products in the United States and Canada. Convenience's product offering includes cigarettes and other nicotine products, candy, snacks, food, including fresh products, groceries, dairy, bread, beverages, general merchandise and health and beauty care products. Convenience operates a network of 39 distribution centers in the U.S. and Canada (excluding two distribution facilities it operates as a third-party logistics provider). There are 35 distribution centers located in the U.S. and four located in Canada.

Specialty. Specialty (formerly Vistar) is a leading national distributor of candy, snacks, beverages, and other food items operating a network of 27 Specialty distribution centers.

Specialty has successfully built upon our national platform to broaden the channels we serve. Specialty distribution centers deliver to vending and office coffee service distributors as well as direct to customer locations including theaters and retail locations. The distribution model also includes “pick and pack” capabilities utilizing small parcel third-party carriers to deliver direct to consumers for our supplier partners and to our customers whose order sizes are too small to be served effectively by our truck network. We believe these capabilities, in conjunction with the breadth of our inventory, are differentiating and allow us to serve many distinct customer types. Specialty's scale in the channels it serves enhances our ability to procure a broad variety of products for our customers.

The Company had no customers that comprised more than 10% of consolidated net sales for fiscal 2025, fiscal 2024, or fiscal 2023.

Suppliers

We source our products from various suppliers and serve as an important partner to our suppliers by providing them access to our broad customer base. Many of our suppliers provide products to each of our reportable segments, while others sell to only one segment. Our supplier base consists principally of large corporations that sell their national brands, our Performance Brands, and sometimes both. We also buy from smaller suppliers, particularly on a regional basis, and particularly those that specialize in produce and other perishable commodities. Many of our suppliers provide sales material and sales call support for the products that we purchase.

Pricing

Our pricing to customers is either set by contract with the customer or is priced at the time of order. If the price is by contract, it is either based on a percentage markup over cost or a fixed markup per unit, and the unit may be expressed either in cases or pounds of product. If the pricing is set at time of order, the pricing is agreed to between our sales associate and the customer and is typically based on a product cost that fluctuates weekly or more frequently.

If contracts are based on a fixed markup per unit or pound, our customers bear the risk of cost fluctuations during the contract life. In the case of a fixed markup percentage, we typically bear the risk of cost deflation or the benefit of cost inflation. If pricing is set at the time of order, we have the current cost of goods in our inventory and typically pass cost increases or decreases to our customers. We generally do not lock in or otherwise hedge commodity costs or other costs of goods sold except within certain customer contracts based on a fixed markup per unit or pound where the customer bears the risk of cost fluctuation. We believe that our pricing mechanisms provide us with significant insulation from fluctuations in the cost of goods that we sell. Our inventory turns, on average, every three-and-a-half weeks, which further protects us from cost fluctuations.

We seek to minimize the effect of higher diesel fuel costs both by reducing fuel usage and by taking action to offset higher fuel prices. We reduce usage by designing more efficient truck routes and by increasing miles per gallon through on-board computers that monitor and adjust idling time and maximum speeds and through other technologies. We seek to manage fuel prices through diesel fuel surcharges to our customers and through the use of costless collars. As of June 28, 2025, we had collars in place for approximately 15% of the gallons we expect to use over the 12 months following June 28, 2025.

Competition

The foodservice distribution industry is highly competitive, with numerous national, regional, local, and specialty distributors. Certain of our competitors may have greater scale and financial and other resources than we do in certain markets. Smaller distributors often align themselves with other smaller distributors through purchasing cooperatives and marketing groups to enhance their geographic reach, private label offerings, overall purchasing power, cost efficiencies, and to assemble delivery networks for national or multi-regional distribution. We often do not have exclusive service agreements with our customers, and our customers may switch to other distributors if those distributors can offer lower prices, differentiated products, or customer service that is perceived to be superior. We believe that most purchasing decisions in the foodservice business are based on the quality and price of the product and a distributor’s ability to fill orders completely and accurately and to provide timely deliveries.

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We believe we have a competitive advantage through economies of scale in purchasing and procurement, which allow us to offer a broad variety of products (including our proprietary Performance Brands) at competitive prices to our customers. Our customers benefit from our ability to provide them with extensive geographic coverage as they continue to grow. We believe we also benefit from supply chain efficiency, including a growing inbound logistics backhaul network that uses our collective distribution network to deliver inbound products across business segments; best practices in warehousing, transportation, and risk management; the ability to benefit from the scale of our purchases of items and services not for resale, such as trucks, construction materials, insurance, banking relationships, healthcare, and material handling equipment; and the ability to optimize our networks so that customers are served from the most efficient distribution centers, which minimizes the cost of delivery. We believe these efficiencies and economies of scale provide opportunities for improvements in our operating margins.

Seasonality

Historically, the food-away-from-home and foodservice distribution industries are seasonal, with lower profit in the first quarter of each calendar year. Consequently, we may experience lower operating profit during our third fiscal quarter, depending on the timing of acquisitions, if any.

Trademarks and Trade Names

We have numerous perpetual trademarks and trade names that are of significant importance, including Performance Food Group®, Performance Foodservice®, Core-Mark®, and VistarSM. We also have registered or applied for trademark protections for our Performance Brands. These trademarks and the Performance Brands on which they are used are widely recognized within the foodservice industry. Although in the aggregate these trademark and trade names are material to our results of operations, we believe the loss of a trademark or trade name individually would not have a material adverse effect on our results of operations. We do not have any material patents or licenses.

Human Capital Resources

Our people are the driving force behind everything we do. Our focus is on attracting, developing, and retaining talented people who bring a wide range of backgrounds, experiences, and perspectives. We are committed to creating an environment where every associate feels they belong and can meaningfully contribute to our shared success. Just as important, we prioritize the safety, health, and well-being of our associates.

Associates. As of June 28, 2025, our team included approximately 43,000 associates across North America, including those in our consolidated subsidiaries. Approximately 99% of our associates were employed on a full-time basis, and approximately 70% were non-exempt, or paid on an hourly basis. Our workforce spans a wide range of functions, from warehouse operations and delivery drivers to corporate teams and frontline customer support, each playing a vital role in serving our customers and communities.

Talent Acquisition. Attracting top talent is essential to delivering on our commitments to customers, communities, and shareholders. Our talent acquisition strategy focuses on attracting, hiring, developing, and retaining individuals whose skills, experiences, and values align with our business goals and culture.

Compensation and Benefits. We believe that fair, competitive compensation is fundamental to attracting and retaining top talent. Our compensation approach combines base pay aligned with external market data and performance-based incentive programs. Eligible associates can participate in short-term incentive plans, including cash bonuses tied to the company’s financial performance and other key priorities. For long-term growth, we offer equity awards to eligible associates, designed to foster ownership, reward sustained contributions, and align our shared interests with those of our stockholders.

Beyond pay, we offer a comprehensive suite of benefits to support the well-being of our associates and their families. These benefits include time off through paid vacation, sick days, holidays, and personal time, as well as family leave; insurance offerings such as disability insurance, life insurance and healthcare; and financial benefits such as a 401(k) plan with a company match, an Employee Stock Purchase Plan, adoption assistance, education assistance, a scholarship program for children of associates, flexible spending accounts, and health savings accounts. Additionally, we offer an Employee Assistance Program that provides professional support for associates and their family members to balance the stress of personal and professional demands at home, in the office, in distribution centers and on the road. In addition to compensation and benefits, we offer associate recognition programs to foster a culture of appreciation and reinforce the behaviors that drive our success.

People and Culture. As one of the nation's leading foodservice distributors, we are committed to creating a workplace where our associates feel valued and can thrive. As part of this commitment, we embrace key workplace culture strategies such as:

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Promote a sense of community and connection to engage our workforce.

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Invest in attracting, hiring, developing, and retaining the best talent to reflect our customers and the communities they serve.

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This work is championed by our senior leadership team and supported through programs such as our associate resource groups. These associate-led communities, which are open to all associates, create spaces for connection, cultural awareness, professional development, and engagement.

Learning and Organizational Development. We believe in investing in our people at every stage of their careers. Our enterprise-wide learning strategy is designed to help associates succeed in their current roles while preparing them for future growth.

It starts with a thoughtful onboarding experience and continues with ongoing development opportunities. By reviewing strategic needs, compliance training requirements, and associate engagement survey data, we create and implement comprehensive training programs. This approach strives to deliver the right broad-based learning and development opportunities at the right time to support both organizational and associate growth. We use a blend of instructor-led sessions and self-paced online learning to provide role-specific training that is accessible when and where it is needed.

Our leadership development program is designed to provide training opportunities for all levels of leadership, from entry level to executive, and equip them with the skills to lead effectively, drive innovation, and inspire high performance.

Our Learning Management System delivers a wide range of on-demand courses tailored to an associate's role, including compliance training, leadership development, and safety modules. Additionally, our segments offer specialized training aligned with both operational needs and the broader company strategy.

Health, Safety and Wellness. Keeping our associates safe and healthy is a responsibility we take seriously. We embed safety into every part of our business through robust training, safety awareness programs, behavioral observation practices, and the use of telematics and other technologies.

We continuously look for ways to improve by identifying and addressing risks, making process improvements, and adopting new tools and systems. Our approach includes proactive coaching, education, and a commitment to fostering a safety-first culture, whether our associates are working in warehouses, driving on the road, or serving customers in other roles.

Engagement. We believe engaged associates are the foundation of a strong company. We work to build, measure, and enhance associate engagement through a variety of communications and activities. In response to associate feedback, we have introduced numerous initiatives to strengthen the associate experience, including enhanced onboarding with day-one benefits, expanded education assistance, new leadership training programs, clearer career pathways, and better communication tools.

We also create opportunities for connection and celebration, including recognizing heritage or history months, participating in industry events such as the Truck Driving Championship and Truck Driver Hall of Fame, or supporting professional growth through partnerships such as the Women's Foodservice Forum, International Foodservice Distributors Association, and Women in Trucking.

Regulation

Our operations are subject to the applicable federal, state, local and foreign laws, rules, and regulations of the jurisdictions in which we operate or conduct business. These laws, rules, and regulations may change in the future and we may incur material costs in our efforts to comply with current or future laws, rules, and regulations or in any required product recalls. Although we may incur additional material compliance-related costs in the future, to date, compliance with these laws, rules, and regulations has not had a material effect on our capital expenditures, earnings or competitive position. See “Item 1A. Risk Factors - Risks Relating to Product Safety, Regulatory and Legal Matters- Our business is subject to significant governmental regulation, and costs or claims for non-compliance related to these requirements could adversely affect our business.”

Food Safety. Our operations are subject to various laws and regulations relating to, among other things, the manufacturing, processing, packaging, storage, distribution, advertising, and labeling of our products, including regulation by state and local health departments, the U.S. Department of Agriculture (the “USDA”), and the U.S. Food and Drug Administration (the “FDA”), which generally impose standards for product quality and sanitation and are responsible for the administration of bioterrorism legislation affecting the foodservice industry. The FDA Food Safety Modernization Act (the “FSMA”) imposes comprehensive, prevention-based controls across the food supply chain, further regulates food products imported into the United States, and provides the FDA with mandatory recall authority. The FDA has finalized FSMA regulations for implementation, which have significantly expanded our food safety requirements. We have established and continue to maintain comprehensive, prevention-based controls across the food supply chain that are both verified and validated, as required by the FDA regulations implementing FSMA. Our seafood operations are also specifically regulated by federal and state laws, including those administered by the National Marine Fisheries Service and the National Shellfish Sanitation Program, established for the preservation of certain species of marine life, including fish and shellfish. Our distribution and certain manufacturing facilities must be registered with the FDA and are subject to periodic government agency inspections by federal and/or state authorities. The Federal Perishable Agricultural Commodities Act, which specifies standards for the sale, shipment, inspection, and rejection of agricultural products, governs our relationships with our fresh produce suppliers with respect to the grading and commercial acceptance of product shipments. We are also subject to regulation by state authorities for the accuracy of our weighing and measuring devices. Our suppliers are also subject to similar regulatory requirements and oversight.

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Our customers include several departments of the U.S. federal government, as well as certain state and local governmental entities. These customer relationships subject us to additional regulations applicable to government contractors.

Labor and Employment. Our operations are subject to a variety of federal, state, and local laws and other requirements, including employment practice standards for workers set by the U.S. Department of Labor. We are also subject to the National Labor Relations Act, which governs the process for collective bargaining between employers and employees and protects the rights of both employers and employees in the workplace; the Fair Labor Standards Act, which establishes minimum wages and overtime standards, among other requirements; various laws that prohibit discrimination in employment based on non-merit categories, including but not limited to Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and other laws relating to accessibility. Our workers’ compensation programs are subject to regulation by the jurisdictions in which we operate.

Environmental. Our operations are also subject to a broad range of federal, state, and local laws and other requirements relating to the protection of the environment and the safety and health of personnel and the public. These include requirements regarding the use, storage, and disposal of solid and hazardous materials and petroleum products, including food processing wastes, the discharge of pollutants into the air and water, and worker safety and health practices and procedures. We operate and maintain vehicle fleets, and some of our distribution centers have regulated underground and aboveground storage tanks for diesel fuel and other petroleum products. Some jurisdictions in which we operate have laws that affect the composition and operation of our truck fleet, such as limits on diesel emissions and engine idling. A number of our facilities have ammonia- or freon-based refrigeration systems, which could cause injury or environmental damage if accidentally released, and many of our distribution centers have propane or battery powered forklifts.

Transportation. The Surface Transportation Board and the Federal Highway Administration regulate our trucking operations. In addition, interstate motor carrier operations are subject to safety requirements prescribed in the U.S. Department of Transportation and other relevant federal and state agencies. We must comply with the safety and fitness regulations promulgated by the Federal Motor Carrier Safety Administration, including those relating to drug and alcohol testing and hours of service. Such matters as weight and dimension of equipment are also subject to federal and state regulations.

Trade. For the purchase of products produced, harvested or manufactured outside of the U.S., and for shipment of products to customers located outside of the U.S., we are subject to applicable customs laws regarding the import and export of various products.

Available Information

We file annual, quarterly, and current reports, proxy statements and other information with the SEC. Our filings with the SEC are available to the public on the SEC’s website at www.sec.gov. Those filings are also available to the public on, or accessible through, our website for free via the “Investors” section at www.pfgc.com. The information we file with the SEC or contained on or accessible through our corporate website or any other website that we may maintain is not incorporated by reference herein and is not part of this Form 10-K.

Website and Social Media Disclosure

We use our website (www.pfgc.com) and our corporate social media platforms as channels of distribution of company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about PFG when you enroll your e-mail address by visiting the “Email Alerts” section of our website at investors.pfgc.com. The contents of our website and social media channels are not, however, a part of this Form 10-K.