"I think that we have every indication to believe that '04 is going to be a good year for us," Spinner said.
Spinner anticipates that casual theme dining and chain accounts business will continue to grow based on the number of new openings and expansion of existing operations. He's also optimistic about opportunities for independents. "There are a lot of good independents that are doing quite well in all of the markets that we serve. We have every reason to believe that that's going to grow tremendously for us as well," Spinner pointed out, adding that growing street sales will be a major focus of the company this year.
While he declined to reveal last year's revenue figures at this time, PFG, the third largest foodservice distributorship in the country, in a statement issued last fall, said broadline sales for the third quarter of 2003 increased 15% as a result of acquisitions, greater street sales and incremental business from current customers. Internal growth in the broadline group amounted to 11%.
The entire company posted third-quarter 2003 sales of $1.4 billion, up 19% from the year-earlier period. Internal growth amounted to 17%, while acquisitions added 2% to growth. Net earnings for the quarter rose 35% to $21.6 million compared with $16 million a year ago.
SATISFYING EXPECTATIONS
Spinner did say that PFG continues to satisfy the financial community's expectations about its revenues and plans for future expansion. It is expected that the company will grow over a five-year period by low double digits every year internally, according to him.
Furthermore, financial observers expect PFG to improve its operating profit by 20-30 basis points a year. "They expect us to be fairly acquisitive. We still need to be out there buying companies," Spinner said, noting that PFG is "the acquirer of choice because of the type of organization that we are." PFG is expected to acquire $200-300 million in new companies every year and "we've made it public that that is an initiative of ours," he explained.
The driving forces behind the division's sustained success, Spinner said, are its integrity and product mix. Spinner believes operators choose to work with PFG because decisions that affect them are made at the operating company level and that means flexibility. "A lot of our customers are specifically looking for companies that have a great deal of flexibility, that are focused on a high level of integrity, that are doing a great job of selling center of the plate products, that are focused on developing their controlled brands that add value, while at the same time continuing to promote national brands. That's a very big part of what we're doing," he elaborated.
In addition to national brands, the broadline division, through its association with Progressive Group Alliance, offers its operator-customers Pocahontas, All-Kitchen and Afflink brand products as well as its distributor-owned brands. He said 23% of street sales come from PFG and Pocahontas brand products. According to the company, street sales represented 50% of broadline sales for the first three quarters of 2003. This mix offers a "great option" for independent operators, Spinner said. "Progressive Group Alliance is going to be very important part of the company in the sense that we continue to attract more of the larger independents across the country because of the services the association provides in terms of procurement, event planning and management," he continued.
As for this year, to meet the goal of boosting street sales, the division hired "quite a few new salespeople in the past two years," though Spinner declined to say how many. "We think that it's going to be a great year for us in terms of street sales," he said.
DSR TRAINING PROGRAM
To get the new DSRs quickly up to speed, PFG launched a new training program that will teach the sales team how to help operators run their businesses more effectively. "We want our sales force to be more than order takers. For the sales people to add value they need to be trained to act as if they are working for the customers. We have several regional trainers and we have a methodology for training our sales people," Spinner indicated.
During the interview with ID Report, Spinner returned several times to the concept of integrity as it relates to PFG's customers, suppliers and employees. "We have a very high standard that we live by that relates to those three entities. We don't deviate from it. Perhaps it causes us to grow a little slower than others would like but it's a very solid line that we don't ever cross," he detailed.
Additionally, with its six USDA meat-processing facilities, a seafood facility and produce processor Fresh Express, Spinner said PFG is endeavoring to be the leading provider of quality center-of-the-plate foods. "We very much see ourselves as a fresh foods company. We make sure that we deliver the safest product in terms of managing the cold chain from the time it comes into our facility, during its stay in our facility, to the time it leaves our facility and goes to our restaurant operators. We have to manage HACCP and cold chain if we're going to be a leader in fresh foods," he said.
Spinner noted that PFG was not affected by the recent spate of produce contamination nor the Mad Cow incidence. As for BSE, while noting that it's too early to make a final determination, Spinner is convinced that the American consumer will not turn away from eating beef.
The distributor executive pointed out that by understanding that it cannot be everything to everyone, PFG is actually enhancing its value and service. Spinner indicated, "There are clear values in selling few customers as much as we possibly can as opposed to the alternative. We want the relationships that we have with our customers to be distinctive. The only way they can be distinctive is if we add value by controlling the center of the plate."
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