US Foods
Careers at US Foods
Mission
US Foods’ mission is to be first in food.
Founding story
US Foods is the result of over a century of merger and acquisition activity among various food-related companies. Reid-Murdoch Co. was founded in 1853 and later became Monarch Foods. Tea and coffee retailer John Sexton & Company was founded in 1883. Tea, coffee, and spice seller L.H. Parke Co. was founded in 1889. Wholesale grocer S.E. Rykoff & Co. was founded in 1911.
In 1946, Consolidated Foods purchased Monarch Foods. In 1962 it bought L.H. Parke. In 1971 it bought the Pearce-Young-Angel Company (PYA) distribution firm and merged it with Monarch Foods, forming PYA/Monarch. By 1982 the top five U.S. food distributors were PYA/Monarch, John Sexton & Company, Sysco, CFS Continental, and Kraft Foodservice, with combined sales of $4.8 billion.
In 1983 S.E. Rykoff purchased John Sexton and became Rykoff-Sexton -- the largest acquisition in the food distribution industry at the time. In 1989 some PYA/Monarch executives launched JPF Holdings, which acquired all of the stock of JP Foodservice Distributors. JP Foodservice soon became the #5 distributor, and went public in 1994. It had over 21,000 customers in 25 states.
The 1990s saw more major events. In 1992 U.S. Foodservice was formed. Within a few months Rykoff-Sexton bought Continental Foods and U.S. Foodservice. Rykoff-Sexton now operated foodservice distribution, private label manufacturing, foodservice contract and design, and foodservice equipment and supply divisions. In 1997 it acquired JP Foodservice.
In 1998 JP Foodservice, now a subsidiary of Ryker-Sexton, took over U.S. Foodservice’s name and began trading on the New York Stock Exchange. In 2000 it was acquired by global retailer Royal Ahold. At the end of that year, as a division of Royal Ahold, it acquired former sister company PYA/Monarch. It was then acquired by CD&R in 2007. In 2011, it changed its name to US Foods.
Logo © by Usfoods (Wikimedia Commons) under CC BY-SA 3.0
Benefits at US Foods
Business model of US Foods
Customer Segments
US Foods has a segmented market business model, with customer groups that have slightly different needs. The company targets its offerings at multi-unit and independent foodservice operations at hospitality, government, healthcare, and educational institutions.
Value Proposition
US Foods offers four primary value propositions: accessibility, cost reduction, risk reduction, and brand/status.
The company creates accessibility by providing a wide variety of options. It is able to offer numerous types of foods and food supplies because it is the result of dozens of acquisitions across its history. In late 2016 alone it acquired two food distributors: Save on Seafood and Jeraci Foods. US Foods’ “Chef’s Store” increases access by providing hundreds of products that cannot be found elsewhere.
The company reduces costs in a variety of ways. It leverages its national buying power to provide deals to its clients, including rebates, trial offers, and PowerBuy promotions, which sell brands offering national brand quality at value pricing. It announces new rebates and offers monthly.
The company reduces risk by maintaining high safety and quality standards. It places a strong emphasis on food safety, as demonstrated by the following:
- It has more Hazard Analysis and Critical Control Points (HACCP) certified workers than any other food distributor in the U.S.
- It was the first distributor to develop food safety training by job function
- It is the sole distributor to conduct external and internal food safety policy compliance oversight
- It pioneered the use of DNA testing to verify species of fish fillets received from suppliers and was the first food distributor to be certified as selling sustainable farm-raised and wild fish
The company has established a strong brand due to its success. It employs over 25,000 people in 60 locations nationwide. Its product portfolio includes over 350,000 items, including its exclusive Chef's Line brand and Rykoff Sexton, a premium line of specialty ingredients sourced globally. Its Culinary Equipment & Supplies division has 13,500 stocked items and ships more than one million orders annually. Lastly, it serves over 250,000 clients and generates $23 billion in annual revenues.
Channels
US Foods’ main channel is its direct sales team. The company promotes its offerings through its website, social media pages, and “Food Fanatics Live”, a series of culinary expos held in major cities.
Customer Relationships
US Foods’ customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. The company’s website features a “Your Business” section that includes tools and tips for foodservice firms on cost control, effective marketing, and improvement of business operations.
The site also provides helpful resources such as product videos, recipes, restaurant operator profiles, a “Farmer’s Report” discussing food trends, and access to a newsletter with fresh food ideas. Despite this orientation, there is a personal assistance component. Customers have access to Restaurant Operations Consultants, who can work one-on-one with them to enhance their business operations in areas ranging from waitstaff training to facility inspections.
Key Activities
US Foods’ business model entails distributing foods from third-party brands to its foodservice customers and providing associated services.
Key Partners
US Foods’ main partners are the suppliers that provide it with the materials and equipment it needs to manage its operations. It maintains a portal through which its suppliers can submit a claim, submit payment invoices, and complete online documentation.
Key Resources
US Foods’ main resources are its human resources, who include the direct sales staff members that obtain new clients and the consultants that assist customers with their operations.
Cost Structure
US Foods has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely sales/marketing, a fixed expense.
Other major drivers are in the areas of customer support/operations and administration.
Revenue Streams
US Foods has one revenue stream: revenues it generates from the sale of the products it sells to its customers.
