The Chefs' Warehouse Profile
The Chefs’ Warehouse, Inc. operates as a premier distributor of specialty food and center-of-the-plate products in the United States, the Middle East, and Canada.
The company is focused on serving the specific needs of chefs who own and/or operate some of the leading menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores in the United States, the Middle East, and Canada (collectively, the company’s ‘Core Customers’).
The company defines specialty food products as gourmet foods and ingredients that are of the highest grade, quality or style as measured by their uniqueness, exotic origin or particular processing method. The company’s product portfolio includes over 70,000 stock-keeping units (‘SKUs’) from more than 3,000 different suppliers and is primarily comprised imported and domestic specialty food products, such as artisan charcuterie, specialty cheeses, unique oils and vinegars, truffles, caviar, chocolate and pastry products. The company also offers an extensive line of center-of-the-plate products, including custom cut beef, seafood and hormone-free poultry, as well as produce and broadline food products, such as cooking oils, butter, eggs, milk and flour. When marketing the company’s products to its customers, the company focuses its efforts on chefs, and by offering a wide selection of both distinctive and hard-to-find products, together with center-of-the-plate proteins and staple broadline food products, the company is able to differentiate itself from larger, traditional broadline foodservice distributors, while simultaneously enabling the company’s customers to utilize the company as their primary foodservice distributor. Additionally, the company markets certain of its center-of-the-plate products directly to consumers through the company’s Allen Brothers, Inc. (‘Allen Brothers’) mail and e-commerce platform.
Excluding the company’s direct-to-consumer businesses, the company serves more than 44,000 core customer locations in the company’s twenty-three primary geographic markets across the United States, the Middle East, and Canada. The company maintains collaborative relationships with thousands of chefs while also acting as a critical marketing arm and route-to-market for many of the company’s suppliers by leveraging an experienced and sophisticated sales force of approximately 960 sales and customer service professionals. The company operates 52 distribution centers and provides service six days a week in many of the company’s service areas, utilizing its fleet of delivery trucks to fill the company’s customers’ orders.
Growth Strategies
The key elements of the company’s growth strategy are to increase penetration with existing customers; expand the company’s customer base within the company’s existing markets; and pursue selective acquisitions.
Markets and the Customers
The company distributes its specialty food products to over 44,000 distinct Core Customer locations from distribution centers located in the company’s primary markets, which include New York, Washington, D.C., Los Angeles, San Francisco, New England, Las Vegas, Miami, Portland, Columbus, Cincinnati, Chicago, Vancouver, Edmonton, Toronto, Seattle, Sacramento, Philadelphia, Texas, Denver, Dubai, Abu Dhabi, Oman and Qatar. Many of these markets set the culinary trends for the rest of the United States, Middle East and Canada; and provide the company with valuable insight into the latest culinary and menu trends. The company has established collaborative professional and educational relationships with some of the United States’ and Canada’s most demanding chefs, which allows the company to anticipate the needs of, and offer cost-effective food product solutions to, the company’s customers while allowing the company’s customers to locate ingredients that will enable them to create unique and differentiated menu items.
The company’s target customers include menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolateries, cruise lines, casinos and specialty food stores. The company’s Allen Brothers subsidiary markets certain of its center-of-the-plate proteins directly to consumers through a mail and e-commerce platform.
The company extends credit to virtually all of its Core Customers on varying terms. Most of the company’s customers have payment terms from 14 to 60 days.
Gourmet Food Products
The company strives to be the primary food source solution for the company’s customers, and to this end, the company offers its customers a comprehensive product portfolio that ranges from basic ingredients and staples, such as milk and flour, to custom-cut steaks, seafood, produce and pastries, as well as delicacies and specialty ingredients sourced from North America, Europe, Asia, Australia, and South America. The company carries more than 70,000 SKUs and the company is fully committed to utilizing its sourcing relationships and industry insights to procure products that the company does not regularly carry but that its customers specifically request as they seek to create unique and innovative menu offerings.
The company continuously evaluates potential additions to its product portfolio based on both existing and anticipated trends in the culinary industry. The company’s buyers have numerous contacts with suppliers throughout North America, Europe, Asia and South America; and are always looking for new and interesting products that will aid the company’s customers as they seek to keep up with the latest developments in the culinary industry. The company’s ability to successfully distribute a significant portion of the total production of smaller, regional and artisanal specialty food producers allows the company the opportunity to be these producers’ primary route-to-market in its markets without requiring the company to make contractual commitments regarding guaranteed volume. The company is also able to leverage its scale and successful track record of distributing products sourced from outside the United States and Canada to minimize importing costs.
The company carries a wide range of high-quality specialty food products, including artisan charcuterie, specialty cheeses, unique oils and vinegars, truffles, caviar, chocolate and pastry products across each of the company’s markets, but the company also offers a number of items in each of its respective markets that are tailored to meet the unique preferences of the individual chefs in that market. The company regularly rotates its inventory to identify and bring to market new products that will continue to support the company’s value proposition.
Within the company’s product offerings, the company carries numerous gourmet brands, and at the same time, the company seeks to maximize product contribution through the sale of the company’s proprietary brands, which the company offers in a number of staple products, including bulk olive oil, Italian grating cheeses and butter. The company’s ability to offer simultaneously high-quality specialty foods and ingredients, center-of-the-plate products, produce and more traditional broadline staple food products provides the company’s customers with foodservice distribution solutions that are efficient.
Sophisticated and Experienced Sales Professionals
The company employs a sophisticated and experienced sales force of approximately 960 sales and customer service professionals focused on meeting the company’s customers’ goals and objectives, while concurrently educating them regarding the company’s latest products and broader culinary trends. The company’s sales force is composed of the following three distinct groups which are all focused on providing outstanding service to the company’s customers:
Outside Sales Associates: Responsible for identifying sales opportunities, educating customers and acting as the company’s public representatives.
Inside Sales Associates: Responsible for processing customer orders and arranging for delivery and payment.
Product Specialists: Responsible for maintaining specialized product knowledge and educating the company’s outside sales associates and customers regarding new products and general developments in several specific categories, including meat, seafood, pastry and cheese.
A significant number of the company’s sales professionals have formal culinary training, degrees in the culinary arts and/or prior experience working in the culinary industry. The company strives to harness this culinary knowledge and passion for food and to concurrently promote an entrepreneurial working environment. The company has historically experienced low turnover among its seasoned sales professionals.
Because the company is highly focused on collaborating with its customers and educating them regarding the company’s latest products and broader culinary trends, the company views the ongoing education and training of its sales force as crucial to the company’s continued success. To ensure that the company’s sales professionals remain on the forefront of new culinary products and trends, the company regularly holds ‘vendor shows’ at its distribution centers, where the company’s sales force is able to interact with vendors and learn more about the vendors’ latest product offerings and the performance of these products relative to competitive offerings.
Regulation
As a distributor of specialty food products and meat and seafood in the United States and Canada, the company is subject to regulation by numerous international, federal, state, provincial and local regulatory agencies. For example, at the U.S. federal level, the company is subject to the Federal Food, Drug and Cosmetic Act, the Bioterrorism Act and regulations promulgated by the U.S. Food and Drug Administration (‘FDA’). For certain product lines, the company is also subject to the Federal Meat Inspection Act, the Poultry Products Inspection Act, the Perishable Agricultural Commodities Act, the Country of Origin Labeling Act and regulations promulgated thereunder by the U.S. Department of Agriculture (‘USDA’).
The products the company distributes in Canada are subject to regulation and inspection by Health Canada and the Canadian Food Inspection Agency. The company’s distribution operations in the Middle East are subject to regulation by municipal and local regulatory agencies including the Abu Dhabi Food Control Authority, the Ministry of Health in Qatar, the Centre for Food and Safety and Quality in Oman, and the Department of Food Safety in Dubai.
The company’s facilities are generally inspected at least annually by federal and/or state authorities. These facilities are also subject to inspections and regulations issued pursuant to the Occupational Safety and Health Act by the U.S. Department of Labor, which require the company to comply with certain manufacturing, health and safety standards to protect the company’s employees from accidents and to establish hazard communication programs to transmit information about the hazards of certain chemicals present in certain products that the company distributes. The company’s Canadian distribution facilities, repackaging activities and other operations also are subject to regulation and inspection by the Canadian Food Inspection Agency and provincial health authorities.
The company’s trucking operations are regulated by the Surface Transportation Board, the Federal Highway Administration, Transport Canada and Canadian provincial transportation authorities. The company is also regulated by the Dubai Road and Transport Authority, Abu Dhabi Transport Authority and the Ministry of Transport in Qatar and Oman.
Seasonality
The company’s Allen Brothers direct-to-consumer business is subject to seasonal fluctuations, with direct-to-consumer center-of-the-plate protein sales typically higher during the holiday season in the company’s fourth quarter (year ended December 2023); accordingly, a disproportionate amount of operating cash flows from this portion of the company’s business is generated in the fourth quarter. Despite a significant portion of these sales occurring in the fourth quarter, there are operating expenses, principally advertising and promotional expenses, throughout the year.
History
The Chefs’ Warehouse, Inc. was founded in 1985. The company was incorporated in 2005.
