After the breakup: US Foods CEO Pietro Satriano on how the company has moved on from failed Sysco merger

 

Greg Trotter, Chicago Tribune

Mar 12, 2018

 

Just a few years ago, Rosemont-based US Foods wouldn’t have sold brisket that had been braised and smoked for 13 hours to its restaurant customers. It would have sold them slabs of raw brisket.

 

Likewise, in the not-so-distant-past, the second-largest food service distributor in the country wasn’t selling cake made with fair trade chocolate and bananas certified by the Rainforest Alliance.

 

The point? US Foods is increasingly seizing upon food trends to grow its business with independent restaurants, according to CEO Pietro Satriano. Customers are willing to pay more for products they consider to be healthier, more natural and sustainably sourced. And US Foods, which employs about 1,400 people at its Rosemont headquarters, is growing its menu of products that align with those trends, while also appealing to restaurants feeling the pressure of rising labor costs.

 

“Being a restaurateur is a tough business. … We say to the customer, ‘Yes, you can make the brisket yourself but how long is that going to take you? And is that how you’re going to differentiate?’” said Satriano, 55, who lives in Winnetka with his wife, Mary Kelly, and three sons.

 

Last year, US Foods’ sales were about $24.1 billion, an increase of more than 5 percent from $22.9 billion in 2016, according to its annual report. But Satriano said the more important figure is the 4 percent year-over-year volume growth in sales to independent restaurants, the fastest growing segment of the business.

 

It’s been a whirlwind few years for US Foods. The company’s planned merger with Sysco, the No. 1 player in the field, fell apart in 2015 after the Federal Trade Commission sued to block the deal, alleging the combination would violate antitrust laws.

 

Following that setback, US Foods launched an initial public offering in May 2016 before becoming a fully publicly owned company in December of last year, following the exit of its largest private equity shareholders. The following interview has been edited for length and clarity.

 

Q: How has US Foods changed since the merger with Sysco fell apart in 2015? ...

 

Q: What was the company’s focus before 2011? ...

 

Q: What led to the planned merger with Sysco? ...

 

Q: What was the reaction internally when the deal was called off? ...

 

Q: What’s contributing to the growth in sales to independent restaurants? ...

 

Q: The products with premium attributes bring better profit margins too, right? ...

 

Q: Would US Foods again consider a big merger, like the planned tie-up with Sysco or some other major distributor? ...

 

Q: How are some of the recent freight challenges in the industry affecting US Foods on a day-to-day basis? ...

 

Q: What’s the significance of the company being completely publicly owned at this point? ...

 

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