Why Fiesta is consolidating its food distribution

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Consolidation of Fiesta’s food distribution

Fiesta Restaurant Group, Inc. (FRGI), parent company to Pollo Tropical, Taco Cabana and Cabana Grill restaurant brands, consolidated all its food distribution under the Performance Food Group (PFG). Taco Cabana restaurants have used a different supplier for the past 20 plus years, so this marks the first time that that Pollo Tropical and Taco Cabana are using the same distribution company.

Restaurant industry sales

PFG partnership will benefit Fiesta Restaurants

PFG has been serving Pollo Tropical restaurants for eight years. Fiesta’s exclusive partnership with PFG will allow the growing brands to share a national distribution system and freight consolidation, which will create money-saving and quality-enhancing efficiencies.

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PFG has been an excellent partner for Pollo Tropical and the company has helped Fiesta expand inside and outside of Florida. Fiesta vice president of supply chain management, Joe Brink, commented that with Pollo Tropical growing rapidly in Texas and at the same time building the elevated Taco Cabana concept in the Southeast with Cabana Grill, centralized distribution is key for company growth. This key move further positions Fiesta for long-term growth.

Fiesta’s future outlook

“Joe Brink continues to deliver strategic wins that help the company serve the freshest foods while continuing to grow the system,” said Fiesta President and CEO Tim Taft. This consolidation is further evidence of the significant role that supply chain plays within Fiesta Restaurant Group.

Fiesta further maintains that PFG is better equipped to accommodate its growth plans as it executes expansion strategies. Similar to Fiesta’s agreement that standardized Coca-Cola as its system-wide beverage supplier earlier this year, Fiesta believes that its enhanced partnership with PFG will lead to a significant strategic win.

Fiesta peers include Chipotle Mexican Grill, Inc. (CMG), Jack in the Box Inc. (JACK), Yum! Brands, Inc. (YUM), and McDonald’s Corporation (MCD). Investors can access the restaurant industry via exchange-traded funds (or ETFs) like the PowerShares Dynamic Leisure and Entertainment ETF (PEJ) and the PowerShares Dynamic Food & Beverage ETF (PBJ).

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