Chris Pappas: Yes. Thanks, Andy. Every market is unique, right? So obviously, New York is our first business and our biggest market and our biggest business out of one Opco, right? San Francisco is quite big when you look at all the businesses that we own. So each — we go through a very, very thoughtful process before we make an acquisition. And as you know, you’ve been following us for a long time. To get the footprint, we’ve had to it’s much more effective unless you’re annexing the market next to you, which is typical in the distribution business, right? If you’re a typical distributor, which we’re not, we always say we’re a marketing company that also distributes and that’s our strength, right, with over a thousand of our own vehicles in the streets every day.
We control most of our own destiny bringing these wonderful products to market. So, in the case of Texas, since we’re talking about it, the thought process of we know Texas is going to be a big market. Obviously, a lot of people have moved to Texas and continue to move to Texas for various reasons in the past 5, 6 years. More of our customers are opening to Texas. They want us to serve them there. And now we have an Allen Brothers cut shop facility which is doing phenomenal. We have a Chefs’ Warehouse which we put together with some small acquisitions just to get enough business to get the warehouse moving. We bought some noncore businesses, but that’s when we realized what an opportunity it was because there really was nobody in Texas to buy who was like — that’s always the great thing is there’s nobody like Chefs’ really that puts the amount of 2,000 artists and vendors from around the world together in one building and has the logistical expertise and the ability to train a sales force, which does take time.
So really, when we looked at Hardie’s, they were not at Chefs’ Warehouse, their margins weren’t, their bottom line wasn’t anywhere near Chefs’ Warehouse. But over the next 5, 10 years, we continue to — it was a great company. We’re changing the way they go-to-market. We’re selling more and more independent restaurants. We’re starting to add Chefs’ Warehouse products to their trucks and that’s really the March. And you’ve watched us do this year — for many years right now. And as we grow — as we did in New England, New England was similar, we bought Sid Wainer, a great company, great people and we kind of shrunk their business and we’re growing them more as a Chefs’ Warehouse with more of our products on their trucks and they’re starting to look more and more like a Chefs’ Warehouse, right?
They’re marching towards the EBITDA margins that we expect in our businesses. And I think that’s what you’re going to start to see in Texas and in most markets where we’ve made these investments. So, it’s pretty exciting times. I always look at it as we own a bunch of stadiums and the stadiums are doing great and you have to add more seats to do more business. And as you’re adding and building those seats, it costs money. It’s a drag on your overall percentage when you look at your capital. But as the stadium seats start to open and you start to fill them, you start to get a great return on your investment. And I think that’s the way we look at it.
Operator: Our next question comes from Peter Saleh of BTIG.
Peter Saleh: Congrats on a strong quarter. I didn’t want to ask about, I think in the past we were talking about how some of the less mature markets like Texas and/or Florida, your customer buys less of their needs from Chefs’ versus some of the more mature markets like New York City. Are you starting to see some evidence now that given the investments you guys have made and some of the organic growth that you’re seeing, some of these customers are starting to tick up their purchases from you in terms of their needs? Is that percentage of their needs ticking up? Are you seeing any evidence of that?
Chris Pappas: Thanks for the question, Peter. Yes, absolutely. I couldn’t be more optimistic than I am right now that things are going as planned. Everything takes a little time, right? You got to get your systems in, the warehouse set up and we are still in the first inning. But Florida is growing at a very rapid pace and every day we are selling more and more items to the customers that we had as we start to fill up the warehouse. Florida is going to be top four markets over the next five years and so is Texas. Texas is taking a little longer because we didn’t have the facilities. We’re operating at a multiple facilities right now, as we’re starting to figure it out. You got Austin, you got San Antonio, you got Dallas, you got Houston.
It’s a very large place. It’s a country in itself. But every day the team is making headway as sales people start to get comfortable with the thousands of items. Even though we hire a lot of chefs who understand food, it’s really understanding how to go-to-market, sell against your competition. But the reason we’ve made these investments is we are so encouraged to see the reception we get, when we start to enter a market and you’re hitting on two probably of our big long-term growth markets, Texas and Florida. And absolutely we’re starting to sell more items to these customers.
