Hf Foods Group (NASDAQ:HFFG) executives highlighted a year of investment and continued growth during a conference presentation, discussing market conditions, operational initiatives, and their approach to acquisitions as they look toward 2026 and beyond.
Restaurant demand, tariffs, and 2025 performance
CEO Felix Lin said the broader restaurant industry saw lower foot traffic pressure, echoing commentary from larger foodservice distributors. HF Foods was not immune to those conditions, but Lin said the company still delivered growth in 2025.
Within that environment, Lin said HF Foods grew revenue in the “single digits” and that EBITDA increased by almost 7% year over year in 2025.
Independent vs. chain dynamics
Asked about differences between independent restaurants and chains, Lin focused on margin structure. He said large chain accounts often negotiate aggressively and pressure distributor margins, which he suggested is one reason larger distributors have been trying to increase their exposure to independents. Lin said independent restaurants generally allow for higher margins than chains.
Lin also addressed the traffic weakness that emerged early in 2025, saying trends have “somewhat normalized” as the company laps that period. Looking to 2026, he said HF Foods is still targeting a “low- to mid-single-digit” growth opportunity, with expectations that pricing will play a larger role amid competitive pressure.
Investments in capacity, sales, and systems
Lin described 2025 as a significant investment year and said the company’s focus is shifting toward leveraging those investments through higher volume and “higher share of the wallet,” along with renewed attention on M&A.
In the Southeast, Lin said HF Foods opened a new facility and doubled ambient storage space. He said additional cold-storage investment—described as “phase two”—is expected to come online in the next few months. The added cold storage is intended to enable cross-selling, since the company historically had limited ability to serve frozen products in the region.
Lin contrasted that with the Midwest, where the company has sufficient cold-storage capacity but needs more ambient space. He tied both efforts to what he described as a $200 million to $300 million organic growth opportunity over the next several years, driven in part by expanding frozen product capabilities in the Southeast and ambient capacity in the Midwest.
Lin said frozen seafood is already a large category for the company, describing it as a business of more than $400 million and “a little bit over one-third” of overall revenue. He also said HF Foods serves a little over 15,000 accounts out of an estimated 94,000 independent restaurants in its addressable market, which he described as roughly 16% share. Lin added that early-year new account acquisition in the Atlanta market had been “fairly positive,” citing mid-single-digit account growth in the first couple of months—before adding expanded seafood capability.
On marketing, Lin said the company has historically relied on reputation and word of mouth and had effectively spent “$0” on marketing over 30 years. With newly added capacity, he said HF Foods is now pursuing marketing efforts aimed at account acquisition, including positioning itself as a broader Asian specialty provider and potentially expanding into Asian groceries and adjacent ethnic categories.
Lin also discussed salesforce changes in the Southeast. He said the company consolidated an outsourced call center into an in-house operation to improve control over incentives, promotions, and pricing. He acknowledged a learning curve given the company’s product breadth—more than 20,000 SKUs—and said the transition was two months in and going well.
Separately, Lin said HF Foods completed an ERP implementation across 16 sites in a nine-month period with “zero days of disruption,” following nearly two years of planning. He said the system is expected to support better purchasing consolidation and operational efficiency initiatives such as route optimization, with more benefits expected to show up in 2026. He noted that true year-over-year financial comparisons would be clearer in the second half of 2026 given SKU rationalization and re-bucketing.
M&A pipeline and competitive positioning
Lin said the company’s acquisition pipeline increased over the past 12 months and suggested valuations have become more attractive as smaller competitors face macro pressure. He described many targets as smaller, first-generation operators getting “squeezed,” which he said could present opportunities at better multiples than a year earlier. Lin also said acquisition discussions are largely inbound and that HF Foods views itself as an “acquirer of choice,” while emphasizing the company intends to remain disciplined and ensure acquisitions “check all the boxes.”
Lin said the company’s organic and inorganic strategies are interconnected, noting that an acquisition could add capacity in a region and alter organic investment plans. He added that HF Foods recently acquired its Chicago facility and expects Midwest initiatives to begin materializing in the second half of 2026, before expanding to other Midwest regions.
On competition, Lin argued HF Foods does not directly compete with broadline distributors because of cultural and product specialization, citing a portfolio where roughly 10,000 SKUs are Asian specialty items. He also said HF Foods has coast-to-coast coverage serving “95% economy in the U.S.” and described the company as the only national player with that coverage in its niche. Against smaller regional competitors, Lin emphasized scale, pricing, and service advantages, and said he sees potential for margin improvement through purchasing synergies when acquiring smaller distributors.
Lin also said there could be partnership potential with larger strategic players interested in entering Asian specialty in a meaningful way, noting publicly stated interest from larger companies and suggesting a partnership could create synergies.
Pricing, fuel costs, and insider buying
In response to a question about fuel cost inflation and the ability to raise prices when restaurant traffic is pressured, Lin said HF Foods’ customer retention is “upwards of 90%+,” compared with what he described as an industry range of 60% to 70%. He said the company prioritizes long-term relationships and monitors competitive dynamics, and that it is not quick to impose fuel surcharges on independents, where such fees are less common than in chain contracts. He pointed to the company’s approach during tariffs, when he said close to 100% of the impact was passed through, split between vendors and customers after active discussions.
To close, Lin addressed recent open-market share purchases by executives, saying he has been buying shares for five consecutive quarters since stepping into the CEO role. He attributed weak stock performance in part to limited public liquidity and emphasized what he described as the company’s long-term runway and the difficulty of entering the niche. Lin also cited 2025 EBITDA of roughly $45 million and said he believes the company’s market capitalization does not reflect the value of the business, adding that management remains focused on executing its multi-year strategy.
About Hf Foods Group (NASDAQ:HFFG)
HF Foods Group, Inc, together with its subsidiaries, manufactures, imports and distributes a variety of ethnic and specialty food products primarily for retail and foodservice customers in the United States. The company focuses on value‐added fresh and frozen offerings that cater to growing consumer interest in Hispanic and other global cuisines. Its vertically integrated operations include in‐house manufacturing, procurement of specialty ingredients, and third‐party distribution partnerships.
The company’s product portfolio spans a broad range of categories, including fresh and frozen tamales, enchiladas, empanadas, tortillas and quesadillas, as well as shelf‐stable salsas, sauces, dips, spreads and snack items.
