All righty, if we could just find our seats, we'll kick off our next presentation. It is my pleasure to introduce US Foods for the first time to CAGNY. Please join me in thanking US Foods for sponsoring the delicious lunch today. US Foods is a $16 billion market cap company that generated $38 billion in sales in fiscal 2024. It is the only pure-play U.S.-based broadline food service distributor of national scale. The company's differentiated go-to-market strategy focuses on the three most profitable customer types in the industry: independent restaurants, healthcare, and hospitality. The company is an industry leader in both digital and food innovation, providing its customers the right tools, resources, and products on time and in full. Please join me in welcoming US Foods Chief Executive Officer Dave Flitman, CFO Dirk Locascio, Randy Taylor, EVP Field Operations and Local Sales, and Mike Neese, SVP Investor Relations.
Dave, over to you.
Thank you, Andrew. Let me offer a warm welcome to start to those of you in the room and the many of you that have joined us by the webcast. As Andrew said, this is my first personal visit to CAGNY, as well as the first time our company has presented, and we are thrilled to be here with you this morning. If you're interested in our disclaimer, see Mike Neese later. I'm going to skip that. We are very excited to be here. We've got a lot of great information to cover for you today, and so why don't we just get right into it. There are five key messages between Dirk and myself that we're going to cover for you over the next 35 minutes or so. First, we embarked on a transformational journey about two years ago when I joined the company.
We've got a strong, seasoned leadership team. We're focused on customer-first solutions and, importantly, driving operational and sales excellence that is leading us to world-class execution. And what I mean by world-class execution is we are doing exactly what we say we're going to do. Second, as Andrew highlighted, we are a leader in what still remains a highly fragmented industry. We've got large national scale. We've got three targeted customer types that we're going to talk about this morning, and we are the digital leader in innovation. Importantly, we've got a simple but very effective four-pillar strategy that is driving both top and bottom line growth over time consistently, and that is a trend that you can expect to continue for a long time to come. We are the industry leader in digital, full stop, and that's a leadership position that we aim to maintain.
And finally, in June of last year, we rolled out our new three-year plan that just started in January of this year, and we expect to achieve our three-year long-term targets and deliver shareholder value creation for a long time to come. Importantly, and you'll hear Dirk talk about this, we are accelerating our free cash flow generation and deploying capital effectively to drive that shareholder value creation. We're excited to be here. Let's start with a quick video that shows you our ambition. I get charged up every time I see that video. There's a lot of things you probably don't understand yet about our company, not the least of which is we trace our roots back nearly 170 years to one of our founding companies, Reid Murdoch, who was born chasing dreamers in the California Gold Rush and supplying food and provisions to them.
Since then, we've built this great company into 30,000- strong associates. Importantly, you can see on the bottom left of this slide the national scale that we have. We have 75 distribution centers and, importantly, 23 meat cutting and seafood operations across the country, and the important part of that footprint is that we are in all the major MSAs across the country. We delivered to 250,000 customer locations across that footprint, and importantly, that leads us to only 10% market share. The TAM is large. We'll talk about that in a few minutes. We have great opportunity to continue to drive growth. The other important part about this industry is ourselves and our two large public peers only have about 35% market share. My point there is this remains a highly fragmented industry still to this day.
Secondly, the three targeted customer types that we have, independent restaurants, healthcare, and hospitality, happen to be the three most profitable segments of food service distribution, and that represents nearly 60% of all the volume that we sell in the company. In that bottom right slide, we have a portfolio of 80,000 products- strong. Importantly, the all-important center of the plate, protein and seafoods, now represents more than a third of everything that we sell to the marketplace. So I spoke about the transformational journey that we started two years ago. I just want to hit some of the highlights of that journey since I joined in January of 2023. One of the first things I did was reorganize my executive team to bring the voice of the field into the room with our executive leadership team.
That's done a number of things for us, but importantly, it's accelerated our speed of decision-making, and that's important in our business. Time matters. We've got a very strong and seasoned leadership team with more than 250 years' experience in this industry. As I highlighted earlier, we unveiled a simple four-pillar strategy that's proven quite effective in helping us execute better in a world-class way, and the four pillars of that strategy—and we'll talk about them later—are culture, service, growth, and profit. We're building on clear competitive advantages, and importantly, we are driving excellence across both sales and operations and a very strong partnership there, and wrapping that all in our digital capabilities. We're driving consistent execution that we've ramped up over the past several years, and finally, we are deploying our capital quite effectively to accelerate growth, drive M&A, and importantly, drive shareholder value creation.
Not only are we benefiting from the things that we control in our strategy, but we're benefiting from the long-term trend that you see on this slide. While it's only shown for the last decade or so, food away from home has actually been growing faster than food at home, at least since 1970, for all but a handful of years. That represents a strong tailwind to the industry, and importantly, this industry has proven quite resilient over multiple GDP cycles. Not only is the industry large, but it's growing. We've got a $370 billion TAM as of last year, and you can see those green circles in the middle is where we are focused. And where we are focused represents about 75% of the entire TAM of the industry.
Importantly also, that TAM is expected to grow over the next three years by about 20%, and 75% of that growth will come from the three targeted customer types that we're focused on. On the right-hand portion of this slide, you see the long-term volume targets that we laid out in our new strategic plan. You can see the growth rates there. But importantly, we have been and will continue to grow these three targeted segments at 1.5x to 2.5x faster than those industries' segments are growing. So let's look a little bit deeper at those three targeted customer types and some of our differentiation.
You can see on the right-hand side of this slide, it underscores the point that I made earlier that these are the three fastest growing, but importantly, most profitable segments of that $370 billion TAM that I mentioned earlier. So in independent restaurants, we have grown market share now for 15 consecutive quarters. That's driven by how we go to market and our competitive advantages, including our team-based selling model. We go to market with our outside sales force, but also a group of specialists that help support them depending upon what expertise they need to put in front of the customer. We've got a great and growing suite of Exclusive Brands. We'll talk about that a little bit later. And we wrap that all in our digital innovation and application called MOXē, which leads the industry, and we are the only one-stop shop for digital e-commerce in our industry.
And what I mean by that is whether you want to search our product line, see if we have those products in inventory, place an order, track your deliveries, pay your bills, fill out a credit app, there's one place for you to go. It makes it very easy for our customers to do business with us. Secondly, in healthcare, we've taken market share in healthcare for 17 consecutive quarters. We are the industry leader in the healthcare space. We've got a long-serving group of healthcare professionals on staff. Importantly, we have digital innovation in that space as well, and I'll just highlight VITALS, which is our tailored specific application that not only helps our customers understand nutritionals for their patients, but also helps them optimize their feeding costs and track all that real time. No one else in the industry has anything like VITALS.
And third, and importantly, is hospitality, where we continue to accelerate our growth in that segment. We leverage our strengths around technology and people and wrap that into long-term group purchasing organization relationships that we have that help us continue to accelerate our growth and, importantly, solve problems for that segment of the customer base. So let's zoom out a little bit here and talk about, at a high level, what differentiates US Foods in this industry. The first one is an important one. We're the only pure-play U.S.-focused food service distributor with national scale. Full stop. Our business model is simpler than some of our competition, but importantly, that allows our team to focus and execute quite well every day because they're not distracted by different business models. We're focused, we've got scale, and we're growing.
We've got that scale and a differentiated value proposition in the three fastest growing and most profitable customer types in the industry: independent restaurants, healthcare, and hospitality. We've got that proven go-to-market strategy that I mentioned earlier. We are the leader in digital innovation, and we continue to invest to maintain that industry leadership. I've spoken about our four-pillar strategy and the strategic playbook that we have. Number six is a very important one. Ours is very much a self-help story, and what do I mean by that? Whether it's growth, gross profit acceleration, operating expense productivity, we have initiatives in each one of those areas that help us deliver the outcomes that we commit to regardless of what's going on in the macro, and we expect that will continue for many years to come.
We believe, and we'll talk about it here, we've got the fastest P&L growth algorithm of anyone in the industry. And importantly, we have been compounding earnings per share growth at a much faster rate than EBITDA growth over the past several years, and that trend will also continue. And finally, we are accelerating our free cash flow generation. We expect to deploy more than $4 billion of cash over the next three years. And right now, we expect to deploy at least half of that towards share repurchases over the coming three years. So with that, let's shift gears and look a little deeper at our customer value proposition. And for that, we've got another quick video.
What's it take to run my kitchen? Come check this out. Hey, what's up, chef? Hey, what's going on? We good? Yes, chef. All right, let's go. Bring it. Yes, chef.
Food's huge for sure, but lean ground beef, chef. Order. I got you. You got to make it that easy to order too. I want beauties like that every single time. What I'm talking about. One stock to the all stock. I don't suck, man. I love you, baby. Where's Ed? Two chickens, two ribeye, one medium, one well. There it is. Behind. Behind. Okay, I got you. Menu check, chef. On the left. Oh. Bible. I got it. But isn't it my favorite sales rep. Yep, I see his pretty face right now. What's up, Pete? We got everything. Yes, chef. Got everything right here. On time as usual. Absolutely. All right. See you next time, 7:00. What's it take to run my kitchen? US Foods. We good? Yes, chef. All right, let's go.
We love our customers.
And importantly, our mission is to help them make it every day. And we do that by delivering more quality. We are a national leader with one-stop shop. But importantly, these Exclusive Brands that we have are a real differentiator for us. We'll do a little bit deeper dive on that here in a minute. But we've been at this for a very, very long time. It solves problems for our customers. These are high-quality foods that are cheaper for our customers and, importantly, more profitable for us. We wrap that all and deliver those products through an ongoing innovation process that we've been at for nearly 15 years that we named Scoop.
And importantly, in the spring and the fall, we bring out new innovative products every year for our customers based largely on their feedback and culinary trends that are going on not just in the U.S., but all around the world. We offer our customers more support. I mentioned our team-based selling, the way we go to market with restaurant operations consultants, a group of chefs, and importantly, specific product category specialists that support our outside sales force. We're the industry leader in technology. We love MOXē. We will continue to make it better. We've got that proprietary technology and are now embedding AI to help that tool make better product recommendations for our customers and, importantly, drive the outcomes that they're looking for. And finally, more deliveries.
We've been on a mission to accelerate our world-class service to our customers, and I'm very proud to stand here and tell you that in 2024, we achieved the highest service levels in our customer's history. That might not seem like much, but this is table stakes in an industry where deliveries matter. Getting your customers their product on time every time is really important. We've got a lot more work to do in that area, but I feel really good about the momentum that we have. We also deliver with flexibility. We're really excited about Pronto. Pronto is our small truck delivery service that we've had for a number of years, but just in 2024, we began to take that to our existing customer base. It's been designed in the small truck multi-temp compartments to be able to deliver more frequently fresh products that our customers need.
Importantly for us, it opened up a competitive piece of the market that we weren't able to attack previously, and that's specially suppliers. For us, we have all the products in our distribution centers. We just didn't have the route to market and the service model that they needed for those frequent deliveries. We're excited about that and the unlock that that will have for growth going forward. We exited 2024 with $730 million in annualized sales in Pronto and growing. We expect that to be a billion-dollar business in the not-too-distant future. Let's do a deep dive in a couple of areas here. I mentioned our Exclusive Brands. Very, very exciting for us. We have 2022, excuse me, Exclusive Brands, private label, approaching nearly 10,000 products now in our portfolio.
We've segmented those in good, better, and best depending upon what our customers' needs are at the time. As I said earlier, these are very, very high-quality products, and our customers love them. But the value proposition is on the right-hand portion of this slide. It starts with the fact that these are great quality products. Secondly, they are cheaper for our customers than manufactured brands, oftentimes significantly cheaper. Importantly for us, they're nearly twice as profitable as us distributing a manufactured brand to our customers. So it's really a win-win for our customers and for the company. Our Exclusive Brands are growing quite rapidly. In 2024, it represented over a third of everything that we sold inside the company and growing quite nicely, and importantly, in independent restaurants, we've penetrated that.
We exited 2024 at 53% of everything we sold to independent restaurants was an Exclusive Brand from US Foods. Excited about our portfolio. We will continue to grow it and make it better, and MOXē. I love MOXē. Our customers love MOXē. You can see the feedback there on the top of the slide. That was from a technical survey done in 2023. We'll get the 2024 data shortly. We are quite a bit ahead of our two large public peers in terms of digital e-commerce. Importantly, we achieved record penetration with our customers in 2024 across the company, 87% penetrated, but the real value you see at the bottom of this half circle. First, it drives productivity for our sellers.
If you think about the things that I described that MOXē does for our customers, it takes a big burden of chasing all that information down that our sales force used to do. I want our sales force going and solving the next customer problem, looking for that next increment of growth, not chasing a customer order. Secondly, we've been at this for two and a half years. We launched MOXē in the fall of 2022, and we've now got enough data that says that those customers stick with us on average 5% longer than customers that we haven't penetrated with that app. And secondly, on average, they're buying one and a half cases per order more than a customer who's not on that platform. It's a great tool for us. We will continue to make it better.
Let's step back and look at how we performed in 2024 versus that four-pillar strategy. I'm not going to read this slide to you, but there are a few important points that I wanted to make. First of all, under culture, we take the safety of our associates quite serious. I'm very proud that we had a 19% reduction in injuries last year or improvement in safety. That follows a year in 2023 where we improved by 23%. We've got two years now of significant safety improvement in the company. We donated more than $14.5 million to support our three areas of focus last year. Those are hunger relief, culinary education, and importantly, disaster relief. There were way too many disasters last year. Second point is service. This is where we've applied AI into MOXē.
I talked about reaching all-time service level highs with our customers, but we got to continue to make that better. One of the unique things that we did last year is we improved our delivery window accuracy, being able to tell our customers when our orders are going to show up so they can plan. We improved that by 30% using artificial intelligence, and you might think that's an odd application for artificial intelligence. However, what we proved through that deployment is that the tool is actually more capable and more accurate at telling our customers when we'll be there than our drivers are. Traffic patterns change every single day. The tool learns from that and gets better. Secondly, we delivered our best cases per mile productivity, delivery productivity in 2024 in our company's history, and we've continued to focus on that with rigor and discipline over time.
We've got a great process across the company, but last year, we overlaid a new technology called Descartes. We deployed that across a number of our locations and covered 50% of our routed miles last year. That will add a new increment of delivery productivity going forward to the company. In growth, I already commented that we've grown share with independent restaurants for 15 consecutive quarters, with our healthcare customers now for 17 consecutive quarters. I love Pronto, $730 million last year. We expect over the next three years or so that we'll reach $1 billion and north of that potentially, and finally, profit. We achieved record EBITDA of $1.741 billion last year, overachieved our last three-year plan. We delivered more than $120 million of operating expense productivity. We are on a mission to deliver 3%-5% annual productivity year-after-year.
Great companies drive growth, and they fuel a portion of that growth by getting more efficient at what they do every single day. And finally, the last important part of our strategy is M&A. And the way I think about M&A, and people hear me say this all the time, there's not one acquisition that we have to do. And why I say that is what you see on this slide is our investment criteria. And we will remain very, very disciplined on that. We are not going to chase acquisitions to do an acquisition. You saw our footprint. I love our footprint, 75 distribution centers all across the country. But there are opportunities for us to increase our local route density and take miles out of our delivery system. We've done four acquisitions in the last two years.
At the heart of each one of those was this criteria. One or a few locations in a geography that increases that density that I just mentioned. It's got to be a well-run company. It's got to have the right mix. You heard us say we're focused on independent restaurants. That's what we're going to go acquire. It's got to be the right cultural fit, importantly accretive to our financials. And we have funded each one of those so far out of free cash flow. On the right side, you've heard me talk about the fragmented nature of the industry. And why that's important is there are plenty of opportunities for us to continue to do these tuck-in acquisitions. Right now in our pipeline, we've got more than 100 capable of rolling up $15 billion of revenue. Now, we're not going to do all those deals.
But importantly, there are opportunities to do that day in and day out. And we will pull the right acquisitions through the course of time that make sense for our company. Dirk's going to get up here in a few minutes and talk to you about our current long-range plan, the one that just started in January. I think it's important to understand how we got to the point where we've got such tremendous confidence in our future. And that's based on the momentum that you see here. Over the last three years, we've accelerated our sales rate, and we've grown at a 9% CAGR. Importantly, we've leveraged that top-line growth to double that at the adjusted EBITDA line, 18% CAGR.
Because of that accretive way that we are deploying our capital to generate shareholder returns, we grew and compounded adjusted diluted EPS at an even faster rate than we grew adjusted EBITDA, 27%. That trend between growth of EBITDA to growth of adjusted diluted EPS accelerating faster will continue over this next three-year plan. What do those financial targets look like? This is what we laid out in June. Over the next three years, we're going to deliver a 5% top-line growth CAGR. We will leverage that to the bottom line at a 10% EBITDA growth CAGR. Importantly, we're going to improve our adjusted EBITDA margins through all that self-help that you heard me talk about by at least 20 basis points per year and leverage all that to approximately 20% annual adjusted diluted EPS CAGR over that period of time.
That is all wrapped in that $4 billion of capital that we have to deploy. That we expect to deploy $2 billion through internal investments and $2 billion to returning capital to shareholders through share repurchases. And with that, I'll turn it over to Dirk to dig into the financials in a little more detail. Thank you, Dave.
Good morning, everyone. I'm excited to talk about where we've been and where we're going, building on Dave's commentary. US Foods is delivering strong financial performance, and we're doing this based on the customer-focused strategy you heard Dave talk about, greater rigor throughout the business, and an intense focus on more effective execution. We're driving these results through that balance that Dave talked about of top-line growth, share gains, gross margin expansion, and operating expense productivity.
We're leveraging these earnings into strong cash flow that we can deploy against our capital allocation priorities. And finally, I'm very excited to just be beginning our new 2025 through 2027 long-range plan after successfully achieving our 2022 to 2024 long-range plan. Our expectation is we will continue to deliver the strong financial results that we have the last few years. And today, I'm going to talk a little more about the outcomes and the hows. Before I look ahead to the new long-range plan, I do want to spend a few minutes on our recent results and the long-range plan that we just achieved. So just last week, we released our fourth quarter and full year 2024 earnings. For the fourth quarter, it capped off a strong year for 2024. For the quarter, we delivered over 6% sales growth on about 3.5% case growth.
Importantly, we increased EBITDA margins by 30 basis points. And those together delivered almost 14% adjusted EBITDA growth and 31% adjusted diluted EPS growth. The full year was very similar with 6.4% sales growth on a little over 4% case growth. We again expanded adjusted EBITDA by 22 basis points, leading to almost 12% adjusted EBITDA growth and 20% adjusted diluted EPS growth. So you've seen a lot of that is through that self-help that Dave talked about through share gains, gross profit expansion, and operating expense productivity. So it was a strong finish to our three-year plan. I talked about the market share gains. You heard from that from Dave as well. I want to click down for a moment on the margin expansion. That margin expansion in EBITDA per case comes from gross profit growing faster than operating expense.
And that happens by driving improvement in gross profit and also driving operating expense productivity to offset a lot of the cost inflation we incur. You saw that come through in the fourth quarter with $0.19 per case increase in adjusted diluted or adjusted EBITDA per case and $0.14 for the year. Each of the last three years, we've improved margin and improved that EBITDA per case. And it's from those initiatives. So Dave and I, if you've listened to us at all in any of our conversations, we talk about self-help, control the controllables. It's not because they're like they're buzzwords we like to use. It's how we run the business. It's how our team runs the business. We're not the victims, and we can only control what we can.
And so that's been an effective way for us to deliver what we have delivered and what we expect to deliver over the next three years. So 2024, we are excited again to have wrapped up the 2022 to 2024 LRP, exceeding our $1.7 billion target, delivering just over $1.74 billion. We did that through these consistent share gains with independent restaurants, healthcare, and hospitality. We did that by driving over $230 million of cost of goods improvement. We did that by extending our leadership and technology, focusing on reducing our net leverage. We finished 2024 at 2.8 times, right within our two to three times leverage target. And we expanded adjusted EBITDA margin 100 basis points over these three years to 4.6%.
Hopefully what you're hearing and seeing across all the different levers to drive those improvements, all while focusing on the customer and improvement in the customer experience. We're growing earnings in a thoughtful, sustainable, and reliable way to continue that, growing adjusted EBITDA, as Dave mentioned, at an 18% CAGR, adjusted EPS at 27%. That is producing 1,300 basis points of improvement in return on invested capital. That return on invested capital holistic lens is important. It's how we think about the business, we will continue to grow our return on invested capital. In addition to the P&L, our strong operating cash flow combined with our healthy leverage profile allows us to execute against our capital allocation priorities of investing in the business for organic growth, returning capital to shareholders, and opportunistically pursuing M&A. All of this is while maintaining a very healthy balance sheet.
I mentioned that we finished at 2.8x levered in line with the prior year, and that's including in 2024 an acquisition as well as nearly $1 billion of share repurchases. I've talked a lot about the P&L, and we are focused on improving the P&L, but the last three years, we've been just as intensely focused on our capital structure and taken steps to thoughtfully manage our maturities proactively, as well as laddering future maturities as we've addressed debt. Our cash flow and capital are what allow us to continue to invest in this business, and our prudent capital allocation to invest for growth will work side by side with capital allocation to be accretive through returning shareholder capital to shareholders, so I've spent the time in the past. Now let's look forward.
Dave mentioned the algorithm: 5% net sales growth CAGR, 10% adjusted EBITDA CAGR, and 20% adjusted diluted EPS CAGR. So within EBITDA, that 10% adjusted EBITDA will produce $2.2 billion-$2.3 billion of EBITDA in 2027. That EBITDA will be a combination of volume growth from share gains and above-market growth with independents, healthcare, and hospitality, combined with 20+ basis points of EBITDA margin expansion. And that margin expansion is going to come from growing gross profit dollars 100-150 basis points faster than operating expense. Some of the things that are going to drive that value, some are similar to what we've done, some are newer. So within gross profit, we're going to continue with our cost of goods work, executing on another $260 million of savings over these three years.
Our next generation of pricing tool and process, expanding our capability with Stock Yards, which is our meat cutting facilities, which improves margin both from the capability and the mix. And finally, continued private label penetration, which are more profitable. On the OpEx side, it'll come through productivity both in supply chain, which is more than half of our cost base, as well as administrative and non-people costs. On the supply chain, it'll be things like the routing that Dave talked about and building upon that 2024 highest in company history cases per mile. It'll be things like continuing to work on flexible scheduling, reducing turnover. On the admin side, it'll be streamlining. On non-people spend or indirect spend, it's an over $1 billion spend category. We expect to generate $60 million of savings in 2027. We're well on our way. We delivered over $30 million in 2024.
This is a relatively newer muscle for us as a business. When I compare the cost of goods work, we've done this several times. We're well on our way. This is newer, but the team's off to a great start. So we have a high level of confidence in achieving this. Then how does that translate to adjusted diluted EPS? So adjusted diluted EPS, 20% growth, $5.20-$5.70 by 2027. Adjusted EBITDA will be the primary driver of that growth, but building on top of that will be the accretive impact of our significant share repurchases that Dave talked about. Again, prudently allocating capital. M&A will contribute both from an EBITDA and EPS perspective. As you heard Dave say, it'll be opportunistic and therefore much less of an impact than the organic activities that we're embarking upon.
We're going to continue to be thoughtful and prudent in allocating our capital and making it accretive to our earnings on top of our strong P&L results. So I've talked a lot about the P&L. Those strong earnings are going to generate, as Dave mentioned, $4+ billion of operating cash flow over this three years. We expect to deploy about 30% or over $1 billion investing back in the business for organic growth, about 20% or $250 million for a tuck-in M&A, and roughly half or $2 billion to share repurchases. We will continue to invest organically and inorganically for growth in a thoughtful way. The thing we like about the share repurchases and the tuck-in M&A is since you don't know exactly when the M&A is going to happen, you can toggle between them, both when we find the right transactions, good uses.
At the same time, we're going to continue to be very thoughtful and very disciplined in maintaining and managing our leverage ratio. Our expectation is to continue to work our way down in our target leverage range over this three years through earnings growth. We will be prudent and thoughtful in the way we allocate this cash capital. Hopefully, you see our strong cash flow and strong capital structure enable us to continue to invest in the business and return that capital to shareholders. Last week, we also gave specific guidance for 2025. It looks very similar to the three-year outlook with 4%-6% sales growth driven by 2%-4% overall case growth. Within there, and importantly, our independent restaurant case growth is expected to grow faster at 4%-7%.
You're going to continue to see margin expansion, and those will lead to 8%-12% adjusted EBITDA growth and 17%-23% adjusted diluted EPS growth. With that, I'm excited about what we've accomplished, and I'm even more excited about the new long-range plan that we're just embarking upon, and I'm confident in our ability to achieve it. So with that, thank you, and I'm going to turn it back to Dave to close this out.
Well done. We're excited. Hopefully, you sense that excitement between Dirk and I, and importantly, the momentum that we've got in the business. Let's just summarize quickly. We've got great momentum in the business. We're driving great balanced top line, bottom line growth. We're focused on operational and sales excellence.
We're enhancing our value proposition in a number of ways for our customers, both with our e-commerce platform, our suite of great quality private label brands, and importantly, world-class service to our customers. We're leveraging that robust cash flow generation and the very strong balance sheet we have to drive outcomes for our shareholders. That will continue over the next three years, and finally, we've got great confidence in delivering this long-term algorithm, the 5, 10, 20, 20 that you see on the right-hand side of this slide, and in the center of this page is why we've got such great confidence. We know where we're going. We've got a very deliberate, simple strategy, and importantly, in that outer ring, we know exactly how we're going to achieve those outcomes, and we've been doing it over the past three years. Love to have you as investors.
And with that, Andrew, let's open it up for questions. Lauren?
Hey, guys, thanks. So the restaurant backdrop has been challenging to start the year of macro, weather, other headwinds. If the macro remains challenging, what's your confidence in being able to hit the EBITDA and EPS targets? What levers do you have to pull to offset any of those top- line headwinds?
Yeah, we appreciate the question, Lauren. Obviously, there's been a challenge started last fall with some devastating hurricanes and some calendar shifts in weather this year. Importantly, we saw some increased momentum on our top line in January, as we spoke about last week on our call. Last year did not have any significant weather in February and March, and here we are with some significant weather this year. So it's been a little bit choppy.
I think underscoring all of that is we just delivered the long-range plan in a weak foot traffic year for restaurants last year, arguably the weakest foot traffic environment since the COVID recovery. That underscores the confidence that we have and what you've heard us talk about time and time again about the number of self-help levers that we have. It starts with our strategic vendor management work that we've delivered $230 million in our last long-range plan. We're confident in delivering $260 million this year and in the next two years. And importantly, we're accelerating our productivity muscle. That 3%-5% productivity that we brought to the company a couple of years ago, we're ramping that up. I would say we're in the early innings of that work. You heard Dirk describe some of it here, and that will continue.
So we've got enough self-help levers that we're confident that we're going to deliver. Jeff?
Thank you very much, Jeffrey Bernstein from Barclays. Just wanted to talk a little bit about the margin side of things. I think you mentioned over the past three years, you achieved over 100 basis points of EBITDA margin expansion, taking you from, I think, 3.6% to 4.6%. You talk about 20+ basis points a year going forward. Just wondering how you think about that over the next number of years. It's obviously a fairly thin margin industry. So unless there's some meaningful changes to the business, I think people start to question how many more years you have of potential that.
So I'm just wondering how you think about whether you could achieve 100 basis points over the next three years or where there's kind of a cap in terms of what's the biggest low-hanging fruit you think you have over the next few years to continue to deliver that outsized margin?
Yeah, appreciate the question. So we said we deliver at least 20 basis points per year over the next three years. That gets us to 60 or north of that basis points. And it's more of the same, Jeff. And what we didn't talk about in my response to Lauren's question is our ability to continue to shift the mix of the business towards our more profitable segments.
As we continue to take disproportionate share in independent restaurants and healthcare and hospitality, those three most profitable segments of the industry, that will naturally help us uplift our margins, continuing to accelerate our private label brands, more profitability for the company, cheaper and high-quality products for our customers, and then I won't repeat it here, but all the self-help initiatives that you've heard us talk about this morning, that's what gives us confidence that we will continue to expand that EBITDA margin.
Christina?
Dirk, on your slide that talked about the EBITDA progression, you said you're going to do some new things that you haven't done before, and I think you even had next-gen pricing. What is that, and can you expand on the new things?
Sure. In some cases, the new things are evolution of the old, such as our Strategic Vendor Management.
Even though we've done it several times, each time you don't just rinse and repeat. There's things you learn and/or address. So I'll just use an example where we haven't focused on our tail of vendors as much in the past. We've recently begun focusing on that. Similar, looking at formulations and standardizations of different products. So those are things we can do. Pricing optimization is a good one where it is updating our pricing engine or replacing it with a more nimble pricing engine. So it allows us to make sure that we're priced right with customers on the items we need to, but that we're also more consistent on the tail-end and lower margin customers where we have opportunities across there. So really leveraging the technology where it can.
The other thing that Dave talked about is embedding some of our MOXē, some of our tools, additional AI and capabilities that allow us to drive some incremental margin in those cases as those capabilities evolve. And that's really where, again, it's adding value to the customers. The other piece that's relatively new is the indirect spend. And really in the middle of 2023 and 2024 is when we really ramped up that capability. The team's off to a fast start, and we see a long runway there. So it's really in all areas of margin, gross profit, and OpEx, we have a number of those activities. And just to build on what Dave said, that is what gives us that strong confidence in continuing to deliver on the outlook that we provided for 2025 as well as the 2025 through 2027 period.
Thank you. Ann Gurkin with Davenport . I was wondering if I could learn a little bit more about your sales force and the need to add to the sales force, return on investment in sales force, retention rates, and any change of maybe incentives to drive further growth from the sales force. And then secondly, within your three-year outlook, have you issued a target for private label or Exclusive Brands penetration across your business?
So I'll take the second question first. No, we've not issued a target on private label brand penetration, but what we have said quite consistently is there's no ceiling that we envision to our ability to continue to penetrate our customers with our brands. As I said in my prepared remarks there, we're 53% penetrated with independent restaurants and have great, great momentum.
The first part of your question around the sales force, part of our model has been through the course of time to consistently add seller headcount to our company. Over the last two years, in 2023, we added 6% more sellers. Last year, we added 5% more sellers. So if you think about it, you get to route sizes that become unmanageable. And the way to deal with that is you split off a portion of that route, you give it to a new salesperson to allow them to seed some business to build a platform to grow from. And then that seller that you've taken that business away from now has the headspace to go drive new growth. So it's really a virtuous cycle, and we've been at it for a very, very long time. We made a small tweak to our sales compensation plan in 2024 in January.
What we did was we shifted more of our sellers' pay back to variable. So we're now 50% fixed and 50% commissioned with our sellers. That was something that we unwound a bit during COVID to protect our sellers. We went to more of a fixed base for them to retain them. And our retention rates are very strong and quite stable in the company.
Bryan Spillane, Bank of America. Thank you for the presentation and lunch later. One of the things we've heard this week from many companies, even across not just food and beverage, but even in some of the other categories, is just consumers being more choiceful on value and trying to find value price points.
So I guess as you are looking at your book of business and engaging with your customers, are you seeing in their ordering that consumer or requests from you looking for more value options, whether that's, I don't know, beef to chicken or different portion sizes or pack sizes? Just trying to understand if you're sort of sensing, right, that your customers are having to adapt to a consumer that's really looking for more value.
I'd say the best indicator that we've had of that, which is a great question, is the acceleration of our private label brands. Again, great quality food. They are cheaper for our customers. That gets passed through to the end consumer.
And those have really accelerated as our customers have felt the pressure coming out of COVID, not only food inflation, but labor inflation, interest rates being high, the rents that they pay on their locations being high. All of that is impinged on our customers and ultimately the consumer. And so it's been a great opportunity for us to lean in with our brands and importantly drive our differentiated selling model where we send our consultants in. Many of them are operators in the industry. It helps our customers take costs out of their back office. They understand the pains that they have every day. And then the culinary specialists that we bring in to optimize the portfolio of products. Importantly, we help our customers with menu design. How do you leverage one product between lunch and dinner and make it creative in something that's not stale?
Those sort of things, all of that wrapped together saves our customers a lot of money.
It's really where our team-based selling comes to life the best. We saw that coming out of COVID with all the inflation we had. And I'll just build upon your example there and proteins. As you have different proteins and see different levels of inflation, et cetera, our training teams are able to work with them. It's menu design, menu engineering in order to deal with some of the challenges they face every day. It's tough to be an operator. And our sellers can leverage those other team members and really help our end customers.