Goodwill and Other Intangibles

12 Months Ended

Dec. 28, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLES

Goodwill includes the cost of acquired businesses in excess of the fair value of the tangible and other intangible net assets acquired. Other intangible assets include customer relationships, amortizable trade names, the brand names comprising the Company’s portfolio of exclusive brands, and trademarks. Brand names and trademarks are indefinite-lived intangible assets and, accordingly, are not subject to amortization, but are subject to impairment assessments as described below.

Amortizable customer relationships, trade names and noncompete agreements are intangible assets with definite lives, and are carried at the acquired fair value less accumulated amortization. Customer relationships and amortizable trade names are amortized over the estimated useful lives (which range from approximately 3 to 15 years). Amortization expense was $54 million, $46 million and $45 million for fiscal years 2024, 2023 and 2022, respectively. The weighted-average remaining useful life of all definite lived intangibles was approximately eleven years as of December 28, 2024. Amortization of these definite lived intangible assets is estimated to be $55 million for each of fiscal years 2025, 2026, 2027, 2028 and 2029, and $292 million in the aggregate thereafter.

Goodwill and other intangibles—net consisted of the following:


	December 28, 2024		December 30, 2023
Goodwill	$	5,781	$	5,697
Reclassification to assets held for sale(1)	(15)		—
Total Goodwill	$	5,766	$	5,697
Other intangibles—net
Customer relationships—amortizable:
Gross carrying amount	$	798	$	715
Accumulated amortization	(241)		(189)
Net carrying value	557		526
Trade names—amortizable:
Gross carrying amount	4		4
Accumulated amortization	(2)		(2)
Net carrying value	2		2
Noncompete agreements—amortizable:
Gross carrying amount	8		4
Accumulated amortization	(2)		—
Net carrying value	6		4
Brand names and trademarks—not amortizing	271		271
Total other intangibles—net	$	836	$	803
1. Relates to the reclassification of goodwill allocated to the planned Freshway divestiture. Refer to Note 5, Acquisitions and Held for Sale for additional information.

The increase in goodwill is attributable to prior period acquisition purchase price adjustments and the IWC Food Service acquisition in the second quarter of fiscal year 2024. The increase in the gross carrying amounts of customer relationships is attributable to both prior period acquisition purchase price adjustments and the IWC Food Service acquisition. The increase in the gross carrying amount of noncompete agreements is attributable to the IWC Food Service acquisition. See Note 5, Acquisitions and Held for Sale.

The Company assesses for impairment of intangible assets with definite lives only if events occur that indicate that the carrying amount of an intangible asset may not be recoverable. The Company assesses goodwill and other intangible assets with indefinite lives for impairment annually, or more frequently if events occur that indicate an asset may be impaired. For goodwill and indefinite-lived intangible assets, the Company’s policy is to assess for impairment as of the beginning of each fiscal third quarter. The Company completed its most recent annual impairment assessment for goodwill and indefinite-lived intangible assets as of the first day of the third quarter of fiscal year 2024, with no impairments noted.

For goodwill, the reporting unit used in assessing impairment is the Company’s one business segment as described in Note 23, Business Information. The Company performed the annual goodwill impairment assessment using a qualitative approach to determine whether it is more likely than not that the fair value of goodwill is less than its carrying value. In performing the qualitative assessment, the Company identified and considered the significance of relevant key factors, events, and circumstances that affect the fair value of its goodwill. These factors include external factors such as market conditions, macroeconomic, and industry, as well as entity-specific factors, such as actual and planned financial performance. Based upon the Company’s qualitative fiscal 2024 annual goodwill impairment analysis, the Company concluded that it is more likely than not that the fair value of goodwill exceeded its carrying value and there is no risk of impairment.

The Company’s fair value estimates of the brand names and trademarks indefinite-lived intangible assets are based on a relief from royalty method. The fair value of these intangible assets is determined for comparison to the corresponding carrying value. If the carrying value of these assets exceeds its fair value, an impairment loss is recognized in an amount equal to the excess. Key assumptions used in the relief from royalty method included the long-term growth rates of future revenues, the royalty rate for such revenue, and a discount rate. These assumptions require significant judgment by management, and are therefore considered Level 3 inputs in the fair value hierarchy. Based upon the Company’s fiscal year 2024 annual impairment analysis, the Company concluded the fair value of its brand names and trademarks exceeded its carrying value.

Due to the many variables inherent in estimating fair value and the relative size of the recorded indefinite-lived intangible assets, differences in assumptions may have a material effect on the results of the Company’s impairment analysis in future periods.