1998 Annual Report
Supporting The Best Business Choices
 With
operations throughout the continental U.S. and portions of Alaska and Canada,
SYSCO is of a size and financial strength that allows significant product
and service consistency as well as cost savings. SYSCO is an immense North
American enterprise, yet the majority of its business activity is of a
very personal and local nature.
Each of the company's operating subsidiaries is managed independently to address local market and delivery needs. Its product line is customized to the 10,000 to 16,000-plus items that are important to customers within its service area, often about a 100-mile radius. This entrepreneurial approach reflects SYSCO's geographic expansion since 1970 through both the acquisition of premier foodservice distributors in major cities nationwide as well as "fold-outs" in strategic locations. Each acquisition has enhanced local flexibility while preserving the entrepreneurial edge that allows SYSCO to maintain outstanding service levels - consistent, accurate, on-time deliveries that help customers reduce "safety stock" supplies and keep their businesses running smoothly. The "fold-out" expansion strategy is an alternative to acquisitions that allows the company to enhance service levels by building its own warehouse complex in an established market that is currently being serviced by an existing SYSCO company located some distance away. With a sales base of at least $100 million in the new market, and marketing associates and truck drivers domiciled in the new area as well, opening a new "fold-out" facility is usually a more seamless transition and less disruptive than a typical acquisition. Since 1995, SYSCO has opened two "fold-out" operations in Florida, one each in Connecticut and Wisconsin and a "fold-out"/relocation in Charlotte, N.C. Additional "fold-outs" in San Diego, California and Birmingham, Alabama are currently under construction. In addition to the enhanced focus on marketing associate-served customers, SYSCO addresses product needs of national chain restaurant customers through The SYGMA Network, Inc., its subsidiary that specializes in chain restaurant distribution. SYGMA operates 12 distribution centers nationwide to fulfill the requirements of large, multi-unit accounts, such as the recent addition of approximately $600 million in annual business from Wendy's International, Inc. that was awarded to SYGMA. The new service began in August and will be implemented over a four-to-six month period, adding 1,700 stores to the 1,100 SYGMA previously served and increasing the Wendy's business to a total of $1 billion. No matter the customer's size, SYSCO always seeks to present chefs with choices that make good business sense for their operations. Arranging an emergency delivery of fresh Angus beef steaks, discussing inventory controls or consulting on the development of a new menu to boost take-out revenues is typical for SYSCO's 6,300 marketing associates. Trained to focus on customers' needs and to offer a range of choices in products and services, they help SYSCO's 300,000 customers become more successful each day. Convenience products are typical of efforts to trim costs and improve quality. Produce frequently is delivered pre-washed, pre-shredded, peeled, sliced or diced to reduce handling, cut waste and improve safety. Fortunately, the pre-processed and pre-cooked foods available now are far better than the prepared foods of the 1970s, which were primarily frozen vegetables or meats. Gourmet chefs often prefer many of today's prepared items. SYSCO's offerings include delicious heat-and-serve soups, gumbos, sauces and side dishes, boil-in-the-bag pastas and entrees, and frozen pastries and cakes that meet the standards of even a fine-pastry chef. On certain products like the Brandables line, SYSCO also includes training, uniforms and manuals on how to prepare, plate and serve time-saving items. One of the greatest concerns today in handling and serving food is food safety. SYSCO actively works with major industry groups to set safety standards. The company also conducts training programs for restaurant managers, who can then educate their own employees, thus expanding the knowledge base of safe food handling techniques. The course includes in-service videos on such topics as employee hygiene, food storage, and safe preparation and serving techniques - all issues that can ultimately affect a customer's business. Acting as a consultant as to what's available from suppliers also is part of each marketing associate's role. The local sales person - laptop in hand - can advise a customer which menu items are in popular demand. The marketing associate may even coordinate the resources to help create a restaurant from the ground up, supplying menus, marketing support, interior design, furniture, glassware, tabletop items, kitchen equipment and wait-staff training as well as the food. Consumers want value for their money, so restaurants are continually challenged to strike the right balance of quality food, atmosphere, service and cost. SYSCO contributes strategic information that helps make those decisions easier. Revamping a menu can trim costs substantially. Selecting the right products also is essential. SYSCO recently completed total yield comparisons on a variety of SYSCO Brand products, such as canned peaches and diced tomatoes, to provide statistical data indicating that SYSCO Brand products can boost savings on customers' overall food costs. This type of information allows customers to make informed - and better - choices about their businesses. |