1998 Annual Report
Variety and Convenience for a Busier World
| Whether dining in an upscale restaurant or picking up pasta as the
entree for a meal at home, people spend less time on food preparation than
ever before. They want variety and flavor in the foods they choose to eat,
yet their time to prepare meals is constantly in competition with work
and leisure activities. More than ever, people are turning to meals prepared
away from home for greater convenience, quality and, most of all, choice.
More than 65 percent of restaurant customers in an industry survey agree that food served at their favorite restaurants affords flavor and taste sensations they cannot easily duplicate at home. Fortunately, from Szechwan to sushi, diners need not go shopping and spend a lot of time in the kitchen. Their favorite foods are being prepared around the corner - or in the plant cafeteria. Even schools and hospitals seek to offer a broad choice of fresh, flavorful and trend-conscious foods to consumers. Moreover, restaurants provide an experience that often focuses as much on atmosphere and the pleasure of being served as the food itself. At all income levels, restaurants are likely to cater to their patrons' notions of fun and enjoyment as well as their dining tastes. It is hardly surprising then that the average person spends nearly 50 percent of the food budget on meals prepared away from home, up from 38 percent in the early 1970s. Correspondingly, the foodservice industry has grown at a real rate of 2 percent to 3 percent annually. Distributor sales have risen from $15 billion in 1970 to more than $158 billion in calendar 1997. The industry is very fragmented and, although competitors number more than 3,000, continues to consolidate. SYSCO, with $15 billion in sales, is nearly three times larger than its next competitor and larger than the next four broadline competitors combined. Despite its size, SYSCO enjoys only a 9 percent market share. The Company's real annual sales growth consistently outpaces industry growth because SYSCO supplies quality products, dependable delivery and services that help its customers devise better menu choices. From a line of gourmet coffees for an upscale bed-and-breakfast to pre-portioned, pre-sliced deli meats for a cafeteria, SYSCO distributes 275,000 products to restaurants, schools, resorts, hospitals, long-term healthcare facilities and hotels, as well as other foodservice locations. Moreover, the company works with customers and thousands of suppliers worldwide to forecast changing tastes and offer consumers the food choices that meet their needs for quality, convenience and variety. |
It is a trend that started in World War II as women began to work outside
the home. Business cafeterias, coffee shops, school lunchrooms and restaurants
broadened the range of dining choices for people who were used to much
simpler fare. Twenty-five years ago, not many consumers could have identified
kiwi fruit. During the past three decades foodservice offerings have moved
from fruit cocktail with a cherry on top to kiwi and other exotic fare;
from steak and potatoes to fajitas with all the trimmings. Consumers have
become accustomed to meals that require many ingredients and offer new
textures as well as exciting color and flavor combinations. Indeed, they
rely on dining-out experiences to learn about new foods, but usually have
less time or resources to prepare those foods themselves.