FOLD-OUT
STRATEGY
SYSCO'S internal growth strategy involves building distribution centers
in established markets that previously were being served by another
SYSCO company from a distance. When a "fold-out" company is formed,
domiciled sales and delivery personnel become employees of the new company,
a core management team is transferred from the original or other companies
and additional employees are hired locally. Supported by a state-of-the-art
facility and the SYSCO Uniform System, the new company is better able
to serve its customers and SYSCO grows more rapidly in both the original
and the "fold-out" markets.
FOODSERVICE
DISTRIBUTION MARKET
The total dollar purchasing volume of food and related nonfood products
by every type of operation preparing food in the "away from home" market
including restaurants, delis, hospitals, retirement homes, schools,
colleges, hotels, cruise lines, entertainment facilities and other locations.
This market is served by three distributor categories, as defined below:
•
Broadline
Distributors
supply a wide array of food and related items to all types
of foodservice operators. These operators generally require a broad
spectrum of products and their menu offerings may change frequently.
SYSCO's 62 "traditional" operating companies are broadline distributors.
•
Customized
or Systems Distributors, also known as chain restaurant
or quick-service restaurant distributors, supply chain restaurant operations.
This customer segment generally serves a relatively fixed menu and requires
a more limited product line. The SYGMA Network, Inc. (SYGMA) is a systems
distributor.
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•
Specialty or Niche Distributors specialize in supplying
a specific product category or a specific customer segment such as ethnic
foodservice restaurants. FreshPoint, Inc. and SYSCO's custom-cutting meat
companies are specialty distributors.
MARKETING
ASSOCIATE
This is SYSCO's term for its 7100 commissioned sales professionals, or
relationship managers, who provide customers with services tailored to
undergird their operations and profitability. Their responsibilities include
assuring that orders are submitted timely and completely, presenting new
products that will enhance the customer's menu or reduce the labor required
for preparation and assisting with inventory control or menu costing and
pricing.
SYSCO'S
BROADLINE CUSTOMER SEGMENTS
•
Marketing Associate Served Customers is a customer segment
that typically includes independent, entrepreneurially-operated foodservice
locations serviced by a SYSCO Marketing Associate. In FY 2000 sales to
these customers represented approximately 55.4 percent of total sales
at SYSCO's 62 broadline, or traditional, companies.
•
Multi-Unit
Customers include local, regional or national foodservice
operations that have multiple locations and, due to their more centralized
purchasing operations, generally do not require the same degree of personalized,
value-added services that marketing associates offer, but are supported
by other sales personnel within the SYSCO companies. Multi-unit customers
contributed approximately 44.6 percent of total sales in SYSCO's 62 broadline,
or traditional companies.
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SYSCO
BRAND PRODUCTS
More than 29,000 products distinctively identified as being available
only from SYSCO carry the SYSCO Brand. Supported by stringent quality
control specifications, these products are designed and developed to meet
or exceed customer requirements, then are monitored throughout the manufacturing
and production process by a staff of more than 180 SYSCO Quality Assurance
professionals.
•
The
Cornerstone Brand is the original brand with four quality
designations — Supreme, Imperial, Classic and Reliance — that
were developed for products across all of SYSCO's broad categories of
offerings.
•
Segment
Brands are designed for specific customer or market
segments and generally include various products in one category such as
ethnic foods, delicatessen items, tabletop condiments or specially formulated
healthcare products. The Arrezzio line of Italian foods and the Casa Solana
line of Mexican items are examples.
•
Brandables by SYSCO is the term SYSCO uses to describe
a complete foodservice package created for customers that incorporates
a SYSCO segment food product that may be served in either a service line
or a kiosk/cart set-up. The total concept includes signage describing
the menu offering, such as the Mein Street Wok, which features items from
the Jade Mountain brand line. The package, which includes uniforms, utensils
and comprehensive operator manuals that specify easy set-up, heat-and-serve
procedures and plating techniques, as well as promotional materials, provides
customers a quick, easy and high profile brand-like theme to create interest
and variety in their foodservice offerings without incurring licensing
or franchise fees.
REAL
SALES GROWTH
Real sales growth is the total SYSCO sales growth less the effect of acquisitions,
plus or minus internally calculated year-over-year product cost inflation
or deflation.
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