Blog of an aspiring foodie

Sysco's upscale image

Posted by beer_chris on 3-February-2008

Although I am in Dubai I read an article in the Chronicle via chron.com today regarding Sysco branching out and including more local and gourmet suppliers as a method to broaden their customer base and sales within upscale restaurants. Sysco is a Houston-based conglomerate serving the food industry. Their headquarters are on the west side of town off of Richmond just outside the beltway. Needless to say I have cultured myself to be on the lookout for Sysco products at a restaurant. They have a reputation, at least with me, as being the lowest common denominator of restaurant supply – cheapest and easiest but not exactly best quality. So, I am a little suspicious of the motives of a giant company like this in working with boutique suppliers and with small chef/owner establishments. The article, which for now is linked here (chron.com changes their story URLs frequently, so this link may not last) reads a bit like a press release – I think that's reality and not just my bias talking.

Robert Del Grande is quoted, although it is not clear if it is directly or via the advertisement the article states that the inventor of the fast casual concept appeared in for the Sysco program – called ChefEx. Of course Del Grande just repurchased Cafe Express from the holding company that owns Wendy's, so I wouldn't exactly call him a 'chef/owner' anymore. He is nearing Tilman Fertita status in my mind.

In any event the Chron also quotes Tracy Vaught – who is owner of Backstreet Cafe and of Hugo's (w/Hugo Ortega of course). She admits to being skeptical and later being convinced by the variety of product available – but there are a couple of telling details in the article. One is that the ChefEx program is part of a larger series of acquisitions/business expansions by Sysco into this area. Mentioned is the purchase of an upscale steakhouse supply company a few years ago by Sysco. Additionally is the seemingly side comment of what a small part of Sysco's overall operating profit these services represent. Numbers are not given – and in my brief overview of the 2007 annual report on Sysco's website, this segment of the business is not even mentioned – save for in a few wide references to 'specialty suppliers' in the various summaries.

Sounds to me like this is being used as=a a way in the door to restaurants to sell other Sysco products. The example of Tracy Vaught – who in the article mentions that she 'kicked Sysco out', obviously was not a customer before this program was brought to her attention. And the mention of the business review process and simplification of billing perhaps means that Sysco is trying to sell other services by using these specialty arrangements as a sort of loss leader to get the restaurateur's attention. In fact, the annual report discusses at length the idea of the business review with customers as part of Sysco's long term strategy to increase sales without increasing COGS/inventory costs.

So, from a purely pessimistic perspective Sysco seems to have absolutely no interest in selling better food products, helping small independent suppliers (assuming the ones given as examples actually are small suppliers) or ultimately getting better food to the consumer more effectively. They want to make money, and this is a good way to do it.

Optimistically, if one looks at Sysco as a middleman only then they are using their scale, purchasing power and access to make it easier for restaurants to provide good products at a fair price – adding efficiency to an otherwise highly inefficient process that would normally depend on the restaurateur to do the coordination to get multiple small suppliers to provide good quality products.

I tend to think the reality is somewhere in the middle. Ultimately, Sysco is not interested in providing expensive and difficult to source products, and appear only to be doing so in order to sell other products or services. Additionally, restaurants seem unlikely to lower prices – my bet would be that any savings by using Sysco would go directly into the owner's pocket. So, from a consumer's point of view I see no reason to think Sysco is any better than before – and I will probably still view them skeptically, and likely try to avoid the places where I know they supply the majority of the foodstuffs. I am not convinced that slow food can include Sysco in the equation.

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