Sysco Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Sysco is a North American food distributing company. Through its subsidiaries, Sysco engages in the marketing and distribution of a range of food and related products primarily for foodservice or food prepared-away-from-home industries in the United States and Canada. Its customers include restaurants, hospitals, nursing homes, schools, colleges, hotels, and motels. Sysco was incorporated in 1969 and employed around 51,000 people as of January 1, 2007. Sysco is a Texas-based company with headquarters located in Houston, Texas. Sysco is quoted in the New York Stock Exchange with the ticker symbol of SYY. It has approximately 13,500 shareholders (as of August 1, 2007).

Sysco’s key products include fresh and frozen meats, canned and dry products, frozen fruits, vegetables, baked goods, poultry, dairy products, paper and disposables, seafood, beverages, and janitorial products. Sysco, while distributing nationally branded merchandise, also provides products packaged under Sysco’s private brands. The company uses the following brands in marketing its own products: Sysco, Arrezzio, Jade Mountain, Casa Solana, Block and Barrel, and House Recipe.

The company operates through three business segments: Broadline, Sygma, and Others. The Broadline segment provides the distribution of a full line of food products and a wide variety of nonfood products to both Sysco’s traditional customers (e.g., restaurants, hospitals, schools, dormitories, hotels, and industrial caterers) and chain restaurant customers (e.g., regional and national hamburger, sandwich, pizza, chicken, steak, and other chain operations). The Sygma segment is a network of foodservice distribution facilities, experienced in distributing to chain restaurants. The segment distributes a line of food products and a variety of nonfood products to chain restaurants. These services are supported by special physical facilities, vehicles, material handling equipment and techniques, and administrative and operating staffs. Diverse products are distributed by the Sygma segment. These include a line of frozen foods, fresh meats, fruits, and vegetables. The Sygma segment also provides a wide range of nonfood items, including tableware, such as silverware; cookware, such as pans and utensils; restaurant and kitchen equipment and supplies; paper products, such as disposable napkins, plates, and cups; and cleaning supplies.

The Others segment includes the company’s specialty product services, which include custom-cut meat and lodging industry products subsegments. The specialty meat subsegment distributes customcut fresh steaks, other meat, seafood, and poultry. This subsegment also provides special foods for the Asian cuisine foodservice market. The lodging industry products subsegment, on the other hand, distributes personal care guest amenities, equipment, housekeeping supplies, room accessories, and textiles to the lodging industry.

Sysco was founded in 1969 by John Baugh in Houston, Texas, as a wholesale food distributor. The company went public in 1970. Sysco expanded its operations by choosing to grow by acquiring other companies. Today, the company operates in 177 distribution facilities throughout North America to provide its services to about 391,000 customers (as of July 1, 2007). Ninety-two percent of the company’s 2006 revenues come from the United States, whereas its Canadian operations account for only 8 percent. Throughout its operations, Sysco uses its subsidiaries, which are more than 180 companies scattered in different parts of the American market, including Sysco Kingston, Buckhead Beef Northeast, Fowler and Hunting, FreshPoint Central Florida, Sysco Food Services of Jackson, and Sysco Food Services of Calgary.

There are many reasons why Sysco may be regarded as a successful company. One of the reasons may be its strong market positioning. Sysco is the largest marketer and distributor of foodservice products in North America with a large market share in the highly fragmented foodservices industry. Sysco’s market dominance drives it to expand its business with less hindrance. The second reason may be its gigantic distribution infrastructure, which extends throughout the United States and Canada. Sysco has strong distribution infrastructure compared to its competitors, and this distribution network gives the company a competitive advantage against its rivals. Another reason may be the company’s thriving financial management. Sysco’s revenues have grown continuously in previous years. A consistent revenue increase paves the way for future growth for the company and strengthens its market position.

Bibliography:

Philip Graber, Selling to SYSCO: A How-to Guide (Technomic Information Services, 2003);
Andrew McAfee and Alison Berkley Wagonfeld, Business Intelligence Software at SYSCO (Harvard Business School Publishing, 2004);
SEC-EDGAR, www.sec.gov (cited March 2009);
Sysco, www.sysco.com (cited March 2009).

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