Sysco Corporation

1390 Enclave Parkway
Houston, Texas 77077-2027
U.S.A.
(713) 584-1390

Public Company
Incorporated: 1970
Employees: 18,700
Sales: $6.9 billion (1989)
Stock Index: New York

The Sysco Corporation (an acronym for Systems and Services Company) is the largest marketer and distributor of food-service products in the United States. With 89 distribution facilities serving nearly 150 of the largest cities in the continental United States, SYSCO provides products and services to approximately 225,000 institutions. The company provides food—fresh produce, meat, and canned and dried food—to restaurants of all sizes and styles, hotels and motels, universities, convenience stores, airlines, and other organizations. It also supplies frozen foods to supermarkets, and supplies all of these institutions with nonfood products such as paper goods, janitorial supplies, cutlery, and chinaware.

The Sysco Corporation has been growing steadily since its founding in 1969. John Baugh, a Houston-based distributor, formed SYSCO by pooling nine small food distributors. Baugh’s goal was to provide a national food service able to distribute any food despite its regional availability. Since that time, SYSCO has grown to become the leader in food distribution, with annual sales well above $6 billion. SYSCO’s phenomenal growth has coincided with the boom in America’s interest in eating out. But the company’s success can be credited to more than luck. In the 20 years after it was founded, SYSCO made more than 43 major acquisitions and saw an annual increase in sales and earnings of 20% nearly every year.

SYSCO went public in 1970 and that year made its first acquisition, of Arrow Food Distributor. In its early years the company grew by acquiring a number of small distribution companies, carefully chosen for their geographic regions. These acquisitions helped to realize Baugh’s early goal of providing uniform service to customers across the country. Throughout the 1970s the Sysco Corporation built many new warehouses to deal with this rapid expansion, later incorporating freezers into its warehouses and adding refrigerated trucks to transport produce and frozen foods.

During the 1970s SYSCO grew steadily except for a brief earnings drop in 1976 caused by a canned food glut and excessive startup costs due to increasing capacity. One reason for such rapid recovery and regular growth was SYSCO’s continuing diversification into new products like fish, meat, and frozen entrees. In 1976 SYSCO acquired Mid-Central Fish and Frozen Foods Inc. and began providing frozen foods to supermarkets around the nation. In 1979 SYSCO’s sales passed the $1 billion mark for the first time; by 1981 the company was rated as the largest U.S. food-service company. That year SYSCO set up Compton Foods in Kansas City to purchase meat, and began to supply supermarkets and other institutions with meat and frozen entrees.

In 1984 the Sysco Corporation continued its policy of acquiring its competitors when it purchased three operations of PYA Monarch, then a division of Sara Lee. SYSCO’s largest acquisition to date occurred in 1988, when the company bought CFS Continental, at that time the third-largest food distributor in the country, which added 4,500 employees and brought the market it served to 148 out of the top 150 markets. Although much of the United States and especially Texas experienced hard financial times during the 1980s, as a national company in a relatively recession-proof industry, the Sysco Corporation was not adversely affected.

Through diversification and with each acquisition, SYSCO has continued to increase its market throughout the 1980s, even providing food for fast-food chains. There is plenty of room for growth, however, since the top 50 food distributors account for less than 20% of the available market. The Sysco Corporation is likely to maintain its growth in the food-distribution market as it continues to anticipate and supply consumer needs.

Principal Subsidiaries:

Allied-Sysco Food Services, Inc.; Arrow-Sysco Food Services, Inc.; Baraboo-Sysco Food Services, Inc.; Bell/Sysco Food Services, Inc.; Cochran/Sysco Food Services.; Deaktor/Sysco Food Services Co.; DiPaolo/Sysco Food Services, Inc.; Food Service Specialists, Inc; Glencoe-Sysco Food Services Co.; Global Sysco; Grants-Sysco Food Services, Inc.; HFP-Sysco Food Services, Inc.; Hallsmith-Sysco Food Services; Hardin’s-Sysco Food Services, Inc.; Sysco/Konings Wholesale; Koon-Sysco Food Services, Inc.; Lankford-Sysco Food Services, Inc.; Maine/Sysco, Inc.; Major-Sysco Food Services, Inc.; Mid-Central/Sysco Food Services, Inc.; Miesel/Sysco Food Service Co.; New York Tea-Sysco Food Service Co.; Nobel/Sysco Food Services Co.; Robert Orr-Sysco Food Services Co.; Olewine’s/Sysco Food Services Co.; Pegler-Sysco Food Services Co.; Select-Sysco Foods, Inc.; Sugar Food Corp.; The SYGMA Network, Inc.; Sysco/Avard Continental Food Services, Inc.; Sysco/Continental Food Services of Indianapolis, Inc.; Sysco/Continental Food Services of Los Angeles, Inc.; Sysco/Continental Food Services of Minnesota, Inc.; Sysco/Continental Food Services of Pittsburgh, Inc.; Sysco/Continental Food Services of Portland, Inc.; Sysco/Continental Food Services of Seattle, Inc.; Sysco/Continental Institutional Food Services, Inc.; Sysco/Continental Keil Food Services, Inc.; Sysco/Continental Mulberry Food Services, Inc.; Sysco/Continental Smelkinson Food Services, Inc.; Sysco Food Services of Austin; Sysco Food Services of Atlanta, Inc.; Sysco Food Services of Beaumont, Inc.; Sysco Food Services of Central Florida, Inc.; Sysco Food Services of Chicago Inc.; Sysco Food Services, Inc.; Sysco Food Services of Iowa, Inc.; Sysco Food Services-San Antonio; Sysco Food Services of South Florida, Inc.; Sysco Food Systems, Inc.; Sysco/Frost-Pack Food Services, Inc.; Sysco Frosted Foods, Inc.; Sysco/General Food Services, Inc.; Sysco Intermountain Food Services; Sysco/Louisville Food Services Co.; Sysco Military Distribution Division; Sysco/Rome Food Service, Inc.; Theimer-Sysco Food Services; Thomas/Sysco Food Services; Vogel/Sysco Food Service, Inc.