Sysco 2009 Annual Report Download - page 22

A comparison of the sales mix in the principal product categories during the last three years is presented below:
2009 2008 2007
Canned and dry products . ............................................................ 19% 18% 18%
Fresh and frozen meats . . ............................................................ 17 18 19
Frozen fruits, vegetables, bakery and other ................................................. 14 14 13
Dairy products . .................................................................... 10 11 9
Poultry . . . ....................................................................... 10 10 10
Fresh produce ..................................................................... 8 8 9
Paper and disposables . . . ............................................................ 8 8 8
Seafood . . ....................................................................... 5 5 5
Beverage products . ................................................................. 4 3 3
Janitorial products .................................................................. 3 3 3
Equipment and smallwares ............................................................ 2 2 2
Medical supplies ................................................................... * * 1
100% 100% 100%
* Sales are less than 1% of total
Our operating companies distribute nationally-branded merchandise, as well as products packaged under our private brands. Products
packaged under our private brands have been manufactured for Sysco according to specifications that have been developed by our quality assurance
team. In addition, our quality assurance team certifies the manufacturing and processing plants where these products are packaged, enforces our
quality control standards and identifies supply sources that satisfy our requirements.
We believe that prompt and accurate delivery of orders, close contact with customers and the ability to provide a full array of products and
services to assist customers in their foodservice operations are of primary importance in the marketing and distribution of foodservice products to
our customers. Our operating companies offer daily delivery to certain customer locations and have the capability of delivering special orders on
short notice. Through our more than 13,000 sales and marketing representatives and support staff of Sysco and our operating companies, we stay
informed of the needs of our customers and acquaint them with new products and services. Our operating companies also provide ancillary services
relating to foodservice distribution, such as providing customers with product usage reports and other data, menu-planning advice, food safety
training and assistance in inventory control, as well as access to various third party services designed to add value to our customers’ businesses.
No single customer accounted for 10% or more of Sysco’s total sales for the fiscal year ended June 27, 2009.
Based upon available information, we estimate that sales by type of customer during the past three fiscal years were as follows:
Type of Customer 2009 2008 2007
Restaurants . ...................................................................... 62% 63% 64%
Hospitals and nursing homes . .......................................................... 11 10 10
Hotels and motels .................................................................. 6 6 6
Schools and colleges ................................................................ 5 5 5
Other ........................................................................... 16 16 15
Totals . . ....................................................................... 100% 100% 100%
Sources of Supply
We purchase from thousands of suppliers, both domestic and international, none of which individually accounts for more than 10% of our
purchases.These suppliers consist generally of large corporations selling brand name and private label merchandise, as well as independent regional
brand and private label processors and packers. Generally, purchasing is carried out through centrally developed purchasing programs and direct
purchasing programs established by our various operating companies.
Sysco’s Baugh Supply Chain Cooperative, Inc. (BSCC) administers a consolidated product procurement program designed to develop, obtain
and ensure consistent quality food and non-food products.The program covers the purchasing and marketing of Sysco Brand merchandise as well as
products from a number of national brand suppliers, encompassing substantially all product lines. Sysco’s operating companies purchase product
from the suppliers participating in the cooperative’s programs and from other suppliers, although Sysco Brand products are only available to the
operating companies through the cooperative’s programs.
Sysco’s National Supply Chain group is focused on increasing profitability by lowering aggregate inventory levels, operating costs, and future
facility expansion needs at our broadline operating companies while providing greater value to our suppliers and customers. One of the initiatives of
this group is redistribution, which involves the construction and operation of regional distribution centers (RDCs), which aggregate inventory
demand to optimize the supply chain activities for certain products for all Sysco broadline operating companies in the region. Currently, we have two
RDCs in operation in Virginia and Florida, and we have purchased the land for a third RDC in Indiana.
Working Capital Practices
Our growth is funded through a combination of cash flow from operations, commercial paper issuances and long-term borrowings. See the
discussion in Liquidity and Capital Resources under Management’s Discussion and Analysis of Financial Condition and Results of Operations at
Item 7 regarding our liquidity, financial position and sources and uses of funds.
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