Sysco 2010 Annual Report Download - page 26
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Please find page 26 of the 2010 Sysco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.A comparison of the sales mix in the principal product categories during the last three years is presented below:
2010 2009 2008
Canned and dry products . ............................................................ 19% 19% 18%
Fresh and frozen meats . . ............................................................ 17 17 18
Frozen fruits, vegetables, bakery and other ................................................. 14 14 14
Dairy products ..................................................................... 10 10 11
Poultry . . . ....................................................................... 10 10 10
Fresh produce ..................................................................... 9 8 8
Paper and disposables . . . ............................................................ 8 8 8
Seafood . . ....................................................................... 5 5 5
Beverage products .................................................................. 4 4 3
Janitorial products .................................................................. 2 3 3
Equipment and smallwares ............................................................ 2 2 2
Medical supplies
(1)
.................................................................. — — —
100% 100% 100%
(1)
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 July 3, 2010.
Based upon available information, we estimate that sales by type of customer during the past three fiscal years were as follows:
Type of Customer 2010 2009 2008
Restaurants ....................................................................... 62% 62% 63%
Hospitals and nursing homes ........................................................... 11 11 10
Hotels and motels .................................................................. 6 6 6
Schools and colleges ................................................................ 5 5 5
Other ........................................................................... 16 16 16
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. Purchasing is generally carried out through both 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 BSCC’s programs and from other suppliers, although Sysco Brand products are only available to the operating
companies through BSCC’s programs.
Sysco’s National Supply Chain group, a department at the corporate headquarters, is focused on increasing profitability by lowering operating
costs and by lowering aggregate inventory levels, which reduces 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 have made initial
investments to build two additional RDCs. Management is evaluating the most appropriate timing for the building of these RDCs, balancing both
market conditions and the timing of the implementation of the company’s Business Transformation Project (see more discussion below under
“Capital Improvements”).
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