Sysco 2011 Annual Report Download - page 26

A comparison of the sales mix in the principal product categories during the last three years is presented below:
2011 2010 2009
Canned and dry products . ............................................................ 19% 19% 19%
Fresh and frozen meats . . ............................................................ 18 17 17
Frozen fruits, vegetables, bakery and other ................................................. 14 14 14
Dairy products ..................................................................... 11 10 10
Poultry . . . ....................................................................... 10 10 10
Fresh produce ..................................................................... 8 9 8
Paper and disposables . . . ............................................................ 8 8 8
Seafood . . ....................................................................... 5 5 5
Beverage products .................................................................. 4 4 4
Janitorial products .................................................................. 2 2 3
Equipment and smallwares ............................................................ 1 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, competitive pricing, 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 approximately 13,500 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 2, 2011.
Based upon available information, we estimate that sales by type of customer during the past three fiscal years were as follows:
Type of Customer 2011 2010 2009
Restaurants ....................................................................... 62% 62% 62%
Hospitals and nursing homes ........................................................... 11 11 11
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.
We administer 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 these
consolidated programs and from other suppliers, although Sysco Brand products are only available to the operating companies through these
consolidated programs. We also focus 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. This
includes 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 will begin construction on a third RDC in fiscal 2012 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 “Management’s Discussion and Analysis of Financial Condition and Results of Operations, Liquidity and Capital Resources” at Item 7
regarding our liquidity, financial position and sources and uses of funds.
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