# Giants merging!?!



## gsuchef (Sep 30, 2012)

Sysco and USFoods are merging creating one large food distributor in Q3 2014. Not sure how this is going to affect others, but in my kitchens I always compare Sysco and US foods for better pricing, quality, and service. And so far in my 17 years in foodservice, it has worked out great. I now fear that that way of thinking is going to go out the window once the merger is complete.

Here is a link to the information on the merger and a short video explaining it.

http://www.bestofbothinfood.com/

Curious to get others thoughts and input into these two giants merging.

Thanks


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## rustbelt (Nov 21, 2013)

That is sad for those who rely on these two primary companies. In my market, they are the two major players for basic staples and basic bulk ingredients, and a merger may make it less advantageous to shop for many items. We have many small specialty companies for fish, produce and baking supplies; but everything else usually comes from Sysco and USFoods. Interested to see the outcome, and how it effects the bottom line of the restaurants here. Thanks for the investigative report.


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## shootoo (Jul 15, 2012)

Nicholas gets most of our produce and egg/cheese orders. Sysco gets our paper and various grocery items... 

US Foods thought it would be a good idea to need the club's current president's signature and home address, so they don't get our business

Most everything else is local


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## chefross (May 5, 2010)

That's really too bad.  US Foods was such a great company.

I have NO love for Sysco. They may be the biggest, but they are no where near the best. At least not in rural America


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## beastmasterflex (Aug 14, 2013)

That sucks, but I'll get real worried when wal-mart buys them both.


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## ilprochef (Dec 9, 2013)

I had two locally owned distributors within thirty miles of here. Sysco swallowed them up. If they can afford 3.5 billion for US Foods, I don't think any distributor is too safe.


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## gsuchef (Sep 30, 2012)

Ilprochef said:


> I had two locally owned distributors within thirty miles of here. Sysco swallowed them up. If they can afford 3.5 billion for US Foods, I don't think any distributor is too safe.


I have also heard from my USFood rep that Sysco is in talks with PFG looking to acquire them as well. Will be some interesting times ahead with only one boardline distributor.


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## its bubba7 (Nov 29, 2013)

That won't be happening...

B-cuz the Investors that Own PFG want to take them public and have enough $$$$$ to Buy Sysco out as Sysco did with US Foods


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## raibeaux (Dec 21, 2012)

Message deleted.


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## its bubba7 (Nov 29, 2013)

Agreed with the Sales response... 

You're right, it won't be PFG with an acquisition... It's one of the Investment Groups that owns PFG/Roma now...


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## its bubba7 (Nov 29, 2013)

In my Foodservice World...We are Struggling to Keep it Foodservice Driven....Not Retail...

The Challenges are 10 Fold


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## petemccracken (Sep 18, 2008)

Its Bubba7 said:


> In my Foodservice World...We are Struggling to Keep it Foodservice Driven....Not Retail...
> 
> The Challenges are 10 Fold


I'm not sure I understand what you are attempting to say.


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## its bubba7 (Nov 29, 2013)

Retail Brokers are trying to Acquire the Foodservice Industry...Foodservice Vs. Retail....Two different world with Quality of Goods

One of the Posters was worried that Wal-Mart would one Day be in the Foodservice World...

He's Not to far off...Retail Brokers buy the Cheapest to meet the Price Points for the Cost of Goods and pass them on as Value Added...for the lack of Words...

Processed Foods...Example:

Veal Top/Leg Cutlet or Chopped and Form Veal

Not Good...


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## petemccracken (Sep 18, 2008)

Ah, and Food Service industry is different than retail?/img/vbsmilies/smilies/eek.gif

Let's see, food service industry buys product from producers and sells to food service operators to add value and sell to restaurant customers.

Retail brokers buy from producers and adds value to sell to stores to sell to customers.

Yup, I see the difference clearly.


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## foodpump (Oct 10, 2005)

The big beef boys, the *really big* beef boys, all say the same thing: Mal*Wart sets the prices for beef, tells the big boys to take their price or to walk away.

But for me, and many other Chefs and Owners, the sky is not falling when it comes to two giants merging.

A broad-liner is nothing more than a middleman, they don't make products, nor do they have exclusive rights distributing them.

Now, for instance about a km (half mile) from me is a very large independent Italian importer. Been there since the '40's, full range of Italian stuff: Cheeses, pasta, tomato products, meats, oils, etc. etc. Guess who his second biggest customers are? The broad liners, Sysco, GFS, and others. I see their trucks there at least twice a week, and they are loading up, not un-loading. Guess where I buy my Italian stuff?

And the produce warehouses? They get trucks from the States a zillion times a day. Again, biggest customers are the supermarkets, next biggest are the broad liners, then the indie grocery stores.

The sky is not falling, we just have to see past the trees to see the forest......


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## its bubba7 (Nov 29, 2013)

/img/vbsmilies/smilies/chef.gifWal-mart does buy Beef products but most of it is Holstein or Select for the most part...They do Choice but IMO its not like a IBP or Excel or Monfort and other I never even heard of...The source of origin may surprise you...

Trimming up Primal Cuts Determines the Cost we pay for Beef...ie; Fat Cap, Trim Removed, Source,,,(Imported)

/img/vbsmilies/smilies/chef.gifAs far as the Merger goes...Most that didn't want to buy from Sysco purchased from US Foods or PFG...With the Anti-Trust piece...Sysco has Already checked that piece out because they wouldnt Acquire US Foods if their was a Hold up for that kind of Coin...

Gordon Food Service, Reinhardt Foods, Independents...still many choices but Partner with a Distributor that is working in You're Best Interest Not his

You're Italian Supporter your purchasing from and the Broad-liners too...its Called Truckload pricing...No exceptions...Pricing can be the same or better than yours...My guess...Better than yours...

/img/vbsmilies/smilies/chef.gifProduce

Buying from the Market can be interesting...Its like Fisherman...First Catch vs Last Catch...Prices will be different...Produce works the same...the Fresher the better...but your paying for Weight for a case of Lettuce...Not for a Case of Lettuce....Ones Price...the other is Yeild...Servings...

Working Smarter is better than harder...Cost per a Lb or Case doesn't mean Squat to me...If their are $$$ per a case different s or 30 cents a Lb difference they better be showing me why...I am looking for yields for profits or Our Restaurants are for Sure...

Ciao


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## raibeaux (Dec 21, 2012)

The largest packers (do we really know who they are?)  have learned to harness the weather and bacteria.  Thus we see blizzards, droughts, animal and plant diseases and other "natural" phenomenon, designed to alter the availability or scarcity of food.  You really don't think Mad Cow Disease occurred naturally, do you? 

Or so say some of us ancient astronaut theorists.


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## foodpump (Oct 10, 2005)

Raibeaux said:


> .....You really don't think Mad Cow Disease occurred naturally, do you?


I dunno...ask any Canadian beef producer for _*his*_ conspiracy theory......


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## beastmasterflex (Aug 14, 2013)

I don't think a merger like this, or one including PFG would have many negative effects for the consumer. I think it will be felt by employees of the food distribution network. A large corporation mostly seeks to streamline and cut costs within their own organization.

Sysco will essentially pick up all of US Foods business and try to service added business with as little added overhead as possible. This means they'll probably keep some of US Food's existing infrastructure, but scale it back as much as possible. Sysco are also moving more towards online ordering, something that US Foods have already invested a huge amount of money. Now with the advent of online ordering food reps workload has considerably decreased. In a different time the food rep served an important purpose, these are not those times.

Basically I see *A LOT* of layoffs in Q4 for Sysco and US Foods employees alike, and probably some closures of distribution centers.


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## just jim (Oct 18, 2007)

If you use US Foods to get the better of Sysco's 3 prices, this is bad news for you.

Sysco works better for me when they have competition.


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## beastmasterflex (Aug 14, 2013)




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## its bubba7 (Nov 29, 2013)

beastmasterflex said:


> I don't think a merger like this, or one including PFG would have many negative effects for the consumer. I think it will be felt by employees of the food distribution network. A large corporation mostly seeks to streamline and cut costs within their own organization.
> 
> Sysco will essentially pick up all of US Foods business and try to service added business with as little added overhead as possible. This means they'll probably keep some of US Food's existing infrastructure, but scale it back as much as possible. Sysco are also moving more towards online ordering, something that US Foods have already invested a huge amount of money. Now with the advent of online ordering food reps workload has considerably decreased. In a different time the food rep served an important purpose, these are not those times.
> 
> Basically I see *A LOT* of layoffs in Q4 for Sysco and US Foods employees alike, and probably some closures of distribution centers.


Well for those who seeking saving with Cost per/lb or Case...you might find its Sysco advantage or Reach out to Local Independents or Alternative choices Like GFS, PFG, Reinhardt to mention a few...

For Those Chef's using US Foods as their Vendor of choice...I see Sysco losing a sufficient amount of Customers once Sysco starts this transition to force US Food Customers to buy from them.

US Foods is Well ahead on On-Line Order Entry...They have the most current System and I think much better then Sysco...

Before Sysco Fiscal year ends, I see the Hit will be as follows:

* Management Changes...Big Time

* Associate Changes based on who has the Best Market Share in there Territory and Non-Performers

* Then Distribution Closures with centers...Based on the Op-Co with the least performance/Profits

Note, the completion date is not Q4 for Crazy changes within Sysco New Acquisition...They will have completion Date to make the Majority by Q 3 2014...that's less then a Year...

Changes is Enviable by or before July 1st...

Will See


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## its bubba7 (Nov 29, 2013)

Just Jim said:


> If you use US Foods to get the better of Sysco's 3 prices, this is bad news for you.
> 
> Sysco works better for me when they have competition.


Interesting-

My guess they will start sooner than later...After laying Down 550 M Cash to Acquire US Foods...Which is Chump Change for them...I'm betting they will start working on the Profits Dollars with Operators sooner than later...


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