Does SYSCO unfairly bully independent restos?

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Joined Aug 23, 2000
Question raised in a NY Times story (free registration required)

http://www.nytimes.com/2003/04/27/bu...rint&position=

Richard J. Schnieders, Sysco's chief executive, said the company runs a profitability analysis on each of its 400,000 customers. If they do not make the cut, "we either ask for a bigger order, reduce service by sending trucks out less often or help find them another distributor," he said. There are an estimated 2,850 broad-line or "soup to soap" distributors and 25,000 specialty distributors in the United States, though none approaches the size and reach of Sysco.

Chefs also complain that Sysco offers rock-bottom pricing on crucial "center of the plate" foods like chicken or steak, only to make it up by charging high prices on other products like broom handles and cocktail napkins.
 
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Joined Oct 28, 1999
Maybe its just 'tactical' business operations.

I can understand their need to drive profits. So they can understand my need to find other purveyors where "everything doesn't come off the same truck".* Especially with the ever expanding (EXPLODING!) practice of using local farmers, local vendors and local.... everything.


* - From Kitchen Confidential
 
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Joined Sep 21, 2001
I have dealt with Sysco on and off for years. I don't think they are better or worse than any other of the big wholesalers. At times, they really helped me out. When I ran a small restaurant up in the mountains, they were the only company that would even send a truck out to our place even if we did have to have a fairly large order. And after all these years I still never place small food orders with purveyors. It costs a lot of money to put a truck on the road. And as for the fact that a big company will be competitive on center-of-the-plate items but be overpriced on some stuff- well, wake up! Shopping is a HUGE part of managing food and supply costs.
One thing that bothers me. while we are on the subject of purveyors-
The grocery company we use got bought up by another company last Fall. Our salesguy told me that the new products would be subbed in for our old inventory, prices and specs would be equivelent-WRONG! I am convinced that they were subbing cheaper items to make sure that the price points were the same. I got it figured out, after tanning the hide of my salesguy and doing comparisons on any questionable items- just more work, I guess.
 
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Joined Jul 2, 2001
I really didn't think that was all that heavy handed. I wonder how many times the salesperson asked Ms. Pope for the check or to clear that invoice up. No salesperson is going to risk losing a good account like that, demand letters are a last resort and not taken lightly. and while every company deserves to make a profit I think they are not very concerned about how they make it. For me Sysco would have to be the last company around for me to buy from them. They are the kings of bait and switch at least in my opinion.
 

kuan

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Joined Jun 11, 2001
Everyone does that. SYSCO needs a minimum drop to make money. If you owned a pizza delivery joint you wouldn't deliver a $10 pizza 30 miles out... at least I hope not. The pizza might get cold by the time you get there. ;)

The sales guys work Sundays and the software tells you in realtime (almost) if you'll be outed an item. Try THAT with Alliant software. Anyway, like I always tell people... bid your big ticket items.

Kuan

Edit: It also depends on which SYSCO house you work with. Some are good, some stink.
 
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Joined Nov 29, 2001
My husband uses Sysco in his corporate chef job. They run the gamut from extremely personalized customer service (the sales rep) to absolutely neglectful (the delivery moron). In their defense, they have some incredible ingredients.
 
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Joined Nov 19, 1999
I have been lucky with Sysco for the last three years. I have the best sales rep imagineable, AND the best delivery guy. They will do almost anything to keep a customer happy.


Hi Beth!:bounce: And Wayne.:bounce:
 
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Joined Oct 6, 2001
Sysco really varies.

I admit I was spoiled in DC. An awesome rep -- working with Sodexho-Marriott, a big company, we had major pull, good pricing. Location, awesome - fantastic supplies almost limitless resources, could get almost anything I wanted without having to dropship for anything specialized.

Now, much smaller shipments; let's face it - but Sysco is one of the few that will deliver without a specified weekly shipment, I can do it as needed for B&B/catering. Sysco also has more variey than most, which is kind of scary. Pricing much higher - variety MUCH lower -- I can get all the tortillas, refried beans and chicken tenders I could want....but...even the upper end items they show at the food shows are drop ship, you may or may not be able to special order them. (They aren't in the reps computer systems...and many aren't inclined to look them up - the reps change monthly so it's a constant battle .... I've been told, "The Marriott settles for X"). Well, I'm not the kind that is inclined to settle for anything! Still, IF I get my hands on the exact numbers and if I push, I can get the special order through. Sometimes it's easier and more cost effective to do the Sam's/Costco/regular grocery store route (although currently we only have one major grocery chain in town beyond Super Target and Super Wal-Marts!) -- so it comes down to a quantity and time factor.

For my 3 weddings next weekend - do I have time to shop and do all prep, get all flowers & rooms ready, etc? Or do I go ahead and play the game, maybe sacrifice some of what I am looking for -- it can be a catch 22
 
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Joined May 9, 2003
And how is this different than a chef running 45% food cost on the Prime New York Strip and 9% on the chicken fettuccine selling the pasta 4 to 1 over the steak?? I call that business management.
 

kuan

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Napkins and broomsticks don't, or shouldn't, even come under food cost.

Your cost for center of the plate items reflect the highest percentage of your total purchases and you better be getting it for a good price. Forget about nickel and diming the toilet paper for the employee bathroom.

But I don't get your point Kell. Could you please explain a bit more? You're just using an example right? How does one get 9% food cost on their Grilled Chicken Alfredo?

Kuan
 
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Joined May 9, 2003
9% is actually pretty low for my place. I'm terrible at Math so if I make a mistake here, please don't crucify me but these are close to actual numbers from some of my menu items...

Smoked Chicken and Forest Mushroom Fettuccine with Rosemary and Parmesean.

The whole dish costs me $2.15 and I get $16 for it on the menu for a food cost of about 13.5%...I sell them like crazy and put $13.85 in the pocket.

My New York Strip costs me $8 for the steak, another $1.25 for the garnish, starch, veg, sauce for $9.25...I sell it for $28 for a food cost of 33%....$18.75 in the pocket.

If I sell 5 Chix Pasta and 5 Steaks I get an average food cost of
23.25%. (13.5% x 5) + (33% x 5)=232.5/ 10 to get the average.

The more Chix Pastas I sell...the greater the reduction of my foodcost to a finite bottom percentage. If I sell 10 Chix Pastas and 5 Steaks...I'm at 20% now.

The sneaky part is I still look better revenue wise with the steak cause I pocket $18.75 as opposed to the $13.85.

Thus revealing how I can do 1.6 Million in revenue a year at my place and still be broke!!!:confused: :D
 

kuan

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Dude you get the average food cost, but you don't get true food cost. I swear that doesn't help you. You just add all your sales (5 pasta + 5 steak) and divide by your cost of food. Your average food cost is 23.2% but your true food cost is actually 28.5%.

So you do 1.6 million and end up netting what... 2.5k? :) LOL j/k. You can work all year in a restaurant to break even while one guy at a shoe store can sell a pair of Bruno Maglis and make the company $100 that day. Better sell shoes lol! But that's the life you choose...

Kuan
 
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Joined Oct 28, 1999
I have to agree. While average food cost can be a useful model for projecting a budget or spreading out anticpated costs over the next fiscal year, averages can be a slippery slope.

For instance, taking your example to the extreme... one might sell 100 orders of 'abc' @ 25.00 with a FC of 30% while at the same time, selling 100 orders of 'xyz' @ 2.00 with a food cost of 8%, the AVERAGE food cost would be artifically low. While real expenses would appear inflated.

This example can be applied to real scenarios, like a lunch menu that offers steak as well as a cup of soup or a side dish.

Here's what I practice:
Ending inventory (from last month)
+ purchases
=gross inventory

Gross inventory
-this months ending inventory
=usage

Usage divided by sales = Food Cost (as decimal) x 100 = FC%

Often, you hear chefs brag about food cost, but you have to be certain you are comparing apples to apples. Then to throw a twist on all of this, as if it weren't complicated enough, you can do a hard and fast calculation using Cost of Goods, by eliminating the inventory step and just diving selling cost by cost of food. But, alas, that is another thread.
 
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Joined May 9, 2003
:D ...I'm with ya all the way:D

I was only trying to make an understandable example of how Sysco prices their product. We all make more on one thing than the other. Sysco is no exeption. If they're overcharging for the broomsticks...buy them from somewhere else and "cherry pick" (their term, not mine:D ) what they give you a good price on. It won't be that price for long though...

I think all the major purveyors do this in one form or another...

As far as how I actually figure my costs...I add all my food invoices and divide by the food revenues per month. Pretty close to what Jim described. Sloppy and not real accurate, but it gives me what I need to know.

Thanks for the replies though...good to know you guys are willing to help a guy out.:)
 
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Joined Oct 13, 2001
I have been using Sysco for 6 years now as my main purveyor and I am still with them so that should tell you something . Customer service is my biggest issue with companies and I have found Syscos to be very good . I only spend about $5,000.00 a week with them now but I am treated as a top of the line customer . I only recieve 1 delivery a week from them and if there is a miss-pick or an outage with an unsuiteable sub all I have to do is call my rep and I have it delivered the next day . Also if I was actualy human and missed something ( of course this rarely happens to us chefs ;) ) on my order I can have it delivered the next day .
With all companies there is always a higher profit from some items than there is with others but your ability to run a food cost should not be that companies fault !
my 2 cents , Doug...................
 
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Joined Apr 13, 2003
i myself am a big fan of local business, i do my best to buy from local meat seafood and produce purveyors, but you cannot beat having your own personal sales guy every day. if i get shorted an item my rep will be in his car and on the way to new orleans(one hour away) just to make sure i am not inconvinenced. as far as raising priced on certain items and keeping them low for others, how do you think they can afford to have such profesional service and keep a warehouse stocked with everything you can imagine.gotta make that money. if you are concerned about such things then get new pricelists every week, keep em on their toes. if you don't trust your rep, get rid of him, theres always someone willing to sell you groceries for a smaller percentage if you don't like your sales guy.
 
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Joined Jun 3, 2002
I own a 45 seat restaurant in the New York area. I used Sysco for two weeks when I first opened three years ago. They talk a big game, but my feeling was they are an all or nothing distributor. After my first couple of orders, I tried to place a $400 dollar order and was told it would have to be higher or they would not deliver it. My first two orders were for abot $2800 total. Needless to say, I got PISSED and that was the end of Sysco. Now, granted I am 45 minutes from NYC, so I can run down to Master's to pick up meet or produce at Hunt's Point. There are dozens of local purveyors fighting for my buisness. So perhaps I am spoiled. I think that SYSCO is a big short cut for a lot of places. Perfect for the big institutional places (Prisons, Hospitals, CC's), but not for the small independant.
 

kuan

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Joined Jun 11, 2001
There are like 4-5 SYSCO houses in NY, which one did you use? In the midwest the closest SYSCO house may be 1.5-2 hours away.

Kuan
 

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