How SYSCO is monopolizing foodservice

I've had more friends who know what I do for a living email me this primer on foodservice for the layman than any other. Now even my old Internet buddies know SYSCO from Cisco.

Don't get stuck in the Shrinking Middle

1) Be the low cost producer or 2) differentiate with product leadership or 3) focus on customer intimacy or die.

This article succinctly illustrates the dilemma facing today's marketers. Just replace the name "SYSCO" for Wal*Mart when reading.

CHICAGO--(BUSINESS WIRE)--Sept. 12, 2006--Despite significant investment, innovation among foodservice manufacturers has been increasingly ineffective. "Foodservice manufacturers have relied too heavily on 'copycat' items, line extensions and package modifications and have not focused on real innovation," states Bob Goldin, Technomic Executive Vice President and Co-Director of Pacesetters. "There is a clear need for fresh thinking and new approaches."

So, if you are not differentiating on product innovation and are not the low cost producer (playing the distributor private label game) the only option is to focus on customer intimacy:

1) Identify your best street customers. 2) Communicate regularly and cost-effecitvely. 3) Reward their new purchasing behavior with something other than discounts. Sound familiar?

Ever wonder if operators read email?

We have a family restaurant that features fresh fried foods such as squash and chicken tenders. We were using Sysco Fry-On and the oil was failing after 3-4 days. The distributor tried everything from giving us a filter machine (we already had our own) to stainless steel screens for catching crumbs.

I saw your offer for offer for extra bonus points and decided to give Bunge a try. It's great! It lasts longer (at least 7 days) and the end product is consistantly better. Ruth Bowers, Owner, City Café, Mount Holly, NC

N.B. How else would your brand have reached this operator? City Cafe is a typical family restaurant that no one representing the manufacturer calls on and the MA did everything in his power to keep a private label sale rather than sell a better performing product...

SYSCO Watching

Just one insight from this analyst's report: "SYY holds close to 15% consolidated market share. However, we find it interesting that SYY actually does business with over 40% of the industry’s approximate 900,000 “purchase points” in North America, which means the market is still quite fragmented. The company also estimates that even its best customers only use SYY for 40% of purchases."

Tip 'o the hat to Pete Leavitt of Barber Foods for supplying.

E-mail open rates according to SYSCO

A recent SYSCO holiday e-mail message had a 36% open rate according to this article illustrating how more marketers are moving to the web to communicate with their B2B customers.