On the surface, the idea of two of the biggest food service distributors coming together to create a food distribution monolith is a bit scary for even the most seasoned restaurant industry veteran. It stands to reason that the more of the total market they control, the more control they have over the cost of goods and the supply chain as a whole.
It doesn’t end there. With this combined company, you can also expect corporate “stuff” to happen like the elimination of redundancies and the creation of efficiencies based on new economies of scale (that was fun to say). This all sounds well and good but success on this front is more complicated than stating a few buzz words on a conference call and translates into negative outcomes for you, the restaurant owner.
The restaurant business is tough. Losing a couple points on food cost due to COG increases, shrink, or labor is the difference between surviving and thriving or becoming a piece of restaurant history. Sysco’s Large minimum drop requirements, non existent delivery flexibility, and cold corporate culture will only become magnified with the combining of their sales force, management, logistics, and technology.
I believe this lack of flexibility and service, mixed with the confusing merger of logistics and systems will create an opportunity for smaller niche distributors like Produce Services Of Los Angeles as well regional broadliners who are looking for growth. In the end, this could be a blessing in disguise for the independent and regional restaurant groups who expect a high level of service from their suppliers.
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