I suppose I should qualify that. Outwardly, for most consumers, not much will be noticed. But from an industry standpoint, this is monumental news, akin to US Airways “merging” with American Airlines. (Oh, and that’s what Sysco and US Foods are calling this, a “merger,” but it is Sysco paying $3.5 billion for US Foods, in the form of $500 million cash and $3 million worth of common stock.)
What does this mean to the industry? One of two things: less competition in the distribution world could mean higher prices and fewer items to choose from, particularly when it comes to unique products. It could also mean a hit to local foods’ access both from the manufacturers/growers trying to reach the marketplace, and those trying to buy those products. And it could also mean serious trouble to regional and local distributors (from Reinhart on the regional side to Classic Provisions on the local) and small but influential food brokers (Bull Brokerage being one of them).
Locally, US Foods in recent years has done a fair job at accessing unique and local products. Sysco used to have a reputation for that, until it sort of let its affiliation locally Heartland Food Network dry up. Let’s hope the former attitude prevails, and it should, given the expanded demand and use for locally-sourced products. It could also mean greater opportunity for those regional and local distributors to establish relationships with local and regional producers, and capitalize on the tendency for many business owners to want to partner with other local businesses. Food brokers tend to know the products they represent extremely well, and niche marketplaces in which they might fit.
What does it mean for local manufacturers like yours truly, the mighty Saint Agnes Baking Co.? Probably not much, but we keep an eye on such things. Because we bake fresh product, it’s a necessity for us to have our own delivery fleet, and thus we’re not reliant on anyone else to do it for us. But we’ve pondered the idea of partnering with a distributor or brokerage to expand our reach, thus, make no mistake, our ears—along with everyone else’s—have perked up.
It’s going to be interesting to see how this plays out. Here’s the full press release from Sysco.