Sysco Corporation is the world's largest broadline food distributor; it sells, markets and distributes food and food-oriented products to the foodservice industry. It serves around 400,000 customers in, “194 locations throughout the U.S., Bahamas, Canada, Ireland & Northern Ireland.” Sysco competes with more than fifteen thousand companies that are operating in the same sector within the United States as well as thousands of companies in other parts of the world. Customers can choose from many broad line distributors, specialty distributors that focus on certain higher-margin product categories, wholesale channels, grocery stores and even online retailers. Because switching costs are very low, customers can change supplier very quickly. The low barriers to market entry allow new competitors to emerge relatively quickly, which means that the existing companies in the space have to keep prices low. While industry statistics are not readily available, the financial data filed with the SEC shows that Sysco is the largest distributor of food and related …show more content…
After merger talks failed USFD had a very successful IPO in May 2016 and now has a market cap of $5 billion, which still trails the $26 billion market cap of Sysco. USFD has $23 billion in annual revenue and a long history of growth and lasting customer relations. Many of the parts that were put together to make USFD were founded in the 19th century, including a company that sold provisions to people moving west during the California gold rush, which started in 1849. USFD distributes more than 350,000 national brand products and has its own private brand goods that range from frozen and prepackaged foods to fresh meats. The reach of the company is broad as it operates in more than 60 locations in the United States and services more than a quarter million