Birth of a Giant: Sysco Nears 50 Years

Half a century ago, John Baugh, who had been a president of the National Frozen Food Distributors Association, was mulling over the direction of foodservice. He started meeting several times a year with a few of his distributor friends to discuss the future. Where was the industry going? What role would distribution play? How could they take advantage of changes that could occur? What might those changes be?

Baugh was not unfamiliar with managing change. In 1946, he left his position as manager of a flagship A&P supermarket in Houston and started Zero Foods, a retail frozen food distribution company. The concept of frozen foods was exploding, strangely enough as an unexpected consequence of World War II. Canned food required precious metals, which had been rationed, so another process was needed. Enter frozen foods. Frozen French fries and fish portions were flying off grocery store shelves.

Retail frozen food distributors, who had responded to the demand, owned the market and provided good customer service. Their salesmen arranged merchandise in display cases and kept them stocked. But their success was to be short-lived: Grocery chains quickly recognized the emerging profit center and soon decided to take frozen food distribution in-house. Eventually, those pioneering retail distributors turned to foodservice. It was the 1950s, the halcyon days of convenience foods. Frozen was in and foodservice demand was growing fast.

Baugh and his cohorts identified multiunit restaurant chains as a new growth opportunity and realized it would take a different type of distributor to service their geographic needs. They decided the best approach would be to band together to obtain financing for product line and facilities expansions and to increase their geographic reach.

Ultimately, 10 companies joined forces. They had a public offering in 1969 and, by March 1970, Sysco – short for Systems and Service Co. – was launched. John Baugh, the visionary behind the effort, was the conglomerate’s first chairman.

The rest, as they say, is history. The idea proved to be a brilliant one and as the foodservice industry grew, so did Sysco. By the end of its first decade, Sysco had 35 operating companies and sales of more than $1 billion. Today, Sysco continues to lead the foodservice distribution industry with 198 distribution facilities serving 425,000 customers. With more than $50 billion in sales, it is focused on growing in U.S. markets as well as globally.

By joining forces, understanding change and having a vision for the future – essentially serving as the ‘disruptors’ of their time – those companies, led by Baugh, gave birth to the giant that is still No. 1 in the industry. Soon, Sysco will turn 50, with decades of growth to celebrate. All because of 10 founders who had a vision for the future.

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