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SYSCO

SYSCO. Sysco, or Systems and Services Company, with headquarters in Houston, is the nation's biggest marketer and distributor of food-service products, including fresh produce, meat, canned foods, paper goods, chinaware, janitorial supplies, and cutlery. In the 1990s SYSCO operating companies in Texas included Sysco Food Services of Austin, Beaumont, Houston, and San Antonio. Among the firm's other subsidiaries were SYGMA Network, Tartan Foods of Philadelphia, Ritter Food Corporation of New Jersey, and Clark Foodservice of St. Louis. Sysco's private labels included Sysco and Buyline. The company was founded in 1969 by John Baugh of Waco, who was brought up on a ranch and attended the University of Houston before going to work for A&P Food Stores. By 1940 he was manager of A&P's first Houston luxury supermarket, and in 1946 he founded Zero Foods Company, specializing in the distribution of frozen products. Baugh later became a member of Houston's Petroleum Club, a founding trustee of Houston Baptist University, and a regent of Baylor University. He established a national food service that could distribute any food despite its regional availability by merging nine small food distributors, including Louisville Grocery Company of Louisville, Kentucky; Plantation Foods of Miami; Texas Wholesale Grocery Corporation and Wicker, Inc. of Dallas; Frost-Pack Distributing Company of Grand Rapids; Global Frozen Foods and Albany Frosted Foods of New York; Food Service Company of Houston; and Thomas Foods of Cincinnati. Shortly thereafter, Grant Grocery Company of Saginaw, Michigan, and Arrow Food Distributor joined the firm. Baugh became Sysco's chief executive officer and chairman of the board in 1969, and the company went public in 1970.

Growth of the firm corresponded with the increase in two-income families and rising demand for food-service products as women moved into the workplace. Over the next twenty years Sysco made over forty-three major acquisitions, established a string of warehouses, and developed a fleet of refrigerated trucks. Frozen and dry product distributors were combined in each region to offer full service, and the firm diversified by adding new items like fish, meat, and frozen entrees to its list of products for distribution. Eventually, a single Sysco operating company offered up to 15,000 separate items, including medical and surgical products. Sysco did not integrate into manufacturing, though it later acquired a manufacturer of chemicals for cleaning and sanitation, preferring instead to emphasize its service to customers. Individual operating firms maintained their corporate names until 1977, when companies phased in the Sysco name, making Allied-Langfield Company, for example, Allied-Sysco Food Services. By 1979 food-service sales rose at the rate of almost 21 percent annually. In 1983 Baugh looked outside the food-service industry when he chose as Sysco's new chief executive officer John F. Woodhouse, a Harvard Business School graduate and financial planner formerly associated with Robert McNamara at Ford Motor Company and with Cooper Industries. Credited with making significant financial improvements at the firm, Woodhouse became chairman of the board in 1985, when William M. Lindig was made president and chief executive officer. Lindig, who was born in Austin and attended the University of Texas, had worked his way up in the food-service industry.

In 1988 Sysco acquired Staley Continental or CFS Continental, which added 4,500 employees to the corporation. Produce sales alone made Sysco the largest fresh fruit and vegetable distributor in the nation by 1990. Three years later the company maintained eighty-nine distribution facilities nationwide, serving almost 150 cities and roughly 225,000 institutions such as hotels, healthcare and educational facilities, universities, restaurants, convenience stores, and airlines. Sales in fiscal 1993 reached over $10 billion. Sysco's Houston headquarters, which serves as the central switchboard of a "solar-system organization" or "confederation of operating companies" that radiate around it, is operated by a relatively small number of people in proportion to the system as a whole. Headquarters provides working capital for operating companies, maintains a Product Evaluation Center to evaluate new products, and sponsors ongoing training courses for all levels of company employees. A Logistics Department, working with Procurement, organizes acquisition and delivery of the firm's three basic grades of products from product manufacturers, such as the Houston area's Minh Eggrolls, and individual vendors, manufacturers, or producers receive regular inspection. In 1994 Sysco employed 24,000 workers, 22 percent of which were members of the International Brotherhood of Teamsters. The company maintained a fleet of 4,100 trucks for delivery of foods from 3,000 suppliers, about 250 of which packed under the Sysco label and accounted for a third of the distributor's volume.

BIBLIOGRAPHY: 

Houston Business Journal, May 13, 1991. The International Directory of Company Histories (Chicago: St. James Press, 1988-). Who's Who in America, 1978–79.

Diana J. Kleiner

Citation

The following, adapted from the Chicago Manual of Style, 15th edition, is the preferred citation for this article.

Diana J. Kleiner, "SYSCO," Handbook of Texas Online (http://www.tshaonline.org/handbook/online/articles/dhs03), accessed August 30, 2014. Uploaded on June 15, 2010. Published by the Texas State Historical Association.