Sysco’s Diversification Across Foodservice Channels Mitigates Impact of Slower QSR Traffic

The foodservice distribution industry is highly fragmented, with Sysco holding just 17% of the roughly $370 billion U.S. market. However, we believe its dominance is much stronger than its share suggests. Restaurants need timely and consistent delivery to serve the freshest food. Sysco allows restaurants to buy most of their needs from a single source rather than dozens of manufacturers, simplifying logistics and saving time. While the goods it sells are commodities, Sysco can differentiate itself in terms of selection, quality, and freshness by also offering services such as menu planning and kitchen setup consulting. Indeed, we believe this has led to revenue growth that has outpaced industry growth, which is expected to continue, leading to our forecast of average annual sales growth of 4.5% over the next five years.