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Sysco Shifts Fleet To Grocery Supply Chain During Coronavirus Slowdown

FreightWaves

Houston-based food distribution giant Sysco Corp. (NYSE: SYY) recently announced new grocery sector-focused initiatives in response to reduced customer demand during the coronavirus pandemic.

Sysco's president and CEO Kevin Hourican said the company is "pivoting our business to better support the surge in demand that is being experienced in the retail grocery store setting,'' according to a press release.

"We are establishing new customer relationships with retail grocers to provide them with logistics services and much needed products. We are also advocating for and supporting our customers, who are essential to our future service," Hourican said. 

Sysco provides products and related services to more than 650,000 customer locations in North America and Europe, according to its website. Its clients include restaurants, healthcare and educational facilities, lodging establishments and other foodservice customers.

Sysco, along with other food service providers such as US Foods and Aramark, have taken a hit as a result of the closure of universities and bans on public gatherings such as sporting events in an effort to slow the spread of the coronavirus.

Sysco has one of the largest trucking fleets in the United States, with around 14,000 delivery vehicles consisting of tractors, trailers, vans and panel trucks. The company employs 69,000 people.

As part of the new grocery-focused initiatives, Sysco said it has begun providing logistics services and products to retail grocery customers; enabling small restaurants to start up home delivery operations and online order pick-up service; and distributing cleaning supplies to kitchens.

"This net new business will help offset some of the declines in the food-away-from-home segment and also positions the company well to capitalize on growth opportunities after the COVID-19 crisis subsides," Hourican said in a statement.

Sysco did not return FreightWave's request for comment on the new grocery sector initiatives.

Rumors that Sysco drivers were being laid off circulated last week. When contacted by FreightWaves, a Sysco spokesperson said, "We are not conducting any interviews or commenting on COVID-19 at this time."

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