Foodservice operators—among them US Foods—have initiated strategies to combat foodservice challenges due to the impact of COVD-19. Sysco, too, recently announced a business and financial strategy, noting an approximate cash on hand amount of $2 billion.
“Sysco is operating from a position of financial strength and will weather this storm. We continue to prioritize the health and wellbeing of our associates, customers, and communities around the world,” said Kevin Hourican, President and Chief Executive Officer. “In addition to ensuring the safe delivery of food and related products, we are taking decisive actions to manage our costs, capital spend, and working capital to maintain a positive free cash flow position.”
Sysco’s $2 billion cash on hand includes recent $1.5 billion withdrawal under its revolving credit facility. The company noted in a press release that it currently has no debt maturities for the next six months and is working with its banking partners to explore opportunities to raise additional funds and further strengthen its liquidity.
“As the largest foodservice distribution company in the industry, we play a significant role in supporting the food supply chain. Due to the significant impact on the food-away-from-home business, we are pivoting our business to better support the surge in demand that is being experienced in the retail grocery store setting,” Hourican continued. “We are establishing new customer relationships with retail grocers to provide them with logistics services and much needed product. We are also advocating for and supporting our customers, who are essential to our future service. I am proud of our associates for their commitment to safety and the work they are doing to serve an essential industry. I am confident Sysco will emerge a stronger company, even more focused on being our customers’ most trusted and valued business partner.”
In addition to efforts to reduce costs, the company is leveraging its supply chain expertise to provide new services to the retail grocery sector. This new business will help balance some of the declines in the food-away-from-home segment and also positions Sysco for growth opportunities after the COVID-19 concern subsides.
Examples of new services provided to the grocery sector include:
Sysco also noted its support of the National Restaurant Association (NRA) in its efforts to seek relief for America’s foodservice industry. The NRA’s proposed policy changes include the establishment of a $145 billion recovery fund for the foodservice industry to provide immediate liquidity and expanded access to federal small business loans, among others. The press release also shared that Sysco does not wish to receive any financial support through this relief package. The company’s focus is to support the small business owners it serves.
Keep reading Deli Market News as we cover how companies are working to protect our industry during this time.