Foodservice giant: Save the farmers

When Rick Schnieders was 10, his first job was bagging potatoes at his father’s small grocery store in Iowa. Today, the 56-year-old is chairman and CEO of SYSCO, North America’s largest wholesale food provider.
SYSCO had sales of $29.3 billion in fiscal year 2004, primarily to restaurants. Its products are designed for foodservice, not for retail.
The SYSCO brand is the biggest brand you’ve never heard of, the businessman says. “We are the largest outsource manufacturer of food products in the world.”
Schnieders knows food. Schnieders knows transportation. And Schnieders knows customer service.
But Schnieders also ponders the role of farmers in his world. He shared his views last spring at, of all places, a Corporate Counsel Institute at Georgetown University.
Why would a corporate bigwig talk to a bunch of lawyers about agriculture?
Quality control. The angle is quality control, or differentiation, which is what Schnieders says drives the foodservice industry.
Go to your local grocery store, he told the attorneys, and look at all the products. Then pick up a jar or box and read the ingredients: corn and corn derivations, soybeans, sugar and salt.
Where do the ingredients – the commodities – come from? Anywhere. Iowa or Ohio … or Brazil.
Foodservice products are more diverse, Schnieders claims. A restaurateur doesn’t just ask for a grade of beef, he asks for a specific size. He wants fresh salad mixes. He wants the shortest distance between the field and fork.
‘Middle’ man. So Schnieders champions what he calls “farmers in the middle.” Not the small-scale hobby farmer and not the large acreage farms, but the farmers in the middle – farmers whose numbers are dwindling. It’s those farmers who are keeping the diversity, the variety, of products alive.
“At SYSCO, we cannot allow ‘our’ farmers to go out of business,” Schnieders told the group.
He calls it a competitive strategy, to grab more “share-of-stomach” from the retail grocery industry that is more commodity-oriented.
“If we can’t continue to source the products that uniquely define the foodservice industry, if we can’t help our customers succeed, the long term will be bleak,” Schnieders said.
“None of us want to see the Wal-Martization of our eating-out options.”
Ethics of eating. Right now, SYSCO has a team of 180 quality control workers who monitor the company’s food products from “farm to fork.” In October, SYSCO’s vice president of quality assurance added “agricultural sustainability” to his responsibilities.
(Incidentally, this person was raised on an Iowa farm and holds a bachelor’s degree in animal science and a master’s degree in meat science from Iowa State University.)
Losing farmers, Schnieders said, is a “huge strategic risk” to SYSCO.
“That risk has moved to the top of my list of priorities, because it has such a long-term effect on our business.”
(Editor Susan Crowell can be reached at 1-800-837-3419 or at editorial@farmanddairy.com.)