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ISellLettuce

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Rumor mill today has Sysco buying Waugh Foods in Peoria, IL. Anyone have any insight into this? Rumors have been floating for a while but seems like the deal may have happened?
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Foodservicedriver20

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Sysco Corp. (SYY), a foodservice distribution company, Monday said it has agreed to acquire Waugh Foods Inc., a Illinois-based broadline distributor with about $40 million in annual sales.

Waugh Foods has been in business for 70 years. Joseph A. Waugh, Sr. founded Waugh Frozen Food Company in 1948, and in 1966, after additions to the company's product lines, the name was changed to Waugh Foods, Inc.

"Waugh Foods has a long, rich history in the Central Illinois area, which includes strong relationships with local independent operators," said Greg Bertrand, executive vice president, U.S. foodservice operations. "We are excited to welcome Waugh into the Sysco family and believe this acquisition is a perfect complement to our existing local and regional presence."

Waugh Foods executives will continue to manage the business, including Waugh President, Rick Look, Tim Waugh and Joe Waugh, Jr.
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Isthisidok

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I live nearby and know firsthand this is great opportunity for performance, Gordon’s (who is very strong in this market), and USF to hit these independent restaurants as many of them will not want to convert to the blue cube. Customers go from buying from the local friendly flexible distributor to the complete opposite from massive my way or the highway corporatized Sysco. Old man Waugh passed away a few years ago and his wife just a few weeks ago. Looks like the Waugh kids were just waiting to sell until both parents were gone.
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broadliner

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My advice to the Waugh sales force is to find another independent to work for. The current sales philosophy of both Sysco and USF is "sell what we want you to sell the way we want you to sell it". USF just changed from to commission to salary plus bonuses. It's my way or the highway at both.

I was at US Foods during the Sysco/USF merger fiasco. Many of my customers hated Sysco for a variety of reasons. The Sysco MAs were going into my accounts telling them that they might as well switch now because I would no longer be their rep. The local independents hired sales reps, increased their product lines and bought more trucks. They have made serious inroads in USF and Sysco accounts because of prices, customer service and less stupid rules. Sysco and USF aren't interested in accounts that buy less than $2,500 to $3,000 a week.

Good luck!
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Investigator

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Quote:
Originally Posted by broadliner
My advice to the Waugh sales force is to find another independent to work for. The current sales philosophy of both Sysco and USF is "sell what we want you to sell the way we want you to sell it". USF just changed from to commission to salary plus bonuses. It's my way or the highway at both.

Good luck!


Isn't this pointless advice? Where would these Waugh reps go; after all their own company was just taken over. They worked for an independent and it didn't protect their future in the slightest. 

What's funnier these days is the shrinking size of these USF and Sysco takeovers-- Waugh Foods is $40 million in annual sales, that's pocket change for Sysco. 
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snoman

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I'm curious to know what the real marginal difference is between one distributor and another regarding price per case. I regularly arrive at customer locations and run into competitors trucks or see their product stacked inside the restaurant.

This observation along w/past experience lead me to believe that price is of greater importance to the customer than relationships. I rank the customers by this observation and if 75% or greater of their dollar isn't w/my employer we obviously aren't their priority vendor. 

That said I'm all about minimums (daily/weekly/etc) on the routes I run. I was thinking today of the 80/20 rule and focusing 80% of energy on those customers that view us as a priority vendor.

The other 20% need to decide where their priorities lie or simply make some adjustments to their ordering strategy to increase their minimums. Some business will shift from one distributor to another the benefit being less stops on a route and more cases each stop equals a more efficient route.

I expect to get some feedback regarding exceptions (availability/rebates/etc), but at the end of the day nobody wants to be anybodies plan B.
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Isthisidok

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Sometimes it’s much more lucrative from a sales reps perspective to be the back up or 20% supplier. Generally this is because you offer products that the primary distributor can’t match up or have to special order. You also generally deliver once a week and visit in person. In my experience the prime vendor might only be online and as the back up, you can show cool products and ideas. So backup at 15-20% margin or primary at 5%. I see many instances where both distributors win.
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FSVET

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$40 million a year?

Big deal! I know reps at USF and Sysco who write that much business by themselves. The only reason Sysco is buying Waugh is that their customers won't switch to Sysco.

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Sidney

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Waugh will vaporize before your very eyes
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broadliner

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Reply with quote  #10 
This will be similar to when Sysco bought Goldberg and Solovy in Los Angeles. Most of the reps left for USF and other companies. Most of the Goldberg customers hated Sysco, and left, too.

Quote:
Originally Posted by Sidney
Waugh will vaporize before your very eyes
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Southchikid

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Reply with quote  #11 
Anyone have an idea what the purchase price was?
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snoman

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Sometimes it’s much more lucrative from a sales reps perspective to be the back up or 20% supplier. Generally this is because you offer products that the primary distributor can’t match up or have to special order. You also generally deliver once a week and visit in person. In my experience the prime vendor might only be online and as the back up, you can show cool products and ideas. So backup at 15-20% margin or primary at 5%. I see many instances where both distributors win.
 

In order to determine the real difference the %'s and cases should be assigned a value to calculate worth and the scenario described is relative to one of the rare occasions listed. The larger distributors that are enforcing minimums are in my opinion simply making a power play to operate more efficiently.

It is unrealistic for them to service every account and therefore they want the more lucrative business which goes beyond sales margins and into the ops side of operating at max efficiency (more cases per stop/less stops). Let the smaller/regional guys have the scraps.
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Isthisidok

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Reply with quote  #13 
2 of 6 Waugh reps already jumped ship and several customers looking for anyone but Sysco!

I’ve heard first hand that if the Waugh rep sold 80% and the Sysco rep 20%, they are giving all the business to the Sysco rep. Welcome to the blue cube Waugh Foodservice!
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broadliner

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Reply with quote  #14 
Pretty typical for Sysco. They just want to business. They don't care about the reps from the companies they bought.

When we were going through the USF/Sysco merger nightmare, the Sysco reps were going into USF accounts telling customers that they might as well switch now because their USF rep won't be their rep after the merger closes. I would have lost half of my route because my customers HATED Sysco.

Quote:
Originally Posted by Isthisidok
2 of 6 Waugh reps already jumped ship and several customers looking for anyone but Sysco!

I’ve heard first hand that if the Waugh rep sold 80% and the Sysco rep 20%, they are giving all the business to the Sysco rep. Welcome to the blue cube Waugh Foodservice!
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deville215

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Reply with quote  #15 
Hearing case volume trends are pretty ugly out there these days (post Jan) due mostly to weather and it's leading to some aggressive sales tactics on price.

Anyone else hearing/seeing this? Not good if true as we head into the Easter period. March is too important to mess up.
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broadliner

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Reply with quote  #16 
If diners can't get to your customers, why would they need to buy anything? They might go to Sam's Club or Restaurant Depot for perishables, but that wouldn't be enough to send a truck out.

Giving away product just to keep management happy isn't good for anybody's paycheck.




Quote:
Originally Posted by deville215
Hearing case volume trends are pretty ugly out there these days (post Jan) due mostly to weather and it's leading to some aggressive sales tactics on price.

Anyone else hearing/seeing this? Not good if true as we head into the Easter period. March is too important to mess up.
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