As Sysco Corporation’s AI360 platform tool entered its second calendar year of use, the wholesale restaurant food distributor announced that sales grew during its fiscal Q3 ended March 28.
The company’s sales increased by 4.7% year over year to $20.5 billion, results that Kevin Hourican, chair of the board and CEO at Sysco, called “strong.” Hourican outlined where the distributor was seeing success with its AI tools as Sysco’s gross profit increased 6.5% to $3.8 billion, even as operating income fell by 9.1% to $619 million over the same period.
AI360’s role in Sysco Q3 sales
Hourican told investors during Sysco’s Q3 earnings call on April 28 that it has improved retention for sales team members, crediting AI tools such as AI360 as drivers of that success. In addition, he referred to improving productivity, noting that sales personnel used “tools like AI360 to sell better and serve better,” offering encouraging signs that made Sysco “confident that we can improve still the loss rate.”
“We had our strongest penetration performance in Q3 in a long time, and that, too, is a direct factor of selling effectiveness,” Hourican said. “What AI360 does for our sales colleagues more than anything is the power of data and intelligence to know what we can be selling, what we should be selling and what should be on Sysco’s truck.”
Specifically, he stated that AI360 “pre-authorizes deals for that sales colleague to be able to offer to that customer to get cases that should be on our truck.” Enabling those sales, he said, is important because Sysco’s “most profitable case is that incremental truck case to an existing stop being made to a customer.”
Next steps following Sysco’s Restaurant Depot acquisition
In March, Hourican previewed plans to leverage Sysco’s $29.1 billion Restaurant Depot acquisition to broaden fulfillment options available to customers. During the April 28 earnings call, Brandon Sewell, interim chief financial officer at Sysco, elaborated on Sysco’s post-acquisition plans, which include realizing $250 million in net cost synergies.
Part of that strategy includes improving compliance and cybersecurity for Restaurant Depot. In the meantime, Sewell said he expected to see merchandising synergies as well.
“So it is taking the products that we buy today, comparing them across Restaurant Depot and across Sysco and working with our suppliers to get increased merchandising benefits,” he said.
Hourican elaborated, describing plans to open “net 125 new doors” for Restaurant Depot.
“As we do that as a combined entity, we’re bringing the low-cost leader, the one-stop shop way in place that restaurants can save money to more communities,” Hourican added. “That will save tens of thousands of restaurants more money.”
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