Settled in at Sysco, FreshPoint dives into deals - The Packer

Settled in at Sysco, FreshPoint dives into deals

04/04/2006 12:00:00 AM
Jim Offner

(April 4) Within a few years, FreshPoint Inc. hopes to be able to count 2 billion positive reasons for joining the Sysco corporate network.

It’s all about earnings.

FreshPoint, which has been in a buying frame of mind of late, thinks it can reach $2 billion in annual sales by 2010.

And FreshPoint is making that case now, said Brian Sturgeon, the company’s president and chief executive officer.

The reason? The foodservice supplier, Sturgeon says, is allowed to pursue its own business goals, under its own business model, all while operating under the significant influence and protection of parent company Sysco Corp., the Houston-based broadline foodservice distributor.

FreshPoint has learned a few things from Sysco, Sturgeon says. One of the lessons is how to expand.

FreshPoint, which Sysco purchased in 2000 for an undisclosed sum, moved its base from Dallas to Houston but was not treated as an unwanted stepchild.

“By combining their purchasing power with ours, we will be able to offer customers a breadth of specialty products that previously was unavailable through our broadline distribution companies,” Thomas Lankford, now retired executive vice president of Sysco’s merchandising services and multiunit sales, said in a news release at the time of the purchase.

That’s what FreshPoint brought to Sysco.

FreshPoint, at the time, was a 28-unit company posting about $750 million in annual sales, according to Sysco.

Sturgeon said FreshPoint’s annual revenues were closer to $500 million after subtracting sales from FreshPoint affiliates that turned exclusively to broadline operations when they joined Sysco.

Now, two years into a growth spurt, FreshPoint has 32 branches and is on pace to earn $1.2 billion in sales this year, Sturgeon said.

“We’ve doubled in size in the last three years,” he said.

It’s a growth plan that was carefully crafted, he said.

“We weren’t making that many acquisitions early on,” Sturgeon said. “After we got bought by Sysco, for the first couple of years, we had to pretty much get assimilated and figure out how we fit into that organization. Then … about two years ago, Sysco gave us the green light to expand FreshPoint. Then, in the last two years, we made acquisitions.”

And how.

The company just finished adding four established companies to its network.

In late February, FreshPoint completed a twin purchase of Austin, Texas-based City Produce, which has operations in Austin, Corpus Christi, San Antonio and Harlingen, Texas; and Oklahoma City-based Thomas Bros. Produce Inc.

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