Sysco Food Services of Spokane Inc. says its new $20 million facility in Post Falls has reached targeted volume levels on schedule, and plans to expand its facilities in the next two or three years.


The company, which is located at 300 N. Baugh Way in Post Falls and employs 165 people, is a subsidiary of Houston-based Sysco Corp., which claims to be North Americas largest distributor of food-service products. Sysco Spokane serves restaurants, schools, nursing homes, and hospitals located throughout the Inland Northwest, as far east as Wallace, Idaho, and as far south as Pendleton, Ore.


Layton Rosencrance, Sysco Spokanes president and CEO, says the operation distributes about 80,000 cases of food a week, and is on track to hit its volume goals this year. He declines to disclose its revenues.


Last week, we shipped our millionth case from Post Falls, he said on July 19. We anticipate a 10 percent increase in our distribution volume by next April.


That case happened to contain cucumbers, but Rosencrance says that along with fresh produce, Sysco distributes a lot of fluid dairy products as well as dry and canned foods; fresh, frozen, and specialty meals; seafood; poultry; beverages; and beef.


It recently, for example, became a licensed distributor in the Inland Northwest marketplace for Wooster, Ohio-based Certified Angus Beef LLC (CAB), Rosencrance says. He says that supplier will provide high-quality beef to customers here, and Sysco operations in Seattle and Billings, Mont., also have agreements with CAB.


The company also plans to distribute CAB convenience products, such as deli meats, chili, fully-cooked burgers, and cheeseburger fries.


Rosencrance says french fries currently are the most popular item Sysco distributes, and adds, Everyone seems to want them more now than ever before. Sysco distributes 100 different types of fries. Frozen bread sales also are rising, he says.


In general, our industry is moving more toward frozen and chilled products, and away from dry and canned products, Rosencrance says.


He attributes the rising demand for frozen products to the cooking and packaging technologies manufacturers are using to improve the taste and texture of ready-to-serve food. The innovations on the food-production end of the industry have provided a wider variety of menu selections available to buyers, which also has increased sales growth for Sysco, he says.


He says the one-floor, 146,000-square-foot building that Sysco Spokane currently occupies takes up about one-third of its 35-acre site in Post Falls. The company plans to expand its facility in the next couple of years, and will hire additional employees when it does, Rosencrance says.


The new facility uses computer and bar code-based technology for its inventory receiving and shipping systems, he says.


Each case that employees unload from incoming trucks is scanned and individually identified for tracking purposes, he says. Employees use hand-held devices attached to computers to scan bar codes, which tell them where to put the cases.


Forklifts, which are equipped with those computers, glide across the concrete floor of the warehouse, hauling cases from arriving trucks into the building, where machines stack them up to 25 feet high. Every pallet leaves the facility with a shipping label that has been matched with a bar code.


The system allows us to provide more accurate and timely orders for our customers, Rosencrance says.


The warehouse portion of the building is divided into a dry foods section and a frozen and chilled foods section. The latter section contains four cooler-temperature zones and two freezer zones, where employees don down-filled jackets to work in the subzero climate.


In terms of other technology, the facility uses wireless computers that help employees select merchandise to deliver to customers. He says all of the salespeople also have wireless laptops, which they use to send order entries back to the facility when meeting with customers at their business locations.


They also use the computers to conduct a menu analysis at clients businesses, during which they break recipes down to each ingredient used and determine whether the menu items costs accurately reflect food costs, he says.


Closer to its customers


Before the Post Falls facility opened, Kent, Wash.-based Sysco Food Service of Seattle Inc. serviced the Inland Northwest region, Rosencrance says. The new location in Idaho not only allows the company to operate closer to its customers here, but also to work with more local growers and suppliers, he says.


Its more difficult to provide customers timely service through a long-distance relationship, he says. Now, we can increase our partnerships with local people and give them a channel of distribution to get their products out into the marketplace.


Rosencrance says, for example, the company stocks products from T.R. Rizzuto Pizza Crust Inc. and Pasta USA Inc., both of Spokane. He says he is working on agreements with other local food manufacturers as well.


Most of the dry beans and rice distributed through the Post Falls facility come from Idaho, and the fresh produce and dairy products also typically come from locally-owned companies, such as Spokane Produce Inc., he says.


Part of Sysco Spokanes plan to increase sales includes creating partnerships with customers through what it calls business reviews, he says. This is to introduce customers to Syscos services, products, and support structure.


Clients can call and make an appointment to take a two- to three-hour tour of the facility. Also, they meet with culinary specialists in a test kitchen, located next to the warehouse, to go over menus and try out products, such as flame-broiled Angus beef burgers.


Sysco also offers customers whats called iCare Services, in which its managers work with restaurant owners and operators to boost their sales and hold business review meetings to analyze the strengths and weaknesses of the clients relationship with the company.


This is the key component of our strategy, Rosencrance says. If we can help our customers grow their businesses, then we can grow ours as well.


Sysco Spokane started conducting business reviews in July, and other Sysco subsidiaries nationwide have been running them for the past two or three years, Rosencrance says. He says customers who participate in those reviews typically grow in their business relationship with us at twice the rate of those who dont.


Sysco Spokane is whats called a fold-out operation, which is part of Sysco Corp.s overall plan for growth that was first implemented in 1995. The term refers to the opening of a new facility and the creation of a new operating company in an area where an established customer base was being serviced from another Sysco location, Rosencrance says.


Fold-out companies employ former delivery personnel, members of the core management team who have been transferred from the original or affiliated companies, and local workers. Rosencrance says a fold-out company opened in Ventura, Calif. last year, and Sysco plans to open additional fold-outs in Alabama and Raleigh, N.C., soon.


Sysco Corp. reported net income of $218 million for the third quarter of its 2005 fiscal year, ended April 2, which was up from its 2004 third-quarter earnings of nearly $196 million. The company reported its 28th consecutive year of sales and earning gains last year. For its 2004 fiscal year that ended July 3, 2004, it reported net earnings of $907 million on sales of $29.3 billion. Its income was up 17 percent, and its sales increased 12 percent from its 2003 fiscal year.


According to its Web site, the company provides food product services to more than 400,000 customers in North America, operates 156 distribution facilities, and employs 46,300 people.