Sep 2, 2023 3 min read

What we learned from taking a $60B Foodservice industry leader through a digital transformation

What we learned from taking a $60B Foodservice industry leader through a digital transformation

Cut+Dry Co-Founder and CEO, Mani Kulasooriya, reveals what it took to digitally transform Sysco, the largest global Foodservice distributor—an unexpected career path from Big Tech to Food Distribution.

I never thought I would end up in Foodservice, nonetheless lead Sysco through a massive digital transformation.

I first met my team in 2002 at Yahoo! We learned a lot during our time there but decided it was time to build our own company, so we left in 2006 and founded CAKE, one of the first Restaurant Cloud Point of Sale companies. During my fundraising efforts, I had the chance to meet Bill Gurley, a renowned venture capitalist. After the pitch, he suggested I meet with a company named “Sysco” and offered to introduce us.

At first, I was puzzled because I didn’t understand why an enterprise hardware company like Cisco would be interested in us. Gurley “clearly” didn't understand our business. I later realized he was referring to the “other” Sysco, and that unexpected meeting was the first step towards Sysco’s acquisition of CAKE a few years later.

Fast forward to 2014, we suddenly found ourselves, a bunch of techies, inside the largest Foodservice Distributor in the world. Sysco was very much an analog, sales-driven organization that was decidedly non-tech.

We were fish out of water.

While our primary responsibility was initially to grow CAKE, we slowly started working on technology products for Sysco’s core business. Shortly after that, Sysco LABS was born, and we were tasked with running it.

Long story short, this team transformed a non-tech giant into the largest digital Foodservice Distributor.

Here are the Top 10 things we learned from our Sysco journey.

  1. Going digital is not a choice; it is a necessity. Unless you want to risk losing market share or your business, then the decision to go digital is non-negotiable.
  2. Digital transformation is not simply a technical task. It is as much a business transformation as it is a technology transformation. In fact, the business transformation is more important and should take precedence over the technology transformation.
  3. You do not need to have the entire front-end and back-end transformation completed before launching your e-commerce solution. It is a common misconception that you do. You can do both stages of the transformation simultaneously in a phased manner and move to completion faster.
  4. Restaurants are ahead of the game; Distributors need to catch up. There have been rapid advancements in technology that connect restaurants to their customers. The same cannot be said about Foodservice distributors; they are falling behind.
  5. To unlock the true potential of e-commerce, you need to have a ‘rich’ e-commerce catalog. A basic e-commerce offering can only go so far; to really reap the benefits of e-commerce (revenue lifts, team efficiencies, increased margins, etc.), you need a catalog packed with all the information a customer needs to make their purchase.
  6. Poor catalog management will lead to losses in sales, poor customer experiences, and poor visibility. Managing a rich e-commerce catalog is time-consuming and costly, but it far outweighs the losses. It is a worthy and critical investment to make.
  7. Managing Sales Staff change is as important, if not more important, than managing customer change. Sales staff are the early adopter champions of any new technologies. With their commitment, making changes, growing your business, and going digital is easier.
  8. Sales teams should be consultants, not order-takers. Distributor sales staff shouldn't be voicemail transcribers and order entry managers. They should be Foodservice consultants, helping distributors optimize efficiency, profitability, and customer satisfaction with strategic advice and solutions like menu planning and product sourcing.
  9. E-commerce is only the first step. Eventually, distributors need technologies to help operate every aspect of their business: payments, delivery, customer support, etc. This is essential to increase sales and improve your bottom line.
  10. Artificial intelligence is the next phase of evolution. But you need to have the basics running smoothly before you can inject AI into it. If you don't, you will be busy playing catch-up while the competitors go leaps and bounds beyond you.

We took all these learnings and started Cut+Dry - an e-commerce platform for food service distributors.

To learn in more detail how to take your Foodservice Distributor business through a Digital Transformation you can download Cut+Dry’s free white paper HERE!

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