Canada’s largest supplier of restaurants and other food service businesses is expanding into e-commerce to sell directly to consumers for the first time in its history, as the impact of the COVID-19 pandemic shakes up food supply chains.
Sysco Canada announced a new click-and-collect program on Monday called Sysco at Home in major cities across Canada. It will offer online orders for pick-up at 15 of its distribution centres. The website sells grocery items in bulk, such as produce, frozen products, meat and poultry, and other supplies. As with some other grocers’ programs, Sysco staff will load orders into customers’ trunks for them. Sysco is also offering delivery in the Greater Toronto Area, with plans to expand that service to other cities such as Calgary, Edmonton, Vancouver and Montreal in the coming weeks.
The company, a subsidiary of Houston-based Sysco Corp., usually sells food products and equipment to businesses such as restaurants and hotels. As such, its products are not typically packaged in the small formats seen in most grocery stores. The e-commerce platform offers items in larger quantities, such as boneless chicken breasts in four-kilogram cases; 20-kilogram bags of flour; frozen waffles in packages of 48; and one-litre milk cartons in cases of 12.
As restaurants and other destinations have closed their doors, major food service distributors – including Sysco – have been redirecting their supplies and working closely with grocers to help them meet a booming consumer demand. That means some larger-format products have begun showing up in stores more recently. The effort has also aided the distributors, who found themselves saddled with inventory they could not deliver to their usual customers. While Sysco is still servicing health-care facilities, other clients have closed temporarily.
“We’ve stepped out from behind the curtain of a business-to-business food supply chain organization,” Sysco Canada president Randy White said.
But while supplies such as meat, poultry and seafood have been relatively easy to redirect to grocery channels, others are not.
“If you want to buy a can of soup, there’s a 10-ounce can of soup at the grocery store; our cans of soup are 100 ounces,” Mr. White said.
Some of the company’s restaurant clients have also been opening their own ersatz grocery services at their locations, as well as continuing to offer takeout. But the damage to the restaurant industry from COVID-19 has been significant. While the company is anticipating a recovery for restaurants when businesses are able to open again, that recovery is expected to be slow, due to the number of Canadians whose incomes have been affected.
Meanwhile, grocery demand has soared: last week, Sobeys parent company Empire Co. Ltd. reported a 37-per-cent increase in sales in the four weeks starting March 8.
Sysco began testing its e-commerce service in the Toronto area last week, in order to gauge demand before launching nationwide. The company was “stunned and shocked” at the initial response, Mr. White said.
“We’re very eager and interested to expand our offering beyond our current customer base, so we do see this continuing as we learn more about it,” he said. "There’s an enormous industry out there – that I don’t think we’ve seen yet – that’s going to come out of this. Given the opportunity, we’re now in it, and we’re moving forward with it.”
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