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UPDATED: Sysco, US Foods’ Steep Prices Hikes a Harbinger of Things to Come?

(Updated Nov. 11, 2021 with Sysco Q3 numbers)

Prices for supplies from foodservice distribution giants US Foods and Sysco rose 11.5% and 13.4% respectively during the third quarter but had little effect on soaring demand from restaurants.

US Foods case shipments rose overall by 18.5% during the period, with the volume of deliveries specifically to independent restaurants surging 21.1%, according to the distributor.

The company said that the food inflation contributed to a 34.9% jump in sales for US Foods for the quarter, but the gain in its costs held the upswing in gross profits to 27.4% (Restaurant Business, Nov. 8)

Meanwhile, total case volume for Sysco U.S. broadline operations rose 28.1%.

Sysco officials did not say how much of the spike in their costs were directly shifted to domestic foodservice customers. CEO Kevin Hourican described it as an “efficient pass-through of inflation” that enabled the distribution giant to increase its gross profit per case. (Restaurant Business, Nov. 9)

The price increases come against the backdrop of record-breaking inflation in the foodservice sector. The Bureau of Labor Statistics reported in today’s Consumer Price Index report that food away from home rose 5.3% in the twelve months ending in October.


Additionally, limited-service meals rose 7.1% over the past twelve months, while full-service meals rose 5.9%. Both were the largest 12-month increases in the history of the reports.

“After seeing food cost inflation moderate in July, these costs accelerated again in August and September,” said US Foods CFO Dirk Locascio, adding that the surge seems to have crested, and company is “seeing inflation moderate a little bit into October.”

State of Inflation

Beyond foodservice, price increases on most food staples continue to impact households across the nation.

As The Wall Street Journal reports, food makers ranging from Mondelez International Inc. to Kraft Heinz Co. have been raising prices in recent months to offset escalating costs in labor, raw materials and transportation.

According to the CPI report, year over year prices for all food consumed at home rose 5.4% in October, largely driven by a 11.9% spike in the prices of meats, poultry, fish and eggs.

Chicken wings, pork ribs and other meat cuts that require hands-on labor have experienced some of the biggest cost increases at the supermarket, according to meat buyers and grocery executives. The index for beef rose 20.1% and the index for pork rising 14.1%, its largest 12-month increase since the period ending December 1990.

Other major grocery store food group indexes also went up over the last 12 months with gains ranging from 1.8% for dairy and related products to 4.5% for nonalcoholic beverages.