Cargill, Inc., SYSCO Corporation (NYSE: SYY – news), Tyson Foods, Inc. (NYSE: TSN – news) and McDonald’s Corporation (NYSE: MCD – news), through eMac Digital, a company recently formed with Accel-KKR, announced today the formation of electronic Foodservice Network (eFS Network), a company that will operate an independent B2B marketplace to facilitate sales and purchases to the foodservice industry. eFS Network, which will be based in Chicago, will be open to all segments of the industry — from foodservice suppliers and distributors to multi-unit operators — and will help maximize Internet-based efficiencies and savings for its participants across the entire supply chain.
Fragmentation in the foodservice industry and a complex supply chain provide tremendous opportunities to cut costs and create efficiencies. eFS Network’s’ neutral web-based marketplace will streamline information flow between participants and promote industry-wide technology standards. It will feature both a public exchange that will promote connections between participants in the foodservice industry and private exchanges that will enable confidential customer-supplier interactions. Initially, the exchange will focus on U.S and Canadian foodservice distribution, a $150 billion industry.
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“This is unlike typical B2B arrangements we’ve seen so far because it includes all segments of the foodservice industry, from food manufacturers and distributors to restaurant chain operators. Together, we can produce efficiencies for all founding and future exchange participants. This exciting partnership is just one example of the kind of new thinking and new opportunity we’re aggressively pursuing at McDonald’s and at eMac Digital,” added Wayne Wolf, Vice President for Corporate Strategy ‘in charge of B2B digital efforts at McDonald’s Corporation.
“We believe that eFS Network will lead the way in revolutionizing the current foodservice marketplace. This is an industry-backed effort designed to bring e-commerce to the foodservice industry, greatly enabling the realization of benefits more quickly. This distinctive approach of connecting operators, distributors and suppliers is an ideal model to drive costs out of the entire supply chain,” said Tom Lankford, Executive Vice President of Foodservice Operations and FreshPoint, Inc. at SYSCO Corporation.
Each of the four founding partners are leaders in their respective segments of the industry. In addition, eFS Network expects several additional strategic partners from other chain restaurants, distributors, and branded and private label manufacturers of foodservice products to join in the near term. eFS Network will have its own board of directors and will begin immediately recruiting a chief executive officer and senior management team.
“Tremendous opportunities exist in the foodservice supply chain to gain greater efficiencies and drive out costs,” said Robert Lumpkins, Vice Chairman of Cargill, Inc. “The expertise that we and our partners bring to the table can offer unparalleled benefits to all users of this marketplace. Our conversations with potential investors and participants indicate that interest in eFS Network is very strong.”
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By GlobalData“The foodservice industry is faced with its own unique challenges in the development of a successful business to business model for our marketplace. The priority for eFS Network and all the other industry participants who will join in the future will be to lower the total cost of inventory ownership by the development of a more efficient and visible foodservice supply chain. It is indeed an exciting opportunity,” said John Lea, Executive Vice President and Chief Marketing Officer, Tyson Foods, Inc.
James Breyer, Managing Partner of Accel Partners and a Director of both eMac Digital and Accel-KKR, said, “Bringing global industry leaders like Cargill, McDonald’s, Sysco and Tyson together to optimize the supply chain of the foodservice industry is a great example of how to use the Internet to create significant and sustainable value. We look forward to working closely with our new partners and others to bring this enterprise to market. We plan to leverage our e-commerce experience, resources and relationship to make eFS Network a successful industry venture.”
Business inquiries for eFS Network should be directed to Pete Levangie, 630-430-2434, or visit eFS Network’s website at www.efsnetwork.com.
About Cargill, Inc.
Cargill is an international marketer, processor and distributor of agricultural, food, financial and industrial products and services with 85,000 employees in 60 countries. The company provides distinctive customer solutions in supply chain management, food applications, and health and nutrition. The Cargill eVentures unit invests in electronic businesses that combine digital technologies with Cargill industry and market expertise. Other Cargill eVentures investments include Rooster.com to serve farmers and Novopoint.com to serve the packaged food and beverage industry. For more information about Cargill, Inc., visit www.cargill.com.
About SYSCO Corporation
SYSCO is the largest marketer and distributor of foodservice products in North America, with a distribution network that extends throughout the contiguous United States and Alaska, as well as portions of Canada. The company operates 105 distribution facilities, serving more than 325,000 restaurants, hotels, schools, hospitals, retirement homes and other locations where food is prepared to be eaten on the premises or taken away and enjoyed in the comfort of the diner’s chosen environment. SYSCO distributes a wide variety of fresh and frozen meats, seafood, poultry, fruits and vegetables, plus bakery products, canned and dry foods, paper and disposable products, sanitation items, dairy foods, beverages, kitchen and tabletop equipment, as well as medical and surgical supplies. For more information about SYSCO, visit www.sysco.com.
About Tyson Foods, Inc.
Tyson Foods, Inc. (NYSE: TSN – news), founded in 1935, is the world’s largest fully integrated producer, processor and marketer of chicken and poultry-based food products with annual sales in excess of $7 billion. Over the years, the Tyson product line has expanded to include prepared meals and entrees, and specialty products such as corn chips and tortillas. Tyson Foods is headquartered in Springdale, Arkansas. For more information about Tyson, visit www.tyson.com.
About McDonald’s Corporation
McDonald’s is the world’s leading foodservice retailer, with more than 27,000 restaurants serving more than 43 million customers a day in 119 countries. Approximately 80 percent of McDonald’s global restaurants are owned and operated by independent franchisees. eFS Network will be the first investment of eMac Digital, a company recently formed by McDonald’s Corporation and Accel-KKR Inc. to accelerate the development of global Internet-related businesses in the food service industry, focusing on business-to-business opportunities that drive efficiencies, maximize cost savings and create new markets and distribution channels. For more information about McDonald’s, visit www.mcdonalds.com.
Accel Partners, a leading venture capital firm with expertise in Internet start-ups, and Kohlberg Kravis Roberts & Co., a leading private equity firm with expertise in building value at large corporations, created Accel-KKR to focus on the next wave of Internet development – the integration of offline and online assets.
Forward-Looking Statements
Certain statements made herein are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They use such words as “may,” “will,” “believe,” “plan” and other similar terminology. These statements are based on current expectations and involve risks and uncertainties. Actual results could differ materially due to the effectiveness of operating initiatives; changes in global and local business and economic conditions; interest rates; political or economic instability in local markets; competition; consumer preferences; demographic trends; the risk of interruption of supplies due to lack of long-term contracts; dramatic changes in supply chain buying patterns; severe weather; legislation and governmental regulation; accounting policies and practices and other risk factors.
