SYSCO Corporation And Dezina Marketing, Inc. Form Joint Venture In First Online Offering Of SYSCO Food Products To Targeted Customers
COLUMBIA, Md. & JESSUP, Md.--(BUSINESS WIRE)--SYSCO, Systems and Services Corporation (NYSE - SYY, $19 Billion market cap), and Dezina Marketing, Inc. (DZNA), announce an exclusive venture designed to penetrate the residential market for online grocery shopping through substantial cost savings offered by SYSCO's immense buying power, and the personalized product delivery system created by Dezina Marketing, Inc. The venture marks SYSCO's first foray into online grocery marketing to individual consumers.
SYSCO is North America's largest foodservice marketer and distributor. Dezina Marketing, Inc., ("Dezina") based in Columbia, MD, is a proactive marketing company in the food delivery marketplace, the fastest growing segment of the multibillion-dollar food products industry. Dezina primarily markets food delivery service commissaries under the trade name, Deli Around The Corner ("DATC"). Through the DATC operations, which focus on building customer relationships, not just customers, through personalized attention, Dezina will provide the marketing and distribution channels for delivering SYSCO food products to individual consumers at a personal level of service.
"In direct contrast to the rising grocery bills most Americans are facing, SYSCO expects to offer the online customers significant cost reductions on their grocery items," said Keith Shapiro, president and CEO of SYSCO Food Services of Baltimore, LLC, which markets and distributes food and related products to foodservice operators throughout the Baltimore and Washington, D.C. metropolitan areas.
"Unlike a handful of other online grocery operations, our association with Dezina and its delivery system will effectively negate the overhead costs typically passed onto customers through product pricing. Groceries ordered come directly from SYSCO's warehouses and are delivered to the customer's location through Dezina's personalized delivery system," said Shapiro.
The initial target market will be DATC business customers with a second phase extending to residential households falling within a three mile radius of DATC locations, all of whom will receive free delivery of their groceries from Dezina representatives. "Beyond tremendous cost savings for our customers, our distinct advantage is being able to offer customers a personal shopper experience, if you will," said Kristin Hill, Director of Operations for Dezina Marketing, Inc. "Our expertise is in turning up the expectations of what constitutes quality and friendly services. And in this particular case, bringing the hometown grocery shopping experience where you know the grocer and the grocer knows you, into the anonymous web-based shopping experience."
Dezina projects the earnings per share from the online grocery venture to be $.26 for its shareholders in the first 12 months of operation.
The two companies are developing an interactive, virtual grocery shopping website that will simulate an actual grocery shopping experience. The site will be made available to target audiences and will have customer use incentives built into the system in various forms.
The new venture is an outgrowth of an existing strategic corporate alliance between SYSCO and Dezina Marketing, Inc. whereby SYSCO has nurtured the development of Dezina and provides all food service products to DATC operations.
Dezina Marketing, Inc. began public trading on August 13, 2008. The milestone was achieved rather quickly for the small company, incorporated September 13, 2007 through a reverse merger with a publicly traded shell. Its flagship operation, the DATC commissaries, primarily focus on lunch delivery and corporate catering to business customers during regular business hours, a customer base that is currently an under-served business segment of the food delivery marketplace. The first DATC commissary is running at capacity, 300 delivered lunches per day, in Timonium, Maryland. Dezina expects to open a commissary in Columbia, Maryland and one in the Research Blvd. area of Rockville, Maryland in the fourth quarter ending October 31, 2008.
SYSCO is the global leader in selling, marketing and distributing food products to restaurants, healthcare and educational facilities, lodging establishments and other customers who prepare meals away from home. Its family of products also includes equipment and supplies for the foodservice and hospitality industries. For the fiscal year 2007 that ended June 30, 2007, the company generated more than $35 billion in sales. For more information about SYSCO visit the company's Internet home page at www.sysco.com.
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