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I Tracked Down The Company Ruining Restaurants

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I Tracked Down The Company Ruining Restaurants

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298 segments

0:02

I've had a sense that

0:03

lots of restaurants are starting to

0:06

taste the same.

0:08

And maybe you, too, have had a sense that

0:10

something is amiss.

0:13

So I wanted to test a hypothesis

0:15

with my coworkers:

0:16

that you can be served the same exact food —

0:19

[Alec, reporting] Can I just get the jalapeño poppers?

0:21

[Alec, hosting] — from totally different restaurants —

0:24

The fried pickles....

0:26

Can I get the fried pickles?

0:27

[Alec, Hosting] — but made in the same factory,

0:30

whether you wanted it or not.

0:31

Can I get the funnel cake fries?

0:36

Here's the question behind this test.

0:38

Are we trapped

0:39

into eating the same mediocre food

0:42

from New York to Alaska?

0:43

And if so, why?

0:45

And who's behind it?

0:47

Alright, moment of truth.

0:48

That’s the mystery we're going to unpack today.

0:52

To get to the bottom of it,

0:54

first I went to Harlan, Iowa.

0:56

Woke up at 5 a.m.

0:57

to talk to a restaurant owner

0:58

about how they get their food.

1:02

[Ellen] I'm Ellen Walsh-Rossman,

1:03

and I own Milk and Honey.

1:05

[Alec] The thing is,

1:06

Ellen’s restaurant does it

1:07

differently than most restaurants in 2025.

1:10

She showed me how she makes something from scratch:

1:13

her French toast.

1:14

She uses a distributor to get most base ingredients:

1:17

the milk from a local dairy,

1:19

and the eggs from a local farm —

1:21

Ellen’s.

1:23

The bread is brioche

1:24

that the restaurant makes from scratch.

1:26

From there, the brioche gets baked,

1:28

cut, dipped in homemade custard,

1:30

griddled, and served to you,

1:32

the customer,

1:33

or, luckily enough, me.

1:36

It’s very good.

1:38

It's not just the French toast.

1:39

Ellen tries to work with

1:41

as many local producers as possible.

1:44

[Ellen] This is our country skillet.

1:47

And this is the local

1:48

sourdough bread from

1:50

a bakery in Omaha.

1:52

But for many restaurants,

1:53

sourcing local ingredients like this

1:55

is getting harder and harder.

1:58

Ellen's distributor is regional

2:00

and employee-owned.

2:02

But if you're a restaurant owner,

2:04

especially in a rural area,

2:07

you might just have

2:08

one or two distributors to choose from.

2:10

There's a good chance

2:11

one of them is a company called Sysco.

2:18

And they are suspect number one

2:20

for my deep fried mystery.

2:23

To hash out that suspicion,

2:24

I spoke to Austin Frerick,

2:26

author of the book Barons,

2:28

who explained the profound way

2:30

Sysco is shaping the way we eat out.

2:33

The innovation of Sysco was that it was

2:35

the first national company

2:36

to essentially offer everything a restaurant needs.

2:39

[Alec] Back in the day, someone like Ellen

2:41

might have one distributor for butter

2:43

and another for eggs.

2:45

But Sysco is what's called a broadliner, supplying

2:48

everything from paper products

2:50

to meat and produce.

2:52

[Claire Kelloway] Sysco was a merger of nine different

2:55

wholesale restaurant distributors

2:57

with kind of the explicit goal

3:00

of making a national player.

3:02

[Alec] That was in 1969.

3:03

Fast forward to today,

3:05

and Sysco has grown so much

3:07

that it really only has

3:08

two other competitors in the national space.

3:11

Among them, Sysco is the largest,

3:13

and even a decade ago

3:15

controlled an estimated 35% of the market.

3:19

And this year,

3:20

their gross profit hit $15 billion.

3:24

The scary thing about Sysco was

3:25

it didn't become this giant through organic growth,

3:28

but instead it became a giant

3:29

through relentless acquisitions that went unchecked.

3:32

[Claire] They've acquired over 150 companies

3:35

to become really one of the only

3:38

national broadline distributors for restaurants.

3:42

[Alec] And this growth I learned,

3:43

is deeply changing the way we eat

3:46

from farm to table.

3:48

Let's start with the farm part.

3:50

Ellen tries to work with as many

3:51

local producers as possible,

3:53

even when it’s more expensive.

3:55

Sysco, on the other hand,

3:56

operates with the biggest producers

3:58

at massive scales to eke out savings —

4:02

producers that often have

4:03

some of the most exploitative production models.

4:06

Sysco gets their berries from companies like Driscoll —

4:09

Driscoll basically took the Nike sweatshop model

4:11

and applied it to berry production.

4:12

[Alec] — and chicken from companies like Tyson.

4:14

[Austin] Tyson's applied a sharecropping model

4:16

to meat production.

4:17

[Alec] If you used a national distributor,

4:19

could you get the Omaha sourdough?

4:22

No.

4:23

- No - No?

4:24

And why is that?

4:25

So a lot of local distributors

4:27

or local producers

4:28

are not able to tap into regional distribution.

4:32

The volume and production quantities is too high.

4:36

[Alec] Sysco scours the globe

4:38

for a good deal,

4:39

and there's reason to be concerned

4:40

about how they're getting some of those deals.

4:43

Seafood is the best example of this.

4:45

Many providers to Sysco

4:47

have been accused of engaging in slave labor.

4:49

[Alec] That includes forced Uyghur

4:51

and North Korean labor in China.

4:52

Basically any dark part of the food system

4:54

has moved offshore,

4:56

which makes policing it really, really hard to do.

4:58

But Sysco doesn't just source shrimp and strawberries.

5:01

They have their own line of

5:02

mass manufactured frozen foods.

5:05

Everything from sourdough and brioche to —

5:08

as I learned from researching this —

5:09

jalapeño poppers,

5:11

other fried appetizers,

5:12

and desserts.

5:14

Frozen food, it turns out,

5:15

isn't just a facet of the Sysco business model.

5:18

It drives it.

5:18

I don't think Americans appreciate that

5:21

frozen food allows these long, exploitative supply chains.

5:24

[Alec] In the early 2000s,

5:26

Sysco was buying jalapeño poppers

5:27

assembled in Mexico

5:28

for well below minimum wage

5:30

and shipped frozen all over the country.

5:33

[Austin] It allows a race to the bottom in terms of

5:34

labor standards and pay.

5:39

[Alec] So the food we ordered

5:40

could have come to a distribution center

5:41

like this, frozen,

5:44

shipped to restaurants across the country

5:46

and then dumped into a fryer.

5:48

And now, the truckers driving those shipments?

5:51

They're also getting squeezed by Sysco.

5:54

Sysco's continuously lobbying year after year

5:56

to deregulate the trucking industry.

5:58

And what we've seen since the 1980s

6:00

is trucking wages are down nearly 40%.

6:03

After the food is unloaded off of trucks,

6:05

it gets cooked up and put on your plate.

6:08

And Sysco's dominance means the food on that plate

6:10

is increasingly the same

6:12

and increasingly worse.

6:15

Do you think regional variety is disappearing?

6:18

Yeah, I would say so.

6:20

[Alec] You've probably had a Sysco meal without even realizing it.

6:23

They offer everything from

6:25

these sad bread rolls

6:26

to wagyu beef burger patties.

6:29

If you've ever spent time in a hospital or a prison,

6:32

you might have had a meal off of a Sysco truck.

6:35

And if you pay attention,

6:37

they're everywhere.

6:39

And so it's getting harder and harder to avoid

6:42

getting the exact same frozen meal

6:43

at your local diner or brewery.

6:46

It probably won't taste that great either.

6:48

If you were to buy pre-made brioche

6:50

from one of the big national distributors...

6:52

[Ellen] They probably will try to keep things cheap,

6:54

so like, they're probably not going to use butter.

6:57

[Alec] So they'll use like a canola oil or shortening —

6:59

[Ellen] Yeah, shortening or something like that.

7:02

And then, like, their sugar might be like,

7:04

processed sugar, like a high-fructose corn syrup kind of thing.

7:07

[Alec] Austin found a story of a Pennsylvania diner

7:09

whose burgers weren't frying the same on the grill.

7:12

when the owner investigated

7:14

he realized the patties now contained soy protein filler.

7:18

Sysco and their competitors are flooding restaurants

7:21

ultra-processed food like this.

7:23

Now, you might expect that with a

7:24

deep-fried cheddar jalapeño popper,

7:27

but maybe less so with something like bread.

7:30

The irony is you could be at a diner in a small town in Iowa,

7:34

surrounded by some of the world's best farmland,

7:36

and yet nothing on the menu is coming from around you.

7:39

It's low quality products

7:40

produced by people being exploited

7:42

outside the national borders.

7:44

The system isn't exactly working out

7:46

for restaurant owners or local distributors, either.

7:49

With the competition bought out, Sysco has more leverage

7:52

to arbitrarily raise prices.

7:54

During Covid for instance,

7:56

they used their market power to pass on inflation to their customers

7:59

and increase their earnings by 159%.

8:03

Sysco’s CEO even said on an earnings call

8:06

that they had no intention of competing on price.

8:09

[Claire] Smaller restaurants have

8:11

almost no negotiating power with Sysco.

8:15

And so if you are in a rural area where

8:18

there, you know, aren't any other distributors,

8:22

then restaurants really don't have many options at all.

8:27

As we've lost some of that regional wholesale infrastructure,

8:31

we also see the loss of local businesses,

8:35

local farms, and a regional food system.

8:39

In general,

8:40

restaurant owners have little recourse when Sysco screws them over.

8:44

Complaints are rampant about

8:45

late deliveries, crushed eggs below stacks of boxes,

8:48

even swapping ingredients without informing restaurants.

8:52

As the industry continues to consolidate,

8:54

these issues will only get worse.

8:57

Sysco already tried to buy their largest competitor, US Foods,

9:01

but was shut down by the FTC.

9:04

Now Sysco's two largest competitors are signaling

9:07

they might try to merge.

9:09

In an environment where the biggest companies

9:11

aggressively push out competition,

9:13

it makes sense.

9:15

It also means restaurants will have

9:17

even less choice than they already do,

9:19

and farmers will have less bargaining power

9:21

when selling their food.

9:23

[Claire] The most aggressive, you know, gold standard

9:27

thing that an antitrust enforcer could do would be to

9:30

look at some of these deals and say, maybe we went too far.

9:34

Like, maybe we let Sysco acquire too many companies,

9:37

and we should unwind some of those, and break up Sysco.

9:42

That's something that we've seen

9:45

antitrust enforcers take on

9:46

with past deals like, Ticketmaster.

9:49

[Alec] The FTC could also block future acquisitions.

9:52

And states and federal regulators

9:54

could scrutinize discount programs that people like Claire and Austin

9:57

suspect Sysco is using to drive out the competition.

10:00

But what about my mission to get the same food

10:03

in entirely different states?

10:05

We ordered a mix of jalapeño poppers, fried pickles,

10:07

and funnel cake fries

10:09

in Nebraska, New York, New Jersey, Pennsylvania, and in Alaska.

10:17

All right.

10:17

Moment of truth.

10:20

Jalapeño popper.

10:23

Never been to this restaurant.

10:25

Never been to this city, but...

10:29

It just tastes like something I've had 100 times.

10:32

In Omaha,

10:33

I'm pretty sure I got the Sysco

10:35

brand jalapeño popper,

10:37

though to be fair, their main competitor sells

10:40

almost the same thing.

10:42

The one that I got in Brooklyn was

10:44

clearly different than that one,

10:45

and was a little bit better.

10:47

Here in New Jersey, I ordered funnel cake fries.

10:50

They seem...

10:51

exactly the same as the ones I got in Omaha.

10:54

A fellow producer also ordered them in Philadelphia

10:57

and another in Anchorage.

10:58

They look pretty similar.

11:00

I also ordered some fried pickles,

11:02

which is what my fellow producer ordered in Philly.

11:05

They're clearly different.

11:06

One is chips, one is spears.

11:08

But there's a chance that I got these Sysco pickle spears.

11:11

Don't get me wrong. You've probably had a frozen

11:14

Sysco meal and thought it was totally fine.

11:17

But the point is,

11:18

in this giant food system, something is being lost.

11:22

Regional variety, local jobs, local businesses,

11:25

and just having a unique meal.

11:28

A meal that's different.

Interactive Summary

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The video explores the hypothesis that many restaurants serve the same food, often of mediocre quality, due to the consolidation of the food distribution industry, primarily by a company called Sysco. Sysco, a national broadliner, supplies nearly everything a restaurant needs, from paper products to frozen foods. Its growth has been largely through aggressive acquisitions, leading to a lack of competition. This consolidation impacts food quality by favoring large-scale, often exploitative, producers and mass-manufactured frozen items over local, fresh ingredients. Sysco's dominance also affects truckers, leading to lower wages, and gives them leverage to arbitrarily raise prices, squeezing smaller restaurants and local distributors. While Sysco claims not to compete on price, their market power allows them to pass on inflation. The video concludes that this system leads to a loss of regional variety, local businesses, and unique dining experiences, with consumers increasingly eating the same mass-produced meals without realizing it.

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