If you want to learn about enterprise artificial intelligence adoption, look no further than Sysco.
The largest food service distributor in the United States delivers food to restaurants, hospitals, schools and hotels, from national chains to independent operators, through 333 distribution centers in 10 countries serving about 670,000 customer locations, according to the Sysco website.
A network that size carries three recurring costs, which include fuel and driver time for trucks that drive more than 4.5 million miles a week in the U.S., the prices Sysco pays suppliers for the goods on those trucks and the hours sales reps spend trying to sell more to each customer on every visit. Sysco is now handing much of that work to AI to lower what it costs to move each case, according to its 2026 Annual Report.
Routing software is live in pilot regions and is delivering 2% to 4% more pieces per mile, meaning more cases delivered for every mile a truck drives, Sysco CEO and Chair of the Board Kevin Hourican said on the fiscal first-quarter 2027 earnings call Tuesday (Nov. 3).
The routing work is part of a $500 million AI efficiency program Sysco introduced in a Sept. 9 press release. The program has four workstreams, including supply chain productivity, covering routing, warehouse selector efficiency and miles driven; automation across merchandising and procurement; indirect spend management; and customer experience and back-office simplification.
The program runs 30 initiatives, and four carry about 70% of the expected value, Hourican said during the call.
Sysco expects $100 million of net cost savings this fiscal year and at least $500 million by the close of fiscal 2029, the release said.
The routing project is the largest single piece of the program, Hourican said during the call. The software plans delivery routes so each truck carries more cases per mile and hits more of its delivery windows. Every 1% gain in pieces per mile is worth about $3 million once it runs across the company. Sysco plans to roll the software out to every U.S. broadline operating location this fiscal year, with specialty and international units to follow.
A second phase will add AI simulation so routers can give the largest customers tighter windows and ask smaller ones for flexibility. The second routing phase will begin at the end of this fiscal year and contribute mostly in fiscal 2028, Hourican said during the call.
First AI-Run Supplier Bid Beats Target by 30%
Procurement is showing results. Sysco ran its first AI-powered request for proposal in recent weeks, Hourican said during the call. The agent completed the bid on its own with a person supervising, and the savings came in about 30% above target.
Sysco Chief Financial Officer Brandon Sewell said during the call that the reverse-auction tools cover more than $1 billion of annual indirect spend and were piloted on truck parts and tires. The tools let Sysco bid out spend categories too small to justify a buyer’s time.
The sales side runs on the same data. AI360, Sysco’s in-house tool for sales consultants, suggests which items to pitch and which to swap for Sysco brand products, Hourican said on the call. Top-decile users outperform bottom-decile users at every tenure level, and Sysco brand mix in local accounts rose 44 basis points.
“The decisions are still 100% in the hands of our [sales consultants],” Hourican said during the call.
Wholesale Distributors Run AI in 35 of 75 Business Tasks
Sysco is not the only distributor doing this.
The PYMNTS Intelligence report “Wholesale Writes the AI Playbook: How Goods Firms Are Scaling Intelligence Across the Enterprise” found in July that the typical wholesale enterprise uses AI for 35 of the 75 business tasks tracked, against 20 in retail and 22 in construction. Meanwhile, 85% of wholesale executives said future AI spending will prioritize margins and profitability.
Sysco rival US Foods reported a 2% improvement in cases delivered per mile from routing software, PYMNTS reported Oct. 28.
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