The Hidden Reason Why Restaurants Are Getting Worse
How one company’s market dominance has wrecked the food industry.
By Brock Hrehor, More Perfect Union
Across the country, Americans have noticed decreasing food quality at countless restaurants. The culprit? One giant corporation that’s taking over the food distribution industry.
Market power in the food production industry is being concentrated among fewer and fewer distributors. One of the largest players in the industry, Sysco, has long been developing an outsized share of the market since forming in 1969, when nine regional food distributors merged together. According to experts, the company has since followed a playbook of relentless acquisitions and exploitative business practices to acquire over 150 companies.
“The scary thing about Sysco was it didn’t become this giant through organic growth, but instead it became a giant through relentless acquisitions that went unchecked,” Austin Frerick, an expert in agricultural and antitrust policy, told More Perfect Union.
As Sysco’s market power has increased, so has its leverage over regional buyers and workers. Sysco has allegedly used its consolidated buying power to pressure producers into accepting the lowest rates possible and to chip away at regulations. During COVID, for example, Sysco passed inflation on to its customers, while increasing its earnings to the tune of 159 percent.
“Sysco’s continuously lobbying year after year to deregulate the trucking industry,” Frerick said. “And what we’ve seen since the 1980s is trucking wages are down nearly 40 percent.”
To achieve its cost-cutting measures, Sysco has repeatedly partnered with producers that have some of the most exploitative production models in the food industry. According to an investigation from Outlaw Ocean Project, Sysco previously partnered with Chinese companies that have been accused of using forced Uyghur and North Korean labor. The company also sources its berries from Driscoll, which has been accused of widespread wage theft. Sysco sources much of its meat from Tyson, which has been accused of child labor violations and animal cruelty and recently agreed to an $85 million settlement after it was accused of illegally conspiring to limit pork supply.
Restaurant owners often have few options for redress when having issues with Sysco, such as late deliveries, crushed eggs, and swapping ingredients without informing restaurants.
And as the industry continues to consolidate, these issues will likely be exacerbated. Sysco already tried to buy their largest competitor, U.S. Foods, but the attempted acquisition was struck down by the Federal Trade Commission. Two of its largest competitors, however, are attempting a megamerger that could provide even fewer options to small restaurants seeking food suppliers.
For a deeper dive into how Sysco developed its market dominance and the company’s exploitative labor practices, watch the video below:
Reporting by Alec Opperman. See below for a full transcript of the video.
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ALEC OPPERMAN, More Perfect Union: I’ve had a sense that lots of restaurants are starting to taste the same. And maybe you, too, have had a sense that something is amiss. So I wanted to test a hypothesis with my coworkers, that you can be served the same exact food…
ALEC: Can I just get the jalapeño poppers?
ALEC, VO: From totally different restaurants.
IAN MCKENNA, More Perfect Union: The fried pickles.
ALEC: Can I get the fried pickles?
ALEC, VO: But made in the same factory, whether you wanted it or not.
ALEC: Can I get the funnel cake fries?
ALEC: Here’s the question behind this test. Are we trapped into eating the same mediocre food from New York to Alaska, and if so, why? And who’s behind it? That’s the mystery we’re going to unpack today.
ALEC: To get to the bottom of it, first, I went to Harlan, Iowa, woke up at 5am, to talk to a restaurant owner about how they get their food.
ELLEN WALSH ROSEMAN, Milk and Honey: I’m Ellen Walsh Roseman, and I own Milk and Honey.
ALEC: The thing is, Ellen’s restaurant does it differently than most restaurants in 2025. She showed me how she makes something from scratch for french toast. She uses a distributor to get most base ingredients, the milk from a local dairy, and the eggs from a local farm, Ellen’s. The bread is brioche that the restaurant makes from scratch. From there, the brioche gets baked, cut, dipped in homemade custard, griddled and served to you, the customer, or luckily enough, me.
ALEC: It’s very good.
ALEC: It’s not just the french toast. Ellen tries to work with as many local producers as possible.
ELLEN: This is our country skillet, and this is the local sourdough bread from a bakery in Omaha.
ALEC: But for many restaurants, sourcing local ingredients like this is getting harder and harder. Ellen’s distributor is regional and employee-owned. But if you’re a restaurant owner, especially in a rural area, you might just have one or two distributors to choose from. There’s a good chance one of them is a company called Sysco. And they are suspect number one for my deep fried mystery. To hash out that suspicion, I spoke to Austin Frerick, author of the book Barons, who explained the profound way Sysco is shaping the way we eat out.
AUSTIN FRERICK, Antitrust and Food Industry Expert: The innovation of Sysco was I was the first national company to essentially offer everything a restaurant needs.
ALEC: Back in the day, someone like Ellen might have one distributor for butter and another for eggs, but Sysco is what’s called a broadliner, supplying…
AUSTIN: Everything from paper products to meat and produce.
CLAIRE KELLOWAY, Journalist, Open Markets Institute: Sysco was a merger of nine different wholesale restaurant distributors with kind of the explicit goal of making a national player.
ALEC: That was in 1969. Fast forward to today, and Sysco has grown so much that it really only has two other competitors in the national space. Among them, Sysco is the largest, and even a decade ago, controlled an estimated 35% of the market, and this year, their gross profit hit $15 billion.
AUSTIN: The scary thing about Sysco was it didn’t become this giant through organic growth, but instead it became a giant through relentless acquisitions that went unchecked.
CLAIRE: They’ve acquired over 150 companies to become really one of the only national broadline distributors for restaurants.
ALEC: And this growth, I learned, is deeply changing the way we eat from farm to table.
ALEC: Let’s start with the farm part. Ellen tries to work with as many local producers as possible, even when it’s more expensive. Sysco, on the other hand, operates with the biggest producers at massive scales to eke out savings. Producers that often have some of the most exploitative production models. Sysco gets their berries from companies like Driscoll.
AUSTIN: Driscoll has basically took the Nike sweatshop model and applied it to berry production.
ALEC: And chicken from companies like Tyson.
AUSTIN: Tyson’s applied a sharecropping model to meat production.
ALEC: If you used a national distributor, could you get the Omaha sourdough? Could you get…
ELLEN: No.
ALEC: And why is that?
ELLEN: A lot of local distributors or local producers are not able to tap into regional distribution. The volume and production quantities is too high.
ALEC: Sysco scours the globe for a good deal, and there’s reason to be concerned about how they’re getting some of those deals.
AUSTIN: Seafood is the best example of this. Many providers to Sysco have been accused of engaging in slave labor.
ALEC: That includes forced Uyghur and North Korean labor in China.
AUSTIN: Basically any dark part of the food system has moved offshore, which makes policing it really, really hard to do.
ALEC: But Sysco doesn’t just source. Shrimp and strawberries. They have their own line of mass-manufactured frozen foods, everything from sourdough and brioche to, as I learned from researching this, jalapeño poppers, other fried appetizers and desserts. Frozen food, it turns out, isn’t just a facet of the Sysco business model. It drives it.
AUSTIN: I don’t think Americans appreciate that frozen food allows these long, exploitive supply chains.
ALEC: In the early 2000s, Sysco was buying jalapeño poppers assembled in Mexico for well below minimum wage and shipped frozen all over the country.
AUSTIN: It allows a race to the bottom in terms of labor standards and pay.
ALEC: So the food we ordered could have come to a distribution center like this, frozen, shipped to restaurants across the country, then dumped into a fryer, and now the truckers driving those shipments, they’re also getting squeezed by Sysco.
AUSTIN: Sysco’s continuously lobbying year after year to deregulate the trucking industry, and what we’ve seen since the 1980s is trucking wages are down nearly 40%.
ALEC: After the food is unloaded off of trucks, it gets cooked up and put on your plate, and Sysco’s dominance means the food on that plate is increasingly the same and increasingly worse.
ALEC: Do you think regional variety is disappearing?
ELLEN: Yeah, I would say so.
ALEC: You’ve probably had a Sysco meal without even realizing it. They offer everything from these sad bread rolls to Wagyu beef burger patties. If you’ve ever spent time in a hospital or a prison, you might have had a meal off of a Sysco truck. And if you pay attention, they’re everywhere. And so, it’s getting harder and harder to avoid getting the exact same frozen meal at your local diner or brewery. It probably won’t taste that great either.
ALEC: If you were to buy pre-made brioche from one of the big national distributors…
ELLEN: They probably will try to keep things cheap. So like, they’re probably not going to use butter.
ALEC: So they’ll use, like, a canola oil, or shortening, or something like that?
ELLEN: And then, like, their sugar might be like processed sugar, like a high-fructose corn syrup, kind of thing.
ELLEN: Austin found a story of a Pennsylvania diner whose burgers weren’t frying the same on the grill. When the owner investigated, he realized the patties now contained soy protein filler. Sysco and their competitors are flooding restaurants with ultra processed food like this.
ALEC: Now you might expect that with a deep fried cheddar jalapeño popper, but maybe less so with something like bread.
AUSTIN: The irony is, you could be a diner in a small town in Iowa surrounded by some of the world’s best farmland, and yet nothing on the menu is coming from around you. It’s low quality products produced by people being exploited outside the national borders.
ALEC: The system isn’t exactly working out for restaurant owners or local distributors, either. With the competition bought out, Sysco has more leverage to arbitrarily raise prices. During COVID, for instance, they used their market power to pass on inflation to their customers and increase their earnings by 159%. Sysco’s CEO even said on an earnings call that they had no intention of competing on price.
CLAIRE: Smaller restaurants have almost no negotiating power with Sysco, and so if you are in a rural area where there, you know, aren’t any other distributors, then restaurants really don’t have many options at all. As we’ve lost some of that regional wholesale infrastructure, we also see the loss of local businesses, local farms and a regional food system.
ALEC: In general, restaurant owners have little recourse when Sysco screws them over. Complaints are rampant about late deliveries, crushed eggs below stacks of boxes, even swapping ingredients without informing restaurants. As the industry continues to consolidate, these issues will only get worse. Sysco already tried to buy their largest competitor, U.S. Foods, but was shut down by the FTC. Now Sysco’s two largest competitors are signaling they might try to merge. In an environment where the biggest companies aggressively push out competition, it makes sense. It also means restaurants will have even less choice than they already do, and farmers will have less bargaining power when selling their food.
CLAIRE: The most aggressive, you know, gold standard thing that an antitrust enforcer could do would be to look at some of these deals and say, maybe we went too far, like maybe we let Sysco acquire too many companies, and we should unwind some of those and break up Sysco. That’s something that we’ve seen antitrust enforcers take on with past deals like Ticketmaster.
ALEC: The FTC could also block future acquisitions, and states and federal regulators could scrutinize discount programs that people like Claire and Austin suspect Sysco is using to drive out the competition. But what about my mission to get the same food in entirely different states? We ordered a mix of jalapeño poppers, fried pickles and funnel cake fries in Nebraska, New York, New Jersey, Pennsylvania and in Alaska.
ALEC (with jalapeño popper): All right.
ALEC: Moment of truth.
ALEC: Jalapeño popper. Never been to this restaurant, never been to the city, but it just tastes like something I’ve had 100 times
ALEC: In Omaha, I’m pretty sure I got the Sysco brand Jalapeño Popper, though, to be fair, their main competitor sells almost the same thing. The one that I got in Brooklyn was clearly different than that one, and was a little bit better.
ALEC: Here in New Jersey, I ordered funnel cake fries. They seem exactly the same as the ones I got in Omaha. A fellow producer also ordered them in Philadelphia, and another in Anchorage, they look pretty similar. I also ordered some fried pickles, which is what my fellow producer ordered in Philly. They’re clearly different. One is chips, one is spears, but there’s a chance that I got these Sysco pickle spears. Don’t get me wrong, you’ve probably had a frozen Sysco meal and thought it was totally fine, but the point is, in this giant food system, something is being lost, regional variety, local jobs, local businesses and just having a unique meal, a meal that’s different.
ALEC: We are always interested in stories about how corporations are changing the world around us. If you have the inside scoop on any part of the food industry, drop us a line at stories [at] perfect union [dot] us. Thanks for watching.