Sysco Corporation (SYY) Earnings Call Transcript & Summary

Hello, everyone, and welcome to Sysco's 2021 Investor Day. My name is Neil Russell, and I am the Senior Vice President of Corporate Affairs and Chief Communications Officer. I'll be your host for the event. Thank you so much for taking the time today to join us. We hope you enjoy the presentations. Before we begin, I would like to remind everyone that today's discussion contains non-GAAP measures. The reconciliation of these non-GAAP measures to the corresponding GAAP measures are included at the end of the presentation slides and can also be found in the Investors section of our website. We also invite you to review our risk factors contained in our annual report on Form 10-K for the year ended June 27, 2020, and in subsequent SEC filings. A copy of these materials can be found in the investors section at sysco.com. We have additional materials, including Sysco fact sheets, available on our Investor Relations website. A copy of our Investor Day presentation will be available on our website after the presentation has concluded. You may also submit questions throughout the presentation for our Q&A session, which will occur after today's presentation. You can send your question via e-mail to [email protected]. I am delighted to have the Sysco leadership team with us today to talk about our bold transformation and how we will strategically position our company for future profitable growth. Our conversation begins with remarks from Kevin Hourican, Sysco's President and Chief Executive Officer. Little background about Kevin. Prior to Sysco, he spent half of his career in operations and half of his career in strategy and sales, which makes him unique in his field of experience. He has navigated numerous facets of the business cycle, including customer-centric sales growth, innovation, merchandising and marketing. Kevin has now been with Sysco for more than a year, and it was a historic year for our company. Kevin's strong leadership has successfully led our organization through the biggest crisis our industry has ever faced. And it's my pleasure to now turn it over to Kevin.

Hello, everyone. I'm excited to be here with you today, but I'm disappointed that we are not able to be together face-to-face, especially for our Q&A session. With that said, we'll make the best of this virtual environment, and we look forward to being together again in the future. What a year this past year has been. My first full year at Sysco is certainly not what I had expected. But I have to tell you, I'm thrilled to be here, and I'm even more bullish on the future of Sysco after 16 months with the company. I came to Sysco for 3 major reasons: First, I'm deeply connected to the purpose of the work at Sysco. Sysco is equal parts a sales organization and a supply chain distribution company. My 2 work passions are driving increased sales by improving the customer experience and driving operational improvements that enable sales growth. Sysco is the perfect company for me to engage in these 2 passions. And stated simply, I love what I do. Second, Sysco's position as the marketplace leader. Our supply chain capabilities, our sales force presence, our financial health and our global footprint, each of these capabilities brings us strength to the market that is unmatched by competition. Third, the company has substantial and ample opportunities to get stronger and improve. My strengths as a leader are a direct match to where and how Sysco can indeed improve. We can improve our sales model. We can improve our customer experience. We can improve the efficiency and flexibility of our supply chain. Most importantly, we can be more customer-centric, agile and growth oriented. As the CEO of Sysco, I'm excited that we will convey to you today how we will improve in these very important areas and how that improvement will drive business results and deliver shareholder return. At Sysco, we are the backbone of the food-away-from-home industry. We are fully diversified, covering every corner of the food-away-from-home market, except cash and carry. Today, we serve restaurants, big and small; hotels; travel and leisure entities, government agencies; and of course, the very large food service management sector. We also own a profitable food-exporting business, distributing food to more than 80 countries across the world. We are the most diversified food distributor, and we are the only international distributor at scale. We have a scale advantage, and we will be further leveraging that advantage in the coming years to the benefit of our customers. Interestingly, the only thing that could negatively impact all of Sysco's businesses at the same time is a global pandemic. And that's exactly what happened on day #45 of my tenure at the company. While I'm not happy that the COVID crisis has so significantly impacted our business, we have taken the crisis as an opportunity to rapidly accelerate our business model transformation. We have used the crisis as an impetus to improve. We have used the crisis to gain full alignment with our business strategy. A business strategy that my leadership team and I have developed over the past year and that we will present to you today. The progress and pace of our transformation has exceeded my expectations over the past year. And I'm confident that the COVID crisis has enabled us to move faster than otherwise. An example of that progress is the regionalization of our field structure. Originally scheduled to take 2 years to complete, we converted completely in less than 6 months. Greg Bertrand will discuss this during his update this morning. And while I'm very proud of the progress we are making at Sysco to become more customer-centric, more agile and more growth oriented as a company, I fully acknowledged we could not have done any of it without our talented associates. I want to say a sincere thank you to our Sysco associates for the dedication they have displayed to our customers during this very difficult year. Our sales teams and our operations teams have been on the front lines from day 1, essential workers by definition. They have fought through very difficult working conditions and have provided terrific service to our customers. The service we provide our customers, measured via Net Promoter Score, has improved over 1,000 basis points since before COVID to where we stand today. As I said earlier, my career passion is better serving customers through sales strategies and improving business and supply chain operations. I love what I do, and I'm thrilled, honored and humbled to be the leader of Sysco. Today, we are excited to present to you 3 very important topics for your consideration. First off, we will present our growth strategy and how the specific initiatives of that strategy will enable us to better serve our customers and differentiate from our competition. Second, we will display how we will financially support the growth strategy with investments in technology, people and physical capacity funded through a robust efficiency improvement project. Lastly, Aaron will display how the growth strategy will deliver strong financial results and return value to our shareholders. Sysco deservedly has a very proud history and a strong reputation. We are the industry leader. Our profit margins are more than 2x the industry average. We are the only investment-grade company in the foodservice distribution industry. We remain the only company in our sector paying a dividend, a dividend which we paid throughout the duration of the industry's biggest crisis. At Sysco, we set the standard in our sector for how to return value to our shareholders consistently, durably over time. Despite our significant success, we can do more and become a stronger company. We can accelerate our growth. I submit that the best companies in the world are growth oriented, always improving, always innovating, always getting stronger and growing. Sysco can and will be a consistent growth company. We can be more purpose-driven in our work. The best companies leverage an aspirational and inspirational purpose to motivate their employees and drive retention and engagement. We can be more agile and bring innovation to the industry and our customers faster. To move faster, we will embark on a centrally led strategy that is executed with excellence in our field operations. These words are important, and they represent a change from how Sysco has operated in the past. The Sysco of the past was very decentralized and operated mostly independently across geographies, even in our domestic market. By becoming more centralized, aligned to a common strategy and a common business approach, we can move faster, invest with a higher return and deliver better results for our customers and our shareholders. We can be even more customer-focused than we are today. Instead of fitting a customer into the Sysco model of doing business, we will adjust our business model to meet the needs of a very diverse set of customers. We will alter our approach to meet our customers' needs versus forcing our customers to accommodate our business model. While this pivot may sound like it will increase our expenses, I respectfully submit we can be more customer-focused and more efficient. In fact, we can take our efficiency improvements and invest them into improving the service levels. And that's exactly what we intend to do. It's not an oxymoron to be both flexible and efficient. Being more customer-centric and also more profitable is our expectation. And we'll be more capable to meet the needs of our diverse customers. We will deliver increased sales growth at the local and national level. That sales growth will come from increasing our Net Promoter Score, winning new customers and increasing the share of wallet of the customers we serve today. Sysco has an extremely diversified customer base, spanning from the largest B2B partners and more than 100,000 small independent operators. We are proud to be the backbone of the food-away-from-home industry and serve so many different segments, account types and geographies. All that said, we know our recovery curve is different by business segment and by geography. Our local independent restaurant business is posting impressive sales gains versus 2019 in many geographies. This is a strong harbinger of things to come as the COVID recovery picks up pace across the country and the globe. Other business lines, such as foodservice management and the international segment, will take longer to reach pre-pandemic levels. The COVID recovery is upon us in our largest business, and we are maximizing the opportunity before us. We are executing against the business recovery from an inventory planning and labor staffing perspective, business by business, country by country. Our expectation is to recover faster and stronger than the overall market. So let's talk a little bit about the market. Here at Sysco, we have a global footprint which represents a unique opportunity for growth. Sysco International consists of 10 entities, which generate approximately 20% of our total revenue. We also have a food export business that transacts in more than 80 countries. These 10 different entities are each in a different place from a business maturity perspective, and they each have a strong growth potential with the right leadership and focus. We understand that our international segment has been a headwind on our performance for the past 2 years. And currently, our international segment is experiencing stiff business disruption as challenging COVID restrictions remain firmly in place. However, we see strong potential in our international platform. And we have detailed plans for how we will improve our performance and turn our international business from a recent headwind to a strong tailwind for our business and our shareholders. I would like to drill a bit deeper with my remarks and speak more specifically to our European operations. Without a doubt, there have been challenges in our European business, including Brexit and then our self-inflicted supply chain challenges in France. However, we are excited about the future growth of this important geography. I have hired a new international leader, Tim Ørting. Tim comes to Sysco with 3 decades of experience in the foodservice space in the international arena specifically. We have surrounded Tim with subject matter experts in supply chain, sales and business technology. I have been asked many questions in my 16 months at Sysco about the role of international in our future. I'd like to highlight our business in Ireland as a testament of what is feasible for our business in Europe. In Ireland, we hold the #1 market share position. And the business is growing nicely on the top and bottom line. We have owned the Irish business the longest, and we are the farthest along in our strategic plan. In Ireland, we have implemented our Sysco systems, introduced our selling model, converted the physical operations to match our U.S. business approach and have begun implementing private label products. Importantly, we're transitioning the name of the business from Pallas to Sysco Ireland. Customers have responded very favorably to these strategies. And we are winning share and delivering solid business and financial results. In the U.K., in France, in Sweden and in our Latin American region, we can follow a similar playbook to win. Each country has specific nuances which will be met. However, the basic building blocks of what makes Sysco, Sysco are applicable in each country. Additionally, our goal is to better leverage our global purchasing scale and bring cuisine innovation more rapidly to markets throughout the regions we serve. There is meaningful potential to grow our top and bottom line, with a keen focus on winning share in the local independent segment in each and every country in which we operate. We know how to win. And we will increase our pace of winning in the post-COVID environment. Tim will cover more details shortly on these plans. I'd like now to transition from international to discuss our important U.S. business. In the U.S., our newly developed business strategy will enable us to accelerate market share growth in a large, fragmented industry. There are 3 important statistics about our U.S. business to highlight. Today, we have approximately 16% share of a highly fragmented $300 billion market. On average, for the independent customers that we serve, we have roughly 30% share of wallet. As importantly, we serve less than half of the independent restaurants that exist in the U.S. Our opportunity to increase the number of restaurants we serve and increase the share of wallet of the customers that we do serve allows us to greatly increase our share of a $300 billion market. The technology improvements that we are delivering will enable us to accelerate our ability to win share of wallet from the customers that we serve today. Winning more share from existing customers is a very cost-efficient growth opportunity as our trucks are already stopping at these customer locations. Each incremental case delivered flows through at a higher profit rate than the prior. We have communicated on earnings calls that we have been consistently winning new business since the start of the pandemic. Wins at both the national restaurant space, wins within our international sector, wins within our Guest Worldwide business and wins at the important, local independent customer level. At the national level, we have net wins totaling more than $1.8 billion since the start of the pandemic. At the local level, we have won more than 13,000 new customers and are currently serving more unique doors than we were in 2019. Importantly, in an industry that is down more than 10% in door count, we are serving 10% more unique customers than in '19. That 20-point delta between us and the industry will enable us to grow faster than the market as these individual customers move up their own recovery curve. The customer wins at the national and local level will enable Sysco to grow faster than the market over the next 3 years. We also have notable wins in our international segment by expanding one of our largest and strongest FSM relationships overseas. Lastly, our Guest Worldwide business has secured a very large new customer, enabling us to now serve thousands of additional hotels that were previously serviced by a competitor. While our international and Guest Worldwide businesses will have a slower recovery than our domestic business, these notable wins have positioned these businesses to exceed our 2019 sales and profit levels when their individual business environments recover. I firmly believe that the best companies in the world are purpose-driven. I learned the importance of harnessing a powerful purpose by working in the health care industry for 8 years prior to joining Sysco. Leveraging purpose to engage the hearts and minds of our associates is a powerful motivator. Earlier this year, my leadership team and I updated Sysco's purpose, mission and identity. Our new purpose is more aspirational and will push us to go further, do more and innovate on behalf of our customers. We are introducing our new purpose to our organization this quarter. Academic research of great companies has documented that purpose-driven companies grow 3x faster on average than their peers. And employees are 11x more likely to stay with a purpose-oriented organization, which is why we have crafted our new purpose. Our new purpose is the following: connecting the world to share food and care for one another. Connecting, bringing people together at a table for some of life's most important moments. The world, we are unabashedly global in our reach, our assortment and our expertise. Sharing and caring, our reach is beyond just our business. We are helping thousands of communities by donating to food shelters and communities in need. We donated over 50 million meals since last March. We are caring for the planet through a more environmentally friendly farming practices, reducing water used in produce fields, decreasing protein production and reducing our carbon footprint by improving our supply chain. Our mission, delivering success for our customers through industry-leading people, products and solutions. Our customers' success is our success. This is a pivot for our mission. We are being more explicit in our specific intent to drive the success of our customers. It is why we waived order minimums in December through our Restaurants Rising program. It is why we stood up over 16,000 restaurant marketplaces during the COVID crisis. These actions were done specifically to help our customers succeed. At Sysco, we are only successful if our customers succeed. Our decisions, our investments and our improvements will be even more focused on our customers' success in the future. Our identity, together we define the future of foodservice and supply chain. We're always improving, setting the standard of excellence for our industry, defining the future of our space. The word together references that this is a people business. Our sales force, 5,000 people strong, is in the kitchen of our customers each and every week. Our drivers are in the back rooms of our customers each and every week. That level of human connection is priceless. Our team is focused through these engagements and helping our customers succeed. Menu services, website optimization, delivery courier engagement, profitability, coaching, these are just a few of the examples of the things that our sales consultants do each and every day to help our customers succeed. Our values, rooted in integrity, committed to inclusion, driving forward together, defining excellence and growing responsibly. Our intention with the updated purpose, mission and identity is to convey to our team and to our customers that we are evolving as a company. Our goal is to ensure that we are always improving, getting stronger and innovating for our customers. Words are important, but sometimes a video can tell a better story. Let's roll our purpose video, please. [Presentation]

That video does a better job than I can of explaining through our customers' eyes what good looks like. The company that we are and the company that we more consistently will be in our future comes to life through the voices of these customers. Our expertise will be brought to life to help our customers succeed. As the owner of the Gather restaurant in the video stated, who would have thought a company as big as Sysco would treat us like the family that we have become? Yes, a company as big as Sysco can and will help hundreds of thousands of small customers succeed. And when they win, we win. Having introduced you to our updated purpose, I'd like now to introduce you to our business strategy. We call it our recipe for growth. And I believe you will agree that the work is substantial and only Sysco can deliver upon all 5 of these elements. At the top of the page is the purpose, mission and identity that I just highlighted for you. In the middle of the page is our overarching objective, grow meaningfully faster than the industry. At the bottom of the page is our growth wheel, a series of 5 specific business strategies that each fuel 1 another, creating a growth algorithm for our company. Digital, the first of our growth imperatives, is improving our digital tools and platforms. The objective of these efforts is to make it easier for our customers to do business with Sysco. My favorite thing to do in my job is to travel to our field to meet with sales associates and our supply chain team. In my first months at Sysco, I consistently heard from our sales team about how our tools needed to improve, how our website was missing opportunities to engage and inspire our customers. I took this feedback to heart. And we completely reprioritized our product road map for our website to specifically address these opportunities. As we improve our technology, we will inspire our customers to buy more of our products and services. Embedded within this growth pillar are the following: Sysco Shop, our pricing project, a new customer personalization engine and improvements to our CRM tool that guides our sales organization. Judy Sansone will tell you about each of these efforts in more detail during her update. The personalization engine, in particular, will be the first of its kind in our industry. Products and solutions. Our second growth pillar is improving our product offering and our marketing solutions that we provide to our customers. As I have briefly mentioned on prior earnings calls, we are rewiring our marketing and merchandising function to improve how we serve specific cuisine segments. We are building go-to-market business strategies curated for each and every customer segment. The business strategies will then be presented to customers, both digitally and locally through our sales consultants. Our go-to-market approach brings together the best of these 2 worlds, great technology and the industry's most qualified sales force. The 2 are simply better together as we combine great tech tools with a great sales force. Additionally, our selling channels will have more compelling promotional offers to introduce to our customers through the work we are doing on product and merchandising. To that end, we are announcing today an exciting acquisition that you will hear about from Greg Bertrand. The acquisition will make us more credible and more relevant with an important cuisine segment. Supply chain. Growth pillar #3 is developing and creating a more nimble, accessible and productive supply chain. Our supply chain will start with the customer and work its way back. We will ask the question, what delivery frequency does our customer need and want? Not what's convenient or efficient for Sysco. If a customer needs late in the day cutoffs with on-demand delivery, we need to meet those needs, too. With Marie Robinson in charge, I'm confident we can meet the evolving needs of our customers and hit our productivity targets for supply chain. We can improve productivity in the core of our supply chain and utilize those improvements as a funding mechanism to increase delivery frequency to our customers. We have started the journey in December by announcing our Restaurant Rising program, eliminating order minimums for our customers. Order minimums were a friction point for our customers, oftentimes causing them to shop elsewhere when they couldn't hit our minimums. Marie will speak to you in more detail about additional delivery improvements we will be making. In addition to the delivery improvements, we have the opportunity to better leverage our inventory offerings. At Sysco, we have the broadest assortment in the industry, broadline, specialty produce, specialty meats, supplies on the fly and European imports. Today, our customers need to engage with each of these businesses through more than 5 different ordering channels. We need to make it easier for our customers to get what they want, when they want through one simple order mechanism. We have hundreds of thousands of SKUs within our assortment. Today, we can only provide convenient access to a small portion of their SKUs to any given customer. To address this issue, we are building an omnichannel inventory management system, supported by a distributed order management system. These tools will unlock our inventory and increase access to what we carry. As a result, we will increase sales while improving the efficiency of our working capital. You'll hear more about this today from Marie and Judy. Customer teams. Our fourth growth pillar is increasing the leverage of our industry-leading sales force. Our sales consultants are the #1 strength of the company. Our sales consultants received a Net Promoter Score of 9.1 versus an industry average in the mid-7s. We will further leverage our biggest strength by increasing the productivity of our sales force. We have built a data and analytics engine that provides our sales consultants with new customer-prospecting opportunities. That same tool can highlight for our sales staff exactly what products they can and should be selling to an existing customer. When combined with our newly introduced team-based selling approach, our product experts are going to be even more productive than they were pre-COVID. They can leverage their expertise in a more tailored and targeted fashion. We are experts in running restaurants. And we want our sales consultants focused on consultative selling, not chasing down administrative tasks. Future horizons. The last and final of our 5 growth pillars is exploring and developing future horizons, new product offerings, new geographies and new capabilities. Joel Grade is full-time working through opportunities in this space, and we're lucky to have him fully focused on these efforts. A great example of this work is the acquisition that we are announcing today. This acquisition is an example of many growth opportunities that exist for our company to profitably pursue. Importantly, we can fund these growth opportunities by being a more efficient organization and leveraging our strong cash generation. Aaron will announce today an updated structural cost takeout target for Sysco that will enable us to run our business, fund our growth agenda and support the future new horizons work. As a result, our top line growth will deliver strong value to our shareholders. Only Sysco can deliver upon each of these 5 growth vectors. Importantly, each of the 5 fuels and feeds the next, and they create a virtuous growth cycle. Each of them has the customer in the center, and each of them will help us differentiate and win. As a result, we are committed to profitably growing faster than the industry. We are confident that the initiatives that we will present to you today will enable Sysco to grow approximately 1.5x faster than the total market by the end of the fiscal year 2024. Aaron will walk you through the flow-through of that growth to profit in his update today. We believe that Sysco is uniquely positioned to win in the marketplace. There is no company other than Sysco that combine product and supply chain expertise with sales and selling expertise and leverage a suite of digital technology tools that will be the best in the industry. Select companies will have a good sales team, but they're going to lack the digital tools and capabilities. Other companies may develop strong digital capabilities, but they will not possess a fie facing sales force of our size and expertise. We have 5,000 sales consultants that are restaurant experts that build strong relationships with customers every day. Our sales consultants engage with their customers on a weekly basis and are deeply connected to their needs. Replicating our sales force's size, expertise and customer orientation via 9.1 NPS is a tall order. There's no company in our sector that can rival our spending on digital tools that will create a best-in-industry set of capabilities. These tools will enable Sysco to better serve our customers by providing them with personalized offers at fair prices and presented in a web, phone and in-person delivery channel capability. These capabilities will generate strong top line and bottom line growth. So now that I've introduced you to the strategy, I'd like to introduce you to the extremely talented team that will lead the work. First up is Greg Bertrand, the leader of our largest business, U.S. Foodservice Operations. Greg grew up in the industry, starting as a sales consultant and has more than 30 years with Sysco. Greg has risen through the ranks and has sat on every leadership chair along that journey. Greg is an industry veteran, an expert and a trusted partner of mine. I'm fortunate and proud to serve alongside him. Tim Ørting, Foodservice Operations International. As I mentioned earlier in my remarks, we needed to hire a leader with extensive international foodservice expertise. After conducting a global search for top talent, I selected Tim Ørting, who has spent more than 30 years with Arla Foods, leading their international business. Tim has tremendous experience, having lived in 4 different countries while expanding Arla's global footprint. He's a global leader and speaks 6 different languages. His international cultural sensitivity will enable him to assimilate quickly to our diverse international segments. Tim will partner with me and the rest of our leadership team to advance Sysco's international agenda. Judy Sansone, Chief Commercial Officer. I hired Judy back in October to help elevate our commercial capabilities. After a more-than-3-decade career in retail, I asked Judy to join me at Sysco to bring a robust consumer mindset to the B2B foodservice space. During her time at CVS, Judy designed, built and managed the ExtraCare loyalty program. ExtraCare is one of the largest and most successful loyalty programs in the world. And Judy recently led an effort to modernize ExtraCare, taking the data to the cloud, introducing machine learning and artificial intelligence in order to create mass personalization. The offers in that program are now exclusive and specific to each and every 1 of the more than 60 million members of the program. At Sysco, Judy is developing our pricing systems, our new personalization engine aka our version of ExtraCare and is bringing a consumer-first mindset to our marketing and merchandising function. She is a proven winner, who has delivered outstanding business results for decades. Marie Robinson, Chief Supply Chain Officer. Marie was my first hire as CEO at Sysco, and I could not be more pleased with her impact. Marie is a former military logistics professional and grew up professionally at Walmart. Post Walmart, she worked within multiple foodservice companies at both the retail and distribution level. Her expertise in supply chain is unquestioned. And her experience is 100% germane to Sysco. She is bringing to Sysco a customer-focused mindset that is improving our supply chain. Our supply chain's clear goal is to enable profitable sales growth. Tom Peck, Chief Information and Digital Officer. Tom joined us in January from Ingram Micro, a $50 billion electronics B2B distributor. What attracted me to Tom was his leadership first and his business technology experience second. Tom is a Naval Academy grad and brings with him the communication and leadership skills that you would expect from an officer. He combines that leadership with a deep knowledge set of pricing tools, website design and back-end systems management of a large, complicated, multinational company. Sounds a lot like Sysco. His experience is directly credible for what we're doing here, and we're in good hands. Neil Russell, Corporate Affairs and Chief Communications Officer. I recently promoted Neil into our C-suite and have him reporting directly to me. Neil has more than 2 decades of experience at Sysco, running our IR, PR, communications and government affairs departments. I think you all know Neil and join me in viewing him as a top shelf talent. Ron Phillips, Chief Human Resources Officer. Just this month, we announced that Ron Phillips has joined our company as our new CHRO. Ron grew up in foodservice, having worked at McDonald's during his formative years. A lawyer by background, Ron grew up in the trenches at McDonald's and then went to become the head HR executive for Carnival Cruise Line. Ron's time with 2 different customer segments of Sysco gives him a clear understanding of our business and our priorities. Ron and I worked together previously. And I can confidently say he's exactly what we need in the HR function at Sysco to ensure we develop and maximize our human capital. Eve McFadden, General Counsel. Eve has been with Sysco for more than 10 years and does an excellent job on our legal, compliance and safety initiatives. Each of these functions are crucial within the food business. I greatly trust Eve's expertise and I appreciate her counsel on many complicated and important topics that impact our global operations, especially over this past year as our business environment rapidly changed due to COVID. Elizabeth Ubell, Strategy and Analytics. Elizabeth joined our team a little over 3 years ago and has brought data and analytics strategies to the company. Our ability to understand our business and know specifically where and how we need to improve comes in large part due to Elizabeth's capabilities and what she's brought to our company. Elizabeth comes from world-class companies like Grainger and Coke and has brought a CPG-targeting mindset to our data approach to identifying growth opportunities. Joel Grade, Business Development. As I mentioned earlier, we are fortunate and lucky to have Joel in his new capacity. We have substantial growth opportunities at Sysco. And Joel is helping us evaluate, prioritize and pursue the most important of these efforts. The future horizons growth work of our company will be specifically aligned with our business strategy. Joel will help us maximize the return on the investments we make. We've learned a lot from our many acquisitions over the years. And Joel is taking all of those learnings into the work that he now leads. Last and certainly not least is the introduction of our new CFO, Aaron Alt. Aaron is bringing to Sysco a strong discipline, a prioritization of resource allocation and tremendous rigor to our forecasting and planning process. One of the greatest positives of Sysco is that we have many initiatives to invest in and diverse business segments to support. Aaron's ability to help me prioritize these opportunities and ensure we are maximizing our business results and shareholder return is a huge positive for the company. Lastly, I want to thank our Board for their guidance and support during this past year. I've worked with several boards, and I can confidently say that Sysco has a very capable Board. Our Board possesses a relevant and modern skill set inventory that strongly matches the needs of a business of our size, scale and international complexity. Our Board is 100% aligned with and supportive of the strategy that we will present to you today. I'm honored to work with our Board as we execute against our recipe for growth. And I appreciate their counsel. As you get to know these Sysco leaders, I am confident that you will agree, we have assembled the strongest team in the industry. I'm excited for what we will be able to do together on behalf of our customers. At Sysco, we have a long history of returning value to our shareholders. Aaron will describe to you today how that will continue and what you should expect from us over the next few years. We will deliver strong business growth while, simultaneously, we make investments in our business. And we will return value to our shareholders while doing both of those things. The best companies in the world are growth companies, always innovating, always getting stronger, always growing profitably. At Sysco, we are not satisfied with our strong track record of success and being the industry leader. My colleagues and I will work continuously to define the future of foodservice and supply chain. I do want to acknowledge that success over the next 12 months will rest significantly on our ability to maximize the COVID business recovery. Sysco is uniquely positioned to maximize the pending business recovery due to our thorough preparation in staffing, inventory management and our service levels. We are prepared to drive the business recovery while also investing to transform our business for long-term success. I'd now like to turn the presentation over to our leadership team that will each walk you through in more concrete detail how our growth initiatives will enable Sysco to take market share in the highly fragmented markets within which we operate today. The key figures to remember as the team walks you through our recipe for growth: 16, 30, 50. We currently have 16% share of a $300 billion sector. We have 30% share of wallet of the local customers we serve, and we serve less than 50% of the unique customer restaurant locations. Each of these figures offers big upside for future profitable growth. As I said earlier, I'm confident that you will agree at the end of our meeting that our recipe for growth will create a set of unique capabilities. And when we do, we will create a sustainable competitive advantage. The durable competitive advantage will help ensure that we are the industry leader for another 50 years. So without further ado, I'd like to turn it over to Aaron. Aaron, over to you.

Thank you, Kevin. Hello, everyone. I hope you are as excited as I am about the potential that will be on display today. As I walk the halls of Sysco and talk to its team, my most common comment is, it's all upside. The opportunity to drive value creation exists everywhere I look at Sysco. And the team that Kevin just introduced you to are the architects, the enablers and the first-round draft picks that will help us achieve that value creation for you. Now I will be back to talk to you later with some specific financial insight and some good news on some topics that I know many of you are interested in: cash, debt, shareholder return. Guidance, anyone? But before I do that, I want to offer up a couple of questions for you to think about as you listen to my colleagues discuss our plans. We will start with operations in the U.S. You should be asking yourself, how is Sysco investing in this business? And how do changes in how we operate improve the top and bottom line for the enterprise? You should also ask, what role does M&A play in our plans? We will then move to International Foodservice, and you should be asking a couple of questions. What role does this business play in the portfolio? How do the plans to improve the core fundamentals within Europe impact our financials? And importantly, can the international business grow? We will then bounce to our commercial and merchandising discussion. I would encourage you to ask, what does personalization mean for Sysco's top line? And how does it support our bottom line? How does e-commerce give us a competitive advantage? Pricing capabilities are also a focus for this discussion. What do our new capabilities mean for our market strategy? Our supply chain leadership will talk about how our model is evolving from old Sysco to new Sysco to meet customer needs and support growth. You should ask the question of, what do our investments need to be to support that growth? We'll then move to technology. You should ask, where are we in our technology investment journey? You should also look for the answer to the question of, how is technology enabling Sysco's growth plans? And what is the cost to get there? Finally, we will discuss our CSR strategy, and you should ask how our focus on people, products and planet makes us who we are and supports our brand. I will come back to you at the end and bring all of the pieces of the business together with our short-term and long-term financial outlook as well as our view of capital allocation. Let's now start today with Greg and our U.S. operations.

Good morning, everyone. I'm Greg Bertrand, Executive Vice President of Sysco's U.S. Foodservice Operations. And I'm proud to say, I've been with the company for 30 years with operational experience across a number of our markets. And I'm coming to you from The Signature Room in Chicago, a great example of one of the local customers we serve here at Sysco. This morning, I'm going to cover 4 key areas: regionalization, which we implemented late last summer; data and analytics-driven strategies, which we incorporated as part of our new sales approach; improved sales model and team-based selling, which we launched in conjunction with a new compensation program last summer; and cuisine-focused sales strategies, which we're in the process of deploying. I'll cover what each of these are, what has changed and the benefits. And lastly, I look forward to sharing with you an exciting announcement, which we'll talk about in just a bit. I'll begin with the key enabler of our transformation and growth platform: regionalization of our U.S. operations. At the start of the fiscal year, we completed our regionalization efforts, which is the new leadership and operational structure for our U.S. Broadline business. With this change, we moved from our previous 6 markets comprised of 74 operating companies to the new structure of 4 markets that consist of 30 regions, each made up of 2 to 3 operating sites. Our Broadline business is our largest at roughly $40 billion in revenue. And the regionalization of our U.S. Broadline business allows for an entirely new, more centralized, aligned and efficient and agile field organization. The placement of our best leaders, the crème de la crème, in key leadership positions unleashes the power of the consolidated enterprise and enables us to move faster and execute with consistency and precision. We're very pleased with the early results and the ability to now further deploy our bold transformation agenda. Our greatest strength here at Sysco is our people. And in this structure, our agenda is led by an experienced field leadership team. Each region consists of one regional president and one cross functional-team, responsible for strategy implementation across the region. The average tenure of our market and regional leaders is over 20 years. And these experienced and talented leaders are highly capable of driving accelerated growth and enhanced performance within Sysco. Our operations, merchandising, finance and other teams are now able to serve our customers more consistently. By having one regional leader, we can now optimize how best to serve each and every customer from a sales and supply chain perspective across the newly regionalized combined geography. We can reduce transportation miles, improve service delivery, and as Marie will explain, we can expand our inventory offerings. Having one team manage the expanded geography greatly reduces former barriers to this collaboration. But regionalization is just the first step. It's the enabler for what's to follow. In addition to our work with regionalization, we've embarked on a separate journey to help fuel our customers' growth with Sysco and strengthen the effectiveness of our sales teams. We refer to this work as sales transformation. Throughout the organization, efforts are underway to bring the sales model to life. So let me take a minute to describe some of this important work and how it will lead to accelerated growth and market share gains. First, we're using an enhanced data and analytics-driven approach to strategically deploy our resources. Data is now more integrated than ever into our sales consultants' activities, and it's used as both part of our new customer acquisition efforts as well as our efforts to gain greater share of wallet. As an example, when I began my career 30 years ago as a sales consultant at Sysco, I would drive around my territory, looking for prospect opportunities or thumbing through the yellow pages on the weekend, something my children wouldn't recognize as they don't get delivered to our doorstep anymore. Over time, that approach evolved to searching restaurants online, finding leads on Yelp, restaurant association lists or even new liquor license applications. Today at Sysco, customer acquisition opportunities are targeted for each sales consultant. And they're assigned within a geography based on data-fed analytics, such as account potential, likelihood to convert and coverage. The larger, more sophisticated targets are assigned to experienced new business developers who are trained closers, proven in their ability to convert our competitors' best accounts. Data is also used to feed our sales consultants and specialists specific customer opportunities to help with share of wallet growth. As a sales consultant, I would use rudimentary sales practices such as looking out back in the dumpster for empty boxes to identify competitor products, we affectionately referred to this as dumpster diving; watching a competitor's driver unload their truck while I feverishly wrote down all of the products we weren't selling; or reviewing menus in an attempt to identify opportunities. Prior to the powerful analytic tools our Sysco sales consultants have at their disposal today, the process for identifying penetration opportunities was highly manual and inefficient. Today, sales consultants and customers are being offered up items previously sold that were either forgotten or are no longer purchased from Sysco as well as items that customers like them are buying. The opportunities within that specific customer are hand-fed to our sales consultant to execute on. The use of data and our ability to target opportunities with analytics makes our sales organization much more efficient. And it's improving closure rates on both new customers and additional lines alike. Second, we've improved our sales model by better defining associate roles and adding greater accountability for new business development and category penetration within existing customers. Our sales consultants and specialists are better equipped to succeed, the result of a focus on associate development and new training and certification programs, which follow a sales process that's more targeted and prescriptive in developing selling techniques. Our sales team is now incented on the addition of new accounts and the further penetration of current accounts, but more details on that in just a minute. We've also redefined roles such as that of the business developer and specialist to further bring team-based selling to life at Sysco. We believe there is ample opportunity to enhance success through deeper integration of team roles into the sales process. And as such, we're increasing the number of sales specialists and new business developers. These roles will help increase our share of wallet, which is around 30% with independent restaurants served by Broadliners, as Kevin mentioned earlier. But more specifically, the specialist role will help increase sales in complex product categories where greater expertise is required to make that sale. The new business developer roles support efforts to increase the number of new customers acquired by Sysco. Early results are strong, with Sysco growing our total number of customers served to a point exceeding pre-COVID levels, and this during a time when Technomic reports the number of independent restaurants shrunk by about 10%. In Q3, Sysco opened more new customers than at any time in our history. In short, we grew the count of our independent local customers by more than 10% during a time when the industry shrunk by about 10%. We've also made changes to our sales compensation model, which is now more directly aligned with targeted growth goals. Our sales consultants are an important part of Sysco's success. And Net Promoter Scores rate our sales consultants at 9.1, 9.1, a full 140 basis points better than our competition. Here at Sysco, we took a good sales compensation model, and we made it great. Previously, our sales consultants were on a transactional, commission-based model. Now sales consultants are on a salary and bonus structure, which provides pace stability while also providing plenty of motivation and financial reward. The new structure is simpler to understand. It better attracts and helps retain our sales associates, and it provides career advancement within the sales consultant role. It's for all these reasons that we're seeing continued improvement in sales consultant retention, which we all know over time translates into deeper customer relationships and increased customer loyalty. The new simplified compensation structure is enabling us to drive and reward specific behaviors and results that contribute to growth. And the new model is proving that when we set clear bonus objectives, we drive stronger outcomes. The results are notable. Our new business is an example of Sysco driving customer acquisition activity by focusing our efforts and aligning compensation. And we're confident we have a structure that now enables us to have the same success in other areas where we focus our sales organization. Through these changes, we've increased collaboration. And the new compensation structure is going to be foundational in our ability to reward team selling across multiple businesses in the very near future. In addition to these changes, our sales teams are now supported by another key component of the improved sales model transformation. Our centralized customer care team, which provides an elevated and more consistent customer experience across all regions. Centralized customer care provides order processing services as well as simple issue resolution for the challenges that customers face day in and day out, such as assistance with placing and modifying orders, managing credit requests and returns and tracking truck status and delivery ETAs. The customer care team provides live interaction for those customers who do not desire to self-serve their needs. And the outcome of this work is twofold. First, it provides a higher quality and transparent experience for our customers. Second, it will give our sales consultants more time to spend focusing on value-added activities and delivering on their priorities to achieve profitable growth. The last key component of our sales transformation is the cuisine-focused selling approach. In the past, our sales consultants were asked to sell all types of customers, using a one-size-fits-all sales method. And while this is common in our industry, it limits our ability to be successful across a wide variety of cuisines. As an example, when I was a sales consultant, I would call on all the potential customers in my territory in my quest to acquire new business. I might have called on a Mexican restaurant, a local burger joint, an authentic Italian restaurant specializing in Sicilian fair. I understood the basics of selling, and I followed the sales process. But the reality is I was better equipped to be successful in the local burger joint than I was in the other more ethnic cuisines. I wasn't an expert in specific regional food preferences. I didn't speak the different languages spoken by the staff or owners. I didn't understand the culture, and I was less familiar with our offerings for these specific cuisine types. With cuisine-focused selling, we have the right dedicated people, products and solutions available for specific groups of customers. And these efforts are backed by specialists who are knowledgeable about and equipped to sell specific cuisines. Cuisine-based selling brings the right people, the right products, the right pricing and the right promotions together to deliver an appealing value proposition for a specific type of customer. And I'm very excited about this work and believe that this cuisine focus is going to be a clear differentiator for Sysco, which brings us to some exciting news I would like to share. Today, I'm pleased to announce Sysco's full integration into the Italian specialty market through the acquisition of Greco and Sons, which was established over 30 years ago and is one of the largest and most successful Italian food distributors in the United States. The annual sales of Greco exceed $800 million. Greco and Sons offers a full range of products that are specifically targeted to the fast-growing Italian restaurant segment, including quality meats and cheeses, fresh produce and specialty imports. For Italian restaurant operators, specific expectations exist around product assortment, expertise and service flexibility. And Greco and Sons has a clear competitive advantage with an experienced team of Italian sales specialists who can provide more business expertise than anyone in the industry. We are excited to join forces with Greco and Sons, creating a leading Italian platform in the foodservice industry with a commanding share position. Our expectation is to expand the Greco model and bring their strong capabilities to additional geographies, creating a growth opportunity for Sysco as we win market share in the large Italian restaurant segment. We believe this is just the first step in what is a concerted effort to focus more deeply on cuisine-specific strategies that will provide a significant growth opportunity, allowing us to expand our presence in metro markets and establish a differentiated focus on ethnic customers. And now I'd like for you to hear directly from Eddie Greco, the Founder of Greco and Sons.

Hello, everyone. I am Eddie Greco, the owner of Greco and Sons. Since 1990, our family of companies have grown to be one of the leaders in the Italian specialty foodservice industry, serving over 8,000 customers across our national platform in pizza and Italian segment, providing premium products and specialty brands that are recognized as the best in the industry. I am incredibly excited to remain on the team moving forward and about the opportunity for Sysco and Greco to join, to embrace their vision and to further growth of the pizza and Italian separate platform. Our highly experienced Greco team will bring significant contribution to Sysco with the expertise in the high-growth Italian sector, exceptional customer service and exclusive premium products. At Greco and Sons, we've become the leader in our space because we put our customers first every day. I am thrilled about the opportunity to partner with Sysco team who understands the importance of a customer-focused approach. Together, we have so many opportunities to grow our business and bring the best of Sysco and Greco to support our customer success for many years to come.

Eddie and I will be great partners, and I'm excited for Greco and Sysco to join forces to create the leading Italian platform in the United States. I'm very encouraged by the changes made to date, beginning with regionalization, which has enabled us to advance our sales transformation and data and analytics-driven strategies. And as we move into the cuisine-focused platform, I'm even more thrilled about our new capabilities with the addition of Greco and Sons. Over these past 30 years, I've never been more energized and confident than I am today. The initiatives I've shared with you, coupled with an enhanced service proposition, will come together to unlock significant growth for the future of our great company. It's an exciting time to be at Sysco, and I'm privileged to be a part of it. I will now turn it over to Tim Ørting to discuss our plans for International Foodservice.

Good morning, everyone. I'm Tim Ørting, Executive Vice President and President of our International Foodservice Operation. I'm excited to be here today in London, Sysco's international home. I now have a strong international leadership team in place. And I'm so excited for this amazing growth opportunity for Sysco International. What I bring to Sysco is 30 years of growing business globally with Arla Foods. Having lived in 5 countries, I understand the cultural differences of doing business across markets. And I have experience in leading culturally diverse teams to release their full potential. At the heart of this is also striking the right balance between global strategies and local execution. Today, there are 3 key messages I would like you to take away when it comes to Sysco International. Firstly, we start from a position of strength despite the recent challenges in Europe. We have a solid foundation, scale and unique leadership positions to build upon. I'm very confident in the future of Sysco International. Secondly, we operate in large and growing markets, and we are embarking on an ambitious transformation and see tremendous headroom for growth and opportunities to further accelerate. Thirdly, we have a clearly defined set of strategic initiatives that will underpin our growth ambition going forward. We will become even stronger, improve across the board to better address our customer needs, harness our international muscles and significant outgrow our markets. I've now been with the company for 100 days, and I see very exciting opportunities ahead of us. We have historically faced headwinds in our European business, and the performance has not been satisfactory. In France, for example, a lot of this has been self-inflected, and we are actively addressing now all these past issues through robust plans. While COVID-19 has substantially impacted our international countries, we have taken the opportunity to create a stronger, more agile, international organization. So this crisis has been a catalyst. We have moved faster and challenged ourselves even further, accelerating our transformation. We are ready to win the snapback, emerge stronger from the crisis and outgrow our markets. I think we are uniquely placed to turn international into a powerful, customer-centric and profitable growth engine for Sysco. We have a scale advantage in many of our markets and will further harness that to significantly outgrow our markets and turn headwinds into tailwinds. So let me give you a bit of background on the business. Today, Sysco's International segment is approximately 20% of total revenue. Our top 5 markets alone were cumulatively worth more than $100 billion before COVID. So there is a vast untapped potential for growth. Now we operate directly in 9 markets in Europe and the Americas and reach an additional 87 markets across the globe through our profitable import and export entity. We are a top 3 player in 8 of our markets and hold multiple #1 position, for example, in Canada, the U.K. and Ireland where we are the biggest and strongest in our space. We have ample opportunities to grow in France and Sweden where our current position needs to be improved. We also have significant headroom in Latin America, a very large and fast-growing region. Of course, each market within this portfolio is unique and is in a different stage of maturity. While there is no one-fits-all solution, we share a lot of fundamental similarities across international. So my strong new leadership team and I have an exciting role to play in bringing the best of Sysco to each market. Our strong centrally led strategy will unlock many new opportunities to drive profitable growth across our portfolio. We will move faster than our competitors. We will outinvest them, and we will ultimately outgrow them to deliver better results for our customers and for our shareholders. So let me tell you more about the specifics of some of these markets and our recent achievements. Firstly, I'm proud to say that we have this new leadership team in place, and we are working hard to bring even more capabilities to the international segment to help our local teams. Secondly, we are progressing as planned with our French turnaround program. I do acknowledge that France has faced some challenges. In the recent past, we have failed to deliver the integration, and actually the model broke to a certain extent during the fall of 2019. However, this market remains very important for our organization. It is an attractive USD 25 billion market and remains highly fragmented. We have a solid growth opportunity in France particularly in the regions where we are underrepresented on categories we are not covering well. France is our third largest market, but our position in the market is not where we want it to be. We have meaningful headroom to grow with both independent and corporate customers in customer segments we have not yet fully prioritized in the past. To win in France, delivering a successful turnaround is imperative. We have successfully implemented the merger pilot of Brake and Davigel in February 2020, paving the way now for a national rollout in fiscal '22. We're integrating our systems, including ERP and back-end systems. We have stabilized our supply chain. And we are now in the process of expanding our combined Brake and Davigel product offering to all our customers. This has included the successful pilot in southwest of France where Sysco France is now one company, one marketing associate, one range, one truck and one invoice. We will continue to further streamline our supply chain to ensure our customers receive timely, accurate and correct deliveries. We have restored our service level with a more robust logistic reliability and strong product availability, unlocking our ability to better retain customers and win market shares. We have taken significant distribution cost out particularly in the warehousing and through our delivery productivity. We are also working to integrate our Sysco brand products and technology changes, and we have ample opportunity to increase our share in e-commerce. This is an area where we will better leverage our global muscle and have a consistent approach across international markets. Lastly, we are also happy to report that we have a new management change -- management team in place, and they are now ready to execute and are executing our new robust strategy in France. Now turning to the U.K. U.K. is our second biggest international market after Canada. Here, our combined Broadliner and specialty fresh liner business command a strong leadership position with a market share of 19%. But this is still a market with untapped potential for growth, in particular with the independents. Our scale in this market will allow us to outperform our competitors. We are making the required investments to further strengthen our leadership, grow our profitability and be even more customer-centric across all our operations. We have successfully completed the transformation journey for U.K. specialty business, consolidating from 5 ERPs to 1 and reducing the number of warehouses from 17 to 6. We are also completing now the implementation of Sysco's best-in-class supply chain and warehouse management system. This work will enable us to efficiently process orders, be more customer-centric and win business at the local level, in particular with the independents. Now turning to Canada. Canada is a large and fast-growing market worth $32 billion today and growing 6% per annum. We are the undisputed industry leader with a market share of 15%. We are the biggest and strongest in our space. Canada is also our largest market within international and one of our most profitable entities. Our lead here is supported by an [ efficient ] regional operating structure similar to the U.S. model that Greg actually presented earlier. And we continue to innovate and focus on constantly better meeting our customer needs in this market. We're currently implementing a new go-to-market strategy to accelerate new business growth while operationally, we are improving our warehouse layouts to increase productivity and drive further profitability. Ireland. Ireland is our fifth largest international market and where we have undisputed local leadership. As Kevin mentioned in the beginning of his introduction, Ireland is a fantastic success story for Sysco and actually the proof of what we should be able to deliver across all our European markets. We command a solid 15% market share, and our scale and efficient operation enable us to deliver strong profitable growth there. There remains room for growth, for example, by accelerating our penetration into Northern Ireland. We have now successfully completed our transformation journey from Pallas to Sysco, including the integration of Classic Drinks to complete our product offering. Alongside this, we are also implementing Sysco best-in-class private-label range and pricing tools to further support the business and improving our gross margins. Next, we have Sweden, our fourth largest market. While our trajectory in this market has been positive over the recent years, we remain #2 in this market, and we'll continue to challenge ourselves to outgrow our peers. We are already investing in our fresh offering and business technology tools to further transform our Swedish operation. We have a growing presence in Central and South America where we are very proud of our performance to date. We've delivered successful Cash & Carry pilots there with 19 stores opened to date. We now have a strong proof of concept with this business model, so we will significantly scale these operations in the future opening of more stores. These markets are growing very fast, and I'm very excited about our opportunity in the region. We also own a profitable food exporting business distributing food to more than 87 countries across the world. This asset-light business model is growing fast and offers exciting growth opportunities. Across all our markets, we are going to deploy our recipe for growth and repeatable Sysco model, better leveraging our scale, implementing the right digital tools and increase our pace of winning. We have significant headroom to grow sales and margins and have defined a clear set of strategic priorities that will turn international into a profitable growth engine for Sysco. First and foremost, our immediate priority is to win the snapback in each market. This includes delivering a better customer experience and ensuring absolute service excellence. Secondly, our big priority across market is to win in the independent segment where our share remains too low and where we have been investing to build out our network, improve our service levels and further capture potential customers. We must also focus on filling assortment gaps to grow our penetration of the market and increase our share of wallet with existing customers. This will be a critical driver for us as we serve many customers today with fewer than 3 or 4 categories. We must better understand the needs of these customers and upsell them. This is a very powerful and cost-effective way to drive profitable growth and, for example, through a stronger Sysco-owned brand, which can drive both profitability and customer stickiness. We also have an opportunity to expand geographically into underpenetrated regions and winning critical city center battles like London, Paris, Toronto, Dublin, Stockholm and other places. From a channel perspective, we must continue to listen to our customers across markets and invest in e-commerce and further drive Cash & Carry development in Latin America. Lastly, we must continue to deploy ruthless efforts to drive our costs down across the board. Our efforts on all these fronts needs to be supported by a stronger international organization focusing on delivering centrally led excellence programs at the service of the front line in each market. For example, we will do Sysco category management and merchandising. Judy will tell us more today about the exciting work we are leading in this space. Sales force effectiveness and go-to-market models, stable and proven technology like our warehouse management and transportation routing system, as Marie will explain in a moment. And new digital capabilities and Sysco platforms for e-commerce and pricing. Tom will give an overview of that great work that is being carried at the moment. We will continue to accelerate both structural and commercial initiatives for our customers. And it is important to note that Sysco has the resources, the dedication and the leadership team to see these initiatives through. As I said in the beginning of my presentation today, there are 3 key messages I would like you to take away. We start from a position of strength despite recent challenges, and we have a solid foundation and platform to build upon. Two, we operate in large, growing, attractive markets. We are embarking on an ambitious transformation and see tremendous headroom for growth and opportunities to further accelerate. And finally, we have clearly defined a set of strategic initiatives to ensure we successfully deliver this ambition. We will become even stronger. We will improve across the board to serve our customer needs. We will better harness our international muscles and significantly outgrow our markets. Thank you, everyone, for your time. I will now turn it over to Judy.

Hello, everyone. I'm Judy Sansone, the EVP and Chief Commercial Officer here at Sysco. I'm coming to you from one of our local Italian restaurants. I have to say it's a great time to be at Sysco. You heard Kevin talk about the recipe for growth a few minutes ago. You saw the growth in both our core business and some of the new growth capabilities that we're bringing to Sysco. Today, I'll be focusing on a few of the newest capabilities. They come to life in 3 areas: personalization, e-commerce and pricing. We're taking advantage of Sysco's strengths and adding decidedly more digital and more personalized growth drivers. Each one of these areas is already beginning to roll out in pilots or scaling. Our merchandise and our brands will come to life in these digital tools and channels. Our strategies for growth in merchandising are accelerated by these capabilities. I'm not spending a lot of time on merchandising today, but I am a merchant at heart. I think you will see how these tools will help us to grow these brands even more. Our customers like the products we have. They buy our Sysco brands. And you will see more from us in the coming months as we accelerate our innovation and newness in those Sysco branded products. Personalization will be one of the key drivers in accelerating our brands. Our customer-centered growth plans are about personalizing a customer's experience, and it's driven by deep customer insights and data. Prior to Sysco, I worked for 30 years, most recently as Chief Merchant at a Fortune 10 company, CVS Health. In that role, I helped drive major transformation in the retail business. An important part of that role included leading America's largest loyalty and personalization program as well as our omnichannel transformation. The loyalty program was big, 70 million active members. We had strong digital engagement and a number of activation channels that reached 100% of our customers. The loyalty program was a key driver of digital commerce and growth in the core business. The reason was that we built customer engagement, which resulted in increased share of wallet. We were reaching customers with relevant product, pricing and offers at the right time and in the right channel. In fact, each e-mail, e-commerce journey and in-store experience was personalized. No 2 customers had the same experience. Literally, there were billions of variations. We also used the base loyalty program as a platform to deliver many other customer-specific programs like beauty club and pharmacy rewards and our subscription program where customers paid for benefits. For each program, nothing was more important than relevance, and that relevance drove the behavior of those customers. You can imagine a beauty customer journey, health food customer, pharmacy customer required a very different experience. The point is each communication used data, insights and AI to deliver what mattered most to those customers. And that's what we're going to do at Sysco. We have the data. We have the activation channels and the talent to make this happen. Greg talked to you about cuisine selling. And through personalization, we have the ability to bring this to life in a number of channels in addition to the work happening with our best sales teams. We're innovating. And while this is new in foodservice, our customers are responding very much like consumers did in my previous experience. The ability to reach them with relevant content is driving their behavior. We have tested some of the concepts at Sysco, and these personalized content activations are working. They are driving behavior change, more engagement, share of wallet. We're early in our journey, but we are beginning to see the effects of this work already. One of the most valuable assets we have at Sysco is our data. We know a lot about our customers. We know who they are and what they buy and what's on their menu. We also know what they should be buying. Think businesses like them. Because we are Sysco, we also know the latest in product and menu trends from around the globe. We can share that with our customers, who would benefit most. We understand a customer's pattern of digital engagement. Are they mobile-first or Web? I was glad to see our mobile engagement is generating over 50% of our orders. That's a lot of customers with Sysco in their hand every day. We also know which customers engage in marketing channels. As an example, do they open e-mails? Or do they prefer content in Shop? Some customers engage in price and value, but others may be motivated by our sustainable products or Foodie ideas, product innovations like our plant-based product range. We need to talk to them about what they care about. A Mexican cuisine restaurant gets an e-mail from us. It should talk to them and include items and messages that matter to them. And we've started that work now. All of this data will build relevant content in our digital channels customer by customer. We've got the data, and now we're beginning to use that data at scale. And to do that, Sysco needed a technology solution that could bring all of this together and find the data signals and importantly scale personalized content and offers. This is the personalization engine. It takes customer data, behaviors, patterns and predictive analytics with AI and combines them to deliver a personalized experience. This work is what I led at CVS and now here at Sysco. Sysco has the benefit of having large scaled channels. We have e-mail and contact information for over 80% of our customer base. We have over 70% of our customers -- street customers ordering online at Sysco Shop directly. And of course, we have 5,000-plus sales team in the U.S., which is a meaningful market advantage. Internationally, e-commerce growth, combined with sales teams, will enable these concepts also. I have just been talking about how we're interacting with customers. But of course, personalization will be brought to life with our sales teams also. Imagine a world where our sales consultant is planning their route for the day. And they get notification that a customer just placed an order, but the order was missing items, items that they usually buy at Sysco. Our sales consultant could visit that customer immediately, make sure they don't lose that order. It is all relevant and timely and all seamless. We are helping our sales consultant have the right information at the right time. We can address all kinds of pain points. Like if a supplier is out of stock, our sales consultant could help right then with a replacement, making it easy. That quick connection could help the customer be more successful and help Sysco retain customers. Greg mentioned the power of our team-based selling. And with more predictive data, we can know the right times and places to activate our best customer solutions. We are enabling our sales consultants customer by customer with that next best action. So whether it's alerts about orders, when to bring in a specialist on a sales call or demonstration, just-in-time information helps the sales team be more successful. I like to think that the sales consultants who are enabled with the right data as sales consultants with superpowers. This personalization takes what our very best sales consultants do today and makes it easier for all the sales consultants to have that impact. Later, Tom Peck will show you how we're scaling these superpowers. What makes me so excited about the possibilities of customer-centered growth and some of the startling facts in our business, you might not know, just a 1% change in the retention of our current customers could drive hundreds of millions in sales. Industry data suggests that personalization can reduce churn by 30%. We only need small improvements to make big impacts. We can now predict and act on customers that are looking like they might churn out of our business, so we can be more proactive. We can drive more engaged customers, and we want to. The difference between engaged customers and less engaged customers is 10% more lines or items. So you can see keeping customers engaged is valuable. Another fact. Not all new customer wins stay a full year, and we all know that winning customers can be expensive. So we want to do that just once, right? And when we do that work, use that data and create the kinds of offers that matter, we will keep them longer. Let's take a look at a video showing what we are doing to engage our customers and sales consultants along the multiple touch points they have with Sysco. [Presentation]

Sometimes videos are just for inspiration, but what we saw in this video is scaling today. Plus, we have a road map of concepts that will continue to release more and more capabilities over the next several months. These innovations will be hard for others to follow. The tactics will vary customer by customer, and that makes it hard for others to address. Our algorithms and digital channels plus the expertise and personal touch of our sales teams are all added to Sysco's strengths, like our private-label brands, international product expertise and Sysco's supply chain leadership. We are combining the unique assets of Sysco to deliver a customer experience that's hard for others to replicate. Let's talk e-commerce for a moment. As Greg mentioned, our sales teams have been a driver of Sysco's e-commerce revolution. The sales incentive changes help to get customers engaged with the e-commerce platform. And when they were there, customers loved it, and it also freed up time for sales teams to do more consulting on the business. Today, 70% of our U.S. street orders are placed by our customers. This is helping basket size and improving transparency of price for our customers. Our international e-commerce platform is scaling as well. Did you know Sysco is one of the top e-commerce businesses in America with over $29 billion in digital sales in the U.S.? Shop is our B2B e-commerce site. It's one of the most powerful channels to deliver personalized content because our customers are engaged with it 1 to 2 times a week, and that's every week. Earlier, I mentioned that 70% of our U.S. street customers are ordering on Shop. When customers shop, we are recommending products based on what they should buy. So think about the opportunity with so many eyes on our e-commerce platform every day. Coming soon, we will show customers how to save more money. We will showcase new items and new ideas plus enhancing and developing more content for our Sysco brands. As I mentioned earlier, Sysco has powerhouse brands. In fact, we have 4 $1 billion-plus brands and a business that represents over 50% of our street sales. Shop will showcase those brands and newness of our range. Everything we're doing in personalization will be a driver of these brands as well as support the growth of our strategic vendor partners. Each exposure is a chance to get one more item or line in the basket. Let me be clear, we want our customers to use Shop. We want them using all of our features like customer -- custom shopping list for the chef or a suggested order list for the manager. Our development is focused on making Shop a seamless solution for our customers. Shop is like the sales consultant when the sales consultant is not in the room. Shop will bring the restaurant tools to life, showcasing some of our expertise. We will show the ways that restaurants and businesses could improve, like menu bundling or helping them have a profitable takeout and delivery menu program and other solutions. Shop will continue to expand with new features. We're making it easier by integrating our delivery app in Shop, so you can see where the Sysco truck is and when your order is arriving, so customers can plan their day. We're providing educational tools and training. More and more, Shop is the one place to help run their business and interact with Sysco. All of these features are solving pain points and improving engagement with our customers. So while I'm excited about personalization, I'm going to move to pricing now because pricing is probably the biggest change happening today at Sysco. Sales consultants previously priced every item, every week for every customer, but they could never have the expertise on our whole portfolio of products, imagine a new sales consultant doing pricing work. And as we scale our new pricing tools and strategies, all pricing is visible in Shop, customers can see what each item costs. That sounds basic, but it's not in our industry. Our new pricing tools allow customers to see how to save money with discounts and Sysco alternatives, and they love this. They love the transparency. We will be able to show pricing specifically for each customer and item combination. You can see on the slide on the left, a customer would see a price in Shop previously, but it may not have reflected all of the discounts if it was new to their basket. But as we roll out pricing, they will see price just for them on the whole range of Sysco products. It's easy, it's transparent and it's custom by customer. I'd like to read a quote from one of our sales consultants in a pilot market for pricing. She said, "my customer just ordered on Shop, and they saw the new interface. They added some new items that they had thought not to ask Sysco about. The customer did not know that we had such good pricing on those items. And because of that, he added 3 more of his restaurants to shop today. And this week, my sales are up 21% in 1 week." Wow. And I love the feedback, the immediacy of that feedback from customers and sales consultants. Of course, another key benefit of our pricing tools is that we can deliver a data-driven price strategy to all of our customers. And this will provide improved central controls, and this will also allow us to invest strategically and surgically by item by customer. Each customer will have sharper pricing on items that matter most to them, like this Mexican restaurant, who will have hot pricing on tortillas, but more market pricing on items that are less important to them. This allows for more surgical investments in item and price on items that our customers value most. In this example, you can imagine customers who run a Chinese restaurant will have different items that are important to them. Because our pricing tools will price each customer, each category, each item based on its importance to that customer, our pricing will be market relevant and customer right. This has all kinds of benefits, including that it's easier for customers to come onboard and learn about Sysco, and of course, to shop our broad range of products that they may not know we already carry. This will keep customers more loyal to Sysco and allow us to win more basket from our customers. Remember what Kevin said, our share of basket with current customers is around 33%. So imagine the business when we get to 40% share of basket with our current customers. Pricing is scaling now and will complete most of the markets and customers by year-end. The last few minutes, I talked to you about 3 new capabilities: personalization, e-commerce and pricing, three new capabilities that will improve our customers' experience, improve customer engagement, they will grow our brands and grow our business. They will be leveraged by our sales teams in a way that is uniquely Sysco. These new additions are a key in delivering the recipe for growth that Kevin laid out. They are changing the game for Sysco in data-driven digital capabilities, and they have the potential to drive over $1.5 billion in growth. But as importantly, they're also positioning Sysco to win in the marketplace by being the most customer-centric foodservice company globally. These combined efforts are a sea change in the way that we engage our customers. I will now hand it over to Marie Robinson, who will share some exciting supply chain innovation supporting our growth agenda. Thank you for your time today.

Thank you, Judy. Hello, everyone. I'm Marie Robinson, EVP and Chief Supply Chain Officer. I joined Sysco a little over a year ago over 30 years leading supply chains and transformation efforts in a number of prominent companies in the consumer and retail sector. I really learned my trade at Walmart, quite literally working every job you could inside the distribution center back in the 90s and later spent 8 years in the food industry, leading the supply chain at Smart & Final for most of that time. When I learned of this position at Sysco, I couldn't resist. As a supply chain professional for all of my life, I know firsthand the power that a strategic supply chain brings, and I'm so happy to be leading those efforts at Sysco today. Welcome to one of our operating sites located here in Houston, Texas. If you look behind me, you'll probably see some of our warehouse associates in action, working diligently to support the foodservice distribution supply chain. I really consider distribution centers to be my second home, and I get happiest when I get to be in them and with the wonderful associates who fuel our company. Today, I get to tell you about some important strategic initiatives that will help define the future of their supply chain. Here at Sysco, we strive to ensure that our supply chain is a strategic growth vehicle for the future. By leveraging our assets, working together and investing in key capabilities, we will set the standard in customer experience and ensure Sysco has the largest SKU offering in the industry. I'm going to share the details of 3 important supply chain strategic initiatives: first, improved delivery performance; next, increased delivery frequency, which we call Sysco Flex, and omnichannel fulfillment, which will greatly expand our SKU offering for our customers. Before I get into the details, I'd like to begin by answering the logical question of how are we going to fund our investments into our supply chain. We will self-fund our journey by improving efficiency as a result of significant investment in industrial engineering capabilities. And by that, I mean the engineers themselves and tools and by ensuring that last mile delivery costs are optimized. I'll talk more about that as we discuss omnichannel in a few minutes. First, improve delivery performance. Our supply chain transformation starts with the customer. Every year, more customers than we would like, leave Sysco for another foodservice distributor. We know from data and analytics that one of the most important indicators to customer turnover is delivery performance. Because of this, one of the key components of our transformation work is improving the delivery experience of all of our customers. It all starts with customer partnerships. Look, in the past, we were not as consistently grounded in our customer's preference or expectations as we should have been. We are now better recognizing our customers' needs and are enhancing the process to ensure that deliveries are consistent and on time. We're using data to anchor our routes for certain customers, giving them delivery windows aligned with the needs of fair business and allowing for them to properly prep, staff and plan for their day. We then meet with every customer to clearly communicate the expected delivery time and day, and we've changed the method by which we assign our drivers to route to build more consistent relationships between those drivers and our customers. Additionally, our efficient communication points throughout the delivery process, including notification of late arrivals and our customers' ability to track the status of their truck through a convenient app, help enhance the overall delivery performance. When you hear me talk so much about improving the delivery experience of our customers, you might think we have an issue with our driver talent. Nothing could be further from that. Instead, we want to leverage the relationship between the drivers and the customer. We're proud of the fact that our delivery drivers get a Net Promoter Score over 9, just as our sales consultants do. In fact, we are rebranding our drivers from driver to delivery partner to better reflect their important role in our sales ecosystem. Our delivery partners actually spend 70% of their time in our customers' locations and only 30% actually driving. I'll never forget my first delivery ride along experience last spring. I accompanied a wonderful Sysco hero named John Gonzales in San Antonio. Along our route, we came upon a hospital that had been literally flooded the night before, resulting in the closure of their entire pantry storage area. I was amazed to witness the relationship between John and the foodservice manager there as they worked together to find ways to store the incoming goods, and as he helped her organize through the chaos that was her life that day. She sincerely thanked me for John. And in that moment, I really understood the culture of the place I had joined. We're also making other investments in our delivery partners, including the introduction this summer of our new uniform program, part of which I'm proudly modeling for you today. Next, let's talk about number two, increase delivery frequency. We've introduced Sysco Flex to our customer market. Sysco Flex is an agile delivery model that drives an elevated customer experience, including increased delivery frequency, no order minimums, as previously talked about with our restaurants' rising campaign and more specificity around that order delivery. Flex is aimed at 4 key customer wants. First, they want delivery windows that align with the flow of their business. Next, they want consistent delivery time, so again, that they can properly prep, staff and plan. Third, they want more flexible delivery options to adapt to the unexpected situations like floods. And fourth, they want effective communication throughout the entire process. Sysco Flex fulfills all these needs. I'm really proud to say that our Sysco Flex program has been live since December, and we have seen significant improvements in top line chase growth and gross profit growth for the customers in the program. You might fairly be worried about the cost of increasing delivery frequency and removing minimums but the incremental expenses have been more than offset by the incremental sales and profit we're generating in our pilot locations. Additionally, we have other improvement projects that will help us route our trucks more efficiently and provide additional sources of funding for that increased delivery. I'm going to now hand it over to Chris Jasper, the SVP and President of U.S. Broadline, who will talk a little more about our Sysco Flex program.

Thanks, Marie. I'm here today to talk about how the Sysco Flex program can help our customers grow, and I'd like to highlight a real example to bring it to life for you. One of our talented sales consultants, Felipe, utilized team selling, working with one of our culinary consultants to help his customer. Felipe has known this customer, Chef Oliver, for a long time. Chef Oliver is partnered in a new business venture to open a Mexico City street-style taqueria in the heart of Chicago's Bucktown neighborhood. It's called Taqueria Chingón. Historically, Sysco has struggled to serve a restaurant of this size due to limited footprint size and an impression that Sysco didn't serve the smaller locations. Enter Sysco Flex and our program changing to no minimum order size. As I said, one of the main challenges a customer like this has is a very limited storage space for product. They have a great busy concept and they need frequent deliveries. If our delivery size is too big, they simply don't have room for it. If we didn't offer Flex, we would have not been able to get the business at one of the best taquerias in the country. They're now ordering 2 to 3 times a week with Sysco. The business started out with paper and disposables, utilizing our resources to find a perfect sustainable container that will allow their menu items to travel well within the to-go containers. Our dedication to provide the right product and increased delivery frequency over the past few weeks, opened the door for us to earn additional center-of-the-plate proteins, produce and canned and dry goods. This taqueria is now booming with business and has quickly earned a reputation as the place to go in downtown. Sysco Flex, no minimum motor size and a great customer concept. Growth for them and growth for us. Back to you, Marie.

Thank you, Chris. Finally, let's shift to inventory productivity and SKU availability through omnichannel fulfillment which will help us grow through a streamlined supply chain that handles all the products that Sysco has to offer. This new approach moves Sysco from a single site to a single customer relationship instead to a platform where all of Sysco's products can be sold to any customer through Shop. For example, think of 3 Sysco sites that are very close geographically to each other that today operate individually. The individual sites operate with little commonality. And remember that today, customers only have access to one site. The future state of Sysco's omnichannel supply chain includes regionally optimized inventory stocking and fulfillment capabilities. Let me take you back. You remember that regionalization map that Greg talked about in the U.S. foodservice section? Omnichannel, when laid over regionalization, will allow us to optimize the placement of an item within a region and to ensure that the last-mile delivery site is the most efficient for the customer. By managing the product assortment at a regional level, we can double the number of available SKUs to a customer in a region. Customers will have a broad regional assortment. Let's take an example. In the Carolinas region today, the average customer has access to about 9,000 unit SKUs. By moving to regional fulfillment that instantly increases to over 18,000, delivery will be optimized, saving significant transportation dollars, and the SKU assortment will be expanded substantially without adding more inventory or more buildings to our system. I have to say that again. We're going to do this. We're going to double the SKU offering without adding any more inventory or any more buildings to our system. We can pivot the partnership and create a better aligned joint effort between the sales consultant and the supply chain. However, as we model the impact of 1.5 market growth in the out years, we know we will have to add capacity, and we're planning for that now. Our aggressive growth agenda will be supported by the investments we're making in facilities and equipment. While over the past few years, we have expanded current facilities in a handful of locations, our last investment in the greenfield facility was in 2014 in Riverside, California. As we look ahead, we anticipate the need to expand our footprint again. We have the balance sheet capabilities to invest for growth. And at Sysco, we're making investment decisions ahead of the market by using data-driven analytics to predict which geographies and which customer segments will grow, that each [ map ] will guide our decisions about where to invest our capital dollars to ensure we stay ahead of any capacity constraints. The incremental physical capacity investments that I just referenced are built into the CapEx planning you're going to hear about from Aaron shortly. We know that we will efficiently and consistently serve our existing customers and new customers with the products they need, when and how they need them through a flexible, agile delivery framework. In closing, you've heard today about 3 important supply chain initiatives: improved delivery performance, increased delivery frequency or Flex and omnichannel fulfillment. And while these initiatives do require investment, we are self-funding them with improved efficiency through robust industrial engineering, increased sales and profit as a result of an enhanced customer experience and significant savings from last mile delivery optimization. Lastly, it is important to note that while the examples I've shared today are U.S.-focused, all of the underlying technology and the new supply chain processes will be leveraged throughout our international businesses as well. It's now my pleasure to introduce you to our Chief Information and Digital Officer, Tom Peck.

Hello, everyone. My name is Tom Peck, Sysco's new Chief Information and Digital Officer, and I'm excited to be here today standing in the kitchen of one of our restaurants to talk about technology. In my first 100-plus days at Sysco, and based on 30-plus years of experience with some great companies, I can definitively say that we are absolutely working on all the right things. It is such an exciting time to be at Sysco and to lead the technology organization. Sysco knows how to bring people, process and technology together for maximized impact on our customers. In my prior role at Ingram Micro, a $50 billion-plus global distributor of technology solutions and third party logistics, I had a very similar mandate. I understand and have direct experience leading large global teams where technology is so essential, and I've done this before in other industries and businesses, both in B2C and B2B environments. So let's take another look at some of the themes from earlier today. Here at Sysco, we start the customer journey with technology, and we end with technology. From the first contact with a sales consultant and our amazing sales team, to the initial onboarding process, which is now less than 24 hours for our customers, to Sysco's online presence, our Sysco Shop platform, to product pack and ship, through the ongoing management of each account. Technology is a key enabler for our digital transformation. You have heard repeatedly that we lead with a customer-first mindset, and we know that our customers, such as restaurant owners and foodservice partners, want a more seamless consumer-like experience. This means delivering a truly personalized interaction at every touch point, serving up carefully curated content with a world-class product assortment, while also enabling self-service, allowing our customers to shop and transact with us when they want, how they want and on the device they want. Every touch point, whether it is through a sales consultant, our customer care centers or our online tools, it is powered by our technology ecosystem. Let's first take a deeper look at our customer online order platform, Sysco Shop and some of our new tools. As Judy referenced earlier, we have the data available. We are using analytics to elevate the customers' ordering experience. Through seamless visibility of products and services, intelligent and predictive next best actions and personalized content, we are utilizing technology behind the scenes to create that consumer-like experience. Judy referenced earlier that our sales consultants have these superpowers. Let me share some of these amazing superpowers in a bit more detail. We built an integrated set of solutions to equip our sales consultants to make it easier to work with our customers and to win more business for Sysco. In the past, our sales consultants would manually plan their visits or think about opportunities. They also lacked a single view of what was selling or not and what the customer was buying. It was difficult to understand top relevant product categories and trends, and there were limited insights. Our integrated tools provide improved capabilities, a territory map, a snapshot of territory and customer performance. Color-coated gaps, as an example, a red product for one they have never purchased or perhaps a yellow-coated product for one we may have lost. See how we did on our recent campaign. Revamped prioritized actions, penetration statistics, sales data and trends, market baskets organized by type of food, for example, meat and seafood, and so much more. As an illustrative example, if I look up our local grill, I know we are not selling bacon to the grill. By the way, who doesn't like bacon? But I've never pitched bacon before. What to do? You can reach out to some buyer or broker, perhaps get some special training. Do some research on some of our fabulous tools like Sysco kitchen or Foodie kits. Sure, I can do all that. But let's find bacon in a Sysco Shop and research some of its attributes. I can quickly find short video vignettes, links to bacon fact sheets, selling aids, culinary innovations and so much more, all in one place, organized by product. I am now much more confident talking about why our bacon is better than our competitors. I also know what bacon the customer wants. Slab presentation, center cut, apple wood-smoked. I add it to the customer's order guide and then I'm off to seal the deal. As the shopping behavior changes and the expectations increase, there is now more demand for an agile supply chain. You heard Marie speak earlier this morning about the customers' expectations for an agile, flexible delivery network and the Sysco Flex program, both of which depend on the seamless flow of data, which we utilize to anchor our routes with certain customers, giving them delivery windows that align with the needs of their business. You also heard about our omnichannel fulfillment initiative, which will allow all of Sysco's products to be sold to any customer through the Sysco Shop platform. Are these buzzwords? No. Imagine an order management system, when the order comes in, leveraging the data and the analytics, it smartly determines the best inventory to expose to the customer regardless of location, and identifies the best location to fulfill from. Smart supply chains. Completing the customer journey on the delivery partner or driver's side, our delivery associates are dispatched using routing technologies and telematics. This allows us to keep in constant communication with the customer so we can send notification if delivery times will be adjusted or if a product substitution is required. Finally, to keep pace with fulfillment, our warehouse and delivery associates are enabled by handheld devices and material handling equipment to create a much more optimized and efficient process. So how will we deliver all this at Sysco? Through a technology strategy that's built on 3 strategic focus areas. First, data. I think we've heard the word data used several times today, right? Of course, we did. Data is the lifeblood of digital businesses and drives a more intelligent Sysco. Our core data resides in a modern cloud-based solution where it is aggregated to feed our downstream systems and solutions. The data that is so critical in driving the personalized experiences, pricing and fulfillment solutions we have been discussing. We are equally focused on working with suppliers to ensure properly curated product attribution to assist our customers in finding the right product. And our artificial intelligence-infused solutions and predictive algorithms help ensure we make the right decisions for our customers and associates. I'm pleased to say we are well on our way to consolidating all of our disparate data sources into the single repository. Second, resilient infrastructure. Quite simply, resiliency means that technology just works, period. Low latency and highly available solutions with world-class user interfaces, our table stakes in today's digital economy. It's what our customers and associates expect. I'm also pleased to report great progress on our modernization program, where a majority of our compute workload is in the cloud, leveraging state of the art technologies. And third, secure and compliant. Our customers and associates trust us with their data. In an increasingly complex world, our focus on cybersecurity is unwavering. Our modern tools and technologies identify, prevent, detect and respond to any and all threats. Previously, CIOs and Chief Information Security Officers were responsible for blocking known bad things, and focused on the perimeter, keep those known bad things out. But today, modern thinking is risk-based, where a zero trust model that assumes all system traffic is bad and less validated. We benchmark against the National Institute of Standards and Technology, or NIST, and their cybersecurity framework, to ensure we stay aligned with the ever-changing risk climate. But our ways of working are also changing. You've heard from many on our executive leadership team. We have grand plans, and we must, and we will deliver. The 3 themes come to mind: speed, simplification and funding. First, speed. Traditional ways of delivering technology can be slow, sequential and reactive. Many companies are burdened by complexity, spare tools and processes and monolithic software code. The pandemic economy proved that more nimble companies, who can adapt to market conditions faster, will win. We are already delivering software in agile sprints, a modern software development methodology where customers see results in days or weeks, and doing real-time fully automated testing. The times of large slow and monolithic code are gone. Speed wins. Second, simplification. You heard from Greg, you heard from Tim. Globally, we are working to solve the same challenges and deliver these amazing new capabilities to all of our customers. Our culture and governance model support enterprise solutions where we can leverage our collective depth of talent and purchasing power to build or buy solutions that will further amaze our customers around the world. Fewer systems, consistent data and harmonized processes, what we call simplification, which further enables the speed previously discussed. And third, and certainly not any less important is funding or should I say, self-funding? One might ask, "But Tom, doesn't this cost a lot of money?" And my answer is yes. But we have identified ways to be much more efficient, ways to consolidate spend and suppliers and ways to redeploy spend to higher-yielding investments. These initiatives, inclusive of our investments in a more resilient and secure environment are in the financial models that Aaron will be presenting to you shortly, and they're in line with our long-range financial plan. Some of you may not know that I have degrees in finance. I often joke that I made a wrong turn and ended up in technology. However, business and financial acumen are usually helpful as I work with my colleagues to prioritize our investments and govern our spend. Here is what I also know. As the Chief Information and Digital Officer at Sysco, we have a talented team of technologists and digital leaders who not only understand these foundational capabilities, but will leverage them to truly differentiate Sysco in the market. I am so proud to be part of this amazing global team. This all results in best-in-industry consumer-like tools. Our technology enables Sysco to be a more streamlined, agile company that is easier to do business with. We offer our foodservice partners a modern, resilient and flexible set of solutions, including Sysco Shop, which positions us ahead of the curve to lead in the ongoing economic recovery. It has never been a better time to work in technology and build a foundation that plays an even greater role in enabling profitable growth for Sysco. I thank you, and I'd like to now hand it back to Neil, who will discuss our corporate social responsibility initiatives.

Hello, again, everyone. I'm back and coming to you from one of Sysco's solar gardens, which is one of our renewable energy sites that reflects our commitment to solar generation to help minimize our environmental footprint. Quick fun fact. Most of our facilities across Texas, nearly 3 million square feet of multi temperature warehouses and office space, are powered by this form of alternative energy. These solar gardens are a great example of our corporate social responsibility commitments here at Sysco. As the global leader in foodservice distribution, we recognize our position comes with great responsibility to build stronger communities in a healthier environment. Sysco is doing more than any other foodservice distributor and making a difference, not only within our company, but within the entire industry. This is evidenced by the fact that we have set public goals and provide regular updates for those goals for others to track our progress. This is taking responsibility to a whole another level. You'll see examples of this focus in how we run our business every day. In fact, we've been working on our sustainability efforts for more than 4 decades here at Sysco. It started with supplier audits in the 1980s and has progressed to some big commitments we have made with our 2025 CSR goals. Today, I'm going to tell you about our CSR strategy. Our goals are based on 3 pillars: people, product and planning and some exciting new announcements about our focus going forward. To set our CSR strategy, we started with a materiality assessment. This was a thoughtful and thorough process to identify environmental, social and governance or ESG topics that matter most to our stakeholders and to our business. We narrowed a long list of nearly 100 topics into 9 key focus areas, spread evenly across these 3 pillars. Within each pillar, we have specific long-term goals to guide our actions. We didn't come up with words we thought others would like or words that our peers already used. We built this from the ground up, based on what would have the most impact for Sysco and the communities we serve. We have made these forward-facing goals public and we hold ourselves accountable to reporting progress each year. And these goals are becoming increasingly global in scope. We know the path ahead isn't easy. We won't be perfect, and we will continue to learn along the way. Let's dive into each pillar a bit further. Let's start with people. At Sysco, we empower people to be their best and take care of their well-being so they can thrive. Our diverse associates and inclusive culture create an environment where associates can develop their skills and give back to their communities. Diversity, equity and inclusion is a priority for Sysco and an area we know we can continue to improve. We are taking a holistic approach to take the actions required to truly be better. We hosted a series of conversations to build greater understanding of the diverse experiences of our associates. We are taking action based upon those conversations. We hired an experienced chief Diversity Officer, Adrienne Trimble, who will help lead the charge. We are also expanding upon our associate resource groups by establishing a global diversity, equity and inclusion advisory council and ambassador program. When we canvass the organization to see who wanted to participate, we had more than 600 associates volunteer to participate. This advisory council will help us build our improvement charter. These steps are bringing us closer to a more equitable workplace and community. Speaking of, I'd also like to take a moment to touch on our support for our communities. We continue to make it our mission to fight hunger in our communities. That mission became even more critical, given the hardships many have faced since the pandemic began. Sysco stepped up and has donated more than 50 million meals to local organizations fighting hunger just since mid-March of 2020. We also supported government-funded efforts in the U.S., U.K. and Canada, to get food to vulnerable populations. These types of creative partnerships supported those in need, and I'm excited to share with you today that we have expanded our charitable giving goal to generate $500 million worth of good in our global communities by 2025. This will be achieved through product donations, cash donations and volunteer service. $500 million, we are excited to recognize associate volunteerism as part of the program, driving engagement and impact at the same time. Now let's talk about products. We are proud of every product we serve our customers and believe it is our primary responsibility to ensure product quality and safety. We have the size and scale to drive real change. For instance, in the beef supply chain, we purchased the equivalent of more than 1 million head of cattle in Sysco brand alone. This gives us the opportunity and responsibility to drive change. We have standards in place to protect animal welfare. Beyond that, Sysco recently partnered with a National Fish and Wildlife Foundation and Cargill on the Southern Plains grazing program. Through this partnership, we will accelerate the imputation of sustainable grazing practices to tackle the impacts of climate change and improve grasslands and wildlife habitat. Over the next 5 years, across 1 million acres in the Southern Great Plains, an area which is responsible for 30% of the beef produced in the United States, the Southern Plains Grassland Program has the potential to sequester up to 360,000 metric tons of carbon per year or the equivalent of removing 78,000 passenger vehicles from the road in just 1 year. This is just one example of how our team is actively thinking about sustainability and how we can take this approach across our supply chain. We recently doubled down on our commitment to sustainable seafood. Seafood is a key protein source for 3 billion people around the world, and we need to make sure it's sourced in a way that maximizes livelihoods and environmental sustainability. We are continuing to drive higher standards in the industry through certified sourcing, fishery improvement projects and innovative pilot programs. And importantly, as part of our 2025 goals, we are committed to increasing the percentage of the product we buy from minority and women-owned businesses. This important work will help us further diversify our leading product portfolio, deepen our supplier relationships and make an impact in the communities in which we serve. Now importantly, let's also discuss our planet. Our commitment to protecting our planet is one we have worked towards since our inception 51 years ago. Our priorities remain: expanding sustainable agricultural practices, reducing our carbon footprint and delivering more products safely while generating fewer emissions. We recently published a report on Sysco's efforts to tackle deforestation and we continue to raise our game on climate change overall. We are undertaking a full carbon footprint assessment for Sysco's operations, including value chain emissions, and we'll use this analysis to inform a broader science-based climate change goal. We know 2 areas of continued focus to address submissions, and our direct operations will be renewable fleet and renewable energy. We are very excited about the electrification of our fleet. It's a significant undertaking, but also a significant opportunity to lead the industry and be a part of the global transition to a low-carbon economy. Our teams are working hard on this challenge, and we've piloted an electric vehicle program in San Francisco. Let's take a look. [Presentation]

Sysco takes renewable energy to another level. I am standing here today talking to you from the Sysco power patch. The energy generated at this site, along with 2 other similar sites in Texas, powers the majority of our Texas energy load, which is one of the largest energy using markets. Emissions avoided from this project alone is equivalent to taking another 7,000 cars off the road. This is yet another example of how we are pursuing alternative energy. As we continue to move towards a low-carbon future, we will pursue additional renewable energy partnerships across our operations. Now let's talk about Sysco brand. We recognize that many of our environmental and social impacts lie within the value chain. One of the strongest ways we are driving change is through our Sysco brand portfolio. Sysco has $4 billion brands in our portfolio. Approximately 50% of what we sell to local independent customers is Sysco brand. And over 50% of our Sysco brand portfolio is included in at least one of our sustainability commitments, whether that be our commitment to sourcing certified paper for a towel, tissues and napkins, increasing sourcing from diverse suppliers or encouraging the responsible agricultural practices in our supply chain. We've also linked Sysco brand to community impact through our Nourishing Neighbors program. A portion of sales from Sysco brand products to local customers goes directly back to local communities. This program has generated more than $7 million since it began in 2017. Half of what we sell to those local customers is branded product. More than 50% of that is included in at least one responsible sourcing commitment. And 100% of it brings dollars directly back to the local community. As we look forward in our CSR journey, we will continue to focus on our brands. We will find more opportunities to drive meaningful change through our brand portfolio and also expand Sysco brand into new markets. We've heard from Kevin earlier today about our purpose to connect the world to share food and care for one another. Our work in corporate social responsibility is, one, of those ways, we live that purpose every day. Sysco has a strong track record of leading in corporate social responsibility practices across the industry. And you can expect us to continue to drive towards the goals outlined in our strategy. Our goals and actions speak for themselves, and we are not going to stop there. This work matters. As a father of 2 daughters, I want to be sure I can tell my girls that we made a difference, for their generation of future customers and associates and for the generations that will follow. We will continue to learn as we go. We recognize that customer expectations are rising. Investors are managing risk in new ways and so are we. Sysco is ready to rise to the challenge, and we have the responsibility to contribute to a stronger community and a healthier planet. And now over to Aaron for the financial summary and closing.

It's good to be back. I know our team has had great news to share with you as they have described our recipe for growth. I hope you have found the details we've been providing intriguing. We have a lot going on, and are moving rapidly to build new capabilities, while taking advantage of the great assets that Sysco has developed over 50 years. I'm going to cover a lot of ground in the next several minutes, and I'm going to jump between the here and now, the upcoming year and the long-term aspiration, because let's be clear, where we are now dictates the path we will take to get to where we are growing. To that end, my order of presentation will be, number one, Sysco expects to grow faster than the market through the initiatives you just heard about. We forecast the industry recovery from data inputs such as Technomic and other industry experts, and apply it to our initiatives to build multiyear plans. Here's the headline: if the industry recovers as modeled and we execute as planned, Sysco expects to be 30% more profitable in 2024 than in 2019. Number two, we are ring-fencing $2.6 billion of capital for potential investment into our business over the next 3 years to support our growth. We are self-funding these investments through our cost-out efforts and our strong cash generation. Number three, we will maintain a strong balance sheet and are focused on our investment-grade rating. And number four, shareholder return is important to us. We will discuss our dividend and lay out our plans for other return of capital. Sound good? Excellent. Let's press on. Our business started the fourth quarter of fiscal '21, like a group of racers, running a long distance race. Everyone has the same finish line in their sights, recovery and growth, but they're starting at staggered locations on the same track. It will not be a straight-line race. But the shoes are laced up, stretching is complete and the starting gun was fired in Q3. Two weeks ago, Kevin and I talked to you about how our U.S. Broadline business was surging forward as restaurant restrictions lapsed, and as consumers ventured out in the south and the central states. We also talked about how our Sygma segment was out in front for the last 3 quarters as its customers, large QSRs, we're on trend with their drive-throughs. These 2 business units make the point that our businesses, even to operating the same geography, will recover or run the recovery rates at different rates. We have 3 businesses that are slower coming out of the blocks. Our foodservice management business, where we are #1 in the industry and our Guest Worldwide business, where we are becoming #1 in the industry, are expected to recover as travel and the hospitality industry return to normalcy over the next 18 months. And we anticipate that they will do so with some extra verve, having taken advantage of customer opportunities and competitor disruption arising from COVID to put in place new contracts, which will help to drive that growth. Our International segment has been broadly impacted by lockdowns, which have been more aggressive than in the U.S. However, we need to look no further than our experience in the U.K. in the last couple of weeks as outdoor dining resumed to demonstrate the point that the international customer is also really tired of eating at home. The International business may be off to a slower start than the U.S. against the recovery, but with all of the changes that Tim is driving, our expectations for progress are high. In sum, as we look at the business for fiscal '22, assuming further COVID good news in our key geographies, we expect that the USFS business and the Sygma business will meet fiscal '19 sales in fiscal '22, even with the headwinds of the foodservice management business. We expect that our guests worldwide and International businesses will continue to improve, but will move more slowly up the recovery curve during the first 6 months of fiscal '22 and as a result, we'll not be back to fiscal '19 results until sometime in fiscal '23. So why is this important? Because that progression of recovery is the baseline for our enterprise business assumptions for FY '22 and beyond, which I will discuss further in the guidance section. As Kevin called out, Sysco's aspiration is to accelerate sales growth and grow faster than the overall market, meaning we will look to gain share. Greg talked to you about better operational alignment and our sales transformation, which on its own is expected to drive more than $1 billion of sales growth over 3 years. He also discussed the Greco platform acquisition, which adds $0.75 billion of sales on closing, but which more importantly is expected to accelerate our sales growth in the Italian cuisine type as we expand the Greco platform across the country and benefit from its expertise in the core of Sysco. Tim talked to you about fixing and growing our International business. When Tim is successful, we expect to have a far more profitable operation in International, one of our biggest close-in profit improvement opportunities, reflecting an approximately $300 million swing from the depths of COVID to our plans for FY '22. Judy talked to you about personalization, an individual project, which adds almost $1 billion to our top line over several years. We are investing heavily in this project in FY '21 and FY '22. She also talked to you about our [ Periscope ] pricing project, which, for the first time, allows data science strategy to be deployed to the field to put us on right price and helps to drive growth at least $500 million according to our models. We are also investing heavily in this capability during fiscal '21 and fiscal '22. Tom talked to you about digital tools and engagement. While I will not quantify the sales impact of technology broadly here today, it is fair to say that we believe that these investments are necessary updates and evolutions for our success. Marie talked to you about optimizing our network for customer service. Serving the customer better, always helps to drive both sales and profit. All of this together drives the growth. I want to be clear on the practical realities of our aspiration. The Sysco truck is under construction. While we're driving it down the road, we cannot be certain of the pace of the business recovery in the external environment. We have modeled the business recovery, utilizing third-party data and projections from each of our businesses. We have then layered our market share capture through staggard initiatives onto those industry projections. As individual transformation projects go live, our ability to grow faster than the market accelerates. So read this as we expect to grow 1.2x the market by the end of FY '22, adjusting for the recovery. By the time we reach the end of FY '24, we expect to be growing at 1.5x the market. Now a lot of companies, when they take on a transformation of the size and scale of Sysco's, announce a rebuilding year and go negative on the P&L or take unfortunate actions with respect to their return of capital. The differentiator here is that Sysco has both strong cash flow and profitability starting point that is 2x higher than the industry average. Our U.S. foodservice adjusted EBITDA margin is the highest in the foodservice distribution industry, and we have the size, the scale and the network to accelerate profitable growth. Only Sysco has the ability to invest for growth while at the same time, maintaining such a strong financial profile. Our transformation will be supported and funded by our cost-out efforts. You've heard us talk about overachieving on the $350 million of structural cost out that we had previously announced. Today, we are announcing that we will build on and increase that original commitment. So that from fiscal '21 through fiscal '24, we will have taken out $750 million of cost from our income statement through a combination of cost of goods reductions and operating expense reductions. The incremental $400 million of cost out goals which are projects we already have line of sight to, are weighted to fiscal year '23 and fiscal '24, given the implementations we have underway in FY '22. Now a couple of critical points around cost out. We will have achieved the original $350 million commitment during FY '21. The savings are real. As I called out during our Q3 earnings call, the savings have been masked in our results so far, by the deleveraging of our business due to COVID. Prior to Q3, they had also been masked by our significant investments against the COVID recovery and against our transformation. During FY '21, we estimate that we will have spent $100 million of operating expense in support of launching the transformation initiatives. We also estimate that we will have spent an incremental $20 million of operating expense in the U.S. alone in support of the business recovery. As we move through FY '22, the return on our cost-out efforts and on our transformation initiatives will become more obvious in the income statement. As we move through fiscal '23, you should be seeing both the growth and the benefits of those cost out efforts. So let me try to paint you a picture of how all of this comes together, even with the business recovering at different speeds from COVID, with a very active transformation effort investment and with everything coming together in a nonlinear way. The headline is that our base expectation for fiscal year '22 adjusted EPS is a range from $3.23 to $3.43. Let's unpack that. Our recovery story started in Q3 of fiscal '21 and continues into fiscal year '22. Our U.S. Broadline business is expected to recover fast than the overall market, and we expect our fiscal year '22 sales in that business to approach fiscal year '19 sales, notwithstanding a slower reboot of the foodservice management business. In the International and Guest Worldwide segments of our enterprise, the recovery will come at a slower pace, though it is still coming, and we are not predicting fiscal '19 sales levels in those businesses or as a result, the enterprise, until fiscal year '23. This is just timing of achieving run rate recovery sales. This is worth emphasis. We expect significant growth in fiscal year '22 compared to fiscal year '21 and fiscal year '20. It will not be linear, but we expect the USFS to approach fiscal '19 levels. The quick math would tell you that just getting back to nearly fiscal '19 levels would be an incremental $9 billion of our fiscal '21 sales. Walking down the P&L for fiscal '22, we expect our enterprise-wide gross margin to improve from fiscal '21, and all in to move toward fiscal 2019 levels, even as we make intentional choices in markets, onboard new customers and deal with inflation. We will benefit from our cost-out efforts in COGS and from the discipline arising from the launch of our new pricing system. Depending on the speed of the recovery, we may see some of the same business mix issues we saw in Q2 and Q3 of fiscal '21. On the expense side, we expect adjusted operating expense as a percentage of sales to improve from fiscal year '21 to approach fiscal year '19 levels in the later quarters of the year as we complete our transformation work. We will achieve cost out, but we will have our investments to complete. On the bottom line, which I called out as the headline, we expect EPS for fiscal '22 of $3.23 to $3.43. The width of the rain is designed to reflect the risk and reward on the recovery and on the speed of transformation benefits. Keep in mind that we have not yet completed our fourth quarter for fiscal year '21. And also keep in mind that in fiscal '22, our interest expense will still be higher than fiscal year '19 as we work on our balance sheet. More on that to come. It is worth noting that in providing this guidance, we have made no adjustments for the prospect of the administration, successfully raising corporate tax rates and are applying a blended rate of 24.1%. If the administration is successful, the new rate would have half year impact for us in fiscal year '22, given our non-Gregorian fiscal year. While fiscal year '22 starts to show our progress against the transformation, we anticipate that it will really show in fiscal year '23 and fiscal year '24. Our market share growth and top line growth are expected to elevate through fiscal year '23 and into '24. Gross margin are expected to be modestly higher than fiscal year '19. In addition, we expect that as a result of the combination of growth and cost out improvement, a decline in operating expenses as a percentage of sales will result. By fiscal year '24, we expect adjusted EPS to be more than 30% above adjusted fiscal year '19 EPS. Again, I am not assuming any change to the corporate tax rate in making that statement. Now I referenced earlier that Sysco's strong cash generation would allow us to self-fund the organic transformation. To that end, today, we are announcing an update to our capital allocation strategy for the next 3 years, and you see it on the slide in front of you. First, we will invest the resources necessary to achieve our growth aspiration. To grow, we must have the right assets; second, we will strive to maintain a strong balance sheet and maintain a strong investment-grade rating; third, we will continue to pursue shareholder returns of capital at the right time. With rising sales and recovering profit, we expect Sysco to generate at least $2 billion of cash from operations in fiscal year '22 with rising levels thereafter. Capital spend, of course, is the other element of free cash flow. We know that we will need to invest in our business to achieve the growth that we are targeting. To that end, we are ring-fencing $2.6 billion of capital for investment against the transformation in the next 3 years. Those investments will come in the form of technology, our distribution fleet and in our distribution network. Regions, markets and teams will compete for the capital dollars based on business cases, and we expect an appropriate return on our investments. To the extent that projects with an appropriate return are not put forth, we will deploy our cash consistent with our capital allocation strategy that I just highlighted. Some of you may be looking to assess how big of a ring-fence of dollars this is for us. Although $2.6 billion sounds like a large number, as you can see on screen, our capital investment expectations are only 10 basis points above our pre-pandemic annual investment rates as a percentage of sales. It is important to point out that Sysco, a company that has grown via acquisition since it was founded, will continue to utilize that tool as we seek to achieve our faster-than-market growth. So we are assuming continued pursuit of tuck-in acquisitions, adding to the more than 200 deals done over Sysco's lifetime. Our efforts will be focused on Broadline, specialty and cuisine-type opportunities that are located in underpenetrated regions or markets for us or businesses that add new capabilities or new platforms to our current portfolio. While we will assess opportunities as they arise, we are assuming an annual contribution of 0.5% to 1% sales growth from those tuck-in acquisitions. I've talked a lot about the investments we're making, all of which add to the strength of our portfolio and Sysco's already strong cash generation. I want to emphasize that these are not break-the-bank plans. All our efforts demand a return on our investments. One of our other strengths is that we are the only investment-grade foodservice distributor. Maintaining an investment-grade credit rating is a core principle for our capital allocation strategy going forward. We have a strong balance sheet, and we intend to keep it that way. We currently have a split rating with each agency rating us at a different notch of investment grade. In service of continuing to improve our rating, today, we are announcing a leverage target that we will work toward to ensure that we preserve our rating. We will target a net debt-to-EBITDA ratio of 2.5 to 2.75x. While this is the first time in recent years that we've announced a formal leverage target, our actions in support of this effort are already well underway. In our recent Q3 earnings call, you would have heard me refer to the 5 specific debt reduction actions that we've already taken this fiscal year, totaling a reduction of $2.3 billion in debt during fiscal '21 so far. During September 2020, we redeemed early $750 million of our outstanding senior notes. In March, we repaid the remaining $700 million in outstanding borrowings under our long-term revolving credit facility. We also repaid GBP 600 million in aggregate principal amount of notes outstanding under our U.K. commercial paper program throughout March, April and now May. And we're not done. Today, we are making 3 announcements. First, we will be launching a $750 million liability management exercise in coming days. We will be opportunistic in coming quarters with respect to our outstanding notes. Second, we are committing that we will pay off and retire and not refinance $500 million of notes next month in June. These 2 actions will increase our debt reduction in fiscal '21 by an incremental $1 billion after payment of the premium, or May call, in Q4 of fiscal '21. We will have reduced our debt by more than $3.3 billion in fiscal year '21. Third, we are committing that we will pay off and retire and not refinance a further $450 million of notes next June. We will take further actions against our indebtedness, consistent with our target as the opportunities present themselves. Finally, I should note that we have paid off and allowed our 364-day facility to lapse to reduce our interest expense. The benefit of these actions is a reduction in our overall debt, a reduction in our interest rates and in particular, a reduction in our debt towers in the next several years. So that you have appropriate context, we ended Q3 fiscal year '21 with $4.9 billion of cash and a net debt-to-EBITDA ratio of 5x. With the actions already completed and those we announced today, we expect that we will end fiscal '21 in 6 weeks with a net debt-to-EBITDA ratio of 3.5x or better. We are benefiting from both debt going down and EBITDA climbing as we come out of the COVID disruption. By the end of fiscal year '22, we expect to meet our leverage target and preserve or improve our investment-grade rating. Shareholder return remains a priority at Sysco, and I am proud to be part of a company that continually returns value to shareholders. Sysco has a 14% total shareholder return over 5 years compared to the S&P 500 Consumer Staples index of 8%. Sysco regularly returns more value to shareholders than peer companies. We have returned $11.8 billion of total value from fiscal '15 to fiscal year '21 in the form of dividend payments and share buybacks. Not only are we the sole company in our sector that pays a dividend to shareholders, we have a 51-year history of dividend payments and are known as a dividend aristocrat, given the 25-year-plus history of our annually increasing our dividend. Throughout the COVID pandemic, we were cautious and maintained, but did not grow our dividend payments to our shareholders, while many other companies suspended or lowered their dividend payments. Looking ahead, we see good things at Sysco. We remain committed to growing our dividend over the long-term as part of our capital allocation priorities. So our pause ends today. Today, we are announcing that Sysco's Board has just authorized an increase to our dividend of $0.02 a share. The increased payment will occur in early July and will bring our dividend to $1.88 per share for the full 2022 calendar year. I am thrilled to make this announcement today as it shows our commitment to returning value to our shareholders while investing in our business and while bringing down our indebtedness. With this announcement, Sysco also preserves its dividend aristocrat status. Finally, we cannot forget that Sysco has completed $6.6 billion of share repurchases in the past 5 years. Share repurchase will continue to be a part of our playbook at the right time and consistent with the capital allocation strategy I highlighted earlier. Today, we are announcing that this morning, our Board of Directors also approved a new $5 billion share repurchase authorization, which will remain available until fully utilized. Now this is an authorization, not a repurchase action. Given the significant actions underway to manage the COVID recovery, to invest against our transformation and to reduce our indebtedness, we have no current plans to repurchase shares in fiscal year '22. In order to start our share repurchase program, certain internal conditions must be met. The market recovery should be robust in both our U.S. and international areas of operation. Investments in the business should be fully funded, including M&A. Debt reductions will have continued, and our investment-grade rating must be preserved. Excess liquidity must be available on hand to fund the repurchase. We will monitor these conditions closely and revisit our plans as we move through fiscal year '22 and beyond. I view this as a pragmatic approach to setting Sysco and its stakeholders up for success over the course of the next couple of years. Thank you for your time today. As you reflect upon the content of our Investor Day, I would ask you to keep in mind 4 key messages: Sysco has the core assets and the balance sheet to continue to lead its industry while growing faster than the market. Sysco has a detailed transformation plan, guided by expert leaders who have done it before to achieve that growth. Sysco's plans include both organic and inorganic efforts. Sysco will balance investments against its business with reducing indebtedness and preserving its investment-grade rating, while also returning capital to shareholders smartly. Thanks, everyone, for your time today. We will now take a short 5-minute break and then resume for our Q&A session. [Operator Instructions] [Break]

Hello, everyone. Welcome back. I hope you enjoy the presentations. Now we've got some time reserved for Q&A with our executive leadership team. Thank you to everyone that have been sending in questions along the way. Again, [email protected] for your questions. They're coming in. I've got them accumulated here, and we're going to go ahead and get started. So Greg Bertrand, I'm going to be coming to you with the first question, please. Greg, the question is from Lee. And the question is, can you please give us some more examples of the categories where our sales associates are helping our customers grow their sales?

Sure. Thanks for the question. So we're very proud of our sales consultants and the work that they do, and we call themselves consultants for a reason. One of their primary responsibilities is to help our customers to grow their sales. They, in turn, build loyalty and our sales grow alongside theirs. When we rolled out our new local sales model, we actually renamed that customer-facing sales position from marketing associate to sales consultant to really emphasize the type of work that they want them to focus on. And then we changed the sales compensation program to support that and to promote greater share of wallet, relationship building and longer-term loyalty of our customers. They do a lot of things to help our customers in their business. And by helping their customers with their business, they help us to grow sales. So some of the things that they do as part of the local sales model, we have culinary specialists. We have premium protein specialists, and they connect the customer with the specialist to help them with product needs, questions, recipes, et cetera. We do recipe design. We do menu design. We put menu. The sales associates also help customers when they have issues. So as an example, during COVID, we helped them to launch over 16,000 grocerants, grocery stores within their restaurants in order to continue to drive revenue and drive profits so that they could stay open. We help them transition from in-room dining to to-go and curbside, help them to set up their packaging, help them to set up their websites, et cetera. So they do a lot of things to help our customers succeed, and in doing so, they help us to grow sales. And I think a great proof point for this is our sales consultants receive a Net Promoter Score of 9.1. That's a full 140 basis points greater than the competition, and I think it illustrates what our customers think of the sales associates and the work that they do to assist them in their day-to-day business.

Okay. Thank you, Greg. I appreciate that. Tim Orting, I'd like to hear from you on the international side. The same question, please. Things our sales associates are doing to help customers internationally.

Helping our customers, in particular, during these difficult times, where we are helping them to transform into outdoor service. We are helping the menu design. We're trying to find new revenue streams. We are also developing new recipes that are strong and good under these circumstances. And then I think one thing that's very important. I think we're quite good at actually taking the current trends that exist in markets and actually recommend and advise our customers to tap into those and make sure that they are capturing the new potential and the new trends that is available in the market. And that we can do globally because we are global operation. So we can take what's good from other parts of the world and actually replicate and do well and advise our customers to drive growth also on that element.

Great. Thank you, Tim. I appreciate that. Kevin, I'm coming to you next. Similar theme here. The question is about customers with outdoor space, restaurants with larger capacity. Do restaurants have more capability than they did prepandemic with some of these capabilities?

Yes, I appreciate the question. I think the short answer to that question is, certainly, yes, as the market conditions in that local geography ease the restrictions. So we've said on our last earnings call, Southern third of the United States where restrictions are essentially eased. Our independent local restaurant customers are running increases to 2019, and that's just working its way north as weather improves. And more importantly, as restrictions are eased in important geographies places like Manhattan, where last summer, outdoor patio, dining was extended. When indoor dining rooms begin to reopen even more fulsomely, they'll have both of those benefits. The extended outdoor patio and also the indoor capacity. But let's not forget, delivery, take-out, all of us have experienced delivery and take-out at an expanded rate during this past year. And I don't believe those things are going away. We actually view it as incremental. And as I've said before, I'll say again, we can see in our data right now that as the restrictions ease on a given community, there is a robust pent-up demand. We call it food-at-home fatigue, and customers are willing to go back out to eat in a meaningful way. Again, as evidenced by the fact that we're growing versus 2019 right now in the markets that are fully opened, and we anticipate over the next quarter or so that many more markets will be fully open, and we're excited about that.

Kevin, well, you got the mic. I've got a lot of questions here that since we announced Greco, about the acquisition environment, can we provide an update on just the overall acquisition environment out there?

We're excited about the acquisition opportunity, and that's why we asked Joel to step out of his former CFO role into leading our business development efforts. We call it the new horizons, go back to the wheel that we showed you today. It's a growth wheel. Each of the individual 5 elements feeds the next and the new horizons work is very important to us. And yes, we see robust activity in front of us. I want to be crystal clear, though, that the work that we will do will be fed from and led from our strategy. Not us soliciting inbound calls and saying, yes, no, do we want to do with the deal or not at the right multiple. That's the days of the past. The Sysco of the future and present today with our announcement of Greco is strategy led. We want to win with the independent local consumer. We believe that cuisine-focused selling capabilities are paramount to doing that, and that's why I went out -- we went out and found the best independent partner in the Italian space, and that was Eddie Greco and his family. We're thrilled to be able to invite Eddie's family into our Sysco family. We're going to grow that Italian business with Greco. We're going to take that Greco model and make it our Italian platform. We believe we can expand it to additional geographies around the country, and it's just getting started. We believe there are opportunities similar to that in the Mexican cuisine segment, many forms of Asian cuisine segments, and there are geographies around the world where we know we have opportunities to further penetrate our business model. It will start with our strategy. Obviously, it has to be a strong partner with strong results, and we will evaluate these opportunities one at a time. But shortly stated, yes, there are meaningful continued opportunities for us to grow through -- grow through M&A.

Thank you, Kevin. Aaron Alt, I've got a question here about the market growth that was mentioned in the presentation, and you had talked about that. So can we explain a little bit more about the pacing of how we get to the 1.5x market growth.

Neil, great question. Here's what I would say, as you will recall from our Q3 earnings call, the recovery is here. We are seeing the upswing in key parts of our domestic business, in particular, the south and the central states. Now as the Northeast and as California and metropolitan areas reopen, we're starting to see that upswing as well, and so we're quite confident and excited about what we're seeing in our core domestic business. We expect the same sort of progress in international and in our guest worldwide business. But at a moderately delayed rate, right, as they respond to the own industry -- to their country regulations into the hospitality industry. And so while we've experienced it, we know how it's going to play out. It will be a series of curves for us as we invest against our business. What that means is, we're moving up the recovery curves. At the same time that we're investing heavily against our business to drive the growth. The capability adds, the technology investments, things I'm really excited about, like personalization and the pricing capabilities, all this is coming together at once. And so what we have guided is that over the course of fiscal '22, we will grow 1.2x the market. We're going to move faster than the market as the market is recovering, and as we move through our transformation. By the time we get to fiscal '24, we'll be growing at 1.5x the market.

Thank you, Aaron. Kevin, I'm going to come back to you. I got a question from Greg here about the traffic lights you showed in the presentation. And we had casual dining and full service and travel and leisure is yellow on those traffic lights. And they're wondering if with the CDC mass guidance change, does that tend to accelerate our thinking there at all?

Yes. I think the short answer is yes. We're seeing good news, optimistic news in many forms recently. As recently as this week, the CDC guidance and masks being less required gives confidence to decision-makers to ease the restrictions that Aaron was just talking about. There was an article in the newspaper this morning about leisure travel is not coming, it's happening now. The number of people that are booking airline travel for this summer from a leisure perspective is up meaningfully. And we have an important business in the travel, leisure and hospitality sector. We've modeled it conservatively. We believe, from a recovery perspective, and I think the punch line of the question we just received is, if anything, I think that recovery curve may come faster than what we had modeled. Even the European Union just yesterday announced that they will begin opening up borders for tourism travel sometime this summer. They weren't crystal clear on the specific when, but that is important. We have an important business in London and in Paris, 2 cities that benefit greatly from international travel, and our Irish business benefits from tourism travel. Now whether or not that's intra-Europe travel or people from the United States traveling across the pond, increased travel is simply additional fuel to our recovery curve. That's how we describe it. So I think the mask mandate, the easing of restrictions and the good news that's coming from the travel industry vis-à-vis more people booking appointments, these are harbingers of good things to come. And what Aaron has modeled to be our slowest recovery sector. And I'll just bring it back to the other end of it, which is that independent local restaurant customer, which is the prime focus of our recipe for growth already running increases to 2019, that is a robust, healthy indication of what's to come. What Greg Bertrand covered in his prepared remarks that we are serving 10% more unique doors right now than we were pre-COVID when an industry is reduced by 10%. That is, again, a significant harbinger of the market share capture that's available to Sysco. And therefore, while Aaron has guided that 1.2 growth versus the market for fiscal 2022 and the 1.4 -- excuse me, 1.5 growth that we will be able to deliver by the end of fiscal 2024.

Okay. Kevin, I've got a similar theme question here about -- you mentioned hotels in your presentation as part of the travel and leisure segment. And the question is, how big of a market opportunity is hospitality for Sysco?

Hospitality pre-COVID was roughly 10% of our total balance of sale. At the current moment, it's roughly 7%. So that actually does show you that just from a pure math perspective as that industry recovers, it is meaningful. It's important to us. Our Guest Worldwide business, in particular, has been hard hit by occupancy rates in hotels being down significantly. We did cover today as a part of our prepared remarks. We have a substantial new customer win within our Guest Worldwide sector where we want a large portion of business from a direct competitor, opening up thousands of additional hotels for us to be able to serve. Now right now, those hotels are ordering less per week than they typically would. But as their occupancy rates improve, and they will, over time, that business, in particular, Guest Worldwide is meaningfully poised to far exceed their sales results pre-COVID. And we will be able to grow that business profitably based upon what we have done with that large contract win. So just in general, FSM, as Aaron covered, then the travel and hospitality sectors, important businesses for us. And if you put the international component in as well, each of them, I think, Aaron's term were starting a little bit further behind on the recovery track, but we're confident that they will recover. And again, as I said, the longevity of our recovery curve, we have plenty of gas still in the recovery tank.

Thank you, Kevin. Greg Bertrand, I'm going to come to you with the next question about share. The question is from John. He mentions that over time, Sysco has talked about 30% to 40% share, and today, we talked about 30% share of wallet. Has our share changed over time? If so, why?

John, thanks for the question. The answer is no. Our share has not dropped. The share of wallet has been fairly consistent over the years. We have about 30% share of wallet with the independence and about 40% with our multiunit customer. And the plan that we rolled out today will grow that share. So we intend to continue to increase our share of wallet within our existing customers.

Okay. Thank you, Greg. Greg, while you've got the mic, another question here. We talked a lot about technology investments today. Tom had a lot of that in his presentation with the investments in technology we're making and all the programs we talked about. Does that mean a reduction in head count for Sysco because of those technology adds?

Not at all. Actually, quite the contrary. There is no plans to reduce the size of our sales organization. What technology does for us is it really brings the best of both our human capital and the technical capabilities together. And so it allows our sales consultants to do what they do best to go out and prospect, to consult and help the customers to be more successful with their businesses, connect them to Sysco resources and build relationships, which are still an important part of this business. The technical capabilities do what they can do better than the sales consultants, things like pricing, things like personalization. And so it's really the magic of when you bring the 2 together that create that opportunity for growth. In many ways, the technology makes our sales consultants more efficient and therefore, more effective. So as I started out by saying, there is no plans to reduce, it's actually quite the contrary. Some of the cost out work that you heard about today will fund continued growth and investment in our customer-facing sales positions like sales consultants, new business developers and specialists.

Thank you, Greg. Kevin, I'm going to come to you next. As Greg was talking about the share of wallet there, we've got some questions about what you had in your presentation, 16%, 30%, and 50% as we talk about overall share, share of wallet, share of customers. Can we talk about that a little bit more and describe what is the 16%, the 30%, the 50%? And where do we think those numbers can go as we look forward?

Yes, love the question. What gives me so much optimism and confidence in the Sysco thesis is, we have the opportunity to improve each of those numbers, and maybe you could show the growth wheel chart while I'm talking through the answer to this very important question. So what are the levers that we can pull that are going to drive growth for each of them. The first is, we can win more business with existing customers. Judith showed through the personalization engine that she's building and her direct work experience before coming to our great company of what she did with ExtraCare. That program, personalization is about increasing the relevance of the offers that we provide to existing current customers. And she knows and we have proven through manual tests and pilots at Sysco that those tactics and those strategies work. So we know personalization will drive increased share of wallet with existing customers. The second thing she talked about was our new pricing software. And think about that tool doing the same for existing customers, adding incremental cases or lines to their orders based on relevant pricing for product they've not bought before. In the past, they would have to reach out to one of Greg's sales consultants to inquire about what the price would be for something that they had not bought. Sometimes people were reluctant to do that. With our new tools, with our new capabilities, every item in our book of business that's eligible to that customer, we'll have a right-on-price offer for that customer, a relevant price for that customer. And she read a great customer example of a customer who's buying more from us simply by seeing relevant and appropriate pricing. That's our second one. Greg talked about adding more specialists, experts in produce, experts in protein. Today, we announced adding many experts in the Italian cuisine segment. Again, those resources deployed against existing customers meaningfully allow us and enable us to increase penetration of cases and lines on things we've not sold before based on team-based selling. Two more. One more here is our Sysco 360 tool, which is the tool we use to guide our sales force on where and how they should spend their time. And so just to repeat what Greg said, we are not reducing our sales force. In fact, we will be increasing the size of our sales force. But the terrific work that's been done by Elizabeth Ubell and our data and analytics team, they are providing new customer prospecting lists for our sales consultants to use that isn't just, hey, a new restaurant opened up. We can see and we know it's a good customer. These are the types of things they're buying based on menu analysis that we can do off of what they post online. And we tee Greg's team up with very specific offers to win new customers and the proof is in the pudding. We've won more new customers over the last quarter than at any other time in our company's history, and the facts are just indelibly clear. We have 10% more customers now than we did pre-COVID in an industry that's down 10%. Those facts speak for themselves, and we will continue to do that work. Post-COVID, we will be increasing the amount of new customer prospecting that we will do. We will certainly be winning more cases and lines per existing customer. And when you put that all together, last but not least, coupled with the exciting things that Marie talked about. One of the reasons why customers would leave Sysco and one of the reasons why they wouldn't buy all of the product they could be buying from us was delivery frequency. So we're eliminating those types of barriers. What matters to that customer? How many days per week do they want product delivered? We need to be flexible to meet their needs and not force them into a bottle like we're going to be there next Tuesday. That model will be there next Tuesday. This simply doesn't work good enough, and she's creating the capabilities through operational improvements to fund increased delivery frequency. When you put all that together, we are very confident that we will serve more customers through the work we're going to do with prospecting with increased delivery frequency. We know we can increase the share of wallet. Today, we're not going to announce specific numbers in that regard. What we did announce today was a growth ambition that's greater than the market, 1.2x the market exiting this next fiscal year, and 1.5x the market exiting fiscal '24. And we think those are robust commitments. And again, that's for the total of our business in a very large $300 billion market. And Aaron covered how that will flow through to the bottom line with an EPS 3 years from now, that is 30% greater than the peak profitability of this company pre-COVID. And we think those are pretty exciting capabilities that we'll be bringing to this industry and to our important shareholders.

Okay. Thank you, Kevin. Aaron, I'm going to you next about CapEx here. We talked about CapEx in your presentation. You talked about some CapEx amounts, and we showed briefly comparison as a percentage of sales. Can you talk about, Aaron, CapEx as a percentage of sales compared to prior years and the expectation of that going forward?

Thanks, Neil. Great question. I'd love to do it. Look, today, we announced our capital allocation strategy for the next 3 years. We start with investing to achieve the very growth that Kevin has been talking about. From there, we move to maintaining our strong balance sheet and maintaining our strong investment-grade rating. And from there, we move on to return of capital to shareholders. And I want to point out a couple of things. Earlier in my comments, I called out the fact that we're going to invest or we're going to ring-fence rather, have the possibility of investment, about $800 million for each of the 3 years of our next 3-year plan, right? Ring-fence, not commitment, because we want the teams to compete for the high-growth opportunities that we have out there. That will total somewhere between $2.4 billion and $2.6 billion over 3 years, if we spend it. But I need to go back and point out that by the time we get to the end of Q4 of this year in 6 weeks, we will have spent $3.3 billion in debt reduction. Now the capital we're talking about on a year-by-year basis is 1.3x, 1.4x sales, which if you look back over our historical periods, is about what we've been spending within 10 basis points or so. And so while we're being clear with Wall Street that we are in it to win it, we are going to leverage our balance sheet to win it, right? We're going to invest, but we're going to invest smartly, and we're going to invest consistent with our historical profile.

Thank you, Aaron. Greg Bertrand, coming back to you about ghost kitchens and question here from Peter. The question is one of the trends unfolding today in the restaurant industry is use of virtual concepts or ghost kitchens. Does Sysco intend to serve those type of customers?

Yes. So actually, we serve them pre-COVID, and we're serving them now. And you're right, there is a positive trend with ghost kitchens. It's an opportunity for some of our customers to grow their revenues and grow their profits in a way that doesn't require as much capital. Ghost kitchen is a very profitable customer segment for Sysco. And I think that we're really well equipped to serve this particular type of customer because we have such a wide variety of products to offer them. And we have such a differentiated portfolio of businesses, whether that's the Broadline business, one of our FreshPoint or specialty meat companies or supplies on the flyer European imports. So yes, there is a great opportunity. We are participating in it, and we plan to participate in the growth of ghost kitchens in the future.

Thank you, Greg. Aaron, I'm going to come to you with a share repurchase question. And then Marie, I'm going to come to you with a labor availability question after that. Questions are coming in fast here. Thank you, everyone, for sending in your questions. Aaron, the question about share repurchases. So we announced today a big authorization amount, but it seems like we're not yet repurchasing those shares. Why would we not purchase the shares sooner?

It's a great question from investors, Neil. And what I would observe is this, we are a cautious company, right? We are at the tail end of an industry-changing and an environment-changing event. And so we want to be cautious, right? We are investing for the long term. We are investing for growth. As we see how fourth quarter of this year pans out as we see how the first couple of quarters of next year pans out, how our investments go, how the growth materializes, of course, we'll be looking at our plan. But for the moment, we are going to be loyal to our capital allocation strategy, which is, first, we're going to invest for growth. We're going to maintain our strong balance sheet and our investment-grade rating. And as the opportunity presents itself with having done that, we'll then look at further return of capital to shareholders. I want to emphasize, we did actually take a step today, right? We announced an increase to our dividend, preserving our dividend aristocrat status and returning capital to shareholders.

Thank you, Aaron. So Marie has noted. I've got a lot of questions here about labor availability and along those lines. Are we having any challenges with hiring right now, particularly drivers or warehouse?

Well, you certainly can't have a conversation with any business person across America, certainly, I think fast coming across the globe, without labor shortages and tightness in markets coming up. And that's especially true as you all read with drivers and what's happening in the driver industry as that population is kind of aging. And it -- for some reason, it doesn't appear to be as attractive yet for the younger generations coming into the workplace. Here at Sysco, one of the things that I'll remind you that we did is we started ahead of the curve. So way back in Q2, we realized that snap back was going to happen, and we started taking efforts then to finalize our labor staffing strategy, calculate how many head count gaps we thought might have developed over the COVID period and really ramping ourselves up, both on the recruiting side, but just as importantly, on the intake side and the training side to be able to handle that influx of new associates. Next, I always like to remind people as well that here at Sysco, we pay above median market averages for all of our very important front line positions. And because of this, we think our pay package is something that we have a right to be proud of, and it certainly helps us attract new candidates during times like this. On top of that, our retention has really held stable. Even though as numbers go up, the raw numbers may be increasing, but our rates have held stable. The number one pressure I would tell you that we're seeing today in regards to our labor balance is really just productivity challenges that always come when you're onboarding new warehouse workers and drivers. Because as you heard me talk about earlier today, what our drivers do is very different from what a driver in another industry might do. Hence, our rebranding to delivery partner, kind of like our rebranding to sales consultant because it is a very different role. It takes us a little bit longer to get them productive. The good news is that we worked really hard during COVID and all of the operations leaders across the globe at Sysco, we're super focused on gaining efficiency during the lockdown period, and that performance is holding. So we're not giving that back, and that's helping us to offset some of the pressures that we're seeing as we onboard those new associates. But hey, you've heard us all say, this is kind of a good problem to have. For several weeks, over the past few weeks, we've actually shipped more units per week than we did in the same week in fiscal '19, and we'll take that challenge on all day.

Thank you, Marie. Okay. Kevin, I've got a question about convenience stores and some activity in the marketplace this week. And then Judy, I've got a bunch of questions on inflation. So I'll come to you next to Judy with inflation. But Kevin, first, one of our competitors had an announcement this week. And are we looking at the convenience store segment? What's our view of that segment?

Yes. I appreciate the question. Every company will develop its own strategy, and we don't comment on other companies' strategies to succeed. This is a big enough market that there could be multiple strategies and paths to success. At Sysco, our focus is on our recipe for growth that we deployed to you all today via communication, that 5-part plan, to better serve our customers. And our customers specifically that we're referring to during that model is the independent street restaurant customer, our most profitable customer segment. The C-store business that you referred to, tobacco is 66% of the acquisition. I think that you just referred to. So $11 billion of $17 billion was tobacco. This is not an industry that we're interested in. It's not a category that we're interested in. It doesn't fit with our purpose. So no, tobacco is not a product category that we're interested, not consistent with Sysco's purpose. Our focus is our customer. Our customer is a restaurant customer, mostly. We do serve travel, hospitality, but it's about food, food expertise, food-selling expertise and creating a merchandising and a supply chain strategy that best serves that customer more than anyone else in the industry. Greco and Sons, our acquisition that we announced today, is a perfect fit to what I just described. Eddie Greco and his family built a business model. They quintessentially comprehend and understand the unique needs of that Italian customer. The product, the culture, they speak the language. They understand the norms of what that end customer wants better than anyone else, and they built a go-to-market strategy that has been extremely successful. We've now joined -- that family has joined our family, and we can take that model and build on it. So the types of acquisitions that you'll see from us are ones that build our capabilities to help better serve restaurant customers over time.

Okay. Thank you, Kevin. Judy has noted, a lot of questions here about inflation and really twofold, Judy. Questions about, are we concerned about inflation? And what's driving the inflation? And the second part of the questions are geared towards our ability to pass that through to customers. Are we worried about our ability to pass-through customers. So Greg Bertrand, you may want to chime in as well. Judy, let's start with you on inflation, please.

Yes. Great. Thanks. Thanks, Neil. I'll take part of that and say that definitely, we're in an inflationary period. We expect that to continue, but to a lesser degree as we get into summer and fall. As you look at Sysco, we have size and scale that really helps us with our suppliers. And it helps us to work on a way to either blunt or mitigate or manage those kinds of inflationary cost changes. And when we think about what we can do, we can help our customers with different mix or with alternatives that really help them with the right cost solutions in this period, and we're also starting to use the new tools in pricing that help us act on these kinds of inflationary changes. And I'll turn the impact that we have with our customers over to Greg.

Sure. Thanks, Judy. So as a reminder, about 50% of our customers are contract customers. And so their contracts actually enable a pass-through of inflation, dollar-for-dollar to the customers. The other 50% of our customer base is a little bit more nuanced when it comes to inflation. And historically, we've seen our customers be very well equipped and very successful at passing through moderate inflation, that 1% to 3%. And sometimes when we get much above that, we start to see them struggle. But that's not the case this time around, and we're actually seeing them be far more successful passing inflation through with increase in menu prices. I think there is probably a couple of reasons for that, but the biggest one is just a lot of pent-up demand. People want to go and dine out. And if I think about myself or if you think about yourself going out to a restaurant, if you went to your favorite restaurant and you were ordering the enchilada plate at $12.95, and 2 weeks from now, it increased to $13.95. It's probably not going to change your mind about going to that restaurant and dining out. You want to dine out. You want that experience. You want that enchilada platter, and so you order it. And that's what we're actually seeing this time around with inflation. The other thing is that Sysco is doing everything that we can do to help our customers understand this. We're educating them that now is the time to pass-through inflation. Do not try to eat it. Don't absorb it yourself, but pass it along because customers are more willing. And then we're helping them with things like recipe development. When we went into COVID, they were shrinking their menus. Now as we come out of COVID, they're expanding their menus, and we're helping them with recipes for that menu expansion. And we're helping them with recipe items and menu mix that will help them also to deal with that inflation better. So I think more than probably any time, Sysco and our customers are well equipped to handle that inflation, and we think we'll be able to pass the vast majority of it through.

Thank you both. I appreciate that. Aaron, I'm going to come to you next about credit rating targets, and then we're going to go to Tim for an international question after that. So Aaron, do we have a target that we have in mind for our ratings?

We are the only investment-grade issuer in our industry. And that is a competitive advantage for us because when we need to invest, the dry powder is there. We're going to preserve our strong investment-grade rating. We are continuing to pay down debt. As I alluded to earlier, we will have paid down more than $3 billion of debt this year by -- in the next 6 weeks, and we'll continue to take action as we carry forward. Right now, we have a split rating. We have a BBB+, a BBB and BBB-. I expect, by the end of fiscal year '22, we will be at or above where we are, given the very proactive actions we're taking to bring our debt levels down.

Thank you, Aaron. Tim Orting, we're going to go to you next with a general question about the overall international marketplace. The question is asking, can we just provide a little color about some of our largest entities in the international area, how those are performing and how those are starting to ease some of the restrictions, if they are at all?

Yes. Certainly, we can. And it is an interesting question because the dynamic in international is somehow different than the U.S. I think on the positive side, you can see and you can say that U.S. is leading the trend, and there is a strong light ahead of the tunnel. We can see that the bounce back is strong once it comes. And then we are also learning and ready and setting us up for success here. If we look at Europe, then we can also see there is a strong correlation between the vaccination and also the opening of markets. And that means that U.K. is opening. I have an office here in Covent Garden. I'm actually looking down now on the street. Although the weather is not great, people are getting into restaurants now, and we can see much more movement. And we can see in U.K. that things are picking up. We know that the majority of the countries in other places are now planning the road map for opening and in France and in Ireland and in Sweden, we can see and we have a plan when that will happen, and that correlates with vaccination. And as Kevin also mentioned, the travel will start here over the summer. So we expect to see strong bounce back, but later than U.S. and somehow, in summer. Canada, in many places, have gone the other direction. Some states, we can see that they have more restrictions in place now. But I'm also rather confident that Canada will see a strong bounce back because of rollout of vaccination is also coming strong in Canada. So my view is that in summer, and we'll start on July and August, we will see a strong bounce back in the majority, if not all, international markets. And from here on, we can see also that we will recover strongly.

Very good. Thank you, Tim. I appreciate it. Judy and Tom, coming your way next. You both may want to chime in here. Lots of questions about the technologies we announced today, particularly our digital order capabilities with our customers and the Shop platform. So Judy, I'm going to start with you. And I get questions here around -- so how many customers are using Shop today? How has that trended over time for us? And then, Tom, maybe could you talk for a minute, please, about where do we go from here? What are some of the enhancements to come for our customers on these platforms?

Great. Neil, thanks. The Shop platform, 70% of our street customers are using that platform to place all of their orders. And this is -- on a weekly basis, sometimes more than that. And so they're using that platform for placing orders along with a bunch of other features that it includes with some of the education and help that we give them on the website. And so we have a lot of activity there. It's why I'm so excited about it for personalization because it's going to be a great channel for us to deliver a whole series of personalized messages. And Tom, I'll jump over to you.

Sure. Thanks, Judy. What we're also seeing is some strong momentum coming out of Q3 on the use of Shop, and we're excited about where we're going. Every day, every week, we're adding new features and capabilities, look forward to more multi language, more rich product attribution, images, additional product recommendation engines, a whole bunch of extra capabilities that will just bring more and more traffic. What we're also seeing is, Shop is also an increasing percentage of our overall digital share of wallet. We're quickly approaching 90% of all of our digital sales flowing through Shop, which is both an endorsement of the product, but an indication that as we consolidate other ways of collecting sales, whether it's traditional business-to-business EDI or other e-commerce tools around the globe, more and more coming into Shop. So it's fueling that usage with the capabilities we're bringing. And one other thing that I think we're all very, very excited about, you've heard lots of discussion around data, data science, artificial intelligence, machine learning, and just very, very quickly on that. Data science, we think about statistics, information, linear regression models, machine-to-machine learning, how we can leverage what the customer is doing online and learn from that. But then adding a layer of intelligence on top of that to drive the artificial intelligence, where we can take that machine learning, we can take that data science and help our customers and our sales associates be better and to grow the business like Greg was talking about. So I'm pretty excited about where we're going and technology, customer, associates and working to grow this business online.

Thank you, both. I appreciate it. One last question here, and Kevin, it's to you. You talked in your presentation about purpose. And I've got a couple of questions here, Kevin. What are our expectations relative to purpose? What does that mean to introduce that? And why are we introducing it now?

Well, I love the question. And as I said in my prepared remarks, purpose-driven organizations deliver business results that are 3x the average, and they have associate retention that's 11x the average. So let's be clear, this work is important. Purpose-driven work is important. It wins the hearts of associates, but it also wins the minds of our associates vis-à-vis the business results that we can deliver. This is not an altruistic effort. This is a business outcomes effort. The best companies in the world are purpose-driven. So why now is that the pivot to be coming an even more customer-centric, even more customer-focused company. Sysco is big, capable, strong. We have the broadest assortment in the industry. We've got the most robust supply chain. And as Greg has said, we've got the best sales team. And we can be more customer focused, increasing that delivery frequency, having more specialists, speaking the language of the customer and having a sales consultant that looks like the customer that we're serving. Those are DEI capabilities that fall directly into our purpose. The video that we showed does a better job than I can of explaining the why. The owner of that gather restaurant saying the words, who would have thought a company as big as Sysco could treat me like the family that we have become. Why purpose? Why now? What I say to our sales team and to our leadership team every day, every week, having every customer interaction every day, feel a bit more like that. We're treating them like family. That is what keeps customers continuing to shop with Sysco. That is what enables them to buy more of the products and services that we sell and is what enables us to take market share in a very large $300 billion market. Why would you leave? We've got the broadest assortment. We've got the best sales team. We have a supply chain that will be more agile, delivering more frequently and meeting the customer where they are and a set of digital tools that Judy and Tom just talked about. But the spirit of the how it makes people feel, how it makes our customers feel about Sysco, that's what the aspiration of this purpose is. Every customer, every day being treated like their family. And then Neil did a great job standing out there in a field talking about the environmental impact of the work we do. This matters. It matters to our planet. It matters to investors. As you know, every year, the percentage of investors that care about ESG increases. And we're ahead of that curve, making bold commitments that will be good for our planet, good for the products that we sell and also good for our business and the people that work here.

Thank you, Kevin, and a big thank you to the financial community for tuning in today. We really appreciate you attending the presentation and sending in your questions. We will have the entire presentation available on the website. We'll have the replay available on the website as well. And of course, the Investor Relations team is available for your questions and follow-ups. Please reach out to us any time, let us know how we can help. And again, thank you for tuning in today. Have a great day.