Federal contractors are scrambling to team up with Northwest nonprofits to give away more than 900,000 food boxes — some packed with fruits and vegetables, others with dairy or meat products — to those in need during the next six weeks.
This is part of a $3 billion Trump administration program put together this spring at breakneck speed to try to help ease farm surpluses and hunger as unemployment during the coronavirus pandemic reaches the highest level since the Great Depression. The U.S. Department of Agriculture (USDA) awarded the first $1.2 billion in federal contracts earlier this month. Ambitious federal deadlines require contractors, in partnerships with nonprofits, to distribute all the food aid by June 30.
The boxes will be packed as many food banks and other hunger organizations are experiencing surging demand. But the short timeline for delivery is likely to prove a challenge.
“It really is about capacity. All this product is perishable, so it is either going to be refrigerated or frozen,” said Linda Nageotte, chief executive officer of Seattle-based Food Lifeline, an organization that supplies some 300 Washington food banks, meal programs and shelters. “Everyone’s intentions are good … but the volumes are huge. Frankly, this is a really fast turnaround.”
Nationally, the program’s initial round of funding has generated controversy. One of the largest awards, $39.9 million, went to a San Antonio, Texas, event-planning company whose owner, Greg Palomino, told The Seattle Times he was “very surprised” at the size of the contract. Another $12.2 million went to a small California company with a website marketing organic hand sanitizers.
“One of the things that scares me is that they give a big contract to someone who can’t do the job,” said Tom Stenzel, president of the United Fresh Produce Association, who declined to specify a company that raised such concerns. The association supported the program but has heard from many members surprised by some of the contracts. Stenzel on May 11 sent a letter to the administrator of the Agricultural Market Service raising questions about the bidding process, in what he wrote was a “genuine effort to ensure integrity in the program and that fresh produce actually gets to those in need in an efficient and cost-effective way.”
A USDA spokesperson said all contracts were “carefully reviewed by a team of contacting and technical experts.”
Nageotte said Food Lifeline has been asked by Northwest contractors to move up to 5 million pounds of food box products in a month, which would roughly double the volume of its current food distributions. Nageotte said this week she expects Food Lifeline will assist. But no decision had been on how much her organization will help distribute.
Oregon Food Bank, another major regional player, also will be involved in the food box distribution. Organization officials welcome more food to meet increased need. But they are cautious as they try to figure out how to coordinate this aid.
“This is a brand new program. The food has not started flowing, so there is much unknown about how well this is going to work,” said Susannah Morgan, chief executive officer of the Oregon Food Bank.
Millions go to Pacific Northwest
In the Pacific Northwest, more than half a dozen contractors are receiving federal food box funds, and they all appear to have ample experience in acquiring and marketing food products.
The largest contracts in the region, a total of $24.8 million, went to Pacific Coast Fruit, a Portland-based company with a Seattle-area operation. Founded in 1977, it has cold storage, trucks and other assets. The company’s contract calls for the delivery of 810,000 food boxes — some containing produce, some containing dairy, and others an assortment that includes meat items — to nonprofits in the Pacific Northwest in May and June.
“You have a week to put in a bid. A week to get started on distribution. It’s been crazy. Crazy fun. We’re really excited,” said Tom Brugato, Pacific Coast Fruit’s president, who said it will be a big boost to his company and workers who have been hard hit by the closures of restaurant customers.
To assist groups that don’t have enough chilled storage, Pacific Coast Fruit will — if needed — park refrigerated trucks at drop-off points until the food can be distributed.
Washington-based contractors include Chelan Fresh, a Chelan-based fruit packer representing a network of growers east of the mountains that have struggled with weak markets. Chelan received a $5.9 million contract to ship nationwide more than 389,000, 20-pound boxes of apples, pears, onions and potatoes. Company officials say they bid the produce, at cost, to keep employees on the payroll and help move product.
“I think it’s a real positive … and I have a lot of praise for what the federal government is doing for our industry and farmers,” said Tim Evans, general sales manager at Chelan Fresh.
In Western Washington, the largest food box contractor is Cascadia Farm Collective, which does business as Full Circle and specializes in delivering farm produce directly to consumers. Full Circle received a $2.7 million contract to put together 120,000 produce boxes. Thaddeus Barsotti, a partner in Full Circle, acknowledges that it’s been a learning experience to balance what they can provide with what food banks and other groups can take.
“I think the silver lining in this is that we are a resourceful society, and giving away produce is really fun, and one of my favorite things to do,” Barsotti said. “It is not as easy as you would think, but it can be done.”
President Donald Trump, during his first term in office, has championed food boxes, which in a 2018 budget-cutting proposal he pitched as a way to cut some benefits of SNAP — the Supplemental Nutrition Assistance Program that enables low-income Americans to purchase groceries through monthly benefits delivered to debit cards.
The food box proposal called for the delivery of shelf-stable products to SNAP recipients, which Agriculture Secretary Sonny Perdue called “a bold, innovative approach to providing nutritious food to people who need assistance feeding themselves and their families.”
The plan, which died in Congress, ran into fierce opposition that included hunger advocates saying it stripped low-income people of important dietary and nutritional choices, and grocery stores concerned about lost business.
This spring, after Congress passed massive stimulus legislation, the USDA resurrected food box aid — this time stocked with assortments of fresh produce, dairy products and meats. By then, the economy was battered by the coronavirus crisis that had caused huge disruptions in the food system as markets tanked for some of the milk, potatoes and other products that would have gone to restaurants and food service.
The USDA carved the food box program — announced April 17 — out of a broader $19 billion aid package, most of which will be spent on direct support to agricultural producers. The department intends some contract awards to help regional and local food service companies who have laid off employees and struggled as people hunker down at home rather than eating out.
On May 8, the first $1.2 billion round of contracts was announced. The next day, Trump tweeted, “Great news for all!” and touted that the food purchases would soon begin “at my order.”
Unlikely award choices
At the USDA, officials scrutinized past performance, pricing, products and capability to perform in deciding what companies to award contracts. By those criteria, San Antonio-based CRE8AD8 LLC appeared to be an odd choice to claim the sixth biggest contract — $39.1 million — since the company’s expertise was staging weddings and other events, and its headquarters office in San Antonio had a four-person staff.
Palomino, the company’s president, said he thought it would be a “great exercise” to go after the contract. He offered to deliver by June 30 up to 750,000 food boxes, a third with produce, another third with dairy and another third with meats. “We had no idea they would actually grant that,” said Palomino who said the task ahead “is daunting in very positive ways … not anything we can’t do.”
Eric Cooper, chief executive of the San Antonio Food Bank, said he also was surprised that Palomino’s company got the big contract. He said the food bank’s distributions have roughly doubled during the COVID-19 pandemic, and he hopes Palomino can deliver. “They are learning as they go and they are definitely going to ramp up significantly with staff and trucks and stuff … We want to make the company successful because it means people will eat.”
The Agriculture Department also awarded a $12.2 million contract to Travel Well Holdings LLC, a small California-based company that, in a state registration document, lists its business “as airport goods and services,” and maintains a website offering “daily wellness products.” Repeated requests for comment about the contract, relayed through a telephone number on that website, were not successful.
Stenzel, president of United Fresh Produce Association, thinks that most of the contractors can handle the food box job. But he is worried that some will fall short. “I would like the USDA to take a hard look. If they need to pull back a few bids, they can do it,” Stenzel told The Seattle Times.
“Giving them what they can take”
In Washington, Oregon and other states, the first of the federally-funded food distributions are expected to begin this week.
Joe Hanson, Pacific Coast Fruit’s Seattle warehouse manager, said his company plans to recruit other firms to help out, including Alki Bakery to help with box assembly and Charlie’s Produce, another Northwest company, to partner in distribution. In addition to distributing through food banks and other hunger groups, Hanson said that his company might also work with nonprofits to organize some giveaways where a semi will pull up to a site and volunteers will put boxes directly into people’s trunks.
“Our goal is to make sure that every single box gets into someone’s hand. Someone in need,” Hanson said.
Barsotti said about 15 percent of Full Circle’s 120,000 boxes — a mix of greens, root vegetables and fruit — will be trucked to Alaska, while other food will be distributed throughout Washington with help from Northwest Harvest, a nonprofit food aid group. They will source as much as possible with regional farmers, and work on logistics.
“We are learning a lot about the food system, and one of the things is that you can’t just shove produce at a food bank,” Barsotti said. “We are giving them what they can take.”
Seattle Times reporter Patrick Malone and Seattle Times researcher Miyoko Wolf contributed to this story