Solutions For Future US Food Supply Chain Disruptions

Neil Johnson, Founder & CEO, Provender Partners

The Coronavirus pandemic has disrupted the US food supply chain in a manner that the US has never seen before. With consumers turning away from restaurants and heading to grocery stores and food banks, the result has been empty shelves and tremendous food waste as the country’s supply chain was unable to pivot from bulk product offerings intended for restaurants to smaller individually packaged products. The infographic above demonstrates this dynamic and illustrates the failings of the current supply chain structure.

Inability to Pivot Equals Food Waste

Food service companies (aka companies servicing restaurants) were able to stop orders from farms, however, the country’s inability to pivot handling bulk product has caused waste of all product types at the farm level. Products that could not be preserved by freezing or other methods, such as milk and eggs have been particularly impacted. This is happening at a time when underprivileged consumers are having a more difficult time putting food on the table as evidenced by a 70% increase in volume at food banks according to Feed America.

Aside from the warehousing of food at the consumer level, the same amount of food is being consumed which will likely continue and result in more food in the system overall. This trend, combined with anticipated strategic governmental reserves (to date the USDA has only focused on canned and other “dry” products) and greater support for “food as medicine” by the institutions has led us to an overarching solution to any future disruptions in the US food supply chain.

“The Program will ensure farmers have a place to sell their products in the event of a supply chain disruption, in addition to housing strategic inventories of “fresh frozen” product and providing critical infrastructure to the nations food banks”

Our Solution:

Strategic Break Bulk Freezer Facilities Our proposed solution is based on the available supply of refrigerated buildings (none) and the size and location of population centers, farms, food processors and public refrigerated warehouses (PRW’s). Provender’s proprietary model has determined the location & size of a series of Break Bulk Freezer Facilities (“BBFF”s), which will house strategic inventories, service food banks, and act as the pivot during the next disruption where products arrive in bulk and can be broken down individually for distribution to grocers and food banks eliminating any food waste and support our great farmers.

The size and composition of the BBFFs is being determined by economies of scale, raw materials geographically present, i.e. dairy, produce, proteins, etc. and our exclusive knowledge of the food distribution and processing supply chains.

The Opportunity

Given the cost of the pandemic and the recent $19B payout to the USDA who doled out $16B directly to farmers, it would stand to reason that the federal government would entertain a solution such as the one we’ve outlined above – there is NO solution outside of additional facilities. Further, we are proposing that we construct these facilities on behalf of the USDA and that they become the tenant on a long-term basis thereby reducing the upfront costs of the solution, which we estimate totaling over $1.5 billion.

Provender is uniquely positioned to execute on this with its proprietary information, management systems and industry relationships.

THE US FOOD SUPPLY CHAIN – WHAT HAPPENED?

The frequency and level of disruption by natural disasters and pandemics are surprisingly consistent and increasing over time. Various stakeholders in the food supply chain will make changes and develop contingency plans, which may help, but none will solve the problem. Outside of animal slaughter, due to its complexity, the BBFFs are the single most effective solution to these inevitable disruptions and will help farmers succeed, eliminate food waste and feed the people.

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