This Cold Storage Firm Wants To Solve The Food Supply Chain’s Biggest Problem

U.S. supply chains suffered massive disruption in the wake of the coronavirus pandemic. Vulnerabilities across different sectors were suddenly highlighted, including the fragility of essential food production, storage and consumption.

As restaurants closed their doors to dine-in customers, demand for bulk ingredients began to fall. The food service companies that supply restaurants cut back on orders from farms, but the production of agricultural goods continued. 

Farmers typically provide their products to processors and food service companies in bulk. But the food supply chain’s inability to pivot from bulk packaging to consumer-sized packaging meant that the surplus of products couldn’t easily get to grocery stores or food banks, resulting in vast amounts of food waste.

When the pandemic began to ramp up in March last year, Provender Partners CEO Neil Johnson said he immediately started brainstorming ways in which his company could address growing problems in the food space. The firm is an investor and operator of food-related industrial buildings, with an existing cold storage portfolio of more than 5.5M SF. 

“The farmers had no way to get their products to you and me, because they didn't have the ability to package, and their customers weren't buying,” Johnson said.

Johnson came up with a proposed model that could address the problem: a Break Bulk Freezer Facilities program, where Provender Partners would construct 15 build-to-suit cold storage facilities for the U.S. Department of Agriculture.

Placed in strategic locations, the buildings could house inventory, service nearby food banks and provide the technology to repackage bulk goods on-site, breaking food down into a size that could be distributed to grocers and food banks. 

The 15 proposed facilities would average 500K SF, have 50-foot clear heights and be capable of storing roughly 56,000 prototype pallets. In addition, the buildings could potentially be used for drug refrigeration. The program would create a total of 7.5M SF of cold storage space across the U.S., according to Provender Partners’ proposal. 

It’s an ambitious plan that could help food get to underprivileged communities, but with a major caveat: The United States Department of Agriculture would need to be involved, because of the scale of the repackaging elements and the support for food banks. 

“It's in their wheelhouse and only their wheelhouse. So they have to really get involved in this; otherwise, it goes nowhere,” Johnson said.

It took roughly six months for the Break Bulk Freezer Facilities program to be conceptually hammered out. The outline was ready by September, but the upcoming federal election meant there was little opportunity for the program to get in front of government officials. 

“Nobody was in the office in D.C., nothing was happening,” Johnson said. 

It wasn’t until after President Joe Biden entered office in January that an opportunity presented itself. On Feb. 24, Biden issued an executive order that launched a comprehensive review of U.S. supply chains, directing federal departments and agencies to identify ways to secure those chains against a wide range of risks and vulnerabilities.

Agricultural commodities and food production is one of the sectors under review. As part of the order, U.S. Secretary for Agriculture Tom Vilsack will be required to submit a report within one year to the president, identifying strengths and vulnerabilities of existing supply chains, as well as recommendations to improve resiliency.

When the USDA opened its public comment period in April, Provender Partners was one of the first parties to file a comment online, outlining its proposal for strategic cold storage locations. 

“We got hard copies in their hands the next day,” Johnson said.

Johnson said that he hasn’t seen any other proposals like Provender Partners’ to address the scale of the food packaging and waste problem in the U.S. As the frequency and intensity of billion-dollar disasters continues to rise, the need for more cold storage facilities and flexible options for farmers and the broader food industry is also growing.

The USDA public comment period ends on May 21. Johnson said he doesn't know if the program will gain traction with government officials, but at least it's out there in a public forum.

“It's the government. Who knows? It may go nowhere, but at least people are thinking about it a little bit,” Johnson said.