Ben Holtz’s small produce company won a $40 million USDA Farmers to Families Food Box contract.
Now he has to scale up to be responsible for distributing over 1,000 truckloads of produce a week for the next six weeks, for hungry people affected by the economic crisis associated with COVID-19.
Holtz owns Ben Holtz Consulting, and helps run his family business, California Avocados Direct, which ships avocados and other fresh fruits and vegetables directly to consumers across the country.
In fact, since the start of April, his business has picked up considerably, he told a local television station.
Considering his typical annual sales are $1-2 million, is his company equipped to handle a $40 million government contract?
“No, we’re not set up for that scale,” he said May 14, “but we will.”
He said his company is contracted to procure, pack and ship hundreds of thousands of 20-pound boxes of fresh fruits and vegetables, roughly two pounds each of 10 items.
Holtz says he knows he won’t do it alone.
“I have an unbelievable network of support to scale up,” he said. “I have help from the largest produce and business entities in Southern California mobilizing right now. It’s been well beyond what I could have imagined.”
Even so, he set up a website, farmertofamilies.com, for food banks to make requests and orders, and for produce suppliers and transportation companies to get involved. He said it will continue to evolve to meet the industry’s need.
The first day to officially start shipping food boxes in the program is May 15, and Holtz said he already started packing the first boxes on May 13.
Obviously, he said, there are challenges.
First, he said he suspects he’s not well known in the produce industry, and his company has neither a PACA license nor a Blue Book rating.
However, he is a fourth-generation avocado grower, and he’s been on the board of the California Avocado Commission.
“I understand there are concerns, but I will meet this challenge. Contact the avocado world of handlers if they know me. If you need that that confidence, just ask them who I am,” he said.
Holtz said he’s working with USDA now to get a PACA license, but his request for advanced funds from USDA was denied.
He said USDA made it clear it would not finance contracts, but it’s still frustrating to him to have to start the contract needing money to make purchases.
“The biggest hurdle is cashflow and meeting PACA law needs,” he said. “If USDA pays as soon as they get an invoice, like they said, I’ll be OK.”
He also said he’s got meetings lined up with banks for more financing, and as of May 15, has secured more than $4 million in lines of credit.
Another challenge has been finding enough boxes that can hold 20 pounds of produce.
“Box companies need lead time,” he said, and he’s only had just a week to scale up.
As far as logistics, Holtz said he’s working with facilities in seven states to handle more than 1,000 truckloads of produce a week to fulfill the six-week, $40 million contract.
As of May 14, he’s working with food banks in California, Arizona, New Mexico, Texas and Georgia.
When he submitted his contract proposal to USDA, Holtz said he submitted a range of plans, the largest of which was $40 million, and USDA picked the max.
“USDA said, ‘we expect you to fulfill your contract,’ and I’m up for the challenge,” he said.
Any company that wants to be involved, he said, should contact him through his new website farmertofamilies.com.