Cancel OK

Many firms lost big food box contracts in Round 4

DiMare Fresh had an $82.5 million USDA food box contract in round 3 but was not selected for round 4, which runs from Nov. 1 to Dec. 31.

USDA made significant changes to the companies supplying Farmers to Families Food Boxes for round 4, which runs in November and December, and box cost may have been a factor.

More than a dozen companies that had more than $10 million contracts in round 3 were not selected for round 4.

These companies include:

  • Caribbean Produce Exchange, LLC, $35.4 million
  • Costa Fruit & Produce Co., $19.8 million
  • Daylight Foods, Inc., $33.8 million
  • DiMare Fresh, Inc., $82.5 million
  • LA Specialty Produce, $43.9 million
  • Luberski Inc., $32.5 million
  • Produce Alliance, L.L.C., $79.3 million
  • Seashore Fruit & Produce Co., Inc., $34 million, and
  • Sysco Corp., $114.5 million.

On the other side, many companies that did not participate in round 3 received sizable contracts for round 4. These include:

  • Fresh Innovations California LLC, $10.9 million
  • Mac Edwards Produce & Company, Inc., $6.7 million
  • RK Group, $23 million
  • Sunrise Produce Co., $47.5 million
  • T.M. Kovacevich-Philadelphia, Inc., $15.2 million, and
  • Tomato Thyme Corporation, $19.7 million.

One company, Oakes Farms Food & Distribution Service, went from an $800,000 contract in round 3 to a $68.6 million contract in round 4.

USDA has not responded to questions about their contract criteria for round 4 as of November 3.

In late October, USDA confirmed the program would continue with $500 million allocated for November and December, though that figure is lower than the other rounds.

Cost per box
USDA contracts have the total bid value and the number of boxes to be packed, which allows us to do some easy math and find out what the cost per box is.

Our math shows box costs as high as $60 in round 3, and Sysco’s $114 million contract worked out to $49 per box, for instance.

In round 4, our number crunching showed that most contracts’ per-box costs are in the high $30s and low $40s, except for $55 per box for Hawaii, $48 per box for Puerto Rico, and $62 per box for Alaska.

It’s also worth noting that two companies which had large contracts in both round 3 and round 4 dropped the per-box price for round 4.

Tulsa Fruit Company dropped its per-box cost from $44 per box in round 3 to $38.70 for round 4, and Shamrock Foods Co. went from $38.75 in round 3 to $36.80 in round 4.

Several companies that had round 3 contracts but not round 4 speculated that box cost was a factor, but they declined to speak on the record about it.

Greg Johnson is Director of Media Development for Blue Book Services