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Friday, Dec 8, 2023

OC Food Banks Form Alliance

Three of Orange County’s biggest non-profits devoted to alleviating hunger have formed an alliance.

Garden Grove-based Community Action Partnership of Orange County (CAP OC), Irvine-based Second Harvest Food Bank of Orange County and Orange-based Waste Not OC are joining forces as the OC Hunger Alliance.

“What we’re bringing to the table is the big picture aspect,” said Gregory C. Scott, chief executive and president of CAP OC. “We are the biggest food banks in the county.”

They said this alliance will help them combine efforts to reduce costs such as transportation, improve purchasing power and minimize food waste while minimizing the competition for the same revenue, talent and recognition.

“We’ve all been siloed,” said Harald Herrmann, CEO of Second Harvest. “Our goal is to bring these entire networks together—so we’re all focused on the same strategy.”

The three organizations together have annual budgets topping $40 million. While they will share some revenue going forward, they said their alliance isn’t the first step towards a merger.

“If these two organizations were Coke and Pepsi, it’s like I just invited the CEO of Pepsi to sit on the board of Coca Cola. Together we are stronger,” Herrmann said.

“We’re laying down a strategic plan that is shared, so we each have our roles to play.”

Shadow Hunger

While Orange County is one of the nation’s wealthiest regions, it still has pockets of hunger that are “hiding in the shadows,” Herrmann said.

“We’re one of the few business models that is not defined by success when you grow,” he said. “We should be shrinking. We should be going out of business.”

The three organizations have been discussing this alliance for almost two years, well before the coronavirus struck.

They said the need is even greater now.

Orange County’s food insecurity rate is estimated to be 13.7% of the population, up from 8.5% in 2018, according to a July report. In pre-COVID days, Second Harvest monthly served 249,000 residents, a number that may more than double this year to 527,000 residents.

“Residents in our county were living three to five paychecks from having to get in a food line,” Herrmann said. COVID-19 “has exposed an underbelly. People are sliding into the category of working poor.”

The experts are worried about upcoming defaults, foreclosures and bankruptcies that may lead to increased evictions and more homeless. They note Orange County’s poorest residents are heavily dependent on tourism, an industry that’s been devastated by the coronavirus.

“As we think about poverty, our concern is not where we are today, our concern is that post-COVID will be a hard road,” Scott said.

CAP, which dates to 1965 when Lyndon Johnson started the War on Poverty, typically delivers 25 million pounds of food annually. It has 300 partners that send the food to 200,000 individuals every month, including 24,000 seniors.

Last year, Second Harvest Food Bank distributed more than 42 million pounds of food to pantries, including houses of worship, schools, afterschool programs, senior centers, homeless shelters, soup kitchens and transitional housing facilities.

WasteNot OC estimates it’s recovered 60 million pounds of excess edible foods in the past five years. The organization said 40% of food produced in the United States is ultimately wasted, and 22% of all landfill waste is comprised, of perfectly good food.

“The alliance allows us to streamline our operation,” Waste Not Executive Director Mike Learakos said.

Unusual Background

The three executives heading up the partnership are unusual in the world of non-profits, as each has a deep background in business.

Learakos’ experience includes cofounding TJM Inc., a foodservice company formed in 1993 that operates Katella Family Grill & Catering in Orange. Herrmann, who has more than 35 years in the restaurant industry, in 1995 helped launched the flagship Yard House. He would later become CEO and helped engineer Yard House’s sale to Darden Restaurants Inc. [NYSE:DRI].

Scott, who began his own leadership development company in 2015, has more than a decade of experience with non-profits.

One thing all three have in common is being relatively new in their positions. Scott began his role in 2018, while Herrmann started in 2019, and Learakos began full-time in 2016.

Learakos noted that some nonprofits discourage collaboration because they “get locked into jurisdictions.” He added that some nonprofits in other counties have sued each other.

“Sometimes it just takes the right players,” Learakos said. “We have a group of individuals who understand collaboration has better results.”

Purchasing Power

The three organizations believe they can get a bigger bang for their buck by negotiating together with vendors and using business techniques such as hedging.

“We’re all buying food from someone—it’s not donated,” Herrmann said. “We allocate a significant portion of annual budget to purchases.”

For example, Learakos knows how companies often send trucks to the Port of Long Beach to pick up food that might be discarded because it’s imperfect.

“Our expertise is to know where that food is at,” he said, adding that his personnel knows details such as timing needed to deliver the food and optimal temperatures required.

The three also intend to work together on transporting the food to hundreds of different pantries.

“There’s quite a bit of engineering that we would like to engage in,” Herrmann said. “It will reduce labor and fuel costs—and reduce carbon footprint within communities.”

Another area of expertise is the ability to find funding either from other non-profits or through local, state or federal grants.

For companies that want to help, the non-profit executives said to contact them.

“We’ll help them connect the dots,” Learakos said. “We’re dialed into all the different opportunities to participate.” 

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Peter J. Brennan
Peter J. Brennan
Peter J. Brennan has been a journalist for 40 years. He spent a decade in Latin America covering wars, narcotic traffickers, earthquakes, and business. His resume includes 15 years at Bloomberg News where his headlines and articles sometimes moved the market caps of companies he covered by hundreds of millions of dollars. His articles have been published worldwide, including the New York Times and the Washington Post; he's appeared on CNN, CBC, BBC, and Bloomberg TV. He was awarded a Kiplinger Fellowship at The Ohio State University.

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