Executive Summary

Forecasts from financial market experts vary but overall they suggest that we need to prepare for a depressed economy for the next five to seven years. That’s not good news – at least short term. Already food banks are seeing a huge spike in demand – some reporting 35% increase on a weekly basis – from largely middle class families.

Not surprisingly, many food banks are struggling to meet the demand – a demand that has historically been met in Denver through a single-point distributor that has done an incredible job. However, the distributor depends on a traditional network of interdependencies that may be at risk.

For the past several months, we have committed ourselves to studying the intricacies of the inter-relationships of the network – and supply chain – and we believe that a crisis is looming if unemployment continues to rise forcing increasing demand on the food bank system. The supply chain of the food industry is a “living entity” like any business network that is designed to self-correct itself to optimize financial results based on projected, or actual, buyer demand. However, demand will remain constant while shifting from “buyer” to “food bank” demand. Even a five percent shift would cause a recalibration of throughput because the economics are based on retail projections. If that happens – and it appears likely – that would diminish, if not eliminate – the surplus that supplies the current food bank distribution network.

The good news is that we believe a parallel “add-on” functionality would provide the volume required by the food banks – without hindering operations or imposing bad economics on the existing supply chain system. To make this work, however, requires that we act now – before farmers turn under surplus produce or ranchers reduce their herds.