Coastal Sunbelt Produce was in the room where it all started.
The U.S. Department of Agriculture’s Farmers to Families Food Box program was launched at Laurel, Md.-based Coastal Sunbelt Produce on May 15.
Sunbelt CEO John Corso entertained high profile visits that day from Ivanka Trump, daughter and adviser to President Trump, Agriculture Secretary Sonny Perdue, Maryland Gov. Larry Hogan and others.
Just a week earlier, on May 8, the USDA had announced first-round funding of $1.22 billion to about 200 companies for the food box program.
In the first and second rounds of funding, Coastal Sunbelt Produce received $5.92 million to distribute boxes of fresh fruits and vegetables to food banks and other charities.
The USDA announced contracts worth $1.22 billion (May 15-June 30) and $1.47 billion (July 1-Aug. 31), leaving around $300 million for the third round. However, the agency raised the estimate of funds that will be spent during the first round because only $947 million was spent in the first round, because of canceled and unfulfilled contracts.
USDA Under Secretary Greg Ibach said the last round of contracts, which extend the program through October, will now be worth $500 million to $700 million.
Food box success
“We were one of the first ones to (launch) the program, and we’re delighted with it,” Corso said in late July.
“I think it is consistent with us helping our community and helps put our people back to work; it’s right in our sweet spot, in our wheelhouse,” he said. “It was a win all the way around.”
Coastal Sunbelt will also submit a bid for the third round of funding, which will include combination boxes of produce, dairy and meat.
“Certainly our foodservice business was impacted pretty significantly with regards to COVID as on-premise dining and hotel occupancy dropped and all those sort of foodservice opportunities came to a halt,” he said.
Now, as foodservice business begins to slowly come back, the food box program still fits in nicely with the company’s operations, he said.
Participation in the program is just another milestone in what has been a busy period for The Coastal Cos., the parent company for Coastal Sunbelt.
In February, The Coastal Cos. acquired Lancaster Foods, a Jessup, Md.-based retail produce distributor and fresh-cut processor.
Lancaster Foods joined The Coastal Cos.’ other companies:
- Coastal Sunbelt Produce, Laurel, Md., a foodservice distributor that serves customers from New Jersey to Virginia;
- East Coast Fresh, Laurel, Md., which shares a 330,000-square-foot facility with Coastal Sunbelt Produce, and offers fresh-cut items ranging from snacks to vegetable noodles for foodservice and retail customers; and
- Hearn Kirkwood, Jessup, a Pro*Act member that offers meat, seafood and produce items, including fresh-cut produce, salads, snacks, wraps and sandwiches.
“In the last two years we have doubled we’ve doubled our size,” Corso said, noting the acquisitions of Lancaster Produce and Hearn Kirkwood.
“The company is diversified, larger and so has a lot of capabilities,” he said.
The diversification of its holdings has helped the company to weather the slump in foodservice sales.
With Lancaster Foods primarily focused on the wholesale retail business, Coastal Sunbelt Produce is substantially a foodservice business, and East Coast Fresh serves both sectors. Corso said fresh sales to retail, including fresh processed items, have performed well.
“Generally retail is way up, so it has been quite a ride here,” said John Gates, president and co-founder of Lancaster Foods.
Corso said opportunity has favored the retail business during the fight to quell COVID-19.
“There certainly has been an uptick in food eating occasions that have shifted over to retail, and because we play in that space, we were able to serve it,” he said.
Corso and a couple of other investors acquired Coastal Sunbelt Produce in 2007, and the investment team has had three governing principles since then, he said.
“The first thing is we’ve always been focused on growth. The second is diversification: we know people are going to eat, we just don’t know where they’re going to eat. And our third focus has been on people,” he said.
Those principles have served the company well, and the strategy to diversify has paid big dividends this year, he said.
Looking ahead, Corso said it will be important to continue a focus on people.
“At some point in time this will pass, just like all the other great challenges this country has ever faced,” he said.
“When it does, I’m hopeful that the actions we’re taking now will put us in a good position for the long term.”