Competition for Supplies Fierce Among Food Banks : Charity: Companies increasingly sell salvaged goods they once donated. More of the hungry are turned away.

Nuns and church volunteers who run Los Angeles’ charitable food pantries circle like wily prizefighters around a pile of boxes filled with dented food cans and torn cereal packages at the Los Angeles Regional Foodbank. Today is “Monday Madness,” the bank’s weekly food grab, where affiliated pantries cart off damaged foods donated by supermarkets and food companies.

“No pushing! No fighting! No name-calling!” a food bank employee warns.

Volunteers swarm over the heap, colliding as they reach for the choicest loot, running the boxes back to their pantry’s zealously guarded stash. “Grab it! Grab it!” pants one nun to another.

Older church workers complain of being nearly trampled in the rush for food, which they take from the food bank and distribute to the hungry through a network of pantries. Fistfights sometimes erupt. “It’s like we’re going into a wrestling match,” says Holy Cross parish pantry director Suzanne Snyder, who steers clear of the coveted frozen meat boxes “for fear of physical harm.”

The skirmish for food has turned frenzied as charitable groups--which flourished in the 1980s as one of America’s primary responses to a rising tide of hunger--struggle to survive cuts in their lifeblood: food company donations. Gifts of “secondary” and “salvage” foods to Second Harvest, coordinator of the nation’s largest network of food banks, slipped 11.2% in the first 10 months of the year--a drop of 23.5 million pounds.

Companies grappling with debt from leveraged buyouts and razor-thin margins are selling what they once gave away, fueling a $2.4-billion industry of dented or expired products trafficked under tarps in flea markets or in secondary food stores--from Scratch ‘N Dent Food Shops in Plant City, Fla., to Dentco in Fontana.

“There has been a national change in corporate priorities . . . ,” frets L.A. Regional Foodbank Executive Director Doris Bloch, turning with trepidation to a Los Angeles map riddled with 758 red dots--one for each agency--that rely on her bank to feed 300,000 weekly. At the food bank, donations from national food companies have dropped 41% so far this year. And in a UCLA study from 1993, one in four hungry families seeking food were already being turned away by Los Angeles pantries.

“I eat Rolaids regularly. This scares me to death,” says Deborah Keegan, marketing director for Second Harvest, whose affiliated pantries fed nearly 21 million families last year.

In the middle of the conflict are the giant food manufacturers, torn between needed profits and charitable giving. The pressures can be intense: At a recent conference, a secondary food chain executive urged corporations to forsake traditional policies of donations and sell to his market instead.

He drilled home the point: selling, not giving, helps companies reel in more cash. Still, the Grocery Manufacturers of America board--a trade group that represents the nation’s largest food companies--has urged members to keep giving.

Augie Fernandes, vice president of a supermarket consulting firm and an expert on the salvage business, says four of 10 major food companies in the past two years have begun selling secondary foods, and he predicts donations could drop another 30%. Says Fernandes: “The food banks are in trouble.”

In the Pantries: A Daily Balancing Act

At the Community Food Bank of West Covina, pantry coordinator Victoria Portillo begins a daily balancing act: helping people, but not running dry before closing time. Portillo unlocks the heavy metal door of the old school that serves as the distribution point for food. People step inside, one at a time, eyes cast downward, voices sometimes cracking. “They never thought they would lose their job. They never thought they would be here,” Portillo says.

Outside, a cadre of elderly men, all volunteers, unload food from a rickety donated pickup truck. Inside, a silver-haired woman prepares the packages to be distributed: a small grocery bag containing canned goods and pasta, bread and a home-grown cucumber donated by a neighbor, a ration more generous than on some days.

A middle-aged woman, divorced, is first to swing open the pantry’s door. Five children cling to her skirt. “Is this your first time here?” Portillo says. When she asks this question, grown men often break down, quietly sobbing. “You can come five times in a lifetime--period,” Portillo tells the woman.

Portillo calculates what she has in stock, then plucks one of a few chocolate cakes stashed in the pantry freezer and piles that on top of the bag of groceries. The children quickly gather around the food. Their eyes devour the dessert. The mother fights off tears. “I didn’t know what I was going to do for my child’s birthday this Saturday,” she says, cradling the bag of food in her arms.

But when a man comes in with his wife and three young children, Portillo tells them she cannot help, because they used up their five visits four years before. The woman’s expression turns from hope to desperation. Her husband becomes belligerent. “Give me some bread! Give me some bread! I got three hungry children here!” he says, springing menacingly from his chair. Portillo fearfully shoves several loaves into his arms.

“This is my last time,” says a young woman who enters near closing time, a tinge of despair in her voice. Portillo suddenly realizes the pantry is down to a few loaves of bread. She madly snatches back some of the loaves volunteers have put into the young woman’s cart; Portillo needs to stretch what’s left for the half-dozen families still lined up outside.

Nearly half of 9,300 pantries and soup kitchens surveyed nationwide have recently been forced to slash the amount of food they give each family, Second Harvest found. Glendale’s Salvation Army has cut the number of yearly visits in half to six; some pantries allow one food request per year. At L.A. First Church of the Nazarene’s pantry, which feeds the first 100 people to arrive three times a week, the hungry line up before dawn to claim one of the coveted food bags, which are given out mid-morning. Twenty San Bernardino and Riverside County pantries in the past 1 1/2 years have shut their doors altogether, says Daryl Brock, executive director of Riverside’s Survive Food Bank.

“There isn’t much food available,” laments Rita Russo, one of two nuns who founded the Seedling, a South-Central Los Angeles pantry. The line of people stretches halfway down the block from the pantry’s red, green and yellow tent, where volunteers sort turnips and cans of food into boxes that once contained a week’s supply, but have dwindled to three or even two days of food.

The Seedling and other pantries are bracing for cuts in their other main food source: government surplus items--made famous by massive cheese giveaways in the 1980s--which provide Los Angeles County’s big food banks with nearly four of every 10 pounds distributed, but have been slashed by two-thirds for next year.

In late 1993, the Seedling had government surplus foods only, and by Christmas, just two items remained: beans and butter. This year, it may have to close for the holidays.

“I’ve heard desperate mothers say we just prayed through last night because there was nothing to eat,” said Russo, who often watches children sit on the floor of the pantry’s giant tent and tear open packages of bread, feasting on the floor as if the loaves were ambrosia. “To me, this is a gospel need. Jesus said, ‘Feed thy neighbor.’ ”

Nearly one-third of those who come to U.S. food agencies are the working poor, people who can’t pay high rents on minimum wage and still put three meals on the table, a survey last year by Second Harvest found. Single parents make up more than two-thirds of pantry and soup kitchen clients, and children, who are a quarter of the population, were almost half of emergency food recipients.

Most who come to the agencies were recently unemployed. A majority don’t get food stamps, either because of the stigma of applying or misunderstandings about eligibility. More than four of five who get the coupons said the aid never lasts the month.

In the 1980s, food bank advocates convinced great numbers of food companies that it was better to donate food than to shovel it into landfills. The Government Accounting Office, Congress’ investigative arm, estimated that as much as 20% of all food grown in the U.S.--up to two tons per person, per year--was thrown away. Food banks touted the write-offs corporations would get, and battled companies’ fear that donating less-than-perfect food would tarnish their product’s carefully cultivated image.

Firms faced the mounting P.R. problem of wasted food as hunger, which appeared to be nearly eliminated by the War on Poverty program, resurfaced in the 1980s. “The trickle of people became a river,” says Carolyn Olney of Los Angeles’ Interfaith Hunger Coalition. Grass-roots food pantries and soup kitchens quadrupled to 40,000 between 1982 and 1990.

Last year, more than 1 billion pounds flowed to the food banks from food companies and supermarkets--products that flopped, were discontinued or had expired code dates or production errors. General Mills Inc. donated cereals that were too lightly toasted or had flakes that were too small. Its biggest giveaway: $3 million of Cheerios boxes containing a toy ball on which a 1-year-old child choked to death. (The food banks had to promise to remove the balls before distributing the cereal.)

American consumers--particularly sensitive since the tampering scares--set aside all but the most pristine packages. (Food bank volunteers sort through cans, removing any that appear questionable. Laws enacted in the ‘80s protect companies from liability when they donate food.)

But by the 1990s, being hailed as a big donor had become something of an embarrassment--a red alert to shareholders that a company was wasteful and inefficient. Two years ago, food company executives began warning food bankers to look elsewhere for food. “They said, look guys, we love you, but we’re going to sell this. We have to look to the bottom line,” recalls Bloch, of the L.A. Regional Food Bank. Excess food was increasingly sold to Pic ‘N’ Save, 99 Cents Only Stores and others.

Major American food companies balk at revealing the proportion of “unsalable” goods they sell to secondary merchants. For example, Quaker Oats Co., whose donations declined from $11.9 million in fiscal 1993 to $5.1 million in fiscal 1994, will not specify how much secondary food it sold. A spokesman attributed most of the drop to increased efficiencies that decreased the quantity of unsalable food available.

Despite critics in the world of food banks, the corporations have many defenders. They note that few other industries are expected to give away a significant part of their goods to the needy, and that they shouldn’t be expected to take the place of the government in feeding America’s hungry.

“Food retailers are in business to make money,” says Fernandes, the salvage expert. “Companies have to recover their losses. They want to put these products back onto their bottom line.”

And indeed, many firms try to balance charity with fiscal necessity. The Vons Cos. grocery chain sells 15% of its salvage and much of its discontinued foods, but donates 12 trailers of food each week to 150 local charities.

General Mills, which was unable to say how much it sells to secondary sources, donates $10.5 million in food yearly. Still, said General Mills Foundation vice president David Nasby: “It’s always better to sell your product than to give it away.”

Bargain Shopping in the Salvage Aisle

Sandwiched on a lonely stretch of road between a massage parlor and a motorcycle shop, Dentco is doing a booming business with the food companies’ change of heart. Founder Orlan T. Riggs, who until his heart surgery presided over a five-store dented can empire from Yucaipa to Santa Ana, now pours all his energy into his Fontana store.

On Saturday mornings, up to 50 people line up outside the mustard-colored cinder block building, waiting to pick over the wire bins of taped boxes and tarnished fare. An employee empties dozens of dented cans into huge bins, replenishing what customers have purchased. “All of the name brands are here,” he says, proudly motioning to the damaged items being scrutinized by customers under a Spartan row of fluorescent lights.

At the high end of the salvage industry is Canned Foods Grocery Outlets in Berkeley. Known as the the Cadillac of the business, Canned Foods promises a “discreet outlet for remarketing your products” to 76 of the country’s largest food companies. Canned Foods has grown into more than 100 stores in six western states. Enthusiastic blurbs from executives for Hormel Foods Corp. and Sara Lee Bakery adorn Canned Foods’ glossy marketing brochure.

Less glossy--but highly popular--is Joe Sanchez’s place in Lincoln Heights.

“It’s kind of an underground business,” says Sanchez, president of La Quebradita (the Broken Thing), whose facade carries a bucolic rendering of a man wearing a sombrero astride a muscular horse pulling a shopping cart full of groceries.

Sanchez inches past his store’s beauty salon and restaurant into a back room, where huge bins overflow with damaged packages of microwave pudding and torn boxes of cereals. (Sanchez says the boxes have an inner package that protects the food and that he tosses out anything questionable.) The back room is for the real bargains. “This is where people won’t run into their neighbor,” he says.

Sanchez buys 2,000 boxes full of dented cans each month from grocery chains for $6 to $11 each, marks up the price 28%, and makes an 8% profit, at least four times what supermarkets in Southern California net. “It’s a super business,” he says effusively. Starting with a $3,800 initial investment, Sanchez has used profits to open two large grocery stores and a sausage company.

“Before, supermarkets donated everything. They want the green now. They want cash,” he says.

The most vigorous salvage sales have perhaps been at flea markets, some of which have seen the number of vendors quadruple in the past two years.

Al Ruby sold shoes for 11 years at the Cypress College swap meet, until the recession caused sales to dry up. He looked across the aisle to see his swap meet neighbor madly selling dented cans of food. “People can’t afford shoes. But they gotta eat,” he says with a shrug.

Low prices scream out from fluorescent pieces of cardboard. Most of the goods on display have outlived their printed expiration date, sometimes by four months. Some cans are rusty. At a neighboring salvage food stand, where food is as much as eight months past the code date, mayonnaise with no paper label sits in the hot sun, huge air pockets developing in the middle of the jars.

“I get a lot of calls each day from people who want to buy this stuff,” says Manuel Duran, manager of salvage operations for Certified Grocers of California, made up of 2,200 small grocers and chains. “C’mon, just show me what you got,” people cajole him, said Duran, standing in the heart of Certified Grocer’s salvage operations, a dimly lit City of Commerce warehouse where huge fans churn the heavy air. Last year, he sold about $3.8 million worth of food products to intermediaries that distributed the goods to peddlers and stores. Duran, who says the sales help supermarkets keep regular food prices down, can name only six companies that still require him to donate their damaged products. Out on the dock today, amid a swarm of small flies: crushed packages of cup noodles that he’ll sell, mangled cans of green beans, fruit cocktail.

Salvage and secondary food operators such as Canned Foods aggressively call Second Harvest’s corporate food donors weekly, often offering to buy products sight unseen. Food banks counterattack by warning companies that salvage operators might not handle their product well, and prey on their fears that people who buy their brand in a salvage store might have otherwise purchased it at a regular store at full price. Calling salvage sales a ticking time bomb, they claim that some salvage operators aren’t careful to eliminate all swollen cans or those dented at the seam that could lead to botulism poisoning, a bacteria infection that can be fatal.

Those in the salvage industry counter that they are as vigilant as food banks and pantries in weeding out suspect food products.

Alfonso Medina, chief of the Los Angeles County Department of Health Services food and milk program, said his inspectors have found at least two cases this year of swollen and potentially dangerous cans of salvage food being sold at swap meets.

To be safe, he says, salvagers must glean out about half the cans they buy, tossing out “flippers, swellers or leakers”--cans that are swollen on one end, both ends, or dented at the seam. Medina said he knew of no questionable food distributed at food banks.

Salvage customer Julio Herrera is grateful for the secondary food industry and the bargains it provides him. “I can’t live without these guys!” raves Herrera, taking a break as he and five of his six children rummage through 16 rows of banana boxes full of motley food products under a gray tarp at the outer edge of the Santa Fe Springs swap meet. They select torn bags of rice.

Before finding the salvage stand two years ago, Herrera was unable on his $15,000 annual salary as a truck driver to put three meals on the table for his children. A church pantry, he says, nonetheless rejected him, saying his income was too high. “They said other people were more needy,” he says, casting his eyes downward as he recalls the embarrassment of asking for food, then being turned away empty-handed. He now buys 95% of his groceries at the stand.

‘What Is to Become of These Hungry People?’

As corporations wrestle with whether it is better to sell or give, food bank proponents have learned they must become more aggressive to survive. Second Harvest typically takes four or five days to tell food manufacturers anxious to clear their docks whether or not they want a food gift, said Mike Mulqueen, director of the Greater Chicago Food Depository.

Foodbank of Southern California, Los Angeles’ second largest, left the Second Harvest network in 1991, dissatisfied that 82% of what they were receiving were snack foods such as candy, potato chips and sodas. Contacting food companies on its own, donations rose 86% the next year.

“Before, you waited at your desk for the phone to ring and the food to flow in. Food banks have to be hungrier and work their tails off now,” said John F. Knapp, president of the Foodbank.

“The big major donors may be tapped out. But lots of medium-sized companies haven’t been asked to join the hunger fight,” agreed Mark Lowry of Orange County’s Community Development Council food bank.

Some food bank authorities say they must also turn to different and more nourishing foods, such as produce, fish and leftovers from restaurants. Half of the food banks approached this year about starting programs to use vegetables and fruits that cannot be sold but are still edible rejected the idea, said Susan Evans, a professor at the Institute for Health Promotion and Disease Prevention Research at the University of Southern California. “Food banks haven’t been responsive to change,” Evans said.

Love Is Feeding Everyone (LIFE), a Los Angeles food bank begun by actors Dennis Weaver and Valerie Harper, trucks milk, meat and bakery products from 52 Hughes markets to needy institutions, but most supermarkets haven’t been tapped, says James Schiffner, LIFE’s chief executive officer.

As another sign of their evolution, a few pantries, such as St. Joseph Center in Venice, are becoming social service agencies, providing help to get jobs, parenting skills and budgeting classes, convinced that the only solution is to stem the number of people who live in poverty and need help.

But for many in the hunger movement, the pantry’s problems have caused a fundamental questioning of whether their core principle--that private charity can take the place of government--works in the leaner ‘90s.

“Everyone agrees government services need to be cut. But at the same time, the private sector says they have to be mean and lean,” says Bloch, of the L.A. Regional Foodbank. “So what is to become of these hungry people?”

About This Series

In this series, The Times examines four battlegrounds in the war on hunger in Southern California.

* Sunday: Hungry children, caught in the battles over school breakfast.

* Today: The growing salvage food industry--spawned by hard times--takes a bite out of charitable food banks.

* Tuesday: U.S. Department of Agriculture changes course and launches a crusade to attract more people to food stamps.

* Wednesday: A one-woman crusade to ease neighborhood hunger, one family at a time.

Inside a Food Bank

HOW DOES IT WORK

The six food banks in Los Angeles County are non-profit institutions that solicit unsaleable but still edible food from food companies, restaurants, produce markets and other sources. They also store government-issued food such as butter, beans, and, in the past, cheese. They hold the food in a warehouse and distribute it for a nominal fee to the approximately 700 member food pantries in Los Angeles County. These pantries are typically church-sponsored organizations run on shoestring budgets by volunteers. Some pantries have cut back on the amount of food they give out because of shortages.

WHO USES FOOD BANKS

Most people who go to pantries for help do not receive food stamps--either because of the stigma of using the coupons or ignorance about the government anti-hunger program. A 1993 research study by Second Harvest, the Chicago-based network for food banks and pantries, found these statistis on emergency food clients.

31.5% seek assistance for three months or less.

39.6% seek assistance for more than one year.

18.1% are homeless.

14.3% own their own home.

45.8% are children. In the total U.S. population, the proportion of people under 18 is 25.9%.

61.7% have no car.

46.7% have no phone.

39.6% have no high school diploma.

48.3% get food stamps.