Farm CEO on coronavirus: it's "quite a challenge" & "stressful"

Five Acre Farms CEO Dan Horan joins Yahoo Finance’s Seana Smith to discuss how the coronavirus is impacting demand for certain food products.

Video Transcript

SEANA SMITH: Welcome back to Yahoo Finance's live market coverage. Now, the coronavirus pandemic has upended the food supply chains, as worry grows over possible food shortages, and what exactly that means for all of our viewers out there. So for more on this, I want to bring in Dan Horan, CEO of Five Acre Farms. And Dan, thanks so much for making the time to join us on the show here this afternoon.

Five Acre Farms, it's a small business. I know that you supply restaurants and stores throughout the Northeast. Let's start with the coronavirus virus's impact on supply chains at this point. What are some of those challenges that you've been faced with during the coronavirus outbreak?

DAN HORAN: Sure. Thanks, and also thanks for having me. There've been a number-- some parts of the business demand has roared ahead-- eggs. Some parts of the business demand has fallen off-- milk. We're in both supermarkets and food service. And some cafes and some food service situations, like, say, at Citi Field with Shake Shack's milkshakes.

So as soon as those things get closed, that business goes away. And then the demand in our retail sector-- most of it has gone up. But there's been a problem with connecting in the supply chain, not only along packages, but actually with people working in the warehouses that have to load the trucks. So all of this hit very quickly. And the advantage of being small is you can be nimble. But it's also quite a challenge and stressful on all of-- you know, all my employees.

SEANA SMITH: Dan, how is, from your perspective, how do you think coronavirus has underscored really the downsides of having such a consolidated supply chain?

DAN HORAN: Well, I mean, it's been enormous. The whole purpose of Five Acre Farms is to bring local food to more people and to work with small and mid-sized farmers and bring them into the mainstream because they have largely been excluded. And today, we see the problems with that where there may be an abundance of food around. But most small and mid-sized farms are left out of the mainstream system, which now desperately needs them.

So it's a big challenge. If you're getting all of your supply from one place, and there is a disruption in that supply, it's a price you pay. Now, I don't think that local food is necessarily a panacea. But I do think that all of us are getting a real sense of how important it is to have, at least, some measure of a robust local food economy.

Dan, how have you changed your business to meet today's demand? And how do you prepare for what it could look like in about a month from now?

DAN HORAN: Well, what we're seeing is we're seeing a lot of small food hubs and small food distribution businesses crop up either out of nowhere or get a little bigger. And we're also seeing some larger distributors who used to only deal with restaurants shift their emphasis into home delivery and into getting into retail. So we're reaching out actively to them. It's a real challenge not being able to move anywhere.

A lot of the business is relationship business. A lot of it is face to face and not being able to do that-- strange that. But we're certainly, because we're very connected in the farming community, at least, able to help guide farmers forge places where their business and help smaller players build up an array of products to offer people coming by.

SEANA SMITH: Dan, you own one farm. You work with 25 others. You have seven employees. At the time or during this outbreak, how are you keeping your employees safe? And have you put any new procedures into place in order to help you do this?

DAN HORAN: Well, I mean, it's certainly strange. Some of the businesses that we work with already have extremely careful safe handling practices. Every business, for example, already presupposes-- already presupposes the risks of food safety. So there, it's relatively unchanged. But social distancing inside a warehouse is important. Everyone's working virtually.

We-- if we have to repack things in a warehouse, we have to be much more aware of spacing. And so from that side, it's been-- it's been fine and easily learnable. But the idea of not being able to go meet or lend a hand physically in some cases is tough. And I think a lot of small businesses can identify that a lot of times if you don't have a sophisticated system.

What you do is you throw all hands at a problem. And in this case, that's not something you can do so easily. But it's challenging. And food is something that connects with people very visceral this early. It's often-- it's a family subject. And now suddenly we're being forced to be apart from that.

SEANA SMITH: Mm-hmm. Yeah, certainly, it's true. It's really disrupting, causing destruction across all industries at this point. Dan Horan, CEO of Five Acre Farms. Thanks so much for taking the time. Thanks for having me.