The 'biggest pressure' on our business is driving consumption of meals to students: Revolution Foods CEO

School meal provider Revolution Foods is reinventing school lunch programs during the coronavirus pandemic. Revolution Foods Co-Founder & CEO Kristin Groos Richmond joins Yahoo Finance’s On The Move panel to discuss.

Video Transcript

- 22 million K through 12 students get free or reduced price lunches in the United States through the National School Lunch Program. Obviously it's been a challenge feeding those kids during this time when there's the need for social distancing. They're not at schools. I want to bring in Kristin Groos Richmond. She is Revolution Foods co-founder and CEO.

Kristin, thank you for joining us. Your company provides school lunches with cooperation with a lot of different school districts. So how are you thinking about meeting these challenges right now? I know a lot of school districts have grab and go right now. But that still means the kids need to get there in order to get the food.

KRISTIN GROOS RICHMOND: Yeah. It's been a huge challenge for our schools and, I think, most importantly for our families. We are working around the clock to make sure that there are distribution sites with our schools where families who are experiencing hunger and those 22 million students that you referred to who qualify for free or reduced lunch can receive meals.

There are significant logistical hurdles right now, both from a logistics standpoint as well as a policy standpoint. So, it's a challenging start to the year.

- Jared Blikre here. We've seen tax receipts for state and local governments fall off a cliff-- well of also nationally likely as well. Are there price pressures on your business, or are they trying to negotiate better terms? Are there delays in receipts, or are you just not feeling that yet?

KRISTIN GROOS RICHMOND: Well, the biggest pressure on the business right now is-- and again, for our schools and families-- is trying to set up a situation where we can drive participation and consumption of meals for those 22 million students who need the meals. So that's the largest pressure right now on not just Revolution Foods, but all of the food companies that we work with and that schools work with.

So the challenge number one is making sure that we have a logistic situation and policy that can support students who rely on school meals as a primary source of nutrition to collect those meals every day. That's by far the biggest challenge we're all facing at this point.

DAN ROBERTS: Kristin, Dan Roberts here. In addition to trying to figure out the logistics of serving the schools that are opening in some form or another, there are a ton of schools that aren't reopening in the fall. Is that going to cause a huge hit to your business, and how much of a hit are businesses like yours going to take-- food-supply businesses that work with schools this fall?

KRISTIN GROOS RICHMOND: Well, it has a tremendous impact on schools, on farmers, on-- certainly on businesses like ours that are supplying school meals. We have designed, produced, and distributed over 30 million healthy meals throughout the COVID period-- overall, 436 million meals since we started the company. So, you know, the capacity to produce is there. We're all working together to maximize participation, but schools need the logistical support through a extended waiver program to be successful in maximizing participation for students who need these meals.

And we now have-- I think its 47% of American families reporting struggling with hunger at this point. 53% of Black families are in that group, and I think 56% of Latino families reporting struggling with hunger. So the numbers are astronomical. A year ago at this time we were at one in seven families reporting struggling with hunger, so the numbers have gone up drastically in this pandemic.

- Kristin, just to follow up on what Dan was talking about. I mean, to be clear, you're a for-profit company. You're not a non-profit organization.

KRISTIN GROOS RICHMOND: Yes.

- And, sadly, in a lot of cases, healthy meals are more expensive. So especially-- not just with kids not going back to school-- but also we well know the budgetary issues and challenges that school districts are having right now. Are you having any canceled contracts as a result of all of this?

KRISTIN GROOS RICHMOND: So, the schools that we serve at Revolution Foods have very high percentages of free-and-reduced-lunch students, so they are continuing to serve students whether they are in, out, or in hybrid learning environments-- right now, primarily out of school as we all know. So those schools are still committed and serving students as we start up the school year. So cancelled contracts is not the fear.

I think the challenge that we're all facing is the quantity of meals that we are able to deliver to food-insecure students. And on the healthy meal front, what I would say is that, you know, Revolution Foods has spent the last decade-plus building a clean label supply chain that's really cost optimized to meet those fragile budgets, if you will. So we've been able to build a business that is sustainable, providing those healthy affordable meals, which has been a-- which has been a journey building the company.

- Kristin, thanks so much. Kristin Groos Richmond is Revolution Foods' co-founder and CEO. Appreciate it.

KRISTIN GROOS RICHMOND: Thank you so much.