Harvest Sherwood notifies employees the business will be shutting down in 60 days or less

Harvest Sherwood Food Distributors once stood as a recognizable name as an independent distributor in the US food distribution industry. At its peak, it boasted over $4 billion in annual revenue, multiple branches across the country, and a well-established relationship with major clients in the retail and restaurant sectors. From the outside, it looked like a steady giant—a reliable partner for grocery chains, restaurants, and specialized foodservice distributors. Yet in the last two weeks, the company has spiraled into apparent insolvency with staggering speed. Offices have been informed of looming closures, major customers have severed ties, and bills remain unpaid.

Many are wondering: how did a company of such scale and reputation implode practically overnight? The reasons behind Harvest Sherwood’s collapse are multifaceted, grounded in what insiders cite as chronic mismanagement, internal politics, questionable leadership changes, subpar operational execution, and a painfully damaged customer relationship that led to $25 million worth of being stuck in their supply chain, most of it being tray-pack chicken.

This piece aims to be both direct and informative: an evaluation of where and how Harvest Sherwood went wrong. I draw upon firsthand experience—having worked at Harvest Sherwood from early 2020 to mid-2021, managing data analytics, inventory, and procurement reporting—along with insights provided by current and former employees whose identities must remain undisclosed. This is not journalism in the investigative sense; rather, it is an insider-informed narrative of a company’s downfall, compiled to shed light on the immediate and root causes of a massive failure.

The Triggering Event

The immediate trigger for the company’s downfall was a dispute with one of its largest customers, Sprouts. Though details remain murky, accounts from both insiders and external analysts suggest that Sprouts had signaled for months—if not years—that it intended to develop its own more centralized distribution network, eventually reducing reliance on Harvest Sherwood. For a while, the partnership continued on a temporary basis; until the week of Feb 10th. Sprouts ceased purchasing tray-pack chicken from Harvest Sherwood altogether, slamming a door that had previously brought in millions of dollars in revenue each month. According to individuals close to the situation, the distributor was left holding a staggering $25 million in fresh chicken, an item with limited shelf life and limited alternative buyers.

The abruptness of this decision was crippling. Companies in the meat distribution business customarily operate on narrow net margins, often under four percent, and they depend on steady orders to keep cash flowing. While the invoices for that particular $25 million in tray-pack chicken might not have been due for another 14 days, Harvest Sherwood’s entire financial system hinged on continued shipments to Sprouts. Because those shipments ended, the revenue needed to pay for the prior cycle’s invoices vanished. This meant payments to suppliers were effectively frozen; vendors realized within days that they were not going to be compensated on schedule. By that point, Harvest Sherwood was frantically trying to offload the surplus stock at cut-rate prices, reducing the unsold pile to roughly $16 million. Even this partial liquidation did not fix the fundamental cash squeeze, and the end of that first week brought word that without a buyer for some or all of the company, Harvest Sherwood might be forced to shutter everything.

Industry analysts point out that no large distributor implodes purely because of one client’s abrupt departure; the Sprouts fiasco was a final straw, exposing the company’s deeper frailties. Harvest Sherwood’s failure to manage the crisis also reflected a broader absence of risk management across the organization. In well-prepared distribution firms, losing a single major account—while always damaging—should not create a total collapse if there are robust financial cushions, diversified streams of income, and flexible logistics systems capable of pivoting quickly. Harvest Sherwood, however, had few of these safeguards. The astonishing speed of its unraveling hinted that the company’s fundamentals had been eroding for years, and insiders concede that, had leadership taken a different approach to technology, procurement coordination, or internal culture, the outcome might have been far less catastrophic.

Losing Customers

Even before the Sprouts debacle, Harvest Sherwood had suffered multiple blows to its top line. Over several years, it lost key customers in different market segments, eroding what had once been a reliable and lucrative base of revenue streams. While any single loss might have been survivable, the cumulative effect was devastating, leaving the company vulnerable to sudden shocks.

One early setback came with Lucky’s Market, a natural and organic grocery chain that was itself experiencing financial troubles around 2019 to 2020. After scaling up quickly in previous years, Lucky’s faced an abrupt reversal, shuttering stores, restructuring its business, and taking many of its suppliers down a difficult path with it. Harvest Sherwood had counted on Lucky’s for a notable share of distribution business; as Lucky’s began closing locations and cutting orders, the distributor found itself with fewer retail channels for its stock, leading to gaps in revenue that were never fully recovered.

Cruise-line business once formed another high-volume pillar of Harvest Sherwood’s sales strategy. Cruise ships can burn through staggering quantities of meat, produce, and dry goods. But when the global pandemic shut down the industry almost overnight, thousands of cabins went dark, and many lines renegotiated old contracts or found new suppliers by the time they sailed again. Harvest Sherwood apparently did not secure commitments to recover its cruise-line partnerships once the travel sector picked up, perhaps in part because it was too slow to adapt to new demands for real-time data and last-minute logistical changes. By the time ships were back at sea, those lines had turned to competitors or smaller local distributors offering more flexible terms.

A third client departure involved Bloomin’ Brands, the corporation behind Outback Steakhouse, Bonefish Grill, and other casual-dining chains. While details on this particular loss are less public, it is rumored that Harvest Sherwood made the decision to spin off that customer account and remove the internal group that serviced that customer. These cascading losses highlight a common theme: insufficient diversification. Each lost account pushed margins and cash flow closer to the red, making it all the more urgent that the remaining accounts (especially Sprouts) kept buying.

Culture, Leadership, and Failures

The seeds of Harvest Sherwood’s collapse were sown long before these high-profile contract losses. Insiders and industry commentators consistently point to leadership deficiencies and a toxic, insular culture as major contributors. The company emerged from the merger of three prior entities; Harvest Meats, Sherwood Foods, and inexplicably the 1998 merger of Western Boxed Beef was still operating as a silo within Harvest and did until the every end. The combined company inherited a patchwork of legacy systems, procurement processes, and corporate mindsets. In theory, the combined organization should have leveraged scale more aggressively, unifying vendor negotiations, standardizing data across a single platform, and enforcing a robust demand-planning discipline to prevent excessive spoilage. But in practice, the merged company appeared to run like a coalition of independent fiefdoms.

Longtime employees recall the era of CEO Leon Bergman as one defined by high consultant expenditures that produced few tangible results. Bergman presided while Harvest Sherwood poured tens of millions of dollars into advisory services, particularly from a globally recognized consulting giant tasked with integrating multiple ERP systems and identifying cost-saving measures. Despite those major investments, employees say that most of the consultant-generated plans languished. Senior executives might have approved pilot programs, but local branches routinely resisted them. Local managers feared that unifying procurement would undermine their autonomy, and top leadership chose to appease rather than confront them. Contracts to unify data or revamp accounting got started, but fizzled before rollout was complete. The pattern repeated so often that some staff privately referred to it as “consultant hopping,” in which each new project demonstrated a superficial commitment to change but never endured long enough to transform day-to-day operations.

Abruptly, Leon Bergman left and Karl Berger took the helm in what was described by insiders as a move not supported by the board, but they had little recourse as they attempted to sell the firm with no success. Unfortunately, the same cultural inertia persisted. As of publication of this page, the CEO approval rating for Harvest Sherwood on Indeed.com is 47%. On paper, Harvest Sherwood was funneling resources into improved forecasting systems, new accounting platforms, and advanced analytics dashboards intended to track product flows in real time. But whenever these solutions encountered friction at the local level—perhaps a manager who did not want to abandon manual spreadsheets, or a distribution center that insisted on using its legacy software—the corporate leadership typically backed down. As a result, only fragments of the promised modernization took root. Demand planning initiatives for fresh proteins were never fully adopted, leading to repeated over-purchasing in categories like pork, which drove up spoilage costs. A new centralized accounting system that might have captured significant savings through early-pay discounts and streamlined vendor negotiations likewise withered.

Internally, the culture of local autonomy clashed sharply with the demands of a low-margin, high-volume business. In such a business, success relies on precise coordination, widespread visibility into daily operations, and the ability to course-correct immediately when forecasts shift. If one distribution center found a better price on chicken wings, in a fully integrated model that pricing data would automatically propagate across all centers so that everyone could secure the same rate. At Harvest Sherwood, buyers in Cleveland might pay one price while buyers in another region paid a different one for the exact same product. Even staff who recognized the potential for tens of millions in annual savings say that they were stymied by political obstacles. Without a unified culture or leadership that enforced best practices, the organization bled margins on almost every transaction.

The revolving door of consultant recommendations deepened employee frustration. The repeated pattern seemed to be: hire an outside firm, pay them large sums to diagnose inefficiencies, receive thick presentations outlining solutions, promise major overhauls—and then watch most of those solutions die in committee or fail to launch. Over time, the sense that higher-ups were squandering resources demoralized talented individuals who might otherwise have championed real improvements.

Failed Projects

Demand Planning Integration

The company engaged consultants to design a system linking historical sales, seasonal patterns, and real-time purchase orders. The goal: forecast exactly how much product each branch should carry. But according to those involved, the rollout stalled midway—either because of leadership changes or departmental resistance. The partial integration allegedly caused more confusion than clarity, and staff ultimately reverted to legacy spreadsheets and manual calculations.

Accounting Software Overhaul

Another initiative aimed to unify accounts receivable and payable with real-time inventory data, so managers could track cost accruals, discount windows, and potential margin gains. Industry sources say that after paying for software licenses and initial consultant work, Harvest Sherwood abandoned the project. Finance teams remained tied to older platforms, and the business lost out on streamlined processes that might have prevented large-scale payment fiascos.

The repeated inability to see projects through reflects a deeper organizational stumbling block. Paying for technology is one step; adopting it and enforcing new practices is another. Without executive focus and end-user buy-in, even well-funded software initiatives fail. In Harvest Sherwood’s case, these half-finished solutions became sunk costs, leaving employees to navigate the old systems and managers to manage half-implemented upgrades.

Timeline

On Monday Feb 10, Sprouts abruptly halted all tray-pack chicken orders, blindsiding Harvest Sherwood and leaving the distributor with a $25 million inventory position that no longer had a committed buyer. By Tuesday, senior managers at Harvest Sherwood were scrambling to find alternative outlets or liquidators, but little progress was made. Come Wednesday, suppliers noticed that their usual invoice payments were late or simply missing—raising alarm bells that cash flow had dried up. On Thursday, desperate measures were taken to offload as much of the surplus chicken as possible at steep discounts, reducing the $25 million glut to about $16 million by day’s end. Yet by Friday of that week, employees were already hearing rumors of potential mass layoffs and the need to sell entire divisions if no buyer stepped in.

The crisis deepened on Monday Feb 17, when Harvest Sherwood formally informed staff that the company could shutter major operations within 60 days, given the abrupt loss of revenue and a backlog of unpaid vendors. Over Tuesday and Wednesday, many suppliers halted future deliveries, aware they might never recoup outstanding bills. By Thursday, prospective investors or buyers had largely backed away, concerned about inheriting unresolved debts and a tarnished brand. By Friday of that week, the atmosphere at Harvest Sherwood was dire—morale had sunk, vendor relationships lay in tatters, and entire branches awaited instructions that might signal an immediate shutdown. In the span of just ten business days, the company had plunged from a once-formidable distributor to an enterprise teetering on the brink of liquidation.

The Human Impact

In just two intense weeks, Harvest Sherwood shifted from a multi-billion-dollar distributor to a company on the verge of liquidation—an upheaval that left over 1,500 people out of work. There are WARN notices filed, but due to the fragmented business entities, work needs to be done to find them all and aggregate the total figures. Do not forget the human impact this has and keep this in mind the next time you have a tough decision to make.

Mon Feb 24, 2025

by Brad Guldemond

an older version of this post from Feb 20 can be found in the archive, changes were made for linking and readability only.