By Jesse Newman
Dozens of companies are sprouting to help U.S. food makers
tackle a wave of new federal safety regulations and intensified
enforcement of the nation's food laws.
The startups are racing to capitalize on the need by farms and
food processors to step up vigilance of food-borne pathogens after
a string of outbreaks in the last decade have sickened thousands,
prompting a major overhaul of U.S. food safety laws and stepped-up
criminal prosecutions of executives at companies implicated in the
cases.
Some fledgling food-safety companies are getting a boost from
venture-capital investors, which pumped $179 million into the
segment over the four years through 2014, up 40% from the previous
four-year period, according to Dow Jones VentureSource.
"Food companies are hungry for help right now," said Diane
Wetherington, chief executive of Seattle-based
iFoodDecisionSciences, which sells mobile applications that enable
food producers and processors to collect and analyze data to
prevent disease outbreaks and product recalls.
Her two-year-old company is among many startups that use
technologies such as cloud-based computing and big-data analytics
to create relatively low-cost solutions for food makers that often
operate on tight margins. Other food-safety vendors are offering
services such as rapid pathogen testing or worker training.
The main federal rules are set to be finalized by next spring
for the U.S. Food and Drug Administration's Food Safety
Modernization Act, which Congress passed in 2010 in the most
sweeping revision of federal food-safety laws in more than 70
years.
Food companies also are on high alert after several successful
efforts by the Justice Department to prosecute executives linked to
deadly outbreaks. In a landmark case last year, a federal jury
convicted the former owner of Peanut Corp. of America of conspiracy
and other felony charges following a 2008-09 salmonella outbreak
that resulted in the deaths of nine people and sickened more than
700 others. Last month, two executives at what was once among the
nation's biggest egg companies were sentenced to three months in
prison for their roles in a major salmonella outbreak in 2010.
High-profile food recalls also are serving as a cautionary tale
for food companies, the latest of which saw Blue Bell Creameries LP
pull its products from stores after health officials linked the
Texas company's ice cream to a multistate listeria outbreak that
resulted in three deaths and additional illnesses.
The federal safety rules, which give greater powers to the FDA
to prevent contamination, create extensive paperwork for farms and
food processors. That presents an opportunity for firms that want
to help companies gather data, boil it down and comply with
regulations.
"We saw document chaos out there," said Ms. Wetherington of
iFoodDecisionSciences.
Using her company's mobile applications, growers and food
processors can log data from a field or plant floor and receive
instant alerts about hazards, such as the presence of animal
droppings in a row of leafy greens or high chlorine levels in a
water tank. They then can receive instructions to remedy the
problem instantly. The software makes obsolete the clipboards and
filing cabinets widely used in the industry and speeds the
distribution of information, she said.
For a year-round grower, a monthly subscription to iFood's data
collection and analytics app costs a few hundred dollars a
month.
iFood, launched in 2013, has more than a dozen clients,
including Mann Packing Co. and Church Brothers Produce, a
California firm that supplies vegetables to Wal-Mart Stores Inc.,
Chipotle Mexican Grill Inc. and other food purveyors.
"When a customer calls to say 'I found some [tree] leaves in my
kale,' I can more readily identify where it came from," pinpointing
the exact field, crew, time picked and prior irregularities at the
same location because of the iFood's app, said Drew McDonald, vice
president of food safety at Church Brothers.
Beyond enhancing a products' traceability, Mr. McDonald said the
tool allows him to aggregate data across multiple growing seasons,
performing more sophisticated risk analysis, and identifying
recurring hazards such as routinely high levels of bacteria like E.
coli in a water source used for irrigation.
Some food-safety startups began by happenstance. Juli Ogden, a
Washington cherry farmer, started a business shortly after
receiving a 328-page set of food-safety standards adopted by her
packing house, along with a mandate to comply within 90 days.
Overwhelmed, Ms. Ogden said she cut the paperwork for the
guidelines sevenfold and developed a one-day training program that
prepares farms to meet new production standards--many of which are
precursors to the new FDA rules--required by many retailers.
"I started out with one apple farmer," said the 59-year-old
founder of the Farm Plan, who has since trained growers, mostly in
her bare feet, from more than 500 farms from California to Florida.
"The fear is you either pass inspection or [suppliers] won't sell
your product. The problem is no one has explained to growers how to
meet the rules."
Some big food companies are investing in food-safety startups.
General Mills Inc., the maker of Wheaties cereal and Yoplait
yogurt, said it has provided funding or expertise to four companies
working to develop methods to quickly test foods for the presence
of toxic pathogens. New pathogen-testing technology that can be
used in-house saves General Mills at least 10 hours, a spokeswoman
for the company said, cutting the time that food products must sit
in plants or warehouses awaiting test results.
Tougher requirements from food retailers also are helping fuel
the boomlet, with industry giants like Wal-Mart demanding more
precautionary measures from suppliers before products land on
grocery-store shelves. Wal-Mart in recent years has required
vendors to comply with globally recognized food-safety
requirements, and has enhanced safety standards for its beef and
poultry suppliers. It also has developed a hand-held device that
allows employees to collect more in-store data, such as deli-case
temperatures, to monitor food safety.
Still, it's an uphill battle, said Frank Yiannas, Wal-Mart's
vice president of food safety. "We're in a race between the
public's ability to detect and report outbreaks and the industry's
ability to prevent them," he said. "Right now it feels like
detection is outpacing prevention. We've got to work to fix
that."
Write to Jesse Newman at jesse.newman@wsj.com
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