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Connecting Disciplines: Supply Chain Visibility Increases Food Safety
July 28, 2011
The food scares of recent years—mad cow disease, E.coli in spinach, eggs contaminated with salmonella—and countless recalls have increased public awareness of and demand for food safety. More consumers want to know where their food originates, and whether it was produced and packaged safely.
FoodLogiQ, headquartered in Durham, NC, and led in part by two Fuqua alumni, has created technology that is at the forefront of food traceability.
“Our system creates visibility into the supply chain—full visibility—so buyers can figure out where products are coming from. They can see which suppliers are safe, and they can also see sustainability metrics,” explains FoodLogiQ President Andy Kennedy (Weekend Executive MBA & HSM ’98).
FoodLogiQ’s technology is making headway since the FDA Food Safety Modernization Act was passed in January 2011, prompting the most significant changes in food safety policy in 50 years, Kennedy says. For the first time, the law created a mandate for comprehensive, preventative controls for food contamination and includes greater oversight of imported food products.
According to the FDA, every year, 48 million Americans suffer from a food-borne illness, more than 100,000 are hospitalized, and thousands die. Whenever there’s a case of food contamination, tracing the product back to its source is critical to identifying whether other products have been contaminated, and to also determine where the contaminated product is being sold so that it may be pulled from shelves, explains Kennedy.
Currently, only 5 percent of the world’s food product is traceable, but FoodLogiQ hopes to change that with the first and most comprehensive solution for tracking food, says CFO Jeff Stewart (Evening Executive MBA ’95). FoodLogiQ’s proprietary software empowers food producers, processors, and retailers to ensure food safety.
“The food supply is very integrated globally, and there needs to be consistent and constant monitoring of it,” says Stewart. “It is comforting to know that progress is being made daily, and we are a part of that progress.”
Stewart and Kennedy work in the office and in the field to customize traceability processes at every step in the food chain, from farm to processor to retailer to table. They partner with farmers and others to ensure that traceability practices are easy and affordable. They also work with shareholders who have questions about the origin and handling of food used in the businesses they finance. For example, FoodLogiQ’s system enables National Potato Council members to collect and share data regarding their sustainability practices with McDonald’s customers and shareholders, who are interested in the production of potatoes used for the franchise’s french fries.
“Food safety, traceability, and sustainability are a team effort,” says Kennedy. “They include people from various areas, starting with consumers and involving legislators, regulators, food companies, and retailers. We work together with standards-setting bodies, auditors, labs, and grower associations to develop workable food safety and traceability systems and standards.”
The importance of traceability became clear to Stewart in 2000, when he was on vacation in Scotland during that country’s outbreak of hoof and mouth disease. He was shocked to see billowing clouds of smoke from more than 25,000 cattle that were being incinerated within a 12-mile radius.
A few years later, in 2005, when mad cow disease broke out in Alberta, Canada, the initial reaction was to follow suit with Scotland and slaughter all the cattle. Instead, FoodLogiQ’s traceability system was used to determine which farms the sick cattle were coming from and which members of the herd had come into contact with an infected animal. The outbreak was soon contained, saving thousands of cattle.
“The outbreak and the slaughtering cost Scotland billions, it cut off their exports and it hurt their tourism industry—it was a complete disaster,” Stewart says. “It’s amazing to think that our traceability system diverted what could have been a similar disaster in Alberta.”