Building unicorns that make the global food supply chain safer
Food safety is one of the biggest challenges facing agriculture. The US Center for Disease Control and Prevention (CDC) defines a foodborne disease outbreak as two or more people becoming ill from eating the same contaminated food or drink. In 2017, CDC reported that there were 841 foodborne disease outbreaks in the US that resulted in 14,481 illnesses, 827 hospitalizations, 20 deaths, and 14 food recalls.
These numbers are driving two changes. First, consumer awareness of outbreaks has increased and they have pushed legislators, regulators, and farmers to make the food supply chain safer. Second, as a result of this pressure, Congress passed the Food Safety Modernization Act (FSMA) in 2011 to transform the nation’s food safety system from response to foodborne illness to prevention. FSMA rules apply to fresh produce crops, one of the major sources of outbreaks, and give the Food and Drug Administration (FDA) broad powers to execute product recalls to protect public health.
As a result of these changes, farmers of all sizes are spending significant amounts on food safety. Smaller farmers (those with less than $500,000 in annual sales — the vast majority of growers) regularly spend 6–7% of total annual sales on food safety compliance. The main compliance costs include water testing, worker training, and record-keeping. In some cases, these costs have caused small farmers to switch crop types to non-leafy greens products (like carrots or potatoes) not regulated by FSMA.
So farmers are investing significant amounts on food safety (new technologies, new processes, and new tests) and yet outbreaks are still having a major impact on consumers. It turns out that providing protection for the food supply chain is really hard. Farmers are being asked to keep food safe from planting through growing, harvesting and processing, and finally through delivery to stores and restaurants. Keeping the food supply safe through the whole supply chain means testing soil, water, and products regularly for pathogens like e.coli, listeria, and salmonella and making sure that animals do not interact with the food in the field.
One bad food safety result for soil or food products can come from a rodent dropping in the field, a bird dropping a food scrap while flying over a field, or wind blowing nearby plants into the produce field (those plants are literally defined in FSMA as a “foreign object”). In addition, one bad water test can come from water supplies that can include ditches, canals, reservoirs, and underground groundwater supplies. A failed test result can cause the purchaser to deny the entire crop and the farmer ends up with a complete loss on that field. Depending on the crop type, this loss can be several thousand dollars per acre for the farmer.
To avoid this, farmers work hard to ensure that anything that touches the product or can end up in harvested product is constantly monitored and managed, including rodents, birds, wild animals, and insects. Farmers build perimeter fences around specialty crop fields and install rodent traps around the field perimeters to keep animals out. Farmers also report animals trapped to government agencies so they can alert other farmers when there are “hot spots” with an unusual occurrence of animals caught. All this activity adds up — one of our farmers pays one employee over $50,000/year just to monitor and report on rodents caught in the perimeter traps for each 1,000 acres of farming.
There has been a lot of progress in food safety. New testing for more pathogens and faster results allows farmers to know more quickly if they have a food safety problem, in many cases without shipping a sample to a lab. Field perimeter fences and animal traps are getting widespread adoption thanks to best practice sharing across the industry. Water testing and treatment startup businesses are getting some early traction and many farmers now test soil, water, and products regularly as part of their standard growing operations. One of our farmers grows spinach for large franchise chains and has committed to not harvesting more than 7 days after the last clean soil, water, and product test.
Additionally, harvest equipment has been developed that allows for night-time harvests in cooler temperatures, with the added protection of a “front of the tractor” crew that works to identify any problems and fix them before the harvester arrives or stop the harvester to give the fix more time. Sensors are being added to product boxes, pallets, and trucks so temperature can be measured on the way to the cooler or processing plant. Alert systems tied to harvest and logistics equipment serves as an early warning indicator for the grower, the tractor operator, or the truck driver depending on where the alert comes from and who needs to get it.
Finally, the in-store and back office improvements help minimize the impact of outbreaks. Large food retailers like Walmart and Costco have built massive technology infrastructure and large data sets to track which fields, which facilities, which batches, and which trucks the product went through or arrived on. Thanks to all of this data, they know exactly which batch of food to recall and exactly which buyers to notify and share information on how to return or destroy the product involved. Outbreaks are tough on everybody and nobody wants them — consumers get sick while farmers and stores end up with product that must be destroyed.
Even with all the progress being made in fields and in stores to identify risks and notify all parties as soon as there is even an inkling of a possible problem, more progress is needed, and this is where entrepreneurs are needed. In-field and in-harvest testing still needs to be better, faster, and cheaper. Equipment needs to make night-time harvests as efficient as daylight harvests through automation (robots) or equipment enhancements. More and cheaper sensors that can do en-route testing on the way to the store help provide one last defense against an outbreak before the consumer buys the food. The key to food safety is to do as much as possible to avoid outbreaks and when one does happen act quickly to minimize the impact by communicating directly with consumers so they know exactly what happened and what they need to do.
So here’s my challenge to all the entrepreneurs that want to build the next great mobile app or the next great social media site. Maybe we’re okay without one more ride-sharing app or the next TikTok (although my kids might disagree). As Steve Jobs famously said to John Sculley when recruiting him from Pepsi to Apple, “do you want to sell sugar water or do you want to come with me and change the world?” Rather than offering you the chance to run Apple, I’m offering you a chance to help make the world’s food supply safer. It’s hard to find more of a “doing good while doing well” than building an awesome AgTech startup in this space. So come with me and build a startup that can solve some of these problems.
