Earlier this month,Â GoodGuide,Â one of the first startups to rate products on health, social and environmental factors using a scientific, research-driven approach, was acquired by Underwriters Lab EnvironmentÂ (UL Environment). This acquisition brings it under the umbrella of a global company that, in part, helps manufactures create more environmentally-responsible products and customers to make more informed purchasing decisions.
The terms of the deal have not been disclosed but, according to GoodGuide, it will continue to operate âbusiness as usualâ and offer its free web and mobile apps. Prior to the acquisition, GoodGuide raised a total of $9.2 million in Series A and B funding from investors like New Enterprise Associates, Draper Fisher Jurveston and Physic Ventures.
âAfter multiple discussions betweenÂ GoodGuide and Underwriters Lab, it became clear we had the same agenda â enabling people to make scientific decisions about the products they buy,â said Scot Case, Director of Market Development for UL Environment, in a Q&A with Sustainable Brands.
âGoodGuide has seen significant uptick in demand in the procurement space and feels their back end can serve as a tool for the broader set of UL customers,â said Dara OâRourke, Co-Founder and CSO of GoodGuide, in the same interview.
Since, here at Food+Tech, we always have an eye on ways data is being used, want to also point out the GoodGuide API. It would allow for a company, e.g., Amazon, to incorporate the GoodGuide ratings system on its site and give customers more information about the social and environmental effects of the products they are buying. It’s a parallel to some food+tech startups that are helping customers make more informed decision in the grocery aisle, like Fooducate and NxtNutrio. And whether it’s t-shirts or cereal, greater transparency and more informed purchasing decisions can have a significant positive effect on our health and environment — another great use of technology and data.
Today, Relay Foods, an online grocery marketplace for local foods, announced it has acquired Arganica Farm Club and raised $1.2 million to expand into the greater Washington, Baltimore and Philadelphia areas. The Charlottesville, Virginia-based company raisedÂ this round of financing from existing investors of both companies. Terms of theÂ acquisition were not disclosed.Â The company previously raised $3.1 million from investors including Battery Ventures.
Relay is a hybrid between an online grocery and a farmers market, offering everything from CPG items like diapers and Jello to local, organic vegetables, meats and breads. Through its website, customers can place orders until midnight for a next day pickup at one of their 60 drop-off locations in Charlottesville and Richmond, Virginia.
With the new round of funding, the company will be improving the shopping experience by refreshing their website and developing a more intelligent product recommendation and personalization engine. Their acquisition will also enable them to capitalize on Arganica’s existing customer base, and perhaps more importantly vendors in Washington, DC, Baltimore and Philadelphia. They will also be launching fulfillment centers in each of those locations in the coming months.
Relay Â is trying to tackle the challenge of shortening “the last mile” - getting products from fulfillment center to customers - which is notoriously difficult and expensive for online grocery delivery outside of dense metropolitan areas. Webvan, one of the largest dot-com busts of all time, tried and failed for a variety of reasons, including their overly aggressive expansion plan and their costly distribution centers, pre-purchased inventory and lack of delivery density.
“Put simply, Webvan failed because they burned through a massive amount of capital putting complex systems in place before enough income was coming in to offset that investment,” say RelayÂ founder Zach Buckner.Â ”Because I’m an engineer, I saw this as an engineering problem and went about setting up systems that could provide solutions.”
Relay’s major innovations have been in establishing convenient pickup locations for their customers and charging a small fee for those that prefer delivery- Â $10 per order or $25 per month for unlimited. The distance between homes in suburban areas significantly adds to the costs of a delivery business model, which is why Relay Â has focused on the pickup approach. Perishables also require temperature controlled packaging or that customers be home to accept delivery, both of which add to the cost and inconvenience of online ordering.
It’s telling that last yearÂ Peapod, the largest online grocer owned by Royal Ahold, began experimenting with curbside pickup at their HelmsfordÂ Stop & Shop store Â and just last week launched the program at theirÂ AbingtonÂ store,Â for these very reasons.
Relay Â has been able to avoid costly investment in pre-purchased inventory by working with vendors that agree to fill orders on a daily basis. “From a costs perspective, this was critical, as we carried almost no inventory risk and were able to scale up slowly,” comments Buckner. “From a customer’s perspective, this meant supporting familiar local farmers, local artisans, and local shopkeepers, plus getting the freshest possible food (often picked or baked fresh the same day). Really, this has been a win-win.”
Peapod and New York-basedÂ Fresh Direct are often cited as the most successful companies in the online grocery, selling more than a combined $500 million annually.Â Â Sourcing local, perishable products for them, however, is still a major challenge because of issues with labeling, code compliance and supply. And this is exactly where Relay’s model, which has already enabled them to source thousands of items from over 100 local producers and deliver them to customers the next day, is something worth keeping an eye on.
“Our technology gives us the capability to engage the customer and make their food buying experience much more transparent than it would be in a traditional grocery store by telling vendors’ stories and providing the kind of details consumers want to know about their food,” says Buckner. “Our IT systems allow us to seamlessly make next-day delivery of the freshest possible foods a reality at low cost.”
Still, Relay has higher overhead costs - fulfillment centers, delivery trucks, fuelâ than others creating software to facilitate online farm-to-fork marketplaces, like Farmigo and Good Eggs. Only time will tell how their models compare as each these companies scale.
The video below features a demo of the website by co-founder Arnie Katz at the Food+Tech Meetup this past July.
July Food+Tech Meetup with Relay Foods from Food Tech Connect on Vimeo.
Here’s a sampling of experiments that offer a window into the future of food retail. They play off a recently-compiled list by the Hartman Group thatÂ features 9 experiments and includes predictions for which innovations will succeed or fail.
Virtual Stores. Online grocers are not new but they are starting to push the boundaries in terms of advertising and customer acquisition. Take this campaign by Peapod, in which it lined the walls of a Chicago transit station with product images and QR codes. Customers could, theoretically, order items while they waited for a train.
Smart Sensors and Automatic Ordering. Basically, devices that allow you to order groceries with the touch of a button. For example, Evian’s Smart Drop, which is a WiFi-enabled refrigerator magnet that allows you to order more water instantly — itself just the tip of the iceberg. A similar technology and behavior could ostensibly allow you to re-up on anything in the fridge, the moment you run out of it. And imagine if WiFi-enabled devices on the refrigerator could communicate with something like Thin Film’s smart sensor tags — items could potentially reorder themselves. Like, for instance, when a package of strawberries is removed from the fridge for more than two hours (presumably thrown away) or has passed its expiration date.
Order Direct. Companies like Relay Foods, which presented at a Food+Tech Meetup earlier this summer, are giving people a way to order directly from local producers and artisans and bringing the farmer’s market closer to home. The company has support from Battery Ventures and is one of several companies connecting local producers and consumers, including Farmigo, Wholeshare, Good Eggs, Chow Locally, Greenling and others.
More via Hartman.
Earlier today I reported on the new Natural Resources Defense Council report examining theÂ areas of the U.S. food supply chain generating the most waste Â and opportunities for reducing such waste.
The following infographics further break down and visualize variations of Â staggering food waste data. Which do you think is most effective?
The first infographic from Face the Facts USA demonstrates the relationship betweenÂ waste and hunger.
The second infographic from Door To Door Organics explains why food waste is a problem and offers tips for what consumers can do to reduce waste.
The final infographic fromÂ Next Generation FoodÂ illustrates Â food waste’s impact on climate change resulting from excess freshwater and fossil fuel consumption, as well as methane and CO2 emissions from food decomposing in the landfill.
How often do you find yourself throwing away wilted greens or leftovers that have sat too long in yourÂ refrigerator? Probably a lot, according to a new report by the Natural Resources Defense Council (NRDC) entitled “Wasted: How America Is Losing Up to 40Â Percent of Its Food from Farm to Fork to Landfill.” On average, people in the U.S. throw away 20 pounds of food each month, which amounts to an annual loss ofÂ $1,350 and $2,275 for the average family of four.
But it’s not just consumers that contribute to the staggeringÂ 40 percent of food that is wasted in the U.S. Waste-related inefficiencies across the supply chain- at the farm, during processing and distribution, and in retail and restaurants - are costly for businesses.Â For example,Â Stop and Shop/Giant Landover, aÂ $16 billion grocery chain,Â saved an estimated annual $100 million by reducing shrink (waste) and improving customer satisfaction through a redesign of their perishables department. Food. University of California-Berkeley food service used LeanPath software to reduce their kitchen food waste by 43 percent, saving them over 1,000 pounds of food and $1,600 weekly.Â One farmer who was not able to sell 70 percent of his carrotsÂ because of their irregular shape, found that he could sell them all, and for $.50 per bound compared to .$17 a pound, by cutting them into “baby carrots.”
The report takes a hard look across the supply chain at the areas generating most waste, using the best available data, and makes a number of recommendations for waste reducing solutions.
One example of a tech-related problem and solution referenced in the report was that of rejected perishables at the distribution stage. Perishable items can be rejected if they do not meet the requirements of a buyer, at which point the distributor must find a new buyer. By the time these items make their way to a new retailer, they have a shorter shelf life. Often times, they are just dumped. The report suggests a need for an online exchange to find markets for reject products, but cautions that distribution “offers limited opportunities for increasedÂ food efficiency.”
There are a number of problems in need of technical solutions. Check out the report for a full summary of the causes and potential remedies.
The United States Department of Agriculture (USDA) is looking for Â input from the public to help determine the Application Programming Interfaces (API) and mobile optimized websites they should prioritize development of between now and May 23, 2013. This Digital StrategyÂ roadmap is part of their commitment to fulfill the Office of Management and Budget’sÂ government-wide mandate to make “existing high-value data available through Web APIs.”
The USDA will be choosing two APIs and two mobile optimized services from the list below.Â I was surprised to see the National Nutrient Database was not included in the API list, given that almost every technology company with a nutrition or ingredient component uses this database.Â USDA Director of Â Web Communications Amanda Eamich assures me that this is just the beginning of the process, so your feedback is really important. You can let the USDA know which APIs and mobile services would be most useful to you here.
World Agricultural Supply and Demand Estimates
Provides USDAâs comprehensive forecasts of supply and demand for major U.S. and global crops and U.S. livestock. The report gathers information from a number of statistical reports published by USDA and other government agencies, and provides a framework for additional USDA reports.
Main Customers:Â Government, Business, Media, Education Institutions, Consumers
National Farmers Market Directory
Agricultural Marketing Service-produced directory containing information about U.S. farmers market locations, directions, operating times, product offerings, and accepted forms of payment. Supports local and regional food systems, as well as development of local economies.
Main Customers:Â Consumers, Business, Community leaders
List of Disaster Counties
Farm Service Agency list of Counties with a specific disaster designation.
Main Customers:Â Producers, Farmers, Government, Media
Office Information Profile System
USDA Service Centers are designed to be a single location where customers can access the services provided by the Farm Service Agency, Natural Resources Conservation Service, and the Rural Development agencies. This tool provides the address of a USDA Service Center and other Agency offices serving your area along with information on how to contact them. Main Customers:Â Government, Business, Public
SNAP Retailer Locator information
Find a retailer welcomes Supplemental Nutrition Assistance Program (SNAP) Electronic Benefits Transaction (EBT) customers. Currently available as an interactive map with geocoded information available by download as a .CSV file. Locations updated monthly
Main Customers:Â Public
Meat, Poultry and Egg Product Inspection Directory
The Meat, Poultry and Egg Product Inspection Directory is a listing of establishments that produce meat, poultry, and/or egg products regulated by USDAâs Food Safety and Inspection Service (FSIS) pursuant to the Federal Meat Inspection Act, the Poultry Products Inspection Act, and the Egg Products Inspection Act. Directory is updated monthly.
Main Customers:Â Business, Industry, Government, Consumers
The USDA Newsroom holds official news releases, statements, transcripts and speeches released by the Department.
Main Customers:Â Government, Public, Media
USDA Blog The Blog features content from all USDA agencies and features the latest news, events and features. The Blog also provides the public an opportunity to ask questions or share their thoughts about the latest issues.
Main Customers:Â Government, Public, Media
As the Economic Research Serviceâs (ERS) flagship publication, Amber Waves provides a window into ERS research through highly readable articles geared to educated but non-specialized audiences. Amber Waves covers important issues on U.S. markets & trade, diet & health, resources & environment, rural issues in easy to digest articles, with comprehensive links to ERS website for more details. Main Customers:Â Government, Media, Researchers, Education Institutions
Office Information Profile System
USDA Service Centers are designed to be a single location where customers can access the services provided by the Farm Service Agency, Natural Resources Conservation Service, and the Rural Development agencies. This tool provides the address of a USDA Service Center and other Agency offices serving your area along with information on how to contact them.
Main Customers:Â Government, Business, Public
There are a lot of restaurant-recommendation services — by our count 29 — that want to help you find the right restaurant or dish. They generally break down by those that display user reviews and those that offer personalized recommendations.
Ness launched about a year ago with a “personal search engine” serving up the best restaurants for you. More that just a way to aggregate user reviews, the application takes a data-driven recommendation approach combining signals from user’s social networks with their own preferences to make personalized recommendations about where to eat. Yesterday, it announced a $15 million round of Series B funding to take its core technology and apply it to other verticals like events, movies or shopping.
Personalized mobile commerce, bringing personal recommendations and deals to mobile devices, has a rosy future and may represent a growing gap between user-review sites like Yelp and services like Ness. The funding round was led by SingTel Innov8 with participation from American Express Ventures.
“American Express is impressed by Ness’ vision to create great products that better serve consumers,” said Harshul Sanghi, Managing Partner, American Express Ventures. “As Ness evolves and the commerce landscape changes, we believe their preference-based search engine has the potential to deliver differentiated value to merchants and consumers alike.”
Ness is only available on iOS but has plans to expand to Android devices. The latest update incorporates restaurant reservations (via OpenTable) and menus (via SinglePlatform).
When it comes to the different methods of restaurant recommendations, it will be interesting to see if one star rises while the other fades (and if so, how quickly).
South By South West, the largest digital-interactive conference in the United States,Â offers a unique opportunity to connect with and learn from a diverse group of people using digital technology to make the world a better place.
Here at Food+Tech Connect, we often write about the innovative companies and people using information and technology Â to disrupt, democratize and bring transparency to the food industry. If you enjoy our insights and analysis, we think you will like some of the SXSW panel proposals we have listed below.Â You can vote for the panels of your choice by registering here and then clicking the thumbs up on the top left corner of each panel description page.
Please be sure to check out our panels: “Hacking Food and Health Research” and “Food, Tech & Music: The Future.”
Let us know what you think and comment away if you find other proposals that we should highlight!
Hacking Food and Health Research- Danielle Gould, Food+Tech Connect
Food and health startups developing apps to help consumers make more informed food choices are capturing real-time data about food preferences and consumption habits on a scale never before possible. Can this data be trusted? What can it really tell us? Hear from pioneers in this emerging space about real life examples of how their crowdsourced data is being used.
Food, Tech & Music: The Future- Destin Joy Layne, GRACE Communications Foundation
This panel seeks to energize the food and music convergence as we discuss the latest models for growing movements, mapping information and leveraging technology.
The Future of Food: From App to Fork - Michael Fedyna, Engrocer
Learn what lies in the future of food connectivity as we open the floor to explore new opportunities, challenges, and pitfalls that affect all of us in the evolution of food apps.
DIY App Publishing and the SXSW Community Cookbook- Babette Pepaj, BakeSpace.com
What better way to understand the latest self-publishing technology than by using it to literally create a crowdsourced book at the conclusion of the presentation? Once published, the SXSW Community Cookbook will be available for anyone to download free via the Web or iPad.
Food Startups and Financing the Future of Food-Â Matt Wise,Â Founderly
The panel will explore the intersection of food, tech, and fundraising. We will discuss the kinds of startups being funded, deal mechanics, navigating pitfalls, and the implications of crowdfunding on food startups and innovation.
Food Fight: Web Tech as Battleground for the Local- Susan Leibrock, Sustainable Food Center
What tools and tactics are local farmers and food producers using to spread their messages into an already-saturated marketplace dominated by an agriculture reliant on big-budget corporate communications campaigns?
The Grocery Store: Going âTechâ Fresh To Survive-Â Daniel Lantowski,Â Maloney & Fox
In this session, learn about whatâs new and whatâs next to help make going to the grocery store exciting again, and place it ahead of the innovation curve, rather than behind it.
What do Sensors Mean for News, Society & Science?Â -Â Javaun Moradi,Â NPR
From governments to universities to utility companies to the media, organizations are tapping into the wealth of data generated by mobile phones and sensor networks. They’re using that data to understand and sometimes solve scientific and civic problems, creating beneficial feedback loops between policy and outcomes.
Sweet Memes Are Made of This: How to Go Viral-Â Michael Selvidge,Â Twilio
From tactical tagging to tweeting at influencers, the panel will discuss the âhow,â âwhen,â and âwhoâ of strategic creation, so companies can target the best audience that will want and need to share their content.
Prizes and Challenges: Good for Gov, Good for Biz-Â Kate Ahern,Â The Case Foundation
Leading prize evangelists from the White House, the Case Foundation, and Luminary Labs will describe the innovative ways that they have crowdsourced innovation using prize inventives, and will invite a lively discussion on ways that audience members have seen prizes and challenges work in their industries.
The Rise of the Impact Entrepreneur-Â Halle Tecco, Rock Health
Meet the founders of three “impact accelerators”, learn about the technologies and companies poised to tackle our 21st century problems, and witness the growing movement of “tech for good”.
99 Problems But A Niche Aint One-Â Erin Edgerton, Danya
Participants in this session will discuss the best ways to reach targeted user groups (such as local, sustainable, and urban farmers, or members of the media) and provide examples from government programs that are doing this successfully.
The New Health Paradigm: Radical Transparency-Â Carissa Caramanis O’Brien,Â Aetna
Here why Aetna Chairman, CEO and President Mark T. Bertolini, and Tim O’Reilly, the founder and CEO of O’Reilly Media, Inc., passionately believe the intelligent sharing of data among patients, providers, payers and communities is critical to solving the nationâs healthcare quality and cost challenges.
Some additional panels that might be relevant to our readers:
Changing diets and consumer preferences are forcing restaurants and food brands to find ways to share nutrition and ingredient information with their customers. Also, restaurant chains with 20 or more locations are now required to Â provide detailed nutrition information on their menus, thanks to a provision upheld inÂ ”Obamacare.”Â But many don’t have Â have central databases to easily organize and publish this data.
Similarly, startups building recipe, grocery, and restaurant nutrition and discovery tools face major challenges with obtaining accurate consumer packaged good (CPG) data and nutrition data. These startups are forced to clean and restructure data on 7,500 basic items from the USDA’s National Nutrient Database or to license expensive - $100,000+ annually- and often outdated, CPG databases from companies like ESHA, Nutribase, Gladson and FoodFacts.
Nutritionix is trying to tackle this problem by building a suite of tools that allow restaurants and food brands to organize and publish their nutritional data, thereby making it easier for consumers to interact with it. Through Nutritionix’s widgets - interactive menus, allergen menus, nutrition calculators and nutrition transparency ratings- customers can get accurate nutrition and allergen information for menu items. The company is currently working with 24 restaurants, including McAlister’s Deli, ChickPea and zpizza. Â They also recently announced they will be launching a Nutrition API pilot program in late October to give developers free access to their nutrition data, which will extend the reach of any participating company’s data. The API will include 40,000 menu items from 350 restaurants, 10,000 items from the USDA SR24 database and 10,000+ CPG items from over 1,500 food manufacturers. Currently, the company already has over 150 developer on their API waiting list.
I got a chance to chat with co-founder Matt Silverman about Nutritionix’s business model and their API.
Danielle Gould: Â What problems are you solving?
Matt Silverman: For consumers: Solving the problem of how to find accurate nutrition and allergen information for foods you eat while on the go.
For restaurants and food brands: Solving the problem of how to allow your customers to interact with your nutrition data, and ensure that anyone can eat at your location regardless of their diet preference or allergies, as long as they are able to access and interact with the nutrition data.
For developers: Allowing them to focus on the interface and execution of their diet and nutrition apps, without having to worry about creating their own nutrition database.
DG: Â On your website, you announced a lofty goal of enlisting 1,000 restaurants by the end of 2012. How close are you to meeting that goal?
MS: Â We currently list nutrition or allergen data for at least 350 restaurants. Shortly after that announcement, we also started listing data for food manufacturers, and we already have 1,500 food manufacturers listed as of today. Restaurants are a lot slower than we anticipated to add, and many of them are scrambling to still analyze their nutrition information before the FDA rules set in by 2013.
DG: Â What is your value proposition for restaurants and food manufacturers?
MS: Â We provide two essential tools for restaurants and manufacturers:
1. An enterprise-class web-based platform to internally organize all of your nutrition data, including recipe components. This is crucial for any food business to adequately organize complex nutrition data.
2. We provide incredibly consumer-friendly widgets that food brands use on their website to turn nutrition into a marketing tool. By making their nutrition data interactive with our widgets, they actually drive more traffic to their website, and allow customers to figure out how to eat at their locations regardless of their dietary restrictions.
DG: Â Do you verify the accuracy of data? If so, how?
MS: Â Currently, each brand is responsible for the accuracy of their data before submitting it into our system. In most cases, it is actually a registered dietitian who represents the brand and submits the data to us. We are working on a number of few algorithms that will scan our datasets to look for pattern mismatches in nutrition data, which will ultimately help us eliminate any data entry errors in the future.
DG: Â You recently announced that you will be releasing an Nutrition API pilot program in late October. What data will developers be able to access through the API?
MS: In Phase 1 of our API release, developers will be able to access:
DG: Â What is your business model?
MS: Â We charge a subscription fee to food brands to use our interactive tools, and to be listed in our directory. This way we are able to give free access to developers, which encourages great growth in nutrition app development, which greatly increases exposure for any of our participating brands by linking them into millions of health-conscious consumers.
DG: What are the most interesting things youâve learned, or greatest challenges, youâve faced building Nutritionix?
MS: Â One of the most interesting things we’ve learned is just how much consumers appreciate it when companies do not treat nutrition as an after thought, but instead make it truly usable to customers. We get a lot of people writing in to us thanking us for making it possible for them to actually sort through a menu to find Gluten Free items, or to find a meal that is low in sodium at their favorite restaurant.
One of the greatest challenges of our business is selling such a new product to restaurants and food manufacturers, as most of them do not even know that they need it until we demo it for them.
At the July Food+Tech Meetup, the theme was distribution — more efficiently getting food from farm to fork. Presenters from three startups outlined how they are tackling the issue, their business model and their vision for a new food system, including Matt Hatoun of Wholeshare, Jennifer Goggin of FarmersWeb and Arnie Katz of Relay Foods. Also presenting was George Fatakhov on behalf of Appetude, a dish discovery startup.
Some of the new distribution efforts represent a different take on CSAs. For instance, Wholeshare brings together individual shoppers and leverages their group-buying power to order directly from the source. For instance, say a local farm is selling a 10 lb block of cheddar but you only want 1 lb. Wholeshare allows you to split that block of cheese with others in the group and each take a share.
It is currently invite-only but looking for new buyers to take part in the beta and producers to feature on the site.
July Food+Tech Meetup with Wholeshare from Food Tech Connect on Vimeo.
Relay Foods is another startup that connects consumers directly with local farms and producers but, born in Virginia, it focuses more on cities between the coasts. And while its model also relies on drop off/pickup locations, it tries to locate these where large groups gather, like at a church or office park. The site is up and running and while the service is currently only available to Charlottesville, VA residents, the company plans to expand in the near future.
July Food+Tech Meetup with Relay Foods from Food Tech Connect on Vimeo.
FarmersWeb is also tackling the issue of getting food direct from the farm, butÂ from the wholesale side. It allows local farms and producers to enter all of their inventory and wholesale buyer’s to shop and order from them. The online platform is up and running and accepting new members.
July Food+Tech Meetup with FarmersWeb from Food Tech Connect on Vimeo.
July Food+Tech Meetup with Wholeshare from Food Tech Connect on Vimeo.
Taking on a slightly different problem is appetude. Not distribution but more in the user review category, the startup is helping eaters find delicious dishes and restaurants. Just looking at the website will make you hungry. It is in beta but accepting new users.
July Food+Tech Meetup with Appetude from Food Tech Connect on Vimeo.