Traceability and food safety technology are a relatively small but growing part of the food and agriculture technology ecosystem.
Technologies working on improving food safety and traceability range in their application but mostly focus on either tracking the journey of food from farm-to-table or on detecting pathogens and allergens before they reach the consumer.
During the first half of 2016, AgFunder recorded just over $70 million of investment in startups in the space across 13 deals. That’s just 4% of the total $1.75 billion that was raised during the half.
It was, however, a 476% increase on the $12 million that was raised during the same period in 2015, reflecting the increasing diversity of innovation targeting this small part of agtech sector.
Traceability and food safety technology funding
This week, two companies brought the yearly level up. Sample6, a pathogen detection and analysis system, raised $12.7 million in Series C funding and Safe Traces, a biological food marker technology, raised $1.5 million in seed funding.
Sample6’s round was led by Acre Venture Partners, the new food and agtech fund that counts Campbell’s Soup as its only LP. Valley Oak Investments, a San Francisco venture firm focused on the food, agriculture, and health & wellness industries was another new investor in the round. They were joined by existing investors Canaan Partners and Cultivian Sandbox.
Sample6’s technology targets specific bioparticles and lights them up without enriching the sample as other testing methods do. The detection system involves an illumination box, which clients purchase for $5k, and disposable bags that contain special enzymes which can bind to the certain bacteria for detection. It also includes a software program for users to analyze any outbreaks and iterate their process to avoid future food safety concerns.
SafeTraces has created a biological marker from DNA sequences drawn from seaweed and plankton. Users subscribe to the program, gaining access to SafeTrace’s database and software, and creating their own biological barcode with set information attached to it such as origin and date. SafeTraces then sends them molecules in a device like an inkjet printer, which takes refills. And users can apply the “SafeTracers” through their existing wash systems.
The markers can be read with specific barcode readers, providing a traceability tool, but also a food safety tool as they will be able to detect some pathogens, according to CEO Anthony Zografos.
SafeTraces is currently undergoing pilot projects with a range of different food and farming companies. Sample6’s current client base is mostly food processors, and it has 40 customers including Unilever, according to an article in Forbes.
Who’s the customer?
But it’s not always clear for these companies who their target market is and adoption is an ongoing challenge across the traceability and food safety technology space.
Who does the onus of ensuring food safety fall on? Is it the farmer, the grocer, the food company, or the retailer?
“The problem with many post-harvest technologies is that there is not a natural constituency for the technology,” argues Tom Schulz, founder and CEO of Fresh Surety.
Schulz’s startup manufacturers tiny sensors that travel with produce from the farm to the supermarket, monitoring the conditions in which it travels by measuring the metabolites related to the condition of fruit.
There are other similar tracking technologies that measure other factors like temperature and moisture levels to give retailers intel about the potential for that produce to spoil en route.
“For farmers, many of these technologies are forcing him to be more careful about what he ships, and if we’re successful, it will mean him shipping less, and potentially making less money,” he said.
Distributors don’t want to be responsible for the quality and safety of the produce they’re transporting, and grocers are still able to make money even if spoiled food goes to waste because it’s built into their pricing, he added.
Place on top of that the costs involved in adopting the technology, and it can be hard to find a client that understands the value, Schulz continued.
It’s about behavior change
SafeTraces’ Zografos believes it’s more about changing behaviors in the food chain.
“The industry is very reluctant to implement these technologies, and I understand why,” he said. “Employing these measures deviates significantly from what they do now, which they think works well, and they believe large deviations create risk.”
For this reason, he is focusing on integrating SafeTraces technology into the existing processes of his clients, such as into the wash systems of fruit and vegetable growers and processors.
Encouraging other parties in the food chain to purchase and use barcode readers is another challenge, however, and a similar challenge faced by Ancera, the salmonella testing kit company. Ancera raised $8.9 million in Series A funding earlier this year for its technology platform which involves a hardware device called the MagDrive.
Schulz targets retailers or food brands and currently has three high-profile clients testing his technology: Driscoll’s, Whole Foods, and AmazonFresh.
He argues that FreshSurety provides clear economic benefit to retailers because it can tell them, before they open a pallet of fruit and vegetables, what percentage of the produce will be spoiled.
“They can then treat them differently and potentially reject the whole pallet, forcing suppliers to improve the quality of the produce they send them,” he said. For food brands like Driscolls, the technology is about quality control and ensuring their product is handled properly from farm to shelf, he added.
Here are 6 more startups focused on traceability and food safety technology:
Verigo is a cold chain monitoring technology selling food monitoring hardware devices, a cloud-based platform and a mobile app to customers across the value chain.
Nima (previously 6 Sensor Labs) is a portable gluten sensor manufacturer for celiac and other gluten-intolerant consumers.
AstRoNA Biotechnologies is an Indie Bio graduate that is building a food detection system that can be deployed on-site at every phase of food production from field to table and produce results within an hour.
Controlant is an Icelandish cold chain monitoring technology that’s manufacturing devices to travel with food from manufacturing, through transportation, storage and sale.
Helium is a smart sensing technology company that can monitor the temperature of refrigerators, freezers, display cases, and other temperature-sensitive assets.
Real Time Assay is developing a series of products to test for pathogens in food throughout the value chain. Currently, it’s developed a lateral flow test kit and a smartphone app to give users alerts and analytics, as well as help with compliance documentation.
There’s also a growing ecosystem of traceability technologies dedicated to the seafood industry which you can read more about here.
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