Food Logistics March 2015

Food Logistics

TRACEABILITY TOOLKIT: Software, Automation, Data Standardization Pg. 22 ®

Issue No. 164 March 2015

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WEB EXCLUSIVES

Global Supply Chain Solutions for the Food and Beverage Industry

CHOOSING A 3PL: Shippers' Scorecards Expand pg 28

‘Endless Aisle Strategy’: How Grocers Can Win In An Omnichannel Market

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Alibaba Opens California Data Center, Challenging Amazon In The U.S. Grocery Manufacturers Association Offers FSMA Readiness Training Webinars

WWW.FOODLOGISTICS.COM

+

SECTOR REPORTS

• The Flip Side Of LMS Objections • Efficient Fleets: Do You Need Telematics?

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INTRODUCING THE NEW FORD TRANSIT

THE MOST VEHICLE CONFIGURATIONS IIN N IITS T S CLASS. C L A S S*.

OPEN FOR 6'5" TALL BUSINESS OVER

**

A WIDE VARIETY

With an available cargo ceiling taller than some basketball players, the Transit van has loads of room for boxes, tools 6'5" and you. That comes in handy if you want a mobile workshop that lets you stand up straight. And the advantages just keep piling up.

OF DIMENSIONS The Transit van and wagon are available in 2 different wheelbases, 3 different lengths and 3 different heights. That makes it easy to choose one that will fit you and your business exactly. And if that’s not enough, it’s also available as a chassis cab and cutaway.

THE NEW

2015 TRANSIT •

The Transit van is available with the best-in-class maximum rear cargo door opening height. The doors open a full 237° and the floor is as low as 28 inches.** It’s all about making loading and unloading easier. No matter what your business is.

THE NUMBERS DON’T LIE

•

* sed *B *Ba s on bodyy typ y e, e bod bodyy length, l , an and whee e lba lb se s and roof hei eiight ht. Clas asss is Full ull-Si -Size ze Van Vans. s. **W When h pr p ope o rly eq equip uipped p . ped † Claass is Fulll-S -Size -S ize ze Vaans, wh when en proope perly per lyy equ eq ipp ip ed. Ex Excluudes di d eseel comp comp ompeti etitititiv tivee mode tiv dels. ls. s s.

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The 2015 Transit can offer a best-in-class gas-powered maximum CARGO CAPACITY OF 487.3 CUBIC FEET.â€

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ON THE MENU MARC H 2015 • ISSU E N O . 164

COVER STORY

2015 Food 14 The Logistics Champions

These “rock stars” of the supply chain are driving their organizations and our industry forward.

By Food Logistics Editors

FEATURE

Toolkit: 22 Traceability Software, Automation, Data Standardization

How technology allows shippers to stay ahead of stricter safety rules.

By Elliot Maras

3PLS

14

28 Choosing A 3PL:

Shippers’ Scorecards Expand

Needs vary, but all shippers place a premium on competence, flexibility and communication.

By Elliot Maras

SECTOR REPORTS

34 WAREHOUSING The Flip Side Of LMS Objections

Lessons learned from multiple implementations.

By David Frentzel

22

& 36 SOFTWARE TECHNOLOGY

Efficient Fleets: Do You Need Telematics?

Telematics experts weigh in on the ELD mandate and the role telematics will play in the push for real-time connectivity for f&b fleets.

By Eric Sacharski

36

COLUMNS

STARTERS 6 FOR Defining A Champion

True champions march to their own beat, as our “Food Logistics Champions: Rock Stars of the Supply Chain” reveals.

By Lara L. Sowinski

12 COOL INSIGHTS

Globalization Keeps Raising The Bar On Safety In Our Supply Chain The ongoing expansion of the global food chain is driving more advanced tracking and tracing solutions to maintain safety and regulatory compliance.

By Elliot Maras

40 FOOD (AND MORE)

FOR THOUGHT Millennials Seek Local Foods That Offer A Sense Of Place The “eat local” trend gains traction with restaurants, grocers and Generation Y.

By Tricia Smith

DEPARTMENTS

8 Supply Scan 10 Food on the Move

Published and copyrighted 2015 by AC Business Media Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage or retrieval system, without written permission from the publisher.

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• FOOD LOGISTICS

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FOR STARTERS FROM THE EDITOR’S DESK

WWW.FOODLOGISTICS.COM

Defining A Champion

W

e all have an opinion of what defines a chamSOWINSKI pion. The same applies for our inaugural “Food Logistics Champions: Rock Stars of the Supply Chain” award, which launches in this issue. The obvious attributes of a champion in the business realm are industry experience, a willingness to go the extra mile, working up through the corporate ladder and so on.

And while these are commendable traits, not everyone approaches challenges the same way or pursues a career in a traditional fashion.

With this new award, our intention was to dig a little deeper, cast a wider net, and introduce our audience to a group of champions who posses skill sets and achievements— conventional and less common—that are making their mark on the global food supply chain.

The 2015 group of champions reflects this objective quite well. It’s a complex and seemingly incongruent mix of people who made the list, which in fact mirrors the diversity and dynamic nature of the global food supply chain itself.

I personally knew two of the champions on our list—Steven LaVoie and Jock Menzies—and while they are no longer with us, their impact was significant.

Steven and I made a connection early on because we both shared an interest in wine.

He was also from California and attended the University of California at Berkeley and the Yale School of Management. Steven was one of the few industry executives who could use the word “existential” when talking about supply chains and get away with it. I admired his intellect and enthusiasm. We were both looking forward to my next visit to Chicago.

Steven was going to pull out the “good stuff’ from his cellar and do some showing off. I’ll keep the wine glass handy until we meet again.

Jock was a fixture at so many industry events over the years; always making the rounds to say “hi” to everyone (and it really did seem like he knew everyone). He was a master at getting people to understand how vital it is for the logistics industry to involve itself in disaster relief, particularly through ALAN (American Logistics Aid Network). Jock’s dedication and determination was incredible and helped us all have a deeper appreciation for the work we do and how logistics plays such an important role in our world. With Kathy Fulton at the helm now, Jock’s vision is sure to continue growing.

These two gentlemen—Steven and Jock—were giving and global-minded people first, and phenomenal at their jobs second. In other words, true champions.

Enjoy the read.

Published by AC Business Media Inc.

201 N. Main Street, Fort Atkinson, WI 53538 (800) 538-5544 • www.ACBusinessMedia.com PRINT AND DIGITAL STAFF Publisher Jolene Gulley Editor-in-Chief Lara L. Sowinski lsowinski@ACBusinessMedia.com Managing Editor Elliot Maras emaras@ACBusinessMedia.com Assistant Editor Eric Sacharski esacharski@ACBusinessMedia.com Ad Production Manager Cindy Rusch crusch@ACBusinessMedia.com Art Director Kirsten Crock Senior Audience Development Manager Wendy Chady Audience Development Manager Tammy Steller ADVERTISING SALES (800) 538-5544 East Coast Sales Manager Judy Welp (480) 821-1093; Fax: (480) 240-4897 jwelp@ACBusinessMedia.com Midwest/West Sales Manager Carrie Konopacki (920) 542-1236; Fax: (920) 542-1133 201 N. Main Street, Fort Atkinson, WI 53538 ckonopacki@ACBusinessMedia.com National Automotive Sales Tom Lutzke (630) 484-8040; tlutzke@ACBusinessMedia.com EDITORIAL ADVISORY BOARD Smitha G. Stansbury, partner, FDA & Life Sciences Practice, King & Spalding Raymond J. Segat, director, cargo & business development, Vancouver Airport Authority Dr. Barbara Rasco, professor and interim director, School of Food Science, Washington State University CIRCULATION & SUBSCRIPTIONS PO Box 3605, Northbrook, IL 60065-3605 (877) 201-3915, Fax: (800) 543-5055 Email: circ.FoodLogistics@omeda.com LIST RENTAL Elizabeth Jackson, Merit Direct LLC (847) 492-1350, ext. 18, Fax: (847) 492-0085 Email: ejackson@meritdirect.com

LARA L. SOWINSKI, EDITOR-IN-CHIEF LSOWINSKI@FOODLOGISTICS.COM

ADVERTISER INDEX ADVERTISER......................... PAGE

ADVERTISER......................... PAGE

ADVERTISER......................... PAGE

Anaren................................................ 16 C.H. Robinson...................................... 5 CaseStack.......................................... 21 Direct Energy Business...................... 19 DSC Logistics..................................... 17 Food Logistics 2015 Educational Webinar Series .......................................... 41 Food Logistics Top Green Provider.... 32 Ford Motor Co................................... 2-3

Global Cold Chain Alliance................. 33 IFS - International Featured Standards............................ 13 Interlake Mecalux................................. 9 Isuzu Truck......................................... 11 Johnson Refrigerated Truck Bodies... 42 Old Dominion Freight Line............. 24-25 OmniVue............................................. 31 PLM Trailer Leasing............................ 20

Port of Long Beach............................ 23 Porteo Group...................................... 18 Rubbermaid Commercial Products...... 7 Ryan Companies................................ 27 United Fresh Produce Assoc.............. 35 US Cold Storage................................ 29 Utility Trailers...................................... 37 Warehouse Education & Research Council (WERC).............. 39

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REPRINT SERVICES Nick Iademarco, Wright’s Media (877) 652-5295, ext. 102 niademarco@wrightsmedia.com AC BUSINESS MEDIA INC. Chairman Anil Narang President and CEO Carl Wistreich Executive Vice President Kris Flitcroft CFO JoAnn Breuchel VP Content Greg Udelhofen VP Marketing Debbie George Digital Operations Manager Nick Raether Digital Sales Manager Monique Terrazas

Published and copyrighted 2015 by AC Business Media Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage or retrieval system, without written permission from the publisher.

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SUPPLY SCAN

D A I LY U P D AT E S AT WWW.FOODLOGISTICS.COM

NE WS FROM ACROSS THE F O O D SU PPLY C H AIN

GAO: FDA Not Meeting FSMA Foreign Inspections Mandate The Food and Drug Administration (FDA) is not meeting the Food Safety Modernization Act (FSMA) mandate to inspect foreign food facilities, according to a U.S. Government Accountability Office (GAO) report. The report was sent to a Congressional foreign affairs subcommittee.

Under FSMA, the FDA was to inspect at least 600 foreign food facilities in 2011 and, for each of the next five years, inspect at least twice the number inspected during the previous year. The GAO report presented numbers showing the FDA is not keeping pace with the FSMA mandate.

and the FDA both having jurisdiction over enforcing food safety.

Obama Calls For Single Food Safety Agency The President’s fiscal year 2016 budget proposal includes the creation of a single food safety agency, according to the Global Cold Chain Alliance. Recommendations for a single food safety agency have been made numerous times over the last 20 years, but none has been successful. Single agency proponents cite the inefficiencies and confusion caused by having the Department of Agriculture’s Food Safety Inspection Service

FDA INSPECTIONS OF FOREIGN FOOD FACILITIES COMPARED WITH FSMA MANDATE Number of inpections of foreign food facilities 3,000 Food and Drug Administration (FDA) actual

2,000

FDA planned

Sources: GAO analysis of FDA (data) and FSMA | GAE-15-183

2011

The U.S. Food and Drug Administration, along with federal and state public health laboratories, has built a publicly-accessible genomic database to compare bacterial pathogens that cause foodborne diseases and trace them back to the sources faster and more precisely. The GenomeTrakr database leverages a laboratory process called whole-genome sequencing that identifies the complete DNA sequence of an organism’s genetic material at a single time.

The U.S. government filed a lawsuit to block Sysco Corp.’s proposed takeover of rival food

FSMA mandate (estimate)

0 Fiscal year

Database To Trace Foodborne Diseases

Feds Sue To Halt Sysco/US Foods Merger

FDA Food Safety Modernization Act (FSMA) mandate

1,000

distributor US Foods Inc. The proposed merger raised concern that allowing the two to combine would reduce competition and give them too much pricing power.

2012

2013

2014

2015

2016

PepsiCo And Coca-Cola Hellenic Bottling Close Russian Plants PepsiCo Inc. and Coca-Cola Hellenic Bottling Co. AG are closing one plant each in Russia, citing a plunge in the value of the Russian ruble and an unfavorable economic situation. The two are the latest food and drink companies to cut production in Russia as the country slides into recession. In January, Danish brewer Carlsberg A/S said it would close two plants in Russia, and Danone Russia said it would consider closing some of its dairy plants should the economic situation worsen.

U.S. BEER IMPORTS

Countries of Origin for U.S. Beer Imports (2014)

5% 8% 19%

U.S. Beer Imports

$5 $4

59%

•Mexico •Netherland •Belgium •Canada

Billions

3% 4%

2%

The U.S. imported more beer than ever in 2014. Import values reached over $4.1 billion. Most people don’t know that Mexico is actually the top supplier for imported brews and provides almost half of U.S. beer imports. The Netherlands also supplies another 19 percent, followed by Belgium, and our northern neighbor, Canada. And here’s a St. Patrick’s Day surprise: Ireland makes up for only 5 percent of imported malt beer.

$3 $2 $1 2007

•Ireland •United Kingdom •All Others

2008

2009

2010

2011

2012

2013

2014

All data provided by Zepol.

Visit zepol.com for a Free Trial

Source: Zepol, www.zepol.com

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• FOOD LOGISTICS

www.foodlogistics.com

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Pallet Flow

Push Back

Wide Span

Selective Rack

Cantilever

Warehouse Racking

SolutionS 8 7 7. 6 3 2 . 2 5 8 9

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www.interlakemecalux.com 3/17/15 9:51 AM

FOOD ON THE MOVE LOGISTICS TRENDS IN OUR INDUSTRY

The ‘Pig Idea’ Promotes Feeding Food Waste To U.K. Pigs The ‘Pig Idea’ movement in the U.K., started by food waste expert Tristram Stuart and the “Feeding the 5,000” team in partnership with chef Thomasina Miers, encourages the use of food waste to feed pigs. In addition to diverting legally permissible food waste, the campaign aims to overturn the European Union’s ban on feeding catering waste, or swill, to pigs.

Congressmen Promote Cargo Airships

China Cargo Train Travels To Spain; World’s Longest Railway Line

T

he first train to complete a jourThe Yixin’ou cargo line completed the trip ney on the world’s longest railway from China to Spain in four months.

Image courtesy of the TomoNews YouTube video. line, connecting Spain and China, has returned home. The 16,156mile, round trip on the new 82-container Yixin’ou cargo line through China, Kazakhstan, Belarus, Poland, Germany, France and Spain took four months. tives to encourage the development of these potentially revolutionary aircraft for military and civilian use. The news was announced by Aeroscraft Corp., a manufacturer of airships.

Congressmen Brad Sherman, D-Calif., and Tom Rooney, R-Fla., announced the creation of the Cargo Airship Caucus in the U.S. House of Representa-

Feds Lift Restrictions On Commercial Drones The Federal Aviation Administra-

tion has proposed rules for the commercial use of drones, lifting some restrictions but still barring activities like delivering packages and inspecting pipelines. The rules also require those operating drones to maintain a line of sight but could work with a secondary spotter for longer flights.

DAT SOLUTIONS’ MONTHLY FREIGHT REPORT

Port Recovery?

It’s In the Numbers

T

here’s no shortage of opinion about how long it’s going to take U.S. West Coast ports to return to normal operations. It’s easy to say, “It’ll take months.” But it’s possible to be more precise than that.

Trends in load-to-truck ratios in the Los Angeles area are revealing.

In October, the outbound load-totruck ratio peaked at about 6.5—that is, there were 6.5 loads available for every available truck in that market.

This number began to drop sharply in November as shippers diverted more cargo to the East Coast. By Feb. 21, the load-to-truck ratio in Los Angeles was just 0.3. Brutal.

(Charleston, S.C., by comparison, had a load-to-truck ratio of 6.6 on Feb. 24.

Norfolk was 5.2.)

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• FOOD LOGISTICS

Has the situation changed dramatically since Feb. 21?

Maybe not dramatically, but load-to-truck ratios do show immediate and steady progress.

On Feb. 24, within a week of the two sides settling on new contract terms, Los Angeles outbound lanes were running a load-to-truck ratio of 0.7. Ontario, Calif., was 0.4., while Oakland and Seattle “improved” to 0.7.

The amount of available spot freight increased day by day. On DAT load boards, Los Angeles volume sequentially measured 608 load posts on Feb. 24; 771 posts on Feb. 25; 976 on Feb. 26; and 1,616 on Feb. 27.

No doubt, it will take time for all of those 40-foot and 20-foot boxes to get

drayed to a warehouse, unloaded, and in many cases go through customs clearance before being trucked outbound.

Typically this is a 25- to 41-day cycle.

Few indicators reflect supply and demand in the marketplace like load-totruck ratios. Watch the numbers in late March and April. They should be again tilting in the favor of truckers.

www.foodlogistics.com

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Continuing maintenance program that promotes maximum vehicle uptime

Act now to take advantage of this low cost finance rate. Leasing programs also available to meet your budget needs

The #1 selling low cab forward truck in the United States since 1986 Visit your local Isuzu truck dealer to learn how your business can profit from the operation of a new Isuzu truck

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FOOD LOGISTICS

• JANUARY/FEBRUARY 2015

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COOL INSIGHTS

BY ELLIOT MARAS

Globalization Keeps Raising The Bar On Safety In Our Supply Chain

T

he globalization of the supply chain has made food accessible to more people than at any time in human history. No one sees this as anything but positive.

But as a result, the supply chain bears more responsibility for the safety of the world’s food supply. The cold chain in particular has expanded, with cold warehouse capacity proliferating worldwide.

The food industry takes safety very seriously and invests millions of dollars a year studying ways to improve food safety and work with government in this effort. Safe practices have improved over the years and companies that produce and transport food have introduced more comprehensive procedures, such as the FDA’s Hazard Analysis & Critical Control Points (HAACP).

But the globalization of the supply chain has created the need for still better controls.

Safety challenges continue Five people in Australia were recently sickened with Hepatitis A virus by frozen berries from China. The frozen berries were repackaged by a company in Australia and distributed to supermarkets. Health officials traced the contamination to the source in China.

Here in the U.S., a Chicago, Ill., a manufacturer recently had to recall approximately 8,856 pounds of chicken tamales because they were not produced under a fully-implemented HACCP plan.

The number of food recalls issued by the U.S. Department of Agriculture’s Food Safety and Inspection Service increased in 2014 over the prior year; 94 recalls were issued, compared to 75 in 2013. Stericycle Expert Solutions, a waste solutions provider that tracks recalls, reported that in Q4 of 2014, the number of FDA recalls actually declined, but the amount of 12

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affected units posted a whopping 142 percent gain over Q3. Clearly, there is work to be done on the food safety front.

Enter the FDA’s Food Safety Modernization Act (FSMA), the most significant overhaul of food regulations in seven decades. For the first time, FDA has a legislative mandate to require comprehensive, preventive-based controls across the food supply chain. The FSMA applies not only to food processors but all supply chain players. When FSMA becomes fully implemented, more players in the supply chain will be required to follow stricter rules.

One of the biggest changes under FSMA has to do with temperature control during food transport.

Temp control takes center stage Many shippers are hoping the FDA will be flexible in its temperature monitoring requirements, based on comments submitted to the FDA. Barbara Rasco, Ph.D., director of the School of Food Science at Washington State University and the University of Idaho, says temperature checking of food while in transit will definitely be stricter.

The supply chain doesn’t have to wait for the FSMA rules to be finalized to do its part to improve food safety.

One of the best things about the proposed regulations is that they do not mandate a “prescriptive” approach to meeting safety goals.

Jorge Hernandez, US Foods senior vice president for food safety and quality assurance, says companies can look to food safety and quality programs that make sense for their business and then get their business and programs certified by an independent company.

In researching this month’s article on traceability, Food Logistics uncovered numerous tools to improve temperature and quality monitoring.

Temperature monitors use a variety of methods for downloading data from the Internet, says Jeff Leshuk, vice president of strategic marketing and business development for MARAS food at Sensitech Inc., which makes temperature monitoring systems. These include USB interfaces that connect to a PC; short- and medium-range radio frequency technologies like Wi-Fi, Bluetooth and NFC; and long-range RF technologies like cellular and satellite communications.

Globe Tracker International recently released a “smart” refrigerated container. The system combines data from the refrigeration unit with data collected from wireless sensors to report condition and security variables from both inside and outside the container.

Cooltrax’s “Fresh inTransit” monitors Thermo King refrigeration units and tracks the temperature using wireless technology.

WAM Technologies LLC, a provider of M2M solutions for remote management of refrigerated, intermodal and other transportation assets, has released a GSM-based tracking system to monitor and control refrigerated, on-board containers.

The traceability article on page 22 in this issue of Food Logistics describes both temperature and humidity monitoring solutions from companies such as Carlisle Technologies, Infratab, LINKFRESH, Dynamic Systems Inc., Park City Group, AFS Technologies, Redline Solutions, Roambee, PakSense and Onset.

In order to balance state-of-the-art capabilities with economic realities, supply chain players have to develop long-range investment plans and partner with supply chain experts. But it’s an exciting time to be part of the global food supply chain. ◆ www.foodlogistics.com

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For several years, retailers and major food processors have been asking suppliers for certification to GFSI standards to ensure safety of the products they supply. And as many of those suppliers have complied with the request, there was another gap noticed – storage and transportation.

US Foods, in their quest to be an industry leader and prove to customers that they have the systems and processes in place to ensure storage and delivery of safe food, began implementing the IFS Logistics certification standard in their facilities.

In 2014, The Acheson Group, led by Dr. David Acheson, a strategic consulting firm for food and beverage companies and those providing technical support to the food industry, released a case study on the success of US Foods outlining their reasons for certification and their experience with FSMA compliance.

These results were significant.

But now, US Foods has gone a step further and commissioned the business department at the University of Michigan to study the business effects of certification pre- and post-certification.

The results of this study, one that was designed to understand the business value of certification, has yielded valuable results.

These results will be delivered at the Food Safety Summit in Baltimore, Maryland.

As the gap in storage, distribution, and transportation certification narrows, more and more companies providing these food services will look to global standards.

And understanding the value of the chosen standard is very important.

Global Food Safety and Quality Standards IFS Family of GFSI Benchmarked Certification Standards for the food supply chain

IFS Food

IFS Logistics

IFS PACsecure

IFS Broker

IFS safety and quality standards are global leading standards accepted anywhere GFSI is requested. »Certification to the IFS standards go above the low bar of regulatory compliance to improve product quality and safety and promote brand protection.« The Acheson Group – from a comparison of IFS standards to Existing and Proposed FSMA Regulations

Learn more by visiting our website and downloading our free standards. Join our group on LinkedIn at IFS Food.

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www.ifs-certification.com

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THE 2015 FOOD LOGISTICS CHAMPIONS These ‘rock stars of the supply chain’ are driving their organizations and our industry forward.

BY FOOD LOGISTICS EDITORS

O

ur inaugural “Food Logistics Champions: Rock Stars of the Supply Chain” award recognizes influential individuals in our industry whose achievements, hard work, vision and leadership have shaped and attained milestones in safety, efficiency, productivity and innovation throughout the global food supply chain. We asked readers to nominate those who exemplify these traits. The magazine’s editorial staff reviewed the nominations and selected Champions based on their qualifications for this award.

Tony Anthony, Operations Manager, Jake’s Finer Foods The founder of Jake’s Finer Foods, Kervin E. “Jake” Jacob, once said, “Dreams really can come true when your values include commitment, service, and a good day’s work.” Operations manager Tony Anthony embodies the foodservice company’s values, says the co-worker who nominated him as a Food Logistics Champion. “He is a team player who is always looking for ways to innovate our warehouse management systems. Tony leads by example and is a man you can trust. And, he always goes the extra mile to exceed our customers’ expectations,” he wrote.

Jason Averill, Executive Vice President, Avercast LLC Jason has been a proponent both in and out of the boardroom for pushing the technological boundaries of what supply chain software can do for the food industry, particularly through end-to-end supply chain collaboration. Many of his current projects involve working with customers to facilitate a common medium of Web-based communication that translates the entire supply chain planning process to all trading partners, i.e. from retail POS sales data, to the distributor, the manufacturer, raw materials vendors, and so on.

The food industry is unique in that forecasting and planning lives and dies by expiration dates.

Jason consistently helps his customers reduce

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their lead times in this time-sensitive industry, increasing inventory turns and improving overall customer service levels while allowing them to operate on less inventory (typical 25 percent or better reduction on inventory in first six months), and facilitate an overall lower supply chain cost that is shared by all trading partners.

Colby A. Beland, Vice President Sales & Marketing, CaseStack As CaseStack’s chief sales and marketing executive, Colby oversees sales and marketing by managing staff and maintaining corporate sales goals and projections for all logistics services. Over the past four years, he has developed strategies that have exceeded the organization’s revenue target by 30 percent.

Prior to joining CaseStack, Colby was director of strategic solutions at ABF Freight System, a national general commodities transportation provider. Previously, he was a corporate account executive for FedEx Services and a sales and project manager at International Packaged Systems. Colby has a bachelor’s degree in transportation and logistics from the University of Arkansas. He was awarded the “NWA Business Journal” Forty Under 40 award in 2013 and now serves as a board member on the University of Arkansas Supply Chain Management Research Center.

Joey Benadretti, President, SYSPRO USA In his current role, Joey con-

centrates on developing ERP software solutions that meet the stringent needs of food and beverage manufacturers and distributors.

These solutions include the traceability of all ingredients from supplier to consumer, the necessity of documentation to meet FDA requirements and rules, and the insight to realtime business statistics that enable management to make judicious and effective decision that speed inventory turns and avoid product perishability. Joey is highly regarded in ERP circles for his marketing capabilities, strategic initiatives and thought leadership.

Eric Blackburn, CPG Director, NeoGrid Identifying and solving critical supply chain challenges is one of Eric’s best attributes. During his tenure at the global information and research firm Nielsen, he developed one of the first Custom Trade Geographies for a $16 billion wholesaler. The project provided statistical sampling and modeling for projected retail sales. Eric’s advice for companies that are evaluating solutions providers is to explore the smaller, up-andcoming providers as much as large- to mid-sized ones. “In most cases, the size of the marketing and sales team is no indicator of solution capabilities,” he says.

Marko Cedilnik, Logistics Director, Mercator Group Headquartered in Slovenia, Mercator Group is a major player in the fastmoving consumer goods sector and one of the largest retailers in the Balkans with over 1,600 stores in seven countries throughout southeastern Europe. Marko is responsible for implementing Mercator’s new click and collect service, which is particularly important for many of Slovenia’s population living in rural areas.

Marko has more than 20 years of experience in the industry and excels in the areas of business process re-engineering and change management.

Ann Drake, CEO, DSC Logistics Ann’s 20-year leadership at DSC Logistics follows a business model based on collaborative www.foodlogistics.com

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partnerships, innovative thinking and high performance operations.

Under her guidance, DSC has become one of the leading supply chain management firms in the U.S. and one of the top woman-owned businesses in the Chicago area. Ann’s vision for future growth is centered around forging strong partnerships with new and existing customers, opening new logistics centers while continually improving operations, broadening the utilization of leading-edge technology and the application of that technology to customers’ strategic objectives, and further expansion of DSC’s professional services and consulting capabilities. According to Ann, “Now is an exciting, challenging time— the right time—for the supply chain industry.

The world is discovering the supply chain—and discovering the value of partnerships and collaboration.”

Don Durm, Director of Strategic Customer Solutions, PLM Trailer Leasing In order to translate knowledge into actionable advice for the company’s customers, Don developed the Food Trailer Needs Analysis (FTNA). The FTNA covers all aspects of the refrigerated trailer operations from loading to final delivery, and Don spends days riding with drivers to observe various conditions in the field, from how the trailer is working to maintaining product integrity and regulatory compliance.

He has completed over 1,000 studies, impacting the operations of over 500,000 refrigerated trailers and identifying over $135 million in cost savings. As a law enforcement investigator, Don learned that “you must live in someone’s world if you want to understand their world.

It is important for me to understand the world of the food distributor’s role within the supply chain and learn the impact of the trailer on all aspects of the business. That was the purpose of creating the FTNA.”

Elliot Grant, Founder & CTO, HarvestMark Elliot’s technology enabled HarvestMark to become the industry leader in fresh supply chain traceability and analytics. He also invented the Voice Pick Code technology, which was adopted by the Product Traceability Initiative, and now helps millions of cases of perishables flow smoothly through the supply chain. Elliot earned his Ph.D. in Engineering from Cambridge University, and currently holds 23 U.S. patents. “The irony of ‘big data’ is that its power is in making lots of little decisions that add up. No one says, ‘I wish I had tons more data’—what they want is help with the decisions they make every day,” he notes. www.foodlogistics.com

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Jeffrey R. Haushalter, Partner, Chicago Consulting Jeff has pioneered the development of the firm’s Optimal Packaging technology to optimize packaging decisions and minimize supply costs. This technology is applied in dozens of CPG and food supply chains and was a CSCMP Innovation Award finalist in 2008.

“Packaging is an overlooked strategic investment in an organization, not a cost element,” says Jeff. “Successful packaging decisions need to be made in the context of reducing total supply chain costs. Double-digit savings are a reality in today’s inflationary environment.”

Louise Hemstead, COO, CROPP Cooperative/ Organic Valley Louise is a native Wisconsinite and graduate of University of Wisconsin – Madison with a degree in agriculture. For the past 22 years, she has dedicated her efforts to developing and overseeing all of the operational aspects of CROPP Cooperative’s unique farm to table supply chain. Louise provided the mindset and know-how to grow the cooperative from a local $1 million organization based in two counties in western Wisconsin to a national cooperative boasting over $950 million in sales that supports farmers in over 30 states as well as Canada, New Zealand, Great Britain and Australia.

Don Hsieh, Director of Commercial and Industrial Marketing, Tyco Integrated Security Don is a commercial industrial business leader and sound advisor who anticipates the need for operational improvement and is a staunch advocate for proactive planning based on actionable business intelligence. Several years ago, Don created a methodology for ensuring successful food defense called the 4As—assess, access, alert and audit. Since then, it has been the cornerstone of Tyco Integrated Security’s food defense practice and helps the company monitor more than 5,000 facilities of its food and beverage clients to ensure their food supply chains are secure.

Michael D. Johnson, President & CEO, Elite Transit Solutions (ETS) After spending three years in a corporate position with a contracted logistics company, Michael quickly found out that he was in an industry eager for updates. Relying on his industry experience and supply chain management degree from Auburn University, he created one of the youngest, fastest-growing, solutions-based companies in North America—

Elite Transit Solutions (ETS). Michael has a passion for helping others reach their ultimate potential, in and out of the office. He personally mentors all new hires during their beginning months at ETS and pushes them to be the best version of themselves.

Neil Johnson, President & Founder, Highridge Provender LLC In mid-2014, Neil launched Highridge Provender (“HP”), which has since raised $400 million of capital to acquire food grade buildings in California’s infill industrial markets—a market Neil believes is underserved.

He is truly contributing to the growth of California’s food logistics network, targeting food warehouses, freezer/cooler buildings, food processing facilities, and/or conditioned warehouse buildings. HP’s portfolio currently consists of three properties totaling 360,000-square-feet and over $40 million of gross asset value. HP has several other properties in contract and expects to close on an additional $45 million of property before mid-year 2015. Prior to HP, Neil was an active investor and manager of Industrial, Office, R&D and Retail assets in major U.S. West Coast markets. During his career, he has completed approximately $4 billion in acquisitions and dispositions in nearly 200 transactions.

Charles G. Kiolbasa, Chairman & CEO, Layer Saver Layer Saver manufactures steel shipping frames that allow shippers to double- or triple-stack product in a truck trailer, rail car or ocean container without damaging the goods, thereby filling the trailer, car or container to capacity and reducing fuel costs and emissions. Charlie’s invention addresses the “squish problem” so often encountered in the food transportation sector, which results in damaged product and lost sales for both buyers and sellers. The company sources the steel used to manufacture the Layer Saver from Cleveland, Ohio.

Dan Labell, President, Westfalia Technologies, Inc. Under Dan’s leadership, Westfalia is transforming supply chains through the power of warehouse automation, with many clients within the food and beverage industry. He understands that customer satisfaction and trust are the key ingredients for success in this industry. Dan also knows that in order to deliver high-quality, fresh products, companies in the food and beverage industry must ensure that goods are moving through their warehouse or distribution center with maximum efficiency and traceability. To that end, Dan views Westfalia as a partner, not a vendor, in every project the company undertakes.

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Steven LaVoie, Founder and former CEO, ArrowStream As the story goes, Steven scratched out his idea for an innovative model of logistics collaboration on the back of a napkin in the late 1990s. The vision eventually became ArrowStream, the company he founded in 2000.

With a team of creative thinkers and real-world pragmatists who were willing to question the status quo, ArrowStream perfected a SaaS solution that helps companies in the food supply chain respond to their network more effectively and drive down costs. Its customer list includes companies such as Ben E. Keith, Jamba Juice, Firehouse Subs, US Foods, Church’s Chicken and many more.

Steven cared a lot about the people he worked with at ArrowStream. Last June, the company was selected as one of “Chicago’s Best and Brightest Companies to Work For” by the National Association for Business Resources (NABR).

The award recognizes companies who score high on such things as employee enrichment, compensation and benefits, employee education and development, recruitment, employee achievement and recognition, work-life balance, and community initiatives. It was the third year running that ArrowStream received the NABR’s award. Steven’s leagacy lives on at the company he created and through the people he mentored.

Tim Luberski, President, Hidden Villa Ranch Tim has grown Hidden Villa Ranch from a small egg-laying chicken ranch in California to one of the most innovative food companies in the U.S. In 1983 and 1984, Tim and Hidden Villa Ranch were recognized

by Inc. Magazine as one of the 500 fastest-growing, privately owned companies in the country. Today, the company is a dominant supplier and

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producer of commodity and cage-free eggs as well as one of the largest egg distributors in the U.S.

Michael Lyle, President & CEO, InfinityQS International, Inc. More than 25 years ago, Michael Lyle sat at a crude desk—a plank of plywood laid atop two file cabinets—in a mobile home writing code with the goal of creating software that would use industrial statistics and Statistical Process Control (SPC) methodology to automate quality data analysis. Today, the code that Michael once wrote fervently on a floppy disk is now ProFicient, InfinityQS’s enterprise quality hub, which is powered by a centralized SPC engine. The software is used by over 2,500 global organizations, including many in the food and beverage industry.

Andy Marsh, President & CEO, Plug Power When Andy joined Plug Power in 2008, the company was a leader in fuel cell technology development, but its target market had not yet been defined. Under his leadership, he guided the company to commercial readiness and success. Today, Plug Power provides over 90 percent of the hydrogen fuel cell power to fleet vehicles in distribution centers and manufacturing facilities—for food logistics organizations, beverage distributors, grocers, big box stores, auto manufacturers and many other companies. As Plug Power’s chief advocate, Andy promotes the company and its “can-do” attitude to customers, employees, suppliers, investors and government partners. He is also working hard to transform the fuel cell landscape on a macro- and micro-scale and participates in a number of industry, technology, clean air, fuel cell and hydrogen supporting organizations in an effort to stimulate a hydrogen economy and positively impact the world.

Paulo Mendes Jr., Director of Planning and Supply Chain Strategy, Coca-Cola With a strong educational background coupled with global operational experience in the supply chain areas of Planning, Procurement, Logistics, Manufacturing, Commercial and Customer Service, Paulo is an expert at global supply chains for one of the largest beverage companies in the world. He authored the book, Demand Driven Supply Chain: A Structured and Practical Roadmap to Increase Profitability, and co-authored Outsourcing Management for Supply Chain Operations and Logistics. He says, “Demand Driven Supply Chain is the critical capabilities for companies to succeed in the new VUCA (Volatile, Uncertain, Complex and Ambiguous) world.”

John “Jock” T. Menzies III, Founder, Chairman and President, American Logistics Aid Network (ALAN) Prior to co-founding ALAN in 2005, Jock served as chairman of the Terminal Corporation, where he worked for more than 40 years. After witnessing the breakdown of relief efforts in the wake of Hurricane Katrina, Jock organized an effort and engaged supply chain professionals and trade associations to come together to found ALAN. They knew that they could help victims of disaster if they worked together, and Jock was a natural fit to lead ALAN. Following Jock’s death in 2013, his brother remarked: “Hundreds of thousands of people have benefited by a much-improved supply chain network that supported FEMA, the American Red Cross and other nongovernment relief organizations and other agencies because of Jock Menzies.

His colleagues at ALAN characterized Jock as “a generous giver of his time, always willing to explore an idea or lend an ear to friends and family. He was a gentle spirit, a visionary and inspirational leader. Jock had a passion for bringing people together and was gifted at helping people understand their shared goals.” www.foodlogistics.com

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Saluting more champions of the food supply chain

Ann Drake, CEO, DSC Logistics Named to the inaugural list of Food Logistics Champions

At DSC Logistics, we have nearly 55 years of experience as the supply chain partner to some of the leading food companies in the world. From our customers who make delicious food… to their customers who buy it, we’re all part of the supply chain. We thank our customers and congratulate our teams throughout DSC’s nationwide network for their leadership and commitment.

People. Partnership. Performance. www.dsclogistics.com

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Therese E. Myers, CEO, Infratab The achievements in Terry’s career touch a variety of industries. She was one of the inventors of the auto teller for Citibank and led the way in developing the first multitasking desktop office PCs simultaneously with Wang office automation.

Terry’s contribution to the food chain are smart sensors and software, collectively known as Infratab Freshtime, that track and trace perishable goods using PCs or mobile devices—simply and securely—throughout the supply chain.

Drew Merrill, Vice President and General Manager, CHEP Pallecon Solutions In a market where manufacturers are often forced to purchase and manage their own containers, Drew saw an opportunity to remove these responsibilities and financial burdens from manufacturers and allow them to focus on their core business. This vision for an asset management business model was a game changer in the industry. Serving liquid and dry food customers for over 16 years, Drew’s business helped countless companies cut costs, eliminate waste and mitigate risk from their supply chains.

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Dr. Kakha Nadiradze, Food Safety Expert, TAIEX Dr. Nadiradze is a food safety expert at TAIEX—the Technical Assistance and Information Exchange instrument managed by the DirectorateGeneral Neighbourhood and Enlargement negotiations of the European Commission. TAIEX supports public administrations with regard to the approximation, application and enforcement of EU legislation as well as facilitating the sharing of EU best practices. He is an author of many analytical publications on the topics of organic farming, sustainable development and climate change. From 1996 to 2000, Dr. Nadiradze served as a leading specialist on the Agrarian Issues Committee at the Parliament of Georgia.

Lee Neal, Director of Transportation Services, M&W Distribution Lee joined M&W Distribution Services in 2014 and is responsible for all of M&W/Fastway Terminals’ transportation operations. His experience in the logistics industry spans more than 30 years, ranging from OTR trucking operations to managing 3PLs in the food industry. Lee’s talent is his ability to analyze an operation and determine a way to make it better. He believes that, “If you treat your employees like family, and make sure they enjoy coming to work every day, the returns on your investment in them are never ending.” In addition to his commitment to the industry and his co-workers, Lee serves on the board of the local youth association, helping kids learn and experience the great game of baseball.

Tom O’Boyle, Director of RFID, Barcoding, Inc. With the growing emphasis on food safety, RFID (radio frequency identification) technology is proving to be a valuable tool for tracking and tracing food throughout the supply chain. Tom has been at the forefront of RFID technology for more than 15 years, and today is leading the way in Hybrid RFID solutions, which combine the best fea-

www.foodlogistics.com

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tures of both passive and active RFID to create a unified visibility solution. This technology holds promise for food manufacturers and distributors, as it allows them to track both large, high-value assets (like machinery, equipment, and even sense temperatures), and smaller, highvolume assets (pallets, crates, etc.) within one single system.

Robert Phillips, Vice President, AM-C Warehouses Robert has led the company toward continuous success since he started as an operations manager in 1996. He developed and institutionalized SSOP and HACCP-compliant organizational processes from the ground up, which he then implemented into the company’s policies and procedures manual. Robert’s dedication to excellence earned the company the highest score of approval for quality assurance by AIB and FSNS—nationally-recognized, third-party auditors. Furthermore, his leadership in the industry allowed him to increase the customer base near 50 percent while reducing client turnover to 4 percent since becoming a co-owner in 2009.

DeAnne Rodgers, Corporate Logistics Manager, Rudolph Foods Company Rudolph Foods is an integral supply chain partner for numerous large grocery chains and other well-known brands. DeAnne and the logistics team are always looking for ways to trim logistics costs without compromising the “customer first” attitude that makes Rudolph Foods a market leader. Under DeAnne’s watch, Rudolph Foods has increased its least-cost carrier compliance to 98 percent—above the benchmark 97 percent compliance rate considered best-in-class in the food industry. She

also implemented strategic LTL carrier sourcing programs that kept the company’s LTL cost-perpound ratios at the same levels for four years, despite upward trending LTL costs over this same time period, according to the Producer Price Index.

Steve Sager, President & CEO, ExtenData In 2005, Steve and his team realized that the current market place lacked a proof of delivery (POD) and direct store delivery (DSD) application that

Heather Powell, Customer Focus Team Director, SafeSourcing, Inc. Heather’s procurement philosophy and practices reflect her company’s values, beginning with proactively supporting customers’ safety and environmental standards in the global supply chain. “We hold ourselves and our supply partners to the highest level of honesty and ethical business practices. We take this commitment beyond contractual terms—we expect personal integrity where our words and actions are always in step,” she says. Heather is graduating in May 2015 from Wittenberg University with a Bachelors of Arts in Organizational Leadership and plans to start on her Masters in the fall.

Derek Rickard, Distribution Systems Sales Manager, Cimcorp (formerly RMT Robotics) With more than 15 years of experience in the supply chain industry, Derek works closely with Cimcorp’s customers, including those in the food/beverage sector, to develop robotic order fulfillment systems that increase efficiency, accuracy and throughput for warehouses and distribution centers around the world. Derek has worked on some of the warehouse industry’s first fully-automated robotic picking systems in North America, with some of the largest ones exceeding 1 million cases per week picked by robots.

www.foodlogistics.com

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met the needs of the foodservice and distribution companies. After a failed implementation of a third-party software, he decided it was time for ExtenData to evolve. In one year, ExtenData launched MobileConductor. Steve’s vision for MobileConductor launched ExtenData into the most exciting chapter of the organization’s history. On a more personal note, Steve is a leader and friend to those who work with him. His interpersonal style creates a casual, yet focused environment around the office. Combined with Steve’s vision for the food supply chain, it’s a winning combination that generates collaboration and innovation throughout the organization.

Paul Sarrapy, Owner, President & CEO, Porteo Group For over 30 years, Paul’s vision and leadership helped position Porteo Group (Grupo Porteo) as one of the top 10 3PLs in Mexico, with global food/beverage companies such as Ferrero Rocher, Nestle and Pepsico among the company’s diversified customer base. His innovative supply chain approach and best practices support a streamlined logistics strategy that improves lead-time delivery, inventory control and reverse logistics for the global supply chain. Porteo Group was formed 20 years ago as a result of a merger of three companies located in Monterrey, Guadalajara and Merida. It is the only logistics company in Mexico offering nationwide operational coverage and nationwide consolidated IT solutions. Porteo Group maintains 23 DCs in Mexico and one in Houston, Texas.

IS YOUR FLEET LIFECYCLE MANAGEMENT PLAN ON THE ROAD TO SUCCESS?

Sean Smith, Supply Chain Director, Agropur Sean’s experience with the U.S. military supply chain system enabled him to drive meaningful change to Agropur’s ingredients operations. The Agropur Cooperative is a leading player in the North American dairy industry, encompassing 3,473 dairy producer members and 8,000 employees. Sean formed the supply chain department within Agropur Ingredients, bringing together the siloed operations to form a single, cohesive, endto-end supply chain. His ability to put supply chain language in everyday terms and teach those concepts to people outside that function were paramount to Agropur Ingredients getting a handle on the implications of supply chain decisions that are made outside the department.

Tom Stretar, Senior Director, enVista His commitment to the labor management profession and the food industry is what makes Tom a champion. During his 20+ years in the industry, he has delivered labor management programs to over 250 clients worldwide, including many in the food and beverage industry. Prior to joining enVista, Tom worked with several other food-related companies, such as SYSCO Corporation, US Foods, Supervalu and the Kroger Company. He is viewed as a top professional and respected expert in the labor management field and is sought out by clients and industry professionals alike for his labor management expertise.

Terry Walsh, COO, Maines Paper & Food Service, Inc. Terry’s career is focused on working collaboratively and transparently with clients to achieve and maintain win/win business partnerships that are mutually profitable and increase shareholder value. From his start with the company in 1996, he was a member of the four-person senior executive team that created unprecedented revenue growth from $300 million to approximately $4 billion, and helped drive expansion from two locations with 500 employees to 11 locations with 2,000 employees serving 8,500 customer sites. According to Terry, “True excellence and enduring success are achieved by creating and inspiring top teams. My management philosophy includes encouraging questions to increase insights and spark innovation companywide. I am fortunate that at Maines, we have recruited, coached and collaborated with a cohesive group of industry leaders.”

Paul Welna, COO, Murphy Warehouse Company The way that Paul manages people is really inspiring, says a co-worker. He allows workers to make operational decisions, enabling them to grow within their roles and take pride in their work. Paul and the management team create phenomenal employee retention. Many of the company’s employees represent the second or third generation of their families who work for Murphy. The company is consistently ranked as a top 3PL provider, and was even ranked in the “Top Work Places in Minnesota” by the Star Tribune.

Peter Zaballos, VP of Marketing and Product, SPS Commerce

•

Consult the experts at PLM Trailer Leasing, the only company with nationwide locations dedicated exclusively to the leasing, rental, maintenance and fleet management of refrigerated trailers in the Cold Supply Chain.

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Peter is helping reshape business processes and technology to enable retailers to compete more effectively in today’s omnichannel environment, thanks to his clear vision for the platform and products that will enable the retail industry to thrive over the next 10 years. He is a driving force in transforming the retail supply chain through collaboration among suppliers, retailers and trading partners to meet the needs of the incredibly demanding consumer of today. Under his leadership, SPS Commerce is revolutionizing the retail ecosystem with second-generation cloud architecture to provide meaningful data that enables agile decision-making throughout the entire supply chain.

www.foodlogistics.com

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T R A C K I N G

&

T R A C I N G

TRACEABILITY TOOLKIT:

Software, Automation, Data Standardization How technology allows shippers to stay ahead of stricter safety rules. by Elliot Maras

W

ill Foods, a Buffalo, N.Y.-based broadline foodservice distributor, invested more than $1 million in technology this past year under a new ownership team. Much of the investment went to a warehouse management software system, along with routing, order management and GPS-equipped vehicles for the company’s 25-truck fleet. The father/son ownership team of Jack and Bob Manley recognized that the future requires technology, even for a small distribution company.

The Manleys know they have no time to lose in getting Will Foods up to speed if they want to be serious players. High on their agenda is federal food safety regulations. By the end of 2015, the Food and Drug Administration (FDA) will require food distributors to have a system in place that tracks the exact quantity of each product in the warehouse at any given time, and where each specific product has been from inception to consumer sale, says Bob Man-

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ley, Will Foods’ executive vice president. Full product traceability is essential to food safety and is a system that the company has already implemented and is currently improving.

Scranton, S.C.-based W. Lee Flowers and Co., which operates or supplies 90 IGA/KJ’s Market and independent supermarkets in the Carolinas and Georgia, recently selected Salt Lake City, Utah-based Park City Group’s tracking platform to manage their food safety-related

risk. The track and trace system identifies the supply chain path taken by a product in the event of a product recall. It can reduce the risk in the supply chain by identifying backward chaining sources and forward chaining recipients of products in near real time.

“With the Food Safety Modernization Act (FSA) regulations now requiring us to store and manage literally thousands of vendor documents, we knew we had to eliminate the paper shuffle happening on both sides of our business,” said Henry Johnson, president of W. Lee Flowers. “We chose the ReposiTrak solution for its automation and validation capabilities. We like that the dashboards and alerts enable one person to stay on top of missing, expired, or inaccurate documents.”

Will Foods and W. Lee Flowers and Co. are among many companies that have begun a journey that could pay big dividends if executed correctly. While the goal of a traceability system is to improve food safety, the end result could be www.foodlogistics.com

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a system that improves the efficiencies of managing inventory throughout the supply chain.

A key component of improving traceability in the supply chain is implementing uniform inventory data standards. As food processors, distributors, operators and retailers adopt uniform inventory data standards in pursuit of traceability, many will find that uniform standards enable them to track inventory faster throughout the supply chain. And as data standardization expands among players across the supply chain, users will find they are able to provide supply chain partners more accurate information faster.

In addition to improving traceability, data standardization also make it easier for companies to comply with food safety regulations, which are increasing.

Data standardization and warehouse automation A review of traceability initiatives indicates that food safety, data standardization and warehouse automation are all part of the same discussion.

“A good food traceability system not only protects the consumer, but also benefits companies throughout the entire food chain because it reduces business expense and can lead to greater brand satisfaction and even increased profits,”

states the book, “Food Traceability For Dummies,” a cooperative effort of Ontario, Canadabased Carlisle Technology, Orlando, Fla.-based Datamax O’Neil and Shaumburg, Ill.-based Motorola Solutions.

Integrated traceability systems include identification technology, data capture, network infrastructure, and data analysis software.

Traceability software can track, label and ship products with specific characteristics. The software can automatically generate bills of lading and verify shipments. Some systems allow the user to track and organize products by pallet, lot and case and even by location. This gives companies the flexibility to move inventory among their warehouses, including repeated commingling and re-boxing at any point in the process, without losing traceability.

“The retailer expects immediacy, and the governmental agencies are more and more expecting immediacy,” says Carol Golsch, director of product management at Redline Solutions, the Santa Clara, Calif.-based provider of traceability software. Golsch stresses the economic benefit of accurate traceability in the event of a recall. “If you don’t know where the implicated lots were shipped, you’re obligated to pull everything that was shipped in the suspect date range. Traceability is a huge cost saving for companies since it allows you to narrow down the recall to only

the lots that are implicated.” But she points out another benefit as well: “If you do not have a traceability plan in place, you risk a lot more than money. You are risking your brand.”

Produce leads the food industry The produce industry took a pioneering role with traceability management in response to widely publicized recalls. A 2006 spinach recall forced many produce companies to take a closer look at their traceability capabilities, says Angela Fernandez, vice president of retail grocery and foodservice at GS1 US, a global organization that develops and maintains supply chain standards.

Prior to that, the perishable segment of the food industry had lagged in GS1 standards make adopting GS1 standards, whole-chain tracewhich are designed to ability possible due uniquely identify products to the fact that they moving through the supply provide interoperchain and provide continu- ability between ous synchronization of accu- existing systems and rate data between businesses. solutions.

In 2008, the produce industry identified GS1 standards as the basis for its Produce Traceability Initiative (PTI), providing case-, lot- and

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Elements Of A Recall Action Plan

batch-level informaproduct information, aving a well-understood recall action plan streamlines the process of removing any unsafe product tion that can be which enables swift, comfrom the market. “Traceability For Dummies” offers the following steps for what to do in the event of traced electronically, prehensive recalls. a recall.

Fernandez says. Major Independent Purchas1 Assemble your recall team. 2 Notify any required regulatory bodies. 3 Identify all products to be food retailers, including Cooperative (IPC), recalled. 4 Detain and segregate all products to be recalled that are in your control. 5 Prepare external ing Walmart, quickly a SUBWAY franchiseecommunications such as press releases (if required). 6 Prepare the distribution list for your external comrequested PTI impleowned purchasing coopmunication (for example, press, supply-chain, and so on). 7 Prepare and distribute the notice of recall. 8 mentation for their erative for more than Quarantine the recalled product(s). 9 Decide what to do with the recalled product(s). 10 Fix the cause supply chains.

30,000 SUBWAY restauof the recall if the problem occurred at your facility. 11 Verify the effectiveness of the recall.

Retailers, wholesalrants, saw GS1 as a tool ers and manufacturers to improve traceability have all benefitted and reduce time to comfrom PTI, Fernandez says. By giving a company many companies are involved or how many borpile information for product recalls. IPC officials the means to trace a specific product in the ders are crossed as food and ingredients travel described the steps they used in adopting GS1 supply chain, the shipper can pull a product from one end of the supply chain all the way to while speaking at last year’s International Foodwithout having to remove more products than the consumer, Fernandez says. service Distributors Association (IFDA) solunecessary. Because the standard provides identitions conference in Indianapolis, Ind. fication for each individual case, it is not necesTraceability addresses recalls Since adopting the GS1 standards, the comsary to remove cases of product unaffected in Traceability is especially important if somepany has learned that “enhanced product tracethe event of a recall or withdrawal. thing goes wrong and products must be recalled. ability will be the end result of following the Since the produce industry has embraced Recent legislation in the European Union standards,” says Rick Buttner, IPC’s director of GS1 standards, other fresh food sectors such as requires manufacturers to inform authorities quality and supply chain risk. meat and poultry have followed, Fernandez says. and consumers of any risk to consumers from “Once the traceability GS1 standards are in “It’s the perimeter of the grocery store that has their products. Many other countries are also place, we will be able to trace product to the more recently recognized how GS1 standards reviewing food traceability rules. restaurant level,” says Lucelena Angarita, qualcan enhance traceability capabilities as well as Meanwhile, growers, producers and manuity/GS1 program manager of IPC. In addition, provide category management,” she says, referfacturers, eager to protect their brands from the there will be fewer operational disruptions at ring to the section of the grocery store that merharm done by tainted materials or poorly-manrestaurants, less discarded product, and potenchandises perishable products. aged recalls, are boosting their internal recall tially fewer product “outages” which can result GS1 standards make whole-chain traceabilpolicies and methodologies. in lost sales. ity possible due to the fact that they provide GS1 standards, because they are global, Warehouse management systems are integratinteroperability between existing systems and reaching from one end of the supply chain to ing GS1 standards. solutions, on a global scale – no matter how the other, ensure immediate access to accurate Prism Logistics has had the ability to scan

H

Old Dominion simplifies global shipping by doing more than delivering freight. Our focus on premium service means every shipment arrives with one of the lowest claims ratios and one of the best on-time records in the industry.

Old Dominion Freight Line, the Old Dominion logo, OD Household Services and Helping The World Keep Promises are service marks or registered service marks of 24 MARCH 2015 • FOOD LOGISTICS www.foodlogistics.com Old Dominion Freight Line, Inc. All other trademarks and service marks identified herein are the intellectual property of their respective owners. © 2015 Old Dominion Freight Line, Inc., Thomasville, N.C. All rights reserved.

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UPC codes for years, but the 3PL’s upgrade to AFS Technologies’ WMS platform with functionality and integration with GS1 standards provides single-scan traceability, says Jere Van Puffelen, president of the Stockton, Sacramento, Livermore and Hayward, Calif.-based logistics provider. This upgrade now allows customers to scan a GS1 label once, extract multiple data elements including the GS1 Global Trade Item Number (GTIN), lot and quantity. Prior to the GS1, lot codes typically had to be logged into the system manually.

GS1 addresses food safety rules Van Puffelen says GS1 is especially important in light of the new food safety rules. The FSMA requires a company to have a plan to enhance tracking and tracing of food. In the meantime, Van Puffelen expects more of his customers’ customers to be mandating scannable lot codes.

“The whole chain of custody will become more of an issue; who has it when,” he says. The fact that the GS1 is an international standard makes it all the more attractive to companies in the supply chain.

While improving traceability is a driver for data standardization, it would be incorrect to say it is the main benefit. Large food industry players such as Dot Foods Inc., the Mt. Sterling, Ill.-based redistributor which resells products in less-than-truckload quantities to distributors nationwide, have gained significant efficiencies by introducing GS1 standards to

Dot Foods Inc. has gained major efficiencies by introducing GS1 standards to its online product catalog.

For more information, visit odfl.com or call 1-800-432-6335.

FLOG0315_22-27_Tracking.indd 25

tify the product to trace it through the supply chain,” she says. “Using an advance ship notice (ASN) and the GS1-128 bar code enables the automated capture of lot information which is more accurate and efficient than manual keying.

In the case of a recall having accurate product, information is critical.”

US Foods, the Rosemont, Ill.-based nationwide foodservice distributor, adopted the International Featured Standards (IFS) for logistics as its food safety and quality program. “We then selected NSF International as the third party independent company to certify all our distribution centers against the standard,” says Jorge Hernandez, senior vice president for food safety and quality assurance at US Foods.

IFS is a standard recognized by the Global Food Safety Initiative (GFSI) as providing a “best in class control” over food safety and quality systems and the IFS-Logistics version is specific to storage and transportation by road, rail, air or ship for all types of foods and disposable products.

“IFS- Logistics provided US Foods a uniform evaluation of our systems that not only ensures food safety and quality, but also provides transparency and a strong focus on customer requirements,” Hernandez says of the IFS certification.

“We had a good experience with certification; it not only improved our food safety and quality metrics, our compliance with regulations, but also had a positive impact on the business performance of the distribution centers certified.”

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their online product catalog.

Companies utilizing GS1 standards and the GDSN (Global Data Synchronization Network) to synchronize item data throughout the supply chain will benefit and reduce cost through improved warehouse management, load optimization and increased productivity, says Debbie Bower, Dot Foods director of e-commerce.

A key benefit of data standardization, Bower says, has been improved transparency throughout the supply chain. “With GDSN, there is one source of the truth, and everyone is using the GTIN for standard product identification,” she says. “This increases efficiency throughout the supply chain.”

As for traceability, Bower says it would be much more difficult without GS1 standards and GTINs. “You have to be able to uniquely iden-

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The Institute for Food Technologists illustrates the complex path produce can follow in the supply chain, demonstrating the need for a robust traceability system.

George Gansner, director of marketing and business development at IFS, says the GFSI standards are comparable to proposed FSMA safety standards. “That (IFS) certification indicates that storage, warehousing and transportation companies and facilities are doing what they’re supposed to do to ensure the product is safe,” he says. “Certification says you have the processes in place.”

Food companies have numerous tools available to meet food safety goals. Traceability systems require hardware and software, and the best solution will vary based on a user’s needs.

Because data must be gathered quickly and easily as to not interfere with production efficiency, experts note that food production processes will benefit from a certain level of automation to support a reliable traceability reporting. “Given the increasingly tight recall windows imposed by today’s leading retailers, traceability is something very difficult to do without automation,” says Wayne Slater, director of sales and marketing at Carlisle Technology.

To have reliable data, he says a company must implement a system that adheres to the three blocks of traceability: 1) backward traceability (knowing who you bought your input from; 2) forward traceability (knowing who you sold your finished goods to); and 3) process traceability (knowing the detailed composition of the product you prepared.)

Process traceability involves the ability to 1) identify product, 2) capture and track movement information, 3) associate the product with the finished good, and 4) know where it got shipped. Traceability can be elusive if the system

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is not be able to identify clearly and quickly the specific origin or genealogy of the raw materials, ingredients, and packaging materials contained in that case by lot number, date received, and supplier, Slater says.

Traceability tools improve In addition to the standard GS1 barcode, companies are using QR codes as a secondary barcode for automated product tracking on in-motion conveyor systems, or even marketing reasons, Slater notes.

By using QR barcodes, a traceability link can be established between the product and the shipping carton, order, inventory, and production occurrence. This allows full traceability of the product to the production lot, and in some cases, to the individual carcass and producer.

RFID tags are another tool in the traceability arsenal. RFID tags use radio waves instead of barcodes to uniquely identify the tags. RFID readers can be used in situations where optical scanning by barcodes isn’t possible.

Some companies are reluctant to invest in traceability technology while certain regulations, such as the FSMA’s record keeping rules, are not yet finalized. To this concern, experts such as Ed

Onset’s data logger measures and transmits temperature and humidity data wirelessly to mobile devices via Bluetooth Smart technology.

Treacy, liaison between the Produce Traceability Initiative and the FDA, says compliance with standards such as PTI will most likely exceed what the government requires.

Carlisle Technology’s Slater points to the instance of a Canadian meat processor that invested in traceability software even though the company never experienced a recall. When a product tested positive for listeria after the software was installed, the company was able to leverage the recall reporting tools within their automated solution to isolate the product and complete the necessary recall communications in approximately 45 minutes. In addition, the meat processor has gained business with new retailers not only because of their products but also because of the benefits the traceability system provides, he notes.

Redline Solution’s Golsch points to a shipper that had less foresight. Because the company could not determine where in the supply chain it’s contaminated product had shipped, they had to recall all their product from customers, losing six weeks of production. “They didn’t have the data to know where the product had gone, so they had to pull everything,” she says.

Temperature monitoring and traceability Temperature monitoring increasingly works in tandem with traceability in the supply chain.

“Based on the proposed (FSMA sanitary transport) rule, we can expect requirements for expanded temperature monitoring during transportation and new responsibilities for shippers in specifying transit temperature and in-transit temperature performance recordkeeping,” says Jeff Leshuk, president of Sensitech Inc., the Beverly, Mass.-based temperature monitoring solutions provider.

Leshuk notes that temperature monitoring is not synonymous with traceability. Temperature monitoring is simply measuring and recording temperature in a particular location and recording it over time. Traceability refers to the ability to follow the movement of food products at item or case level through production, processing and distribution, both forward and backward. “It involves recording critical tracking events such as harvest or production, packing, aggregation, disaggregation, commingle, receipt, shipping, etc. It also involves recording key data elements such as item ID, location ID for event, date and time of event.”

Technology providers continue to offer traceability and temperature monitoring tools.

Nogales, Ariz.-based organic fruit and vegetable producer Wholesum Family Farms, Inc. recently deployed the LINKFRESH ERP to establish common practices, standards, and systems across four sites in the U.S. and Mexico.

The system allows the company to trace a case or a pallet anywhere in the supply chain in the www.foodlogistics.com

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event of a product recall, says Ron Meyers, LINKFRESH executive vice president. Wholesome Family Farms chooses to monitor temperature readings by scanning bar codes when a shipment leaves a warehouse and when it arrives at its destination, Meyers says.

Ocean Beauty Seafoods in Seattle, Wash., uses Redmond, Wash.-based Dynamic Systems Inc.’s traceability software to capture the many attributes of the fish on the fly. The system integrates to scales that automatically input exact weight and produces a complex label quickly.

Roambee Corp., a supplier of real-time tracking sensors, recently partnered with Redline Solutions, a provider traceability solutions, to offer full in-transit visibility and condition monitoring for shipments of perishables. RedLine already offers products and services to enable produce traceability and inventory management.

Rainer Kuehling, Roambee’s vice president of sales and marketing, says the sensor acts as a real-time temperature logger. This is important for shipping perishables that have strict temperature ranges to maintain freshness.

Infratab’s Freshtime sensor tag enables a grower to attach a tag to a perishable in the field, start sensing by either button push or near field communication (NCF) phone, deliver the perishable to the packing house and enable the packing house to use RFID readers at receiving, receiving inspection and then subsequently track products and ingredients by supplier’s batch lot and by the freshness of the batch lot received.

Freshtime sensor tags are identified by an EPC number, says Terry Meyers, Infratab president. This number is a GS1 GRAI (global

For more information: AFS TECHNOLOGIES, 877-821-3007, afs.com CARLISLE TECHNOLOGY, 905-332-5757, carlisletechnology.com DYNAMIC SYSTEMS INC., 800-342-3999 dynamic-systemsinc.com GLOBAL FOOD SAFETY INITIATIVE, mygfsi.com GS1, 937-435-3870, gs1us.org INFRATAB, 805-986-8880, infratab.com INTERNATIONAL FEATURED STANDARDS, 800-967-5352, Intertek.com INTERNATIONAL FOODSERVICE DISTRIBUTORS ASSOCIATION, 703-532-9400, ifdaonline.org LINKFRESH, 805-804-5060, linkfresh.com ONSET, 508-759-9500, onsetcomp.com PAKSENSE, 208-489-9010, paksense.com PARK CITY GROUP, 435-645-2000, parkcitygroup.com PRISM LOGISTICS, 925-838-1691, prismlogistics.com REDLINE SOLUTIONS, 408-562-1700, redlinesolutions.com ROAMBEE, 408-663-6655, roambee.com SENSITECH, 800-843-8367, sensitech.com www.foodlogistics.com

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PakSense developed its the reusable temperature and humidity logger in response to customer requests. returnable asset identifier) because it is reusable and returnable. When temperature is sensed, status data (temperature, points left, alerts and tag state) and key data used for local analytics is stored in the RFID or NFC chip memory. Thus, sensor status, because it resides in RFID chip memory, can be read at any time by RFID-EPC or NFC readers.

Boise, Idaho-based PakSense recently introduced reusable temperature and humidity logger.

The loggers download data via a USB connection to a PC and are fully programmable by the user via the provided software.

Onset, a Bourne, Mass.-based provider of data loggers, introduced a logger that measures and transmits temperature and humidity data wirelessly to mobile devices via Bluetooth Smart technology. The self-contained wireless data logger works with Onset’s free app for logger setup.

Clearly, shippers have more tools to enhance traceability in their supply chains. This will help them improve their efficiencies, minimize recalls and comply with new food safety regulations. ◆

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3 P L s

CHOOSING A 3PL:

Shippers’ Scorecards Expand Needs vary, but all shippers place a premium on competence, flexibility and communication.

W

hen it comes to selecting a 3PL, user priorities run a wide gamut.

What’s important to a multi-national food and beverage producer differs markedly from a startup company looking to gain a foothold in the market. But all users agree they need a logistics provider who understands their needs, provides reliable service, keeps abreast of new technologies and alerts them when problems arise.

BY ELLIOT MARAS It may sound like nothing has changed a lot in what’s important in a shipper/3PL partnership. But the food and beverage supply chain is in a constant state of flux. New storage facilities keep emerging, new tracking and tracing technologies are evolving, carrier capabilities fluctuate, and consignee requirements change.

Food and beverage (f&b) shippers often decide what’s important in a 3PL partnership through trial and error. As a company grows, it gains a better understanding of the factors that help to decide which 3PL to partner with.

For many f&b shippers, 3PLs play a big role in allowing them to add more customers and expand to new markets.

For small companies, a 3PL’s carrier reliability ranks high.

Newbies embark on a learning curve Oh Baby Foods Inc., an organic baby food company in Fayetteville, Ark., faced a fairly basic challenge when it had to find a way to

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deliver product from its manufacturer in central California to the United Natural Foods Inc. distribution center in Lancaster, Texas. Finding a cold storage facility near the UNFI distribution center was an early challenge. The other challenge was finding a 3PL to move the product from the production plant to the cold storage warehouse.

Company owner Fran Free managed to find a cold storage warehouse and a 3PL, but the two companies had trouble coordinating shipments.

The 3PL required a delivery window of two or more hours while the warehouse would not provide a delivery appointment window of less than two hours. In addition, the two companies required different sets of information on their bills of lading. They eventually worked this out, but it took several shipments before an agreedupon format was reached.

Free eventually signed with a 3PL that was able to coordinate deliveries from the cold storage warehouse to the distribution center. The 3PL also was able to reduce deliveries through www.foodlogistics.com

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Best Practices For Selecting A 3PL

By Laura Easley, Chief Operating Officer, Transportation Insight ood and beverage companies are faced each day with getting their products to supermarkets or big box retailers in a timely manner. Daunting challenges of fluctuating commodity prices, short expiration dates, government regulations and shelf space competition directly impact profitability and growth potential. Winning contracts with large customers is coupled with demanding service levels. It is a steep price to achieve product innovation and expand geographically. Plus, growing competition from private label offerings, which provide comparable value at a lower price, is ever challenging.

Despite these circumstances, food and beverage companies have adapted by making operations more efficient. Utilizing third party logistics (3PL) providers with significant industry experience helps food and beverage companies drive process improvement, reduce costs and enable growth – all critical aspects to stay ahead of the competition. Choosing the right 3PL, however, is key to making the relationship work.

Usually, when a 3PL partners with a food or beverage company, their first order of business is to identify ways to reduce freight costs both inbound and outbound. The food and beverage industries produce high-volume and low-value products, making it very important to keep transportation costs as a percentage of sales as low as possible.

The best 3PLs collaborate with manufacturers to define and implement solid distribution strategies by analyzing and understanding their historical shipping data. Business intelligence is vital to continuously improve and track progress. For example, being able to understand the cost to serve by customer, region, mode and product can help companies effectively price their products to be competitive Laura Easley is while still maintaining healthy margins. Understanding this data could also uncover chief operating opportunities to relocate a distribution center or warehouse. Utilizing a 3PL may be officer at Transthe most economical way to obtain this information. portation Insight, Aside from reducing costs and providing sophisticated reporting, a 3PL can help a Hickory, N.C.foster expansion and growth for food and beverage companies. New contracts and based logistics products make it imperative for processors to create agile supply chains, allowing solutions provider. them to meet shifting consumer demands and reach new buyers. Many choose to partner with a 3PL to gain economies that could not be obtained on their own, therefore leveling the playing field with larger competitors.

How would a 3PL assist in these circumstances? Securing warehouses, logistics staff, installing and maintaining information systems are all large, up-front investments. A 3PL can quickly bring knowledge and technology at a fraction of the cost. Food and beverage companies can then focus their energy on core competencies such as producing desirable products, while the 3PL keeps the logistics function in tune with state-of-the-art technologies and trends in the logistics world.

Additionally, for many food and beverage companies, expanding to sell to big box retailers is a critical channel of growth, but meeting their logistics demands is not a simple task. A 3PL that understands the importance of these situations focuses on improving vendor scorecards by ensuring optimal carrier performance. Having extensive knowledge of carrier service levels is an example of how a 3PL’s expertise can be valuable in a food or beverage companies’ quest of serving big box retailers.

Experimenting with different products to meet regional appeal is another aspect of expansion. Since the cost of product innovation is high, it is especially helpful to partner with a logistics provider who is able to not only reduce costs, but also quickly change distribution strategies. Without the necessary speed to market, food or beverage companies might miss the opportunity to introduce and maximize exposure of new products before the trend passes.

Food and beverage shippers want reliability, speed, innovation and value for the money they spend with partners that help them get their products to market. For a 3PL to offer innovation to customers, the 3PL needs to understand the business of their customers – who are their customers; what industries do they target; and what benefits do their solutions provide customers? Secondly, 3PLs need to focus on becoming a strategic partner by delivering value for customers, such as superior services, supply chain talent, industry knowledge and best practices.

Being proactive and taking a closer look at the supply chain can truly be game changing for companies. The landscape continues to change due to consumer tastes. Manufacturers, distributors and retail partners rely more and more on effective, flexible distribution strategies to remain profitable. The right logistics partner can help with the expansion of new products into new markets.

In today’s supply chain world, it should be less about “flavor of the month,” go-it-alone trials and more about proven, data-driven strategies to extend reach and optimize customer service. With continuous analytics and supply chain expertise, the right 3PL can help shippers remain nimble and innovative to dominate their markets. ◆

F

consolidating its freight with other shippers.

My Brother’s Salsa, a Bentonville, Ark. chips and salsa company, managed all warehousing,

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replenishment and logistics in-house for its first 10 years, notes CEO Blake Pointer. When his 5-person company decided outsourcing made

more sense than investing in more warehousing, he reached out to Gravette, Ark.-based, R&R Solutions, a local 3PL. He appreciates R&R Solutions’ partnership and creative approach to operational excellence. “We’re working through how we best use a third party partner for our warehousing and replenishment needs,” Pointer says. “We believe finding the right 3PL partner will add capacity back to our team and allow us to focus on building our brand and serving our customers.” The partnership with R&R Solutions has enabled the company to supply Walmart, Whole Foods, The Fresh Market, Harris Teeter and many local grocery stores across more than 25 states.

Big players need versatility For larger companies, other factors can come into play. Meeting customer requests on short notice can require the services of a 3PL adept at making changes to packaging to create promotion packs. Larger companies also often rely on a 3PL’s ability to do pallet-to-store deliveries.

Consolidated freight ranks as a concern for many shippers since it can reduce the number of shipments and minimize the need for costly less than truckload (LTL) deliveries. In a collaborative warehouse that houses many similar consumer products, even competing products, 3PLs must have the ability to create aisle-ready, multi-vendor pallets and prepare them for either cross-dock handling at the retail DC or directto-store delivery.

Alex Stark, director of marketing at Kane Is Able, a Scranton, Pa.-based 3PL, claims manufacturers can cut 35 percent of distribution costs by moving to a more collaborative distribution model. He says shippers pay more in customer owned and operated space versus sharing space and overhead costs.

But whether or not consolidating freight provides such a benefit depends on a number of variables, says Derek Ridenoure, a partner with 4Clarity, a Rogers, Ark.-based supply chain consultant. “Suppliers can be reluctant to share the costs on outbound shipping as it may impact the overall cost of their inbound logistics if they lose price breaks based on volume,” Ridenoure says.

Ridenoure nonetheless sees freight consolidation as a growing trend.

In 2011, candy makers Hershey Co. and Ferrerro Group invested in joint distribution operations to reduce carbon emissions and energy consumption in warehouse and freight.

“For companies like Hershey and Ferraro that both will use the same raw materials, it would make sense as they can benefit from inbound www.foodlogistics.com

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and outbound,” Ridenoure observes.

Consolidating freight is an important consideration for Sunsweet Growers, the Yuba City, Calif.-based global marketer of prunes, specialty dried fruit products and fruit juices, according to Melanie Foster, distribution and transportation manager. “That saves us money in transportation costs and gets it in the door faster versus LTL trucks,” she says.

Sunsweet Growers also puts a premium on logistics providers than are up-to-date on changing consignee requirements. Customers can have different requirements for things like unloading, hours, and co-mingling of pallets. “Knowing those requirements helps us meet our customers’ needs,” Foster says. “It’s not just a matter of delivering freight and taking it off. Knowing all that’s required by the consignee is very helpful.”

The 3PLs also have to be able to track inventory using electronic data interchange (EDI) standards for Sunsweet Growers.

The company reviews its 3PLs’ performance regularly. “As we see there may be a need in a certain region, we’ll look,” Foster says. “We are always analyzing our costs and our services.”

The company has its 3PL partners’ warehouses audited by the American Institute of Baking annually. Foster also visits each location annually to do an inventory and audit.

On average, Sunsweet Growers’ 3PL tenure

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averages 10 years. Some are more than 20 years.

The company works with warehouses in New Jersey, Atlanta, Chicago, Florida, Dallas, Buena Park, Calif., Modesto, Calif. and Portland, Ore.

Flexibility ranks high A 3PL’s flexibility is very important to Premium Waters, the Riverside, Mo.-based water bottler, says Craig Havel, director of operations.

The company uses 3PLs on a seasonal basis in markets not close to Premium Waters’ six manufacturing facilities. The 3PLs must be able to haul bottled water from rented warehouses to customer facilities on a seasonal basis.

Demand can change quickly in the bottled water business, Havel says. The company makes it a point to visit a prospective 3PL partner to see if the warehouse is well organized. They also require customer references and good carrier ratings. “We don’t just talk on the phone and sign them up,” Havel says.

The 3PLs also have to be proficient tracking inventory with bar codes.

All things considered, communication is an important part of the relationship. A 3PL’s business model can change just as easily as their own business model can, says Havel.

Sprout Foods, a Duluth, Ga.-based nationwide shipper of organic baby foods, uses Eden Pairie, Minn.-based C.H. Robin-

son for inbound logistics and Santa Monica, Calif.-based CaseStack for outbound logistics.

CaseStack consolidates shipments from its Naperville, Ill. facility. Sprout Foods’ customers include Walmart, Publix, Harris Teeter, Whole Foods, Target, Kroger, Winn Dixie, Bi-Lo, Diapers.com, Amazon, Hy-Vee, HEB, Jewel, Schnucks, Albertsons and Safeway.

Dale Caldwell, Sprout Foods vice president of supply chain, says CaseStack makes sure that all carriers are on each customer’s approved carrier list.

CaseStack’s Internet portal makes it easy for Caldwell to check on deliveries in real time.

This is important since customer deliveries need to be received in seven to 10 days.

CaseStack is also adept at handling irregular requirements like attaching instant redeemable

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coupons to baby food pouches, Caldwell says.

He appreciates that both of his 3PLs are readily accessible and are “solutions oriented.”

“Their folks are very responsive to us,” he says.

They know the hours of the DCs, the flexibility the customer has in the delivery date, and how to manage exceptions if they occur.”

“The more the carrier can handle on their own, the more time we can spend on creating value,” Franks says. “Our logistics providers are an extension of our brand. A retail buyer or end consumer only sees Rayberns, so our vendors

consistency in the sail schedule. “Consistency in the sail schedule gives us flexibility in production and transfer freight activities. We need to produce ‘this day’ to have it landed at our DC by ‘then’ to support carrier pick up ‘that day.’

Competence in We don’t have to account for volatility or variafood safety important tion in the carrier’s sail schedule.”

Managing chilled and frozen shipments The quality of the carrier’s drivers is another requires a 3PL that understands important factor. “Not all drivers food safety, transportation reguare trained or capable of managing lations and customers’ delivery the processes required for successful requirements, says Joshua Franks, transport of frozen food,” he says. senior director of operations at “We are looking for carriers with 1 Must have clearly defined and narrowed scope of expected services.

Raybern Foods, a Hayward, Calif.good training programs for drivers, 2 Must include a Q&A session within week of sending out RFP. based sandwich maker. The compaand good driver retention rates.” ny ships sandwiches nationwide to “Food safety is so important, and 3 Must develop a specific statement of expectations between parties. retailers from production facilities our carriers play a key role,” Franks 4 Must lay out reporting and key metric expectations in advance. in California and Illinois. says. “Additionally, we always look 5 Must demand a technological solution as part of the RFP. Franks looks closely at a 3PL’s to have a single point of contact; one relationships with his company’s person operationally responsible for 6 Must develop a specific problem resolution process as part of solution. vendors and customers. “We want our account. We look for that person 7 Must develop a precise proforma of costs so that there are no surprises to provide the sales order or P.O. to be capable and innovative in lookpost contract....what is included versus excluded? details (EDI or manual) to our ing for ways to help us save. Calling Source: IFMC Inc., Yorba Linda, Calif.

LTL carrier and/or distribution a dispatch center or sending a mescenter, and have confidence the sage to a group email just doesn’t get order will be picked, picked up and delivered have to perform at a level consistent with the you that level or partnership. An addition to a at the correct times,” he says. “Having a strong value of our brand. You don’t want to tie your P.O. will find its way onto another truck at a relationship allows for seamless scheduling of brand to a vendor that your customer may view higher rate instead of being consolidated with pickups and deliveries without constant monias substandard.” one of your existing orders because it is viewed toring and engagement from our team here.

Another important attribute for Franks is as a transaction rather than a smaller piece of a

Elements of a successful shipper/3PL agreement

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2015 TOP PROVIDERS

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This annual award recognizes companies whose products, services, or exemplary leadership enhances sustainability within the food and beverage industry. The companies chosen as FL’s Top Green Providers will be profiled in our June issue.

Winners will be determined by FL’s editorial staff and advisory board.

TO NOMINATE: www.FoodLogistics.com/awards 32

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| ENTRY DEADLINE: Monday, May 4, 2015 www.foodlogistics.com

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large product movement.”

Flexibility is also critical to Raybern Foods. “We need a vendor who can handle a return, or a late addition to a P.O. without it generating excessive work or cost. Does the carrier have relationships with frozen warehouses or donations centers close to your major customers? You don’t want to incur the cost of transporting a few cases all the way back to your DC. Is their process nimble enough to service that late P.O. or P.O. addition? How much other business is the carrier pulling out of your facility? You want to have your inventory at a facility the carrier is already using as a consolidation center rather than having the longer lead times associated with the product being picked up and then reconsolidated.”

For all the progress 3PLs have made in ensuring product safety, some shippers will take more convincing.

Why some shippers will need convincing George’s, a Springdale, Ark.-based frozen and refrigerated poultry processor, is looking to grow, says Darrel Keck, vice president of sales and marketing, but he is skeptical his www.foodlogistics.com

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company will outsource dispatch for any refrigerated deliveries on account of customer service and product quality concerns.

“We could potentially outsource the frozen business and not miss a beat, but for the fresh business, somebody would have to be able to show they can handle our requirements. For now, we will continue to internally manage our total spend.

You just can’t miss a beat when you’re handling fresh poultry.”

While f&b companies often cite intangible concepts like communication and flexibility when asked to list elements of a good 3PL relationship, consultant Tony Vercillo, Ph.D., says measurable metrics can do a lot to improve these relationships. Dr. Vercillo has a scorecard for food shippers that includes metrics such as cost as a percent of sales, cost per unit or case, cost per load, and on-time delivery.

Dr. Vercillo works with f&b clients on selecting 3PLs and says clients nowadays can be more selective than they were a few years ago since the competition among 3PLs has increased over the years. Dr. Vercillo, who operates Yorba Linda, Calif.-based IFMC Inc., says most f&b companies fail to establish the ground rules when contracting with a 3PL.

The two biggest areas of neglect Dr. Vercillo sees in these agreements are: 1) not having the right cultural fit and 2) not delivering a clear statement of expectations. “The client company didn’t lay the groundwork for an agreement between the two parties,” he says. The client must state if they expect the 3PL to do things like pay lumper fees and provide pallets.

The two parties should also have a written resolution process in the event of a disagreement.

All of these areas can be covered in the request for proposal (RFP).

Dr. Vercillo says the two sides should do a conference call before the 3PL submits an RFP. “That Q&A session is critical to making sure the 3PL responds correctly to the RFP,” he says.

Once the service begins, Dr. Vercillo says the client should complete a weekly scorecard on the 3PLs performance that includes four or five quantifiable metrics. ◆

For more information: 4CLARITY, 479-531-8900 CASESTACK, 866-828-7120, ww2.casestack.com C.H. ROBINSON, 800-323-7585, chrobinson.com IFMC Inc., 310-498-7991, tonyvercillo.com KANE IS ABLE, 815-886-7800, kaneisable.com R&R SOLUTIONS, 479-787-7005, rr-solutions.com TRANSPORTATION INSIGHT, 828-485-5000, transportationinsight.com FOOD LOGISTICS

• MARCH 2015

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SECTOR REPORTS

WARE HOUS ING: LA BOR MA NA GE ME NT S Y S TE MS

The Flip Side Of LMS OBJECTIONS Lessons learned from multiple implementations. BY DAVID FRENTZEL

I

t’s often been said that if you build a better mousetrap, the world will beat a path to your doorstep.

However, when it comes to giving DC operators the ability to more effectively control one of the most expensive components of their operating cost, that’s clearly not the case.

Although Labor Management Systems (LMSs) have existed and successfully paid their way for years – offering workforce savings of anywhere between 5 and 30 percent, depending upon whom you ask – many companies still David Frentzel haven’t made widespread investments in them.

In certain cases, a low or non-existent LMS adoption rate is understandable (see sidebar).

But in many others, it’s subject to debate, because many of the common arguments that companies have for holding off may not be as compelling or accurate as initially advertised.

The most common argument: “It’s too expensive.”

Unlike the rumors of Mark Twain’s death while he was still very much alive, the ones about the high expense of some LMSs are anything but exaggerated.

Many Tier One LMS options are indeed pricey, with final tabs totaling more than $1 million once the costs of implementation and support are added in. (And to their credit, they often offer impressive functionality that’s well worth it, which is why several of our company’s largest and most complex operations currently use them.)

However, that doesn’t mean there aren’t many other well-performing LMSs that may be just as capable of meeting most of your company’s initial objectives for considerably less. That’s what my company discovered when we decided to deploy LMSs at several of our facilities across the U.S. After carefully weighing our options, we selected a mid-range solution that had many if not all of the capabilities these facilities needed – and a friendlier price tag of less than six figures per facility. Thus far, that solution has proven to be highly effective.

With that in mind, don’t rule out the possi-

When An LMS Doesn’t Make Sense

L

abor Management Systems are often synonymous with substantial efficiency. Yet that doesn’t mean these high-powered tools are the ideal match for every facility.

“Some warehouse operations are so small or simple that they wouldn’t really derive the huge benefit from an LMS that a larger, more multifaceted operation would,” advises logistics engineer Rajiv Saxena, Ph.D. The same holds true with warehouses located in some of the world’s lower-cost markets: “If workforce expenses are already extremely low, shaving a percentage off isn’t likely to yield significant enough savings to merit the systems investment,” Saxena said.

Even operations that appear to be prime LMS candidates can occasionally prove to be problematic.

“LMS tools won’t work as well as they should unless they’re plugged into the right kind of people – those who have the willingness to commit to doing everything from inputs to analysis the right way without bending rules or cutting corners,” says Saxena. “If the commitment’s there, the sky is the limit. If not, don’t be surprised if your facility’s results are on the bottom end of the savings spectrum.”

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bility of getting an LMS just because your company can’t or won’t bankroll one that’s top-tier right out of the gate. You may not need as many bells and whistles as you think, especially during the early years following implementation.

Another objection: “Our facility doesn’t have time to collect all of the essential information.”

Although gathering the kind of detailed performance data that an LMS requires can be akin to chopping up multiple onions for a barbecue sauce – essential but painful – it’s usually not necessary to start this process from scratch.

In fact, it’s highly likely that your facilities already have most of this information on hand, provided they keep transaction logs, use a WMS or have developed other kinds of lineitem detail.

Admittedly, the information may not be in an LMS format.

However, it can easily be tweaked via scripting that enables integration between your WMS and LMS of choice – or by using an LMS that’s part of your existing WMS. Plus, should your operations still have data gaps, it’s possible to fill them in via strategically placed data-entry kiosks.

The next objection: “Why do we need an LMS? We already have excellent measurement tools.”

LMSs clearly don’t have a monopoly on measuring and monitoring productive time. In fact, many food and grocery DCs clearly do a highly commendable job of this with the help of various reputable systems and process management techniques. However, unless these systems and techniques are especially advanced, they’re probably not capturing it at the granular level that an LMS would, which means your facility managers could be missing out on considerable www.foodlogistics.com

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precision. (Our LMSenabled facility managers couldn’t praise this granularity or the additional insights it gave them highly enough.)

More important than that, most other systems and processes can’t measure a workforce’s unproductive time, and that’s something LMSs can do in spades. Considering that this time may represent as much as 15 percent per shift, it could open the door to countless previously untapped costcutting and efficiency-enhancing opportunities.

better-running pick lines, more accurate budgeting, the enhanced ability to forecast dayto-day staffing, greater insights about which employees need mentoring, and better morale, just to name a few.

I can honestly say that if our company had it to do all over again, we’d do it again in a heartbeat, except this time we’d do it sooner. And I don’t believe we’re an anomaly.

So if your organization hasn’t considered an LMS lately, maybe it’s time to revisit the subject.

Get some updated research. Request some system demos. Run some new ROI calculations. And see for yourself whether or not the reservations you once had about these robust systems still apply. You may discover that it still isn’t right for you. Or you may find out that it’s time to move forward. Either way, you’ll be glad you checked. ◆ David Frentzel is senior vice president of global consumer industry at APL Logistics, a Singaporebased supply chain solutions provider with an office in Scottsdale, Ariz.

Another issue: “It won’t go over well with our workforce.”

It’s not difficult to understand why the thought of an LMS might cause ripples of preadoption anxiety. But contrary to what you might think, LMS-related employee pushback isn’t inevitable – especially if your company is careful to avoid confusing the S in LMS with “surprise” or “strong-arm.”

Once our company decided LMSs were a go at several of our facilities, we immediately began interacting with those facilities’ personnel about everything from what an LMS was and why it worked to how we’d be rolling it out at their operations. We also engaged the help of HR and communications professionals to make sure we were doing it in a diplomatic and people-centric way. Ultimately, it played a huge role in ensuring that these personnel were fully prepared to support an LMS by the time it went live.

Although your employees will probably never want to do handsprings at the thought of additional scrutiny and supervision, a proactive approach to keeping them in the loop and the perspective of professionals who have strong people skills can make a world of positive difference. So can the promise (if sincere) of a formal gainsharing initiative that will eventually allow employees to be the beneficiaries of some of the improvements that an LMS yields.

Still another objection: “Considering everything, it seems like more trouble than it’s worth.”

Implementing an LMS isn’t a walk in the park. Among other things, it takes considerable time, teamwork and brainpower – not to mention a fairly steady supply of Tums.

But ultimately, those are small and predominantly temporary prices to pay in exchange for all the potential rewards: improved operations, www.foodlogistics.com

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SUPER SESSIONS United Fresh will host super sessions that address specific issues and needs within your sector and give you the opportunity to interact with your peers. No matter which part of the industry you’re in, these sessions offer education designed specifically for you! · Consumer Trends and Their Impact on the Produce Industry · Disruptive Technology & the Farm of the Future · Social Responsibility in a Global Produce Industry · State of the Industry: Today’s Trends and the Future of Floral · Strategic Planning for Family Businesses

Register Today at www.UnitedFreshShow.org FOOD LOGISTICS

• MARCH 2015

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SECTOR REPORTS

SOF TWA RE /TE CHNOLOGY: TE LE MATICS

EFFICIENT FLEETS:

Do You Need Telematics?

Telematics experts weigh in on the ELD mandate and the role telematics will play in the push for real-time connectivity for F&B fleets. BY ERIC SACHARSKI

N

ot only does the rapid speed of innovation continue to push telematics deployment in the food and beverage (F&B) sector, but with new governmental regulations seemingly being proposed every day, the role telematics plays in managing a fleet is set to increase in the coming years. Given the fact that most food and beverage fleets are still not using telematics, supply chain decision makers need to get up to speed on what this technology can offer them.

• Cloud-based telematics sends real-time information to fleet managers, including proof of delivery and vehicle and driver performance.

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Food Logistics recently asked telematics executives to provide their insight into what the challenges in the market will be, what they are currently experiencing in the field as the electronic logging device (ELD) mandate draws near, and how real-time information has become crucial in the global food supply chain.

One size, solution does not fit all In a market with hundreds of providers and endless solutions, food and beverage (f&b) fleets are finding that reliable, imbedded solutions are starting to give ground to more portable and smartphone/tabletbased options.

Telematics experts offer different ideas about the merits of imbedded versus portable solutions.

“Imbedded will be your tried and true system since they stay with the units constantly reporting location, temperature, fuel, etc., and alleviates the customer from further hassles of misplaced equipment and possibly theft,” says Chris Gilham, senior systems support specialist at Alpharetta, Ga.-based CoolTrax. “Portable leaves you open to the problems an imbedded system alleviates, and in a fast-paced environment like this (f&b), we see many people turn their heads trying to keep up with portable systems. Smartphones are a great option, but when you are reading temperatures directly from a reefer, there still has to be some sort of imbedded technology to send you that information.”

Even though it has some drawbacks, portable systems are gaining market share because they are convenient and cost-effective solutions that meet the demands of today’s pace and style of business, according to Jon M. Van Winkle, vice president www.foodlogistics.com

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THIS IS MORE THAN A SAFETY PRECAUTION

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FOOD LOGISTICS

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Are You ELD-Ready?

E

ven though the regulations on the electronic logging device (ELD) mandate aren’t even finalized, and with the hours-of-service rules and other governmental mandates being added and dropped every other session, telematics providers have been forced to stay on their toes to stay ahead of the regulations.

So how prepared are most fleets to comply with the ELD mandate that becomes effective in 2016? Their answers vary.

“We are seeing mixed results in this area,” says Geotab’s Hiew. “Some fleets have been using ELDs for some time, others are just implementing now, and still others will wait for the last possible moment. From a telematics perspective, what is different today than it was five years ago, is you rarely need to sell the benefits of an electronic logging solution – these are well understood by fleets today.”

“Even if the regulation does go through in 2016, and it looks like that’s a big if right now as this keeps getting pushed out,” says Frey of Telogis. “Most of the large fleets have been preparing for this for years now. Everybody is aware of it, unless you’ve had your head in the sand. I’d be surprised if most fleets aren’t prepared for it.”

“I will say that many will be probably be scrambling to purchase equipment when that time arrives,” says Cooltrax’s Gilham. “Many companies will be making uneducated purchases and not fully testing their options and the capabilities. It seems the lowest cost wins right now, but the lowest cost may not give you the support and education needed to properly use the

• Compliance issues like the ELD mandate could help smaller fleets appreciate the benefits of telematics systems. of product management at XRS Corp. in Minnetonka, Minn.

“Our customers – including Sysco, US Foods, Dean Foods, Gordon Foods – are looking for ‘mobility’ solutions that meet the needs of drivers doing work in and out of the cab,” says Van Winkle. “At the moment, Androidbased tablets and smart phones are the most common platform. However, Windows-based, ruggedized handhelds are becoming more common in the food services space. iOS/iPhones are beginning to make their way into the industrial market, too.”

As the need for mobility increases and handheld and smartphone solutions gain popularity, the bottom line still follows the cliché that every telematics situation has its own ideal solution.

“There are various operational needs even within a food or beverage fleet. Sometimes, even within the same customer, a portion of their fleet may need something slightly different than the rest of the fleet,” says Eric Witty, vice president, product management, Cadec Global, Inc. in Manchester, N.H. “So I don’t think there is a one-size-fits, all and we try and encourage fleets to understand both their in-cab and out-of-cab needs to see what technology fits the highest priority problems they are trying to solve and pick the one that best fits and has the power to expand and adapt to their future needs.”

“It really depends on the use case,” says Kelly Frey, vice president, product marketing

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• A large majority (92%) information you get from this technology of companies who have and put it to good use and save your telematics installed in their fleets company thousands of dollars.” use it for vehicle tracking.

Some of our experts even speculate the ELD mandate may help drive f&b fleets that don’t currently have a solution into a shopper in the telematics market.

“I would say that less than half of all fleets are prepared to be in compliance at this time,” adds Driscoll of GPS Insight. “That’s not to say that they won’t be by 2016, but that would mean that this year we will see a huge spike in telematics and ELD adoption in the food delivery and transportation industry.”

at Calif.-based Telogis.

“For a company-owned truck in service in the fleet for six, seven years, an imbedded system makes sense because it can come right from the manufacturer. But if you’re dealing with an older fleet, or one that doesn’t have an imbedded solution, it’s easy to put a tablet-based or portable-based solution in there.”

Real-time: the real deal One area telematics experts are unanimous on is the importance of real-time or instant information for food and beverage customers.

“Real-time is the expectation for all fleets in today’s technology age where there is so much information at our fingertips,” says Cade Global’s Witty. “Faster, more accurate, real-time decision making based on real-time data can avoid delivery delays, HOS (hours of service) violations and other operational issues and therefore increase efficiency and reduce costs.”

Reducing inventory loss is another important asset of real-time communication, according to Ryan Driscoll, marketing director at Phoenix, Ariz.-based GPS Insight.

“Real-time data is crucial for food and beverage businesses,” says Driscoll, “Knowing the temperature inside the trailers in real time is imperative for these businesses because spoilage can cost thousands of dollars per delivery.

Telematics can alert management and drivers in real time when the temperature in the trailer is too low or too high so that they can address the issue immediately.”

Real-time telematics solutions also aid in

the safety and traceability of the global supply chain, a point Krystine Hiew, sales and marketing coordinator at Ontario, Canada-based Geotab Inc., emphasizes.

“Food and beverage companies not only have to prove that their products are safe, highquality, or compliant with regulatory requirements, they need to ensure that their suppliers’ products adhere to these criteria as well,” says Hiew. “Reasons why real-time data is so important include determining unplanned or missed stops on the fly; off-route notifications on the fly; dangerous driving or accident notifications; expected arrival at customer locations; over/ under temperature notifications in real time indicating an issue with the reefer or doors; and even alerts indicating long customer stops.”

With the increasing focus on food safety and complete traceability in the entire supply chain pushing companies to demand information at a second’s notice, real-time telematics is likely to play a bigger role in the way companies throughout the f&b sector achieve these goals. ◆

For more information: CADEC GLOBAL INC., 800-252-2332, www.cadec.com COOLTRAX, 877-667-6868, www.cooltrax.com GEOTAB INC., 877-436-8221, www.geotab.com GPS INSIGHT, 866-477-4321, www.gpsinsight.com TELOGIS, 800-787-2337, www.telogis.com XRS CORP. (OMNITRACS), 800-795-9282, www.xrscorp.com www.foodlogistics.com

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3/17/15 1:59 PM

FOOD (and More) FOR THOUGHT

TRICIA SMITH

Millennials Seek Local Foods That Offer A Sense Of Place

T

he farm-to-table movement may seem like something that exploded onto the scene within the last five years or so, but the idea of embracing fresh, natural foods from one’s own backyard isn’t new. If you look back far enough, this was once the only way to eat, before refrigeration and other modern technologies made the global supply chain possible. But even in the era of modern restaurants, local foods have long been a passion for many chefs and avid diners. In the 1970s, the country was buzzing about California cuisine, and Alice Waters’s acclaimed Berkeley restaurant, Chez Panisse, was at the center of the early farm-to-table movement.

Today, farm-to-table is practically de rigueur, and consumers are taking their dedication to local foods to the next level. Shoppers, especially millennials, are increasingly patronizing farmers markets and seeking out restaurants that source local goods beyond just produce.

Artisan breads from neighborhood bakeries, seasonal pickles from nearby producers and locally-brewed craft beers all deliver a unique, specific flavor that lends a sense of place.

“I think farm-to-table is … the embodiment of knowing where your food came from, because you’re actually eating the food at the place it was harvested from,” said Maeve Webster, senior director of Datassential.

‘Food Terroir’ strikes Nancy Rodriguez, founder and president of Food Marketing Support Services, refers to this elevated level of local eating as “food terroir,” a play on the wine-making term that describes the characteristic taste and flavor imparted to a wine by the environment in which it is grown and produced.

“I think what it speaks to in a broader context is the genuineness of what they choose to buy,” Rodriguez said of young, single shoppers. “They want the authenticity.”

She pointed to craft beers and single-origin coffees as items that are particularity attractive to millennials, who have an increasing awareness of growing regions and interest in farming practices, although for the most part, their knowledge of food production is still somewhat superficial.

“I don’t think their understanding of the agriculture is deep at all,” she said.

Even so, for many members of Generation Y, “farmers are the new folk heroes,” said Susan Porjes, an analyst with Packaged Facts. Recently, football player Jason Brown made headlines by leaving the NFL to become a farmer and help the less fortunate.

Business Insider reported that the former center for the St. Louis Rams learned how to work on a farm by watching YouTube videos.

A new advertising campaign for Cargill focuses on independent farmers, responding to the fact that “consumers are becoming more 40

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interested in where their food comes from,” said Ruth Kimmelshue, president of Cargill Turkey and Cooked Meats, in a recent artiSMITH cle. The campaign is certainly not the first to embrace the idea of farmers as modern-day celebrities. Spots from food giants ranging from Lay’s to McDonald’s have showcased some of the farmers who grow their fruits and vegetables.

However, farmer-focused marketing may be the extent of some brands’ participation in the local food craze. For the most part, large brands have not been able to participate in this segment of the market in the way small producers can.

“I don’t see big brands doing a lot,” Porjes said. “They sometimes offer local flavors, but usually market them on a national basis. It’s hard for them to address local markets due to supply chain and distribution issues.”

Webster agreed, saying millennials are more likely to seek out smaller brands, and many of them are innately distrustful of large manufacturers.

Big players enter the local foods market Some big manufacturers are adding smaller brands to their portfolio in a bid to boost their participation in the local food trend. Rodriguez said large companies are putting a high value on early investment in small brands, such as Campbell Soup’s acquistion of Bolthouse Farms in 2012.

Even though millennials are looking to small brands to get their local food fix, many shoppers are starting to look for local items outside of the typical farmer’s market stands and mom-and-pop stores, and local foods are becoming a priority for more mainstream retailers.

“Mainstream retailers are trying to tap into this trend … by adding more local products to their stores and highlighting local products through marketing and display,” Porjes said. “They are buying these products from local vendors or through food brokers.

Kroger, Safeway, Meijer and even Walmart have identified local foods as one of their priorities.”

In addition to bringing more millennials into the store, stocking and promoting local products can also benefit the bottom line.

“Almost half of those surveyed by Packaged Facts said they are willing to pay up to 10 percent more for locally grown or produced foods, and almost one in three said they are willing to pay up to 25 percent more,” Porjes said. ◆ Tricia Smith is an editor at Smart Brief, an online business newsletter.

This article ran as a blog on SmartBlog in Smart Brief ’s food and beverage e-newsletter.

www.foodlogistics.com

3/17/15 2:03 PM

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The “Food Logistics Champions: Rock Stars of the Supply Chain” award profiles people in our industry whose hard work and vision are driving the global food/beverage supply chain forward.

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