To pinpoint trouble with tainted food, Norway's TraceTracker has a global system that tracks products' ingredients from farm to supermarket
Talk about an image problem. For weeks, newspapers around the world have carried stories about dairy-poisoned babies—at least six have died, and 300,000 have been sickened—and chronicled how milk, eggs, soy-based foods, and even candy bars containing ingredients from China have been contaminated with melamine (BusinessWeek.com, 10/31/08), an industrial chemical used in plastics and fertilizers.
It's no surprise, then, that the China Daily reported on Dec. 1 that the country's milk exports had plunged by 92% since September, when news about the tainted milk emerged. But the damage doesn't stop there. "It has harmed China's entire food industry," says Ole-Henning Fredriksen, chief executive of Norway's TraceTracker Innovation, which is creating a global information exchange for the food industry. Based in Oslo, TraceTracker is one of 34 companies named on Dec. 4 by the World Economic Forum as tech pioneers—companies offering new technologies or business models that could advance the global economy and enhance peoples' lives.
TraceTracker has developed an online service to identify and track each batch of every product that is merged together in the global food chain, from raw ingredients to products on the supermarket shelf. Its system is aimed at making food safer—and preventing entire industries from being tarnished by the misdeeds of a few.
To that end, on Sept. 24 TraceTracker signed an agreement with China's Shandong Institute of Standardization, a government agency, to develop a system called ChinaTrace, to help companies in China's food industry deal with internal traceability, set up third-party verification systems, and connect to a national grid. Foreign trading partners will, in turn, be able to use the database to gain assurances about the origins, freshness, and safety of every ingredient coming from China.
Systems like ChinaTrace aim to protect consumers and help save companies and industries from huge losses. Consider the 1999 case in Belgium, when dioxin was introduced into the food supply through contaminated animal fat used in feeds supplied to farms. Hens, pigs, and cattle ate the contaminated feed, and high levels of dioxin were later found in meat products as well as eggs. The origin of the dioxin contamination remained a mystery for weeks. In the interim, Belgian farmers had to slaughter animals indiscriminately on order of the government, costing them billions of euros. "This is what happens when you don't have a documentation system set up throughout the whole chain," says Fredriksen, 45, an entrepreneur with a master's degree in economics.
He and his business partner, Knut Jorstad, got the idea for TraceTracker in 2000 while doing consulting work for a big food-processing company. "We discovered that all information collected in one step was lost when an ingredient moved to the next step," he says.
That same issue has been plaguing the Chinese food industry. China's dairy product problem could have been solved sooner if every producer had been able go back and look easily, through online documented samplings and analysis, at exactly which batches of milk were contaminated and which companies supplied the ingredients they contained, he says. But many companies in China are still logging information manually. And details about each ingredient remain in information silos, making it difficult to connect the dots.
A Log of Where Every Bite Came From
The Shandong Institute is introducing an electronic system that is being made mandatory by the Chinese government. Although still in early stages, the network is already being used to trace pork products within China. The dairy industry also will be part of ChinaTrace. A central database is being built to use the Internet to connect even the most local Chinese players into the supply chain, says Fredriksen.
The key will be plugging China's upgraded national system into TraceTracker's global traceability network, known as GTNet. GTNet allows trading partners to exchange information across sectors and national borders. A kind of "passport" is issued to every ingredient in a food product so a complete history of an item can be graphically represented and viewed—via a secure site on the Net—by all authorized parties. Since GTNet is Web-based, it works with all the diverse internal IT systems of food suppliers around the world.
One company, Simexinter, a Euskirchen (Germany) franchisee of Walt Disney (DIS), has started using GTNet not only to document the source and safety of the ingredients in its food products but also to take the story out to consumers. Simexinter holds licenses for Disney food products in Austria, France, Germany, and Switzerland. In France alone, it markets more than 45 products under Disney and Nickelodeon (VIA) brands for children aged 3 to 17, including breakfast cereal, yogurt, and fruit juice.
On the company's consumer portal, kids and their parents can go to Google maps and track the ingredients in products to their source. After entering a product code from Disney food packages, consumers follow Disney characters on adventures to see where their products came from and how they were made. The information includes interactive maps, videos, nutrition information, and games. In addition to general information about food manufacturing, consumers learn specific details relating to their products.
Sliding Scale of Prices
"This is not only about food safety but about creating a platform for trust, that people can go in and explore," says TraceTracker's Fredriksen. "Walt Disney is using their brand in a new area, so if something goes wrong it could harm the whole Disney brand."
TraceTracker makes money by selling subscriptions to its services, priced on a sliding scale to reflect the flow of goods, so even small players can afford it. That's important because the increased demand for information about the origin and process history of all ingredients could mean that suppliers in developing countries could be excluded from the global marketplace unless they adopt traceability tools. One client that recently signed up is the Ugandan coffee board. It took only two days for the agency to get the system up and running, Fredriksen says.
As the latest food scandal in China demonstrates, there's no time to lose. "Over the past few decades, food supply chains have grown from local to global without any coherent development of standardized systems for documenting and exchanging traceability information," says Fredriksen. With GTNet, "companies can streamline operations, manage their product documentation, and reach markets while consumers get food they can trust with the information they have been longing for."