The Supply Side: Zest Labs ready to push process to improve freshness

When it comes to food, fresh is a must for consumers, whether that’s reaching to the back of the dairy case for the latest “sell by date” or scouring the produce looking for what might have the longest window of freshness.

Peter Mehring, CEO of Zest Labs, one of the sustainability companies owned by Rogers-based EcoArk, has spent the past four years testing how its proprietary technology can raise the bar for freshness with supply chain transparency from growers through distribution and into a store.

Mehring said the problem is the misconceptions around freshness which are made by the assumption of a “best use by date” which is assigned to the product. He said this date is a guess at best based on limited information. The missing component from the data is how the product might have been handled or treated in the supply chain.

Zest Labs has worked with produce growers and suppliers for the past four years testing its ZIPR technology which acts as a measure for how the product has been handled and any impact that handling might have on the product’s freshness. He said the company is preparing to launch its technology at retail on a national scale in the coming months, though he would not say which retailers are looking at the product.

The largest grocers in the country — Walmart U.S., Kroger and a H-E-B — have all made “fresh” a major initiative in recent years and they often speak of the positive impact fresh is having on their grocery businesses. The flip side of that is the huge amount of waste associated with trying to deliver fresh products to the consumer.

The U.S. Department of Agriculture estimates $161 billion annually is lost in food waste. Walmart U.S. CEO Greg Foran has said reducing shrink and improving freshness for consumers is a major goal. The retailer lowered sight lines and revamped fresh produce centers in its stores last year. More staff were added to produce departments and each received training on how to handle the produce, rotate and recognize “fresh” based on consistency patterns.

The industry admits only 70% of the products meet the consistency requirements, which creates a 30% loss rate. Mehring said consistency is the primary key used in identifying freshness. But he said indirect benefits such as water reduction, transportation, and cooling times may also have an impact on how long a product stays fresh once it gets to the retailer. The retailers don’t have complete visibility all the way back to the grower and worker who might have picked the produce.

He said Zest Labs freshness metric known as the ZIPR code is based on the specific product type, growing location and harvest and processing conditions that enable improved freshness management decisions. Zest calculates a ZIPR code for each tracked pallet, using patented methodology and sensors, ensuring inventory and shipping decisions are based on actual freshness. Mehring said the technology makes use of Internet of Things (IoT) cloud-based software which can be pushed out to workers in the field on handheld devices or viewed on a laptop or desktop further up the supply chain. Through RFID and Bluetooth technology growers and suppliers using the software can tag an entire pallet of bagged lettuce or crates of strawberries and track freshness through the supply chain. Everything possibly affecting a crop of strawberries can be seen upstream in real time.

The software can notify workers at the grower levels about a potential problem and offer solutions to mitigate any damage to the product’s freshness window. That means there is less waste upstream when the products reach retailers. U.S. testing of the product has shown that using Zest with the ZIPR code can reduce that waste by roughly half, and improve the customer experience, Mehring added.

California growers have been using the technology to monitor their winter crops in Mexico. He said the company owner described the ZIPR technology as “turning on the light.” He said without the visibility of ZIPR it was like working in the dark, but now that they have complete view of the supply chain they can do a better job extending freshness.

Mehring said if a certain batch of berries is handled differently and the fresh window is going to be shorter, they know up the chain to distribute that batch to retailers close by and reduce transportation time.

Retailers like Wal-Mart use a scorecard system that looks at the history of the product, but that system isn’t really helping them detect freshness or expand freshness given that industry-wide wastes are still roughly 30%. Mehring said growers and suppliers testing ZIPR are finding it takes about two to three months to get comfortable with the system, and the cost is about 1 cent per item. He said companies using the technology are finding savings about 10 times over the cost.

When asked about future plans, Mehring said Zest Labs has 65 patents for the technology and 12 others in process. He said it’s been four years in the making, being tested along the way, not just by produce growers but also dairy producers, restaurants, fish distributors and some retail. He expects to see the technology being used more this year and continues to look for those opportunities.

Mehring, a former hardware exec at Apple, said during his work for the late Steve Jobs, Apple insisted on a 99% production yield from its manufacturing line. He said anything less meant people lost their jobs. But in food production a 70% yield has become acceptable.

“We think Zest Labs ZIPR technology can increase that to 90% now, and that’s a big savings for everyone along the supply chain,” Mehring said.