Zest Labs Brings IoT and Blockchain to the Fresh Food Supply Chain

Posted on  in BLOCKCHAININDUSTRIAL

Contributing Writer.

With all the hype around blockchain, it’s a technology that’s still finding its feet when it comes to wide, mainstream adoption. Therefore it’s not every day when you come across a company that uses both IoT sensor technology and the blockchain to solve a common agricultural problem. Zest Labs have created a fresh food management solution that focuses on consistent food quality, reduced waste, and improved food safety and use technology to achieve this. I spoke to CTO Scott Durgin to find out more.

Durgin explained:

“We provide a solution from grower to grocer. We use sensor-based technologies to help suppliers and retailers manage the freshness and quality as well as tracking and traceability. And core to this concept is the fact that waste is a fairly big problem in the industry. This stems from the fact that 30% of products aren’t handled correctly, and it is difficult to differentiate them from the 70% that are. There are literally tens of millions of tonnes of produce shipped. You can’t individually check all the pallets.”

Food waste costs the nation an estimated $218 billion per year according to the NRDC. Produce picked on the same day is not all equal and will not necessarily have the same shelf life, depending on metrics such as humidity and field and storage temperatures. This brings best by dates into question. In response, Zest Labs has derived a single freshness metric — the ZIPR code — which is based on the specific product type, growing location, and actual harvest and processing conditions, that enable significantly improved freshness management decisions.

Zest Fresh software calculates a ZIPR code for each tracked pallet, using patented methodology and sensors, ensuring inventory and shipping decisions are based on actual freshness.  Growers, retailers, and restaurateurs can benefit from intelligent routing, meaning that produce with a closer best-by date can be re-routed earlier, to a nearer location or a juicer.

Testing has shown that using Zest Fresh with the ZIPR code can reduce that waste by roughly half, and significantly improve the customer experience. This provides continuous real-time visibility of the remaining freshness capacity of produce and then directs intelligent routing to optimize delivery for required shelf-life.

Screen Shot 2017-10-26 at 16.44.33

As Durgin explained:

“We see an opportunity to help suppliers in that they get paid the same amount today regardless of the freshness capacity of the product they’re putting out. So imagine if you could differentiate your product offering to be a competitive advantage in regard to its freshness.”

Zest labs introduces the blockchain

Zest Labs announced this week that they are now also offering free blockchain set up for growers and shippers using the Zest Fresh platform. Durgin believes that the blockchain creates an added layer of security and trust throughout the fresh food supply chain by creating true transparency about all key food freshness factors to all participants within the network.

“Zest Fresh quickly delivers access to blockchain technology for its customers by leveraging secure and authenticated data collection from its wireless IoT sensors, through its intelligent access points, and into the secure Zest Cloud. Further, by combining our predictive analytics, we can extend the value of blockchain through smart contracts that can automatically recognize when fresh products meet contracted specifications throughout the supply chain.”

With most industries considering how the blockchain may benefit their operations, food suppliers, in particular, are paying close attention since there’s a very real possibility that large companies may eventually require their supply chain partners to participate. This could mean many growers are forced to adopt blockchain, whether they like it or not. Forced technology adoption has happened before such as with RFID where adoption was successful until large companies mandated its use and none of the smaller suppliers could afford the tags.

Zest-Lettuce-bins-in-field

Durgin believes that the blockchain solves the problem of trust but it isn’t a replacement for conventional IoT data processing and storage:

“Would we use blockchain for our core internal processing of the system? No, it’s not designed to do that. We have the Zest platform underneath which is actually a data streaming complex event processing system and it’s designed to scale in the world of IoT and it does things in a very real time fashion and handles very complex event streams that could never be applicable to being processed in a blockchain.

If you think about quality in freshness, it’s more than just sensor data thrown into a block or a transaction in a block and so we see the opportunity to take this universal ZIPR code and for those folks where blockchain makes sense to their business. Given the very nature of what blockchain does it creates a very interesting information sharing network opportunity that ensures consistency up and down the supply chain.”

Durgin also likens the blockchain’s adoption challenges to his days as Product Manager at IBM working on Lotus Notes :

“Back in the day we actually used to license the TCAP IP protocol and the AppleTalk protocol amongst others. We had to license the protocols and include them in the product so that it could talk with a client server. Such a thing would be unheard of today. So when you think about blockchain technologies, I liken them to when we had to do extra heavy lifting to build a platform like Lotus Notes, designed to make it easy for people to solve business problems also.”

As agtech becomes increasingly automated and connected, the blockchain may just become another business tool in a farmer’s arsenal.

Zest Labs Bolsters Fresh Food Security and Trust with Integrated Blockchain Support for Produce Growers and Shippers for No Added Cost

Company’s Zest Fresh Platform Embeds Food Freshness Metrics into the Blockchain for True Transparency Across the Supply Chain to Ensure the Safest Produce to Retailers and Restaurants

 

San Jose, Calif. – October 26, 2017 – Zest Labs, a subsidiary of Ecoark Holdings, Inc. (“Ecoark”) (OTCQX: EARK), today announced integrated blockchain support at no additional cost or labor for growers and shippers using the Zest Fresh platform. The addition of blockchain support creates an added layer of security and trust throughout the fresh food supply chain by creating true transparency about all key food freshness and safety factors to all participants within the network.

 

“You can’t put a price on food safety and security,” said Peter Mehring, CEO of Zest Labs. “Consumers have become much more interested and informed about the safety and handling of their food. As a result, premier retailers and restaurants are now demanding blockchain technology be used to ensure the accuracy of this important information. To help make it easy for our growers and shippers to meet this new demand, we’ve seamlessly implemented this technology at no cost to them.”

 

Zest Fresh is the only freshness management solution that autonomously tracks and reports in real time the freshness of products from harvest to the retail store or restaurant kitchen. With the industry’s first dynamic freshness metric – the ZIPR code – Zest Fresh provides continuous real-time visibility of the remaining freshness capacity of produce and then directs intelligent routing to optimize delivery for required shelf-life.

 

“Zest Fresh quickly delivers access to blockchain technology for its customers by leveraging secure and authenticated data collection from its wireless IoT sensors, through its intelligent access points and into the secure Zest Cloud,” said Scott Durgin, CTO at Zest Labs. “Further, by combining our predictive analytics, we can extend the value of blockchain through smart contracts that can automatically recognize when fresh products meet contracted specifications throughout the supply chain.”

 

This unique combination of secure traceability and the ZIPR code freshness metric provides true transparency and intelligent routing that significantly improves freshness consistency for consumers and reduces waste for retailers. In fact, Zest Fresh is proven to reduce waste from spoilage by more than 50 percent for grocery retailers.

 

About Zest Labs
Zest Labs, a subsidiary of Ecoark Holdings, Inc., provides a growing suite of freshness management solutions that substantially improve quality consistency and drive sustainability for a wide range of clients. Zest Labs provides solutions to modernize the existing food distribution and delivery system by significantly increasing efficiency through continuous condition monitoring and real-time prescriptive analytics.

To learn more about Zest Labs, please click here. To watch a video about Zest Fresh, please click here.

 

About Ecoark Holdings Inc.

Founded in 2011, Ecoark is an AgTech company modernizing the post-harvest fresh food supply chain for a wide range of organizations including growers, distributors and retailers. The company’s Zest Fresh™ solution, a breakthrough approach to quality management of post-harvest fresh food, is specifically designed to help substantially reduce the $161 billion amount of food loss the U.S. experiences each year. Through item-level monitoring and real-time predictive analytics, Zest Fresh enables customers to improve the freshness and quality of produce, realize substantial cost savings and reduce food waste. To learn more about Zest Fresh click here.

 

Forward Looking Statements

This release contains forward-looking statements, including, without limitation, statements concerning the business and possible or assumed future results of operations of Zest Labs; and statements concerning the ability of Zest Labs’ technology to improve delivered quality consistency, significantly reduce perishable food waste, drive sustainability, and increase efficiency in the industry. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons including: access to growth capital on favorable terms; adverse economic changes affecting markets we serve; competition in our markets and industry segments; our timing and the profitability of entering new markets; greater than expected costs, customer acceptance of our products or difficulties related to our integration of the businesses we may acquire; and other risks and uncertainties as may be detailed from time to time in our public announcements and SEC filings. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.

 

Contact

Investor Relations:                                                   

John Mills

ICR

646-277-1254

John.Mills@icrinc.com

 

Public Relations:

Keith Watson

fama PR

617-986-5001

ecoark@famapr.com

Steve Nelson of Dillard’s Inc., UCA (Lifetime Achievement Award in Accounting)

By Arkansas Business Staff on Monday, Oct. 23, 2017  (“Ecoark”) (OTCQX: EARK)-

Hanging on the wall of Steve Nelson’s home office in Little Rock is the associate degree in accounting his father earned in 1952.

Nelson said his father, Arnie, always encouraged him to enter the accounting field and become a CPA.

But, curiously, Nelson, 59, doesn’t remember his father ever talking about having the degree or working as an accountant. He first learned about it when he discovered the degree in a chest in his father’s home after he died in 2015. “If I knew about it, I don’t remember it.”

Nelson did follow his father’s advice and worked in various accounting positions in central Arkansas for 35 years, including 27 as vice president and controller for Dillard’s Inc.

He retired in 2015 and now teaches in the Accounting Department at the University of Central Arkansas.

“I’ve lived a charmed life,” he said, adding that he enjoys teaching and providing the next generation of accountants with valuable lessons that he learned, often the hard way.

“I teach a lot of ethics in the leadership class, and I tell them you will be confronted with things that may not be right. And the advice I always give the young ones is be true to yourself,” he said.

Born in Nebraska, Nelson and his family moved to Murfreesboro when he was a boy. His father was manager of a plant there.

In high school he took a bookkeeping class and loved it. “My father said, ‘You can be a CPA and do well,’” he recalled. His father also taught him and his brother the importance of a good work ethic.

Although he entered the University of Arkansas with the idea of studying business, Nelson fell in love with accounting when he took a principles of accounting class taught by Nolan Williams, who himself had a distinguished career as an accountant before entering teaching.

“Taking that class really sealed the deal because [Williams] would tell stories on how he would use this accounting in real situations. … He really made accounting fun. The hook was set after that, and that is what I try to do today.”

Another teacher, James Modisette, also had a major impact on his early career. “He motivated me to study hard and take the CPA right away,” Nelson said. “He said, ‘You are not going to be more prepared to take the CPA exam than you are right now.’”

Nelson passed on his first try.

After graduation, Nelson took a job as an audit associate with Ernst & Whinney in Little Rock. “Since we had a small office, I served a variety of clients. However, I mostly audited financial institutions and Dillard’s Department Stores.”

Tiring of the travel, and following the birth of his first child, Nelson took a job as vice president and controller with First Federal of Arkansas. In 1986 he converted First Federal from a mutual ownership form to a stock form and executed an initial public offering of stock. “This was an exciting time for me as I learned a new set of rules associated with SEC reporting.”

It was also in 1986 that he was named controller of First American Bank, which later changed its name to One Bank. He worked there for 18 months before being hired as controller at Dillard’s, at the age of 30. “I got to see it grow, and I grew along with it,” he said.

Nelson, who earned an MBA from the University of Texas in 2007, has served on a number of boards and commissions over the years. He is currently on the board of directors and chair of the audit committee of Ecoark Holdings Inc.

Following the Golden Rule was his management style, he said, adding that the best advice he can give to students is to be true to themselves.

“I try to impress upon them the importance of the accounting system, paying your taxes and being responsible.”

Ecoark Finding Talent It Needs

Two Execs Reshaping Holding Company
By Robbie Neiswanger
Published July 2, 2017

It didn’t take long for Jay Puchir and Charles Rateliff to realize they had a similar vision for Rogers-based Ecoark Holdings Inc.

Puchir, the new chief executive officer, began laying out his plans and needed a chief financial officer. Rateliff, who was retired after a 25-year career at Wal-Mart Stores Inc., was a member of Ecoark’s board of directors but began considering a return to full-time work.

“Charles said, ‘I think I might like to do this if we were going to go toward the Berkshire [Hathaway] model,'” Puchir said, referring to Warren Buffett’s holding company. “I picked up my 90-day plan and showed it to him, and it said ‘Berkshire model’ right on there. That was when the light bulb went off.”

They decided to team up and over the past three months have been reshaping the company, which was founded by Randy May in 2011. May stepped down as chief executive officer earlier this year, and Puchir, who joined the company as director of finance in December 2016, moved into the role. May remains board chairman.

Ecoark’s mission, according to Puchir, is to allocate capital for acquisitions and fund its existing businesses that have the greatest opportunity to produce long-term value for shareholders. He described the overall strategy as a “modified Berkshire model,” adopting a decentralized approach to managing companies and being open to an array of targets.

One key step has been the development of a merger and acquisition team within Ecoark to identify and evaluate potential businesses to bring into the fold.

“What we don’t want to do is exclude any potential possibilities of what might be a good return for shareholders,” Rateliff said. “So we want to be active.”

Currently, Ecoark has a portfolio of businesses that provide technology and services designed to make companies more sustainable without compromising profitability.

Zest Labs, based in San Jose, Calif., has generated the most enthusiasm and is Ecoark’s core subsidiary. The company’s technology tracks perishable foods with real-time analytics and is able to route those items through the supply chain to maintain as much freshness as possible. The technology is designed to help eliminate food waste and has plenty of market potential, according to Rateliff.

Ecoark recently purchased 440Labs, the software development arm for Zest, and sold a company called Eco3D for about $4.8 million. The firm’s other subsidiaries are Pioneer Products, Sable Polymer Solutions and Magnolia Solar.

“We’re not going to be standing over their shoulder,” Puchir said. “But we’re also going to be here to provide them guidance and capital and check in on their budget once a month.”

Over the past four months, Ecoark has raised $18 million with two institutional investors, and Puchir said the company has “well over” $10 million in cash on its books. He also added that the company also has about $60 million of equity it could put toward any potential acquisitions.

Ecoark completed its initial public offering last year, and shares of company stock are trading on the over-the-counter market. Ecoark has completed its application for uplisting to the Nasdaq and is awaiting approval from the U.S. Securities and Exchange Commission.

“It would open up a whole new realm of investors that can invest in the fund,” Puchir said.

The company continues to fill out its team. Last week, Ecoark hired Stephen Dacus as the company’s general counsel and his addition will help Ecoark “efficiently manage the deal structuring and vetting process for multiple acquisition targets simultaneously,” according to Puchir.

His addition comes after the company added former Wal-Mart chief human resource officer Susan Chambers and former Dillard’s controller Steven Nelson to its eight-member board in April.

The additions have been noticed. Clete Brewer, managing partner of Bentonville’s New Road Capital Partners, said he paid attention when Rateliff came out of retirement to become CFO.

“The more capital available in a market to both acquire and invest in growth companies is better for everyone,” Brewer said. “A rising tide lifts all boats. So we welcome that here and love to see more of it. I think it’s all positive for the area, the ecosystem.”

While most of the company’s current subsidiaries aren’t based in Northwest Arkansas, Puchir and Rateliff acknowledged the possibilities in a region that has produced Fortune 500 companies like Wal-Mart, Tyson Foods and J.B. Hunt. They believe there’s potential to help foster more successful businesses as well, which is why they’ve teamed up to lead Ecoark.

“I left a very strong career and career path,” said Puchir, who was previously in a CFO development program with HCA Holdings. “Charles came out of retirement after a long, storied career as well. The opportunity to work together, the opportunity to work with the company and the opportunity in Northwest Arkansas is just too great to pass up.”

SundayMonday Business on 07/02/2017

Measuring Produce Freshness: Part One–Ensuring Delivered Freshness

Bill McBeath Published on Jun 27, 2017

Freshness ‘blindness’ causes a lot of waste in produce supply chains. Here we explain the role of the Condition-based Expiration Date–a critical element to solving this problem. We look at what it takes to create a reliable and accurate algorithm that models deterioration of different varieties of produce exposed to different temperature histories.

The Big Freshness Blind Spot

The produce supply chain has a big problem—‘freshness blindness’ across the entire chain. Visual inspection is standard practice to assess freshness of produce as it travels from field to shelf. But visual inspection doesn’t work very well. Visual freshness indicators are lagging indicators. Produce appearance only reflects visible deterioration, not remaining freshness, even when very few days remain to consume the product (see Figure 1).

At the grower, everything looks fresh when loaded on the trailer. There is typically little or no visibility into how it has been handled up to that point. A grower may occasionally make a decision based on some known factor impacting freshness—for example, if they skimped on pre-cooling some pallets, they may send that batch to the local market—but typically, growers are not using a consistent, product-condition measurement method to determine the actual remaining freshness when they make decisions about where to send the produce.

The retailer also relies on visual inspection, resulting in low rejection rates but high return, mark-down, and throw-away rates. They usually will not know about inadequate remaining freshness until it is too late, as the product will already be at the store. The retailer needs to accurately know remaining freshness at the point of receiving the product. If spoilage only becomes evident at the store, or shortly after the customer purchases, it is too late. Post-purchase spoilage is especially damaging to a grocer’s brand and customer loyalty. Freshness of produce and other fresh food is the number one reason customers choose where to shop for their groceries. When produce goes bad shortly after being brought home, the shopper takes their business elsewhere.

What is needed is a consistent, condition-based metric to accurately determine remaining shelf life and systems that use that knowledge to make the smartest decisions at each step in the cold chain.

Ensuring Delivered Freshness

Delivering Every Pallet at Full Value

Freshness blindness in the produce supply chain results in many pallets being delivered at less than full value. Why is this? There are two primary contributors to this problem. First, a grower that has no visibility into actual remaining shelf life is shipping blind, resulting in a random distribution of freshness. Next, different customers have different ‘delivered remaining shelf life’ requirements1 (i.e. the customer’s requirements for days of shelf life remaining at the point the produce is delivered to them), as well as different transit time from the grower to their facility:

Group A—8-12 days freshness required: Regional and national Grocers
Group B—5-7 days freshness required: Restaurants, Institutional Food Services, local Grocers
Group C—2-5 days freshness required: Food processing plants, Bakers
Deriving Freshness (Shelf Life) Requirements

The freshness requirements for each of groups A, B, and C are derived by adding up component requirements. For example, a grocer may require 1-3 days to distribute to the stores from their distribution centers (DC), another two days to sell the product, and their customers have an expectation of 5-7 days of remaining freshness when they buy, hence the grocer requires 8-12 days of remaining shelf life at delivery. Institutional Food Service companies (e.g. Sysco, US Foods) may have 1-2 days distribution from their DC, two days to process, and 2-3 days at the restaurant, thereby needing 5-7 days remaining freshness upon receiving the produce. A good freshness management system will do all this math for you, once the right information has been entered.

When growers lack visibility into actual remaining freshness, some pallets with maximum remaining shelf life will be sent to B or C customers, whereas some pallets with inadequate shelf life will be sent to A customers. As a result, the value of the longer shelf life pallets sent to the B or C customers is wasted, since those customers do not need, or value, that extra shelf life as they will consume the product in a few days, whereas an A customer needs that extra shelf life. At the same time, the A customer ends up returning, marking down, or wasting product that had inadequate shelf life for them, which a B or C customer would have been perfectly happy to accept and use. Now instead those pallets end up discarded, donated, or sold for pennies on the dollar at a terminal market.

Every pallet has a ‘home’… i.e. a place where it will have full value when delivered. This ideal can be realized if the grower has three things: 1) visibility into accurate actual remaining shelf life, 2) knowledge of the transit times to each customer, and 3) an understanding of each customer’s freshness requirements. With those three pieces of knowledge, all pallets can be sorted and delivered to the right customer for full value.

Unfortunately, lacking visibility into actual remaining shelf life, the majority of growers do not match pallet freshness to customer requirements. How bad is the problem? Industry rejection rates are typically 1%-2%, but soft claims (product spoiled before it got to the store) are 7%-8%, representing a major revenue recovery opportunity for growers. Retailers typically cull over 10% of what they purchase, and markdowns represent another 7% inventory impact for retailers. Those numbers could be substantially reduced, while at the same time dramatically increasing reliable freshness for customers, resulting in decreased waste and more satisfied and loyal customers.

The Importance of Accurate Actual Remaining Shelf Life Measurement

As mentioned, one of the main reasons more growers do not adopt the kind of methodology described above is they lack a way to accurately predict remaining shelf life within the first 12 to 24 hours after harvest (key to making the proper distribution decisions), so they simply assume all pallets (of a particular variety of produce) have equal shelf life, based on the date of harvest. That assumption is wrong. As explained in Pallet-level Monitoring: Maximizing Delivered Shelf-life in the End-to-End Fresh Food Supply Chain, the varying amounts of time different pallets spend in the field can result in three or more days variation in shelf life between those pallets. Add to these differences in completeness of pre-cool and other handling varitations, and pallets of the same produce variety harvested from the same field on the same day, can have shelf lives that vary by as much as a week, even before they have left the pack house. The problem is compounded when pallets travel through a multi-echelon distribution system, as decisions are made at each node without knowledge of the actual remaining shelf life of each pallet.

Product-tailored Condition-based Expiration Date

What the industry sorely needs is a normalized freshness metric—more specifically, a Pallet-level Condition-based Expiration Date—one that is much more accurate than the traditional expiration date stamped on packages at the time of harvest. The traditional approach is a static date that ignores temperature exposure history and other conditions affecting shelf life. A Condition-based Expiration Date is dynamic, based on temperature exposure and other conditions such as location of harvest, condition at harvest (weather, ripeness), and time of season. Each time the Condition-based Expiration Date is referenced, it is re-calculated, based on the temperature exposure history up to that moment. It is also tailored to each product variety and field location, as each variety’s response to these conditions differs.

Thankfully, there is an affordable system available that provides accurate estimates of the actual remaining shelf life of each pallet of produce. Zest Labs has developed a solution comprised of devices, software, methodologies, and algorithms that take into account the product type, variety, the specific location (field or lot number) of harvest, harvest conditions (weather, ripeness2/maturity level), time of season, and most importantly, temperature exposure history.

Each pallet has its own unique history of temperature exposure in its end-to-end journey from field to shelf. That is by far the single biggest determinant of freshness.3 Therefore, to get an accurate measure of remaining shelf life, the temperature history of each pallet of produce must be monitored, from the time it is harvested in the field, until the end of its journey when it is delivered at the store.4 However, temperature history data by itself is not enough. An algorithm is required to accurately calculate the actual remaining shelf life of each pallet, based on a combination of pre-harvest factors, harvest conditions, and its temperature exposure history to-date.

Zest Labs calls its Pallet-level Condition-based Expiration Date a ZIPR Code. It takes into account harvest location and conditions, and is adjusted5 as a pallet of produce is exposed to various temperatures throughout its journey from field to shelf. Two pallets picked on the same day, from the same field, but which are then exposed to conditions that are different enough, will end up having different ZIPR Codes, accurately reflecting the actual remaining shelf life of each pallet.

The Role of Temperature Response Profiling

The Condition-based Expiration Date must be tailored to each produce variety if it is to have any validity and accuracy. Of the tens of thousands of varieties of fruits and vegetables grown in the U.S., about 500-1,000 varieties comprise the majority of what is sold in grocery stores and restaurants. In order to convert a temperature history of any one of those into an accurate remaining shelf life estimate, someone has to develop temperature response profiles for each of the various varieties. This requires testing and observing how each variety responds when exposed to different temperature histories. Zest Labs has done (and continues to do) the required testing and modeling of response to different temperatures for different varieties for each harvest location.

Temperature response profiling requires an objective measurement of what constitutes the end of shelf life for each variety. For grocers, this comes down to two moments of truth: 1) buy decision—when a shopper examines the produce and makes a decision whether it is fresh enough to buy, 2) eat/throw decision—later at home, does the produce stay fresh enough, long enough for the shopper to satisfyingly eat it (or if they have to throw it, has it been long enough that they don’t expect it to still be fresh, so they don’t blame the grocer). These subjective decisions, ‘would I buy it’ and ‘would I eat it,’ need to be converted into an objective measure6 of freshness. This is done by building up a body of knowledge about specific objective measurements, such as number and size of spots, measured firmness, color changes, and other signs of deteriorating freshness that are specific to each variety. The system needs to be very specific about translating these measured freshness indicators into what is and isn’t acceptable; i.e. what constitutes the end of useable shelf life. This also serves to capture and institutionalize this knowledge. Instead of relying on a few quality control experts, who can only be experts in a few dozen varieties anyway, knowledge of hundreds of varieties is encoded in the system.

A Methodical Approach to Temperature Response Profiling

Developing a temperature response profile for a variety of fruit or vegetable requires a methodical approach. Zest Labs takes samples of each specific variety right from the grower at the time of harvest over a period of time during the beginning, middle, and end of the season. These samples are brought to their lab to be stored at different temperatures. The samples are photographed and evaluated daily, using specific objective criteria. Different varieties spoil in different ways so the criteria are specific to the variety. The freshness criteria are developed through interviews with produce managers at the growers and quality control managers at the retailers, asking them what specific criteria they use. These criteria may vary by chain, region, and store. Through these interviews, a consensus criteria is reached.

The subjective criteria (‘this one has too many spots,’ ‘the color is not quite right’) are then translated into specific measurable objective criteria in a normalized rating from one to five (for example, 10-15 spots might be a two rating for a specific variety of fruit). From this, Zest Labs is building up a database of intelligence about how long different varieties stay fresh (according to the specific freshness criteria used in the industry) under varying temperature conditions. This approach also discovers how each variety’s temperature response profile changes when it is grown in different locations and/or harvested at a different level of maturity or time of the growing season. Zest Labs’ knowledge base is continually expanding as new varieties are tested, and deepening as the same varieties are tested in different seasons, locations, and conditions. There is no other solution provider that we are aware of making anything close to that kind of investment and building up that knowledge base.

For the highest volume varieties (the 20% of produce that comprises 80% of the volume), Zest Labs also has its retail customer’s quality control (QC) expert conduct testing at the retailer’s DC. The QC person takes pictures every day, using the same mobile application used in Zest Labs’ lab. In this case they are observing the condition of the produce in real world scenarios, having tracked the temperature exposure of each of those pallets from the point of harvest. Zest Labs correlates observations of these ‘retention samples’ back to what it is seeing in its labs from the growers’ samples. This includes observing which symptoms prevail first (e.g. decay, spotting, wilting).

Zest Labs may also have the produce manager in some of the retailers’ stores use the same application to check the produce again at the store. This helps the retailer dispel the common myth that the real problem is in the handling of produce at the store. People tend to blame the workers at the place where the item spoils, but the data shows that often it was going to spoil anyway, no matter what the store did. This knowledge directs attention to where the real problem is—delivered freshness. The point is not to blame the grower, but diagnose the problem and give both the grower and the retailer the tools to fix it.
In part two of this series, we will look at the role of process mapping in deriving accurate customer requirements, the need for a prescriptive system driving operations across the cold chain, and the benefits of a freshness-aware, intelligent cold chain.