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.

Ecoark Remains Focused On Delivering Long-Term Shareholder Value

By Lorimer Wilson
Wednesday, June 14, 2017 10:30 AM EDT

Introduction
It is seldom, if ever, that one comes across a company that bills itself as being in the “freshness management” business, so when I learned of Ecoark Holdings, Inc. (OTCQX: EARK) it immediately piqued my interest. I wanted to learn more about: what such a business was all about, if the company had anything unique to offer in concepts and products, how sound, yet aggressive, their business plan was, how successful they had been in their initial launch and what their rollout plans were how solid their financials were, how soon it was going to get a Nasdaq listing as opposed to the current OTC and, most importantly, if they had the management strength to make a success of their aspirations.

To that end I made contact with Peter Mehring, the CEO of Ecoark Holdings’ subsidiary, Zest Labs, and put forth a series of questions which he was good enough to answer in full. I think that after you have seen his frank replies you will be well suited to make an investment decision regarding EARK.

The Company

First some background. Ecoark Holdings, Inc. is a diversified holding company based in Rogers, AR and was founded in 2011. The company currently has three wholly-owned subsidiaries: Zest Labs, Pioneer Products and Magnolia Solar.

Zest Labs
Product Information
My understanding from my research is that:
Zest identified that the primary cause of the roughly 33% of post-harvest waste that occurs annually between the farm, the retailer and consumers in the U.S. was due to the fact that the supply chain struggled to keep produce sufficiently cool, and therefore fresh, along the way from farm to store and that
Zest developed technology – something it called the “Zest Fresh solution” – to monitor the produce at pallet level and provide real-time feedback as to its condition.

Zest maintains that the application of its technology has allowed retailers to reduce their spoilage by 50% thus representing a significant boost to their bottom line.

1. Please expand on what this “Zest Fresh” solution is, and how it works?
Zest Labs offers a complete “freshness management solution.” Our wireless sensors monitor time and temperature at the pallet level throughout the entire supply chain. Our cloud-based Zest Fresh platform is able to combine pallet level data with product profile data (specific to field and pack house) to dynamically calculate a freshness metric – or ZIPR Code – in real time. In this way, Zest Fresh provides two primary benefits to growers:
It improves quality consistency through real-time feedback on adherence to best practices, with process-specific corrective actions.

It improves delivered freshness consistency via intelligent routing that accommodates for natural variances by matching destination requirements with measured freshness. Zest Fresh also empowers workers with mobile applications and web-based dashboards that provide product visibility and real-time alerts to manage each process step. Zest Fresh is challenging the status quo, which currently assumes all products harvested on the same day have the same remaining freshness, with no visibility into field or processing variances, resulting in arbitrary shipping assignments.

For example:
If a load of fresh strawberries came in from the fields for inspection, but the inspector was late, Zest Fresh would notify the yard manager with a real-time alert, letting them know that the pallets exceeded the inspection process time. While this may seem like a minor adjustment, a typical pack house will have hundreds of pallets in motion every day, with many getting delayed or temporarily misplaced, leading to significant impacts on remaining freshness if not addressed in a timely manner. Further, Zest Fresh also considers the impact on the product, dynamically adjusting the ZIPR code which may alter first expired, first out (FEFO) inventory management and/or subsequent routing.

2. How did the development of your product come about (through acquisition or research and development)?
The Zest Labs team sees food waste as a significant sustainability issue, larger than most people realize. More than 30 percent of post-harvest food is wasted, squandering precious natural resources and contributing to global warming through wasted transportation miles and decomposition in landfills.

While investigating pallet-level monitoring of in-transit temperature – where there can be as much as a 30 percent temperature difference between pallets – the Zest Labs team found that an even greater freshness variance was occurring pre-shipment. Upon review of post-harvest processing, it was evident that even though the science behind extending produce shelf life through refrigeration is well documented, adherence to these practices for each pallet was not being realized. The lack of visibility into the post-harvest process monitoring contributes to significant variance, since most facilities run near capacity. Any problem leads to impacted product, with further impacts propagating through the remainder of the day. Typically, one-third of product is impacted every day, resulting in less than assumed shelf life.

Zest Labs’ solutions were developed through internal research and development. We have been developing and testing our freshness management solution since 2010. Zest Fresh was released in 2016, initially targeting fresh fruits and vegetables. We have taken a “first principles” approach to understanding food waste, and have leveraged existing technology and developed new technology to address these issues. The company was acquired by Ecoark Holdings and operates as a wholly-owned subsidiary.

3. Is the technology proprietary?
Yes. The core workings of the Zest Fresh technology and our Intelleflex wireless temperature monitors are proprietary, and are in part based on 65 U.S. Patents issued to Zest Labs. However, we do embrace open platforms and standards to facilitate ease-of-use integration and deployment. For instance, the Zest Fresh mobile applications are based on the Android platform, enabling use of most third-party rugged handheld devices. Further, Zest supports application integration (i.e. WMS, TMS) through the REST Web API, a standards-based definition that makes for easy integration. Zest Fresh also incorporates traceability standards such as EPC and PTI.

4. Do you have competition and, if so, how do you differentiate from them?
There are a number of organizations involved in food waste, as the industry has gotten increasingly more attention. However, the vast majority are focused on food waste salvage and re-distribution. Zest Labs is the only organization devoted to food waste prevention, by helping producers, distributors and retailers avoid the factors that significantly contribute to food waste. Certainly, there will always be some waste, so it’s good that food waste salvage and re-distribution organizations exist. However, to truly address the issue, what’s needed is a solution that addresses the fundamental problems and helps the industry become more efficient and sustainable.
As long as we have had refrigeration to extend food’s shelf life, cold supply chain tools have existed to monitor compliance. Unfortunately, other than Zest Labs, the available solutions in the supply chain only provide what is referred to as either “after the fact” or “forensic” data. That is, examining data after spoilage was detected, and trying to ensure it doesn’t happen again. What’s important to note is your supply chain rarely operates the same way twice, and yesterday’s setbacks or instances of non-compliance are often not the same as today’s. To truly optimize the supply chain, the food industry needs to rely on real-time analytics that ensure proper processing and distribution of product as they ship.

Zest Labs is the only company targeting waste prevention with pre-emptive analytics rather than salvage and redistribution. The Zest Fresh solution, built with event-driven real-time feedback, ensures that growers deliver and retailers offer a more consistently fresh product. In doing so, we are helping to reduce waste at every stage of the food supply chain.

5. Where was the Zest Fresh solution first introduced and when?
Zest Fresh was officially launched in the summer of 2016. The launch was based upon successful pilots with strawberry farmers and lettuce growers in Florida and the U.S. Southwest in 2015 and 2016. Zest Fresh has been in development for more than six years, including numerous trials and studies based on a variety of produce. The underlying value proposition for Zest Fresh was developed in 2011 based on a case study of field-to-retail pallet-level monitoring of a Mexican blackberry harvest.

6. How many contracts along the grower/shipper, distributor and retailer operations chain did you secure in 2016 (by category, if possible)? What is your objective in 2017? Can you expand on how such contracts are developed?
Ecoark and Zest Labs are under NDA agreements and not able to discuss these details. Zest Labs continues to deploy with additional growers and retailers in 2017, and will make public announcements as enabled by our customers.

7. Have you yet secured what I would think is your ultimate objective of having a pallet load monitored through every link in the chain i.e. from grower to distribution center, to transport, to retailer warehousing, utilizing your Zest Fresh solution?

Yes. Successful testing and initial deployments have validated every aspect of the Zest Fresh solution, reflecting a greater than 50 percent reduction in waste experienced by retailers. Engaged growers and processors have also appreciated the significant benefits of real-time operational visibility, resulting in improved efficiencies and quality consistency. We validate these improvements by benchmarking quality at the retailer, both before and after using Zest Fresh. Zest Fresh has real-world results reflecting measurable improvements in quality and ease-of-use by operational workers and scalability across multiple growers, harvest locations and nationwide retailer locations.

8. What states are you currently selling your solution in? What is your share of market in each? What are your rollout plans for 2017?
Zest Labs is working with a number of retailers and growers that have a regional or national presence. At the moment, our focus is on deployments within the United States and Canada.

9. What is the market potential for your product?
There is strong market potential for Zest Labs. Food waste is gaining more attention – not only causing frustration within the industry, but is significantly affecting customer satisfaction. Again, no organization wants to waste the products they devote so much time and energy to delivering. It’s simply bad business. As customers begin to pay more attention to sustainability and want assurances that they are buying from sustainable businesses, retailers are increasingly attracted to solutions like ours in order to demonstrate their corporate social responsibility.
Zest Fresh can help address retail waste for approximately 70 percent of fresh food offered by retail grocers. Given the FMI market size estimates for annual perishable food sales of $260B, we see the addressable market as approximately $182B (with distribution and retailer food loss estimated at 18 percent, this represents addressing roughly $33B of food loss). With roughly half of the U.S. retail grocery industry served by the top seven grocers, we see a significant opportunity to address half the market. Zest Fresh has the advantage of the “network effect” in deployment, as when a retail grocer requests use of Zest Fresh by its suppliers, those suppliers are more likely to promote the use of Zest Fresh to other retail grocer customers. This quickly builds market momentum, increasing the adoption rate while reducing sales and support overhead.

We are looking to expand internationally in 2018 as a natural progression to support produce importers from Central and South America. Some of those importers may provide entry into the European market, as well.
10. What are the most significant challenges your company is facing right now?
Our major challenge is introducing an entirely new metric to the food service industry. The people whose job it is to deliver fresh produce have never had a metric for measuring how fresh their produce actually is. Traditionally, fresh food was grown, harvested and consumed all in a local environment, so waste was minimal and “freshness management” was not something people had to worry about. As the supply chain has expanded, waste has become a much larger issue. And while growers and retailers are aware of this, education is needed to get them to think differently and change their processes.

Zest Fresh challenges the status quo of assuming all food harvested on the same day has the same freshness. This initially intimidates growers and retailers, as they are not sure how to manage product differently. Currently, the cause of early spoilage is most often blamed on the current owner either in transit or at the store. The fact that fresh food was delivered with varying remaining shelf life has generally been overlooked. This needs to be addressed through education, which is part of the benchmarking process we use to provide direct evidence for each retailer and grower.

Financial Information
The following sections were answered by Ecoark’s CEO, Jay Puchir.
Now down to money matters!
1. Where do you see Ecoark in 2 years, 5 years (regarding sales, market share, profits, new business acquisitions, new product development, etc.)?

Ecoark remains focused on delivering long-term shareholder value. Our new executive leadership team, with the support of our Board, has recently shifted the company’s mission from a sustainable supply chain company to a sector-agnostic diversified holding company. As we move towards attaining profitability and deploy a decentralized management approach to our subsidiaries, we will be able to aggressively grow through acquisitions in the next one to three years.

Management Information
In real estate it is all about “location, location, location!” In business having a profitable, growing company is all about “management, management, management!”

1. Tell me about yourself and your background and that of one or two of your senior executives.

I am Ecoark’s president and chief executive officer. I joined the company in December 2016 as director of finance, was appointed as treasurer and secretary in January 2017, and was appointed chief executive officer in March 2017. I started my career as an auditor at Price Waterhouse Coopers and a consultant at Ernst & Young, ultimately achieving the position of senior manager at Ernst & Young. Immediately prior to joining Ecoark, I held the role of associate chief financial officer with HCA, and from March 2010 to February 2016, I served as both the accounting manager and director of finance/ controller at The Citadel. I also served on a part-time basis as the chief financial officer of Trend Discovery Capital Management from July 2014 until March 2017. I received a Bachelor of Arts from the University of North Carolina at Chapel Hill and a Master of Business Administration from Rutgers University. I am also a licensed Certified Public Accountant. I am a relatively young CEO at the age of 41, and have a tireless drive, focus and plan to take Ecoark to the next level.

Charles Rateliff is Ecoark’s chief financial officer, who retired in 2005 from Walmart Stores as a senior vice president after a 25-year career. He started his career at Walmart as an internal auditor and within two years was promoted to assistant treasurer and three years later to treasurer. During his tenure at Walmart, Charles worked across several departments including, compliance, risk management, profit sharing and associate benefits. He is also a member of the Ecoark Board of Directors.

As you know, Peter Mehring is the Chief Executive Officer and President of Zest Labs. He has led Zest Labs’ efforts in pioneering pallet-level condition monitoring and real-time prescriptive analytics for fresh food management. Peter was formerly vice president of Macintosh hardware group at Apple Computer, SVP of Engineering at Echelon, and founder, general manager and vice president of R&D at UMAX. He’s also held engineering management positions at Radius, Power Computing Corporation, Sun Microsystems, and Wang Laboratories throughout his extensive career.

2. What gives you confidence that you and your team have the experience and abilities to expand and fulfill the objectives of Ecoark?

Ecoark is committed to building the best team possible – from our executives to our Board of Directors and down to our portfolio companies – to ensure that we can properly execute on the company’s objectives and responsibilities to our shareholders. The current experienced management team and board of directors at Ecoark reflect our commitment. Zest Labs also has a very experienced management team with extensive background in technology, software solutions and successful large scale deployments.

Reasons to Invest
Hopefully the answers to the above questions will give a potential investor sufficient insight into the merits of investing in Ecoark. That being said,

1. Are there any aspects of Ecoark that you think Wall Street is overlooking?
Ecoark is located in Northwest Arkansas in the retail capital of the world, and feel that we can generate alpha by utilizing the business opportunities, talent pool and access to capital in this growth area of the country. We have an ambitious, aggressive strategic plan to commercialize the Zest Labs technology and grow through acquisition in the coming year. Also, the technology of our subsidiary, Zest Labs, has numerous applications outside of fresh produce which we intend to commercialize in future years.

2. How soon do you expect to be listed on the Nasdaq exchange as opposed to the current OTC?
Ecoark expects to be listed on the Nasdaq in the near future.

3. What have your company’s greatest successes been to date?
The company’s greatest early success has been its ease and ability to generate capital since inception. We have numerous investors who have believed in and invested in the company since it was private. Many of these investors have invested in multiple financing rounds and continue to be shareholders to this date. We’re now in a position to move the company towards attaining profitability and aggressively grow through acquisitions.

4. What makes Ecoark a good investment opportunity at this time?
Ecoark’s core mission is to generate long-term shareholder value by establishing and developing a portfolio of subsidiaries featuring both stable, free cash flow positive businesses and opportunistic scalable technologies.
Our vision is to deploy a company-first philosophy using radical transparency to optimize capital deployment via aggressive deal flow sourcing and vetting, and to achieve financial objectives by hiring and developing strong, properly incentivized managers.
Going forward::

We will be allocating capital for strategic acquisitions and to fund existing businesses that present the greatest opportunity for producing long-term shareholder value. The company will continue its production of commercialized solutions to solve the $35 billion problem of fresh food loss within the U.S. supply chain, led by Zest Labs.
We will focus on attaining profitability of our existing subsidiaries, increasing deal flow sourcing and vetting, and continuing to evaluate and develop talent.

As our subsidiaries attain profitability, we will begin moving toward a decentralized management style that will allow the holding company to properly scale. We have remained committed to these goals, with recent announcements such as the addition of Susan Chambers and Steven Nelson to Ecoark’s Board of Directors, helping the company to further streamline operations and focus key subsidiaries on attaining profitability.

Supplementary Information
Pioneer Products
As I understand it from your web site:
Sable Polymer Solutions, based in Flowery Branch, GA, was acquired by Pioneer Products in March 2016 and that it is a compounder of recycled plastic from reclaimed retailers’ waste streams.
Pioneer Products then repurposes the plastics into new consumer products sold back to retailers and consumers and that, for example, Pioneer places recycled plastic 45 gallon garbage cans to all 3,600 Walmart stores in the continental U.S.

Rather than go into detail please give me an overview as to:
1. What is the financial health of this subsidiary currently.
Pioneer Products’ sale of recycled plastics products was the company’s principal source of revenues in 2016 and 2015. Product sales increased 89 percent between 2015 and 2016.

2. What are the future plans and objectives for the company.
Through the acquisition of Sable Polymer Solutions in May 2016, Pioneer Products is able to expand on its specialization across the purchase, sale and processing of post-consumer and post-industrial plastic materials, as well as the services it provides to variety of customers and suppliers throughout the plastics processing industry, from small extruders, molders and scrap collectors to large corporations.

3. What synergies, if any, Pioneer has with the Zest Labs subsidiary?
Similar to Zest Labs, Pioneer’s offerings enable Ecoark to play a key role in supporting retail-level sustainability, including the reduction of waste within the supply chain and operations.

Magnolia Solar
Again from your web site I note that:
Magnolia Solar’s key innovation is in their proprietary nanotechnology (they currently have 7 patents and 16 more in the pipeline) that captures more of the available solar energy.
Their research is focused on developing flexible, lightweight, high-efficiency solar cell technologies that harness the abundant, renewable, and entirely free energy of the sun.
Their unique design increases cell efficiency by absorbing more light and converting more photons to electricity.
This seems like a very exciting venture.

1. What more can you tell me about Magnolia?
Through industry innovations, such as its anti-reflective coatings, Magnolia can combat many of solar’s shortcomings. For example, most solar cells suffer from a reduction of efficiency due to reflection of some of the incident sun light away from the solar cell. The energy in the reflected light is not converted to electric power and the loss of this power affects the efficiency of the cell. Magnolia’s anti-reflection technology reduces the loss of power due to reflection of negligible levels, thereby allowing more sun light to be absorbed for a higher efficiency. Further, its design uses nanostructure to horizontally scatter light that enters the cell to substantially increase the travel path of the light. This innovation addresses another shortcoming of the traditional solar cells where the travel path, particularly in thin-film solar cells, is small and therefore all the energy that enters the cell is not converted to electric power.

2. Are any of its technologies used by Zest Labs?
No. Ecoark subsidiaries currently remain independent of one another, but future acquisitions may potentially have synergies with Zest Labs technology.

The Supply Side: Zest Labs ready to push process to improve freshness (Talking Business & Politics)

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.