YottaMark’s Investors Double Down on Food Tracing Technology

8/15/12Follow @wroush

Fresh, local, organic, seasonal, sustainable—in the food world those adjectives go together so often that there’s an acronym for them, FLOSS. But if Redwood City, CA-based YottaMark has its way, there will soon be another letter to add: T, for Traceable.

As a hedge against fraud, counterfeiting, relabeling, and other common supply-chain hazards, YottaMark has developed a system of individualized security labels that can be printed out in the form of QR codes and attached as stickers to almost any product package. Using a smartphone or other mobile device, shippers, retailers, or consumers can scan a YottaMark sticker, verify that a product is authentic, and figure out where it came from.

Well, that kind of traceability turns out to be pretty useful in the fresh produce business, where YottaMark has set up a whole division called HarvestMark. And the company announced today that it has collected $24 million in new venture financing to grow the HarvestMark operation, almost doubling its total funding to $53 million.

Westbury Capital led the Series D round, which also included new investor Fairhaven Capital and existing investors ATA Ventures, Thomvest Ventures and Granite Ventures.

HarvestMark offers an app for iPhone and Android smartphones that lets shoppers scan the QR codes on the packages of participating fruit, vegetable, and poultry brands and see information about where the products were grown or raised, when they were harvested, and whether they’re subject to recall. The company says that 300 brands are using the HarvestMark codes, including Driscoll’s, Sun World, Calavo, and Petaluma Poultry. So far, products using the HarvestMark codes can be found at the supermarket chains Kroger, Fred Meyer, and Ralphs.

YottaMark says the HarvestMark codes give produce growers an easy way to comply with standards being developed by the Produce Traceability Initiative, a program devised by the leading produce industry associations in the U.S. and Canada to create a consistent way for producers and grocers to trace food “from farm to fork.” YottaMark is one of about 50 technology vendors participating in the initiative.

Adopting the codes brings at least two benefits to producers, YottaMark argues. When there’s a food recall such as this May’s recall of baby spinach contaminated with salmonella bacteria, consumers can more easily figure out whether the food they bought is affected. That can help limit the marketing and economic impact of recalls. (A wider 2006 spinach recall drove spinach consumption to record lows, and it took the industry five years to recover.)

But just as important, according to YottaMark, the HarvestMark system addresses a growing desire on the part of shoppers to know who grew the food displayed on their local supermarkets’ produce shelves, how long ago it was harvested, and how far it traveled. The company says providing that kind of transparency can turn loyal shoppers into brand evangelists. (Shoppers can use the HarvestMark app to share social media updates about their favorite foods, or to send comments and questions directly to farmers.)

And there’s one more benefit, according to YottaMark CEO Scott Carr: the HarvestMark codes let food growers, shippers, and retailers participate in the burgeoning “big data” movement, which uses digital information about consumer spending and behavior to derive new marketing insights. The funding round will enable the company to “advance proprietary analytics that deliver actionable insights to drive retailer and producer profits,” Carr said in a buzzword-bingo-winning statement. (YottaMark did not immediately respond to Xconomy’s requests for direct comment on the funding round.)

“The fresh food industry is an emerging market with tremendous opportunity, and HarvestMark is capitalizing on the value of big data to bring food suppliers significant return on their investment,” said ATA Ventures founder Hatch Graham in a statement. “HarvestMark is the first solution that links the first and last mile of the perishable food supply chain, addressing needs at every point from farm to kitchen.”

Here’s a HarvestMark video explaining the QR code system to food producers.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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