Good data in, good food out

When your company is being investigated by the Food and Drug Administration over contaminated Chinese food products, it's good to have proof you did nothing wrong.

Rene Lavoie had that proof -- computerized proof -- earlier this year when the FDA thought his New York state cattle-feed company might have shipped a tainted Chinese feed additive to a Canadian mill. But, using "track-and-trace" software from Feed Management Systems of Brooklyn Center, Lavoie proved the FDA wrong and ended a freeze on importing the Canadian feed back into the United States. "Within minutes we could prove the origin was South America through the product's lot number," said Lavoie, general manager of Mercer Milling Co. in Liverpool, N.Y.

What Lavoie experienced was a run-in with the federal Bioterrorism Act of 2002, enacted in the aftermath of Sept. 11. It requires animal feed and human food manufacturers to keep records of the source of their ingredients -- and produce the records in 24 hours if the FDA demands them. Lately the law has been used not to thwart bioterrorism but to root out shoddy Chinese practices that result in feed or food contamination.

Regardless, Feed Management Systems' track-and-trace software helps pinpoint the source of animal feed constituents. It does so by tracking details such as the supplier that delivered a product, where it came from, what truck it was delivered in and what previously was kept in the storage bins into which the new shipment was put.

The company is just one of several that have jumped at the chance to provide such software, said Jean Kinsey, co-director of the University of Minnesota's Food Industry Center.

"It's a big health issue if a fake ingredient gets eaten by animals and harms them in some way, or gets into the meat or milk of animals and is transmitted to humans," Kinsey said. "The software makes it possible to have an investigation and then do a recall or issue a stop order on shipments."

Track-and-trace software, which got a marketing boost after Sept. 11 and the 2003 mad cow disease outbreak, might benefit further from the more recent Chinese food and feed contamination, said Richard Reynertson, CEO of Feed Management Systems.

While federal government concern about contaminated Chinese products has extended beyond food to include toys, the issue first came to public attention earlier this year when the chemical melamine was found in Chinese wheat gluten exports used in U.S. pet food. The ingredient was found only after many pets were poisoned. Later, similar concerns were raised by antibiotics used in Chinese seafood products and a poisonous chemical found in Chinese-made toothpaste.

"But I don't see the Chinese contamination causing a spike in our sales this year or next year," Reynertson said. "It takes longer than that." He's also careful not to claim his firm's software will prevent all future contamination or bioterrorism.

"The truth is, we're vulnerable," Reynertson said. "We're a very open society, and the food supply is still very open to tampering. But by monitoring the food supply with good people, processes and technology, we can minimize what might happen."

A boost from Cargill

Another boost for the company is coming from agribusiness giant Cargill, which under an April agreement is recommending the software company's products to customers of its agricultural consulting services. Cargill said it decided to recommend Feed Management Systems because it also has a strong suite of feed mill business programs tightly integrated with Microsoft's accounting software.

"Track-and-trace capability is very big in the feed mill business," said Bill Mead, Cargill's North American regional director for consulting and animal nutrition. "It has to do with both the government tracking requirements and with companies wanting to protect their reputations."

There may be more track-and-trace software customers as feed mills push to save money by switching from paper record-keeping to computerized management, he said.

"A lot of the larger agricultural companies have had this capability for years, but the smaller ones, such as feed mills, haven't been able to use the technology because it was very expensive until recently," Mead said.

Cost depends on size

The price of the Feed Management Systems' track and trace software depends on the size of the feed mill, but typically is $50,000 to license the software plus $10,000 to $15,000 a year for software maintenance fees, Reynertson said. The company's software is used in about 200 of the nearly 3,000 U.S. feed mills, he said. The target market is 640 of those feed mills that produce more than 40,000 tons of feed annually.

So far, Reynertson said, track-and-trace software isn't a big seller on its own, but instead has helped sell his firm's full suite of software, which the company claims will pay for itself through increased efficiency in about a year.

Privately owned Feed Management Systems has 50 employees, including 12 in the Twin Cities. It will have $8 million in revenue this year, and has been profitable for the previous five years, Reynertson said.

Feed Management Systems began in 1986 as Easy Systems, a custom programming company, and in 1999 bought Brill Corp., which made software for the commercial feed industry. The company went through Chapter 11 bankruptcy in 2001 and hired Reynertson as CEO. Today it sells software in about 50 countries.

Reynertson's goal is to expand international sales and broaden the potential customer base from feed mills to other industries that produce products such as flour and rice for human food, liquor and the corn-based alternative automotive fuel ethanol.

"They all use a manufacturing process that's based on the frequently changing availability of ingredients and their cost," he said. "That's our niche."

Steve Alexander • 612-673-4553

Steve Alexander • alex@startribune.com