How FoodMaven impacted the pandemic food supply chain by reducing food waste - an Acumatica use case
- The pandemic brought a disconcerting dose of food supply uncertainty. FoodMaven found itself right in the middle of that - trying to keep food supplies from the landfill via their supplier marketplace. Here's their story.
Pandemic life has exposed food uncertainty to more people than ever before - including our dependence on international supply chain networks.
In turn, that's fueled interest in localizing resources - and supporting organizations that serve those populations.
Enter the Denver-based FoodMaven. Their goal? No more landfills of discarded food. Recover the $200 billion in lost revenue caused by wasted food each year - and give buyers and suppliers a new marketplace to sell and purchase food - before it hits the landfill.
But could FoodMaven rise to the pandemic food supply challenge? On a recent video call, Greg Lems, FoodMaven's Director of Engineering, gave me the full story.
Building a new marketplace for selling food supply
We would all love to stop food waste in landfills. Much of the discarded food is perfectly good for human consumption. But - easier said than done. So why does food waste happen? Lems outlined three major reasons: food oversupply, imperfect-but-still-perfectly consumable food, and local food. Local? Yes, because some farmers are too small to be considered by the "big food system." Can a marketplace help? Perhaps, but you better get the tech right. As Lems told me:
In order to create a marketplace for that type of product, you have to have some technology behind it. It's more than just "Hey, let's create an app or a website." It's creating a fair amount of smarts around that entire chain.
We have suppliers that come to us and say, "Hey, we have an over-supply of food, how do we get that with you, and get it into a marketplace?"
FoodMaven also needs the tech to reach out to organizations that buy food in bulk, and do it at scale. Then there is the pricing engine. Lems:
Part of our value proposition is that the food we sell, we can sell it at a discount, because it was, you know, sort of rescued. But if we don't have the prices right, nobody's going to want to buy it. So we have to be able to create algorithms, and store a tremendous amount of data about correct prices for food.
Welcome to the engineer's riddle. Each piece of FoodMaven's process requires a technical underpinning - far more than their previous QuickBooks system could handle. That's why Lems joined the organization in July 2018.
Getting the food sourced properly, putting it into a marketplace, and then having the right pricing around it - every piece of that has a technology component... I have a career as a software developer and technology leader; it just seemed like a super cool problem to try to solve.
Your tech platform must support your growth
Lems wanted an infrastructure that could keep up with their ambitions:
Part of our strategy is to start in one part of the country, in this case, Colorado, and then acquire food distributors in other markets across the United States... I just went to Dallas to get our acquisition down there cut over to our new platform.
Time to think like an enterprise:
As you look at a rollout like that, how will you go to multiple cities, multiple markets, integrate with e-commerce systems, integrate with a warehouse management system, all that kind of stuff? Obviously, you have to look at a more enterprise-type solution. And that's what I was brought on to do.
So was Acumatica on the radar screen from the beginning? Lems explains:
Yes, we had a few different vendors on the radar screen - Infor was in there, as well as NetSuite. But we really liked Acumatica for its flexibility and integration capabilities.
Pulling in data was a key criteria:
We have a lot of things we want to tie into. Like I mentioned before, data and data flow is important. We need to be able to integrate to a number of other systems.
FoodMaven actually began with a pilot project on Acumatica, related to community purchasing of food at the Pikes Peak Community College food bank. FoodMaven used Acumatica to manage the food inventory. That showed Lems what he needed to see:
We said, "Let's have an initial project with it; that way, we can see how the integration works before we do a full-on cut over. "Anybody who's done ERP rollouts knows all sorts of horror stories of trying to do too many things at once. So we figured we'd give it a whirl this way - and it went well.
FoodMaven's main Colorado business went live on Acumatica in September of 2019; they were fully operational on Acumatica well before the proverbial adversity hit the fan this spring. So what happened next? Lems:
Unless you have a warehouse full of robots, which, like most startups, we don't, everything hit the fan... For one, as you alluded to, a lot of employees needed to be able to work from home. Acumatica, as a cloud solution, is great for that. We didn't have to get everybody on a VPN, and go through all that hassle.
The pandemic hits the fan
FoodMaven's customer demand went in different directions. Restaurants shut down; retailers found their shelves bare - and needed FoodMaven more than ever. Colleges were emptied - one client source (temporarily) gone. But: hospital demand remained steady. FoodMaven was compelled to add another service: business-to-consumer sales. Lems:
We had a number of members of our community interested in our product... That's somebody coming to you and saying, "Here's my credit card; I want to buy some food." We felt the community deserved that common offering. And: it furthered our mission to try to prevent that food from going to waste.
So we set it up. We still have a limited presence of a B2C, which is supported by Acumatica on the back end, so that people in our community can make purchases from us. Anybody who wants to buy fifty pounds of chicken breasts, have at it - just make sure you have a big freezer.
FoodMaven pulled through. If anything, the public interest in a sustainable food supply has gone up. Lems:
It's something that hits home with everybody. You know, with everything that's been going on in politics recently, somebody said to me, "You can watch what's happening at the national level on TV, but really, what it comes down to is: what's your mayor doing? And what's your school board doing?" Those are the things that affect you the most. So it makes sense that people are paying attention to local - and food as part of that.
What else does FoodMaven want to do with Acumatica? Lems says their recent focus was customizations needed for the food industry. Now he wants to push ahead with even deeper e-commerce and warehouse management integrations. Keeping up with Acumatica's new functionality keeps his team busy also:
Acumatica is always coming out with new features. We've been through one major upgrade at this point, and it was great. There were a lot of really interesting things - integrations with reporting platforms, and data and analytics, which we want to dive more into as well. So we're really excited about what's kind of next.
The wrap - taking on the data and analytics challenge
As FoodMaven adds more metropolitan areas, more data will be pulled into Acumatica - including pricing preferences, and seasonal demand fluctuations. Lems sees all of that going into Acumatica's built-in dashboards. That provides views for the operations team, as they manage the flow of products from FoodMaven warehouses.
Lems' team has customized their share of Acumatica reports. Some of FoodMaven's supply comes in on consignment. When that food is sold, consignment fees must be paid and accounted for. That impacts margins, and year-over-year forecasting as well. Lems:
There's a lot of reporting around operational accountability. Have we processed all of our returns for today? Have we processed anything that is maybe in like, inventory investigations - type bin or location. That gets automatically reported on, blasted out to the people who need it. They see it every night; they're held accountable to maintaining the numbers correctly that are in those reports every day.
Lems laid out a simple data rule:
The saying in the company is: "If it didn't happen in Acumatica, it didn't happen." So the reporting that comes out of Acumatica is how we run our entire business. It's kind of the linchpin to everything.
Lems just brought the Dallas business into Acumatica, as of October 2020. As for the biggest benefit of the new platform, well, that depends on your role. For Lems, it's about the integration capabilities. "Once you can integrate to a system like that, you can do pretty much anything," he says. For other users, it's about visibility:
Probably the number one benefit is the visibility and transparency into the business. What's going on every day? Where is it going on? And where do we need to focus to meet our goals? It's that capability to see everything.
But in this most unusual year, perhaps the best thing was having a lifeline from home into the operations of the business. Lems says that Zoom was the top application for keeping employees connected - but Acumatica was a close second:
Aside from Zoom, it's probably the number one app that pulled everybody together during that time.
If you've been around ERP systems a long time, that's a whole new way of thinking. I'd argue that's what ERP was supposed to be doing all along.
Updated, December 5, 5:00 pm with a number of tweaks for reading clarity.