Food Safety

How the IoT Is Making Food Supplies Safer

Underwriters now use the Internet of Things to help determine whether their agriculture and supermarket clients have adequate processes in place.
By: | July 27, 2017 • 6 min read

The Internet of Things is improving transparency within the food supply chain — from farm production, to monitoring processing and shipping, to determining food quality on grocery store shelves and even in home refrigerators.

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“IoT is becoming increasingly important, especially within the food supply chain, as consumers want to learn more from farm to fork,” said Shaun Kirby, a director at Cisco Consulting Services in San Jose.

“IoT helps companies collect and track information to address issues in a timely manner, such as problems that could cause foodborne illnesses.”

Cisco, in conjunction with Penelope S.p.A. and NTT DATA, helped the Barilla Group implement a platform called Safety for Food, enabling consumers to trace the production chain for the ingredients in their food. Powered by ValueGo® software, consumers scan a QR code on the back of products to access a website that tells the story of the specific batch of the product they bought — from where the ingredients were grown to how the product arrived on the store shelf.

More companies are using “fog computing” in the field to analyze data from IoT devices faster, Kirby said. For example, a sensor on a truck could catch a dip in temperature, transmit the information to the cloud and take local action to correct the situation, he said.

“Fog computing enables companies to make more intelligent decisions at the edge, where devices are very low cost and constrained, or the actions can be coordinated at higher levels on [the] cloud.”

Richard Bladek, national underwriting manager of food and beverage, Starr Companies

Other devices include ethylene gas sensors that detect produce spoilage on trucks, in warehouses or on grocery shelves, and hyperspectral cameras that detect light reflected from foods to determine whether they’ve gone off, Kirby said.

“These applications could one day be used throughout the supply chain, but right now, they are large and expensive to install, so they’re better suited for large centralized facilities,” he said. “As the sensors become more commoditized, they will become smaller and less expensive, so they can be used downstream within the supply chain.”

Cisco’s experts are watching the development of a new infrared spectrometer for consumer use. It’s a pocket-sized device that conducts chemical spectrum analysis on almost any product, Kirby said.

A significant challenge is managing data collected from all of these devices. Today, there are about 200 devices per information technology worker to manage, but as the use of IoT increases that number could jump to 1 million devices.

Sean Riley, global industry director of manufacturing and transportation at Reston, Va.-based Software AG, said companies can utilize sensor data related to the food products to ensure optimal quality.

“Spoilage … is not necessarily noticed in advance, especially when it is a product that is going to be utilized in the processing of a finished food,” said Riley, who works from Chicago.

“Testing can be used to determine the state of the product at that time and then be used to draw inferences to the life left of that product, but it requires time and resources.”

Data from IoT devices throughout the food supply chain can be coordinated to ensure products are handled appropriately with regard to temperature, light and other environmental metrics, he said.

“As IoT evolves, I envision it will help us proactively prevent foodborne contamination from happening altogether.” — Richard Bladek, national underwriting manager of food and beverage, Starr Companies

“For example, bananas spend a significant amount of time ripening and the amount of airborne chemical used to ripen them is selected at the beginning of the journey,” Riley said.

“An IoT sensor can provide information regarding the ripening process and may be used to trigger an event to inject more or less chemical into the environment to shorten or lengthen the ripening process. This would, of course, be based on the in-transit time to the final destination and the need at the final destination.”

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Previously, growers provided discounts to push ripened product, but the use of IoT devices now enables them to gain a greater amount of control over the ripening, in turn giving them more time to locate suitable demand, he said.

“This information could also be made available to consumers, so they can understand where their products have originated from with certainty.”

Using IoT within the food supply chain can help insurance companies better track the sources of food when a claim arises, said Richard Bladek, national underwriting manager of food and beverage at Starr Cos. in Chicago.

The use of IoT would help identify the food manufacturer and processor, especially if there are multiple manufacturers and processors used for a single product.

IOT in Underwriting

From an underwriting perspective, IoT helps carriers determine whether clients have safe processes in place, and enables them to address potential issues early, Bladek said.

IoT can also help track contaminated items before they get into a food product and are passed on to the general public.

“As IoT evolves, I envision it will help us proactively prevent foodborne contamination from happening altogether,” he said.

Christopher G. Van Gundy, partner, Keller and Heckman LLP

“As underwriters, we’re analyzing data constantly. We could use this information to help insureds manage their business through loss control. … The data derived from [IoT] could enhance our capabilities internally to help our insured prevent losses from occurring in the future.”

Some farms are using IoT sensors to track climate and weather to improve crop yields, said Leslie T. Krasny, a partner in the San Francisco office of Keller and Heckman LLP.

The use of radio frequency identification can locate food in transit and reroute shipments for efficiency, such as when there are hurricanes, snowstorms or landslides, she said. This can allow for the purchase of replacements to meet customer commitments.

There are cameras with software that can help detect foreign materials in foods during processing, and significant variations from specifications, which could prevent adverse health effects, damage to corporate reputation, and product loss.

IoT is a tool with great potential for food supply chains, but it will make the liability equation within the supply chain more complex, said Christopher G. Van Gundy, another Keller and Heckman partner.

If food transported in a refrigerated truck with automated temperature control arrives spoiled at its destination, the device manufacturer could be an additional source of liability, Van Gundy said. Questions could arise about whether the device was set and functioned correctly, and who bore responsibility for that task.

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IoT devices in the supply chain also can increase regulatory compliance liability, he said.

“Regulators like the FDA might start requiring that companies show them their data to determine if they are in compliance with food safety regulations, such as tracking data for pathogens,” Van Gundy said.

“This could create a dilemma for companies that want [enough data] to monitor their pathogen situation, but don’t want to draw the attention of [the] FDA to potential problems that may not exist.” &

Katie Kuehner-Hebert is a freelance writer based in California. She has more than two decades of journalism experience and expertise in financial writing. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession

As risk manager for a cloud computing and software company, Laurie LeLack knows that the interconnected economy and cyber security remain top risks.
By: | December 14, 2017 • 4 min read

R&I: What was your first job?

One of my first jobs was actually at a local insurance agency when I was a high school student, before I had any idea I was going to get into insurance. After college, I was a claims analyst at Sunbeam.

R&I: How did you come to work in risk management?

I fell into it after college, where I studied international business. I had a stack of resumes, and Sunbeam came to Florida from Rhode Island, so I applied. I interviewed with the director of risk management and just stuck with it and worked my way up.

R&I: What is the risk management community doing right?

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Getting a holistic view of risk. Risk managers are understanding how to get all stakeholders together, so we understand how each risk is aligned. In my view, that’s the only way to properly protect and serve our organizations.

R&I: What could the risk management community do better?

We’ve come a long way, but we still have to continue breaking down silos at organizations. You also have to make sure you really understand your business model and your story so you can communicate that effectively to your broker or carrier. Without full understanding of your business, you can’t assess your exposures.

R&I: What was the best location and year for the RIMS conference and why?

Being on the East Coast, I like Philadelphia.

Laurie LeLack, Senior Director, Corporate Risk and Americas Real Estate, Citrix Systems Inc.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

Organizations understanding their cyber risk exposures and how this line of insurance can best protect them. Five to ten years ago, people shrugged it off as something just for technologies companies. But you can really see the trend ticking up as a must-have. It was always something that was needed, but people came to their own defining moments as we got more involved in electronic content and social media globally. Cyber risk is inherent in the way we do business today.

R&I: What emerging commercial risk most concerns you?

The advent of security and contractual obligations. These are concerns as we all play a part in this big web of a global economy. There’s that downstream effect — who’s going to be best insulated at the end of the day should something transpire, and did we set the right expectations?

R&I: Is the contingent commission controversy overblown?

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I think so. At the end of the day, it’s all about the transparency you’re getting from the people you work with. I think some best practices in transparency came out of the situation, but we were working on a fee basis, so it wasn’t as much of an issue for us as it may have been for other companies.

R&I: Are you optimistic about the U.S. economy or pessimistic and why?

I’m cautiously optimistic. We seem to be stable in terms of growth, and I’m hoping that the efficiencies and the economies of scale we achieve through technology will benefit us. But I’m also worried about the impact that could have on the number of jobs globally.

R&I: Who is your mentor and why?

Robert O’Connor, my former director when I was first on-boarded at Sunbeam, gave me so many valuable tidbits. I’ll call him to this day if I have an idea I want to bounce off him. He’s a good source of comfort and guidance.

R&I: Of what accomplishment are you most proud?

I have two very empathetic, healthy and happy boys. Eleven and soon-to-be 14.

On the professional side, there were a lot of moments during my career at Citrix where we were running a very lean organization, so I had the opportunity to get involved in many different projects that I probably wouldn’t have had in other larger organizations.

R&I: What is your favorite book or movie?

My favorite movie is Raiders of the Lost Ark.

R&I: What’s the best restaurant you’ve ever eaten at?

A place in Santa Barbara called Bouchon.

R&I: What is the most unusual/interesting place you have ever visited?

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Caverns in Gatlinburg, Tennessee. They were interesting. It was cool to see these stalagmites and stalactites that have been growing for millions of years, and then just above ground there are homes from the 1950s.

R&I: What is the riskiest activity in which you’ve ever engaged?

Riding on the back of my husband’s Harley.

R&I: What about this work do you find the most fulfilling or rewarding?

I like educating people and helping them find their ‘aha’ moment when you highlight areas of risk they may not have thought about. It allows people to broaden their horizons a little bit when we talk about risk and try to explore it from a different angle. I try not to be the person who always says “No” because it’s too risky, but find solutions that everyone is comfortable with given a risk profile.

R&I: What do your friends and family think you do?

I tell my kids I protect people and property and sometimes the things you can’t feel or touch.




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]