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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

2018 Risk All Stars

Stop Mitigating Risk. Start Conquering It Like These 2018 Risk All Stars

The concept of risk mastery and ownership, as displayed by the 2018 Risk All Stars, includes not simply seeking to control outcomes but taking full responsibility for them.
By: | September 14, 2018 • 3 min read

People talk a lot about how risk managers can get a seat at the table. The discussion implies that the risk manager is an outsider, striving to get the ear or the attention of an insider, the CEO or CFO.

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But there are risk managers who go about things in a different way. And the 2018 Risk All Stars are prime examples of that.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Goodyear’s Craig Melnick had only been with the global tire maker a few months when Hurricane Harvey dumped a record amount of rainfall on Houston.

Brilliant communication between Melnick and his new teammates gave him timely and valuable updates on the condition of manufacturing locations. Melnick remained in Akron, mastering the situation by moving inventory out of the storm’s path and making sure remediation crews were lined up ahead of time to give Goodyear its best leg up once the storm passed and the flood waters receded.

Goodyear’s resiliency in the face of the storm gave it credibility when it went to the insurance markets later that year for renewals. And here is where we hear a key phrase, produced by Kevin Garvey, one of Goodyear’s brokers at Aon.

“The markets always appreciate a risk manager who demonstrates ownership,” Garvey said, in what may be something of an understatement.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Dianne Howard, a 2018 Risk All Star and the director of benefits and risk management for the Palm Beach County School District, achieved ownership of $50 million in property storm exposures for the district.

With FEMA saying it wouldn’t pay again for district storm losses it had already paid for, Howard went to the London markets and was successful in getting coverage. She also hammered out a deal in London that would partially reimburse the district if it suffered a mass shooting and needed to demolish a building, like what happened at Sandy Hook in Connecticut.

2018 Risk All Star Jim Cunningham was well-versed enough to know what traditional risk management theories would say when hospitality workers were suffering too many kitchen cuts. “Put a cut-prevention plan in place,” is the traditional wisdom.

But Cunningham, the vice president of risk management for the gaming company Pinnacle Entertainment, wasn’t satisfied with what looked to him like a Band-Aid approach.

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Instead, he used predictive analytics, depending on his own team to assemble company-specific data, to determine which safety measures should be used company wide. The result? Claims frequency at the company dropped 60 percent in the first year of his program.

Alumine Bellone, a 2018 Risk All Star and the vice president of risk management for Ardent Health Services, faced an overwhelming task: Create a uniform risk management program when her hospital group grew from 14 hospitals in three states to 31 hospitals in seven.

Bellone owned the situation by visiting each facility right before the acquisition and again right after, to make sure each caregiving population was ready to integrate into a standardized risk management system.

After consolidating insurance policies, Bellone achieved $893,000 in synergies.

In each of these cases, and in more on the following pages, we see examples of risk managers who weren’t just knocking on the door; they were owning the room. &

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Risk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, clarity of vision and passion.

See the complete list of 2018 Risk All Stars.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]