Making food safer pays off for start-up

With the effects of the horsemeat scandal still reverberating, Safefood 360 has seen demand for its systems shoot up.There are big plans for the next two years, its chief executive tells Trish Dromey.

Since the start of the horsemeat scandal in January, Dublin company Safefood 360 has found that the interest in food safety systems has shot up.

“We have been getting a lot more inquiries, especially from meat companies,’’ says co-founder and chief executive George Howlett, explaining that his company offers a software system which is designed to ensure that food firms comply with safety regulations.

“The system won’t prevent the type of fraud which was involved in the use of horsemeat, he says. “But it is ideal for companies which are intent on complying with legal regulations.”

Mr Howlett believes that the scandal has created a climate in which companies are more willing to embrace technology to manage food safety and to demonstrate compliance.

Founded in 2010, Safefood 360 is, according to Mr Howlett, one of a small number of companies offering food safety management systems online.

“Up to 95% of food companies are still using paper-based systems for food safety management,” he says.

“Our system, launched in late 2011, is the only complete system dealing with all 30 elements of food safety.”

The company now has about 100 customers, and aims to increase this to 400 by the end of the year. Safefood 360 employs a staff of three in its Dublin office, as well as one in the US.

The North American market accounts for 60% of sales but the company also has customers in Australia and New Zealand.

Clients include Brodericks Bakery and Celtic Pure Water in Ireland, as well as Schwebels and LeeSar & Cooperative Services in Florida.

Since last year, Safefood 360 has been selling through a channel sales partner in Australia.

It is currently in the process of setting up an office in London with a view to developing the UK market this year.

Safefood 360 began in 2010 with the realisation that there was a gap in the food processing industry for companies supplying an electronic solution for regulatory compliance.

A food safety management specialist who lectures on the subject at DIT, Mr Howlett had worked in this area for 20 years with companies such as Premier Dairies and United Beverages (Guinness), and had previously set up a consultancy which focused on this area.

Observing that compliance with food safety regulations generated huge quantities of paperwork, Mr Howlett decided to create an IT solution.

He was joined in the venture by Philip Gillen, an IT specialist who previously worked in the food industry and who is now the chief operating officer.

“We had to build the solution from the ground up and broke down the regulation clause by clause and designed a software system which took seven months,” says Mr Howlett.

The product was trialled with a number of Irish companies in 2011 and, by the end of the year, the company was ready for launch.

To fund development, Safefood 360 initially raised €360,000 in BES funding and in 2011 it secured a place on Enterprise Ireland’s High-Potential Start-up programme. During 2012, AIB Seed Fund and Enterprise Ireland invested €500,000.

Safefood 360 was able to break into the US market at a very early stage.

“The traditional pattern of a rollout for an Irish software company is to get some traction in Ireland, start selling in the UK, and at a later stage move on to the US,” says Mr Howlett. “That’s what everyone told us to do, but our experience has been different.

“From day one, the majority of interest has come from the US.”

He believes this is due to the fact that US customers are more open to adopting cloud-based software solutions, because the US is introducing food safety regulations, and because companies there are now legally required to put food safety systems in place.

At present, Safefood 360 is selling to a range of companies in the food processing sector. Mr Howlett says that the opportunities in a global food industry worth €2.1tn are vast.

“Our key target markets are Ireland, UK, US, Canada, Australia, New Zealand, Germany, and South Africa,” he says. “There are an estimated 250,000 food processing plants which could be considered low-hanging fruit ripe for picking.”

Although Safefood 360 is still in the start-up stage, it has ambitious plans, and expects to break even this year.

The key focus now is on North America and Australia, but Mr Howlett says there have been a significant number of inquiries from South American companies supplying the US market.

“For now, we are concentrating on English-speaking markets and don’t have a Spanish or Portuguese version yet,” he says.

“There is a massive untapped market — our aim is to scale up in a managed but accelerated way.”

The expectation is the company will achieve a multimillion-euro turnover in two to three years.