GlobalFoodExchange.com is going for the spoils of electronic commerce.
The Atlanta-based online market-maker for the perishable foods industry is moving quickly to get a piece of the $800 billion a year worldwide food industry by concentrating on such perishable products as poultry, seafood, dairy, produce and meat, as well as specialty categories like beans, says marketing director Karen Fox.
So far the company has lined up 1,700 buyers and sellers who range from food producers like Perdue and Tyson Foods to more general agribusiness concerns like Conagra. Buyers include chains such as Kroger as well as restaurants and specialty food retailers.
The company, which claims it’s growing by 20% a week, seeks to provide a fast way to move perishable foods before they go bad. Fox maintains the best way to do this is through the Web. Normally it takes food brokers and others 20 minutes or so to close deals, handling multiple phone calls at once. Even e-mail takes about three minutes. But on the site, these transactions can take less than a minute.
In addition to hosting a market, GlobalFoodExchange offers other services like logistics from freight companies C.H. Robinson and Aqua-Gulf, and credit reporting from Dun & Bradstreet. “We don’t accept just anyone on our site,” says Fox.
The company recently signed Lan Infosystems to integrate the Windows version of its Net.Yield software to facilitate routine back-office functions. Such measures have helped to cut food procurement costs by as much as 20%.
Sellers indicate what they have to offer on one part of the site, while buyers list requests for quotes of what they’re looking for on another. Once a buyer and seller have met, GlobalFoodExchange no longer bears any responsibility, says Fox.
She isn’t disclosing revenue projections, but since the site went live last fall, more than 8.5 million pounds of food have been sold for a total of $2.5 million. GlobalFoodExchange makes its money through transaction fees which range from 0.1% to 1%. “Margins in the food business are slim,” says Fox.
For the moment, the company is promoting itself through trade shows, word of mouth and other forms of publicity that it hopes will help educate the food industry about doing business over the Web.
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