Food For Thought: Emerson Leverages Technology Investment To Improve Food Safety

| About: Emerson Electric (EMR)

Summary

Food safety is more top-of-mind for consumers than ever. A recent Emerson survey found that nine out of 10 adults are concerned about food safety.

Emerson is investing in Internet of Things technologies to help food producers and providers ensure safe food handling at every stop between the farm and the supermarket.

The new federal Food Safety Modernization Act is tightening regulations at every stage of food production and preparation and calling attention to an often-overlooked aspect of food safety: transport.

By Bob Sharp, Executive President of Emerson Commercial and Residential Solutions

Food safety is a growing concern for many consumers, and rightly so -- nearly 50 million Americans become sick from a food-borne illness each year. Still, despite the growing awareness, most people focus on just the first and last chapters of a food's journey: the farm and the fork. But what about the often-overlooked middle chapters of your "apple a day"?

From fresh-picked fruits to meats to bags of frozen peas, nearly all food follows a path behind the scenes from farm to warehouse to retailer. Each step on this journey introduces opportunities for food to rise above safe temperatures -- a risk for perishable foods in particular. The federal Food Safety Modernization Act, which recently went into effect with a new wave of food safety regulations, shines a spotlight on these food transit challenges.

Advances in Internet of Things (IoT) technology are making it easier to ensure that food safety is maximized during transportation by ship, truck or train. Emerson (NYSE:EMR) has been a long-standing leader in fresh food monitoring technologies, and we're investing to expand our offerings to meet increased needs in this area -- as well as help customers comply with new regulations. We recently completed two strategic acquisitions that give us greater visibility into the interconnected network of high-tech facilities and transport vehicles that keep food safe.

In the not-so-distant past, monitoring food temperature meant sticking a thermometer in the package once it reached its destination, whether that destination was five or 500 miles away. There were often no guarantees that food was maintained at a proper temperature throughout transport. Now, using the latest IoT technology, Emerson provides customers with small sensors that continually measure the surface of refrigerated or frozen foods in real time. These sensors send an alert if foods go above safe temperatures.

While food used to sit in a box until it was stocked on shelves, it now comes with a full pedigree and a daily report card outlining its status at every move. Sensors make it possible to provide an accurate record of food throughout its entire life cycle. This record is increasingly important: Under sanitary transportation requirements of the new regulations, transport companies, storage warehouses and retailers will be held accountable for showing that food was maintained at proper temperatures.

Expanding our capabilities is an investment not only in our company, but in our customers as well. About 80% of food shipments are handled by transport companies with a fleet of five or fewer trucks. Meeting the requirements can be a challenge for smaller transport shops. By partnering with larger companies like Emerson, small businesses can comply without costly investments in their own equipment.

Food safety is about more than ensuring quality. More than 133 billion pounds of food are wasted each year, according to U.S. Department of Agriculture estimates. In a country where nearly 50 million people are sometimes hungry, this is unacceptable. Maintaining food safety throughout every step of the transport process can help reduce food waste and protect the nation's food supply.

Investors would be smart to keep a close eye on this and other trends that will emerge in the wake of the Food Safety Modernization Act. These shifts will help to ensure healthier and more plentiful food for all of us. And they should also lead to new business opportunities for innovators delivering solutions that help to meet these objectives and safeguard the global food supply.

Disclosure: I am/we are long EMR.

Business relationship disclosure: Bob Sharp is an Emerson employee.