Posts Tagged ‘Intelleflex’

Hawaiian produce trial will track pallets of produce from Taiwan starting next month

Sunday, August 14th, 2011

In case you missed last week’s issue, we’ve posted our lead story here:

The Hawaii Department of Agriculture is a leader when it comes to piloting RFID for food safety. In May, the department began shipping 70 RFID-enabled pallets of produce between distribution centers on the islands of Maui, Hawaii and Oahu to monitor shipping temperatures and to learn how variances in temperature impact produce.

The Hawaii Produce Traceability Initiative is ready to take its next step, which will occur in late September when a pallet of produce is shipped from Taiwan carrying RFID and GPS technology. The pallet will be tracked from the pallet build level in Taiwan, although the program’s partners in Taiwan want to extend the project and tag produce immediately after it is harvested in the field.

“This is an opportunity to establish a working relationship on food safety with other countries and cooperatively develop the technology,” says John Ryan, the retired head of Hawaii’s quality assurance office, and now a principal with Ryan Systems. “We think that in the not too distant future, something like this could become a standard.”

Taiwan-based Asia Pallet Pooling is providing the plastic pallets for the pilot project, as well as much of the funding. Intelleflex has been selected to supply the battery assisted passive RFID tags for the project. The DCs are operated by Armstrong Produce. Ryan says that he is also working with the Riverside County (Calif.) Economic Development Association with the hope of tagging pallets of perishables flowers or dairy items destined for Taiwan later this year.

“We want to help the exporters out as well,” says Ryan. “The idea is to not only determine why spoilage is happening, but to work together to and try and prevent produce losses from occurring altogether. The food supply chain has a ways to go when it comes to how to manage product better.”

Intelleflex says that one-third of all fresh produce spoils before reaching the retail market, resulting in $35 billion of losses annually. On that note, Intelleflex is seeing a rapid demand in pilots for fresh produce tracking, as well as for temperature-controlled pharmaceuticals. Kevin Payne, the company’s senior director of marketing, expects to see deployments ramp up as early as this fall.

“We’re seeing more pilots, especially in the grower and shipper area, and we’re seeing a lot of interest in the earlier edge of cold chain at the production level because the real cost burden is on the growers and the packers,” says Payne.

Retailers are typically less motivated to install technology to monitor temperature control and spoilage because they usually push costs on to the consumer, or back up the cold chain. “They are less motivated financially,” says Payne. “It’s the growers and packers who are paying for the one-third of produce that spoils in transit, so we’re seeing an uptick in the number of growers and shippers interested in the technology.”

Intelleflex tags and readers provide on-demand, data visibility solutions for cold chain and asset management applications. Its battery-assisted passive RFID technology enables condition monitoring of individual products on loaded pallets or totes from a range of up to 300 feet and can penetrate packaging. That means that users can make informed decisions on product shipment, inventory and product rotation that can reduce shrink in perishable foods and guarantee efficacy of pharmaceuticals.

Intelleflex hopes to announce the results of a study soon that shows the effects of temperature swings on shelf life. “Our tests have generated some real interesting data for fresh produce, as far as monitoring temperature of products and the impact on shelf life from both the field to the pack house as well as the pack house to the DC,” says Payne. “The data has been extremely compelling in that we are finding significant amounts of variation between each hand off point in the cold chain.”

“We’re hoping to see a significant number of customers adopting this technology starting this fall based on the level of pilot activity and the inquiries we’ve had,” says Payne.

Of course, the ROI of less than four months achieved during one pilot, or one growing season, is opening a lot of eyes when it comes to deploying the technology through the produce cold chain.

The technology has also caught the eyes of the insurance industry. This week Intelleflex announced a unique partnership with The Hartford Financial Services Group, in which both companies will explore insurance-related opportunities to reduce the amount of produce lost and improve the overall quality of produce during the distribution process from the grower to the retailer. The partnership, which is through The Hartford’s corporate venture division Hartford Ventures, may also enable The Hartford to enhance its loss control and underwriting practices based on results from RFID tagging.

In many cases, the billions in losses each year from spoiled produce are covered by insurance companies like The Hartford. In this case, RFID could help to not only limit those financial payouts, but also cut down on the huge amount of paperwork and investigative research that goes into each claim.

“Identifying cold chain issues quickly and routing perishables based on remaining shelf life are critical to enhancing customer profitability and operational effectiveness,” says Alexander McGinley, marine underwriting officer at The Hartford. “This new technology will help our customers decrease the amount of produce wasted due to temperature variations.”


The Hartford teams with Intelleflex to reduce insurance claims from spoiled produce

Tuesday, August 9th, 2011

The insurance industry is warming up to RFID technology. Insurers represent a strong market for applications like asset tracking for IT items and document management. But this morning’s announcement from the Hartford Financial Services Group takes the potential benefits of RFID to a higher level.

By teaming up with cold chain solution provider Intelleflex, the insurer hopes to potentially save billions in claims, while also reducing the staggering amounts of paperwork, documentation, and investigatory research that accompany each claim.

You see, one-third of all fresh produce shipped goes bad before reaching the retailer, representing $35 billion worth of losses each year. Some of those losses are actually covered by insurance claims. The Hartford hopes to use Intelleflex’s XC3 Technology™ RFID readers and tags to provide shippers, distributors and retailers with the ability to route product to maximize quality, salability and reduce unnecessary perishable waste. Placed in pallets of produce at harvest, RFID tags continuously monitor the temperature and condition of produce as it travels through the distribution process, calculating the remaining shelf life.

“Identifying cold chain issues quickly and routing perishables based on remaining shelf life is critical to enhancing customer profitability and operational effectiveness,” said Alexander McGinley, marine underwriting officer at The Hartford. “This new technology will help our customers decrease the amount of produce wasted due to temperature variations.”

While the Hartford is focusing on the produce market, think about the possibilities of using RFID when it comes to the claims litigation process. A bank or financial institution that reports theft of a group of laptops, for example, might be able to isolate the last place the equipment was if it was tagged with RFID for asset tracking. The same theory holds true for retailers, who fight a constant battle with shrink during the supply chain process. Item level tagging, which allows complete visibility of an item as it moves through the supply chain, can help to isolate where a product left its intended route, and help to catch the parties involved, and therefore limit the exposure to insurance companies.

“The Hartford is strongly committed to open innovation in helping us get to the future faster,” said Jacqueline LeSage Krause, vice president of innovation and corporate venture capital at The Hartford. “Hartford Ventures allows us to identify and collaborate with leading private companies to develop solutions that address the unique needs of our insurance and wealth management customers.”

Impinj IPO will ignite investment in RFID sector

Wednesday, April 27th, 2011

In late 2005, I predicted in another publication that a young upstart company called Impinj would some day file for an IPO. Six years later that time has arrived. In case you missed this week’s coverage of the Impinj IPO announcement, we have included it on our blog page.

Four years ago, Alien Technology created a buzz in the industry by filing for an IPO. Buzz quickly turned to bust because of poor market timing, a balance sheet that didn’t please investors, and orders that never materialized.

How is last week’s announcement by Impinj to pursue an IPO possibly worth $100 million any different? Like Alien, Impinj has never turned a profit. Impinj lost $11.4 million in 2010, and $1.8 million in Q1 2011.

Well, the losses are the only similarity, and they carry an asterisk, since tag sales are exploding, something that was not true four years ago. Today’s market features real orders and strong momentum. Impinj grew sales from $20.8 million in 2009 to $31.8 million last year. First quarter revenue for 2011 came in at $12.2 million, compared with $5.1 million for the same period last year.

“There is a different story here,” notes Drew Nathanson, Auto-ID practice director at VDC Research. “When Alien announced its IPO, the market wasn’t there yet. This is real money coming in.”

“And even though Impinj is not profitable, it is clear they will be eventually because they own so much share in a lot of these core markets that are growing at huge rates.”

Impinj will not comment on the IPO because of SEC regulations, but the company will not be profitable in the near-term. However, explosive growth is occurring in the apparel item-level sector, an industry Impinj is a big player in. And Impinj execs see item level tagging spreading quickly into non-apparel sectors like electronics, cosmetics, tires and jewelry. In fact, it is highly believed that Walmart is ready to extend its item level-tagging program to electronics and tires and possibly other non-apparel product lines before year-end.

Impinj has sold over two billion of its Monza tag ICs since the product line was introduced in 2005, including 940 million tags in 2010 alone. VDC projects the number of UHF Gen2 ICs shipped will grow from 1.6 billion in 2010 to 41 billion in 2015, a compound annual growth rate of 92.2 percent. Investors drool over such growth numbers, and such explosive growth should also push Impinj to a profit.

Impinj focuses exclusively on UHF RFID solutions, which is the fastest growing segment of the RFID market. UHF Gen2 systems are ideally suited for high-volume, item-level applications that require low-cost, consumable tags, such as retail inventory management, pharmaceutical authentication and airline baggage tracking. From 2009 to 2010, unit sales of the Monza UHF Gen2 tag ICs increased by 279 percent. Impinj is the market leader in UHF Gen2 tag ICs, reader ICs and stationary readers. According to VDC, Impinj owns 60 percent of the tag IC market, 86 percent of the reader IC market and a 25 percent share of the stationary reader market.

Impinj estimates that its technology enables more than 70 percent of the UHF Gen2 reader market when you combine the share of its Speedway reader with that of other readers based on its Indy reader ICs.

“Their innovation rate is aligned and they seem to have a very good understanding of how their markets are evolving and the constantly changing end user requirements,” says Nathanson.

Impinj will use the proceeds of the IPO to pay down debt, including venture firms that have financed the company to the tune of at least $160 million since it was founded in 2000. Published reports say that venture capital firms own about half of the company. Intel holds a stake worth about 6 percent.

A successful IPO would drive further investment in the industry, resulting in the potential for more IPOs and increased M&A activity. A year ago, RFID 24-7 reported that ODIN could be 12-18 months away from filing an IPO. Privately held ODIN has never commented on its sales, although industry estimates place revenue at $25-30 million annually. That puts ODIN at about the same size sales-wise as Impinj. ODIN CEO Patrick Sweeney said this month that first quarter sales increased by 30 percent in 2011, indicating continued solid growth.

Is ODIN on track for an IPO too? All you have to do is read into Sweeney’s blog post regarding the Impinj IPO: “The big winner will be the second company to IPO, because everyone who is sitting on the sidelines during Impinj’s road show is about to see a very successful tech company emerge and will wish they got in on Impinj; and they will climb all over themselves to get in on the second IPO in the RFID sector. If Impinj is successful, and I believe they will be, and I owned an RFID company I would be doing everything I could to be the second company out in the IPO market.”

ODIN, which acquired Reva Systems late last year, is also a potential takeover target, as are companies like GlobeRanger, Tego, Omni-ID, and Intelleflex, especially if momentum behind cold chain tracking continues.

The Impinj IPO places a spotlight on a pure-play RFID star. A successful IPO means investors will take note that the technology is finally mature and that they can invest in the industry and reap gains in the short term, instead of waiting years for payback.

“The call volume coming in from the investment community, especially the larger investment firms, indicates that they are really looking at this market in a big way,” says one industry expert. “They are looking to dump more money in, so expect a lot of acquisitions happening going forward.”


Grocers target RFID to help eliminate spoilage in perishable food chain

Wednesday, March 9th, 2011

As fuel costs continue to rise, transporting perishable food items becomes more expensive. And as water supplies continue to diminish, growing crops becomes more challenging. Those are two reasons why it’s so important to address the food spoilage problems that plague the perishable foods cold supply chain, and one reason why President Obama recently signed the Food Safety Modernization Act.

According to the United Nations Environment Program (UNEP), over half of the food produced globally is lost, wasted or discarded as a result of inefficiency in the human-managed food chain.

With that in mind, the food cold supply chain is turning to RFID-based solutions that can monitor temperature and expiration dates. In November, Intelleflex launched on-demand, product-level monitoring system for perishable foods and the pharmaceutical cold chain.

The Intelleflex solution was recently featured in a news segment by WKGO-TV, an affiliate of ABC News. Click here to watch the video.

A blurb from the news report:

By most accounts, one-third of all fruits and vegetables are discarded somewhere between the field and the customer because it is so difficult to monitor the shelf life of produce. A temperature variation of just 2 degrees during shipment can cut 4 days off the life of berries and bananas. Current technology monitors only a whole truck, regardless of which side travels in the sun or other factors. This technology, on the other hand, records what happens to every pallet, every minute, every step of the way.

Peter Mehring, CEO of Santa Clara’s Intelleflex says, “We collect a month of temperature data in one tag that can be quickly be read out and be displayed on our handheld readers.”

Click here to view RFID 24-7′s coverage on how RFID is being used in agriculture.