New regulations yield opportunity for animal feed tech startup

Editor’s note: This content is sponsored by LaunchKC but independently produced by Startland News.

Growing up, Gretchen Henry’s family farmed cotton in Southeast Missouri.

Although most are familiar with the white, pillowy substance we find in our clothes, use to wash our face or clean our ears, animals also eat it. Livestock feed features many byproducts — including cotton, thanks to its high fiber and protein — but only recently were farmers required to keep tabs on what goes into animal chow.

That’s where Henry hopes to carve out a niche.

“The animal feed world creates products for livestock out of different byproducts,” Henry explained.  “Whether you’re a manufacturer or a feed mill operator, you need a way to track all of those byproducts and grains and ingredients that come through to be able to feed the cattle or sell the products to different feedlots.”

Depending on the size of the company, Henry said feed mill operators often keep track of more than 1,000 different ingredients. That requires a lot of paperwork, she said, and it’s what she now is working to alleviate.

Henry founded the technology’s parent company ConsultUS in 2006 with her co-founder Jim Taylor to assist clients with business problems by implementing integrated software solutions. What started as a side-hustle grew into a full-time gig in 2014 when Henry launched CommodiTrade.

The software allows customers to easily view ingredients in their inventory and keep track of sales and purchases. CommodiTrade can also manage scheduling, maintain accounting and offer analytics. As the platform gets to know individual customers, CommodiTrade’s predictive purchasing model will notify staff when it’s time to make their next purchase. Tailored to mill operators and merchandisers, the company’s mobile- and web-based app is offered on a subscription-based model with prices dependent on the production of feed.

Henry said that most animal feed mills operate on such a small margin that if they don’t understand what is in their inventory or what the current ingredient market price, they can lose big. CommodiTrade aims to keep mill operators and feed manufacturers efficient and profitable.

A flexible platform was important to Henry as the company began designing the software.

“Most of our customers aren’t tied to a computer or in an office — they’re out in a field or on a farm,” Henry said. “It was especially important to us for our application to be compatible with mobile devices.”

The CommodiTrade solution was in part born out of new regulations’ effects on the industry, Henry said.

In 2011, President Obama signed the Food Safety Modernization Act into law, setting the bar higher for food safety regulations. Instead of focusing on resolving contamination issues, the Food and Drug Administration began taking measures to prevent it from happening in the first place.

This law has yet to become finalized for many small businesses in the animal feed industry. But with a mandatory compliance date coming up in 2017, businesses are seeking a quick fix to meet regulations.

“These regulations are really important because it helps the animal feed industry maintain their profitability and prevent them from potential recall,” Henry said. “It’s definitely a laborious effort for the animal feed mill to manually keep track of every single thing that they manufacture, but this is good legislation and protects our food supply.”

Because of this, Henry is gearing CommodiTrade toward small businesses and believes the platform could help mitigate the process.

“Everyday, a bad ingredient can be introduced — that could be one piece of broken glass in a truckload of products,” Henry said. “We need to have the ability to identify that and make all ingredients traceable. If you have the right records in place, if something is corrupt you would know what the impact is for your feed”

In September, ConsultUs won a $50,000 in grant from LaunchKC during Techweek Kansas City. With the funds, Henry plans to better develop her sales and marketing strategy. CommodiTrade is currently used by five companies in Kentucky, Tennessee and South Carolina.

And thanks to LaunchKC’s visibility and stability, Henry believes she can expand the platform to Kansas and Missouri.

“The LaunchKC and Techweek experience really helped us learn and see all the great benefits to Kansas City and what they do for entrepreneurs,” Henry said. “I believe that for anybody who wants to get started in business, there’s so much support and we’re very fortunate to be able to have this opportunity.”