It’s been a devastating start to the year for two US e-commerce ventures in the food sector. Yesterday we reported the demise of Foodline.com, the online restaurant reservation system which went to the wall despite investment of US$13m (to read more, click here). Today news broke of a flop at the b2b end of the spectrum, as it emerged that FoodUSA.com, an online exchange handling trades of meat and poultry, has shut up shop after it failed to find a buyer.
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According to a report published by hi-tech news site UpsideToday, FoodUSA.com blames its downfall on an industry-led rival, Commerce Ventures. This is a fledgling B2B marketplace founded by several industry heavyweights, notably soon-to-merge Tyson Foods and IBP, as well as Gold Kist and the red meat arms of Cargill and Farmland Industries.
Ironically, FoodUSA.com had earlier entered into cooperation talks with Commerce Ventures, which has yet to go live. FoodUSA.com chairman Rod Heller admits to initial scepticism that Commerce Ventures would make the grade and confirmed that it was his company which went cold on the talks. His caution was understandable – at the time of the discussions, last spring, net marketplaces were the darling of the B2B sector, while industry-driven marketplaces had the reputation for being slow to get off the ground and adapt to the needs of the Internet.
However, the tide of opinion among both investors and potential users has since turned, and Heller said that “meat and poultry traders were like deer caught in headlights. They won’t do anything until they see what happens [with Commerce Ventures].” Despite reporting as recently as October that more than US$30m in closed transactions had been completed since its April 2000 launch, FoodUSA.com came unstuck.
The collapse of Madison, Wisconsin-based FoodUSA.com leaves 22 employees looking for work.
