vTraction.com(TM), the New York-based food and agriculture (F&A) business-to-business (B2B) e-commerce initiative of the Rabobank Group, announced today that it took a 19 percent equity stake in FBIX(TM), the Food and Beverage Information Exchange.
Rabobank, based in the Netherlands, is the world’s leading bank for the food and agriculture industry. It is the only privately held bank to receive the prestigious AAA-rating from Moody’s, S&P and IBCA.
FBIX is a Web-enabled network that provides electronic commerce solutions for the foodservice industry. The network is a “shared resource” solution in which many foodservice distributors and operators can exchange information electronically and save the expense of purchasing, supporting and maintaining a proprietary network solution.
FBIX provides all the technical support required to exchange information electronically between trading partners–regardless of the existing software used by either partner. This is a technological advance in the $250 billion annual foodservice industry, one in which 65% of orders are still placed manually.
FBIX has had an impressive performance record since it began regional operations in Jessup, Maryland in 1991, and its expanding business horizons attracted the attention of vTraction.com.
“vTraction.com’s investment in FBIX gives us the economic power and shared resources to turn FBIX from a strong regional player into a national leader in the e-commerce foodservice industry,” said Michael O’Donnell, Chief Executive Officer of FBIX.
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“Our alliance with vTraction.com gives us an opportunity to develop powerful synergies and share expertise with vTraction.com’s other portfolio companies. These strategic partnerships will allow us to lead the way in food and beverage e-commerce,” he added.
“Our focus is on enhancing our family of food and agriculture B2B Internet solution providers, from dirt to dinner table,” said Terese Engolz, Marketing Manager of vTraction.com. “We were attracted to FBIX because of their strong track record of facilitating online transactions. FBIX gives foodservice operators a simple, secure, and cost effective online procurement vehicle.”
vTraction.com’s investment in FBIX is the latest example of how vTraction.com’s unique eCooperative(TM) approach to e-commerce gives its “family” of Internet solution providers the traction, or liquidity, to lead the way in their respective markets.
The eCooperative way of doing e-business is based on cooperative principles in which portfolio companies share expertise, enhanced by Rabobank’s know-how to grow and their century of success as a cooperative.
FBIX is the eighth food and agriculture Internet company to receive a significant investment from vTraction.com since Rabobank’s e-commerce initiative was founded last year. So far, vTraction.com has invested in Florida-based Foodtrader.com, Canadian-based agribiz.net and eHARVEST.com, California-based TradingProduce.com and WineryExchange.com, North Carolina-based Farms.com and Argentina-based Agrositio.com.
FBIX: the Food and Beverage Information Exchange
- Founded in 1993 by Michael Fredrick, an architect of shared network technology
- Chief Executive Officer: Michael O’Donnell Executive Vice President: Michael Fredrick
- Corporate headquarters: Jessup, Maryland
- Equity stake from vTraction.com: 19 percent
How FBIX works
- FBIX replaces error-prone manual order entry systems with a fast, accurate Web-based electronic ordering network;
- Users conduct their transactions via a standard modem and PC;
- FBIX maintains a series of servers and a database of its distributors’ products and their pricing. Operators access the distributors of their choice and place their orders electronically. FBIX verifies and accepts the transaction and forwards them to distributors for processing. Simultaneously, distributor pricing and product information is updated on the FBIX system.
FBIX consists of:
- an Internet connection, or:
- an online electronic interface for foodservice distributors;
- an order entry browser on the computers of foodservice operators;
communication between the order entry browser and electronic interface through a virtual private network between the foodservice vendors and operators (via the FBIX servers) for automated order entry, or an Internet connection.
Food for thought: facts about the food service industry
- Food and beverage industry sales total $128 billion a year–the food service industry accounts for approximately 48% of those sales;
- Sales are generated by over 740,365 operators. These include restaurants, convenience stores, vending machine operators, hotels, schools, hospitals and institutional dining operations;
- The food service industry is served by approximately 3,400 distributors in 5,500 locations;
- Distributors purchase products from an estimated 2,000 processors and manufacturers of food and consumer products;
- The average food service operator deals with an estimated 6 distributors, and places 50 orders a week with an average order of $341. With FBIX, operators use one simple system.
From Agriculture. For Agriculture.
Facts of interest
- vTraction.com is the Rabobank Group’s Internet initiative.
- Corporate head office for vTraction.com: New York City.
- CEO of vTraction.com: Ejnar Knudsen Vice President, Rabobank e-commerce Group: Ot Quast Business Development Manager: James Coulter European Business Development Manager: Robert Wolthuis Marketing Manager: Terese Engolz
- vTraction.com’s mission is to facilitate food and agriculture e-commerce using a cooperative model based on strategic alliances and partnerships.
- vTraction.com distinguishes itself from traditional venture capital firms by inviting Rabobank clients and other strategic partners to participate in vTraction.com, or co-invest in specific food and agriculture ventures.
- vTraction.com has made strategic alliances with these food and agriculture Internet companies:
- Canadian-based agribiz.net
- Argentina-based Agrositio.com
- North Carolina-based Farms.com
- Canadian-based eHARVEST.com
- Florida-based Foodtrader.com
- Maryland-based FBIX.com
- California-based TradingProduce.com
- California-based WineryExchange.com
- Will announce Europe and Asia teams in the coming months.
The Rabobank Group
The know-how to grow
Facts of interest
- Founded 100 years ago in the Netherlands; began as a cooperative by the agricultural community to solve their financial needs.
- The world’s largest financial institution specializing in the food and agriculture industry.
- bank’s financial health and stringent risk control have earned the bank the coveted triple-A rating Moody’s, S & P and IBCA, the top three rating agencies. This makes Rabobank unique in the world of commercial banking.
- offices in over 32 countries; headquarters in Utrecht, the Netherlands.
- billion in assets.
- offices in the US with a primary focus on food and agribusiness, and an increased presence in media and telecommunications, life sciences and global financial markets.
- ides corporate banking, corporate finance and investment banking services, as well as food and agricultural research (FAR), a global knowledge management network.
- Rabobank Group provides services to almost 500 autonomous local banks which make up the Rabobank cooperative, as well as these specialist companies: De Lage Landen (leasing and trade finance), Interpolis (insurance), Robeco (asset management-50% Rabobank owned), Gilde Investment Management (venture capital), Schretlen & Co. (private banking) and Rabobank International, and its two subsidiaries: Rabo Securities and Rabo Vastgoed (domestic real estate projects).
- anuary 1, 2000 the Rabobank Group joined the World Business Council for Sustainable Development (WBCSD), an international network which brings together 120 companies in more than 30 countries.