• Joe Witte

How this startup plans to solve the supplement industry's transparency problem

By Michelle Caffrey  – Reporter, Philadelphia Business Journal.

https://www.bizjournals.com/philadelphia/news/2019/04/29/how-this-startup-plans-to-solve-the-supplement.html (View original) Anand Swaroop was struggling. Competitors kept undercutting his prices, the president of natural products company Cepham said, and he couldn’t figure out how. Then he found out how common it is for supplements on the market — which use the kind of natural botanical extracts he sells — to not contain any of the products advertised on the label. He was spending his time, money and resources finding the best quality ingredients and building relationships with farmers in India who grow them, Swaroop realized, while his competitors were simply lying. “I realized this is not apples-to-apples,” he said, adding he tried stressing their differentiation from competitors in marketing videos and documents, but it wasn’t enough. “There had to be a third-party verification system out there.”He went looking, and found TagOne. The recently launched company, based in Princeton, is developing a blockchain-based product that enables companies like Cepham to have a transparent supply chain, tracking a product from when it was planted to when it’s consumed.

Or as its Vice President of Ecosystem and Partnerships Joe Witte describes it, “from seed to shelf.” Witte, the former head of Philadelphia's veteran-focused startup organization Bunker Labs, said consumers are becoming more and more aware of both where their food comes and from the unreliability of supplements’ claims. Blockchain, or a distributed ledger that locks in transactional data, is notorious for being the basis of cryptocurrencies but took on new life in recent years as both large firms and startups work to find a range of use cases. In the process, blockchain became the latest technology to enter the Trough of Disillusionment on Gartner’s famous Hype Cycle, meaning interest has waned until real, profit-driving results are produced at scale. Gartner projects that the current generation of blockchain uses are specific and limited to “specific operational issues,” like in inter-organizational process or record-keeping. TagOne uses a private blockchain that works by giving each link in the supply chain simplified access. That means giving farmers abroad an affordable smartphones that allow them to record data in the field and upload it when they get near Wi-Fi, giving processors and manufacturers enterprise software that allows them to manage their processes and giving consumers an app they can use to track it all. The company, which employs about 20, is actively onboarding pilot partners, working with them to fix the little things that can throw a data-based solution off, like databases with redundant info and incomplete supplier lists. “Our platform in many ways is going to change the way people have done business,” Witte said. TagOne’s founders also founded a consulting firm focused on tracking and tracing pharmaceutical products sixs year ago. Proceeds from that is helping fuel TagOne.Swaroop said it’s still early in his company’s implementation of the technology — it’s brought in its A-level supplies and is working on integrating B-level now — but he’s hopeful it will help him differentiate his products in the market. Every part of the supply chain needs to realize it’s about more than marketing, he said, it’s about a new data system that can improve how the entire industry operates. “The farmer, the people who transport the truck to the factories, we are all stakeholders,” he said. “We’ve got to tell [the customer] we’re doing good things for you. We all have to be on the same page with that one message.”

Change will only come with two forces, he said, the FDA holding businesses responsible for their claims about supplements, and consumers becoming more educated and demanding transparency. Both, he said, are there.

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