Both companies are private, and financial details were not announced. But TraceGains CEO Gary Nowacki did say the deal was a full acquisition of all of Healthnotes’ assets, and all of that company’s employees will be retained, including former CEO Skye Linniger, who now holds the title of president of dietary supplements for the combined company.
The new combined company’s headquarters will be in Westminster, a suburb of Denver, CO. The company will also retain a large office in Portland, OR, where Healthnotes had been based.
Food, supplements becoming increasingly intertwined
Nowacki said TraceGains had a significant presence in the food industry, while Healthnotes was strong in supplements. Among Healthnotes’ major clients are Arizona Nutritional Supplements, a leading private label manufacturer, Nature’s Way and NOW Foods.
“TraceGains grew from a predecessor company whose focus was the so-called ‘first mile’ of the food chain,” Nowacki told NutraIngredients-USA.
Nowacki said the decision to base the company in the Denver area came from an early history of involvement with the cattle industry. Denver is one of the centers for this trade, with one of the biggest and oldest livestock shows, the National Western, held in the city annually in January.
“We were at first very much a virtual company. We had a lot of software for the food industry and in particular for livestock. The board of directors made the decision we needed to pivot more directly into food and supplement worlds,” he said.
“We decided we needed to have a critical mass in one spot,” he said.
Nowacki said the newly combined company provides comprehensive documentation management capabilities across the food and supplement realms. The supply ends of these realms have become increasingly intertwined, which made offering a single solution practical.
“Both companies were on eerily parallel paths with how to connect customers down to their suppliers,” Nowacki said.
“Both industries are very fragmented. You have thousands of customers buying from many thousands of suppliers.”
Documentation burden growing heavier
Both companies had developed software suites to manage the increasingly complex documentation required to stay abreast of evolving regulations. The documentation required under DSHEA (the Dietary Supplements Health and Education Act) for supplements was already voluminous. Now companies playing in both realms need to keep up with what’s required under FSMA (Food Safety Modernization Act), which is billed as the biggest change in food industry regulation in more than 80 years.
“With this documentation there is a lot of information and paper that needs to flow. A lot of this done with old-fashioned techniques, such as e-mails and phone calls,” Nowacki said.
“Now our customers can manage this data through dashboards that they can customize. They can ‘vacuum’ up documentation from their suppliers. You can see at a stroke what’s missing, what’s up to date and what isn’t,” Nowacki said.
Nowacki said that presently more than 1,000 customer sites and 14,000 supplier locations are connected through the TraceGains network.
Tom Dubinski, VP of quality systems at Arizona Nutritional Supplements said the combined company will help companies like his rapidly expand their web of suppliers.
“With the combined technology platform and expertise of TraceGains and Healthnotes, the supplement industry can share standardized information and data with the thousands of suppliers already on TraceGains Network. We look forward to the additional supplier management capabilities that the merger of TraceGains and Healthnotes will deliver to our business,” he said.
“Transparency is becoming more important to both the food and supplement industries; consumers are increasingly concerned with sustainability and social issues, and in particular, where products come from,” Nowacki added. “Our goal is to enable organizations to provide transparency and efficiently manage regulatory compliance across the supply chain. Now, with Healthnotes, we’re positioned to provide an integrated software and network platform that increases the ease and depth of transparency.”