Better Food, Better Service

June 13, 2013
BY Ron Snyder
Start-up website Foodem.com offers efficient way for food operators, distributors to do business
Foodem employee (from left) Tom Jepsen, Kash Rehman and Harry Kozlovsky say their product is cutting-edge. (David Stuck)

Foodem employee (from left) Tom Jepsen, Kash Rehman and Harry Kozlovsky say their product is cutting-edge. (David Stuck)

Harry Kozlovsky, a local information technology professional and businessman, said the key to any successful start-up is identifying a need in the marketplace and establishing a business to fill that need.

That was the motivation for him to get behind Foodem.com, a website that launched in 2010 where bulk food purchasers such as restaurants, hotels and caterers in the Baltimore-Washington D.C., area can buy food in an efficient, user-friendly and cost-effective matter.

“In many cases, restaurants, schools and others that purchase food in bulk don’t realize what options are available to them, and the system is really inefficient. Also, it can be difficult for smaller distributors to break into the market and compete with larger businesses,” Kozlovsky said.

Kozlovsky told the JT that Foodem provides buyers the ability to compare prices and gives small and medium distributors an avenue to reduce the costs associated with managing large sales teams. Foodem is also a platform for sellers to advertise and market their products along with any additional specials.

“I’ve been in corporate IT for more than 25 years and believe in start-ups,” Kozlovsky said. “When I heard about the concept behind Foodem, I was intrigued and wanted to get behind it. Many investors now agree with me. It’s really like Expedia.com, only for the food industry instead of hotels.

Foodem’s offices are located in Canton at Baltimore’s Emerging Technology Center. The company secured $75,000 in funding from the Maryland Technology Development Corp. The young company also recently received $600,000 in angel funding.

The idea for Foodem came from company founder and CEO Kash Rehman, who has vast experience in the food industry as an operator and with a distributor. Among those distributors that have already joined Foodem are Metropolitan Meat, Seafood & Poultry, S. Freedman & Sons, FoodPro, Bel Air Produce and Fells Point Wholesale Meats.

Rehman, 37 of Greenbelt, said Foodem is great for buyers who now have a more transparent system to deal with pricing while distributors can increase their market reach and lower their overhead expenses.

“In years past, a distributor would have to hire many more salesmen to cover their market, and with a 5- to 7-percent commission rate, that can be costly,” Rehman said. “Foodem only charges distributors 2 percent on each sale and gives them exposure they would not have normally received. This is a net positive for everyone in the business.”

Among those that invested is Panacea Capital Advisors, Inc., a Bethesda-based venture capital firm with significant experience in the food-service industry and technology-enabled business services.

Panacea President Sam Rubenstein said Foodem is on the cutting-edge of this burgeoning industry and believes the company has a bright future. Rubenstein said Rehman’s experience on both sides of food-supply management offers him unique perspective to provide a service that will help both operators and distributors.

“Foodem offers a unique product that can disrupt the whole food service supply chain in a positive way,” Rubenstein said. “This service is beneficial to both the buyers and the sellers in the marketplace and opens up opportunities for so many businesses that just were not available before. This service not only helping people purchase products that are the cheapest, but it also allows them to search for products that best fit their needs from a quality standpoint. Efficiency is really at the heart of what Foodem provides.”

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