Food Engineering

Another dot com bites the dust

March 22, 2003
Another dot com company bit the dust when FoodUSA.com -- an on-line exchange handling the meat and poultry trades -- announced it would shut down after a deal it made to sell the business fell through. FoodUSA.com founder and chairman Rod Heller points to Commerce Ventures as the reason for closing down. Commerce is a competing b-to-b marketplace backed by some of the industry's largest companies -- IBP, Tyson Foods, Gold Kist, Cargill and Farmland Industries.

"Commerce Ventures froze the market," said Heller. "Meat and poultry traders acted like a deer caught in headlights. They won't do anything until they see what happens with Commerce Ventures."

FoodUSA opened for trading in April of 2000. FoodUSA and Commerce did hold talks about a possible partnership or acquisition last spring, but a deal was never struck, in part because Heller and his backers had doubts about Commerce Ventures' prospects.

Looking back, Heller admits the decision to back away from a deal was a mistake, but at the time, independent Net markets like FoodUSA were b-to-b favorites, while industry-led marketplaces were being buried by heaps of doubt. With its closure, FoodUSA laid off 22 employees from its Madison, Wis., headquarters.