Efdex

» see efdex.com as it lived, on the wayback machine

~ the obit ~

Efdex stood for Electronic Food and Drink Exchange, and the pitch on its own front page was the clearest thing about it. "For thousands of years, we've traded in food and drink. But while the financial market has reaped the rewards of electronic trading, the food and drink market has stayed basically unchanged. Until now." Underneath, in the tone of the year: "stop DREAMING... efdex has the solution!" The logo was an orange sun with a blue wordmark through it, over a strip reading "bringing food to market in the 21st century". The product was a trading screen for wholesalers and the catering trade, carrying market prices for fresh produce updated by the minute, with buyers able to source new suppliers and benchmark what they were paying.

Tim Carron-Brown had been working on the idea since the middle of the nineties and got it funded at the top of the boom. The company said it would introduce the system to the UK in October 1999, then the United States during 2000, then mainland Europe late that year, and then develop global coverage. Joining was not a matter of visiting a website. The company's own words: food and drink firms across the whole UK market would be invited to "install the PC and satellite equipment needed to become a member of the efdex community". Efdex supplied the hardware.

To front it, Carron-Brown recruited Ellen Marram, who had run the Nabisco biscuit business and then Tropicana, and whose arrival was a serious signal in American food circles. Businessweek ran the story in September 1999 under the headline "From Nabisco To Tropicana To...Efdex?", which contains the entire problem in its punctuation. Marram was president and chief executive of Efdex Inc. from August 1999 to May 2000, nine months, and then she left without a public explanation.

The rest of 1999 and early 2000 was spent on the British trade show circuit: Pub & Bar at Earls Court in September, Hospitality Solutions at Olympia in October, Hotelympia in February, the Food & Drink Expo at the NEC in March. The exchange went live. Almost nobody signed up to trade on it.

~ the rap sheet ~

~ the money, and where it went ~

Efdex burned roughly $69 million of venture capital and was out looking for US$110 million more in a rights issue when the market closed its window. The spending while it waited is the part that reads badly twenty-five years later. Free computers went out to companies that might become customers one day. The marketing budget was spent as though the customers already existed. One line item that survived into the reporting: £10,000 on a band for the staff Christmas party.

By spring 2000 the paychecks were bouncing. Staff went unpaid from May onward while the management kept naming dates for an investment that was always a few weeks out, and the tools were withdrawn from the building one at a time, which is what being switched off looks like from the inside. The unpaid bills came to £42 million. The Telegraph would later file Efdex, in a single clause about Carron-Brown's record as a director, as "the £43m dotcom disaster".

~ the friday the screens went blank ~

The end was not announced. On a Friday the Efdex internet trading section and the staff bulletin pages all went blank at once and the phone lines were cut. Just Food filed the story on 8 September 2000 under the headline "Efdex goes into liquidation as directors walk away", and the detail in it that lands hardest is that employees were left unsure whether they still had jobs. Adam Rhodes, the UK president, had resigned the week before. The management team around Carron-Brown had worked out that the second round was not coming and stopped turning up.

The marketing site outlived the company by months, because nobody switched the web server off. The Internet Archive was still collecting benefits_us_buyer.html and current_trade.html off efdex.com in late January 2001, trade show dates and buyer benefits intact, four months after the liquidation. By 31 March 2001 the domain had become a single frameset pointing at an unrelated site. Today efdex.com answers 200 with two kilobytes reading "EFDex.com for sale".

~ the idea, which was correct ~

Electronic trading did arrive in food and drink. Wholesale produce moves through online exchanges now, and a pub chain's buyer can pull minute-by-minute pricing up on a phone. What none of it needed was a startup posting a PC and a satellite dish to every greengrocer in Britain before the broadband arrived that would make the dish pointless. Efdex spent $69 million building a distribution layer the public internet handed out free about four years later.

The food trade is also the wrong industry in which to be early and underfunded. The margins are thin and the supplier relationships are decades old, and the people being asked to put their price lists into Efdex's hands were reading in the trade press that it had stopped paying its own staff. Hardly any of them did it.

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