Ecoark Holdings and Zest Labs File $2 Billion Complaint Against Walmart

According to a recent announcement, Zest Labs, an AgTech company working on modernizing the post-harvest fresh food supply chain, and Ecoark Holdings, its parent company, have filed a complaint against Walmart in the United States District Court for the Eastern District of Arkansas, Western Division.

The complaint reportedly is for alleged violations of the Arkansas Trade Secrets Act, the federal Defend Trade Secrets Act, unfair competition, unjust enrichment, breach of contract, breach of the covenant of good faith and fair dealing, conversion and fraud. The damages at issue exceed $2 billion.

Zest Labs claims that it developed Zest Fresh to reduce field to shelf food waste while improving delivered freshness to consumers. The data and insights provided by Zest Fresh also help growers, food distributors and retailers reduce the $85 billion problem of fresh food waste.

The complaint alleges that, starting in 2015 Zest Labs engaged with Walmart to demonstrate the value of Zest Fresh to reduce waste and improve delivered shelf life consistency. During this time, Zest Labs’ proprietary information and trade secrets were shared with Walmart, including members of Walmart’s executive leadership team, the company said.

In March 2018, Walmart publicly announced that, after six months, it had developed Eden to “keep track of food freshness all the way from the farms to our stores” and to, “eliminate $2 billion in waste over the next five years.”

“We were surprised and concerned by how similar Walmart’s Eden description was to Zest Fresh,” said Peter Mehring, CEO of Zest Labs. “Like most innovative companies, we believe strongly in the need to protect our intellectual property, recognizing the importance of preserving the value for our shareholders and customers. Zest Labs challenged long held beliefs at most retailers by properly identifying the primary contributing factor to pre-consumer waste. We then defined and implemented a breakthrough, proactive approach to managing fresh food from the farm to the shelf, significantly reducing that waste.”

The case is Zest Labs, Inc. et. al. v Walmart, Inc. case number 4:18-cv-500-JM, in the United States District Court for the Eastern District of Arkansas, Western Division.