As the demand for blockchain solutions increases, the food industry is not behind in exploring the potential of the technology to enable a transparent food network in terms of traceability and accountability.
Moreover, there is an increase in concern among consumers who demand knowledge on the source of the product’s ingredients for health and ethical reasons. With this comes the need to create a transparent supply chain with end-to-end visibility to uphold safety measures while keeping a check on product spoilage.
Major Issues
Fraud
There have been several cases of fraud and food tampering which has breached consumer trust. These carry grave risks which result in food-borne illnesses. The US Center for Disease Control and Prevention (CDC) consulted Walmart about product traceability with the rise in food-borne illnesses, such as an E. coli outbreak that occurred affected 200 people who had to be hospitalized. The CDC estimated that about 3,000 Americans alone die each year due to food-borne diseases.
As blockchain helps in logging every step of the food production process, the chances of fraud becomes very small.
For example, a halal food marketplace, OneAgrix, announced its blockchain-based traceability tool for “transforming the world of halal supply chains”. The platform along with the traceability feature will endorse authentication of halal certificates to combat food fraudulence. The decentralized data sharing will help keep a check on fake halal products to underpin the trust of consumers and halal stakeholders.
Minimizing waste
The biggest challenge faced by the industry is to minimize wastage while maintaining a fresh supply of the food as it is transmitted through the various participants of the network such as the farmers, processors, distributors, retailers and the consumers. Wastage occurs due to poor management, spoilage and oversupply to stores. This is a vital step to sustain the needs of the ever-growing population.
As reported by The New York Times, about one-third of food produced globally is wasted every year. Although this statistic includes wastage by consumers too, a major portion of poor countries battles this due to the lack of proper inspection and perhaps the technology to manage the complex networks. About 5% of global food does not reach intended markets, as it gets spoilt completely during transit and storage.
With traditional methods, product records are prone to manipulation, whether intentional or unintentional. To confront this problem, IoT sensors along with DLT are being utilized for tracking the humidity and temperature of the product. This, in turn, warns the suppliers and the consumers about the potential spoilage of food. It also keeps a check on oversupply as grocery stores can track the quantity required for supply based on the current supply levels.
Product recall
Food recall indicates the removal of items from sales/distribution if they prove to be hazardous. Government agencies can request recalls for examination. However, food recalls cost the industry a fortune including loss in sales and reputation damage. Recognizing the serious impact, supply chains tend to increase end-to-end visibility. This ensures isolation of issues at the very step and rectification of the same. Therefore, validation occurs conveniently without having to pay hefty amounts.
Illicit produce
Illegal produce brings along great dangers such as health risks and ecological impacts. This problem affects the fishing sector the most. In 2017, a pilot Blockchain project in Fiji was undertaken by the World Wildlife Fund (WWF) to battle illegal fishing and preserve the endangered species.
Processing payments
Currently, smallholders seeking to invest in farming face several challenges pertaining to the liquidity constraints. Most of the times, they end up selling the product to the buyers at very low costs. With blockchain, there is a transparent fiscal processing paradigm. With transparency comes the liberty to eliminate the centralized intermediaries, leading to improved margins for the producers.
Adoption of blockchain models by food companies
From poultry to fisheries to bee keepers, blockchain technology is being considered as the game-changer by various food companies to optimize product supply from farm-to-fork in an unprecedented manner. As traditional paper-pen methods get outdated, the technology is being eyed to sustain the indispensable need for tracking. Blockchain along with IoT will perhaps serve as a bridge between the physical and digital world of the industry. Reaping the benefits of the same, the industry can address the several challenges.
In 2017, the world’s largest food suppliers including Walmart, Nestlé, Unilever and Kroger partnered with IBM Food Trust to roll out a platform based on the Nestlé, Unilever. This was aimed at providing quality products which would, in turn, spur the growth of the overall profits.
Brigid McDermott, the Vice President of Blockchain Business at IBM said:
“A blockchain food safety program is tremendously good because it provides transparency into the food system, which means that in the event that there is a problem like a recall, you’re able to quickly, effectively, surgically deal with that problem.”
Csilla Zsigri, senior blockchain analyst, said that to track a package of mangoes using the traditional paper-based method, Walmart requires an excruciating seven-days period. However, when this was replaced with blockchain, the same tracking could be done in merely 2.2 seconds. These figures speak for themselves as to how the technology has made supply chain tracking more convenient than ever.
Walmart has been very active in reinforcing decentralized ledger technology. The US multinational corporation has pushed forward numerous patents to promote the technology while giving a fair warning to about 100 food suppliers to implement blockchain technology by September 2019 to ensure fresh produce fortified with intact nutritional benefits.
As reported in 2018, French multinational retailer Carrefour introduced a blockchain-based traceability program to grant consumers a detailed production history of their purchase. Initially, the program was designed to trace the production of chickens only but eventually, was implemented to extend data sharing facilities for other products such as eggs, cheese, milk, oranges, tomatoes, salmon and hamburgers.
Earlier this month, the world’s largest food and beverage conglomerate, Nestlé, announced its new blockchain project in collaboration with OpenSC to facilitate food tracking. The company claimed that this will set new standards for transparency and global production. Magdi Batato, the Executive Vice President, said:
“We want our consumers to make an informed decision on their choice of products – to choose products produced responsibly. Open blockchain technology might allow us to share reliable information with consumers in an accessible way.”
Less than a week ago, Oracle joined hands with the World Bee Project (WBP) to incorporate blockchain in the honey supply network. The idea was to introduce a “BeeMark” label to ensure authentic produce from sustainable sources. Oracle has already been using blockchain to identify fake honey and counterfeits.
Disclosing food supply chains has become a necessity to win consumer trust in this world of adulteration. This also helps to boost shelf life while ensuring food safety and quality control. In May 2019, research by Gartner, Inc indicated the major shift of global grocers towards blockchain. The research claimed that 10% of the top global food conglomerates would adopt blockchain for food traceability by 2025.
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