Consumers are demanding increased transparency, fair trade and strong sustainability practices from the companies they buy from, and food is no exception. In the past, complicated supply chains that left organizations with limited visibility into supplier operations resulted in a loss of trust at best and public scandal at worst.
Enter blockchain. Widely known for its role in cryptocurrency, the technology also enables disbursement of ownership for storing, maintaining and verifying the information. In other words, blockchain can boost trust in the food supply chain because suppliers’ transactions are visible to retailers, and hacking or altering data is difficult. By September 2019, Walmart plans to implement a food safety blockchain solution. Walmart is just one of many behemoths in IMB Food Trust conglomerate: Kroger, Unilever, Tyson Foods, Dole Food, Driscoll’s, Golden State Foods, McCormick and Company, and McLane Company are also adopting blockchain for their food supply chains. Dairy Farmers of America (DFA), a national cooperative owned by dairy farm families across the U.S., launched a pilot program in September to test blockchain with startup ripe.io.
Overall, analysts predict explosive growth for blockchain in the food supply chain, anticipating a market worth $429.7 million by 2023. In an industry plagued by serious food fraud cases and heightened demand for transparency, blockchain is poised to explode in the food supply chain. What will be the effects?
How Blockchain Can Help the Food Supply Chain
Safety: Blockchain equips the food industry for rapid response when food safety disasters occur. The timeliness is particularly critical. Before blockchain, tracing contaminated products often took days – with blockchain, contaminated products can be located in seconds. Auditing the supply chain is also easier, which bolsters prevention.
Efficiency: Historically, retailers couldn’t always distinguish contaminated products from safe foods. With blockchain, specific contaminated products can be quickly traced, ensuring safe foods aren’t wasted unnecessarily. The supply chain, in general, receives a boost in efficiency, as tracking and inspection are digitized and retailers have more precise self-life information.
Transparency: Through this fully digital chain, each node on the blockchain could become a party who has handled the food. Not only is contaminated food easily located, but so is the source of the issue. This also means the origins of the food are easily tracible, giving new validity to labels like “fair trade,” “organic” or “grass-fed.” Transparency also helps isolate illegal production, like illegal fisheries, with origin, processing and shipping data. For consumers, this also means more precise expiration dates and storage temperature records.
Fraud: In some cases, well-meaning retailers have sold fraudulent food from unreliable sources simply for lack of visibility. Blockchain prevents compliance data from being hacked and altered because of its decentralized structure. This also means records can’t be deleted, and information is shared quickly across parties. If, for example, a large retailer and a small grocer shared a provider that violated compliance, the small grocer would also see the data in the chain.
Ethics: Not only does increased visibility help substantiate food label claims, but it also helps ensure food purchased from human rights abusers, overfishers, illegal or unregulated sources. The seafood industry, in particular, has been under scrutiny for these ethical violations, as overfishers and unethical practices force out smaller, more ethical fisheries. Through blockchain, information for regulation and enforcement is readily available, and retailers can swiftly cut out unethical providers.
Although blockchain in the food supply chain is poised to streamline many efficiencies and bolster consumer confidence and public safety, the industry still needs to consider several key questions:
- Who will authorize the information as legitimate for storage on the blockchain?
- Who has the power to grant access to information?
- Where will payment be processed?
- Are the players really ready for true transparency?
In addition, a common protocol and data format must be established and standards will need to be approved by both suppliers and governments.
When it comes to knowing where our food comes from, where it has been and who has been involved in distributing it, it appears blockchain is poised to take a bite out of some of the big challenges plaguing the food supply chain today.