The technology behind bitcoin could improve food traceability. Unsure how that could be possible? Here’s how.
If you’re a food manufacturer and you haven’t got to grips with blockchain technology, it’s time to start. Blockchain is the underlying enabling technology developed for the cryptocurrency, bitcoin. But beyond that, there’s a growing buzz around blockchain and its power to transform the way we do business.
While initially adopted for its financial advantages, blockchain’s core attributes mean that it has significant potential to improve food traceability.
But before we get into that, here’s a quick summary of what blockchain is:
Blockchain technology is a way of storing and sharing information across a network of users in an open virtual space. It allows users to look at all transactions simultaneously and in real-time.
The World Economic Forum defines blockchain as a “shared, programmable, cryptographically secure and therefore trusted ledger which no single user controls and which can be inspected by anyone”.
In the food supply chain, information is digitally connected to a food product and entered into the blockchain at every step of its journey. This could include farm-origination details, batch numbers, processing data, factory information, expiration dates, storage temperatures and shipping details.
All members of the network agree on the information captured in each transaction, which is assigned a digital certificate. This then becomes a permanent record that — and this is the important bit — cannot be altered.
Benefits of blockchain for food traceability
Transparency: One of the biggest benefits of blockchain is its public nature. Blockchain technology provides provenance, traceability and transparency of information. For example, in a food supply chain, all of the transactions for one item of food can be seen and validated at any point in time. This will allow every party in the supply chain to have a better picture of the food’s journey, all in the form of a digital ledger provided in the blockchain.
Security: Blockchain provides a permanent record of transactions, which are then grouped in blocks that cannot be altered or tampered with. Transactions are verified and approved by consensus among participants, making fraud more difficult. Food fraud is therefore less likely and, if it does occur, easier to spot. At the same time, consumers are reassured that companies cannot change the information in a bid to hide the true origin and movement of the product through the supply chain.
Decentralised: Blockchain provides a neutral open platform. No third party is needed to authorise transactions – rather, there’s a set of rules that all participants — both users and the operators of the system — must abide by. This is highly valuable in complex supply chains were trust is low and compliance is difficult to gauge. In fact, The Economist has dubbed blockchain “The Trust Machine”.
Real-time information: Because blockchain technology operates on a distributed (rather than centralised) platform, each participant has access to exactly the same ledger records. When information is updated, it’s updated for everyone in the network at the same time. This empowers the whole supply chain to be more responsive to any fraud threats or food safety disasters.
Blockchain technology could bring advantages to every player within the supply chain: growers, processors, distributors, suppliers, retailers and regulators. Here are some of them:
- Producers – Any attempts to tamper with a food item as it moves through the supply chain can be immediately identified and prevented before the food reaches the retailer.
- Retailers – Should a potentially hazardous food product make it onto shelves, stores can identify and remove only the hazardous items. This eliminates the need for costly batch recalls.
- Consumers – The transparency and openness of the blockchain reassures consumers that the food they are buying and eating is exactly what the label says it is. Currently 75% of consumers don’t trust the accuracy of food labels.
Blockchain to improve food safety
Imagine if a retailer could see and validate with 100% certainty where each food item was grown, handled, processed, stored and inspected. They can track every stage of its journey to their store. Blockchain technology has the potential to make this a reality.
With blockchain, there are no gaps in the history, location and status of a food product. Instead, you can see the whole picture. So, if a retailer becomes aware of a potentially deadly issue with rock melon for instance, participants of the blockchain network can view the entire history of that rock melon to find the root of the problem. And, where necessary, rock melon from that specific farm or batch can be recalled rapidly.
How rapidly exactly? In October, Walmart, IBM and Tsinghua University signed an agreement to use blockchain technology to explore food supply-chain traceability and authenticity. Before using blockchain, Walmart tested how quickly it could trace back the mangoes in one of its stores to their original farm. It took six days, 18 hours, and 26 minutes.
Using blockchain, it took 2.2 seconds.
Blockchain to battle counterfeiters
PricewaterhouseCoopers estimates food fraud is worth $52 billion globally each year. An increasing number of Australian producers are being targeted by food counterfeiters in Asia and the Middle East, and it’s only getting worse. (You can read more here and here.) Our reputation for high-quality food is being undermined by foreign operators, who are counterfeiting labels and packaging to sell their own lesser-quality and potentially unsafe products.
Blockchain technology could help, as Alibaba has already set out to prove. In March 2017, the Chinese e-tailing giant enlisted the help of PricewaterhouseCoopers to run a pilot program with Blackmores in Australia and Fonterra in New Zealand to prevent food fraud using blockchain.
Alibaba ANZ managing director Maggie Zhou said that should the pilots be successful, they will form the basis of a global supply chain model for all of the group’s e-commerce markets, thereby protecting the reputation of food merchants and giving consumers further confidence to purchase food online.
Meanwhile, Blackmores CEO Christine Holgate hit the nail on the head when she said the Alibaba plan will make her company’s supply chain more visible and transparent to consumers in China.
Blockchain to bring trust back to the food industry
Food processors and manufacturers often struggle to validate the origin of their ingredients. If consumers are to trust in the quality and provenance of any food product, the processor must be able to provide detailed information about what’s in it and how it was made.
Blockchain allows the grower and processor to share information with each other privately and securely, while also having the supply chain validate this information. In other words, it provides a Web-of-Trust system that allows the network participants to evaluate and validate assertions made about food, whether on the food’s origins, dietary claims, sustainability, and so forth.
However, this system will work only if the data at the source is accurate; in other words, if food processors are inputting the correct data. Currently, data is stored on paper or in centralised databases, which are open to human error and inaccuracies. One solution to this challenge is sensors. Food processors can use sensors to collect accurate and detailed information which can then be made available to all across the supply chain.
Blockchain technology has the potential to transform the food industry. But it will only work if everybody participates. If goods are to be traceable from farm to fork, all parties along the chain need to adopt the technology. This isn’t something that will happen overnight, but with large companies such as IBM and Walmart leading the way, it could start happening sooner than we think. Who would have thought how blockchain can improve food traceability?
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Image credit: iStock / Peshkova