How can you find out whether the food you buy in a supermarket is really healthy or not? Even when clearly labelled as such, do you still have doubts? I hope to answer these questions by elaborating on how a new emerging technology can help – Blockchain.
First, are our doubts in the supermarket really justified? Actually yes, they are. With the increasing complexity of the global supply chain today, it is almost impossible for retailers to guarantee the provenance of products they sell. Real cases of food fraud confirm this. Two widely-known examples are:
- 2013 UK horse meat scandal – Foods advertised as beef actually contained undeclared horse meat, in some cases as much as 100 per cent of the product. While consumption of horsemeat is not a health issue, the scandal revealed a major breakdown in the traceability of the food supply chain. (In fact, there was a health risk as well, since horses could have entered the food supply chain with the harmful veterinary drug phenylbutazone in their systems)
- 2008 milk scandal in China – An estimated some 300,000 fell victim in total – with around 54,000 hospitalised – when melamine, a chemical used to make plastics, fertilisers and concrete, was added to milk to fake a higher protein content.
In addition, on average 1 in 6 people in America fall sick from contaminated food annually, causing losses estimated between 50-90 billion dollars each year (and some sources have reported up to $152 billion!)
So how does the food industry mitigate this problem? Certainly there are international standards, such as ISO 22005 for proper “traceability in the feed and food chain” within individual suppliers. But it doesn’t help solve inconsistency problems in the overall supply chain – the guarantee that, on the way to a supplier organisation, the products haven’t been substituted or tampered with.
What the food industry really needs is a trusted, traceable and easily accessible history of each product’s journey – from farm, to fork.
And this is exactly what Blockchain can do. Every step in the food production and transportation cycle is verified (through the consensus of those involved) and recorded onto the Blockchain – guaranteeing security and immutability.
This information is also open for all parties to check anytime and anywhere. Blockchain’s ability to expand to all participating devices removes the problems of accessibility and bottleneck performance problems, which are often encountered in centralised systems.
While industry practices require all handlers to be certified, document every step and meet all technological standards, recording on a Blockchain is the only way to ensure product safety. For consumers, Blockchain guarantees all processes have been documented (and not just in the private logs of individual companies) to carefully preserve every single can on the shelf. Consumers can verify this by using a Blockchain explorer application. To check a specific product’s history, the user just inputs its unique number, ensuring no one has tampered with the product along the way.
To make this possible, all participants within the supply chain must use the same Blockchain. Even missing one step in the process could lead to fraud. This is one of the difficulties Blockchain adopters face, among other issues such as a lack of standards and current Blockchain performance speed. To put this into perspective, Bitcoin processes an average of seven transactions per second, while a major payment system like Visa completes thousands.
Tell me: How do I do it? Why should I do it?
Luckily, to start using Blockchain, it’s not necessary to start from scratch. Many companies already offer Blockchain platforms for in-house solutions as well as Blockchain as a service. For example, the company OwITing uses Blockchain for a pork supply tracking system based on the platform from AMIS, a Taiwanese Blockchain technology company.
Blockchain not only ensures supply chain transparency but also promotes the following:
- Decreased transaction fees for mobile payments and credit – Try using cryptocurrencies, which are Blockchain-based payment tokens.
- Real-time supply chain transactions – Rely on quick and reliable ownership changing based on the contractual conditions governed by smart contracts, rather than confusing logistics
- Production and operations management
- Internet of Things (IoT) – Monitor food storage and transportation conditions, make batch statistics and real-time alarms (e.g. when the freezer is broken), and many other things through IoT.
Companies Big and Small
There are a number of start-ups successfully implementing Blockchain today:
- Provenance – A real-time transparency data platform aiming to empower brands by being proven and transparent about product origins
- arc-net – Supply chain security & analytics company
- FarmShare – Decentralised platform to optimise resource sharing for local agricultural markets
- Ripe.io – Provides an infrastructure of distributed ledgers, Internet of Things sensors, APIs for a connected food supply chain workflow and hopes to become the “Blockchain of Food”
- Food Blockchain XYZ – Food tracking complete with quality and safety monitoring and the management of commercial relationships between workers in the supply chain through smart contracts.
Looking at larger companies, Walmart is partnering with IBM to bring traceability and transparency to its entire food supply network through the use of Blockchain. Ultimately, Walmart expects that consumers will be able to interact with food labels using a smartphone application. This way, users can document the journey of the product and view any other information they wish to see. IBM believes that using Blockchain for supply chains could increase worldwide GDP by almost 5 per cent and total trade volume by 15 per cent.
Look Toward the Future
Using Blockchain technology for supply chains is still a young endeavour and the vendor eco-system is still immature, but the speed of its development and adoption is accelerating. With last year being a hype year for Blockchain, more and more companies are looking to adopt to reliably trace their products.
In a nutshell, by establishing a clear record of every time a product changes hands, the transaction can be documented, creating a permanent history of a product, from manufacture to sale. This could dramatically reduce time delays, added costs, and human error that plague transactions today.
Andrei Povarov, Head of Learning Management, Luxoft
Image Credit: Zapp2Photo / Shutterstock