The buzz around blockchain, and how it can transform the way we do business, is growing. By its very definition, blockchain is a “shared, programmable, cryptographically secure and therefore trusted ledger which no single user controls and which can be inspected by anyone”, according to the World Economic Forum. This technology also provides provenance, traceability and transparency of information, creating an “immutable record of transaction” and also eliminating the duplication of effort that is the typical of traditional business networks. For the consumer, it means that companies cannot change the information in a bid to hide the true origin and movement of the product through the supply chain. This is enabled by the platform that contains all producers, operators, member records and product information to ensure traceability takes place through the supply chain. No participant can change or tamper with a transaction after it is recorded in the shared ledger. Any error has to be reversed with a new transaction, wherein both transactions are visible.
Blockchain technology is expected to bring multiple benefits to the multiple players in the food industry
First, supply chains can revitalize their management and handling, as they will have detailed information on member profiles, which provides a higher level of certainty over the safety of food. The proof of this to the consumer is by implementing QR codes and product labeling. It can prevent contaminated food from entering the supply chain, help spot it in case it has entered the shelves, and remove it. This is reassuring for consumers, as it alerts both retailers and manufacturers to food that is unsafe.
In the agriculture sector, blockchain can help with inventory tracking and shipping processes, which helps reduce the associated costs that would otherwise go to a third party verifier. Food fraud globally is worth $52 billion each year, according to PricewaterhouseCoopers estimates. Blockchain technology can help combat food fraud and counterfeiters through its transparent and automated multi-ledger system.
With regard to brand transparency, the key component in ensuring food safety is information gathering. Consumers can access labelling information from their smart phones to know product information. On the other hand, supermarkets can access large amounts of data that travels through the supply chain.
Knowing the origin of ingredients that go into processed foods is another challenge that manufacturers face. To build consumer trust, this information needs to be available to the consumer. Blockchain allows the grower and processor to share information with each other privately and securely, while also having the supply chain validate this information. However, the catch is that this will work only if the data at the source is accurate.
One of the biggest benefits of blockchain is its public nature. In a food supply chain, all of the transactions for one item of food can be seen and validated at any point of time.
Blockchain provides 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.
It provides an open platform, and no third party is needed to authorize transactions – rather, there are a set of rules that all participants must follow.
Because blockchain technology operates on a distributed (rather than centralized) platform, each participant has access to exactly the same records. Information is updated for everyone at the same time. This empowers the whole supply chain to be more responsive to any fraud threats or food safety disasters.
Another major advantage is that the time required to source any information regarding the supply chain and its components is reduced to a fraction of what it was before.
Blockchain technology connects every player in the value chain. In the food industry, everyone from growers to retailers to suppliers is connected like never before. Blockchain technology could bring advantages to every player within the supply chain – growers, processors, distributors, suppliers, retailers and regulators. For the producer, 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. For retailers, should a potentially hazardous food product make it to the shelves, stores can identify and remove only the hazardous items. This eliminates the need for costly batch recalls. For consumers, the history and path of an individual food item is made instantly accessible from any device. This can include a host of details from certifications to information on how to increase shelf life, minimize waste, improve quality and sustainability, and make food safer. A consumer will sure want to know that what he’s eating is safe to eat and fresh, because he will be able to trace when and where, down to the second, where the tomatoes in the breakfast were picked, shipped and processed. Currently, 75% of the consumers don’t trust the accuracy of food labels.
Imagine if a retailer could see and validate with 100 per cent certainty where each food item was grown, handled, processed, stored and inspected. Blockchain technology has the potential to make this a reality. With blockchain, there are no gaps in history, location and status of a food product. Instead, you can see the whole picture. So, if the retailer becomes aware of a potentially deadly issue with water melon, for example, participants of the blockchain network can view the entire history of that melon to find the root of the problem. And where necessary, the melon from that specific farm or batch can be recalled rapidly. How rapidly? Here’s an example – in one use case, Walmart decided 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. Starbucks has a bean to cup initiative to track the production of its coffee and allegedly provide coffee farmers from Rwanda, Colombia and Costa Rica with more financial independence.
For any technology to bring benefits, there are a set of pre-requisites and challenges. In the case of blockchain technology, the data at the source needs to be accurate. All parties along the chain need to agree to adopt the technology. Data would need to be collected from all the players in the value chain, which requires all of them to actively cooperate on what data to collect, how to capture and how to compile the information into meaningful product data that consumers can read. So some effort would go into fixing the data before it is entered. For food companies, the issue would be to carry out a proper analysis of the data to be uploaded.
Although the data is accessible to the public, there is still an ownership. Within a permission blockchain (which calls for permissions to be given by the user), the user controls who has access to their data, and to what level of detail. When a data gets uploaded, it is the user who owns the data before and afterwards. The user alone governs who can see the information.
Today, at SourceTrace we’re happy to share our moment of pride and fulfillment, having made it as the cover story in the Food and Beverage Tech Review.
Download our new whitepaper
'Traceability in 2020: Global Scenario with a focus on India'