Your Food Chain on Blockchain: The Coming Shakeup

C. Drake

Summary Bullets:

  • Blockchain digital ledger technology can make complex food supply chains more transparent, while delivering a range of benefits for food producers, distributors, retailers, and consumers.
  • However, these are early days for blockchain as a supply chain management technology, with limitations including the challenge of verifying the authenticity of data supplied to the platform.

Several innovative applications of blockchain, the distributed digital ledger technology, illustrate the technology’s potential use beyond its cryptocurrency origins. One promising application of blockchain is as platform for improving the efficiency and transparency of global food supply chains. Here, we are already seeing numerous applications of blockchain which promise to bring benefits to producers, retailers, and consumers. However, these are still early days for blockchain as a supply chain management tool and it is important to be mindful, not only of the technology’s potential as well as early successful applications within food supply chains, but also of its risks and limitations. Among them is the challenge of how to verify the authenticity of the data supplied to the blockchain.

Blockchain has several characteristics that make it suitable for managing supply chains, including its ability to provide supply chain producers, distributors, retailers, and consumers with equal and transparent access to the same stored information. Food supply chain information stored in a blockchain could include the origin or quality of a particular product and the manner in which it was transported and stored. In addition to providing greater visibility into the contracts and connections that make up complex food supply chains, blockchain allows producers and retailers to guarantee the originality and quality of products, while helping with efforts to identify fraud and illegality within the food chain and facilitating the tracking and recall of defective or contaminated goods.

For example, the World Wildlife Fund is working with global blockchain venture studio ConsenSys, technology implementer TraSeable, and tuna company Sea Quest Fiji Ltd. on a project that aims to eliminate illegal fishing and human rights abuses in the Pacific Islands’ tuna industry. The project uses blockchain and other technologies – including radio-frequency ID (RFID) tags, quick response (QR) code tags, and scanning devices – to track tuna from the moment they are caught by fishing vessels right through to the points of delivery to consumers. By providing consumers and retailers with information about where the tuna came from, and how and by whom they were caught, the blockchain-based traceability platform is designed to provide reassurances that the tuna was not caught using illegal, unreported, or unregulated (IUU) methods. The idea is that, although the technology won’t prevent IUU fishing methods, it will make them more discoverable and facilitate action against them.

A separate collaboration between Ireland’s Moyee Coffee, blockchain platform provider bext360, and the Netherlands-based FairChain Foundation aims to make all of Moyee’s coffee fully blockchain-traceable from point-of-origin washing stations in Ethiopia to the company’s customers in Europe. The bext360 platform gives all stakeholders – farmers, roasters, and consumers – access to data across the entirety of the supply chain. For consumers, this will mean being able to access information about the origin and quality of the coffee they are drinking, including the ability to follow real-time payments to Ethiopian farmers for their coffee beans.

Other examples of efforts to apply blockchain to food supply chains suggest that collaboration is becoming the norm, with specific initiatives bringing together IT leaders, technology startups, food retailers, NGOs, and systems integrators. In early October, IBM officially launched its blockchain-based food tracking network, Food Trust, while also announcing that France’s Carrefour would become the first major food retailer to use Food Trust across its network of stores. During the testing phase of Food Trust, which began in August 2017, IBM partnered with other major retailers including Nestle, Dole, and Unilever. These companies appear to be mainly interested in using blockchain-powered platforms such as Food Trust to track food items backward and forward through the supply chain, in order to identity instances of damage or contamination.

Nevertheless, despite early successes, the application of blockchain to food supply chains faces numerous hurdles and limitations. Although several food and drink industries are seeing early first movers embrace new blockchain technologies, most industries have entrenched interests that will be harder and slower to change. For example, it is difficult to imagine a scenario whereby larger global food conglomerates support consumer transparency down to the level of payments to individual farmers and producers. This would restrict the use of blockchain as a platform for enforcing fair trade endeavors to smaller, niche use cases. Other concerns focus on how to verify the authenticity of the data supplied to the blockchain and the possibility that the cost of deploying and operating blockchain-based solutions could be prohibitively high for some companies. Expect the next wave of innovators to try to address some of these concerns.

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