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Could blockchain initiate a food industry revolution?

Sustainability and traceability – this year, food industry professionals have spoken about little else. But according to research from TÜV SÜD, only 64 percent of food manufacturers say they can trace every component of their products all the way through the supply chain. So if you are unsure about what exactly is in that frozen pizza you just bought, chances are, so is the company that made it.

Manufacturers know there is nothing hip about this state of affairs, and are moving fast to make some pretty bold promises about their food. For instance, Unilever, owner of some of the world’s biggest food brands, claims that it will source 100 percent of its agricultural materials sustainably by 2020.

But for many professionals, change is simply not happening fast enough. Britain’s Food Standards Agency has reported a sharp increase in product recalls. Allergen labeling issues are wreaking havoc in both the EU and the United States, and few countries appear safe from the rapidly escalating pesticide-contaminated egg epidemic.

Big food companies cannot afford to micromanage their suppliers, they simply have too many of them. That means it often takes months to track down the source of a contamination. But in 2017, industries just do not have that sort of time – it takes mere minutes for a food-related Twitter tempest to reach critical mass. And this is precisely where, optimists claim, blockchain is about to step in to save the day.

Quest for a workable platform

With its immutable blocks of data and time stamps, blockchain technology could potentially provide food industry professionals with the ability to do quite a lot of things.

If blockchain platforms were the norm, decentralized ledgers would mean neither suppliers nor manufacturers could hide data about their materials or products. It is still early days, but it is possible to envisage blockchain platforms that allow all parties to peruse production, harvesting and best-before dates, as well as factory data and logistics information. In an ideal world, this data could then be made available to government regulatory bodies – or even the general public.

Supermarkets are falling over one another in the race to find a workable blockchain platform. Wal-mart’s high-profile pilot scheme, conducted in conjunction with IBM and China’s Tsinghua University, has “shown promise for food safety.”

The American retail giant has used its platform to monitor the pork products sold in Chinese outlets and mangoes sold in the United States. Its decentralized ledger contains a compendium of a digital data comprising breakdowns of farm and factory information, batch numbers, use-by dates, storage temperatures and shipping information.

Fighting fakes

China, already tearing up trees in the East Asia bitcoin stakes, is forging ahead full-steam with food-industry blockchain pilots. Fake products have long blighted the country’s food industry, with fraud detectives claiming that the problem is “pervasive, across food groups and in anything you can possibly imagine.”

e-Commerce is particularly at risk. Alibaba, online retailer giant, has launched its own fake-busting blockchain test-platform in Australia and New Zealand which are major sources of Alibaba’s China-market food products.

And it would be wrong to assume fakes are only a blight in the Middle Kingdom. Last year, Interpol seized some 10 million kg and 1 million liters of “hazardous fake food and drink” from 57 countries, including Italy, South Korea and Australia.

Companies in Northern Europe are thus working on similar anti-fake initiatives. PwC Netherlands has partnered with supply chain authentication specialist Arc-net for a cloud-based blockchain platform. The platform aims to provide manufacturers and retailers with the data they need to assure customers of the authenticity of their products.

Farm to fork

Who can forget the company that put tuna onto the blockchain?

Provenance’s headline-grabbing six-month sustainable tuna trial made use of “mobile, blockchain and smart [RFID] tagging technology,” providing an open system where traceability was prioritized. Should projects like these prove successful and financially viable, they have the potential to transform not only the tuna fishing industry, but also the worlds of catering and retail.

The United States’ Grass Roots Farmers’ Cooperative last month released a blockchain mission statement, claiming the technology will allow meat producers to “prove exactly who raised the animal and how it was raised, how many animals were raised in its batch and how they lived, and who the butcher was.”

In fact, companies are so keen on incorporating blockchain platforms that they have piloted just about any food item you care to name. British bank Barclays last year tested a blockchain system, created in conjunction with an Israeli tech startup, to trade cheese and butter worth US$100,000 – from an Irish food co-operative to a company based in the Seychelles, off the coast of East Africa. 

Leap of faith

As promising as all these pilots are, they still represent a hoped-for, rather than an expected vision of the future. Using a blockchain-powered platform requires manufacturers and producers to make a very big leap of faith. It requires them to trust in a decentralized management system. And for many food manufacturers, saying goodbye to traditional centralized ledgers feels like letting go of the steering wheel while the car is in top gear.

Blockchain tests are increasingly commonplace, but wide-scale implementation is still fairly distant. Some critics even say there is “too much hype” surrounding blockchain’s use in the food industry’s supply chain.

Nevertheless, the fact remains that many manufacturers and suppliers simply have to improve their supply chain traceability if they want to stay reputable – and profitable – in the long-term.

Urgent need

In the internet age, the risk of product recall is now higher than ever, and most companies just do not have the financial clout to weather a food scare scandal.

Governments everywhere are getting more stringent about sustainability, traceability and labeling criteria – and it looks like this will only intensify in the years to come. Discerning customers are starting to demand that their food is fully traceable, and will even pay a premium for sustainable, fully traceable products.

All these reasons and more make it almost inevitable that producers will simply continue to invest in blockchain pilots until they develop successful models. Some may still have reservations about the technology, but many industry professionals privately believe that when it comes to food production, blockchain simply cannot afford to fail.

Featured image from Lukas Budimaier on Unsplash

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