July 27, 2019 · 10 min read
Blockchain for food supply chain
Problems Blockchain Can Solve For The Food Supply Chain Industry
Food safety is a global concern that touches our everyday lives. According to the WHO, an estimated 600 million — almost 1 in 10 people in the world — fall ill after eating contaminated food and 420 000 die every year, resulting in the loss of 33 million healthy life years. Children under the age of 5 carry 40% of the foodborne disease burden, with 125 000 deaths every year. Poor storage facilities, unhygienic transportation, improper farming techniques, carelessness in due-diligence, and lack of transparency in food supply chain are some of the primal factors responsible for the upsurge of the foodborne diseases across the world. On the other hand, the all-time high food fraud costs the food industry around $49 billion globally each year. The most affected food categories include milk and its products, tea and coffee, fruit juices, olive oil, maple syrup, seafood, honey, and various other food items. Seafood is suffering from illicit production due to unreported, unregulated, and illegal fishing. The present food supply chain is not efficient to deal with all these challenges.
With different sectors opening their doors for emerging technologies, food supply chain companies are exploring the collaborative potential of IOTs and blockchain to enhance the reduce the losses. Here are the ways the food supply chain can benefit from the blockchain technology:
**FOOD TRACEABILITY —**Food traceability has been the centre of discussion to tackle the above-mentioned drawbacks of the current environment. Now imagine you visit a grocery store to buy food. Simply by using an app, you can scan the sticker on the food products and the app reveals all the historical information of the food’s journey from the farm to the store. This historical information includes the location and name of the farm and the farmer, the amount and the name of the fertilizers used, the temperature at which the food was stored in different stages, measures of inspections, timely tracking of the value chain, and the transactional breakdown of the food’s retail price. This trustworthy transparency is what the blockchain brings on the table for the food supply chain. Blockchain can efficiently connect multiple stakeholders like farmers, processors, retailers, distributors, and consumers in a trustless environment. The structure of blockchain ensures that each player along the food value chain would generate and securely share data points to create an accountable and traceable system. Vast data points with labels that clarify ownership can be recorded promptly without any alteration. As a result, the record of a food item’s journey, from farm to table, is available to monitor in real-time. The traceability and transparency in the food supply chain will force the participants to take appropriate measures for quality assurance.
**AUTOMATION —**Blockchain has been on the leading edge of introducing automation in the company’s day-to-day operations. With the advent of smart contracts, the reduction of middlemen is prevalently observed in the value chain operations. Reduction of middlemen helps in reaching the profits of the food products to the deserving stakeholders and most importantly, the farmers. The digital update of real-time data and execution of the blockchain transactions with the help of smart contracts make the entire ecosystem more quick, methodical, and fault-resistant. Blockchain has helped germinate automated payment platforms to charge a fee that is a fraction of traditional payment transfers and automatically facilitate transactions between the stakeholders. This improves profitability for farmers and everyone else along the supply chain.
**MARKETPLACE CREATION —**Companies incorporating blockchain in their food supply chain are looking to help destitute farmers in underdeveloped countries to help them reach a dynamic market for revenue generations. Farmers do not know who their end customers are and are void of any market analytics tool to boost their production based on data. Historically, intermediaries have controlled a significant percentage of profits. Digitally transparent marketplaces allow buyers and growers (not only sellers) to connect directly, increasing the amount of profit that goes to the farmers, and investors to invest directly into farms producing commodities and then trade on that investment. Lack of documentation, credit histories, proof of ownership, and other issues make it difficult for farmers to access bank benefits for short-term loans. With blockchain, farmers get access to significant funding from investors and tech-savvy companies who are aiming to disrupt the agriculture sectors. Investment tokens have been developed by companies to crowdfund the agribusinesses across the world. Improved access to funding for farmers helps them to buy seed and other inputs to increase their production.
**FOOD RECALLS —**If effectively implemented across the supply chain, blockchain could improve food recall processes because of the ease and speed with which food can be traced to both its origin and its destination. When tracked immediately, grocers and restaurants could account for the recall-affected items and remove them from shelves or menus. For retailers, if a potentially hazardous food product somehow makes it onto shelves, stores can identify and remove only the offending items, eliminating the need for costly batch recalls. This prevents illness and saves lives, as well as reducing the cost of product recalls.
**OTHER BENEFITS —**Agricultural commodities are big business, and commodity managers have been plagued by data management challenges and payment time lags. In addition to improving supply chain transparency and food safety, blockchain can provide invaluable data and insights to help the food industry do its job better. For example, with the help of sensors and subsequent test routines, blockchain can help companies to get detailed insights on tomato’s colours, tastes, salt and sugar levels, and pH levels. Such minor details can help the companies to make customer-desired changes from the factory to the farmer stage.
TOP PROJECTS TO NOTE
The IBM Food Trust initiative started with their collaboration with Walmart China and Tsinghua University with a straight objective of increasing food traceability. During testing the IBM blockchain platform, the improved data traceability provided by IBM reduced the time it took to trace a mango from the store back to its source from seven days to 2.2 seconds. The initiative has now grown into a global consortium that includes big names such as Dole, Driscoll’s, Kroger, Nestle, Tyson, and Unilever. According to IBM, the Food Trust system stores the data of about 1 million items, specifically noting Nestlé canned pumpkin, Driscoll’s strawberries and Tyson chicken thighs.
AgriLedger is a UK-based agricultural-focused blockchain systems provider working on World Bank to implement end-to-end full food traceability. AgriLedger has joined forces with SourceTrace, and a local Haitian partner Ecole Supérieure d’Infotronique d’Haïti (ESIH) to forge a new narrative for Haiti’s rural communities. AgriLedger is developing a custom-built platform for fresh produce chains in Haiti allowing buyers to scan a mango’s QR code and see the tree, the details on packaging and transportation, and the cost breakdown at each step from a tree to the moment it is paid for by a buyer. The cold-chain logistics data including registration, certification, transport and sale documents are collected along the path are made immutable and visible in supportive formats on the web and on smartphones.
OriginTrail is a Slovenia-based blockchain-powered data exchange protocol for interconnected supply chains. The team is also working toward helping IT providers and supply chain leaders with blockchain-powered data insights that are beneficial in multi-organizational environments. Since 2014, OriginTrail’s protocol is solving this challenge with a trusted decentralized network and has already succeeded in joint projects with BTC Company and the Chinese online food marketplace Yimishiji.
Provenance solutions help give consumers visibility on the location and quality of the manufacturing and other subsequent operations. Provenance provides transparency for both food and clothing companies, allowing customers to learn about the people who helped in the production of the products, their compensations, and the impact the products leave on the environment.
Ambrosus is a blockchain company that developed a system that merges IoT (Internet of Things), blockchain technology and real-time sensors, to trace and transmit information about everything that happens to a product within a supply chain. Ambrosus has driven its special focus on the food and pharmaceuticals to ensure the quality and safety of a product’s consumption.
Viant is a supply chain traceability focused subsidiary of Consens. It has partnered within Fiji with WWF and Traseable Solutions to track albacore tuna caught by Marine Stewardship Council-certified fishing company Sea Quest Fiji. Viant has installed Automatic Identification System (AIS) transmitters on the vessels to track and monitor fishing activities. Fish are tagged with a sensor when caught; that sensor interacts with the AIS transmitter to record both the time and exact location of their movement. Chinese commerce giants Alibaba (parent of Taobao) and JD.com are using blockchain-backed traceability to improve consumer confidence in the authenticity of food products in an environment. Beijing-based JD.com started by tracking beef from Kerchin, a company in Inner Mongolia (a province in northern China), to customers in Beijing, Shanghai and Guangzhou. They’ve also worked with Australian exporter InterAgri and processor HW Greenham & Sons to track Black Angus beef from where it is bred and raised through to processing and transporting.
Beefchain is a “rancher-centric” supply chain project utilizing blockchain technology to bring value to Wyoming beef producers. By authorizing unique animal identification and livestock origin, BeefChain enables ranchers to receive premium pricing for actual premium beef. This application was pioneered by University of Wyoming computer science student Kip DeCastro, who worked with BeefChain Philip Schlum to build a blockchain code for tracking a shipment of Wyoming beef to Taiwan back in December last year. To achieve beef provenance, BeefChain utilized blockchain technology in combination with Radio Frequency Identification (RFID) labels. Each RFID label is equipped with a unique digital identifier that allows the beef containers to be tracked as it moves along the supply chain. The RFID labels are provided by Avery Dennison.
Bext360 utilizes a combination of IoT, blockchain, machine learning, and artificial intelligence to build a fully-transparent food supply chain. They provide the SaaS platform to growers and different players along the value chain for sharing data and tracking progress.
Ripe.io has partnered with R3 to innovate food industry by improving food transparency and digitization in the agriculture supply chain. Through the collaboration, ripe.io will leverage R3’s Corda Enterprise and Microsoft Azure to serve its growing food and agricultural customer base. A key feature of the Corda Enterprise platform is its scalability and data privacy management. Microsoft will support the effort with cloud technology for data, security and improved blockchain capabilities for enterprises, and its advanced AI platform specifically tailored to the needs of the vast food and agriculture domains.
BeefLedger, an Australian beef traceability initiative focused on exports to the Chinese market; the Chai Vault, a UK-based wine initiative focused on verifying the provenance of investment-grade wines; OwlTing, founded by an ex-Google employee in Taiwan in 2010 to enable consumers concerned about food safety to buy directly from farmers; TE-FOOD, focused on providing farm-to-table traceability in emerging markets; and Zest Labs, another US company that uses sensors to collect data that enables companies to reduce food waste.