Blockchain for the food supply chain
As blockchain pilots for the food supply chain continue to move into production, the positive impact is already palpable.
Blockchain is an emerging technology that began with Bitcoin and is now touted to be a potential solution to myriad business challenges in almost every industry, most notably, the food supply chain. Blockchain can revolutionize food safety, dramatically improve traceability and speed recalls. But, this same technology also enables easy authentication of value-enhancing claims that products are organic, free-range, allergen-free or sustainably sourced, and greatly reduces time spent in transit, fulfilling the promise of farm-to-table.
Blockchain is a new type of database that brings together four key characteristics in a way that no other database has done before:
- Public-private key cryptography, which enables enhanced data privacy/security.
- Distributed networks, which increase network security and trust among parties.
- Data immutability (via hashing), which prevents tampering with records.
- Disintermediation, which allows users to “cut out the middleman” in data transfer.
By combining these four characteristics, blockchain enables new efficiencies in situations where multiple independent entities rely on, update and use the same dataset. These efficiencies may be realized in applications for currency, payments and capital markets, but all of these are highly regulated areas, and creating new scalable solutions will require overcoming many legal hurdles. In contrast, the food supply chain is far less regulated, making it a prime target for blockchain innovation.
The current food supply chain involves multiple independent entities with diverging incentives and varied legal relationships, and provides different levels of transparency into a fragmented and siloed set of information. Transitioning to a blockchain-based system enables all parties involved to view the entire record of supply chain transactions—all in real-time and with an enhanced degree of trustworthiness and data integrity.
Globally, food and beverage companies, retailers, technology companies, governments and non-profit associations have implemented and tested blockchain solutions for the food supply chain. The IBM Food Trust, for instance, a consortium of 10 major food suppliers, including Walmart, Nestlé, Dole, Tyson and Unilever, partnered with IBM, Armonk, N.Y., to build a blockchain-based system enabling a farm-to-grocery view of the food supply chain. Similarly, TE-Food, Germany, is implementing blockchain solutions for tracing food in emerging markets. Both the IBM Food Trust and TE-Food are utilizing GS1 standards and have recorded millions of food data transactions. SAP, Chicago; the Blockchain Food Safety Alliance, China; retailers and startups are also pursuing blockchain solutions to tackle the complexities of the food supply chain.
Other projects utilize blockchain technology to trace a wide variety of food items from places of origin to their final destinations. In one of the earliest projects, Walmart, Bentonville, Ark., used IBM’s blockchain to reduce the time to track mangos from farms in Mexico to stores in the United States from six days, 18 hours and 26 minutes to just 2.2 seconds. Nestlé USA, Arlington, Va., uses IBM’s Food Trust blockchain to track multiple ingredients for baby food, such as apples, sweet potatoes and pumpkins. And, BeefChain, created by Wyoming Certified Beef, LLC, Devils Tower, Wyo., is tagging this year’s calves for a future blockchain project verifying free-range status.
Blockchain allows participants to create a single, immutable record of the food’s movement along the supply chain, complete with necessary documentation such as certifications of quality, storage conditions and temperature, shipping and customs documents, letters of credit and payment information. Many of these projects also allow supply chain participants to access information on the blockchain about where and how the food was grown, livestock conditions and how the food was processed through the food’s quick-response (QR) code.
Some of the projects, particularly those related to perishable proteins such as seafood, poultry, pork and beef, employ radio frequency identification (RFID) tags, Internet of Things (IoT) sensors and cameras to monitor and permanently document the temperature and other storage conditions along the supply chain of the packaging, pellets, containers and trucks. For example, Intel, Santa Clara, Calif.; Viant, Irvine, Calif.; and the World Wildlife Fund, Washington, D.C.; are tracking tuna on the blockchain from the catch (to ensure environmental sustainability) to the landing dock and processing facility to the location where the fish is sold. Via blockchain, supply chain participants can verify where a fish was caught, watch videos of the fish to verify size, species and date of catch, learn about the fishermen, view data on transport conditions such as temperature and humidity gauged from IoT sensors affixed to the fish and monitor the location of the shipment in real-time.
As blockchain pilots for the food supply chain continue to move into production, the positive impact is already palpable. The challenges are real, but the opportunities are boundless. Beyond the hype of blockchain, there is potential to improve human lives, food safety, sustainable growth, employment practices and environmental stewardship at the most fundamental level.