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FOOD AND HEALTH ESSENTIALS

Your regular update for technical and industry information

Creating a transparent supply chain, and the potential of blockchain technologies

In the 21st century, ready access to food from all over the world has dramatically improved the quality and healthfulness of the food products that we consume, and has given consumers a greater variety of food choices than at any point in history. At the same time, the complex food supply chains that are required to bring food products to consumers also presents significant challenges for ensuring that the food that reaches our tables is safe and provides the promised nutritional quality.

Improving the transparency of global food supply chains will be an essential aspect of food safety efforts in the coming years. Indeed, one of the key findings in the most recent TÜV SÜD Safety Gauge study is the belief that supply chain transparency will be an important factor for consumers in assessing the safety of a given food product. Therefore, producers, suppliers and retailers are actively investigating technologies that can aid in their efforts to verify the origins of food ingredients, and to validate that their food products comply with their specifications for quality and safety.

One of the most exciting developments in this area is the application of so-called blockchain technology to address supply chain transparency issues. This article will provide a brief overview of this technology and its potential benefit to the food industry.

What is “blockchain” technology?

Originally developed in 2008 as the underlying technology for the digital currency bitcoin, blockchain is a sophisticated but secure form of digital records management that can be used to identify and track sequential activities in a variety of industries and applications. Rather than relying on a central server, blockchain uses databases distributed over an open network of computers to track individual “blocks” or activities in almost any type of process. The assembly of sequential blocks in a process serves as a kind of notarised ledger of an entire activity, since individual blocks in a blockchain cannot be altered after the fact without altering all subsequent blocks in the chain.

A number of industries are currently exploring how the application of blockchain technology could serve to improve system interoperability and to increase access to information, all within the context of a highly secure environment. Financial service institutions, accounting firms, insurance companies, medical records systems providers, publishing companies and even government agencies are initiating piloting programmes to test the effectiveness and security of online ledgers built on blockchain technology. The transformative potential seems endless. 

How could blockchain technology support food supply chain transparency?

In the food industry, blockchain could serve as an important foundational technology in the digitalisation of supply chain information. For example, systems based on blockchain technology can be used to maintain records on:

  • The provenance of food ingredients, such as country of origin;
  • Producer-specific information, including farm source or factory location;
  • Production information, like date of production and production batch codes;
  • Food inspection, testing and certification results;
  • Anticipated shelf-life or “best if used by” dates

Information on these and other activities and transactions along the entire food supply chain, from farm to fork, can be securely maintained on a decentralised, tamper-proof, online ledger. Using QR codes, barcoding and other labelling identifiers, the information can then be easily retrievable at little or no cost by food distributors, retailers, consumers, auditors, regulators and any other stakeholders with authorised access to the blockchain ledger.

The application of blockchain technology to the food supply chain has the potential to provide several important benefits to both food producers and consumers. For example, greater transparency regarding the source and production of food and food products could be a key tool in reducing the incidence of food fraud around the world, and help to minimise the safety risks to which consumers are exposed through the consumption of fraudulent food products. And blockchain-based supply chain ledgers could also be used to more quickly identify and locate food lots subject to product recalls, thereby facilitating the prompt removal of unsafe foods from store shelves and consumer pantries.

How are food companies adopting blockchain technology?

The potential advantages of blockchain technology in improving supply chain transparency are already being evaluated by a number of global food distributors and retailers. In the U.S., for example, Walmart implemented a programme in 2016 using a blockchain to track the movement pork and pork products originating in China. The programme, a joint effort with information technology giant IBM, was prompted by increases in the number of food-related illnesses, and the retailer’s desire to provide customers with greater assurances regarding the safety of their food purchases.1

In a separate instance, China’s online retail megastore Alibaba has announced a new blockchain-based experiment designed thwart the growing problem of fake food in China. Under the programme, Alibaba will provide vendors on its Taobao and Tmall online marketplaces with access to blockchain tools that will enable them to verify the authenticity of food products sold on these sites. The company’s blockchain experiment will initially focus on food products from Australia and New Zealand, which are reportedly two popular sources of food products for Chinese consumers that shop on Alibaba’s online marketplaces.2 

Conclusion

These and other examples illustrate the potential of blockchain technology to help increase transparency in the food supply chain, thereby providing greater assurances on the quality and safety of food and food products, and contributing to efforts to stem the distribution of potentially dangerous fake food products. As consumers around the world demand greater assurances regarding the quality and safety of food, blockchain technology could provide innovative food producers and suppliers with an important edge in an increasingly competitive global food market. 

 

[1] See “Walmart and IBM Are Partnering to Put Chinese Port on a Blockchain,” Fortune Magazine Online, October 19, 2016. Available here (as of 5 June 2017).
[2] See “Alibaba to use blockchain to fight China’s fake food,” TechinAsia website, March 24, 2017. Available here (as of 5 June 2017).

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