How Blockchain is Being Used Today in the Food & Beverage Industries
Author: Kevin Lynch
While there has been a lot of talk in the media and we are seeing it revolutionize across many industries, blockchain technology is impacting the food and beverage industries faster than we realize. From Walmart to IBM, large, well-known companies are recognizing the importance of digitalizing our food and beverage system and are implementing the necessary procedures in order to trace food more accurately across the supply chain, combat food-borne illness, and bring improved transparency and efficiency to the global food supply chain.
What is Blockchain and How Does It Work?
Simply put, blockchain is a chain of “blocks” across a computer database that stores information. As more information is stored, more “blocks” are added to the chain. While this information can be stored, it cannot be copied. With most transactions, there is an intermediary such as a bank. The blockchain network has no intermediary or central authority – the information is transparent to anyone who has access to it. So how does it work? Think of a blockchain like a Google spreadsheet. The spreadsheet contains information about the many transactions of data, which then generates what is called a “hash,” or a combination of numbers and letters. As each transaction occurs, a “block” of digital data is created and the blocks become connected or chained together. As soon as a new block is formed, it can no longer be changed.
Improving Food Traceability
With blockchain technology, organizations can trace the entire lifecycle of food products from origin through every point of contact on its journey to the consumer. The Food Trust Solution, created by IBM, is the first blockchain safety solution that allows transaction partners to confidently and securely share food information, creating a more transparent and trustworthy global food supply chain. According to IBM, simplifying the food supply system could help consumers eat well, vendors save money, and omit the negative news stories in the media.
From leafy greens such as spinach and romaine lettuce to fresh fruit and vegetables, organizations such as Albertsons Companies, the world’s second-largest supermarket in terms of sales, are testing out IBM’s Food Trust blockchain. Announced this Spring, they began piloting the blockchain with suppliers of romaine lettuce, a product which was recently linked to a widespread outbreak of E-coli.
Additionally, Walmart issued a mandate to all of their suppliers of leafy greens, including spinach and romaine lettuce, stating they have to adopt blockchain by September of 2019.
In the food supply chain, information such as farm-origination details, batch numbers, processing data, factory information, expiration dates, storage temperatures, and shipping details are all valid sources of information that could be accessed through the blockchain. Having better food traceability through blockchain technology across the food supply chain allows companies to help reduce the spread of food-borne illnesses by pinpointing issues in the food chain through these blocks of data. At the same time, this could help avoid massive losses for retailers and suppliers at the time of a recall.
All of the transactions for one item of food can be seen and validated at any point in time in the blockchain. This will allow every party in the food supply chain to have a better picture of the lifecycle of the product, and these sources of data cannot be altered or tampered with.
If anything happens to a product along the line of production and distribution, organizations leveraging blockchain can easily pinpoint the source or track whomever is accountable.
“With the promise of fast and secure end-to-end product traceability, blockchain is easily one of the most energizing – and complex – technological developments of the past few years,” stated Melanie Nuce, Senior Vice President of Corporate Development at GS1 U.S. At the present, companies are using blockchain to continuously improve traceability within the food supply chain. In the near future, consumers may be able to trace their food from “farm to fork” with the scan of a QR code.
Combatting Food-Borne Illness
Food safety is not just a food or public health issue, it is a supply chain issue. Similar to our ability to better trace food across the food supply chain with blockchain technology, blockchain is becoming increasingly prevalent in food safety. When foodborne illnesses occur, it is difficult to trace the source of contamination using traditional food supply methods, such as paper trail.
Last year, the World Health Organization published that an estimated 600 million people fall ill after eating contaminated food. In addition, according to the Centers for Disease Control and Prevention, about 1 in 6 people in the United States get sick from foodborne illnesses each year. With blockchain technology, the data sources available could provide links to trace these outbreaks more effectively and possibly limit the number that occur by more accurately tracing contaminated and diseased products.
According to Frank Yiannas, the Food and Drug Administration’s (FDA) deputy commissioner for food policy and response, the FDA is using blockchain to identify the sources of food safety issues, with the goal of creating more transparency in the food system.
So how could blockchain help the FDA track food sources faster? When the E-coli outbreak was announced to the public in November 2018, the FDA spent several days tracing the outbreak to farms in California, as many organizations are still using old methods of paper data and cabinet filing. According to tests conducted by Walmart and IBM, capturing the tracking information can happen in as little as 2.2 seconds with blockchain. As Don Durm, Vice President of Customer Solutions at PLM, states, “Blockchain technology has proven that we can trace food to its origin in a very complex and messy food supply chain that would normally take two weeks or more, to an astounding 2.2 seconds.” In the 2008 China incident, about 30,000 infants fell ill after consuming milk contaminated with melamine. This incident addresses another example of the importance of leveraging blockchain technology to reduce subsequent losses incurred due to contaminated products. With blockchain, there is no missing information when it comes to the history, location, and status of a food product. Having the ability to exactly pinpoint where the tainted food originated, where it was distributed, and where it was served or sold is vital in combatting food-borne illness in our food supply chain.
In August 2017, Walmart joined IBM’s Food Trust blockchain pilot along with other suppliers including Kroger, Nestle, Tyson Foods, and Dole. With a digital food system, these companies recognized the importance of becoming a proactive contributor to eradicate the challenges in our food system. For example, many of the mangos sold in Walmart stores are mostly grown by small farms in Central and South America and then transported by land, air, and sea to stores in the United States. Tracking a package of mangos using traditional methods can take several days or even weeks. With blockchain technology, this tracking process can be simplified and minimized to minutes, if not seconds. In the case of a recall or outbreak, stores can quickly access the source of the contamination through the blockchain and remove the mangos from the shelves the same day, versus using a traditional method that takes days or weeks, thus risking further complications from the contamination.
As part of the IBM Food Trust, they provide full transparency of food products from tracing, certifications, and fresh insights. Tracing is likely the most imperative piece of the IBM Food Trust as it can trace food products within seconds, show location or status, and verify credibility or safety of each product. Moreover, besides tracking recalls and contaminated products, blockchain technology has the capability of tracking spoilage or expired products as well. For example, with the implementation of temperature sensors in shipping containers, alerts can be sent and stored in the blockchain when a product goes above or below a specific temperature. When products sit at a higher temperature, foodborne illnesses are more likely to manifest, so having temperature records can prevent potentially tainted foods from making it to store shelves.
Bringing Transparency & Efficiency to the Food Supply Chain
IBM’s Food Trust is a great example of a company that is currently using blockchain to help bring transparency and efficiency to food supply chains and food safety. Real-time certifications, test data, and temperature data ensure that proper food handling protocols are met.
Secondarily, Greenfence, the food industry’s first remote auditing and certification platform, is leveraging blockchain technology to identify the people, locations, distributors, equipment, and anything else involved in the farm-to-table process of the food supply chain. Some of the advantages blockchain technology brings within the food supply chain include the following:
- Any attempts to tamper with a food item as it moves through the food supply chain can easily be identified with blockchain technology
- Stores and supermarkets can identify and remove products from their shelves once a potentially contaminated or hazardous product is identified
- Consumers can be reassured that the food they are buying and eating is what the label states
In addition, blockchain could help eradicate counterfeits and food fraud in our global food supply chain as the data is much less vulnerable to being tampered with or lost. PricewaterhouseCoopers (PWC) estimates that food fraud is worth $52 billion globally each year. With blockchain, providing full visibility and traceability allows for better control over the food supply system, accurate data, and better customer satisfaction or customer trust in our global food supply.
Health supplements company Blackmores and dairy products supplier Fonterra have recently worked together to run a pilot program to prevent food fraud – a practice that involves packing foods with lower quality or counterfeit ingredients – using blockchain. Products will also be tagged with QR codes, a code used for storing information. These organizations strive to utilize blockchain to achieve supply chain traceability and transparency while boosting customer confidence. Moving forward, it’s going to be a continuous effort across all parties involved in the food supply chain to bring more transparency to our producers, retailers, and consumers.
Blockchain technology not only has the potential to transform the food industry, it has already begun to. With large, well-known companies such as IBM and Walmart implementing and mandating blockchain for their food supply chain efforts, it’s only a matter of time before we see a larger global shift of organizations leveraging blockchain technology.
However, for blockchain to work effectively, organizations need to transition from traditional styles of record-keeping such as the cabinet filing of paper documents to digital solutions that allow the data to be encrypted in a blockchain. For anyone interested in learning more about blockchain technology and its impact on the food and beverage industry, I hope this information was helpful in providing more information on a complex, exciting topic.
About QProducts & Services:
QProducts & Services is a manufacturer of passive temperature protection and cargo security solutions for the global supply chain. For over 25 years, they have developed innovative, cost-saving solutions for transporting temperature sensitive commodities. QProducts & Services has expanded their product line to include cargo security solutions and wireless temperature monitoring technologies. Manufactured just outside of Chicago, IL, their patented products are noted for durability, performance and reliability in protecting the integrity of shippers’ cargo throughout the supply chain.