Briefing: what does blockchain mean for the food industry

The technology that underpins bitcoin could also be a vital weapon in securing supply chains all the way from farm to fork. By Nick Hughes.

What exactly is it?

Blockchain was created in 2008 as a virtual ledger for trading digital assets without the need for a bank to act as an intermediary. Users have shared access to and ownership of the ledger, meaning the blockchain is visible to all parties in real time and transactions must be agreed by consensus. Originally created to trade cryptocurrencies such as bitcoin, blockchain is being heralded as the future of supply-chain technology and even an answer to the Irish border question.

OK, but why should I care?

Proponents of blockchain say it will become a vital weapon in the war against food fraud since it allows for complete food traceability from farm to fork. Currently, data on the origin of goods and how they are bought and sold, as well as their quality, safety and integrity is held in silos by numerous parties operating different, often paper-based systems. This makes end-to-end supply chain transparency almost impossible and creates dark spaces in which rogues can operate.

Blockchain allows all of this information to be held on one digital ledger which is accessible and visible to all parties, from the farmer right down to the supermarket shelf stacker. It is also immutable, meaning entries cannot be changed retrospectively.

In theory, blockchain will be able to identify a problem in the supply chain, for instance a suspicious sampling result, in real time and pinpoint exactly where the problem lies. Given that traditional approaches to food verification have been found wanting of late, it’s perhaps understandable that blockchain is getting the food industry extremely excited.

Who’s using it?

Lots of food companies, although mostly at the pilot stage. In August 2017 a group of global food giants including Walmart, Nestlé and Unilever announced a collaboration with IBM to identify and prioritise new areas where blockchain could benefit food supply chains.

The French supermarket Carrefour is using blockchain technology on certain lines of fresh produce, so that shoppers can scan QR codes attached to the label to get a complete view of the product’s supply chain.

The Co-operative is among the UK retailers to have trialled blockchain technology, while Soil Association Certification has worked with the tech start-up Provenance and retailer As Nature Intended to track the journey of organic food from farm to shelf.

In the future, blockchain may strengthen the case for mandatory labelling of ingredient origin and methods of slaughter for animals. Opponents of these have traditionally argued they would be too burdensome for businesses.

Are there any downsides?

The biggest barrier in the way of more widespread adoption is cost, particularly for smaller suppliers. For blockchain to be effective it requires buy-in all along the supply chain – if one piece is missing the entire chain is compromised. However, experts believe that once the upfront cost of implementing blockchain is met, the savings made from switching away from paper-based or legacy IT systems could be significant.

Would it have prevented the horsemeat scandal?

Good question. Opinion is divided on how failsafe blockchain really is. While the digital ledger itself is incorruptible it is still susceptible to misinformation being deliberately entered in the first place. And blockchain will not remove the need for verification, such as auditing and sampling, which is inherently subject to human error.

But even if it wouldn’t have prevented the horsemeat scandal, a complete blockchain would undoubtedly have made the process of untangling the complex supply chain much faster.

So is it the transformative technology that some are claiming?

The answer is that we don’t yet know; but here’s something to ponder. A recent white paper from the certification provider Bureau Veritas noted that blockchain was expected to do for transactions what the internet did for information. In this era of fake news and dubious data mining, you can decide for yourself just how much of an endorsement that really is.

 

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