Italian wine makers are the first to use DNV GL’s blockchain solution MyStory, which allows consumers “to have instant and in-depth access to key products characteristics such as quality, authenticity, origin, ingredients, water and energy consumption and more, all verified by DNV GL along the entire transformation process,” says DNV GL’s Business Assurance CEO Luca Crisciotti. By scanning a QR-code, consumers can see the full history of the product and its journey from grape to bottle.
From farm to fork, food produced today goes through more hands than ever before. A greater number of players in the production of even a single product could increase that the risk for foodborne illness. Not only do companies need to check incoming and outgoing products from their own facilities, but they also need to consider whether products that they are importing from other countries are compliant with local regulations, and whether the products that they are exporting are compliant with the regulations of the destination country.
The current traceability standard of “one step forward, one step back’”is less and less suited for the current global marketplace, and governments are demanding more. Handling all this information is a challenge for food producers of all sizes, around the world.
Taking Traceability Global with FSVP
Needless to say, with 600 million people contracting foodborne illnesses every year, there is a dire need for food traceability and transparency in the food supply chain. If and when something goes wrong, traceability gives oversight agencies greater visibility investigating the root causes of an outbreak to prevent further risk to the public. It also allows companies to minimize the financial impact of a recall if they are able to pinpoint exactly which lot numbers of their products are affected.
In response to the changes in the food industry, in 2011 the USFDA introduced FSMA to implement a more proactive food safety regulatory system. With FSMA came the Foreign Supplier Verification Program (FSVP), which basically extends FSMA regulations to companies supplying food to the United States. All U.S. importers are now required to monitor and manage their foreign suppliers through six steps of hazard analysis, record keeping and more. Given the complexity of the global food supply chain, this is by no means an easy undertaking and it is clear that technology is crucial to achieving this granular level of data management alone. Blockchain technology, however, might be the answer to this problem—and many other related ones.
What is Blockchain Technology?
Evolving from the digital financial world, blockchains are distributed databases that build a growing chain of ordered records, called blocks. This means that any type of information can be stored in a chronological, consistent and secure way; even if multiple users are involved, it is extremely difficult to alter a blockchain.
Since any information on the blockchain is shared with all of its users, they can view any transactions made historically and in real-time. Theoretically, this could allow authorities to pinpoint food problems within minutes, when previously it would take days, potentially saving many lives in the process.
Blockchain in Action in the Food Industry
In 2016, retail giant Walmart started using a pilot version of the technology in its stores, tracking two products using blockchain: A packaged produce item in the United States and pork in China. Walmart announced that the results were “very encouraging,” noting that using blockchain technology could dramatically increase the speed of traceability from days to minutes. In fact, Walmart is now taking it to the next level with a collaboration with one of China’s largest retailers, JD.com, and their suppliers, to bring a higher level of food safety to China.
Other major food suppliers and retailers—Dole, Driscoll’s, Golden State Foods, Kroger, McCormick and Company, McLane Company, Nestlé, Tyson Foods and Unilever—have also signalled their intention to work with IBM to create blockchain-based solutions. Blockchain technology is even being used to track the movement of tuna through the ocean and all the way to the consumer.
At the same time, implementing blockchain technology throughout the industry is a mammoth task. As of now, blockchain technology has a problem with scaling up and can only process a limited number of transactions per second, which would not be sufficient given the needs of the global supply chain. According to Coindesk, each transaction costs about $0.20, and can only store 80 bytes of data, so the bill might become quite hefty as well.
There’s also the fact that the food industry is traditionally slow to adopt new technologies. It’s not just about big players like Walmart—small, medium, and large businesses alike need to come onboard in order for this to become an industry-wide standard.
Can FSVP Unlock the Potential for Blockchain Technology?
There are several reasons why blockchain technology could be the key to tackling the complex challenge that is tracking and verifying foreign suppliers. Blockchains can help increase transparency and communication across the food supply chain, ensuring that there are no gaps and that records are widely available and up to date. When all the information about suppliers and products is easily accessible, the potential to increase the speed of recall response is very high.
Blockchain technology is also suited to FSVP’s goals, specifically. One of the main goals of FSVP and FSMA generally is to tackle the issues of food fraud, intentional adulteration and bioterrorism that are unique problems of our time, in terms of scale if nothing else. Such a modern problem requires modern solutions. Because the blockchain, forming the basis of cryptocurrencies like Bitcoin, focuses on security, it could mean that blockchains can help close the gaps that would be exploited by food companies employees, or other actors who harbor ill intent.
The reality, however, is that the level of industry-wide coordination—and voluntary transparency—that would be necessary to deliver real benefits is extremely high. The theoretical possibilities are exciting and hugely impactful; the practical reality is more complex. For blockchain to reach its full potential, it has to be universally mandated, which is highly unlikely given the current circumstances. It seems more likely that adoption in this area could be driven by industry organizations and/or government, but unfortunately, the recently proposed budget cuts for the FDA might block progress in the latter area.
Still, with major food suppliers and retailers leading the charge and taking blockchain technology for a test run, the rest of the industry is waiting with bated breath to see what happens next.
Cryptocurrency is a favorite topic in the business world currently, but it’s not the coins or currency that are the star of the show. Bitcoin in and of itself is exciting and promising from several perspectives. However, the foundation of what these technologies run on is much more important. You likely already know what we’re going to talk about next: Blockchain.
To understand why blockchain is considered so crucial, you first need to delve into the core components of the technology. It’s basically a digital ledger, except it has some incredibly useful properties that make it uniquely lucrative. For starters, it’s public and transparent, so anyone with access to the network can see what’s happening in the moment, or what has been happening while they were away. However, the parties involved in a transaction or entry remain private, as do the materials or items exchanging hands.
Finally, because of the nature of blockchain, it’s secured and valid. The ledger itself is thoroughly protected, and no one can alter data save the parties involved. Even then, the relevant parties only weigh in with pertinent information such as time and date of the transaction and the amount transferred.
Most of what we’re talking about here is in reference to currencies and more traditional transactions. But it’s important to remember that we’re merely scratching the surface. As we speak, various organizations are working to adapt this technology for alternate industries and applications.
Still, what does any of this have to do with your average food supply chain?
Blockchain May Evolve the Food Supply Chain As We Know It
Believe it or not, blockchain can help improve the transparency and management of the food supply chain. It’s definitely needed. The world’s population continues to grow, and it’s expected to reach 10 billion by 2050. In food requirements, that means we’ll need to be increasing food production by as much as 70% to keep up. This puts a demand on the food supply chain to evolve and become more efficient, more accurate and more reliable.
The following are several ways blockchain can help achieve better transparency in and management of the food supply chain.
Preventing Foodborne Outbreaks, Enabling Fresher Goods
IBM has teamed up with several major suppliers including Wal-Mart, Dole and Nestle to come up with a blockchain-powered system that can be used to track a product’s journey from farm to store shelves. The goal is to create a more transparent deployment and transportation process so that interested parties can see exactly when and where certain foods might become contaminated.
Tracking this information will achieve a couple of things. For starters, public health officials, suppliers and management teams can help limit and prevent contagions from spreading. After the detection of Salmonella, for instance, they could mark all related goods as a risk and stop both stores from selling them and consumers from buying faster than ever before.
Second, it will help identify problematic systems and processes, hopefully cutting down on the risk of contamination in the future. If they know certain foods are going bad in transport, they can discern that it’s something to do with how they’re handled or stored along that segment of the journey. This would further enable them to identify and fix or optimize the issue. In other words, suppliers and retailers will use blockchain to keep food fresh. This is especially important since FSMA calls for reliable hygiene and storage methods during transportation.
More Accurate Inventory Tracking for Distributors
Unexpected shortages pose significant challenges to the food supply chain. A variety of external factors can contribute to a supply block, including inclement weather, poor soil, insect infestations, equipment failures and much more. When this happens, distributors are left to pick up the slack, but sadly, they often can’t do much to fix the problem.
Blockchain technologies, however, make the supply chain more transparent, which helps distributors get the information they need to address shortages. Through the use of blockchain, they’ll know exactly how much supply is available and what they need to do to ramp up their offerings.
For example, in the event of a shortage, they might connect with local farmers to make up the difference. Gathering the information needed to find the right partner, however, can take a long time when using traditional methods. Through blockchain, though, distributors could easily see product types, farming practices, harvest dates and amounts, treatment info, fair-trade certifications and other information. This would allow them ample time to find a suitable replacement or additional partner.
Transparent Safety Protocols
The food supply chain is lengthy, includes a lot of different parties and involves a lot of metrics and details that need to be recorded and monitored. The problem with having so many factors is that it can muddy the waters. It’s hard to keep track of what every party is doing, where problems exist and what improvements can be made.
Many modern food supply providers are as transparent as they can be with partners and colleagues, but it’s not an element you would describe as streamlined or accessible to all. Blockchain can completely alter and disrupt this for the better.
Since food safety is an enormous concern for suppliers, distributors and retailers, blockchain can offer more than just peace of mind. It can help organizations perfect the entire process, improving safety for consumers and even enhancing the freshness or quality of the products provided. Improper storage or transport, for instance, can have a detrimental effect on quality, before the goods even reach store shelves. Blockchain will enable better tracking and monitoring, and make the resulting details much more accessible and transparent.
It’s Time for the Food Supply Chain to Evolve
The coming change is warranted and welcomed by many. A more transparent process means a much more accessible system. Suppliers can better communicate with farmers and food sources. Distributors and retailers can keep a close eye on the goods they’re acquiring and offering to consumers. Furthermore, safety, quality and quantity can be more accurately monitored and measured by everyone along the way. It’s time for the food supply chain to evolve in this way — it’s been a long time coming.
FoodLogiQ has announced the launch of its API as a Service offering within the company’s Connect platform. Companies can use the platform to centralize IoT and blockchain data.
“By connecting the data our customers are gathering in FoodLogiQ with other platforms serving the food industry, our customers will achieve supply chain visibility unlike any other in the industry,” said Dean Wiltse, CEO of FoodLogiQ in a press release. “Whether it is a consumer-facing loyalty app, temperature monitoring sensors, inventory management platforms or grocery delivery services, the food industry requires a centralized technology platform to connect these many complex data sources and reduce redundancies through integrations.”
The service offerings include temperature and location monitoring, blockchain, data pools, business intelligence, and food quality and auditing technology. For more information about FoodLogiQ API as a Service, visit the company’s website.
The food we eat is a lot less secure than we would like to imagine. According to PricewaterhouseCoopers, food fraud is estimated to be a $40 billion a year problem, with instances of fraud becoming worryingly frequent—from wood shavings discovered in our parmesan to the 2013 horsemeat scandal in the UK.1-3 Not only do these incidents damage the faith consumers have in their food, but as seen in the 2009 salmonella peanut butter outbreak, which resulted in the death of 9 Americans and sickening of 714, they can have fatal consequences.4 Indeed, the World Health Organization estimates that nearly 1 in 10 people become ill every year from eating contaminated food.5
While it may be uncomfortable to imagine our food supply can be susceptible to such high profile attacks, what is more unsettling is that our food supply chain has grown so complex that it has become almost impossible for food producers to guarantee the provenance of their products—meaning consumers can never entirely trust in the food they eat. In this article I will identify five main issues the global food supply chain faces, and what steps can be taken to address them.
Exchange knowledge about managing your supply chain at the Best Practices in Food Safety Supply Chain conference | June 5–6, 2017 | LEARN MORE1. Consumer demand for traceability
Traceability is no longer a request from consumers, but a demand, and one that is only growing stronger. A recent transparency survey found that consumers want to see everything from a complete ingredient breakdown to sourcing information, with 94% of respondents saying they are likely to be more loyal to a brand that offers complete transparency.6 While a new study discovered that more than half of Canadians are concerned about food fraud.7
If we take seafood products as an example, almost half (46%) of respondents to an independent research survey conducted by the Marine Stewardship Council (MSC) agreed that they trust brands that use ecolabels (a form of third-party certification) more than those that do not.8 The survey also found that 66% of respondents felt that traceability of the product was the primary factor determining seafood purchasing decisions.
This kind of consumer driven, high-quality information opens up a world of possibilities for companies that recognize the significance of its demand. Brand protection, demand forecasting and consumer loyalty all becomes possible for early adapters who show themselves to be taking practical steps to guarantee the authenticity of their products.
2. Lack of communication between actors
One of the biggest challenges preventing full traceability of our food is the fragmented nature of the supply chain. For even the most seemingly simple of food items there can be a huge number of actors involved that are spread around the globe with little to no knowledge of one another’s actions.
For instance, to trace your hamburger from farm to fork may involve tracing your lettuce back to the farm in which it was grown (but not what happens to it before it reaches your supermarkets shelves), tracing the beef back to the cattle (with no guarantee, as seen with the horsemeat scandal, that the end product is 100% beef) and any number of logistical barriers.
It is vital then that stakeholders within the chain prioritize communication with their suppliers, either through the implementation of traceability solutions, or the commitment to engage only with suppliers they know they can trust. Not only is this beneficial to the end consumer, but to the food producers themselves, allowing them to ensure that their organizational reputation remains solely their responsibility and not left in the hands of unknown and uncontrollable third parties.
3. Influence of organized crime
When one thinks of the Mafia, it’s rare that olive oil is the first thing that comes to mind. Currently, however, it is the fraudulent manufacture of this and many other Italian exports (cheese, wine, etc.) that is fueling organized crime and ending up on our shelves.9
High-scale food fraud is not a naturally occurring phenomenon but rather exists as a result of highly organized criminal activity. In his 2014 UK government report, Professor Chris Elliot notes that “food fraud becomes food crime when it no longer involves random acts by “rogues” within the food industry, but becomes an organized activity by groups that knowingly set out to deceive and or injure, those purchasing food”.10
This is not just a problem for Italy; counterfeit food and drink occurs on a massive scale throughout the whole of Europe. A joint initiative by EUROPOL and INTERPOL last year led to the largest ever seizure of fake and adulterated projects. This project, known as OPSON V resulted in 11,000 tons and 1,440,000 liters of hazardous fake food and drink seized across 57 countries.11
In order to combat the growing threat organized crime has on our food supply, it is vital that governments devote resources to organizations with the sole responsibility of identifying food crime. In response to the horsemeat scandal, the UK government launched its National Food Crime Unit within the Food Standards Agency in London, while the FDA has a special focus on food defense.
The establishment of these organizations is important, as police forces traditionally have struggled to combat food fraud, either through a lack of time, resources, or simply understanding of the complexities of how fraud affects the supply chain. The creation of specialist taskforces not only legitimizes the fight against food fraud, but allows for easier intelligence share.
4. Lack of transparency throughout the supply chain
In her work on trust for the digital age, Racheal Botsman tells us that trust has evolved from an institutional based system to a distributed system. Nowhere has this more potential than with our food supply.
In such a complex system it becomes necessary to consider how the food industry can begin to move away from traditional systems of centralized trust. As Botsman points out, “institutional trust is not designed for the digital age”, the emergence of new technologies, most notably the blockchain, highlights the potential to introduce more trust in our food.12
Originally the technology underpinning Bitcoin, the blockchain has wide ranging applications beyond the world of FinTech. Blockchain is a transformative tool in the fight against food fraud, allowing an open and transparent ledger of our food products journey. This allows unalterable trust to be introduced into an untrustworthy system, ensuring every actor in the chain records and shares their interactions with our food.
This represents a huge opportunity for those companies who see the advantage of early adoption of blockchain infused traceability systems. Indeed by 2022, Gartner estimates an innovative business built on a blockchain will be worth $10 billion.13
5. Need for strong legislation
Steps have already been made in legislation to allow for earlier prevention of food safety incidents occurring, such as FSMA. While it is important that lawmakers are proactive in their response, the focus has primarily been on food safety, and there is still a difficulty in treating food fraud as its own separate entity.
Legislation regarding food labelling could also be more stringent, especially in Europe. At present only olive oil, fish (unless it’s canned or prepared), beef (fresh, chilled, frozen or minced), fresh or frozen poultry of non-EU origin, wine, most fresh fruit and vegetables, honey and eggs are required to be labelled. This means that origin information is largely missing on foods such as meat products (e.g., ham and sausages), yogurts and cheese, kitchen staples (e.g., oil, flour, sugar and pasta), biscuits and confectionery, or ready-meals.
Tighter legislation, leading to significant punitive measures taken against actors found to be committing fraud, would be a vital catalyst in ensuring that food in our supply chain is as secure as possible.
The growth of the global food supply chain may bring with it complexity and challenges, but also great opportunities. If actors can interject their processes with the kind of joined up thinking outlined above, with the help of technological tools that are becoming more and more accessible, the benefits will be significant, not just for them, but for all of us.
- PWC. (2016). Fighting $40bn food fraud to protect food supply [Press Release]. Retrieved from http://press.pwc.com/News-releases/fighting–40bn-food-fraud-to-protect-food-supply/s/44fd6210-10f7-46c7-8431-e55983286e22
- Mulvany, L. (February 16, 2016). The Parmesan Cheese You Sprinkle on Your Penne Could Be Wood. Retrieved from https://www.bloomberg.com/news/articles/2016-02-16/the-parmesan-cheese-you-sprinkle-on-your-penne-could-be-wood
- Grierson, J. (August 26, 2016). Three men charged over UK horsemeat scandal. Retrieved from https://www.theguardian.com/uk-news/2016/aug/26/three-men-charged-over-uk-horsemeat-scandal
- Andrews, J. (April 16, 2016). 2009 Peanut Butter Outbreak: Three Years On, Still No Resolution for Some. Retrieved from http://www.foodsafetynews.com/2012/04/2009-peanut-butter-outbreak-three-years-on-still-no-resolution-for-some/#.WD7tE6KLTpJ
- World Health Organization. (2015). WHO’s first ever global estimates of foodborne diseases find children under 5 account for almost one third of deaths [Press Release] Retrieved from http://www.who.int/mediacentre/news/releases/2015/foodborne-disease-estimates/en/
- Label Insight (2016). The 2016 Label Insight Transparency ROI Study. Retrieved from https://www.labelinsight.com/hubf /2016_Transparency_ROI_Study_Label_Insight.pdf?t=1486676060862
- Sagan, A. (February 21, 2017). Study finds 63 per cent of Canadians are concerned about food fraud. Retrieved from http://www.theglobeandmail.com/news/national/study-finds-63-per-cent-of-canadians-are-concerned-about-food-fraud/article34094664/
- MSC (2014). MSC Consumer Survey 2014. Retrieved from https://www.msc.org/newsroom/news/new-research-shows-increasing-appetite-for-sustainable-seafood
Bacchi, U. (February 21, 2017). Italian police break mafia ring exporting fake olive oil to U.S. Retrieved from http://www.reuters.com/article/us-italy-crime-food-idUSKBN1602BD
- HM Government (2015) Elliot Review into Integrity and Assurance of Food Supply Networks. Retrieved from https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/350726/elliot-review-final-report-july2014.pdf
EUROPOL (2016) largest ever seizures of fake food and drink in INTERPOL-EUROPOL operation [Press Release]. Retrieved from https://www.europol.europa.eu/newsroom/news/largest-ever-seizures-of-fake-food-and-drink-in-interpol-europol-operation
- Botsman, R. (October 20, 2015). The Changing Rules of Trust in the Digital Age. Retrieved from https://hbr.org/2015/10/the-changing-rules-of-trust-in-the-digital-age
- Panetta, K. (October 18, 2016) Gartner’s Top 10 Strategic Technology Trends for 2017. Retrieved from http://linkis.com/www.econotimes.com/Zk8mh