How Can Blockchain Improve The Food Industry?

Over the past few months, I have tackled how blockchain technology will be used to improve several important industries.

Among other topics, I have looked at how we will be able to use blockchain technology for identity, how blockchain can keep medical records secure, examined 5 use cases of blockchain in financial services, and shown how blockchain has the potential to revolutionize healthcare.

While at this point, the real potential of blockchain to be revolutionary is hotly debated, the vast number of blockchain solutions already under development will very soon be proving whether or not the hype is justified.

In this article, I aim to examine how blockchain can be used to improve the food industry. I will begin with the now ubiquitous breakdown of what blockchain technology is before examining the main areas where the food industry will benefit.

Contents

What is blockchain?
The Food Industry And Food Safety
Food And Our Health
Blockchain in the Food Industry
Blockchain In Food Safety
Preventing Fraud
Product Labeling Including Producer Information
Speeding Up Payments Throughout The Supply Chain
My Final Thoughts

What is blockchain?

12 years ago an enigmatic developer by the name of Satoshi Nakamoto published a paper that outlined a promising new solution to the digital currency double spending problem.

The paper, entitled “Bitcoin: A Peer-to-Peer Electronic Cash System“, outlined a new technology that would use a decentralized network comprised of multiple nodes or participants to prevent the possibility of a single piece of currency being spent twice. This technology was called blockchain.

Every full node on the network would be required to maintain and validate the database. To this end, each node would have a complete record of the information contained on the database. Should any unauthorized attempt be made to try to alter any data, the remaining nodes would be able to check their records and see this change was incorrect. They would then be able to collectively overrule the change.

A blockchain is, therefore, an immutable database. Rather than data being overwritten, it is stored in data blocks which are cryptographically linked. Each new block, once validated by the network, is added to the previous one to form a a never-ending chain.

The advantage of such a system is that the blockchain has a complete record of all the data ever written, which helps bring accountability to everyone using the database.

The Food Industry And Food Safety

I‘m sure that you have heard about a scandal that has hit the food industry. The most common story to hit the news headlines related to food recalls after some contaminate or bacterial outbreak has been detected.

Download Our Project Specification Template

Here are a few recalls you might remember:

  1. Peanut Corporation of America‘s salmonella outbreak

Back in January 2009, the Peanut Corporation of America was forced to undertake one of the biggest food recalls in history. One of the company‘s biggest factories was found to contain salmonella after a total of eight deaths and some 500 cases of illness were reported across 43 states.

The company issued a mammoth recall of over 2,100 different products that contained their affected peanut products.

  1. Cargill‘s ground turkey tainted by the risk of salmonella contamination

August 2011 was not a good month for the Cargill food company. It was forced to recall 36 million pounds of ground turkey after it was found to be at risk of having been contaminated with salmonella.

  1. Nestlé‘ E.coli risk

Nestlé USA recalled 300,000 cases of refrigerated cookie-dough products in June 2009. Despite a quick recall, a total of 65 illnesses were reported in 29 states. The company was forced to resort to telling consumers just to throw away Nestlé Toll House refrigerated cookie dough to try to prevent further illnesses.

Food And Our Health

Bacterial contamination is only one of the risks that our food faces. This article relating to the 10 Biggest Food Recalls in U.S. History highlights some of the other problems. These include:

  1. Food containing products other than those claimed (horse meat, non-halal etc.)
  2. Products from origins other than stated.
  3. Incorrect dates/production information.
  4. Producers not maintaining adequate food production/animal humane standards

Few people are aware of the true scope of the problem and just how regularly serious problems arise. Take a look at the United States Department of Agriculture‘s ’Current Recalls and Alerts‘ page and you will see just how often recalls are made.

Each recall is in response to a potentially life-threatening problem. The food industry and government watchdogs, therefore, have enormous pressure on their shoulders to get unsafe products off store shelves and out of people‘s homes.

This poses yet more problems like traceability. Thankfully, many of these problems can be addressed by the implementation of blockchain solutions. Let‘s take a look at how.

Blockchain in the Food Industry

The global food supply chain is massive. Each year, a staggering 4 billion tons of food gets produced each year, roughly one third or 1.3 billion tons of which gets lost or thrown away.

Here is how blockchain provides a solution:

Blockchain In Food Safety

The World Health Organization estimated that 582 million people all over the world suffered from some form of food poisoning in 2010. This figure meant that approximately 1 out of every 14 people were affected, some of whom died as a consequence.

The need for improved accountability regarding the way that food is produced and makes its way through the supply chain is more important than ever. Nearly every human being on the plant is now reliant on the global food supply chain.

Everything from supply chain management to product recalls will benefit from blockchain.

Food traceability blockchain solutions will allow a food manufacturer to be able to guarantee food authenticity.

A blockchain solution can be used to track food products from their source right the way through the supply chain.

Imagine a case where a farmer initiates the creation of a new blockchain after harvesting their crop. Essential information such as time, date, location, and even the types of fertilizers/pesticides used during production could be recorded in the database.

Next, as the goods are received by the transportation company, details such as time of collection, transportation time, and the details of the driver and vehicle could all be recorded.

Read How We Helped a Marketing Company to Build a Back-Office Custom Ads Dashboard

Another block could be added as the goods make it to the warehouse for processing to record all essential data. This process would then continue as the products made their way through the entire food supply chain to the supermarkets.

Even if a product was used as an ingredient in some processed food, the entire contents of its blockchain could be added to a new blockchain for that particular processed food. This way, there would be complete transparency regarding where products have come from, where they have been, and what factors/vehicles they have come into contact with.

This way, should there be a scare regarding contaminated food, producers will be able to trace all the affected food products in a matter of minutes.

Nestlé, Unilever, and Wallmart are all piloting blockchain based supply chain solutions for this very reason.

Frank Yiannas, Wallmart‘s VP of food safety, recently green lighted a test of the companies existing systems to see how long it would take to trace a packet of mango‘s to the farm that they came from. He was stunned to discover that it took nearly seven days to track the produce using faxes, emails, and telephone calls.

After this, Wallmart tested a blockchain supply chain that had been developed by IBM. They found that they were able to track the same mangos in just 2.2 seconds. For any doubters, the case to use blockchain to improve food safety was sealed.

Preventing Fraud

Problems relating to fraud begin and end with data accuracy. Having a completely transparent supply chain that offers accountability at every stage, can and will prevent fraud. The advent of specialist food tests that detect any foreign matter in food will mean that such illegal actions can be detected while food is still in the supply chain.

Blockchain supply chain solutions could be integrated with smart contracts that would require random tests to be performed at various stages of the supply chain. If produce was found to be not 100% original, the blockchain system would refuse to allow it to continue any further down the supply chain until it had been checked out.

Every individual/company that is involved in the supply chain would have their role recorded in the blockchain. Therefore, if a batch of food was found to have been interfered with, it would only take a matter of seconds to pinpoint the guilty party.

To prevent food fraud using blockchain would be a relatively simple system to put in place. With very little investment, a viable blockchain solution could be easily set up using mostly existing hardware.

Such as system would have prevented the cases of fraud which resulted in the UK‘s 2013 Horse Meat Scandal and the Halal Meat Turkey Fraud.

Product Labeling Including Producer Information

I have already touched on how blockchain could be used to record supplier information. This information is important for the following reasons:

  1. Gives consumers trust regarding the authenticity of their food
  2. Enables complete industry transparency which benefits both producers and consumers
  3. Allows consumers to select their preferred producers accurately (fair trade goods etc.)
  4. Helps trace food to suppliers
  5. Facilitates full accountability
  6. Prevents Fraud

Another advantage is improved food labeling. Adding supplier information and being able to create more accurate use by dates for products will help consumers make the right choices.

Were supermarkets to give consumers access to supply chain information, they would be able to confidently access where their food was coming from.

One potential way this will benefit consumers is with fair trade produce.

At the current time, consumers must be satisfied with some vague information as to where the foodstuff was produced. Accurate information relating to the producer could help fair trade consumers actually take part in more precise campaigns that could help specific regions or producers.

This would be a powerful tool to help farmers get back on their feet after a poor harvest year or a natural disaster etc. Blockchain supply chain solutions could spark the very first global buy regional fair trade movements.

Speeding Up Payments Throughout The Supply Chain

Anyone who has ever been part of a supply chain will know that payments are a real frustration at times. Usually, this means allocating staff to creating invoices and chasing down missing payments etc.

The reason payments take so long is that companies are required to recheck to see that goods have been received before paying invoices. For multinational companies, the sheer volume of paperwork can be overwhelming.

The implementation of smart contracts into food supply blockchain solutions will allow the automation of payments. Terms and conditions can be preprogrammed into a smart contract meaning that once this set of conditions is satisfied (good delivered and signed for), the smart contract could automatically initiate payment to the sender.

This would, in effect, put an end to the need for a large number of accountants to process invoices, while also reducing errors too.

My Final Thought

Blockchain technology is set to transform the food industry. One only needs to take the example of the IBM supply chain blockchain solution being tested by Wallmart to see just how.

The real question is how long it will take before blockchain becomes an industry standard. The technology is still relatively new and faces many hurdles before it can become the solution to many of the problems that it is currently being developed to solve.

It seems that we are less than a few years before the first supply chain blockchain is fully implemented. After this has happened, more and more companies will race to jump onboard. This will be a positive feedback cycle as it will speed development and create an even bigger need as the solutions get more and more sophisticated.

Download Our Project Specification Template

Aran Davies

Blockchain Expert | Developer | Writer | Photographer
Aran Davies

Latest posts by Aran Davies (see all)