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Blockchain and the Food Supply Chain

April 18, 2022

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When most people hear the term “blockchain,” they think finance not food. The truth is, however, that just as many lives are likely to be affected by how blockchain is used in the supply chain as how it is used in the financial sector. Journalist Bob Sperber (@BobSperber) explains, “Blockchain technology, having outgrown early fears of supporting shady cryptocurrency deals, is coming to a boardroom, supply chain, loading dock, and perhaps production facility near you. It’s an especially relevant technology for industries such as food and pharmaceutical where, in addition to supply chain efficiency, product safety and traceability are required.”[1] Food safety expert Francine L. Shaw, CEO of Savvy Food Safety & TracSavvy, notes, “Blockchain technology is not a new concept to the foodservice industry. Before the pandemic, those of us in the industry discussed blockchain technology, traceability, transparency, sustainability, digital technology, and food safety and its impact on the green revolution every day.”[2]

 

Shaw and her colleagues may have talked about blockchain in the foodservice industry every day; but, Robert J. Bowman, Managing Editor of SupplyChainBrain, believes talk is much more prevalent than actions. He writes, “Blockchain technology is progressing at a rapid clip, but when it comes to supply-chain applications, full deployment is far from being realized. Blockchain holds special promise in the food products sector, where tight control and visibility of items moving from the farm to retail shelves is essential.”[3] That “special promise” is why many experts believe blockchain will find a permanent home in the food supply chain.

 

Blockchain and the Food Supply Chain

 

Jim McMahon, CEO of ZebraCom, points out that the Food and Drug Administration (FDA) Food Safety Modernization Act (FSMA) was signed into law over a decade ago. He writes, “One provision of the Act was that the ‘FDA will have access to records, including industry food safety plans and the records firms will be required to keep documenting implementation of their plans.’ The intention of this mandate was clearly to safeguard the health and safety of the American public.”[4] He adds, “But there is a problem here. These records are stored all over the country on paper, in file cabinets located in thousands of places. So when there is a serious problem of contamination with, say romaine lettuce as there was in November 2018, and again in November 2019, this explains why it can take the FDA 45 to 60 days backtracking just to locate the records, with potentially thousands of farms under review for contamination.” John Monarch, chief executive and co-founder of the blockchain start-up ShipChain, agrees that traceability challenges can be problematic. He writes, “For carriers and shippers that specialize in food delivery, a lack of visibility and traceability can be dangerous. If there is a risk of foodborne illnesses with a particular shipment that is not being carefully tracked, the potential scope could be uncertain for some time — especially if health officials are unable to issue a recall due to an inability to track where the potential outbreak originated.”[5]

 

Both McMahon and Monarch believe blockchain holds the key to making things better. McMahon writes, “If these records were accessible through blockchain, the potential contaminated farms would be whittled down from thousands to less than 10, and identified within a matter of seconds.” That capability would obviously save time and, potentially, millions of dollars. Monarch adds, “Businesses need to improve transparency and real-time visibility — the ability to track shipment data in real time from origin through the final destination. Blockchain technology is capable of providing this kind of end-to-end transparency about where food originated and traveled, which can help reduce the risk of foodborne illness and the cost of produce contamination.”

 

Shaw observes, “Transparency, traceability, and sustainability are vital to everyone in the industry. The FDA has outlined four core elements in the New Era of Smarter Food Safety Blueprint, and the first of these elements is tech-enabled traceability. Traceability processes are critical to ensure all food items are traced and tracked throughout the supply chain. Traceability is essential for food safety as well as operational efficiency. With a solid traceability program, it is possible to locate a product at any stage of the food chain within the supply chain — literally from farm to table.” Traceability is not only important for industry stakeholders, it’s important for consumers as well.

 

Keeping Consumers Safe and Healthy

 

Fresh foods, especially those that must be temperature controlled, are particularly prone to causing hiccups in the food supply chain. Blockchain solutions could help reduce these hiccups. But there is a problem. John Haggerty, Vice President of Business Development at Burris Logistics, explains, “The challenge with blockchain in temperature-controlled foods, and indeed for the entire supply chain, is more fundamental than integrating blockchain-enabled companies, it is system standardization. Establishing a universal language with developed and managed standards from a recognized independent standards agency, which enables the openness like we enjoy with the Internet is where we need to focus our efforts. A uniform standard for blockchain is still a long ways away from being ready and effective across multiple channels.”[6]

 

The reason the FDA, supply chain stakeholders, and consumers are interested in traceability is to reduce and mitigate foodborne illnesses. Pramod Sajja, chief executive officer and president of Farm to Plate, explains, “Food-borne illnesses can be deadly. … Food industry executives are, of course, keenly aware that these events are more frequent than desired, and that the process to track contamination sources and mitigate these crises is more manual than most realize.”[7] He insists, “Blockchain — the same technology that fuels Bitcoin — is the solution to the U.S.’s food-supply contamination issues. Blockchain is designed to securely store data from multiple sources and make it easily accessible in real time while keeping it immutable.” Blockchain solutions will obviously be a significant help; however, as Monarch notes, “Implementation of blockchain won’t take away all risks of foodborne illnesses, but it is a step in the right direction.”

 

Concluding Thoughts

 

In order for blockchain solutions to work effectively, everyone in the chain must abide by strict protocols. Since there is no standardization, some organizations could be required to work with more than one solution provider. Shaw insists the simpler a system can be made the better for everyone. “For this technology to work well,” she writes, “it must be user-friendly and affordable to all — small businesses and large corporations alike. When it is available and widely used, it will minimize foodborne illness outbreaks and assist significantly with speeding up the process of finding the source if an outbreak does occur. Affordable digital technology connecting buyers with validated verified sellers is at the forefront. This technology will reduce research time for buyers and assist with social and environmental sourcing, helping more companies buy locally with confidence.” Sajja adds, “With fewer food recalls and fuller store shelves, U.S. consumers can enjoy shopping while producers and distributors breathe easier, knowing exactly where their products are and when they will arrive — contaminant free — at retailers.”

 

Footnotes
[1] Bob Sperber, “Blockchain Brings Efficient Packaging Traceability to Food Supply Chains,” Design News, 12 May 2021.
[2] Francine L. Shaw, “Blockchain technology developments help elevate food safety protocols,” Food Safety News, 2 January 2022.
[3] Robert J. Bowman, “Is Blockchain Ready to Serve the Food Industry?” SupplyChainBrain, 18 December 2019.
[4] Jim McMahon, “7 Industry Experts Weigh In On Blockchain and the Fresh Food Supply Chain,” Global Trade, 6 October 2020.
[5] John Monarch, “Perspective: Blockchain Useful in the Food Supply Chain,” Transport Topics, 19 November 2019.
[6] McMahon, op. cit.
[7] Pramod Sajja, “Can Blockchain Solve the Problem of Food Recalls?” SupplyChainBrain, 18 February 2022.

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