Food producers are using blockchain to ensure the quality of their products along every step of the supply chain
Step inside a popular restaurant and you’re sure to find plenty of patrons happily chowing down on their meal of choice. Ask them if the food is good and they’ll sing the praises of the chef and the ingredients.
But how much do they really know about the meal they’re eating? Quiz them on the food’s origins and you’ll likely get a blank stare. Ditto for the restaurant owner. Sure, they’ll point you to their supplier, but they probably won’t have much more information to offer.
Therein lies the problem for conscientious consumers: how can they know if the food they’re eating is what it claims to be — sustainably grown, safely produced and fairly traded? Food information systems within the industry today are largely inaccessible to consumers and can be tampered with by unscrupulous companies.
Soon, blockchain technology — known more for tracking the contents of digital wallets than stomachs — will provide the market with the answers it is craving.
“I think blockchain has a lot of promise in food traceability and safety — using it to strengthen applications that are out there, tracking things from seed to shelf,” says Tim Heydon, Chief Executive Officer of Shenandoah Growers, the largest fresh herb supplier in the United States. “Because of the open nature of blockchain, you can see every step of the process and trust it, and I think that’s absolutely huge.”
Heydon’s company is just one of many that are adopting the distributed ledger as a way to trace every step of the food production process. The firm is in the process of integrating a blockchain-based platform in which key data about its crop production will be shared and secured. When information is uploaded onto a public blockchain, it requires a majority of participants to sign off on any changes. This means data cannot be arbitrarily altered after the fact, giving customers peace of mind about its veracity and the product’s quality.
When applied globally, these blockchain solutions should greatly reduce fraud in the food supply chain, which the University of Michigan estimates costs the industry as much as $40 billion each year.
“The consumer today wants to know their brands are authentic, so to the extent we can make that information available, the brand value that will build is tremendous,” says Heydon. “Brand at the end of the day is all about trust.”
UK–based Provenance is also leveraging the so-called Trust Protocol. The company has developed a software platform that allows farmers to upload information about their products along every step of their supply chain and verify those claims with certification from suppliers. Each physical item they produce is tagged with a unique ID number that allows consumers to tap into its digital history and learn more about the stories behind the businesses that created them.
More than 200 organizations are using Provenance to build brand trust with their clientele. One of them is the International Pole and Line Foundation, an agency that ensures fish are sustainably sourced and free of slave labour in southeast Asia. Provenance’s blockchain solution was able to thread sourcing data along the supply chain and, perhaps most importantly, give actors at every stage of the supply process an incentive to participate.
These sorts of blockchain–enabled tracking systems are more than a luxury for marketing–savvy brands — they also allow almost instantaneous data verification for producers at a fraction of the expense. Walmart is experimenting with a blockchain–powered supply chain platform to track pork shipments in China. It has slashed the time it takes the retailer to trace the goods from 26 hours to 2.2 seconds.
“That’s huge,” says Shenandoah Growers’ Heydon. “Consider that in an organization that large, how many people under the prior system would have been working to figure that information out and now in two seconds someone is just reading the data.”
The potential for significant cost reduction is a major factor driving early blockchain adoption in the agriculture space where margins are often thin and highly variable from year to year. Technology-focused producers such as Shenandoah see the blockchain as a way to connect other computerized systems together, streamline data collection and optimize its usage. Nevada-based Filament is linking Internet-of-Things sensors to the blockchain to automatically input environmental data into the distributed ledger. And California’s Skuchain is using blockchain to streamline the sharing of certification and regulatory paperwork along international shipping lines.
Shenandoah Growers is pursuing a blockchain-based logistics platform that will allow it to more efficiently ship products to local markets.
“There are seven to 14 different varieties of products that may be going to five different sites across three or four different grow platforms, so keeping track of that and being able to manage that data in a way that’s reliable and secure and ultimately correct, that’s where [blockchain] comes in,” says Heydon. “We’ll be able to have less waste, and make sure we have the right product in the right place at the right time.”
Shenandoah Growers also envisions using blockchain to empower the machine learning systems within its indoor farming operations which use controlled climate systems to optimize crop growing conditions and ultimately boost production yields. The goal is to have the artificial intelligence emulate the decisions made by human farmers under different climatic conditions so that workers can be freed up to handle more qualitative work.
“A lot of things we may have had to spend time on can be built into the system, and that can lock into something like blockchain as it feeds in data. It could have a substantial outcome in terms of lowering costs — certainly double–digit percentages down the road,” says Heydon. “It really changes farming dramatically when you look into the future.”
That future may be much closer to reality than consumers might realize. For its part, Shenandoah Growers is aiming for a rollout of blockchain–based food safety and logistics systems within 24 months. It intends to launch product trials later this year.
“We’re looking forward to this next stage of development,” says Heydon. “These new tools absolutely allow you to scale faster and bigger and at a lower cost. It’s really exciting.”