Blockchain Fundamentals
The easiest way to understand blockchain technology is to think of it as an electronic notary. A notary protects the integrity of a document by verifying the signer’s identity, making sure they aren’t being forced to sign under duress or intimidation and making sure they’re aware of the contents of the document or transaction. So, when a document is notarized, you can feel confident the document is legitimate.
Blockchain serves a very similar function.
A blockchain is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. By design, a blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.”
Therefore, like a notary, Blockchain protects the integrity of the information stored within each block.
Why is Blockchain such a buzzword in the Food Industry?
During a foodborne illness outbreak, one of the biggest challenges is determining where the contaminated food originated from and where it was distributed/served/sold. There is not an easy way to track down this information; which makes managing a recall, or an outbreak, incredibly tricky, time-consuming, and dangerous.
Blockchain could change all of that.
Blockchain technology can keep a record of the entire supply chain. If Blockchain were implemented across the food industry, it would be possible to see everywhere a single piece of produce has been — from farm to plate. Consumers and food industry professionals alike would be able to see if a recall had impacted their produce or if it was from the same farm that is being investigated for a foodborne illness outbreak. Cool, right? It doesn’t stop there! This enhanced traceability could also help protect against food fraud by providing a verifiable record or every stage in the supply chain.
Okay great, let’s do it.
It isn’t that easy. There are a lot of very real obstacles in the way, and there is no easy solution.
Slow Supply Chain Adoption
In a dream world, when helpful technology is created, people rush to adopt it because they know it is valuable. In the world we actually live in, the reality is much different. Many key stages of the food supply chain operate with very low margins. Growers, packers, slaughterhouses, wholesalers, and harvest companies have very manual processes – and they don’t always have the capital to invest in technology. The other thing these companies are short on is time for training. Successful implementation of a new system requires time, money, and desire. When you’re operating with a shortage of time and money, desire is hard to come by as well. Transparency and traceability are popular ideas throughout the food industry, but when it comes time to actually turn that idea into reality, many companies have an “if it ain’t broke, don’t fix it” attitude.
The unfortunate reality is that people often pay the cost of food traceability at the early stage of the supply chain (growers, packers, processors) and the benefit is felt the strongest by those at the end of the supply chain (retailers and consumers). What this means is that we are asking the companies with the smallest margins to make the most significant investments – which they are often unwilling or unable to make. It is a fair point, outside of altruism, there is not a clearly defined business benefit to growers — so we are asking them to complicate their process, invest time and money, for little direct benefit.
This is particularly damaging because Blockchain won’t be revolutionary if it is only protecting part of the food supply chain. To be completely effective, every piece of the food supply chain needs to be on board.
Food Fraud is big business
Experts estimate that food fraud is now a $40 billion-dollar business. Unfortunately, the people committing food fraud are making a lot of money, and they are likely to be involved at some point in the supply chain. Blockchain and traceability technology threaten this business because of the technological ability to sound alarm bells and alert the world to food fraud. So, to protect their business model, these criminals will fight traceability implementation tooth and nail.
Too many independent systems
There are a lot of small-to-mid-sized companies offering traceability solutions, but unfortunately, these systems don’t always talk to each other. Blockchain success is heavily dependent on private tech companies being open to working together and sharing their data — which historically, they are not.
Traceability is different for different groups
Traceability varies by industry and product. For example:
- Agriculture/Farming: Identification starts with the birth of livestock or planting and moves through the growth process, use of pesticides, nutritional records, vet records, and transportation records;
- Food Processors: Identification starts at the source of each ingredient and follows through the processing, packaging, distribution, and transportation process;
- Retail and Food Service: Identification starts with receiving receipts/invoices to identify the lot and batch information with regulations not requiring tracking “one-up” to the final consumer;
- Transportation and Distribution: Commingling points of contact are vectors for the spread of disease. Waybills should contain source party and target party identification. Specific locations are needed for livestock in most countries. If products are disaggregated for smaller shipments, then records need to reflect lot/batch codes of the manufacturer or processor.
Different groups have different motivations, and it may be difficult for a system to accommodate the needs of each industry or product.
So, does it live up to the hype?
The short answer is maybe. Blockchain represents immense possibility, but it also comes with equally immense challenges. If the food industry doubles down on Blockchain and can secure engagement at every phase of the supply chain, the results would be revolutionary. However, if there is only partial adoption of traceability technology, it will be far less successful.
There is a reason to be optimistic, however! The FDA recently launched the New Era of Food Safety program that looks ready to move the food industry forward into new traceability technologies.
