Trust is at an all-time low in many industries. Many consumers, having seen brands fail to live up to their promises, are highly skeptical, especially of big businesses. At the same time, these consumers are more informed than ever before. Some companies have utilized digital platforms like websites, apps or QR codes to aid and guide customers in their research. Perhaps even more promising, Blockchain offers food producers and the food supply chain a way to demonstrate transparency and win back trust.
It’s no secret consumer trust in large food brands and food producers is dwindling. For starters, consumers have become skeptical of food science and technology because they are uncertain of the long-term effect on personal health. Take GMOs (genetically modified organisms) for example: GMO crops have the potential to help reduce food waste, use water and land more efficiently and improve food safety. However, gene editing sounds scary, and some consumers are wary of both big agriculture and big food. They believe participants in the food supply chain are more concerned about their bottom line than the public’s health and well-being.
Additionally, numerous food recalls have eroded consumer trust. Following Chipotle’s E. coli breakout in 2015, the chain’s reputation was seriously tarnished; their quarterly bottom line profitability declined 44% for the same period one year later. Despite all the food safety protocols Chipotle put into place, in July 2018, they experienced another foodborne illness breakout in Ohio (this time contained to one store). McDonald’s also experienced food safety issues recently when they had to recall salads at approximately 3,000 restaurants due to lettuce tainted by Cyclospora parasites.
Today’s consumers want to learn more about what they eat so they can feel safer. Transparency is the currency of trust.
Blockchain – Supply Chain Solutions
Blockchain technology, originally developed for virtual currencies, is a public electronic digital ledger, which is open to all participants. It traces transactions and assets using a massive amount of computational power. Because every participant’s computer has a copy of the ledger, it is incredibly difficult and labor-intensive to change or falsify a blockchain transaction once it is recorded. In a sense, blockchain crowdsources to create trust.
In the world of food and beverage, supply chains are complex, and foods pass through multiple stages to get from farm to fork. Each handoff can be recorded in the blockchain ledger, which is virtually unchangeable. This will help track foods through their entire journey, making the supply chain transparent to consumers and also speeding and better-targeting recalls.
In the past, isolating food contamination issues has been a tedious, time consuming process that would take days, sometimes weeks. Blockchain tracking takes seconds, enabling food industry leaders to locate the issue quickly to remove contaminated products from supply chain, shelves, even menus.
In China, multinational retail leader Walmart formed a blockchain food safety alliance with IBM and Tsinghua University as early as 2016. Historically, Chinese agriculture had been notorious for alarming poor food safety mandates. The goal of the blockchain Hyperledger Project was to ensure the provenance and quality of Walmart’s Chinese pork supply. Their database lists the transactions of how the protein flowed through the commercial network – farm origins, factory data, expirations dates, storage temperatures and distribution. Another early adopter is French multinational retailer Carrefour. Currently, Carrefour uses blockchain technology for their product line of free-range chicken and plans to extend their capabilities to other protein (including seafood) and vegetable product lines later this year.
Numerous major food companies, including Nestle and Unilever, have begun working with IBM to form a blockchain consortium along with supermarket chains and global financial service companies. But blockchain can also benefit smaller niche players, like Block Bird chicken. Sourced from several small, Midwestern farms and verified by blockchain technology, the entire journey of their chickens to the grocery store is documented and visible on the front label of their packages. Block Bird’s label includes hatchery information, starting weight, ending weight, the type of feeds consumed, as well as the health and handling of each bird.
The Future Challenge
Adoption of blockchain technology in the food and beverage industry is in its infancy. As with any new technology, there will be numerous challenges – flawed data and cybersecurity threats come to mind. However, these challenges are common to any new technology. The opportunity to build trust with consumers, as well as to manage food safety incidents with speed and accuracy, makes blockchain a promising investment for any stage of the food supply chain.