June 2, 2019
Do you ever think about where your food comes from? Or whether your coffee was harvested by someone who was paid a fair wage? These are questions that blockchain can help answer.
Consumers are becoming more interested in where their food comes from, and how it is packaged. Many people are even changing their shopping habits based on that information.
Blockchain can help track the production of consumer staples across complicated supply chains, giving consumers the data they need to make informed choices.
The online public ledger creates a permanent and unchangeable record of transactions. Each transaction is time-stamped and linked to the last, so that it can’t later be altered.
Creating a fair supply chain
The traceability offered by blockchain is invaluable when trying to untangle supply chains that are associated with illegal practices and human rights abuses.
Take fishing, for example. Illegal fishing accounts for up to 31% of catches worldwide, according to the Environmental Justice Foundation.
World Wildlife Fund is trying to address the issue with a blockchain traceability project focused on tuna in the Pacific. In January, the group launched a tracking platform called OpenSc.
An electronic tag is affixed to each fish as it comes on board a vessel, which automatically registers at the dock and processing facility. As the fish is prepared for sale and packaged, it receives a specific QR code.
The consumer can then scan the code to see where the fish was caught, manufactured, processed and how it was transported to the shop.
World Wildlife Fund uses the data to focus on human rights abuses in the industry such as forced labor and modern slavery. It can learn about staff in the supply chain and their working conditions.
“It’s no magic bullet,” says Dermot O’Gorman, CEO of World Wildlife Fund Australia, “but it’s a tool that helps to stamp out slave trade.”
O’Gorman says the World Wildlife Fund hopes to extend these practices to other commodities, such as paper, beef, palm oil and dairy.
“Unless we’re able to address, for example, the illegal aspects in fisheries or human rights abuses in the palm oil industry, we’re not going to be able to deliver a sustainable planet,” he says.
Streamlining the supply chain
Complex supply chains can be hard to digitize. The challenge is convincing fishermen or farmers to apply technology at the source.
O’Gorman says it helps to offer a financial incentive. He says that many smaller producers are interested in OpenSC because it helps to optimize operations and reduce costs, through eliminating bottlenecks and enabling more accurate forecasts of supply and demand.
Ramesh Gopinath, one of the leaders of the IBM Food Trust, a global network of suppliers and retailers including Walmart and Carrefour, says that blockchain can also have a huge impact on efficiency.
“If along the supply chain there is a sharing of information, that will have significant benefits in terms of improved freshness to the end consumer and reducing waste overall,” he says.
Access to data allows suppliers to predict market conditions more accurately and to localize the sourcing of ingredients -— ultimately shortening the supply chain, Gopinath explains.
The adoption of digital supply chain tools could reduce food loss and waste by up to $120 billion annually, according to a 2018 report by the Boston Consulting Group.
Trustworthy supply chains
Traceability also means accountability, because blockchain can give a tamper-proof guarantee of a product’s origin.
This is crucial for products where food fraud is common, such as olive oil, which the European Commission has marked as a major target for fraudulent activity.
“You can have an Italian name, but not necessarily have Italian oil in the bottle,” says Susan Testa, director of culinary innovation at the olive oil producer Bellucci.
To prove their provenance, both to consumers and retailers, Bellucci is deploying blockchain technology developed by Oracle along their supply chain.
“They want to know how close the product is to the source,” says Testa. “That way, they feel good about the brand and what they’re buying.”
Sources: CNN and Environmental Justice Foundation