How Blockchain Technology is Increasing Supply Chain Transparency

On Yavin is the founder and CEO at Cointelligence, a company that conducts data research and analysis for the crypto economy. He has extensive experience as a serial entrepreneur and angel investor, as well as more than 20 years of experience in the tech industry. On uses his deep, hands-on experience and knowledge of online marketing to create winning strategies for crypto, and blockchain companies. Having earned the reputation of “blockchain and cryptocurrency expert”, he continues to contribute to this industry in ways that advance cryptocurrencies and blockchain technologies. On has a law degree (LLB) and is also a certified Advocate by the Israeli Bar Association.

Is there such a thing as too much information when it comes to the origins of the food we eat? People are increasingly concerned about the safety, sustainability, and ethics of the food they consume. While some are content with simple labels like “organic” or “locally grown”, others prefer to dig deeper.

Blockchain technology is proving to be one powerful tool for both suppliers and end consumers, as it provides an immutable record of a food item’s journey from the farm to the shelf or table.

A Lack of Trust in the Food Supply Chain

Under the current system, consumers have to take food’s provenance on faith. In 2016, an expose by the Tampa Bay Times revealed that local restaurants were often lying about their “farm-to-table” offerings, instead serving customers food crafted with ingredients sourced from the same major suppliers as other restaurants in the area.

Dishonesty surrounding terms like “farm-to-table” are distasteful, but ultimately only harm the customer’s pocketbook and trust in restaurateurs. But other food supply chain issues can have costly and even deadly results.

The news regularly features reports of food recalls initiated over fears of contamination, whether it was multiple stores recalling houmous over salmonella concerns, or Cadbury recalling chocolates for containing unexpected almonds. The presence of harmful bacteria or allergens can be life-threatening, especially for the very young, the elderly, and those with compromised immune systems.

In the case of prepackaged, prepared foods, it is often easy for suppliers to narrow the issue down to specific SKU numbers and recall only the impacted products. But consider the repeated lettuce recalls in the US in 2018. During those e. coli outbreaks, any romaine was suspect, because it was difficult to track the lettuce’s provenance and no one wanted to take a chance on food poisoning.

Recalls of major fresh ingredients like romaine lettuce are harmful up and down the food chain. They harm farmers when everyone is considered a suspect until the source of the contamination can be found. They harm suppliers, who are forced to destroy products that are considered potentially unsafe. They harm grocers and restaurants who have to pull products from shelves and menus. And they harm the end consumer, who has to worry whether the salad or houmous they ate yesterday will make them sick.

This harm continues even after the outbreak has been contained, as it leaves a lingering sense of distrust between consumers and suppliers.

The Promise of Blockchain

Blockchain, or distributed ledger technology (DLT), promises a more transparent and trackable supply chain. Because of this, we are seeing more and more suppliers and retailers to embrace it as a method of improving trust in the safety of food and other products. Nestle and French grocer Carrefour have just announced a partnership to use blockchain to track baby formula. And Walmart Canada will be using blockchain to track all of its freight.

In the case of Nestle and Carrefour, and other similar partnerships, customers can scan a QR code to learn the provenance of what they are purchasing. It’s no surprise that they chose baby formula as the perfect platform for this, as parents are anxious to be sure they’re doing the best for their babies, and a clear picture of the supply chain may help them feel confident in their purchase decision.

Other blockchain/supply chain applications revolve around helping Muslim shoppers confirm the halal status of their groceries and showing customers the path their orange juice takes from orange groves to the grocery store in the Netherlands.

The hope is that these blockchain solutions can not only help improve customer engagement with brands but also help brands address supply chain issues more quickly and efficiently. When there is an e. coli or salmonella outbreak, the blockchain can more accurately track where the contaminated food came from, allowing for more accurately targeted recalls and swifter resolution to the cause of the contamination.

As more and more businesses learn about the blockchain and see how it is being successfully used for supply chain improvements (not to mention its application in other industries), it is expected that the growth of blockchain adoption will only continue to grow.

Thank you to guest blogger On for sharing his knowledge on Blockchain and how it is increasing supply chain transparency