Cryptocurrencies are receiving an enormous amount of publicity. Investors, banks, speculators and proponents are mentioning Bitcoin and altcoins regularly, hoping that it will create traction and an increase in prices.
The technology of blockchain which all cryptocurrencies relies on is mentioned as a necessary precursor to cryptocurrencies but rarely expanded upon.
Some within the food industry are interested in changing that. They intend to use the technology behind cryptocurrencies and the extensive network that has evolved since its inception to improve the way that food is processed, shipped and tracked. Hoping that blockchain technology might be a viable update to bar codes and the less popular QR code.
News on Bitcoin, Dogecoin and Ethereum may well be supplemented by improvements in food health standards, delivery times and transparent food-sourcing practices – thanks to blockchain.
Read on, to learn more about the intended impact of blockchain technology in the food industry’s supply chain.
What Are Some Of The Issues With The Way The Supply Chain Runs At The Moment?
This is a valid question, food seems to appear in our supermarkets and at wholesalers, restaurants and take-out venues have a steady supply and farms look to be producing and shipping regularly.
Three of the biggest improvements that can be made to the supply chain are in the areas of food safety, fraud and sustainability.
1. Food Safety
Food safety is a big thing, with companies, supermarket chains and farming collectives spending an enormous amount of time, resources and money making sure that the food you eat is safe.
Outbreaks caused by viruses and bacteria, such as E. coli and Salmonella, can have a real impact on consumers and on the incomes of those producing, packaging and processing the food. Traditional traceability systems in place at the moment struggle to identify the source of the contamination quickly and accurately enough. This can lead to widespread recalls and possible public health concerns.
The immutability of blockchain technology and information can contribute to higher food safety standards. Information stored on the blockchain ledgers cannot be altered without the consensus of all parties involved. If a product is flagged for any food safety concerns along its path, the entire history can be viewed including food safety inspections, storage conditions and transportation details. This large-scale overview allows inspectors the opportunity to identify potential risk areas along the process and connect with their network to inform others.
2. Fraud
The food industry is susceptible to fraudulent practices, such as the mislabelling of products. Consumers need to rely on the label on the package, to guarantee that the farmed fish isn’t labelled as wild-caught, that the coffee beans are genuinely from that region in Africa and that the produce they buy is legitimately organic.
Mistrust affects not only the supermarkets’ margins and consumer confidence but might also impact the income of real wild-catch fishermen, small Ethiopian coffee producers and local organic farmers – as well as every step of production, packaging and transport along the way.
Blockchain can help to combat fraud by providing a transparent and verifiable record of product origins and transactions. Supermarkets do not have the resources to verify each organic or fair-trade claim product by product.
Industry Insight:
Walmart has implemented blockchain technology to trace the origin of its produce. By scanning a barcode, customers can access the complete history of the product, including where it was grown, how it was handled and when it arrived at the store. This level of transparency not only enhances consumer trust but also promotes accountability among suppliers – weeding out those looking to supply fraudulent products.
3. Sustainability
Shoppers and consumers are developing a greater interest in sustainably and ethically sourced and handled food products. Without a reliable way to trace the origins and practices of food products and food producers, consumers and suppliers need to rely on the claims made by food companies and farmers.
One of the biggest benefits to introducing blockchain in the food supply chain is increased traceability. In theory, blockchain can allow each stakeholder along the way to input data on the food item. Allowing stakeholders to track the journey of the food product in real-time. This offers supermarkets and wholesalers the opportunity to fact-check origin, travel time, type of transport and handling – ensuring the agreed upon level of sustainability.
Is There Anything Standing In The Way Of Blockchain Implementation?
As with most technological innovation, knowledge, budget, training and infrastructure are required. These can be challenging to roll out, due to a variety of reasons. Farmers might lack appropriate internet connectivity, transport companies could prefer their existing system and supermarkets may shy away from the training cost of getting staff blockchain educated.
1. Adoption
Adoption is one of the largest hurdles to blockchain use in the food supply chain. Many contributors are small businesses that do not always have access to the resources and technical expertise to properly implement blockchain solutions. They would require government support, easily accessible ways of learning, possible upgrades to internet infrastructure and belief in the benefits of the system.
Marketing campaigns that guarantee the validity of a product label due to blockchain use might fetch higher prices or more regular sales, incentivizing parties that benefit along the way.
2. Interoperability
Individuals may believe that all cryptocurrencies use the same blockchain technology, yet one of the reasons for the over 20 000 cryptocurrencies on the market is that each seeks to develop its own version of blockchain. This leads to an issue with interoperability, requiring industry standards and protocols to unify blockchain users.
3. Cost
Initial implementation costs for blockchain technology can be prohibitively high. Costs include training, possible software purchases, additional manhours to enter and monitor food data and hardware for those in the field. Businesses will need to weigh these costs against the long-term benefits of enhanced efficiency and inclusion.
To Sum Things Up
Blockchain has the potential to improve food safety, reduce fraud and offer higher levels of sustainability to the food supply chain. Farmers, suppliers, food warehouses, supermarket chains and governments will need to decide if the cost and effort is worth the reward.