How blockchain technology can help rebuild trust in the food and beverage industry
Originally written for Black Marketing
In recent years, blockchain technology has experienced an explosive growth. Providing a decentralised, efficient and nearly unhackable way of storing and sharing data in a virtual open space, it allows for increased traceability, efficiency and transparency for both businesses and consumers. The food industry for instance, following a series of scandals and international public embarrassments, is set to benefit immensely from the blockchain.
According to the World Health Organization, contaminated foods cause 10% of the world’s population to fall ill and as many as 420,000 to die every year. Furthermore, repeated instances of fraud have led consumers to grow suspicious of mainstream corporations and distrust conventional labels – even if they include terms such as “organic”, “ecological”, or even “halal”. As a result, many are turning in favour of retailers who can “guarantee” the quality of their products by either working with local vendors or owning their own farms.
The more intricate the supply chain, the more difficult it usually is for companies to trace commodities all the way back to their original source. It can take at least several days, and up to several weeks, and such an extended timespan can prove fatal in situations of product contamination.
While the origin of a contamination, loss of quality or fraudulent practice on a food product has traditionally been difficult to track; blockchain technology makes it easier. In fact, during a pilot programme launched by IBM and Walmart in collaboration with one of China’s largest retailers, JD.com, testing found that the blockchain made it possible to trace a pack of mangoes all the way back to its farm within two seconds. With previous methods, it would have taken almost seven days.
Blockchain technology allows relevant information about a product to be recorded step by step all the way from the supplier to the consumer. Each individual transaction is recorded and verified, and once a consensus is reached, the report is closed and cannot be modified anymore. The blockchain thereby helps to ensure the authenticity of the data in the food supply chain.
In a complex food supply chain that involves multiple changes of hands, there are many areas where things can go wrong. That includes poor hygiene practices, problems with food processing and distribution, temperature inconsistencies, and so on.
Blockchain technology will however, in a matter of seconds, enable retailers to trace a defective product back to when it was first corrupted. Thus, with the contamination of a single stock, one might track down a whole deficient batch and thereby prevent its consumption and the spreading of a potential disease. With traditional methods however, the same process would take days, and possibly leave enough time for the faulty batch to already have been consumed.
As blockchain technology helps prevent the distribution of products of poor quality, it can also enable certain farmers to boost their sales. In Southeast Asia for example, where the rice production has a central role in the region’s economic growth, small and medium-sized rice farmers might, instead of relying on traditional marketing techniques, market themselves as part of the blockchain, which gives them credibility as to product quality.
Adapting blockchain technology to the food and beverages industry can allow companies of all sizes to digitally track product data in a food supply chain in order to provide the consumer with farm to table information. It has the capacity to brief the consumer about the growing or raising conditions of the product, its expiry date, shipping data, batch number, as well as storage and temperature conditions.
Following a great number of halal meat scandals, industry specialists in Indonesia, Malaysia, Pakistan, China, Nigeria and Malaysia have come together to establish HalalChain – a new blockchain technology developed by HLC Technologies FZCO in Dubai. The technology uses smart cameras, IoT devices, LoRA, RFID, and so on to gather data as accurately as possible, in order to assure customers that the products they buy are, in fact, halal. Currently in a three-months’ trial HalalChain will launch commercially in August, and will start off in the United Arab Emirates, Indonesia and Malaysia.
When a business subscribes to HalalChain, it is given a specially tailored blockchain solution. HalalChain then teaches and advises the company on how to best compile and store the necessary data. This also allows the consumer to access all information, which is made possible with QR codes printed on food packages that they can scan with smartphones and receive a full history of the product (from farm to point of sale).
This information will assure the consumer not only of the quality of the stock, but also of its production according to Islamic law. Blockchain technology might thus allow the world’s Muslim population to develop a new global halal certification system.
Preventing illegal activities
The transparency provided by the blockchain expands even further than food quality. In 2016 for example, the London based collective Provenance conducted a 6-month long pilot using blockchain technology in order to track tuna fishes from the moment they are caught by fishers in Indonesia, to the consumer. As Indonesia is the world’s largest tuna-producing country, it also has important problems of illegal, unreported and unregulated fishing; not to mention overfishing.
Through the blockchain, consumers in the US were able to track their fish all the way back to Indonesia. In addition to confirming the quality of the fish, the traceability also allowed them to know that the fish they bought was caught both legally and sustainably, and that safe labour conditions were met.
The use of blockchain in the food and beverage industry has many advantages: it can reduce or prevent the spreading of illnesses, limit fraud and tampering of products, give financial perks to certain businesses, and even improve labour conditions and human rights.
A difficulty however will be to raise awareness and spread knowledge of blockchain technology itself. This might be complicated, especially in rural areas in part of the world. At the same time, let us not forget that even though blockchain secures data against retrospective tentative frauds, it will not always be able to prevent anticipated scams.