How can blockchain be used in the food industry?

How can blockchain be used in the food industry?

By Evangelia Vogiatzaki

The blockchain technology creates a shared, distributed ledger of transactions over a decentralized peer-to-peer network. In the food industry, this is especially valuable as it makes it possible to track the source of various food items starting from the farm, for example, and ending at supermarket shelves. In the case of a suspected contamination or foodborne illness, finding the bad batch using blockchain is easy and quick.

Foodborne illnesses and the numbers:

Diseases transmitted through contaminated food are a persistent concern, not only for each one of us, but also for governments. According to the latest global data available from the World Health Organization (WHO), 582 million people around the world got sick from contaminated food in 2010.

“Governments on the global and national level need to implement measures to protect against food contamination, and respond quickly to food-related outbreaks. Consumers should make sure they practice properly food handing and cooking hygiene.” – WHO.

Although this problem has attracted the attention of governments, consumers and food companies around the world should also be concerned about this issue. With the increasing globalization of food trade and distribution, the opportunities for contamination in the supply chain are numerous.

“These changes introduce multiple new opportunities for food to become contaminated with harmful bacteria, viruses, parasites, or chemicals.” – WHO Director-General, Dr. Margaret Chan

Furthermore, it is well-known that mass foodborne illness outbreaks can destroy the reputation of companies, and in some cases it takes years to earn back the public trust and convince them that there’s no longer any threat. Consumers seek for reliable and responsible suppliers who conduct regular inspections in their establishments. A famous example is the Escherichia coli outbreak at Chipotle stores in 2006. Aside from the loss of sales through store closure to deal with the contamination, the same-store sales showed quarter-on-quarter declines for the next year (by 5%, 11%, 7% and 6%).

Causes and symptoms of food poisoning:

Food poisoning, also known as foodborne illness, is a common, dangerous and costly public health problem caused by the consumption of contaminated food. It costs Americans billions of dollars each year, and remains a constant challenge for consumers, researchers, governments and the food industry. Norovirus, SalmonellaClostridium perfringens, and Campylobacter are marked as the most common foodborne pathogens. Usually, people that get infected present symptoms such as nausea, vomiting or diarrhea but in some cases they can also develop a serious acute illness or long-term health problems.

Food poisoning can occur for various reasons:

  • Undercooked meat
  • Uncooked items that have come in contact with contaminated surfaces
  • Raw vegetables not properly washed
  • Improper handling or storage of food

Transportation and distribution of this contaminated food leads to spread of the pathogens and creates complications in tracing the source, and thus eradicating the threat.

The blockchain solution partnership:  

In order to prevent food contamination in the supply chain and start taking steps towards preventing both financial and human losses, some of the food giants around the world are partnering to develop a solution. The food companies include Dole, Unilever, Walmart, Golden State Foods, Kroger, Nestle, Tyson Foods, McLane Company and McCormick & Co. The solution involves a blockchain collaboration technology, developed in partnership with IBM.

“A blockchain food safety program is tremendously good because it provides transparency into the food system, which means that in the event that there is a problem like a recall, you’re able to quickly, effectively, surgically deal with that problem.” – IBM’s vice-president of blockchain business development, Brigid McDermott.

How the blockchain solution works:

In today’s systems, it can take weeks to identify a contaminated food, its origin shipment and finally, its vendor. Meanwhile, more consumers become sick.

“The main problem is not the lack of information; it is the lack of access” – Merve Unuvar from IBM Industry Platform.

IBM’s blockchain solution is built on a distributed ledger technology which provides a shared, digital view of transaction data being available to all permissioned participants in the network. Product information is digitally connected to food items and recorded into the blockchain at every step of the process which creates a trusted system of record. In doing so, blockchain can transparently track the origin of goods as they are passed from one organization to the next. At the end, each piece of information (e.g. information on the supplier, details on how and where a food was produced and who inspected it), serves to provide critical data points that could potentially reveal food safety issues with the product.

The blockchain solution will dramatically improve supply chain transparency. With this solution, all participants in the supply chain – producers, suppliers, distributors, retailers, supervisors and consumers – will be able to access all the information regarding the food, from its single recipe to details on how and where the food was grown, produced and who inspected it. This means food providers can use the blockchain to trace contaminated products quickly, in order to remove them from the store shelves. For example, if there’s an issue with an outbreak of E. coli, the source of the problem can immediately be identified using the blockchain solution. This will mean the difference between weeks of labor-intensive, retrospective searching and seconds to access existing records of the supply chain.

How long it takes to trace a specific food item:

Walmart, which is known as the owner of one of the best food traceability systems in the industry, completed a test using traditional methods to trace the origin of mangoes. The test took them six days, 18 hours and 26 minutes to trace a package of mangoes to the exact farm of origin. By using blockchain, it took just only 2.2 seconds. This dynamic and safe solution supports a new era of end-to-end transparency in the global food system as all participants will be able to share information rapidly and with confidence across a strong trusted network.

“This is critical to ensuring that the global food system remains safe for all” – Frank Yiannas, vice president of Walmart´s Food Safety Department.

The economic value of blockchain:

IBM’s vice-president of blockchain business development, Brigid McDermott, analyzed in three different categories what are the global financial costs of delays in identifying dangerous food. According to Mrs. McDermott, the first category is obviously the one which drives the most cost:   “the human loss of health and life”. According to the Centers for Disease Control and Prevention (CDC), each year, about 48 million people (1 in 6 Americans) get sick due to foodborne diseases, with 128,000 hospitalized and 3,000 dying. The second and third ones result from the “potential threat to the health of consumers”. The time it takes from the moment that a customer gets sick until the identification of the dangerous product, when and how it was shipped, the vendor and it’s subsequent removal from the market costs a lot of money to the companies. As a consequence, prices can drop and people frequently stop buying this product.

Altogether, this usually results not only in financial losses to the owners of even the safest products but also in serious impact on the U.S. economy. According to CoinDesk:

“These losses can be so costly that recent estimates on the total economic impact of foodborne illnesses on the U.S. economy alone have varied between as low as about $4.4 billion per year to as high as $93.2 billion.”

Conclusion:

The new IBM’s blockchain solution will help retailers and food companies to better supervise and manage the shelf life of products as well as reduce the risk of non-compliance in individual stores, ensuring that consumers are getting authenticated, safe products.

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