The pandemic economy is increasing the complexity of the world’s food supply chains. In addition to myriad logistics challenges, the global food industry faces freshness, quality, and safety issues. Enterprises need to recognize food-related problems as a serious concern, soon, because of their impact on human survival. The food industry, along with relevant stakeholders, needs to step up to solve these problems. There is no silver bullet to solve the problems the food industry is facing, but the combination of blockchain and IoT technology could help tackle the root causes.
This PoV looks into a potential solution that employs a combination of IoT and blockchain to solve some of the global food supply chain problems.
The food supply chain lacks 3Ts (transparency, traceability, and trust), creating a blind spot in the global food supply chain
A 2019 report from FAO (Food and Agriculture Organization of the United Nations) suggests that about 14% of the world’s food is lost between the post-harvest and retail levels; in central and southern Asia, around 21% is lost. The world’s population is almost 8 billion, and FAO predicts it will reach nearly 10 billion by 2050, requiring an increase of 70% in food availability. To achieve this, the food industry needs to address many parameters, such as climate change, food waste, and food losses, by using technology to increase productivity. The United Nations has set ending hunger, achieving food security and improved nutrition, and promoting sustainable agriculture as the second of its 17 Sustainable Development Goals (SDGs) for 2030.
One of the food supply chain’s problems is the lack of transparency, traceability, and trust. Due to the involvement of multiple stakeholders ranging from farmers and processors to retailers and consumers, there is no proper transparency, traceability, and trust across the supply chain system.
The combination of blockchain and IoT provides a potential solution for food supply chain woes
Blockchain is a distributed database containing records that cannot be tampered with or deleted. With blockchain’s distributed ledger technology, a digital record of every supply chain transaction can be created, and everyone’s entries can be viewed in real-time, thus solving 3T problems of the food chain supply chain.
IoT could help confirm food safety by using sensors to log food temperature or other pertinent information into the blockchain, which could be useful for food recalls if something unfavorable happens to the food. A convergence of IoT and blockchain would favor tamper-proof, reliable information flows by providing end-to-end visibility into the food supply chain and sharing the data across stakeholders in real-time, increasing transparency, traceability, and trust. It would also help with government audits, wholesaler bids, and consumer food sources. A smart contract in a blockchain can automate the full process, creating better transparency. Adding AI, ML, and other emerging technologies will make the process a lot quicker and more automated, but the whole system needs to sit upon the framework created by IoT and blockchain.
Exhibit 1: Stakeholders will have access to food quality and flow information on the blockchain network
Source: HFS Research
Some retail and CPG companies are implementing IoT and blockchain-based solutions
Some firms have begun experimenting with food tracking using blockchain and IoT:
- Walmart implemented IBM’s blockchain for food traceability: Walmart, together with its technology partner IBM, ran two proof of concept projects. One project was about tracing mangos sold in Walmart’s US stores, and the other aimed to trace pork sold in its China stores. Walmart can now trace the origin of over 25 products from 5 different suppliers using a system powered by Hyperledger Fabric. It has recently announced that it has started asking suppliers of fresh leafy greens (like salad and spinach) to trace their products using the system.
Nestle worked with OpenSC on dairy (starting in New Zealand) and palm oil (starting in Mexico). World Wide Fund for Nature Australia (WWF-Australia) and Boston Consulting Group Digital Ventures founded the 2019 start-up OpenSC.
- Bumble Bee Seafoods uses SAP’s Cloud Platform Blockchain service to trace yellowfin tunas’ journey from the ocean surrounding Indonesia’s remote islands to local retailers.
- Naturipe Farms, LLC uses the SAP Cloud Platform Blockchain service to track blueberries from harvest to the dinner table.
- Boombloc and the Malaysian Palm Oil Council: The Malaysian Palm Oil Council (MPOC) partnered with Boombloc to restore some credibility to the sector, a vital income source for Malaysian farmers. The project uses smartphones to upload information about individual trees to a database, which helps build a detailed ledger. Users can track the lifecycle of a tree and the origin of any palm oil they purchase.
These experiments are promising, but they need to be carried out on a large scale to create a ripple effect across the food industry.
The Bottom Line: Food supply chain transformation hinges on emerging technology to solve one of the biggest challenges for the future of humanity.
Addressing food supply chain challenges requires an innovative approach. The food and agriculture sector lags far behind other sectors in its investment in and adoption of technology. The food supply chain needs to be transformed at priority to form end-to-end traceability. Traceability will address many of today’s food-systems issues and contribute to the advancement of FAO’s Sustainable Development Goals. Blockchain-led transformation of the supply chain is in progress, and if it is implemented properly, it can enhance trust by creating verifiable, immutable transactions within the supply chain.