Blockchains are Changing the Food Industry
According to the Food and Drug Administration, each year, 1 in 6 Americans (or 48 million people) contract a sickness from contaminated foods or beverages. Of this number, 128,000 are hospitalized, and 3,000 die of foodborne diseases. Furthermore, the number of disease-causing microbes, or pathogens that can contaminate foods is steep. The risk of contracting a sickness from poisonous chemicals, or other harmful substances also remains high, as they too can cause foodborne diseases if they are present in food.
Foodborne illnesses aren’t the only issue. A recent analysis suggested that 50 percent of US food production is wasted, with a global estimate of 30 percent. Calamities such as these can be daunting with costs running as high as $940 billion per year in global economic losses and accounting for about 8 percent of global greenhouse gas emissions. It’s numbers like these that have led executives of leading commerce enterprises to consider investing in practical supply chain management solutions like blockchain technology.
Who’s Using the Blockchain?
Wal-Mart, the world’s leading retailer, services roughly 260 million customers a week; which makes tracking and monitoring goods quite a feat. A recall from a merchant of their magnitude could prove chaotic both physically and fiscally. In order to mitigate loss, and to boost consumer confidence in its brand, the merchant has decided to utilize blockchain technology to track its goods.
In October, the retail giant announced a collaboration with IBM and Tsinghua University in Beijing to put Chinese pork on the blockchain. Wal-Mart is utilizing blockchain technology to also track a packaged produce item in the US. As a result, food service industry analyst are increasingly optimistic about Wal-Mart’s decision. Marshal Cohen, an analyst at researcher NPD Group, Inc, a market research company, stated that “[i]t gives them an ability to have an accounting from origin to completion,” because “[i]f there’s an issue with an outbreak of E. coli, this gives them an ability to immediately find where it came from. That’s the difference between days and minutes.”
Provenance, a London based platform, is using Ethereum to make supply chains more transparent. Provenance is accomplishing this by invariably monitoring the histories and origins of products using blockchain technology. The small team is starting with a dozen of what Jessi Baker, Provenance’s founder, calls ‘good suppliers’ who want to showcase not only how their products are made, but also how their workers are treated. Currently Provenance is using Ethereum blockchain technology to authenticate tuna caught in Indonesia, and delivered to Japanese restaurants. They do this by recording the information obtained from sensors or RFID chips on to the blockchain. Essentially, tracking the fish from “hook to fork”.
Farmshare, a decentralized platform for community-supported agriculture (CSA), is using blockchain technology to innovate the local agriculture markets, incentivize volunteers, optimize resource sharing and minimize food waste. Farmshare’s technology enables people to use a local currency to purchase locally produced food. Farmshare allows users to track the supply chain of an item from the farm to the table, but the technology allows for every DApp on the network to interact with each other, so it could be possible to trade produce for intangibles like excess solar energy.
What Does the Future Hold?
The number of firms entering into the blockchain supply chain arena is steadily increasing. Blockchain technology offers a practical solution to a currently impractical system; if these firms find success in their blockchain efforts, it should be expected that more merchants will follow in the footsteps of retail giants like Wal-Mart and expand the favorable technology to goods in both the US and global markets. Regardless, successful tracking systems enable better communication between both the customer base and more transparency for corporations. This boosts consumer confidence and encourages further research into blockchain-facilitated supply chain management technology which, consequently, attracts more investors into blockchain based supply chain management systems—ultimately reducing the amount of risk and critical elements involved in the cumbersome process of supply chain management.