Finally a real-world use for blockchain: Food industry giants using it to prevent food fraud and speed logistics

Friday, August 11, 2017 by

Food fraud is a serious problem, and it’s estimated to cost the global food industry around $40 billion each year. It’s not just a costly problem; it can also be a deadly one, as the 2008 crisis with melamine-tainted milk that killed at least six babies illustrated. Two out of five Chinese people consider food safety to be a “very big problem” according to a Pew Research Center study, and a similar sentiment can be noted throughout the world.

One big part of ensuring that the food regulations designed to protect people are followed is transparency, and this has been a huge stumbling block given the highly complex and international nature of the food supply chain. Information sharing plays a big role in identifying potential problems so they can be prevented and reacted to swiftly when they do occur, and this is where blockchain can prove to be quite useful.

Blockchain, the same technology that most people associate with crypto-currencies like the Bitcoin, is a shared ledger of transactions that is cryptographically secure, and its records database is built like a chain. It cannot be re-ordered or broken without affecting the entire connection, making it a great tool for dealing with food fraud.

Blockchain can curb fraud, human error

The global food industry still heavily relies on paper records. Blockchain records the identity of the person who inputs every piece of data into the chain, thereby eliminating the anonymity that has until now allowed food fraud to proliferate. The automated capturing of documentation could also reduce human errors.

According to Chain Business Insights, more than a dozen companies are currently working on implementing blockchain solutions in their food supply chains for applications like showing chain of custody and origin determination. Some analysts believe it is no longer a question of if but when firms will get on board.

Businesses increasingly launching blockchain food supply projects

Wal-Mart was one of the first companies to try the technology for this purpose. They have just finished up a trial that uses blockchain tech to keep track of pork in China; the world’s biggest retailer has more than 400 stores in the country. Blockchain has allowed them to whittle down the amount of time needed to track the pork’s supply chain from 26 hours to mere seconds, and the company’s Vice President for Food Safety, Frank Yiannis, said that its use will soon be expanded to other products as well.

Shanghai’s Zhong An Information and Technology Services Co. has announced that it plans to use blockchain to track chickens on their journey from coop to processing facility to the store where it will be sold to the end consumers.

Meanwhile, Chinese internet giant Alibaba, which accounted for more than three-fourths of the online retail sales in the country in 2015, is planning a blockchain project in conjunction with food suppliers in New Zealand and Australia along with auditors from PricewaterhouseCoopers LLP to gain better product integrity across all of its platforms. The company believes this will help to protect food merchants’ reputations and give consumers the confidence to buy food online.

Experts say that food fraud is rampant in China and it involves every type of deceit imaginable, from rat meat disguised as lamb to fake shrimp that actually sizzles when you toss it in a hot pan. This is not a comforting thought when you consider how much of what is sold in American stores originates in China. Food supplies remain a giant vulnerability to every nation, and ensuring that proper cleaning, handling, temperature control and other regulations are complied with is essential for public health and safety.

Sources include:

Bloomberg.com

FreightWaves.com



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