Blockchain technology in the food supply chain – The genie is out of the bottle

 

The ability to create a tamper-proof, immutable ledger of products as they pass through a supply chain is an alluring prospect and one which is gaining significant traction in many industries, including the traditionally conservative (some may say secretive) world of food supply. 

Blockchain technology has the potential to transform the way food products make their way onto consumers’ plates, and in so doing, to potentially eliminate many of the detrimental, value-destroying and illegal activities that have been witnessed in the global marketplace in recent years.   There is a clear momentum to clean up the immensely complex, traditional methods of supply chain management.  Authenticate has been at the forefront of accurately delivering supply chain transparency data for the past 8 years and is therefore fully involved in the emergence of this new technology and how it will impact the world of supplier compliance and technical due diligence. 

Authenticate specialises in providing supplier compliance metrics for tens of thousands of food products for major food companies across the entire food supply chain network.  Whilst many of its mapped products are those single constituent protein lines (meat and fish) where country of origin and farm assurance are of most relevance, it also maps back to source many more complex, multi-ingredient processed goods, where there may be more than 20 indirect suppliers from across more than 3 continents.  Even those who would consider themselves modern, savvy consumers would no doubt be baffled by the complexity of origin behind the humble orange and raisin muffin, with ingredients from as far afield as Madagascar, the Philippines and Costa Rica.  Such is the nature of today’s supply chain. 

The question to date has been: does anyone care enough to warrant greater transparency – as long as the product consumed is cheap, tastes good and is being sold from a reputable source? For many manufacturers and their clients, the easy and most economical route is to push the issue into the long-grass and rely on the traditional insouciance of consumers.  Besides, the ability to verify the origins and methods of procurement deep down the chain is too arduous to merit much attention.  Whilst the emergence of blockchain technology has been met by many with the same  degree of convenient scepticism – too complex, too expensive and unlikely to be mainstream in my lifetime – it is the mere fact that blockchain highlights the art of the possible which may change everything.

With the likes of IBM, Walmart and J Sainsbury all entertaining the idea of significant investment in some form of blockchain technology, it seems highly likely the traditional methods of supply chain transparency measurements are about to be fundamentally changed forever.  It is not so much the actual technology which is so interesting, rather it is the direction in which the conversation has been taken; blockchain brings to the fore the indisputable truth that full declared transparency is a possibility, and if it is a possibility, why aren’t all food organisations prepared to embrace it? 

For now, there remains confusion and hyperbole over the term blockchain and with it, a convenient way to dismiss it.  Simply put, true blockchain is a technology structure which delivers three important characteristics:

  1. It is impossible to edit past data and is therefore almost  ‘tamper proof’.  If your supplier delivered a raw material from one country, it is impossible to change its origin later in its transformation to a finished product.
  2. The data is decentralised.  No one party has control over a the database.
  3. The data is widely distributed and held across many networks.

The case against this working at any scale across the global food supply chain is, today, compelling.  It requires the willing participation of all parties in the chain, meaning all parties must be digitally connected and, crucially, it relies upon each player being willing to supply accurate data at each step.  All three of these variables are far from given in today’s market reality. 

However, the genie is out of the bottle.  The mere fact that it is possible, and that there is an ever growing conversation across the food industry, means that the global food supply network may be on the cusp of much needed change. 

Like it or not, transparency has arrived and it is here to stay. The requirements to offer more data about food products, their origin, the way in which they are procured and the attitudes of the suppliers deep down in the supply chain are only going to increase, probably exponentially, in the coming years.  The need to comply with Modern Slavery regulations, understand ethical and environmental standards and meet the generation’s attitude to social policies are here to stay.  The existing traditional spreadsheet methods of collecting and analysing this kind of data are out-dated and no longer fit for purpose.  The emergence of ‘blockchain’ technology, or a derivative of it, is a logical new methodology for sharing and authenticating data in a cost efficient and compelling way.  Those who ignore it do so at their peril.   

Over the coming months, Authenticate will be continuing to map products and deliver deep supply chain data to its many customers.  Whether you want to call it blockchain,  a private blockchain, an immutable source of data or just ‘fully authenticated’ data will be determined by the buzzwords of the moment.  Regardless, this new focus on transparency all adds to the growing clamour for better, clearer, more efficient methods of data distribution throughout the industry. 

Posted by: Authenticate 26/02/2018