Blockchain in the Food Industry

Poor transparency throughout the supply chain minimizes the possibility for companies to affect change, not only within production processes but also in avoiding fraud. In addition, relevant data rarely reaches the consumer. Increasing transparency is not easy. It requires the will and cooperation of all actors in the food supply chain. Unfortunately, today conflicts are common while the solutions are costly. Ensuring that standards are met requires following up on suppliers, which is a time consuming process where cooperation is seldom.

Blockchain promises to radically simplify processes of food regulation, origin control and traceability. This technology is however, still underdeveloped. Questions remain about how blockchain should be scaled up, integrated and best implemented in complex human driven environments.

Another challenge is ensuring the credibility of data uploaded to the blockchain. Various digital innovations, such as IoT’s (Internet of Things), RFID (Radio-Frequency Identification) codes, satellite imagery and more, are important tools that complement the blockchain in order to validate and guarantee data authenticity.

“Blockchain has the potential for environmental and social monitoring of supply chains. There is still however a long way to go with its development. Supply chains are often complex and issues of upscaling are still unsolved, which complicates the analysis. “

The project was built around three full-day workshops where IBM conducted design studies based on three cases: origin and traceability of MSC-certified pike from Lake Mälaren; verification of working conditions for female farm workers in Morocco; and transparency of Swedish added value in Swedish pig breeding. These design studies allowed participants to apply blockchain theory to actual supply chains, which enabled a deeper understanding of the potential of blockchain technology in the food sector. The project resulted in a report, “Designing blockchain use cases to deliver greater sustainability in the food chain”, which summarizes some of the key conclusions and observations from the three supplier paths the group explored.

The most obvious advantage of applying blockchain to the food industry is its ability to provide traceability of a product’s origin or quality. However, we wanted to see if blockchain also could be used to track social aspects- like if working conditions are followed. If workers on the Moroccan strawberry farm would use blockchain to record their working hours in conjunction with their contracts, a buyer on the other side of the world can trust that working conditions meet the standards that they expect from the supplier. However, it is crucial that all actors have been fully identified on forehand and that there is a clear incentive to share data and participate. Our initial field visit shows that this was not the case. I see this as a human challenge and not a tech one. – Hanna Hobohm Skoog, Axfoundation

Blockchain functions through a so-called “shared ledger”, where all types of information can be registered and shared with all participants in the blockchain. There are four basic mechanisms in blockchain technology: the shared ledger; a method of consensus; smart contracts; and effective ways of implementing a certain degree of integrity. These mechanisms improve the ability to track where products come from, and that information has not been manipulated along the way. Blockchain technology can achieve this functionality without any of the controls that are normally needed today in the food supply chain.

Verified origin of data: Although blockchain does not guarantee that the uploaded data is accurate, a clear audit trail is created showing who uploaded it and when. Each actor is thus clearly linked to his actions, which means that the origin of the problem can be identified.