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How Blockchain is Revolutionizing the Food Industry

How Blockchain is Revolutionizing the Food Industry

 Suppliers, food retailers and consumers can now view and share food data through a private blockchain system with parties they know and trust.

As technology continues to reshape the way we live and access information, it also is transforming the way we access and manage our food.

In an interview with Xtalks, IBM’s Food Trust Director of Offering Management, Suzanne Livingston, shares how her team is transforming the industry from farm to fork through a customized digital platform known as blockchain.

Blockchain technology has been around for over a decade and is mostly attributed to public cryptocurrency transactions between unknown parties. However, IBM Food Trust is using blockchain to create a system based on visibility and transparency for supply chain management. This will allow suppliers, food retailers and consumers to view and share food data through a private blockchain system with parties they know and trust.

“Since the cryptocurrency platforms were so focused on how do we enable trust and transactions when we don’t know or trust the possibilities involved, the IBM Food Trust blockchain came from the idea that we could enable trust and visibility across the food supply chain if we can build something where companies are willing to share trusted food data,” Livingston says.

IBM built Food Trust in cooperation with global food companies, and the design point is that the data and insights remain with the respective companies. No single company owns all the data, not even IBM. In this distributed system, all companies own their own data and any insights they derive from it.

IBM Food Trust is also based on open standards, making it easier for food companies to integrate it with their current systems. GS1 is an international standard in the food and pharmaceutical space and is the standard in Food Trust. In addition, Food Trust was built on the open source Hyperledger blockchain platform.

During their pilot project, many major global food companies guided IBM’s product team of engineers, designer, and offering managers. Together, they built a customized version of blockchain targeted to all levels of the supply chain – large consumer packaged goods companies (CPG), smaller farmers, retailers and more. The idea was to create a supply chain management system that addressed transparency and visibility issues in the industry.

“In a public blockchain all the entries are viewable. In Food Trust, you as a participant gets to decide who can see the content of your entries. In that way, you have a lot more control, and this is especially true for food companies who are very secure about who they do business with, for example, their recipes, that information needs to stay private,” Livingston states.

IBM Food Trust has been an ongoing project for over two years and was officially launched in October of 2018. Walmart was the first mega-retailer who partnered with IBM, stressing the need for a platform to assist their food safety department.

“It was actually our partners at Walmart in the food safety division who said we really suffer as an industry because we don’t have visibility from the farms, to the stores, to the consumer in our food supply chain. And we believe that if we had that level of visibility, we could reduce the amount of time it would take to get products off the shelves and lower the risk to consumers,” she said.

Food safety was the first motive behind the blockchain management system, and it now serves many purposes for supply chain management.

“How much trust would we increase if you could proactively call your buyer or notify them that there is a contaminated food product they have and you know exactly which warehouse, which distribution center or which retail stores it’s in to get it out?” Livingston states.

Despite the industry taking precautions to avoid food outbreaks, salmonella, listeria, E coli, and other foodborne pathogens will always be an ongoing threat in the industry, especially among fresh produce and meat. According to the World Health Organization, one in ten people die each year from a contaminated food product, and four-hundred and twenty-thousand people die annually from food-related illnesses. Livingston adds that visibility across the supply chain is a key element for assisting food safety managers and other authorities during times of recall.

“Blockchain isn’t going to remove E coli from farms, but what blockchain can do is track test results and food supply chain data, so when you are aware that there is a contamination, you can immediately see where that lot of food is in the system,” she says.

IBM can also work to combat food fraud in the supply chain. Mislabeled products on the black market are a universal issue that both retailers and consumers have suffered from for decades. IBM Food Trust addresses this ongoing epidemic by enabling consumer access to important data such as source ingredients in food products.

“We are working with a company whose products are often counterfeit or on the black market, and as a consumer, you may not even know that you are buying a product that is not from a legitimate source. So, giving you a way to scan and know this indeed came from the company and is safe, is important to the brands and the consumers.”

In addition to food safety, IBM’s Food Trust blockchain system can help manage food waste from suppliers, which Livingston says is largely a result of supply chain inefficiency and mismanaged products.

“For example, if you knew a box of produce was going to expire sooner than another box of produce, which would you put out onto your shelves first? To reduce waste, you would put out the one that was going to expire sooner unless there was another issue with it such as condition or spoilage,” she says.

If suppliers knew exactly when their food products were going to perish, they could manage inventory more efficiently to avoid throwing them out, which in turn creates a rigorous cycle of food waste. IBM Food Trust could help by giving retailers a more accurate and precise evaluation of shelf life through their blockchain system.

Furthermore, when it comes to food management, transparency is critical for the end-to-end supply chain. IBM’s Food Trust can meet consumer demands for transparency by showcasing information like the food products farm location and harvesting methods.

“Consumers are demanding information like this, they want to know where food is in their eco-system, where has it been, is it what it claims to be on the label,” she states.

Trust in the food eco-system is a growing demand, and blockchain enhances the relationship between consumers and suppliers through interactive food labels.

“Imagine taking that mobile experience and scanning that food item you love. When you scan that food item you see where it came from, where it was manufactured, where the source ingredients came from, the region that those sources of ingredients came from, how long it’s been since it was produced? Companies like Carrefour and Nestle are using our system to do this today,” she said.

To Livingston, the future of food is digital, and these types of technologies are easily accessible through food packaging and are critical to the industry, especially if suppliers want to receive long term, loyal customers.

As of now, the IBM blockchain platform focuses on traceability, freshness certification management, dwell time and time since harvest and production, but the versatile platform also allows for other companies to modify the system towards their other unique operations.

“We also have partners who are joining the system and creating new value-added applications and asset on top of the platform, so those who are in the ag tech space, or even customers who want to build custom experiences using data that’s stored in IBM Food Trust can do that and can address their own specific needs besides what we have already put into the platform,” says Livingston.

Since IBM was launched last October of 2018 it has now attracted over 75 companies and has generated over 8 million transactions in their supply chain management system.

Suzanne Livingston has been invited to speak at this year’s upcoming Agri Tech Venture Forum in Toronto. Register here to listen to her discuss the importance of blockchain technology in further detail on May 15th.