Food Supply Chain Blockchain- Solving Food Supply Problems
Imagine you visit a grocery store to buy the vegetables.
The vegetables in the store look fresh and so, you buy them. But do you know if the food items you are buying are safe to eat or not?
Whether it is a veggie or any other food item, everyone of us wants to ensure that the item is not adulterated.
What if you could see where the food items are grown, refined, stored, and inspected?
Currently, it is impossible for the consumers or retailers to access the information related to the origination of food items.
The existing supply chain process is not efficient enough to take care of the food safety at every stage. Due to inefficiencies in the food supply chain, food industry faces countless challenges.
But the emerging distributed ledger technology, blockchain can improve the food safety by connecting multiple stakeholders like farmers, processors, retailers, and consumers.
Everyone within the network could have access to the transparent and immutable view of the transaction history.
Companies like Nestle, Walmart, Dole, Golden State Foods, Unilever, and McLane Company, are also experimenting with the potential of blockchain in the food supply chain.
Read further to know the existing problems and how blockchain could offer a better solution.
Here are the problems that exist in the traditional supply chain process
- Food Fraud
Due to the complicated global food supply chain system, tampering, misrepresentation, or deliberate substitution has grown significantly.As per the report submitted by NSF, the food fraud costs the food industry around $49 billion globally each year.The most affected food categories include milk and its products, tea and coffee, fruit juices, olive oil, maple syrup, seafood, honey, and various other food items.
2008 Chinese Milk Scandal was the severe case, which led to the death of six babies due to the food contamination, and around 54,000 babies were hospitalized in China.
The scandal involved infant formula, milk, and various other food components being contaminated with an organic compound, Melamine.
- Foodborne Illness
Out of 600 million people, 1 in 10 falls sick after consuming contaminated or adulterated food.According to the fact sheet by World Health Organisation, 420,000 deaths are recorded every year, leading to the loss of 33 million healthy life years.Foodborne diseases hinder socioeconomic development by burdening healthcare system, affecting trade and tourism, and national economies.
- Illegal Production
Seafood is one of the popular categories with crisp reports of the illicit production into the supply chain. The global fishing industry deals with the challenges related to unreported, unregulated, and illegal fishing.The newspaper published in the journal, Marine Policy reported that 24-36% of around 2.15 million tonnes of wild-seafood imported to Japan in 2015, valued between $1.6 to $2.4 billion, were of unreported origin or illegal production.Illegitimate production of food items leads to economic loss as well as infectious diseases.
- Food recalls
In some cases, government agencies like FDA or USDA request food recall to discover the presence of any potential allergen in the food items. Performing food recalls frequently can cost food industry a lot.As per the survey conducted in 2010 by the Grocery Manufacturers Association (GMA), it was pronounced that the average cost of the food recall is $10 million, including lost sales and brand damage.Over the last few years, the reputed brands like Pepsi, Kraft Foods, Coca-Cola, Cadbury, Nestle, Blue Bell Creameries, and the Peanut Corporation of America have suffered losses due to withdrawals and recall from the market.
Apart from the problems mentioned above, it is currently impossible to find out the cause of a problem because every participant in the food supply chain maintains their own paper-based records.
Maintaining manual records are vulnerable to inaccurate updating. In case of any issue, it becomes difficult to track and trace capabilities, resulting in the investigations delays.
The blockchain could be the only solution which can maintain the traceability of immutable records.
Blockchain- Remodeling Food Supply Chain
Blockchain could bring transparency and auditability to the system by connecting the following stakeholders directly-
- Logistics Service Provider
- Government Auditors
Here’s how food supply chain blockchain could work
1. Farmers could store the information about food crops on the blockchain
A farmer could save details of grown-up crops like origination, type of crop, the procedure used for sowing, storage info and so on using the mobile app or center location on the blockchain.
The information stored by farmers could be accessible by all involved stakeholders within the system.
Farmers can also upload the pictures of crops which are processed through Machine Learning and Artificial Intelligence to help refineries or factories make informed decisions about the quality of a crop.
The regulations built within the smart contracts ensure that the compliance is met while feeding the data on the blockchain.
Once the crops are grown up, the farmers distribute them to the food processing companies or refineries for further processing.
2. Food Processors add the processing details on the blockchain
After receiving food items from the farmers, refineries or food processing companies can bid for the crops through smart contract.
Once the bid is accepted, they could start processing and store the information related to the refining of crops on the public blockchain.
Information stored on the blockchain could help retailers or consumers verify if the food has been appropriately processed or not.
Since the regulations are added to the smart contracts, food compliance is followed in every step of processing.
3. Wholesalers would bid for the processed products through smart contracts
After processing the food items, refining companies could put the processed items for bidding.
Wholesalers could start bidding through the smart contract.
Once the food processing companies accept the bid, processing companies would transport the processed food to the wholesalers and update transportation details on the blockchain.
The wholesaler could then hire the logistic service providers to distribute the items to different retailers.
Transporting the processed food through IoT-enabled vehicles or trucks could help to keep the food items safe under the controlled temperature.
The sensors built in the IoT vehicles could send information related to the temperature of food items and real-time location to the blockchain.
It could help retailers to keep an eye on food items they are going to receive.
4. End consumers could ensure if the food they are having is safe to eat or not
From source to destination, the information such as farm origination details, batch numbers, transportation details, factory and processing data, storage temperature, expiration details, and other details can be linked digitally to the food items within the supply chain blockchain.
Every piece of information captured during each transaction is validated by all stakeholders in the network to form a consensus.
After validating every block, it is added to the entire chain of transactions, creating an immutable and permanent record.
An end-consumer could then ensure if the food is safe or not by back tracing the food items from supply chain blockchain.
With the help of blockchain, a consumer could quickly decide if he or she should buy a specific food item or not.
Moreover, the government auditors could also perform audit checks on the cost and quality of the crops quickly through the records stored in supply chain blockchain.
Once it is clear that different stakeholders could be able to access every piece of information related to food items at every stage, the quality of food item could never be compromised.
Now, let’s discuss what could be the benefits of blockchain supply chain across the entire food supply chain.
Food Supply Chain Blockchain could offer the following benefits:
Food companies can utilize the blockchain to inculcate transparency in their supply chain process. Blockchain has the potential to add an extra layer of security to the food industry.
Since the data captured at every step is accessible to everyone within the network, blockchain can help bring transparency in the supply chain.From production to the sale of a food item, everything can be recorded on the blockchain to get rid of any food frauds, or food recalls.
Blockchain can improve the way food is tracked, transported or sold.By maintaining every digital record of the transaction, blockchain could overcome inaccuracies caused by traditional paper-based records.In case of any food recall or investigation, the process could be carried out seamlessly as blockchain offers end-to-end traceability.
- Secure and quick transactions
With blockchain, it is possible to transfer the information in a matter of minutes. Once the data is validated, it is replicated on various networks to take care of its security.
- Food Safety
Blockchain could bring considerable progress in food safety by saving lives and cutting down costs. Since the permanent records of information are maintained on the blockchain, there are fewer chances of contamination incidents.
Having a team of experienced developers, LeewayHertz is a blockchain development company that has the potential of building a blockchain-based solution for food supply chain.
Talk to us to discuss the Blockchain Solution