Last summer, several major food manufacturers and retailers including Nestle, Unilever, Tyson, Walmart, and Kroger joined together to announce a major exploration of blockchain technology for food traceability. This announcement drew attention to blockchain as a technology that had real applicability for food safety and has helped the food industry envision the possibilities of blockchain beyond its cryptocurrency origins.
As more companies explore its possibilities, it has become clear that blockchain represents an opportunity to efficiently manage supply chain data across a complex network from farmers, to distributors, processors, retailers, regulators, and consumers. With the promise of amplifying traceability, blockchains record specific information about products as they move throughout the supply chain. Although industry analysts say blockchain is still very much in its infancy, now is the time for companies to educate themselves on its benefits and how it can lead to vast improvements in efficiency and security in the food supply chain.
Blockchain = Shared Database
Blockchain was first used in bitcoin—digital currency operating independently of a central bank. The blockchain technology that underpins bitcoin is proving to offer valuable benefits to use in cases outside of the financial world. Casting the catchy buzzword aside, blockchain at its core is a shared database. Many industry veterans already know that shared databases have benefits, but what makes blockchain special is that it is a distributed ledger. There is no single point of failure in a distributed ledger—it is a consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites.
This decentralized structure makes the data resilient to a technology or organizational failure. This, in theory, could significantly change the way companies access and store important documents and transactional histories. For instance, in developing countries, where paper documents can be destroyed in a natural disaster, or electronic copies can be lost in unstable economic conditions, blockchain represents a huge opportunity for consistency.
For the past few years, technology providers like IBM and Microsoft have been focusing on taking blockchain from being a public ledger to an enterprise solution designed to solve supply chain problems. Enterprise blockchains are decentralized in nature, meaning there is no one central point to hack, and support multiple levels of permissions for robust security around who can write to and read from the ledger.
Standards as a Foundation for Blockchain Traceability
Driven by consumer demand for safer food, the global food traceability market is expected to grow to $16.09 billion by 2022, according to a report from Research and Markets. For several years, food suppliers, manufacturers, distributors, retailers, and technology providers have collaborated to enhance the retail grocery and food service industries’ ability to trace products from farm to fork. Industry stakeholders participating in initiatives such as the Produce Traceability Initiative, the Foodservice GS1 US Standards Initiative, and the GS1 US Retail Grocery Initiative have made significant progress in moving traceability forward. While some have made more traceability progress than others, these more than 200 industry participants have at least committed to taking the first step toward the track and trace of products using GS1 Standards. Many have moved along to adopt other GS1 Standards for automated data capture through the use of standardized barcodes, and the ability to share data in real time through a continuously updated network of product data called the Global Data Synchronization Network. With all of these standards working together, a company can have supply chain visibility—a crucial first step that can set a company up to maximize blockchain’s power in the future.
GS1 Standards enable traceability by ensuring all trading partners communicate in a uniform manner. Standards ensure systems interoperability, and provide a singular approach to maintaining product information that supports, at the very least, “one up/one down” visibility of the product’s movement through the distribution channel. The internal data and processes a company uses to track products is integrated into a larger system of external data exchange that takes place between trading partners.