Tackling Food Supply Chains: how technology is transforming the way we track our food

When it comes to food, there are some important facts to consider:

• By 2050, the global population is expected to reach 9.8 billion. To ensure sufficient food supply, crop production will need to double.
• In 2018, approximately 815 million people around the world suffer from chronic undernourishment.
• An estimated 30% of the food produced for human consumption is lost or wasted somewhere along the supply chain.

Resource scarcity and global economic and climate conditions are often attributed to world hunger and undernourishment in developing regions. With the above statistics in mind, could malfunctioning supply chains also be to blame?

Streamlining supply chains

Supply chains are networks of people, information, and resources that are growing increasingly complex as global trade becomes more elaborate and expands into new regions. Increasing complexities bring increasing inefficiencies, particularly in an industry that is still very much run on manual, paper based processes and administration-laden tasks.

Simply getting food from a farmer to a consumer’s table involves multiple participants including farmers, brokers, food processors, logistics, retailers, and regulators. Data sharing in this ecosystem is usually limited to groups that have direct contact, and no one has a complete, end-to-end view of the supply chain. Although the current system seems to work, information is often incomplete, comes from multiple sources and is in different formats.

Consider this. Between 1996 and 1999, over 37,000 metric tons of bananas were lost in Australia due to weak communication channels between banana growers and packing facilities. Take this example on a global scale, increasing the variety and amount of produce, and the supply chain participants involved, and it is easy to see how these sorts of issues can grow exponentially very quickly.

Food producers are recognising the need to improve supply chain systems, not only to meet global food demands, but to manage waste and spoilage, ensure the livelihood of growers and producers, and improve efficiencies and linkages across the chain. Companies all over the world are embracing technology and experimenting with smarter solutions such as blockchain to optimise and transform existing supply chain processes.

Technology for a more efficient supply chain

Blockchain is one of the biggest buzzwords around the globe, and with good reason. Through blockchain, the technology finally exists to create a secure end-to-end record of tracking information, transactions between participants, temperature readings, and environmental factors. This record is decentralised, meaning it’s not owned or controlled by any one party. As data is added, it cannot be changed, so supply chain participants can be sure that the information around the storage and transport of their produce is tamper-proof, and they can have 100% confidence in the product.

Already large, international food companies such as Walmart, Unilever, and Carrefour are testing blockchain applications or working with software companies to develop blockchain solutions to help track food supply chains, improve food safety and minimize wastage.

Technology: beyond tracking & tracing

Streamlining the tracking and tracing of food and fresh produce has a ripple effect across food supply chains:

Reduced food recalls

The World Health Organisation estimates 600 million people (almost 1 in 10) fall ill after eating contaminated food, while 420,000 die every year. Using blockchain to locate the source of outbreaks could reduce that number significantly and safely. Upon learning about a customer illness, a retailer can obtain data from a single receipt that shows precisely where the product was grown, processed, inspected for quality, purchased, and so on. Because detailed information is readily available within the blockchain database, supply chain participants can find the contamination source, and order recalls of small, specific quantities rather than stripping store shelves clean throughout entire geographic regions.

Improved traceability

Foodborne illness costs the United States of America between $55-$93 million per year, and not all of it from medical expenses. For example, In 2006, hundreds of investigators in the USA worked for two weeks to identify the source of some contaminated spinach. Today, through the immutable data stored on the blockchain, issues can be traced quickly back to the precise source, minimising outbreaks and illness.

Eliminate manual systems

Not only do manual inspections and paper tracking systems require more people, time, and investment, they also expose costly inaccuracies. Since 2016, IBM and Walmart have been working on a pilot study to demonstrate the benefits of tracing food products on blockchain. Vice President of Food Safety for Walmart, Frank Yiannas, said initial results from the pilot had been ‘very encouraging,’ demonstrating that digital solutions backed by blockchain meant tracking important information took as little as 2.2 seconds — a process that took almost seven days using the traditional paper chain.

Increase shipping transparency

Danish container ship and supply vessel operator, Maersk is trialling blockchain to monitor ocean container shipments and, if successful, could streamline global trade, secure cargo during transit and increase transport efficiencies. In partnership with IBM, the blockchain solution is designed to create a truly digital supply chain, establishing a shared view of transactions in real time, accessible to trading partners without compromising privacy or confidentiality.

Improve food provenance

One in three Australian consumers are conscious of where their food comes from. Whether it be concerns about the origin of food, or its organic or fair-trade status, leveraging data stored via blockchain can improve provenance and consumer confidence. E-commerce giant Alibaba recently launched its blockchain based ‘Food Trust Framework’ aimed at achieving end-to-end supply chain traceability, with vitamin producer Blackmores and dairy brand Fonterra two of the first companies to sign on to the network. The initiative aims to not only improve information about where and how food is produced but also minimise counterfeit products and food fraud, which costs the global food industry an estimated USD40billion each year.

AgriDigital

AgriDigital is currently underway with the development of our blockchain protocol for the global trade and finance of agri-commodities. Our vision is to provide the digital infrastructure to build digital trust along the entire agri-supply chain to bring transparency, efficiency, and trust to farmers, traders and site operators. We recognise that the most most critical challenges are lack of transparency due to inconsistent or even unavailable data, the high proportion of manual paperwork, lack of interoperability and limited information on the product’s lifecycle.

AgriDigital is dedicated to bringing blockchain to agriculture and demonstrating the benefits it can deliver to participants throughout the supply chain. While we continue to develop our commercial blockchain protocol, we are working on a range of pilots and proofs of concepts to test aspects of the technology:

• December 2016: AgriDigital successfully executed the first live settlement globally of a physical commodity on a blockchain between a farmer and a buyer
• August 2017: AgriDigital partnered with CBH Group, Australia’s largest grain exporter, and focused on matching title transfer of a grain asset to payment, as well as supply chain provenance and traceability; in this case for organic oats
• November 2017: In our most recent pilot, AgriDigital teamed up with the world’s largest agricultural bank, Rabobank. This pilot demonstrated how blockchain can be used for supply chain finance and was the first project of its kind globally.

Where to next? Read more about our blockchain pilots, or to find out more about the AgriDigital platform visit www.agridigital.io or contact hello@agridigital.io