Blockchain Bringing Transparency, Traceability to Food – and More
“Don’t eat that. You don’t know where it’s been.”
It’s been the protective mantra of mothers for millennia. And it’s especially poignant now, for those who love romaine lettuce but prefer it without E. coli.
Perhaps the best way to know where food comes from, and where it’s been since its origin, is by using a fast-evolving technology-based system called blockchain. It’s a concept that enables tagging and tracking everything from food to fiber and beyond. And it’s going to rock our world.
That’s among the takeaways from the recent Ag Tech Professional Forum sponsored by the North Carolina Biotechnology Center’s agriculture sector development group.
More than 80 attendees learned about this new technology that allows the transfer of assets or products from one point to another with traceability, transparency, food security, more efficient supply chains, faster transfer of payment and accountability, all within one virtual system.
Panelist Mark Parzygnat, program director of IBM Blockchain, emphasized that blockchain is not cryptocurrency. Instead, it is the underlying technology upon which cryptocurrencies are built.
“Blockchain is a distributed ledger technology – so think of a distributed database system -- that provides an immutable ledger. It can’t be changed, can’t be deleted, can only be appended to from that point on,” said Parzygnat. “And those transactions are put into something called a block. Each block is cryptographically linked to the previous block.” The linking of the blocks forms the blockchain.
This renders the data tamper-proof, he said. Alteration of any transaction in a block, or any block itself, by any one of the participants of the ledger changes, or “breaks” the hash, and it is immediately visible to all other participants. The hash is a unique cryptographic signature of the data. Breaking the hash breaks the chain.
“That’s what makes this so powerful. The chain is always being synced and verified to make sure the entities’ ledgers are up to date,” said Parzygnat.
What’s more, participants in the ledger choose only what data to share with the rest of the blockchain. That means an entity can maintain control over proprietary information, sharing only that information relevant to the relationship among the parties in the chain. The purpose is to facilitate appropriate information sharing in ways that improve efficiency, reduce costs and provide transparency to all parties about the integrity of transactions.
For example, using blockchain, Walmart was able to trace romaine lettuce during an outbreak of E. coli bacteria in as little as 2.2 seconds. Traceability through previous paper methods took seven days, said Parzygnat.
In fact, Walmart and its Sam’s Club division have mandated the use of blockchain technology by all suppliers of fresh, leafy greens, starting in September 2019, with plans to extend that mandate to other fresh fruit and vegetable providers within the next year, according to a Seattle Times report. This will provide real-time, end-to-end traceability of products from farm to store.
Managing intangible assets
Leonard Nelson, founder and CEO of Navia, next explained how organizations are using blockchain to access data for more timely, effective operational and marketing decisions. He introduced the Iris Participation Brand Index (PBI) and the positive relationship between brand performance and the telling of stories which demonstrate passionate purpose and consumer experiences and drive conversations about a brand. He described these intangibles as “the new asset class in the enterprise.” The higher the PBI, the more a consumer is willing to pay for a product.
“Today’s consumers are not going to sift through the data; you have to tell the story,” he said.
Nelson provided a brief non-agricultural example. Using blockchain data, he was able to see in real time that consumers in high numbers were trying on a clothing retailer’s item, but none were buying it. Upon inquiry with a store manager, he learned that there was a problem in the design of the zipper. Armed with that information, the retailer then worked on a solution with the supplier.
In terms of agriculture and food, Nelson focused on the role of blockchain to remedy traceability lacking in the seafood industry.
“Up to 30% of the $100 billion fish in U.S. retail and restaurants are counterfeit by species when genetically tested,” he said. “Much more fish is mislabeled (wild vs. farmed, fake organic, etc.). Aquaculture feed is a massive counterfeit market.”
Building trust with math
Andy Kennedy, interim director, Global Food Traceability Center, Institute of Food Technologists, spoke about more specific applications of blockchain in the food industry. One is to comply with the 2011 Food & Drug Administration Food Safety Modernization Act (FSMA). FSMA’s goal is to transform the nation’s food safety to prevention of foodborne illness rather than reaction with use of systematic measures by the food industry.
Kennedy explained Internet of Things (IoT) device integration to the blockchain. Examples are sensors that monitor and report temperature of cold storage of food throughout transport. A grocery retailer will know whether cold food remained within the specified temperature range throughout shipping. Monitoring of this type incentivizes transporters to perform well, because the retailer can contractually withhold payment for goods not kept within spec temperatures and will have the data to back that up. In the end, the entire system improves, and costs go down with the reduction in food waste.
Another benefit Kennedy identified is food safety audit sharing within a blockchain. Organizations can upload one trusted copy by the auditor and share with all buyers and regulators on the blockchain. When a new audit occurs, everyone immediately receives the update in a permanent, immutable record, he said.
According to the Global Food Traceability Center, food fraud costs the global food industry $10 billion to $15 billion annually. Kennedy shared a photo of digitized tamper-proof tags on food packaging that provide data to the blockchain.
“It’s about trust -- building trust with math and true consensus,” said Kennedy.
In closing, Kennedy described use of blockchain technology to better match supply and demand and reduce the 2.4 trillion pounds of food waste per year (about 70 percent in the non-consumer space). He touched briefly on how blockchain technology can transform the commodities-trading market as well.
Finally, he brought it back to points made by both Navia’s Nelson and IBM’s Parzygnat about storytelling.
“Producers can tell the stories of doing a better job and get known for it.”