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The potential of blockchain

Blockchain technology has the potential to transform the food industry and herald a food safety and anti-fraud revolution. Sterling Crew examines its application to enhance food supply chain transparency, tracking and traceability and considers how it could play a part in the fight to build consumer confidence in a more secure food system.

The challenge

Food scandals, scares and incidents, such as the recent case of eggs contaminated with the toxic insecticide fipronil, highlight the importance of a robust secure food supply chain. Food safety is key and consumers and watchdogs want to know where their food comes from and to have confidence in its provenance. There is also a strict legal obligation to inform competent authorities immediately if food that may be injurious to human health has been placed on the market and for that food to be effectively withdrawn or recalled.

Effective food security, tracking, traceability and recall management enables food businesses and authorities to build capacity to safeguard food and enhance consumer confidence. As with the affected eggs, current methods can take weeks to trace the source of a problem.

Traditional systems are often paper-based or use basic tools and have to be reconciled by the various businesses at different points in time, making it difficult to manage safety issues within the supply chain and causing costly delays. The current approach can also often make it difficult to pin point exactly where things went wrong, contributing to the erosion of consumer trust in the food system.

As food supply networks are becoming increasingly complex and globalised, traceability is ever more challenging. The network is so convoluted that it has become almost impossible for food producers and retailers to unconditionally guarantee the provenance of their products.

This was demonstrated in 2013 with the infamous horsemeat food fraud scandal, when for an undetermined period of time, food retailers in the UK and continental Europe sold an unknown amount of horsemeat labelled as beef to unsuspecting consumers. Food fraud costs the global food industry some £28 billion a year according to PwC and costs the UK £1.7 billion annually in addition to the damage to organisational reputation and brand loyalty.

More important is the issue of food safety. The UK’s Food Standards Agency states that 500,000 food poisoning cases are reported annually in the UK with close to 500 of these resulting in deaths.

The World Health Organisation reports on the substantial global burden of contaminated food with 600 million people, almost one in ten, falling ill and 420,000 deaths a year. A Blockchain food supply chain management system could be part of the solution and could contribute to its reduction.

Blockchain could provide a new generation of transactional applications that could foster trust, accountability and transparency across the food supply network.

What is Blockchain?

Blockchain is a collaborative solution that has the potential to revolutionise traceability and transparency of food across the supply network from farm to fork.

It is widely used in the financial sector as a tool to track and trade stocks, bonds and other assets and is most frequently associated with the cryptocurrency Bitcoin, where it is used to publicly record every Bitcoin transaction. Blockchain, created in 2008, is a shared, immutable ledger for recording the history of transactions.

It is called blockchain because all the transactions are sorted into continuously growing lists of records called blocks and each block is chained, using sophisticated mathematical algorithms, to the ones before it all the way back to the very first transaction.

By design, a Blockchain is inherently resistant to modification of the data. This structure makes it tough for anyone to change the records and provides a quick mechanism for various parties to check and agree on a set of recorded facts, providing greater trust in transactions. Information about what is in the food and its origin could be identified in seconds!

Blockchain could provide a new generation of transactional applications that could foster trust, accountability and transparency across the food supply network, making food safety simple by digitalising existing food safety procedures and product information and creating a single secure historical record. This could potentially lower the cost of compliance and increase efficiency. The Blockchain technology is an enabler and not a final solution in itself. It will only work as part of an integrated solution that is supported by a strong company food safety integrity culture.

Blockchain is designed to facilitate secure online transactions. It could help prevent food fraud and counterfeiting issues as each link would be documented in a permanent record that cannot be altered, with instant end to end visibility. Any changes to the blocks require a digital signature, and interested parties would immediately be informed of any modifications. This would help with verification of identification to prevent fraud and building assurance through recording legitimate transactions.

By design, a Blockchain is inherently resistant to modification of the data. This structure makes it tough for anyone to change the records and provides a quick mechanism for various parties to check and agree on a set of recorded facts.

Food fraud

Food fraud occurs when food is deliberately placed on the market for financial gain with the intention of deceiving consumers or customers. This includes the sale of food that is unfit for consumption and potentially harmful or is deliberately misrepresented. Blockchain is not the silver bullet to eliminating all food fraud in the food network, but it could help provide extra security and strengthen safeguards related to food authenticity.

Fraudsters are adaptable to the circumstances and constantly change their ‘modis operandi’ to keep up with new security measures.

If they have integrated themselves into the legitimate supply chain they could overcome Blockchain systems by entering false information into the blocks. It may still be necessary to audit the points of data entry at farms, distribution points and processing plants to observe how the data is being recorded and entered and to validate it. The goods also need to be physically secure to maintain integrity so that criminals cannot replace legitimate goods with counterfeit or adulterated products.

Blockchain by its very nature has a decentralised structure. This has a great advantage in the fight against fraud, as centralised data is more susceptible to record manipulation. By storing data across its network, the Blockchain eliminates the risks that come with it being held centrally and makes data transparent to everyone involved.

Future challenges and developments

It is inevitable that the early adopters of Blockchain technology in the food chain will be larger corporations with global interests and significant resources. The value of their brands’ reputation will be higher and they will have more to lose.

Most of the supply chain consists of small and medium sized enterprises and many of these lack dedicated sophisticated platforms for the exchange of logistical transactions. Initiatives are now needed to determine optimal approaches and tools for blockchain technology to be effective in supporting a global, highly complex food supply network. It must be accessible to all food chain operators, irrespective of size or geographical location, from small individual farmers in developing countries, through brokers and shippers, up to large multinational manufacturers and retailers and ultimately the consumer.

A Blockchain system inclusive of smaller, local vendors will probably take longer to develop.

What is clear is that the benefits of Blockchain will not be truly exploited until it covers the entire food network and that a common system is adopted internationally.

Individual private bespoke in-house Blockchain solutions could be nothing more than cumbersome databases. The food supply Blockchain system must align and be fully integrated. There may be some barriers to this as some members of the chain may be distrustful and may be wary about sharing their information and intellectual property unless they have confidence in the security, confidentiality and robustness of the transactions.

Recent high profile hacking incidents have played a part in undermining organisational confidence. Understandably, to mitigate risk, businesses may be reluctant to place Blockchain at the core of their business structure.

A Global Food Blockchain Initiative has recently been formed to bring the food chain together in a not-for-profit collaboration consortium to facilitate the building of an effective universal blockchain for food as a trusted source of integrated verified food chain information[1].

A consensus is building that Blockchain is the next food safety and anti-fraud revolution, a genuine paradigm shift in the way that the industry operates.

When it comes to the food supply chain, the technology will fundamentally change the way we transact food and do business, opening up new opportunities to enhance food security.

What the internet did for communications and information, Blockchain will do for trusted transactions. The challenge of making this work is that everyone at every link along the food chain needs to be involved.

Early adopters, such as IBM and Walmart working with Tsinghua University in China, are already testing Blockchain to strengthen their food supply chain and to create new levels of trust. GS1, the global business communications standards organisation, announced a collaboration with IBM and Microsoft to leverage GS1 Standards in Blockchain application.

Blockchain could provide consumers, suppliers, manufacturers, retailers and regulators greater transparency and confidence in our food. It will connect the food to digital product information, such as farm origin details, batch numbers, manufacturer’s and processing data, site certification, expiration dates, storage temperatures, logistical details and claims substantiation.

This data can be captured along with details of allergen cross-contact exposure and additives, veterinary drugs, such as antibiotics or hormones, and application of biocides and agrochemicals, such as herbicides and pesticides.

As tools, such as handheld devices for DNA/genome sequencing and chemical identification using transmission raman spectroscopy (TRS) sequencing, coupled with blockchain information technology provide faster and wider–reaching data, the lag time between observing an outbreak of food-borne disease or contamination and pinpointing its source will fall dramatically.

The use of the latest low cost RFDI technology could even enable the tracking of individual cans and packs. Blockchain has the added promise of bringing significant efficiencies and the reduction of food waste to the global food supply chain.

It could also assist with the increasing requirement to supply sustainability information. In a post Brexit world there is a potential to help with smoother and speedier import and export transactions.

It would allow stakeholders to more clearly identify those who do the right thing and so could not only result in increased food safety but also reward competent, honest food chain operators with increased profitability and business growth.

A consensus is building that Blockchain is the next food safety and anti-fraud revolution, a genuine paradigm shift in the way that the industry operates.

Consumer choice

As well as improving food safety and reducing the potential for fraud, Blockchain has the potential future capability to empower and enhance the consumer experience. Many consumers are unaware of where their food comes from and how it is produced.

Blockchain will make it easier for consumers to track the content and origins of foods, enabling them to make a more informed choice about the food they eat by directly connecting them with producers.

By integrating Blockchain with other technologies, such as smartphones with QR codes and the IoT (Internet of Things), they could scan their food and have a complete history of its journey from farm to fork, allowing them to personally validate the provenance of their purchases by tracking foods along the supply chain.

Sterling Crew FIFST, FCIEH, FRSPH. Managing Director SQS Ltd. Strategic Advisor Shield Safety Group. Vice President Institute of Food Science and Technology. Chair of the IFST Food Safety Group.

Email. Sterlingmcrew@aol.com

 

 



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