Blockchain could be the one ingredient that everyone in the food industry agrees is good for you. True, widespread blockchain adoption isn’t here yet, but that’s about to change. Gartner researchers predicted blockchain will support the global movement and tracking of $2 trillion in goods and services annually by 2023. This VIDEO interview at SAP TechEd demonstrated blockchain’s incredible potential to add trust through traceability across food supply chains, helping manufacturers, consumers, and regulatory agencies alike.
Blockchain is key ingredient in chocolate bars
IDC analysts named asset tracking and assets/goods management among the top ten blockchain use cases. That’s because blockchain is ideal for business transactions that involve many organizations exchanging numerous documents pulling data in different places. Blockchain’s capabilities as an immutable ledger are tailor-made for supply chain track and trace, whether it’s to guarantee the provenance of goods or manage food safety.
Benjamin Stoeckhert, business development manager for blockchain at SAP, showed me how a hypothetical chocolate manufacturer and nut supplier could use SAP Logistics Business Network for farm-to-consumerto recall chocolate bars contaminated by metal pieces during production.
“Blockchain improves transparency, efficiency, and sustainability by connecting the entire supply chain with partners in a trusted, shared ledger,” said Stoeckhert. “With tracking details on every ingredient that goes into producing an item like a chocolate bar, food manufacturers can prove certifications, identify allergens, and support recalls faster.”
He added that SAP co-innovated the solution with leading food companies and retailers, including members of the company’s industry blockchain consortiums.
A faster way to food safety
High-profile food recalls make for scary headlines, and rightly so. Consumer watch-dog group, Mass PIRG, reported a 10 percent uptick in food recalls between 2013 and 2018. In the U.S. alone, one in six Americans contract foodborne illnesses, and 3,000 people die yearly from eating contaminated food. Yet it’s still a heavy lift to track the ingredients in any food, such as a chocolate bar. Blockchain can help companies trace the genealogy of ingredients in a product, accurately analyzing mountains of data across the most complex supply chains.
In Stoeckhert’s example, the food safety manager at a chocolate manufacturer and the quality manager at the nuts supplier worked backwards to recall certain chocolate bars. They used data on the blockchain to see which chocolate bar batches contained the tainted nuts.
“Decision-makers can track where and when the product was produced, which ingredients were added at what stages of production, and where the final candy bars were shipped, delivered, and sold,” said Stoeckhert. “The manufacturer and supplier can issue an alert based on which batches contain the metal particles, triggering market-wide recalls across the supply chain from raw material suppliers, to factory floor production through distribution, shipment and grocery store delivery in near real-time.”
Blockchain’s benefits are not confined to alerting the right people. Proving acknowledgement and action on alerts is equally important.
“Information on the blockchain tracks alert status, including when each organization acknowledged that they were informed of a problem,” said Stoeckhert. “Companies can prove their timely response and regulatory compliance.”
Transparency plus business control
This newfound transparency doesn’t stop companies from preserving trade secrets or other sensitive information, like pricing or the names of suppliers and distributors. Blockchain addresses the understandable reluctance of companies to share detailed product data with organizations further up or down the supply chain.
“Organizations can decide which properties to share across the supply chain, and information can be encrypted so it’s not visible to all the partners on the chain,” said Stoeckhert. “Chain participants can’t see other buyers and sellers upstream or downstream, reducing fears of disintermediation or losing valuable intellectual property.”
Blockchain meets consumer expectations
Blockchain also answers consumer demands for transparency, whether fueled by environmental, social or other brand value expectations.
“Consumers are much more conscious about what’s in the food they eat and how it’s manufactured,” said Stoeckhert. “They want to know where and how all the ingredients in that chocolate bar were sourced and produced.”
Indeed, IDC predicted that by 2021, 30 percent of manufacturers and retailers will build digital trust using blockchain in collaborative supply chains that give consumers access to product histories. Meantime expect blockchain to become a key ingredient in safe, trusted food supply chains worldwide.