Blockchain could be the one ingredient that everyone in the food industry agrees is good for you. While widespread blockchain adoption is not here yet, it is about to arrive.
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: Key Ingredient in the Chocolate Bar
IDC analysts named asset tracking and assets/goods management among the top 10 blockchain use cases. That is because blockchain is ideal for business transactions that involve many organizations exchanging numerous documents with data from different places. Blockchain’s capabilities as an immutable ledger are tailor-made for supply chain track-and-trace — whether they guarantee the provenance of goods or manage food safety.
Benjamin Stoeckhert, business development manager for blockchain at SAP, demonstrated how a hypothetical chocolate manufacturer and nut supplier could use SAP Logistics Business Network for farm-to-consumer to 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.
Faster Path to Food Safety
High-profile food recalls make for scary headlines, and rightly so. Consumer watchdog 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 annually from eating contaminated food. Yet, it is still difficult to track the ingredients in any food. Blockchain can help companies trace the genealogy of ingredients in a product and accurately analyze 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 a nut supplier worked backwards to recall certain chocolate bars. They used data on the blockchain to see which 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.”
Food Safety Requires Transparency and Business Control
This newfound transparency does not stop companies from preserving trade secrets or other sensitive information such as pricing or 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,” remarked 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 valued 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.”
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. In the meantime, expect blockchain to become a key ingredient in safe, trusted food supply chains worldwide.
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