How blockchain can protect reputations and attract committed customers
Anant Kadiyala is director of blockchain and IoT industry solutions at Oracle. He is also a specialist in enterprise digital transformation and applied innovation.
The recent romaine lettuce recall in the U.S., like the drawn-out infant formula scare in Europe, is putting increased pressure on food manufacturers and retailers to trace and track unsafe food with greater speed and precision. In addition to traceability, consumers are showing increased willingness to buy only those goods that align with their values — whether those involve organics, ethical sourcing or national origin. Both trends require that the industry provide greater transparency across their supply chains.
One possible source of that traceability and transparency is blockchain. The technology could give producers, distributors and retailers a single source of truth about every shipment that passes through incredibly complex food supply chains. Blockchain technology may even help businesses regain and reinforce trust from the public — acting as a “certification of excellence” that consumers could rely on when choosing products off the shelf.
Placing higher emphasis on traceability
Producers, distributors and retailers often blindly have to trust each other when operating their supply chains. For instance, instead of conducting stringent and time-consuming background checks on the authenticity of their shipped produce, food retailers will often choose to trust the quality assurance processes of their suppliers. While this simplifies supply chains, it becomes problematic when a food crisis occurs — often plunging businesses into a race against time to locate the source of contamination. At the start of a crisis, the standard operating procedure is to conduct a blanket recall of all products — even uncontaminated ones — as both a cautionary measure and an effort to buy more time.
In addition to profit losses, supply line disruptions and food wastage, businesses also suffer a significant reputational hit. The longer it takes to pinpoint the source of a contamination and take action, the greater the risk of public outcry. It’s in the interest of every participant or stakeholder to make tracing any product batch easier throughout the entire supply chain.
Blockchain would do this by creating a record of every such batch — one that’s automatically updated as it goes from field to factory to supermarket fridge, and that can’t be edited without the permission of every party along that supply chain. That creates a data trail which improves track and trace capabilities throughout the supply chain — potentially allowing problematic batches to be identified and isolated within hours instead of weeks, and paving the way for more purposeful action.
This sort of visibility means food companies would be able to identify contamination with far greater accuracy and speed than ever before. In the case of fresh produce contamination, for example, producers could send instructions to retailers to pull only affected batches off the shelves, while providing hard data to customers and regulators to show that other batches were safe for consumption. That would’ve made it easier for farmers and distributors of romaine lettuce to contain the controversy, regain public trust, and even identify those responsible with far greater speed and fidelity.
Customers want greater transparency
Making the food supply chain more transparent allows shipments to better adhere to today’s ever-tightening food safety regulations. With the right data points, the condition of all shipments can be automatically mapped: time spent in storage or for pallets to be loaded and even minute-by-minute ambient temperatures of shipments. In turn, this allows participants in the supply chain to be confident in their ability to comply with the regulations of any country they ship to, no matter how long or complex the supply chain becomes.
This level of transparency would also help answer consumers’ growing questions about where their food comes from. Food companies that can provide more accurate information on how their food is grown, packed, processed and shipped along the supply chain will be in a better position to give consumers the confidence they desire.
It’s still early days for blockchain, yet it holds great potential for transforming the way we bring food from the farm and onto our tables. If used correctly, it could help demystify today’s complex and sprawling food supply chains, making it easier to ensure the security and safety of the food that we eat. People demand peace of mind when buying their food — and blockchain technology could provide it like never before. The benefits for food safety and customer loyalty are worth digesting for any farmer, distributor or retailer.