Walmart plan will affect Yuma ag
Produce suppliers will need to join traceability network
Walmart’s recent announcement that it will require every producer in its supply chain for leafy green vegetables to join a blockchain traceability network a year from now will clearly affect Yuma County’s $2 billion agriculture industry.
Local growers and shippers are beginning to look at how the new requirement will affect their workload and bottom line, but Vic Smith, CEO of Yumabased JV Smith Companies, said he doesn’t think the answers will matter very much.
“I have no idea what it’s going to cost, I have no idea the depth and detail, I suspect it’s going to be complicated. But if this helps us deliver consumers safe food, then let’s do it,” he said.
Yuma’s first crops of romaine lettuce and other salad greens since last spring’s deadly E. coli outbreak are nearing harvest. In response to that and other food-borne illness crises, the world’s largest retailer announced Sept. 24 that it will require direct suppliers to provide one-step traceability via blockchain by Jan. 31.
Then those suppliers will have to work with the companies that grow and prepare the product for them to be using the network as well, entering data on who grew the produce, where it was grown, the date of harvest, and every other stop the crop makes on the way to a supermarket or restaurant.
“All fresh leafy greens suppliers are expected to be able to trace their products back to farm(s) (by production lot) in seconds — not days,” states an open letter to suppliers signed by four vice presidents of Walmart and Sam’s Club.
During this year’s E. coli outbreak, which led to five deaths out of 210 illnesses, investigators at the U.S. Food and Drug Administration were only able to trace about a quarter of the illnesses back to their origins in Yuma-area
fields; in many of the other cases the bag that reached the consumer was already gone. When paths could be traced back toward the fields, many of the records were incomplete, with verification from only one end of the transaction. Sometimes the records were all done on paper.
The blockchain protocol was developed for Bitcoin, the electronic currency that first debuted in 2009. The currency has plunged in value since then, but the technology behind it is being explored for numerous other uses, for stringing “blocks” of data about transactions into a “chain” that’s resistant to tampering.
Ed Treacy, vice president of supply chain technologies for the Produce Marketing Association, said the excitement around blockchain is “it encrypts the data in a way that makes sure no one can change the data or manipulate it once it’s been created. And that’s where it’s different from other data sharing protocols.
“If somebody changes it, it becomes very obvious to anyone who’s looking at the data, they go ‘oh, no, this isn’t right. It’s not the original data, someone did something, manipulated it,’” Treacy said.
The data entered into the cloud-based blockchain network’s encryption protects against manipulation, and it also connects entries so that when information doesn’t jibe, it gets noticed.
“It makes it very obvious when someone’s data is not correct,” Treacy said. “‘Hold on a second, you said the trucker picked it up at 8:30, but the trucker says he didn’t get it till noon.’
“Boom, there’s a mismatch. By using the blockchain technology you can see that very easily, and you can say, one of you two is not correct. And people can investigate and sort it out and make that happen,” he said.
Walmart will use the IBM Food Trust Network, available to all food retailers as of Oct. 8, after 18 months in testing. Dole, Kroger, Tesco and French retail giant Carrefour are some of the other companies that have also joined.
Treacy said to meet Walmart’s requirements its suppliers — which already must provide information to the Produce Traceability Initiative — will have to send an extra copy of that information to the Food Trust blockchain. And meeting the minimum requirement isn’t going to cost them anything, he said.
“And that’s just minimum compliance. Get your data over to them,” he explained.
Producers will have to pay IBM to watch their goods all the way through the system, with plans starting at $100 a month.
The large companies already participating are finding the data useful beyond the food safety aspect, Treacy said, such as increasing efficiency or reducing food waste.
Blockchain could also form the basis for the selling and buying of produce along the way, said Paul Brierley, executive director of the Yuma Center for Excellence in Desert Agriculture.
It should also eliminate the need for blanket warnings like the U.S. Centers for Disease Control telling consumers not to eat any romaine lettuce grown in Yuma, Arizona.
Not only was it difficult at best for them to know where the lettuce was grown, “you don’t want to say, ‘don’t buy any lettuce from Yuma.’ You want to say, ‘don’t buy any lettuce harvested from these fields on these dates,’ so you’re not overly broad on what you’re impacting,” Brierley said.
Smith said he’s not certain exactly how his companies will have to react.
“We don’t sell directly to Walmart; we’re one step removed from selling directly to them, but since we do a lot of the packaging, and growing and packing, we’re involved in that supply chain, from the beginning. So we will have to do a certain amount of input with that,” he said.
Industry financial losses tied to the latest E. coli outbreak haven’t been calculated yet, but Smith said it has to restore public trust, more than anything.
“This last outbreak cost the industry a lot of money. That’s not — the paramount thing is some people died, and some people got sick. It’s horrible, we can’t have that. We’ve got to prevent that,” he said.
Yuma Sun staff writer Blake Herzog can be reached at (928) 539-6856 or bherzog@yumasun.com.