Blockchain technology has the potenitial to transform food traceability and speed up payments for farmers, reports
AS a consumer, how do you know that the free-range eggs you buy are actually freerange? And how can you be sure that a meat product hails from the farm from which it claims?
And as a food producer, how can you prove to your customers that your products are as described?
Food supply is built on trust, but that trust is easily damaged, as evidenced by scandals relating to contaminated food products, horsemeat masquerading as beef, and so on.
On Thursday, researchers and industry experts will gather in Dublin to consider the challenges of food production and supply chain management.
The seminar organised by Teagasc, in association with Cork University Business School and Safefood Ireland, will consider how new technologies like blockchain can help make supply chains more efficient and more transparent.
Already blockchain is making waves in the agri-food space, and industry experts believe that the technology has the ability to transform the sector.
Blockchain makes it easier to trace the journey a product takes from farm to fork; helps suppliers, retailers and food producers to prove the claims they make about their products; gives consumers access to more transparent information; and has the ability to transform payments systems for suppliers.
HOW IT WORKS
For many people, how blockchain works remains something of a mystery.
“There’s not a great understanding of it,” says Aidan Connolly, the chief innovation officer at agri-food and biotech company Alltech.
In a blog post he published earlier this year, Mr Connolly (pictured) attempted to clear things up.
“Essentially, blockchain is simply an online documentation system that records the transaction at each point in the supply chain through an encrypted block using a distributed ledger,” he wrote.
Speaking earlier this year, Carlos Moedas, the European commissioner for research, science and innovation, explained the potential importance of blockchain to the agri-sector.
“Most people associate blockchain with digital currencies, but if we apply it to the agri-food chain, the impact could be incredible,” Mr Moedas said.
“In the event of an outbreak of any disease in the food supply chain, a technology like blockchain could help us pinpoint in minutes, not days, with absolute certainty where the risk is coming from.
“We can go on the journey of the food and limit any major spread before it even begins.
“We could innovate our way towards total trust in our agrifood chain.”
Finistere Ventures, a company that invests in agtech start-ups, has seen an increasing number of start-ups consider the po- tential of blockchain and its applications.
“It’s very trendy. It’s a definite buzzword,” said Kieran Furlong, who heads Finistere’s Dublin office. “Traceability and provenance are the applications [of blockchain] that people are talking about the most.
“Traceability is possible without blockchain, so it’s important to remember that the process isn’t something new.
“People have used paper ERP [enterprise resource planning] systems. So you don’t need blockchain to do it, but it potentially makes it easier.”
Mr Furlong pointed to a recent shift that is likely to drive blockchain’s adoption among retailers and food suppliers.
“Consumers are more interested in where their food comes from.
“If you look at a piece of steak in a supermarket, it has come from one animal, and so should be easy to trace,” he said, explaining that a DNA code or other unique identifier serves as a unique reference in a blockchain-based traceability system.
However, Mr Furlong said such a system could still be hit by human error.
“The first step requires a human generally, to get the information, the unique identifier, into the system,” he said.
Professional services firm Deloitte recently published a report looking at how blockchain can transform the beef industry.
“Farmers will interact with the technology without realising,” the report noted.
“Blockchain is the underlined technology that the ecosystem will exist on, similar to the way the Google search engine operates on the internet.”
Deloitte’s report suggested a number of ways that blockchain could shake up the beef industry.
For example, it said the technology could be used to prove “to market regulators, retailers and consumers that Irish cattle are predominantly grass-fed and graze on open pastures for the majority of the year”.
Cillian Leonowicz, head of business development at Deloitte’s EMEA Blockchain Lab in Dublin, said that blockchain technology makes it easier to trace food products, not just from farm to fork but from “conception to consumption, soil to sewer”.
Mr Leonowicz said that this end-to-end traceability enables the source of a disease outbreak to be “pinpointed straight away”, and can link to retailers’ systems and alert retailers and consumers that a product is not safe to eat.
Already a number of major retailers around the world are using blockchain technology.
For example, retail giant Walmart has partnered with IBM to introduce blockchain technology in its supply chain.
“Thousands of individuals work to produce a variety of fresh foods for our customers, from farmers and ranchers to food processing facilities, transporters, and distribution centers,” a Walmart statement said.
“Blockchain simplifies the process for everyone in this supply chain by allowing each of us to track food from the farm to our store shelves. This transparency helps ensure food is fresh and safe when our customers buy it.”
In 2017, Walmart ran a number of pilots to track mangos and pork using blockchain technology, and is now expanding the technology to other food products.
In September, the retailer wrote to its suppliers of leafy greens asking them to trace their products using blockchain technology. Suppliers are expected to have the required systems in place before the end of next year.
French retailer Carrefour has also introduced blockchain technology to trace some of its products, such as free-range chicken.
Each chicken’s label features a QR code which consumers can scan using their smartphones. Consumers can find out where each animal was reared, the name of the farmer, what feed was used, what treatments were used, where the animal was slaughtered and so on.
Bord Bia expects other retailers to follow in the footsteps of Carrefour and Walmart.
“As retailers look for new ways of engaging with their customers and improving the shopping experience, it is likely that they will consider the blockchain technology as part of their overall strategy, especially when investigating ways of providing greater traceability and transparency,” a spokeswoman for Bord Bia said.
“At this stage it is difficult to know what to expect from the retailers in this space but presumably they are all looking seriously at how they can use the technology to help meet their own business and consumer demands.”
Mr Leonowicz believes that blockchain can help boost consumer engagement and change the shopping experience for consumers by allowing retailers to provide extra information about products and additional services, such as information on how to cook a piece of meat, for example.
“It’s a question of deciding how much information to give the consumer and how to present it,” he said.
Another key question is who will bear the cost of blockchain becoming more widespread.
“Food suppliers are concerned about the cost and having to implement it,” said Alltech’s Aidan Connolly. “There’s no question at this stage that it will be forced through in larger companies at all levels in the supply chain. It becomes a cost of doing business.”
While the agri-industry has so far focused mainly on traceability as a use case for blockchain, Mr Connolly believes it also offers other opportunities within the sector.
“The greatest potential probably is in finance, such as around payment systems,” he said. “Blockchain provides opportunity for a robust system with less opportunity to be cheated. For example, for small producers sending products and being paid.”