The international trade of goods and services related to the food industry is very complex and poses great logistical challenges. Knowing where these goods and services come from, how they were produced and by whom are only a fraction of the crucial information needed to be able to ensure the authenticity as well as the safety and security of what will be offered to consumers. Although it was not created for the food industry, blockchain technology lends itself perfectly to it and has immense potential for the industry.
What is it?
Export Development Canada (EDC) defines blockchain as “a distributed database holding encrypted ledgers that reside on a network.” Well established in the cryptocurrency sector, this technology allows network members to consult and share a register of transactions, data entries or documents called blocks. This network can be public (for example, through the Internet) or private (such as between a group of companies).
Data must be verified by members in a private ledger, and when all agree on the validity of the information the block becomes a permanent record that no one can change.
Why you should care
Food fraud continues to occur worldwide at an alarming rate. No commodity or country seems to be spared, and all sectors are affected, from the farm to the final point of sale. According to the U.S. Grocery Manufacturers Association, fraud costs the global food industry between $10 and $15 billion a year. Other organizations estimate that the industry loses up to $40 billion a year.
At the same time, consumers are demanding more transparency from the industry about their products and business practices, a demand that can be difficult to meet if we don’t know the full history of the food we produce and process ourselves. Blockchain technology offers a complex but powerful solution to optimize and secure the entire supply chain. Benefits of using this technology include:
- Complete traceability of all interventions made on a commodity.
- Real-time supply management, including precise monitoring of a commodity’s journey and transport conditions such as temperature or humidity.
- Centralization of information about a commodity.
- Anticipation and simplification of recalls.
- Accountability of all stakeholders.
- Helps build a solid reputation, facilitating local and international trade.
Not surprisingly, the cost of implementing this technology is high, which is also the main obstacle to its expansion.
Opportunities in Canada
Here are some examples of local and international companies with expertise in blockchain development for the food industry:
FuturistIQ and Appinventiv are two international companies specialized in digital transformation. They operate in many sectors, including the food industry.
IBM, a well-known computer and digital giant, also offers consulting services for the implementation of various technologies, including blockchains.
As for TraceFood, their main focus and expertise is the creation of blockchains and they serve exclusively the food sector.
If you have a digital solution to make supply chains safer and more agile, apply for our Food Innovation Challenge. Applications are due July 7th.
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@Dana’s Take:
When it comes to traceability, consumers want to know that their food is safe, and increasingly, that it was produced in a sustainable way. By digitizing operations and using technology such as blockchain, food companies can track every ingredient and product in their supply chain, ensuring vendor compliance on sustainability measures, while offering consumers transparency on how products are sourced, processed, transported and retailed. The real potential of this technology will be realized when its use of energy is optimized or mitigated. An inspiring collaboration in North Vancouver, sees that municipality, using the heat generated by block chain activity to heat buildings!