There has been a lot of discussion recently in
the food industry about blockchain and its potential impact on the
industry. From our interactions with
customers and colleagues we have noticed there is a lot of confusion and
misunderstanding about this technology.
In response we have put together some of the most frequently asked
questions to help to get a perspective as to its potential effect on our
Blockchain, is a relatively new technology
(established in 2009) but we are still not really sure what the consequences of
this technology is going to be in the food industry. However, according to CB Insights, the food and beverage industry, agriculture sector and the food supply
chain are among 55 major industries that could be transformed by the blockchain
“If someone asked you out of the blue “what is blockchain?” how would you respond?
Without context some of you may say “A chain of
You may even describe it as cryptocurrency or a
Although cryptocurrency (like bitcoin), uses
blockchain technology, cryptocurrency is not blockchain.
Blockchain is a database but a database is
not blockchain. While they both store data they differ in
design. The following table shows a
simple comparison between the two.
Data stored in tables
Data stored in blocks
Mutable (can be
modified after creation)
Immutable (cannot be
modified after creation)
Example: Food Fraud
Example: Supply chain
traceability blockchain platform
Blockchain is an entirely
new technology which refers to a sequence of blocks or
groups of transactions that are chained together and distributed or shared
among the users as a ledger. Simply put
the ledger is a "record book" and a “block" is a "line
item" in that record book. So blockchain is a shared record book and each addition
to this record book is a new line item.
Unlike a database, there are no administrators
in a blockchain. A database can be modified, managed and controlled by a user
who can create, delete, modify and change any record in the database. This cannot happen with blockchain.
Blockchain is de-centralized. This means there isn’t just one record book
but thousands of copies of the record book.
As there is no administrator, blockchain uses a peer-to-peer network
with hundreds of computers to confirm whether data or a transaction is
valid. This makes the data on a
blockchain extremely secure and extremely difficult to change.
So next time you are asked to explain what
blockchain is, can respond that “it is a very secure shared digital record
Is blockchain better than a database?
The answer to this question is dependent on
what you want to do with your data.
If you have confidential information or data
that does not need verification then a database is most likely a better
option. However, if you need to provide
verification of trusted data, such as identity, reputation, credibility and
integrity then blockchain is a new technology that can give you this
What data verification is needed in the
In the food industry there is an inherent lack
of trust, but not everybody needs to know everything. Generally, there are four key stakeholders
that need verifiable trustworthy data:
3. Regulators/Governments and
Consumers may want to know their food is
sustainably and ethically sourced. They
have started questioning the source of origin of the ingredients in their
food. They want to be sure that what
they are purchasing is actually what is on the label? For example, “are the eggs truly free range
or is the corn truly GMO free?”
Customers may also want to know this
information but they need more from the data. They need trustworthy supply
chain information that would enhance traceability and make the process more
accurate and efficient.
Regulators may want to know that the data
provided for key regulatory compliance activities is trustworthy.
As a food safety auditor, I have been shown
many food safety records. Some have been
fraudulent or a misrepresentation of the truth.
In many cases it is difficult to prove the records are false and we
often had to rely on the word of the company. This led to a decrease in
confidence in the data that was being provided to us. With blockchain, companies can now provide a
custody of truth resulting in better transparency. In addition to increasing
confidence this reduces audit trails and audit time.
We can see that there is an application
for blockchain in the food industry, but is there a demand?
It is predicted that in the next five years 20%
of the top global grocers will be using blockchain for food safety and
traceability to create visibility around production, quality and
freshness. As consumers are starting to
hold grocers to higher standards of visibility and traceability best practices
for the supply chain will evolve.
Blockchain has the ability to reduce miscommunication, increase
efficiency and speed up traceability from days to seconds.
Blockchain gives farmers the opportunity to
interact with consumers. Niche marketing
of GMO free, free range eggs, sustainable agriculture and organically grown
products are all already being used on the back of blockchain technology.
Coffee, apples, durian, palm oil, and leafy greens are just some of the
agricultural products already using blockchain.
Countries such as UAE, USA, Australia and China are already
incorporating blockchain solutions to monitor food products from farm to fork.
Walmart is currently using a private*
blockchain to trace leafy greens.
(*Private blockchains use the same principles
as public ones except the software is proprietary and hosted on private
While there are numerous perceived and real
applications for blockchain in the food industry it is unclear whether or not
blockchain is the proverbial “hammer looking for a nail”.
Some argue that it is one of the most overhyped
technologies ever,” arguing that it’s not the new internet, that in the decade
it’s been around users have not grown exponentially, the number of transactions
has collapsed, and transaction costs are rising through the roof.” We can
understand this argument. This is a new
technology and a huge market disruptor especially for the financial
sector. However, there are already some
big players in the game and depending on the application blockchain is not as
expensive as you may think.
Where do we see blockchain having the
biggest impact in the food industry?
1. Mapping the food journey, including supply chain tracking, secure data
aggregation, brand quality verification and sensor and IoT (Internet of Things)
2. Tracing contamination issues to the source which can avoid contaminated
food making its way to the consumer.
3. Providing a custody of trust for critical information such as food
safety certification, training records, qualifications and CCP records
4. Enhancing the Farm to Fork experience for the consumer and allowing
farmers to more closely interact with the consumer. Essentially a marketing
tool for verifiable product differentiation
Will Blockchain be a ripple or a tsunami?
While blockchain is still in its infancy, all
indications are that the ripples we are seeing are going to gain momentum. Blockchain is already making waves for all
the right reasons and our experience with the food industry is that the
adoption of this technology will build in momentum. The early adopters and pioneers (many of
which are industry giants) are already using the technology but whether it will
achieve wide scale adoption will depend on the importance the industry
influencers such as retailers, consumer groups and governments place on
verifiable data. In this digital age, it
is predicted that the biggest applications are going to come when blockchain is
integrated with other technologies such as IoT (which is a system of
interrelated computing devices).
Due to the distributed nature of the
blockchain, if we continue to see food fraud activities the need to immediately
detect fraud before the food items are put out for sale may also be a strong
influencer for its use. The 2008 scandal where 300 000 infants fell ill after
consuming milk contaminated with melamine cost the industry billions of
dollars. Blockchain can help in getting
rid of such losses and protect the wellbeing of consumers who rely on the
As the blockchain technology is resistant to
fraud it has the ability to transform many industries. The use cases for a
transparent, verifiable register of data are practically endless. In my opinion there will be a tsunami and all
indications are the food industry is going to get very wet.
Food Ecosystems has teamed up with Veridoc Global who possesses a finished public Blockchain solution. With our experience in the food industry and
the Veridoc Global blockchain we are uniquely positioned to help the food
supply chain investigate the multitudes of blockchain applications. We have
numerous completed blockchain solutions or we can customise a solution based on
This article was written by Anthony Raschke, who is the Supply Chain
Specialist at Food Ecosystems. He is an
internationally recognised Food Safety Expert who aims to provide food safety leaders with the skills and
opportunities to become food safety champions and excel in their field.