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Is Blockchain Ready to Serve the Food Industry?
Making the food chain blockchain-ready
July 3, 2020Blockchain Technology : A Catalyst for Disruption in Finance World
July 22, 2020Is Blockchain Ready to Serve the Food Industry?
“The old question ‘Is it in the database?’ will be replaced by ‘Is it on the blockchain?’
By MINAL PATEL
“Blockchain will facilitate $31 billion in food fraud savings by the year 2024, according to new data from Juniper Research.”
Blockchain technology is developing at a rapid pace, but when it comes to supply-chain applications, full deployment is far from being realized. Blockchain grips special potential in the food products sector, where tight control and visibility of items moving from the farm to retail shelves are essential.
Blockchain Technology is not yet fully prevalent. There is tremendous interest in the technology for food. Ensuring ethical ways for producing and bringing food to market, cost, and efficiency considerations in exploring what can be done to improve track and trace capability for the food products that people buy are the factors that generate interest in Blockchain Technology.
With the current #pandemic, knowing the origin of the food, how it has been packed and shipped has become a necessity more than a luxury.
Obstacles that are standing in the way of full implementation of blockchain for the food supply chain are generating correct and sufficient data, creating standards for data and connectivity within the supply chain. For example, there are advances in data generation, for food from seed to table. But how do you track that through the life cycle of a food product? The food ecosystem involves many different players. Dealing with them all can be challenging. Taking an example of marginal producers, how can you bring technology to them, so that we can capture data of all the processes involves in farming from sowing to harvesting and make it visible?
“The Internet is programmable information. The blockchain is programmable scarcity.”
There are always technological obstacles in any Digital transformation and it is a common occurrence. But blockchain is rather unique, in that the more around the business model and strategy and less around the technology for adoption. Another obstacle is bringing together the various parties and agreeing about the type of data and the amount of data they want to share, as well as the standards by which they will be sharing. Standards of data are as important as data. Though, there is progress towards bringing more transparency to the industry. However, the focus should be more on work that has to be done on standards to scale this to the point where it becomes ubiquitous.
There are costs associated with any technology or business transformation. When it comes to blockchain, at least from the technology point of view, the investment is usual and in line with normal Digital transformations. A major technological transformation is moving core systems of record that exist to a new-shared source of record. However, when it comes to the size and scope of blockchain technology, it is similar to a normal IT transition.
There are several forms of blockchain-like public, private, permission-ed and hybrid. In a permission-ed blockchain, you have known actors operating and running the network. They allow the network to run on behalf of a consortium of organizations, or a single organization, if that is in the business model. Another is permission-less, where effectively anyone can join and participate in running the network. On the permission-less side, the data is always public. We need some infrastructure — not just the technology, but also the foundation pieces to achieve widespread adoption by across hundreds and maybe thousands of participants. The definition of “ubiquitous” is challenging. For the supply chain, we will see greater adoption across multiple industries over the next five to 10 years.
Blockchain will facilitate $31 billion in food fraud savings by the year 2024, according to new data from Juniper Research. Blockchain, along with Internet of Things (IoT) trackers and sensors, would help to cut down costs for retailers. This would be achieved through the restructuring of supply chains, efficient food recall processes and simpler regulatory compliance. We can describe the Internet of Things (IoT) as merging “physical and virtual worlds, creating smart environments.” The internet of things and blockchain would add significant value to those involved in the supply chain, namely, farmers, retailers and the consumer. Many consumers are increasingly aware of where their food comes from and how it is produced. Nevertheless, trust is still a big issue, especially when it comes to supply chains.
Transparency and efficiency in the food supply chain are limited by opaque data forcing companies to rely on intermediaries and paper-based records. Blockchain and the IoT (internet of things) provide an immutable, shared platform for all actors in the supply chain to track and trace assets; saving time, resources and reducing fraud.
As blockchain continues to push for mass implementation, the food and beverage industry is shaping up to be one of the most inclusive destinations for the technology. Companies like Nestlé, Carrefour and Starbucks have reported on their latest blockchain-powered initiatives within the field. Indeed, blockchain has been piercing the food industry at an accelerated pace. According to research, 20% of the top-10 global grocers will use blockchain by 2025.
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