Food Supply chain of tomorrow: The convergence of more educated customers & a possible transparency powered by distributed ledgers

By: Vincent Doumeizel

9, March, 2018

Categories:

Blockchain - Data - Retail - supply chain -

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In the next 50 years or so, in order to feed 9 billion people with a diet richer in calories, the food industry will have to produce as much food as we have produced over the last 10 000 years.  The Food industry is highly globalized and fragmented and by far the most complex supply chain with various sub-products, ingredients and streams. Transparency in such a complex supply chain is just a dream so far but, in the meantime, we are the first generation that really knows the risk of this food system, including emerging pathogens, growing antibiotic resistance, climate change, waters scarcity, deforestation and biodiversity degradation.

Today’s consumers are savvy; they know what they want to eat and what is good for them. What they choose to buy have a direct impact on their health, their society, the planet, local communities, forest, farming, water and our climate – both tomorrow and in the future.

Digitalisation, transparency & traceability are key prerequisites to making it all possible. More and more people feel that each time they eat and drink something, they vote for the world they want. A new democracy is coming and the only way to secure people’s vote may lie in blockchain solutions.

As highlighted in the Foresight Report on Distributed Ledgers from the Lloyd’s Register Foundation – the charitable arm of Lloyd’s Register (LR) – it is clear that blockchains have the potential to bring about such changes in a broad range of industries – including food – especially where there is still significant scope for digitalisation and automation of processes.

Food is now perceived as a very controversial business in terms of impact on the safety of ourselves and our planet. Besides the dramatic consequences of foodborne diseases (which are often linked to obscure sourcing and kill hundreds of thousand people every year) food is indeed also linked with some of the most serious environmental and humanitarian concerns on our planet.

A non exhaustive list of examples includes:

– Coffee, sugar and cocoa and the 3 commodities currently employing most of the existing 26 million workers that have been identified as being in a slavery situation by the ILO

– For cocoa, an estimate of 400,000 or more child labourers used in production in West Africa (UNICEF, 2012).

– Palm oil contributes to deforestation (burning of peatlands), seasonal haze and 100,000+ respiratory deaths per annum (Environmental Health Perspectives, 2012).

– Soybean is responsible for 68% of total forest loss in South and Central America.

– For livestock, deception and fraud of both governmental and consumer parties is well-documented over the past decade not even mentioning the growing issue on animal welfare.

– Overfishing is likely to eradicate any wild fish in the ocean by 2060 (FAO report 2014)

With all of this being public and strongly echoed by the media and social media, the demand for accurate information and a transparency is increasing. Still no solutions enabling this transparency in the supply chain have proved to be efficient.

Blockchain also has the potential to change the way we buy and sell, interact and verify the authenticity of everything from property titles to organic vegetables. It combines the openness of the internet with the security of cryptography to give everyone a faster, safer way to verify key information and establish trust.  It has already demonstrated its efficiency with regard to traceability of the product through this new way of recording transactions.

Within the food safety arena, Blockchain is a hot topic as retailers and suppliers alike recognise the considerable benefits that Blockchain could bring in terms of efficiencies, transparency and brand reputation. Blockchain technology allows users to look at all transactions simultaneously and in real-time. Transactions not being stored in any single location, it is almost impenetrable from cyber-attack.

Some say the “oil” of the future is “data” and the future oil prospectors are the data programmers. A Blockchain by nature does not belong to anyone; it is decentralised, free, secured and public. No one can control a Blockchain and the data does not belong to anyone but is accessible to everyone. In that aspect, it provides an agnostic platform which is a key element for such a sensible topic of ensuring safe and sustainable food supply chains.

For consumers, Blockchain technology can make a big difference. By reading a simple QR code with a smartphone, data such as an animal’s date of birth, use of antibiotics, vaccinations, and location where the livestock was harvested can easily be conveyed to the consumer. Blockchain technology provides a permanent record of transactions that are grouped in digital “blocks” and cannot be altered. So applying this to food safety, it could serve as an alternative to traditional paper records and manual inspection systems that could leave supply chains vulnerable to inaccuracy or fraud.

Blockchains linked with The Internet of Things (IoT), Machine Learning and Next Generation Sequencing (NGS) will create not only a huge amount of data related to each of every food product that cannot be addressed by a single auditor, but will also drive sustainable supply chains and the safety of our food.

Lloyd’s Register outlines multiple issues to face in regards to sustainable and ethical approaches to food, but also the growth of new digital assurance opportunities that will help clients better identify, track, manage and publicly communicate the sustainability and ethicality of crops and livestock leveraged in their final products.

There has clearly been a ‘rush to market’ by many assurance providers but there is a need to focus on delivering credible Blockchain solutions that are constructed properly in order to build a really global, holistic and online food ecosystem to bring more resilience and efficiency in that critical industry.

Whilst the issue of the scalability and interoperability with existing systems remain a cause for concern – along with costs – we are on the verge of transforming the way in which we operate.  The actual path of a raindrop as it goes down the valley is unpredictable, but the general direction is inevitable and blockchains today is much the same, driven by patterns that are surprising but inevitable.

There is a call to action here as we deem tomorrow’s leaders will be those who will shape and make the future, not those who will only predict it.

As an organisation with a social purpose, we will continue to investigate and bring to market new ways to provide insight and assurance to the global food supply chain, to enable the sector to continue to feed the world safely and sustainably.

Lloyd’s Register has recently announced Blockchain pilots for organisations serving the food sector.  Building on the research from the Lloyd’s Register Foundation the pilots will focus on delivering client and consumer value alike.

By Vincent Doumeizel, Vice President Food and Sustainability at Lloyd’s Register

Image: istock.com/erikona

Hear more from Vincent at Blockchain Expo Global 2018