Blockchain and efficiency, transparency and trust in food supply chains


By Janette Woodhouse
Thursday, 27 July, 2017


Blockchain and efficiency, transparency and trust in food supply chains

OK, I admit it: I keep hearing the word ‘blockchain’ but have no idea what it means, let alone how its use can help to break down information silos to improve visibility and traceability from the farm to the table.

So, for beginners...

It seems that blockchain is a pretty nifty invention that allows digital information to be distributed across a network but not copied. Effectively it is a database of blocks of data where new, timestamped blocks of data can be added, while existing blocks cannot be modified but can be viewed.

Aha — this explains why blockchain would be good for visibility and traceability.

According to Wikipedia, a blockchain can serve as “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. The ledger itself can also be programmed to trigger transactions automatically”.

Chain Business Insights, an independent research firm focused on the application of blockchain in supply chain management and trade finance, has published a research brief — ‘Blockchain and the Future of Food: Driving Efficiency, Transparency and Trust in Food Supply Chains’ — that explains how blockchain can help to break down information silos to improve visibility and traceability from the farm to the table.

“The food supply chain comprises countless players that are functionally and geographically diverse. Many of these entities are largely unaware of each other and have very different commercial agendas,” Ken Cottrill, co-founder and research principal at Chain Business Insights, explained. “This fragmented structure inhibits the free flow of information up and down the supply chain.”

Yet a perfect storm of global supply- and demand-side forces is reshaping the market for food products and their supply chains. Among them are: population growth, the agtech boom, depleting natural resources, demographic changes, shifting buying patterns, safety concerns, the war on waste, the fight against fraud and tighter regulations.

The way food is consumed defines the overall structure of the supply chains that deliver it. Blockchain and the Future of Food first focuses on the midsection of the foodservice supply chain. It begins with food manufacturers (that receive the raw materials from producers such as farms and fisheries) and ends with the venues that serve food to consumers. This is where the complexities of the supply chain and the rivalries of its stakeholders are especially apparent.

The research brief explains how the traditional retail channel, where consumers buy food products from retailers and prepare meals in the home, differs from the foodservice channels. It also discusses how the rapid growth of online channels in the food business is adding new demands to the supply chain.

“Clearly, the food business is undergoing far-reaching change,” noted Peter Harris, co-founder and research principal at Chain Business Insights. “These changes, coupled with longstanding structural issues, pose challenges that lend themselves to blockchain-based supply chain solutions.”

Driven by the substantial global business opportunity, several vendors are targeting blockchain-based innovations in the food supply chain. Blockchain and the Future of Food contains profiles of 13 companies — from large firms to start-ups — that are already engaged in a proof of concept in the food industry. Some of this work will likely come to fruition over the next year, but the widespread adoption of blockchain in the food industry is further away.

“Despite the obstacles of implementing blockchain, we believe that the food industry and its supporting supply chains represent one of the most important applications of the technology,” Sherree DeCovny, co-founder and research principal at Chain Business Insights concluded. “Given the potential benefits and promise offered by blockchain-based applications, we believe that it’s not a question of whether they will be implemented, but when.”

Visit www.chainbusinessinsights.com for more information.

Image credit: ©stock.adobe.com/au/Andrey Popov

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