How Blockchain will transform the Food Supply Chain

 

Food is an important need for life, but the fact that we often ignore is that the food which provides nourishment, can be harmful too. According to a survey, the costs associated with the foodborne illness range from $55- 93 billion in the United States alone. Looking at the past and current scenario, several companies are exploring ways to use the shared and immutable ledger technology known as Blockchain to renovate the food system.

Food supply chain tracking and authentication help us to truly understand the provenance of the supply chain. The main goal of using Blockchain-based supply chain solutions is to improve the way the food is tracked, transported, and sold to consumers all across the world. The power of Blockchain technology is felt in generating transparency and efficiency in supply chain record-keeping.

Challenges in Food Supply chain

1.       Food Fraud

Due to the complex and complicated food supply chains, tampering, misrepresentation and deliberate substitution have grown significantly. According to a report by NSF, the costs associated with food fraud in the food industry costs around $49 billion each year globally. The most affected categories are milk, milk products, tea, coffee, fruit juices, olive oil, maple syrup, seafood, honey, and much more.

2.      Foodborne Illness

Out of 600 million cases, 1 in 10 people fall sick after consuming adulterated food. According to the fact sheet by the World Health Organization, 42,000 deaths are recorded every year, leading to the loss of about 33 million healthy life years. Foodborne diseases hinder socio-economic development by burdening the healthcare system, affecting trade and tourism. Blockchain in the food supply chain can be an effective solution for this challenge.

3.      Strenuous system

The food supply chain is a strenuous and complex system. One of the biggest challenges for the business entering in Food industry is to overcome this complexity of the food system. There are various challenges in adapting to the food system caused by multiple platforms and non-synchronized technologies. The food ecosystem contains various players (i.e distributors, retailers, buyers) and many different layers of structure such as terminal markets, distribution networks, and many more.

4.      Growing regulations

It is often assumed that the regulations within the supply chain are made to protect people, but these regulations can sometimes also turn the things ugly. To make sure that the regulations are fully served, there can be an increase in costs and struggles. To escape from these regulations, stakeholders would look for loopholes and exploit them, and hence more illegal activities would be performed.

Integrating Blockchain in Food supply chain

1.       Food Traceability

Food traceability is the center of the recent food safety discussions, particularly due to new advancements in the Blockchain applications. Due to the nature of the perishable food, the food industry as a whole is vulnerable and makes mistakes that affect human lives. The current communication framework within the food ecosystem makes traceability a time-consuming process.

Traceability is critical for the food supply chain. Blockchain technology would ensure that each player in the food value chain would generate and share data across a distributed ledger that would ensure an accountable and traceable system.

2.      Marketplace creation

One challenge for commercial food companies is outsourcing the quality ingredients in sufficient quantity. Farmers or producers don’t know what the end consumers are looking for. For a long time, intermediaries have controlled a large percentage of profits. The traditional price mechanism for buying and selling relies on the judgment of the involved players, rather than the information provided by the entire value chain.

Digital marketplaces allow the buyers and the consumers to directly connect, and hence increase the amount of profit for the farmers.

3.      Food wastage reduction

Food wastage reduction is another praise-worthy benefit of Blockchain. According to the food and agriculture organization, out of one-third of the food produced in the world, approximately 1.3 billion tonnes of food gets lost or wasted. This extra food lands wasted on the landfills, depriving hundreds of underprivileged families of the food.

Blockchain adoption would help consumers and suppliers to create better supply chains. Suppliers remain informed, inventories are recorded and quality checks are done precisely. Business intelligence and clarity generated by Blockchain technology facilitates better decision making.

4.      Data transparency

Data transparency is another big issue that raises concerns about the authenticity of the data.  On one hand, the disclosure of the data would provide accountability for transactions and farming practices, on the other hand, detailed information might get scrutinized and cause a backlash against businesses if things go wrong.

Blockchain with its transparent and visible nature helps to make the data transparent, and available at each node. With a transparent, end-to-end trail of the data, certifications, product identifiers, and other data, retailers can open their books with a clear conscience.

Final Thoughts

Adopting Blockchain technology in the food supply chain can be a transformative approach, and it would also provide better visibility in the otherwise bumpy journey from harvest to retail. However, all the parties in the chain need to follow the best practices to embrace technological change. As Blockchain is a form of database, its eventual power will be proportional to two factors: the quantity and the variety of good, clean, and true data loaded supply chain and the number of stakeholders in the supply chain.

 

Want to know more about how Blockchain can be integrated into the supply chains? Connect to our Blockchain app development experts.