In 2015, an E-coli outbreak spread like wildfire across Chipotle restaurants in 11 states. More than 50 customers fell ill and almost two dozen were hospitalized, making headlines nationwide and sending the corporation and its stock into a tailspin. Food contamination issues like Chipotle's happen often around the world and at far greater scales. One way to stop them may be blockchain technology.
Once you wrap your head around what blockchain is and how it works, one of the first questions people ask is what you can do with it beyond powering cryptocurrencies. Blockchain experts often point to banking and finance, insurance and healthcare, and digital identity as first-mover industries and applications. However, one that's sometimes overlooked is how blockchain could revolutionize global trade and supply chain management. Today, some of the largest food manufacturers and retail grocery chains in the world are coming together with IBM to try to realize that potential.
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IBM announced it's working with a consortium that includes Dole, Golden State Foods, Kroger, McCormick and Company, Nestlé, Tyson Foods, and Walmart on blockchain-based asset tracking solutions. The goal is to reduce food safety risk, increase traceability and transparency of the food supply chain, and create a smarter, more efficient, and more trusted global food system. Brigid McDermott, Vice President of Blockchain Business Development at IBM, said the company plans to introduce a food safety solution built on IBM Blockchain to which food supply chain participants all around the world can connect.
"This news is about bringing the ecosystem together to ensure we are approaching the issue of food safety the right way and understanding what needs to be done. With IBM Blockchain this will prove to not only help speed and more precisely target the process of taking contaminated food off the shelves when it is recalled, but also to lend a sense of accountability and security for consumers to affect a larger, more significant impact on a global level," said McDermott.
Tracking the Worldwide Food Supply Chain
The World Health Organization's (WTO) first-ever global estimates for foodborne diseases in 2015 found that almost one in ten people get sick from contaminated food per year, and more than 400,000 people per year die as a result. According to a study from the Centers for Disease Control and Prevention (CDC) on a recent salmonella outbreak, it took more than two months to trace the source of the outbreak back to imported papayas from one Mexican farm.
The goal of this joint effort is to create a network where you can trace the origin and supply chain path of any product with the simple scan of a QR code. Identifying food outbreaks can happen in minutes, verified by the shared blockchain transaction ledger. The process can speed up the global coordination required to isolate contaminated products, stop shipments, and safely remove any unsafe food from store shelves at the point of sale.
"Food safety for us is a non-competitive issue. Once there's an issue of food safety and it affects one of us, it affects us all," said Howard Popoola, Vice President of Corporate Food Technology and Regulatory Compliance for Kroger. "We're excited to be working with IBM Blockchain across the entire food supply chain to get to a place where we meet the needs of the over three million consumers who come into Kroger stores every day."
IBM and other companies have been piloting these kinds of applications for several years. IBM and Walmart started working with Tsinghua University of Beijing in 2016 to track shipments in China's massive pork market, and startups such as Swiss company Ambrosus use integrated systems of biosensors, food tracers, and blockchain-based smart contracts. This consortium marks the highest profile and most widespread global effort to put a global food supply blockchain into production, and IBM sees these initial members as the start of a broader global network.
"The strength of blockchain lies in the networks it enables, and Walmart recognized the need to take it a step further, which is why we are working with a number of leading players, including retailers, suppliers and distributors in the food system," said IBM's McDermott. "Since they are the food safety experts and not every player in the collaboration will have the same needs, we are looking for all of their input, on everything from capabilities to user experience and onboarding, to make this a success. The objective is truly to leverage our findings to address this lack of transparency across the entire food supply chain."
Today, nobody currently oversees the entire supply chain. In a recent Walmart pilot, it took six days, 18 hours and 26 minutes to trace a package of mangoes to the exact farm of origin. According to IBM, the consortium of food manufacturers and retailers will use the tech giant's cloud infrastructure platform and Blockchain-as-a-Service (BaaS) offering to build and participate in a private blockchain network spanning the entire global food supply chain. Food growers, distributors, suppliers, processors, retailers, regulators, and consumers themselves will have permissioned access to food data on the origin and transaction history of products worldwide.
"A global retailer will have different requirements, and will see different benefits from the solution than a farmer in China that has a two-acre crop," explained McDermott. "The needs of a midsized supplier will differ from that of a regulator. It's critical we understand the value proposition for everyone ranging from a one-acre farm, to a factory farmer, to small and large suppliers, to retailers, to regulators, and consumers."
IBM's McDermott said one of the toughest challenges will be building out blockchain infrastructure that can serve the diverse needs of all the different actors in the supply chain. Some companies have IT departments, and other parties in the ecosystem just want to download an app on the internet. The system also has to be able to handle sensitive company data while allowing the supply chain to be auditable by regulators.
One way the food safety blockchain will serve these needs is through the Linux Foundation's Hyperledger Fabric 1.0, which is built into the IBM Blockchain platform. This framework builds in distributed governance mechanisms, a flexible modular architecture, and deeper data confidentiality and security features into the blockchain to tailor permissioned access for different participants.
This means that participants in the network will be able to scan a QR code and see the entire transaction history of a food product, but competing retailers wouldn't be able to see each other's order histories. Kroger's Popoola said blockchain simplifies the entire supply chain while building in data security for all the parties involved.
"You have these big manufacturers like Dole and Tyson that buy the ingredients or have farmers growing produce items. They pack them in their facilities, and ship them out to retailers like Kroger and Walmart and Publix. Blockchain is like one universal language getting spoken. If there's one QR code, it goes on every package," said Popoola. "There's also a kind of firewall, so Kroger can't know what Walmart ordered, but with the same QR code Walmart can scan where a product came from and see it came from the same facility as ours. The transparency and simplicity this brings to the supply chain saves hours of manpower."
A food safety blockchain gives all the manufacturers and retailers in the supply chain a complete set of data to collectively stop outbreaks. Blockchain is also about strength in numbers. The more food producers, suppliers, and sellers join the network, the more effective this ecosystem will be at triangulating contaminated food sources and reducing the health incidents, food waste, and revenue loss these outbreaks cause.
Finally, there's the effect this level of transparency and traceability has on consumers. In addition to reducing the risk of food poisoning, Kroger's Popoola explained that a food supply blockchain gives shoppers walking through a supermarket a level of visibility into a product's history that everyday consumers have never had.
"This will bring transparency to the food supply chain to the point where consumers will know the papaya they picked up came from a farm in Guatemala. If I'm about to buy a box of spinach, I'll know whether it came from Mexico or California," said Popoola. "Customers will know where their products come from, where they have been, where they were warehoused, and even what temperature the food was kept at. Blockchain can provide transparency for the food they eat."