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Blockchain + IoT: Creating True Transparency Within The Food Supply Chain

True transparency is the key to not only becoming a trusted partner in today’s dynamic food supply chain industry, but also meeting increasingly high consumer demands. The right application of IoT and blockchain can transform the supply chain, enabling manufacturers and retailers to have a shot at succeeding at both.

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Peter MehringPeter Mehring

Today’s food supply chain landscape is becoming increasingly dynamic. Non-traditional retailers like Amazon are disrupting the grocery business. Consumers are increasingly interested and invested in where their food comes from. Manufacturers are as much responsible for the quality of food as growers are. But one thing about the fresh food supply chain has remained consistent: mistakes in the handling or distribution of food — resulting in recalls or foodborne illness outbreaks — have the potential to irreparably damage brand reputation and the bottom line.

Can new technologies help?

To date, there has been limited technological innovation with the potential to transform how retailers and manufacturers deal with recalls or outbreaks. For the most part, dealing with foodborne illnesses and safety recalls has simply been reactive. When an issue occurs, you try to deal with it as best as you can, but the costs — including the time and resources spent trying to figure out where the outbreak or mishandling stemmed from, the collateral damage (i.e. food waste) of recalling products that aren’t contaminated and the brand/customer loyalty fallout that often follows — can batter your bottom line.

The Transparency Challenge

The CDC estimates that 48 million people get sick, 128,000 are hospitalized and 3,000 die from foodborne diseases each year in the United States. And, according to the USDA, nearly 60 million pounds of food was recalled in 2016 alone. That’s a lot. But the history of food, in addition to the increase in food safety and quality regulations, gives us an indication of how we got to this point.

Consumers’ eating habits have drastically changed throughout the years, and with those habits brings new consumer demands and expectations. Traditionally, fresh food was grown, harvested and eaten all in a highly local environment. Now, thanks to consumer demands for having year-round availability of their favorite foods — particularly produce — our food supply chains span thousands of miles, meaning multiple days of handling starting from the growers and suppliers through to the grocery stores.

With this new reality, and the increase in players along the supply chain, transparency has become both incredibly difficult and increasingly important. While there are efforts to move back to a “farm-to-table” mentality, today’s supply chain still includes multiple manufacturing and shipping partners in between the farm and the consumer. The more food changes hands, the greater chance of mishandling, temperature discrepancies and more — all of which increase the risk for foodborne illness outbreaks and major food recalls.

If manufacturers and retailers had the tools to achieve “true transparency” throughout the entire fresh food supply chain, along with access to every link in the chain, everyone involved (including consumers) could have complete visibility into where food has been and if it has been handled and distributed correctly.

What if there was a way to enable food manufacturers and retailers to more quickly and accurately identify the source or sources of contamination? Further, what if there was the potential to improve delivered freshness and more easily identify problems before a product reached the consumer?

Achieving True Transparency with Blockchain and IoT

A foodborne illness outbreak or recall can be a manufacturer’s or retailer’s worst nightmare. But implementing a proactive solution for managing food safety — instead of relying on reactive responses — is easier than most would think, thanks to technology that exists today.

The first step in achieving true transparency is being able to gather the right data about the product at the pallet level. Studies have shown that the pallet is where variation occurs, not at the lot or trailer level. And, what’s important is monitoring the condition of the product, not the components of the supply chain such as the temperature of the pre-cooler or trailer.

We need to start in the field with the product at harvest, and then track its temperature and time throughout the supply chain. Did the broccoli sit out in the sun for multiple hours at the pack house, causing the chances of pathogen growth to increase? Was the cut/bagged lettuce washed and tested? We need to know its processing. Finally, we need to know the logistics at the distribution center and where the produce was shipped to. Implementing IoT sensors at the pallet level, and automatically collecting its data along every step of the supply chain from harvest or production through to the retailer is critical.

The second step for true transparency then becomes: what do manufacturers and retailers do with that data? Of course, there is immense value in collecting quality-focused data on its own, but blockchain is emerging as an important enabling technology to take IoT data and make it completely transparent, delivering security and trust across the supply chain. Blockchain takes the concept of a transaction ledger and brings it into the digital age through a continuous list of records (otherwise known as blocks) linked together and secured using cryptography. From a food quality and safety perspective, blockchain makes it easier to track a product’s journey through the supply chain and log data points about key safety and quality information at every stage.

Blockchain can enable us to be proactively notified of non-compliant product through smart contracts, and include pointers to relevant data about each pallet of product. Through the combination of blockchain and the data collected from IoT sensors, growers, distributors and retailers will be able to automate decisions through smart contracts to address food safety issues, identify and implement solutions for recurring problems, and — in the case of foodborne illnesses or recalls — proactively identify and remove products that are at elevated risk of contamination based on handling history. This means that manufacturers and retailers have the potential to eliminate products at risk before they even reach the consumer, reducing the issues that come from issuing a recall — including cost, consumer safety, damaged brand reputations and decreased customer loyalty.

While there isn’t a silver bullet when it comes to eliminating foodborne illnesses or contamination recalls, by implementing a solution using IoT and blockchain technologies in tandem, growers, processors and retailers have the potential to more efficiently track produce handling and quality, and make educated, proactive decisions about what food should (and shouldn’t) make it into consumers’ homes.

True transparency is the key to not only becoming a trusted partner in today’s dynamic food supply chain industry, but also meeting increasingly high consumer demands. The right application of IoT and blockchain can transform the supply chain, enabling manufacturers and retailers to have a shot at succeeding at both.

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