5 Benefits of Blockchain in Food Supply Chains

Salomon Kisters

Jul 27, 2022

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We all know that a blockchain is a decentralized database that stores data in a distributed manner. This means multiple copies of the same data are stored on different nodes, and all participants can access them. It creates a radically transparent environment and removes the need for trust or central authority.

As an emerging technology, blockchain is rapidly transforming several industries. Its potential is enormous. With increased transparency, it can help combat food fraud and minimize safety risks for consumers. The technology was first used in supply chain management for digital record-keeping, but it was only recently that the blockchain made its way into the food industry.

Blockchain can solve many of the problems faced in food supply chains by increasing traceability and decentralization. Another benefit of blockchain technology in the food supply is its immutability. Because the blockchain is decentralized and traceable, transactions cannot be hidden. They are recorded and publicly displayed.

In this article, we will examine how blockchain technology can be used for food traceability, supply chain transparency, and food fraud. By identifying the key issues to be addressed, we can better understand the benefits of blockchain for food supply chains.

Transparency in the food industry with blockchain

Blockchain technology offers a way for consumers to get detailed information about products, where they are grown, and how they are harvested.

By scanning QR codes on the packaging of food products, consumers can find out more information about the origin of their food, when it was harvested, and how it was harvested. The data collected is then stored in a tamper-proof blockchain.

Blockchain-based supply chain ledgers can identify food lots that are subject to product recalls, thus, facilitating the prompt removal of unsafe food from store shelves. Armed with such information, consumers can make informed purchasing decisions and protect themselves from potentially harmful food.

IBM and Carrefour have partnered to set up their own blockchain system. The project covers around 20 food products.

Another example of a blockchain-based food-traceability project is the Food Trust. This project allows consumers to track the progress of a food item from farm to fork through smartphones. The Food Trust plans to expand its use of blockchain to other food items as well.

It’s not the only company embracing blockchain-based food traceability. Unilever and Nestle have also participated in projects aimed at increasing the transparency of the food supply chain.

Another use for blockchain in the food industry is its ability to make the entire food supply chain traceable. This increases consumer confidence and trust in food brands.

By utilizing blockchain-based food tracing, a brand can improve its image and stand out from the competition. With blockchain-based food traceability, it will be easier to show consumers where their food comes from and how it is manufactured.

FSC Collaborations

As a data-driven network, blockchain enables the efficient tracking of food. This new technology can benefit all the participants in the food ecosystem. Its benefits will depend on the business objectives of each participant. It is crucial to consider its scalability to handle the massive data set that blockchain can create.

One of the primary benefits of blockchain is its immutability. With a distributed database, companies can use the same database to store and share information on the same supply chain. In addition to being immutable, blockchain also offers increased transparency, a key benefit in the food supply chain.

This allows companies to track fresh produce in real-time. Additionally, because of its traceability, blockchain provides a transparent record that allows them to pinpoint where food safety violations occurred.

Using blockchain technology to track and trace food can improve customer experience. Alibaba, for example, has been working on a food supply chain project with Fonterra, which would ultimately serve as the model for the global supply chain.

Alibaba is also collaborating with PricewaterhouseCoopers to create a unified system. The new technology will make it possible for companies to track the food that they sell and improve customer satisfaction.

Blockchain technology can also be used to help protect consumers from counterfeit drugs. The U.S. Drug Supply Chain Security Act requires pharmaceutical companies to trace prescription drugs. Its use has been growing rapidly in recent years.

The biggest pharmaceutical companies are already using blockchain to keep track of their drug inventory. This technology tags all of the inventory with GS1 standards and electronic product codes. All of the scanned information is recorded on the blockchain, which creates a permanent record of its movement through the supply chain.

FSC Efficiencies

The adoption of blockchain technology for food supply chains can help address several key issues. Consumers can scan products to verify their authenticity, while blockchain allows them to query digital records.

In addition, blockchain technology is less costly than existing food tracking systems. Blockchain technology can be used to track ownership records and provide tamper-resistant data. This feature can be used to address urgent food supply chain issues, such as food safety recalls and inefficiencies.

FSC operators need access to business-critical data to make informed decisions. Because many FSC organizations operate globally, internationally, or nationally, digitization of these data sources is critical to facilitating the actionable decisions of the broader food industry.

But current data sources are siloed and disparate, making it difficult for food supply chain operators to analyze and use them efficiently. This data is crucial for determining pesticide and herbicide levels and to help ensure the integrity of the food that they purchase.

Blockchain-based traceability systems can help FCS operators to optimize large-scale food supply chains. FCS can employ a consensus process with blockchain to store transaction data and improve food integrity, food safety, and smart farming.

Nevertheless, the implementation of blockchain technology for food supply chains faces certain challenges. In some cases, the initial cost of implementing blockchain technology for food supply chains may prevent industry players from participating.

Food Safety

Food safety is a major issue in today’s food industry, as inefficiencies persist throughout the process. The implementation of blockchain in food supply chains could have major benefits for food safety.

Blockchain provides a new way to bring diverse stakeholders together to ensure food safety by providing a transparent and immutable history of transactions. This transparency can enhance customer trust and brand loyalty. By making it possible to easily trace where a food item comes from, blockchain can help the food industry improve its overall quality and reliability.

Aside from improving food safety, implementing blockchain technology in food supply chains can also lead to more accountability for food manufacturers and suppliers. Food manufacturers and suppliers are unlikely to intentionally break rules to avoid fines, but not following food safety regulations can put them out of business.

Blockchain technology could help make suppliers more transparent, allowing consumers to more easily spot bad practices. Ultimately, consumers will benefit from better food safety and increased profitability.

By enabling transparency throughout the entire food supply chain, blockchain can provide real-time updates about food items and help supply chain management processes.

It also creates a digital record of all food transactions, making it easier to trace the origin of an offense and the subsequent consequences. This is important in a world where food safety is becoming an increasingly critical issue.

Blockchain has been a central issue in recent food safety discussions, with numerous examples of the technology in action. The food industry is vulnerable to slips, especially in perishable food items like fruits and vegetables.

As a result, foodborne diseases can threaten the public’s health. With enhanced traceability, companies can prevent a large number of food-safety problems by identifying and tracking all ingredients. Using blockchain technology, businesses can automate each step of a product’s journey through the supply chain.

Reduces food wastage

Blockchain technology can help to combat food fraud because it makes it harder to mislabel products. It also helps to reduce food wastage because it can identify and trace the source of dangerous products.

It is no surprise, given the growth of population and mismanagement in the food industry, that a third of the world’s food is wasted. Uneaten food is the leading cause of landfill waste. Food waste also results in a significant loss of water, which is necessary to sustain agriculture. Food waste in landfills contributes to the global warming problem and will increase the amount of carbon dioxide in the atmosphere.

Minimizing food waste at the industrial, retail, and consumer levels, therefore, is important for averting any major food crisis and meeting the rising food needs. The benefits of using blockchain in food supply chains cannot be denied.

As the COVID-19 pandemic heightened the awareness of the issue, blockchain technology is already helping farmers and food suppliers to prepare for and better manage sudden disruptions and risks in food supply chains.

It helps farmers to track contaminated produce and identify hotspots. It also improves transparency and efficiency of business relationships, which in turn enable food companies to reduce food wastage. This can lead to greater profitability, as the system can pinpoint where a product was contaminated in a matter of seconds.

The Bottom Line

In many countries of the world, the burden of proof is increasing for food manufacturers and suppliers to be certain that their products are safe to eat. Blockchain technology provides secure, real-time, and accurate traceability of products. This helps to reduce business and consumer risk.

Ultimately, it enables a proactive food system. The speed of food authentication processes and the ability to monitor and track products through a distributed network make it more valuable than ever. With blockchain, a food business operator can ensure that products are of high quality and contain the necessary ingredients for safe consumption.

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