Rising demand for credible information
Over the past decades, there have been occurring numerous scandals regarding the food supply chain. Examples of these are several meat scandals like the horsemeat scandal in 2013 and Brazil’s meat scandal in 2017, but also other scandals like the Chinese milk scandal in 2008 and the fipronil scandal in 2017. These have made a large impact on the awareness of consumers on what they buy (Pardo et al., 2015), and have highlighted the importance of quality and safety regulations. Next to this, the COVID-19 pandemic has increased environmental awareness and sustainable consumption (Severo et al., 2015), and has in combination with the other increments in awareness created a higher-than-ever need for credible information in food products.
However, most of the current systems used in supply chains to trace food products are not able to deliver the credibility that is asked for; it is either too difficult, not cost-effective, or even impossible given the traditional supply chain information technology (Francisco & Swanson, 2018).
Blockchain is the solution
Fortunately, Blockchain technology, which has been in the spotlight over the past few years and has been developing itself tremendously, contains the means to address this problem. Viriyasitavat & Hoonsopon (2019) best define Blockchain technology as “A technology that enables immutability, and integrity of data in which a record of transactions made in a system are maintained across several distributed nodes that are linked in a peer-to-peer network”. In other words, Blockchain enforces the integrity of information and could make sure consumers are provided with credible information.
Foreign supermarket chains
More and more supermarkets see that Blockchain is beneficial to its consumers and improves their trust in the food products that are offered. Carrefour, for example, one of the biggest French supermarket chains, is currently following more than 30 product lines on its blockchain. It states that this feature has boosted sales and aims to expand it to 100 product lines by the end of 2022 (Forbes, 2021). Also Wal-Mart, which has mainly implemented Blockchain to detect contamination and other food safety issues, is now tracking nearly 500 products with its Blockchain and will be conducting a pilot with U.S. Customs and Border Protection to track imported foods this year (Forbes, 2021).
Supermarkets chains in the Netherlands
Surprisingly, the adoption of Blockchain regarding food products in the Netherlands seem to be in contrast with big foreign supermarkets: Albert Heijn for example, has made the journey through the supply chain transparent by the implementation of blockchain technology for its own orange juice and eggs in 2018 and 2019 respectively. Although these were successful experiments, they remained a proof of concept. According to IT-specialist Marcel Yska, who was part of the team that was developing these projects, it had to do with the numerous partners and different locations that are involved in the logistic chain that all had to be put in the Blockchain. Next to this, he mentioned that the business case for Blockchain is not very strong because “you cannot lay the connection between Blockchain and improved sales” (VMT, 2020).
Jumbo, another big supermarket in the Netherlands, also has not come up with another Blockchain implementation since the experiment with its Tilapia (a fish species) in 2019. The reason for this remains unclear.
Final thoughts
One can argue that the foreign supermarket chains that are mentioned in this article are substantially bigger than those of the Netherlands, and therefore the effects of the implementation of Blockchain could be more visible. However, the growing demand on credible information for food product remains a fact, and the reasoning behind the stagnation of blockchain projects on food products do not seem to be substantiated thoroughly. It might be worthwhile for the Dutch supermarket chains to explore the possibilities with blockchain once more and do some more research on the consumer side. More and more experts are saying that Blockchain is here to stay. When also keeping in mind the progress that your foreign competitors are making with new technologies such as Blockchain, will it then not be wise to give the implementation of it a serious try?
References
Severo, E. A., de Guimarães, J. C. F., & Dellarmelin, M. L. (2021). Impact of the COVID-19 pandemic on environmental awareness, sustainable consumption and social responsibility: Evidence from generations in Brazil and Portugal. Journal of Cleaner Production, 286, 124947. https://doi.org/10.1016/j.jclepro.2020.124947
Pardo, M. N., Jiménez, E., & Pérez-Villarreal, B. (2016). Misdescription incidents in seafood sector. Food Control, 62, 277–283. https://doi.org/10.1016/j.foodcont.2015.10.048
Francisco, K., & Swanson, D. (2018). The Supply Chain Has No Clothes: Technology Adoption of Blockchain for Supply Chain Transparency. Logistics, 2(1), 2. https://doi.org/10.3390/logistics2010002
Viriyasitavat, W., & Hoonsopon, D. (2019). Blockchain characteristics and consensus in modern business processes. Journal of Industrial Information Integration, 13, 32–39. https://doi.org/10.1016/j.jii.2018.07.004
del Castillo, M. (2021, March 5). Blockchain 50 2021. Forbes. https://www.forbes.com/sites/michaeldelcastillo/2021/02/02/blockchain-50/?sh=1dfcb952231c
de Jong, M. (2020, February 18). Blockchainexpert Albert Heijn: ‘De businesscase om blockchain te gebruiken is niet echt sterk.’ VMT. https://www.vmt.nl/duurzaamheid-mvo/nieuws/2020/01/blockchainexpert-albert-heijn-de-businesscase-om-blockchain-te-gebruiken-is-niet-echt-sterk-10139857
Hi Beau, very interesting read! I am personally very interested in blockchain and its possible applications as well.
I did read an article before telling me about the tests AH was performing with blockchain.
What I think is interesting is that they mention that blockchain can not be related to increased sales, while Carrefour says it does. In addition, implementing blockchain in the supply chain of our supermarkets would not only be beneficial for sales, it also had many extra positive externalities. Like the freshness of our food and it can have a positive effect on fair trade by being able to check where the food comes from.
So overall, I do agree that we have to give blockchain a chance in the dutch food supply chain.