There is no one who denies that blockchain is going to disrupt many sectors. With the emerge of Decentralized Finance (DeFi) everyone will have access to financial services (e.g. trading, lending, borrowing, payments) in the future without the fulfilling the requirements of traditional financial entities (Sheinix, 2020). However, besides DeFi there is another huge real-world blockchain application that might benefit our safety, health and climate; food supply chain traceability.
Today’s food producing companies seek for a more precise and accurate supply chain food traceability as their consumers are demanding that their food is both safe and environmental-friendly produced. Take for instance the outbreak of the E. coli outbreak that was linked to Chipotle Mexican Grill restaurants, which was caused by the lack of transparency across their supply chain. In addition, the global damage as a result of ‘food fraud’ and lack of food traceability is estimated at $50b per annum (Bindt, 2016). Traceability refers to tracking the whole process from production to consumption; it is all about safe food trade, ensure trust among supply chain participants and to prevent future disease outbreaks.
There are several reasons of why blockchain technology will contribute to a greener and safer food supply chain. First, blockchain technology provides better traceability. All food trades and concerned transactions cannot be deleted afterwards or hidden as every change is tracked, recorded and showed to the all blockchain network participants (e.g. producer, distributor, supermarkets, and consumers). Second, blockchain technology stores all data in a decentralized ledger. This means that there is no single server or entity who has the power to keep food information hidden; multiple copies across the world are saved on different computers. (Civati, 2021) As the fundamental core competences of blockchain technology relies on trust, transparency and no need for central authority, this technology are particularly helpful with:
- Hampering food damage or preventing food fraud
- Realizing on-time mass recalls of contaminated food as more accurate and precise food information is provided
- Decreasing food spoiling
- Stimulating food companies to produce fair-trade food and pay their suppliers fair prices for the products they buy.
- Strengthening the relationship between food companies and their customers.
Although the potential of blockchain technology on the food supply chain seems promising, there is one main limitation to consider. In order to successfully adapt blockchain in the food supply chain, the overall cost of implementing such a technology is highly unpredictable because of its relative young existence (Simal-Gandara, Galvez, & Mejuto, 2018). Nevertheless, as major companies such as Walmart and Nestlé adopting blockchain technology, I truly that more companies will follow them in order to achieve a common goal; a safer and healthier life for all.
References:
Sheinix. (2020, January 27). DeFi: The Future of Finance? From Medium: https://medium.com/swlh/defi-the-future-of-finance-757c35a2bcfd
Bindt, V. (2016). Costs and benefits of the Food Fraud Vulnerability Assessment in the Dutch food supply chain.Wageningen : Wageningen University.
Civati, A. (2021, April 9). Blockchain & Food Traceability. From LinkedIn: https://www.linkedin.com/pulse/blockchain-food-traceability-alessandro-civati/
Simal-Gandara, J., Galvez, J., & Mejuto, J. (2018). Future challenges on the use of blockchain for food traceability analysis. TrAC Trends in Analytical Chemistry , 222-232.
