What You Need to Know About Blockchain

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What You Need to Know About Blockchain

By Peter Mehring - 01/03/2018

As a food retailer today, you face myriad challenges, but few probably keep you up at night more than food safety concerns.

A foodborne illness outbreak could be a retailer’s worst nightmare. And, considering that the Centers for Disease Control estimates 48 million people get sick each year in the United States from foodborne diseases, this fear is well founded.

Beyond the health and safety risks, outbreaks can add significant costs to your bottom line and cause profound damage to your brand’s reputation. Further, organizations like the FDA can take weeks to identify the cause of an outbreak, while your brand and business suffer as consumers continue to feel at risk.

What if technology could automatically identify at-risk product to hold, and also cut the time it takes to identify the source of a recall from days or weeks to seconds, enabling you to know almost instantly where the food safety issue originated, and which product is affected?

Transparency, Safety and Trust

Fortunately, there is a new technology with the potential to accomplish this: blockchain. Blockchain can improve transparency, trust and safety within the food supply chain.  And when properly implemented, it can also help to improve the delivered freshness of perishable food and reduce waste.

For those unfamiliar with blockchain, the technology takes the concept of an accounting ledger and brings it into the digital age. While it was originally developed to support Bitcoin, blockchain has many other applications.

A blockchain is a continuously growing list of records – otherwise known as blocks – linked together and secured using cryptography. Each block generally contains a pointer as a link to the previous block, as well as a timestamp and product-specific transaction data.

From a food quality and safety perspective, this is transformative – blockchain makes it easier to track a product’s journey through the supply chain and log key product safety and quality information at every stage.

And, when integrated with the appropriate data, it can even allow companies within the food supply chain to proactively address safety, waste and quality concerns – even preventing them from occurring in the first place.

Blockchain Benefits

Before everyone jumps on the blockchain bandwagon, however, it’s important to consider the goals and benefits of using this technology in your business.

Here are three ways retailers and growers can benefit by correctly implementing blockchain technologies:

  1. Improve Delivered Freshness Through Proactive Management

While food safety is always a major concern for growers or retailers, the day-to-day struggle is with freshness and shelf life. Many of the fresh products that retailers receive include little information as to the product’s history or handling – they just assume it’s fresh based on when it shipped.

This a problem, since history and handling more directly impact the produce’s remaining freshness than the harvest date. For example, if a pallet of strawberries wasn't immediately cooled after harvest, it will have a significantly shorter shelf life and spoil before you or your customers expect it to, increasing waste and costs.

About 40 percent of the food produced in the United States gets thrown out, according to the NRDC. This is because more than a third of produce purchased in grocery stores has a significantly shorter shelf life compared with the 10 days or more that it should have upon arriving at a retailer – resulting in produce that goes bad on store shelves or immediately after purchase.

Blockchain can provide a single, shared view of the product’s history from field to shelf, incorporating track-and-trace, food safety, and freshness data that ensure a high-quality product. By integrating this data with blockchain, they become secure and trustworthy across the multiple players within the supply chain.

The related blockchain smart contracts can also proactively generate alerts when something doesn’t adhere to best practices, such as a prolonged delay in processing, or a hot temperature when in transit. This can also automatically hold product for further inspection, and immediately order additional product to reduce out-of-stock risk. This allows growers to more consistently deliver the freshest product to their retail partners, and retailers to deliver a more consistent experience for their customers.

  1. Prevent or Minimize Damage to Your Brand’s Reputation

The branding implications of a foodborne illness outbreak are acute. Food safety issues need to be addressed quickly, because for every hour the issue stays in the news, the more damage it does to your brand’s reputation. With data delivered through the blockchain, combined with smart contracts, growers and retailers can proactively identify products that are at an elevated risk of causing illness and get them out of circulation.

For example, product that was shipped ahead of completing a HACCP-specified water test could automatically alert the retailer to hold the product at the distribution center for failed test results, updating the status of each pallet impacted to “hold.” This would be a targeted “hold” for the pallets processed during the time related to the test, and potentially avoid the need for a recall.

This allows you to proactively manage the supply chain not only to significantly improve the consistency of your products, but also to reduce the likelihood of at-risk product reaching your store shelves by quickly identifying the source and halting the spread of the contaminated product.

It allows every member of the supply chain to trust each other, and work together from the shared data when incidents occur – and in turn, increase consumer trust, which ultimately builds your brand.

  1. Achieve True Transparency as a Competitive Differentiator

In the era of the hyper-informed consumer, constant pressure is put on food retailers as their customers are increasingly interested in the safety and handling of their food. When forced to keep records of key safety information about your products, you’ll need “True Transparency” within your supply chain.

To achieve True Transparency, blockchain needs to be adopted across all aspects of the supply chain – from growers to shippers to retailers.

While there are always challenges to adopting new technology, there will be significant benefits for the first adopters beyond simply future-proofing. Significantly reducing the risk of food safety liability can improve your brand. Being able to successfully meet the demands of customers for increased insight into the safety and handling of the products they buy will deliver a significant competitive differentiator for growers and retailers alike in the form of improved brand reputation and customer loyalty.

The Benefits Are Tied to the Data

While many retailers and growers are still waiting to see what impact blockchain will have, there is much to be gained by embracing it now, provided you include the necessary data:

  • Growers that embrace blockchain can differentiate themselves by offering information about the safety, freshness and quality of their products upfront, which is attractive to retailers and consumers.

  • Growers can avoid the “ship hold” that some retailers require while waiting for food safety test results, by implementing automatic alerts through blockchain smart contracts.

  • Retailers that combine this secure traceability with freshness data will end up with a truly transparent supply chain, enabling proactive and informed decision-making, and ultimately protecting brand reputation and improving customer experience with fresher product.

To make this work properly, it’s critical that growers and retailers are empowered with the right data. Before getting started, make sure you’re not only incorporating track-and-trace data, but also product safety and freshness data. These provide you with the ability to know the remaining shelf life of the product and reduce waste.

With complete information about the product’s post-harvest processing, blockchain has the potential to completely transform the entire food chain. Those who properly implement their blockchain solutions will benefit from improved food safety and product freshness.




About the Author

Peter Mehring

Peter Mehring

Peter Mehring is CEO of San Jose, Calif.-based Zest Labs, which strives to improve food quality, reduce waste and benefit the environment by modernizing the food distribution and delivery system. Read More