Food Industry Embracing Blockchain for Safety, Organic Labeling and More

Farmers, commodity traders, food processors and others across the food & agriculture industry are making an ever-tighter embrace of blockchain technology to track food ingredients from the farmer’s field to the consumer’s dinner table. Blockchain — most commonly known for its use in Bitcoin and other virtual currency, but with far broader possibilities of use — offers numerous ways to make agriculture more sustainable.

A growing number of food & agriculture companies are investing in blockchain programs that allow consumers to see the provenance of their food. Two uses for blockchain in particular — involving food safety and product labeling — are seeing increasing adoption, and could have far-reaching ramifications at the consumer end of the global agricultural supply chain, experts say.

Food product labels today go far beyond simple brand and nutritional information. More and more consumers are demanding that their food be organic, fair-trade, or otherwise responsibly and sustainably sourced, and food manufacturers are responding by labeling their products as such.

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For example, more than one-third of all coffee sold today is certified by an industry standard such as Fair Trade or 4C, said Amarjit Sahota, president and founder of Ecovia Intelligence, at the Sustainable Food Summit held recently in Singapore. About a quarter of all cocoa is certified organic, Fair Trade or something similar, while 17% of all tea sold carries some kind of certification. Even palm oil has certification standards, and about 15% is currently certified as sustainable by the Roundtable on Sustainable Palm Oil, Sahota says.

Those numbers are all on the rise. “It’s only a matter of time before more than half of all the coffee produced on the planet will be certified,” Sahota says.

But the words “fair trade” or “organic” on a label don’t necessarily mean anything, and consumers may not necessarily trust those words. “How can you tell it’s organic? How can you tell it’s actually fair trade coffee?” Sahota asks. “How can you tell that it actually is what it says on the label?”

Enter the blockchain — the digitized and decentralized public ledger that allows participants to track transactions without central record-keeping. In agriculture, blockchain technology “can trace a product from where it’s grown, all the way across the supply chain until it reaches the consumer,” Sahota says. The consumer can then check, even via smartphone, that the bag of fair trade coffee he’s considering purchasing is truly responsibly sourced. “This could revolutionize supply chains, and provide a great degree of transparency in the supply chain.”

Food safety is another important application for blockchain. Companies like IBM have been working to use blockchain technology for food traceability, in part for improved response during food safety recalls.

If a particular product needs to be recalled, blockchain can help companies trace the product along the entire supply chain, from field to shelf, in a matter of seconds, a process that, without blockchain, can take several days, according to IBM platform market development leader Oliver Meeker. 

The blockchain can also help clean up efficiencies across the supply chain overall, removing “enormous costs from an inefficient system,” Meeker said at CleanTechIQ’s Sustainable Food & Agriculture Forum last year in NYC.

The use of blockchain for areas like labels and food recalls points to an area where it has perhaps the most potential, one that’s nearly impossible to put a dollar value on: trust.

Blockchain is crucial for consumers to trust the entire supply chain, from the farmers to everyone involved in processing and shipping, says Dato’ Joel Low, co-founder and CEO of agricultural investor Agrivo International, also speaking at the Singapore conference. “The only way we can earn that trust in agriculture is through the blockchain,” he said. “You can’t hide in blockchain.”

“Blockchain is already present in agriculture,” Low adds, pointing to firms like Olam International. The Singapore-based company, one of the world’s biggest suppliers of products like cocoa beans, coffee, cotton and rice, earlier this year launched a platform called AtSource. “They use blockchain because they need traceability,” Low says.

Olam describes AtSource as “a sustainable and traceable sourcing solution” that will track raw ingredients and products from field to table, while also helping to identify ways to make processes more efficient and sustainable. The AtSource program started with five product supply chains — onions and garlic from the U.S., coffee from Brazil and Vietnam, and cocoa and cashews from Côte d’Ivoire. The company plans to add more supply chains over time, with a goal of having 100% of its products in the system by 2025.

Meanwhile, Switzerland’s Olam Foundation — a non-profit formed by a group of supply chain veterans, and an organization that is unrelated to the Singapore agri-giant — is working on a blockchain platform that is open to all shippers and suppliers across all industries, not just agriculture. It’s meant to allow for the seamless exchange of product information and other data between suppliers and across different technology platforms, making it easier and more cost-efficient for raw materials and products to be traced up and down the entire supply chain.

The program, which is still in beta, already has signed up several large global shipping companies, the foundation says.

Last year, just ahead of the U.S. Thanksgiving holiday in November, Cargill launched a blockchain-based program allowing some consumers to trace their holiday turkey, from farm to shelf. And a few months earlier in 2017, China’s ZhongAn Technology announced a program using blockchain to track chickens from farm to home.

Blockchain technology is expected to continue to grow rapidly in every industry, and will very likely be very disruptive to the food industry, experts say. “Blockchains are going to completely transform the food and ag industry,” Philip Harris, founder of blockchain startup, said at a CleanTechIQ forum in April.

It certainly will, Low agrees – but blockchain remains at an embryonic stage in agriculture, with plenty of room to grow.“There are not that many people exploring it yet,” he says.

The technology will really hit its stride when the sensors that can start the tracking process at the farm level become more affordable. “Once the cost of the sensors come down, all farms will be wired up in this way,” Harris says.

Tags: Agtech

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