Fresh produce on blockchain
While demand for fresh produce grows as people strive to eat healthier and look for more choice in their fruits and vegetables, the challenges around food safety and freshness persist. Across the industry’s highly complex, cross-border supply chain, challenges range from issues around the origins and quality of farm products to shrinkage and spoilage resulting from improper handling and storage.
Postharvest technologies are important tools, materials and services that help in maintaining the quality of the fresh produce. Our technology pages show the different knowledge that is useful for companies that operate in the fresh supply chain, from farm to fork. If you need immediate consultation on one of the technologies, please contact our technology expert Frank van de Geijn.
Will blockchain be the holy grail of fresh produce traceability?
In December 2016, so the story is told, Frank Yiannas went to a local Walmart store and picked up a package of sliced mangoes. Returning to the office, Yiannas, Walmart’s vice president of food safety, challenged his team to find out where the mangoes had come from, and set a timer. Six days, 18 hours and 26 minutes later, an answer came back.
While nearly a week is an improvement over the multiple weeks some companies can take to trace a product; it is still far too long when customer safety is on the line, and a recall is urgently required. That lag time leaves a retailer with little choice but to exercise the extremely costly step of pulling all the suspect product from the shelf as a precautionary measure.
While Yiannas was initially skeptical about blockchain, Walmart decided to try it out, partnering with IBM for a trial run. As part of the test, shipments were tracked and digitally recorded via a blockchain. Pallet loads of mangoes were assigned numeric identifiers. At each stage of the supply chain, from farm to store, their status was logged.
A few months later, Yiannas performed the same task that had taken his team almost a week. An instant after keying the six-digit lot number on the web portal, the product’s history appeared on screen, tracing its journey from harvest and hot-water treatment to import, processing, cold storage, and finally its arrival at a Walmart store. The time taken was around 2 seconds. For a supply chain looking to find an optimal visibility solution, the result was compelling.
What is blockchain?
"Simply put," writes Sylvain Charlebois, professor in food distribution and policy and dean of the Faculty of Management at Dalhousie University, "blockchain technology is a way of storing and sharing information across a network of users in an open virtual space. Blockchain technology allows for users to look at all transactions simultaneously and in real time. In food, for example, a retailer would know with whom his supplier has dealt. Additionally, since transactions are not stored in any single location, the information is almost impossible to hack."
Such information allows supply chain partners to more quickly collaborate and optimize their operations. Consumers could also benefit from the instant access to visibility. By just reading a QR code with a smartphone, Charlebois notes customers could see the product’s history. In the case of a piece of meat, for example, information might include the animal’s birth and use of antibiotics as well as processing and supply chain information.
Visibility into product history details, such as country of origin and fair trade, may offer an advantage to smaller or mid-sized suppliers who have not developed a brand reputation.
Walmart, which has already undergone blockchain tests with mangoes in North America and pork in China, recently joined IBM, Chinese retailer JD.com, and Tsinghua University National Engineering Laboratory for E-Commerce Technologies to form the Blockchain Food Safety Alliance, dedicated to improving food tracking and safety in China. In August 2017, a U.S. collaboration was announced, including IBM, Dole, Driscoll’s, Golden State Foods, Kroger, McCormick and Company, McLane Company, Nestlé, Tyson Foods, Unilever, and Walmart.
In the UK, a blockchain collaboration between Sainsbury, packaging company Sappi and three financial services companies recently formed, along with several technology startups, to track and verify contracts with tea farmers from the country of Malawi in Africa. The group is looking to connect with up to 10,000 farmers and offer preferential pricing to those who use sustainable farming methods designed to increase yields.
While excitement around blockchain is enormous, whether or not it will become the "Holy Grail" of traceability remains to seen. Roman Kuhar of Compac advises fresh produce growers and packing houses to align themselves with partners who understand the technology and who can help you implement it. He believes that consumer demand for transparency will drive innovation and that "packhouses and growers that adopt a blockchain driven traceability will become the gold standard for innovation and food safety."
Others tread cautiously. Harry Smit of Rabobank cautions that two prerequisites are required for companies to achieve success. "First, processes within companies, and between companies, have to become digitalized and standardized," he says. "Second, a broad participation of stakeholders along the value chain is required; otherwise the value of blockchain is lost." Nonetheless, Rabobank recommends that companies participate in more than one blockchain initiative while maintaining flexibility to switch to others.
Charlebois echoes the need for participation. "The most important challenge remains participation," he writes. "All parties must adopt the technology in order for it to work. In food distribution, not all companies are equal, and some can exercise their power more than others. A successful integration of the blockchain requires the engagement of all participating organizations." He states that further research is needed "before we get too excited."
How can IBM Food Trust help?
IBM Food Trust™ understands the challenges facing the fresh produce industry. That’s why we are dedicated to building trust and transparency and empowering seamless collaboration throughout the cross-border ecosystem with blockchain.
Providing proof of origin and accelerated tracking
The Trace module enables end-to-end supply chain visibility, cutting the time needed to track a food source from days to seconds. Know the provenance of fruits and vegetables and their status to mitigate the spread of contamination and prevent waste in the case of a food borne illness outbreak.
Building consumer demand and brand trust
The Consumer module shares the journey of fresh produce. Connect shoppers to specific, permissioned information that helps influence buying decisions, such as origin, quality and sustainability practices.
Streamlining produce handling and reducing food waste
The Insights capabilities module provides near real-time supply chain data, including information on temperature and product movement. Leveraging blockchain and IoT technology, Hyper Insights enables better handling and transportation of perishable fruits and vegetables as well as dynamically optimizing inventory management.
Enabling reliable documentation across the supply chain
The Documents module allows participants to upload, manage, edit and share any documents along the supply chain. Improve information management, demonstrate organic and sustainability growth practices and show compliance with quality standards.
Enabling a global retail giant to trace leafy greens back to the farm
In 2018, a multistate outbreak of E coli-related illnesses linked to romaine lettuce started making headlines. Walmart had recently completed a food traceability pilot on the IBM Food Trust platform in which it reduced the time required to trace a box of mangos back to farm from 7 days to 2.2 seconds.
As a result of the successful pilot, the company sent a letter to all its leafy green suppliers asking them to join the IBM Food Trust-enabled Walmart Food Traceability Initiative. The goal was to have leafy green suppliers be able to instantaneously trace every product back to its farm, by production lot, within a year.
To help suppliers get started, Walmart worked with IBM Food Trust to provide education and onboarding support. Today, the majority of the retailer’s leafy green suppliers are using blockchain technology.
Companies use blockchain to track food products from farm to fork
Author Gautam Naik
Theme Retail & Consumer Products
Major companies are increasingly using blockchain technology to improve food safety and product recalls, as well as to boost supply chain transparency so that consumers get a closer look at food's long and complex journey from farm to fork.
Walmart Inc., Carrefour SA, Koninklijke Ahold Delhaize NV and Nestlé SA are among those that have begun to use blockchain — the technology that powers the bitcoin cryptocurrency — to trace food back to its source within seconds instead of days or weeks. The speed enables companies to quickly investigate the origin of contaminated food, certify the organic provenance of their products, improve shelf life and reduce loss from spoilage. While companies have previously used other types of software to track their food supply chains, blockchain's advantage is that it can digitally store and send secure data from multiple parties in such a way that it cannot be tampered with.
"It provides the capacity to create trust in the system," said Brigid McDermott, vice president at IBM Food Trust, in an interview. "It's the missing piece of the puzzle" in the traceability of food supply chains.
Global food supply chains are mind-bogglingly complex. For a head of lettuce to travel from a farm to a salad bowl, it must go through a dozen or more handoffs — from farmer to processor to distributor to delivery company, which might then use a ship, plane or truck to dispatch it to a retail store, where it is purchased by the consumer. Multiply this process by 70,000 — the number of food items typically stocked by a grocery store — then add to it the cross-border nature of food distribution, and the enormity of the tracking task becomes apparent.
Blockchain is a method of recordkeeping that is open to users. When data gets entered into the chain, other computers in the network are notified. Because the change in information is open for all to see, the information is very hard to falsify. More accessibility means more accuracy, greater trust and, crucially, faster access to information. This is vital when it comes to tracking down the origin of, say, salmonella in a shipment of eggs.
Because large food companies often share producers, processors and distributors, blockchain offers another benefit: everyone can use the same system, and yet sensitive data can be kept secure. "When you have Walmart and Kroger on the same system, how do you trust that Kroger can't see Walmart's data and vice versa?" says McDermott. "With blockchain, you can do it."
In Aug. 2017, IBM Food Trust, owned by International Business Machines Corp., said it was teaming up with Unilever PLC, Nestlé, Tyson Foods Inc., Walmart, The Kroger Co. and other food giants to champion blockchain for supply chains. IBM's system stores data about harvests, food processing, packaging and shipping on a secure blockchain network. All participants, from growers, suppliers, processors and distributors to retailers, regulators and consumers, can quickly learn the origin and state of food in their transactions.
Since its launch in October 2018, more than 4,600 facilities have been connected to the network, over four million transactions have been entered onto the blockchain and nearly three million packaged food products have been traced via IBM Food Trust. One early tester was Nestlé, which used the system to track the multiple fruits, vegetables and other ingredients from different countries that end up in some of its Gerber baby food products.
"We are using blockchains in North America when we source pumpkins from farmers," said Benjamin Ware, Nestlé's global head of responsible sourcing, in an interview. "In the future, we want to pilot blockchain in trade channels such as palm oil, where there are six to seven intermediaries between a plantation and Nestlé, and six to seven more between Nestle and [a supermarket] like Tesco PLC."
Walmart also tested the technology. Using old-style tracking systems, "it took Walmart six days, 18 hours and 26 minutes to trace a package of sliced mango from its store back to a farm," said McDermott of IBM. But when the mango trace was tested on IBM's blockchain system, "we did it in two seconds."
On Sept. 28, 2018, following a large U.S. outbreak of E. coli in romaine lettuce that sparked food contamination fears, Walmart wrote to suppliers of fresh, leafy greens, requiring them to use IBM's blockchain to track their produce all the way back to the farm. "Our suppliers are expected to ... enable end-to-end traceability back to farm by September 30, 2019," the retail giant said in its letter.
French supermarket chain Carrefour says it is using IBM's blockchain on its "Quality Line Auvergne chicken," of which it sells a million each year, and is also rolling out the system for tomatoes, eggs, cheese, milk and Norwegian salmon. The company expects to extend it to all 100 Quality Line products by 2022. Separately, Carrefour Spain has a plan to certify antibiotic-free chicken with a QR code for consumers to see the data, and Spanish fish products maker Angulas Aguinaga has also joined the blockchain system, according to IBM.
Other software providers have spotted the opportunity, too. A small U.K. firm called Provenance is using blockchain to help British food retailer The Co-Op track fresh produce from origin to grocery shelf. Dairy Farmers of America Inc. — the world's largest milk processor — recently teamed up with food technology startup Ripe.io to test blockchain in its vast supply chain.
In September 2018, Albert Heijn, the biggest supermarket chain in the Netherlands and a unit of Ahold Delhaize, said it was using blockchain from privately held Supply Chain Information Management to make the production of its own-brand orange juice completely transparent to consumers. "Through a QR code on the packaging, they can track the entire route traveled by a bottle of orange juice, from the grove to the store shelf," Albert Heijn says in an explainer posted on its website.
The blockchain captures a wealth of data along the complicated, nine-step route that the orange juice takes. The journey starts at Brazilian plantations owned by LDC Juice that are certified to be deforestation-free, then moves to the plant where oranges are pressed for juice, turned into concentrate, and then transported to the port of Santos. From there it is on a two-week boat journey to Gent, Belgium, and then on to the Netherlands by truck. Water is added to the concentrate, as well as vitamin C to ensure that the color is maintained. The juice is pasteurized, packaged, labeled and eventually sent to an Albert Heijn supermarket. At every step of the way, a trove of information is added into the blockchain: when the oranges were picked; their level of sweetness; working conditions in the plantation; processing period; transport time; sensory smell, color and taste tests; and the control of the sweetness-acidity ratio.
"Transparency in the chain is becoming increasingly important," said Marit Van Egmond, commercial director at Albert Heijn, in a statement. "We know all the steps that our products go through to ensure that they are produced with respect for people, animals and the environment and we want to show these steps to our customers, in an open and transparent way."
BLOG 16 Aug, 2022
Insight Weekly: Examining the US climate bill; fintech earnings dip; mining equipment costs rise
Author Sarah Cottle
Theme EnergyMetalsCorporatesHealthcare & PharmaceuticalsRetail & Consumer ProductsTechnology, Media & TelecomESGFinancial ServicesBankingInfrastructure & Utilities
Segment AcademiaBankingCorporationsGovernmentsInsuranceInvestment BankingInvestment ManagementPrivate EquityProfessional Services
Tags Metals & MiningTMT
Today is Tuesday, August 16, 2022, and here’s your weekly selection of essential intelligence on financial markets and the global economy from S&P Global Market Intelligence. Subscribe to be notified of each new Insight Weekly.
In this edition, we examine the U.S. Inflation Reduction Act, a Senate bill packed with $369 billion in energy security and climate change spending. The bill includes renewable energy and energy storage tax credits that could accelerate the clean energy transition, industry executives say. The legislation puts the U.S. within reach of its 2030 emission reduction target, but the nation still would need additional policies to get there, according to analysts. Some experts say the measure also will raise the stakes for expanding the U.S. electric transmission system and expedite environmental reviews.
Most financial technology companies, payment processors and specialty finance companies that have reported second-quarter earnings saw quarter-over-quarter declines in their EPS, according to S&P Global Market Intelligence data. Headwinds from the volatility in foreign-exchange rates and the current macro environment hurt companies' revenue growth.
Supply chain disruptions are pushing up the price of machinery and raw materials, driving increases in production costs for equipment manufacturers and mining companies that are rethinking their existing equipment fleets. The equipment shortage has had varying impacts on miners' activities and forced them to make unusual sourcing choices.