Blockchain in Fresh Produce Packaging: Hype or Hope?
As blockchain technology becomes more pervasive, what does it imply for your product packaging plans?
Slipping from the “Peak of Inflated Expectations” toward the “Trough of Disillusionment” on Gartner’s Hype Cycle for Emerging Technologies, 2018 – blockchain might have been oversold. Still, it appears all but inevitable to be widely adopted across many industries. That’s why the time is right for companies plotting their product packaging strategies to start asking themselves:
Can we gain a competitive advantage as an early adopter of blockchain technology in product packaging?
Does it make better business sense for us to hold off for a year or two – or even longer – before launching a blockchain project?
Would the benefits we could gain from blockchain be worth the risks and investment?
To help businesses answer these questions, let’s start with a layman’s explanation of what blockchain is all about, and then delve into what it implies for any particular business.
Blockchain: Commoditizing Trust
At its core, blockchain is a network of decentralized, immutable and sequentially grouped “blocks” on which all the users/partners in the network can track, share and verify actions and transactions. Virtually anything of value can be tracked on the network – and whenever any action or transaction is executed, it is recorded as a block. The sequence of these blocks forms the blockchain.
What differentiates blockchain from previous systems? Transactions no longer need a centralized administrator. The system is public and transparent. Because every block is shared and consensually verified by all the users/partners in the network, no single user can con or corrupt the system.
Ultimately, blockchain creates a commoditization of trust – and that’s why it’s a game-changer. Traditionally, companies and consumers have relied on three major institutions to administer transactions: banks, governments, and large retailers. But in light of recent events – the ongoing scandals at Wells Fargo, the Greek debt crisis and the Target security breach to name just a few – many people, particularly millennials, no longer trust these organizations.
From this lack of faith, blockchain evolved. The most notable example is Bitcoin, a network of cryptocurrency (digital currency) that can be exchanged for other currencies, products, and services.
Because blockchain is decentralized and immutable, all the partners/users in the network can independently track and verify the data on a ledger without the need for banks, governments, retailers, or any other intermediaries. The system is protected by “hashes” on the blocks which must match. When they don’t, the chain is blocked.
What Blockchain Could Mean for your Business
Though blockchain is still a few years away from going mainstream, significant real-world examples already exist. De Beers is using blockchain to eliminate conflict minerals and child labor practices from its supply chain. IBM and Maersk have partnered to apply blockchain across the global supply chain. And proving that blockchain is not just a passing fad, Walmart — after teaming up with IBM and nine of the world’s top grocery and food producers to improve the safety of the global food supply chain by leveraging blockchain – is now exploring ways to use the technology to strengthen its mammoth delivery operations.
As these and other use cases demonstrate, companies involved in product packaging can not only streamline – and build integrity into – their supply chains with blockchain, but also cut costs. Blockchain achieves all that in two key ways:
It cuts out the brokers and other intermediators in the supply chain whose service fees and administrative costs eat away at revenues.
It verifies transactions, and as a result, products move more quickly from vendor to consumer.
As a result, medical device manufacturers, pharmaceutical companies, and other highly regulated organizations can use blockchain to improve regulatory compliance and the auditing trail. Food and retail businesses can use blockchain to improve customer awareness and transparency. For example, blockchain verifies that a purse that says “Made in the USA” actually is made there, and that food labeled “all natural,” “Vermont-raised” and/or “organic” are the real deal.
Go With the Flow
According to Gartner, the business value-add of blockchain will grow to slightly more than $176 billion by 2025, before skyrocketing to $3.1 trillion by 2030. In other words, blockchain means billions of dollars will be on the table for companies across all industries in the next decade. So, now more than ever before, it’s time to consider: How will – or should – your company go after a piece of the blockchain pie? That’s a tough question for sure. But this flow chart from the World Economic Forum should make it a little easier to answer.
Unlocking the power of blockchain for sustainable fresh produce packaging
Concern is rising worldwide about the environmental impact of non-recyclable and non-biodegradable packaging. As a bio-based material, paper products are a vital alternative. To deliver sustainable paper packaging solutions, however, we must ensure that the wood is sourced responsibly from well-managed forests.
This requires forest certification and a high level of transparency and incorruptible tracking systems. With Project Trado, the University of Cambridge Institute for Sustainability Leadership (CISL) is testing the use of blockchain technology to reinforce chain of custody systems.
Trado is designed to create a real-time view into certification at origin and a single source of truth using blockchain technology. If realised, it can result in fairer distribution of benefits along a product supply chain as well as higher visibility into the sustainable attributes of packaging.
Project Trado brought Sappi together with major global brands (Sainsbury's, BNP Paribas, Unilever, Barclays, Standard Chartered and Rabobank) to explore how a new model of blockchain and other data-sharing technologies can enhance the sustainability of global supply chains without increasing production costs. It's all part of of our effort to pursue practical innovation that can move us towards the thriving world and sustainable future we envisage.
Testing Trado in Malawi
The Trado model was piloted with smallholder tea farmers in Malawi, showing how sustainability in end-to-end supply chains can look at every aspect from the tea farmers' products right down to the product packaging sitting on supermarket shelves. Sappi's contribution involved ensuring the traceability of the sustainable paper packaging.
The tea farmers were offered financial incentives in return for feeding social and ecological data into the blockchain. The model could potentially pay for some of the investments needed to establish traceability across supply chains, although further investigation is needed to scope the model’s ability to do this while still benefitting smallholders. Trado hopes to use Malawi's experience as a blueprint for replication, development and experimentation in other contexts.
The project represents a significant step towards technology-driven innovation to support the UN Sustainable Development Goals. It shows how collaboration between corporates, financial institutions and fintech firms can harness new technology for a fairer and more just world.
How blockchain is revolutionising fresh produce packaging supply chains
Blockchain has long been used for supply chain management, however, it has only begun to make its mark on the food industry recently. Soon we could see blockchain implemented to combat some of the biggest challenges facing food supply chains today.
Why use blockchain to track food supply chains?
Blockchain technology provides traceability, security and decentralisation when dealing with data around food.
Blockchain has the feature of immutability. Transactions cannot be altered or hidden as every change is tracked, recorded, and displayed to the entire network of people who have access to the information.
It also stores data in a decentralised manner. This means that there is no single server where information is kept. Instead, multiple copies of the data are saved to different nodes (computers) where all members can access and view it. Blockchain creates such a radically transparent environment that the need for trust is removed completely and no central authority is needed to mediate between parties.
The unique functions of blockchain technology are particularly helpful with:
Deterring food tampering, fraud and false advertising
Aiding in mass recalls of contaminated items
Identifying wastage in food supply chains
Decreasing chances of food spoiling
Allowing companies to certify organic or fair-trade origins of products
Who is using blockchain?
As people are beginning to see the real-world benefits of having radical transparency in their food supply chains, there has been a steep increase in companies adopting the technology.
Walmart has been using blockchain technology to digitise their supply chain and reduce the time it takes to track the source of food contamination. In 2020, an E. coli outbreak that spanned 19 states and hospitalised 20 people was traced back to leafy greens in the US. The industry spent millions of dollars notifying the public as well as tracing and removing the contaminated vegetables from the market. Walmart now requires all suppliers of leafy green vegetables to upload data onto a blockchain that tracks produce right back to the farm it came from. In the event of batch contamination, Walmart is able to trace contaminated food within in seconds, versus the weeks-long manual process. This is invaluable during times of product recall.
Frank Yiannas, VP of Food Safety at Walmart said:
“With a blockchain traceability solution you could scan a product and trace that product back with precision and accuracy to source in seconds – not days or weeks… in the future a customer could potentially scan a bag of salad and know with certainty whether its been involved in a recall”.
Nestlé uses a blockchain to trace the growing origins of its Rainforest Alliance certified coffee brand, Zoégas. To enhance trust and transparency around the product, The Rainforest Alliance provides its own certification information, guaranteeing the origins and sustainability practises of the coffee growing. By scanning a QR code on the packaging, customers can view information on farmers, time of harvest, the roasting period and even the transaction certificate for their coffee’s specific shipment.
Bumble Bee Foods records its yellowfin tuna operations on a blockchain to improve traceability and deter fraud. The system traces the movement of the fish through the supply chain, from the moment it’s caught to when it’s sold in the shops. Like Nestle’s initiative, customers can view information on where the tuna originated, the fishing community that caught it and the size of the catch. Fair-trade data is also displayed, giving customers peace of mind that their money is not being used to fund unethical practises like slave and child labour.
By leveraging blockchain technology, we have the opportunity to bring transparency, accountability and trust to food supply chains.
Blockchain Technologies is empowering companies with blockchain-backed solutions like STAMP Supply, a platform that enhances transparency, auditability, and performance of supply chains.
Blockchain implementation in agriculture has begun. Blockchain is recognized as an emerging technology in the agri-foods industry which may provide an efficient and robust mechanism for enhancing food traceability and a transparent and reliable way to validate quality, safety, and sustainability, of agri-foods. However, the technology is in its nascency, therefore, this review was written to foster discussion and encourage the application of blockchain technology, especially in the agri-food industry. In this review, the working principle of blockchain for data recording and tracking is briefly described. The collaboration models for the current blockchain applications on agri-foods are summarized. Furthermore, the specific utilization of blockchain to enhance safety and quality of agri-foods is discussed in four aspects: enhance the data transparency, realize data traceability, improve the food safety and quality monitoring, and reduce the cost of financial transactions. A case study on a Walmart pork traceability system has been provided to demonstrate how blockchain may be used to enhance the food traceability. Finally, challenges and future trends of blockchain technology in agri-foods concerning data/cost management, data security, and data integration are discussed. Blockchain technology reveals a promising approach to foster a future of agri-foods system in a way that is safer, healthier, more sustainable, and reliable.