// Exploring the morphology of smart economies and ideas that belong to them.
// Exploring the morphology of smart economies and ideas that belong to them.
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June 2020 - SDB.
Agricultural goods of poor quality are introduced to the market every day. Overuse of chemicals in the manufacturing process, the use of uncertified chemicals and mechanisms for preservation and maturing processes are main issues affecting the quality of agricultural goods as well as the overall health of consumers. Consequently, consumers increasingly want healthier foods with simple ingredients and certified organic status. However, the organic food industry is facing an existential crisis. Consumers are worried that the food they are eating is truly organic.
Over the years, there have been several fraud cases of organic food where non-organic products tricked consumers by misleading them under a particular label, imported ingredients, or privately making financial arrangements. While several certifying bodies certify a farm for producing organic products, it does not assure that a particular food product is 100 per cent organic (Verified Organic, 2020). The growing skepticism is stagnating consumer confidence worldwide, but what if the entire food chain could be placed on a “trust-less” platform where transactions are transparent, traceable, tamper-evident, immutable and compliant?
Mechanisms to classify agricultural products’ quality are highly requested due to the lack of accountability in the current supply-chain process. Blockchain is a distributed ledger technology that offers the much-required traceability and transparency in an otherwise complex food supply chain by preventing fraudulence and ensuring the authenticity of products to consumers. Besides capturing data at every point within the supply chain ecosystem, a cloud and Internet of Things (IoT) powered Blockchain system also ensures that it’s shared amongst every supply chain participant, including farmer, manufacturer, supplier, distributor, and consumer (Sofocle Technologies, 2020). For stakeholders in the food supply chain, having traceability and transparency will build better relationships with their customers, increases efficiency, and reduces the risk and cost of food recalls, fraud, and product loss (Bumblauskas, Mann, Dugan & Rittmer, 2020).
Furthermore, considering the current Covid-19 pandemic scenario, traceability along the supply chain is vital. When an outbreak of food tampering or disease occurs, it can take days, if not weeks, to find its source. For instance, in 2018, at least 18 reported outbreaks of foodborne illnesses in the USA, including the E. coli found in romaine lettuce. If investigators cannot point to a specific farm or farms, the government usually advises consumers to avoid products grown in a particular area (as in the case of romaine lettuce from Yuma, Arizona), or even avoid the good altogether. According to Walmart, millions of bags or heads of lettuce had to be removed, and consumers lost confidence in romaine lettuce entirely (Walmart, 2018). Better traceability could help save lives by allowing companies to act faster and protect farmers’ livelihoods by only discarding produce from the affected farms.
Today, major corporations such as Walmart, Starbucks, and Nestlé are executing blockchain programs. For example, to validate the framework, Walmart, along with its technology partner IBM, ran two proof of concept projects. One initiative was to trace mangos sold in Walmart’s US stores and the other was to trace pork sold in its Chinese stores. The blockchain-based food traceability system worked. It allowed the upload of certificates of authenticity to the blockchain for pork in China, adding more trust and confidence to a system where it used to be a severe problem, and for mangoes in the US, the time needed to trace their provenance went from 7 days to 2.2 seconds (Hyperledger, 2019).
With big players announcing blockchain programs, it is easy to assume this technology requires massive capital expenditures. Nevertheless, blockchain technologies have risen exponentially over the last years and are now available through numerous Blockchain-as-a-Service (BaaS) delivery models. This means, there is no expensive infrastructure to purchase or upgrade as Walmart did back in 2018. BaaS platforms only require a device with an internet browser and easily integrate with existing supply chain management systems. With little deployment time or expense needed, these subscription-based, out-of-the-box systems are ready to launch. An outstanding example of Blockchain BaaS success is Ruby Rockets’ frozen snack brand’s work in its supply chain. The company is committed to using only organic or natural fruits and vegetables in its nutritious snack foods. Ruby Rockets implemented a BaaS solution to support this commitment, integrating the platform with its existing accounting system, purchase orders, inventory management system, and online shop. In fewer than 90 days, Ruby Rockets had a system to track products upstream and downstream. Now, the company can rapidly trace ingredient origins and log processing information, ensuring product integrity backed by data on the distributed ledger, ensuring a “USDA-Certified 100-Percent Organic” label (Pratik, 2020)
It is clear that the long-term benefits and opportunities in applying blockchain technologies to business operations are undeniable. Opening a traceable, transparent supply chain to shoppers is an effective way of building consumer trust and may help the brand stand out against competition at the point of sale. A commitment of this innovative nature would improve operational efficiency, increase revenue, and position a brand image with high corporate social responsibility. Indeed, as blockchain technology adoption rises among farmers, suppliers, and food manufacturers, the organic food supply chain will only strengthen, which means healthier food and beverages for consumers today and a sustainable future for tomorrow.
References:
Daniel Bumblauskas, Arti Mann, Brett Dugan & Jacy Rittmer. (2020). A blockchain use case in food distribution: Do you know where your food has been?, International Journal of Information Management, Volume 52, 2020, 102008, ISSN 0268–4012, https://doi.org/10.1016/j.ijinfomgt.2019.09.004.
Sharma, Ravi & Wingreen, Stephen & Kshetri, Nir & Hewa, Tharaka. (2020). Design principles for use cases of blockchain in food supply chains. Retrieved from: https://www.researchgate.net/publication/338885549_Design_principles_for_use_cases_of_ blockchain_in_food_supply_chains
Sofocle Techonologies. (2020). Is Your Organic Food Product Actually Organic? Can Blockchain be of Help?. Retrieved from:https://medium.com/sofocle-technologies/is-your-organic-food-product-actually-organic-can-blockchain-be-of-help-6ff172bb16ac
Pratik. (2020). Blockchain Organic Food Supply-Chain. Food Quality and Safety. Retrieved from: https://www.foodqualityandsafety.com/article/blockchain-organic-food-supply-chain/2/
Walmart. (2018). Blockchain supplier letter. Retrieved from: https://corporate.walmart.com/media-library/document/blockchain-supplier-letter-september- 2018/_proxyDocument?id=00000166–088d-dc77-a7ff-4dff689f0001
June 2020 - SDB.
Agricultural goods of poor quality are introduced to the market every day. Overuse of chemicals in the manufacturing process, the use of uncertified chemicals and mechanisms for preservation and maturing processes are main issues affecting the quality of agricultural goods as well as the overall health of consumers. Consequently, consumers increasingly want healthier foods with simple ingredients and certified organic status. However, the organic food industry is facing an existential crisis. Consumers are worried that the food they are eating is truly organic.
Over the years, there have been several fraud cases of organic food where non-organic products tricked consumers by misleading them under a particular label, imported ingredients, or privately making financial arrangements. While several certifying bodies certify a farm for producing organic products, it does not assure that a particular food product is 100 per cent organic (Verified Organic, 2020). The growing skepticism is stagnating consumer confidence worldwide, but what if the entire food chain could be placed on a “trust-less” platform where transactions are transparent, traceable, tamper-evident, immutable and compliant?
Mechanisms to classify agricultural products’ quality are highly requested due to the lack of accountability in the current supply-chain process. Blockchain is a distributed ledger technology that offers the much-required traceability and transparency in an otherwise complex food supply chain by preventing fraudulence and ensuring the authenticity of products to consumers. Besides capturing data at every point within the supply chain ecosystem, a cloud and Internet of Things (IoT) powered Blockchain system also ensures that it’s shared amongst every supply chain participant, including farmer, manufacturer, supplier, distributor, and consumer (Sofocle Technologies, 2020). For stakeholders in the food supply chain, having traceability and transparency will build better relationships with their customers, increases efficiency, and reduces the risk and cost of food recalls, fraud, and product loss (Bumblauskas, Mann, Dugan & Rittmer, 2020).
Furthermore, considering the current Covid-19 pandemic scenario, traceability along the supply chain is vital. When an outbreak of food tampering or disease occurs, it can take days, if not weeks, to find its source. For instance, in 2018, at least 18 reported outbreaks of foodborne illnesses in the USA, including the E. coli found in romaine lettuce. If investigators cannot point to a specific farm or farms, the government usually advises consumers to avoid products grown in a particular area (as in the case of romaine lettuce from Yuma, Arizona), or even avoid the good altogether. According to Walmart, millions of bags or heads of lettuce had to be removed, and consumers lost confidence in romaine lettuce entirely (Walmart, 2018). Better traceability could help save lives by allowing companies to act faster and protect farmers’ livelihoods by only discarding produce from the affected farms.
Today, major corporations such as Walmart, Starbucks, and Nestlé are executing blockchain programs. For example, to validate the framework, Walmart, along with its technology partner IBM, ran two proof of concept projects. One initiative was to trace mangos sold in Walmart’s US stores and the other was to trace pork sold in its Chinese stores. The blockchain-based food traceability system worked. It allowed the upload of certificates of authenticity to the blockchain for pork in China, adding more trust and confidence to a system where it used to be a severe problem, and for mangoes in the US, the time needed to trace their provenance went from 7 days to 2.2 seconds (Hyperledger, 2019).
With big players announcing blockchain programs, it is easy to assume this technology requires massive capital expenditures. Nevertheless, blockchain technologies have risen exponentially over the last years and are now available through numerous Blockchain-as-a-Service (BaaS) delivery models. This means, there is no expensive infrastructure to purchase or upgrade as Walmart did back in 2018. BaaS platforms only require a device with an internet browser and easily integrate with existing supply chain management systems. With little deployment time or expense needed, these subscription-based, out-of-the-box systems are ready to launch. An outstanding example of Blockchain BaaS success is Ruby Rockets’ frozen snack brand’s work in its supply chain. The company is committed to using only organic or natural fruits and vegetables in its nutritious snack foods. Ruby Rockets implemented a BaaS solution to support this commitment, integrating the platform with its existing accounting system, purchase orders, inventory management system, and online shop. In fewer than 90 days, Ruby Rockets had a system to track products upstream and downstream. Now, the company can rapidly trace ingredient origins and log processing information, ensuring product integrity backed by data on the distributed ledger, ensuring a “USDA-Certified 100-Percent Organic” label (Pratik, 2020)
It is clear that the long-term benefits and opportunities in applying blockchain technologies to business operations are undeniable. Opening a traceable, transparent supply chain to shoppers is an effective way of building consumer trust and may help the brand stand out against competition at the point of sale. A commitment of this innovative nature would improve operational efficiency, increase revenue, and position a brand image with high corporate social responsibility. Indeed, as blockchain technology adoption rises among farmers, suppliers, and food manufacturers, the organic food supply chain will only strengthen, which means healthier food and beverages for consumers today and a sustainable future for tomorrow.
References:
Daniel Bumblauskas, Arti Mann, Brett Dugan & Jacy Rittmer. (2020). A blockchain use case in food distribution: Do you know where your food has been?, International Journal of Information Management, Volume 52, 2020, 102008, ISSN 0268–4012, https://doi.org/10.1016/j.ijinfomgt.2019.09.004.
Sharma, Ravi & Wingreen, Stephen & Kshetri, Nir & Hewa, Tharaka. (2020). Design principles for use cases of blockchain in food supply chains. Retrieved from: https://www.researchgate.net/publication/338885549_Design_principles_for_use_cases_of_ blockchain_in_food_supply_chains
Sofocle Techonologies. (2020). Is Your Organic Food Product Actually Organic? Can Blockchain be of Help?. Retrieved from:https://medium.com/sofocle-technologies/is-your-organic-food-product-actually-organic-can-blockchain-be-of-help-6ff172bb16ac
Pratik. (2020). Blockchain Organic Food Supply-Chain. Food Quality and Safety. Retrieved from: https://www.foodqualityandsafety.com/article/blockchain-organic-food-supply-chain/2/
Walmart. (2018). Blockchain supplier letter. Retrieved from: https://corporate.walmart.com/media-library/document/blockchain-supplier-letter-september- 2018/_proxyDocument?id=00000166–088d-dc77-a7ff-4dff689f0001
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