Blockchain is changing the supply chain
Consumers demand more and more transparency in their food supply chain, and companies like Walmart, McDonald’s and others are changing how and where they source their food to reflect that.
There are various marketing streams requiring farmers to keep more verifiable and transparent records of how they produced their livestock and other commodities because of this demand. From “antibiotic-free” to “grass-fed” to “organic” and everything in between, there is value in this data.
And “blockchain” technology is quickly changing how this data is collected, protected and shared from the farm to the fork.
“Trust everyone, but brand your cattle.”
Farmers and suppliers use the tools of brands, RFID tags, bar codes, bank records, health papers and more to help auditors verify each point of the supply chain. However, brands can be altered. Entries in ledgers can be adjusted or forged. And third party auditors are expensive and slow.
As the Centre for International Governance and Innovation in Canada explains it, blockchain is an emerging “decentralized ledger” technology.
Rather than ledger books, and even computerized databases stored on hard drives, a blockchain stores the same kind of data over a vast network of computers. Data is written in “blocks” that are linked together in a chronological, continuous line. Entries can’t be rewritten and are instead saved as a new block in the chain.
In a Dec. 11 AGree Discussion Series webinar “Blockchain Applications for Agriculture” experts explained that blockchain gives users several benefits:
It creates trust in the data. Before a block of data can be added to the chain, there has to be a digital “key” that allows the user access to the chain. And when the block is added it tracks the user, the date and the time—essentially leaving a brand of who did it and when. So, for example, a farmer could track which employee entered the feeding ration of a set of pigs, at what time on a specific date.
No intermediaries are needed for verification. That digital brand on that block shows everyone in the chain what happened and who entered it. So rather than relying on auditors to come to the farm to wade through feed receipts and vet records, the blockchain could show every vaccination or every feed ration of the calf in question using its RFID tag and corresponding records.
The technology can be completely public and open for viewing, or private and closed to a select group of users, depending on the entity. For example, a government body may want to show meat inspection records to the public, but not allow the public to change the data in the records.
Currently, tech developers are including blockchain capabilities into various record-keeping apps for farm and food suppliers. It’s not one single program, but rather it’s open-source software that can be adjusted to fit the users’ needs.
Building consumers’ trust
Tejas Bhatt, senior director for Food Safety Innovation at Walmart, spoke in the webinar about its Food Traceability Initiative that is rolling out blockchain to track produce from the field to the store. The value of blockchain means improved data quality and accuracy because suppliers know that the data that is recorded is permanent and can’t be changed without detection.
“It’s consensus based, so no one entity can change the rules of the game, even Walmart,” he explained. Each party in the blockchain—even the competitors that Walmart has brought on board its blockchain, like Kroger and Wegmens—have equal access to verify the data, building trust into the system.
Walmart is using a private blockchain from a supplier to track all of its leafy greens and eventually all foods, across the country. It’s tracking even those that don’t wind up in its stores, as well, for food safety.
“It used to take seven days to track a package of mangos back to the farm that produced them,” he said. “The same data, on the blockchain, is visible to Walmart and anyone else with access to that blockchain. And we can trace that same package of mangos back to the farm in 2.5 seconds.” This could mean less food waste and more precise and less expensive actions in the case of food safety advisories.
“Typically, at our scale, our size, we say to suppliers, ‘put all of your data into this Walmart system and Walmart gets better, but they don’t know where the data goes and what it’s used for,” he explained. “With blockchain, we share that data back to the suppliers. There’s visibility from our stores and our customers.” This two-way shared value of the data means suppliers can make decisions at their end to improve their production, he added. And Walmart gets verifiable data that backs up the labels that customers are searching for on the shelves.
For example, in the proof-of-concept phase of its Leafy Greens Initiative using blockchain, Bhatt said Walmart found that a four-day bottleneck at customs was causing a decline in mango quality at its stores. A problem that used to be blamed on the farmer, can now be identified at another point in the supply chain and corrected.
The value of data
Bonita Carlson is a Wyoming rancher who co-founded Beefchain.io, a blockchain that traces grass-fed beef through the supply chain from the pasture to the plate, and captures the value of that data for the ranchers who participate in the chain.
“Blockchain could bring a producer a more intimate relationship with the end consumer,” she explained. With this technology, ranchers can show essentially a “Pasture of Origin” label that backs up their claims—whether that’s grass-fed, organic, no added hormones or antibiotic-free.
BeefChain uses RFID tags in calves that follow the calf through its lifespan on the ranch. The RFID numbers are then tied to QR codes that follow the calf into the store and on its packaging.
“So, if a producer has to pull a calf that needs an antibiotic, for example, the tag is scanned and the data uploads to the blockchain so that there’s a concrete record that on this date the animal was given this product for this reason and they are sorted out of the program,” she explained.
Cody Hopkins is general manager of Grass Roots Farmers Co-Op in Arkansas, which uses blockchain to track poultry, pork and beef from the farm to the fork. Its blockchain is focused on traceability for consumer trust.
“We are seeing a crisis of trust in consumers,” he said. “Consumers want to see more information on the label, and they expect companies to get better.”
Grass Roots is a smaller company that markets its “radical transparency with customers.” Blockchain allows the cooperative to compete in the greater marketplace by backing up the labels and the marketing claims with data.
“Grass Roots customers are people who really want to know more and are willing to pay a premium for that,” Hopkins said. So, a customer can scan a QR code on a package of meat in the case with an app on a smartphone and instantly see every step that animal took from the farm to the fork.
Technology catches up
While initiatives like this have been attempted in a fashion in the past decade or so, technology is finally catching up to the supply chain’s speed-of-commerce demands. With RFID tags, QR codes, bar codes, scanners, smartphones and other Internet-connected devices, developers are in a race to figure out blockchains for all sorts of needs, and agriculture is the ideal starting point for many.
• Ripe.io is a blockchain that collects quality data on high quality food products from the farm through the distributors, to the retailer and then consumer, using sensors that monitor temperature, humidity and food chemistry. In 2018 it raised $2.4 million in seed funding in a round led by the venture arm of the global container logistics company Maersk.
• The IBM Food Trust is a blockchain that tracks the transfer of ownership and provenance of products. It’s a global initiative that includes companies like Dole, Driscoll’s, Kroger, Nestle, Tyson and Unilever.
• ChorCheck is a farmer-created app that allows livestock producers to track specific parameters of their operation, collect the time-stamped data each time an employee interacts with the livestock, and put it in a transparent format to be shared with purchasers.
“The solutions have to be built with the users in mind,” explained Mike McRoberts, a startup business advisor and investor in the Kansas City area. It’s not just tracking food from the farm to the fork. Blockchains can manage commodity movement to encourage efficiency; help commercial food companies source ingredients from smaller producers that meet their quality specs; allow faster data sharing between entities; even provide smallholder farmers with access to capital and the ability to make payments without a banker (a hark back to blockchain technology’s roots in the cryptocurrency markets.)
Blockchain technology may be an unfamiliar concept to farmers today, but tech firms right now are developing tools that very well could be mainstream in 5 to 10 years McRoberts said. “If you keep it simple, you can take advantage of the mobile tools we have today, and that’s a start,” McRoberts explained.
More importantly, blockchain has the potential to allow farmers to carry their brand from the farm to the fork, and capture the value like never before.
Jennifer M. Latzke can be reached at 620-227-1807, or [email protected]. For more to the story, visit www.hpj.com.
