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Blockchain technology is quickly growing in use cases, and it’s still in the infancy stage. Most people who know anything about blockchain tech quickly identify it as Bitcoin. This is true, but Bitcoin is a very small component of what the blockchain can do. Blockchains can be used as a form of currency, a ledger for transparent transactions, and to fight food poisoning.

Some of the world’s largest food suppliers are collaborating with IBM to pinpoint the source of foodborne illness and eradicate it. Food suppliers and major conglomerates like, Walmart, Unilever, Tyson Foods, Kroger, Golden State Foods, Nestle, McCormick & Company, and McLane are joining the group. According to Frank Yiannas, Walmart’s VP of Food and Safety, this is a formally integrated enterprise system. Blockchain technology will extend Walmart’s proof of concept for food safety to other partners and cut down the time it takes to track down dangerous food from weeks to seconds. Additionally, this technology could save companies millions of dollars in unnecessary costs from pulling uncontaminated products from shelves.

 

Global supply chain costs accumulate in a few different categories, according to Brigid McDermott, the head of blockchain business development for IBM. Most of the cost accumulates in human health and the loss of life. A report from the Centers for Disease Control and Prevention shows that a papaya crop infected 173 people and led to 258 hospitalizations. According to the World Health Organization, 420,000 people die each year from food poisoning. As you can imagine, the health costs associated with being in a hospital for an extended period can be dramatic. The other costs are associated with supply chains and efficiency due to the health of the consumer. These inefficiencies take place when the producer of the product has to take on the cost of pulling the product. The process of identifying where the product is tainted is strenuous, and the market prices for the product can drop during this period, causing more burden on the supplier. Even if it is just a bad case, the resulting loss can be catastrophic because consumers may not ever buy the product again. Food borne issues result in $4.4 billion to $93.2 billion dollars in cost to the US economy due to foodborne illness.

 

Prior experience in the food supply chain business (Sysco) showed me the amount of money that can be saved from just being aware of poor management. One tainted product can not only take weeks to find, but once you find it, it takes a lot of manpower just to remove. You have to deal with brokers, suppliers, and logistics just to get the product out, never mind getting new product in. Imagine a 42,500 lb. truck with 1,100 cases of bread from New Jersey that is found to be faulty. Now imagine a chain such as Cheesecake Factory, which goes through 800 to 900 cases a week in Southern California alone. The logistics involved in moving three weeks of product out of the freezer and moving three weeks of product back into the freezer is a coordinated effort. Depending on timing, another truck will have to be sent to several locations across Southern California. I can see that blockchain tech will help the food business immeasurably.

Cheers,

Colin Bennett

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