Ten of the world's largest food supply companies have recently announced plans to form a blockchain that will revolutionize the way the industry tracks food on a global scale. Called "Food Trust", this new initiative will allow a more rapid and efficient recall of unsafe or contaminated food, ensuring that consumers are informed as quickly as possible.
This new technology will not only protect consumers better, but will also support corporate loss prevention caused by unnecessarily large calls while improving the company's reputation.
The group of companies involved consists of:
- Walmart Inc.
- Nestlé SA
- Dole Food Co.
- Driscoll & # 39; s Inc.
- Golden State Foods
- Kroger Co.
- McCormick and Co.
- McLane Co.
- Tyson Foods Inc.
- Unilever NV
Understanding Blockchain Technology
But what exactly is blockchain technology? Originally created for use with Bitcoin, blockchain allows you to distribute digital information without being copied. Technology can record virtually any type of business, financial or otherwise. Any information stored in a blockchain resides in a shared and constantly updated database.
The database itself does not live in a single location, allowing easy verification. Because data is not stored centrally, hackers can not compromise information security. Blockchain can not be controlled by any single part and does not have a single point of failure. Therefore, all risks associated with traditional centralized data storage are eliminated.
Every transaction that occurs is referred to as "block" and is automatically registered. Updates to a blockchain network take place every ten minutes, maintaining accuracy and transparency.
How Blockchain will change the food supply sector
Blockchain technology could completely renew the way in which the supermarket sector takes care of daily activities, for the benefit of both consumers and companies. The following are some of the main features and advantages offered by this technology:
- Greater transparency and traceability – The use of blockchains in the food sector would significantly increase transparency, particularly as regards food products from which they come, when and how they were shipped, and so on. This is of increasing importance for today's consumers; in a recent Response Media study, 70% of respondents said that their purchases are always or frequently influenced by product transparency. This is especially important when it comes to seafood, which has been found sold under false pretenses in restaurants and grocery stores, with owners and retailers who have intentionally listed the wrong species on the labels.
Traditionally, transparency initiatives have led to higher expenditures for parties at the beginning of the supply chain, such as farmers. But blockchain creates a consistent, easy-to-use and cost-effective system for all parts of the supply chain.
- Reduced waste and greater sustainability – When contaminated food enters the retail space or restaurant, it must be urgently recalled. But these calls are often time-consuming and overly broad, which translates into a slow process that prevents consumers from taking precautionary measures as quickly as possible and leaves the parties involved in the supply chain to cope with expenses and expenses. high losses. A more efficient and targeted blockchain system would allow for quick recall, reducing food waste and thus favoring the environment.
In addition, farms and retailers would be able to assess food demand in real time, which means that it could be adjusted as needed, further reducing waste. This is an advantage for farmers, who should face less risk in their business, also helping people on a global scale, as food supply companies would be better able to assess and meet global demand.
- Reduced costs and greater ability to compete – Blockchain technology would also allow farmers to trade directly with consumers, reducing costs for both parties while eliminating food waste. Blockchain eliminates the intermediary, reducing transaction fees, while decentralization makes it easier for small farmers to compete with large entities. For example, new blockchain technologies enable small farms to access sophisticated financial services, allowing farmers to pre-sell crops using smart contracts that do not involve third parties and provide more information to consumers.
Consumers would also see lower prices – returns would be higher and more profitable. And since food companies would be more transparent about the origins and details of their products, premium brands – even the small ones – would be better placed to compete, extolling what sets them apart from others, and explaining why consumers should pay more for their superior products.
- Less instances of foodborne illness – When contaminated or unsafe food enters the supply chain, there is often a domino effect, with stores blaming their suppliers, suppliers that blame their suppliers, and so on. Traceability is limited by the traditional food supply chain system and recalls are often complicated, exhausting and expensive. But with blockchain technology, every aspect of a supply chain would be easily traceable, reducing food fraud and accelerating delays.
Consumers would have access to a great deal of information about the products they are buying, allowing for better peace of mind. With the blockchain, buyers would be able to find out where the meat they buy comes from, how they were bred and what the environmental, animal welfare and hygiene controls are.
The Challenges in the implementation of Blockchain technology in the food supply sector
While blockchain technology offers a wide range of unique advantages for food companies and consumers, there are some obstacles involved in its implementation , or scalability. When it comes to the agricultural sector, food stores and consumers, it is necessary to collect and distribute a large amount of information very quickly to ensure accuracy and efficiency. Any transmission of incorrect information could be disastrous for the consumer's experience.
The energy requirements involved are also very high, making scalability even more difficult. Because transactions are added to a chain at pre-established intervals and only a certain amount of information can be transmitted in each block, a bottleneck may occur.
But efforts are underway to address the problem of scalability and bandwidth limits. For example, Transparency-One, a source-to-store supply chain transparency solution, has announced new scalability features in food supply chains. Several other projects are underway to allow easy scalability in blockchain systems.
Research and projects for blockchain for the food and food sector are underway, with many exciting new initiatives and ideas at the horizon. Companies and investors around the world are recognizing the benefits of this technology and are taking steps to implement new techniques in their supply chains, allowing benefits for both consumers and businesses.
And with various other initiatives in this area – from streamlined methodologies to optimization techniques to improve inventory forecasts – the way we supply and purchase food products will continue to change and evolve for years to come.
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