Here's how the blockchain can restore confidence in the Australian food industry

It has been a difficult year for the Australian food industry. News of needles in strawberries and fake honey – have put the livelihood of farmers and the wider reputation of the industry at stake. While stricter safety regulations and stricter self-controls have a role to play, it is increasingly clear that improved traceability and transparency could help Australian food supply chains prevent future incidents such as these from disrupting the lives of owners and consumers.

A possible source of that transparency? Blockchain. The technology could give producers, distributors and dealers a unique source of truth about every shipment that passes through our incredibly complex food supply chains. Blockchain technology can even help companies regain and strengthen the confidence of the Australian public, acting as a "certification of excellence" that consumers can rely on when choosing products from the shelf.

Emphasizing more emphasis on traceability

Manufacturers, distributors and retailers often trust each other blindly when managing their supply chains. For example, instead of conducting rigorous and time-consuming background checks on the authenticity of their shipped products, food retailers often choose to rely on their suppliers' quality assurance processes. While this simplifies supply chains, it becomes problematic when a food crisis occurs – often sinking businesses into a race against time to spot the source of contamination. At the beginning of a crisis, the standard operating procedure would be to conduct a general withdrawal of all products, even those that are not contaminated, both as a precautionary measure and as an effort to buy more time.

While the immediate effects of this – loss of profit, interruption of the supply line, waste of food – are already serious enough, are the long-term consequences, namely the violation of customer confidence that can really bring down reputation. The longer it takes to identify the source of contamination and act, the greater the risk of public protest. It is in the interest of each participant or stakeholder to track any batch of product throughout the supply chain.

Blockchain would do this by creating a record of each lot of this type – one that is automatically updated as it goes from the field to the factory to the supermarket and can not be changed without the permission of each part along that supply chain. This creates a track of data that improves tracking capabilities throughout the supply chain, potentially allowing you to identify and isolate problematic lots within a few hours instead of weeks and paving the way for more targeted actions.

This type of visibility means that food companies would be able to identify contamination with much greater precision and speed than ever before. In the case of contamination of fresh products, for example, manufacturers could send instructions to retailers to extract only the affected lots from the shelves, while at the same time providing complex data to customers and regulators to show that other lots were safe for consumption. This would have made it easier for farmers and distributors to contain the fury, regain public trust and even identify those with greater speed and loyalty.

Customers want more transparency

Blockchain could also, perhaps surprisingly, help the food industry give consumers what they want. We already know that the presence of a blockchain localization system would drastically increase the focus on food safety and integrity: operators are less likely to cut corners if they know their effort – or their lack – can be seen by any other partner. This could potentially place food supply chains in a closer alignment with the evolution of consumer habits, or a greater awareness of the origins of food products.

Making the supply chain more transparent allows shipments to better adhere to increasingly stringent food safety regulations. With the right amount of data points, you can automatically map the conditions of all shipments: time spent in the warehouse or for loading pallets and even the minimum environmental temperatures of shipments. This, in turn, allows participants in the supply chain to be confident in their ability to comply with the regulations of any sending country, regardless of the length or complexity of the supply chain.

Furthermore, this level of transparency would also help to respond to growing consumer questions about where their food comes from. Customers are increasingly concerned about the authenticity and safety of their food sources. Only 26% of shoppers trust their labels completely on their food, while the rest will dig deeper and change their buying habits – and brand loyalty – based on the information they discover. Food companies or supply chains can provide more accurate information on how their food is grown, packaged, processed and shipped along the supply chain will be in a better position to give consumers the confidence they want.

It's still early on for blockchain, yet it has great potential to transform the way we bring food from the farm and onto our tables. If used correctly, it could help unmask today's complex and sprawling food supply chains, making it easier to guarantee the safety and security of the food we eat. Australians deserve peace of mind when they buy their food – and blockchain technology could provide it like never before. The benefits for food safety and customer loyalty deserve to be digested for any farmer, distributor or retailer.

Scott Newman is a Senior Director at Oracle ANZ. He manages the Australian and New Zealand pre-sales team specialized in IaaS (Infrastructure as a Service), Data Platform Services, Insights & Analytics. At Oracle, his experience has focused primarily on basic technologies (infrastructure and middleware) related to the latest products and solutions.

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