A recent Walmart announcement could mark the beginning of the widespread adoption of blockchain in the global supply chain. Next year, Walmart will establish a program that will require anyone selling green leafy vegetables to the mega-retailer to use a blockchain-based tracking platform originally designed by IBM.
Blockchain technology is often associated with Fintech, but it seems that logistics could be the first area to see the widespread adoption of blockchain by an established industry. Walmart has been working on new food monitoring solutions for many years. While many areas of their business have been made more efficient by computers, the food supply chain has been mired in archaic record keeping techniques.
Like many aspects of the logistics industry, food supplies are not tracked by any type of central database. Instead of having a sort of shared register, food suppliers are only required to register where they got an item and where it was sold. Beyond that, companies in the food supply chain have no idea where it was originally something they were run from, or where it eventually went.
Walmart is making changes
With the current system, it may take days or even weeks to track down the source of food contamination. Today, food is grown in industrial quantities and shipped all over the world. The practical implication of this is that when there is a food contamination problem, it can poison thousands of people in a short period of time.
At the start of this year the United States was hit hard by an epidemic of E. coli bacteria that has traveled to at least 36 states in contaminated Roman lettuce. It is impossible to say how many people have been ill, but 205 have been hit hard enough to seek medical assistance and five have lost their lives. Eventually the contamination was traced back to the Salinas Valley and Yuma, Arizona.
There have been numerous other events like the one that killed five people in April of this year. It is not surprising that Walmart was able to get Dole, Fresh Express and Taylor Farms to jump on board with their new blockchain tracking platform.
Walmart vice president for food safety, Frank Yiannas, announced that, "We are requesting our suppliers of fresh, leafy vegetables to be able to trace their produce back to the source, to the farms, in seconds and not days or weeks." In most cases the time taken to trace contaminated food could mean a big difference for consumers, especially children and the elderly.
Blockchain is a great solution
Walmart seems to worry about security in the food supply chain. There are other applications for the same technology that can also help ensure that consumers receive the high quality foods they pay.
Read: Blockchain and supply chain management
Alibaba is one of the largest markets in the world. Among other things, they link food vendors around the world with consumers in China. Many people in China do not trust their food reserves and are more than willing to pay a premium for imported diet foods. Australian vitamins and supplements are a perfect example of a luxury dietetic good that is required in China, which is often counterfeited.
Blackmores was one of the first Australian brands to start using Alibaba's pilot blockchain authentication platform at the start of this year. Alibaba thinks, "These technologies are designed to authenticate, verify, record and provide continuous reports on the transfer of ownership and supply of products and goods" according to a statement.
Whether used to guarantee food quality or prevent death by contamination, blockchain is the perfect solution for a global supply chain that will become increasingly complex over time. China is also working on a global build-out of the infrastructure, called BRI, which will likely connect global business partners to a whole new level. Given the usefulness that the blockchain has demonstrated so far in logistics, it could be an integral part of Beijing's drive to connect Eurasia.