To Successfully Implement Blockchain, The Food Industry Must Change Its Mindset

1 October 2019   |   Readtime: 2 Min.

Let's face it: the food industry isn't known for its open collaboration among competitors! In fact, since the industrialization of food production, ingredients, recipes, and processing technologies are kept tightly under lock and key, protected from nosy want-to-be copycats in fear of a competitor stealing trade secrets. Also, the secrecy didn't only apply to direct adversaries, but often across the same food supply chain as well.

However, with the skyrocketing demand for more transparency, traceability, and visibility, and with the resulting adoption of blockchain in the food industry, the mindset of our traditionally protective and secretive industry must suddenly change to not only succeed but to avoid becoming obsolete.

Emphasize Collaboration Over Competition

Have you heard of the saying "a chain is only as strong as its weakest link"?

This aphorism is true for the blockchain. By definition, blockchain (unless strictly implemented to optimized internal procedures only) requires the collaboration of the entire consortium, e.g., participants of a specific food supply chain.

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This can include the farmers and growers, processors, packagers, distributors, wholesalers, retailers, and sometimes even consumers. Ideally, this also includes government agencies (e.g., the FDA), certification agencies (e.g., USDA), and other stakeholders that have oversight or audit requirements.

From the moment of harvest (sometimes even before) to the moment of purchase/consumption, food components and finished products are tracked every step of the way on the blockchain. This way, everything can be easily traced back within seconds; food safety and integrity can be ensured, and much more. Without the participation of all partners, the entire supply chain suffers.

However, how do you gain buy-in from all participants and achieve collaboration? Well, that depends on your supply chain. For example, from now on, Walmart and its Sam's Club division require all of their leafy greens suppliers to participate in their Food Trust Consortium by implementing real-time traceability capabilities — including the ability to trace all the way back to the farm.

Data-Driven & Analytical Insights Become Increasingly Important

With the enhanced transparency, visibility, and traceability that comes with the implementation of blockchain comes data — a LOT of data! Processing it into meaningful insights is becoming increasingly important as it can enable you to eliminate bottlenecks, identify and eradicate potential food safety hazards, increase efficiencies and much more.

But the important thing to remember is that blockchain is simply a technology. You will need business processes and applications in place to analyze, monitor, report and act upon your insights.

Opening Up To Consumers

Consumers have never been further removed from food production as today's consumers. A shocking percentage of children (38%) think cows drink milk rather than produce it, and the vast majority of buyers have never seen a butcher at work or grown a vegetable. Yet, they demand 'clean food', more transparency, and the ability to trace products back to their origins.

While I have heard some companies wave these concerns off saying, "What is the consumer going to do with all that data?", in my opinion, the food industry has an enormous opportunity to educate here. By sharing real, verifiable insights (like blockchain managed food safety or origin data), forward-thinking companies can build trust and understanding with consumers. Those leading the charge can create a sustainable competitive edge!

Conclusion

Whether blockchain has been on your radar before now or not, it is a dangerous gamble to ignore blockchain. While it is still in its early adoption stages, now is the time to get familiar with the concept, the technology, and its benefits — but it is also time to consider the organizational consequences for you and your supply chain.

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ABOUT THE AUTHOR

Bob Burrows

CEO & Founder of Chainvu

As the CEO and founder of Chainvu, Bob is passionate about the safety and sustainability impact in the food and pharmaceutical supply chains. Did you know that 35% of food in North America doesn’t make it to the table? Chainvu gives the entire supply chain actionable product visibility and 100% traceability of products live at every step. Our solution is embedded and proactive, providing immediate notifications to prevent damage, reduce labour & waste, and improve product quality. Prior to Chainvu, Bob has over two decades of experience as a serial intrapreneur and entrepreneur achieving global leadership in digital networking products, and large-scale communications services. Bob holds a B.S. in Electrical Engineering from the University of Waterloo and an M. Sc. in Business from the Sloan School at MIT.

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