Blockchain technology
Although it’s still considered to be in its infancy, blockchain has already been one of the buzzwords of this year as companies learn how the technology can help support traceability within supply chains.
Hyped as a potentially game-changing pioneering innovation, blockchain technology is inspiring change and innovation in the global food and beverage industry – and although it’s still in the extremely early stages, it offers the promise of disruption on a huge scale across multiple sectors including agri-food, retail and the ingredients business at large.
From helping with food contamination issues, tracking down fraud and increasing transparency from the factory/field to the consumer, blockchain technology can take transparency to another level. That’s why giants like Walmart, Nestlé, Unilever and Dole are hopeful the high-tech tool can be used to address traceability issues and tackle food safety problems. These companies, alongside the likes of Driscoll’s, Golden State Foods, Kroger, McCormick and Company, McLane Company, Tyson Foods, are part of a consortium that joined IBM to strengthen consumer confidence in the global food system.
How is traceability influencing retailers?
F-Trace is a traceability service that allows both retailers and consumers to trace goods back through each stage of their journey to the source. The EHI Retail Institute has recently recognized Germany's biggest retailer Edeka for its commitment to full traceability at the meat counter by awarding the digitalization and traceability implementation with the Retail Technology Award Europe Reta and F-Trace with the Top Supplier Retail 2018 Award.
What is already possible for pre-packaged meat and fish is now a reality for the fresh meat counter. Using F-Trace work routines from unpacking and documentation procedures in the store to additional on-site processing and finally, the sale can be optimized at the meat counter. With scanners and labels, the workers are able to record all stations and processing steps electronically.
This makes the widespread used paper-based unpacking list redundant. Moreover, with F-Trace consumers learn about food origin via a touchscreen at the meat counter. Alternatively, they can retrieve the information using their smartphone.
ProductDNA
In June, Tesco and Ocado joined a new traceability platform called ProductDNA and is developed by business standards organization GS1 UK, which is designed to make it easier for retailers and suppliers to trace products.
Last year, Tesco and Ocado were among a group of 12 leading grocery retailers and brands to sign up to an industry charter committing to moving toward a single solution for managing and exchanging product data and information. And now, the two are the first retailers to sign commercial contracts. Other big names involved in the initiative include Sainsbury’s, PepsiCo, Waitrose and Mondelēz International.
With ProductDNA, everything a shopper might want to know is held on a single, industry-owned platform. ProductDNA provides end-to-end services that claim to make life easier for suppliers, retailers and shoppers.
Supplier view: Palsgaard
Consumers are increasingly curious about the origin of the food and beverage products they buy and the stories behind them. This is particularly true of younger generations. At the same time, digital technology is making it easier than ever for them to verify that a brand is produced in a way that’s compatible with their own ethics and beliefs.
Karin Elsebeth Hansen, Global Quality, Environment, Health and Safety (QEHS) Manager, Palsgaard, tells about how this added scrutiny means the whole supply chain needs to be engaged in traceability.
“It isn’t a concern only for manufacturers of finished products – it’s just as significant for ingredient suppliers too. Ingredients are made from raw materials that have their own origin story and their provenance is no less important. Ingredient companies have suppliers, and they too have suppliers, and so on. As such it’s important to keep the entire supply chain in view,” she says.
“In practice, this means food manufacturers should consider working only with ingredient suppliers who have watertight traceability processes in place. If a supplier can’t tell you the supply chain story behind their ingredient, that should ring alarm bells.”
Traceability helps food manufacturers stay alert to anything that might compromise safety and quality, including contamination, food fraud and food defense encompassing a range of potential threats from relatively common tamper hoaxes to less probable terrorist attacks as well as newer threats like cybercrime, says Hansen.
“However, it’s a complex process that’s challenging to get right. Supply chains are global and complicated, involving several different parties in any number of different countries. If you’re a food and beverage manufacturer who wants to talk about traceability to your customers and consumers, you need to be completely sure you have eyes on all parts of the supply chain and at all times,” she adds.
“Fortunately, the traceability technology available to businesses is becoming increasingly sophisticated and we now have ways of monitoring our supply chains in real time and in greater detail than ever before. Palsgaard has, for some time now, managed traceability through a sophisticated enterprise resource planning (ERP) system called AX. It’s a superb tool that gives us a very clear oversight of our supply chain from top to bottom.”
The ERP system makes it easy for Palsgaard to monitor multiple supply chain factors simultaneously. If a problem arises, the company can move fast to identify the cause of the issue, isolate the source and take immediate action to ensure it is dealt with appropriately and effectively.
“In the event of a problem, our traceability system enables us to drill down as far as an individual pallet of product. This is important because it minimizes disruption and allows production and distribution of unaffected ingredients to continue while our highly trained quality and safety experts work to resolve the matter at hand.”
The potential for blockchain technology is exciting and even if full implementation of blockchain in the food supply chain is still a little way off, Palsgaard is expecting to see more companies in the industry embracing its potential in the coming years.
“The systems Palsgaard already has in place are pretty close to where blockchain will take us. But blockchain would bring incremental benefits that we’re excited about,” continues Hansen. “For instance, in a blockchain-enabled food industry, information about quality, traceability, sustainability and regulatory compliance will be uploaded and held across many servers which connect in a chain that’s immediately accessible to all parties in the supply chain. Today we still rely very much on our suppliers to send documentation and certificates to us. In a complex supply chain, this approach takes time and blockchain has the potential to speed up the whole process.”
“As well as making the supply chain more efficient, this benefit could prevent those instances where food products get trapped in administrative processes for so long that they become unusable, thereby reducing waste.”
“Furthermore, blockchain can enhance security. Once data has been entered into the system and approved by the other parts of the chain, any attempt to change one of the copies of the data without proper authorization will instantly be noticed by all the other servers in the chain and the data will be repaired on the spot. This has great potential in terms of preventing food fraud and cybercrime.”
However, Hansen believes that for blockchain to work, the whole supply needs to adopt it and not everybody is quite ready to do so yet.
“We’re excited about blockchain. But until it becomes a mainstream approach in the food industry, Palsgaard’s existing ERP system already offers market-leading traceability from plantation to plate,” she concludes.
