On August 27, 2006, an 81-year-old Nebraska woman was rushed to the hospital in so much pain, she was given morphine. Four days later she died from a food-borne infection that was later identified as E. coli. Over two weeks later, with hundreds of people getting ill across the USA, fresh spinach was identified as being a strong possible source of the pathogen. On September 16, the Food & Drug Administration told Americans to stop eating bagged spinach. All spinach was pulled from supermarket shelves, restaurants, and salad bars across the entire nation, from Alaska to Florida..

Five deaths later, the source of the infection was finally found on September 29, a small 2.8-acre plot of farmland in California’s Central Valley whose fields were contaminated with feces coming from either wild pigs or neighboring cattle.

The 1,002 lbs of spinach harvested from Paicines Ranch were processed within a day by Natural Selection Foods, one of the USA’s largest processors of leafy greens. The spinach went mostly into bags of Dole Baby Spinach, each tagged with the production code P227A. It was then shipped nationwide.

Along with the deaths and 209 recorded people becoming ill – some serious – the outbreak cost the food industry over $350 million, created tons of food waste, and caused sales of bagged spinach to stay 20 percent lower for years.

SWOT Analysis

Strength
Way to reduce fraud and waste in food chain
Full traceability can take seconds, not weeks – lives saved
Makes supply chain more transparent than ever before (see Threats)
Very difficult to hack

Weakness
Needs majority participation of supply chain
Big companies have clout to demand blockchain; small do not
Governments unsure how to regulate

Opportunities
Everyone can be paid faster
Can eliminate middlemen and lower transaction fees
Option for farmers to not rely on marketing boards

Threats
Makes supply chain more transparent than ever before (see Strengths)
Unproven for food industry
A few big players such as IBM could be in a control position

The problem

US restaurants and grocery stores often buy produce from the same major food processors, sometimes under the same label, but most often under different labels, according to The Food Industry Center (FIC) at the University of Minnesota, which conducted research into the 2006 spinach E. coli outbreak and others.

The produce a consumer purchases in a grocery store might be processed by the same company as that in a restaurant. This label flexibility enables sellers to provide a consistent retail presence by sourcing product from multiple growing regions in response to market demand and weather-induced supply.

As most retailers commit to their print ads six weeks in advance, the ability to pack-on-demand makes it possible to promote highly perishable short-dated products. The down side of this process is a given brand can come from multiple processing facilities packaging multiple brands, says FIC.

As a result, it is more difficult to determine the source of suspect product and to confine a recall to that brand without implicating other labels. Additionally, when wholesalers and retailers in the middle of the supply system find themselves with too much of one product in one place, they might divert it to other parts of their operation (perhaps in a different part of the country), sell it to other organizations, or even donate some product to a charitable organization.

Food takes many routes to get from producers to consumers. The more twists and turns a product takes within the food supply system, the more difficult it becomes to track, and the more vital the UPC product codes become. The more diversions a product takes within the food supply system, the more difficult it subsequently becomes to trace through the supply chain when disaster strikes. Even in a best-case scenario, however, when a company has planned well and communicates the recall quickly, there are difficult hurdles because of the complexity of the food supply system.

For the purposes of a recall, citing information such as brand names, use-by dates, and manufacturer production codes often causes confusion. Barry Eisenberg, vice president of technical services for River Ranch, one of the companies that recalled spinach-containing products, took a broad approach to the recall since specific field information was not immediately available. “It just got very confusing,” he said. His company became part of the recall because its Spring Mix contained spinach from Natural Selection. He said everyone who handled spinach from Natural Selection “was guilty by association from our customers’ viewpoint”.

While this was spinach, there have been other recalls around the world with the same problem. Each of the companies involved could easily track one step below and above, but getting beyond that point proved to be the challenge. There was no way to do a fast check of every link of the processing chain or to quickly get the ‘big picture’. With deadly pathogens, each minute, hour, day or week delay can prove fatal to consumers.

Possible solution

Frank Yiannas, is vice president in charge of food safety at Walmart. If you want to keep him awake all night, just have an imp whisper “salmonella” into his ear as he starts falling asleep. Food safety issues are always at the forefront of his mind; for years he has seen the problem and has searched for the best solution. But it’s not until you talk with him do you realize just how all-consumed he is by this issue.

In 2016 IBM introduced to Yiannas and Walmart a project that a small team had been working on involving blockchain traceability. While Yiannas was skeptical going into the meeting, he came out a convert.

To prove what blockchain promised, Yiannas did an experiment at Walmart and IBM. He brought to a meeting a pack of sliced mangos that he had taken off the shelf of a Walmart. He asked those at the meeting to trace it. Walmart doesn’t play around with food safety; it goes well beyond what the law requires. Still, it took the team just shy of seven days (six days, 18 hours, 26 minutes) to track the mangos from a Walmart shelf back to the Mexican farm where the mangos originated from.

Yiannas then did another experiment, also with mangos. This time it was after introducing blockchain in the Walmart system. It took 2.2 seconds to do the trace. He duplicated the same experiment in Walmart’s China offices with pork and had the same results.

If it had been a real food emergency with mangos in the States, without blockchain Walmart would have pulled all mangos off the shelfs throughout the USA and kept them off until the source of the pathogen was found. If any other retailer had the slightest possibility of being also effected by contaminated mangos, their mangos would be pulled as well. While mangos are far from being Walmart’s number one seller, it still would have cost the chain millions of dollars and wasted tons of food – a case of a necessary overkill – and affected the reputation of the global chain.

However, with blockchain – along with accompanying platform software – in place, Walmart could instantly see the entire distribution chain from farm to shelf of the suspect mangos and remove only those from the market. While not mentioned in the experiment, with check-out barcode scanning and numerous supermarkets tracking customer purchases through loyalty schemes, it would even be possible to trace those who bought suspect mangos to warn them not to eat them.

Because the blockchain record is permeant, in cases of food fraud like the horse meat scandal in Europe or Kosher/Halal mislabeling in the States, it would give stores a way of seeing where the fraudulent product entered their distribution chain.

In 2017, leading UK chicken producer 2 Sisters Food Group was caught altering “kill dates” on chicken labels to artificially stretch the commercial life of the product and fool consumers into buying chicken past its use-by-date. None of the UK’s top grocers where able to identify this practice or prevent the chicken from reaching the consumer, it was discovered only through an undercover news team. With blockchain, however, every chicken product would have registered on the database from the farm. Two Sisters would be unable to tamper with the data on the blockchain without everyone knowing.

According to Arvind Krishna, director of research at IBM, blockchain technology could save the shipping industry billions of dollars lost to coordination costs. Containership ship giant Maersk says that each container generates up to 30 pieces of paper, with labor and documentation processing costs amounting to $300 per container, or $5.4 million for an 18,00 TEU containership. A missing piece of paper means a container just sits at port, with food spoiling, but with blockchain it would be possible to have paperless bills-of-lading and save millions of dollars throughout the industry. Right now the Port of Rotterdam is testing blockchain for sharing logistical and contract information.

In a nutshell, Blockchain has the possibility to change the world’s food safety chain in a way never before imagined. Lives, money, and reputations will be saved.

The basics

Blockchain was developed to keep track of the cryptocurrency Bitcoin. Because with Bitcoin you have a form of currency that doesn’t physically exist, you need to be able to track each coin in cyberspace. If you couldn’t, you would be leaving yourself wide open for counterfeit Bitcoins being created and other types of fraud – you have to remember that some of the people using Bitcoin aren’t on the legal side of the law. It’s called blockchain because all the transactions are sorted into ‘blocks’, and each block is chained all the way back to the beginning to make it hard for anyone to change the records.

Blockchain provides end-to-end traceability because the entire ecosystem shares a single, tamper-resistant ledger of information that can only be updated through consensus. Participants can view their section of the same information in a permissioned – depending on the system used – trusted and scalable network. According to IBM, this enables ecosystem participants to exchange data and transact with trust, improving transparency and efficiency within the supply chain.

This is how it can apply to you.

No doubt in your office you have a ledger – either electronic or paper. Now imagine this ledger being for just one item – broilers from Sally’s Chicken Ranch. Every time the broiler passes to another part of the chain, so too goes the ledger. But, not everyone in the chain is honest. For example, the trucking company has a theft problem and some of the boxes of frozen chicken are stolen. On the ledger they altered it to show fewer boxes. If there is a problem with the broilers at the end delivery, it’s not their fault.

With blockchain, however, your database works like a network that is shared with everyone in the chain. But when the first initial entry is made for an item – when Sally’s Chicken Ranch lists the broilers, what antibiotics they were given, etc, this entry is given a unique ‘fingerprint’. Just like with humans you can’t change your fingerprint, you can’t change this one either without everyone in the supply chain being aware of it. Because it’s transparent – anyone can see alterations, corrections, etc – it creates trust amount the users of it. There is no one single party controlling the data, everyone in the chain can see it. A change in broiler numbers will be spotted by all.

An important note, with Bitcoin anyone in the world can see the blockchain data. However, as much as the purist might complain that anything else is taking away from the blockchain spirit, depending on how and whom you use to set it up, it can be kept transparent only to those with a need to know. Do you want consumers at your store to be able to scan a simple QR code with their smartphones and see what farm their meat was raised on? Would you want them, however, to also see the age of the animal, what antibiotics or vaccinations it was given, or where it was slaughtered?

In its current stage, blockchain is far from perfect with its greatest problem being participation. If Sally’s Chicken Ranch and end user AlphaBeta supermarket were the only ones using blockchain, the information would be next to useless. To prevent food fraud, to allow for quick tracing of items, you need to have as many blocks – users – as possible. Someone big with clout like Walmart, Unilever, and Nestle could insist that all parts of the distribution chain, from farm to Walmart stores, use blockchain. There are few other companies who carry the same weight.

“Blockchain itself is a great technology, but unfortunately due to the hype around it is presented by many vendors as the silver bullet solving all the problems. This glorification is unfortunately possible as still very few people understand blockchain on an appropriate level,”Branimir Rakić of OriginTrail tells MPJ.

“Blockchain is good for data integrity and trust, but it is actually very inefficient for any type of bigger data storage and manipulation, and it’s pretty slow while we are at it – look up the Bitcoin and Ethereum scaling issues. Last time I did a calculation, to store 1kb of data on Ethereum costed around $1,300.

“This comes from the inherent properties of blockchain technology, which is exactly the properties that give it great features. OriginTrail builds on top of this, but focuses on the data itself and utilizes blockchain for what it does best – data integrity through fingerprinting,” says Rakić.

Blockchain is new with developments happening frequently, making web articles almost obsolete the minute they go on line. Even changing its name to something like ‘Electronic Ledger System’ or ‘Distributed Ledgers’ is being discussed. What it reminds MPJ of is the beginning days of PCs with different operating systems fighting it out for supremacy until there is only one or two – who remembers Tandy’s DeskMate system? If you’re in the meat industry – especially in international trade or if your product goes through multiple distributors – you should investigate blockchain. However, unless it means losing out on a contract which requires blockchain, don’t feel rushed into making a decision. From what MPJ sees, it will be around for a long time.

Key players

IT experts are saying that there has been more growth in blockchain companies than any other sector. MPJ presents four that standout in a crowded field.

Jammed field to get only more congested

Entering the world of blockchain today is like the early US pioneers meeting up at Independence, Missouri, and trying to decide which trail guide to choose. Pick the right one and you’ll find yourself farming in Oregon; pick the wrong and you’ll be eyeing over your traveling companions while snowed in on Donner Pass with no supplies.

Similar to the start of PCs in the early 1980s, there are many companies claiming to offer the best service, but do they? To continue with the analogy of PCs, when PCs were first introduced with MS-DOS, you needed to know some basic programming skills to use your PC plus you had to be familiar with all the ‘F’ keys. Now, while MS-DOS in still in computers, as far as users go – thanks to Windows – it’s invisible.

This is similar to blockchain technology. View blockchain as the foundation layer, what companies layer on top makes it user friendly. Just how friendly and cost-savings, however, is the question with MPJ finding few straight answers.

Much like how Microsoft won the battle of the PC operating systems, MPJ suspects IBM will be the top dog with blockchain technology, with Dole, Driscoll’s, Golden State foods, Kroger, McCormick & Company, McLane Co, Nestle, Tyson Foods, Unilever, Walmart, and others coming together with Big Blue. The company has blown some big opportunities over the last 40-years and could use a win. With a war chest of $200 million, a dedicated blockchain staff numbering in the thousands and a new office in Munich, ‘serious’ is how it’s taking blockchain. It’s doubtful it will squander an early lead this time.

That said, MPJ has found others who we think stand out in the crowd for truly being unique. A tip for blockchain companies out there; it’s the board that will buy your product, not the IT department. Gear your presentations towards them.

Big Blue’s blockchain platform

World giant IBM has introduced the first fully integrated, enterprise-grade production blockchain platform, as well as consulting services, that will allow more organizations to quickly activate their own business networks and access the vital capabilities needed to successfully develop, operate, govern and secure these networks, says the company.

The platform builds off of the successful blockchain work IBM has delivered to more than 400 organizations, incorporating insights gained as IBM has built blockchain networks across industries including financial services, supply chain and logistics, retail, government, and health care.

Extensively tested and piloted, the platform addresses a wide range of enterprise pain points, including both business and technical requirements around security, performance, collaboration and privacy that no other blockchain platform delivers today. It includes innovation developed through open source collaboration in the Hyperledger community, including the newest Hyperledger Fabric v1.0 framework and Hyperledger Composer blockchain tool, both hosted by the Linux Foundation.

The integrated platform allows multiple parties to jointly develop, govern, operate and secure blockchain networks to help enterprises accelerate blockchain adoption.

The platform offers all participating members a level of control, while preventing any one member from having exclusive control. A new class of democratic governance tools is designed to help improve productivity across the organizations using a voting process that collects signatures from members to govern member invitation distribution of smart contracts and creation of transactions channels. By quickly onboarding participants, assigning roles and managing access, organizations can begin transacting via the blockchain.

Unites best of both worlds

OriginTrail started as a full stack system consisting of the application layer (mobile/web applications for iOS, Android and websites), and the OriginTrail backend which took care of automatic data import, data storage, retrieval and other necessary systemic functionalities. People usually focus on what is visible though, so many thought of OriginTrail as ‘an app’ for customer food provenance, though it was in fact a whole system, says Branimir Rakić, chief technical officer & co-founder.

Today, it is a protocol which enables applications to be built on the application layer, but focuses on the underlying layers (data layer, network layer, blockchain layer) to provide all the necessary functionality in order to have an operational application layer.

By using OriginTrail protocol, companies will be able to develop and use a variety of applications, with origin of product being one of them – but not the only one.

This comes from the inherent properties of blockchain technology, which is exactly the properties that give it great features. OriginTrail builds on top of this, but focuses on the data itself and utilizes blockchain for what it does best – data integrity through fingerprinting, says Rakić.

“This is how OriginTrail united the best of two worlds – the scalability of existing technologies and superior transparency, integrity and security of blockchain,” he says. “What OriginTrail can offer and none of the others can is an advanced, database grade level of data handling, validation and storage in a decentralized trustless manner.

“And once this data is there and available, many different services and applications can be built on top of OriginTrail protocol (such as applications for certifications, alert systems, origin of products – the existing use case with the app we have developed before, recall, compliance, etc).”

The important thing is to distinguish OriginTrail protocol from blockchain – they work together, one on top of the other. Essentially this means that companies could be using different blockchains (as blockchain is used for fingerprinting data) while using OriginTrail – it presents a middleware between blockchain, IoT and supply chain IT systems on one side, and on the other side applications built on the consumer facing end.

Although OriginTrail is not the only IoT (Internet-of-Things) ready company, what MPJ likes about this is that the protocol can handle the data from smart sensors and wirelessly synchronizes them. The more sensors involved from more sources, the more the opportunity to cross reference this information. An example of this would be temperature sensors in containers. Once the information is introduced to the system, it is tamper proof along the entire chain.

Chain for Auz beef

A very specific blockchain that has its own cryptocurrency – BeefLedger Token (BLTs) – has been launched in Australia at Queensland University of Technology (QUT). The blockchain will be used to prevent food fraud involving Australian beef to protect the brand.

Marcus Foth, professor of Urban Informatics at the QUT Design Lab, says: “The BeefLedger Token, or BLT, is being developed as part of the design and implementation of the world’s first application of distributed ledger or blockchain technology to the entire beef supply chain.

“It has the potential to revolutionizes the industry by limiting price fluctuations, supporting food provenance and preventing food fraud, which is a growing problem in international export markets.

“The BLT will power the BeefLedger Blockchain and provide users with the value-added benefits of access to credentialed provenance data, sale history, consumer feedback insights, disease prevention, streamlining payments, and heightened food security,” says Foth.

Warwick Powell, CEO of BeefLedger, says BeefLedger was designed to be a wholesale data platform that delivers credentialed food provenance data to consumers, driving value growth for the supply chain and delivering additional income to producers in recognition of product provenance excellence.

“Our aim is to empower producers to serve the growing middle class markets of Asia, in particular China, and meet the market’s increasing expectations around food provenance and safety,” says Powell.

“BeefLedger supports the strong reputation Australian beef producers already enjoy as safe, clean and green suppliers.

“Beef is an increasingly high-risk industry in terms of brand so it’s critical to be able to prove it is top-quality Australian beef. Our research in China demonstrates consumers will pay premiums for high levels of security and the value that food provenance can add to the consumer experience.

“Chinese consumers also increasingly shop with their smart phone, where scanning QR codes for product information and payments is now commonplace. The paddock-to-plate nature of BeefLedger meets this market expectation so that Australian beef remains at the forefront of Chinese consumer experiences.”

Not yet for meat

While the vast majority of blockchain platform companies are for a myriad of industries ranging from banking to diamonds, Australia’s AgriDigital is only for agri-supply chains.

Unfortunately, so far the company is working only with grain companies. This is a real misfortune for meat/poultry because AgriDigital understands the agricultural industry.

Customer Roger Fletcher, chairman of Fletcher International Exports, says this about AgriDigital. “We never want to see another IT guy in here that doesn’t understand the industry and our business. Things are changing fast and we’re excited to have AgriDigial as our technology partner for the future.”

Out of all websites MPJ looked at, AgriDigital’s was the most user-friendly for non-techies and gave a near-perfect presentation of blockchain and what it can do for you. If nothing else, you will find AgriDigital’s free pilot report to be helpful. The company also responded to questions faster than any other company MPJ contacted.

AgriDigital was founded by a small group of agriculture industry experts with almost 80 years combined agri-experience. “We have a hard-earned appreciation for day-to-day challenges within the agriculture industry and the disruptive potential of technology. Our team is committed to building the agriculture industry of the future: one in which all participants in the ecosystem can act with confidence,” says the company.