Blockchain For Food — Why We Need It And How It Works
Author: Sönke Mißfeld
You are what you eat
the longer one thinks about that common phrase the more reasonable it gets. Of course, eating a pig doesn’t make you one, but even in the biological sense, it transports a true message: Every meal we eat somehow becomes a part of us — be it vitamins becoming part of our defense, carbs becoming the body and brain energy, or fat becoming the unloved reserves. You eat bad or toxic food, you become sick sooner or later. That should be common wisdom by now.
In a social context, „you are what you eat“ fits even better. Put in a nutshell, it means we are part of the problem. If we eat unsustainably or unfairly produced food, we have our share in deforestation, pollution and poor living conditions of animals and humans. An unpleasant truth, no matter if we like it or not.
That’s why seriously thinking about that phrase helps us to clarify who we want to be and reminds us of what we are certainly not, yet: Socially and environmentally responsible human beings — conscious consumers. In most cases, not because we’re not caring about tomorrow or because we are not willing to change our habits.
It’s because we have very limited choices and receive poor and unreliable information, if any, prior to a purchase decision.
The industrialization and globalization of the food production have undoubtedly brought us major benefits, in particular, low costs, standardized quality and limitless availability. But it simultaneously led to a broadening disconnection between production and consumption. Combined with the ever-growing pressure to compete for profit and market share this resulted in something obviously dangerous when it comes to human nutrition: Secrecy and anonymity!
In a world where one single ingredient or product can travel through multiple continents and countless hands, no one seems to be responsible for negative consequences. And every participant in such a supply chain seems to have a very reasonable excuse from his point of view: Farmers, producers, logisticians, and dealers are all constantly forced to reduce costs to survive and meet the demand of the mainly price-focused masses. On the other hand, customers need to invest too much personal effort and time for research, and make sacrifices, to act in a fair and sustainable manner. Worse than that: A vast majority is not even aware of the damages done to themselves and everybody’s future.
Conscious consumerism becomes an almost impossible task due to unfounded brand claims, insufficient certification and verification, lobby-dominated regulation, mislabeling and large-scale fraud.
Think that’s overexaggerated? Not at all. For example: Did you ever eat sustainably fished red snapper or white tuna anywhere in the world? Well, sorry to tell you, but you very likely did not. Statistically, in more than three out of four cases, you did not even get the same fish you ordered, but some far cheaper low-quality substitute like the potentially sickness-causing Escolar. Surveys estimate that over 20 percent of all fish in the retail and catering sectors is mislabeled!
And the problem isn’t limited to seafood: In Italy alone, the revenue of organized crime in the food sector is estimated to exceed 15 Billion Dollar per year! Food fraud is a worldwide problem and it doesn’t stop at the growing borders of the first world. In the best case, you just pay high-quality prices for low-quality nutrition. In the worst case, your health is at risk due to undeclared allergens, bacterial contamination or even toxic chemicals.
But it would be short-sighted to concentrate on the one side of the medal that is officially illegal. On the legal side, governments and consumer protections constantly fail to rein the powerful industry-lobbyists when it comes to health- or environment-damaging production methods. E.g. the traffic-light labeling for food in Europe was averted in 2016, Sodium Nitrite, which is known to cause cancer since the 70’s has finally been declared so by the WHO in 2015, but it is still used for almost all processed meat.
Each such scandal, recall and investigative report about health risks, fraud and mislabeling demonstrates how vulnerable we are when it comes to our nutrition.
Additionally, it shows that regulators and certifiers either don’t have the possibilities or the will to appropriately address these problems. Some may have very promising approaches, but so far, consumers obviously cannot rely on their efforts. And because of this growing insecurity, each negative publication causes damage that is by far bigger than the isolated incident: The greedy misbehavior of a few black sheeps can easily bring the rest of the industry in discredit for decades, no matter how honest their intentions and notable their efforts are.
The customer’s trust is hard to gain and easy to lose. Because of one incident, many give up on their expensive ideals and turn back to the masses’ penny-pinching mentality.
“If organic often proves to be not organic at all, why should I buy it?”
“If the high-quality-labeled product is potentially just a rebranded or counterfeited low-quality punch, why should I pay the higher price?”
“If the extra charges for fair trade don’t really make a change for the poor farmers, why should I bother?”
All the above quotes demonstrate that there is a strong and urgent cause for the food-sector-wide adoption of blockchain technology.
Its core capability to document everything happening in the real world in an immutable distributed digital ledger enables us to gain back what we have lost in the overwhelming and rapid process of globalization: Trusted information and responsible behavior.
Of course, there’s no such thing as a single solution to all problems. But blockchain-based documentation could actually prove to be the missing element for many already existing solutions to unfold their full potentials. It may become the glue that unites all other elements of digitization, automation, regulation, and certification.
Trusted track and trace from farm to fork
The technological capabilities to document every single action and item in the entire supply chain have been developed for years, but it had clear limits that hindered a widespread adoption. The gained data would have very likely been fragmented, centrally administered, owned by a single actor and — most important — could have been altered any time without notice.
The ability of Blockchains to define one single unalterable version of the truth for a decentral protocol solves two critical problems for digitized supply chains.
At first, if no single entity controls the data anymore, the participants can truly trust each other. Once they agree on a fair rule set and a common goal, e.g. gapless traceability, the willingness to share information and increase effort is much higher than in a centralized solution. Additionally, this opens up enormous unused cooperative potentials, but this will have to be illustrated in another article.
Secondly, the impossibility of manipulation makes it worth the extra efforts in the first place. Untrusted data might still be of use for some internal analysis, but as described above, the food industry needs to change rapidly. Before any efforts can have a widespread effect it has to cope with a growing trust problem. Only immutable traceability provides a suitable solution for the critical customer — and the same goes for the use of any product data for certifiers and regulators.
OURZ.world offers the needed functions to achieve and utilize this new trustworthy supply chain visibility. The challenge we accepted is not only to maximize the quality and transparency of the data but also to integrate it into a holistic ecosystem that will incentivize all participants for sustainable behavior. Read “Traceability and Transparency are Key to Sustainability” as prologue.
This approach promises large-scale efficiency gains, reduced waste of resources and a more fair and sustainable economy.
Do you still wonder how all this might actually work in practice? Let’s follow the story of a really big fish:
As soon as the 35-kilo white tuna is pulled by line onto the small boat, Sonu, the Maldivian fisherman opens an App on his Smartphone and logs by fingerprint into his public profile. With a few clicks, he creates a unique digital twin for his catch. The provided information is immediately written onto the blockchain with time, geolocation and creator as automated entries. To provide additional proof, he uses the app to take a selfie with the fish in the back, this gets directly connected to the blockchain twin. To make everything even more bulletproof, he also uploads and links a video of how he catches the fish, covers it with ice and directly attaches a temperature data logger that writes his record to the digital tuna.
At the same time, the Indian Ocean Tuna Commision (IOTC) in the Seychelles registers the event and sends a print order to the safety-seal label printer located in the Maldivian fishing authority. Moments later, Anaan, an IOTC-certified auditor with a perfect five-year track-record scans the new QR code label that directly links to the digital twin, therewith accepting the order and responsibility to verify the catch. He follows the GPS-live-tracker of Sonu and awaits him in the harbor. Once arrived, the tuna itself, the temperature logger and the line-fishing get signed via selfie by Anaan and the cooling box is closed and sealed.
Simultaneously in Frankfurt, Germany, star cook Steffen Walz orders 20-kilo of white tuna on his marketplace app for blockchain-traced sustainable fish. Within the following two days, he follows the assigned share of Sonu’s catch passing through the hands of a Malaysian logistic company, Singapore authorities and Lufthansa Air Cargo with each supply chain participant scanning the unbroken QR code seal and adding valuable data on the way. Only German customs had to break and renew the seal for a routine screening, but that was, of course, all documented on the blockchain.
The next day is your tenth anniversary, so you and your partner decided to spoil yourselves in this fancy 24th-floor restaurant that is famous for its top-quality fish. In the menu, you discover a small QR-Sticker next to the quite costly white tuna filet, that claims to be fresh and from sustainable line fishing. You scan it with your phone and find detailed profiles of the restaurant and the staff with linked customer reviews and ratings. More importantly, you get a precise list with all ingredients’ whereabouts and a full-scale documentation of the tuna’s journey from the Indian ocean to your plate.
Back home from a perfect night, you scan the code on your check to share your excitement with the rest of the world. You discover you’ve been lucky twice this day: It’s not only been the best fish you ever had but yours has been traced to be the last piece of Sonus’ catch available in the whole wide world!
As you can see in this simplified example, there are many different devices, authorities and verification methods involved to achieve reliable visibility throughout the whole supply chain. For other goods and products, very different approaches and methods will have to be developed. Blockchain (and other distributed ledger technologies) clearly can’t fix all the human points of failure at once, but it provides an essential fundament of honesty by implementing always the same basic principle:
Immutable data allow trust and cooperation in between all involved parties. Harmful anonymity and secrecy are replaced by personal responsibility and transparency.
If implemented correctly with a holistic approach, fraud becomes far less probable and counterfeiting becomes almost impossible. Imagine someone tried to sell a tuna with the same QR-code a second time. At first, the system would immediately identify the logic breach. Secondly, the criminal would not be authorized by the previous holder to take over the digital twin. And thirdly, how stupid would you have to be to try a coup like that when you have to log in with your real person and company, risking your freedom and life-long documented professional reputation?
Food recalls and health risks are also fields where we can profit immensely from reliable traceability. If you know exactly which charge of spinach was processed when and where you don’t have to destroy a whole harvest anymore and cause unnecessary economic damage in the millions because of one E Coli contaminated farm.
Or imagine the priceless statistics from this kind of data that may one day find a high correlation in between a specific enzyme used for industrial bread production and celiac disease.
Certification, labeling and marketing claims will reach a whole new level of authenticity once substantiated claims can be digitally proven. The black sheep can finally be separated from the herd because the good actors now have all the technology needed at hands to show their efforts and justify price gains for a more sustainable and fair way of production.
Those companies that walk the extra mile and participate in the creation of this valuable supply chain data will have their costs many times overcompensated by efficiency gains, attractive coalitions and unseen loyalty from involved customers. Those who don’t will have to cope with an ever-growing pressure — from the digitally advanced competition as well as from authorities and consumers that increasingly demand more transparent and reliable product information.
Finally, thanks to unalterable and well-condensed data, sustainable and fair production and consumption become far more realistic than ever before. The more trusted information there is, the harder it becomes to ignore the negative consequences and the more responsible our decisions will be.