Blockchain technology allows food companies to be totally transparent about their supply chains – and this is a major opportunity, says Messem International CEO Jan Sevenhuysen.
Messem International produces frozen strawberries in Morocco, which are then stored in The Netherlands before shipping around the world. The company is considering implementing blockchain technology to trace its products from the producer to the end consumer.
“For me blockchain could be a tool to improve situations, not only defensively but also offensively,” Sevenhuysen said.
The technology refers to a system that produces a permanent digital record of ingredients each time they change hands. Each transaction becomes a block of information that everyone along the supply chain can access, but no one can edit without the authorisation of everyone else in the chain. Blockchain promises to centralise and standardise information about how food ingredients are sourced and handled, providing unprecedented traceability from seed, farm or fishery, to the end consumer.
“Blockchain itself is not an objective,” he said. “It’s a tool, but not a goal.”
The promise of faster checks
Sevenhuysen was a keynote speaker at a Foodvalley Breakfast Session in Wageningen, in The Netherlands in November 2018, where he gave the example of how blockchain could have been helpful to assess compliance with pesticide legislation for a customer in Australia, a country whose laws do not quite match those of the European Union or those of the United States.
“Sometimes we have requests from countries where the legislation is close to that of the EU but not the same,” he said. “There are five pesticides that are not allowed in Australia that are in Europe, so we needed to check if they had been used. And if so, when had they been used?”
For the company’s strawberries to be allowed in Australia, there had to be no risk of finding traces of banned pesticides. Messem found that two of the five pesticides had been used, but not by all of the farmers. If they were used on the farm at least three months before harvest, the strawberries would be allowed for export. Within twenty days would be considered critical, and otherwise it would not be possible to take the risk.
Going through traditional records, it took several trained experts three days to find an answer.
“My theory is if we had had blockchain we would have had easy and quick traceability,” said Sevenhuysen. “We have full traceability at the moment, but there’s too much work and risk for errors.”
What is more, he suggests that farmers could benefit from access to this kind of information, allowing them to assess the best pesticide strategies for improved yield per hectare when balanced with cost, for example.
Blockchain has been hailed as a way to restore consumer trust in complex supply chains, to prevent food fraud, for example, and to ensure food ingredients are what they claim to be in other ways, such as organic, sustainable or Fair Trade.
“By far the biggest opportunity is to get totally transparent,” Sevenhuysen said. “Far more transparency is absolutely necessary to regain consumer trust.”
However, he said it was easier for a company like Messen International, which does not deal directly with consumers.
“Dealing only with industry allows you to be completely transparent,” he said, suggesting that in this context, it would be possible to highlight elements in the supply chain like pesticide use, to show that all products are compliant with legislation.
“Blockchain gives a supreme opportunity to make it happen,” he said.
Major players using blockchain
Sevenhuysen’s confidence that the technology can improve trust puts him in good company. Major retailers are getting on board with blockchain, including Walmart in the United States, Alibaba in Australia and New Zealand, the French supermarket chains Carrefour and Auchan, and IKEA for its cotton supply.
Several major commodity ingredient companies, including Archer Daniels Midland, Bunge, Louis Dreyfus Company and Cargill, also have been exploring the use of blockchain to keep tabs on their supply chains. They say it could help reduce ingredient storage times and cut the amount of time and money spent processing traditional documents.
However, Sevenhuysen warns that ‘blockchain’ too often is used as shorthand for concepts like sustainability.
“The biggest problem is probably the wrong expectation,” he said. “It is a buzzword and we should get rid of that. On the one hand, it is a buzzword for sustainability and I don’t know why. Sustainability is often also linked to traceability and there’s no reason for it to be linked. Even with full traceability you can still squeeze farmers in Africa to the bone. Traceability is only a starting point.
“On the other hand, it is linked to Bitcoin and we should be more pragmatic about that. It’s a tool; a nice tool, but no more than a tool.”
Then there is the broader concern that many consumers may have a romanticised notion of what traceability means.
“Consumers feel very comfortable if they know who produced their food,” he said. “Cheese from a farm is so much better than cheese from a factory, but why? There’s no guarantee that it is better or safer.”
Dutch retail chain Albert Heijn encountered the romantic notions associated with traceability when it used on-pack barcodes to allow consumers to trace their orange juice back to its origins.
“It’s very romantic and gives an idea of a small scale farmer – scan the barcode and you meet Carlos in Brazil – but in reality it was a multinational company,” he said. “And only two or three years earlier it was involved in a big fine for not paying social security charges…They have made big improvements since then, but that’s not the message you want. The message must be perfect.”
For now, uptake of blockchain is still in its early days, even though many major retailers and suppliers have embraced it, and Sevenhuysen cautions that it is much easier – and cheaper – to implement when supply chains are simple.
“If it’s too complicated it’s too expensive – for now,” he said. “I think it’s truly a next development. What we now consider very complicated will soon be considered very normal. Take my example of Australian pesticides – in years from now it will be a very simple thing.”