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Blockchain provides missing link for food companies

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Blockchain provides missing link for food companies

Blockchain is best known as the platform upon which cryptocurrencies such as bitcoin operate, but its potential applications are diverse, as a growing number of food companies are showing.

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Source: Associated Press

The nature of blockchain — in essence, a ledger that records information at each stage of any given process in a manner that is more difficult to forge or manipulate — means companies can know the precise journey their products have taken in an instant. As our story this week shows, the likes of Nestlé SA, Unilever PLC and The Kroger Co. have used the IBM Food Trust, a dedicated blockchain set up by the IT giant for the food sector. Koninklijke Ahold Delhaize NV's Dutch grocery store chain Albert Heijn, meanwhile, uses blockchain to track each of the nine steps its orange juice takes from the grove in Brazil to the shelf in Amsterdam. Through a QR code, consumers are able to access all of this information.

Allowing customers to see where their products come from is a nice touch, but blockchain can have a potentially much greater impact when it comes to food safety. The recent outbreak of E. coli in romaine lettuce is an apt example. The FDA's traceback investigation into affected products took almost three months, during which time it recommended that retailers remove all romaine lettuce from their stores, a costly and wasteful exercise. In theory, any retailer using a blockchain would have been able to identify the culprits much quicker and without destroying untainted products.

Lettuce growers that plan to sell their products in Walmart Inc.'s stores better get acquainted with blockchain. Following the E. coli outbreak, the retail giant told all of its suppliers that they must join the IBM Food Trust within a year. Blockchain is by no means flawless, but the prospect of greater safety and transparency means it can only be a positive for companies and consumers alike.

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Consumer Edge is a weekly collection of critical developments across the automotive; retail; and food, beverage, and tobacco industries that draws on exclusive analysis and value-added content from the Consumer News team at S&P Global Market Intelligence.