How Blockchain can Improve the Food Industry
By Cindy Huynh, Coinsquare
January 10, 2018
The global food industry is worth trillions of dollars.
Unfortunately, where there are opportunities, there will be those quick to take advantage. Not only does fraud in the food industry have economic costs, it can lead to public health and brand reputation risks. Unfortunately, the current approach to prevent fraud in the food industry is failing.
The systems built were originally made to ensure food quality but didnít foresee sophisticated fraud practices in the supply chain. Criminals are therefore outsmarting the current procedures in place.
Blockchain technology, however, can trace long and complicated supply chains. Its transparency, speed, security and user collaborations allow quick and easy traceability of products. Global brands such as Nestle and Walmart are therefore testing blockchain technology with great success, according to Reuters. Blockchain technology has great potential to fight the billion dollar fraud issue and transform the food industry.
The global problem of food fraud
Food fraud is a collective term that encompasses the act of purposely altering, misrepresenting, mislabelling, substituting or tampering with any food product at any point along the farm to table food supply chain. Fraud can occur in the raw material, in an ingredient, in the final product, or the foodís packaging.
Food fraud costs consumers $30 to $40 billion a year worldwide, according to PwC analysis. Key examples include the Chinese milk scandal in 2008 where baby milk powder contained toxic industrial compound melamine, killing six babies. In 2013, England faced a scandal where its beef burgers contained pork and horse meat instead.
With a long and complicated supply chain involving layers of management including wholesalers, distributors and retailers and rising food prices, itís not surprising to see these long supply chains compromised. Food fraud in the last decade has steadily increased as organized criminals who have long trafficked drugs are diversifying into food. Criminals can easily intercept the supply chain and substitute, add, dilute, tamper or misrepresent food, food ingredients or food packaging. Food fraud often occurs when the potential for gains is high, and the risk of getting caught is low.
Why current control measures fail ...
Blockchain adds traceability to food supply ...
Current blockchain projects in the food industry ...