Dramatic changes in the global demand for food, safety concerns and the rise of precision farming are among the challenges facing food supply chains. Can blockchain technology help the industry to meet these challenges at a time when it is also grappling with increasing supply chain complexity? Blockchain and the Future of Food: Driving Efficiency, Transparency and Trust in the Food Supply Chain examines these issues and the blockchain solutions that could help to transform food supply chains and enable the industry to compete in a rapidly changing competitive landscape.
Introduction: Meeting Food Industry Challenges with Blockchain
If there was a league table of industries that are currently grappling with wide-ranging change, the food industry would surely occupy a position near the top. In addition to global forces such as rising demand for food across the world and shifts in consumer buying preferences, the industry faces technological innovation that is advancing at a rapid pace. For example, sensor networks that deliver detailed profiles of products moving through supply chains are growing in both size and sophistication.
Another essential element of the change management challenge is transforming an industry structure that is inherently siloed. The farm-to-table supply chain comprises countless players that are functionally and geographically diverse. Many of these entities are largely unaware of each other, and have very different commercial agendas. This fragmented structure inhibits the free flow of information up and down the supply chain.
Clearly, the food supply chain is extremely complex, but it is possible to discern certain key requirements that are critical to the industry’s future. Traceability is one; the ability to trace product pathways back through a supply chain. Engendering trust between trading partners and being able to quickly and accurately verify the identities of players such as suppliers and distributors are other examples.
This is where blockchain technology is playing a vital role. A blockchain is a type of distributed ledger. These specialized databases leverage cryptography, data synchronization and peer-to-peer network communications technologies to provide an extremely secure, tamper-proof and immutable data store. They can be shared and updated by many participants with no central control. In addition to storing data, blockchains can also execute computer code, known as smart contracts, to implement business processes. These capabilities promote the supply chain traceability, trust and veracity that are vital to the industry’s future competitiveness.