A shout-out and a thank you to the Ontario, Canada-based Blockchain Research Institute (BRI) and the authors of this research. BRI allows for the distribution of a high percentage of its blockchain research of really interesting case studies with real-world applications via a Creative Commons license. The first BRI report we feature as part of our research and analysis of blockchain technologies in the agriculture industry sector is a pilot project from Walmart in collaboration with IBM using IBM’s blockchain solution based on Hyperledger Fabric.
Video Source: The Blockchain Institute
“When blockchain is deployed by the largest company in the United States, Walmart, we should all take note.”
FOOD TRACEABILITY ON BLOCKCHAIN
Walmart’s Pork and Mango Pilots with IBM
Author: Reshma Kamath
Release Date: September 28, 2017
Abstract
This case study looks at Walmart’s pilot projects with IBM to track mangoes in the Americas and pork in China, from farm to table with a focus on food safety. Blockchain technology helps to identify the source of contamination quickly so that food producers, processors, distributors, and retailers can act quickly and protect the public from harm.
Description
With blockchain, in the event of a recall, retailers can quickly identify a food’s source and route to market. It also helps boost retailer profits by optimizing supply routes, minimizing harm to cargo, and monitoring health and treatment of livestock and the conditions of transport and storage of foodstuffs. Walmart used blockchain for two food-provenance pilot projects—pork in China and mangoes in the Americas.
Case in Brief
- In 2016, Walmart announced plans to invest $25 million over five years to support research projects to enhance food safety. Using IBM’s blockchain solution based on Hyperledger Fabric, Walmart has completed two blockchain pilot projects–pork in China and mangoes in the Americas.
- With a farm-to-table approach, Walmart’s blockchain solution reduced the time for tracking mango origins from seven days to a matter of minutes. This paper examines why and how Walmart partnered with IBM to conduct food traceability pilot projects, how to leverage blockchain in food safety, and what lessons were learned.
- “Blockchain helps boost retailer profits by optimizing supply routes, minimizing harm to cargo, and monitoring health and treatment of livestock and the conditions of transport and storage of foodstuffs.”
Outline of Contents
A rise in food contamination scandals The Centers for Disease Control and Prevention (CDC) estimates that 48 million people in the United States contract foodborne illnesses annually. Moreover, the World Health Organization estimates that one out of every ten people suffers from food poisoning worldwide, 420,000 of whom die.
In 2013, bad actors in the EU supply chain replaced lamb and beef with horsemeat. The illegal substitution affected more than 4.5 million processed products representing at least 1,000 tons of food.Such food fraud is estimated to cost the global industry $40 billion a year.
In 2011, China suffered a pork mislabeling debacle, and donkey meat products that included fox meat were recalled. Additional contaminants such as melamine, Sudan red, clenbuterol, Sanlu toxic milk powder, and trench oil, further eroded Chinese trust in food markets.
Following a spinach E. coli outbreak in 2006 in North America, consumers stopped eating spinach. Restaurants and grocery stores pulled it off their menus and shelves. It took two weeks to identify the source, which was one supplier, one day’s production, and one lot number.
In July 2017, papayas in the US market were linked to a multi-state outbreak of Salmonella. It resulted in 58 hospitalizations and one death. It took almost three weeks to identify the source — a single Mexican farm. “One up, one down” approach is insufficient The widely accepted industry approach is “one up, one down” (OUOD). Food supply chain participants need to identify only the immediate supplier (one link up the chain) and the immediate customer (one link down the chain) of a foodstuff or ingredient. In suspected contamination outbreaks, investigators typically have to review paper documentation step by step, dealing with erroneous or incomplete data. As a precautionary step, entire shipments are thrown out under the current OUOD parameters.
The “One up, one down” Approach is Insufficient
The widely accepted industry approach is “one up, one down” (OUOD). Food supply chain participants need to identify only the immediate supplier (one link up the chain) and the immediate customer (one link down the chain) of a foodstuff or ingredient. In suspected contamination outbreaks, investigators typically have to review paper documentation step by step, dealing with erroneous or incomplete data. As a precautionary step, entire shipments are thrown out under the current OUOD parameters.
Walmart’s Blockchain Pilot for Food Provenance
To identify the source of food contamination, Walmart had to go beyond OUOD traceability. The company worked with IBM to develop its food provenance pilots. According to Brigid McDermott, a Walmart vice president, “Blockchain solves business problems where trust is part of the solution – you can’t do that with a database.”
McDermott identified two key features of blockchain that differentiate it from standard databases and help to build trust: first, data immutability, and second, speed and security of dissemination leading to a single version of the truth. When records are stored on a blockchain, everything such as dates and times to temperature controls becomes tamperproof. Secondly, technology enables information to be disseminated rapidly and simultaneously protected.
IBM recognized that it could accelerate the adoption of blockchain and avoid a proliferation of internal systems and data formats by using existing open standards such as the Global Specifications 1 (GS1), specifically its Electronic Product Code Information Services (EPCIS) and Core Business Vocabulary (CBV).
Interoperability among participants was crucial. “By removing barriers…including those caused by disparate entry systems, [blockchain] solidifies that trust even further,” McDermott said. “That’s why we are working with our clients and collaborating with other industry leaders to implement GS1 open standards into the work that we do.”
Pork chains across China
Food consumers in China are putting more emphasis on food safety and quality. The Chinese government is upping food inspection and safety methods.
In October 2016, Walmart launched the Food Safety Collaboration Center. The center’s staff started researching foodborne contaminants and developing food safety risk assessment models globally that other corporations and organizations will be able to use. Walmart also invested in food-related technologies to detect food-borne illness and harmful bacteria, and to monitor packaged food for unusual patterns of contamination in the supply chain.
Cooperation with governmental entities was crucial to the blockchain pilot’s success. Regulators were enthusiastic about blockchain. Every pig is smart- tagged with bar codes that follow the product
all the way to packaged pork. Cameras monitor slaughterhouses. Procurement managers can trace all information, from expiration dates to warehouse temperatures, in an immutable and tamper-proof ledger. Should anyone become sick from tainted food, the system can pinpoint which products should be removed, while keeping the safe products in stock.
Throughout the product life cycle, supply chain participants record, crosscheck, and ensure a product’s authenticity and trace its movement and quality.
Mango Chains in the Americas
In the event of another recall of spinach or similar produce, blockchain traceability would enhance public trust about which product was bad, which might be bad, and which was safe. Like other produce items, mangoes are susceptible to Listeria and Salmonella contaminations. The pilot project was to trace sliced mangoes from South and Central America.
Mangoes can suffer from disorders such as fruit decay, surface defects, internal breakdown symptoms, chilling and heat injury, disorders during ripening, and more. Producers may cut corners by using contaminated fertilizers, allowing children to work, paying poverty wages, or requiring laborers to work extremely long days.
Walmart’s blockchain traceability system stores information captured at orchards, packing houses, importers, processing facilities, distribution centers, and retail stores that the “one up one down” approach fails to do.
While improving supply-chain visibility, customers can also provide retailers with specific feedback regarding quality that can be linked to growers and sources. In addition, customers can get the added benefits of cost-cutting, fresher produce, and knowing when groceries will arrive.
Key Takeaways
-
Transparency and trust. What is clear is that blockchain provides greater transparency, veracity, and trust in food information. It provides information that supply chain members can act on.
-
Identify the core issues. “Blockchain is not solving a technical problem, it is solving a social problem,” said McDermott. Walmart’s need for traceability arose from its focus on food safety, to prevent or respond quickly to contamination, fruit, and animal disease, harmful drug or pesticide residues, or attempted bioterrorism. Thus, with prevention, preparedness, and proof, blockchain also has a positive effect on the Walmart brand.
-
Make the business case. Walmart’s blockchain solution can solve myriad problems in food supply chains such as time efficiencies, cost reduction, long-term goodwill, and revenue generation. Walmart’s pilot programs improved confidence in the supply chain— breeders/farms, processing plants, cold storage facilities, distribution centers, retail stores, and more.
-
Engage and prepare members of the supply chain. Throughout the product life cycle, supply chain participants can record, crosscheck, and ensure a product’s authenticity and trace its movement and quality. This information gave all participants greater control over their brands and businesses.
-
Identify the relevant data to combine. Blockchain technology enables food traceability to the item level, not just batch level. Participants can trace each item in the supply chain. Walmart’s blockchain pilot identified which data were relevant to capture.
-
Leverage existing processes and information systems. Walmart chose IBM’s blockchain solution because it was not recreating the supply chain, but leveraging existing technologies to enhance supply chain traceability using Hyperledger. Traceability systems that are integrated with existing company business practices are more likely to be maintained and more likely to be accurate.
-
Invest in testing and learning. Walmart will continue to experiment, scale, and learn from its blockchain pilots as it builds coalitions within the supply chain ecosystem where members are seeking to implement blockchain applications more broadly.
Resources
- Reshma Kamath, “Food Traceability on Blockchain: Walmart’s Pork and Mango Pilots with IBM,” foreword by Don Tapscott, Blockchain Research Institute, 22 Oct. 2018 (member portal)
- Video introduction by Don Tapscott (member portal)
- Don Tapscott and Alex Tapscott, Blockchain Revolution: How the Technology Behind Bitcoin and Other Cryptocurrencies is Changing the World (New York: Portfolio Penguin, 2018)
- Centers for Disease Control and Prevention, June 2011. www. cdc.gov/foodsafety/foodborne-germs.html, accessed 29 June 2017.
- World Health Organizations, December 2015. www.who.int/mediacentre/factsheets/fs399/en, accessed 30 June 2017.
- “Supply Chain Resilience Report,” Business Continuity Institute, 2016. www.riskmethods.net/resources/research/bci-supply- chain-resilience-2016.pdf, accessed 29 June 2017.
- Stephen Castle, “Europe Says Tests Show Horse Meat Scandal Is ‘Food Fraud,’” New York Times, 16 April 2013. www.nytimes. com/2013/04/17/business/global/european-study-affirms-role- of-fraud-in-horsemeat-scandal.html, accessed 29 June 2017.
- PricewaterhouseCoopers and Safe and Secure Approaches in Field Environments, “Fighting $40bn food fraud to protect food supply,” 2016. http://press.pwc.com/News-releases/fighting– 40bn-food-fraud-to-protect-food-supply/s/44fd6210-10f7-46c7- 8431-e55983286e22, accessed 30 June 2017.
About the author: Reshma Kamath is a law graduate of Northwestern University Pritzker School of law, where she wrote a whitepaper on blockchain. Before this, she pursued a graduate degree in International Studies, specializing in International Cooperation, under the guidance of Seoul National University.
The Blockchain Research Institute is an independent, global think tank founded by Don and Alex Tapscott and funded by an international membership of corporations and government agencies. Its multimillion-dollar research program consists of nearly 100 projects on the strategic impact of distributed applications and blockchain technology on business and society. Each white paper is written by a subject matter expert and designed to prepare private- and public-sector leaders in their roles as catalysts of change, ushering in this next generation of networked technologies.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
The Canton Network: Institutional Blockchain Interoperability in the Financial Services Sector
Security, Privacy and Interoperability: Blockchain-based Decentralized Identifiers 1.0
NIST on Blockchain and Cybersecurity at the Physical Layer (Access Control Systems)
