Blockchain Food Traceability: Enhancing Transparency and Safety

Published
January 9, 2023
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Dock has been innovating digital identity and Verifiable Credential solutions based on blockchain technology since 2017. Dock has been innovating verifiable data solutions using blockchain technology since 2017.

In this article, our blockchain experts will go over: 

  • Why food traceability is important
  • The challenges of the current traceability methods
  • How Verifiable Credential technology can be integrated in food supply chains 
  • The benefits of blockchain food traceability technology for supply chain stakeholders, governments, and customers

TL;DR

  • Food traceability is important for many reasons including the ability to quickly respond to contamination issues, ensuring product safety, decreasing foodborne illness risk, and verifying claims about a product’s ingredients.
  • Current food supply chain systems are dominantly outdated, have caused many foodborne illness outbreaks around the world, are rampant with supply chain fraud, and often have a lack of data transparency between supply chain stakeholders.
  • Blockchain food traceability systems have many benefits including helping to effectively contain contamination outbreaks, enabling people to trace a product within seconds instead of weeks, creating an auditable trail of accurate data in a tamper-resistant way, and significantly lowers costs.
  • With Verifiable Credentials backed by blockchain technology, companies can enable customers to see where the products came from and their details by simply scanning a product QR code with their phone.

Introduction

Veggies and chilli

The food supply chain is extremely complex especially as products move between many players in different countries. The current challenges with traditional methods of food traceability include incomplete or inaccurate recordkeeping, slow response times during recalls, supply chain fraud, lack of data transparency between supply chain stakeholders, and difficulty tracing products through multiple steps in the supply chain.

Blockchain technology is becoming increasingly integrated in the food supply chain to enhance traceability and safety. With blockchain food traceability systems, every step of the journey from farm to consumer can be recorded and easily accessed. 

Why Is Traceability In Food Important?

Food traceability is the ability to track the journey of a food product from its source (such as a farm or factory) through all steps of the supply chain, including processing, distribution, and sale. The key with traceability is to identify where the product was made, who produced it, and who sold it. 

Importance of food traceability information

The data can be used to:

  • Verify claims about a product's origins or ingredients
  • Enable companies to ensure product quality 
  • Identify and respond to issues like contamination as efficiently and quickly as possible
  • Reduce spoilage 
  • Ensure organic certifications on food are legitimate
  • Decrease foodborne illness risk by identifying the issue before they reach the customer
  • Show customers the origin and details of products which can gain more trust from consumers

What Are the Current Challenges of the Food Supply Chain?

Paper-based recordkeeping before blockchain food traceability is implemented

Food supply chain systems are dominantly outdated, manual, and expensive

Food tracking and tracing is essential for food industry businesses. But unfortunately, recordkeeping in agri-food supply chains is largely manual and paper-based, which creates a lot of opportunities for data manipulation and fraud. Food supply chain problems get more complex and harder to trace the source of problems especially when multiple countries and systems are involved. 

Even when companies use software, they still rely on stakeholders providing honest and accurate information, which is vulnerable to human error and record tampering. Many actors keep their own record of transactions and there is no unified source of information that is accessible between all relevant parties. These problems are what often leads to food contamination. 

Foodborne Illness Outbreaks 

About 600 million people in the world (almost 1 in 10 people) get ill after eating contaminated food and 420,000 die every year. According to the World Health Organization, children under five years old are at the highest risk with 125,000 children dying every year from foodborne illness. Manual processes, paper-based records, and old systems often take days to weeks to identify contaminated food sources.

It costs a lot of money and uses many resources to respond and control an outbreak

In Germany there was a foodborne outbreak that required multiple long investigations and the problem was traced back to fenugreek seeds from Egypt. 50 people died, 4000 fell ill, and as a result, this incident caused the food industry in the European Union to lose 1.3 billion euros. The ban on importing fenugreek seeds and 15 other food products from Egypt cost the country about $4.2 billion.

Manipulated records and food supply chain fraud

The current system of food traceability often relies on manual recordkeeping and a complex network of suppliers which makes it difficult to quickly track contaminated products and ensure the safety of our food supply. Bad actors can easily manipulate records to suit their own interest without being caught such as invoicing fraud or lies on documents about product standards. Food fraud results in damages of up to $US30 to 40 billion annually.

Lack of data transparency between stakeholders in the food supply chain

Many parties in the supply chain are using their own recordkeeping systems that aren’t easy to share with other stakeholders. The manual input processes and risks of human error can cause major delays in getting accurate and timely information.  

Inability to hold stakeholders accountable

Older software systems and paper-based record keeping make it difficult to trace data manipulation, especially when there are a limited number of people who have a copy or access to records. There are steps in the supply chain that don’t have an auditable trail of transactions and updates about the food data. 

These consistent problems in the food supply chain reduce public trust in food safety. According to the “Food Safety Supply Chain Vision Study,” only 20% of global consumers place complete trust in companies to ensure food safety.

How Blockchain Is Used in Food Traceability

How DIDs and VCs work in the blockchain food traceability system
Product details are added on documents issued as Verifiable Credentials by supply chain participants to a product’s decentralized identifier (DID)

Blockchain, Verifiable Credentials, and decentralized identifiers (DIDs) are key technology components to enhance food traceability in the supply chain. 

  • Blockchain: A blockchain is a decentralized database that records information in a way that is tamper-resistant and difficult to cheat the system.
  • Verifiable Credential: A digital, cryptographically secured record, like a certificate or document, that has been verified and issued by a trusted institution or individual. 
  • Decentralized identifiers (DIDs): A DID is like an identifying address that is registered on the blockchain and it can be used to identify a product or batch of products that have several Verifiable Credentials associated with it. 

In order to enhance food traceability, DIDs can be applied to each food product and Verifiable Credentials can be added to product DIDs by different actors as the product moves through the supply chain.

It’s important to know that with Dock, Verifiable Credentials are not stored on the blockchain for security and privacy purposes. Rather, they are securely encrypted and stored by stakeholders. Only the public DIDs are stored on the blockchain. Basically, each product DID can have many Verifiable Credential documents associated with them but the details on the Verifiable Credentials are not actually on the blockchain. The blockchain’s function is to be able to efficiently verify that data is authentic, without relying on a central entity. This enhances transparency between actors as everyone has the same source of truth.

When blockchain food traceability systems integrate Verifiable Credentials that are added to food product DIDs, people can track and trace food sources within seconds compared to days to weeks with traditional processes and systems. Blockchain enables the food data such as its origins, movement, standards, and quality to be instantly verified. 

Benefits of Using a Blockchain Food Traceability System

Blockchain food traceability brings visibility across the entire supply chain

Accurate and tamper-resistant food data

Since Verifiable Credentials are tamper-resistant thanks to the security of cryptography, the food data is very accurate. Every relevant party in the supply chain can request to view the verified data that contain food product details such as the quantity received, organic certification, farming community, safety standard certifications, and so on. Once a record is entered, it can’t be changed.

With a blockchain food traceability system, anytime there is a relevant transaction, a Verifiable Credential can be issued. A transaction can be any significant interaction between parties in a supply chain including the transfer of information between the state of products and transfer of ownership/custodianship of products.

Efficiently prevent, contain, or rectify contamination outbreaks while reducing the loss of revenue

Blockchain food traceability systems can quickly identify points of contamination with Verifiable Credentials because of the immutable and verifiable data collected over time. With blockchain, when a food disease pathogen (an organism that can cause disease) is identified, the company could quickly locate the origin and batch for immediate recall of that contaminated batch rather than throwing out an entire inventory of the product.

Before, when a food product was contaminated, customers and companies had to throw out the entire inventory resulting in a lot of waste and loss of revenue. An E.coli outbreak in California led to discarding spinach from supermarkets across the US for two weeks and the state’s farmers had losses of US$ 74 million. Food-borne illness costs US$ 110 billion per year in low and middle income countries. 

Creates more transparency and trust in the authenticity of Verifiable Credential data 

With conventional supply chain recordkeeping systems, there was no way to efficiently verify the authenticity of data without going through an intermediary or contacting the issuing party. Blockchain food traceability systems can efficiently verify the food data that is tamper-resistaent and there is no need to rely on a centralized party to check the information. Blockchain enables stakeholders to safely and effectively do business together even though they know nothing about each other.

Secure and efficient data transfer between parties

The digitization of the information in a format that can’t be manipulated can be shared quickly and efficiently between participants. The ability to verify data efficiently results in fewer delays, waste, and other inefficiencies that cost time and money. Stakeholders can access data related to all transactions associated with a specific food product making the whole system accountable and easier to monitor. 

Verifiable Credentials help eliminate and prevent fraud 

When food data is authenticated and issued as a Verifiable Credential, people can easily go back to track the product information The visibility of food data allows policymakers and relevant parties to monitor damaging actions like deforestation and or other environmentally damaging activities. 

Helps organizations comply with food regulations

Blockchain food traceability systems can help companies comply with food safety regulations. For example in 2020, the Food and Drug Administration (FDA) proposed a New Era of Smarter Food Safety Blueprint to enhance food traceability which motivated trading partners to expand the use of blockchain technology to trace a product back to its origin. 

Customers can instantly see information about food origins and product details which can enhance the reputation of companies

There is growing global demand for customers wanting sustainably sourced food products that are organic and slave free. They are also asking companies to be more transparent about where the food came from and consumers want assurance that they were produced by people working in good conditions. In a study on global consumer trends, 79% of all consumers today say that it’s important for brands to provide guaranteed authenticity like certifications when they’re buying products. 71% of people in this group are willing to pay a premium for companies offering full transparency and traceability. 

Because of these requests, more companies are enabling customers to see where food products came from and other details verified by the blockchain by simply scanning a QR code. Some examples of information they can see include videos about the farming community that grew the food, how it was harvested, and organic certification.

Blockchain food traceability systems enable customers to see the origin and details about products

Using the Dock Blockchain for Food Traceability

Every stakeholder in the food supply chain that needs access to the data can create a unique digital ID called a decentralized identifier (DID) that can be stored on the blockchain. Each party can add food data to product DIDs in the form of Verifiable Credentials which will help track food products. Common stakeholders in the food supply chain usually include farmers, cooperatives, processors, shippers, distributors, wholesalers, and retailers. 

Organic food certification as a Verifiable Credential
Organic certification certificate issued as a Verifiable Credential and added to a product batch.

Let’s go through a step-by-step example of how a blockchain food traceability system would be integrated in a supply chain to track a product from the farm to the store. For this scenario, we will track a batch of organic peaches. 

  1. Each participant would create a DID and they would be able to issue and add Verifiable Credentials with product details to the product’s DID.
  2. Every batch of 500 peaches is also given a DID. The details of the batch can be tracked from the time they are harvested until it reaches the store where the customer can buy it. Every batch has a QR code that is connected to the product’s Verifiable Credentials. So anytime someone in the supply chain needs to verify the details, they can simply scan it with their phone to access the information.

3. The farmer adds details on a Verifiable Credential document about the conditions the peach batch was grown in including the soil temperature and weather. This document is added to the peach’s DID so anyone in the supply chain, including the end customer, can instantly verify the details about the product.

4. A government inspector checks a batch and issues an organic certificate as a Verifiable Credential and adds it to the product’s DID stating that it meets organic certification standards.

5. When the processor packs a box of 100 peaches, they issue a Verifiable Credential stating that they delivered 100 peaches to the distributor. 

6. When the distributor receives the batch of peaches, he adds a VC to the product’s DID confirming the date of receipt and quantity. He also issues a VC document with important details like the storage temperature in the warehouse and the date it was sent to the retailer. 

7. When the peaches arrive at the organic store, they scan the code to ensure that there are 100 peaches in the box. If there are only 80 peaches, they will immediately know that some went missing somewhere between the distributor and the store’s receiver because the Verifiable Credential data shows that there were 100 peaches between the processor and distributor. Based on this information, the relevant parties can investigate what happened to see if anything was stolen. If all the peaches are there, the retailer issues a VC confirming that they received 100 peaches in the box. She scans the QR code on the box to instantly verify that this batch of peaches has their organic certification.

8. The store has QR codes by each product for customers to scan and they can see the details of the product’s origin, the conditions it was grown in, the farming community, and organic certification. 

Dock allows anyone to issue and verify Verifiable Credentials as well as to create DIDs. Our technology is flexible to work in conjunction with other systems including front end systems where stakeholders are entering data. 

These are just a few examples of systems that can interface with our blockchain solutions:

  • Traceability systems
  • Logistics systems
  • Invoicing systems
  • Order management systems
  • Payment systems

For example, let’s say an IoT sensor is continuously collecting data such as the temperature and soil quality in a designated farm area. With the Dock blockchain and APIs, you can program Verifiable Credentials to be automatically generated and added to a product’s DID on the specific data you want to capture. 

Contact Us for a Free Consultation

Contact marketing@dock.io for a consultation on how our solutions can be integrated in your supply chain to manage digital identities and Verifiable Credentials.

Companies Using Blockchain Food Traceability Systems

There are a growing number of food companies that are using blockchain to improve their product traceability, reduce fraud, and enhance safety.

Bumblebee Foods uses blockchain to track tuna operations from the moment fish is caught to the market. Their blockchain food traceability system is used to:

  • Instantly check for food fraud and product tampering 
  • Identify and classify product waste in supply chains
  • Quickly identify food contamination issues that help with rapid product recalls

Europe’s largest retailer Carrefour uses blockchain food traceability systems to meet consumers’ growing demand for transparency about the origin of their organic products and production methods. Customers will have access to information about the product including where they were produced and their shipments. They will gradually extend the application of blockchain to all of their Carrefour Bio brand products.

Walmart has been using blockchain to digitize their food supply chain and reduce the time it takes to track the source of food contamination. The company requires all trading suppliers of leafy-green vegetables to comply with data record input into a blockchain-based platform that can traceback their produce. They now can trace the source of contaminated produce within seconds. Before, tracking a package of sliced mangoes took the internal team seven days to complete. But with blockchain, they were able to trace the sliced mangoes through every checkpoint including a Mexican farm, hot-water treatment plant, importer, processing plant, and cold storage facility in just two seconds!

Nestlé uses blockchain in several ways. Users can get access to key food supply chain data including the complete history and current location of any individual item, certifications, test data, and temperature data. All of this is available in seconds once it is uploaded to the blockchain. Blockchain is also used to track the origin of their luxury coffee brand Zoégas which is made from coffee beans from Brazil, Rwanda, and Colombia. Customers can scan a QR code to access blockchain data that includes information about the coffee’s farmers, the transaction certificate for specific shipments, the time of harvest, and roasting period.  

Tyson foods is using blockchain management to organize supplier documentation to meet quality standards and track and report quality issues across the supply chain.

Key Considerations When Implementing Blockchain Food Traceability Systems

Once you’ve decided that you will implement blockchain in your food supply chain, these are some important considerations in this process.

1. Clarify the objectives of implementing a blockchain food traceability system 

It is essential to be clear about the objectives and motivation for enhancing traceability to all stakeholders. Some examples of objectives:

  • Monitoring for deforestation and human rights abuses
  • Ensuring food quality and safety standards across the supply chain
  • Enhancing transparency across the supply chain

2. Define the scope of the project and specify the segment of the supply chain that the blockchain solution will first be applied to

You can start with a minimal viable product or proof of concept before going further into the development process. To help make the transition as smooth as possible over the long term, an architectural blueprint for the future phases should be drafted to detail how blockchain will integrate with existing systems from operational and cultural perspectives. 

3. Establishing data governance

It’s crucial to put a data governance system and strong data practices before implementation. Formalizing the data practices and roles will help maintain data accuracy. Here are some key questions to consider in this part of the process:

  • Who makes the decisions about rules, access of data, and the process for members to join and leave?
  • Who makes decisions to update the platform?
  • At what stage should a product be registered in the system?
  • When should a product be registered in the system?

Registering a product

It’s key to determine how new products will be registered with unique digital identifiers (DIDs). Products can be entered in three broad levels:

  • Class level: Identifies only one type of product
  • Lot level: Identifiers a batch of products (e.g. a batch of lettuce)
  • Instance level: Every individual item is given a digital ID

4. Identify key actors and areas in the supply chain that require decentralized identifiers (DIDs)

Actors are the individuals and organizations that participate in the food supply chain including small-scale primary producers, shippers, and wholesalers. Other areas of the supply chain that would likely need DIDs include products at any packaging level, trading partners, and physical locations.

5. Detail the traceability flow between actors by using Verifiable Credentials

To effectively track the journey a product takes from its origin to the consumer, it’s key to document the flow that happens during each interaction between actors and decide what fields of each transaction need to be added to the Verifiable Credential.  

As you’re planning these details, here are some questions to consider:

  • Who will execute the transaction?
  • What products will be created or exchanged?
  • Why will the transaction happen?
  • Where will the transaction occur?
  • When will the transaction happen?

Here is an example that answers these questions:

Question Relevant transaction fields
Who A manufacturing firm
What Lot number the product belongs to and the product’s DID
Why Grinding grain to make raw flour
Where DID of the factory
When Time-stamp of completion

6. Align stakeholder interests

Once you define the scope of the project, the next steps involve identifying, consulting, and building partnerships with relevant stakeholders. It is good to take the time to gather feedback about being part of the blockchain food traceability system and educate them about the benefits to increase their engagement in the transition process. 

These are the key benefits of integrating blockchain to work with existing systems for each stakeholder:

Actor Benefits of integrating blockchain
Farmers and producers Enables them to have visibility of the records of transactions and have a better understanding of who the other actors are in the supply chain. Blockchain will help efficiently verify relevant information about safe and sustainable practices for them to be certified.
Processors Processors participating in a blockchain food traceability system can improve their brand image for stakeholders who prefer to purchase from transparent brands that ensure sustainable sourcing.
Distributors These actors involved in transporting finished products from the processors to retailers can increase their brand value and image through increased traceability. When they provide transparency on the details and storage conditions of the food products, including on ships, trains, and trucks, it provides more assurance to retailers about the maintenance of food quality.
Retailers Blockchain can improve the efficiency of retailers in tracing the origin of products and recalling them if contamination is detected in addition to improving their brand image and reputation.
Consumers If retailers enable customers to see the origin and details of their food products by scanning a QR code, they can be assured about the products’ quality, history, and safety.
Government agencies Blockchain can help government agencies monitor and verify companies’ compliance to regulations and export market requirements to protect citizens from potentially harmful or contaminated products that can lead to illness and deaths.

Governments Regulations on Food Traceability and Use of Blockchain

Processors

There is growing interest among regulators and policymakers in traceability to ensure safe, sustainable, and resilient supply of food. Current regulations in many Western markets require food companies to keep records of food stages including the steps that food products go through from the source of origin to the market. 

Scott Haskell is a food safety expert with a PhD and Doctorate of Veterinary Medicine. He said since the passage of the Food Safety Modernization Act (FSMA), the Food and Drug Administration (FDA) in the US has worked towards full product traceability. One of the FSMA requirements in the section Enhancing Tracking and Tracing of Food and Recordkeeping, “instructs the FDA to develop additional recordkeeping requirements for certain foods to help establish clear tracing of a food product’s source when needed to address food safety risks.” Another part of the regulation on Animal Disease Traceability requires traceback. Blockchain technology can help efficiently trace back to a product’s origins to address the problem source.  

The European Food Safety Authority is enhancing the Food Safety Market program with trace labs to increase blockchain adoption. “The FSM aims to transform the European food certification market with the power of Big Data and the support of blockchain technology.”

Australia is using blockchain food traceability systems to ensure food safety and quality. “Australia’s agricultural sector has been an early user and developer of provenance and traceability systems to demonstrate safety. Today, producers are deploying incoming technologies to develop close and authenticated links between the end-user and primary producer.”

Conclusion

Current food supply chain traceability systems are dominantly manual, expensive, have outdated software, are vulnerable to data manipulation, and lack data transparency for supply chain stakeholders. These problems often result in foodborne illness outbreaks that have caused many people to be sick or die. Fortunately blockchain, Verifiable Credential, and decentralized identifier (DID) technology can be integrated into existing systems and effectively solve many of these problems.

Benefits of using a blockchain food traceability system:

  • Accurate and tamper-resistant food data
  • Efficiently prevent, contain, or rectify contamination outbreaks while reducing the loss of revenue
  • Creates more transparency and trust in the authenticity of Verifiable Credential data 
  • Secure and efficient data transfer between parties
  • Verifiable Credentials help eliminate and prevent fraud 
  • Helps organizations comply with food regulations
  • Customers can instantly see information about food origins and product details

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About Dock

Dock is a Verifiable Credentials company that provides Dock Certs, a user-friendly, no-code platform, and developer solutions that enable organizations to issue, manage and verify fraud-proof credentials efficiently and securely. Dock enables organizations and individuals to create and share verified data.

“We’ve looked at a lot of the systems that allow you to issue DIDs and VCs and generally what we’ve found is that Dock is far easier to use than many of the existing tools out there. It can deploy very quickly and it will be very easy for our developers to use the tool.”
Amber Hartley
Chief Strategy Officer, BurstlQ

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