Core Principles of a Food Blockchain

July 12,2018 09:23 AM By James Flynn

"Great discoveries and improvements invariably involve the cooperation of many minds."
Alexander Graham Bell - Scottish Inventor of the Telephone

During our blockchain journey to date, one thing has become abundantly clear to me. "Blockchain is a team sport". No one person, or company, can accomplish a blockchain solution that helps solve the supply chain traceability and provenance problems of the current "one up one down" food supply chain system.

This means that to have a successful blockchain solution that delivers on the promise of whole of supply chain visibility, we need to have the involvement of all players from retail, food manufacturing and farming. This will not be enough however, we will also require the collaboration of software providers that hold food safety data and hardware providers like RFID (Radio Frequency ID) and sensor technology companies that gather and transmit food safety and traceability data. To make such a solution even more effective we would also want to see packaging companies getting involved, for example, embedded RFID tracking in product packs.

The implementation of an effective global food blockchain will require a large number of participants to come together to work on the problems they wish to solve. When they do, they will need to agree how to best go about building the solution for the good of all the parties involved. This is where the real problems around blockchain adoption lie. How will it be governed? What standards will be adhered to, etc.? Such issues commonly result in the "white Elephant graveyard" of ambitious, cross industry collaborations as vested interests come into play and disagreement and dispute breaks out.

Today, I would like to draw your attention to some work that is going on at Walmart and several other global food businesses that address the principles of blockchain governance in the food supply chain. I believe that these points make for a very good start on how participants in food blockchains can and should operate together. However, I also feel that they can be simplified and improved upon. Below is a my take on a summary from Frank Yiannis's stellar work on the subject, with his partners in the Walmart blockchain project. I have streamlined the text somewhat for readability and put my own emphasis on these core principles.

Solve a Business Case: There should be a clear business case for a blockchain solution, it's not about the technology but the problem you are trying to solve. Without this, no-one will adopt or use the blockchain solution.

Collaborate: No single company or sector can "fix" the food system alone. Working together is the only way to gain mass adoption and realise mass benefits.

Interoperate: A collaborative, digital traceability solution does not currently exist because companies do not collaborate. Instead, they work within their own information silos, unwilling to share information for commercial or cost reasons. To prevent this in future, we believe blockchain food networks must work with existing systems (such as food safety and traceability systems) as well as other blockchain networks and standards, like GS1, where possible.

Create Shared Value: Blockchain technology will only be useful, and be adopted, if it creates an ecosystem that participants want to join and participate in willingly. In this way, the entire food system improves, rather than individual entities gaining competitive advantage.

Leverage: Whenever possible, blockchain solutions should use and build on existing technologies, processes and standards (such as GS1). Investment should be made in digitising the food system to allow blockchain solutions to develop in a cost-effective manner.

Blockchain Consensus based Governance: Blockchain solutions are designed to be decentralised with no one entity in control of it, or its' data. This means that blockchain networks must establish clear rules for self-governance, including membership, data ownership, rules of conduct, and privacy. Blockchain is about having trust built into the system fabric where the blockchain solution replaces the central trusted authority.

Make It Affordable: Food businesses generally operate on low profit margins, therefore any increase in industry costs will inevitably be passed on to the customer or consumer, potentially making them less competitive. A well implemented blockchain based food ecosystem may reduce costs through eliminating duplication of work and reduction of food safety and provenance costs and risks but the reality is that if it costs too much then adoption rates will be low and this will kill the blockchain adoption stone dead. The cost of any blockchain solution must therefore be spread amongst the participants in proportion to the value derived to stand any chance of gaining traction. Striking the sweet spot in this area is the most critical factor of a blockchain ecosystem.

As previously mentioned, this is my take on Frank Yiannis's full article. Frank's full version of the above can be found here and I highly recommend reading this for a primer on blockchain's use in the food sector. Frank's article will be referred to for decades to come as one of the big milestones on blockchain adoption and he has already sealed his legacy in this regard. I congratulate him for the impact he is making on food safety and cost efficient supply chains.

Global Food Blockchain Initiative: We are very aware that most current food blockchain work is being orchestrated by very large, global companies whilst over 80% of food companies (the small, very small and medium) are in danger of being left behind in a future 'blockchain-less' landscape for small businesses where they have no voice or stake in the global blockchain ecosystem. In recognition of this, and the team nature of blockchain, we have established a non competitive collaborative group called the Global Food Blockchain Initiative (GFBI). This is designed to provide a place where companies of all sizes, that are interested on working on blockchain, can come together to find project collaborators and work on blockchain projects, standards and other initiatives. Please visit the GFBI web site and get involved. If you are on LinkedIN feel free to joint the Global Food Blockchain Initiative Group - we want to bring interested food professionals, collaborators and pioneers together in this space and build a collaborative community who want to get involved and drive the great blockchain project forward.

Some Great Blockchain Work Going On: Several other notable, and well funded, initiatives with great teams behind them are progressing at pace in the food blockchain space such as Origin Trail who are working with GS1 on food traceability and provenance. Also Ambrosus, a Swiss government backed food blockchain is focusing on sensors and data automation. In addition, Microsoft are working with a California company called Mojix on RFID technology that they have integrated with blockchain technology. The space is filled with innovation and excitement.

What Primority are Doing? Primority's 3iVerify solution is well placed to take advantage of blockchain technology by integrating food safety and traceability data from an affordable and easy to implement and use food safety and quality management system. We believe that there are only a handful of potential long term winners in the blockchain "land grab" race that has started in the food supply chain area. We are actively working on this from an R&D perspective. If you would like to discuss a blockchain project please get in touch.

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