The adoption of digital technologies in the food industry is no longer an option. The use of digital technologies is now a necessity. The contemporary food supply chain will include producers, carriers, suppliers, wholesalers, retailers, a host of other intermediaries, and finally the customers at the tail end of the supply chain. The food industry comprises many diverse stakeholders all driven by their own autonomous goals.
The supply chain in the food industry is a series of independent, disconnected, largely autonomous events controlled by marketing, production, and distribution activities. The management of these events and processes in a classical way can be near impossible, especially with increased globalization. The development of technology and associated infrastructure has led to the digitization of these processes. More and more key stakeholders in the food industry are working closely with IT developers to create solutions for longstanding problems as well as emerging issues.
Blockchain technology is playing a key role in the food industry – both transformative and disruptive. Overall, the digitalization of global economies is one of the major dynamic changes of our time and is opening up new possibilities in the creation of new business models. Increased availability and integration of data, automation of production and manufacturing processes, interconnection of value chains, and development of digital customer interfaces are fully transforming business models and reorganizing entire industries.
Food supply chains are continuously changing but require permanent control to avoid these supply chains becoming a source of danger for consumers. Potential use cases for blockchain technology that are increasingly seeing the light of day are traceability, sustainability, food safety, transparency, and the green revolution. Blockchain technology is playing a particularly important role in supply chain control processes. Concerning food safety and traceability, blockchain is transforming the broad understanding of trust and food safety. The COVID-19 pandemic slowed down the deployment of blockchain in the food industry, particularly food traceability. The disruption of supply chains meant that efforts were diverted to more pressing concerns. Additionally, collaborations were becoming very complex due to social distancing and other measures. The pandemic altered how people work seeing that more people have to work from home.
However, a lot of activity was happening behind the scenes as developers and innovators enjoyed the sufficient time to research, test, and develop new technologies. In the next couple of years, we can expect to see major developments crop up on a scale that wouldn’t have been expected. Digital technologies have allowed the food industry to connect to the cloud and use apps over the internet. Specifically, the pay-as-you-go model for software and solutions provides companies with a way to conduct business today efficiently and obtain information quickly.
The most prominent challenges to the centralized system of identifying food safety issues in the food supply chain are that the existing systems are monopolistic, rarely 100% transparent, and asymmetrical in the information flow. These challenges are serious and often lead to problems associated with the lack of trust among individual participants in the food supply chain or the banal irregularities of falsifying certificates of origin and manipulation of information in the production process. The above-listed challenges inform the need to create a more decentralized system to eliminate the limitations of the existing food safety systems.
Blockchain technologies embody the four core elements of the New Era of Smarter Food Safety Blueprint by the FDA. The first of the core elements is tech-enabled traceability. With the knowledge that traceability is critical for food safety and operational efficiency, blockchain solutions will help improve these two areas. Keep in mind that food safety concerns are not only of a biological nature but also of an economic nature. There’s a need to protect consumers against financial fraud that may occur when buying food.
Some of the major problems in food value chains include:
- fraud in the trading of food
- falsifying information about the producer and the technological process of food production
- illegal production and marketing of food without proper documentation
- food-borne diseases
- costs of withdrawing food items that fail to meet legally regulated requirements from market circulation in a given country and even globally
Traceability is critical in ensuring that food items are traced and tracked throughout the supply chain. The developments in blockchain technology will provide solid traceability programs that help locate products at all stages of the food chain or supply chain.
This technology promises to be user-friendly and affordable to all businesses both small and big. As soon as blockchain traceability solutions ate readily available and widely used, they will hasten the process of finding the source of food contamination and minimize the occurrence of foodborne diseases. With Blockchain Platform like Lutinx.com it is possible to connect verified buyers to verified sellers. In this way we will see more companies buying locally with increased confidence since the technology reduces the research time for buyers and even helps with the aspects of social and environmental sourcing.
Just like SaaS solutions have had a great impact on food traceability, decentralized apps and blockchain-as-a-service will become more affordable and user-friendly. Food experts and the food industry stakeholders will have access to valuable information in real-time and can, therefore, take corrective action where problems arise to avert a possible crisis.
Blockchain solutions will serve as massive data pipelines for businesses as they become more widely used and as the digital world continues to explode. Data integration is currently the backbone for businesses not only in the food industry but across different industries. Emerging solutions will allow for the extraction of data from different points of the supply chain for information gathering and analysis. Blockchain will allow businesses to question data that has been processed up to a specific point without having to start over from the beginning. Integration and analytics will be key drivers of food products and food services.
Finally, blockchain technology will offer solutions to the numerous challenges and shortcomings of the current food production system and the conventional food safety systems. The biggest advantage of blockchain is a significant increase in transparency of operations among all stakeholders, especially those using big data across all parts of the food supply chain.