HomeBlockchainBlockchain and traceability: the implementation of new technologies in traditional sectors

Blockchain and traceability: the implementation of new technologies in traditional sectors

Blockchain became a recurring topic following the rise in the price of Bitcoin at the end of 2017. The technology underlying the functioning of cryptocurrencies, which allows the creation of a totally decentralised trading system, has revolutionised not only our monetary system, providing an alternative to central banks, but also other aspects of everyday life. One of these is the traceability of the food supply chain, thanks to the introduction of new technologies, the traceability process has become cheaper, safer and faster.

Traceability: why has it become fundamental?

The issue of traceability of food products has emerged since the 1950s when the process of globalisation began to develop. In addition, in the last 20 years, the awareness of consumers in the food sector has increased, who are increasingly concerned about issues such as food safety, which is precisely linked to traceability. Food safety and the health of the individual who consumes a certain type of product go hand in hand, although it is not always possible to guarantee a “safety” standard. The World Health Organization (WHO) estimates that every year one in 10 people in the world contracts diseases due to food contamination and of these, 420,000 die, of which 125,000 are children. Ensuring the traceability of as many products as possible could help mitigate this problem. Traceability, in fact, in addition to allowing the consumer to know the characteristics of production and transport of a food product, allows to quickly and safely identify the causes of non-compliance and allows to trace the recipients of a batch of goods not suitable for sale and thereby to optimise the recall of products when necessary.

How did the companies and the regulator proceed?

In this regard, companies that work in the food chain, both downstream and upstream, began to move as early as the 90s to try to address customer requests and establish a lasting relationship with them based on transparency.

Despite the important improvements in terms of quality and safety in the food sector in recent years, consumer confidence in the agri-food sector has decreased. This is due to the fact that very often consumers are not aware of the regulation mechanisms in the food chain. An information campaign in this regard could be challenging for the producers themselves, but it could also help to build loyalty with customers who would be guaranteed a safe and monitored product. Greater consumer awareness would bring benefits especially in a country like Italy, famous throughout the world for its food excellence.

From a regulatory point of view, Europe has moved relatively slow. Traceability as a horizontal mechanism, therefore applicable to the whole food chain, only appeared in Community regulations in 2002 (EC Regulation 178/2002). The subject of the regulation is the traceability of food, animal feed and livestock intended for food production, which is provided for at all stages of production, processing and distribution. The aim of the regulation is to enable food business operators to identify who has supplied them with food or animal products, to identify the businesses to which they have in turn supplied them and to enable the competent authorities to obtain the necessary information, if needed. Since January 1st, 2005, all EU countries have adopted the European Regulation.

Why is the blockchain so important in this process?

The blockchain is a public digital ledger that records transactions between several parties, without allowing subsequent alteration. Each unit of the ledger represents a block and all blocks are linked together through cryptography, which binds them in a non-alterable way. Cryptography allows to communicate and carry out transactions without the need for a third party to authenticate the operation. Precisely for this reason, blockchain technology turns out to be a revolution even in the field of traceability. With blockchain, consumers (or any third party) can monitor the status of the product in real-time. This technology allows to control the processes in a totally transparent way but above all to reduce the time of detection and recall in case contaminated food is discovered. The implementation of blockchain in the processes of traceability of the food chain has also brought economic benefits. The use of the technology has, in fact, led to a reduction in input errors and, as already mentioned, the risk of tampering with data is zero. There are also considerable savings in terms of time and reduction of food waste.

The only weakness of the blockchain in the traceability of the supply chain is that all those involved must be willing to share the information, which will be available only when all participants validate the transaction.

Among the food companies that are pioneers in the use of blockchain, there is Carrefour, which already in 2018 began to use blockchain technology on the supply chains of poultry and citrus, with the aim of including other foods by 2022.

This article is a translation from the original written in Italian published by Luca Poma on his blog.