A recent announcement from Walmart may mark the beginning of widespread blockchain adoption in the global supply chain. Walmart will be instituting a program next year that will require anyone who sells leafy green veggies to the mega-retailer to use a blockchain-based tracking platform that was originally designed by IBM.
Blockchain technology is often associated with Fintech, but it looks like logistics could be the first area to see widespread blockchain adoption by an established industry. Walmart has been working on new solutions for tracking food items for many years. While numerous areas of their business have been made more efficient by computers, the food supply chain has been mired in archaic record keeping techniques.
Like many aspects of the logistics industry, food supplies aren’t tracked by any sort of central database. Instead of having some sort of shared register, food suppliers are only required to record where they obtained an item, and where it was sold. Past that, companies in the food supply chain have no idea where something they handled originally came from, or where it ultimately went.
Walmart is Making Changes
Under the current system, it can take days, or even weeks to track down the source of food contamination. Today food is grown in industrial quantities and shipped all over the globe. The practical implication of this is that when there is a food contamination problem, it can poison thousands of people in a short period of time.
Earlier this year the US was hit hard by an outbreak of E.coli bacteria that traveled to at least 36 states on tainted romaine lettuce. It is impossible to tell how many people were sickened, but 205 were hit hard enough to seek medical attention, and five lost their lives. The contamination was ultimately traced back to the Salinas Valley and Yuma, in Arizona.
There have been numerous other events like the one that killed five people in April of this year. No wonder Walmart has been able to get Dole, Fresh Express and Taylor Farms to jump on-board with their new blockchain tracking platform.
Walmart’s vice president for food safety, Frank Yiannas, announced that, “We’re requiring our suppliers of fresh leafy greens to be able to trace back their product to the source, to the farms, in seconds and not days or weeks.” In most cases the time involved with tracking down tainted food could mean a big difference for consumers, especially children and the elderly.
Blockchain is a Great Solution
Walmart seems to be concerned with safety in the food supply chain. There are other applications for the same technology that can also help to ensure that consumers are getting the high-quality food they are paying for.
Alibaba is one of the largest marketplaces in the world. Among other things, they connect food sellers across the world with consumers in China. Many people in China don’t trust their own food supply, and are more than willing to pay a premium for imported dietary items. Australian vitamins and supplement are a perfect example of a luxury dietary good that is in demand in China, which is often counterfeited.
Blackmores was one of the first Australian brands to begin using Alibaba’s pilot blockchain authentication platform earlier this year. Alibaba thinks, “These technologies are designed to authenticate, verify, record and provide ongoing reporting of the transfer of ownership and provision of products and goods,” according to a statement.
Whether it is used for ensuring the quality of dietary items, or preventing death for contamination, blockchain is a perfect solution for a global supply chain that is only going to get more complex as time goes on. China is also working on a global infrastructure build-out, called the BRI, which will probably connect global trading partners at a whole new level. Given the utility that blockchain has demonstrated so far in logistics, it may be an integral part of Beijing’s push to connect Eurasia.