IBM, Walmart, and Nasdaq-related Chinese retailer, JD.com, together with Tsinghua University National Engineering Laboratory for E-Commerce Technologies, have announced that they would work together in a Blockchain Food Safety Alliance collaboration to enhance food tracking, traceability, and safety in China, in order to achieve greater transparency across the food supply chain. The latest efforts and collaborations with one of China’s largest retailers, JD.com, is commendable, as it helps to bring a safer food supply to China. These efforts are a continuation of the initiative by Walmart and IBM in the US in August 2017.
These four companies are not the only ones interested in providing food tracking and traceability in China, as ten food suppliers and retailers – Dole, Kroger, Driscoll’s, Golden State Foods, Nestle, McLane Company, Unilever, McCormick, Tyson Foods, and Walmart want to be part of the collaboration. On the other hand, Walmart’s food safety solution has been working with IBM and its Blockchain platform. The food supply chains around will tremendously improve with this initiative, as it will bring about efficiency, transparency, and authenticity that is greatly needed.
The importance of good food cannot be overemphasized. A food item may look well packaged or a fruit looking succulent and ripe, both of them sitting prettily on the shelves in your local supermarket, and the first instinct is to grab them because they look presentable; but the big question is what can you tell by their outward looks that the food item is safe for consumption?
Research has shown that 1 in 10 people fall ill every year as a result of foodborne diseases and around 420,000 people die. This disturbing statistics brings to reality, the number of unhealthy foods that consumers take in. Food companies, distributors, and retailers are not oblivious of these things, as they have tried to address these issues globally, although, it has not been devoid of challenges.
With the introduction of Blockchain and the many benefits it poses, some people hope that the distributed ledger technology (DLT) can drastically cut down food disease. Also, if retailers and distributors are aware that they could check and validate with certainty where the food/fruit that reaches the consumer is grown, handled, stored, and inspected, including every stop made en route to the store, the details could be shared via DLT.
Walmart conducted a pilot program and their findings showed that the application of blockchain to trace food reduced the time it took to trace a package of mangoes from the farm to the store from days or weeks to two seconds. A while later after the test was conducted, on December 14, 2017, over 100,000 mangoes from a Queensland supplier in northern Australia were recalled by Biosecurity SA after it was discovered that fruit fly larvae were seen in a mango the Adelaide foothills.
The collaboration of these four organizations will see the creation of a standards-based method of collecting data about the origin, safety, and authenticity of the food, using blockchain technology to provide real-time traceability throughout the supply chain. This will greatly encourage accountability and provide insights to suppliers, regulators, and consumers into how food is handled from farm to consumers.
Vice President, food safety, IBM, Brigid McDermott said that IBM, Walmart, JD.com and Tsinghua University will work closely together, maintaining collaboration and communication, to ensure that JD’s solution and IBM’s solution have standards that will enable Walmart and JD customers to have a consistent user experience when accessing the food safety and traceability information.
McDermott also stated that the four partners in the Blockchain Food Safety Alliance will work with food providers and regulators to develop the standards and solutions for food safety in China. Tsinghua University will help ease the engagement between the China Food Safety Alliance and China regulators and government entities.
This initiative will foster accountability and provide suppliers, regulators, and consumers greater insight and transparency into how food is handled, from farm to fork. In the past, achieving this has been very challenging because of the complex and fragmented data sharing systems that are often paper-based and prone to error. This is where the Vottun project plays a pivotal role.
The Vottun Project is a decentralized blockchain ecosystem that runs on the Ethereum blockchain and provides a platform for decrypting and encrypting certificates. These certificates cannot be forged, as it leverages on the power of the immutable distributed ledger that runs on smart contracts. Institutions can issue certificates and employers and recipients can verify the authenticity of the certificate.
One of the aspects where the Vottun project is applied is food traceability. Vottun issues certificates at each step of the food supply chain. A certificate is issued to the farmer, shipping gets its own certificate, the supplier issued a certificate, and another certificate is issued at retail. Certificates issued at every step show that these steps have been individually scrutinized and the process of food production is safe. The certificates are tied together by the product QR code or Barcode and this enables customers to scan the QR code and all related certificates for the entire supply chain will be displayed.
The Vottun project ensures that food products from farm to shelf are checked and certified healthy for consumption. The Vottun project gives room for transparency and authenticity, and it will drastically reduce foodborne diseases. Also, the certificates issued by Vottun cannot be tampered with or forged, as they are stored in the blockchain.
JD.com is the largest e-commerce company in China and the country’s largest retailer by revenue. The company boasts of the largest fulfillment infrastructure of any e-commerce company in China. A major competitor to Alibaba-run Tmall, the company as of September 2017, had 266.3 million active users on its platform and it operated seven fulfillment centers and 335 warehouses across China.
IBM is going to contribute to the alliance by providing its blockchain platform and expertise, while Tsinghua University will act in an advisory role, sharing its expertise in the key technologies and the China food safety ecosystem. IBM and Tsinghua will team up with Walmart and JD to develop, optimize, and roll out the technology to other suppliers and retailers who join their alliance.
McDermott of IBM commented on aspects of the blockchain technology, saying: “IBM’s Food Safety solution is built on our IBM Blockchain Platform, which already leverages the Linux Foundation’s Hyperledger standard. This is a key standard in the blockchain community and one that the Alliance supports.” In areas that might require bespoking for the Chinese market, McDermott also said that with all the technologies that abound, it is obvious that there is a possibility for some localization needs and one of the things the Alliance will do is to work to understand if there are China-specific needs for Hyperledger and how it can show its support.
In China, heavy research is invested in food safety through the Walmart Food Safety and Collaboration Center, and has always promoted food safety through its own supplier network as well as working with JD, which has what is often described as “rich omni channel” food supply chain management experience. Both companies have been able to leverage on JD’s skill in the application of artificial intelligence (AI) blockchain, big data, and other new technologies to protect consumers. Walmart, on the other hand, has a well-developed online grocery business in China, that is capable of transporting fresh produce from its shelves to homes within one hour.
Vice president, food safety and health at Walmart, Frank Yiannas, said in the wake of the Alliance announced that through collaboration, standardization, and adoption of new technologies, traceability and transparency can be greatly improved and it will ensure the global food system remains safe for all. President of JD Y, JD.com’s supply chain research unit, Yongli Yu, said: “Partnering with IBM, Tsinghua University and Walmart, all global leaders in traceability, gives our customers and partner brands unparalleled accountability. Throughout the world, and particularly in China, consumers increasingly want to know how their food is sourced, and JD is dedicated to using technology to promote complete transparency.”
Bridget van Kralingen, senior vice president, IBM Industry Platforms, an IBM business created in August 2016 stated thus: “Blockchain holds incredible promise in delivering the transparency that is needed to help promote food safety across the whole supply chain. This is a fundamental reason why IBM believes so strongly in the impact this technology will have on business models.” Kralingen, who holds a Masters of Commerce degree from the University of South Africa, further stated that “By expanding our food safety work with Walmart and Tsinghua University in China and adding new collaborators like JD.com, the technology brings traceability and transparency to a broader network of food supply chain participants.”
“Tsinghua University is committed to in-depth research into food safety – one of the most important areas for improving quality of life in China and also around the world,” said Professor Yueting Chai from the National Engineering Laboratory for E-Commerce Technologies at Tsinghua University. The university which is located in Beijing, founded in 1911, and is a member of the C9 League of Chinese Universities, has been working with IBM and Walmart to create a whole new model for food traceability using blockchain to provide transparency in the food supply chain. According to him, “We see this new cooperation as an important next step in this endeavor,” the Professor said. Use of Blockchain to trace food items by the parties has been piloted, including pork in China.
The Collaboration is also designed to ensure brand owners’ data privacy while helping them integrate their online and offline traceability for food safety and quality management channels. Information will be shared using blockchain for companies who will decide to join the Alliance. These companies will also be able to choose the standards-based traceability solution that best fits into their needs and legacy systems. This act will, in turn, bring about greater transparency to the food supply chain and introduce new technologies to the retail sector designed to create a safer and healthier food environment and also amplify the consumer experience.
Insights gained from the work being undertaken in China will show how blockchain technology can help improve processes such as recalls and verifications and provide the greater transparency that will boost consumer confidence in China and around the world.
As to the project’s timetable going forward, McDermott said “We work with a sense of urgency. IBM and its collaborators in this effort believe that blockchain can accelerate extremely quickly. As we continue to develop the solution, we will expand the scale of the networks involved by focusing ensuring that each stakeholder sees value in participating.” She also said that “Blockchain adds the most value when you have the largest ecosystem. As such we will seek to build out the ecosystem by collaborating with other stakeholders, including farmers, suppliers, and retailers.” Financial details on the project were not disclosed by the parties.