Blockchain food supply chain: trends, challenges, and solutions

The disruption of the food supply chain that occurred in 2020 sped up the application of blockchain food supply chain which needs solutions and trends to solve current challenges.

The born of blockchain has given a new norm for several parts of the world, which provides the potential for possible applications in many industries. Expressly, in the food and beverage innovation, blockchain technology is believed to add transparency and efficiency to the food supply chain, improve food trust, and control food safety and sanitation.

Applied Blockchain food supply chain

In principle, blockchain in the supply chain acts like digital storage, which is shared the memory capacity in a computing network instead of a single server. Accordingly, data is stored in the form of a block that blockchain means chains of block data. One of the outstanding attributes of blockchain technology refers to security, which protects data by cryptography. Additionally, data stored by blockchain is immutable to maintain the data quality and keep it raw.

Blockchain food supply chains offer a secure space where all the factors in the chain could access data in a secure way. The Food supply chain has witnessed the participants of several subjects, including farmers, manufacturers, authorities, logistics, distributors, and more, which introduce its close relationship. Accordingly, the act of one party would induce a change in other operations.

Related article: Technology in the food industry – the impact of digital transformation

Food trust blockchain  

In the supply chain, each participant holds its own data stored in its local server. In which the lack of transparency in the chain induces an increase in food fraud. Currently, for enhancing food trust, food software systems are leveraging the blockchain. Blockchain gives parties a key to access data without modifying them. In this way, it maintains the assurance of food information or certificates.

IBM has launched its food trust platform, leveraging blockchain technology to enhance the safety of the food supply chain. With the food trust blockchain, consumers might handily track the origin of food, including checking original farms, suppliers, and food shelf life. Whereas the record created by producers and retailers would be shared publicly in blockchain, offering instant access.

IoT in the blockchain food supply chain  

Current technology supports the transformation between blockchain and the Internet of Things (IoT), which is claimed as improving product freshness and food safety. Accordingly, IoT sensors are used to support blockchain technology to track food transparency. Besides, the fresh product margins would be strictly controlled to reduce food waste. Reports showed that applying IoT and blockchain promise to degree food waste in the supply chain by 50%.

In fact, IoT sensors in the food supply chain help with keeping the process of information adding to the blockchain smoothly and efficiently. The added data cannot be modified that it is hard to be manipulated since blockchain technology covers a high level of security in storing information. 

Related article: Top IoT solutions in food and beverage industry

On the other hand, one of the recent technologies used in IoT sensors tends to be RFID seals. This technology gives the blockchain a hand to instantly detect any fraud in the food supply chain before it induces any damage. Combining the data from IoT in the food supply chain to the blockchain is believed to protect the reliable flow through the chain. With constant innovation in these sensor technologies, food software companies are leveraging IoT and blockchain as the fundamental key to success.

Challenges of blockchain technology in supply chain

Obviously, blockchain technology refers to the future of the food supply chain due to the undeniable benefit it brings to users. However, along with advantages, businesses have faced enormous challenges coming from the incomplete innovation of technology and user acts as well.

The complexity of supply chain management blockchain  

The diversity of the food supply chain induces one of the most significant challenges that software development companies face, which is system complexity. The data incurred from the food supply chain was collected in different forms that required distinct storage methods. In blockchain technology, businesses are struggling with developing a custom system fitting with multiple data entries. Additionally, in the farming industry, there might be massive handling of data daily, deterring the process of recording.

The food supply chain consists of many players with various data entry layers. Hence, applied blockchain in the food supply chain has to start with constructing a custom infrastructure system. The system would be responsive to many operation types. Besides, to better data entry effort, the custom blockchain system also requires a high level of integration with other systems, including enterprise resource planning system (ERP), restaurant POS system, Customer relationship management system (CRM), Online ordering system, and more.

Related article: ERP system for food industry – Opportunity and challenge

Data transparency in Blockchain food  

Besides undeniable advantages, many experts are skeptical about data transparency when various parties have been involved in the same chain. Obviously, detailed information tends to be a secret that businesses do not expect to reveal. In other words, to protect their business, companies might choose to provide inaccurate or deficient information. Hence, it would damage the operation of the whole system.

The data transparency challenge seemingly deters other players from contributing to the blockchain implementation. Productions would suspect the data added by rivals, leading to potential withdrawal.

On the other hand, businesses are also reluctant regarding the storage capacity of the blockchain that data coming from trading and processing are giants without interruption entering the digital ledger. As a result, before building the comprehensive blockchain system, it needs to consider several economic impacts, infrastructure, and technology ecosystem.

Upcoming trends of blockchain food supply chain  

1. Food supply chain Traceability: food trust blockchain would enhance traceability technology to protect food safety. Leveraging the blockchain, consumers can track the origin of the food and find who contributed to the distribution chain. That information is collected without interruption from many producers. Take Provenance as an example, based in the UK, that food blockchain company offer data-based, support to customer knows where their products came from. Hence, protecting the customer’s right of being compensated if the transparency is inadequate.
2. Cloud-based commodity management with blockchain: Undoubtedly, cloud-based technology has become the norm these years, and many complex management systems are moving to the cloud. With blockchain, businesses expect to boost the efficiency of commodity management. Accordingly, the challenges of data management and time lag that occurred in the business process would be no longer a concern. The cloud-based management system would reduce the data entry time while optimizing server efficiency. Without complex infrastructure, users could access the system more easily via a regular device, including via mobile app development or web application development.
3. Food supply chain marketplace: Balancing supply and demand remains trouble for many businesses, especially in the food industry where products face short shelf life and need to deliver in a massive volume. Accordingly, the dawn of the food marketplace is indispensable that connects buyers and sellers. However, the fact is tons of transactions placed per second weaken the system. In this case, blockchain technology would reduce the stress of managing data drain for each food supply chain marketplace.
4. Data sharing in the supply chain: The sharing economy is definitely dominating the market, which appreciates the share of information across players. Having a market position with information transparency and accuracy is the future we are expecting. At this time, businesses would be leveraging the available information from many sources to deliver decisions. Obviously, there is still the difficulty of compelling companies to share their information, but data sharing in the supply chain is remaining an ideal perspective that benefits all.

In final words, applied blockchain in the food supply chain tends to be the most recent and feature in many countries. It promises to deter business uncertainty and maintain the health of companies as a whole. In practice, protecting the right and benefits, it requires care in constructing the blockchain system.