Food firms and IBM join forces in blockchain consortium

Food companies Nestle, Unilever and Walmart, among others, have joined forces with technology firm IBM to use its blockchain network to fight food fraud.

The technology – essentially a digital database of time-stamped records or transactions – would be used to track supply chains and identify the origin of any contaminated or counterfeit foods, IBM announced.

The company said one of the main challenges facing the food industry was the lack of access to information on the supply chain and general product traceability, especially in light of any contamination or adulteration, which can take weeks to investigate and add costs to companies.

"Blockchain is ideally suited to help address these challenges because it establishes a trusted environment for all transactions," IBM said in a statement. "In the case of the global food supply chain, all participants – growers, suppliers, processors, distributors, retailers, regulators, and consumers – can gain permissioned access to known and trusted information regarding the origin and state of food for their transactions."

In an interview with CNBC, Brigid McDermott, vice president for blockchain business development at IBM, said: "We're trying to use [blockchain] to get that transparency across the whole system so that we can find the problem, so that we can make it easier for people to run safer systems, run safer food supply chains."

Other companies joining the IBM consortium to employ the technology are Dole, Driscoll's, Golden State Foods, Kroger, McCormick and Company, McLane Company, and Tyson Foods.

Blockchain, which is the technology that underpins the digital currency bitcoin to keep track of transactions, is becoming increasingly popular as a track and trace and authentication tool to ensure the integrity of physical supply chains.

The IBM consortium was initially initiated by Walmart, which had previously used IBM's blockchain system to successfully track pork sales in China and mangoes in the US. However, the firm noted the limitations of the system when used by just one player – other companies would still take weeks to investigate food fraud concerns resulting in wasted products, reduced prices and a loss of sales to the industry as a whole. Walmart asked IBM to form a collective of industry players.

Under the IBM partnership, the consortium hopes to reduce fake, substandard and mislabelled food entering the supply chain, as well as food contaminated with bacteria such as E. coli. The use of the technology would essentially aim to make food safer and reduce recalls, by giving power to companies to trace dodgy products back to source much more quickly.

"A blockchain food safety programme is tremendously good because it provides transparency into the food system, which means that in the event that there is a problem like a recall, you're able to quickly, effectively, surgically deal with that problem," McDermott said.

It is also hoped the use of the technology will provide information on regulatory compliance and certification.

In addition, it is also hoped to act as a deterrent to commit food fraud.

"Blockchain technology enables a new era of end-to-end transparency in the global food system – equivalent to shining a light on food ecosystem participants that will further promote responsible actions and behaviours," Frank Yiannas, vice president for food safety at Walmart, said in a statement. "It also allows all participants to share information rapidly and with confidence across a strong trusted network. This is critical to ensuring that the global food system remains safe for all."

The consortium also plans to identify ways that blockchain can be used to save food companies money through increased traceability of the supply chain.

Earlier this year, one of the world's largest supply chain security trials used blockchain to successfully track a bottle of wine from Australia to China.

Meanwhile, Chinese e-commerce giant Alibaba is running a pilot scheme using blockchain technology to stop food fraud on its marketplaces.