Walmart expands blockchain in Chinese food supply chain

Retailing giant Walmart is extending its blockchain efforts in China in a bid to improve supply chain integrity.

According to a report in the South China Morning Post, the company is “in active conversation to accelerate the progress” of using blockchain to trace the origin of its food products, quoting Frank Yiannas, Walmart’s vice president for food safety.

The move follows a successful pilot project in China in May, where Walmart used a blockchain technology co-developed by tech firm IBM to trace pork products from a farm owned by Chinese meat producer Jinluo to a Walmart distribution centre in Beijing. The company has also successfully tracked mangoes from farm to store in the US.

Blockchain is the technology that underpins the digital currency bitcoin and is essentially a digital database of time-stamped records or transactions. It is now becoming increasingly popular as a track and trace and authentication tool to ensure the integrity of physical supply chains, most notably food.

In August, several food companies including Walmart, Nestle and Unilever joined forces with IBM to use the tech firm’s blockchain network to fight food fraud.

“Blockchain technology is a game changer in the food industry and China is probably the place to scale its adoption as the Chinese government is already interested in tracing (the supply chain of food) and Chinese consumers are so tech-savvy,” Yiannas told the SCMP.

The blockchain extension using IBM’s technology will give power to consumers who will be able to trace the supply chain of Walmart food products by using their smartphones to scan a QR code on the products. Walmart has 400 stores in mainland China.

Besides supply chain integrity and product authentication for consumer peace-of-mind, Walmart and IBM believe the digitised time-stamped records will also speed up the time it takes to accurately trace products in the case of product recalls, as well as reducing exposure and identifying the origin of any contaminated or counterfeit foods.

“The process of finding out where the food is first produced, how many times it changes hands between different wholesalers, brokers before reaching our dinner tables, can be very complex. By tracking how and where the food we sell is produced, blockchain provides new levels of transparency and accountability – responsible systems result in safer food,” Yiannas said.

The Walmart executive was speaking to the SCMP on the first anniversary of the company’s ‘Food Safety Collaboration Centre’ in China, which is an initiative bringing together food safety experts and stakeholders, and involving an investment of $25m by 2020 to improve food safety in the country through technological innovation.

Following the pork-tracing pilot, Walmart noted the limitations of the blockchain technology 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.

As a result, Walmart asked IBM to form a collective of industry players and the IBM blockchain consortium was born. The aim is to improve transparency and access to supply chain information, as well as provide information on regulatory compliance and certification. It is also hoped that such a system will act as a deterrent to commit food fraud.

In a statement when the consortium was launched, Yiannas said: “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. 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.”

A number of food companies are jumping onboard the blockchain bandwagon. American agricultural conglomerate Cargill recently announced it was piloting a blockchain system to trace the origin of Honeysuckle White brand turkey products, giving consumers information about the farm the turkeys were raised on. Cargill has also just announced the launch of a Canadian beef trial using a variety of technologies including blockchain to track and audit beef.

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.