In 2016, Chipotle reported its first-ever quarter of declining sales, with revenue down 6.8% to just under $1 billion. During the period, same-store sales declined 14.6% and net income plummeted 44% to $67.9 million. This decline, of course, was a result of the company’s food safety crisis following the burrito chain’s devastating E. coli and Norovirus outbreaks.
That same year, the Department of Justice launched investigations at a Dole Foods plant in Springfield, Ohio, for a deadly Listeria monocytogenes outbreak linked to the company’s packaged salad products. This particular outbreak left 33 Americans and Canadians hospitalized and, ultimately, four dead.
Food contamination costs the industry $55 billion and makes 48 million Americans ill every year. It’s no surprise then that food safety is more important than ever as food manufacturers turn to technology to improve food safety and quality control.
What Is Blockchain?
IBM defines blockchain as a shared, immutable ledger for recording the history of transactions. The ledger can be shared among a distributed network of computers, allowing participants on the network to securely manipulate it without the need for a central authority. Blockchain is best known for being the accounting backbone of the digital currency Bitcoin, but since inception, it has become a “disruptor” in various other industries as well — like auto manufacturing, as one example.
Why? According to IBM, the benefits of blockchain for businesses are numerous, including:
- Reduced time for finding information, settling disputes, and verifying transactions
- Decreased costs for overhead and intermediaries
- Alleviated risk of collusion, tampering, and fraud
To put it simply, blockchain is being promoted as a catch-all solution for transparency, efficiency, and trust.
Blockchain & Food Supply
Food supply companies are hopeful that this technology can be used to address long-standing problems around food safety and traceability. That’s why last year, IBM and nine food manufacturers and retailers formed a consortium to explore how blockchain could improve the safety and transparency of food supply. The collaboration includes Tyson Foods Inc., Walmart, Dole Food Co., Driscoll’s, Golden State Foods, Kroger, McCormick & Co., McLane Co. Inc., Nestle S.A., and Unilever.
When used in the food supply chain, possible benefits of blockchain include speed and transparency in such areas as product recalls and product certifications.
In 2017, the Center for Disease Control was unable to determine the source of the E. coli outbreak linked to “leafy greens” that sickened 25 people and killed one person in California. No recall of romaine lettuce or other vegetables was ordered.
Had those heads of romaine lettuce been tracked on the blockchain, government agencies and retailers might have known where they had come from, and where they were sold, and the contamination could have been contained.
Blockchain technology may help companies pinpoint the source of trouble in a recall situation more quickly, which could potentially protect food manufacturers from large-blanket recalls.
One of the biggest proponents of blockchain is Frank Yiannas, vice president of Food Safety at Walmart, who has been quoted as referring to this technology as the “holy grail.”
When Walmart suffered from salmonella outbreaks, it took weeks for Yiannas’ team to track the origination of the ingredients. When the team used blockchain software developed with IBM to track the path of mangoes from a farm in Mexico to U.S. stores over a 30-day period, the exercise took a mere 2.2 seconds.
Contamination and recall aren’t the only issues that plague the food supply industry. According to Food Safety Net Services, cases involving food fraud are growing by the year both domestically and worldwide.
The organization defines food fraud as the act of purposely altering, mislabeling, substituting, or tampering with any food product at any point along the farm–to–table food supply chain. And while most cases of food fraud aren’t harmful, today’s savvy consumers want to know where their food is coming from.
In addition to providing food safety benefits in the supply chain, blockchain may eventually play a role in certifications such as organic, non-G.M.O. and allergen-free, and ultimately empower consumers to know the exact origins of what they are consuming.