Blockchain: The Key to a Greener, Safer Global Food Supply
The global food supply chain, worth an astounding US$9tn, is a significant driver of carbon emissions.
The World Economic Forum (WEF) has been actively investigating ways to make this essential system more sustainable, without compromising on food accessibility.
One of the most promising solutions discussed is blockchain technology, which offers unprecedented transparency, traceability and security to food supply chains.
Tackling inefficiencies in traditional supply chains
Conventional food supply chains are often riddled with inefficiencies, security issues, and a severe lack of transparency.
These weaknesses contribute to widespread problems like food waste and even fatalities linked to contamination. Blockchain technology could play a pivotal role in addressing these issues, offering a more efficient, secure and transparent system.
By leveraging blockchain, the food industry can enhance its ability to provide safer, more accessible and more sustainably produced food.
One of blockchain's standout advantages is real-time product tracking, from farm to fork. This level of transparency ensures that environmental, social and governance (ESG) standards are met, while also ensuring that producers are fairly compensated.
- 86% think blockchain technology offers a competitive advantage- but only 49% report their executive team as "blockchain believers".
- Respondents think security, scalability and transparency are the biggest benefits of blockchain.
- 78% have experimented with blockchain technology.
- Of those who experimented with blockchain, the biggest challenge was integrating it with legacy systems- 71% moved blockchain projects from R&D into production but only 38% were fully successful with their project.
- For those who have not yet experimented with blockchain, a lack of budget is the top hurdle to starting.
- 71% expect the volume of blockchain projects to increase.
Overcoming emissions and supply chain visibility issues
Blockchain's transparency is particularly crucial when dealing with Scope 3 emissions, which originate from a company's supply and value chains.
These emissions are notoriously tricky to manage, especially when suppliers operate in regions with lax environmental regulations. Blockchain offers a clear and immutable record of each transaction within the supply chain, enabling companies to monitor and reduce their carbon footprint across multiple tiers of suppliers.
Visibility is another pain point in traditional supply chains, where companies often struggle to look beyond their immediate suppliers.
This lack of visibility weakens the resilience of the supply chain and hampers efforts to anticipate potential disruptions. With blockchain’s distributed ledger system, all supply chain participants can access the same data, ensuring better communication, trust and coordination.
A real-world case study that showcases blockchain's impact is Silal Fresh, a division of agritech company Silal. Before adopting blockchain, they faced challenges in tracing their products along the supply chain.
By integrating blockchain, Silal Fresh implemented a comprehensive traceability system, enabling them to log every touchpoint of their products. Consumers can now scan a QR code on produce to see the entire journey of the item from farm to table, boosting trust, loyalty and customer satisfaction.
Security and sustainability benefits
In addition to enhancing transparency, blockchain offers substantial security benefits. Traditional, centralised supply chain systems are particularly vulnerable to cyber-attacks. Blockchain’s decentralised structure distributes data across multiple nodes, significantly reducing the risk of such attacks and protecting sensitive supply chain information.
Matthew Van Niekerk, CEO of blockchain platform SettleMint, highlights blockchain’s potential: "We’re seeing blockchain technology improve operations and the end-user experience across many industries — and its potential to transform supply chain management is enormous."
He notes that blockchain not only ensures more accurate tracking but also promotes security in data exchanges, making supply chains more efficient, resilient, and compliant.
Beyond its security advantages, blockchain is also a driving force in fostering sustainable innovation across the food supply chain.
From soil management improvements to emission reductions, blockchain facilitates the adoption of practices and technologies that make food production greener and more efficient.
By making data easily accessible and transparent, blockchain allows supply chain participants to adopt these sustainable innovations effectively.
As the WEF continues to explore paths to a sustainable future, blockchain stands out as a crucial tool for transforming the global food supply chain. It promises a future where food production and distribution are not only efficient but also environmentally conscious and secure.
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