Even though the agriculture industry is facing substantial challenges due to depleting farmland and the exhaustion of finite natural resources, there has been an increase in global food consumption.
Due to this rapid expansion, major food companies have built several food manufacturing facilities around the globe.
To provide agricultural products and food to customers quickly and at a cheaper cost, food companies have had to adjust their supply chains by turning the chain into a complex network of suppliers dispersed across several geographic regions.
Although this development has led to the global expansion of food supply chains, they have also complicated the chain.
Consequently, it has also led to a feeling of distrust and disconnect in consumers due to the lack of awareness regarding the origin of the food and the processes it might have undergone.
To address issues such as food waste, a lack of provenance information, delayed payments, and a lack of crop insurance, consumers and other stakeholders in the food supply chain is calling for increased openness in the food supply chain.
Blockchain technology is pitched to be the leading contender in the food system to streamline the handling of all these concerns.
How blockchain works in food industry?
A supply chain powered by blockchain guarantees that food firms are accountable for using components that are as nutritious and high-quality as those stated on the product packaging.
The unmatched benefits of blockchain technology, including immutable data storage, enhanced stakeholder transparency, and decentralized control over the asset by all stakeholders, have attracted a lot of attention from the agriculture and food industries.
To test blockchain technology goods, major food companies using blockchains, such as Nestle S.A., Dole Food Company Inc., Tyson Foods Inc., as well as retailers such as Walmart Inc., JD.com Inc., and Alibaba Group Holding Ltd., are forming consortiums with firms like IBM Corporation.
Due to all these advantages, the blockchain in the agriculture and food market is expected to grow at a significant rate.
According to the BIS Research analysis, the global blockchain in agriculture and food market was valued at $139.6 million in 2020, which is expected to grow with a CAGR of 51.0% and reach $1,488.0 million by 2026.
FDA Raises Concern on Supply Chain Security Risks as Online Food Delivery goes Mainstream
The U.S. Food and Drug Administration (FDA) organized a meeting in October 2021 to learn more about how human and animal foods are distributed through business-to-consumer (B2C) e-commerce platforms both domestically and internationally.
The pandemic and the rising number of people ordering food online were the main driving forces behind the gathering. Determining a course of action to address possible supply chain security risks, including those that may emerge in the online food delivery process, is now necessary.
The three-day conference covered a variety of B2C e-commerce models, such as meal kit subscription services and cloud kitchens, as well as delivery models, such as third-party and autonomous delivery using drones.
It also covered the supply chain security risks associated with foods sold through B2C e-commerce, industry standards of care used to reduce these risks, regulatory approaches to food sales online, and labelling of foods sold through e-commerce.
This came after the FDA's New Era of Smarter Food Safety Blueprint was unveiled in 2020. It outlines potential courses of action to address how new food delivery business models affect food vulnerability.
The strategy, which is based on the Food Safety Modernization Act (FSMA) of the FDA, declares: "The world is changing quickly, and the food revolution is underway... The food system is getting more digital as foods are reformulated, new foods and food production techniques are developed".
The strategy ultimately revolves around four key components:
• Tech-enabled traceability,
• Improved preventative response tools and techniques,
• New business models and retail modernization,
• Food safety culture.
The objective of technology-enabled traceability is to have end-to-end traceability across the food safety system by leveraging an internal digital technology system, such as blockchain, to receive crucial tracking events and important data pieces from industry and regulatory partners.
The FDA wants to see more blockchain usage. According to Frank Yiannas, the FDA's safety commissioner for food policy, "More thorough traceability through access to records of key data elements associated with critical tracking events in food production and distribution has the potential to help us pinpoint the exact sources of foods involved in an outbreak. This not only enables us to take potentially dangerous items off the market more rapidly, limiting the spread of disease or death, but it also enables us to carry out root cause analyses to determine what went wrong to trigger the epidemic".
However, the current challenge has been a lack of data, which may be utilized to improve traceability and enable predictive analysis in addition to other things.
The FDA's New Era of Smarter Food Safety Blueprint aims to address the issue of food traceability in the supply chain, which has now been extended to include last-mile delivery to the customer through e-commerce.
According to the experts, with the help of blockchain technology, it is also possible for the customer to get a text message informing them that the bag of lettuce they just purchased is associated with an outbreak of foodborne disease.
However, the execution will be left to the producers of food and drinks to work out how to achieve that.