Retail Reflections: Musings on blockchain

An important technology that has captured the attention of the produce industry is blockchain.

Anytime a new technology approach is being touted by a company such as Walmart, people start to take notice, and rightly so. When a major retailer begins to suggest something is going to be a foundational support process for its supply chain, one had better take notice.

While the blockchain platform looks to be one that can have a significant impact on many facets of the supply chain—what exactly is it? How does it impact fresh fruits and vegetables? What are the benefits? What are the drawbacks?

I, for one, am not a technology expert, but what I understand blockchain to be is a way to organize data into “blocks” which can be linked together in “chains” in any way the owner of the data wishes.

This data can be shared with any entity the owner wishes, and the amount of data to be shared is at the discretion of the owner. So, the entire supply chain of an item can be linked and viewed instantaneously, or any part of that supply chain.

This, allegedly, provides tremendous transparency. There can be numerous applications for this process, but notable in the produce industry is traceability. Traceability continues to be an Achilles heel for the produce industry.

Despite wonderful and commendable efforts in food safety, we continue to see significant foodborne illness outbreaks. If open agriculture continues to be the prevalent way to produce fruits and vegetables, there will ALWAYS be food safety compromises.

And, despite multiple attempts at creating an effective traceability platform, the industry hasn’t managed to “move the dial” in this important area.

For effective traceability to take place, three things need to happen:

  1. compromised product needs to be identified;
  2. the identified product needs to be isolated; and
  3. consumers need communication as to what to avoid and what not be concerned about.

In most other fresh food areas, this process happens reasonably effectively. But in produce, not so.

Think back on the recent romaine crisis. It took a long time to track down the cause of the problem and all anyone was told was “Don’t eat romaine”! And that same thing can be said for any commodity that falls into a food safety issue.

Now would blockchain have solved this crisis? It could have a significant impact IF consumers or foodservice operators knew where the product came from. The retailer or foodservice distributor could refer to the item’s ‘chain’ and very quickly trace the supply to its source.

So, blockchain could be an important tool in traceability. But for this to be an industry solution, it must be available to ALL participants in the supply chain, regardless of size and resources. And while Walmart is leading the charge, it can’t leave producers and other retailers behind.

As the saying goes, “a chain is as strong as its weakest link” and if there is a compromise at any level of the supply chain, it impacts everyone. Consumers get information in soundbites. And if an outbreak occurs, it doesn’t matter how big or how small the situation is, everyone is painted with the same brush.

So, essentially, I am personally excited by the prospects and promises regarding blockchain; my only caution is the hope that those driving the effort are looking at it holistically and as an industry solution. No one should be left behind.

This column appeared in the October issue of Blueprints magazine. Click here to see the digital version.

Bruce Peterson is the founder and president of Peterson Insights, Inc., a consulting company specializing in the complex challenges of the fresh food industry. Peterson began his career bagging groceries, and went on to work for several supermarket chains, including 17 years at Walmart Stores, Inc. He has owned and operated a wholesale produce company, and served as chief executive officer of both Naturipe Foods LLC and Bland Farms.