Pia Brinkmann Madsen is CPO at Palsgaard A/S and has assumed several leadership roles and trusted positions with leading players in the food industry - working in-depth with risk management as well as actively promoting sustainability through pioneering solutions. Madsen holds a degree from Aarhus University in International Business Management and Supply Chain.
Blockchain and sustainable emulsifiers – where’s the connection?
Whether you understand the technology or (like most people) not, blockchain has become a hot topic in the food industry. But what implications will this new ‘trust-enabling’ technology have for the food supply chain? And where might it be particularly applicable to sustainable emulsifier sourcing, production and distribution?
What’s the problem?
Today, it can be difficult to really be sure that all of the links in any particular food supply chain can be trusted. The situation with olive oil or honey is a good example of this. Around 10% of global olive oil and some 20% of honey isn’t what it claims to be. Instead, extensive supply chain fraud has tainted the market for these products, largely through falsification of certificates. And it’s a problem that is very difficult to solve.
In the world of sustainable emulsifiers, the key need is to be able to rely 100 percent on each link in the supply chain, ensuring consumers get exactly what they have been promised – and squeezing more value out of the world’s food system.
The Roundtable for Sustainable Palm Oil (RSPO) works hard to maintain high standards of control and sustainable emulsifier manufacturers have their own Responsible Sourcing programmes in place. But, while leading brands have pledged to use 100% RSPO-certified palm oil and oil products, only around 17% of global palm oil production1 is certified.
So, it’s not exactly easy for regulatory authorities to know the information they’re given is correct or to reliably track and trace raw materials. Nor is it easy for consumers to be able to trust that their choices are contributing, for example, to the United Nations’ Sustainable Development Goals (SDGs).
Blockchain technology, once implemented, is expected to remove many of these uncertainties, simultaneously making many supply chain tasks far more efficient and extracting greater value.
Blockchain in brief
Briefly, blockchain technology can be thought of as a decentralised administration system designed to increase the level of transparency and trust in many different types of information flows.
Any organization can set up a blockchain node and become a guardian of the information exchanged through the node. Multiple blockchains, it is expected, will interoperate, turning the food supply chain into a set of real-time checks and balances to improve food creation, distribution and efficiency.
In a blockchain-empowered world of food, information about quality (freshness, taste and safety), traceability (for risk management and brand integrity), food sustainability and regulatory compliance is held not just in one place but distributed across many servers. Any attempt to change one of the copies of the data without proper authorization will instantly be noticed by all the other servers – and the data is repaired on the spot.
Another advantage for the food supply chain and its participants is the fact that, with the need for laboriously checking documentation removed, raw materials and products can flow more quickly through the chain. And if we can do that, we can also reduce food waste (part of the problem concerns food that becomes trapped in administrative processes, finally becoming unusable).
Farmers, packers, carriers, manufacturers, distributors and retailers also stand to benefit from a risk point of view. With supplier relationships and brand reputations based on trust, blockchain’s superior security strengthens the bonds between seller and buyer. More information can be reliably appended to goods, enabling greater control for those further down the chain. And along with a smoother, faster supply chain comes lower risk of changing supply and demand impacts.
A blockchain concept known as ‘smart contracts’ is part of the risk reduction side, and it’s also a powerful tool in increasing overall transparency. These contracts are administrated within each blockchain server network, allowing sensitive information (such as processing parameters specific to one manufacturer) to be shared with other links in the supply chain under complete anonymity. So, a list of ingredients, for example, can be momentarily available to the blockchain system to establish whether a product is completely vegan, yet without revealing the list to supply chain participants. Every single order for the product is then checked against its complete supply chain parameters to ensure consistent compliance.
Way to go
So, when might the promise of blockchain emerge in the food supply chain? It’s early days yet, with the first blockchain-empowered systems just beginning to appear in other industries, including banking and shipping. The barriers to its widespread implementation are highly complex – and there are still significant uncertainties about how things will actually work in real-life contexts. So when it finally does arrive in the world of food, it’s likely to turn up in isolated, experimental contexts, such as in one product category for a single, large manufacturer.
It’s useful, however, to think of blockchain technology as being somewhat like the early stages of the internet – no one really knew its potential and there have been many revelations as it matured. Just imagine, for example, what connecting the blockchain into the Internet of Things (IoT) might mean. In fifty years or less, we could be harvesting information about the growing conditions of individual oil palm trees, even using the data to shape flavours and influence formulations. Farmers could make data on their water consumption and fertilizer use available directly to interested consumers. And smart marketplaces could change the face of food supply and distribution forever.
Is it sustainable?
Since we’re talking about blockchain in a sustainability context, there’s another aspect to consider: blockchain’s own impact on the planet. Currently, a heated debate is underway concerning the vast new energy requirements to keep blockchain servers exchanging and processing information. It’s an issue that must be resolved and one which could significantly delay implementation. After all, there’s no point in pursuing the sustainability advantages of blockchain if they are outweighed by its sustainability disadvantages!
(1) RSPO – Round of Sustainable Palm Oil – http://www.rspo.org/about