Reimagining the Global Food Supply Through Blockchain: Q&A with Brigid McDermott
Two years ago, IBM began exploring ways to leverage blockchain technology to address the issues plaguing global food supply chains, including waste, freshness, safety and sustainability. For example, roughly 1.3 tons of food is wasted or lost each year, due in large part to inefficiencies in how it’s shipped, stored and sold.
Since its inception in 2017, IBM Food Trust has gone from test mode to production, with one of the largest non-crypto blockchains in the world. Food items tracked on the blockchain are already on store shelves. This happens using the decentralized ledger of blockchain technology to enhance transparency and trust in the global food industry by creating a shared record of food origin details, processing data, and shipping and other data.
Through Food Trust’s network of global retailers, producers and supplier partners, more than 2 million food products and hundreds of SKUs have been digitized. Consumers today can create an entire meal from products run through this network. On Sep. 24, Food Trust took a big step forward when Walmart and its unit Sam’s Club announced that leafy greens suppliers will be asked to join the network and implement farm-to-store tracing using IBM blockchain technology by next September.
To learn more about the IBM Food Trust vision, how it has scaled and some of the lessons learned so far, we sat down with Brigid McDermott, Vice President of IBM Food Trust. McDermott was a featured speaker at the Wall Street Journal’s Global Food Forum, held on September 27 in New York.
What was the impetus for IBM looking at food supply chains?
The global food ecosystem doesn’t function nearly as well as it should. There are problems with food safety, food freshness, food waste and sustainability — a whole host of things that impact the consumer experience and that impact business for the companies providing food. At the end of the day, these problems all come down to lack of transparency in the food ecosystem: how visible the information is, how well people are able to understand what is going on and react in a timely and appropriate manner.
None of these are new dilemmas. Why has no one addressed them before?
For the first time, we have the missing piece of technology to actually solve some of these big problems. What's been limiting us is not the creation of data, not the quality of the food itself. It's always been a question of trust in terms of ownership and permissioning of data. How much data can I share without putting my business at a competitive disadvantage?
Is that where blockchain comes in?
What blockchain does is it enables you to look across the entire food ecosystem, because you have a trusted system of record. Collaborators and competitors can both bring data onto the system. This matters because the food ecosystem isn't just a single linear chain, but a dense web of growers, suppliers, manufacturers, retailers, regulators, consumers, restaurants. All of these different entities have a stake in providing good quality, safe food at the right price from one end to the other. Blockchain enables transformation because it allows you to have trust among this diverse set of participants.
Why is trust such a pivotal issue?
Every retailer uses a different trade system because they don't want to risk that one of their competitors would have access to their information. What that means is many suppliers are using a different system for each of their customers, so they have to enter the data in different ways across different systems. That’s a huge waste for suppliers. Blockchain provides a secure way of sharing only the data that needs to be shared, and it does it in a private and immutable way. The owner of the data is the only one who can permission it to another party, and they can audit any changes or updates. So you can work with your suppliers as well as your competitors because you have confidence in how the information is stored.
How will this eventually impact consumers?
The potential impacts to the consumer start with lower risk of getting ill from a food safety incident, and feeling confidence when they spend money for organic, sustainable, brand name, non-GMO foods. It can also include food that stays fresher longer.
The retailer now has the potential ability to trace it all the way back to the farm, knowing that it was picked on a certain day, that it was not part of a bad lot that's being recalled. They can understand what has happened while it was being shipped: Did it get too hot? Did it get too cold? Is it being treated the way I want my food to be protected before it's given to me?
IBM has been working on Food Trust for a few years now. How has the technology evolved?
What we’ve realized is that it's not enough to just put information on the blockchain. To make this a business solution that actually delivers value, you need five things. The first is a robust ecosystem of participants, in this case everyone from farmers to suppliers, to retailers, to wholesalers, to restaurants. The next thing you need is a business model. Nobody's actually going to join unless there's a positive ROI for them; everyone doesn’t need the same drivers of value, but everyone needs a positive ROI. The third thing you need is a governance model. Everyone in the ecosystem needs to be working under the same set of rules; it doesn't work otherwise. Two different participants can't have two different views of who owns the data. The fourth thing is interoperability and standards. Blockchains will need to be interoperable, and architecting it from the beginning for that is important. And the final thing is, of course, technology. We’re providing both the innovation that you get from a start-up, the blockchain, as well as the resilience, reliability, auditability and security that you expect from a company like IBM. We're innovating in each of these areas and will continue to offer new capabilities in each.
For more on issues and trends in the food industry, including how blockchain is helping to improve food safety, see the conversation with Brigid McDermott and other industry experts at the Wall Street Journal’s Global Food Forum.