SIAL Talks 2022: Food traceability – How blockchain builds trust
This week’s look back at SIAL Talks features Matthieu Hug, co-founder and CEO of supply chain traceability and transparency platform, Tilkal, on the importance of blockchain technology in food traceability and how this builds trust among consumers.
In his talk, Hug championed blockchain technology for helping those in the food supply chain to create transparent, traceable systems and gave various examples where the system has failed due to opacity and a lack of traceability.
He said that although those in the food supply chain were in the business of some food traceability for some time, the World Health Organisation describes the system as “dangerously opaque”.
“This is quite a strong statement, and how can there be traceability and opacity at the same time?”
He explained that most links in a supply chain only trace back within their own boundaries. “They might go back as far as tier one suppliers but usually not as far as tier two or three.”
He said that very few people know their tier two suppliers and almost no one knows their tier three suppliers.
“So, what is meant by ‘food traceability’ nowadays is that it should be end-to-end – one end of the supply chain to the other – and this is something that most industries do not have.”
In the food industry, traceability should cover from farm to fork and that is important because it connects directly to the confidence of consumers. Conversely, opacity breaks that confidence and trust, Hug stressed.
He gave the example of the providence of olive oil as one of the areas where consumers might lose confidence in a product or brand because of a lack of clarity over the supply chain, where there might be bold marketing claims but no clear facts to back it up. He also noted the issue with product recalls – especially in the US and in Europe – where he said “we’ve seen product recalls fail dramatically”, noting examples from around the world, including a product recall lasting two years involving products contaminated with ethylene oxide.
Hug added that what is making matters worse is a growing problem with fruit. “In France there are about 30% of organic products which have been awarded providence by the authorities, same with meat, olive oil and honey. In the US, it is similar with seafood. And it’s not just in the food industry but across medicines too, so it’s a global problem.”
He went on to note that this global problem has an impact on how regulators regulate, and that they are now using end-to-end food traceability as a de-facto licence to operate. “So, in the US, you now need to have farm-to-fork traceability to operate,” he said.
In terms of the solution, Hug said the supply chain needs four things to make it transparent:
- Digitisation – “Non-digitised information is useless, you can’t make sense of it, you can’t aggregate it, you can’t compute it. You need to digitise.”
- Confidentiality – “It is essential that all the stakeholders in the chain have the same level of confidentiality.”
- Auditability – “this is essential to operate as it relates to traceability.”
- Decentralisation– “If you look at this from a bird’s eye view, it is a decentralised environment so it makes sense to not operate in too much of a centralised way.”
Hug said that when you take all these elements you realise it relates to a digital technology called blockchain.
He described blockchain as a decentralised data network made up of a series of modules which is owned by no one person in the chain but everyone in the chain. It’s a way to share information in a secure and controlled environment and it can guarantee the trail because all parts of the chain can be seen.
Finishing his talk, Hug said that this traceability is necessary to create a more ethical landscape – for example, one free from child labour. He added that farm-to-fork traceability is here to stay as it’s the foundation for establishing and maintaining consumer trust. So producers and the food industry broadly needs to have protocols in place to ensure they can operate for the long term.
Food traceability would also promote industrial resilience as each part of the supply chain knows what is happening elsewhere.
Finally, he said that those who don’t provide that providence and follow a transparent, traceable strategy would also lose confidence with both the authorities and consumers and would not succeed.
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