Blockchain technology and the Internet of Things (IoT) can solve some of the food industry’s most pressing challenges and save it $100 billion a year, according to a recent report by Cointelegraph Consulting and VeChain.
The report forecasts that $300 billion worth of food items will be traced along the supply chain annually within seven years.
Major Food Safety Incidents. Source: Cointelegraph.
The lack of transparency and accountability in the global food industry’s supply chain costs billions of dollars annually. To take one example, it’s believed that as much as 20% of global wine sales are counterfeit, worth $6 billion. And things get even fishier when it comes to the seafood industry, “25 – 70% of red snapper, wild salmon, and Atlantic cod are disguised by species that are less desirable, cheaper or more readily available.”
Arseniy Dain, CEO of Cointelegraph Consulting, noted, “Food safety has been one of the billion dollar challenges that people struggled for decades to solve.”
Tracing items along the food supply chain using blockchain is one of the better explored use cases for the technology, with IBM leading the way as a service provider, and many global industry leaders like Walmart, Carrefour, and California Giant Berry Farms, joining the party.
The Potential Improvement For Food Industry Supply Chain. Source: Cointelegraph.
Blockchain and IoT are often used in tandem as additional benefits may be achieved by connecting the two. IoT sensors — for example temperature sensors for frozen items — can send accurate information about food items to the blockchain network, providing stakeholders with a snapshot of the entire supply chain.
This data can be used to assure a food’s genuineness, freshness and overall quality. The report contends that this combination of technologies can help the industry save billions of dollars.
It states, “We estimate IoT+blockchain-based solutions can reduce annual costs by $70 billion for the food industry globally and create up to $47 billion in revenue enhancement. In addition, we expect solutions to reduce potential losses due to food safety risks by $12 billion to $14 billion.”
VeChain CEO Sunny Lu said, “From our experience in international food trades and large-scale traceability platforms, the introduction of blockchain technology to the food value chain applies a long-term benefits scheme into the entire business model.”
The report also explores several well-known use cases of blockchain technology in the food industry.
Cointelegraph Consulting and VeChain are commercial partners.