Oct 8, 2018Bringing blockchain to the fruit market
It’s impossible to know whether a Super Bowl will live up to pregame hype, like the Philadelphia Eagles’ eight-point victory did in 2018. The same is true with explosive trends like blockchain. You can’t go a day without a story about blockchain in the trade and business press. Some companies have even changed their name to include the word “blockchain,” without even having the technology to back it up.
Despite all the hype, blockchain merits a discussion and serious consideration as the upside benefits for its use and application in the fresh food supply chain are significant. But, at this point, is blockchain a technology looking for a problem to solve, or a way of solving or improving the solution of a known problem? And, how does implementing blockchain relate to your existing business processes? Can or should blockchain replace your current systems or is a hybrid model the best?
It’s prudent to find ways to apply blockchain to address known business issues, as this will significantly improve its chances of being successful. And there are many solid use cases that exist in the food supply chain today. Food safety and traceability are often cited as a place to start but ensuring food freshness can also benefit from the intelligent use of blockchain technology.
Zest Labs commissioned an article by ChainLink Research about how blockchain can be applied to the produce industry. While it discusses how food traceability and freshness can be managed by a networked SaaS (software as a service) solution without the need for blockchain, the author, Bill McBeath, states that “recording the various transactions, HACCP (hazard analysis and critical control points) steps and temperature readings onto a blockchain can add trust and additional capabilities to the system.”
In addition to discussing applications of blockchain solutions, the article identifies several key things to consider before you begin on your blockchain-enabled journey.
It’s essential to put the right data into the blockchain to achieve true transparency, as one of the main benefits of blockchain is enabling all relevant parties to have access to the data. There’s immense value in collecting quality-focused data on its own, but analyzing, applying and making traceability, food safety and food quality data broadly available is where the benefits really start to multiply.
It’s important to have a blockchain agnostic architecture. There are many different blockchains today and no industry standard and, as with the Super Bowl, it’s too soon to find out who the winners and losers will be. Betting exclusively on one may prevent you from working with companies in your supply chain that use another.
Understand the role of public versus permissioned blockchains. For supply chain use cases, a permissioned blockchain may make more sense.
Know the difference between blockchain-enabled smart contracts and off-chain automation in your existing business applications. While utilizing smart contracts in a blockchain may be feasible, it may not be the most cost-effective approach to solving your business needs.
This leads to the question of whether or not you should abandon your existing SaaS-based approach in favor of a blockchain approach. The answer is no. Each brings advantages to the game. McBeath said that, ultimately, hybrid systems combining SaaS and blockchain models will prevail.
“Blockchain technology alone cannot provide freshness, safety, provenance and recall capabilities. That requires data and capabilities from outside the blockchain,” he said.
The best emerging approach, McBeath said, seems to be a hybrid consisting of:
- A centralized networked SaaS platform providing economical scalability, and deep algorithmic and process capabilities.
- Combined blockchain and smart contracts for transparency and validation.
Blockchains are attractive because of their ability to create a shared, trusted single version of the truth between trading partners. However, a networked SaaS platform can provide a shared, trusted single version of the truth at a much lower cost.
If you’d like a copy of the Chainlink Research article, please email me at [email protected].
– Kevin Payne is vice president of marketing for Zest Labs, an agtech company specializing in postharvest freshness management solutions that reduce food waste, and improve product margins and profitability for growers, processors, distributors 3PLS and retailers.