Blockchain can prevent fraud in the food industry
Inspections by the Danish Food Administration have revealed that a large share of the extra virgin olive oil for sale in Danish supermarkets actually contain an inferior product. In his thesis project from ITU, Kristoffer Just investigated whether blockchain technology can make the supply chain more transparent - for the benefit of consumers and retailers alike.
Written October 19, 2017 9:32 AM by Vibeke Arildsen
Why did you decide to work with blockchain?
During my studies, I worked on various blockchain projects, and I am very interested in the food industry, so I decided to combine my interests in the thesis project.
As consumers, we know very little about where our food originally comes from. For example, a bottle of olive oil goes through many hands before it ends up in the supermarket, and the process is not necessarily linear.
In the spring, the Food Administration's travel team found that only 6 out of 35 bottles of extra virgin olive oil in Danish supermarkets actually contained oil of a sufficiently high quality. This indicates that somewhere in the supply chain, somebody is dishonest about the product.
What did you investigate?
I wanted to trace the olive oil's journey through the supply chain and investigate whether a blockchain solution would help to increase the traceability of food and make the process more transparent.
I looked at the current supply chain to get an idea of how a blockchain-based solution might look and in addition, I investigated what blockchain can do for trust between actors in such a system.
What might a blockchain-based supply chain look like?
In a blockchain system, it will be registered each time a product is handled in some way. For example, when the olive oil is bottled, certified and transported. This information is visible to everyone in the supply chain, it is constantly updated and cannot be manipulated.
»In a blockchain system, it will be registered each time a product is handled in some way. For example, when the olive oil is bottled, certified and transported. This information is visible to everyone in the supply chain, it is constantly updated and cannot be manipulated.
«
That way, anyone with access to the blockchain could see exactly what hands the product has been through, all the way from the olive farmer to the shelf in the supermarket.
What potential does blockchain have in the food industry?
Blockchain is a very young and untested technology, and there are still technical challenges. But the technology offers great opportunities for increasing transparency and traceability in the supply chain, which can benefit both consumers, retailers and suppliers.
My interviews with both subcontractors and COOP Trading, a company that I collaborated with, showed that they see a big potential in the technology as it could increase trust between the different actors.
»As consumers, we could get a guarantee that the products we buy contain what is on label - for example that they are actually organic or fair trade.
«
As consumers, we could get a guarantee that the products we buy contain what is on label - for example that they are actually organic or fair trade. Supermarkets today have to trust that the supplier delivers the agreed-upon product, but in a blockchain system, they would have certainty. For suppliers, it would be a competitive advantage to be able to show through a blockchain certification that their products live up to what they promise.
What are you doing today?
I work for the small startup called BLOC in Copenhagen Fintech Lab, where I work with blockchain in the industry as well as other industries. In fact, we have just received funding to explore the potential of blockchain-based supply chains – it is fantastic to be able to continue working on something that I find really interesting.
Vibeke Arildsen, Press Officer, phone 2555 0447, email viar@itu.dk