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03.02.22

Blockchain’s innovative impact on the food and beverage industry

By Elizabeth Baio

According to the Center for Disease Control, 1 in 6 Americans gets sick, 128,000 are hospitalized, and 3,000 die from foodborne diseases each year in the United States. Expediting and improving the accuracy and transparency of traceback investigations to identify the distribution and production chains and sources of potentially hazardous food products is critical in reducing these numbers. To streamline the traceback process and record, the Food and Drug Administration (FDA) is implementing the Food Safety Modernization Act Proposed Rule for Food Traceability, expected to be completed in November 2022, to promote the use of blockchain technology to track critical events (e.g., growing, receiving, transforming, creating, and shipping) in the food supply chain for certain products. About 500 member companies of The Food Trust have been promoting blockchain technology for this purpose since about 2018, and some members, including Walmart Inc. are already using it to track how their products got to their shelves.

Historically, food supply chains have been tracked using conventional databases, which are often unwieldy, given that thousands of SKUs are scanned daily. Using blockchain technology, pass-off events occurring in a product's supply chain can be accurately recorded, stored, and shared within a single distributed, decentralized food system. This creates a much more streamlined way for retailers and consumers to figure out exactly where a particular food item came from and the path it took to get from farm to shelf. Additionally, the information is highly trusted due to the security, visibility, and reliability of information on the blockchain.

Implementing these systems is not without challenges. For example, many in the supply chain are unfamiliar with blockchain technology and, as with any shift in processes/technology, are resistant to learn and implement a new system. In addition, especially in some rural areas where some food originates, lack of Wi-Fi could be an issue (though the data collected could, presumably, be entered at a later time). Nonetheless, the new FDA rules are a promising first step to a situation where the ends are likely to justify the means.

Utilizing the blockchain for food supply traceback is another example of blockchain technology living up to the hype that continues to surround it. It is here to stay, and more and more, businesses can and should continue to consider how it can be used to achieve important business purposes. Food and beverage is just one recent example of a well-established industry, served for decades by Nixon Peabody, crossed by innovative technologies like blockchain.

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Elizabeth Baio

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