Friday, 23 April, 2021

Trust is Gone, Consumers want Transparency in the Global Food Supply Chain

The globalization of supply chains has pushed consumers further away from producers as many entities now operate in between this relationship. With specific reference to the food industry, this can include corporations or individuals which provide services such as processing, packaging, storage or shipping among a range of post-harvest services that vary with the type of product. This phenomenon is largely characteristic of how the global economy has developed in line with innovations and advancements originating primarily within the information communication technology (ICT) landscape.

A negative consequence of this larger phenomenon has been the rise of adulteration within the global food supply. This can be attributed to two reasons; first, since the product transits through many ‘middle-men’ before actually reaching the consumer, ‘bad’ actors have the opportunity to contaminate it; second, since consumers are so far away from the produce, they are unable to differentiate and distinguish between authentic or real food versus that which has been heavily tampered with. The former problem is exacerbated by the lack of transparency in terms of who exactly comes into contact with the product while the latter is a result of our contemporary society which is dependant on ‘persuasive’ marketing for making ‘informed’ decisions.

Honey is one such product that is produced in multiple countries around the world and is traded heavily in world markets. The transnational nature of honey makes it an appealing product to be tampered with especially due to its color and form which has been popularized through advertising. Majority of the honey found in supermarkets is heavily processed, brown in color and liquid or semi-liquid in nature. This is what most have become accustomed to and thus have come to expect over the years. In reality, unprocessed honey is very much different in color and texture – what you may find in the supermarket is likely to be quite different from what may be offered at a farmer’s market – signifying how distinctively a product could be transformed depending on how many entities are involved between producer and consumer.

Given such a lucrative business, adulteration has become commonplace as the profit to be reaped has attracted many. Transnational consortiums involved in the honey business have been implicated in scandals for using subpar equipment to process honey which is later shipped around the world. The United States, in particular, has imposed sanctions on countries, namely China where most of the global honey supply originates. Chinese companies, in particular, have been known to use banned antibiotics which seep into the honey and thus impose health concerns. Furthermore, to mask the trail of such illicit substances in their production processes, these companies mix their product with sugar or corn syrup to make it more digestible for consumers.

Although implicated and banned some countries, fraud is rampant as the entities involved in making the supply chain possible have found loopholes within the global honey trade which they have been able to exploit effectively in their favor. In order to circumvent such restrictions, traders seeked out accomplices in countries that were not blacklisted from exporting and thus were able to sneak their products via fake place of origin verifications. This has meant that most honey products originating from China have reached the United States via proxies such as Thailand, Indonesia or Malaysia.

The adulteration and fraud in the global food supply have been a consequence of the limited information and tracking mechanisms afforded by the contemporary infrastructure. Although ICT advancements made the global supply chain of food possible, cost-effective and to a great extent efficient, it simultaneously provided opportunities for exploitation. But given the continuously evolving nature of technology, there are mechanisms that can be effectively leveraged to minimize exploitation within this supply network.

Startups and established companies alike have identified the transformational impact made possible via the implementation of blockchain technology in the global food supply. Interest in the technology has been steadily growing as partnerships expand and trials materialize.

North American retail giant, Walmart which sources its products globally is working with IBM in regards to testing blockchain-based tracking of live food by encouraging its suppliers to implement the technology on their end to make the produce trackable and verifiable from harvest to consumer. This is aimed at better managing cases of contamination, improving transparency and reducing waste. Additionally, this system has been able to greatly speed up tracking processes reducing the time from 6 days to 2 seconds.

Similarly, startups have also been focusing their energy on providing robust solutions for the current problems rampant in the global food supply; and Provenance are two such examples that are integrating the technologies of today to bring greater transparency for producers and consumers by leveraging sensors, IoT (Internet of Things) & blockchain. Again, the aim is to widen the scope of information available to all stakeholders ultimately allowing both producers and consumers to make relatively informed decisions driven by data.

Overall, contemporary advancements in technology are providing newly founded business value. The most interesting aspect of this phenomenon is that this value does not necessarily require massive scale as a precursor to implementation but can also be successfully leveraged by smaller enterprises and individuals. In conclusion, data is the ‘oil’ of our times and success in the information economy requires a strong foundation based on data generation, accumulation & analysis to make better decisions for all stakeholders involved in a global supply chain.