Blockchain’s Data Problem in the Food Supply Chain

Blockchain indeed has the potential to help create a more secure and transparent supply chain, but it’s going to need a few tweaks.

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Many people involved with the global food supply chain herald blockchain technology as the perfect solution for major industry challenges. That’s because blockchain can prove food quality, track it to ensure safe handling and alert managers quickly if abnormalities crop up. It is almost a panacea, but stops short for one reason—it wasn’t originally built to handle data. And, for a data-heavy industry like the global food trade, blockchain’s data problem has become an adoption-killer.

That doesn’t mean that the industry should give up on the technology completely. If anything, tracking the global food supply chain is more important than ever. Thanks to recent high-profile food fraud incidents, global customers are skeptical about the origins of their food. 

Even incidents that don’t involve deception are causing widespread consumer concerns about whether it’s safe to eat food sourced from farms and factories all over the world. From an e. Coli outbreak traced to romaine lettuce from California, which lasted for months, to fish poisoning traced to a company in Vietnam, the FDA opened 16 outbreak investigations in 2019 alone. 

Blockchain indeed has the potential to help create a more secure and transparent supply chain, but it’s going to need a few tweaks. Major companies like Walmart are already implementing their own blockchain technology to set a new standard for transparency. Whether funding such a build in-house or compiling pieces from outside vendors, it is crucial that industry leaders understand blockchain’s built-in weaknesses and how to combat them.  

Blockchain wasn’t built for extensive data management

It’s important to remember that blockchain’s original purpose was to securely transfer cryptocurrency assets. Its method of doing so — by recording cryptocurrency transactions in a public ledger — was revolutionary for its secure, transparent and decentralized approach. However, the task was singular. All blockchain had to do was track an asset as it transferred from one account to the next.

What blockchain didn’t have to do was manage and store large amounts of data. When companies in other industries try to retrofit blockchain technology to meet their more data-heavy needs, therefore, they often find that the technology’s abilities come up short. A food supply chain ERP application, for example, needs to manage purchase orders, stakeholder information, RFID or SKU info and inventory information. The typical blockchain simply can’t handle those multiple levels of data, making it necessary for companies to use a layered approach to data storage. 

In terms of both development and information security, building out a blockchain solution that can natively manage and store this type of data and metadata is incredibly difficult. Many enterprises have developed a subpar workaround: they work layers of integration directly into their legacy stacks. Instead of complete data storage on the blockchain, they end pushing data related to blockchain transactions onto a centralized database. This solves the problem of data storage, but opens them up to problems managing ongoing integration as well as security vulnerabilities. In addition, it prevents them from fully taking advantage of data insights. 

What blockchain can do with a data-first approach

Just because blockchain has limitations when it comes to managing data doesn’t mean that industry leaders should write off what the technology can do. It just means that they should look into ways to take a data-first approach to keeping records using blockchain. 

For example, some private companies use the best of both blockchain principles and data management principles to build blockchain-powered databases. Instead of multiple data layers or complex integrations, your data will be available in an enterprise application that you can easily query, making your data useful and usable. At the same time, that application will be secured by unbreakable cryptography and built-in governance rules. 

Using these principles, blockchain-based databases can provide tamper-free, end-to-end traceability for a product from origin to consumer. That can solve some of the supply chain’s most pressing problems, like putting an end to fraud. For instance, consumers buying lettuce will know that they’re getting the real thing, and can even verify details like which fields the lettuce grew and how it was moved to the warehouse. Additionally, if news comes out about contamination, it would be easy to figure out which products were affected and where they went, helping prevent any disastrous consequences. 

With a data-first approach, all stakeholders can enjoy the security benefits of blockchain with the operability of the best database solutions on the market. 

Preventing a crisis in consumer trust

Only by understanding blockchain’s limitations and reckoning with how to combat them can companies fully and appropriately tap into its possibilities to transform the industry. Data-first solutions can help them do so just in time to prevent a crisis in consumer trust. 

Transparency influences consumer behavior and improves customer sales and loyalty, especially in the current environment where skepticism abounds. At a time when 91% of people say it’s important to know where their food comes from and 62% say they’re not provided enough information about what’s in their food and its origins, a data-first approach to blockchain is the perfect way to provide consumers with the transparency they desire without sacrificing data integration. There isn’t any time to waste.