Will Walmart's Bet on IBM Blockchain Pay Off?

It's been a particularly bad year for food poisoning and contamination, from 5 dead and over 200 sick due to an E. coli outbreak in romaine lettuce in California, to needles being placed in strawberries in Australia (and now New Zealand.) A critical way to address the problem is through the ability to track products from farm to store and ultimately consumers. It's estimated that every year, one-in-ten people fall ill — and 400,000 die — from contaminated food.

After several years of tests, Walmart is ready to mandate the use of blockchain technology by a swath of its U.S. suppliers, marking it as one of its biggest commercial uses. Starting in September 2019, Walmart and its Sam’s Club division will require suppliers of fresh, leafy greens to implement real-time, end-to-end traceability of products back to the farm using a digital ledger developed by IBM. The world’s largest retailer plans similar mandates for other fresh fruit and vegetable providers within the next year, according to Frank Yiannas, vice president of food safety:

“It’s becoming a business requirement, it’s a part of our supplier agreements,” Yiannas said in an interview. The goal is to speed up response times in case of food-borne illnesses and recalls."

Several Years of Research Have Created the Blockchain Supply Chain

Walmart opened a Walmart Food Safety Collaboration Center in Beijing in 2016, a collaboration between Walmart, IBM, and Tsinghua University to improve the way food is tracked, transported, and sold to consumers across China. By harnessing the power of blockchain technology designed to generate transparency and efficiency in supply chain record-keeping, this work aims to help enhance the safety of food on the tables of Chinese consumers.

Then, in 2017,  a group of leading companies across the global food supply chain announced a major blockchain collaboration with IBM intended to further strengthen consumer confidence in the global food system. The consortium includes Dole, Driscoll’s, Golden State Foods, Kroger, McCormick and Company, McLane Company, Nestlé, Tyson Foods, Unilever, and Walmart, who worked with IBM to identify new areas where the global supply chain can benefit from blockchain.

Why Blockchain?

Food authentication and supply chain tracking is a critical step to quickly finding and helping address sources of contamination around the world. With blockchain, food products can be digitally tracked from an ecosystem of suppliers to store shelves and ultimately to consumers. When applied to the food supply chain, digital product information, such as farm origination details, batch numbers, factory and processing data, expiration dates, storage temperatures, and shipping details, are digitally connected to food items and the information is entered into the blockchain along every step of the process.

Each piece of information provides critical data points that could potentially reveal food safety issues with the product. The information captured in each transaction is agreed upon by all members of the business network; once there is a consensus, it becomes a permanent record that can’t be altered. This helps assure that all information about the item is accurate.

In short, blockchain food tracking is predicted to ensure:

•  Provenance—stronger assurance of origin and chain‐of‐custody
• Recalls—faster and more precise recalls
• Freshness—fresher produce and meat, reduce waste and spoilage
• Safety—fewer contamination incidents

What Does This Mean for RFID Tracking? 

Food tracking is nothing new. The Electronic Product Code, or RFID, was developed by the Auto-ID Center as a successor to the barcode. It was designed with the intention to identify products as they move through the global supply chain.

IBM partnered with Shell stores for a staffless store trial last year, where items were individually tagged with RFID tags. With the data from RFID tags, the retailer could keep tabs on their entire inventory. They could be alerted when a product is about to expire and when shelves need to be replenished, alert staff if they are not stored at the right temperature, if meat has gone bad, or even if someone has injected a biological agent into food. They could also figure out where best to place items in a store depending on the time of day or the weather. And, they could help prevent theft. In this trial, the RFID tags had to placed manually but they could be placed at the food manufacturing stage — or at the farm in the case of fresh produce. 

Where IoT Meets Blockchain

The use of blockchain in the food supply chain — essentially a big ledger or database, raises a few red flags. Blockchain technology alone cannot provide freshness, safety, provenance, and recall capabilities. Nor can blockchain technology determine if food has been contaminated and spoiled deliberately (as in the case of the needles in fruit in Australia.) But, it could potentially make these conclusions if combined with RFID or other sensor tools. One company providing the best of both technologies in handling fresh produce is Zest Labs. They automatically collect pallet‐level freshness data using wireless temperature tags, which they call ZIPR tags, that farm workers place into each pallet as soon as each pallet is loaded with produce out in the field. The tag starts recording temperature immediately and throughout the end‐to‐end journey. The system has algorithms to detect delays in turning on the temperature recording device, to ensure that any time spent sitting out in a hot field is included in the temperature record.

The Zest solution generates a condition‐based expiration date, which they call the ZIPR Code. This date is dynamically calculated (potentially changing as the pallet is exposed to different temperatures) based on extensive temperature response profiling that Zest has conducted on many varieties of produce for different locations and time‐of‐harvest. They use AI, machine learning, and prescriptive analytics to dynamically determine freshness and enable prescriptive intelligent routing. Their Zest Fresh solution has integrated blockchain as an optional data interface to provide added security. Zest Labs has been demonstrating this blockchain integration since earlier in 2018. Zest Fresh uses an abstraction layer to integrate with multiple types of blockchain technology.

Interestingly, Zest Labs and its parent company Ecoark Holdings Inc. have filed a $2 billion complaint against Walmart, claiming that the retail giant unfairly and illegally used its Zest Fresh intellectual property in the development of Walmart’s Eden food freshness technology. Eden was launched by Walmart in March as a high-tech “Intelligent Food” initiative designed to improve the quality of its perishable foods business and eliminate waste from its perishable food supply chain. The company is currently partnering with Costco Wholesale in the use if their technology in store. 

It'll be a while until IBM and Walmart's use of blockchain technology at scale is able to be assessed and rated as a success or not. But as one of the few real commercial examples in action, all the world will be watching.