Mastercard enters into blockchain food supply tracking
American multinational investment bank JPMorgan this year said that it may take a few years for blockchain’s impact to be “felt meaningfully”.
While it seems to be universally agreed that blockchain hasn’t reached its full potential, it’s also widely agreed that the technology has transformational importance as confidence in cryptocurrency, on the other hand, falters.
According to Deloitte’s 2019 Global Blockchain Survey, in 2019, 53 percent of global organizations believe the technology will be a top-five strategic priority in the next 24 months.
The fact is, blockchain is demonstrating itself as a solution to problems across industries and use cases. And if payments processing & money transfers were the most logical use cases, tracking supply chains is probably the second.
Blockchain’s attributes in security and transparency are hugely beneficial for today’s complex supply chains— comprising multiple components from production, procurement, logistics, sales, and customers— meaning tracking a product’s journey from start to finish can be problematic.
Blockchain has already been used to effectively track the origin and authenticity of precious metals and minerals, luxury goods, and oil. But it’s also proving a boon to the food and FMCG industry, which comprise webs of thousands of supply chain— spanning growers, farmers, packagers, shipping firms and more— where products can change hands hundreds of times before landing in the customer’s hands.
Using blockchain here can enhance traceability, which can lead to efficient and accurate recall of produce if there are recalls required or quality issues. The result can be large cost-savings in identifying problems, and ‘damage limitation’ when it comes to food safety and contamination.
Already, Walmart has deployed blockchain technology to track the provenance of leafy greens— following bacterial outbreaks— in a coalition featuring Unilever and Nestle, while French supermarket giant Carrefour claims to be seeing boosted profits and increasing consumer trust, using the technology to track meat, milk, and fruit from farms to stores.
Mastercard moves in on food tracking
With 100 blockchain patents filed, Mastercard is the third-biggest blockchain innovator worldwide.
The firm piloted its blockchain platform Provenance in August this year. Early trials were focused on combating the global trade in counterfeit goods which was said to have amounted to US$323 billion in 2017 alone.
Now New York-headquartered financial services firm is turning its platform to the food industry.
In a partnership with Envisible, a company that enables the supply-chain visibility in food systems with its Wholechain traceability system, the two firms will work with member stores of leading US food cooperative Topco Associates.
Starting with Topco member Food City, the pilot will see blockchain used to provide visibility into the ethical sourcing and environmental compliance of seafood sold at their stores, including salmon, cod, and shrimp.
Speaking on the blockchain tie-up, Deborah Barta, Senior Vice President, Innovation and Startup Engagement for Mastercard, said that as consumers raise demand for transparency, “the identity of things is becoming even more important.”
Barta said: “Our provenance solution leverages Mastercard’s established network capabilities, globally-scaled technology, and services, such as payments and counterfeit programs. This allows us to deliver trust, financial inclusion and back-end efficiencies to the marketplace.”
Envisible partner Mark Kaplan said the partnership said the “sheer volume of global trade” makes it difficult to track the journey and authenticity of food, and that the partnership promised to bring transparency to an area that has previously been “considerably opaque”.
Blockchain spend by the US retail sector increased 103.1 percent during 2018 to reach US$112.4 million, according to ResearchAndMarkets. From 2019 to 2025, meanwhile, it will rise from US$208 million to US$2.6 billion.
The technology is slowly, but surely, finding its way into large-scale deployment, way beyond mere experimentation. It may not be yet have entered the mainstream of industry in the “revolutionary” way its flag-wavers may have promised, but it’s certainly getting there.
17 August 2022
16 August 2022