Is Blockchain the Answer to Sustainable Food Supply Chains?

The global food supply chain, valued at US$9tn, is a major contributor to carbon emissions. The World Economic Forum (WEF) is exploring ways to make this industry more sustainable without affecting food availability.

Among the proposed solutions, blockchain technology emerges as a powerful tool to enhance transparency, traceability and security in food supply chains.

Tackling inefficiencies with blockchain

Traditional food supply chains are often plagued by inefficiencies, security risks and a lack of transparency. These issues can lead to serious problems, such as excessive food waste and contamination-related deaths.

Blockchain technology offers a solution that significantly improve global food safety, accessibility and sustainability.

One of blockchain's most compelling advantages in food supply chains is real-time product tracking from source to consumer. This feature supports sustainability efforts by ensuring compliance with environmental, social and governance (ESG) standards and helps producers receive fair compensation.

As highlighted in the WEF report: “To become more sustainable, firms now need to consider how they operate as part of an extensive multi-tiered supply network with multiple supply and demand links, reverse loops, multi-way interactions and exchanges with numerous actors and non-linear dynamics.”

Overcoming supply chain visibility challenges

Blockchain's transparency is crucial for addressing Scope 3 emissions, stemming from a business's supply and value chains. These emissions are notoriously challenging to manage, especially when suppliers are based in countries with weaker environmental regulations.

By providing a clear and unchangeable record of every transaction and process within the supply chain, blockchain helps companies better monitor and reduce their carbon footprint, even across multiple supplier tiers.

Another key issue in traditional supply chains is visibility. Companies often struggle to see beyond their first-tier suppliers, weakening supply chain resilience and making it difficult to anticipate disruptions. Blockchain’s distributed ledger system ensures that all supply chain participants access the same information, thereby improving communication and trust.

The rise of blockchain in food supply chains

According to the WEF report, 86% of respondents believe blockchain technology offers a competitive advantage, yet only 49% of executive teams are 'blockchain believers.'

While 78% have experimented with blockchain, many face challenges in integrating it with legacy systems. Despite these hurdles, 71% expect the volume of blockchain projects to increase.

A case study from SettleMint, featuring Silal Fresh, an agritech company division, demonstrates the practical benefits of blockchain. Silal Fresh implemented a comprehensive traceability system that records every touchpoint of their products in a blockchain ledger.

This led to improved delivery efficiency, customer satisfaction and brand loyalty. Consumers can now scan a QR code on produce to see its journey from farm to table.

Matthew Van Niekerk, Founder & CEO of SettleMint, says: “We’re seeing blockchain technology’s ability to improve operations and the end-user experience grow across a number of different industries and applications today — and which will only continue.

"One of the biggest areas blockchain has the potential to transform is supply chain management. From more accurate tracking through increased transparency to promoting more security in data exchange, blockchain can make supply chains more efficient, resilient and compliant."

Blockchain's role in securing supply chains

In addition to transparency, blockchain offers significant security advantages. Traditional supply chains often rely on centralised systems and are vulnerable to cyber-attacks. Blockchain's decentralised nature makes it more resilient to such threats, as data is distributed across a network of nodes rather than stored in a single location. This added layer of security is crucial for protecting sensitive information and maintaining the integrity of the supply chain.

The WEF report also emphasises the importance of sustainable innovation throughout the food supply chain, from raw materials to delivery. Blockchain facilitates the spread of innovative practices and technologies that can reduce emissions, improve soil management and enhance farming techniques.

By making data more accessible and transparent, blockchain enables all supply chain participants to adopt and implement these innovations more effectively.

As the WEF continues exploring strategies for a more sustainable future, blockchain stands out as a critical tool for transforming how food is produce, distribute and consumed.

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