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Blockchain, Provenance, Traceability & Chain of Custody

This is an article written by John G. Keogh.

Here are my answers to questions posed over the past few months online and in industry and regulator dialogue. As some of my points can be successfully argued from different angles, this is intended to create the dialogue and not limit it. Your comments and perspectives are valuable and I look forward to this discussion.

Question 1 : Do I need a Blockchain for effective Food Recall? 

No. In a closed supply chain with limited exchange partners you don’t need a blockchain to execute a rapid recall of an unsafe product. Any GS1-standards based technology platform can be used to rapidly trace (backward) and track (forward) a consumer packaged product if the product has a data carrier (barcode) and/or batch/lot # attached. Check out the GS1 global office website or your country GS1 organization as they have a traceability and product recall standard and guidelines on how to execute recall effectively.

In the USA, industry standards body GS1 has partnered with GMA and FMI and has a nationwide, cloud-based Rapid Recall Express platform in operation for almost 10 years. There are similar industry-driven, national recall platforms in place in CanadaAustralia and New Zealand which align to regulations and helps protect consumers and reduces industry risks. GS1 South Korea has a ‘stop-sale’ process in place with multiple government regulators for about 10 years. If any of the regulators determine a product is unsafe, the regulator sends a GS1-centric message to the retailers HQ. Within 30 minutes of receiving the regulators alert, all points of sale (cash registers) in the country are blocked and the ‘stop-sale’ process is enacted. I have seen this in action and it’s amazing. The stop-sale process is quickly followed by the formal recall process. This globally unique process reduces the risk of consumer harm and helps to protect the brand at the same time.

Blockchain is helpful for a recall use case when you have multiple exchange partners across multiple countries and using disparate technologies (see Q2). The opensource and purpose-built blockchain data protocol from OriginTrail is very useful in this scenario because it enables GS1-standards based interoperability between multiple blockchains and legacy. As the below slide from OriginTrail indicates, today we have many data silos and interoperability is crucial to address both traceability, transparency and to execute a rapid recall. Origin Trail will be the first to advise that without first addressing data governance (accurate and standardized data) blockchain will not work as intended.

Disclaimer: I advise the Origin Trail board on industry standards, transparency and trust

Question 2: Are current food regulations driving the need for Blockchains?

Yes. Regulations are generally non-prescriptive and in the food chain they call for a “1-up/1-down” traceability. In complex, multi-party supply chains this is costly, time-consuming and can lead to (preventable) illness and death. In the Walmart Mango use case, it took almost 7 days to execute a mock recall based on 1-up/1-down approach and 2.2 seconds using their specific Blockchain configuration. Blockchain technology is helpful in complex, multi-country, multi-exchange party supply chains that already have good data governance and industry data standards (GS1) in place. A standards-based blockchain enables linkages to be made between the exchange parties and permits sharing of product master data, transactional data and event data – the unhindered flow and visibility of this data is what we call transparency.

I have adapted and use the following diagram to explain the success of the Walmart model in context of theoretical and practical applications of transparency and trust using technology. In this model, the below-the-line RMT indicates regulation mediated transparency. You will note that this is based on mistrust – so are strong contracts that buyers put in place with suppliers. The alternative is what Walmart achieved with voluntary trust-building with strategic transparency and identification based trust enabled by technology – what I call TMT or Technology Mediated Transparency.

Question 3: Can Blockchain guarantee Food Safety and Food Authenticity?

No. Blockchain is oversold as a guarantee of food safety, food authenticity and anti-counterfeit in general. The only legitimate and legal way to guarantee food safety and authenticity is through analytical testing of the product itself – we cannot track the outer package or container and claim the food is safe and authentic. On-pack security features (forensic, covert or overt) help in fraud detection but forensic evidence is required for successful conviction in food fraud cases.

Example 1. WINE bottle recycling

There is a known underground industry that trades in used wine bottles. A hotel or restaurant worker may be incentivized to collect and sell empty vintage wine bottles for hundreds of dollars each. They are re-filled and re-sold for thousands of $, often with fake security features. According to a 2017 Forbes article, an estimated 30,000 bottles of fake imported wine are sold in China every hour. Solution providers are making technology advances and offering security features that create obstacles on the bottle itself including tamper-evident features and fraud alerts for multiple scans of the serialized identifier. Despite the technology improvements and their utility, the only way to legally guarantee the wine is genuine is through forensic testing of the wine bottle contents against the reference samples taken from the harvested crop, or the final blended mix. The storage of reference samples by harvested batch may be a regulatory requirement in some regions.

Example 2. Commingling of fresh fruit and vegetables

Colorful vegetables for sale at the Central Market of Hoi An, Vietnam

Fresh fruits and vegetables may be commingled with products from multiple, geographically dispersed suppliers which increases the risks related to quality, safety, authenticity and provenance. For example, a product may claim to be organic but might have 50% non-organic mixed in to complete the order. The role of blockchain and other technologies in this scenario is limited because human behaviour is the variable. Risk reduction strategies will vary and depend on the context and culture. They can draw on combinations of 1) incentivized behaviour to reduce cheating 2) training on a food safety culture 3) effective food safety practices 4) farm and supply chain auditing 5) industry supply chain standards 6) technology solutions and 7) analytical science. The latter, analytical science being the most critical for evidence.

Question 4: Can Blockchain deliver a guarantee of Food Provenance?

European flags on minced meat. International meat trade

No. This is confusing I know. Provenance refers to geographic source or origin and is determined by forensic science not software, GPS or hardware (see below traceability). Let me share a hypothetical example; lets say we have potatoes and carrots in Vietnam that go to market as ‘product of Vietnam’. In one possible scenario, bad actors could roll the veggies in dampened local dirt to enhance the illusion of being a local product. When the product is forensically tested, both the veggie species, and their carbon fingerprint proves they are indigenous to, and were grown in a particular region of China. This is food fraud and classified as an economically motivated adulteration where a cheaper product is sold as a more expensive premium local product. Blockchain, IoT, stickers/logos or barcodes on bundles of products will not solve this because human behaviour is the variable.

Analytical laboratories can address these issues as part of a regular audit of suppliers and supply chains. Similarly, forensic testing can determine if fish were wild caught or farmed. Companies doing exceptionally well at this today include Perth-based Source Certain and New Zealand-based Oritain, to name a few.

Question 5: What’s the difference between provenance, traceability and chain of custody?

Even the experts get these confused. Let me explain how I see it. Provenance is defined above as geographic source or origin and it is guaranteed only through the results of forensic testing of it’s carbon fingerprint. You will hear experts or software companies say they ‘track provenance’. In many cases what they really mean is classic supply chain traceability or in some cases, chain of custody. Classic traceability includes the source of the materials and is best interpreted as the ‘business or logistics source’. In my opinion, we should not call it tracking provenance as we are not necessarily tracking the true geographic source or origin per-se, we are tracking physical ‘movement’ from a business or logistics source through the supply chain. This draws an important distinction between classic product traceability and forensic product traceability of the geographic source or origin as defined by forensic testing of the products carbon fingerprint.

To help the discussion and align on terminology, see below definitions of food traceability extracted from Olsen and Borit (2013).

CODEX: Traceability is defined in the Codex Alimentarius Commission Procedural Manual (FAO/WHO, 1997) as “the ability to follow the movement of a food through specified stage(s) of production, processing and distribution ”.

ISO: Traceability defined in ISO 9000 and ISO 22005. ISO 9000 (ISO, 2000) as “The ability to trace the history, application or location of that which is under consideration”

The ISO 22005 (ISO, 2005 ) definition is word for word the same as the ISO 9000 definition, but ISO 9000 is a standard for quality management systems in general whereas ISO 22005 is a specific standard for traceability in the food and feed chain. ISO 22005 adds that “Terms such as document traceability, computer traceability, or commercial traceability should be avoided. ”

For all these ISO definitions (ISO 8402, ISO 9000, ISO 22005), there is an additional clause which states that when relating to products, traceability specifically entails “the origin of materials and parts, the processing history, and the distribution and location of the product after delivery”.

EU General Food Law (EU, 2002) defines traceability as “The ability to trace and follow a food, feed, food producing animal or substance intended to be, or expected to be incorporated into a food or feed, through all stages of production, processing and distribution ”.

 

The net-net, traceability includes the material origin. A brief note: within a supply chain, physical products are tracked-forward but traced-backwards and this bi-directional capability is generally referred to as traceability. The chart below is unpublished and from my academic research. It shows the nuances of information, product and assurance flows.

 

Chain of Custody (CoC)

CoC or cumulative tracking was an active discussion in pharmaceuticals in the early to mid 2000’s but seems to have lost some favour. CoC is critically and legally important in highly regulated sectors. For example in weapons, explosives, transport of bulk money, works of art etc. where exact time stamps of the product physical movement, locations and details of all transactions including the parties in physical custody must be tracked and registered. This is similar to a FedEx package delivery where very detailed information is available and signatures are required for acceptance from one party to another. This accumulation of data along the supply chain is sometimes referred to as similar to a ‘Russian doll’.

Example: Pharmaceuticals and Tobacco

Pharmaceuticals and tobacco are two sectors that are highly regulated to protect against many issues including illicit trade, counterfeit, human health and safety etc. What this means is that every dispensing unit of a drug and every pack of cigarettes must be globally and uniquely identified with a serial number and tracked at every stage in it’s supply chain (to the point of dispensing for drugs and to the last point before purchase for tobacco. Note, drugs are tracked to prescriptions and patients, tobacco is not tracked to smokers).

In the (old) chart below from GS1, CoC is represented by cumulative tracking in comparison to 1-up/1-downcentralized database control for closed networks and distributed databases; which we noted more than 15 years ago and is now similar to the current blockchain dialogue. The latest version of the various traceability models can be found in the GS1 Global Traceability Standard (2017).

Disclaimer: I was previously a senior vice president at GS1 Canada and Director of Product & Consumer Safety at GS1 Global office.

Food is regulated of course but not to the extent above that it requires serial number specificity (lot size 1). Generally, food is tracked by lot, batch or date code and a can of soda will have the same global trade item number (GTIN) as the same soda product next to it. The GTIN, while globally unique and aligned to the brand is not a serial number and is referred to as a product family or class code. With the increase in food fraud, there is now growing momentum to add a second data carrier to a food product with a serialized identifier and links to a product web page or product authentication tools. Note, date carrier is a ‘family name’ for all barcodes and RFID tags. Regulations may suggest the ‘data to be carried’ and the brand owner will then select the appropriate data carrier.

To visualize how a GTIN works in a food chain today, see the chart below from GS1 which can be found in the 2017 version of the Global Traceability Standard

BREAKING NEWS

On August 13th 2018, GS1 released a new standard called the GS1 Digital Linkstandard which will enable connections to all types of B2B and B2C information. This new standard is the foundational bridge between physical products and their digital twins.

That’s it for this post – your comments, feedback and opinions are highly valued and very important. Keep an eye out for upcoming posts on topics related to transparency, trust, credence, anti-counterfeit, traceability, product recall, blockchain, provenance and many more.

About the Author:

John G. Keogh is a sought-after speaker, advisor and researcher. Operating at the intersection of the Public + Private sectors globally, he provides confidential advisory, research & interventions across policy, operations, strategy and technology.

John holds a PG Dip. and an MBA in General Mgmt. He has an MSc (distinction) in Business and Management Research into Supply Chain Transparency and Consumer Trust. He is currently a part-time, associate researcher at Henley Business School, undertaking doctoral (DBA) research into food chain transparency and consumer trust. John plans to publish an ebook “Food Chain Transparency – what executives need to know” in 2018.

Photo by Martin Adams on Unsplash

#YouAreWhatYouEat

In many countries, especially here in Denmark and EU, we don´t have to worry about when we get the next meal. Many of us have the possibility to pick and chose what we want to eat, and when. So in the age of self-realization, we can now use tech to make sure that we eat healthy, or least try to.

“One quarter of what you eat keeps you alive. The other three-quarters keeps your doctor alive” – Source unkown

Eating healthy starts with understanding what you’re eating on a frequent basis, but we all know that tracking what you eat, and trying to determine the nutritional information of certain meals requires a significant amount of effort. And a lot of data handling. So companies are developing apps and new tech, to let you monitor our own health. Many of these products are still in their infancy, so the data collected have to be taken with a grain of salt, but they offer an important glimpse into the future of self-regulation and personal health management.

Why is this important in the light of transparency?

If we can monitor what our body, with precision, consumes of sugar, pesticides, non-organic etc, it will have a reverse effect. When Millennials adopt health apps, that will make them much more interested in knowing the source of their food. With a never growing population of consumers with food allergies, they are demanding a clear information about reliable information. And with the growing interest in sustainable, organic, and local food, there is a pressure from consumers that value eating organic and/or sustainable, on the industry, to ensure that it really is organic, or sustainable.

“If everything is known, if it is known what is inside a product and its health effect on the body, that will really be a big change in the industry as we know it” – Nard Clabbers, Senior Business Developer at TNO

One of the companies trying to deliver precise transparent meal nutritional content is AVA. AVA uses artificial intelligence to allow users to take a photo, with their smartphone, of their meal to get instant information about the meal´s nutritional content. This is just one example, with other tech companies and startups applying blockchain, machine learning (ML), big data, argumented reality (AR) and virtual reality (VR).

Next week, you can read more about AVA and the tech companies and startups that are paving the way for more transparency of the food we eat. It might not be the companies business models, but it will be great side-effect with the focus on personal nutrition.

Sources:

https://medium.com/@sirianbrady/introducing-ava-and-intelligent-eating-224b0f9be826

Book: Our Food Our Future – Eat better, waste less, share more; (2017) Alan Watkins & Matt Simister.

Photo by Dan Gold on Unsplash

Top 3 foods with hightest environmental footprint

Climate change is getting real, and agriculture is one of the largest sources of heat-trapping greenhouse gases such as methane and carbon dioxide.

But when it comes to their “carbon footprint,” not all foods are created equal. So here is a Top 3 with the highest carbon footprint, and a visual overview of all foods with the highest carbon footprint. This is so you are aware, and have this in mind, when you put your food in the basket. An easy way to bypass this, is to buy as local as possible.

Top 3

  1.  39.2 kg of CO2.                                                                                                       You thought is was beef, but sorry lamb lovers. Eating a kilo of lamb is equivalent to driving about 90 miles or 145 km! In the US a massive 50% of lamb is imported, so a lot of the carbon footprint comes from shipping. But the main contribution is the animals’ digestion, their feed, manure management and other farm operations.
  2. 27 kg of CO2
    The sinner we all know (or should know) is beef. Cows produce a lot of methane (a potent greenhouse gas), and also require a lot of water and land. Especially in South America, a lot of rainforest have been eliminated, to make way for huge farms for the never ending urge for for beef.
  3. 13.5 kg of CO2
    And maybe the joker here, is cheese. Cheese is also a major CO2 contributor. Only a small fraction of cheese is imported to the US, but that accounts for half of all the carbon emissions from cheese.

 

Source: https://bit.ly/2Ek9hPL

 

Sources:

http://www.businessinsider.com/the-top-10-foods-with-the-biggest-environmental-footprint-2015-9?r=UK&IR=T&IR=T

https://www.ewg.org/meateatersguide/a-meat-eaters-guide-to-climate-change-health-what-you-eat-matters/climate-and-environmental-impacts/

Book: Our Food Our Future – Eat better, waste less, share more; (2017) Alan Watkins & Matt Simister.

Photo by Leon Ephraïm on Unsplash

Bologna – A 360 degree focus on food at FICO World

Me (Kristoffer) and my girlfriend, Nina, had planned our easter vacation destination. Italy! Visiting a few places in Tuscany, and Bologna a bit more north-east. We wanted to visit Bologna, due to being the “food capital” of Italy. And we were not disappointed.

We ate at many different restaurants during our short stay, and tried to eat out, as much as possible. One restaurant we highly can recommend is Ristorante Pizzeria La Brace, where I had their delicious swordfish and Nina had fresh pasta with a variety of seafood. Fantastic meal!

Besides all the restaurants, we also visited the local food markets on Via Pescherie Vecchie and Mercato delle Erbe. I also wanted to visit the newly built FICO Eataly World, a agri-food park few kilometers outside of central Bologna. We had no idea what to expect, since I stumbled upon it when googling “what to do in Bologna”.

It was a massive place, with a combination of food stalls, playground, learning areas, food courses, animals and supermarket. You can easily get lost in all the lovely smells and colors of the rainbow, when walking through the wine area, or the olive oil area.

I can go on and on, but what I like about this place is the 360 degree focus on food. It started with plants, bees and animals outside the building. Here you can, e.g. read about the animals, learn where you food comes from, what it eats and so on (mostly for kids, I guess 😃). Then you walk inside and see the produce in action. Most of the food shops have mini-production sites at FICO, where you can, just like in a zoo, watch workers make the products, which you can taste and buy a few feet away. I applaud this form of transparency!

This was also the same for the restaurants, where you look directly into the kitchen and watch the chefs do their magic. Many of the restaurants also had a “how it’s made”, either on the menu or as big illustrations on the wall. Again, to inform the visitors of what they are putting in their mouths.

Part of the experience was also interactive installations about food, courses on food, and as the picture below shows, talks about different aspects of food production.

So their tagline of “You have seen them being made, you have tasted them in our restaurants… why don’t you take them home with you?”, holds true, at least the first and second part, as we didn’t buy anything, since we had to drive to Piombino in the afternoon. All in all a very interesting place to visit, so if you are interested in food do spend some hours at FICO World.

Ciao!

Interview – Founder of SensoMind, Rufus Blas

We love the new technologies here at MyFoodTrust, of course in relation to improving the current lack of transparency. Last week we talked to Daniel from Bext360, and their use of blockchain and AI. Today we focus on AI again, which we find super interesting as a tool for food transparency, so it was a no brainer to do a interview with Rufus from SensoMind.

Read here, how SensoMind have applied AI to create a system to detect anomalies in food products and what role AI will play in creating transparency in food supply chains in the future.

Can you start with telling us a little about yourself and SensoMind?Hi, my name is Rufus. I’ve been involved in AI ever since I studied at MIT in 2004 at their Artificial Intelligence Lab. I hold both a PhD and an MBA and have a passion for innovation management and entrepreneurship. Previously I worked a lot with perception for self-driving vehicles in agriculture. I founded Sensomind with my partner in 2016 in order to democratize AI and get it out to the masses.  We’ve built our own set of tools around top AI products such as Googles Tensorflow which we thought at the time were too much targetting data scientists and not enough the engineers that are out in the field today. Our core competencies lie in analysis of complex sensor data. This is available in abundance in manufacturing so is one reason why we have gotten into this industry.

Rufus Blas
Sounds interesting, but can Sensomind’s AI technology be applied on food?
We’ve been working extensively with food manufacturing customers where our technology can be used for quality monitoring and sorting of food products. Most of our solutions are based on optical sensors (Such as cameras and multi-spectral imaging). Vision technology has been around in the food industry for 10-20 years but it’s been very difficult to apply it to food products with organic shapes and high variety. Examples include monitoring breads, meat, and fruits & vegetables. With AI you can teach the system just be showing it examples which opens up for completely new applications. An example can be automating the cutting of meat.  The price of a final product has a large influence on the cutting being done correctly and it can be very difficult using traditional computer vision to recognize exactly where to cut.
And in relation to that, can Sensomind’s technology help tackle the problem of, e.g. food contamination or unapproved enhancements/additives in food?
So we have a system to detect anomalies which can for example detect contaminants. In the food industry we have used this to detect contaminants such as bone fragments, metal, plastic, and other objects which shouldn’t be there. Unlike a human operator, our system never tires. Unapproved additives is difficult to detect using traditional color cameras so here we work with spectrometers or multi-spectral cameras. Using traditional computer vision an engineer would normally sit and try to make a model for different additives based on a pre-conceived notion of what to look for. AI allows a more statistic and data-driven approach which reduces the chance of unapproved additives making it through the production undetected.
In your opinion, what role does new technologies, e.g. AI, play in creating transparency in food supply chains?
Supply chains are notoriously difficult to model because of large amounts of often poor quality or missing data. AI is really good at crunching numbers and extracting meaningful informations from poor quality and multi-source data (including images, text, numbers, etc). AI can help piece together the information about specific products which would be impossible to model by hand.
If someone was interested in learning more about the work you do, where can the find more? 
The obvious thing would be to contact me. Check out our website (sensomind.com). We have a number of international projects going so location is often not a big issue.
A big thank you to Rufus, and great to hear of the use of AI in the food supply chain. Here at MyFoodTrust, we are always looking for how new technologies can enhance transparency and traceability.
So if you know of any startups, please let me know!
Have a great day.
© MyFoodTrust 2018

Farm animal welfare & transparency. So call me blockchain? Maybe

This article is written by Dan McGlynn:

Sustainability & animal welfare – the power of transparency, technology & collaboration – so call me blockchain, maybe?

Farm Animal Welfare – it’s now seen as a strategic opportunity by many global companies.

The benchmark…

I was fortunate enough to attend the launch of the 6th BBFAW report evaluating the performance of 110 large food institutions. The headline was ‘good progress but still a long way to go’.

Thank you to Nicky Amos for inviting me, one of the best events I have ever attended.

The venue was the London Stock Exchange – strange setting you may possibly think? Not so, it became very evident when David Harris, Head of sustainable investment at FTSE Russell opened the event by talking about how investors are closely linking sustainability and animal welfare metrics with share performance and valuation.

All business should take note – as the consumer becomes more aware and demands greater transparency on the goods that they are buying, companies that are transparent with their performance in dealing with ethical, sustainability and animal welfare issues will outperform those that are not.

Steve McIvor – chief executive of World Animal Protection made some great comments : ‘Consumers are showing that they increasingly care about the welfare of animals when they are deciding where to eat’.

The Foodservice industry still has ‘a lot more work to do’ providing transparency of animal welfare in their supply chains according to the new report. Despite making some progress (JD Wetherspoons rose 3 places) in the Business Benchmark on Farm Animal Welfare, pub & restaurant chains lag behind retailers and manufacturers and still need to make improvements.

No hospitality company achieved the ‘tier one’ status in the ranking but McDonald’s & our very own Greggs placed towards the top of tier two after making farm animal welfare a part of their business strategies.

The likes of KFC, Pizza Hut and Starbucks managed tier five, defined as showing limited evidence of implementation, while Subway and Burger King both ranked in tier four, and were defined as making progress. Waitrose, Marks & Spencer and The Co-operative Group all achieved tier one ranking.

The stats are staggering. Globally, 50 billion chickens are slaughtered every year (that’s 7500 every 10 seconds) – a large proportion of those live in unacceptable conditions. A lot of work is being done with the emerging markets of countries such as China, Brazil and Thailand.

 

Did you know that the largest dairy industry in the world is in India? China produces 700 million pigs per year – the UK produces 10 million. Big numbers, lots of animals.

The report scores companies on 4 areas:

·      Management policy & commitment

·      Governance & management

·      Leadership & innovation

·      Performance reporting & impact – increasingly becoming more important

Similar to the Modern Slavery act 2015, it’s not good enough just to have a policy in place. The company needs to have the commitments as part of their culture and strategy and more importantly, measure and report on their performance.

Only 11% of companies report on animal welfare outcomes – that’s 12 out of 110 global businesses. The answer is data and technology.

Can blockchain fill this void? Possibly. There are more and more commentators on this subject, very few are experts and it’s unproven in food. Watch this space and I aim to provide more insight on this subject soon.

There is existing technology that maps supply chains and is able to harvest sustainability & animal welfare KPIs from any part of that chain – look at my linked in profile and you will find out who they are!

Transparency will be king – do not underestimate the power of transparency. Technology will be the vehicle for this much need transparency.

If any of the above has resonated and you would like to discuss this subject further, lets connect and get in touch. I am heading up a project to drive collaboration in the foodservice industry focusing on compliance, ethical and animal welfare performance. All fingers point towards integrity.

Don’t get me started on integrity (doing the right thing even when nobody is looking). That subject is for another day.

I also love feedback – good, bad and ugly, it’s how we all grow so please let me know your thoughts.

Have a great day

Dan McGlynn

Authenticate IS

Original posted here:

https://www.linkedin.com/pulse/farm-animal-welfare-transparency-so-call-me-maybe-dan-mcglynn/

Towards a Transparency Culture in the Food Chain

This article is written by John G. Keogh.

Conventional wisdom suggests that transparency is an irrefutable practice in public and private sector governance (1). In fact, transparency is viewed as foundational for the efficient functioning of markets and provides a bedrock layer for trust to function as a ‘social lubricant’ by reducing information asymmetry (2). Although there is a complex bidirectional relationship between transparency and trust, increased transparency increases trust, according to a growing number of empirical findings and industry research.

“Trust is in Crisis” Edelman, 2017 Trust Barometer

The recurring exposures of deceptive practices, ethical lapses as well as opportunistic and immoral behaviour by individuals, governments, media, NGO’s and businesses has catapulted transparency into global prominence especially in the food industry.

No doubt you would concur that we have ideological and biased reporting, allegations of ‘paid-for’ scientific publications, deceptive practices, fake news and then there is the viral nature of social media to spread the falsehoods.

With all this going on in the background, sceptical consumers continue to raise their concerns about major social issues related to sustainability of natural resources and habitat destruction of endangered species. A key question raised often is whether the 3rd party certifiers are independent and unbiased, whether their results are peer-reviewed and can be trusted. And more importantly, can they be trusted when they rely on the firms they audit for revenue?

Research by Graham Bullock (2015) on 245 eco-labels and sustainability schemes in the USA found only 2 firms met criteria of being independent, had qualified staff (PhD level experts) and their results were peer-reviewed. He further noted that 56% of Americans do not trust companies’ green claims. Bullock’s insightful research was based on the findings from Starobin and Weinthal (2010) who found competency issues with 3rd party certifiers for Kosher labels.

Furthermore, consumers have legitimate concerns spanning from fair trade to the immoral acts of human slavery and forced child labour in our food chains. On top of concerns for animal welfare and a growing fear of antibiotic resistance, consumers are suffering from a lack of consensus among the public health agencies, NGO’s and the food business operators on the long-term health and safety of common foods. Again, whom can they trust?

do you remember the 2015 ‘processed meat causes cancer’ from the WHO? It seemed well grounded in scientific evidence but after significant push-back from industry, there was consumer confusion followed by a partial retraction by WHO a few days later. Who can the consumer trust to provide transparent, and trusted information? Unbiased reporting and evidence-based recommendations? Was the retraction the result of an industry lobby to protect revenues or grounded in sound science?

When transparency is lacking, so is trust!

In my view, the problem today is a lack of a transparency culture throughout the food ecosystem. But my question is; who is hiding what and why are they doing it? Following on from that, it is no wonder (at least to me) that Edelman argues that trust is in crisis. The challenges we are now faced with is ‘whom’ do we trust, and ‘what information’ can we trust? And my question is, therefore ‘can a transparency culture help’? I think it can.

The Merriam-Webster dictionary defines transparency as the “quality or state of being transparent”. And ‘transparent’ is defined as “having the property of transmitting light….” and “free from pretense or deceit”, “easily detected or seen through”, “readily understood,” “characterized by visibility or accessibility of information especially concerning business practices”

What is a Transparency culture?

Much like a food safety culture which is brilliantly outlined in several books by Frank Yiannas, VP of Food Safety at Wal-Mart, in my view, a transparency culture is essentially about human behaviour. Regardless of laws, regulations, standards and organizational SOP’s, a transparency centric culture means doing the right thing when nobody is looking. And when they are looking, to accept responsibility and accountability.

A transparency culture should extend throughout the organizational ecosystem and is critically important to the boundary spanning employees who engage in direct communication and business transactions with stakeholders. A transparency culture is also about honest, forthright, clear and understandable communications, not hiding details in the fine print or providing scientific or technical language that consumers cannot normally decipher.

An example of a Transparency Culture fail

A transparency culture in the food chain is not only about the food itself but also related to business practices which impact consumers negatively. In the past week, Canada’s premier retailer, Loblaw received immunity from prosecution as the whistleblower on more than a decade of industry practices of collusion and price-fixing for bread. This ethical and immoral lapse was not just one person but a whole supply chain colluding to cheat consumers and break Canadian anti-trust laws. Will a Blockchain fix this? Nope.

This illegal practice will be costly for Loblaw and others, and not just financially. It will take time for consumer trust to bounce back. Loblaw is booking a CDN$ 150 million charge this quarter to appease angry consumers with a 25-dollar ‘mea-culpa’ voucher. Unethical behaviour doesn’t pay and will get exposed eventually.

 ‘‘Transparency is the deliberate attempt to make available all legally releasable information—whether positive or negative in nature—in a manner that is accurate, timely, balanced, and unequivocal, for the purpose of enhancing the reasoning ability of publics and holding organizations accountable for their actions, policies, and practices” Rawlings (2009)

How do we fix this?

The entire food ecosystem needs a rethink on transparency as an enabler of consumer trust. From farm to retail we should consider how to put into practice a program, or programs to ensure ‘transparency as a culture’ is embedded in all aspects of the food chain.

A lofty goal right? Why am I proposing this? well, no government or enforcement agency can control or govern all aspects of our complex society. Therefore, voluntary measures such as those embedded into a corporate social responsibility (CSR) program becomes an alternative, non-state mechanism to address these societal issues and concerns broadly (5). And specifically, issues such as food safety, food security, food fraud and price fixing – the latter being one of those issues where consumers, regulators and insiders alike probably shake their heads in dismay thinking that was a thing of the past.

Embarking on a CSR journey focused on implementing a transparency culture is one way for an organization to publically state, ‘we are taking responsibility’ and ‘we are accountable’ for addressing these big-hairy societal issues and also the specific issues of food safety, fraud and deceptive practices. By the way, transparency is viewed in the discourse as fundamental to the implementation of successful CSR, which, if not managed ethically, becomes just another tool for an organization to peddle untruths such as greenwashing (fake sustainability claims).

Finally, in a transparency culture, whistleblowing at all levels should be encouraged to continually improve processes by shining a light in the opaque areas of the food chain where unethical, immoral, deceitful and illegal behaviours are most rampant. This is no doubt a marathon, and the food industry is likely still at the start line without a race plan.

Thanks for reading.

Cheers.

About the Author:

John G. Keogh is a sought-after speaker, advisor and researcher. Operating at the intersection of the Public + Private sectors globally, he provides confidential advisory, research & interventions across policy, operations, strategy and technology.

John holds a PG Dip. and an MBA in General Mgmt. He has an MSc (distinction) in Business and Management Research into Supply Chain Transparency and Consumer Trust. He is currently a part-time, associate researcher at Henley Business School, undertaking doctoral (DBA) research into food chain transparency and consumer trust. John plans to publish an ebook “Food Chain Transparency – what executives need to know” in 2018.

Sources:

(1) Welch et al., (2006), (2) Berg (2004). (3) Rawlins, (2008), (4) Penders et al., (2017), (5) Dubbink et al., (2008), plus in-text references.

 

Original posted here:

https://www.linkedin.com/pulse/towards-transparency-culture-food-chain-john-g-keogh/

Interview – Founder of bext360, Daniel Jones

I have looked so much forward to this interview.  Ever since I first read about bext360, and their use of blockchain, I have impatiently been waiting to see their work in action. So, if you are a coffee addict, and want to be sure that the coffee you drink everyday, in fact is the quality of what it is suppose to be, bext360 will have you covered. Lets get started!

Can you start with telling us a little about yourself and Bext360?I’m (Daniel Jones) a US and Africa based entrepreneur with over 17 years of experience living and working in emerging and frontier markets including China, the Democratic Republic of Congo (DRC), and India. I have professional roots in technology, applied mathematics, electronic commerce, and emerging economies. In 1991, I was with the Defense Intelligence Agency, where I was a key architect and topology designer of the Joint Worldwide Intelligence Communications Systems (JWICS), the first and now largest TCP/IP system to transfer voice, video, and data across Top Secret networks.

After that, I spent the last five years living in Kinshasa, DRC, where I evaluated supply chains and structured/funded companies as CEO and founder of Pioneer Management. In the DRC, I founded RAMIKA, the first US-owned company to successfully export conflict-free minerals from the DRC to the US in compliance with supply chain and traceability requirements under the Dodd-Frank Act. In addition, I structured the first private port facility constructed in the DRC.

I launched bext360 in April 2017. bext360 is company that develops technologies to streamline critical supply chains in emerging economies. Although our technology can be used across industries for different commodities, we are focused on the coffee industry first. Our bext-to-brew” platform aims to revolutionize the coffee supply chain with IoT, blockchain, machine vision and artificial intelligence (more on this below), while bringing consumers and farming communities together to improve product quality, community livelihoods and the consumer coffee experience. A guiding principle of bext360 is to build community by enabling buyers and other organizations with direct paths to improve the quality of both the product and the communities that provide the coffee.

Great, but how did you first get involved with coffee supply chains?I got involved with coffee supply chain after working for years in the Democratic Republic of Congo exporting conflict-free minerals, where security necessitated by large cash transactions represented a significant expense. I saw that most were entirely inefficient and lacked so much transparency. At around the same time, I started learning about blockchain technology and I became fascinated with the idea that it could potentially transform the supply chain for many industries. I landed on coffee because it is one of the most valued commodities in the world and its supply chain is completely antiquated.

Why is there a need for better traceability and transparency of coffee supply chains?

Although coffee is the second-largest traded commodity in the world (a $150 billion market worldwide), its supply chain remains antiquated and opaque. While global demand for coffee continues to grow, farming communities in developing countries must accept low prices and delayed payments for their harvested goods (women are responsible for 70 percent of growing and harvesting). However, millennials and coffee connoisseurs are now demanding transparency for sourcing and origin – indicating a shift in consumer preference and their willingness to pay for supply chain transparency.

And in relation to that, how do Bext360 technology tackle the problem?

bext360 is helping to eliminate many of the inefficiencies of the coffee supply chain while simultaneously providing transparency at each step of the process. Using machine vision, AI and IoT along with blockchain technology, we evaluate and sort coffee cherries and parchment (a phase of coffee been processing) based on quality. Farmers are then able to use a mobile app to view payments based on coffee quality, and may offer or reject the proposed payment. They are effectively increasing compensation for higher quality cherries. Powered by Stellar’s blockchain, the application immediately pays the farmer for her product upon acceptance of the offer. The application may also connect to the farmer’s other accounts for transactions such as loan repayments, local taxes and other financial commitments. Each evaluation and transaction relating to the coffee – including farmer identification, quality, purchasers and payouts – is recorded on the blockchain providing visibility to end consumers.

The certification process in supply chains is extremely costly. Currently, inspectors must physically examine each product at every point of the supply chain to verify that the product is what it purports to be. For coffee, every batch requires certification papers to move along the supply chain from one port to the next. bext360 is moving this data to the blockchain, providing transparency and immutability, which eliminates today’s costly and sometimes unreliable paper trail.

Using blockchain technology, the bext360 platform also creates crypto tokens based on the analyzed quality of the coffee to more accurately reflect the value of this commodity. As the commodity progresses through the supply chain, new tokens are automatically created to represent the increased value of the product until it becomes the roasted coffee we know and love.

For example, when a coffee cherry enters the supply chain, a token is created to represent its quality at the first level. As it continues through the supply chain and is processed to become “green coffee”, a new token will be created at this supply chain node and exchanged with the older token to represent the commodity in its new form. This tokenization technology can be used to represent other products, such as cocoa, nuts, spices, seafood products and pharmaceuticals.

The ability to create tokens representative of commodity value is groundbreaking in many ways. All stakeholders across the supply chain can own tokens, which hold real value for financial institutions. Banks, suppliers, business owners and the machines themselves can own, pay and collect from each other seamlessly. Commodity financing, plays a significant role in the portfolios of certain financial institutions. Rabobank has welcomed the use of tokens to reduce risk, while fundamentally changing how companies interface with the bank itself. Tokenization technology drastically reduces the transaction cost of global commodities and may also be applied to inventory valuation and the development of smart contracts.

Additionally, by providing the data recorded on the blockchain to banks and microfinancing institutions, it makes financials easier to audit and assess lending risk and therefore, reduces the risk to make individual loans. On the bext360 platform record includes: how much each farmer has sold, the quality of her cherries, and how many coffee cherry trees she owns. Based on this information and her unique history, the bank may borrow against the value reflected on her blockchain record. It is an innovative solution to address ongoing limitations for the under-banked – something other startups like Tala are trying to address with alternative credit scores.

Blockchain technology can also bring consumers and farming communities together. Using the bext360 platform, eventually, consumers may tip coffee farmers directly for coffee purchased at their neighborhood coffee shop. Payments to the farmer could be made instantaneously and tracked through the blockchain’s immutable ledger to assure consumers that tips were allocated appropriately.

If someone was interested in learning more about the work you do, where can the find more?

They can visit our website, or also read about us on Fast Company and Fortune. There is also a short documentary video about our company and technology that was created by Freethink Media for their Coded Series that was sponsored by Facebook.

I believe that this combination, blockchain and on-site quality control, will help ensure transparency from start to finish, and as Dan says, bring consumers and farmers closer together.

® 2018 MyFoodTrust

By

Kristoffer Just

Food fraud in China – KFC is the answer?

39 year old Shen Yicheng, a former computer salesman, now a farmer that are growing food the ecological way, which is a rare thing among farmers around the outskirts of Shanghai. He produces products without pesticides. He wanted to be self-sufficient, but now friends and family want to buy his carrots and watermelons. The reason? Chinese food products are filled with toxic chemicals or otherwise harmful to their personel health.

Even though there is Chinese food products with eco labels, there is massive lack of confidence in that labelling due to several incidents with food fraud (and because the labels can easily be bought on Taobao). The list is long and horrifying: rats sold as lamb, cooking oil fished up from the sewage and poured in new bottles, poisoned milk powder, decades old so-called zombie meat and an almost impressive selection of fake products, including everything from eggs and rice to prawns. Scams, corruption and unscrupulous profit hunting are a major part of the problem.

Food fraud in China

In annual interviews with 5000 citizens from different cities, the concern of food safety is top one or two every year, the last ten years. They are terrified to get sick or die of what may be a part of their diet. Everybody knows that the food supply chain in China is a huge mess. This is one of the reasons why people eat at KFC (Kentucky Fried Chicken). Crazy as it may sound, people eat there because it’s healthy (and safe). People trust KFC, because of hygiene control and the chicken is not fake.

China is ready for a food innovation revolution. One of the tools could be a implementation of new technology, where blockchain can be a way forward, to reduce the risk of food fraud along the supply chainBlockchain is just one tool in the belt, where vertical farming or lab grown meat also can be a path forward. 

The people of China are ready for it, so they can live with the peace of mind, that the food they eat are safe and sound.

References:

http://classic.samvirke.dk/magasin-artikel/1373000000-munde-maette

Consumers find transparency in food important

Transparency has been one of the biggest buzzwords in the food business. It has driven product reformulations, moved producers to utilize more sustainable practices. It is now no more an option, it’s a requirement. The survey by Response Media underscores its importance as producers, manufacturers and retailers move forward with greater transparency of their products. The survey was carried out Q1 this year with 500 US respondents and mixed gender demographics.

The findings

Consumers place a significant value of importance on the source of ingredients; the manufacturing, handling, and shipping of the product; and the sustainability, charitable, and labor policies of a brand.

Consumers primarily want it before and during purchase. So an easy-to-use QR code or NFC tag, combined with the consumers smartphone could do the trick.

So their recommendation is that companies that can deliver content during all stages will secure a stronger level of trust and differentiate themselves from competition.

So, brands must consciously develop and communicate meaningful transparency content to consumers when and where they want it. This transparency have to be founded on a trusted process, or else it is just airy-fairy. This could be a supply chain blockchain tech and RFID process, to ensure the greater transparency and traceability. So there is no need to wait, the first that brings transparency to the food we eat, is going to have a great advantage when people have to chose between products in the supermarket.

© 2018 Kristoffer Just Petersen

References

http://www.fooddive.com/news/grocery–study-nearly-all-consumers-find-transparency-in-food-and-beverage-important/446999/?mc_cid=a1edfc77cc&mc_eid=35fb007d92

Response Media – 2017 Transparency Study