Food Way Forward PDF

IBM and Walmart: Blockchain for Food Safety
David Galvin
Blockchain will fundamentally change business processes
 You can access any information about what is in the food and its
origins… from the farm to the table...in seconds
 You can better prevent counterfeiting issues around goods such

as pharmaceuticals, luxury goods, electronics and diamonds…
 You can have end to end visibility across your supply chain allowing
you to meet your customers demands for accuracy, transparency
and agility.
 And more…
Blockchain, the next Consumer Industry

and Supply Chain revolution
2 #IBMBlockchain © 2017 IBM Corporation

Why is Food Supply Chain Provenance Critical Today?
600 million - almost 1 in 10 people in the world - fall ill after eating
contaminated food every year, 420,000 of them die
$55.5B - $93.2B a year - The total cost caused by foodborne illness (loss of economic
productivity because inability to work and/ or death, medical costs) in the U.S. alone
• 20% increase in the last four years
$14B by 2019 – Global Food 9.5% CAGR between 2014-2019

traceability market • Emerging markets will have much higher CAGRs i.e. China - 18.9%
Food Incidents are not stopping but increasing:

$10B-$15B Annually - The cost of Food fraud incidents
Spinach Outbreak (2006)
199 Cases, 31 HUS,
3 Deaths, 26 States
E. coli
4
SOURCE: #IBMBlockchain
Frank Yiannas and Walmart are the source for this slide content. © 2017 IBM Corporation
Peanut Corporation America (2008)
5
Global Food Supply
Chocolate-
Cocoa Belgium
Powder-
Switzerland
Kahlua-
Roasted Mexico
Espresso
Beans-
Columbia
Mint Leaf –
United States
Mascarpone
Cheese and
Ladyfingers- Cream-
Italy United States
Cinnamon
Vanilla Beans- Powder –
Madagascar India
7 #IBMBlockchain
40,990 Food Miles
SOURCE: Frank Yiannas and Walmart are the source for this slide content. © 2017 IBM Corporation
Food Safety
Provenance
What  Providing consumers, suppliers, manufacturers Benefits

carriers, retailers, and regulators greater transparency 1. Improved track & trace capabilities
on their goods
for the consumer & industry result
in decreased response time to
 Increasing ability for key participants to meet new product recalls
regulatory pressures
2. Enhanced food flow has material impact
How  Digitize the existing food safety process and product on shelf life management
information on blockchain creating a single historical record 3. Lower compliance costs
 Vendors create new levels of trust through

information sharing

Walmart’s Compelling Business Issue - China
More than three quarters of the Chinese citizens surveyed believe that food
safety is one of the most important quality-of-life indicators.1
95% of 133,225 participants have encountered food safety problems

• 50% expressed worries about China’s food safety
• More than 60% did not have enough confidence in government’s new
actions against food safety issues2
> 49,500 food safety incidents in food production and circulation sections were detected in China
2001 2013
68.2% of food safety events happened in China were caused by illegal activities
2002 2011
Walmart & IBM are working on 2 pilots around food traceability & transparency
Mango Pork

Walmart & IBM are envisioning a fully transparent 21st century digitized food system
In case of a food safety issue, how to do traceability

in minutes/ seconds instead of weeks ?
11
Life of a mango … from tree to shelf
 5 to 8 years for a mango tree to mature

and bear fruits
 Mangoes grown by small farmers
in Central or South America
 Shipped to a packing house to get
washed and boxed
 Shipped to the US by air, sea or land
(custom border)
 Washed, peeled, sliced and put into
containers in a facility center
 Shipped to Walmart distribution center
to get refrigerated
 Transported to store, refrigerated
and put on shelves
12
In a nutshell, Blockchain can be a game changer…
Saves Removes Reduces Increases

time cost risk trust
Transaction time Overheads and Tampering, fraud Through shared processes
from days to near cost intermediaries & cyber crime and recordkeeping
instantaneous

Walmart’s Expectation of Value
Increase trust & transparency to Improve shelf-life management Minimize fraudulent products that Build a more sustainable food
Walmart’s end consumer and waste of expired products either hurt a consumer or result in a system by detecting food fraud,
PR disaster (true or rumored) increase food safety, reduce
spoilage & waste with analytics
FSMA
FSIS
HACCP Create a global view of the
provenance across Wal-Mart’s
Meet the requirements of Increased monetization from specific
supply chain
demanding governments segments by validated organic beef vs.
in-organic OR wild vs. farm raised
salmon
Themes in Blockchain in the Consumer Industry
Traceability and Visibility Fraud & Provenance Redundant & Incomplete High Friction Enterprise
across the value chain Transparency Data Integration
Increasing speed & flexibility Customers and watchdogs Existing data systems are Transactions volume and
of supply chain drives want to know where goods based on messages between speed of the business lead
demand for real time tracking come from. Safety is key. silos, with different to a highly disputed
across partners Fraud and Counterfeit cost organizations having different environment and eroding
and reputation or incomplete data trust and exposing cash
Examples: Examples: Examples: Examples:

Product recalls Food & Product safety Order management Dispute Resolution
Manufacturing collaboration Organic food verification
Trade promotions
Government compliance Authenticity
Order fulfillment

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IBM and Walmart: Blockchain for Food Safety

 You can better prevent counterfeiting issues around goods such

Blockchain, the next Consumer Industry

2 #IBMBlockchain © 2017 IBM Corporation

$14B by 2019 – Global Food 9.5% CAGR between 2014-2019

Food Incidents are not stopping but increasing:

What  Providing consumers, suppliers, manufacturers Benefits

 Vendors create new levels of trust through

8 #IBMBlockchain © 2017 IBM Corporation

95% of 133,225 participants have encountered food safety problems

10 #IBMBlockchain © 2017 IBM Corporation

In case of a food safety issue, how to do traceability

 5 to 8 years for a mango tree to mature

Saves Removes Reduces Increases

13 #IBMBlockchain © 2017 IBM Corporation

Examples: Examples: Examples: Examples:

16 #IBMBlockchain © 2017 IBM Corporation

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