Wal-Mart, Tyson and other food and retail companies are working with IBM to explore how blockchain technology can improve safety in their food-supply chains.
The collaboration, announced Tuesday, builds on Wal-Mart's previous blockchain tests with IBM, where it tracked the distribution of pork in China and mangos in the United States.
"While the initial work was successful, we all knew that in order to achieve truly transformational results, the food safety efforts needed to expand," an IBM spokesman said.
Other companies collaborating with IBM on the project include Dole, Driscoll's Golden State Foods, Kroger, McCormick and Co., McLane Co., Nestle and Unilever.
IBM has worked on more than 400 blockchain projects worldwide, ranging from real estate and finance, to medical and food safety solutions.
A blockchain is a digital ledger used to record transactions securely. The technology has primarily been linked closely to the financial services industry. But Wal-Mart announced last year that it was working with IBM to develop blockchain ledgers to use in the food system.
Elaborating on Wal-Mart's tests, each company can provide different insights on how to sharpen IBM's blockchain technology throughout food supply chains, a spokesman said.
"The needs of a midsized supplier will differ from that of a regulator," the spokesman said. "It's critical we understand the value proposition for everyone ranging from a small farm, to a factory farmer, to small and large suppliers, to retailers to consumers."
Tech companies, such as IBM, are racing to be the first to develop a global blockchain standard so more suppliers can join, making it difficult for competing tech companies to partner with other food and retail companies, said Annibal Sodero, assistant professor for the Walton College of Business at the University of Arkansas.
It's important that the companies involved are in Wal-Mart's best interest, Sodero said.
"You want the big players to join," he said. "These guys, they have the resources, they have the capabilities and they have the skills to join and influence the technology."
Wal-Mart supplier Tyson Foods is taking steps to move its supply chain and logistic information to a central digital database, said Scott Stillwell, Tyson senior vice president of food safety and quality assurance.
"The concept is to get rapid visibility into the entire life span of the product," Stillwell said, and broaden the supply-chain oversight of one food or retail company.
By sharing a single database, companies can track the product's origin more efficiently, preventing food-safety problems like the spread of recalled products and food-borne illnesses from days to a matter of seconds.
"Ideally, we'd be able to see specifically who bought which products and contact them to let them know about any food issues," Stillwell said.
One Arkansas group began using blockchain technology earlier this month. Grassroots Farmer's Cooperative in Clinton is working with a blockchain startup company, Provenance, to trace its poultry products from farm to fork. Grassroots manager Cody Hopkins said that in the next month the cooperative wants to expand the tracing technology to its beef, pork and turkey products and eventually allow for customers to view the cooperative's price margins.
"What we're wanting to move toward is not only using this to show the journey of the product, but showing other levels of detail like pricing transparency," Hopkins said.
Waiting for the technology to develop could be costly for some businesses, Sodero said.
"In the future, when this really becomes a standard, those who are not part of that will have to incur extreme high costs of adoption," Sodero said. "If you can influence the development of the standard to make it closer to your technology and it becomes the standard, you are better off."
Business on 08/23/2017