Walmart tests blockchain technology to solve food safety issues

Rage Review : Walmart is working with IBM to use blockchain technology to track the source of food, thereby ensuring food safety and quickly solving the problem of food-induced diseases. The products currently tracked by blockchain include packaged products in the United States and pork in China, which can help Walmart deliver food to stores faster and reduce food corruption and waste. If Walmart uses blockchain technology to track food worldwide, it may become the largest deployment of blockchain technology to date.

Translation: Nicole

Like most businesses, the world's largest retailers are struggling to identify and remove recalled food. When a customer gets sick from food, it can take days to get to the bottom of the product, shipment and supplier information to find out why. With blockchain, Walmart is able to get critical data from a single receipt, including details about the supplier, how and where the food was grown, and how the food was inspected.

Marshal Cohen

NPD Group Research Analyst Marshal Cohen said:

“If there’s an E. coli outbreak, they can find the source of the problem immediately, which can mean the difference between days and minutes.”

Frank Yiannas, vice president of food safety at Walmart Bentonville in Arkansas, said:

“With blockchain, it gives consumers and companies more confidence, and we think that having better traceability is good for other aspects of the food system, helping to make food distribution more efficient.”

According to the Centers for Disease Control and Prevention, more than 1,000 foodborne illness outbreaks are reported to state and local health departments each year. The CDC estimates that approximately 48 million people are afflicted, 128,000 are hospitalized, and 3,000 die each year. Chipotle Mexican Grill has seen sales drop one year due to several outbreaks.

In October, Walmart began using blockchain to track two products: packaged goods in the U.S. and pork in China. Although it only included two items, the test involved thousands of packages shipped to multiple stores.

Blockchain is a distributed ledger where companies that transact, such as growers, distributors and retailers, can securely record transactions. The advantage of a database is its trustworthiness: the records cannot be tampered with. A blockchain database can also hold more data than a retailer, providing the tools for more detailed analysis.

That could help Walmart deliver food to stores faster and reduce food spoilage and waste. Cutting costs is critical for all retailers. Last year, retail sales grew just 2.1%, the smallest gain since 2009. Traditional offline retailers continue to feel the impact of Amazon and its efficient supply chain.

Yiannis said if the test is successful, Walmart will expand its food programs in both countries.

Frank Yiannas

He said:

“So far, things are going as expected and smoothly.”

Walmart has been at the forefront of adopting new technology. It began installing new chip-card readers at U.S. checkout counters a decade ahead of a deadline required by credit card networks such as Visa Inc. and MasterCard Inc. This summer, Walmart Pay became one of the first major retailers to launch its own mobile payment service nationwide. It is also expanding its online grocery delivery service.

Blockchain, a technology that has only been around since 2009, has been widely tested by companies in the financial, healthcare, and natural resources industries. Companies such as IBM, Nasdaq, and BHP Billiton have already deployed or plan to deploy blockchain technology to run their businesses more efficiently.

Walmart is using blockchain technology developed with IBM. In October, the company opened the Walmart Food Safety Collaboration Center in Beijing. Walmart also announced a partnership with IBM and Tsinghua University to use blockchain technology to change the way food is tracked, shipped and sold to Chinese consumers. If Walmart uses blockchain technology to track food globally, it could become the largest deployment of blockchain technology to date.

Paul Chang

Paul Chang, IBM’s global supply chain subject matter expert, said:

“They are setting new standards for how technology can be implemented to solve long-standing problems.”