The question that companies from the food and beverage sector are already starting to ask themselves is how blockchain technology can help them solve problems related to food safety.
There are several challenges associated with food security, among others
- we are faced with poverty and hunger of a large number of population on the one hand and wasted food on the other. Blockchain-supported projects in combination with other technology (e.g. IoT – Internet of Things) can, for example, monitor the cooling system during transport or to shorten the time for transport and customs clearance (mainly due to the traceability of the goods as well as timely and authentic or verified documentation, which is necessary for export/import procedures), which consequently reduces food waste that occurs during longer transport. Food waste can be reduced also by charity systems supported by blockchain technology, which will be able to track food surpluses or food before the expiration date and distribute this food to those who cannot afford it themselves.
- food recalls and withdrawals or even food contaminations are all too common. As an example of how frequent these recalls are, I cite the website of the English Food Standards Agency or the daily announcements on the pages of the American FDA, where recalls are updated daily. The published data shows how big a problem this is for all stakeholders in the food chain, but especially for importers, sellers and, of course, for end consumers. Similar announcements are published also by other agencies as well as by many consumer protection organizations. Blockchain technology can help a lot in this respect and there are several projects aimed at reducing the risk associated with this aspect of food security.
- transition to renewable energy sources, where opportunities are sought in several directions and throughout the food chain with the aim of contributing to the reduction of climate change, which can have a major impact on food security. For example, production companies introduce the use of different sources of energy, and blockchain technology enables the management of these resources through smart contracts. Opportunities are also being sought on the side of the farmers, where they are looking for possibilities for the parallel use of agricultural land, which would enable both food production and the installation of solar systems at the same time. Even in these cases, the energy obtained or consumed can be managed via smart contracts.
Last year, the European Commission published an overview of funded projects related to the blockchain technology. It is seen from this overview that EUR 347 million of European funds have been earmarked until February 2022 to support blockchain-based research and innovations. 20.9% of this budget was allocated to food security.
The list of all funded blockchain-based projects can be seen from the published post of the European Commission. The list of all current and past European calls for project proposals, as well as the list of current and past approved projects, can also be followed on several pages of the European Commission (depending on the individual European programme), including on the “funding & tender opportunities” portal.
In case you are interested in individual cases of development and testing of individual blockchain solutions in more detail, you can visit the websites of the mentioned projects from the above-mentioned European Commission announcement. I highlight some projects below (even those not mentioned in the above-mentioned list) with the aim of getting a better idea of what projects are being developed in the food and beverage sector:
- SmartAgriHubs with a larger number of smaller projects (including those that include blockchain technology);
- Food Safety Market with a larger number of pilot projects;
- Bio-Based Digital Twins – BBTWINS with a digital platform for optimizing the processes of the agri-food value chain and supplying high-quality biomass for bioprocessing.
- EIT Food and Food Unfolded and FoodHIVE – primarily for training purposes; Every year, EIT Food also provides funding for various projects related either to training or to the introduction of new technologies in the food and beverage sector. You can follow the current calls on the pages EIT Food – Open Calls.
- for information on approved past and ongoing European projects, follow regularly the European database on funded European projects.
Characteristics of European projects
Projects in an international context
Unlike projects financed at the national, regional or local level, which finance individual applications or applications with a very limited number of partners with an emphasis on supporting the individual applicant, European projects are very complex and solve a comprehensive problem of a process in an international context. This also means that we are not only talking about blockchain technology. This is only one part of a comprehensive development story, which involves several different technologies and, of course, a large number of information sources and data. In majority of projects, they deal also with the Internet of Things (IoT), big data, artificial intelligence and machine learning, sometimes also with robotics, circular economy and green energy.
It should also be said that in European projects, the use of European data hubs is encouraged, which are created within the framework of EU projects and allow access to a large number of free and paid data.
There are many stakeholders involved in the journey of food from the farmer to the final consumer, especially when it comes to international trade. This means that project consortia include private innovative and development or production companies in the role of pilot partners, the public sector, non-governmental organizations, research organizations, perhaps also sectoral associations or given that we are talking about the food industry, also food producers, food cooperatives or even educational organizations. Depending on individual projects, there are also logistics partners, customs offices, and others.
Given that the projects are complex, international and with the ultimate goal of preparing for foreign markets, experts in business development and internationalization, marketing and sales are also needed, among the subcontractors there are often legal and intellectual property experts and, of course, financial advisors, which help with financial projections. Larger projects also have a quality specialist. The project partners also carefully plan the structure of the advisory board, as individual members of the advisory board can greatly contribute to the recognition of the project in professional and business circles both during the project and after the completion of the official European project.
Last but not least, it should of course be emphasized that it depends on the individual case who should be involved in order to successfully develop, test and implement the blockchain project in practice and additionally those who can bring additional value in terms of support in entering foreign markets or any other value.
Useful additional European resources
The European Commission also regularly publishes publications on individual technologies. For example, in connection with blockchain and the food sector, you can search for publications on two links of the European Commission:
Final thoughts and recommendations for those new to blockchain technology
Although we would all like new blockchain-based technological solutions to cover the entire food journey, it has to be said that, for now, blockchain solutions usually support one part of the food chain or only a limited number of partners in the chain, and not yet as a whole, precisely because this journey takes place, e.g. in the case of international trade, through several countries with different laws, with different stakeholders who are at different technological maturity levels and also have different more or less missing knowledge for the introduction of a blockchain-based food chain.
As already mentioned above, in addition to blockchain technology, many other technologies are also used in international projects, all of which require interoperability between processes inside and outside the business system. Often also new business relationships and business models.
You also cannot carry out a blockchain project individually or independently, since the point of blockchain projects is to track the flow of products, documents and transactions between you and external stakeholders through a single process.
Therefore, I would advise you to familiarize yourself with the trends and also with the technologies introduced by your partners, and above all by your larger buyers. Because in the future they will ask you to adapt your business to their technological requirements. National governments typically provide a number of incentives for technological innovation. And you can start here. Your task is to develop an information and data architecture within the company that enables interoperability with external data sources. I would advise you to start using many external data sources (many of them are available for free) and artificial intelligence as soon as possible, and thus enrich your business analytics with external data sources as well. At the same time, upgrade your knowledge for the use of blockchain technologies or create an appropriate team of internal and external experts with whom you can develop an appropriate digital strategy. Namely, due to the complexity of these solutions and mutual business and data connections, it becomes obvious that it is necessary to have a good digital strategy and also good business relationships management, which also bring to the surface e.g. data ownership and privacy issues. The digital strategy will then be a good basis on which you can start looking for suitable partners and with whom you can start developing and testing new blockchain solutions.
This article is available also in the Medium’s Development Navigator publication.
* The article was created as part of the “DLT Talents” programme at the Frankfurt School of Finance and Management – Blockchain Centre. The 18-week study programme provides an excellent basis for further challenges in connection with blockchain and Web3 technologies and I highly recommend it. In addition to the “DLT Talents” programme, there are also other programmes offered. More on the Web3 Talents website.
** The topic related to food security was initiated based on an invitation to actively participate in the EU Tech Chamber – SDG Alliance event on blockchain potential for progress in food security, which took place in January 2023.