Blockchain paradigm in food retail supply chain

Being a newly-born concept, the implementation of blockchain in food retail supply chain has still been a proposal with related studies undertaken. Therefore, the authors aim to grasp the basics of a blockchain system that is potentially adopted in food retail supply chain in this subchapter. These are among the most significant characteristics widely accepted in the research-wise world.

4.1.1 Overview on potential features

Some general features of a blockchain used for food retailing will be mentioned in this part. Initially, a food retail blockchain system belongs to the tier of Blockchain 3.0 with non-financial application (Swan 2015, ix) as mentioned in Chapter 2.

Regarding the types, as food retailing falls into the category of supply chain, its related blockchain is likely to follow the structure of the larger industry (Kehoe, Gindner, Dalal, Andrzejewski & O’Connell 2017, 10). In fact, when conducting studies on the adoption of blockchain in supply chain, researchers have a tendency to overlook the potential

blockchain types and therefore leave room for discussion. Peck (2017, 38-60) visualizes the selection of blockchain by a logical flow shown in Figure 9.

Figure 9 Blockchain selection (Peck 2017, 38-60)

Based on the selection flow, Chen (2017, 25) decides that the blockchain implemented in supply chain can be permissioned blockchain. Firstly, hardly can traditional database meet the demands of modern supply chain. Secondly, obviously more than one company or organization need data to be updated. Thirdly, trust issue does exist in the supply chain and there is no trusted third party agreed among all participants. Fourthly, it is necessary that the data should be kept private. All of the reasons lead to the choice of permissioned blockchain with generic elements of all blockchain types and some other distinct typical features mentioned in the second chapter. (Chen 2017, 25.)

4.1.2 Specific blockchain paradigm

This part illustrates the possible framework of a blockchain system adopted in food retail supply chain, specifically its modelling and operation.

If the actors in food supply chain in Chapter 3 have been reviewed as food producer, food processor, trader, distributor, wholesaler and retailer (Figure 10), which are classified into agriculture, processing and distribution, the authors decide to simplify the figure into a linear structure in this chapter. Moreover, physical flow, digital flow (digitized information) and blockchain network are added to complete the visualization of blockchain-enabled food supply chain.

Figure 10 Visualization of blockchain-enabled food supply chain (Rooyen 2017) Traditionally, the physical flow with, for example, agricultural products and processed food, has been existing to form the backbone of the food supply chain. Kehoe et al. (2017, 13) also give an illustration of this physical flow (Figure 11).

Figure 11 Physical flow in food supply chain (Kehoe et al. 2017, 13)

The advancement of digital age has transformed the physical data into technical information, which is later able to be recorded in the blockchain system, to reach customer. The chain of data is susceptible of forming a chain of blocks in blockchain system, and the exchange of data between actors in the food supply chain can be considered to be a transaction. In general, Figure 12 vividly depicts the longitudinal facet of a blockchain system adopted in food supply chain.

Viewed from a cross section, the system would indicate a more decentralized and distributed structure – the key attribute of blockchain technology. Forming a complete circle, every single actor in the food supply chain would connect to each other for information exchange. Regulator and logistics also join the blockchain system with the same position as the existing elements in food supply chain, such as producer and distributor. What mainly links all network participants is the distributed real-time update of information.

Specifically, an industry-wise blockchain based platform could be established by food stakeholders so as to onboard and manage supplier relationships, as well as examine the quality of food products. By using a digital identity, each user would access and

participate in the platform. Smart contracts could be employed to store and manage meta-data and every event involved in supplier onboarding and relationship maintenance, such as supply chain details (products’ data and related actions), quality certifications, and endorsements by food stakeholders. (Kehoe et al. 2017, 11.)

Figure 12 A cross section of blockchain in food supply chain (Kehoe et al. 2017, 13)

Thanks to the platform, participants possibly have end-to-end visibility over the supplier relationship with real-time access, which is currently impossible in the supply chain. A comprehensive audit trail of food ingredients would be close at hand for platform users.

Providing that all the data, such as supplier profiles and food materials, added to the system are timestamped, a full history of the stakeholder relationship and associated activity could be conveniently retrieved. Under no circumstances should food suppliers lose quality certificates as they could be revoked and notified to everyone in the network in case of the failure of standard adaption. Furthermore, anyone with direct contact with the food ingredients could provide endorsements as a contribution of food critics’ reviews and ratings to convey a multifaceted view on any food. (Kehoe et al. 2017, 12.)

Another question is addressed to the exchange of information among participants in the blockchain network for food supply chain. Combining the operating mechanism of

blockchain in Chapter 2 with the modelling in this chapter, the authors try to demonstrate a potential data transaction in a food retailing-wise blockchain.

Firstly, two parties, for example consumer and retailer, want to exchange information, or consumer requires food ingredients’ information from retailer, which creates a transaction.

After that, the transaction would be broadcast to the network and validated. The

verification could be proceeded instantly; otherwise, nodes assume the responsibility for determining the validity of transaction based on a set of pre-defined rules. The transaction is then placed into a new block, waiting for the approval of the network before being added to the chain. When a block is validated, the transaction is executed, indicating that the data of food ingredients have been transmitted from retailer to consumer. (Kückelhaus et al. 2018, 5; Deloitte Tech Trends 2016 as cited in Trouton, Vitale & Killmeyer 2016, 6.)