By PYMNTSPosted on September 27, 2018
Origins are all the rage in modern life: origin stories, family origins via DNA and digital ancestry databases.
Add to that Walmart’s latest effort to gain more grocery market share: using blockchain technology to trace the origin of the food sold by the retailer back to the farms from which it came. The idea is to introduce more transparency into the process, which could serve to prevent outbreaks of foodborne illnesses and encourage consumer trust of the grocery goods on Walmart shelves.
In a new PYMNTS interview, Karen Webster spoke with Frank Yiannas, Walmart’s vice president of food safety, about the origins of the blockchain initiative, overcoming skepticism and why the retailer is starting out with green, leafy vegetables.
The Walmart interview and blockchain initiative come amid increasing roles for the technology in payments and commerce. No longer confined to the world of virtual currency, blockchain is finding use in the U.S. Navy to track aviation parts, streamline high-volume B2B transactions, and facilitate trade finance and other tasks.
Food safety is part of the blockchain promise for the world’s largest retailer.
“Walmart is not chasing blockchain technology because it’s this new shiny coin,” Yiannas told Webster, “but to improve the food system.”
In fact, Yiannas described himself as a “major skeptic” about using blockchain to make it easier for Walmart to trace the food it sells — how the food makes its way from the ground, trees or ponds and onto customers’ plates. However, after a year of work and effort that involved IBM, which led to the blockchain system being launched with 11 food companies, he is a solid fan.
Blockchain — as commonly known — is a decentralized, distributed and digital form of record-keeping. That’s one reason Yiannas backs it for grocery, since the central attributes of blockchain (besides the digital part) can also describe much of the food system.
“It’s a duplication of what the food system is,” he said.
Tracking Supply Quicker
That’s not just some poetic satisfaction.
Keeping track of the food supply — think of a bushel of apples, for instance — is traditionally a slow, labored, paper-centric process. Overall, it can require days to trace the origin of goods that are perishable, which might end up in someone’s stomach before any notice of a foodborne illness gets to consumers.
According to results from Walmart’s blockchain pilot with IBM, the seven days it could take to trace food was reduced to 2.2 seconds. However, speed — more specifically, speed in public health service and good retail public relations (PR) — was not the only motivation behind the Walmart blockchain groceryinitiative.
“The food system has changed quite a bit,” Yiannas said, “with more producers and more complications. The food system on balance is extremely [safe], but one foodborne illness is too many.”
Blockchain seems well-suited to such a world, one where a retailer of Walmart’s size carries tens of thousands of food-related stock keeping units (SKUs).
So, how will this work right out of the gate for Walmart? Here’s a hint (fair warning) that might give some readers a flash of childhood trauma: “Eat your spinach!”
The blockchain initiative is focused on fresh, leafy green vegetables — not only spinach, but lettuce and related foods. Those foods, in general, account for multiple uses per week for the average consumer. Though such foods are relatively safe, those vegetables — as recently seen with a romaine lettuce recall— are, indeed, sometimes the source of illnesses.
In addition, there are “big food networks” associated with the production and distribution of those leafy greens, making them a natural choice for the initial blockchain grocery initiative by Walmart. When asked why the chain started in that particular food area, he joked, “We don’t necessarily shy away from big problems at Walmart.”
The point of Walmart’s blockchain grocery effort is to “capture transparency” all the way down to the origin of the supply chain. “We want to be able to trace it all the way back to the farms or farms where it came from,” Yiannis said.
Transparency is “sunshine,” he added, saying that transparency will lead to suppliers applying better, tighter, self-governing principles to their food operations. That’s not something to dismiss when talking about Walmart, its mastery of the supply chain and its power over suppliers having long been a source of praise and criticism around the world.
Public health has come a long way since the days when canned vegetables dominated family menus — when a mom might stick with a particular brand because she had been buying products from that same brand for years and never gave it a second thought. However, blockchain could now represent a new digital counterweight to those risks, putting that mother’s mind at ease.