Have you happened to see those strange labels in the wine shop or supermarket that say“product tracked on blockchain,” and you want to know more?
You are in the right place!
In this article we will address in order:
- What blockchain traceability means
- What types of traceability exist
- How you can track your products
- How much blockchain traceability costs
Blockchain traceability: what it is and what it is for
What is the difference between normal traceability and blockchain traceability?
The difference lies in the way the data is saved: in the second case, in fact, all the information about the product is saved precisely on a blockchain, a special computer network that makes the data essentially immune to counterfeiting(at this link you can find blockchain explained easy easy).
This is obviously very important for the consumer, because it allows him or her to know without a shadow of a doubt the history of what he or she is eating or drinking.
In fact, this information is then made accessible through various technologies (which we address later in the article), such as the QR code, which allows the product’s history to always be within reach of the smartphone
A story carved in (digital) stone
Tracking on blockchain means to say:
“Here, this is my product and how I made it, I’ll write it down and sign it for you, in fact, I want it carved in stone!”A responsible producer
It therefore means taking full responsibility for one’s supply chain in front of consumers, creating the highest degree of transparency and trust allowed by our technologies.
A manufacturer that tracks on blockchain stands out from others because of its focus not only on selling, but also and especially on informing and educating about product quality.
From producer to consumer: QR code and RFID
There are various technologies that allow consumers to access information provided by manufacturers, but the most widely used are definitely QR codes and RFID tags.
What are QR codes? They are those square, pixelated images that we see more and more often on the Internet or around our cities. These codes can be scanned from your smartphone via the camera on iPhones or via special apps on Android phones.
When you scan a QR code, your phone obtains text information, usually the address of a site, to which you can link to receive information about the object you are scanning: in the case of an agri-food product, you might be taken to the web page that tells its story.
What about RFID tags? Just like QR codes, RFID tags transmit an information to your cell phone, but they do so with radio waves: to read them you have to pass your phone over them with the NFC option enabled.
What types of traceability exist?
Let’s start by saying that there is not so much a one-size-fits-all solution for blockchain traceability as there is a set of different solutions that are more or less suitable for various production processes and company size.
For example, as a manufacturer you might choose to track only parts of your supply chain that you perhaps consider most important for the purposes of communicating the quality of your product, or you might choose to track every detail of product production and logistics, from raw material to distribution.
There are also differences in the types of data that are recorded and the technologies used to collect them: larger manufacturers connected to large retailers may decide to Use sensors, drones and other IoT devices, while a small producer might choose to log manually the information that it considers most important.
For simplicity we distinguish into three types:
1. First-level traceability: the micro enterprise
Small business owners often lack the financial means to invest in a complex system of sensors and IoT devices. This is why more and more manufacturers are turning to much cheaper“first-tier” solutions where data entry is left to the manufacturer and its operators.
This can be done in two ways: the first is self-certification of a “supply chain storytelling”, that is, a description of the ways in which the product is processed: a winemaker might record the characteristics of the soil and vineyard, a cheesemaker might focus on the curdling temperature and the grafts used, or even the cashmere manufacturer might highlight the careful selection of fibers used. This collection of information is prepared by the producer and then recorded using blockchain technology.
The second is the self-certification of true traceability: as the product is processed, the producer enters key information about the individual supply chain step, such as date and mode of processing, into the system and records it in real time on the blockchain database.
This type of traceability is not so much geared toward actual individual lot traceability (for product recalls, for example), but rather toward achieving more transparent communication with the consumer-that is why it is often considered a form of storytelling rather than traceability in the traditional sense.
2. Second-level traceability: the medium-sized enterprise
A larger company might decide to invest in a complete IoT sensor system. In this case, the producer can choose between two options for recording information: integration with enterprise software or manual entry.
The former option is certainly more reliable than the former, as the collected data goes directly from the source to the blockchain, with less risk of information tampering. However, it is also the most capital-intensive upfront, because it requires full integration of the chosen blockchain platform with the software the company already uses for data collection and tracking.
Unfortunately, many of these applications do not provide the ability to export directly to other programs, so these integrations can be quite complex and expensive, even for a medium-sized company.
The second option, manual input, on the other hand, requires the work of an employee to copy the data from the sensors and register it on the blockchain. Although this solution saves on the initial investment, it comes with a sacrifice in terms of security, as the transition from sensors to blockchain goes through human intervention.
3. Third-level traceability: the large-scale retail trade.
We definitely find the most complex blockchain traceability systems in large-scale retail: large food groups have highly articulated supply chains, involving numerous producers, processors and service providers, and producing very large quantities of batches of each product.
In this scenario the ability to accurately trace the history of foodstuffs turns out to be even more important, with or without blockchain: however, this technology gives the assurance that the recorded information is not changed, and that there is no room for interpretation in attributing errors to one or the other part of the production chain.
What does it take to implement blockchain traceability?
It all depends on which path you want to choose: to achieve complete blockchain traceability (second and third levels) you will need to place sensors at critical points in your supply chain, and integrate your systems with blockchain software that creates the records.
If, on the other hand, you opt for first-level traceability, you are most likely ready to go! The first thing you need to do is to identify everything that makes your product special: your territory, the processes you use, your focus on not using harmful substances in processing… Anything that can set you apart from the competition and communicate the quality of your product.
Once you have defined the story of your product, you can find photos and videos that can also visually communicate your company’s values. You can show the various stages of processing, your factories, but also, most importantly, your people, so that the consumer can put a face to your product and strengthen his or her trust in your brand.
When you have collected all the information you just need to find a service or company to help you register it on the blockchain, and provide you with the QR code to insert on your packaging. This can be done in the label, with a slight change in design, or directly by applying an additional sticker on the package.
How much does it cost to track products on the blockchain?
It is difficult to set an a priori price on this type of software.
The cost depends largely on your requirements: the type of tracking you want, the number of products you want to track and the detail you have to achieve, and whether you already have or want to install an IoT sensor system.
This technology is very advanced, and companies in this area often create products tailored to the individual manufacturer.
There are exceptions: QualityChain for example offers an annual subscription starting at €1’500, with no upfront costs, while others, such as IBM Food Trust and Foodchain, have opted for a combination of upfront installation cost and annual fee.
Other companies, such as TE-FOOD, EZ Lab, FoodLogiQ, Ambrosus, and ValueGO, on the other hand, are more focused on the custom model, creating ad hoc projects and evaluating implementation costs on a case-by-case basis.
We are at a key moment in the adoption of this technology in the Food&Drink industry. If you choose to be one of the first to track your products on blockchain, there is no question that you will stand out in the crowd, particularly in an industry that is often as uninnovative as agribusiness. A “tracked on blockchain” stamp attracts the consumer’s eye, of that there is no doubt.
But we need to look further. We are moving toward a world where this kind of technology will become the norm, where all products will be tracked on blockchain, where consumer trust will already be cemented on new brands, new flavors.
According to many, now is precisely the right time to start building this confidence, for small business as well as large, and it is the time to go the extra mile and position yourself as an innovator and pioneer in the industry .
[Articolo aggiornato il 4 Marzo 2021]