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Walmart’s supplier blockchain mandate is a huge leap in food safety

Posted: 25 September 2018 6:42 pm

Walmart's unassuming letter to suppliers might be the biggest advance in food safety since pasteurisation.

Walmart is requiring its leafy green suppliers to get on the IBM Food Trust blockchain solution by this time next year. Leafy greens might be a healthy place to start, with a high-profile E. coli outbreak from contaminated lettuce making its way around the states earlier this year. As is is usual for these kinds of outbreaks, a few people died and hundreds more got sick.

That particular case was also handled as usual. Health officials quickly identified the source of the outbreak as the Yuma region and advised everyone to start avoiding any lettuce grown there. But because no one could actually identify which lettuce came from Yuma, the only solution was to pull lettuce from stores all around the country.

It only takes one bad apple

"This year, the United States experienced a large, multistate outbreak of E. coli O157:H7 linked to romaine lettuce," Walmart wrote in a letter to its leafy greens suppliers. "All in all, the outbreak resulted in 210 confirmed cases, caused 96 hospitalizations, and tragically, 5 deaths. Although the FDA and CDC were able to inform consumers, producers and retailers that the romaine lettuce associated with illnesses came from the Yuma growing region, in general, health officials and industry professionals were unable to quickly determine which lots were affected and which were not."

"None of the bags of salad had 'Yuma, Arizona' on them," said Frank Yiannas, Walmart VP of Food Safety. "In the future, using the technology we're requiring, a customer could potentially scan a bag of salad and know with certainty where it came from."

If that seems like a fairly stupid problem to have in this day and age, as well as a very literal example of one bad apple spoiling it for everyone, you might be right on the money.

It's also quite remarkable given the extreme danger posed by food poisoning. In the USA alone, food poisoning kills about 1,800 people per year, according to the CDC, while about 10 million people per year are hit with foodborne illness. Worldwide, it's estimated that about half a million people die annually from food poisoning. Australia has had a bumper year for food poisoning deaths too, with a rockmelon listeria outbreak claiming nine lives earlier this year and, in more of a food sabotage incident, some guy sticking needles in a few strawberries triggering the mass pulling of strawberries from shelves around the country.

Someone should really do something about that

One part of the problem is that suppliers, distributors, stores and everyone else along the enormously complex worldwide food supply chain is just keeping their own siloed paperwork. Theoretically this might let health departments and sufficiently motivated consumers track down the original source of an outbreak, but in practice, it's impossible to actually respond to food safety issues in a timely fashion.

With the current system of paper-based ledgers, Yiannas says it might take his team a full week to track down the source of a source of contamination. They have to contact the supplier, get their paper records and then use those to follow the trail one piece at a time, just hoping at each step that someone will be there to pick up the phone, all while there might be deadly bacteria sitting in people's pantries and digestive systems. Blockchain systems stand to let people do it in just seconds, rather than days or weeks.

"Multiply this process by the 70,000 food items stocked in a typical grocery store, and you have an almost insurmountable challenge," Walmart says.

This is one of the reasons the usual response is to pull and destroy everything that might be contaminated, rather than risk it. But naturally, this is time-consuming, expensive and in many cases, not exceptionally helpful, given the days or weeks that might elapse between the time a shopper puts the food in their cart and the time they keel over.

The commercial elements of food safety and the extreme cost of mass recalls probably also does its part to keep the fatalities coming. A few thousand semi-random deaths per year is easy to write off as just one of those things, but pushing the button on a mass nationwide recall of one's own product is extremely difficult. Being able to conduct quicker, more granular and more specific recalls where needed will almost certainly encourage more reporting of potential issues.

Just ship it

"Just ship it," said Stewart Parnell in an email to a plant manager. The email was sent in March 2007, in response to findings of a potential contamination in a batch of Peanut Corp. peanuts. Over a year later, 9 people were dead and over 700 more were taken ill around the nation after contracting salmonella from peanut butter.

The first reason this outbreak is notable is that six years after the deaths, a Georgia jury took the unprecedented step of actually convicting Peanut Corp. executives for knowingly shipping salmonella-tainted products.

The second reason is that it triggered the largest food recall in American history, involving at least 361 companies and 3,913 different products, because peanuts are used in just about everything and Peanut Corp. manufactured about 2.5% of all peanuts processed in the USA at the time.

The recall was an enormous undertaking, more akin to a natural disaster response than a product recall, right down to FEMA's involvement. Beyond the actual cost of the recall operation itself, the entire US peanut industry is thought to have suffered about $1 billion in profits from customers reflexively avoiding all peanut products.

The court case that came much later and after years of investigation prominently featured horror houses.

Former Peanut Corp. plant employees gave graphic descriptions of filthy conditions, while federal inspectors would find roaches, rats, mould, dirt, accumulated grease and bird droppings at the processing plants, as well as a leaky roof which is thought to have supplied the moisture which kicked salmonella's growth into overdrive.

Maybe it shouldn't have come as a surprise. Peanut Corp. had a trail of health violations running back to the 1980s, but the occasional settled lawsuit and wrist slap was apparently just consistently written off as the cost of doing business.

The salmonella outbreak was just the straw that broke the camel's back, and a combination of circumstances that became impossible to ignore. No one will ever know how many of those other thousands of food poisoning illnesses and deaths that rake around the USA each year were avoidably caused by Peanut Corp.

The MO was pretty clear though: Just ship it. Life is cheap and food poisoning deaths happen every day. By contrast, mass recalls are expensive and can only be done in exceptional circumstances.

"My strong suspicion is that this happens much more often than is known," said one of the lawyers involved in the case.

Take it from the top

Having a food trust blockchain available is one thing, but actually using it is another. Blockchain solutions depend on picking up a wide range of participants from across a network (the network, in this case, being the food supply chain), but the benefits aren't shared equally among participants.

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For a producer whose sole job is to manufacture as much as possible as cheaply as possible while meeting minimum applicable regulatory standards, there might be no immediate business case for upgrading from the tried and tested pen and paper to a more expensive digital system, and dealing with all the disruptions, learning curves and related systemic changes that might entail, just for retailers and others to get the benefits.

But when someone like Walmart starts throwing its weight around and politely demanding that its suppliers get with the times, there's suddenly a much more pressing commercial case for these upgrades.

"Over the past 18 months, Walmart has piloted new technology in collaboration with numerous suppliers and IBM, and we have demonstrated that meaningful enhancements to food traceability are possible," Walmart said in its letter to suppliers. "Using the IBM Food Trust network that relies on blockchain technology, we have shown that we can reduce the amount of time it takes to track a food item from a Walmart Store back to the source in seconds, as compared to days or sometimes weeks."

But blockchain or not, it's probably still a good idea to wash your fruits and veggies before eating them.

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VET, XLM, BTC, ADA

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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