The Fintech Effect

IBM partners with Nestle, Unilever and other food giants to trace food contamination with blockchain

Key Points
  • IBM has announced a blockchain collaboration with food giants including Nestle, Unilever and Walmart.
  • The corporation said blockchain would enable food businesses to trace the source of contaminated produce in mere seconds.
  • Blockchain maintains a digital ledger of transactions rather than a physical one.
IBM deploys blockchain technology to provide enterprise solutions to food safety: IBM's Brigid McDermott

IBM has been joined by a group of global food giants including the likes of Nestle, Unilever and Walmart in an effort to reduce food contamination by using blockchain.

The corporation announced Tuesday that it would enable global food businesses to use its blockchain network to trace the source of contaminated produce.

One in ten people succumb to illness every year due to contaminated food, according to the World Health Organization. Earlier this month a summit was called by the European Union's food safety commissioner, after a contamination scare over eggs infected with the pesticide fipronil.

IBM said that the problem of consumer health suffering at the hands of toxic food could be solved using its distributed ledger technology, which maintains a digital record of transactions rather than a physical one.

It would enable food suppliers to source information about the origin, condition and movement of food, and to trace contaminated produce in mere seconds.


"The whole opportunity that we share is to provide transparency across the ecosystem today," Brigid McDermott, IBM's vice president for blockchain business development, told CNBC over the phone.

IBM's blockchain specialist said that building a blockchain network meant providing both a "brilliant solution" and a "growing ecosystem".

"That's what we're trying to do," she said. "We're trying to use that to get that transparency across the whole system so that we can find the problem, so that we can make it easier for people to run safer systems, run safer food supply chains."

Walmart has previously worked with IBM to digitally track the movement of food. At a meeting of shareholders in June, Frank Yiannas, vice president for food safety at Walmart, demonstrated the process of tracking information using blockchain in less than 3 seconds.

"Blockchain technology enables a new era of end-to-end transparency in the global food system – equivalent to shining a light on food ecosystem participants that will further promote responsible actions and behaviors," Yiannas said in a press statement on Tuesday.

"It also allows all participants to share information rapidly and with confidence across a strong trusted network. This is critical to ensuring that the global food system remains safe for all."

How blockchain works

Blockchain - or distributed ledger technology - is a decentralized log of data maintained on a network of computers, rather than a physical ledger.

The original blockchain was created by bitcoin-founder Satoshi Nakamoto to serve as the public ledger for all bitcoin transactions.

Experts believe the technology could provide a secure, transparent network of information, and revolutionize industries ranging from healthcare to agriculture.

"We see other industries like energy, healthcare and marketing, looking at transformation that really could be happening," IBM's McDermott said.

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"And I think it's partially because the transformation you see happening with blockchain can come from different areas."

Another blockchain expert from Hyperledger, the open source blockchain platform which IBM built its solution on, said that blockchain was likely to continue broadening out from financial services to other big sectors.

"Because it can impact every sector out there, it's no surprise that the sectors that are most interested are those that are extremely transactionally and actually fairly distributed," Brian Behlendorf, Hyperledger's executive director, told CNBC in a phone call earlier this month.

"The financial markets, even if you divide that into core banking, into capital formation, private equity – all of these different domains have ledgers at the heart of what they do. And building a distributed ledger is a way to reconcile these ledgers."

Behlendorf added: "But also health care, also supply chains; those are recurring themes. Any big sector, any big component in the U.S. GDP (gross domestic product), it's likely that they're talking about blockchain pilots."

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