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How blockchain can save the food industry millions from recalls

Product recalls are no laughing matter for food manufacturers and retailers. If they don’t act fast enough to rein in the negative publicity a product recall can cause heavy losses and even bankrupt companies, as the company at fault often must absorb any financial costs related to food recalls, putting a significant dent on margins.

In Asia, food products recalls are on the rise as regulators step up monitoring and requirements for food traceability, advertising and labelling. For instance, in Singapore, stricter rules were passed by authorities in 2017 to allow for product recalls of suspicious products, without having to wait for investigation outcomes or test results. Hong Kong has similarly passed strict regulation.

Charles Breen, an independent advisor at EAS Consulting Group, leading advisory firm for regulatory matters, remarked: “Even when buying directly from a commodity source, the supplier may be obtaining the item from many small, local sources.Just to use black pepper as an example, the firm that sells it in bulk from the country of origin may buy from dozens of small growers.”

It is insights like these that visitors can gain at Vitafoods Asia, Asia’s leading nutraceuticals event. A new feature on the show floor this year, the Market Entry Hub offers information, advice and insights into market entry regulations and strategies across various Asian markets including China, Japan, Indonesia, India, Korea and Taiwan. Consultants such as Charles Breen will be on hand to offer advice first-hand.

Blockchain technology, which simply put, is a distributed, digital ledger without a central authority, is already widely used as a real-time record-keeping system in areas like banking, real estate and cybersecurity. It is used to track exchanges, agreements or contracts, transfers and payments. Every transaction is recorded in the distributed ledger, which makes the blockchain’s documentation process very transparent and quickly accessible.

But for now, many companies are still new to the idea of adopting blockchain, Breen says. Blockchain-enabled supply chain operations also need to be seamless so there are no gaps in tracing a product’s origins and distribution journey. “Blockchain technology is indistinguishable from magic to most food business executives. They don’t understand it, and don’t know what it can do for them,” he notes. “Businesses who understand blockchain know they don’t have to rely on others to assure the integrity of production and distribution record keeping. Government regulators would very much like to drive seamlessness into the supply-chain because it makes their jobs faster, easier, and most importantly, provides superior protection to consumers,” he notes.


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