Blockchain Technology - why it matters in driving food safety and sustainability

With the population set to reach 8.5bn by 2030, food organizations
worldwide are exploring new technologies and methods to ensure safe
and sustainable supply chains.
To meet changing client requirements, Lloyd’s Register (LR) is at the
forefront of not only embracing new technologies to blend conventional
assessment with digital monitoring and audit solutions that will enable
the delivery of real-time assurance and insight, but also researching
alternative food sources to feed the expanding population.
Blockchain Technology
Why it matters in driving food safety and sustainability

Vincent Doumeizel, LR’s Vice President Food & Beverage speaks
about some of the new technologies and approaches that are
disrupting traditional ways of thinking and operating within the
food sector and bringing about positive change.
What do you think are
the main risks being
faced by the food
supply chain?
The main risks are related to a lack
of resilience and sustainability in
the primary production; put simply,
this means that there is the risk that
food supply chains will not be able
to provide enough food for the
expanding global population.
This fact alone could not only spark
strong social tensions across the world,
but could result in corruption and
spiralling costs for the most simple
of food items, meaning that only the
wealthy could afford to put food in
their mouths.
However, there are many other risks
related to food safety and – to an
extent – the lack of transparency in
the supply chain.
To try and put this into context, we
have to remember that the food
supply chain is very fragmented with
billions of operators meaning that the
risk associated with the supply chain is
traditionally high.
There is a well-known phrase that we
use when talking to our clients serving
the food sector and that is that ‘their
supply chain is only as strong as their
weakest link’ and I for one believe that
to be absolutely true.
An organizations’ supply chain is only
as strong as its weakest link says
@lloydsregister #foodsafety #assurance
#blockchain
Through this lack of transparency, there
is ultimately a strong risk to completely
disconnect people from their food.
So how do we mitigate these risks?
Well we look at resilience as a starting
point. Resilience implies flexibility
and agility. Its implications extend
beyond mere process redesign to
fundamental decisions on sourcing and
the establishment of more collaborative
supply chain relationships based on a far
greater transparency of information.
New IT tools and platforms mean that
collaborative working is becoming
possible. Traditionally supply chains have
been characterized by arms-length, even
adversarial, relationships between the
different players with a history of those
serving supply chains being unwilling to
share information either with suppliers
or customers.
However, that is all changing.
Technology and data is changing the
way we think and operate. In the
food industry there is a significant
collaboration between manufacturers
and retailers in the form of
Collaborative Planning, Forecasting
Replenishment and other food safety
initiatives, many of which are driven by
the notable Consumer Goods Forum
(CGF) through the Global Food Safety
Initiative (GFSI) and other initiatives.
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Following a degree in economics,
Vincent worked for the French
government in Africa on a number
of agriculture projects; he also
carried out humanitarian work in
the Middle East and Africa.
Vincent Doumeizel joined Lloyd’s
Register in 2014, as Vice President
for Food & Sustainability at group
level over 100+ countries and tens
of thousands clients.
Vincent also supports actively
the charitable objectives of the
Lloyd’s Register Foundation (LRF),
notably through the identification
& funding of innovative projects to
mitigate food insecurity as well as
through participation to Advisory
Boards in various food universities
research projects across Europe.
He contributed to the latest LRF
Foresight Review of Resilience
Engineering and is a regular
speaker at some of the world’s
leading events including COP and
the Global Food Safety Conference.
Vincent Doumeizel
Vice President
Food &
Sustainability
Lloyd’s Register
2

How can the changing
face of assurance
underpinned with
technology help to
address these food
supply chain risks?
The underlying principle of collaborative
working in the food supply chain is that
the exchange of information can reduce
uncertainty. Thus a key priority for
supply chain risk reduction has to be the
creation of a supply chain community to
enable the exchange of information.
Assurance is part of that ecosystem
and the aim is to create a high level of
‘supply chain intelligence’ whereby there
is a greater visibility of upstream and
downstream risk profiles.
The Internet of Things (IoT), Machine
Learning and Next Generation
Sequencing (NGS) will create not only
a huge amount of data related to each
of every food product that cannot be
addressed by a single auditor, but will
also drive sustainable supply chains and
the safety of our food.
Let’s consider NGS as an example; with its
unprecedented throughput, scalability,
and speed, NGS enables researchers to
study biological systems at a level never
before possible.
For example, thanks to NGS, food
fraud and adulteration will eventually
become a figment of our imaginations
as testing will become far more intricate,
thereby delivering accurate results to
manufacturers that their food products
are safe to eat; good news for their
brand reputation and more importantly,
good news for the consumer.
Assurance will need to reinvent its
own concept to operate in this new
world. Assurance will be key to secure
systems and billions of billions of online
transactions as well as the related
products and all related data from
these new technologies and platform
ecosystems.
In the digital economy, platform
ecosystems are nothing less than the
foundation for new value creation.
They offer unrivalled potential
for connectability, scalability and
interoperability of existing databases,
schemes and systems and also for the
future development and enhancement
of assurance services across all industry
sectors – not just food.
This changing face of assurance means
that as we move forward, we will see
the blending of conventional assessment
with digital monitoring and audit
solutions that will enable the delivery of
real-time assurance and insight, moving
from a retrospective focus to predictive
insight, from what went wrong to what
could go wrong.
This is expected to have a disruptive
effect on traditional testing, inspection
and certification business models, which
in turn also presents opportunities –
hence LR’s decision to take an early
adopter position.
We will see the blending of traditional
assessment with digital monitoring and
auditing says @lloydsregister
#foodsafety #technology
Further, snapshot verification based on
sampling will no longer be sufficient
in a world where everything will be
much faster and bigger. We will need to
leverage this tsunami of online data to
enable real time compliance monitoring
of the supply chain so that any deviation
at any stage can be immediately
identified and corrected.
We must leverage the tsunami of online
data to enable real-time supply chain
compliance says @lloydsregister
#foodsafety #innovation
The concept of ‘Smart Contract in
Distributed Ledgers’ is an interesting
concept that we at LR are looking at in
more detail. A distributed ledger is a
database that is consensually shared and
synchronized across networks spread
across multiple sites, institutions or
geographies. Underlying the distributed
ledger technology is the blockchain.
In contrast to today’s networks, distributed ledgers eliminate the need for central authorities to certify ownership
and clear transactions. They can be open, verifying anonymous actors in the network, or they can be closed and
require actors in the network to be already identified. The best known existing use for the distributed ledger is the
cryptocurrency Bitcoin.
FT graphic. Source: Santander InnoVentures, Oliver Wyman & Anthemis Partners
Embedding distributed ledger technology
A distributed ledger is a network that records ownership through a shared registry
Clearing
house
Centralized ledger Distributed ledger
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Brigid McDermott, VP of IBM’s Blockchain business development has recently
said that Blockchain technology provides a permanent record of transactions
that are grouped in digital “blocks” and cannot be altered. Applied to food safety,
it could serve as an alternative to traditional paper records and manual inspection
systems that Walmart’s Yiannas said could leave supply chains vulnerable to
inaccuracy or fraud.
How is the assurance sector embedding Blockchain into their service
offering to meet the needs of organizations like Wal-Mart?
A new technology is redefining the way
we transact. If that sounds incredibly
far-reaching, that’s because it is. As
Goldman Sachs recently said, Blockchain
has the potential to change the way we
buy and sell, interact with government
and verify the authenticity of everything
from property titles to organic
vegetables.
It combines the openness of the internet
with the security of cryptography to give
everyone a faster, safer way to verify key
information and establish trust.
Blockchain is clearly part of the solution
in terms of driving food safety and
sustainability as it already demonstrated
its efficiency with regard to traceability
of the product through this new way of
recording transactions.
#Blockchain is part of the solution
in driving #foodsafety says
@lloydsregister #technology

A Blockchain by nature does not belong
to anyone; it is decentralized, free,
secured and public. No one can control a
Blockchain and the data does not belong
to anyone but is accessible to everyone.
In that aspect, it provides an agnostic
platform which is a key element for such
a sensible topic of ensuring safe and
sustainable food supply chains.
So far Blockchain is known mainly for
cryptocurrencies – like Bitcoin – and hold
records for financial transaction. But
applying it to the assurance sector means
that it will be a very efficient way to
track the transaction of certificates and
the related products and follow these
with ease along the complex food supply
chains.
In addition, Blockchain can enable smart
contracts. Though in its infancy, this
system will address the scalability issue
of the controls operated by generating
direct action based on various factors.
Typically, the data is aggregated and that
triggers an action automatically in the
supply chain based on various conditions
or determining factors.
So back to the likes of Wal-Mart, as
reported in Bloomberg Technology a few
months ago, if you shop at Wal-Mart,
you might be buying packaged produce
unlike any ever sold in a US store.
The sliced apples or cut broccoli – the
merchant won’t say what’s involved
exactly – are being used to test
Blockchain. If successful, the trial could
change how Wal-Mart Stores Inc., which
serves some 260 million customers a
week, monitors food and takes action
when something goes wrong. That could
spur big leaps in food safety, cut costs
and save lives.
Like most merchants, the world’s largest
retailer struggles to identify and remove
food that’s been recalled. When a
customer becomes ill, it can take days
to identify the product, shipment and
vendor. With the Blockchain, Wal-Mart
will be able to obtain crucial data from a
single receipt, including suppliers, details
on how and where food was grown and
who inspected it. The database extends
information from the pallet to the
individual package.
While the issue of the scalability and the
costs of Blockchain solutions remains a
cause for concern, we are on the verge
of transforming the way in which we
operate; exciting times lie before us.
An option contact
between parties is
written as code into the
blockchain. The individuals
involved are anonymous,
but the contact is the
public ledger.
A triggering event like
an expiration date and
strike price is hit and
the contract executes
itself according to the
coded items.
Regulators can use
the blockchain to
understand the activity
in the market while
maintaining the privacy
of individual positions.
1 2 3
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4

Vincent, there is a lot
of talk about big data
and analytics; what is it
and how can it help to
drive food safety and
sustainability?
While assurance providers like LR are developing new technologies,
how is the market reacting to these new services? Is it only the largest
organizations serving the food supply chain that are embracing technology
or can the smallest suppliers benefit too from these new technologies?
Big Data is just the immense amount of
data generated by each product and each
operator of the associated food supply
chain that are somehow connected to
internet. It goes from the DNA of the
product to the related HACCP plan
through cold chain measures, weather
reports, labs analysis and GPS location.
All this data can be aggregated and
properly analyzed through very complex
algorithms to enable real predictive
analytics mechanisms. Hence we could
provide traceability, transparency and an
improved level of safety for the product.
But this analysis cannot be systematic,
we will have to use trends in order to
identify and anticipate any issues before
they happen; I refer back to my earlier
comment about predictive insight.
Based on existing data and the proper
algorithms, it is possible to define a
model that will clearly indicate when
and where the next issue – whether it is
food safety, social or environmental – is
likely to happen and how to address it in
advance.
Big data will drive #predictiveanalytics
and #foodsafety says @lloydsregister
#technology #bigdata

This process is currently extensively
used by large brands and authorities
to prevent food crisis and recalls and
is proved to be very efficient and ties
back to general ledgers, Blockchain
and digital ecosystems. Together, these
approaches represent a far better way
to monitor sourcing and production.
You’ve spoken about real-time assurance and insight moving from
what went wrong to what could go wrong. Can you explain what
this means in more detail and share with us some of the services
that LR is offering within this arena?
To explain this, it is easiest to think of
moving from a snapshot and sampling
exercise with an on-site auditor,
physically verifying limited records over
a couple of days, to a fully connected
system encompassing the entire supply
chain and any online device operating
in this supply chain.
Any deviation will be automatically
identified and corrective action advised
or acted upon directly. This entire system
will be able to learn systematically from
any issue that has happened and always
apply the right correction. This is what
we call the machine learning and is
clearly the first step toward Artificial
Intelligence, or AI as it is known.
The level of risk is scaling down
tremendously. Obviously, you will need
some brains and the right expertise at
some point to take the best out of it. But
most of this monitoring will be remote
and online. On site actions will be limited
to cases where real risks are anticipated
and there will be core objectives to
address these risks.
We are seeing interest from both
sides as all parties will gain efficiency,
which is key in a supply chain often
characterized by low margins and
severe economic issues of the operators
within in.
But ultimately I believe the solution
will be pushed by the large brands
through their supply chain. This is
mainly because a limited number
of manufacturers deliver some of
the world’s best known brands and
they have the ability to use forums or
associations to create and enforce these
types of solutions across their supply
chain. The solution then becomes a
“license to operate” and has a viral
effect all along the chain.
In the meantime, we have seen from
some recent experience in Africa or
South America that small farmers are
very often the one that benefit the
most from these innovations when
properly done.
As a consequence, many of the
world’s smallest suppliers are now
enjoying levels of profitability
that had never been seen before;
the commitment to sustainability
goes beyond the food product,
sustainability touches everything,
most of all humans.
Disruptive #technology can deliver
profitability to smallest #supplychain
suppliers says @lloydsregister
#foodsafety

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For many of our clients, it’s not just about food safety. Organizations like
Cargill are proactively promoting their commitment to sustainability –
their announcement that they have partnered with CARE in 110 cocoa
farming communities in Ghana to promote more prosperous, sustainable,
and resilient livelihoods is a prime example.
How can we help
organizations worldwide
meet their sustainability
objectives?
The 17 Sustainable Development
Goals from the United Nations (UN)
are now an undisputed roadmap
and everyone agrees.
Based on them, large organizations
have defined associated action plans
to better control and support their
supply chains in order to reach these
objectives.
If we consider that 160 countries have
voted at the UN so say that food is a
human right; they have defined the
access required in terms of quantity
and quality to decent and culturally
acceptable food - this encapsulates
what people are after. Digitalization,
transparency & traceability are key
prerequisites to making it all possible.
You cannot address a sustainability issue
if you don’t know it is there and have
no way to identify it.
On the other hand, once again, primary
production is very often hampered by
trifling logistical problems such as a
low level of transaction records, poor
communication between the operators,
lack of capacity to transport and store
the food where appropriated and lack
of training/information by the farmers.
All these issues can easily be overcome
by efficient IT solutions which will then
bring resilience and sustainability in a
healthier supply chain.
Most of the large food brands are
engaged in this process all along their
supply chain as they all know it is key to
enable resilience for their company but
also for our entire human eco-system.
To do all of this, these food large
companies need proven tools and
trusted organizations – like LR – to track
and demonstrate their progress in order
to play their part in making this world
more sustainable.
We need third parties to identify
measure and reward the best
practices in order to establish them
as a standard for the rest of the
chain.
Sustainability is a bit different to
food safety as it is much more a
competitive topic for them.
So here we need more need
fair measures and independent
statements to define what is best
for the food ecosystem, which
the major manufacturers are fully
engaged with.
Today’s consumers are savvy; they
know what they want to eat and
what is good for them. What they
choose to buy, their decisions have
a direct impact on their health,
their society, the planet, local
communities, forest, farming, water
and our climate – both tomorrow
and in the future.
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For more information about how LRQA can help with your food safety and
sustainability requirements, visit www.lrqausa.com or email inquiries-usa@lrqa.com
Lloyd’s Register and variants of it are trading names of Lloyd’s Register Group Limited, its subsidiaries and affiliates.
Lloyd’s Register Quality Assurance, Inc. is a Delaware USA corporation. Care is taken to ensure that all information
provided is accurate and up to date. However, Lloyd’s Register accepts no responsibility for inaccuracies in, or changes to,
information. Copyright © Lloyd’s Register Quality Assurance, Inc. 2017. A member of the Lloyd’s Register group.
www.lrqausa .com Follow us:
At the heart of LR sits a charity, the LR Foundation. Most organizations do
something to make money but at LR, we make money to do something.
Can you share with
us any of the projects
that we are involved in
to help drive safe and
sustainable food supply
chains for the world’s
population?
As diets around the world become
richer and demand for protein
increases, natural resources will be
increasingly stretched. To ensure
sustainable access to nutritious food,
we can expect a fundamental change
to what is on the menu – including
insects, laboratory-grown meat, and
functional foods designed to provide
optimal nutrition for specific segments
of the population.
The Lloyd’s Register Foundation is
funding a project with Wageningen
University and Research (WUR) to
develop a safety assessment and
controls for multiple simultaneous uses
of maritime space to enable the safe
creation of energy sources and food at
sea in the form of aquatic algae (mostly
seaweeds). Although seaweed has
been used as food and animal feed for
centuries, logistics and safety issues have
limited large scale production.
Seaweed farming presents significant
opportunities: as a sustainable and
efficient source of protein; as a natural
desalination process; it absorbs carbon
dioxide and its residue can create energy
through biomass. Also worthy of note
is that recent articles have highlighted
the research showing that algae has
proved to be a very efficient and
biodegradable, and even sometimes
edible, substitute to the plastic bags,
bottles or glasses that are damaging so
much of our ecosystem today.
Seaweed delivers #food, #desalination,
mitigates #climatechange and delivers
#energy thru #biomass says
@lloydsregister

As an organization with a social
purpose, we will continue to investigate
and bring to market new ways to
provide insight and assurance to the
global food supply chain. Because
altogether, we are the first generation
that really knows the risks and the
possibilities of this food system.
With the access to incredibly disruptive
technologies and based on our
collective intelligence, we can now
produce sustainable and safe food for
every human being on this planet –
and I truly believe that we will!
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