The incidence of foodborne illness in the United States leads to the hospitalization of 128,000 people and the death of 3,000 Americans every year, costing the economy nearly $78 billion. Broader adoption of new information technology, such as blockchain and low-cost IOT sensors in the food and agribusiness sector, can reduce the frequency of foodborne illness outbreaks.
Every year, it is estimated by the U.S. Centers for Disease Control (CDC) that 48 million Americans get sick from food-borne illness, of whom 128,000 require hospitalization and 3,000 die from that illness. A 2012 study commissioned by the CDC estimated that those illnesses cost the U.S. economy nearly $78 billion annually due primarily to medical costs and lost productivity at work.
There are a combination of factors driving this continued problem, but chief among them are poor sanitary practices by people cooking the food, whether at home or in restaurants, consumption of spoiled food products, and time lags in removing recalled food products from grocery store shelves and refrigerators and pantries at home. Over the last few years, new technologies have emerged which have some promise in addressing these matters, if they are adopted in a comprehensive way.
Blockchain technology tops that list, with many food processing and retailing companies seeing it as a significant advancement in helping them track the provenance of the products they offer to consumers. This technology, which involves generating a digital record of transactions which is both decentralized and open, emerged in 2008, as a means of creating and distributing the cryptocurrency Bitcoin, which was billed as an alternative medium of financial exchange that was not centrally controlled by sovereign governments. Due to an extremely speculative trading environment, the value of Bitcoins and other cryptocurrencies have varied widely over the last decade, especially over the last year, falling from more than $17,000 per Bitcoin in December 2017 to less than $7,000 as of late August 2018. While there are hundreds of retailers who accept Bitcoins for payment, only a handful of them are well known to the general public, such as Overstock, Expedia, and Dish.
The interest by companies in utilizing blockchain technology for conducting transactions that are more easily and readily traceable is independent of the cryptocurrency phenomenon, and has picked up steam in the last few years. In 2017, Walmart did an experimental blockchain transaction involving a shipment of sliced mangoes sold to the public at some of their Super Walmart stores offering fresh produce. They then conducted a traceback of that shipment, both through their blockchain channel and through conventional means. The conventional, paper-based traceback to the original mango producer took more than six days to complete–through blockchain, the request was completed within 2.2 seconds.
Of the 456 food products recalled in the United States in 2017 by either the Food and Drug Administration (FDA) or USDA’s Food Safety Inspection Service (FSIS), nearly half of them occurred due to mislabeling of food products, resulting in the presence of undeclared ingredients that were allergens, like milk or peanuts, to some in the general public. The presence of pathogens, such as listeria, salmonella, and e-coli, accounted for another one-third of food recalls.
However, because of the slow information flow in today’s retail food sector, a significant share of recalled food products is typically eaten before the consumer becomes aware of the problem. Wider adoption of blockchain technology would make it easier for companies at all stages in the supply chain to respond quickly to reports of outbreak of food contamination and/or foodborne illnesses. This would allow them to more easily pinpoint the source of the raw ingredient causing the problem or the facility where undeclared allergens were inadvertently added to food products. If the various parties can address the problem quickly, the likelihood of a formal recall process being triggered would be reduced.
Reducing the incidence of food products being recalled helps consumers by improving the safety of the food supply, and helps food companies avoid the costs associated with those recalls. A trade association-funded study in 2012 found that the average direct cost of a recall of a food product was $10 million. The components include notification (to regulatory bodies, supply chain, consumers), product retrieval (reverse logistics), storage, destruction, the value of unsalable product, and of course, the additional labor costs associated with these activities as well as the investigation of the root cause. This study does not account for indirect costs, such as reduced value of the company due to declines in stock prices from the negative publicity and the costs of settling any subsequent lawsuits by consumers believing themselves harmed by the product, which could well be far higher than $10 million in some cases.
Other promising technologies on the horizon are inexpensive printable sensors which can be incorporated into food packaging to provide monitoring of the freshness of meat, dairy, and other perishable products on grocery shelves. Similarly, work is underway developing sensors that provide early warning of mold or insect infestation in loads of grain stored in elevators. Once incorporated into commercial operations, these sensors can both reduce food waste and loss and reduce the likelihood of spoiled or contaminated food reaching and remaining on shelves and being sold to unsuspecting consumers.