THE global food sector is losing $40-$50 billion annually to food fraud. PwC recently declared that every second kilogram of beef sold in China under the banner of Australian beef could be fraudulent.
Countless such cases happen due to the lack of transparency and the need for greater traceability. While the COVID-19 pandemic shook industries, it revealed the defects of supply chains.
In Australia, farmers are empowering themselves by leading a global supply-chain revolution. Livestock traceability platform Aglive, and agritech businesses Ceres Tag and Two Hands head technology-led initiatives within the Asia-Pacific and are providing urgent solutions to food traceability issues that will provide consumers with the provenance they demand.
Mark Toohey, executive director at Aglive Group Limited says, “Aglive's technology allows farmers to connect directly with consumers by providing detailed and transparent data that links the end product in supermarkets and restaurants around the world, back through the supply chain to the farmer. As Australia is widely considered among the world’s cleanest and most trusted sources of food, new technologies are essential to ensure that Australian produce continues to command premium prices.”
Mr Toohey explains this further in the following interview with FoodPacific Manufacturing Journal.
Mark Toohey, executive director at Aglive Group Limited,
a company that focuses on blockchain-based logistics
What concerns were being raised by farmers, and how has the Aglive, Ceres Tag, and Two Hands partnership been able to provide solutions to the agribusiness in Australia?
Aglive provides the paddock-to-plate history and delivers on-farm data right to the consumer. Two Hands is particularly strong in ensuring the ‘last-mile’ or ‘white van’ delivery remains secure. That last vital step, some suspect, can often be the most perilous part of the journey for products and is possibly a vulnerable link in the supply chain where substitution may more easily occur. Ceres Tag’s rich farm data will only strengthen and deepen the on-farm information that can be provided to consumers to help inform their purchasing decisions.
Despite checks in place, why is food fraud still difficult to control, and how alarming is the crisis in Asia Pacific?
Food fraud exists because there are massive profits to be made by those who lack the business drive and the ethics to produce quality products. Food fraud has been steadily increasing. If reports are correct, the COVD-19 crisis has caused fraud rates to surge.
Traditionally, food fraud has been difficult to control because there are so many data gaps in the supply chain. Many companies have invested heavily to secure their operations and their effort works reasonably effectively - while the items are in their control.
The problem is the gaps between data silos as goods move from one company to the next. Those black spots can be exploited by criminals to steal profits.
Blockchain is about all those data silos collaborating to create a single chain of information that tracks the shipment all the way from the production line to the buyer.
The technology now exists to shine a light into the dark corners of our supply chains.
Could you please support this with recent incidents occurring especially in Southeast Asia and China?
One of our clients was recently contacted by a long-term loyal buyer who angrily asked why he was being charged a higher price for our client’s meat that was being sold online. Shocked, our client replied he wasn’t selling any product online at the moment.
He investigated and found meat packed in boxes identical to his was indeed being sold online so of course, prices for this inferior product could be set lower.
Are there food or beverage products more susceptible to fraud than others, or maybe markets more affected than others?
As a fellow consumer, I would like to be able to provide a short list of at-risk products. The grim reality is that industry after industry is finding its quality products substituted or faked. With global losses to food fraud totalling $40-50 billion annually, it is a worldwide plague.
There are credible reports that a large percentage of the supposed ‘exports’ from leading European countries into the United States are either from a different source, of lesser quality than the label claims, or are even counterfeited. There are even claims that dodgy products could be the majority of the products being imported from these suddenly troubled markets. As economic conditions worsen, this trend is likely to increase. The equation is simple: if it is valuable, there is probably someone out there trying the pass off an inferior product.
How is the COVID-19 pandemic making the situation even worse, and what are the repercussions?
Many businesses are financially struggling at present and the temptation to earn quick profits has never been higher.
The repercussions will be even more unsafe, dangerous or even toxic products will be sold to unwary customers. The financial difficulties faced by customers may also make that ‘too good to be true’ bargain just a little more compelling.
Alongside this, the chaos in many supply chains may have only created large security holes that the fraudsters can exploit.
To fight fraud requires the combined efforts of industry, government, and organisations. What can you say about current efforts?
Inertia – the tendency to do nothing and change nothing – is something that the food and beverage industry is struggling with. Adopting new processes or concepts is often more about our reluctance to change our settled ways, than it is about anything else. But this needs to change. Implementing a cost-effective tracing platform is about far more than adopting a new, innovative technology. When a restaurant can prove the origin of a product served to a customer, it opens a world of marketing opportunities. Brands can embrace the changing consumer sentiment and meet these new expectations. People want to know where their food comes from. We all do. Most of us are quite willing to pay a premium to get good food, but we are also reluctant to be conned. How many of us have looked at the free-range products and wondered if the claims are genuine and worth the extra cost?
So, the solution is revitalised marketing and communicating to the consumers that a product is safe and authentic. New campaigns can answer these key questions that flit through a consumer's mind at the time of the purchase decision. If we win that marketing moment, the technology is the easy part.
Tell us about food traceability platforms.
There is no doubt we all want safer food. It should be normal to always get exactly what we pay for, particularly when we are willing to pay a premium price for a superior quality product. Aglive is working hard to enable food producers and brands to prove this and meet this growing demand. Certainty about the product we are buying is important to all of us - particularly if it is a product we are giving to our children or loved ones. Achieving better traceability involves piecing together and joining existing supply chain information so that the journey from food production to plate has guaranteed transparency. The supply chain currently works in well-protected data silos. We need to adopt secure ways of storing and sharing this pooled information. Collaborative information sharing in a safe and controlled environment is exactly what blockchain technology can achieve. It is a transparent and collaborative data ledger. This technology can provide a solution to a lack of transparency along the supply chain, and that is why there is increasing interest in this new opportunity.
What are the track and tracing capabilities provided to the farming industry? Can these be used by other food / beverage manufacturers?
Blockchain can readily be adapted to many industries. It is, after all, just a data storage system. It simply tracks tokens. Said another way, tokens are just a ‘digital twin’ where each digital token represents a physical object. This process just helps computers simplify, manage and track the far more complex events that are happening in the physical world.
So, from the back-end perspective, it does not matter whether that token represents a carton of meat, a bottle of wine, vitamins, milk or any other product. The Aglive blockchain just tracks the baton changes as the goods move from one company to the next along the supply chain.
Adopting the technology is not the hard part for our users. The bigger issue is a question of how to best convert this extra information into premium prices, greater customer loyalty or some other important goal.
Adoption of blockchain technology is more a marketing decision than a technical decision.
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