FoodBlockchain.XYZ: Your Food’s Safe Journey From Farm To Fork

Remember how the late Noughties (yep, the époque when the world wasn’t such a vapid commonplace in its substance) were ignited by a fad for realistic sci-fi? Back then, one visionary writer came up with a total mind-blower of a story: a group of handpicked heroes was instructed to build a beta-version of a new universe from scratch…Would you fancy to join in as well? No, seriously. Imagine you alone could take control over everything, just everything – including the expectancy of your own life. Sounds reassuring?

Well, to that extent, maximizing the nutritional value of your daily food intake could be a good point of departure into a secure future. Statistically speaking, smart food choices can instantly win you 2-3 years of longevity top-up. Albeit, there is a catch to this seamless survival plan – up the sleeve we have a stressor which John Humphrys (The Great Food Gamble’s author) aptly describes as “the stranglehold of big corporations”. And the recent upsurge of food safety & hygiene scandals indeed reveals: when it comes to dealing with raw materials, supply chain intermediaries are no longer shy of resorting to product tampering when quick and easy gain is at stake. Which again proves that on the racetrack of corporate avarice there are plainly no finish lines in sight. Whilst top industry players continue living up to this truism the need for decentralized control over supply chains has never been so acutely crucial. To address this critical gap, FoodBlockchain.XYZ is now rolling out an Ethereum-blockchain-based ecosystem designed to nurture the unique needs of food buyers and manufacturers and to align the food markets with the interests of farmers and consumers!

But can we predict that Foodcoin – a new cryptocurrency developed by FoodBlockchain.XYZ – will serve as the panacea to weakened trust relationships in the agricultural market? Angel Versetti, the startup’s CEO, has agreed to lift the edges of secrecy veil draped over the project launch.

Angel, what is the core underlying principle of FoodBlockchain.XYZ? How can we avail ourselves from blockchain when it comes to bridging food supply inefficiencies?

We have a vision for the Food Supply Chain 2.0: this is not a project or a startup, this is a whole ecosystem intended to leverage the Ethereum Blockchain technology to transform the way global food markets and supply chains work, in a way to bring more transparency and quality assurance to consumers, convenience of supply chain management for producers and fair commercial opportunities for farmers and suppliers. We intend to bring these stakeholders on board through several tools that bring direct value to different stakeholders: mobile solutions for food origin and quality tracking at individual product level for consumers; blockchain-based storage and asset tracking for manufacturers; and a peer-to-peer marketplace where farmers can secure better deals for their quality products. We intend to also create a lot of building blocks and developer tools to allow the community to build additional valuable modules, dApps (decentralized apps) and solutions for the users of the system. To power the system and creative incentive models, Foodcoins will be used as the medium for service exchange, transactions, and usage.

Fair said blockchain-based solutions are lately garnering global industry interest which immediately incentivizes big companies to include it in their basic inventory. How could your system be different from what they are proposing?

Firstly, when you hear that a certain company is building a blockchain-based solution for their supply chain: there’s a big red flag for you! That brings absolutely nothing to me as a consumer, because if I want to be assured of food quality and origins I want the system to be independent and distributed. I think if the same company whose products and supply chains should be checked is also building the quality assurance system – that completely kills the purpose! This is not trustworthy, and sticking the word blockchain to it, is mere marketing. It needs to be distributed, free of central interested party and community-driven. Just look at that new huge scandal in the USA last week where billions of dollars’ worth of products labeled as organic actually contained non-organic corn and soybean – people were essentially scammed of their money for years. They thought they are paying extra for better food, and they were sold cheap, low-quality food! We are building FoodBlockchain.XYZ to get rid of these practices once and for all.

Secondly, unlike others, we are also developing a hardware solution: Sensor System. It controls and records quality aspects of food such as origins, actual qualitative aspects such as the internal composition and structure and the external parameters such as temperature, humidity or pressure. These aspects are very often missing or incomplete in food supply chains.

Could you explain a bit more about these weak links in food supply chains you have just mentioned?

A lot of food waste happens either at the stage when products reach processing facilities or from processing facilities to the retailers, due to lack of sufficient control for quality of food. What very often happens is that if any breaches of the quality are discovered – which often is not the case – the client then rejects the whole batch altogether, or in case of serious breaches of safety standards the whole product line must be recalled: this leads to huge losses for companies and also results in a lot of food waste, because often only a particular batch was contaminated. So on the one hand, you have many consumers getting spoiled food and are unaware of this, on the other hand perfectly normal food is destroyed if one batch was contaminated. And this all comes from missing insights into quality assurance as well as the time and place of the quality breach. With our system this discovery can be made in real-time, as smart contracts are constantly fed the readings from sensors, thus any issues will result in immediate rejection of the contract so that manufacturers can follow up fast.

What added value does this solution bring to your potential clientele? How do you envision the everyday usage of your tech for supply chain management?

Our sensory systems are using the infrastructure which already exists in food supply chains but instead of making fragmented records where the client will have to order the auditing or would spend a long time trying to find the source of the problem with food we can do it in real time and the blockchain ensures that records are made immutable and once and for all. This is where we add a key differentiator from others. We are also the first startup to bring Ethereum technology and smart contracts to ensure the quality of food and we are very happy with the warm reception and help we have received from the Ethereum community. In other regions where we have received interest, such as the USA and Asia, there is often no sufficient infrastructure and sensors in place, so we can also supply hardware solutions to our clients there.

How did you manage to learn the ropes of the food market so promptly given its nearly threatening volatility?

This is true that in the food industry there are a lot of conglomerates and closed loop systems. Our team consists of several people who have more than 25-30 years of work experience in the food industry, in supply chain management or building quality assurance sensors, so they understand all of the structures completely. Despite the closed-loop systems – or perhaps because of it! – there seems to be an opportunity, specifically in the establishment of peer-to-peer models where farmers could join into co-operatives and supply products directly to the customer. This system would allow more effective trading pattern and it could completely bypass the middlemen who control the buying power – and they are the ones who have been the bottleneck of the peer-to-peer system development because so far there has not been a solution to validate the quality of food delivered to the end client, so they took on that task, but at the cost of completely squeezing out any profits from farmers. Now, it’s the manufacturer’s job to control the quality and if anything happens, the manufacturer is liable for any food poisoning or outbreaks of health problems. In our case, the system controls the quality independently – directly from the farm itself. We are able to establish independent means of quality verification and at the same time, we do have a capacity to create financial relationships between suppliers and buyers. Our first demonstrator of a decentralized food exchange platform is going to be live soon.

Does this mean you are planning to dismantle the status quo & replace and the traditional buyer-supplier horizontal with something completely new?

Our goal is to align the markets with the interests of consumers/farmers. Our platform, coupled with a protocol and a marketplace will be able to create a new level of peer-to-peer financial relationships between different parts of the supply chain. These relationships existed in the past but at a very small, local scale. There was no technological structure for them to scale. So, we intend to build a marketplace where the farmers are getting paid fairly whilst buyers are presented with a lot more transparency insights on the food they are buying.

How does your startup contribute to ensuring this transparency?

Our system will allow consumers to reward the farmers of their choice by sending them a token of appreciation that will constitute a reputation system. Thus transactions using our native token Foodcoin can also serve as a conduit for a reputational value whereby if people are buying products they are particularly enjoying or they discover in our system that certain farmers follow good farming practices. Either they commit to sustainable agriculture or they make sure there are no pesticides in use even when it is not required by labeling of the government – people can reward them. The next step will be that these producers gain an enhanced reputation in the system so they get more orders from consumers or start supplying cafeterias, restaurants or shops directly.

The advantage is that farmers will capture the value of a better product they produce. In the past, if someone enjoyed the product it would have been simply bought again from the same shop. So the shops as intermediaries could increase the prices and capture a higher percentage of profits, which would not necessarily translate into better revenue for the farmer.

For the current moment, which milestones have you set up for the company?

One is to release our demo publicly. The demo will consist of three parts: a software demonstrator that will show the functionalities of the Ethereum-based solution that we offer. We will have profiles for buyers and sellers with multi-currency wallets who are able to create orders and smart contracts with certain specifications. For example, you could stipulate what storage conditions or quality parameters of the food you want to have and each individual batch could be assessed in real-time so you only receive goods that have passed your requirements. In the opposite case, the goods will be discounted or re-routed to another buyer who is willing to accept lower quality products. For the protocol architecture, we will show which templates for smart contracts we have, what modules we built and how the sensor systems will communicate with the blockchain and demonstrate how the whole ecosystem on top of the blockchain will work. And the third part is the hardware: we will demonstrate the sensory system which is able to analyze different food samples, create the data, transform it into the proper structure suitable for the blockchain and record it on top of that.

Where will this demo take place?

We want to publicly unveil it in June at one of the conferences where we are participating: Pioneers Festival in Vienna and the United Nations Global Conference for Sustainable Food in South Africa. By the end of summer, we also want to demonstrate how the aforesaid three components work together as a system implementing the whole process from A to Z.

Is the European landscape conducive to the deployment of blockchain solutions in general?

There are already movements at the central level to introduce solutions where blockchain will be useful. For example just a few days ago a new legislation came into force in Switzerland. It is now required from the local manufacturers using the “made in Switzerland” label to put up verifiable methods of quality control. Thus it will be necessary for the food industry to adopt new systems for regulatory compliance purposes. The same is happening in other parts of Europe: more stringent measurement criteria are being increasingly adopted to ensure quality and safety of food for the consumers. The main goal here is to prevent counterfeiting and also reassure people regarding the content of their food. In terms of the market itself, we are working with certain areas of the food industry where the quality matters a lot more.

Any example in this regard?

One such example is baby food. In Europe, the market for baby food is the most price-insensitive one. What does it mean? Parents do not care about the price of the baby food as much as they care about the quality. And they are willing to pay a lot more if they are sure about the quality of the food. Quite a few reports also indicate there is no brand loyalty on the market. Parents only stick to brands as long as their friends or doctors recommend it. Some crucial market players are investing millions of Euros into campaigns and communications with health associations. They are just spreading the message that their food is of good quality and people simply choose them from the best-known brands. But if we could actually create a system allowing for independent verification we would lead smaller companies and new challengers straight into the market. With our system, they could potentially prove that they are better than the existing players.

Angel, where does your personal passion for decentralization derive from?

I would like to avoid a cliché answer to this question. Everyone who looks at the Blockchain close enough is immediately hooked by the limitless possibilities it offers to improve our world. When I joined the United Nations, I thought I would make the world better. I spent quite some time there trying to do that, with few tangible results. When I discovered the blockchain, I realized through this technology I could make a much bigger positive impact on the world. And that’s why I quit the UN and started building up my vision for a better supply chain for something that is so important to the wellbeing of every person: food.

We have a long road to plow through, but this journey is exciting enough for me to embark on. And with the passionate and dedicated team and the early support we are getting, I am more and more confident that we can make a meaningful transformation of the way that food globally is produced and distributed, making life better for both the growers of food and its consumers.

Do you believe that the life of an individual can be affected by blockchain?

The blockchain is now at the early adoption stage but we are already seeing that blockchains have already empowered people to make stronger claims against the established governments in terms of accountability and responsibility. Some European governments (e.g. Estonia) and are now launching public services on the blockchain, Latin American countries are launching land registers on the blockchain to prevent disputes and appropriation, countries legalize cryptocurrencies. This is just the beginning. They are doing that to ensure a large-scale efficiency. For instance, Dubai did a research and announced using blockchain for running the public services will save them more than 25 million hours of human labor. Likewise, the UN have begun distributing public aid using Ethereum blockchains. In some ways, people may not realize how their lives are affected by blockchain now but it does make the system where they belong to work more efficiently. As the education about blockchains becomes more widespread, as people understand the potential value it could bring to them I think we will see how the creativity of the developers’ community will allow each person to become an active user of the blockchain.

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