Arsenic in your rice. Donkey meat in your ground beef. Salmonella in your child's shampoo. Sugar water in your grandmother's insulin shot. Incidents of counterfeit products, contamination, and outright fraud are mushrooming in the food, beauty and pharma sectors — and consumer trust has plummeted to historic lows. But what if your products could talk? Tell you where they came from, and where they've been? If they were real - or if they'd spoiled? Former Xerox VP Eric Weaver discusses the growing risks around these very personal products and how distributed ledger tech is allowing brands to demonstrate proof of origin, chain of custody, and marketing claims. Attendees will walk away with a deeper understanding of how integrating IoT and blockchain technologies with on-the-ground certification is transforming the packaged goods sector.
3. Why? Because trust is necessary for a healthy
society
TALK TRACK: One of the most used and perhaps overused words in conversations around blockchain is TRUST. “Trust in a trustless world,” as the saying goes. e
need to trust that the doctor that is performing surgery won’t leave some clamps behind when they stitch us back up. We need to trust that the corporation
we are buying from isn’t going to put profit before our safety. We need to trust that the police officer that stopped us for a burnt out turn signal won’t shoot us
when we reach for our license.
4. TALK TRACK: According to the Edelman Trust Barometer, the trust in the US toward these organizations crashed in 2018. And the industry with the biggest
trust decline: FOOD AND BEV. In fact, CPG brands have a huge new level of risk and distrust they have never seen before.
2018 EDELMAN TRUST
BAROMETER
COUNTRY WITH THE BIGGEST
DECLINE IN TRUST:
UNITED STATES
CATEGORIES WITH BIGGEST
DECLINES IN TRUST:
FOOD & BEV
PACKAGED GOODS
5. Consumers losing trust
TALK TRACK: When employees of trusted restaurants air footage of themselves adulterating food for fun, massive trust is lost.
6. Consumers losing trust
TALK TRACK: Things like this have led to consumers losing trust in well-documented, legal certifications like USDA Organic, NonGMO or Free-
Range.
7. Consumers losing trust
TALK TRACK: Marketers are NOT helping. There are only 8 restaurants in the US who actually serve authentic Kobe beef. Yet clearly many
establishments feel alright lying about this fact.
8. BIG SYSTEMIC
ISSUES IN THE
FOOD SECTOR
WILL INCREASE
CONSUMER
DISTRUST THIS
YEAR
TALK TRACK: Five big systemic issues will make this worse this year: traceability, complexity, fraud, contamination and an eroding safety net.
9. ISSUE#1
TRACEABILITY
IS TOUGH
9 of 10 farms are small
family farms & generate
80% of world’s food supply
WORLD RESOURCES INSTITUTE
No records, paper records,
human error
GLOBAL FOOD TRACEABILITY CENTER
A single shipment uses 30
documents on average
CARGOSMART
10. ISSUE#2
ENORMOUS,
INCREASING
COMPLEXITY
IN OUR FOOD
SUPPLY
69% of US food, 48% of
UK food, is imported
USDA – JOURNAL OF THE ROYAL SOCIETY INTERFACE
75% of all food loss occurs
before retail
MAERSK GROWTH, 2018
Avg 7 major changes to PO
while enroute
ITRADE NETWORK
13. FRAUD
EXTENDS TO
BEAUTY &
PHARMA
TALK TRACK: This issue goes beyond food to touch beauty and pharma products too – brands with which we have incredibly personal customer experiences.
Here we see a counterfeit makeup factory. A little talcum, a few scents, and voila! Lancome!
14. FRAUD
EXTENDS TO
BEAUTY &
PHARMA
TALK TRACK: It’s almost impossible to tell the difference between what’s real and what’s fake. Can you tell the difference?
15. FRAUD
EXTENDS TO
BEAUTY &
PHARMA
TALK TRACK: Most of the high-end salon products you see at retail are counterfeit. And counterfeiters have extended the model to pharma products like heart
meds, Alzheimer’s treatments and even your grandmum’s insulin.
17. ISSUE#4
CONTAMINATION
TALK TRACK: On one day in April, three massive recalls were announced. It’s not your imagination – the number of recalls is increasing.
18. MORE THAN OUR
FAMILIES AT RISK
TALK TRACK: It’s not just our families at risk. In Washington State recently, dogs began dying due to pentobarbitol, a euthanasia drug. How did it end up in dog
food? Because that’s not real beef in that “beef” dog food: it’s horsemeat, and the pentobarbitol was used to kill the horses.
19. SOME GOOD NEWS
TALK TRACK: But I don’t want to be too much of a Debby Downer. On one positive note, horsemeat recently found in British supermarkets may actually be
DONKEY. So we have that small win. XD
20. ISSUE#5
NO SAFETY
NET
<2% of US food
imports are inspected
Checks for bio
contaminants, no
chemicals/metals
Extensive bribery
among inspection
teams
TEXAS A&M UNIVERSITY STUDY, 2014
TALK TRACK: And our last issue is the safety net we trust to be in place to protect us. According to a recent study – it’s not there.
21. The customer’s
experience with
food is infinitely
personal — it
affects us
and our
families
TALK TRACK: These are products that go in or on our bodies. These are products we feed our kids. That we give to our loved ones.
22. #truestory
How contaminated
corned beef (shouldn’t
have) ended up in my
cupboard
TALK TRACK: I’m going to share a true story about a can of contaminated beef that ended up in my cupboard. You can see the very official looking seal of
inspection, endorsed by Brazil’s Minister of Agriculture. The production date is April 11, 2017. I bought it at my local grocer. But I shouldn’t have been able to.
It’s likely contaminated. And no one in the supply chain stopped it.
23. MARCH 2017
TALK TRACK: Only a couple of weeks before the production date, federal police raided the beef companies that canned that corned beef. Inspectors,
executives and government officials were arrested for their part in this scam of masking expired, rotting meat with bleach and cardboard – and then continuing
to sell the world these dangerous products. http://bit.ly/2017-brazil-beef-arrests
24. JUNE 2017
TALK TRACK: Two months after the can was produced, the USDA banned all imports of Brazilian beef due to a high percentage of shipments failed to pass
safety checks. Yet that can of corned beef came into the States, ended up in a Colorado warehouse, then in a logistics company in Washington State before
finding its way to shelf at my local Safeway. Nothing would have stopped me from opening it. No one knew. http://bit.ly/us-suspends-beef-brazil
25. Lots of folksare pioneering blockchaintrack& trace for food
But how do we keep people from fudging the input data?
How do we know the data is real?
26. “Sunlight is the best disinfectant.”
US SUPREME COURT JUSTICE LOUIS BRANDEIS, 1914
How can we use technology to insert
transparency and remove all doubt in
the consumer packaged goods sector?
TALK TRACK: The late US Supreme Court Justice Louis Brandeis once said, “Sunlight is the best disinfectant.” He was referring to transparency in the light of
numerous pump-and-dump scams in the early 20th Century (sound familiar?). We now have the technology to remove all doubt for all parties in the food chain.
27. First, what’s really
happening on the
ground must be
certified
TALK TRACK: The first step is certifying facts on the ground. Is this really sustainably raised? Organically produced? Ethically sourced? GMO? Non-GMO? We are
partnering with global certifier Source Certain to be our boots on the ground proving that marketing claims are true.
28. CREDIBLE?HOWCREDIBLE?
Sustainability produced +
ethically sourced +
truthful marketing claims
validated by an
independent auditor
88%
TALK TRACK: But what if only SOME of the grapes in that expensive wine can be certified as Glyphosate-free? Producers need a credit rating of sources, an
agreed-upon scale for credibility of product claims. Perth-based BHT is providing this ranking system for us, to be validated by an independent auditing firm.
29. TEMPERATURE–HUMIDITY–
LOCATION–TIME/DATE–
TAMPERING–VOLUME
Next, you make it
easy and cheap
to automate the
capture of
accurate product
data to a chain
TALK TRACK: Just putting data on a ledger isn’t enough. You have to make the data automation & track/trace granularity work. What if we could bring
container-level tracking down to palette, end cap or even product level? Printed memory and chipless RFID make that possible. We can drop the typical tracker
cost from $30-50 down to $5. Now we’re at a scale that allows us to make a nice-sounding vision a reality. This is where my former employer Xerox shines.
30. SMARTLABELSWATCHTHEPRODUCT
ENROUTE
Then, you store
environmental
sensor data on
package – for the
times you can’t
connect to a chain
TALK TRACK: The problem with uploading data to the blockchain is – what happens between uploads? What if the temperature on this milk spikes to
dangerous levels? On-package memory can continually store sensor data to keep tabs on conditions between “reads.”
31. SMARTLABELSWATCHTHEPRODUCT
ENROUTE
Then, you store
environmental
sensor data on
package – for the
times you can’t
connect to a chain
TALK TRACK: The consumer or the retail can scan the QR code to get provenance, but the package itself can sport the memory within the same label to store
environmental data en-route.
32. ALLPARTIESBENEFIT
Finally,yousharetheinformationon aconsortiumblockchain
TEMP > 120°F 8/21/18
14:05
SHIPMENT REJECTED
PRODUCER CONSUMERABATTOIR CANNERY DISTRIBUTOR RETAILER
PERMISSIONED+PUBLIC DAPP
W/CREDIBILITY SCORING
VET
TALK TRACK: You’ve likely seen this typical diagram for recording provenance and logistics data to a chain. What you need to know is that if we can sense, ON
PACKAGE, that a dangerous situation has occurred, the next party in the supply chain can reject the shipment, thus preventing risk and cost downstream.
33. ALLPARTIESBENEFIT
Finally,yousharetheinformationon aconsortiumblockchain
EXPIRED PRODUCT NO PICKUP
PRODUCER CONSUMERABATTOIR CANNERY DISTRIBUTOR RETAILER
PERMISSIONED+PUBLIC DAPP
W/CREDIBILITY SCORING
VET
TALK TRACK: Let’s say a disreputable distributor repackages expired food. Without the full, proven chain of custody, the logistics partner can avoid legal risk
and cost – and the retailer and consumer can similarly be protected – if the shipper rejects the product based on lack of provenance data. $$$$ saved.
Consumer safety assured.
37. THROUGHPUT
BIG MOTIVATORS
PUBLIC VS PRIVATE
POWER IN NUMBERS
TALK TRACK: Four things to consider: 1) due to processing requirements, this needs a third-gen chain like Hashgraph. 2) we need to segregate competitive data
from public data. We’re doing so by focusing on food origin and traceability data rather than any ERP or logistics systems. 3) we need the big players to push
the industry for this change, and it’s happening. Maersk, Wal-Mart and Carrefour are making things happen by mandating them. And finally, 4) group efforts
win. TradeLens now boasts 92 companies including Walmart. The only way smaller suppliers and logistics partners will want to play is if they are forced to.
38. IBM FOOD TRUST
Pilot 2017-2018; full subscription July 2018.
BEER LOGISTICS PILOT
Completed March 2018
CREDIBILITY SCORING PILOT
Completed April 2018
INDUSTRY DATA ALLIANCES
BITA: August 2017; TraceAlliance May 2018
PORT/CUSTOMS/CARRIERS
CONSORTIUM
TradeLens announced August 2018
94 companies signed
41. Transparent Path is an enterprise solution
architecton a mission: to connect the data and
tech to remove all doubt from the food supply.
@weave @HerrWeave
@transparentpath
xparent.io