Interview with Davide Costa, CDO at Foodchain S.p.A, the blockchain technology to build a transparent food supply chain.
In the last few years, the food sector has been at the center of many debates both on television and on social media. Increasingly, people want to know what they bring on their tables, how a certain food is produced and processed. These needs arise especially in the light of several scandals that have affected the industry: palm oil scandals, terrible work conditions in factory farms and many more – but what really interests us most here is to provide answers for those who want to know what solutions exist today to reveal the true story and the entire journey that a product makes from the field to the table. If you are interested in this topic, you certainly need to know about Foodchain, the Italian leader company that was born to bring transparency to the food sector.
The Foodchain platform was born from the need to enhance products and producers and their best attributes. At the same time, it provides a service that allows end consumers to trace the history of an agrifood product through all its phases.
What does Foodchain provide?
Foodchain tracks food products from their origin to the end consumer using blockchain technology. The solution proposed by Foodchain allows the implementation of a transparent product traceability that covers every step of the supply chain, from production to logistics and distribution. The monitoring of the entire process and product quality takes place in real time and is shared among all participants in the value chain simply by using a computer or a smartphone. For consumers, it will be enough to scan the QR code on the packaging to know all the production phases of a given product. Through blockchain disruptive technology, Foodchain gives a new look to the food value chain, making it transparent, interactive and safe.
Why choose Foodchain?
Foodchain was designed to provide users:
– transparency, thanks to the sharing of information, photos, and videos that enhance the product and its attributes;
– traceability, real-time access to supply chain data to reduce time and costs;
– interconnection, designed to make the supply chain an ecosystem of suppliers and customers in which information is exchanged in a simple and clear way;
– verification, a tool to strengthen and protect the value of the product and the “Made in Italy” brand;
– legal validity, thanks to the recognition of blockchain as an evaluation tool in many countries.
Hello Davide, nice to meet you, and thank you for your time. Foodchain: what is it about?
Today Foodchain is the Italian leading company in the design and development of customised IT solutions based on Blockchain technology. The Foodchain dApp powered by Quadrans enables the digital traceability and authentication of food and non-food products. Foodchain was one of the first companies in the world to have applied to the agrifood sector a traceability tool for the products entirely connected to the blockchain.
How and when did the idea behind Foodchain come about?
Foodchain’s story starts back in 2012 when I met Marco Vitale, now CEO of Foodchain S.p.A., on BitcoinTalk.org – an online forum dedicated to bitcoin, blockchain technology, and cryptocurrency. At the time, despite the Italian blockchain community being almost non-existent, Marco and I spent entire days studying the mechanism of blockchain technology and discussing potential applications outside of the financial sector. This is when our collaboration began.
How long did it take to develop the project?
Food supply chains are extremely complex and heavily regulated, so we had to invest a massive amount of time in research and analysis to understand how to adapt the potential of blockchain technology and develop an innovative solution to protect one of the most counterfeit industries in the world, the agrifood one. Our solution aims at protecting the “Made In Italy” brand, tackling the counterfeiting of products, and facing the “Italian Sounding” phenomenon. The opportunity to present our solution took place during EXPO 2015 MILAN, dedicated to technology, innovation, culture, and traditions and how they relate to food and diet. We introduced Foodchain as the world’s first blockchain-powered tool for transparency and traceability of food supply chains and the great success encouraged us to officially launch Foodchain in 2016.
How is the market responding?
It took a while for blockchain technology to sink into people’s minds – this hasn’t quite happened yet, and companies still need to understand the true potential of such innovative technology. In 2016, we were basically the only company in the market offering a blockchain-based solution for supply chain traceability, but today the story is very different and the field is developing at a fast pace.
In March 2021, the Smart Agrifood Observatory of the Politecnico di Milano reported that the agrifood sector is the third most developed sector in terms of number of blockchain projects internationally with 7% of the 1,242 initiatives mapped. However, I would like to point out that 31% of these initiatives are pilot projects and only 8% are actually operational, compared to 61% of the announcements. This doesn’t make life any easier for agribusiness operators who are not very familiar with blockchain technology and don’t have the right technical skills to distinguish a pilot project from operating companies. Our approach is based on creating valuable concrete use cases for industry that showcase best practices that can then be adopted in any type of supply chain. Be wary of “companies” that have no projects under their belt and base their business model on marketing!
In the last two years, and particularly in the last months thanks to government aid and incentives made available to SMEs in Italy, we have noticed a growing interest in blockchain traceability services. Our customers include the Apulian company Pralina srl, Alberto Marchetti’s ice cream parlors, the Terra Mia Italia project, and the Citrus Productive District of Sicily and its associated companies, which all work in the field of citrus production and transformation. In fact, traceability is one of the main areas in which companies want to invest in the near future. Today 89% of companies in Italy say they already use a digital solution for food traceability and 72% of them have obtained a high benefit from it. Moreover, 47% of them want to invest in traceability solutions in the next 3 years (Source: SmartAgrifood Observatory 2021).
Everyone has heard of blockchain, but not everyone truly knows what it stands for. Can you explain what blockchain is as you would to a child? Why connect it to the food supply chain? What are the benefits?
Blockchain is an innovative and decentralized way of storing information. It can be compared to a database shared between multiple users. This database is stored identically on multiple machines that create the blockchain network. Two things differentiate the blockchain from a simple database. The first is that the information is always entered into the ledger sequentially. The second is that the information entered cannot be changed or deleted. So the consequentiality and immutability of the data is what ensures the integrity and security of the data stored in the blockchain. Given these characteristics, blockchain technology is an effective and useful tool for manufacturers who want to create a “digital passport” for their products and highlight information such as the origin and provenance of the materials used, the technique used during production, the manufacturing processes and their distribution.
Blockchain-based solutions also represent a powerful tool to increase brand reputation and communicate an added value to consumers through transparency and integrity of information. Via tags such as QR codes, end consumers can access information recorded on the blockchain to verify claims and make more conscious shopping choices. In addition, the blockchain, and in particular the one Foodchain operates on, Quadrans (www.quadrans.io), is characterized by high scalability and negligible maintenance costs, in addition, it is suitable to manage the complexities of participants and processing processes.
What about the future?
We started from the agrifood supply chains but we are expanding our horizons following a natural evolution. We are no longer a start-up, we have been around for almost a decade. Over the years, it has been possible to adapt our successful model throughout the digital landscape. Today we serve sectors such as textiles, pharmaceuticals, energy, and even public administration with projects involving digital identity and e-invoicing. We are a Blockchain Technology Provider and an enabler for companies to achieve digital transformation. Backed by our experience we also provide Consultancy services. Our blockchain dApp is already being successfully used to track and encode processing steps across the entire production cycle, gathering information from all supply chain participants, linking workflows to optimize management efficiency and avoid waste. In the near future, we expect our solution to be applied to increasingly complex and long supply chains across the industry.
Credits: