Food fraud has been a global problem for what feels like forever. It first came about as an attempt from dishonest individuals to make a profit, and since then has only increased in prevalence as lower-cost alternatives continue to be passed off as their high-value counterparts. Food fraud has now become a pressing issue in global supply chains, and it needs to be addressed as soon as possible.
What is food fraud?
According to John Spink and Douglas Moyer at Michigan State University as reported by Food Dive, there are seven distinct types of food fraud:
- Adulteration: whereby some part of a final product is inauthentic
- Tampering: whereby legitimate product and packaging are used improperly
- Over-run: in which more authentic products are made than agreed upon in contracts
- Theft: whereby a legitimate product is stolen and used in fraudulent ways
- Diversion: whereby genuine products are sold outside of intended markets
- Simulation: whereby fraudulent products are designed to look very similar, but not exactly like a real product
- Counterfeit: in which a fraudulent product is packaged and created to mimic a legitimate one completely
Clearly, there are far too many ways for fraudulent activity to occur in the food supply chain, and the current lack of supply chain visibility only makes things worse. Without transparency, it’s easier to get away with any variation of food fraud, as there is no way to place accountability if things do go awry. Often, supply chain managers are left in the dark, making things worse as no proactive steps can be taken to ensure that the issue doesn’t occur again. And once a food fraud scandal goes public, it can be extremely damaging to a company’s reputation, causing sales to plummet in both the short and long term.
Food fraud is on the rise
According to the U.S. Pharmacopeial Convention (USP), food fraud has increased by over 60% in recent years due to the opaque and trustless nature of the industry.
So why is it that we don’t hear about it more often?
Unfortunately, food fraud does not receive the attention that it should, as more often than not, no one gets hurt. Even worse is that a lot of times, food fraud goes unnoticed by the consumer, and he or she eats something that they believe to be authentic, that is, in truth, illegitimate.
That said, the consequences can still be quite devastating if not fatal, especially if someone has a severe allergy. So although most food fraud cases don’t typically lead to much harm, that doesn’t negate the fact that it is still potentially dangerous.
How blockchain can make food fraud a thing of the past
Blockchain’s immutable digital ledger technology offers several benefits, one of the most noteworthy being increased visibility for all. Heightened transparency helps offset the threat of fraud by granting all parties visibility into the status of all supply chain operations. Blockchain can prove authenticity by tracing an item back to its origins, thereby showing how it was handled and how it made its way onto your plate.
Additionally, when you think about it, blockchain is inherently anti-fraud. Since data cannot be altered, edited, or tampered with, and all activities are time-stamped and verified, the ability to engage in fraudulent activity is greatly diminished. People are less likely to commit crimes when a verified record of exactly where and when all items in the supply chain were last accounted for exists. Additionally, if someone engages in dishonest behavior, blockchain will effectively point the finger and allow supply chain managers to replace anyone compromising the integrity of the supply chain.
What this all means moving forward
According to CoinTelegraph, the food industry “could save up to $31 billion in global fraud savings by tracking food on its way from farms to consumers via the blockchain.” These savings are on account of less time and resources spent on retroactive issues, allowing supply chain managers to focus on new and innovative ways to streamline operations.
Ultimately, it is clear that blockchain can play a huge role in lessening the prevalence of food fraud. It is time that the industry turned to new and emerging technology to leverage the benefits and make a change for the global good.
To learn more about ShipChain’s Track and Trace solution and how it can help to put an end to food fraud, get in touch with us!