How this startup is using blockchain technology to prevent food fraud

Over a period of time, food fraud has increased at an alarming rate in India. According to Authentication Solution Providers' Association's 'Counterfeiting in India 2020' report, food fraud incidents in the food and beverage sector have risen by 24 per cent during 2018 and 2019. New generation digital traceability systems are the answer to counterfeiting. Bengaluru-based blockchain powered traceability solution startup, TraceX Technologies is making efforts to solve the problem of food fraud by assuring an authentic product through real-time data intelligence. In an interview with Bizz Buzz, CEO & co-founder, Srivatsa Sreenivasarao (SS), and co-founder of TraceX Technologies Anil Nadig (AN) stress upon the need for consumer's to verify the authenticity of a food product before making a purchase

Any technical upgrades that can be expected on the platform?

AN: We are working towards further enhancing our product by leveraging Asset Tokenization (NFTs), artificial intelligence, machine learning, Internet of Things to provide digital empowerment to all the participants in the supply chain. Our aim is to harness the power of Web3 technologies to build a large distributed autonomous supply chain network for food and agriculture businesses. Over the next few months, we plan to extend our offerings to encompass carbon offsets and climate action goals of companies.

In Telangana, TraceX was roped in for a pilot of seed value chain traceability. Has the collaboration been furthered?

AN: TraceX piloted the seed value chain traceability in Telangana to counter the spurious seed market and ensure farmers and associated organisations with quality seeds. Traceability and quality certification helps to bring greater transparency in this vulnerable market. Going ahead, TraceX is also helping TS government to ensure forward traceability in the seed supply chains. The ability to trace the raw materials to its source and track the forward movement to the shelf brings in transparency in the seed ecosystem, delivering an authentic product.

Any personal experience as a consumer wherein TraceX if implemented could have brought in difference for the consumers...

AN: Chocolates are a favourite treat for all. But today, the chocolate industry has been vulnerable to several food security risks. Salmonella has been the main contaminant in chocolates leading to recalls in this industry amounting to huge losses. Such incidents can be prevented with adherence to food safety standards, timely and effective product recalls and enhanced transparency in these systems. TraceX traceability solution leverages the power of blockchain to counter these challenges and ensure a secure and safe product to the end consumer. The real-time tracking system aids in targeted recalls, prevents fraud and helps to track quality practices all along the supply chain.

What is the scope of growth for TraceX in the food traceability market of India?

SS: A report published by Markets and Markets indicates that the global food traceability market is projected to grow at a CAGR of 9.1 per cent with its estimated value reaching $26.1 billion by 2025. Traceability is more relevant today than ever before. More consumers are keen to know about the origins of the food they buy, the processes it undergoes and the journey it takes before it reaches them. Due to the opacity in supply chains, consumers today have no way to trace and track the products they buy. Traceability in the supply-chain bridges the information and trust gap among consumers, agri-businesses, and farmers.

Can startups such as TraceX support the F&B industry and government in reducing food fraud?

SS: Today's global food systems are complex, and food fraud is a global business exceeding $50 billion dollars annually. The fragmented supply chain creates blind spots across the value chain with weak links at various stages right from production to consumption making the system vulnerable to food fraud incidents. The lack of transparency and the need for regulations are creating a pressure on the food ecosystem. TraceX's blockchain platform enables end-to-end transparency by digitizing the transaction records and storing them in decentralized, immutable ledgers that eliminate the opportunity for food fraud in food supply chains. It is estimated that blockchain can annually save $31 billion in food fraud and reduce regulatory costs by 30 per cent.

How much of organic are the organic products available in the market?

SS: Today we have foods right from vegetables, fruits, spices and cereals with their organic friends sitting with them in the supermarket shelves all at a premium price. It is hard for an average consumer to sift the authentic organic product from something that may be just trending as organic. How will you prove the product is 100 per cent organic and safe? Labelling is the prime proof to endorse an organic product. Unfortunately, labels may not carry the true stories. Food fraud in terms of mislabelling and adulteration is widely prevalent, making the organic tag vulnerable. Provenance of food in organic food supply chains becomes important to authenticate its purity, quality and safety. The real-time tracking of products brings transparency ensuring the end consumer of an authentic premium organic product.

How important is tracing of ingredients in the herbal and Ayurveda wellness industry?

AN: While herbal products may be chemical free, pesticides may have been used in them. Also, Ayurveda products are not completely natural and may have some toxic level of metals. Adherence to quality standards and knowing the product provenance is crucial to ensure product safety and authenticity. There is a need for following stringent standards to meet the regulatory export demands too. Blockchain traceability systems are game changers in the journey of these products from plants to the bottles. Brands that incorporate traceability in their supply chains will win the consumer's trust. According to a Nielsen report, 98 per cent consumers believe that ingredients are an important consideration in the products they purchase.

How can blockchain bring difference in the livestock, poultry and seafood sector benefitting its consumers and related companies?

SS: The farm to fork story of livestock, poultry and seafood products are vulnerable to different challenges in the supply chain. Contamination can occur at any point right from production, processing, transport, storage and distribution in these supply chains. Also illegal, unregulated and unreported fishing is putting the marine system and mankind in peril. In order to bring transparency in these food systems, traceability is the right solution. Going ahead, TraceX intends to address the climatic concerns in these sectors with the adoption of sustainable practices and carbon management on the blockchain platform. With organisations sensing the urgency to reach the net-zero goals, TraceX plans to help these companies accelerate their decarbonization journey with robust and resilient traceability solutions.

Can food fraud be brought under control?

AN: The global population is growing, and a static food chain cannot exist. Today's food supply chains are complex, fragmented and opaque. The suppliers, producers, sellers, policy makers and consumers are all players in this ecosystem who need to collaborate on a shared platform to realise a trustworthy system. There is a need for visibility, transparency and accountability among the stakeholders to ensure a fool-proof food ecosystem. Though the first mile of food production is the most vulnerable, the integrity of the entire supply chain is involved, and it needs to be addressed as a whole. Everyone involved in the supply chain is responsible to ensure that the product is not tampered with, and the product integrity is maintained.