HF: Describe the evolution of TE-FOOD to this point, and its vision for the future.
Marton Ven: TE-FOOD was launched in 2016 as a centralized, database-driven traceability solution. Our first implementation was in Vietnam; due to local distrust in the supply chain, in 2018 we migrated to a decentralized blockchain system.
HF: Can you describe this distrust?
MV: Between consumers, companies in the supply chain and authorities, the industry is so full of disagreement, lawsuits and corruption; even data from a third party—like an existing traceability system—is viewed with suspicion. This started us thinking about how to restore trust in food-related data. We initially thought about an external certification agency to verify that no data is altered in our databases. But this wouldn’t actually solve that trust problem. We needed technology that ensures that data cannot be corrupted or modified in any way. This led us to blockchain.
Certainly, blockchain is not a magic pill, in that it can’t prevent companies or individuals from entering false data into a system, but it at least ensures that they are held accountable for the data they do communicate. Our blockchain, the TrustChain, is one of the top 15 blockchains, in terms of daily activity.
HF: What are some of the challenges in the AI/traceability space, both in terms of evolution to this point, and forthcoming innovations and growth in the market?
MV: One big challenge is that supply chains, which often consist of many companies, are technologically very heterogeneous. Some use modern backend systems, some simply use Excel, while others don’t use an electronic ledger at all.
Another is that globalization and the pursuit of cheaper food have made supply chains “long,” with more participants (collectors, agents and traders, for example) who don’t provide added value to the goods, but have relationships with various primary producers. These intermediaries are no longer safe if a supply chain is transparent from the farm to the retailer. The fact of major participants in the supply chain that have no interest in transparency is a difficult problem to solve.
HF: You’ve said that resistance within “longer” supply chains can result in increased food-related fraud, especially when goods are in intermediaries’ custody. How is TE-FOOD managing?
MV: In longer supply chains, these participants—collectors, agents, or traders – that exist simply because they have information their customers do not. Unsurprisingly, those possessing this information are far less in favor of traceability. In many emerging countries, collectors and agents are commonplace, and often behind instances of food counterfeiting. Now, not all intermediaries are fraudulent, of course – many provide transportation, financing, or even pre-financing for primary producers – but, either way, this setup is naturally bad for transparency.
Consumers and regulators still have a huge role to play in the future of traceability. If they don’t demand [it], participants in the supply chain won’t consider it an important area for investment, and regulations will continue to move in a “one step forward, one step back” pattern.
HF: Have you found a greater appetite for traceability in more technologically advanced regions, where it is simply an incremental step forward? Or are less-advanced regions more enthusiastic about “leapfrogging” intermediate technologies to the cutting edge?
MV: As I see it, the best region for traceability implementations is Southeast Asia. There are a lot of companies in the region that don’t use any back-end system. This can be positive: It removes the need for integration, as collaboration with multiple IT teams can slow down a project. Mobile penetration is very high, which makes mobile apps an ideal tool for gathering data in the field or on processing lines. Such technological leapfrogging makes it possible, for example, for Vietnamese consumers to buy a box of chicken legs that includes the feeding and vaccination data for each chicken from which the product originates. This level of transparency doesn’t exist in more developed countries.
HF: You spoke about how TE-FOOD has expanded into industries beyond food—including GE Aviation (for airplane engine parts) and Eurofins (for COVID-19 tests). What are the greatest challenges of working in other industries?
MV: Fighting off counterfeiting is hugely important in non-food industries, but it will only work if the end user can scan QR codes on products to verify genuineness. We need to motivate stakeholders to embrace traceability.
Another challenge is to set the right granularity of information. The deeper the granularity, the more work traceability requires. This, unfortunately, can create friction in industries with low margins and existing processes.
HF: Beyond financial success, what are some other metrics by which TE-FOOD measures progress and success?
MV: Foodborne diseases result in the deaths of 400,000 people each year, mostly in children under five years of age. Though we can’t currently measure our impact on this, if TE-FOOD can play a role in decreasing this number by improving the quality of food that’s distributed, then all of the work that we’ve done will have been worthwhile.