Romaine Chain

Head of romaine lettuce

Last week, the CDC warned Americans not to eat romaine lettuce due to an outbreak of E. coli infections.

The industry is going to adopt improved labeling to narrow down future outbreaks more quickly. This exchange appeared in my Twitter feed today:

Nitlin’s question is a good one: what about blockchain?

Earlier this month, Newsweek’s cover story focused on the state of blockchain technology, including IBM Food Trust, which is focused on traceability of our food supply.

I thought it would be interesting to try to understand the level of adoption of IBM Food Trust. IBM announced general availability less than two months ago, and integration of new technology into established business processes is always challenging, so we should certainly expect it to be very early days. But can we quantify it?

The Newsweek story stated that “4 million individual products have been logged on the blockchain-based IBM Food Trust.” The term “individual product” wasn’t defined in the story, but when a company representative provides statistics related to their offerings, you can be assured they’ll use metrics that result in the most impressive sounding quantities possible. Accordingly, I took “individual product” to mean, “the equivalent of a line item on your grocery store receipt.”

The average supermarket carries roughly 30,000 unique SKUs. And of course, there will be multiple units of each SKU kept in stock. For the purposes of this discussion, let’s assume an average of 5 units in stock for each SKU. That brings us to approximately 150,000 items on the shelf (i.e., 150,000 “individual products) in your average supermarket.

So the number of individual products tracked through IBM Food Trust to date might fill about 27 grocery stores (4,000,000 products ÷ 150,000 products stocked per supermarket = 26.667 supermarkets) at a given moment in time. This is less than one-tenth of one percent of the 38,571 supermarkets in the United States as of 2017 (Source: FMI).

Furthermore, this figure is just a snapshot – it doesn’t account for the expected inventory turnover of supermarkets over the timeframe that Food Trust has been operational. Nor does it account for the romaine lettuce purchased through wholesale channels by restaurants and the foodservice industry.

So while blockchain may have huge potential for the food supply chain, it is understandable why improved labeling might be instituted as a stopgap measure for improving food safety.