Dispatches from GFSI 2017 in Houston

Blockchain can transform traceability - Bureau Veritas

By Joseph James Whitworth

- Last updated on GMT

Related tags Supply chain

Bureau Veritas on ‘disruptive’ Blockchain technology
Blockchain technology has the potential to change the traditional audit and certification industry, according to Bureau Veritas.

Blockchain technology offers secure, time-stamped and openly distributed information.

Vincent Bourdil, VP of food at Bureau Veritas, explained more about the technology at the Global Food Safety Conference.  

“Blockchain is a short name for a distributed chain of blocks that traces transactions and assets. It is information which is encrypted, time stamped and not removable which is openly shared on a ledger by many thousands of computers at the same time,” ​he told FoodQualityNews at the event in Houston, Texas.

“You can put any document [in the Blockchain]. It is not only tracing the product by having a barcode reader. You can put an inspection document, a purchase order, you can put anything that gives proof of something and it will be recorded, encrypted and there forever so that anyone can have a look at it, but only the information you want them to see.

“We think that the Blockchain is a technology that is disrupting our traditional business and we need to leverage it to bring traceability to a new era. We cannot just continue inspecting just a few percentage of what is coming up and down.

“We need to automatize that and move from an auditing and inspection side to a technology enabler and the Blockchain is the right technology for this because it is cheap, it is already there and does not require a lot of investment.”

Catching information as well as fish

Bourdil said it was ready to give as many pilots as needed to spread the word.

“When you have a new technology like this which is potentially very disruptive to our industry, our competition and colleagues are not always willing as they think it will be a reduction in the number of audits, which is true. But if that is the reality that will happen to us we better embrace it now,” ​he said.

“We are an auditing company and what I am saying to clients here is we will reduce the number of audits that we are going to do. That’s fine because in the end we will reduce some of it and we will replace that by technology to give a better understanding of the value chain and of the product journey, so in the end the products can be more valued for the consumer.”

Using expertise in the tuna industry, Bureau Veritas has used the technology for supply chain monitoring and end-to-end traceability.

“It works for every supply chain, we took the example of tuna because we know this very well, we have a lot of data there, we have customers and they are ready to work with us on that path as they see the value of this story, to increase the value of the product for the consumer,” ​said Bourdil. 

“It is also because it is a product that cannot be farmed and we need to value more this product because the stocks and the resources are limited. It is important to value the product and to give the complete story to the consumer will perhaps help make that product more protected.”

Slipping through the traceability net

Bourdil said there are “big holes” in the chain at the early stage of the fishing vessel and the cargo.

“The cargo gets a lot of batches of tuna from the fishing vessel, it has been unloading in the middle of the sea where nobody knows what’s happening. There we are pretty sure there are some other fishermen using other fish instead,” ​he said.

“We are the only ones today sending inspectors on the fishing vessels for fishing trips. It is complicated to find auditors to do that as you stay three weeks in the middle of the Pacific Ocean and you are not always welcome.

“That is why we believe you cannot just do as we do today sampling, lets say we have 200 fishing trips for a large tuna player we do only 10 or 15 because this is what the industry can afford.

“So if there was a way to autotomize it so that in the end we can cover 90% and still do the 10% by inspection, that is fine.”

Bourdil said Blockchain is for people who have a product which is expensive and of value to be traced.

“Tuna is a good example because it is quite expensive compared to other fish species. There are many industries looking at it, the wine industry is a good example, anything that is also linked to country of origin certification,” ​he said.

“We are talking to regulatory, state owned organisations that look after that in Europe and so they are looking at replacing the way [they do things] and we work for them because we do the audits at the production stage to make sure it is compliant with the specifications of the standard.

“They are looking at replacing a lot of the auditing work and a lot of their current technology such as traditional databases on the cloud with this Blockchain technology.”

One example is Walmart with their own suppliers in China on pork and fruit and vegetables.

Bourdil said the retailer can use this approach with their own suppliers due to size and market footprint.

“For all the other supply chains which have a more balanced bargaining power I think there is a need for a third party organizing the technology and bringing all the players to the table to explain the benefits of using this technology and investing a little bit to get a payback by bringing the value of the whole product story to the consumer,” ​he said.

“One of the problems we have with the traditional traceability systems is you will identify the piece of information you want to share from the beginning and you will stick on that because that is the one with the consensus that everyone agrees into sharing, which is basically a very tiny one in the end.

So that is the beauty with the Blockchain as you can select every document, you can send a purchase order, an invoice, a transaction or whatever it is you can say this piece of information I want to make visible and that piece I want to make not visible, encrypt it, it means that it is there but only you can see it."

Bureau Veritas boosts agri-food market presence

Meanwhile, Bureau Veritas has acquired Schutter Groep B.V. (Schutter Group), a provider of inspection, testing, certification and logistical support services to the agri-commodities markets.

Schutter Groep works in edible oils and fats, grains, animal feed and bio-fuel and services include inspection, laboratory testing, risk management, supply chain auditing and certification.

The firm has 600 employees and offices and labs in 11 countries across Europe, South America and Asia. The company generated around €35m revenues in 2016.

Hans Zwijnenburg, CEO of Schutter Groep B.V., said it will speed up and boost growth internationally.

“We look forward to continuing to provide swift, accurate, reliable services in a flexible and responsive manner for our customers, as part of the Bureau Veritas Group.”

Bureau Veritas said the Testing, Inspection and Certification (TIC) market for agri-food is set for growth, driven by population increase, globalization of the supply chain, more stringent regulations and rising consumer awareness for quality.

The firm reported 10% organic growth in the agri-food segment in 2016.

Schutter Group is the third deal in food and agricultural commodities in the past year, following the acquisition of a majority stake in Dairy Technical Services and buy of KMA in Brazil.

Didier Michaud-Daniel, CEO of Bureau Veritas, said it has an ambition to be recognized as a leading player in the agri-food market by 2020 and the acquisition was an important milestone.

“By diversifying our service portfolio through leveraging Schutter’s proven expertise, and expanding our geographic footprint, we will provide more comprehensive support for new and existing customers.”

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