Olive Oil Producer Implements IBM Blockchain to Avoid Food Fraud

  • Jan 14, 2020
  • Investing

Blockchain keeps growing continuously with more institutions and entities investing in the nascent technology. CHO, a large olive oil producer operation in the southern Mediterranean region announced on January 14 that it has invested in blockchain. The manufacturer is using IBM’s blockchain to offer traceability for all its Terra Delyssa extra virgin olive oil products.

The company is the latest major food producer to join the IBM Food Trust Network. CHO can now track Terra Delyssa as the products move across eight quality assurance checkpoints using blockchain. Users can also track the orchard where these olives were grown, all the mills where the olives were crushed, and also the facilities where the oil was entirely filtered, bottled, and distributed.

Ramesh Gopinath, the vice president of IBM Blockchain Supply Chain Solutions, said that using blockchain technology is quite helpful for CHO. Blockchain creates a validatable record of the places where every CHO olive oil bottle was produced. It also keeps track of all the manufacturing methods that were used.

“The best part of the IBM Food Trust network is its ability to connect members of the supply chain, like the end consumer with the farmer. CHO has done just this, as every entity involved can share data, which not only provides traceability and food information but also shows where food trust is heading in general.”

Wajih Rekik, CHO America’s CEO, said that the company’s olive oil is manufactured by Tunisian farmers. That information is included on each of the bottle’s label. Even though CHO has managed to enhance transparency by telling its customers where the olive oil comes from, it also wanted to add a layer of trust to its products.

IBM’s blockchain is powered by Hyperledger Fabric. It lets Terra Delyssa retailers scan a QR-code that is found on every bottle label to discover the product’s provenance record. Rekik said that Terra Delyssa’s entirely traceable extra virgin olive oil is being bottled currently. The product is expected to reach store shelves at major retailers in Canada, the United States, Japan, France, Denmark, and Germany by March 2020.

Rekik believes that olive oil mislabeling especially for the higher grade designations like ‘extra virgin’ is quite common. Various tests done by the National Consumers League in 2015 and 2019 reveal that 50% of all olive oils on store shelves have misleading labels. The issue goes beyond the issues related to flavor profiles. Sally Greenberg, the CEO of the National Consumers League, said:

“You cannot be sure unless you are a very well informed consumer that a bottle labeled ‘extra virgin olive oil’ is that very high quality. […] The value of having extra virgin olive oil is that it is good for you. It has some very particular healthful properties that are positive for consumers and their families. So you lose out on those. You lose out on the good flavor that you get from really wonderful extra virgin olive oil. And you pay top dollar for substandard olive oil.”

A recent study by IBM Institute for Business Value revealed that 73% of consumers pay premium for full transparency into the types of products that they buy. Gopinath also said that as food crime continuously increases, the IBM Food Trust Network becomes larger.

“The number of Food Trust clients is growing. By the end of this year, we will be much bigger than we are currently. We are linking together the entire food ecosystem to provide transparency and greater consumer trust.”