Seafood is a major source of nourishment, providing sustenance to billions of people worldwide. The seafood industry is one of the world’s largest and oldest market sectors. It ranges from traditional fishing in open-water areas to inland aquaculture farming and recreational angling.
The industry is estimated to employ around 200 million people globally by generating some $80 billion annually. At the same time, it’s plagued by malpractices and poor management of fisheries.
The three main forms of malpractice include:
- Overfishing: Out of these three malpractices, “overfishing” takes the biggest toll on marine life. It not only affects the seafood that we eat but also creates imbalances in the marine ecosystem. About 90% of the world’s fish species are currently considered to be fully fished or overexploited. The World Wildlife Federation has issued the grim warning that, if overfishing doesn’t stop, they will run out of seafood by 2048.
- Illegal, Unreported and Unregulated (IUU) fishing: IUU fishing depletes fish stocks, affects the balance of the marine ecosystem, and endangers the long-term survival of fisheries and local fishing communities. Fishing is illegal when done without authorization, against conservation measures or national laws. When unreported or misreported, it contravenes national laws. It’s unregulated if the fishing vessel has no nationality and the fishing activities destroy marine life. All told, losses due to IUU are estimated at around $36.4 billion annually worldwide.
- Bycatch: Bycatch is the catching of unwanted species while fishing for a particular species of fish. Other marine species accidentally hook onto the bait or tangle in the fishing nets. Bycatch puts the population of other marine life at immense risk. It causes 300,000 whales, dolphins, and seals to die every year.
The industry is made up of complex global supply chains, and it is subjected to suffer from social and environmental challenges. Traceability and transparency along these supply chains are the major concerns that can be fulfilled by the potential value of blockchain technology.
We should know that seafood is one of the largest industries on the planet, where:
- 12% of global livelihoods: 1 out of every 10 people on the planet derives their income from seafood and aquaculture.
- 90% growth in consumption: People are eating more seafood than ever. In the past 50 years, global per capita consumption has nearly doubled.
- $150 billion in annual export value: Export value doesn’t include retail, or domestic production so full estimates of the industry size are upwards of $500 billion USD.
- 89% of fish stocks are at capacity: At present, 89% of global wild fish stocks are overfished or being fully exploited.
- 50%+ of seafood is thrown away: As much as 60% of the seafood we take from the ocean is discarded, lost, or wasted in supply chains.
- 700KG of seafood is stolen every second: Illegal, unreported and unregulated (IUU) fishing accounts for more than 700KG stolen each and every second.
People want to know the story behind their seafood:
- 90% of seafood consumed in the US is imported: Of this seafood, less than 1% is actually inspected by the government specifically for fraud.
- 20% of consumer seafood is mislabeled: Depending on the species and supply chain mislabeling can be as high as 86%.
In this article, we will discuss how blockchain transforms seafood industry!
Blockchain in Seafood Industry
As the seafood industry is one of the fastest-growing sectors in the global food market, current record-keeping across today’s seafood supply chains is time-consuming manual record-keeping, making the ecosystem prone to errors.
Nowadays, consumers are becoming more conscious of where their food comes from and how it has been looked after on its way to their table. Regulators are becoming more demanding, too, by requiring accurate, instant information regarding food products and their history.
So, blockchain technology is transforming the seafood industry for good, focusing on traceability and transparency, the topmost governing factors for the rise of seafood, as blockchain offers a shared, distributed database that is accessible by everyone in the supply chain and is tamper-proof, and also it helps in bridging the gap between various partners.
Now, let’s see how blockchain technology eradicates imbalances in the marine ecosystem.
The complete process goes in this way:
- With blockchain technology, one has to register their catch on the blockchain network by entering the necessary details like type of species, time, location, and even the weight of the fish and also the gear one is using.
- After the data is entered, it follows the fish throughout the supply chain. With the integration of the concept of IoT, blockchain can connect data from each trawler to respect their processors. It enables real-time monitoring of the seafood as it moves along with the supply chain.
- When fishermen catch the fish, they can attach a radio frequency identification (RFID) tag with a unique ID number.
- When fish moves towards the processor, the tag gives out real-time information regarding its location, condition, and number of people during its journey. In this way, blockchain can track every movement of seafood.
- And then finally, when it reaches the store, the entire journey can be traced by scanning a code on the package.
We can say that blockchain provides opportunities in the seafood industry that lead to an improvement in operating efficiency across the supply chain. It also equips the end consumers with trustworthy product information with increased data sharing and interoperability among each other.
Many companies have begun implementing blockchain in their supply chains. Industrial giants such as Walmart, Albertsons, Unilever, Nestlé, and Starbucks are deploying early versions of the technology to improve food traceability and safety.
According to research firm Gartner, 20% of the top global grocers will use blockchain by 2025.
According to the Fishcoin project, 89% of fish stocks are at capacity and, 89% of global wild fish stocks are overfished or being fully exploited, while 50%+ of seafood is thrown away. However, blockchain can increase efficiency and transparency in global seafood chains.
Blockchain differs from traditional traceability systems in the following ways:
- It’s decentralized: With no single party in control of the information, there’s a set of rules that all participating organizations must follow.
- It’s distributed: Because multiple nodes carry a complete copy of the data, blockchain is inherently resilient to failure.
- It’s immutable: In traditional seafood traceability systems, data can be altered easily. That’s not the case with a blockchain, which prevents data tampering.
According to the report by DNV GL and Deloitte, Blockchain in the Seafood Industry – Increasing transparency and efficiency in global seafood supply chains, the data from all levels of the industry’s supply chain can be openly available.
The report highlights issues where blockchain provides an opportunity:
- Demand and need for increased transparency to improve operating efficiency across the supply chain, equip the end consumers with trustworthy product information, and to manage fish stocks and biological ecosystems in a more sustainable way.
- Blockchain could provide a remedy, provided that the industry players are willing to engage in data sharing and interoperability amongst each other, from feed production and broodstock, or fishing vessel operators, and all the way down to the retailers.
- Incentivizing that stakeholders gather and share their data will be a crucial step towards more transparency while all ecosystem players, sector players and adjacent service providers alike, can contribute with incentive schemes for data sharing and, at the same time, benefit in a transaction heavy, global and disaggregated trading sector from gaining more data-based insights into stakeholder operations.
Challenges within the industries that provide obstacles, but at the same time opportunities for those able to engage and make the transformation:
- Trust within supply chain partners is a major hurdle to overcome and must be ‘exercised’ in a real-life project to harvest overall benefits.
- The data already being collected are ‘trapped’ in silos today and to connect with other partners’ (in the supply chain) information needs the significant effort of sharing in daily operations.
- Identify the priority topics, which generate a surplus situation for all. The report’s insights point towards the following topics to concretize such benefits:
- Traceability: Finding the means and defining the necessary information to present to end consumers in their hunt for a truly high-quality product
- Fish welfare and biology: use of analytics for better insights into biologics to boost productivity and quality
- Innovative finance and insurance products based on better data to make qualified decisions which render benefits for stakeholders
- Efficiency gains in the supply chain, e.g. through automated documentation and smart contracts.
The United Nations World Commission on Environment and Safety stated:
“Sustainability is meeting the needs of the present generation without compromising the ability of the future generations in meeting their own needs.”
Due to ever-increasing consumer awareness and the need for validation of sustainable practices, seafood traceability has become of paramount importance.
Seafood traceability verifies the authenticity of the food item from point of origin and validates the sustainability efforts of the producer. Yet industry malpractices such as mislabeling and illegal fishing continue to take place on a large scale. Seafood suppliers often fail to provide adequate information concerning the origin of the seafood.
Certification Bodies approving Seafood Traceability
Here are a few certification bodies that approve seafood traceability within the supply chain:
- The Marine Stewardship Council is an independent, non-profit organization whose primary aim is to place the seafood market on a sustainable basis by reversing the decline in fish stocks, improving the marine ecosystem, and securing fishermen’s livelihood. The council has developed two standards, one for fisheries assessment (MSC fisheries) and the other for processors and exporters (MSC Chain of Custody). The MSC recognizes and rewards sustainable fishing practices, influencing the choices people make when buying seafood, and works with partners to make the market sustainable.
- The Food Alliance commenced its sustainability standard for farmed shellfish in 2010. The Oregon-based body sets guidelines for food farms, processors, and distributors based on its certification standard.
- The Aquaculture Stewardship Council was established in 2010 by the World Wildlife Fund and Dutch Sustainable Trade Initiative. It’s a robust standard for fish aquaculture farms globally. The council operates with a chain of custody certification, to ensure that all stakeholders comply with traceability requirements. ASC uses MSC’s Chain of Custody as the basis for its standards.
- The Global Aquaculture Alliance has been working with stakeholders in the seafood industry to promote sustainable aquaculture practices. It maintains a Best Aquaculture Practices certification standard, providing guidelines for the entire production chain, including processing plants, farms, hatcheries, and feed mills. The standard requires verifiable systems for traceability that fully account for all inputs, production, and outputs at each step in the production chain.
Traditional traceability systems employed by the majority of the seafood supply chain industry are centralized. This means that data is owned by one partner, and data integrity is dependent on implicit trust in the data owner. A centralized database lacks transparency among the partners in the supply chain and is vulnerable to data tampering. Better technology is needed to improve the manner in which data is shared and stored within the seafood supply chain.
To merge the digital and physical world, Sawtooth records the journey of seafood from ocean to table. Like the fish in this case study, IoT sensors can be attached to any object entrusted to someone else for transport, with trackable ownership, possession, and telemetry parameters such as location, temperature, humidity, motion, shock, and tilt. The final buyer can access a complete record of information and trust that the information is accurate and complete.
Issues with the traditional seafood industry supply chain:
- Error–prone, laborious manual record-keeping
- Improper food storage conditions
- Illegal, unreported, & unregulated fishing practices (as mentioned above)
- Seafood fraud (mislabeling)
Impacts on the economy, consumer, and world’s natural resources:
- Compromised food security and product quality
- Threatens the seafood industry’s economic security
- Does not promote sustainability of resources
- Lack of vendor and consumer trust
How it Works
- Seafood is caught by fishermen and physically tagged with IoT enabled sensors
- Sensors continuously transmit data about time and location to the blockchain
- Sawtooth facilitates and tracks possession changes through the distribution channels
- The buyer can access a comprehensive record of the fish’s provenance
Advantages of Blockchain–Operated Seafood Supply Chain
- Transparency results in trust throughout the supply chain
- Levels the playing field for suppliers and rewards good practices
- Automation saves time and operating costs
- Vendors and consumers know what they’re getting and get what they’re paying for
Fishcoin is a stablecoin token that incentivizes data sharing. The flow of tokens moves from buyers to sellers in supply chains, thus rewarding those who make the extra effort to capture and communicate data. This shifts the economic burden to downstream actors such as hotels, restaurants, and retailers who benefit most from traceability.
To address the fragmentation of most seafood supply chains Fishcoin has been designed as a peer-to-peer network that allows independent industry stakeholders to harness the power of blockchain using a shared protocol so that data can be trusted, transparent, and secure.
Unlike many blockchain initiatives, Fishcoin is not based on a central company or entity. Instead, it is designed to be a decentralized ecosystem that incentivizes data capture so that an ecosystem of companies and 3rd party developers can benefit by adding value to the network.
Norway-based technology company SeafoodChain has launched its Enterprise Blockchain platform. This Enterprise application has been built on the public permissionless blockchain-powered by UNISOT to provide global traceability, proof-of-quality, and product provenance across its seafood products.
With SeafoodChain, supply chain stakeholders can ensure products are compliant with legal regulations regarding the capturing and sharing of traceable information in the seafood industry. Real-time tracking of a product in a supply chain using blockchain technology also reduces the overall cost of moving items in a supply chain.
Seafood supply chains can be anything from a fisherman catching fish in the sea or the DNA history of the fish eggs in a fish hatchery, throughout the breeding cycle, feeding, environmental conditions, harvesting, processing, distributing, retailing, preparing, and recycling.
The system enables data capturing and monitoring from all parts of this supply chain, from a fisherman’s smartphone app or the extraction of data from fish egg production plant to automatic IoT sensors, ERP-plugins, big data analytics, and machine learning.
SeafoodChain provides solutions for the Seafood and Aquaculture industries to record and display insights into the complete supply chain. This provides transparency and enables supply chain partners and customers to make choices based on product authenticity, quality, and sustainability. The technology also makes it easy to comply with legal regulations and reporting.
It tracks products from the first raw product producers to the logistics, production distribution, and the end consumer. Each partner in the supply chain can provide and share detailed information, leading to sustainable and eco-friendly choices. This results in minimizing waste and improves the use of valuable natural resources.
Consumers scan a QR code on a product to get information regarding its content, proof of journey, proof of origin, or get suggestions on suitable recipes. Manufacturers can use this information to optimize manufacturing processes, increase quality, and strengthen the customer’s connection to the product.
Blockchain, in the seafood industry, can lead to greater openness, eliminating uncertainty and curbing sustainability and food safety concerns.
On a consumer level, it enables consumers to have better sustainable seafood products by accessing a wide range of relevant information like the location of catch, sustainability indicators, and others, thus offering a powerful tool to make a well-informed choice and select organizations that embrace sustainability challenges.
Cover Image: GoodFon