Walmart puts expensive food tracking with blockchain on ice

Blockchain solutions for supply chain management and digitized traceability are increasingly popular.

While tech cryptopurists continue to tout the transformative potential of blockchain technology, the Web3 architecture that also underpins the cryptocurrency ecosystem, leading corporate organizations are quietly shuttering pilot projects and revising their own expectations around the technology’s supposedly revolutionary applications.

At a high level, blockchain provides organizations with an immutable, decentralized ledger that allows data and digital assets to be tracked across interactions. Everything can be tracked and traced using blockchain, and it is that promise and premise that underpins the appeal of the technology’s potential for businesses looking to streamline logistics and other processes, both internal and external.

As it is, big names such as Maersk and IBM are decommissioning their TradeLens system at the beginning of 2023. The ambition of TradeLens, which started in 2018, was to digitize global supply chains, reduce fragmentation and share tracking and accounting information. The desired “level of cooperation and support has not been possible to achieve at this time,” it said in an announcement about the discontinuation of the platform.

Had the solution worked as intended, it would have been a game changer for the shipping industry, removing paperwork issues and providing greater visibility into shipments of all types.

But a peer-to-peer, decentralized solution like blockchain only works if all the parties involved buy in — and buying into blockchain has proven to be, quite literally, expensive.

Costs of doing business

Onboarding suppliers, vendors and other third parties for blockchain-based platforms, it turns out, requires a large upfront investment from both sides. Third-party vendors often need to be trained around the new technology, and their teams generally require upgrading around integrating blockchain into existing systems, many of which are historically paper-based and non-digital.

Blockchain is dependent on adoption, and participants must participate – but in its current existence, the technology requires more computing power to run than existing systems, as well as costs more than most of them, making the return on investment relatively unclear, at least in the short term term.

For example, Walmart announced – also in 2018 – the Walmart Food Traceability Initiative, a food tracking partnership and logistics platform powered by IBM’s blockchain technology along with 10 other category leaders, including Nestlé, Dole Food, Driscoll’s, Golden State Foods, Kroger, McCormick, McLane, Tyson Foods and Unilever .

However, Walmart’s many suppliers weren’t so thrilled. As reported by The Wall Street Journal (WSJ), many small and medium-sized suppliers, mostly farmers unfamiliar with next-generation technologies, struggled with the adoption process. In the four years since the program’s launch, only one additional element has been added to the production tracking platform.

That said, it only takes a few seconds to trace the products included on Walmart’s blockchain platform back to their sources, compared to the days-long process tracking elements involved in the past.

External pressure

While blockchain-focused business model changes have been subject to slow adoption, external pressures can speed up integration into enterprise systems.

Specifically in grocery, the US Food and Drug Administration (FDA) announced in November its “requirements for additional traceability records for certain foods (Food Traceability Final Rule).”

The enhanced requirements mean that for more than a dozen food groups such as dairy products and melons, companies must establish traceability records that go beyond existing regulatory requirements. Relevant businesses and suppliers are expected to comply with the updated rules by 20 January 2026.

The final rule, which is consistent with current industry practice and covers domestic as well as foreign firms that produce food for US consumption, will be enforced along the entire food supply chain in the farm-to-table continuum.

FDA requires participating entities to share information with each other as part of a peer-to-peer network. A public release states, “the most effective and efficient way to implement the rule is to bring all subject persons into compliance by the same date.”

It represents an almost too perfect use case, or a critical litmus test of transformative feasibility, for blockchain-based supply chain solutions.

But to revolutionize various industries to the extent that its applications have been promoted to be able to, blockchain technology will need to iron out the key friction points and cost bottlenecks that hinder its scalability.

How consumers pay online with stored credentials
Convenience prompts some consumers to store their payment information with merchants, while security concerns give other customers pause. For “How We Pay Digitally: Stored Credentials Edition,” a collaboration with Amazon Web Services, PYMNTS surveyed 2,102 U.S. consumers to analyze the consumer dilemma and reveal how merchants can win over holdouts.