Walmart Puts Pricey Blockchain Food Tracking Platform On Ice | PYMNTS.com (2024)

Blockchain solutions for supply chain management and digitized traceability are increasingly on the chopping block.

While tech crypto purists continue to tout the transformative potential of blockchain technology, the Web3 architecture that also supports the cryptocurrency ecosystem, leading enterprise 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 allowing data and digital assets to be tracked across interactions. Anything can be tracked and traced using blockchain, and it is that promise and premise which underpins the appeal of the technology’s potential for businesses looking to streamline their logistics and other processes, both internal and external.

As it is, big name early adopters like Maersk and IBM are winding down their TradeLens system during the start of 2023. The ambition of TradeLens, which began 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 point in time,” stated an announcement of the platform’s discontinuation.

Had the solution worked as intended, it would have been a gamechanger for the shipping industry, removing paperwork hassles and offering greater visibility into shipments of all kinds.

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

Cost of Doing Business

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

Blockchain is reliant upon adoption, and participants need to participate — but in its current existence, the technology requires more computing power to run than existing systems, as well as costs more than the majority of them, making the return on investment relatively non-obvious, at least over the short term.

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

Walmart’s numerous suppliers, however, weren’t so thrilled. As reported by The Wall Street Journal (WSJ), many small and medium-sized suppliers, mostly farmers unused to next-generation technologies, struggled with the onboarding process. In the four years since the program’s launch, only a single additional item has been added to the produce-tracking platform.

That said, it takes just a few seconds to trace the produce included on Walmart’s blockchain platform back to their sources, compared to the dayslong process tracking items previously entailed.

External Pressure

While blockchain-focused business model changes have faced slow adoption, external pressures may speed up their integration into enterprise systems.

Within grocery specifically, the U.S. Food and Drug Administration (FDA) this November announced 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 like dairy products and melons, companies must establish traceability recordkeeping that goes beyond existing regulatory requirements. Relevant businesses and suppliers are expected to comply with the updated rules by Jan. 20, 2026.

The final rule, which aligns with current industry best practices and covers domestic as well as foreign firms producing food for U.S. consumption, will be enforced along the entire food supply chain in the farm-to-table continuum.

The 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 have all persons subject to the requirements come 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 in order to revolutionize various industries to the degree its applications have been promoted as being able to, blockchain technology will need to smooth out the key friction points and cost bottlenecks hampering its scalability.