Why scallop supplier Raw Seafoods got addicted to blockchain

This article is adapted from the GreenBiz newsletter, VERGE Weekly, broadcast on Wednesdays. Subscribe here.

Raw Seafoods, a family-owned business, is not a particularly large business, but it does have fairly large customers for fresh and frozen scallops, tuna, salmon and other processed fish at its 80,000 square foot facility in Fall River, Massachusetts: Regional locations for Wegman’s grocers at Whole Foods Market. It has also made serious investments in sustainable harvesting practices that have been certified by the Marine Stewardship Council and the Global Sustainable Seafood Alliance, among others.

So I was intrigued last week when Raw Seafoods and one of its distributors trumpeted a new collaboration with tech giant IBM’s ubiquitous blockchain team. The initiative, starting November 1, will allow diners across the country to theoretically trace the origin of scallops on their plates to the bottom of the North Atlantic Ocean.

The project was born over a year ago, after the Raw Seafoods management team heard about Walmart’s efforts to use a digitized IBM ledger to help monitor the provenance and quality of vegetables – leaves, mainly for food safety reasons.

Since about 80 percent of seafood sold in the United States is imported, sourcing is also subject to many of the same concerns Walmart hopes to address with its investment, Daniel McQuade, vice president, told me. marketing for Raw Seafoods. . Specifically, it is difficult to prove exactly where an item came from or the conditions under which it was stored and shipped. “We are recognized for our quality, standards and certifications,” he said. But often when there is a fraud or security issue, the entire seafood industry has a black eye. “Every time we have a fraud problem, it hurts us all,” McQuade said.

It is difficult to prove exactly where an item came from or the conditions under which it was stored and shipped.

The “a-ha” moment for Raw Seafoods’ effort came when McQuade connected with a longtime scallop owner and one of his most trusted and frequent suppliers in the profitable seaport of New Bedford, which was already digitizing the operations of its six-vessel fleet. The motivation was financial: By providing better data to potential returning buyers sooner, well-respected fleet owner Danny Eilertsen hoped to get a better price at auction.

Raw Seafoods took a leap of faith: he convinced Eilertsen to invest in tagging his fleet’s catch using blockchain technology in exchange for paying a premium for scallops harvested and tagged by his crew with information. such as exact GPS location, size, rank, weight, boat name, captain and so on. (Because Eilertsen pays his crew a percentage of transportation, this extra profit is shared.)

Why is this important? The nature of blockchain projects, of course, is that they work best when they are spread across an ecosystem of suppliers and distributors and buyers and sellers – you need every member involved so that the information being shared becomes really valuable.

All data provided by Eilertsen’s fleet, including images and videos, is uploaded to the IBM Food Trust service in the cloud. This 50-pound bag continues to collect data along the way. “He shares the data, he shares what he wants us to see,” McQuade said. “We pack, inspect and add our own information.”

It took an investment of at least $ 50,000 in software, hardware – including scales where scallops are cleaned, bagged and tagged – and satellite communications equipment to do it on the boat alone, a estimated McQuade.

This data will help us forge a more direct and fruitful partnership with the captains and crew who harvest the seafood we serve.

The distributor who initially brings these super transparent scallops to the West Coast is Santa Monica Seafoods, which, starting next week, will deliver the scallops to at least two local restaurants. “This data will help us forge a more direct and fruitful partnership with the captains and crew who harvest the seafood we serve,” said Tom Hope, Director of Food and Beverage at TAPS Fish House & Brewery, the one of the first restaurants to receive labeled scallops. “Not only will the data help us be more strategic as a business, but we believe customers will love it. “

For its part, the information shared via the blockchain will help Raw Seafoods prioritize boat captains that use sustainable fishing practices and prove that its product does indeed come from American waters as the company claims to be marketed. The US scallop industry is tightly controlled at 50 million pounds of harvest per year, and each fleet is limited in how much it can catch (ranging from 17,000 to 18,000 pounds per boat depending on location and season). ).

Raw Seafoods is working on a consumer application that will eventually allow consumers to view menu or point-of-sale data. “We want to share this,” McQuade said. “It’s not just about us – it’s about letting people trust what the industry is saying.”


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Tanya S. Norvell