Midcounties Co-op using Blockchain to increase supply chain transparency

We speak to the society’s new chief executive Phil Ponsonby about his work with local suppliers on the new tech

The Midcounties Co-operative is taking supply chain transparency to a new level by using Blockchain technology.

The retailer has launched a partnership with food technology business Happerley that will enable customers to track the provenance of food and drink products from its Best of our Counties range. Using the technology provided by Happerley, customers shopping at Midcounties’ stores can learn more about the ingredients in the food and drink products.

In an interview with Co-op News, the society’s group chief executive, Phil Ponsonby, explained how its co-operative values play a key role in shaping its efforts around supply chain transparency.

“Supply chain transparency is really important – if you think about the original Rochdale Pioneers, and why they started their co-op, it was to give affordable, unaltered food to members,” he said.

“People can access affordable food in all sorts of places nowadays but there is still this real problem about how transparent food is. How much do we really know about the ingredients of the food?

“Some ingredients are not necessarily from Britain and packaging can be misleading, they are not necessarily of inferior quality but it is important that consumers really know that they are buying British.

“Also, if you think about the horse meat scandal from five years ago, it is important for consumers to know how suppliers are manufacturing products, if ingredients are grown locally or animals bred locally.

Mr Ponsonby joined Midcounties in 2015 as group general manager for food retail, having been chief operating officer at the Southern Co-operative for eight years. He came to Midcounties to expand his reponsibilities beyond food. He is now also a board member of Happerley, which was founded in 2014 by 10th generation farmer and businessman, Matthew Rymer, and neighbour, farmer, hotelier and meat processor, Clifford Freeman. It provides the Happerley certification and passport technology to help make the UK food industry more transparent and enable consumers to explore the journey of their food.

Mr Rymer said: “In days of near total transparency in every aspect of our lives, too many smokescreens hide the truth of food.

“Whether a £4.99 chicken, a bag of carrots or a steak on a plate, the consumer should be able to name the farms and know the journeys, which will help to build consumer confidence and strengthen provenance.

“I see a real opportunity for the UK farming industry and its supply chain to flourish post Brexit, despite less subsidy and cheap imports. However, farmers must lock in their provenance differentials – across food miles, welfare, sustainability, environment and creed – and for these values to be validated through to the consumer for the benefit of all, for this to happen.”

Related: Dairy co-op experiments with blockchain to improve supply transparency

The Midcounties Co-operative forms part of the Federal Retail Trading Services (FRTS), a central buying group for co-operative societies in the UK, managed by the Co-operative Group on their behalf.

“We are focusing on local suppliers because we benefit from most of our products being sourced through the Federal Retail Trading Services. But locally, where we are responsible for suppliers we want to show we have the best in class due diligence in terms of supply chain,” added Mr Ponsonby.

Once they sign up to the programme, suppliers provide all of their purchases and invoices, producing a document with information on where all the ingredients come from, which gets checked by Happerley. Each product receives a QR code that can then be scanned in the store by the consumer.

Midcounties currently works with 130 local suppliers. Fifty have already signed up to the scheme,with another 34 pending.

“The majority of suppliers are on board already,” said Mr Ponsonby. “The products are starting to appear. It will take the rest of this year and into the next year for suppliers to update their packaging. But what we are starting to display the QR codes adjacent to the products so consumers can still scan them in store.”

Some suppliers may not want to reveal the source of products, he added.

“For example, honey producers do not want to reveal the location of their hives for security reasons so we have to work with them to ensure transparency without risking the security of their hives, for example being able to say that the honey is from Oxfordshire without giving the exact location for security reasons.”

At the moment, Midcounties sources approximately 3% of its products by volume from local producers, and hopes to increase this.

“It is not just the case of piling local products into shops,” said Mr Ponsonby. “What’s important to us is the quality of the product and the provenance attached to it.”

Midcounties plans similar supply chain transparency initiatives in other business areas. Its childcare nursery will be the first major provider in the UK to make all of its food 100% transparent. Using Happerley, the society will be able to show the provenance of food served to children. The co-op runs just under 50 nurseries nationwide, each of them employing a chef who cooks the food from scratch.

“We want to make all products transparent so our parents will be able to see the menu online as well as where all the food comes from,” said Mr Ponsonby. “We want to improve transparency of food fed to children. This is part of a wider strategy to improve standards, parental awareness and nutrition for our children.”

The society has also introduced a veg-growing scheme into a number of its nurseries, and last month, showcased some of its Best of our Counties products at the BBC Countryfile Live event in Blenheim Palace, Oxfordshire. Twenty-five of its suppliers attended the event where Happerley also demonstrated the new technology.

“We had a lot of visitors. We were able to really showcase the work we’re doing with sourcing and transparency,” said Mr Ponsonby.


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