Authenticity is a word that’s used a lot in product marketing. Rather than selling a dream, brands have seen the power of selling consumers their reality. But they can’t build an authentic relationship on promotional hype.
As consumers become more curious about where and how products are made, food brands are under pressure to provide detailed information. They need to validate claims like ‘ethically sourced’ or ‘100% natural ingredients’ with more than just a line on their label. And blockchain technology is unlocking this new level of brand transparency and trust.
Blockchain has the potential to transform visibility in the food supply chain. With broader adoption, consumers can see the origins of every ingredient in the goods they buy – from the farmer’s location to their cultivation methods. And cutting-edge food and drink brands are already using the blockchain to prove their products’ authenticity, quality and sustainability.
What is blockchain?
The blockchain is a digital system for recording information and tracking assets. It uses distributed ledger technology to log and store data securely.
With a distributed ledger, any information uploaded to the blockchain is duplicated and saved across a computer network in millions of locations (known as nodes). When a transaction takes place, it needs to be verified by all these blockchain nodes.
Distributing data across the blockchain protects it from unauthorised changes. For example, someone trying to hack the system would need to access every node for a transaction to be approved. Equally, an authorised user cannot accidentally edit or delete critical business data by changing it in one location.
This video from blockchain expert Bettina Warburg describes how the technology works in various levels of complexity:
Most people associate blockchain with cryptocurrencies such as Bitcoin, which use blockchain technology to facilitate transactions and maintain a record of ownership. However, blockchain is being adopted by multiple, diverse industries – and there are many exciting use cases for blockchain technology in food and drink.
How can blockchain technology benefit the food and drink industry?
Any industry that relies on transferring information and goods can benefit from a secure trading network like the blockchain. For the food and beverage sector, blockchain can be used to bolster:
- Product trust and authenticity: all documentation related to food items can be securely stored on the blockchain to validate product claims. For example, organic food producers can upload certifications from approved organic control bodies, and food brands can keep digital copies of their patents and intellectual property rights. This helps to reduce food fraud, as information cannot be edited or tampered with once it’s been added to the blockchain.
- Food safety: in addition to ensuring ingredient authenticity, digital documentation stored on the blockchain can be used to manage quality control and ensure relevant checks have been completed and supporting documentation provided. It also provides much greater levels of traceability for rapid (and thorough) product recalls.
- Environmental transparency: every ingredient in food and beverage production can be tracked from the source with blockchain technology, to support brands’ carbon footprint calculations and green product claims. It can also help to reduce waste as catch, slaughter, harvesting and manufacturing dates can be provided for fresh produce.
If customers want to know more about where their food has come from and its cultivation conditions, food brands can also use the blockchain to access and share trustworthy information. Researchers in Finland are currently trialling an app that uses blockchain data to educate consumers on the environmental impact of their food choices.
- Cost efficiency: by making supply chains more transparent, the blockchain can improve communications between food brands and their suppliers to ensure ingredient quality and streamline deliveries. Reducing food fraud will save up to $31 billion globally by 2024.
- Food security: according to the FAO, around 14% of the world’s food is lost before it reaches retail level. Blockchain can help to identify areas of surplus food for redistribution to areas of short supply.
- Level playing field: the blockchain offers small farms and cooperatives an opportunity to verify their credentials and practices to build trust with major food brands. There is also an opportunity to create alternative credit systems via the blockchain, which can empower smaller producers to grow their businesses.
Which food and beverage products are already using blockchain technology?
Many world food brands build their reputation on using authentic ingredients. Blockchain technology allows these brands to trace the origin of the herbs and spices they purchase, to validate where they were grown and how they were cultivated.
Example: Dutch brand Verstegen Spices and Sauces uses the blockchain to create a transparent journey from farmer to customer. Consumers can scan a QR code on the back of its nutmeg packaging to learn more about the farmer that grew their nutmeg and see that he has received a reasonable price for his produce.
Over 1.6 million tonnes of olive oil is imported into Europe yearly, 61% of which is extra virgin olive oil. However, this product is vulnerable to food fraud as some counterfeit producers mix olive oil with other oils that have undergone a ‘soft deodorisation’ process to mimic olive oil’s colour and aroma. Blockchain technology allows olive oil producers to verify the quality of their produce and give food brands the confidence that they’re purchasing the real deal.
Example: tech company OLEUM has developed software for analysing olive oil quality to prove product authenticity. This information is stored on the blockchain for food manufacturers to review when purchasing olive oil.
The global health and wellness food market will be worth $1 trillion by 2026, and sourcing naturally grown ingredients is key to its expansion. For example, food brands want to know that goods such as nuts have been grown without using chemicals and pesticides to offer consumers ‘clean’ products. And this information can be captured and shared via the blockchain.
Example: nut supplier Veracruz Almonds is implementing blockchain technology across its Portuguese Estate to share data on the product lifecycle, including growing conditions.
In the ultra-competitive alcohol market, craft beer companies are using the blockchain to prove their brand differentiators. For example, tracking the use of local ingredients and showing that sustainable processes have been followed to manage each beverage’s carbon footprint.
Example: Swedish microbrewery Ängöl Brewery uses blockchain traceability to prove that local, solar-powered farms produce its grain and hops and that the water used in its brewing process comes from lakes near the brewery. It also tracks donations of residual products from the brewing process to a local dairy farm to use as cattle feed.
The chocolate industry is under pressure to improve working conditions in countries such as Ghana and Cote d’Ivoire, following allegations of child and slave labour. Ethical chocolate brands are using blockchain technology to provide vital information on the cocoa farms from which they source, proving that workers are paid and treated fairly.
Example: Tony’s Chocolony uses 100% traceable cocoa in all its products, working with cacao farmers to optimise productivity and increase the money their farm makes from cocoa bean cultivation.
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