With the recent announcement of blockchain being used to improve consumer confidence in food safety, you may see another label join the growing list on your favorite box of cereal or carton of ice cream.

Organic, Non GMO, Fair Trade, etc.

Have you noticed that more and more food products have “USDA organic” or “Non-GMO verified” labels?  While some of your favorite brands may have truly become ultra-ethical and health-conscious, there’s also big business in marketing products as “healthy” and “ethical.” A recent study by the Food Marketing Institute shows 44 percent of consumers want to know that their food has been produced ethically, with designations such as “fair trade” and “cage free.” Approximately 43 percent want to know that the food was minimally processed, with designations such as “organic,” “non-GMO” and “no preservatives.”

People don’t casually want this; they demand it and they’re willing to pay for it. A price comparison study found that the mean cost for organic items surveyed was 68 percent higher than for non-organic items. With such price differences, shopping cart totals can add up quickly.

Companies are finding it financially rewarding to use packaging labels that deliver on consumer demands for ethically produced and minimally processed foods. That’s why you’re seeing more certification stamps and more explicit marketing of those certifications. However, 75 percent of consumers don’t even trust the accuracy of these labels. That’s where blockchain can help.

What is blockchain and how is it being used in the food industry?

Blockchain is a distributed ledger technology that allows all members of a supply chain to record transactions in a decentralized data log maintained on a network of computers, rather than a physical ledger or a single database. Transactions must be approved through consensus, and everything is secured through cryptography. A transaction is immutable once added to the blockchain, which prevents participants from manipulating or altering the records. Participants also all gain access to data across the supply chain. For example, as soon as a wheat farmer records a transfer of wheat — that will one day become cereal — to the mill, the grocery store will know about it.

The number of companies adopting blockchain in their businesses is growing rapidly. In a recently announced collaboration, IBM has teamed up with Kroger, McCormick and Company, McLane Company, Driscoll’s, Tyson Foods, Golden State Foods, Unilever, Nestlé and Dole, among others, to implement distributed ledger technology.

Fortune reports that “the food giants like the idea of simplifying their supply chains,” and “see blockchains as an opportunity to revamp their data management processes across a complex network that includes farmers, brokers, distributors, processors, retailers, regulators, and consumers.”

Why blockchain will be important to customers

Consumers have grown suspect of what goes into their food and are demanding more transparency in its preparation. By all accounts, they have every right to be concerned!  Every year, 1 in 10 people in the world fall ill after consuming contaminated food. There have been highly publicized incidents where entire restaurant chains closed to address contamination and millions of grocery products were recalled due to a peanut based salmonella outbreak.

With blockchain, accountability, traceability and quality assurance can be raised to such a level that companies can react to issues with the speed necessary to prevent additional people from getting sick. Investigations into food-borne illnesses that used to take weeks or months could be reduced to minutes if not seconds. This has the potential to give consumers an incredible amount of confidence, because they can know that everything in their food, and every place that the food products touched, are fully accountable.

It’s my belief that as consumers become aware of blockchain, learn of its benefits and hear real life success stories, they will want all the products they buy to be part of a blockchain network.

Blockchain on the box

So what does the emergence, acceptance, and implementation of blockchain mean for brands?  A new marketing opportunity.  Just like brands are capitalizing “USDA Organic” and “NON GMO” by including icons on packaging and highlighting in marketing, they will do the same with blockchain.  Including a blockchain logo will provide instant insurance to knowing customers and separate their products from competitors.  I believe that some form of this marketing will start very soon.  So I’ve even created the logo for them.

1. https://www.fmi.org/docs/default-source/webinars/trends-2017-webinar-7-18-2017.pdf
2. http://www.mofga.org/Publications/MaineOrganicFarmerGardener/Fall2011/PriceDifferences/tabid/1966/Default.aspx
3. http://www.nielsen.com/us/en/insights/news/2017/fresh-products-drive-total-store-success.html
4. http://www.pnas.org/content/112/24/7611.full
5. http://fortune.com/2017/08/22/walmart-blockchain-ibm-food-nestle-unilever-tyson-dole/
6. http://www.who.int/mediacentre/news/releases/2015/foodborne-disease-estimates/en/