Blockchain Technology To Shake Hands With The Food Industry
With blockchain technology, food suppliers and intermediaries can submit data related to breeding, transport of products, and manufacturing into a ledger, which consumers can then access. Data stored in this ledger cannot be changed subsequently. It acts as an assurance of the quality and reliability of the data.
That means vendors can distinguish their products by quality and freshness, and charge a premium price for higher quality segments, according to a report by consulting firm Deloitte about the use of blockchain in food.
But professional services firm Accenture stated customers might not see that effect on prices at the register.
“For instance, price data would allow upstream supply chain actors to negotiate price better and get a huge portion of the final value from the customer,”
According to a report by Accenture in 2018, Due to high margins, the opportunity exists for producers to increase their prices without much effect on the final retail price.
One company that’s using blockchain technology to track tuna fish is Bumble Bee Foods. The company, known for its canned seafood products, in alliance with cloud company ‘SAP’ to provide more precise information about the fish.
SAP’s blockchain lets customers smoothly access the complete origin and history of Bumble Bee’s yellowfin tuna. By verifying a QR code on a package, consumers can test a product’s authenticity, sustainability, and freshness.
Deloitte highlighted that blockchain might lead buyers to target elements like the taste, grade information, and shelf life rather than quantity when purchasing food.
Meantime, other analysts argue blockchain can lower prices by preempting specific problems. Better record-keeping through blockchain ledgers would make it easier to pinpoint locations of outbreaks of foodborne diseases or prevent mislabeling of allergens, according to Head of research at ‘Blockchain.com’ and researcher at the ‘London School of Economics,’ Garrick Hileman.
Garrick said, “Anything that reduces those issues will reduce the cost of manufacturing and distributing food.” “There are chances that prices may drop down due to these cost savings related to the introduction of blockchain technology.”
Steve Davies, PwC’s global blockchain leader, agreed, explaining that greater transparency about food supply will provide more precise information about the origin, quality, and efficiency of ingredients.
“Eradicating fraud goods in the food and beverage industry is going to be worth billions of dollars and has wide health and welfare benefits,” he told CNBC in an email.
Beef and pork supply chains could be amidst the first to gain profit from the use of blockchain, stated LSE’s Hileman, due to the cost of illness outbreaks in those varieties of meat.
For instance, China has seen pork prices escalate as it struggles to handle a plague of African swine fever, which has taken the lives of millions of hogs. The country is the top global producer and consumer of pork, a staple food in the diet of Chinese people.
“They’re two areas in the food SCM where there is a huge hazard and huge potential cost if anything goes wrong,” Hileman said.