Why Does The Food & Beverage Supply Chain Need Blockchain Technology?
The Food and Beverage supply chain desperately needs to eliminate opaqueness to make it more transparent for the consumers. The complexity of the supply chain is increasing rapidly with changing customer interest, regulatory controls, and global competition.
The food and beverage supply chain is highly fragmented and plagued with multiple problems like frauds, food safety issues, and inefficient transaction procedures. The Industry needs to adopt advancing technologies that hold the promise to reduce opaqueness associated with food and beverage companies’ supply chains.
Blockchain technology can revolutionize the entire food and beverage economy, by increasing efficiency, transparency, and collaboration throughout the food system. Blockchain can be implemented to streamline a multitude of food and beverage supply chain processes and ensure food and public health safety.
The technology is bound to impact every level of food and beverage value from farm to plate. Let us look at the spectrum of advantages that Blockchain offers to the food and beverage supply chain.
Need for Blockchain Technology in Food & Beverage Industry
The incredible features of Blockchain Technology offer some amazing opportunities to transform the complicated food & beverage supply chain. The adoption of Blockchain by manufacturers, processors, and distributors in the industry welcomes the age of decentralization in the food and beverage supply chain.
Blockchain guarantees transparency, efficiency, and security: The adoption of blockchain technology in food & beverage supply chain could improve food recall processes. The food recall process would become easy, reliable and fast and one can track the food from its origin to its destination.
Blockchain is a decentralized and distributed platform; the data of each step in the supply chain adds to the data in different “blocks” that all participants can view. These blocks can be easily traced as they are timestamped and cryptographically secured; thus, encryption prevents them from altering or deleting existing data.
A traceable Food & Beverage Supply chain with Blockchain: With the rapid expansion of global trade, the food and beverage industry has globalized. The globalization of the industry has made the supply chain increasingly complex, making it very difficult to track any product. Blockchain Technology could not only reduce paperwork relating to supply chain operations but would also allow manufacturers, processors, and distributors to trace any product and its ingredients.
With Blockchain, the products could be traced at any step in the supply chain or back to their origin, within seconds. This would mean less wasted produce, fewer sick people due to the prevention of outbreak of foodborne illness, more confidence and traceability in the food system.
Ensuring food safety: The major driving force behind blockchain adoption and increasing transparency in food & beverage supply chain is food safety. Blockchain technology has the potential to provide evidence for the history of the production and handling of food, from the farm to the consumer’s plate.
In cases of an outbreak of foodborne illness, blockchain would make it easier to track and identify the source where a product was affected. This would help businesses protect their reputations and stave off financial losses incurred from recalling a food or beverage item if the source of contamination is unclear.
Blockchain Financial security and services in the Food & Beverage Supply chain: Financial security and safety is a major concern for the food and beverage industry. CSIRO, in its report, revealed that food fraud costs the global economy an estimated $40 billion a year.
The adoption of Blockchain Smart contracts would enable new kinds of payment mechanisms, helping farmers get a better price for their produce. The consumers would also be benefitted with lowered prices for goods because of the elimination of intermediaries in the food and beverage supply chain.
Blockchain would enable automatic invoice discrepancy resolution, improving whole supply chain management operations.
Conclusion: Blockchain and Food &Beverage supply chain
The world economy is increasingly adopting Blockchain and it is becoming even more sophisticated and embedded within businesses. Though Blockchain offers the promise of efficient and transparent Food & Beverage supply chain, the technology is still emerging.
In order for all parties to truly benefit from blockchain, all stakeholders must ultimately adopt the technology, regardless of their position in the supply chain. The companies who adopt Blockchain can gain deeper insights into their supply chains, while those that don’t adopt it may lag behind their competitors.
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