Why Blockchain Tech is Maturing into a Game-Changer for our Current Food System Conversation

26 May, 2022
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Why Blockchain Tech is Maturing

The global supply chain continues to evolve and adapt to consumers’ changing needs. As a result, today’s food system is more complex and globalized than ever. Undoubtedly, this helps manufacturers and producers meet the need of end-users for convenience, speed, and all-year-around availability.

At the same time, integrated and globalized supply chains come with a major downside: overseeing each product phase and transaction becomes incredibly challenging.

This isn’t only conflicting with the growing demand for food transparency – but it also increases the risk of counterfeiting, adulteration, and food fraud.

That is where emerging technologies like blockchain represent a real game-game changer to boost the security, efficiency, and transparency of the growing supply chain. In this guide on the tracking and authentication system of Authena Shield™, you’ll learn more about the vital role that blockchain will play in ensuring the traceability of Fast Moving Consumer Goods throughout the supply chain.

How a Blockchain Database Helps Streamline Trade & Eliminate Fraud

As it continues to grow, the global fast-moving consumer goods (FMCG) market accounted, in 2021, for a revenue of over 8 trillion US dollars. And yet, each year, nearly $35 billion is lost to food fraud and counterfeit goods.

Value of the global FMCG market by 2021

Illegal activities that lead to the adulteration, tampering, and diversion of food goods don’t just cause significant financial damage to producers and manufacturers. Indeed, food fraud can lead to the loss of jobs and pose a significant health risk for consumers.

As the supply chain continues to expand, it is easy to see how these issues are bound to intensify – exactly at the same time when consumers are becoming increasingly concerned with the transparency and authenticity of their products.

Blockchain technologies – and their unprecedented ability to record transactions in a way that is secure and immutable – are presenting themselves as a solution to both issues. Here’s how.

The Last-Mile Solution: Applying Blockchain to Food Industry Safety

Over the past years, the global supply chain has adapted to ensure what is now called “just in time” service, or an integration of the supply chain that ensures that products and supplies are available when and in the quantity they are needed – not before or after.

This system has helped manufacturers offer same-day or one-day delivery options, as well as reducing waste and streamlining the production process.

And yet, if there is still one significant pain point most manufacturers have to deal with is the “Last Mile” – or the last leg of a product’s journey to the consumer. In this environment, applying blockchain technologies can help consumers access an unprecedented amount of information about the product they are buying, thus making a better-informed choice.

But how do blockchain technologies work?

Blockchain refers to a digital ledger system used to record information and store data. Once the transactions are recorded on the blockchain, they become impossible to tamper with or modify without leaving any trace.

While this technology is primarily known to be the underlying system on which Bitcoin and other cryptocurrencies run, Blockchain is proving itself to be a vital player in boosting supply chain transparency.

Blockchain Technology and Its Potential for Supply Chain Effectiveness

As seen above, introducing blockchain technologies and immutably recording each transaction of goods through the supply chain can be instrumental in preventing food fraud.

But blockchain technologies are also essential in boosting supply chain effectiveness.

Food manufacturers and organizations involved in the manufacturing of FMCGs understand the importance of having to guarantee an ongoing availability of products – all this, while also preventing counterfeit, avoiding product diversion, and reducing unnecessary waste.

Blockchain technology – when paired with other systems, like NFTs and smart labels – can help manufacturers by:

  • Boosting supply chain’s unit-level traceability
  • Improving transparency and visibility at each stage
  • Recording each transaction and providing real-time information
  • Preventing financial losses that come from diversion, fraud, and waste

Blockchain Technology and Its Potential for Supply Chain Effectiveness

Important Factors That Impact Supply Chain Management

Supply chain management is, arguably, one of the most important fields of expertise in today’s fast-moving economy. And yet, it is almost impossible for supply chain managers to keep up with the rapidly changing customer needs, technologies, innovations, and regulations.

Here are some of the factors that affect effective supply chain management:

  • Changing supply chain relationships
  • Business management
  • Changing customer trends
  • Fast-changing and emerging technologies
  • Economic and environmental uncertainty

Using Blockchain Technology To Simplify Food Transparency Trend

End-users are highly concerned with the authenticity and origin of the products they are buying – so much so that nearly 75% of them are willing to pay more for more transparent products. Blockchain technologies can boost the internal traceability of each item and might play a vital role in delivering these levels of transparency.

When paired with the right, safe, and user-friendly technologies, blockchain can help consumers access information about the products they are buying. Some of the solutions food manufacturers might implement include:

  • Radio Frequency Identification (RFID) labels
  • Near Field Communication (NFC) tags Security seals

These seals can be activated through the user’s smartphone and deliver real-time, secure information about the product.

Tips for Effective Security Seals Supply Chain Solutions: Exploring the Business Value of Using Security Seals

Security seals are part of most successful traceability solutions. Security seals offer a wealth of benefits to businesses and manufacturers. These include:

  • Protecting the brand’s reputation and consumers from a public health scandal
  • Preventing fraudulent activity and detecting illegal attempts to refill or tamper with a certain product
  • Delivering high levels of customer data and insights, such as when a product is opened or where
  • Improved customer service and customer communication

Tips for Effective Security Seals Supply Chain Solutions

Recent Developments With Seal Technology

Security seals have been developing to become immune to the always more sophisticated fraudulent attempts carried out by bad actors. Today, food manufacturers can access an unprecedented range of solutions, including tamper-resistant seals and tamper-evident labels.

But blockchain technologies have also elevated the potential of security seals. Today, most end-to-end track and trace systems incorporate state-of-the-art technologies like:

  • NFCs
  • Customizable tags
  • Geolocators

Digital-physical seals are particularly important across the food supply chain, which carries an inherent public safety risk. While in case of collectibles, such as exclusive wine or spirits bottles, the NFC security seal can be also paired with a unique NFT, a digital twin of the bottle that guarantees ownership and authenticity of the collectible item itself.

Introducing Custom Tracking and Authentication Solutions With Athena Shield

Introducing blockchain technologies in your supply chain can boost the system’s effectiveness and security. But each business is utterly unique, and so should be your traceability solution. With Authena Shield™, authentication experts will review your organization’s needs and recommend a tailored IoT and blockchain solution designed around your business’s goals.

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