Blockchain technology is revolutionising the financial sector but could it do the same in the food and beverage industry? Min-Kin Mak, Vice President Corporate Development & Digital Transformation at SIG, explores the benefits it could bring
When bitcoin fever took hold in 2017, the blockchain was the solid centre of it all. The unique technology underpinning the cryptocurrency boom quickly became known as the global digital ledger – a watertight way to keep a chronological record of all transactions.
As the bitcoin buzz grew, the spotlight soon turned to blockchain itself as other industries started to realise its huge potential. Blockchain technology lets multiple parties collaborate and record a series of tamper-proof transactions without having to go through a central authority. In other words, it’s a machine for establishing widespread trust.
It’s easy to see why blockchain is now being talked about as something that could transform the entire food and beverage industry. In fact, many industry experts believe the blockchain could do for business what the internet did for communication – increasing efficiency, transparency and collaboration on an unprecedented scale. But how exactly would it work and is the industry ready for this kind of transformation?
For food and beverage businesses, blockchain would function in a markedly different way than with cryptocurrencies as the technology has evolved considerably since the early days of bitcoin.
Essentially, supply chain data can be recorded, stored, tracked and evaluated across multiple parties and computing systems. All data and information related to a product and its ingredients is submitted to a common network ledger. There’s no central authority or third party needed to authorise transactions, meaning anyone can potentially access this data – from farmers, processors and manufacturers to distributors, retailers and consumers.
The obvious advantage for the industry is that any attempt to tamper with a product as it moves through the supply chain can immediately be identified and resolved before it ever reaches a retailer or consumer. And if an adulterated product should make it into the market, the blockchain enables retailers and producers to pinpoint the exact offending items in a matter of seconds. Ultimately, this means no costly product recalls, less wasted produce, fewer safety incidences and more consumer confidence in the entire food system.
The road ahead
Despite the apparent advantages of blockchain technology just 12% of middle market food and beverage companies are currently using it in their operations, according to RSM’s Digital Transformation Report. However, 95% view blockchain as important for the future, suggesting interest is growing and that many businesses are preparing the groundwork for a potential blockchain revolution.
As with any digital transformation, a successful transition depends on having trusted expert partners at your side. That’s why SIG is in active dialogue with key blockchain players to ensure customers can fully realise the opportunities ahead – helping them assess their needs, how it could integrate into existing infrastructure, and how it would work in their daily operations.
It’s clear that distributed ledgers and blockchain technologies have applications far beyond their cryptocurrency beginnings. And as this potential becomes clearer, being prepared will be crucial to stay ahead of the competition.
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