Original post here by Tim Hammerich “Future of Agriculture” Host
Blockchain Can Help Provide Product Journey: But Do Consumers Care?
Nishant Dass offers some use case examples for blockchain in food supply chains.
I recently had the opportunity to interview Dr. Nishant Dass from the Scheller School of Business at Georgia Tech about blockchain.
After emphasizing his excitement for the promise of blockchain, he quickly cut to the heart of how we need to be approaching the technology:
“It has to solve real business problems…Without those real business problems, it will just remain a ‘shiny’ nice-to-have object…So we have to look at where the problems lie…Some of these would reap the biggest benefits by a good marriage between blockchain and IoT.”
So, where are the problems in the agricultural supply chain that blockchain could potentially address? I outlined five potential use cases in this previous post.
Many of the use case examples involve bringing transparency to the product journey in some way. Meaning, keeping track of where the product originated (provenance), who controlled the process of getting it to market (governance), and under what conditions it was kept in the process (storage time, temperature, humidity, etc.).
While it’s very cool that we can collect all of this information, it begs the questions:
Who really cares about knowing the exact product journey?
Are most consumers going to pause before they buy each item and examine it’s journey?
Does this really solve a real business problems?
I would make the argument that most consumers are not going to take much additional time to examine product journey on most of the food products they buy. The benefits the blockchain offers will somehow need to operate in the background.
That is, until there’s a problem. Collecting data on product journey can be very helpful in tracing food safety problems or even stopping them before they happen.
However, what customers are going to do is be influenced by labels. Recent trends have proven this. Unfortunately, many labels are either meaningless or fraudulent.
Blockchain is a plausible way to bring verifiable truth and relevance to some of these labels by collecting and storing data on the product journey. However, two things would still need to happen:
Consumers need to demand strict label guidelines and verifiable proof that the products meet those guidelines.
Consumers must be educated with regard to what those labels mean. Blockchain can provide information, but does little to provide context for how to use that information. Meaningless labels will still be meaningless.
In addition to perhaps improving the effectiveness of food labeling, we can look at food products that consumers already care about the product journey at scale. Nishant mentions two great examples: fisheries and wine.
In both instances, consumers are paying attention at scale to where and how the products are sourced, what’s being said about the production/quality, freshness (in fisheries), crop year and winemaker (in wine). Add in aspects like sustainability and traceability to the source, and you have supply chains that consumers have already proven that they will take the time to research the story and “vote with their dollars”.
These seem like ideal scenarios for blockchain in supply chains. There is a vested interest on the part of the consumer, and hence the part of the producer to prove themselves to that discerning customer.
I like videos (I’m guessing you do too). Here’s a short one about blockchain in wine:
Here’s a video Sawtooth Lake created about how their technology could be applied to the fisheries industry:
These show examples of food/agricultural supply chains in which the customer is already going to lengths to understand the product journey. Applications built on blockchain will solve this real problem for them. Once suppliers start to prove product journey to discerning customers, it becomes very likely that other suppliers will follow.
To me, this gets to the heart of blockchain adoption. The first applications have to address real pain point for both producers and consumers. Once the benefits are seen, other market participants will be more incentivized to shift the way they operate to accommodate this level of data sharing along the supply chain.
Nishant talks more about both the promises and challenges of blockchain, as well as what the timeline for adoption might look like. Check out my full interview with him here: