More transparency with Blockchain

12-Sep-2019 - Germany

The food and beverage sector is facing a new challenge. Consumers attach increasing importance to the origin of their food and whether it has been produced in an ethical and sustainable manner. Companies have therefore been forced to resort to technologies such as 'blockchain' or new management software to improve their transparency.

Photo by Clint Adair on Unsplash

"A number of wide-ranging but preliminary technology initiatives are being developed to help major food trade associations meet customer demand through more environmentally friendly packaging and increased supply chain visibility," explains Colin Elkins, Global Industry Director at IFS.

According to a 2018 study by the Food Marketing Institute & Label Insight, 75 percent of buyers would switch to a brand that would provide more detailed product information than is provided on labels, even if this meant a price increase (in 2016 this percentage was 36 percent).

The first solutions are already being implemented. OpenSC uses 'blockchain' technology to allow users to scan the QR code of a product or a restaurant menu to see all the information about the history of a food. Nestlé, Procter & Gamble, PepsiCo and other major companies in the sector are working together to replace single-use packaging with reusable packaging delivered to households.

However, large companies are faced with the problem that most of their enterprise resource planning (ERP) systems support their business operations financially, but "they are disconnected from the systems used to supply their raw materials, formulate their production sequences and manufacture their products," explains Colin Elkins.

This expert warns that this "disconnection" may cause managers not to perceive that clearer labelling can help increase their income. "Rigid and inefficient business software in these areas is an additional difficulty that large food and beverage companies will have to face", who are "more vulnerable than ever before to the most agile, fast and aggressive emerging companies", concludes the IFS executive.

These new management software are adapted to new methodologies, such as the so-called 'Demand-Oriented Material Requirement Planning', which allows the creation of strategic 'stocks' of raw materials so that they can satisfy a surprise increase in demand or orders, due to new weather patterns or new retail outlets.

In this way, technology provides new tools for large or small companies to effectively meet the new needs of users, who now put greater pressure on companies to make social responsibility and sustainability strategies part of their own production chain.

Note: This article has been translated using a computer system without human intervention. LUMITOS offers these automatic translations to present a wider range of current news. Since this article has been translated with automatic translation, it is possible that it contains errors in vocabulary, syntax or grammar. The original article in Spanish can be found here.

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