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are demanding greater knowledge of where their food comes from and want to ensure the integrity of the products they’re purchasing—especially in the booming $40-billion organic foods sector. In 2017, The Washington Post reported that a shipment of 36 million pounds of conventional soybeans from Ukraine passed through Turkey before arriving in California. Along its way, the conventional soybeans had been relabeled as “organic” on all receipts, invoices and shipping records. The false organic label boosted their value by around $4 million before they were sold off to different organic food brands across the country for incorporation into their products. This meant that these brands not only paid an excessive amount for conventional ingredients, but also were mislabeling their final products, which could result in penalties and lawsuits. Using blockchain to confirm these properties can help instill consumer confidence in a brand, especially among those that care about understanding the lifecycle of their food goods. For instance, beyond being organic, there are other considerations such as whether or not a product was produced locally, manufactured in a facility that processes nuts or dairy for those with allergies, and the like. If consumers learn that they were misled or suffered a medical concern due to a product label, it could damage brand reputation—leading to trust issues and lost revenue. Because blockchain can connect every part of the supply chain with records of each transaction, it can also help with food safety by mitigating the impact of a food recall and protect suppliers, brands and most importantly the consumer. www.foodlogistics.com

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By implementing the technology, only in expired product, but also the a manufacturer, brand, retailer or manufacturing and transportation consumer could easily trace back costs that go into it. Meanwhile, the records and find the source of they may under-project demand a problem. It might be a and fail to deliver adequate supplier issue, a plantreplenishment on products, By floor quality problem, implementing resulting in out-of-stock or something wrong in the technology, items for customers and, packaging and labeling. a manufacturer, therefore, lost sales. Corrective steps can Instead, blockchain can retailer or then occur to prevent consumer could provide food and beverage additional supply chain easily trace back manufacturers visibility issues, such as following into the store level, enabling the records the records to the retail and find them to gauge demand level and finding out the source downstream in order to which stores received properly plan production of the the affected lots and upstream in the supply chain. problem.” Because the data is connectshipments. As a result, the company can do a ed and flows seamlessly in more targeted recall and only pull real time between every party, manthe faulty products from store ufacturers can gain instant insight shelves, rather than a sweeping, into what consumers are buying as widespread recall that will inadverwell as what products are nearing tently remove good products in the the end of their shelf life. Thus, they process. Companies can thereby can be more proactive with their mitigate the amount of waste due manufacturing planning and replento product recall destruction and ishment, rather than simply reacting minimize lost profits. to inventory stockouts. Further, they can ensure that they always have Reactive to Proactive the right types and amount of stock Another major issue in today’s in their distribution centers, as well hyper-complex supply chain is as guarantee the freshness of their demand forecasting and manufacproducts and maximize their shelf turing planning. The data silos and life at the retail level. No matter how disconnects, as mentioned above, much demand may fluctuate, they among manufacturing, warehousing will always have goods available to and retailers, force most companies satisfy consumers with limited exto approach manufacturing planning cess, thereby eliminating lost sales, and inventory management from a minimizing waste, and increasing reactive model. Demand increases, revenue and profitability. so they raise production and output. Blockchain technology is more Items run out of stock or expire, so than just hype. It is a practical they send more to fill store shelves, consideration for any food and refrigerators and freezers. beverage manufacturer, brand and Unfortunately, a reactive retailer dealing with the challenges approach also means that these of a fragmented, complex supply manufacturers are always behind chain. Companies ready to tap the curve, resulting in supply and into the blockchain and connect demand imbalances. Companies these disparate links will be able to and their retail partners end up with streamline the exchange of inforexcess inventory due to increased mation and data across their value production on items that were in de- chain and drive greater business mand but no longer are, as demand outcomes. With complete transis perishable just like the product. parency from source to shelf, they In the business of perishable goods, can generate greater consumer where items have a limited shelf life, trust, ensure food safety and better companies could be dealing with meet market demand with the right a significant amount of waste not product across all channels.

Pratik Soni is co-founder and CEO of Omnichain Solutions. He is an investor and global executive with a career spanning the United States, Europe and South East Asia. In the past 15 years, Soni has held leadership positions for startups and Fortune 500 companies including i.am+, Apple, Beats Electronics, 20th Century Fox and Sears Holdings Corporation.

AUGUST 2018 | FOOD LOGISTICS

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Profile for Supply+Demand Chain/Food Logistics

Food Logistics August 2018  

Food Logistics is the only publication exclusively dedicated to covering the movement of product through the global food and beverage supply...

Food Logistics August 2018  

Food Logistics is the only publication exclusively dedicated to covering the movement of product through the global food and beverage supply...