Blockchain in the Food Industry: the advantages of traceability for suppliers and distributors

What is the blockchain and how does it work? What are the advantages to the agri-food system? In this article, we will analyze this technological solution and its application in the food industry, examining the benefits to producers, distributors, retailers, and final consumers.

The Economist defined blockchain as "the trust machine". It enables traceability to control and protect food from the moment it is produced to the moment it reaches the final consumer. Therefore, the use of blockchain technology can not only guarantee the quality of products but also contribute significantly to promoting the development of the food industry (one of the most significant contributors to the Italian economy).

The major media and political attention of the last few years, involve producers, institutions, large food distribution companies, and technology giants (such as IBM), encouraging them to develop and be early adopters of blockchain technologies. Below is an overview of the reasons for this interest and the real benefits for the entire agri-food chain.

Blockchain and protection of food and wine excellence

Two of the main objectives of the agrifood sector are to ensure proper nutrition and to protect the quality of products. Blockchain, in this, can make an important contribution, fostering a renewal of both production processes and commercial organizations. It all has a positive effect on trade and consumer trust.

In particular, blockchain is a key technology for safeguarding excellence such as food and wine "Made in Italy", promoting business opportunities based on transparency and trust, and encouraging the food industry to provide guaranteed quality and provenance to aware consumers (who perceive the value and are willing to pay more for it). When we talk about customer protection, we are referring to two phenomena in particular: counterfeiting and "Italian sounding".

Blockchain for agricultural and food companies: advantages and benefits for producers, distributors and final consumers

The latter phenomenon is widespread in the food industry and is based on the fame that Italian food enjoys all over the world. The imitation of a brand or a product that recalls the so-called "Italian style" damages the true Made in Italy and, therefore, the entire commercial chain and the final consumer.

Thanks to blockchain technology, food and wine suppliers can protect the quality and origin of their products, communicate them through traceability, safety, and authenticity, and facilitate trust-based marketing.

Who should use blockchain technology?

This technological solution guarantees greater transparency and brings major benefits to producers, distributors, retailers, catering, and final consumers. Each of them can trace and verify the origin of the product, its production chain, and its commercial path. Through a succession of data and information blocks linked together, each transaction is linked to the previous one, forming a safe, effective and transparent chain, accessible to anyone who wants to verify the truthfulness of the information and the process at every stage.

The blockchain, therefore, creates a sort of "digital identity card" for the products, promoting a transparent supply chain for the benefit of the final consumer, who is increasingly attentive to the information reported on food labels (origin of products, processing methods, conservation, etc.). In this way, from production to distribution, to sale, it is possible to easily access key information, which is almost impossible to corrupt.

Now let's discuss the benefits of blockchain and analyze specifically who benefits from it and why:

Food producers, through the blockchain, can safeguard their uniqueness and protect authenticity (for example, Italian producers to prevent "Italian sounding").
For distributors and retailers, this technology can facilitate and optimize the product search phase. In fact, by accessing all the necessary information, it is possible to verify the guarantees of authenticity and quality.
Finally, consumers can access information about the products, verify the origin, increase food safety, and be encouraged to an informed purchase.

Conclusions

Customers' demand for healthy and authentic food has notably increased worldwide in recent years. Italian food belongs to a long tradition that has its roots in one of the richest heritages: the Mediterranean Diet. For this reason, the agri-food sector is improving on traceability and safety, especially for high-quality food, such as Italian artisan products, in order to meet increasing demand worldwide. Blockchain technology can provide an important contribution also for marketing purposes, being able to supply genuine food with a verified origin, which can be effectively communicated to end consumers.