While blockchain technology is not a new concept in and of itself, it is new to the FMCG sector.
Brands are already considering the blockchain's potential and the impact it may have on their client base. Brands are starting to recognize that customers are becoming less trustworthy and want more transparency in the products they buy. Blockchain technology has the ability to offer all of this and much more throughout the supply chain.
Consumers can now monitor items and have a complete understanding of what is in their food, from how the materials were produced to how ecologically sustainable the product is. Consumers may now engage with items side by side, allowing them to compare and assess what is best for them.
Blockchain is a distributed ledger technology that enables food, beverage, and supplement makers and brands to centrally record all product information in a database that customers may access for research reasons. This information contains information about agricultural and animal care, manufacturing operations, expiration dates, and how items are transported. This technology enables anybody to upload information and prevents anyone from deleting or changing anything without the consent of all participants.
According to the FMCG Gurus study, customers in South Africa are unaware of blockchain, with just 10% have heard of the phrase. Although they are unaware, 64 percent of customers responded that this information would be attractive to them after learning about blockchain. Within the FMCG industry, blockchain technology enables customers to see more information farther down the supply chain. While customers see this as an attractive feature, many remain suspicious of what the data may include.
Many customers find this technology intriguing, and 43% said they would utilize the database in the near future or very soon. Therefore, what kind of information do individuals want to see? Consumers in South Africa want to see the following:
- Brands and manufacturers' commitments to ensuring suppliers' ethical and environmental certifications (73 percent)
- The extent to which product manufacture results in deforestation/damage to green land (73 percent)
- Minimum standards for farms and storage spaces for farm animals (71 percent)
Interestingly, 38% of customers said they would pay a premium price for, or supplement goods if their information was recorded on such a platform. This suggests that food, beverage companies might offer value by being more honest with customers when using the blockchain. This openness might subsequently result in more sales at a premium price.
Consumers value trust because they perceive trustworthy brands to be of higher quality (64 percent). When it comes to food goods, 70% of customers believe that brand credibility is critical. While customers want businesses they can trust, just 24% say brands are completely honest when expressing rules and practices. The difficulties organizations encounter when attempting to persuade customers that they are adhering to corporate social responsibility guidelines may provide a blockchain opportunity. This technology enables firms to interact with their customers, fostering more trust and enhancing the value of their goods.
Who (and where) in the consumer products market is using Blockchain technology?
Walmart is using blockchain technology in two initiatives to secure product safety in China's food industry and to enable monitoring in its US marketplaces.
As with the United States, China has had its share of food safety issues, ranging from the sale of smuggled meat (which may be frozen for up to 40 years) to inappropriate disposal of food by-products, resulting in contaminated drinking water. China imports a large amount of pork but also offers this popular meat product to the majority of the globe. Therefore, it is critical for China's food supply to be secure, not just for its own inhabitants, but also for the country's economic reputation with its consumers.
In China, small family pig farms are being phased out and replaced with industrialized pig farms similar to those seen in the United States. China desires that these industrialized farms adhere to contemporary safety and food safety norms.
Considering the possibilities
Blockchain technology has the potential to revolutionize business and, in turn, our economy. It's time to start planning and prioritizing in order to keep up with shifting customer needs and remain ahead of the competition. Our paper examines over 50 possible blockchain use-cases in the retail and consumer packaged goods sectors, categorizing them according to their potential value and complexity.
The use of blockchain technology has reached a tipping point.
Companies will likely reach a tipping point in the next five years as they recognize blockchain's power to monitor and trace items, record contracts, and transactions, and ensure the flow of information. The consequence will be broad, mainstream acceptance of blockchain in the retail and consumer packaged goods (CPG) sectors, but only careful planning can ensure long-term, sustainable success. The more advanced organizations will concentrate on scaling up the chances they've discovered, while those that ignore the potential risk fall behind.
Improved operations are a win-win situation for both businesses and customers.
In areas including product cost, working capital needs, time to market, and service perception, well-managed retail and CPG supply chains may have a significant impact on an organization's competitive stance. However, blockchain has direct consumer uses in addition to the operational benefits it provides to businesses. It has the potential to transform the way we browse for things and pay for them, as well as create alternative payment platforms and power improved loyalty programs. In the immediate term, we think blockchain will have the greatest influence on supply chain traceability. For example, a complete audit trail helps safeguard customers from fraudulent items.
Bayshore can assist you in taking advantage of these possibilities.
Many organizations want to comprehend and use blockchain, but are unclear where to begin, according to our interviews with retail and CPG leaders. We looked at where blockchain may have the most influence in the retail and CPG sectors, and we came up with a number of use cases. We understand the many techniques and critical considerations that leadership should consider before commencing on their blockchain journey - a good place to start for any firm wanting to prioritize the investment of time, money, and resources into a blockchain work program. This information, along with our experience, can assist firms in the retail and CPG industries in better understanding blockchain and how it can be integrated into their business strategies.
Get in contact with a member of our team.
Our blockchain experts are available to answer your queries, discuss the potential for your company, or just brainstorm. Contact us today!
November 16, 2023
