Blockchain technology could be the answer to the woes of the beef industry, according to Deloitte research.
Global demand for beef continues to grow, with the global production of beef and veal set to reach 63m tonnes this year. This increasing demand is coupled with a number of challenges facing the beef industry, particularly in an Irish context. A new report from Deloitte, Beefing Up The Blockchain, identifies several ways blockchain could improve the beef supply chain.
According to the report, beef accounted for a fifth of Ireland’s €12.6bn food and drink exports last year. Despite the volatility of sterling due to Brexit uncertainty, the UK remains the primary destination for Irish beef. The value of Irish beef exports grew by 5pc in 2017.
Deloitte outlined several ways blockchain can change how businesses interact with customers and each other, providing differentiation and a competitive advantage for those who take it on board.
At present, the diet plan of Irish cows is predominantly grass-based, supplemented at times with grains. There is no clear definition of what grass-fed means and it can cause consumer confusion. Blockchain could communicate with existing smart farming devices to provide clarity on the animals’ diet, providing an immutable audit trail.
End-to-end blockchain traceability
Using blockchain, traceability of Irish beef products could become a lot simpler. From the farm to the port authority, right down to consumer level, data from all nodes could be posted to the blockchain. Other members could be added over time and sensitive information could be made private to ensure business strategies are not exposed. Non-compliant behaviour could also be highlighted within the supply chain using this method.
Adrian Cummins, CEO of the Restaurants Association of Ireland, said: “The Restaurant Association of Ireland believe blockchain traceability is the way of the future. It gives assurance to the customer and the business owner. You can trace the ingredients of the dish right back to the animal in the field, farm to fork.”
In its report, Deloitte has reimagined how trade finance can leverage a blockchain-based infrastructure to boost the exporting cost base. At present, trade financing is difficult due to multiple platforms generating confusion, as well as delayed timelines, among other things.
By using blockchain for trade finance, the correspondent banks can be removed and contracts can be settled automatically once conditions are met. Real-time review and approval of documents, as well as reduction of manual processing times, are also factors.
Using blockchain, customers could access information stored through QR codes on meat packaging. AR technology can provide more information to consumers, aligning with current market trends around traceability and informed eating. It could also ensure public trust in the Irish beef market.
Customer feedback loop
Customer data is critical for brands to stay competitive in intense market spaces, while also allowing for organisations to create new ideas using consumer data. A decentralised feedback model could allow reviews to be added to the blockchain and accessible to all network participants. Feedback cannot be altered once posted and customers could potentially receive a reward to their loyalty account following a review.
Certification storage, management and sharing could be radically altered using blockchain technology. All data posted to the blockchain would be auditable and immutable, and it would act as the single source of truth, creating greater confidence in the validity of certificates. The current model can be time-consuming and tedious when it comes to tracing paper trails.
BeefChain is a US-led start-up that aims to create a new “rancher-centric” supply chain using blockchain to recapture the value realised by third-party feedlots and processors. By enabling unique animal identification and ensuring origin, BeefChain allows the rancher to receive premium pricing for premium beef, and provides consumers with greater confidence in the meat they consume.
It is currently partnered in a pilot project with six multigenerational ranches in the US state of Wyoming, using the Ethereum blockchain. More than 1,600 calves have been hashed to the blockchain and this “first-in-the-world” blockchain herd, totalling 500,000lbs (approximately 227,000kg) of high-quality Wyoming-certified beef, will be ready for delivery in late summer of 2019.
Deloitte recommends that the Irish beef industry harness the potential of this new technology to differentiate itself in a competitive market. It also recommends the establishment of an industry body, the development of a pilot solution and a terms-of-reference charter. Industry adoption and incentivisation are also crucial pieces of the puzzle.
Joe Healy, president of the Irish Farmers’ Association, said: “Farmers are dedicated to producing the highest-quality food. We are the foundation of the food chain and anything that helps us produce our beef more efficiently, through speeding up transactional and regulatory elements of the supply chain, is welcomed.
“Another benefit of blockchain that we can see is that it now gives consumers new ways to understand how we farm to the highest standards, the quality assurance schemes we adhere to and how committed we are to producing best-in-world beef.”