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Traceability, authenticity and transparency: the Blockchain in the agrifood sector

December 24, 2017

 

Visa, Microsoft and IBM are some of the largest companies in search of Blockchain developers. This technology is bringing great changes caused by stronger needs of control of every stage of the production, processing, distribution and needs of information about the quality and the deeper characteristics of a product.

 

The Blockchain is no more simply linked to the use of bitcoin and cryptocurrencies, it is going to have a more pervasive impact on our lives. People is starting to use it at home, to better manage domotics applications and the big energy companies are starting to use it for a better control on energy consumption billing.

 

At the same time, in the agrifood sector the Blockchain could be a great opportunity for manufacturers and consumers to create new ways to set differentiation policies and to better understand what stands behind a product.
But first of all, when we refer to the Blockchain, what are we talking about? How does it work?

 

Blockchain: what is it and how does it work?
In brief, a Blockchain is a system of interconnected nodes, considered transparent and incorruptible thanks to its decentralised and distributed nature.
Transparent because all of the activities within it are public and are periodically registered on all of the interconnected nodes in the system. Each group of information recorded corresponds to one block.

 

These blocks are distributed and shared between all of the nodes in the network, as if linked by a chain. That is why the system is considered incorruptible: to manipulate the information contained within it, you would have to break into every single node in the network and we are talking about hundreds of millions, if not billions of devices.


The Blockchain applied to consumer goods
Technology related to the Internet of Things, which allows an object to be connected to the Internet to obtain information or exert control, forms the basis by which a physical product can be connected to the Blockchain.
Below is a description of one of the trace formulas developed by 1trueid for the agrifoodsector: the NFC tag.

 

How does 1trueid’s NFC tag work?
The tag is a chip that is applied to the object to be monitored or “read” and is associated with a serial number that uniquely identifies the object.
Once the tag on the product has been scanned, the contents of the tag and its information can be decrypted and read using 1trueid’s application or web app, providing an unequivocal way to assess the authenticity of the product.

 

 

 

Manufacturer and consumer benefits
The chip provides different information depending on how it has been registered in the application and the type of access. The manufacturer can access all of the information about the product, processes and distribution (with relative control of the grey markets).
However, consumers can access information such as features, photos, videos, etc. to which they attach greater importance, making it possible to assess the authenticity and quality of the product.
In the event of a breakdown in communication between the chip and the device, or if the product is not equipped with a chip, it would be classed as a counterfeit product and not corresponding to that declared on the label.


 

 

Direct benefits for marketing
When a user scans the tag on the product, the marketing department can obtain information such as their name, surname, email address, sex, age and geographic location at the time the tag was scanned.


In addition, the user can declare ownership of a product on the application, with the option to share the information on social media. In marketing terms, this takes the consumer experience beyond the actual moment of product consumption, integrating marketing activities performed previously, or rather the process by which the customer reached the purchasing decision.

 

In addition, given the close link between object and owner, the contents read from the tag can be customised with the name of the purchaser and other products that could potentially meet their needs can be proposed, applying cross-selling and up-selling techniques.

 

 [1TrueID tracking solutions]


Application in the agrifood sector:
differentiation and health standards

The wide variety of agrifood products and application of the Blockchain, make it possible to exploit marketing levers that focus on the intrinsic features of the product associated with the raw material, territory and craftsmanship, rather than levers based mainly on price policies.


In addition to marketing-related issues, the application of tags connected to the Blockchain makes it possible to resolve issues connected with the observance of quality and health standards.
For example, small producers of wheat and pasta in Italy have had to address the problem posed by the use of glyphosate on wheat imported from other countries. In the American meat market, a portal has been developed that uses the Blockchain to trace the origin of turkeys, preventing health issues for intensive farms, but above all raising the profile of the smallest producers that are given the opportunity to differentiate their product.

 

In Japan, to solve an issue raised by the overpopulation of wild animals that caused considerable damage to small local communities, it was decided, together with the Ministry for Agriculture, to use the Blockchain system to monitor the health standards of game meat. They have simultaneously transformed a threat to the local economy into an asset.


There is only room for imagination...
Adopting this technology in the agrifood sector has so many benefits that it is difficult to list them all in such a small space. However, it is clear that the Blockchain can help companies achieve greater efficiency, by saving resources thanks to greater process control, and greater effectiveness, through the ability to exploit the qualities of the product and its origins as a lever for differentiation.

 

Moreover, we should remember that these advantages will have the greatest impact particularly on smaller manufacturers and agrifood SMEs. Their use of the Blockchain through NFC tags and other applications will grant them the possibility to better manage every stage of production, processing and distribution and expecially to exploit premiums based just on the kind of the product, its characteristics and the other limitless factors that contributed to get that result of production. Besides logistics benefits and the correlated efficiencies, this technology will lead to a progressive decrease of the value of price and brand marketing strategies as factors of differentiation.


Wineries, olive oil producers, cheesemakers, farmers and agrifood entrepreneurs should take this opportunity: thanks to the integration between online and offline spheres, it could be the best way to amplify the value of territory, the value of agrifood variety and above all, the value of work.

 

 

Tommaso Cattivelli

Founder of the Cru Agency & agrifood marketing specialist at 1trueid

 

 

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