Bringing Blockchain to the Marketplace

Recently in class we discussed the concept of making supply chains more transparent in an effort to cut costs and improve consumer expectations and levels of satisfaction. In particular we talked about “Blockchain Technology” and its effects that it could have on global transactions and logistics. This has been a buzzword recently in the news that seems to have little meaning and is often associated with extremely volatile cryptocurrency.However the computer code and technology behind it shows real promise in order to remove middle men such as banks from transactions and can keep a digital bill of sale attached to a good to follow it through its life. I decided to pursue if any companies were actually implementing this in their businesses today as the ideas behind the technology seemed several years ahead of where we were today. Several companies around the U.S. and the globe are actively trying to integrate this into their business models.

In particular, Denver’s Coda Coffee Co. has already fully incorporated this technology into all their products they sell in order to prove their grinds and beans are both fair trade and organic from seed to store. This helps to reinforce their business model which is responsible global coffee that doesn’t take advantage of either the environment or the coffee plant’s farmers. This is done through a simple QR code that allows you to see all the steps in the journey that particular bag of beans underwent. As a result Coda Coffee Co does have higher prices than many of their competitors but many consumers still choose to purchase their coffee there as they are attracted to the ethics and quality of their goods. Starbucks has also come out recently declaring a two month pilot program of a similar nature in order to keep the origins of their coffee transparent.

The food industry in particular is one that is quickly moving to embrace the blockchain technology as food fraud and health concerns have led many industry professionals to determine this is the answer. 60 minutes recently did a piece on food fraud, in particular on olive oil and how the mafia throughout Italy would repackage low quality olive oil with the brand “extra virgin” which has been estimated to amount to a 16 billion dollar a year enterprise through criminal misrepresentation and up-charging. Blockchain technology could prevent much of this criminal wrongdoing from happening and protect consumers from purchasing unethical or subpar products without their knowledge. This could be a simple fix that would eliminate health and safety concerns, as well as criminal activity and provide transparency for the entire supply chain.

While the food industry is one of the first to quickly embrace blockchain technology I can see how it may become more and more pervasive throughout our economy when it begins to take hold in several key industries. I believe currently it would be too costly to implement and the technology has to catch up to the ideas behind it in order to be widely successful but has vast potential. Here are some questions you can think on to consider the Blockchain technology and whether or not it has a place in our economy today.

Are there any industries in particular that you could see Blockchain having a sweeping effect on such as the Food Industry? Do you believe Blockchain technology is even the answer to a lot of our problems or is there a better solution out there? Should Blockchain technology even been implemented at all because of the high costs to many suppliers, distributors and retailers now that the consumer knows the costs of all of the goods?

 

 

Articles:

https://www.wsj.com/articles/bringing-blockchain-to-the-coffee-cup-1523797205

https://www.digitaltrends.com/cool-tech/can-blockchain-bring-transparency-to-global-supply-chains/

https://www.cbsnews.com/news/60-minutes-overtime-how-to-buy-olive-oil/

8 thoughts on “Bringing Blockchain to the Marketplace

  • April 17, 2018 at 5:46 pm
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    One of the main advantages of Blockchain technollogy is that it brings transparency to customers. When it comes about food, customers want to know what they are eating, so this technollogy is very attractive to this industry. But also to many others, like the car industry. Actually, blockchain technollogy is already changing this industry. In the firts place, it brings immutability because no records in the chain can be changed. Also transparency and high speed of operations; as well as data safety and data security.
    But it is very interesting to see how this technollogy is changing the second-hand car market. When we purchase a second-hand car we usually don´t trust the seller because he will tell us everything in order to sell us the car. He might say that the car is 10 years old when it is actually 12; or that it has dirven 100,000 miles when it has actually driven 200,000. But with blockchain technollogy they won´t be able to do that anymore because all the data is immutable. We could always compare what the seller tell us with the true information sotored in the blockchain. We will be able to check any information about the car: miles, life…
    http://www.archer-soft.com/en/blog/how-blockchain-changing-auto-industry

  • April 17, 2018 at 7:37 pm
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    I was very interested in the video we saw in class about blockchain and was curious to see what other companies have already incorporated this into their business. It was also interesting to read that a coffee company has taken the lead and incorporated this into their business model. The biggest takeaway I had from class was that blockchain allows for and increased level of transparency for companies. So, it makes sense that Coda Coffee Company values transparency and their business model is providing responsible global coffee to customers.
    I believe that the food industry would benefit greatly from this new technology. With all the food fads that are coming out these days, it would be nice to know what exactly is in particular foods.

    • April 18, 2018 at 5:15 pm
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      I agree with Lauren, I think that transparency throughout the supply chain is vital to a company’s success. It’s interesting to me that Starbucks, for example, hasn’t tapped into this blockchain technology. Considering they pride themselves on giving the customer an experience, I would think that they would be interested in something like this, regardless of the cost. Sure enough, I found an article about the beginning stages of Starbucks’ blockchain journey: https://www.geekwire.com/2018/starbucks-explores-potential-use-blockchain-tech-bean-cup-pilot-program/. With such an industry giant getting involved with blockchains, I’m hopeful that other large food and beverage companies will join in as well. Not only does blockchain technology improve Supply Chains, but it also allows transparency in consumers and what the supply chain they’re supporting looks like.

  • April 18, 2018 at 4:03 pm
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    I think it is especially important that consumers know exactly what goes into the production of their food. There are plenty of examples (https://features.weather.com/thesource/, http://fortune.com/big-chocolate-child-labor/) of the horrors that go on in agriculture all around the globe. As much as we would like corporations to do their part, and even as much as they might, the problems are likely too widespread and uncorrectable to be solved through such initiatives. This is why I think the blockchain can have a tremendous impact. While it would not be able to eliminate issues such as child labor, and often the human trafficking that supports it, it would give consumers a much better sense of their supply chain. Instead of hoping that claims on the packaging are true, they could actually investigate the path of their product to make sure they are not supporting problematic practices.

  • April 18, 2018 at 8:24 pm
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    This post is a good follow up from last week’s post that talked about reassuring food quality within the food industry. Many companies that manufacture or sell food are being forced to redesign their supply chain in order to enforce a higher level and a more consistent product. The reason many firms are forced to do this is because consumers are growingly more concerned with the health, quality and ingredients of the foods that they purchase. Consumers want to know the source of their food is and how it has been handled along the way. Many times, companies advertise the healthy origins and handling of their foods, but customers are usually slow to believe it. Blockchain will allow companies to prove their quality and allow customers to understand everything about the food that they eat. That is why I believe Blockchain will take over the food industry, but I do think that this technology has the capability to extend far into multiple different industries.

  • April 18, 2018 at 9:35 pm
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    Wait this is actually crazy that you are writing about this because recently, I cant remember if it was on the news or in an article that I read, I learned that there are lots of different products/foods that are FAKE but being pawned off as the real thing because they are cheaper and easier to produce/sell. Lets take our first culprit for example, good ole Wasabi. Think you’ve enjoyed the fiery spread with your many sushi rolls? Think again. 99% of wasabi sold in the US is #fakenews. It is simply a mixture of horseradish, hot mustard, and green dye (yes I said green dye, just think about that for a second). Wasabi is not only difficult to grow but also extremely expensive, costing 160 dollars per kilogram. The second food fraud, which I personally feel is a more widely known lie, is truffle oil. When most people hear truffle oil they think of the exquisite aroma and gourmet taste, but did you know that luxurious flavor is actually the chemical 2,4-dithiapentane, otherwise known as bis methane (yummy)? Your favorite health food grocery store, Trader Joe’s is even facing a lawsuit for selling said fake truffle oil. With 50 billion dollars in annual revenue this deceptive business only keeps gaining momentum. I decided to do some more research and see what other chemicals I am ingesting on a daily basis and come to find out Honey, one of my favorite sweet treats is actually just a combination of different factory made sugars, oh and a few illegal Chinese antibiotics!! I definitely think blockchain technology is a step in the right direction but we need to see legal action being taken, as well as harsher regulations by both the government and FDA if we want to drink and eat our favorite foods without the worry of how many chemicals and animal parts we are actually ingesting.

    http://www.businessinsider.com/most-wasabi-served-in-the-us-is-fake-2017-1

    https://www.nytimes.com/2017/09/15/opinion/truffle-oil-chemicals.html

    https://www.prevention.com/food/healthy-eating-tips/food-fraud-11-most-common-cases/slide/3

  • April 18, 2018 at 10:30 pm
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    Blockchain is a relatively new trend that I had no prior knowledge of before our class lesson this week. I find Blockchain-ing to be incredibly innovative, and I am excited to learn more about it. Wondering whether the “extra virgin” olive oil that you paid $10 extra for is actually what the label entails is not something that would ever cross my mind. I have grown to trust labels and claims so easily because how would I know otherwise? Blockchain improves and increases communication across and throughout the supply chain, which allows for greater transparency for partners and customers. Blockchain touches on the ethics of business and operations. This makes me wonder if blockchain could have caught the Wells Fargo scam as “employees moved funds from customers’ existing accounts into newly-created ones without their knowledge or consent”. Wells Fargo forged accounts, and I wonder if Blockchain could have tracked the creation of these new accounts and been able to spot the fraud earlier rather than later. Regardless, Wells Fargo has agreed to pay $185 million in fines along with $5 million to refund customers. I’m sure the employees who created these accounts never imagined how costly their unethical acts would be.

    Here is the article: http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/index.html

  • April 18, 2018 at 11:31 pm
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    I think it is great that the food industry is finding ways to integrate Blockchain into their companies. Tranperacy is something that many people are willing to pay for. As you mentioned, Denver’s Coda Coffee Co. charges higher prices, but all their customers know exactly where their coffee beans have been. This new technology can help to find where health concerns in the food industry are coming from and lead to more customer trust of brands. I believe higher prices are worth the transparency and better ethical work standards.

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