Food and beverage supply chains are keen to embrace the blockchain

Apr 10, 2018

Food Supply Chain Blockchain

After a sudden surge in blockchain adoption within food supply chain in the last quarter of 2017, the momentum seems to have continued in the first quarter of 2018. Here are some trends related to the enterprise blockchain adoption for projects related to food and beverage supply chains.

  • Strong handover from previous quarter: 4Q17 had seen seven new enterprise blockchain projects focused on food and beverage supply chain. These projects were started by various industry stakeholders that included restaurant chains, government organizations, NGOs, food retailers, and beverage companies, among others. The seeds of this strong adoption were sown in the previous quarter, in which IBM and a consortium of several large food companies and retailers came together with IBM to test the technology.
  • A weak start to the quarter in January: Post the holidays, the first quarter of 2018 started sedately as January was a relatively calm month. This also coincided with the downtrend that was being witnessed in the crypto market, as bitcoin and ether prices crashed significantly from their December highs.
  • Beverage giants boost adoption in the latter half of the quarter: However, the two trends soon disassociated. Even as the crypto market continued to dwindle and stumble during the remainder of the quarter, the enterprises stood behind the technology strongly. The quarter saw six new enterprise blockchain projects, announced by a variety of industry stakeholders. However, the quarter was dominated by the confidence shown by leading beverage giants in this technology.
  • Balanced mix of local and global initiatives: The global footprint of the projects announced during the quarter was a mix of some regional initiatives and some large initiatives that will address global, highly complex supply chains.
  • Blockchain plus IoT emerging as a template: We have also seen an increasing trend of projects where the blockchain technology is being used in tandem with IoT. We believe that the food and beverage supply chain can perhaps be the best template for how these two emerging technologies can complement each other.
  • Vendor ecosystem seems pretty diverse: If we look at the overall vendor selection trend, for all projects, we note that large and established IT and consulting vendors continue to be a preferred choice for projects where some sort of consortia are involved. At the same time, some large players from the food as well as retail industry, have also initiated in-house projects. The third category is of the small niche vendors being entrusted by individual enterprises for specific, mostly regional applications.

Note: Please note that these enterprise blockchain projects do not include independent blockchain platforms/ projects which claim to provide solutions for improving food supply chains. We have only included those projects, which have been selected by enterprise clients, Non-profit or government organizations to improve existing supply chains. For any questions please write to our research team at: contact@esg-intelligence.com

About ESG Intelligence

ESG Intelligence closely tracks the enterprise blockchain adoption across different industries, countries, and applications. We have provided sourcing intelligence to several senior IT decision makers, who are exploring the adoption of this technology. Our database of ~400 enterprise blockchain projects and ~200 enterprise blockchain vendors make us the right source to start your blockchain research.

Interested in similar content

We will continue to publish similar articles to discuss the trends in enterprise blockchain adoption in various industries, geographies, or related to specific applications. Please subscribe to our viewpoint, by submitting your email address in the right menu. Also, explore our food supply chain management dashboard. 

About ESG Intelligence

ESG Intelligence enables corporations to embrace emerging technologies to improve their business and sustainability performance. We deliver research-driven insights in the areas of blockchain intelligence and risk management.

Our enterprise blockchain intelligence solutions have evolved after speaking to 100+ senior decision-makers at enterprises and leaders at blockchain technology companies, about how they want to use our intelligence. Our solutions can empower corporate and investment decision-makers to make intelligent and informed decisions, about blockchain use case identification, vendor selection, consortia identification, and at the same time allow you to prepare for challenges that make blockchain adoption difficult.

Our risk management solutions are aimed at identifying and mitigating supply chain risk for corporates. We conduct in-depth supplier risk assessments and monitor your critical supplier to uncover any supply chain disruption before it happens.

Explore More

Can blockchain regulation keep up with innovation?

Nov 22, 2017

blockchain regulation

Image courtesy: pixabay

2017 has been an year where significant progress has been made in the direction of enterprise blockchain adoption. This has been made possible through concerted innovation efforts of enterprises and IT vendors. There are more than a 120 enterprise blockchain use cases, that are in various stages of their lifeycles. However, what’s not catching-up is the blockchain regulation – a framework to define the rules for the various enterprise applications. This delay can hurt blockchain ecosystem in multiple ways:

  • Several large enterprises in various industries are still sitting on the side-lines, waiting for the rules of the game to be defined.
  • Even for the enterprises that are experimenting with the technology, it might be difficult to implement it on a meaningful scale unless they are clear about the regulatory framework.
  • Unregulated use of the technology by unethical and anti-social organizations, can cause serious economic and social damage to enterprises, consumers, and the governments.

BFSI is where the action is

The BFSI sector currently leads in terms of strategic and technological investments in blockchain. Therefore, the regulators in this sector have also become active and are closely monitoring the progress.

  • In United States regulators like SEC, CFTC (The commodity futures trading commission) and FinCEN (The financial crimes enforcement network) are actively studying and monitoring this technology.
  • Bank of England has also acknowledged the usefulness of this technology and is testing it for a couple of applications.
  • In Canada and Cambodia, central banks are actively involved with financial institutions and technology companies to successfully implement blockchain technology for different applications.
  • In India and China, the central banks are embracing this technology and are contemplating ideas of using the technology for digital currencies.

There are also other sectors such as healthcare, food supply chains, and identity management, where regulators and governments are showing keen interest to understand the technology and its impact.

Challenges for the Regulators

Conflicting characteristics: Many characteristics of blockchain, such as transparency, security and immutability, should attract the regulators. However, these same characteristics are not compatible with the current regulatory set-up, and conflict with many regulations such as data protection and right to be forgotten.

Evolving Technology: The technology is still in development stage and there is lack of clear understanding of its impact on various industries and current the regulatory frameworks. With many companies conducting different pilots and proof of concepts there is a possibility that current regulations need to be amended or additional regulation to be introduced.

Public Blockchains: While it is still possible to draft regulation for a private network as number of parties are limited. However, in case of public blockchains it would be difficult to apply jurisdictional laws due to its nature of free access and international distribution.

The way forward

Regulators need to start by acknowledging the aspects of the new technology which can positively impact existing industry dynamics. Next, they need to define a roadmap for creating a regulatory framework. Finally, they should highlight the aspects of blockchain which are difficult to regulate. This would allow other stakeholders to apply their knowledge and innovation efforts towards these ‘tricky aspects’. We are sure, these steps will enthuse the enterprises and IT vendors and will expedite the process of rolling our the blockchain regulation, for various industries.

About ESG Intelligence

ESG Intelligence enables corporations to embrace emerging technologies to improve their business and sustainability performance. We deliver research-driven insights in the areas of blockchain intelligence and risk management.

Our enterprise blockchain intelligence solutions have evolved after speaking to 100+ senior decision-makers at enterprises and leaders at blockchain technology companies, about how they want to use our intelligence. Our solutions can empower corporate and investment decision-makers to make intelligent and informed decisions, about blockchain use case identification, vendor selection, consortia identification, and at the same time allow you to prepare for challenges that make blockchain adoption difficult.

Our risk management solutions are aimed at identifying and mitigating supply chain risk for corporates. We conduct in-depth supplier risk assessments and monitor your critical supplier to uncover any supply chain disruption before it happens.

Explore More

Top five enterprise blockchain challenges that must be overcome in 2018

Nov 13, 2017

blockchain challenges

Image courtesy: pixabay

Although blockchain is being viewed as the next big thing in technology, its adoption is fraught with myriad risks and compliance concerns. Some of the major blockchain challenges relate to regulatory uncertainty, privacy, high cost of implementation, and lack of standardization and integration. Progress is being made to overcome these hurdles by appropriate stakeholder, even as the pace of progress is only chequered to say the least.

Past couple of months have been ‘very good’ with respect to enterprises (even beyond financial services) coming forward to test this technology. We believe that 2018 can be the year of enterprise blockchains. Several ongoing use-cases should coming to fruition and the vendor landscape should also get more depth and a better structure. However, the enterprise adoption of blockchain might not realise its full potential if the appropriate stakeholders fail to address the following challenges.

Shadow of the ‘coins’

Challenge: The two most popular blockchain implementations thus far – Bitcoin and Ethereum, have not covered themselves in glory when it comes to enterprise level security, trust and transparency. Other cryptocurrency related negative media, generated by the likes of the Tezos and more recently Bitconnect, is not helping the blockchain reputation either. Most enterprise use cases are currently focusing on permissioned private blockchains, which are far more secure and supposedly trustworthy. However, their success stories have not arrived yet, to counter the dark shadow cast by some of the cryptocurrencies.

The way forward: Some positive and successful use-cases related to enterprise use of blockchain technology must come to fore. Also, better regulatory framework for cryptocurrencies and ICOs should help contain more negative surprises.

Regulators’ Inhibition

Challenge: Inadequate regulation and absence of standardization around implementation of blockchain technology also poses a challenge. This is partly because governments and other public institutions such as central banks, utility regulators, etc. are resistant to change. Their reasons are justified to some extent, as they seek clarity on possible and viable use cases, and the cost of change (discussed below). However, it is turning out to be a chicken an egg situation, which if persists will only harm the blockchain ecosystem.

The way forward: Regulators need to shed their inhibition and start a systematic process of drafting regulations to clear the playing field. Meaningful steps in this direction can facilitate the entry of several enterprises who are currently waiting on the sidelines.

Vendor reluctance

Challenge:  Microsoft, and IBM have played a big role to bring the enterprise adoption of blockchain to its current state. Recently, Oracle has shown positive intent about the blockchain cloud, which is also a positive step. However, many other large IT vendors are not sharing their enthusiasm about the enterprise viability for this technology. Unless there is a consensus among the large enterprise IT vendors, CIOs might find it difficult to give the right mindshare to blockchain.

The way forward: Other IT vendors from across the ICT value chain must buy-in to the blockchain story to create a consensus on the supply-side. 

Beyond Consortiums

Challenge: Building consortia to test the blockchain technology has been the modus operandi of many enterprises experimenting this new technology. This is justifiable because the technology is inherently based on peer-to-peer transactions, and multiple stakeholders in the ecosystem must be on-board for any successful implementation. However, the consortia mode comes with its own set of challenges. Many of these consortia have competing members from the same market, having their own business objectives to satisfy. Now, these objectives might not always be in-line with the objectives of the consortia, creating a friction. This friction is counterproductive in terms of time and investments, and slows down the process implementation. R3, the biggest blockchain consortia yet, has already seen exits of heavy weights such as Goldman Sachs, Morgan Stanley, Santander, and JPMorgan.

The way forward: We hope that some of these consortia can soon deliver something fruitful, else the interest of the participants might dwindle. We also believe that enterprises that go alone, or partner with up-stream or down-stream stakeholders in the value chain, stand a better chance of success.

Cost of change

Challenge: Everything has a price. Also, cost-saving has been the most important driver for technology adoption by enterprises. The blockchain technology currently requires high capital cost, as the proof-of-work algorithm used by most blockchains requires significant computing power to process transactions. However, there remains a lack of clarity on what enterprise implementations can cost, or perhaps will there be any cost-benefit of going with the blockchain?

The way forward: The vendors must provide some clarity on the ‘cost of change’ relative to existing set-up to induce more interest from the enterprises.

With the US and most EU economies on the recovery path, 2018 can be the year, when many CIOs should look to loosen their purse strings. Therefore, if the relevant stakeholders in the blockchain ecosystem can get their acts together to overcome these blockchain chalenges, 2018 can truly be “the year of the enterprise blockchain”.

Follow Us

About ESG Intelligence

ESG Intelligence enables corporations to embrace emerging technologies to improve their business and sustainability performance. We deliver research-driven insights in the areas of blockchain intelligence and risk management.

Our enterprise blockchain intelligence solutions have evolved after speaking to 100+ senior decision-makers at enterprises and leaders at blockchain technology companies, about how they want to use our intelligence. Our solutions can empower corporate and investment decision-makers to make intelligent and informed decisions, about blockchain use case identification, vendor selection, consortia identification, and at the same time allow you to prepare for challenges that make blockchain adoption difficult.

Our risk management solutions are aimed at identifying and mitigating supply chain risk for corporates. We conduct in-depth supplier risk assessments and monitor your critical supplier to uncover any supply chain disruption before it happens.

Explore More

Pin It on Pinterest