What Are the Benefits of Using Blockchain in Your Food and Beverage Supply Chain?

Article sponsored by: Siemens




Blockchain technology has already had a significant impact on the financial industry. As technology advances, it appears to be ready to address long-standing supply chain challenges in the food and beverage industry. Companies and their partners having their own logging systems can result in information loss or confusion, such as recalls due to contamination, counterfeiting, increased regulatory requirements, matching changing consumer preferences, and increased global competition. Previously, the difficulties of acquiring and sending data to the blockchain in industrial settings threatened its viability, but recent blockchain technology has stepped in to simplify global supply chain communications.

With the prevalence of internet access, cloud computing, and the decreasing cost of the Internet of Things (IoT), it is now possible to generate, manage, and communicate data effectively. In combination, blockchain and the Internet of Things have the ability to generate immediate benefits and revolutionize food and beverage supply chains.

How blockchain is transforming supply chains

Assume you go to the grocery store to get some fruit. You buy the fruit because it appears to be in good condition, but can buyers be certain of where their fruit came from or if it was contaminated?

Everyone wants to know that the food they buy is safe to eat, whether it’s a fruit or something else, but what if you could see where your food is grown, stored, and inspected simply by scanning a barcode and instantly access details about the fruit stored on the blockchain? This decentralized digital transaction ledger stores information about the fruit, beginning with where it was grown. It could even include the name of the particular farm.

Obtaining information about the origins of food items is not yet a common practice for consumers or retailers, and with the food industry facing a number of challenges due to inefficiencies in the food supply chain, the current supply chain process continues to fail to ensure food safety at all stages.

Blockchain, a new distributed ledger technology, has the potential to improve food safety by bringing together a diverse group of stakeholders such as farmers, processors, retailers, and consumers.

Consumers, delivery drivers, stores, and food and beverage companies could all have access to transaction history that is transparent and immutable.

What is blockchain technology?

Blockchain technology enables products in the food and beverage industry to be tracked transparently throughout their entire life cycle – from the field all the way to the kitchen, but what exactly is blockchain and how does it work?

Blockchain technology is a decentralized distributed ledger or information record that is cloud-based and stores records of all network transactions in secure “blocks.” Due to the distributed nature of the technology, it is not owned or controlled by a single entity, as opposed to a centralized system in which the government or a brand has complete control over the transactional data. This allows different partners to upload information at any time, and the blockchain will save all copies.

Because of its security, efficiency, and scalability, Blockchain has gained popularity in a variety of industries. Blockchain is a distributed database that displays real-time information as well as chronological changes to a document. It can be applied to any supply chain where a unit is moved from one partner to another. It serves as the central repository for all shared data. This simplifies communication with supply chain partners in ways that were previously unthinkable.

Using blockchain technology, data is collected from all parts of the supply chain. Critical information is shared and synchronized among partners to ensure that the product is delivered to its full potential.

What are the benefits of blockchain in the supply chain?

Blockchain has the potential to dramatically transform supply chains throughout the food industry. Blockchain technology has the potential to improve supply chain transparency while simultaneously lowering costs and risks. Blockchain supply chain innovations, in particular, have the potential to provide the following significant benefits:

Traceability & transparency

As a result of changing customer interests, increased regulatory controls, and increased global competition, global supply chains are becoming more complex, food safety standards are rising, and more trust issues are emerging. Companies can use blockchain technology to ensure complete traceability and quality assurance from the source of resources to their customers, allowing them to provide the product variety that consumers expect while also providing the security required to build trust.

Blockchain is a distributed database that encourages honesty and transparency. All partners are responsible for uploading their product information and data. Accurate digital data collection increases partner accountability and trust.

Because of blockchain technology, product updates can be made in minutes, allowing you to see where a product is, how it is being made, and when it will be delivered all on one platform.

Blockchain technology can inform consumers about the preservation techniques used as well as the ethics of any raw materials sourced. As consumers become more concerned about ethical sourcing and production, blockchain solutions may become more common.

Food safety & quality

Experts estimate that approximately 15% of all food sold today is fake. Incorrect weight claims, relabeling expired foods, or labeling conventional foods as organic – given the enormous profit potential, criminal energy is high in this sector. Especially since the risk of falling victim to this scam has been so low thus far.

The creators of the brand bear the cost of the damage. They not only lose up to 13 billion € per year. Worse, if damage occurs, consumers face a health risk as well as a loss of confidence.

Track-and-trace solutions powered by blockchain provide the transparency required to successfully manage supply chains. They ensure complete traceability of all food and beverage ingredients and effectively aid in the fulfillment of a trustworthy brand’s promise.

Increased efficiency

Blockchain technology can be used to track product activity throughout the supply chain automatically. The possibility of human error is greatly reduced because blockchain automates each step of a product’s journey through the supply chain.

Because all data is uploaded to the cloud, logging digitization results in less administrative work and more consistent data tracking. You don’t have to try to connect with your partners to get the information you require; simply sign on to the blockchain to download it instantly. Everything about the product is in one place, which simplifies communication and operations.

Furthermore, blockchain is both global and scalable. This means that the technology can support global collaboration and communication in a matter of minutes. As a result, it is the ideal solution for a globalizing economy.


Secure “blocks” are used to construct blockchain technology. These are copies of the document that have been stored in chronological order and are linked to previous blocks. Blockchains are extremely hard to hack, which reduces the possibility of fraudulent activity or forgery. In fact, leading financial institutions use blockchain to securely transmit data.

As a result of the security provided by the blockchain, businesses’ reputations and credibility improve. Misconduct in the supply chain is greatly reduced, which reduces the likelihood of costly and damaging public relations risks. Blockchain is an excellent solution for safeguarding your supply chain data against cyber-attacks (which are becoming more common these days).

Greater customer satisfaction

In today’s siloed food supply chain, a product’s history is frequently unknown. As a result, many customers are skeptical of the information on food packaging. However, blockchain enables businesses to tell customers when, where, and how their food was processed, as well as allowing consumers to trace the origin and path of the product and retrieve detailed and batch-specific information. This transparency has the potential to increase customer trust and brand loyalty.

Trusted traceability with MindSphere and the blockchain

Siemens cloud-based IoT operating system – MindSphere – provides the perfect means to capture data across supply chains. Ready-made blockchain applications on MindSphere make it easy to subscribe and contribute. These applications also allow companies to limit information viewing privileges. In this way, sensitive information can be kept behind closed doors, while exposing only critical information to other members of the supply chain. Data from shop-floor systems, equipment, and IoT sensors are packaged and sent through secure cloud gateways to the blockchain.

Increased transparency and a new level of traceability can lead to significant savings, improved inventory holdings, brokerage fees, fraud prevention, and more.