Blockchain technology is driving dairy’s future

By Dale Beaty, director of member relations

It’s likely you have heard the word “blockchain” since it has existed for just over 10 years, but you may not have grasped its importance to dairy’s future. If you were aware that a new technology would soon transform dairy for every farmer, processor, trucker and retailer in the supply chain, would that be worthy of your full attention? Well, that’s exactly what is happening. Wherever you are in the dairy supply chain, blockchain technology is coming faster than you think.

What is blockchain?

Blockchain is basically a network of computers that all have the same history of transactions. Instead of one company or a single database server holding all the information, now the information is spread across the entire network. Blockchain is a system for recording information in a way that makes it nearly impossible to change, hack or cheat. Each block in the chain contains several transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant's ledger.

Why will blockchain transform dairy?

Today’s dairy customers are more discerning, which means they are willing to pay a premium for food safety, sustainability and ethically produced food. To earn those premium prices, the dairy sector must embrace transparency and traceability throughout the entire supply chain, from its production on the farm to its ultimate consumption by the customer. Increasingly, major food brands use transparency and traceability to set themselves apart from their competitors.

A blockchain technology-based dairy supply chain system benefits every participant in the chain. Using the blockchain platform, dairy farmers can communicate more effectively with all the other participants in the supply chain. Dairy farmers can maintain the strong reputation of dairy by disseminating improved food production practices, sustainability and animal care throughout the entire supply chain.

Certification agencies and regulatory bodies will use blockchain to make certification and compliance easier to track and manage. Food processing and manufacturing industries can communicate accurate information about food ingredients, handling instructions, expiration dates and cooking instructions to customers. They can also easily recall any defective products. Logistics agencies will be better able to track and reduce food spoilage during delivery. Wholesalers and retailers can better market dairy foods by focusing on specific attributes the customers seek. Expired, spoiled or recalled food products can be easily identified and removed from shelves.

The customer will gain confidence in the dairy foods they purchase because they will know every detail of the product from the dairy farm until it reaches their table.

Three key benefits of a blockchain system for dairy:

• Improvement in dairy food safety. With the transparency of blockchain technology, customers can check and validate every detail in the production, processing, transportation and sale of each product. With the traceability of blockchain technology, a foodborne disease outbreak can be mitigated because the entire history of the food item can be traced and recalled quickly.
• Competitive advantage for real dairy foods. Since blockchain information cannot be altered, information on real dairy products will stand out in comparison to non-dairy alternatives.
• Establishing trust in the industry. Blockchain provides a web-of-trust system that enables every participant of the supply chain to check and validate every detail of information supplied. Thus, customers will trust the dairy products they buy.

Blockchain technology is just beginning to transform the dairy industry. I strongly encourage you to learn more so you are prepared to be a leader in adopting and using this technology.