Back in 2016, Congress shook the food and beverage industry by passing the first major change to labeling requirements in nearly two decades. Aimed at creating more transparency, accountability and traceability in the industry, the two pieces of legislation have spurred a wave of anxiety, as companies begin to seek guidance on how to best implement these new rules. On the bright side, new technologies are making this daunting task look more appealing.
Blockchain, in particular, is giving wary food and beverage companies something to be excited about. Not only can this technology help implement the new rules, but it also has the power to help companies transform their consumer experience and cultivate a more collaborative relationship between consumer, brand and product.
What are the new labeling regulations?
Over the years there has been an increasingly strong shift in how the public views, understands and ultimately purchases the products they consume. By popular demand, the new regulations are aimed at providing the U.S. consumer with more insight into the nutrition and ingredients found in packaged products.
For example, the first major change, The National Bioengineered Food Disclosure Standard (NBFDS), addresses genetically modified foods, or bioengineered (BE) food. The new rule specifies that any BE product must be labeled with a symbol to signify the existence of BE ingredients.
As more of an umbrella change to labeling, the Nutrition Facts Panel (NFP) Final Rule aims to provide consumers with increased data and transparency. The Food and Drug Administration (FDA) mandated that there be more specific nutritional labeling, including declarations of calories, sugars, daily reference values, percent daily values as well as a specific format on how to display the information.
Companies with annual sales equal to or greater than $10 million must implement these new rules by Jan. 1, 2020, while companies with sales under this threshold have an extra year to comply. As 2020 quickly approaches, it’s important for food and beverage companies to begin tagging and labeling all ingredients immediately — no matter how small.
What is blockchain, and how can it help?
Blockchain is a growing list of records linked together using cryptography to create timestamps and track data with extraordinary accuracy. For food and beverage companies, blockchain can create an audit trail that traces every possible stage of production. That means it can trace all of the nutritional data and origins, link supply chains and provide detailed data for targeted recalls.
For many businesses already adhering to strict labeling and ingredient tracking, these new rules may not seem like too big of a hurdle. On the other hand, many companies are finding these new rules both daunting and extremely challenging, especially if starting from scratch. In either case, more meticulous recordkeeping and documentation will inevitably shift the way these businesses are required to conduct processes and production. Lucky for food and beverage companies, the use of blockchain can greatly aid the process and provide incredible benefits along the way.
The ability for a company to provide such transparent and verifiable information to its consumers provides a massive opportunity for companies looking to differentiate themselves in a highly saturated market. Consistently transparent information has the ability to increase brand loyalty and nurture a positive consumer experience, both of which are trends seen in today’s market and are now required by the new labeling laws.
For example, a company could provide consumers with a QR code to scan in order to see a full history of their food’s production journey. This information would all be verified by blockchain and printed directly on the product’s label.
In recent years, product recalls have become an increasingly prevalent occurrence with improper tracking negatively affecting a brand’s reputation and bank account. Blockchain can help alleviate this threat by quickly identifying points of contamination and immediately pinpointing the location of affected products. Having this information readily available has the ability to decrease disruption and minimize the costs associated with a targeted recall. Not to mention limiting the number of consumers affected and swiftly eliminating the problem at the source.
For products containing a high portion of meat, blockchain has the ability to tag the origins and track every step of that product as it travels through the supply chain. It can also provide instant verification for consumers that a product is in fact organic, grass-fed or natural.
There is no doubt that the new labeling rules will cause some disruption, however, blockchain has unfathomable potential when it comes to improving processes and helping food and beverage companies leap to the front of the health movement.