Today’s consumers are better informed and more health conscious than ever before. As a result, consumers are interested in learning about what’s in their food and where it came from. These trends lead to huge shifts in the food industry, making supply chains more complex while consumers demand more transparency.

That’s why food suppliers need to move rapidly to meet these changing demands. Further compounding the issue is the increasing demand for niche products, like gluten-free foods, meat alternatives, locally-sourced produce and more. These issues pose a formidable challenge to food suppliers. They have to meet unprecedented demands for variety and adapt to rapidly evolving trends, all while providing greater consistency, safety and transparency.

Blockchain offers a comprehensive solution to these complex and interlocking challenges. In fact, this technology is poised to revolutionize the way food and beverage producers build consumer trust, improve food safety and perform compliance.

Unrivaled transparency

Blockchain is essentially a system for sharing information across multiple devices and organizations. It is both distributed and decentralized, meaning that no single person or company owns the system. This allows for multiple organizations to contribute information to the blockchain. More importantly, information stored in the blockchain is protected from tampering or hacking because all changes are transparent throughout the architecture. Think of it like a fool-proof digital ledger.

Food and beverage producers can also pair blockchain with the Industrial Internet of Things (IIoT), which collects data on ingredients and food products through every step of the supply chain. For example, IIoT devices track humidity, temperature and other environmental factors of products in transit or at manufacturing facilities. This data is then entered into the blockchain, where other organizations can trust the data is accurately recorded.

Blockchain can be utilized to build consumer trust in a variety of ways. Here are a few key examples:

Proactive approach to food safety. Traditionally, the food industry has approached food safety issues reactively as opposed to proactively. Blockchain completely changes this dynamic, as it enables companies to identify safety or quality concerns early in the food chain. As the first step in building and maintaining consumer trust is avoiding failure in the first place, this is crucial for food suppliers. The traceability offered by blockchain further bolsters food safety efforts. Current systems make track and trace a slow, laborious process, hindered by the fact that many companies still use paper records. Blockchain incorporates data on the entire supply chain in a single system, allowing companies to track food in a matter of seconds. Considering that the process traditionally takes several days, this can save food suppliers millions of dollars while protecting their reputation.

Alleviate health and safety concerns. Consumers are becoming more informed about the health effects of various foods. The health concerns (both real and manufactured) of GMO products, pesticides, additives and more weigh heavily on the minds of today’s consumer. Additionally, a study conducted by Crispy Green, Fairfield, N.J., indicated that 82% of Americans feel they have been deceived by a food label, which only makes it harder for food producers to build trust. Blockchain can provide the necessary transparency to alleviate this issue. Blockchain tracks and provides information on the entire supply chain, pulling back the veil on where food comes from and who’s involved. Food suppliers can then capitalize on this transparency to guarantee their customers are getting what it says on the package.

Environmental and ethical concerns. Consumers are increasingly invested in the environmental and ethical ramifications of their food consumption (fair-trade coffee, meat-free diets, etc.). Paired with eroding consumer trust, this puts the onus on food suppliers to prove their products are sourced in an ethical and environmentally-friendly manner. In theory, by scanning the label in-store, consumers could see every organization involved in production and assess the reputation for themselves. Furthermore, they can identify where different ingredients were sourced. But, while this level of transparency may seem excessive, it will likely prove essential for combating the growing skepticism of consumers.

Consumers—especially younger generations—demonstrate that they will switch brands and pay more money for transparent products. Unprecedented transparency gives food suppliers a critical edge on the competition. As a result, food and beverage producers have to ask themselves how they will adapt to these trends, and whether they will be on the front or tail-end of blockchain innovation.