Have you heard of blockchain rice?
4 min read

Have you heard of blockchain rice?

Consumer brands' story of trust with blockchain

Transparency content is becoming increasingly important to consumers during their purchase journey. Providing a trustworthy source of provenance data is a unique feature of blockchain. This post shows the trust quality of blockchain in practice and how it can be used in real world scenarios. It is something that is often overlooked but is actually an important element in many industries. Product marketers who understand this concept will be able to apply it to their industry and see what benefits Blockchain can offer. They will be able to create a competitive advantage and be an industry leader

David Ritter, CEO of Penta Solutions, and I had a meaningful discussion about this aspect of blockchain. Penta aims to become a "Universal Blockchain Connector". They want to make blockchain accessible to a wide audience - mass adoption. Penta solutions intend to connect not only different blockchain technologies, but blockchains to existing networks like online systems etc. As well as connecting blockchain technology with off-chain, brick-and-mortar businesses.

"Consumers are increasingly demanding transparency in products. They want to know that if a product says organic, it's really organic. Or they want to know that if a product says that it's a sustainable product than the farm that it comes from is truly a sustainable farm. Or they want to know that the clothing they buy wasn't made by child labor. Consumers are demanding more transparency. This is a key factor for consumers in modern economies. Blockchain comes here because this is where blockchain has a unique value proposition for supply chain," David Ritter tells me this in reference to Blockchain Rice, a use case in which Penta Solutions has been involved.

David's experience is also supported by a "2017 Transparency Study" done by Response Media. As their report confirms, "Consumers are willing to spend more on a transparent product vs. nontransparent product, with Millennial Moms and Gen X Dads willing to pay the highest price for these products."

Source: 2017 Transparency Study by Response Media

Their data goes on to show that 80% or more consumers are willing to pay more in all product categories. Fresh foods tops the list with 92% of respondents willing to pay more for better visibility in the supply chain from farm to table. They want to know all about source of ingredients, manufacturing and shipping & handling of the product. Along with sustainability, charitable, and labor policies of brands.

Source: 2017 Transparency Study by Response Media

Consumer expectations are becoming more sophisticated and we need to consider the fact that there is now, more than ever, a new generation of consumers that does not have the same expectations as those who came before. In 2017 Penta did their first at-scale deployment of a supply chain solution. It is a traceability platform for rice in China. They worked with a state owned enterprise and a public company to track about 13 million acres of rice farm land in China's northeast. The traceability was done up to the point of purchase by consumers, which was through JD.com, which is the second largest online retailer in China.

It was marketed it as part of the product offering for rice and called it - Blockchain rice. When  somebody would buy a bag of rice on JD.com, they could scan it and see the the provenance through the whole supply chain. This is one of the key takeaways for Penta from this project - that people are willing to pay about three times as much as they would otherwise pay for the same bag of rice.

In context of the Chinese consumer, there's a huge problem with adulteration of rice products. People are concerned about the safety of buying rice at supermarkets. As David told me, "There's been news reports and studies have come out saying that, if you buy a bag of rice at a Chinese supermarket, it might have up to 30% contamination."

In some cases, it might be natural additives like stones, but in other cases, there's also chemical contamination like glass particulates. We don't know where this comes into the supply chain. Rice is a staple of nutrition there in the diet. So if one of your staple products has that level of contamination, it's a serious issue. Just by presenting transparency in the supply chain, and allowing consumers to interact with the data, to see for themselves that it was a safe supply chain, and there was no adulteration of their rice, they're willing to pay more money.

Consumers expect some form of transparency and blockchain offers a way to make that happen, with an immutable audit trail for provenance data. As consumers see the benefits of transparency, their expectation is for brands and businesses to provide all relevant information such as ingredients details, manufacturing process and sustainability practices etc. Providing a trustworthy source of provenance data is a unique feature of blockchain. There is a clear, practical business use case for transparency that can’t be ignored. It has the potential to disrupt a wide range of industries. By determining the nature and origin of items and information through a blockchain solution for provenance, brands can ensure a high level of trust from consumers throughout the purchase journey.


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