The food supply chain is one of the most important parts of any business in the world. Without a proper supply chain, most people across the world would be without food on the table. To ensure that everything goes according to plan, companies need to do a lot of work and ensure that every piece of information is reliable, verified, and up to date.
When you add companies focusing on organic food to the mixture, things can get even more challenging quickly. Here, we will look at some of the organic food supply chain problems, challenges, and ways to improve current processes and make them more reliable.
We will also analyze some of the key factors and tweaks that can be a significant change in this sort of market.
The Latest Trends in the Organic Food Supply Chain
More people are interested in learning more about organic food and what changes it may bring. By organic food, we mean any type of product farmers produce without fertilizers, pesticides, irradiation, etc. The primary idea is to focus on how our ancestors produced food. In other words, the food with no artificial chemicals used to grow it.
Naturally, things have significantly changed since the old days. But that does not mean that food cannot stay natural and organic. When we talk about the food supply chain, it involves all people, organizations, activities, and resources needed for organic food to reach consumers.
The interest in organic food keeps increasing. Today, 5.7% of total food sales in the United States is organic. Although numbers might seem too low, it is a significant increase compared to the previous decade. Slowly, the supply chain is already stretching to meet demand.
One of the latest trends that become popular not only in the organic food industry but in other spheres as well is e-commerce. It allows a certain degree of freedom that would otherwise be unattainable. Also, it can help with the demand for organic food. To a degree, at least.
That only shows how the use of technology can significantly improve the entire organic food market and help with consumer demand. As we can notice, the demand for food and beverages without chemicals is growing. There is no doubt that the numbers will increase in the next couple of years too. The only question is how to improve the process and involve technology necessary for proper functioning to ensure the consumers will be satisfied.
Current Organic Food Supply Chain Challenges
As interest in organic ingredients, beverages, fruits, and vegetables increases, it opens a door for new challenges. If the company is looking to sell certified organic food products, they must use at least 95% of ingredients that have organic certification. The other five percent still need to be organic-complaint and follow regulatory affairs.
The other challenge that companies might face is supply and demand. As we already mentioned, the demand for organic food and beverages is increasing each year. Therefore, some companies are unable to ensure an adequate supply. One way of dealing with that is by increasing the number of organic suppliers. However, that is not something you can easily achieve. Other than that, the companies currently working would need to increase production to meet the demand.
One of the ways to motivate farmers to transition to organic food is by offering them a chance to become a part of the Certified Transitional program. Unfortunately, there are still no official certification programs by NOP/USDA/OTA. But, there are several companies that set up this type of program on their own. All farmers will have to go through the transition period before they can produce organic food.
When we talk about the supply chain, the problems might occur during transportation, and every other step after the supplier. The entire process lacks transparency, but there are a couple of ways we can improve the situation.
Finally, there are many people who claim how going organic can in fact be more harmful to the environment.
The Latest Solutions on the Market
According to recent research, the organic food market will reach $272.18 billion by 2027. As a result, more people are shifting their focus towards organic food production and how they can improve the process.
Due to the Covid-19 pandemic, many industries were forced to focus on moving their business online. And the same applies to the organic market. There are more and more e-commerce websites built for the food industry, and the numbers will continue to grow. The primary reason that is so important is that the companies will continue to conduct their business online even after the pandemic is over.
Furthermore, the past decade will be remembered for the introduction of Bitcoin and the rapid growth of other cryptocurrencies. Since 2009, companies have been looking for diverse ways to use blockchain for their business and enjoy all the benefits it brings. The food market is no different.
Blockchain opens a new door for the organic food market. Also, it provides a unique opportunity for the company to improve their business and step up their game. Since the market is still young and small, the companies are forced to innovate if they want to stay in the game. One of the ways to improve the quality of the final product is to implement grading and sorting technology.
Sorting technology is used to detect any unwanted material or imperfection on the product. In other words, to see whether it is suitable to be sold to consumers. Moreover, the quality of the product can be detected quite early. That is, the company can find an alternative and reduce the amount of organic waste.
Benefits of Blockchain-Based Supply Chain Technology
If you are one of many people interested in what blockchain has to offer in organic food chain management, you are already aware of how beneficial it can be for the supply chain. That applies to every industry, not only organic food, and it is an excellent way to bring everything to the next level.
Let us look at all the benefits that come from implementing blockchain into the organic food supply chain.
One of the main qualities of blockchain is that every bit of information is available for all users. That means that anyone interested can keep track of the price changes, dates, quality, certification, location, and anything else that might be relevant for their business. All of that can improve the traceability of crucial materials on the supply chain. Also, it can reduce losses originating in the grey market and counterfeit items. In short, it is a significant improvement that could make the supply chain more efficient.
Ever since Bitcoin appeared, companies from all over the world have been looking for diverse ways to implement the technology behind it. Visa Europe, RBS, the Commonwealth Bank of Australia, and numerous other banks across the U.K. started working on their own proof of concept based on blockchain. And banking is just the beginning. Using blockchain in a supply chain will improve transparency, supply chain management, and efficiency while lowering risks.
Implementing blockchain technology in organic food supply chains can reduce risks and costs across every step of the process. Furthermore, the very nature of blockchain eliminates the need for unnecessary paperwork and administration. Since transparency is one of the key benefits of blockchain, the company will not have to spend time and resources on administration and paperwork.
Another example of a benefit directly tied to transparency is a company’s reputation. Everyone will be able to see materials used during the production. It will only serve to boost the reputation of the seller. That will also improve their credibility and public trust. At the same time, it will lower the risk of malpractice and the negative impact it might have on the company and its public relations.
Lower the Chance of Mistake
The business will have more control over outsourced contract manufacturing. Furthermore, each party within a supply chain will have access to the same info. Consequently, it will eliminate the chance of error or mistake, reduce the need for additional communication, and allow companies to spend less time validating data.
Since every transaction or update on the chain is visible to all authorized parties, it means that no one will be able to alter, delete, or hide important data. At the same time, it also enables an effective audit of data important for the supply chain.
These are just some of the examples of how implementing blockchain technology can be beneficial for the company, and the best thing is that there are no downsides. There is not a single point of failure in the blockchain, and it is designed to provide accurate and reliable information without any chance of fraudulent activities.
How to implement blockchain in food supply chain?
As you can guess, there are many ways and areas where you can implement blockchain technology. Based on what you are trying to achieve, the process will vary. Here, we will look at some of the examples of processes and how blockchain can improve them and make them more reliable and efficient.
By implementing blockchain in food supply chain, the company will be able to manage freight tracking and provide its buyers with a perfect mechanism for tracking goods around the world. And the process gets more complex the farther the goods are shipped. For example, sending something across the border requires a lot of paperwork. Blockchain can ensure that the company will deliver a secure record of the transaction. In turn, that will reduce the time needed for the goods to reach the destination.
We already mentioned traceability. That means that a company can track the entire journey of an item from the farm to the table.
The food industry is one of the biggest industries in the world. Thus, blockchain can ensure necessary transparency in every step of the food supply chain. The primary reason for the importance is quite simple — many types of food are perishable. It is necessary to ensure that everything is according to the highest standards since food can be a threat to public health. That means that there is no space for any mistake.
Finally, implementing blockchain will create a universal ledger. Also, due to transparency, every authorized party will be able to check it. That will create a balanced price across the entire market, and everyone will have a direct insight into the true value of the product.
TheBlockBox Blockchain Solution for Food Supply Chain
Here at TheBlockBox, we have already managed to tackle this challenge. We understand the importance of blockchain, as well as all the possibilities that come with it. Our primary challenge was to develop a product-tracking platform based on the blockchain that would be able to capture product quality metadata. That includes humidity, temperature, and various conditions of the environment like geotagging.
The idea behind it was that every involved party would be able to share and store data about the product and the origin of the raw substances, as well as track everything in real-time. Once the product reaches the store, a customer would be able to scan the QR code and see the entire journey of the product.
Naturally, the only way to achieve that is to use blockchain. The very nature of technology ensures transparency, decentralization, and tamper-free data. That is just one of the ways we aim to change the market and provide necessary tools for all businesses across the globe.
If you are looking for more details, or just have a couple of questions on your mind, feel free to message us. We love answering all your questions and finding incredible, market-changing solutions. Join us and help us shape the future of blockchain together.