Blockchain in the Consumer Industry | Consumer Products | Deloitte Netherlands


Blockchain’s potential for consumer products companies

Increase efficiency, value and transparency

Blockchain technology is expected to be a game-changer for the consumer products industry. It can help increase efficiency, value and transparency and has many practical use cases. What exactly could and should you do with blockchain technology? What are major companies currently doing, and where to start?

A potential solution

Blockchain technology is a potential solution for a lot of the challenges consumer products companies are facing, says Jacob Boersma, senior manager of the Blockchain team at Deloitte Netherlands. “It’s especially useful when it comes to the tracking and monitoring of supply chains, cross-border flows of goods, and services, as well as the authenticity and origin of products.” 

In a nutshell, blockchain is a distributed digital ledger of economic transactions. This infographic from the Deloitte publication Blockchain: A technical primer describes how blockchain works: 

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50 use cases, classified by potential value and complexity

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How blockchain works

Blockchain applications in the consumer products industry

The authenticity and traceability of consumer goods are becoming more and more relevant in the consumer products industry, explains Patrick Schunck, partner in the Consumer Products segment at Deloitte Netherlands. “End consumers are interested in the origins of a product and whether it was manufactured under sustainable circumstances. It’s something where consumer products companies can differentiate themselves from the competition.”

With blockchain technology, consumer products companies can create a digital twin of a physical product, explains Boersma. “With ‘digital twinning’ you can trace and monitor a physical product during the manufacturing process and once it is in the hands of the end consumer.” The latter may be useful when it comes to tracking previous owners, verifying whether a warranty has expired or doing a complete recall. “Those are all hard to do within the psychical reality, but very easy within a complementary digital reality,” says Boersma. 

Another important use case of blockchain technology is in the space of trading, says Schunck. “Especially in the space of agri-commodities trading, where there are multiple partners involved in the supply-chain. Using blockchain, parties can simplify, secure and accelerate the settlement of each transaction.”

However, these are just a few of the potential applications of blockchain technology in the consumer products industry. The figure below gives an overview of many more use cases, both business-centric and consumer-centric.

Use cases

Major companies join forces in blockchain consortia

To apply blockchain, you can experiment with smaller applications to gain experience and better insights, says Schunck. “But to get blockchain technology implemented throughout a whole supply chain is quite the challenge. You need a lot of investment and the cooperation of the whole industry,” he explains. “That’s why four big agribusiness companies are considering joining forces to further investigate options to apply blockchain to digitise and standardise global agricultural shipping transactions. The market leaders have the scale to make these investments and the market power to set the standards.”

Blockchain is definitely a technology where working together is really important, adds Boersma. “These kinds of consortia are being set up in almost every industry. As a smaller company, you don’t want to reinvent the wheel, you want to join a consortium and adopt the industry standards. You have to make sure you speak the same language as the rest of your industry.”

Blockchain within your company’s and industry’s context

While a lot of start-ups are working on and with blockchain, consumer products companies will need a lot more than just technology. “At Deloitte, we have a thorough understanding of your industry,” says Boersma. “We know everything about blockchain, but we also know how to build a business case within the regulatory and tax framework.” 

A digital transformation is much more than just a digital step, adds Schunck. “Just implementing the technology doesn’t mean your company will benefit from it. At Deloitte, we have all the expertise you’ll need to innovate and successfully implement new processes and technologies.”

Blockchain technology in action: what are major companies currently doing?

Blockchain technology can be used to verify the origins and route of food and beverage ingredients to improve transparency for consumers. The Dutch supermarket chain Albert Heijn is tracking the supply chain of their own-label orange juice using a private blockchain. Consumers can scan a QR code on the packaging with their smartphone and see the route the oranges travelled from the orange groves in Brazil to the supermarkets in the Netherlands. 

Albert Heijn traces oranges using blockchain technology

Facilitating B2B payments is an important use case of blockchain as the technology can simplify, secure and expedite the payment process, while reducing intermediary costs and risks. In May 2018, Cargill and a global bank completed the world’s first commercial trade-finance transaction using a single, shared digital blockchain-enabled application, rather than multiple systems, which minimised the time taken to complete the transaction and the paper trail.

Cargill completes a trade-finance deal using a single blockchain system

In 2018, Deloitte Netherlands opened BlockCenter, the Blockchain Center of Expertise, a cross-functional center where our experts from tax, legal, risk, audit and consulting come together. The Deloitte Blockchain Lab in Dublin is spearheading the deployment of blockchain in the European, Middle Eastern and African regions. 

Deloitte is one of the partners of the annual Odyssey Hackathon, the world’s largest blockchain hackathon. Over the course of the weekend participants can develop a proof of concept with a team. It’s quite an easy way for any consumer products company to figure out if a blockchain application is the solution to their problem.