COVID-19 had a chilling effect on the food, beverage, and agribusiness industries, causing labor shortages and supply chain disruptions that significantly slowed food to market. The persisting impacts of the pandemic, paired with an uptick in adverse weather activity and rising energy costs, are placing a significant strain on the sector as a whole. According to the World Food Program, there were 50 million people in 45 countries in the “emergency” phase of food insecurity in 2022, just one step away from a declaration of famine.
Companies have a number of options to address these challenges through the use of technology. One notable example is employing blockchain to manage supply chain issues. As the name implies, a blockchain is an encrypted, chronological series of “blocks” or groups of transactions “chained” together to store different types of information that are historically kept separate. In functioning as a ledger of sorts, the blockchain can create a digital record of processes, such as the flow of information, inventory, and financials.
Blockchain will be key in mitigating supply chain inefficiencies. Take, for example, the problem of expired food items. Traditional methods may tell you how many expired food items are on a shelf, but they don’t tell you the reason why—was it inventory mismanagement, shipment delays, a decrease in demand for the product, or price increases? Blockchain can help trace all of those factors and identify the cause in real-time.
Blockchain is just one example of how companies can leverage technology to navigate disruptions and streamline their processes. We’re seeing this play out across the industry through the automation of fertilizers and pesticides to replace blanketed coverage, through improved efficiency of farm equipment, and, in particular, through the innovative management of food waste.
Solutions to managing food waste are far-reaching. Some companies are turning lost revenue associated with waste into business opportunities while creating a positive social impact. We’re excited to see how innovation continues to account for social investment potential.
Our food is heavily reliant upon the global supply chain and intricately related to climate. GHD recently conducted a groundbreaking study that showed the fast-moving consumer goods and the retail sector could lose $1104 billion of total gross domestic product by 2050, with agriculture set to lose $332 billion by 2050 through water-related risk. It’s crucial, then, for organizations to consider climate resiliency in their business strategies. Governments, communities, and businesses should be strategic in their resource management by planning for climate risks, optimizing infrastructure, leveraging data, and prioritizing nature-based solutions.
Identifying inefficiencies in the food supply chain will also be crucial. Blockchain can be immensely helpful in addressing these challenges by streamlining and providing transparency in the supply chain reporting process. Still, it’s important to keep in mind the inevitable pitfalls of new technology and remain diligent when reviewing and protecting information.
We’re excited to continue guiding businesses through the complex issues facing the food, beverage, and agribusiness industries. Please reach out to either of us—Elizabeth Baio or Virginia Philps—with any questions you might have.