World Milk Day: Blockchain is thriving in the dairy sector

May 31, 2020

Twenty years ago, the FAO (Food and Agriculture Organization of the United Nations) designated June 1 as “World Milk Day”. This year’s event is an opportunity for us to revisit the importance of traceability and transparency in the dairy industry, which has been a pioneer in the adoption of blockchain technologies.

Consumer confidence in the dairy industry has been lagging

The dairy industry has been affected by multiple scandals in recent decades. The most notable, such as contaminated milk in China or milk containing salmonella in France, have undermined consumers’ trust in the sector.  On top of this, many ethical issues are being raised (producer compensation, animal welfare, etc.), calling into question the existing model of today’s milk production.

Yet the industry has shown strong resilience and an incredible ability to reinvent itself. In France, initiatives such as “C'est Qui Le Patron?”, “Les Laitiers Responsables”, or “Juste & Vendéen” guarantee better compensation for producers who agree to meet strict produt specifications. The rapid increase of organic products in stores also shows the ability of industry players to shift and meet new consumer demands surrounding animal welfare and quality.

The challenge for the future will be proving these commitments and communicating them effectively to the consumer, while drowning out the noise of the various quality labels – of which there seems a new one every day. Blockchain has emerged as the most popular technology to address these issues and has established itself as the primary solution for dairy players looking to improve their traceability and transparency.

You're not familiar with blockchain yet ? Learn more with this simple but useful video !  

What role can blockchain play in the dairy sector?

Food safety: Blockchain technology can ensure reliable tracking of every single batch in the milk chain. In the case of a food-borne illness, blockchain makes it very easy to find the defective link and discard all batches that have been impacted.

Food Waste: The granularity blockchain provides during product recalls makes it possible to avoid mass recalls of an entire product line, reducing food wastage as well as the total financial cost and the impact on brand image.

Collaboration: Blockchain is a distributed and decentralized ledger, making it a «trusted third party». It allows all participants in a food chain (feed mills, producers, cooperatives, manufacturers, brands, retailers) to safely share information, thus offering the ability to track a product from start to finish and ensure its compliance.

Reassurance through transparency: Being able to guarantee the journey of a product in full transparency is an excellent way to stand out from competitors. Thanks to the blockchain, the consumer can discover the entire history of a product as well as proof of quality. Research has shown that consumers are more likely to buy a product that provides more detailed information, and that they are likely to pay more for a product that they know meets their values.

Reassurance through certificates: Tangible proof of product promises and certifications (labels, external audits, etc.) will also increase trust. In this instance, blockchain facilitates certificate verification through the provision of relevant data to independent certifying organizations (for proof of origin, ecological footprint, animal welfare, etc.). Certifications thus become easier to obtain/maintain and become more relevant to the consumer.

CONNECTING FOOD, a platform for traceability and real-time auditing of dairy chains, powered by  blockchain

The Connecting Food adventure started in the dairy industry, making World Dairy Day the perfect opportunity to return to our origins and celebrate the work done with our dairy customers.

Our very first client was Juste & Vendéen, a small dairy cooperative offering locally sourced fair pay products at reasonable prices. Their small size did not stop them from innovating, and this is how the very first bottles of blockchain-trace milk appeared in France in July 2018. Equipped with a QR Code, the bottles allowed consumers to access information regarding the origin of the product and the details of its production. In the goal of total transparency, the producer’s portion of pay (45 cents per liter) was also shared directly with the consumer, in order to reinforce the brand’s alignment with new consumer values.

The Juste & Vendéen milk bottles were first sold in the Système U grocery stores in the Vendée department, then more widely across the region, reinforcing their short distribution channels. Today, the Juste brand also sells honey traced by the Connecting Food platform, and plans to expand its product range.

Learn more with the testimonial of Agnès Texier, dairy farmer at Juste & vendéen

In 2019, a collaboration with Ingredia & Prosperité Fermière marked a new stage in our development. This global dairy player chose Connecting Food to ensure the full transparency of its fresh milk and milk proteins. Today, full traceability is in place in their dairy chain, from the feed mill to the finished product at the milk plant.  In addition, our LiveAudit® solution verifies 24/7 the product compliance of the “Via Lacta®” line, allowing them to ensure they are meeting their CSR promises.  Ingredia can thus prove that its commitments in terms of origin, animal welfare (grazing days, M2 per cow, pasture area) and health (GMO-free milk) have been met to both B2C consumers and B2B customers.

Learn more in this video of Alessandra Bonacasa, head of Sales & Marketing Director of Prospérité Fermière -Ingredia

Blockchain-based initiatives bloom in the dairy sector.

On a global scale, major players have also seized this opportunity to add value to their products. Arla Finland launched in 2018 a «Milkchain» on its organic UHT milk. Danone launched its  «Track & Connect» blockchain on the Aptamil & Nutrilon baby formulas in China. In France, Nestlé partnered with Carrefour to use blockchain on their Guigoz Bio 2 and 3 range of infant milk. Carrefour, the biggest French retailer, is also a blockchain user for its fresh whole milk Carrefour Quality Line (FQC).

Other initiatives currently at the project stage provide a hint at the widespread applications of blockchain in the industry. There are many examples: Bright Food in China, Vinamilk in Vietnam, El Ordeno in Ecuador, Nestlé in New Zealand…

While these projects have not yet been implemented on an industrial scale, they all share the ambition to add value to their products by communicating their strong commitments (producer compensation, freshness, organic, origin, etc.).

These initiatives highlight the new standards and respond to the growing consumer demands for transparency and traceability, marking the entry into a new era of the “Marketing of Proof”.

Interested in learning more?

Producers, cooperatives, brands, manufacturers and retailers: we are committed to supporting you in your transparency project. Our solution can be used to trace to all types of dairy products, from fresh milk to further processed products (yogurt, chocolate, ice cream, etc). Contact us !

Example of 100% transparent product lines produced from Via Lacta dairy ingredients by Ingredia, and traced with Connecting Food blockchain-based platform.