How Nestle is Using Blockchain for Procurement Transparency

One of the disadvantages of being able to enjoy the wide range of exotic foods available to us these days is that we’ve never been farther from the source of our produce. Gone are the days when we used to get all our food from the local butcher and greengrocer, with modern supermarkets and food brands sourcing ingredients from all over the globe.

This puts pressure on the procurement arms of food producers to operate in a manner which is both ethical and transparent. And that means keeping track of these items as they move through their global supply chains.

Blockchain – the technology which underpins cryptocurrencies such as Bitcoin and Ethereum – can be used for this purpose, and that is exactly what food giant Nestle has been busy implementing over the last year.

Thanks to blockchain’s public ledger of immutable records of every transaction in a shipment’s history (we use the term “transaction” when discussing the blocks in a blockchain, but it is not limited to financial interactions) Nestle can make sure that each item it procures has been sourced ethically and that no counterfeit items have entered the supply chain.

“We looked at other legacy technologies to do the same thing,” said Nestle’s Benjamin Dubois. “The problem we had is that there is no technology that was flexible enough, that had the level of trust. Blockchain is a decentralized solution.

"The consumer knows that the data uploaded by the farmer has not been subsequently changed by someone else. We can consolidate the data we have in silos and show it to the consumer so that they can make their own judgement.”