Dive Brief:
- Unilever has launched a one-year pilot project that leverages blockchain technology to manage transactions on its tea supply chain, according to GreenBiz.
- The company is partnering with big banks and technology start-ups to track tea farmers in Malawi, who supply tea for Unilever brands. Greenbiz reports the project could reach up to 10,000 farmers.
- The project uses technology to maintain transparency on the supply chain, so both the company and the consumer know the origins of their tea.
Dive Insight:
Sustainability isn’t always at the top of the list of metrics to measure a company’s success. But executives are becoming more aware of its importance. Building a sustainable supply chain is one of the top challenges procurement managers cited in a forum earlier this year.
Unilever is tackling the challenge of sustainability in the supply chain by using data, technology and analytics. At an investor event earlier this year, Marc Engel, Unilever's Chief Supply Chain Officer, cited real-time data as a way to find solutions to supply chain problems. He reported response times cut in half, and quality issues down by 20%.
The company's decision to build partnerships in Malawi gives Unilever additional presence on the African continent. It already owns tea estates in Kenya and Tanzania. Globally, Unilever has hundreds of factories, sites and distributions centers in 67 countries.
Investing in sustainable tea is a critical part of Unilever's business strategy. The company hopes its strategy will build trust with consumers, who may be willing to pay a premium for a sustainably-sourced product. This is where blockchain comes into play. It can dramatically increase efficiency and accuracy of tracking tea from farm to store.
Unilever is by no means the only company using technology, specifically blockchain, to improve visibility on its supply chains. IBM and Walmart launched a pilot earlier this year to trace mango packages.
Normally it took Walmart nearly a week to trace the packages from grocery store back to farm, according to the International Finance Corporation. With blockchain, that same tracking process took just seconds.
A U.K.-based tech company, Provenance, “empowers brands to [trace] the origins and histories of products,” according to its mission statement.
The tech company uses blockchain as a way to keep data visible and current. It's one of the partners in Unilever's project. Provenance has previously used blockchain technology to trace origins of tuna fish. The project tracked tuna from fishers catching it in Indonesia to ultimately the consumer purchasing the fish.
Unilever's new blockchain program will not only increase efficiency and reduce counterfeits, but also build a more sustainable supply chain.
