Can Nestlé Lead Enterprises Into The Realm Of Public Blockchain Application?
Even though 2019 has been dubbed the 'Year of the Enterprise Blockchain,' the exploration of this technology by billion-dollar companies has been very limited. Blockchain, in its original and purest form, has yet to be fully investigated.
IBM, Linux foundation’s HyperLedger, AWS, Microsoft, Oracle, and a few other big-name IT solution companies flocked to be able to provide enterprise-grade
blockchain services to companies such as those outlined on Forbes' Blockchain 50 list. More than 50 percent of those companies are using Hyperledger in some form.
These solutions for enterprises are, of course, incredibly attractive as they offer the efficiency and transparency of the blockchain, while still keeping the control of data in the hands of those implementing these private blockchains.
With this level of control, however, is a sacrifice of some of the other, more inclusive and transparent, features of blockchain. This has led to a dividing line being drawn between the private blockchain believers - which encompasses most enterprises - and on the other side, those who would not even dubb a private blockchain as an actual blockchain.
Now the world's biggest food producer is willing to take a chance on public blockchain for its supply chain. Nestlé, while still working with IBM and the FoodTrust, has announced a partnership with OpenSC to pilot a public blockchain for a few essential commodities.
It is an exciting development, as there is no enterprise on the same scale as Nestlé that is actively pursuing a public blockchain solution for their supply chain, but what makes it even more noteworthy is Nestlé’s reasoning.
Nestlé has said they want to be the example. They want to be the leaders, the ones to prove the viability and power of a fully transparent public blockchain supply chain in the hopes that other enterprises will follow their lead.
If Nestlé can be the successful pioneers of public enterprise blockchain usage, it could well re-shape the entire journey of blockchain's adoption and usage at the highest level.
The logical next step
Nestlé’s foray into blockchain began roughly two years ago and came as a logical progression to their needs for the supply chain. Benjamin Dubois, Blockchain lead and digital transformation manager at Nestlé, explains how the company first got involved through IBM and the FoodTrust.
“We were looking for solutions to digitize out the supply chain, and at about the same time, we saw the Food Trust with IBM and what they were doing," explained Dubois. "We discussed with IBM, and Walmart, which is a key customer, and they said, 'well, join the effort, it is what we want to do, it is what you want to do, so let's join the industry effort'; that is why we joined food trust as a foundational member."
Nestlé has been an integral part of the IBM FoodTrust, and they maintain there is a lot of value and growth still to be had by building this private blockchain ecosystem. Dubois notes that the B2B side of FoodTrust is vital for companies like Nestlé, and as the trust continues to grow, the better things are getting.
"The message we had for IBM was to be open; they are open, I mean, you can join, and you have people joining and uploading data, and it works that way, but we are at a stage now where the solution is to grow," added Dubois.
"It is growing too; there are close to 100 companies in Food trust. So when we were 12 companies, and this was a little too concentrated, now it is becoming something significant, but now it is converging to that philosophy of connected ecosystem."
"The Food Trust blockchain is also fast, and easy to implement, IBM helps suppliers, they help us, and they make the solution quite mature. Food trust is very advanced compared to what we have seen, but there is still permission, so you still have to be invited, you can't see all the data which for a B2B application os good, because we still control the data."
Even though the Food Trust is growing and showing a lot of promise and potential for companies on the scale of Nestlé, it was commitments the company made, relating to its supply chain, that drove this move towards public blockchain piloting.
More so, the potential prize for getting this public blockchain pilot right for Nestlé would not only be help them achieve key commitments, it would give them the the glory of pioneering a new space, with nascent technology, for massive enterprises to come.
Going for glory
Nestlé’s key commitments are leading them towards greater transparency in foodstuffs for their customers. They want data to be transparent and for there to be an elevated level of trust for customers. This is what has ultimately lead them to public blockchains. So, the bonus of pioneering the space for others comes with high rewards, as well as high risk.
Benjamin Ware, manager of Responsible Sourcing, at Nestlé, admits that the company is excited to be one of the more significant enterprises trying to pioneer a successful shift towards public blockchain's on this large scale.
"Most of the companies have been trialing blockchain, but they have been quite shy and have been avoiding getting in too deep into the public blockchain," Ware said. "It is really about breaking the ice. That is precisely what we want - we want to be the public blockchain pioneers for enterprises.”
"We believe that it's not just Nestlé that has the power to transform this entire industry, we need everyone to do the same, this means trying to make things work between different companies and different commodities."
Dubois also echoed these sentiments.
"There is an aspect that we, as the biggest food producer in the world, we want to show the example and have leadership to say, 'we are doing it, follow us.' “Everyone is doing it and that is how you improve the situation for farmers and make the industry more sustainable and better so we believe this could be very powerful."
A changing face?
If Nestlé was to be successful in its pilot, and its implementation of public blockchain for supply chain on such a vast enterprise level was attractive enough to entice similar companies to follow suit, it could cause a massive shift in the adoption of the technology.
Many are still looking at Libra as the game-changer in terms of
cryptocurrency adoption. However, in terms of enterprise adoption, this shift could be even more significant.
The foundations that have been laid thus far by enterprise blockchain offering companies has been an attempt to get an early foot in the door, and to profit. However, if Nestlé pioneers an open-source blockchain supply chain protocol, the capitalist mindset of marketing and profiting off of blockchain may ultimately slow.
Nestlé is still a long way from changing the face of enterprise blockchain usage, but they are envisaging it. They do see the power and potential in private blockchain, but also feel that a whole other side of advantages can come by teaming up with public blockchain. And, perhaps, it is time that a company does prove the value of a fully decentralized platform in this manner.