Deloitte most recently published a comprehensive 24-page report on the economic benefits of blockchain. The primary advantages, according to Steve Larke, Partner at Deloitte, are tracking, tracing, and authenticating the manufacturing and distribution of products, contracts, resulting in a significant overall cost reduction through the supply chain. Ultimately, this will benefit consumers globally as more efficient processes (using blockchain) will roll out.
One of the main developments within the retail and consumer packaged goods (CPG) markets, according to the report, is the increased on-demand and personalized services associated with changing consumer demands. Blockchain, as a comprehensive repository for storing information, grants all involved parties an eye on all moving parts within a system. Within the CPG markets, Deloitte points out that in the short term, blockchain opportunities can be implemented for operations related consumer protection, delivery, consumer payments, consumer participation, digital advertising, and fraudulent transactions. These aspects of businesses are less complex to implement, and can offer greater value relative to investment in the short term. In the long term, the firm reported important developments within the sharing economy, targeted recall, locating stolen products, supply-chain, authenticity, and provenance. These particular facets of business’ operations are more difficult to implement because of more external factors and demand for more resources for successful execution.
Deloitte believes the tipping point of widespread blockchain adoption within CPG markets will occur in the next five years. According to research from Gartner, blockchain’s business value-add will grow from $176 billion in 2025 to exceed $3.1 trillion by 2030.
According to a survey of executives in CPG markets, 42% indicated a plan to begin an investment with the technology of at least $5 million in the coming year. The biggest obstacle for adoption, is the lack of education about the technology and its practical, nuanced applications.
These are four main points that Deloitte identified most common to enterprises within the CPG markets:
Many liken the eventual widespread adoption of blockchain as Internet 2.0. Similar to how the Internet created additional layers of interaction, protection, and accessibility between consumers and enterprises, blockchain will create even more nuanced and product-specific assurances for CPG markets that will ultimately benefit enterprises and consumers alike. Potentially, blockchain will drive opportunity costs down for manufacturers which could ultimately benefit consumers.