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Consumer willingness to pay for blockchain verified lamb

Project start date: 20 May 2019
Project end date: 30 November 2019
Publication date: 26 August 2019
Project status: Completed
Livestock species: Lamb
Relevant regions: National
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Latitude 28° Produce (L28) is an Australian beef and lamb exporter with a focus on leveraging and developing technologies to better connect Asian consumers to the true origins of their products. Through innovative technology, L28 aims to empower Asian consumers with the choice of 100% accurate and immutable product authentication.

If distributed ledger, or blockchain, technology is applied to the meat and livestock supply chain, it can build a higher level of transparency and awareness of the products origins. The unknown is the willingness of consumers to pay for blockchain verified products, and this is what L28 plan to test.

Project P.PSH.1190 (herein referred to as the ‘project’) tracked the movement of lamb on the blockchain through the complete supply chain from a farm in Moora, Western Australia, to a BBQ restaurant in Shanghai, China. L28’s decentralised blockchain application tracked the movement of the livestock and product on its journey from paddock to plate.

The project required the involvement of seven participants at different stages of the supply chain to scan the livestock, or animal product, via smartphone scanning device. Each scan captured the time, date and geographical coordinates of the product and the activity completed by the participant. The information from the scan was distributed instantly to the immutable blockchain ledger preventing any direct control of the information from any one source.

Blockchain technology has been touted as a technology that can build authenticity and transparency into supply chains, helping to eradicate food scandals which have become common in markets such as China. A major risk to the Australian red meat industry is inferior products being fraudulently sold as Australian. This fraudulent trade artificially increases the supply on Australian meat within international market, putting downward pressure on pricing as result of the artificially increased supply and cheaper products offered as Australian. The other major risk of this trade in inferior products is a poor product experience, which damages the reputation of Australian produce worldwide.

The blockchain verified lamb in this project was sold at a BBQ restaurant in Shanghai. Consumers used their smart phone to scan the unique QR code on the Australian packaged products. The unique code scanning enabled the customer to view the interactive blockchain authenticated supply chain. An e-survey was embedded within the blockchain application, to gather data around the consumer’s future willingness to pay for this level of authenticity. To incentivise the completion of the survey, consumers were prompted to input a unique code printed on the lamb packaging. The

consumers entered the code at the end of the survey with one in five customers winning a free meal announced instantly on their phone.

There were several key findings from the survey:

  • Just 12% of consumers were unaware of how blockchain can be used to authenticate product provenance, after a brief introduction to the verified lamb from the waiter.
  • That 12% who were unaware of blockchain authentication, indicated a preference for blockchain verified over non-verified when made aware of its benefits with a short explainer in the survey.
  • 51.4% of participants indicated they would pay additional value for blockchain verification in the future.
  • Consumer sentiment at the restaurant indicated the blockchain verification can be used effectively as a marketing tool by the restaurant if customers are educated of the process.
  • 100% of customers surveyed indicated they would choose blockchain verified product over non-verified, if the product price was comparable.

These key findings indicate that there is definite support of blockchain verified products at a consumer level. The project in its practical completion did highlight there is still a need to educate customers on the exact benefits and how blockchain is applied in a supply chain setting. This education piece typically happened via a prior interaction with either the promotional material and or waiter.

More information

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Primary researcher: Latitude 28 Produce Pty Ltd