Summer 2019 Issue
Many management consultants have heard of blockchain / distributed ledger but do not know how it is being used by their clients. Despite the views of some, it is not, in fact, a weapon from Game of Thrones. I have had the fortunate experience of working with a few companies in this space who are responding to the growing demands by consumers to know where their products come from and where they are spending their money.
Let’s examine how blockchain has been used in two different industries – agriculture and art – and how consumers benefit.
What is blockchain?
A blockchain is a decentralized, distributed, public digital ledger that is used to record transactions across many computers so that any involved record cannot be altered retroactively without the alteration of all subsequent ‘blocks.’ No one individual can cheat the system (easily).
Agriculture – ‘Bock Chain’ Beer
Let’s start with craft beer and the use of blockchain in agriculture. 'Bock Chain' (not blockchain) Beer is a collaboration between Hamill Farms, Canada Malting Co., Red Shed Malting, Last Best Brewing & Distilling, and TE-FOOD. TE-FOOD is a farm-to-table fresh food traceability solution. This collaboration is using blockchain technology to offer consumers the ability to trace the beer they are drinking from its source: from the farm where the barley or wheat was grown to their beer can.
In this case, the barley was grown and harvested at Hamill Farms in Penhold, Alberta; then it was taken to Canada Malting Company in Calgary, Alberta for malting; then to a 3rd party lab for quality assurance testing, back to Red Shed Malting in Penhold for roasting and then finally to Last Best Brewing & Distilling in Calgary for brewing and packaging and consumption by the consumer. Blockchain technology is increasingly being used to allow traceability in food ingredients. With ‘Bock Chain’ beer consumers can follow the entire beer production process. They have the option of getting visual information on a newsfeed as well as insights of the beer production process. The newsfeed shows a lot of detail beyond merely timestamps and locations. Consumers can also scan the QR code on the beer in order to display the complete production process.
I worked with Hamill Farms, the barley growers in the early stages to complete the market validation that craft brewers wanted to locally source their custom malt, instead of importing malt from overseas. We do, after all, grow the best barley in the world right here in Alberta. Red Shed Malting was born from this market validation. Since then, I have worked with many craft brewers and distillers which has contributed to the strong growth in tourism in our province in the last few years.
Art Industry – UppstArt
UppstArt based out of Calgary, Alberta is an online original art marketplace where art-lovers can buy art directly from artists and resell it whenever they want. It is the first online marketplace for original artwork to use blockchain technology to help prevent fraud, publicly record the history of art, and enable the secure resale of artwork through our resale marketplace. When you buy artwork directly from the original artist on UppstArt, a customer pays in standard currencies like Canadian or US dollars and receives the artwork via courier just like any other e-commerce site.
After the seven-day return period expires, the customer is "given a digital certificate of authenticity that immutably and publicly records the information about [the] artwork on the blockchain so that it can never be changed, altered or deleted". This is an easy way to enjoy some of the benefits that blockchain provides without a customer actually needing to know how to use the technology.
Artists are benefiting significantly from UppstArt’s approach as they get to keep more of the sale (80% versus 50% in traditional channels) and they may receive a royalty when their art is resold to a new buyer.
Customers can use the peer-to-peer resale marketplace powered by a blockchain smart contract. UppstArt makes it easy to trade art that consumers have purchased for something new – no need to try online sales or garage sales.
I have worked with UppstArt to help build their launch marketing strategy by defining personas and building referral sources such as interior designers. It’s been fascinating to watch the organization's growing acceptance into the marketplace, which has taken place at the grassroots level.
It’s clear that the use of blockchain is much more expansive than many management consulting leaders are aware.
1. Once hailed as unhackable, blockchains are now getting hacked. MIT Technology Review, 2019.
2. Blockchain Beer Introduced by Canadian Collaboration. TE-FOOD Medium Post. January 31, 2019.
3. The UppstArt Resale Marketplace – How Does it Work? July, 2018.
Pauline Patenaude, B.Comm., CMC, MBA is the Founder, Managing Director and Principal Consultant of Marketing Directions, a boutique management consulting firm in Calgary, AB. She specializes in helping companies bring new products to market starting with product concept/ideation and market validation to launch and profit with some new ventures now using blockchain.