When you start to deal with storytelling in an entrepreneurial context, you will quickly come across the following statement: “Stories are remembered up to 22 times more than facts alone” (1). Since pretty much every storytelling article starts with this statement from Stanford University, I didn’t want to break ranks and have done the same. So…, now that the first seemingly obligatory aspect for an article about storytelling has been dealt with, let’s get started!
In my last article, “Bridging the Attitude-Behavior-Gap: What Foodies Are Doing Wrong and How Blockchain Technology Can Help,” I explored why so many people say they want to consume sustainably, but rarely do. These “swinging consumers” are a key target group for purpose companies to secure their growth and establish themselves in the market. Furthermore and more importantly, these consumers are also crucial for securing human existence on planet earth. By now, most people have understood that the way we live and consume is destroying our environment. To convince the few who do not want to accept and understand this is like fighting windmills. You can’t fight some opinions with reason. The philosopher Gert Scobel speaks in this regard of the “banality of the stupid”. But getting people who already want to consume sustainably to do so is anything but tilting at windmills. It’s much more like flying kites in a storm.
What seems to be generally accepted is that the most promising way to overcome attitude-behavior gap is to become competitive in the following four areas:
This is certainly true, but many consumers accept minor disadvantages in these categories if they receive more sustainability and purpose in return. The problem is that sustainability and purpose are hidden product attributes! You can’t check and compare them in the supermarket any more than you can in the online store. Providing the right, understandable and trustworthy information is therefore the fifth area in which Purpose companies should improve. By the way, OURZ sends its best regards at this point ;).
Why is storytelling important for your business?
When the right, understandable and trustworthy information is available, another significant step in closing the attitude-behavior gap is customer engagement (2). The customer’s willingness to learn more about a product depends on the extent to which he/she considers it personally relevant (3). If consumers develop sufficient interest in a product, it can be assumed that behaviors such as researching information in detail, forming a positive opinion about the product, frequency of product use, enjoyment of consumption, and product loyalty, among others, will be positively influenced (4).
So at this point we come to storytelling, because what better way to engage someone if not through a good story. And on top of that, one (or more) good stories naturally also increase brand awareness, which is one of the classic paths to success mentioned above. So what is storytelling and why are some new technologies, especially blockchain, worth considering in this context? Let’s start with normal pre 4.0 storytelling first!
How to tell a story
Storytelling transcends culture and time, and is a central feature of the human condition (5). Our brains are designed to empathize with stories in order to train us to deal with the complexity of social relationships (5). Stories cause us to release oxytocin, through which we become more empathic and cooperative (6). To achieve this, the story should be about people, their problem, and triumph over the problem (6). The point is to connect emotions and information (7). People are more likely to accept information when it is in “story mode” than when it is in critical “factmode” (5).
A story, hold on, consists of a beginning, a middle, and an end (1). Save yourself a long introduction at the beginning, though; a good story must start with conflict and tension (8). The best stories are also simple and straightforward (9). It is very important in entrepreneurial storytelling that it is not about generating customers, but the goal is to create a community (7). Think carefully about who you want to reach with your story, what you want to achieve with your story and how you can achieve this through a story (8). Depending on the audience you have to change the weighting between information and emotions, too much information is just as bad as too little (8). The biggest mistake you could make is to make yourself the hero/heroine of your story (9). It is best to think about how you can make the audience heroes.
The “science” fiction of yesterday is today becoming a reality,” says the foreword to the book by World Economic Forum founder Schwab on the fourth industrial revolution (10). I use the term Storytelling 4.0 here in reference to Industry 4.0, which originated from a working group initiated by the German government to examine the technological advances of digitalization and their potential significance for German industry. The working group came to the conclusion that the development of “more intelligent monitoring and autonomous decision-making processes” (11) had the potential for such an industrial transformation that one could speak of a fourth industrial revolution.
At the heart of this revolution through “intelligent monitoring and autonomous decision-making processes” are technologies for data collection (including sensors), data storage (especially blockchains & clouds) and data processing (especially Big Data & AI). While the potential of these new technologies is seen primarily in increasing efficiency along corporate value chains, they also hold huge potential in other areas, such as corporate storytelling. So let’s move on to the four new 4.0 possibilities of storytelling.
1.0 Reconstructible storytelling
The new technologies are not only causing an industrial revolution, they are also causing a trust revolution. Trust, which previously had a personal or systemic origin, can now be generated from the combination of the new technological possibilities for data collection, data storage and data processing. At the center of everything is blockchain technology, which allows “trust through clever code” (12) to emerge. Giddens already noted before the dawn of this millennium: “There would be no need to trust anyone whose activities were continually visible and whose thought processes were transparent” (13) and Simmel stated over 100 years ago: “The completely knowing person does not need to trust, the completely not knowing person cannot reasonably even trust” (14). With future stories, no one needs to wonder which part is true and which is made up, because thanks to 4.0 technologies, this can be verified in microseconds – every piece of information in every story is traceable to its source, forever unfalsifiable.
2.0 Real-Time Storytelling
Real-Stories are about the past? 4.0 Stories are real-time! Due to the trust-creating traceability of information, 4.0 stories are a window into the past, but they are also a telescope to another place in the present. Through developments like the division of labor and globalization, we hardly see how the products that shape our lives are created. We have lost the connection to them and to those who make them. Through the new technological possibilities we can change this again. For example, in Product Storytelling 4.0, customers can not only see where & from whom the product they are considering buying comes from (past) via a QR code (in the online store or on the packaging), but they can also see what is happening there at the exact moment they access Story 4.0 (real-time).
3.0 Integrative storytelling
As noted earlier, it can make sense to make consumers the heroes of the story. Is buying one of your meals connected to planting a tree? Let your consumers know when the money went to the nursery and send them a picture of the tree once it is planted! Are your products about paying the producers of mouth & nose masks more fairly? Show your consumers which workers were involved in your masks and give them the opportunity to say thank you via a virtual heart or even support them with a small tip. Let the purpose of your company or product develop relationships and create communities!
4.0 Adaptive Storytelling
The right mix of information and emotions is crucial for a story. But is there such a thing as the right mix? People have different needs for information. While for some a little information is already too much, for others there can’t be enough. Especially sustainability-oriented consumers (15) and younger generations (16) have a great desire for information. However, the density of information demanded by these classic target groups of purpose companies may possibly overwhelm and deter “swinging consumers”. As already noted, this would be fatal for the sustainability movement in business and society. Here, 4.0 technologies make it possible to individualize the information content of each story. Furthermore, depending on interests, more social or ecological aspects can be included, more regional or global aspects, more health or sustainability-oriented aspects etcetera etcetera etcetera. In addition, stories can also be adapted depending on the location, if a 4.0 story is scanned via a QR code at home (which is the case in 3/4 of scans according to our experience at OURZ), the story may definitely be more detailed than if the QR code is scanned in the supermarket, for example. Stories can now be told in a way that corresponds to the interests and (situational) needs of the individual consumer.
Sounds interesting, but more like the future? I am observing with increasing concern a highly critical trend. Many large corporations have identified Green & Sustainable as an extremely profitable segment. For example, 70% of Unilever’s revenue growth already came from their Sustainable Living Brands in 2017 (17). Please misunderstand me correctly: I think it’s great that the really big players are addressing the issue of sustainability. Small changes with them can have big positive impacts. We at OURZ would love to help them understand their value chains. But the half-hearted commitment coupled with targeted greenwashing by too many corporations is currently damaging trust in the sustainability movement (18)! While more and more purpose-pioneers of sustainability manage to advance eco-growth through their heart and sweat, in the same breath more and more large corporations infiltrate exactly this growing “niche”. Trust is like a commons. If everyone cultivates it, everyone can make a wonderful living from it. But even if only a few exploit it for their own short-term profit, soon no one will have anything left to gain from it.
To prevent this, purpose driven companies must make use of their secret weapons. Radical transparency & authenticity. Many already use them, but forget how damaged consumer trust already is. Radical transparency only helps if the transparency is credible and all the data revealed is presented smartly. This is where Storytelling 4.0 can help. Based on the authenticity and social impact of purpose companies, Storytelling 4.0 has the potential to become a game changer for the sustainability movement – today!
ZDF (2019): Grüne Versprechen – Wie Verbraucher getäuscht werden; ZDF (2019): Der Trick mit dem Greenwashing; ZDF (2020): Mythen – Die großen Irrtümer der Nachhaltigkeit (-> Ich habe mich mal auf einen Sender und die letzten Monate beschränkt).
In order to further protect internationally recognized human rights and environmental standards, the German Federal Parliament passed the Supply Chain Due Diligence Act on 11 June 2021. This law is the first in Germany for business companies to establish binding standards related to human rights and the environment. It requires that companies take responsibility for human rights and environmental due diligence obligations along their supply chains. The scope of application covers companies with at least 3,000 employees that have their statutory seat, principal place of business or a branch office in Germany and foreign companies’ German branch offices if it employs 3,000 employees and more. The size of the scope will expand and companies with 1,000 or more employees will be affected from 2024 onwards. On January 1, 2023, the Act will enter the force, in-scope companies must identify and assess risks to human rights and the environment within their supply chains, and establish effective risk management systems.
In-scope area and companies’ obligations
The Supply Chain Due Diligence Act impacts two areas of companies. The first one is business operations. The own business area includes all business activities worldwide and includes dominated subsidiaries, especially activities with regard to production, product refinement and service provision. The second one is the companies’ supply chains. The supply chain includes all products and services of a company and all production steps in Germany and abroad which are necessary for the production or the performance of service. The supply chain due diligence duties extend through the total supply chain, from raw material extraction to the delivery of the product to the end-user, both upstream and downstream. The Act requires companies to adopt the highest standard of obligations regarding their business operations and the operations of direct suppliers.
In the case of the operations of indirect suppliers, companies only have a duty to end a violation if the violation occurs in their own business area. The Act requires companies to take measures and carry out a risk analysis once they believe that human rights abuses or environmental damages have occurred. Numerous sources may be deemed to provide companies with grounds for believing that human rights abuses or environmental damages have occurred, such as the fact that an indirect supplier operates in a sector with high exposure to human rights or environmental risks. The Act builds on the conviction that the vast majority of human rights abuses and environmental damages occur in the extended supply chain.
Targeted human rights abuses & environmental issues
The Supply Chain Due Diligence Act requires companies to address the following human rights violations and environmental issues:
forms of slavery
disregard of workplace safety standards
disregard of the right to freedom of association
discrimination against employees
denial of a decent wage
unlawful displacement of persons
violence on the part of security forces
environmental damages that entail human rights abuses (damage to soil, water pollution, air pollution, noise pollution, and excessive water consumption)
Additional duties & Fine police
In particular, companies are required to set up a risk management system and grievance mechanisms, and report on an annual basis to the German government on the regulated activities.
If companies fail to comply with their obligations, fines (of up to 800,000€) and penalties will be applied.
The future impact of the Act
The Supply Chain Due Diligence Act can be seen as a major step with regard to protecting all human rights in companies’ supply chains, and also plays an important role in global sustainable development. In the context of globalized trade, supply chains extend across the entire world and the diversity of stakeholders increases, which leads to environmental degradation and serious labor issues. The International Labour Organization (ILO) estimates that 25 million people worldwide are victims of forced labor, while global environmental damage is also steadily increasing, according to the UN. Nowadays, transparent supply chains are urgently needed for sustainable development. By increasing transparency, companies can ensure sustainable production and avoid labor from exploitation. Because of this, The Act requires companies to increase transparency requirements in their supply chains on a regular basis, and strictly combats low social responsibility and low environmental standards in global supply chains. Although the Act only applies to large businesses, in the medium term, the new Act will also affect small and medium businesses, as they are part of the supply chains of companies in the scope of the Act. In addition, since companies are increasingly taking responsibility for social and environmental sustainability violations committed by their contract suppliers, the whole supply chain standard will be increased and consumers will have higher requirements accordingly, which can also impact those companies that are not in the scope of the framework at this point. Sustainability is the inevitable trend of supply chain development. Increasing transparency and ensuring corporate social responsibility should therefore be the top priorities for all companies, no matter the size.
You are somewhere in the center of London. Actually, you just wanted to leave your front door to go to the bakery next door. Now you no longer know where you are. You have lost all orientation. When you look down you can’t see your feet anymore, when you stretch your arms forward your hands disappear. Everything around you is hidden under a heavy and all smothering gray. You panic and want to take a deep breath to calm down, but what flows into your lungs is not air, but acrid smoke. You start to wheeze and cough. From all around you, you hear other people doing the same, but you can’t see anyone.
As many as 12,000 people lost their lives in the “Great Smog,” a toxic cloud created by industrial processes in central London in 1952 (1). The term environment then took on real meaning. More and more people became interested in this so-called “environment”. Especially the 68 movement, which was inclined to flowers and grass, was committed to a better and more conscious relationship of people to it. After many protests, the first UN climate conference was held in 1972 at the suggestion of Sweden. This conference, which was attended by 112 countries (probably mainly because of the promised Kjötbollur), stated, among other things, the following three points: Humans can change their environment, the environment is important to humans, and all people, nations, and corporations must work to preserve a livable environment (2). Wow. This terrific new insight after only about 300,000 years of human existence.
Attitude does not lead to behavior
Despite this incredible discovery of human dependence on its environment, half a century later problems such as oceans full of plastic, air polluted by particulate matter, nitrates in groundwater, glyphosate in the fields, labor rights violations in developing and newly industrializing countries and, above all, climate change are more acute than ever. According to the behavioral models of the 1970s (3), which assumed that knowledge of environmental problems would lead to a more sustainable attitude and appropriate behavior among people, the majority of people should have long since adopted a more environmentally conscious behavior.
However, studies (4) refute these models by showing that although you and I state that we want to act in a sustainability-oriented way, we do not actually put this into practice. Thus, we do not act only according to our knowledge and attitude. This creates what is known as an Attitude-Behavior Gap. This gap can be seen as one of the very big hurdles on the way to a life in harmony with our planet.
What does it look like in the food industry, for example? The trend towards sustainable food products can be seen in the increased sales figures in some sectors related to sustainability aspects. For example, sales of (so-called) FairTrade products have grown from 533 million euros in 2012 to 1.3 billion euros in 2018 (5). In the same period, turnover from the sale of (so-called) organic food products has increased from 7.4 billion euros to 10.9 billion euros (6). While total sales in the food industry grew by 5.6 percent between the years 2012 and 2018 (7), sales of FairTrade products grew by 144 percent and those of organic products grew by 47 percent. However, the share of FairTrade products has never approached the one percent hurdle of total food industry sales during the period, and the share of organic products remained below seven percent.
The market for sustainability thus lags far behind its potential. A survey conducted by the European Commission (8) in all 28 member states concluded that environmental protection is very important to 56 percent of Europeans. According to the Consumer and Media Analysis 2020 (9), it is still very important to 38 percent of all Germans that the company from which they buy a product acts in a socially and ecologically responsible manner. This is becoming increasingly important, especially among the younger generations. According to FirstInsight (10), over half of Gen. X and over 60 percent of Gen. Y & Z prefer sustainable companies. So there really is an attitude-behavior gap in the food industry as well.
The underestimated problem of sustainable consumption
But what might fair foodies now try to do to tap into their true market potential? The first and seemingly most obvious measure should be to ensure that sustainable food products are competitive in the classic purchase decision categories compared to classic food producers (11). These classic purchase decision categories can primarily include price, quality, availability, and brand recognition (12). If fair foodies are already lagging behind in these areas, it can be surmised that further attempts to narrow the Attitude-Behavior Gap among potential consumers will largely fall flat.
However, many foodies manage to be competitive in these areas. In terms of price, fair foodies keep up well with other suppliers who offer comparable products of comparable quality. The time when sustainability was associated with inferior quality has long since passed. Products from fair foodies are now available in every supermarket and are also well placed on the internet. No one has to go to the weird-smelling organic alternative corner store on the outskirts of town to buy a piece of tofu. And best of all, more and more fair foodies are making it out of the shadows of the eco-niche and into the limelight of the big food world. Foodies like Veganz, LemonAid, FritzKola, Taifun-Tofu, Lycka, Oatly, Beyond Meat, Voelkl, Rapunzel Naturkost and Solino are just the tip of a huge iceberg.
But if we are doing so well in these areas, why is the gap still so large? Why do we still have so many problems caused by the food industry? The answer: data is the problem! More specifically, the lack of information, the incomprehensibility of information, and the mistrust of information (13). The less product information there is, the more complex it is, and the more it contradicts itself, the more likely neither you nor I will buy the product. It is important for Foodies to find out what information potential buyers are asking for and to provide it as clearly as possible. It is also important that they build trust towards this information.
It happens again and again that we consumers have problems in assessing the information about origin and production conditions (14). 90% of German consumers do not trust foodies (15) and 80% do not trust the information provided on packaging labels (16). The problem: When you go to the supermarket to buy a banana, for example, you will see the size, shape and color of the banana, but you will not be able to easily identify its sustainability. But if a foodie’s product differentiation strategy is higher sustainability at the cost of a slightly higher price, then all that’s left in the end is the higher price – personally, that doesn’t catch me, does it? Of course, there are many sustainability romantics (like me and maybe you) who naively think they’d rather buy a sustainable product based on speculation than one they can be sure isn’t sustainable. But if fair foodies only target this group, they can never reach their true market potential and the environmental problems we already have today will become more and more dramatic.
I talked to the marketing director of one of the foodies mentioned above about two years ago when he visited my university at the time. He gave a long and very interesting talk about how sustainable his company was. To my somewhat cheeky question why I should believe the sustainability of the product he presented, he answered that his company would visit the plantations once or twice a year and they would also take photos. He himself had also been there. By my query as to why I should trust him, he became slightly confused. “Like why…of course I can be trusted…!” – WOW! He then at least said at the end that yes, the products were certified.
Certificates were actually a good tool to counter mistrust about the sustainability of products. They collect hard-to-generate and complex data and compress it to a symbol that you and I can then see and understand on the product. However, there are now over 1000 certificates in Germany alone; you could say we are “Lost in Label” (17). Many companies simply certify their products themselves – not so super confidence-inspiring. Certificates are also always a look into the past. There is (in the best case) an inspection and after that the product is certified for a period of time without anyone caring what is really going on. Furthermore, unfortunately, multi stakeholder certificates, which actually have structures that are promising, are in the public eye due to shortcomings (18). The more products a certifier has to check and the more complex their production, the more classical controls reach their limits and the more trust is lost in the instrument of certification.
Blockchain can help
A blockchain is actually just a very unspectacular database on which ones and zeros are stored. Like a USB stick, for example. However, if someone were to hand you a USB stick with product information, this would probably not inspire too much confidence in you. How would you know who uploaded the data to the USB stick, if the data is correct and if it ever was, if it hasn’t been altered by someone. The blockchain, however, has a few properties that a USB stick does not, which is why you can trust the information on it.
It is a back-to-end database. All data that is stored on a blockchain remains on it forever. Data that is newly added must not contradict the previous ones in order to be stored. So one can still lie on the blockchain if this is not prevented by other additional technologies. However, one can then no longer contradict oneself. Pretty hard to cheat in our complex world. In addition, the data of a blockchain is not stored in one place, but in many different ones. So if someone tries to manipulate the data that is stored with her or him, then everyone else can not care, because their data remains integer.
So blockchain is the perfect technology to store data with trust and share it with others. This is true for B2C and B2B relationships. All that is needed is an interface to the Blockchain on which the collected data could be displayed in an understandable and clear way. It would have to be a device with a camera that could, for example, scan a QR code on a food package and then show data from a blockchain on a display via internet access. It’s a pity that you don’t carry such a smart device around in your pants pocket or handbag… If you did, you could use this device to retrieve exactly the information that interests you. Do you want to have data highly compressed and clearly arranged like a seal, or do you want to see the entire history of the product from its genesis in a field to its exodus on your plate? It’s your choice from now on! Either way, you can trust the information you see. Thanks to innovative technology!
Information asymmetries are eliminated, all parties involved in the product (such as growers, suppliers, producers, NGOS, government agencies and consumers) now know what attributes it has. Externalized costs, such as pesticides, air pollution or child labor are therefore disclosed, or in the case of fair foodies, it is disclosed that they do not exist. For the first time this creates the much needed level playing field between normal food producers and fair foodies. The product differentiation strategy of sustainability can finally unfold its full potential in competition against the product differentiation strategy of low price. Fair foodies can thereby realize their market potential. You and I now have the information to shape a better world with every purchase decision we make. Environmental problems caused by our consumption will improve. All without harsh restrictive government intervention, just through credible transparency.
Let’s fix Blockchain on the horizon as the polar star of the sustainability movement, so that it navigates us out of the all-suffocating gray and sickeningly acrid smoke of our current economic interactions.
fairfood Freiburg & OURZ cooperate to enable Farm2Fork traceability of nuts from Rwanda in a batch-accurate and forgery-proof way via blockchain. The two impact startups want to set an example against exploitative supply chains and greenwashing.
Nuts are a real superfood. But do we even know where the nut comes from that we just popped into our mouths from the sustainable deposit jar? Do we know who harvested the nuts or was involved in the roasting process?
Sad to say, most of the time we don’t. And the sad thing is that too many companies don’t know about their “sustainable” ingredients themselves.
Along our supply chains, people, animals and the environment are being exploited. More than ⅔ of German consumers want to buy sustainably, but don’t even get the information from where and who their products come from. Who benefits from this? Those companies that undercut minimum standards for the sake of their profits while lying to their customers via greenwashing marketing
But one company that knows exactly who is involved in the supply chain of their product is fairfood Freiburg. The company is committed to sustainability from the tree to the deposit jar. The nuts and dried fruits are sourced directly from the producers, who crack, shell and dry the products in the country where they are grown.
And it is precisely this supply chain and the producers involved that are now being shown transparently and with batch accuracy using blockchain technology. This is where the startup OURZ, based in Hamburg and Flensburg, comes into play. OURZ has developed an innovative traceability platform that enables sustainable companies to make the path of a product tangible and at the same time provides information about how much work is behind a fairly traded product until it reaches the consumer.
fairfood Freiburg chose OURZ because the blockchain technology used offers a very important advantage: transparent and decentralized storage of data that is tamper-proof. This results in a complete and transparent mapping of the entire supply chain. The first batch of the product, fair macadamia nuts from Rwanda, has just left fairfood Freiburg’s warehouse. Each deposit jar carries a QR code that, when scanned, allows the production steps of the macadamia to be experienced. Unfortunately, this first batch is exclusively reserved for supporters of the crowdfunding – which has, of course, been successfully completed – but the company from the south still has a lot of plans:
“We see great potential in this technology. End consumers are increasingly demanding more transparency from companies and want to know what route their products have taken.”
In the future, the northern German startup OURZ will make even more products from fairfood Freiburg transparent and use its blockchain platform to trace every step of the product, from its origin to the deposit jar (or the zero waste store), down to the last batch. Counterfeit-proof, trustworthy, and stored in a decentralized manner – this is the future of the food industry that we want to see.
Scan the QR-Code and discover the product journey of the macadamia nuts
Corona has the world firmly in its merciless grip. As of right now [3/28/2020, 6 p.m.], there are nearly 650,000 confirmed cases worldwide, according to the John Hopkins University (1). 30,000 people have lost their lives, about ⅔ of them in Europe. The world, Europe and Germany were not prepared for such a catastrophe. But we were warned. One of the brightest minds of our species, may you think what you will of him as a person, already pointed out the danger to us urgently four years ago. If you haven’t seen it yet, I would like to urge you to watch Bill Gates’ Ted Talk: “The Next Outbreak? We Are Not Ready” (2).
The summary: We knew what should have been done in the last years and what was and is at stake.
But it is not in our nature to react to vague and distant threats. Our ancestors are those homo sapiens who fled in panic at the sight of a saber-toothed tiger and then later copulated with each other. Those who remained sitting by the campfire, deep in thought about the sustainability of their wood consumption, became cat food and then obviously had no more opportunities to spread their genes. But we have long since ceased to let our evolutionary predestinations determine everything. I, as a more or less typical homo sapiens male, for example, do not feel too much sperm competition with my competitors anymore. This manifests itself, among other things, in that I don’t try to copulate with all the homo sapiens females I see, and I don’t try to gain exclusive sexual access to my non-existent female pack members (probably wouldn’t be so promising anyway, given my stature). If we as a species, at least most of us, have made it this far, then we will probably also manage to think more actively about the great invisible dangers that threaten our existence.
Food & the spread of pathogens
So why am I writing this text right now? I am involved with the blockchain tech start-up OURZ (3) as a sustainability strategist and have been an absolute blockchain fanatic since 2017. OURZ has made it its mission to make the history of food transparent and thus traceable from the field to the plate in an unalterable way. However, my article is not meant to be a tribute to OURZ. We at OURZ do not want to use the Corona disaster to make a name for ourselves. Nevertheless, we would of course like to share our unique insights from several years of experience with blockchain technology in the food industry for the common good. We hope to do no more and no less than help protect human lives. My article will therefore discuss to what extent the technology with which OURZ manages to make food traceable can make its contribution to preventing or at least mitigating situations like the current one.
What does food have to do with pandemics, epidemics and endemics? Unfortunately quite a lot, as I had to find out during the last days by intensive research! Mainly a publication(4) by the Robert Koch Institute (RKI) from the year 2009 caused me to write this article. It shows that food and our consumption of it contribute to the potential spread of disease in two ways. In the process, the second also fuels the first. But slowly, let’s start from the beginning.
The RKI has stated in its publication that the danger from pathogens in Germany comes in particular from rodents, ticks and precisely food. So the first way food contributes to disease spread is directly. Foodborne infections, such as salmonella, are among the most common infectious diseases, according to the RKI. Current and, more importantly, reliable figures on those who have fallen ill or died from foodborne infectious diseases are difficult to find. The first and, on a global scale, the only truly reliable information to date comes from the World Health Organization. Based on a study from 2010(5) to date(6), the organization estimates that about 600,000,000 people per year fall ill from contaminated food and that about 420,000 of them die each year. Especially the young and old among us. About 23,000,000 of these cases, with about 5,000 deaths, occur annually in Europe(5).
And it is getting worse. The German Federal Ministry of Education and Research believes that infectious diseases from food pose a growing threat(7). The RKI(4) also suspects that the numbers of infectious diseases in the world, just as in Germany, will increase, fueled by climate change. Warmer temperatures and extreme weather events help pathogens in food to develop, multiply and spread. This brings me to the second way food, or our consumption of it, contributes to the spread of disease. Indeed, according to the German Federal Environment Agency(8), after mobility, our food is the second largest area of consumption in terms of our greenhouse gas emissions. Worldwide, the area of nutrition even causes about ⅓ of our emissions.
However, we like to eat beef, pork and whatever else has two or more or sometimes fewer legs. However, because animal products have an extremely poor energy efficiency, our consumption of them accounts for about ⅔ of our food-related greenhouse gas footprint(9). But then what to use for the morning sandwich if not salami? N****la hazelnut cream, of course! No, wait a minute. It’s full of palm oil. To make room for plantations, rainforests, the lungs of our planet, are being cleared around the world(10). Exactly the same applies to soy, by the way, the stuff we feed to our salamis and vegans. Then consume only regional? Will be difficult! After all, our salami from the village next door just keeps eating soy from Brazil. Plus, if there were only products without palm oil in the supermarket, we would only smile tiredly about the few empty shelves due to the hoarding purchases that currently exist(11). Moreover, regional does not necessarily have to be sustainable. Production in particular, but also storage, processing and packaging can contribute to climate change. In the case of production, for example, the land and the fertilizer that are used are criticized(12).
Blockchain will help
Let’s move on to the blockchain and how it will help. I don’t want to spend too much of your reading time at this point explaining blockchain technology in all its subtleties. If you realized at this point that you had read just one tenth of my text, you probably wouldn’t read another tenth. I’d rather use your attention to show you how blockchain technology can acutely help us. If you want to learn more about blockchain technology itself, start with Don Tapscott’s Ted Talk on it (13).
But maybe this much: A blockchain is really just a database on which ones and zeros are stored. Like a USB stick, for example. But while you can delete and change data on your USB stick as wildly as you like without anyone noticing or being able to trace it, this is not possible on a blockchain. This is essentially due to two of its properties.
First, it is a back-to-end database. All data that is stored on a blockchain remains on it forever. Data that is newly added must not contradict the previous ones in order to be stored. So you can still lie on the blockchain if this is not prevented by other additional technologies, but then you can no longer contradict yourself. The increasing complexity of our world therefore makes it very difficult to cheat or lie.
Second, it is a distributed ledger technology. Data is no longer stored centrally in one place, but everyone now has copies of the data. Not only does new data have to match the previous data, but a majority of those using the blockchain have to agree to the new data being added. Only then will the new data be immortalized on the Blockchain. And even if they try to cheat you, you will definitely notice it, since you have your own copy of the data. This creates, according to the blockchain visionary Tapscott just mentioned, “trust through clever code”.
But back to the actual topic! Why do we need to push blockchain technology in the food industry now in the face of the Corona pandemic? After all, I’ve already explained the two ways food is related to the spread of pathogens. There’s a common thread in both problems: transparency is the big issue. But transparency, especially trust-based transparency, is exactly what you can provide with the help of blockchain technology. Let me explain both ways that food supports the creation and spread of pathogens, the direct and indirect, and how blockchain can help.
Let’s start with the direct way. As described earlier, already about 420,000 people die each year from pathogens in food. The bad thing is that even if food is already known to be contaminated, it can take forever to get it out of circulation. Often, no one knows where which goods were delivered, in which products they were processed and, above all, who bought the final product. Do you remember the Wilke incident? At the time, I wasn’t particularly shocked by the conditions at Wilke. What shocked me was that even after the scandal became public, Wilke’s products continued to be used and consumers were not warned.
A major food producer recently told us that he happened to hear on the radio on the highway that parts of his products were contaminated and dangerous to his customers. At the time, he was literally furious with Wilke and the German control system. However, if Wilke’s goods had been backed up on a blockchain, as so-called digital twins, all producers would have known exactly which of their products were affected the second a contamination was detected. Consumers who had bought affected products would also have been informed in the same second. Economic damage could have been kept to a minimum, suffering could have been avoided and, above all, lives could have been saved. The more complex, global and fast-moving our economy becomes, the less sufficient classical controls for food safety, for our safety, become. Due to climate change, there will be more and perhaps more dangerous such food contaminants in our future. Not only in meat but also in tea, spices, chocolates and all sorts of other foods. The application of blockchain to prevent, or at least target and quickly contain, such disasters, is absolutely implementable with the state of the art we have today.
The increase in pathogens due to climate change, the indirect way food contributes to the spread of disease, leads me to the second and somewhat complicated aspect of how blockchain can protect us from pathogens. Our way of living, specifically our way of consuming, is causing climate change. Many of us understand that by now. The ingenius of our market economy: where there is demand, there is supply. The problem with our market economy is that it is based on trust – trust of which there is currently very little. What do I mean by that? More and more people, especially younger people, are willing to pay more for more sustainable products (14). The potential of the sustainable food market is taking on sizes that no one could have imagined just a few years ago. But the problem is that sustainability is an invisible product attribute. When we are in the supermarket, we see product attributes such as size, color, and most importantly, price. But not sustainability. We have to trust sustainability. But 90% of Germans don’t trust food manufacturers(15) and 80% don’t trust the information on food packaging either(16). If there is no trust in sustainability, the only thing left to do is to pay a slightly higher price. Not a good motivation for more sustainable consumption, if you ask me. Sustainability fanatics buy anyway, of course, but sustainable consumption doesn’t really get out of the niche that way.
So there needs to be more trust for more sustainable consumption in the food industry to limit climate change and with it more and more endemics, epidemics and pandemics. Certificates have been a good tool for this. They collect hard-to-generate and complex data and compress it into a symbol that you and I can then see on the product. But now there are over 1000 of them in Germany alone, you could say we are “Lost in Label”(17). Many companies simply certify their products themselves. And also the certificates, which actually have structures that are promising, are in the public eye because of deficiencies(18). The more products a certifier has to check and the more complex their production, the more classical controls reach their limits and the more trust is lost.
In short, we need blockchain! There is no complexity limitation here. Quite the opposite. The more and the more complex the data, the more secure and informative it becomes. The consumer who still just wants a little symbol oil to guide her purchasing decisions can have it generated based on the data on a blockchain. But for those consumers who want more information, there are now literally no limits.
In between, my blockchain enthusiasm got the better of me again. If you’ve made it this far anyway, I’d like to conclude with a summary and a little plea.
Food, be it bats, cattle or sprouts, is often the source of deadly pathogens. When diseases break out, we need to get the products they come from out of circulation quickly and effectively. Blockchain can do that! But we don’t just need to use Blockchain reactively. It can also play a significant role proactively to prevent waves of disease by fueling the sustainability movement in the food industry and beyond. We can use it to provide us with trustworthy information that drives us to more sustainable consumption with gentle elbow pokes to the ribs. More sustainable and traceable food saves lives!
People are already dying from contaminated food. In Europe, too, including Germany. According to all forecasts, the numbers will increase due to climate change. Who knows if we would be in a pandemic right now if we had tackled climate change earlier and more energetically. Everyone always says we need new and innovative technologies to address climate change and environmental destruction. Blockchain technology is such a new and innovative technology. And it is ready for the market. Outgrown from its infancy, it is now in the final stages of its puberty. It may need some tweaking in some places, but overall it is ready to contribute to a better society. Now it just needs to be given the opportunity to do so.
Robert Koch Institut (2009): Die Auswirkungen des Klimawandels: Welche neuen Infektionskrankheiten und gesundheitlichen Probleme sind zu erwarten?, in: Bundesgesundheitsblatt 2009, Berlin: Robert Koch-Institut.
WHO (2015): WHO Estimates of the Global Burden of Foodborne Diseases.
Three global hectares. That is roughly the space that I, Jonas Wendt, take up on earth through my consumption (1). If everyone used that much, we would need 1.9 Earths. Despite the fact that I had to go through the G8 Turbo-Abitur, I noticed immediately, that is too much. Until just 15 minutes ago, I would have told everyone that I live & consume sustainably. I eat vegan, mainly seasonal and relatively much “organic”. I have a bicycle and otherwise use mostly subways & commuter trains. I live in a sparsely furnished 11sqm room in a wonderful 12-person shared apartment and heat only when really necessary. Clothes (except for underpants, socks & shoes) I buy only used. And indeed, my ecological footprint is about 40% smaller than the average German footprint (1). But do I therefore consume sustainably, even though my ecological footprint is almost twice as big as it should be? What does this buzzword sustainability used by everyone even mean?
What does sustainability mean?
In the German-speaking world, the concept of sustainability can be traced back to Hans Carl von Carlowitz (2). 300 years ago, wood as a resource was one of the most important economic goods in Germany, which, however, led to severe deforestation (3). Carlowitz realized that if trees are cut down faster than they grow back, there will be fewer and fewer of them. Recognizing the long-term problem of the depletion of wood resources, Carlowitz therefore advocated for a “sustainable” management of this resource (4). Only as much wood should be felled as would grow back. Sustainability hence means that conditions for action in the future are not worsened by actions in the present. In particular, he had in mind the socioeconomic conditions of the following generations:
“Where damage comes from neglected work, there grows poverty and penury among men” (Hans Carl von Carlowitz 1713: 105).
The issue of sustainability is of course becoming more and more present, even if it has just been slightly slowed down by COVID-19, with the increasing awareness of climate change. Mankind has not yet fully understood, however, that the more we destroy our environment, the less we can live off it. But at least it is slowly dawning on us. As a result, the pressure on us humans to consume sustainably is growing, as is the pressure on companies to enable sustainable consumption (5).
What is sustainable consumption?
Two of the most commonly used definitions for the construct of sustainable consumption are the so-called Oslo and Brundtland definitions. The Oslo definition emerged from an expert meeting convened by the Norwegian government in Oslo in 1994 and reads:
“Sustainable Consumption and Production can be defined as […] the production and use of goods and services that respond to basic needs and bring a better quality of life, while minimizing the use of natural resources, toxic materials and emissions of waste and pollutants over the life cycle, so as not to jeopardize the needs of future generations” (Oslo Symposium 1994).
This definition has also been adopted by the United Nations Commission on Sustainable Development, among others, but has also been criticized in the (scientific) debate (6). Terms such as Quality of Life or Basic Needs are said to be too imprecise, the measures to be taken are said to be too arbitrary, and the definition makes an inadequate distinction between production and consumption.
The United Nations Brundtland definition, named after a former Norwegian prime minister, has gained wider acceptance. According to it, lasting development, now understood as sustainable development, is:
“development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (Brundtland Commission 1987: 46).
Building on the Brundtland definition, two sustainability experts, Prof. Belz and Dr. Billharz, differentiate sustainable consumption into a narrower and a broader understanding (7). Sustainable consumption in the broader sense is to switch to products and services that are more socailly fair and take up less of the earth’s surface than conventional products or services of this kind. Sustainable consumption in the narrower sense is consumption that neither disadvantages other people nor contributes to the consumer using more than his/her allotted area of about 1.6 global hectares.
The balance between too little and impossible
And so from the scientific debate back to my real-life question: Am I living a sustainable life? Yes & No is probably the answer. In the broader sense according to Belz & Bilharz I consume sustainably, because in most areas I use products & services that are fairer and take up less space on earth than their alternatives. As a result, I take up significantly less space than the average person in Germany and probably also contribute to less intra- and intergenerational injustice. Nevertheless, I still take up twice as much space as I actually have available. So as far as sustainability in the narrower sense is concerned, I have failed absolutely catastrophically.
But what should be the guideline for me now? Should I continue to “only” pay attention to consume fairer & more sustainable products or do I have to strictly pay attention to live in a way that I use a maximum of 1.6 instead of the current 3 global hectares? Is it even possible to use only one earth in Germany? The base amount alone (collective footprint due to infrastructure such as roads or schools) is 0.9 global hectares (1). That leaves only 0.7 global hectares for food, mobility, housing and other consumption. This is hardly enough to light a fire under the bridge (under which we then have to live).
On the other hand, is sustainability in the broader sense enough? What is better, according to this understanding, is not best, but still good. No one really knows where the “point of no return” is with climate change, but it is becoming clearer and clearer that we are racing ever closer to it. Closer and closer to a future that will be characterized by a global loss of security and quality of life on an unprecedented scale. Is better therefore really good enough?
So far I’ve talked about sustainable consumption on a personal/individual level, but what does that mean for businesses? For producers, it means that their products are sustainable in a broader sense if they are socially & environmentally better than competing products. Products would be sustainable in a broader sense if it is realistic that even despite or because of consuming the product, the consumers do not have to use more than extrapolated one earth and do not contribute to any intra- or intergenerational injustices.
But also here the same question arises: is it enough to be better than the competition or does a company have to actively support its customers via its product to use less than one earth and to prevent intra- or intergenerational disadvantages? Personally, I think the former is no longer enough in the face of the challenges we face, and the latter is too unrealistic to serve as an orientation. But when we talk about a sustainable economy and a sustainable F&B industry , what do we actually mean?
So, Europe has a new green deal. The most exciting message is that the EU sees climate change as the greatest challenge of our time and now actually wants to do something about it. 50 years after mankind officially stated at the first UN Climate Change Conference in Stockholm that it can change its environment and must protect it, the EU is now stating that, overall, this can possibly be regarded as rather potentially quite important. Congratulations to us!
But after all, better late than never. Sticking your head in the sand is useless, after all, climate change will make it uncomfortably hot and it will certainly be full of microplastics. So, as optimists, let’s take a look at the reforms we are aiming for.
“The European Green Deal […] is a new growth strategy that aims to transform the EU into a fair and prosperous society, with a modern, resource-efficient and competitive economy where there are no net emissions of greenhouse gases in 2050 and where economic growth is decoupled from resource use.” (EU 2019: The European Green Deal: S. 2)
The transformation that the EU is striving for is literally crying out for blockchain technology in all areas. Both the partial aspect of the deal “supplying clean, affordable and secure energy” as well as “mobilizing industry for a clean and circular economy” and “accelerating the shift to sustainable and smart mobility” are aimed precisely at those areas in which there is currently a lot of activity in the blockchain world. However, one point is of course particularly close to our hearts at OURZ and we are glad that it is now receiving more attention.
Since 2018, OURZ’s mission has been “Transparent Food from Field to Plate” and now, three years later, this has managed to become, letter by letter, one of the EU’s main goals for a transformed economy!
In our opinion, it was about time! More attention is needed with regard to holistic approaches that can reform the food & beverage industry. Industrial agriculture is closely related to, among other things, slave & child labor, marine & groundwater pollution, food waste & famine, resistant germs & zoonoses, bee deaths & biodiversity loss, virgin forest clearing & greenhouse gas emissions, fraud & greenwashing, and other unpalatable things. But: We need agriculture, not only rural agriculture but also industrial agriculture. It is also a fact that many farmers are deeply concerned about nature and are the pioneers of a better green future.
In the 18th century, before the industrial revolutions, the resulting division of labor and the ever-advancing globalization, people (mostly) knew very well where their food came from. The conditions under which the tofu animals grazed were just as easy to check as the origin of the hops for the beer or the wheat for the bread. In addition the people also knew their butchers, brewers and bakers personally. Long-standing, sometimes intergenerational relationships could develop, together with trust.
Today it is hardly or not at all traceable where one’s food comes from and who had something to do with it. This of course opens the door, the window and even the cat flap for the problems described above. But if we can no longer trace where our food comes from, how healthy it is for us or how fair and sustainable it is in terms of social and environmental aspects, then we can no longer trust these aspects either. Food fraud and greenwashing have unfortunately become commonplace. Simmel already stated over 100 years ago: “The completely knowing person does not need to trust, the completely not knowing person can reasonably not even trust”. The only thing left which we can be absolutely certain to know: The purchase price. Whether this is cheaper or more expensive than with other products we can understand very easily. Reasonably, the purchase price is therefore also the product attribute on which we usually base our purchase decision most strongly. But, since the true cost of our food remains hidden, we can’t even base our decisions on it.
Blockchain is changing that. It is the technology to re-establish a direct and trust-building connection between all parties involved in the value creation process.
A blockchain is actually just a database on which ones and zeros are stored. Like a USB stick, for example. But while you can delete and change data on your USB stick as wildly as you like without anyone noticing or being able to trace it, this is not possible on a blockchain. This is essentially due to two of its properties.
First, it is a back-to-end database. All data that is stored on a blockchain remains on it forever. Data that is newly added must not contradict the previous ones in order to be stored. So you can still lie on the blockchain if this is not prevented by other additional technologies, but then you can no longer contradict each other. Given the complexity of today’s world this makes it pretty difficult to cheat.
Secondly, it is a distributed database, the so-called distributed ledger technology. Data is no longer stored centrally in one place, but everyone now has copies of the data. Not only does new data have to match the previous data, but a majority of those using the blockchain have to agree to the new data being added. Only then will the new data be immortalized on the Blockchain. And even if they try to cheat you, you will definitely notice it, since you have your own copy of all the data. This creates, according to the blockchain visionary Tapscott just mentioned: “trust through clever code”.
But now back to the EU’s big deal and in particular the Farm2Fork strategy. What is this actually supposed to entail? It’s about sustainable food production, sustainable food processing and distribution, sustainable consumption, and preventing food waste. So in other words, it’s about sustainability from the field to the plate and it’s about OURZ. In the following I would like to show what we are already delivering for the Farm2Fork strategy and what we are actively working on.
1. OURZ Sustainable Food Production
As described earlier, we humans have lost the relationship with our food. Blockchain can change that – OURZ is changing that. Consumers get a direct insight into the history of their product and can establish a connection to it, learn to value it again. Currently, consumers can express this via a heart on our web app. In our next app version, which we are already working on, there will be even more possibilities to interact!
OURZ also offers a digital marketplace. Sustainability-oriented producers and soon also consumers will be able to make trust-based purchases on this marketplace, if desired guided by a fairness algorithm, which can promote cooperation and coopetition. Farmers receive an additional sales platform, but also more planning security. Together with Solino and Geisenheim University, OURZ is currently researching how the order management between producers and farmers can be automated, improved and thus made more resilient. The next step is to put our so far rudimentary AI into operation, which will provide reliable planning advice to all parties on our blockchain, enabling faster decision-making and of course resilience.
To sum it all up: Food producers get the knowledge and certainty they need to prioritize sustainability
2. OURZ Sustainable Food Processing & Distribution
What helps farmers, of course, also helps those who build their business on their work! Real-time data, the new magic word with three T.. Once data is entered on the blockchain (preferably automatically via cyber-physical systems), it is immediately available to everyone else (or at least to those who should be granted access to it). Procurement management can be made much more dynamic and efficient via the OURZ marketplace, without taking away planning security from farmers. Already now this holds the possibility to generate significant efficiency gains in vertical and horizontal supply processes and we have just started to realize our Tech 4.0 ideas!
But not only upstream there are many opportunities. Especially downstream, blockchain technology, i.e. OURZ, is creating a rousing sustainability stream. Most people in the EU want to shop sustainably, but very few say they actually do so. This phenomenon is called the attitude-behavior gap, and we have already addressed the causes and possible business solutions in our previous articles. Very briefly summarized: In order for sustainability (which, after all, cannot be perceived with our senses in the supermarket) to be sold, consumers must also believe in it. They have to trust all those involved in the value creation process, even if they don’t know them at all. OURZ creates credible transparency along the value chain and helps producers to demonstrate and prove quality and sustainability. We at OURZ cannot force unfair companies to reveal their externalized costs to people and the environment, but we can enable the fair ones to show that their prices are the true prices. #truecost
With our next version of the consumer app, we’ll then be paving entirely different paths to bridging the attitude-behavior gap. Among other things, trust management, engagement & co-creation will be completely rethought! Today, we are already helping sustainable producers to distribute their products online in a trust-generating way. In the future, we want to additionally offer them a huge trust-based marketplace via the app, so that sustainable food products can conquer the market even more.
Of course, in the future our OURZ AI will also help producers. How much of what product needs to be produced and where it needs to be delivered to, when, and where the resources for it can be sourced from and when it should be done. While OURZ real-time transparency helps with just-in-time production, the Corona crisis has shown us that this process may not always be the best. Our AI will enable Perfect-Time production based on real-time data and its autonomously acquired knowledge!
3. OURZ Sustainable Food Consumption
Consumers want to consume sustainably. Most of them know what is at stake for them, their children and grandchildren. That they have not succeeded so far sooo well but it is not only due to them. Confusing packaging, misleading labels and a lot of trust gambled away by green-washing. So it is extremely difficult to stick to one’s personal values and interests when shopping, be it digital or analog. OURZ helps. We make it possible to quickly obtain usable information regarding the sustainability of a product in hectic situations, and also to comprehend and compare the entire product history in all its facets.
We give consumers the opportunity to build a relationship with their products and the people who were involved in them. In this way, our approach promotes sustainable consumption.
4. OURZ Food Loss & Waste Prevention
The most obvious benefit of OURZ: With trust-building real-time data and more dynamic sourcing management, we can already help reduce food loss everywhere. Our AI will then soon be able to reduce loss even more by providing intelligent demand alerts. But we can also help in other aspects.
Until now, when contamination of ingredients in products occurs, it is often difficult to trace in which products and batches the contaminated resources were processed. Far too much food has to be disposed of as a result. With OURZ blockchain technology, it is possible to trace exactly which products are affected – in seconds! A fast, effective and product-specific recall management is thus possible all the way to the end customer. Our new app will also be able to warn customers when their products are approaching their best-before date. Besides, who even throws away good food when they know the work and love behind the product? Yesterday’s future is today! What was science fiction ten years ago is now just, plain and simple, science. We at OURZ have proven, among others with our partner Solino, that blockchain technology works along value chains and combines entrepreneurial profit-making with sustainability in a unique way.
Please misunderstand me correctly, the enormous challenges we are facing can of course not be solved by technologies alone (as many unfortunately think)! It needs a joint effort of producers, manufacturers, service providers, consumers and politicians in all conceivable areas. However, this does not change the fact that the F&B sector absolutely must be catapulted into the 21st century. Part of the collective effort must therefore be to promote innovative and unique ventures. The more innovative and unique a startup or initiative is, the harder it is to find support for what are often seen as overly visionary missions. This must change!