Blockchain technology offers benefits for supply chain transparency and traceability. The document discusses how the honey producer RawHoney could integrate blockchain into its supply chain and business model. Specifically, it proposes creating a decentralized application on the Ethereum platform where each supply chain participant could record details about product batches as they move through the chain. It also suggests RawHoney use a blockchain platform like BitPesa to improve the efficiency and security of its B2B payments. Legal and regulatory considerations for these strategies are also outlined.

1. Integrating Blockchain into the Supply
Chain of RawHoney
Stefan Petrov
Amaya Hundal
Taisiia Zinakova
Ada Brotkin
Mei Yan-Koponen
Report
December 2018
Finance and Corporate Governance
Degree Programme in International Business

2. 1
Table of Contents
1 Competitive landscape ....................................................................................2
1.1 Food producers using or planning to use blockchain worldwide.............................2
1.2 Food producers using or planning to use blockchain in Finland ..............................4
1.2.1 Arla Foods ......................................................................................................4
1.2.2 S-group...........................................................................................................5
1.3 Possible partners......................................................................................................5
2 Blockchain in RawHoney’s Supply Chain ..........................................................6
2.1 What Blockchain offers for Supply Chains................................................................6
2.2 Blockchain in RawHoney’s Supply Chain ..................................................................7
2.3 Legal and Regulatory Implications............................................................................9
3 Utilizing Blockchain in RawHoney’s B2B payments ........................................10
References............................................................................................................12

3. 2
1 Competitive landscape
At the initial stages of our project we have decided to focus on the competition
among honey producers in Finland. Our research has shown us the following major
honey production companies in Finland, including the one specialized on the raw
honey production. Honey producers in Finland: Hunajayhtymä Oy Honey Group Fin-
land Ltd.; Polar-Honey Finland (Lappi-Hunaja)/Pasiina Oy. Raw honey producers in
Finland: Hikiän.
1.1 Food producers using or planning to use blockchain worldwide
The research has shown that there is no honey production company in Finland,
which uses blockchain technology in its operations. However, there are food produc-
ers around the world and in Finland, which are applying blockchain technology in
their operations. The names of the companies are mentioned in the lists below:
• IBM Food Trust
• Nestle SA
• Walmart Inc.
• Dole Food Co.
• Driscoll’s Inc.
• Golden State Foods
• Kroger Co.
• McCormick and Co.
• McLane Co.

4. 3
• Tyson Foods Inc.
• Unilever NV
IBM Food Trust is a group that is focused on solving the traceability in the food sup-
ply problem. The traceability platform is based on blockchain technology provided by
IBM, which is planned to be used in the operations by the world’s biggest companies
mentioned above.
IBM strives to make world’s food supply chain safer, more efficient and more sustain-
able, by developing the possible blockchain applications. IBM Food Trust applies
blockchain technology to improve visibility and accountability in the food supply
chain. This network is connecting growers, processors, distributors, and retailers
through a permissioned, permanent and shared record of food system data. IBM
food trust also enables safer food, longer product shelf lives, reduced waste, and bet-
ter access to shared information.
The following is a description of how IBM Food Trust works, retrieved from their
website (IBM food trust solution brief 2.0, 2018):
“The solution provides authorized users with immediate access to actionable food
supply chain data, from farm to store and ultimately the consumer. The complete
history and current location of any food item along with its accompanying infor-
mation (i.e. certifications, test data, temperature data) can be readily available in
seconds. (IBM food trust solution brief 2.0, 2018.)
The solution provides participants with a permission-based, shared view of food eco-
system information, allowing convenient data publishing and controlled sharing of
information. To achieve this goal, the IBM Food Trust solution enables participants to
enter and control access to their encrypted blockchain data. (IBM food trust solution
brief 2.0, 2018.)

5. 4
In doing so, transaction partners can only access the data they are permissioned to
view. Permissioned data access is an integral part of the core solution. Access con-
trols ensure that the organization that owns the data maintains full control over who
can access it on the network. IBM Food Trust solution users can quickly locate items
from the supply chain, in real time, by querying food product identifiers such as
Global Trade Item Number (GTIN) or Universal Product Code (UPC), using the prod-
uct name, and filtering on dates. All data is stored on blockchain ledgers, protected
with the highest level of commercially-available, tamper-resistant encryption.” (IBM
food trust solution brief 2.0, 2018.)
Figure 1. IBM Blockchain
1.2 Food producers using or planning to use blockchain in Finland
1.2.1 Arla Foods
Arla has launched a pilot project called Arla Milkchain, which allows customers to
track the origin and production of the company's products from farm to dairy. The
first item to launch on the platform is Single Estate Organic Milk. Blockchain technol-
ogy allows Arla Finland to provide an overview of the milk’s journey from farm to

6. 5
dairy. This project has the same aims and operational processes as the IBM Food
Trust. (Arla employs blockchain in Finland to offer traceability, 2018
https://www.just-food.com/news/arla-employs-blockchain-in-finland-to-offer-trace-
ability_id140380.aspx)
1.2.2 S-group
S-group has a partnership with IBM and planned to test their Pike-perch radar solu-
tion, which is based on IBM Blockchain technology, during the summer season 2018
as part of the retail group’s strategy to improve customer experience. (This summer,
fishing in Finland means food traceability on the menu, 2018
https://www.ibm.com/blogs/blockchain/2018/07/this-summer-fishing-in-finland-
means-food-traceability-on-the-menu/)
1.3 Possible partners
While making the research of the competitive landscape we have found the possible
partners for RawHoney, which can help them with blockchain applications. These are
technology companies which are developing blockchain technology. The list can be
found below.
• OriginalTrail
• BitPesa
• IBM
• VTT Technical Research Centre of Finland Ltd.
• VTT Technical Research Centre of Finland Ltd in partnership with Aalto Uni-
versity and Research Institute of the Finnish Economy (ETLA) have researched
blockchain technology usage for non-cryptocurrency use cases in the BOND
project (Blockchains Boosting Finnish Industry). The knowledge gained and

7. 6
data collected during this research can help RawHoney to apply blockchain in
their operations.
• Empirica. Empirica Finland is a technology startup, that specializes in digital
services, blockchain, and ICO Advisory Services. It is the partner company of
Arla Food, which helped them with the blockchain technology application.
2 Blockchain in RawHoney’s Supply Chain
This section will be dealing with how blockchain can actually be integrated into the
supply chain of RawHoney and what that means for their business model as we navi-
gate through the legal and regulatory implications.
2.1 What Blockchain offers for Supply Chains
Blockchain works as a distributed ledger for peer-to-peer transactions, based on con-
sensus of the involved parties and supported by assistive technologies, such as a sys-
tem for smart contracts. (Schwentker 2018) It can be operated across various com-
puters and across different locations, thus increasing the security by having no one,
single central database. Since the information is structured across the entire net-
work, anyone at any given time from any location can view it given that they have
registered onto the network. It makes a substantial use of cryptography by encrypt-
ing public and private keys for the security of the information stored across the
blockchain network, along with other security tools. (Tapscott 2018)
Manufacturing supply chains are not the easiest things to navigate through, they are
a complex process with the involvement of many parties, especially due to the wid-
ening scope of these supply chains globally with end-consumers being located across
various locations. Many times, this complexity fails to maintain a reliable information
flow among the various parties involved and the end-consumers, thus bringing the
quality of trust under question. (Milgate 2001) The inconsistencies of the information

8. 7
flow in supply chains has put forth many ethical crises, such as Volswagen with car-
bon emissions and Nike with labor exploitation, that have made transparency and
traceability necessary for consumers more than ever before, backed by the growing
megatrend of conscious capitalism. (Frentrup & Theuvsen 2006) (Fyke 2013)
What the blockchain technology would do by becoming a part of a supply chain is
that it would project forth a ledger with numerous actors of numerous tiers within
the supply chain; offering a record of n-tier involvement, especially considering since
many companies are not properly aware of their own 2nd or 3rd tier suppliers. Any
supply chain based on this technology has the potential of becoming the most crystal
clear supply chain with each object in it permanently recorded along with all its tasks
done to it or with it, from who acted upon it to how it becomes a component of a
larger object, thus acting as a destructive innovation for the elements of the current
supply chains and potentially changing the way supply chains work. (Busch 2016)
(Abeyratne & Monfared 2016)
Considering this, what blockchain has to offer to supply chains is stability, transpar-
ency and efficiency with all the key information about each product available on the
blockchain network for the actors of the supply chain and the end-consumers to
view, thus working towards strengthening trust with the customers and building to-
wards an improved quotient of customer loyalty. (Abeyratne & Monfared 2016) (Ball
et al. 2004)
2.2 Blockchain in RawHoney’s Supply Chain
Making blockchain a part of RawHoney’s supply chain would first require a block-
chain network to be made. There are many such system softwares that can host
blockchain networks, for example Ethereum and the IBM blockchain. (What is
Ethereum n.d.)
For simplicity’s sake, let’s consider the example of Ethereum.

9. 8
One way RawHoney can go about this is by making a decentralized application, or
Dapp, which will run on a blockchain-compatible code. This where Ethereum comes
in, it will provide a platform for RawHoney’s app developers to create such a Dapp.
This Dapp will then make it possible to be used by the actors on RawHoney’s supply
chain, from them as a producer & manufacturer, to their retailers, distributors, con-
sumers etc.
Through the Dapp, each actor that acts on each RawHoney jar or batch of honey will
type in key information about what process was done to it. As the product would
move along its supply chain, each key actor will “own” the product for a while and
type in key information about it such as the location, the time stamp, product-spe-
cific information, its environmental impact etc. This information will be encoded on
QR codes continuously by the Dapp until each jar is ready for end-consumers. Once
the end-consumers buy a RawHoney jar, they will be able to access all key infor-
mation about their specific jar and the honey contents inside from the blockchain.
(ibid) (Abeyratne & Monfared 2016)
Below is a visual representation of the above concept:
Figure 2. Proposed Concept (Abeyratne & Monfared 2016)

10. 9
What this means for RawHoney’s business model
Based on the information provided to us, RawHoney’s current business model is typi-
cal of any other production and manufacturing company, with the core focusing on
generating revenues and making profit through the basically selling. However, put-
ting blockchain in the mix would not only mean integration into their supply chain
but also their business model.
Their business model would have to put investment in a blockchain-based supply
chain as a top priority. The answer to how RawHoney would generate revenues and
make profits would have to be the blockchain-based supply chain and the quality and
trust assurance it gives instead of simply selling one jar of organic honey at a time.
(Business Model n.d.)
2.3 Legal and Regulatory Implications
Blockchain technology is still a relatively new concept for people and governments to
form opinions, laws and regulations on. There is still no major uniformity in the laws
and regulations regarding blockchain technology. However, many countries in the
EEA have been rather welcoming to the technology with Finland being one if them.
And the general attitude of the people and governments in the EEA countries has
been positive and optimistic. (Henderson 2017)
However, there are still aspects concerning the possibilities of RawHoney’s block-
chain and regulatory issues.
If RawHoney decided to forward with utilizing blockchain for B2B payments and
money transactions (discussed in upcoming section), there can be certain issues con-
cerning money laundering and tax compliance issues that would need special atten-
tion from RawHoney in the initial stages of development to make sure that proper
documentation and clarity is provided to the government authorities in questions
and appropriate permissions have been received.

11. 10
Since RawHoney’s blockchain would be a permissioned blockchain, or a blockchain
developed for their own private and business-related use, with information of key in-
dividuals of the company and its supply chain on it, there will have to special atten-
tion given to data privacy and security laws and how to follow them fully throughout
the development and implementation of the blockchain. Other related regulatory ar-
eas that ought to be looked at are the cybersecurity regulations and information
technology regulations. (Rennock et al. 2018)
3 Utilizing Blockchain in RawHoney’s B2B payments
As RawHoney has a lot of B2B transactions with hotels, restaurants, cafes and gro-
cery stores we suggest RawHoney to utilize blockchain system in their B2B payment
system in the future. Applying a blockchain money transaction technology into Raw-
Honey’s B2B payment system would improve its processes significantly in security,
time and cost-wise. There are a variety of companies that offer these fast, easy and
cost-effective transaction solutions. There is for example one company called Bit-
Pesa offering these blockchain B2B transaction solutions. It is a digital payment plat-
form that leverages blockchain settlement (BitPesa team 2018). BitPesa accepts
money from the company’s bank account and moves it directly to the destination ac-
count or the other company’s account without any middlemen (How BitPesa works).
We believe that RawHoney could benefit using technology like this to take a control
of the payments and transactions to its distributors and suppliers in their supply
chain. RawHoney would add value to its competitive advantage with transforming
their B2B payment system into more efficient by utilizing BitPesa platform.
There are some legal and regulatory requirements for executing the strategy of utiliz-
ing BitPesa. For RawHoney to register and operate a business account for applying
the blockchain technology offered by BitPesa requires some documents for making it
legal. Documents required include: certificate of business registration, memorandum
and articles of association or company constitution, valid IDs of directors and owners,

12. 11
extract of business formation showing the ownership structure and proof of address
of the company (BitPesa Team 2018).
Applying these ready-to-use platforms like BitPesa to RawHoney’s B2B payment sys-
tem would be easy and affordable strategy. However, we believe it is still beneficial
and important for RawHoney to consider how to integrate the system into the supply
chain of their own to make it more suitable for their own business and to serve its
purpose. As international business students, we believe that applying blockchain
technology into RawHoney’s B2B payment system would definitely enhance the com-
petitive advantage of RawHoney. And if and when RawHoney would aim for interna-
tional markets, the management of blockchain technology B2B payments would be
essential in the future as it would simplify transactions in frontier markets.

13. 12
References
Abeyratne, S. A. & Monfared R. P. 2016. Blockchain Ready Manufacturing Supply
Chain Using Distributed Ledger. International Journal of Research in Engineering and
Technology, 5(9), 1-10.
Ball, D., Coelho, S. P., Machás, A. 2004. The Role of Communication and Trust in Ex-
plaining Customer Loyalty: An extension to the ECSI model. European Journal of Mar-
keting, 38(9/10).
Busch, J. 2016. Why Bitcoin’s Blockchain Technology Could Revolutionize Supply
Chain Transparency. The Secured Lender (July/August), 31-32.
Business Model. N.d. Page on Investopedia’s website. Accessed on 1 December 2018.
Retrieved from: https://www.investopedia.com/terms/b/businessmodel.asp
Frentrup, M., Theuvsen L. 2006. Transparency in Supply Chains: Is trust a limiting fac-
tor? Department of Agricultural Economics and Rural Development, University
Goettingen, Goettingen, Germany. 65-72.
Henderson, D. 2017. Blockchain Regulation In Europe And Potential Hurdles. Page on
Nasdaq’s website. Accessed on 1 December 2018. Retrieved from:
https://www.nasdaq.com/article/blockchain-regulation-in-europe-and-potential-
hurdles-cm854360
Milgate, M. 2001. Supply Chain Complexity and Delivery Performance: An interna-
tional exploratory study. Supply Chain Management: An International Journal, 6(3),
218-230.
Rennock, J.W. M., Cohn, A. & Butcher R. J. 2018. Blockchain Technology and Regula-
tory Investigations. Practical Law February/March Issue, 36-44.
Schwentker, R. 2018. Blockchain for Business – An introduction to hyperledger tech-
nologies. Online course by the Linux Foundation on Edx.org.
Tapscott, D. 2018. Blockchain Revolution: The internet of value. Insight Investment,
page 5.
What is Ethereum? N.d. Page on Blockgeek’s website. Accessed on 1 December 2018.
Retrieved from: https://blockgeeks.com/guides/what-is-ethereum/