Beefing up our economy
For starters, China’s emerging middle class increasingly demands high-quality food that can be trusted. As incomes rise, so too does the demand for proteins and, in particular, red meat. In the past few years, we’ve already witnessed an explosive rise in China’s imports of Australian beef. The reality is that we’re only touching the surface.
We have two challenges here, which is in reality two massive opportunities. The first challenge is to supply the high-quality product that is demanded. The second is to demonstrate to an increasingly discerning consumer that it really is what it’s meant to be. I’m talking about credentialing provenance.
Two birds with one stone
Our BeefLedger project is focused on ‘killing two birds with one stone’. The project brings together the emerging power of blockchain technology to secure provenance with a real-world beef supply chain integration.
Meeting growing market demands for beef is challenging when, as a nation, we are constrained by our ecology and by bottlenecks in export-accredited beef infrastructure. To appreciate the extent of the challenge, it’s worth reflecting on some recent statistics.
On the demand side, we know that on average China consumes 6kg of beef per person each year. This ranks China 47th in the world. By way of contrast, Australia consumes around 28kg (ranked seventh) and Hong Kong a remarkable 57kg (ranking it third in the world behind Uruguay and Argentina). If Hong Kong tells us something about what a future Chinese consumption profile might look like, it’s pretty clear there’s a massive gap to close.
Think about this. China’s population is almost 1.4 billion people. Let’s say China’s per capita demand for beef increases over the next 10 years to look something like Australia’s experience (not even to the levels of Hong Kong!).
What this means is that in 10 years, China’s demand will increase by 30.8 million tonnes. Australia’s total export capacity is in the order of 1.25 million tonnes, which already accounts for around 70 per cent of our national production.
The numbers are stark. China’s potential market is way larger than Australia could ever hope to supply. But don’t lose hope! In the global scheme of things, we make up about 3 per cent of total global supply, so the issue isn’t about figuring out ways of simply upping our supply volumes. No, instead, the focus must turn to the quality end of the marketplace and play to our national strong suit.
Australia’s reputation as a ‘clean and green’ supplier of food products is well-earned. But like all reputations, it’s fragile. An outbreak of disease or contamination is enough to tarnish market perceptions of our core strength. We need to continue investing in brand value protection as a basis for increasing value in our export markets.
Bringing it together
BeefLedger is a project vision that focuses on high-value production and credentialing provenance to secure brand value. We are integrating supply chain capacity — from breeding and grazing through to feedlots, slaughtering, and distribution — within a single structure. Our footprint extends from North Queensland, through central Queensland and ultimately to the hinterland of SEQ and northern NSW.
By integrating a real-world supply chain capacity, we are able to secure supply certainty, maintain quality control ‘on the ground’ and manage risks that usually rip fragmented supply chains apart. A supply chain is only as strong as the weakest link, and a whole-of-chain strategy means we can manage fragilities when they most need nurturing while preserving the integrity of the entire supply chain.
On the other side of the equation is our blockchain system. The blockchain is a distributed ledger technology that has two key features. The first is that it delivers a near-immutable record of the past. This security of data makes the technology a powerful ally in the quest for proving provenance to consumers.
By digitising provenance-related data, we are able to deliver it in an easily digestible format for consumers at the other end of the supply chain. Imagine a consumer being able to scan a QR code and be confident that the product in front of them is the genuine article. This may sound trivial for us in Australia, spoilt by robust government regulation of food labelling, but in places such as China, food fraud is a huge problem. Peace of mind is something that consumers in China value when it comes to food safety and food quality.
The second feature about the blockchain is that it enables us to create systems of payments that can streamline the entire supply chain and reduce risks for businesses involved in it. One of the biggest challenges for the beef supply chain is the ebbs and flows of payments (cash flow, if you will), and smart contracts and the blockchain are potentially powerful tools to secure and automate payments.
To use the services of the BeefLedger, participants will need to use what we call BeefLedger Tokens (BLT for short). In tech terms, this is a native utility token, which acts as a means of payment for services delivered by the data network.
In simple terms, you can use a BLT to buy beef and access the credentialed provenance data. Without a BLT, you simply couldn’t get the verification information. BLTs would also be used to pay for smart-contract services, data analytics services, and data security services.
We can also use BLTs to reward supply chain participants for excellence in behaviour and for conduct that maintains supply-chain integrity.
In effect, the BLT and the blockchain platform links the consumer and what they value through to the entire supply chain so that the value of provenance is actually distributed fairly to all of those in the chain who contribute to it.
For readers with a cryptocurrency bent, the BLT is presently going through what’s called a ‘token pre-sale phase’. The token can be prepurchased with Ether or Soar Coin (two cryptocurrencies), subject to a bunch of terms and conditions. Details are at the website (www.beefledger.io).
Securing a stake: public investment opportunity
Because we started this project as part of our overall ambition to contribute to the revitalisation of regional economies, we’re also preparing to open up BeefLedger to participation from the wider community.
It’s about ensuring that the entire community — not just the ‘big end of town’ — has a chance to secure a stake (no, not a ‘steak’) in this project and participate in the tremendous opportunity for future wealth that comes from meeting the needs and expectations of the rapidly growing Chinese middle-class market.
We’ve also launched a community investment fund — the Regional Resilience and Development Fund — which provides the broader community with opportunities to participate in the future growth that will come from meeting Asia’s emerging demands for things that Australia, and regional Australia in particular, has in great abundance.
Food (and beef) is just the beginning.
Warwick Powell is the chairman and founder of Sister City Partners Ltd, a not-for-profit regional investment banking enterprise. He is also a founding director of BeefLedger Limited. Details of each can be found at www.sistercitypartners.com.au and www.beefledger.io