The blockchain-based T.R.U.S.T. platform from Clarins potentially helps suppliers transact with the firm and inform consumers of what goes into the products and how they are produced. There are several examples of blockchain initiatives with lofty goals that don’t scale. By focusing on their own products and operations, Clarins can refine the processes so that the blockchain is embedded across the firm’s product range.
The T.R.U.S.T Platform Shines a Light on Clarins' Operations
Cosmetics firm Groupe Clarins announced in November 2022 the launch of its blockchain-based T.R.U.S.T. platform that serves multiple objectives, including providing a secure ledger of transactions between suppliers and the firm. In addition, Clarins created the T.R.U.S.T. platform to provide a mechanism for informing interested parties about the ingredients that go into Clarins’ products and the manufacturing processes, such as quality and safety controls, involved in producing individual product batches.
Furthermore, the platform reinforces the Clarins brand values with the company stating that T.R.U.S.T. stands for:
Other implementations of blockchains in a manufacturing context have focused on providing a system of record. The T.R.U.S.T. platform suggests that the technology can help firms not only create a digital thread of their supplies and operations, but also support corporate communications.
Delivering Transparency at the Batch Level
The T.R.U.S.T. platform securely records exchanges between the producers and suppliers of plant extracts with the firm. The advantage of the blockchain being that the technology authenticates and certifies the interactions in a centralized database. For external stakeholders, the platform provides information such as the geographical origin, harvesting methods, and sourcing certifications of the plant-based ingredients that go into the cosmetic products.
Clients can directly access the T.R.U.S.T. interface via the Clarins website and consumers can retrieve the information by scanning a QR code that is included on the packaging of their product. By entering their product’s batch number, consumers can also receive information regarding all the plants that go into the product and the different manufacturing steps, such as formula preparation, quality control measures, and packaging techniques, to produce it.
Behind the scenes, the data, certifications, and processes are tagged by specialist provider of traceability platforms, Communify. The blockchain itself is underpinned by protocols and workflows developed by NeuroChain, which are integrated into Amazon Web Services (AWS).
Currently, the T.R.U.S.T. platform covers 30 products and 40 plant extracts. By the end of 2023, Clarins is aiming for 100 products to be included on the blockchain.
Ingredients for Success
Blockchain technology can support several objectives for manufacturers, such as improving supply chain transparency and demonstrating regulatory compliance. The Clarins example shows that the technology can simultaneously support manufacturing operations and illustrate aspects of the firm’s environmental, social, and corporate governance credentials; Clarins aims to have its social and environmental performance, transparency, and accountability credentials to be verified and considered a Certified B Corporation during 2023.
Elsewhere in the cosmetics industry, Estée Lauder’s Aveda brand launched a blockchain in 2021 that focused on the supply of vanilla from 450 farmers in Madagascar. The blockchain enabled farmers to receive a certified time stamp of their sales at local co-ops having used QR codes to scan their sales. Consumers can also scan QR codes, included in over 125 Aveda products, that provide information of the probity related to one of the key ingredients in Aveda products.
It’s not only the cosmetics industry where consumers are looking to better understand how and under what conditions the goods they are considering are produced—it’s critical in the food and beverage industry, too. In 2018, IBM launched the IBM Food Trust solution based on IBM’s Blockchain Platform, a Blockchain-as-a-Service (BaaS) (see https://www.abiresearch.com/market-research/insight/1032411-supply-chains-get-a-blockchain-boost-with-/), with the intention of improving processes surrounding product recalls and identifying supply chain bottlenecks. However, despite these worthy goals and the involvement of other leading exponents in the food and beverage industry, including Walmart Inc., Kroger, Nestlé SA, and Dole Food Co, the initiative has yet to scale. In fact, Walmart is only using the blockchain to track the supply of peppers.
The lack of scale is stark, but several factors contribute to this. At the launch of the Food Trust, IBM needed to offer a “virtually guided onboarding” to the tune of US$5,000. A blockchain is not going to extend right across the value chain if participants are required to spend thousands of dollars to come to grips with the new process. There also needs to be a common language across the blockchain to ensure comparability, which can form part of agreements to achieve common data standards. Success is predicated on the willingness of all participants moving to the blockchain—if some do and others don’t, then the benefits won’t be realized.
Another issue is whether the blockchain solves an existing problem in an industry. Data sharing is the essence of a blockchain and manufacturers, their suppliers, and customers can achieve transparency already sharing data from Enterprise Resource Planning (ERP) systems and supply chain management tools via APIs. For wide adoption, the blockchain needs to be tied to solving a common commercial problem; for example, showing evidence of regulatory compliance and extolling the opportunity to save money or generate additional revenue.
By being focused on internal operations, rather than cross-industry collaboration, the T.R.U.S.T. platform stands a better chance of succeeding. Clarins can make participation and adherence to its data standards a requirement. Vertically-integrated blockchains have a better chance of success than horizontal collaborations—the cancellation of TradeLens being a case in point.
A blockchain should not be considered a technology, but a way to implement governance, data sharing, and, ultimately, strategic value for all participants.
For more information on the blockchain in an industrial context, please refer to ABI Research’s Blockchain in Industrial Applications report (AN-5113) and Industrial Blockchain Competitive Ranking (CA-1263).