The food manufacturer will work with OpenSC on the project, a blockchain platform that gives access to independently verifiable sustainability and supply chain data.
OpenSC was founded by WWF-Australia and The Boston Consulting Group Digital Ventures. The platform can be used by anyone and anywhere, it said.
Nestle will initially use the blockchain for a pilot program tracing milk from farmers in New Zealand to its factories and warehouses in the Middle East before rolling it out to palm oil sourcing in the Americas.
A spokesperson for the company told FoodNavigator-LATAM it was too early to comment on details of the second phase of this pilot scheme but confirmed it would use blockchain to help improve traceability of palm oil in Latin America.
“These pilots will allow Nestlé to understand how scalable the system is,” the Vevey-headquartered company said.
Benjamin Ware, global head of responsible sourcing at Nestlé, said: "This open blockchain technology will allow anyone, anywhere in the world to assess our responsible sourcing facts and figures.
"We believe it is another important step towards the full disclosure of our supply chains announced by Nestlé in February this year, raising the bar for transparency and responsible production globally."
The company first piloted blockchain in 2017 through the IBM Food Trust. Last year, it partnered with retailer Carrefour to allow consumers to access blockchain-encrypted traceability data for its potato puree Mousline in France.
Nestlé said the OpenSC blockchain pilot was part of its journey towards full transparency.
In 2016, the company bought around 460,000 tonnes of palm oil from processing companies that source it from Malaysia, Indonesia, Latin America, and West Africa.
In Latin America, its suppliers and mills are located in Guatemala, Ecuador, Costa Rica, Colombia, Brazil, Honduras, Mexico and Peru.
In 2018, it announced it would stop buying palm oil from Guatemalan company Reforestadora de Palma del Petén SA (REPSA) due to links with environmental degradation and corruption.
Cargill suspended with REPSA prior to this.