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How Blockchain Technology Will Underpin the Fresh Food Sales Boom

As the research partner of Distributed: Trade, Chain Business Insights is providing this early access into its exclusive research on blockchains’ role in supply chain management. At Distributed: Trade, we will present highlights from our research and lead a panel of blockchain innovators to offer a technology response to business issues.

Supermarket shelves are barometers of consumer demand for food and they are pointing to a sunny future for fresh foods and an uncertain outlook for processed products. In this shifting and highly competitive climate — as exemplified by Amazon’s pending acquisition of Whole Foods — blockchain technology is emerging as a key enabler as the industry looks to reshape supply chains to meet customers’ changing demands.

A recent Wall Street Journal article maintains that the consumer shift “started several years ago, but its impact on big food makers is intensifying now because of added pressure from retailers.”

Supermarkets are allocating more shelf space to fresh food, prepared hot meals and local products, exacerbating “a drumbeat of bad news” for packaged-goods companies, reported the Journal.

A Nielsen consumer analyst characterized the plight of packaged goods as “death by a thousand cuts.”

This realignment is forcing many established brands to rethink their market strategies. For example, Unilever announced recently that it is looking to exit the margarine business as part of an overhaul of its food and beverage operations. 

The rise of fresh food offerings reflects a general shift toward healthier consumables containing less sugar and fat, and buyers’ concern over ethical issues and environmental sustainability. As a result, shoppers want to know how and where their food purchases are sourced and created, and what’s in them. This is particularly important for specific categories, such as organic and gluten-free, which are experiencing substantial growth.

Blockchains have a key role to play in supporting the focus on these markets. The technology — with its shared ledger and immutable data architecture and its ability to run smart contracts — is being developed and tested in three critical areas of the food supply chain:

  • Sustainable agriculture: The agricultural industry is harnessing the explosive growth in Internet of Things technology by using arrays of sensors to monitor the usage of materials such as pesticides and fertilizers. Blockchains’ interface with sensor networks to provide farmers with the timely, secure information they need to manage growing operations both profitably and sustainably.
  • Supply chain transparency: In addition to information on the raw materials that go into natural food products, blockchains’ immutable record of every transaction in the farm-to-fork supply chain is paramount. Relevant details are made available to discerning consumers via smart labels paired with apps running on mobile devices.
  • Safety monitoring: Every year, spoiled foods cause thousands of people in the U.S. to be hospitalized (and some even die). A blockchain’s ledger can be used by retailers to pinpoint the cause of these problems quickly, and to recall tainted natural food products in order to limit consumer impact and maintain overall supply chain health. 

Such applications will increase in importance as the market for fresh foods continues to evolve. The Amazon/Whole Foods tie up is indicative of market dynamics and pressures, with the likes of Walmart (which is testing IBM blockchain technology) stepping up its fresh food offerings and specialist home delivery services gaining attention, customers and venture investment.

PayPal Creates Internal Blockchain Token for Employee Reward System

Distributed Summary:

  • Online payment system dabbles in cryptocurrency with blockchain-based token for employee perks
  • Filed patent for “expedited virtual currency transaction system” in March
  • Historically cold toward crypto/Bitcoin, this could signal shift from PayPal

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