Will blockchain change grocery?

There's been a lot written in recent months about blockchain’s potential to transform everything from banking to law enforcement. I wondered: how might this technology affect the grocery industry?

Investopedia defines blockchain as “a digitized, decentralized, package of all product transactions.” That should mean blockchain has the potential to revolutionize communication between buyers and sellers of grocery products by permanently storing all the data from a transaction such as quantity, price, delivery date, bar code, package measurements, source of the ingredients and so on. One key benefit of blockchain is that it allows for near-instant traceability.

And traceability may very well be the trigger to bring blockchain into wider use in the grocery industry. A while back, Walmart tested blockchain on sliced
mangoes from Mexico. Without blockchain, it took almost seven full days to trace a package of the fruit back to its original source. With blockchain, it took just 2.2 seconds. Just imagine how blockchain could be used in food recalls and for food safety. A contamination risk could be headed off in seconds.

Retailers such as U.S. grocer Kroger and Chinese online giant Alibaba are also testing blockchain. Grocery consultant and author Michael Sansolo says: “Blockchain discussions are picking up, but I’ve yet to encounter anyone really well versed or immersed in the topic. The recent romaine lettuce problem in the U.S. points to the importance of using technology that enables such great (and relatively safe) sharing of information. And there seems to be some thought that food safety issues could give blockchain more of a push.”

I also asked Kantar Consulting’s senior vice-president of retail insights, David Marcotte, for his take. “Blockchain as a base concept is very difficult for most retailers,” he says. “When faced with the duplicating and replacing all those existing procurement processes, it rapidly overwhelms a normal-sized retailer.” At this moment, blockchain seems to make more sense for manufacturers, particularly those that are looking at direct-to-consumer sales. Manufacturers such as Dole Foods, Driscoll’s and Tyson Foods are investigating blockchain and, along with Walmart and Kroger, are collaborating with IBM to pilot blockchain to “further strengthen consumer confidence in the global food system.”

Startup INS Ecosystem is also planning a solution that aims to leverage the power of blockchain to “reinvent” the grocery industry. For many companies, says INS CEO Peter Fedchenkov, the days of full truckloads as the minimum consignment are over as they might just want to ship a single pallet. INS has a platform to connect manufacturers with consumers via a network of fulfillment providers that are linked via blockchain; the idea is this approach will overcome the inefficiency of current supply chain processes and reduce costs.

Blockchain also reimagines the idea of farm-to-table. It documents all of the business-to-business relationships that lead up to the final business-to-consumer transaction. It may soon help consumers see exactly when their food was grown, what sorts of pesticides and antibiotics were used and how it compares to other products on the shelves. An educated consumer would only need her smartphone to determine which grocery item is the cleanest, healthiest and most ethical.

It’s too soon to tell the exact impact of blockchain on the grocery industry, but there are many who are determined to ensure it does make an impact.

This article appeared in Canadian Grocer’s June 2018 issue.