Opportunities for Blockchain in the Food and Grocery Industry

With the market being extremely competitive, more and more retailers are hoping to boost their numbers by offering a smooth shopping experience and automating their back-end operations. Old-line mega-chains, eCommerce giants and technology startups are working on minimizing the possibility that the customer will procrastinate, forget about the need to make the purchase, go elsewhere or refuse to shop due to poor quality of food and services.

Apps to order meals from nearby participating restaurants, food subscription services, Dash Buttons and Replenishment systems that track how much product has been used and automatically reorder it, voice-based interfaces that allow for natural language input and contextual understanding. Retailers want it all and look to technology and automation strategies not only to provide consumers with fresh food, better experiences and instant gratification but to drive down costs, streamline operations, be able to process multiple orders in a short period of time and have them delivered in minutes.

In this article, we discuss various robotic technologies such as delivery drones and droids, explore shelf monitoring and waste management, plus highlight key opportunities for the adoption of blockchain in all these areas of retail, food and grocery industry management.

Delivery Infrastructure

Today, retailers, grocery chains and Internet-based companies deploy high-end technology that offers new ways to shop, receive orders and optimise logistics. Some businesses even go so far as to unlock customers’ doors to put the packages safely inside. This requires the use of smart locks, keys and cameras to monitor customers’ homes around the clock. Although the technology allows for in-home delivery and scheduled access to recurring visitors, however, it also raises questions of trust and security.

Same-day delivery is another area of intense innovation. Here, businesses ‘hire’ pavement droids and areal drones to transport packages. Starship’s droids can carry up to 20 pounds of groceries and travel about 10 miles at a time. When on its way, a droid notifies the customer and provides an unlock code. In turn, Amazon’s delivery drones can carry packages up to 5 pounds and drop them off on a designated spot within a 7.5-mile radius.

Regulations, though, are not quite there yet. Given the lack of consensus on the safety of unmanned systems and remote piloting, international discussion around the topic is just getting started. According to Reuters, it is moving towards establishing a global drone registry. It would allow for identification and tracking, but it’s not yet clear who would operate it.

In addition, there are worries that companies will have to design different drones for different environments and regional standards. This will not be a problem for eCommrece giants such as Amazon, JD and Alibaba that are set to build delivery drone beehives and plan to have own fleets in various locations. However, smaller businesses and independent producers might get cut out of the drone game due to the lack of resources needed to meet the standards and launch their own robotic delivery services.

As the robot use expands beyond the supply chain and moves into the delivery space, it becomes the key to streamlining shopping and cutting down costs, especially with regards to same-day delivery logistics and the last-mile delivery expenses. However, current solutions can be improved.

By design, blockchain-based systems are tamper-proof and can securely keep track of complex digital transactions together with the information related to real-world objects involved in those transactions. The technology allows businesses to define the rules for various transaction types with the help of smart contracts. Drone delivery systems can utilize it for registering routes, real-time communication, traffic control, logging location details, authentication and completion of delivery tasks.

According to Fortune, Walmart explores blockchain for its drones, as it aims to improve the last mile of delivery and extend it to customers’ homes. Apart from issuing blockchain identifiers, the company can log information in a tamper-resistant ‘format’ and enable trust-building by providing customers with access to supplier information, items’ pedigree and temperature logs.

Once a drone is airborne, blockchain enables real-time signature verification and live map tracking until it successfully authenticates with a delivery box or a smart window, drops off the package and triggers a designated smart contract that issues delivery notifications to be sent to the customer.

Managing a fleet of drones is a complex task that requires a combination of innovation, information security and resource planning. A blockchain-based registration system and smart contracts mechanism allow for harmonised regulations and standards. Its decentralised nature makes robotic delivery systems cost-effective and affordable for businesses of all sizes.

In-store Operations & Waste Management

When a business wants to cut delivery costs, it invests not only in high end robotic systems but in-store grocery pickup as a real-world alternative. In this way, customers have the option to collect packages ordered online from one of retailer’s stores. Walmart, the mega-chain, offers same-day pickup in thousands of locations and even helps customers load their cars.

Pickup spots act as a transition mechanism for eCommerce to expand into the offline space. Amazon, an online retailing powerhouse, now have more than 15 outposts close to U.S. universities. Locals use them to pick spur-of-the-moment orders as the company makes them available for collection in 15 minutes. Its drive-through service loads groceries into shoppers’ cars as well.

This model evolves into and a hybrid supermarket that mixes the best of online and in-store shopping. As a technology giant, Amazon brings its eCommerce capabilities into checkout-free grocery stores it has opened in Europe. Its RFID powered tracking system detects when a shopper takes an item from the shelf, tops up corresponding virtual shopping cart and logs the items purchased as the shopper goes along. When the customer exits the store, the system charges the total cost of groceries purchased from his or her account in a designated ‘transition area’. Thus, the company frees its customers from the need to spend time going through a check-out line.

Blockchain technology can help scale up the hybrid model to smart shopping bags and IoT solutions that create friction-free processes. Blockchain-based smart contracts can power most in-store operations and help streamline shelf audit and monitoring. From the state of groceries to placement to pricing, most food businesses don’t have any monitoring present in these areas. And that is where consumers make purchasing decisions when shopping in-store. Manufacturers such as Unilever and MARS are vested into improving their display opportunities and verifying that their product is properly placed.

Blockchain-based perspective is about the knowledge on the state of the store environment and informing key stakeholders such as store managers and corporate offices on opportunities to improve store performance. The blockchain technology allows to digitally track sustainable sources of produce through the supply chain, from catch to plate. It is a tamper-proof way of verifying transactions between suppliers, supermarkets and consumers. Anti-counterfeit solutions based on blockchain will ensure that groceries are verified at each point along the supply chain. This ‘history’ or ‘product journey’ will be available at any time and will enable end-to-end transparency, from producers to shoppers. Walmart plans to implement this opportunity and integrate blockchain into its processes on a global scale.

However, most supermarkets serve as example of how bad the food wasting problem has become. Forecasting the right amount of products with verified real-time waste data enables at least partial recovery and would allow for the food industry to reduce disposal fees, potentially improve shopping experience and promote responsible actions and behaviors.

We at INS are working on the disintermediation of grocery retailers and offering consumers a chance to be part of the networked solution. The INS Platform will provide shoppers with access to discounted food and rewards based on their action within the ecosystem.

Here, is a series of Medium articles that explore the market and explain the concept behind the INS Ecosystem in detail: