Straight from the Source: How Blockchain Technology Will Change eGrocery
In late 2018, the latest in a string of E. coli outbreaks brought Romaine lettuce into the national spotlight. Five people died, and 96 were hospitalized – yet supermarkets were unable to verify where the contaminated lettuce was grown. As the FDA investigated (their progress slowed by the government shutdown), the Center for Disease Control advised consumers to throw out all Romaine lettuce in their fridge, regardless of whether they'd already eaten some of it and hadn't gotten sick – just to be safe. As a result, thousands of pounds of food went to waste while the FDA ruled out Arizona, Florida, and Mexico as possible culprits, finally honing in, weeks later, on California.
All that waste of time, energy, money, and food could have been avoided with blockchain technology.
Why we need traceability
Traceability is a big issue in food sourcing today. One major reason for this is, of course, public safety. Outbreaks of food contamination lead to general confusion while entire crops are recalled, nationwide, resulting in even more food than usual going to waste, and causing undue stress to consumers.
Another major reason is that consumers are becoming more discerning. They want to know where their food is coming from, and increasingly, they don't trust marketing. That means a label isn't enough—they want transparency.
How blockchain technology solves the problem
Grocery is going online, and many people think that simply means they can order milk and eggs on their phone. But eGrocery is much more than that: it provides a means for the entire supply chain to go digital.
Blockchain is essentially an online ledger that records that supply chain, so that every product sold in stores can be tracked accurately. It amalgamates data from growers, processors, wholesalers, distributors, and retailers, using algorithms, scanners, and sensors to take snapshots of every product's journey. In short, blockchain creates an online paper trail from farm to consumer.
A key aspect of blockchain is that its record-keeping is available to consumers – in real time. That means consumers would be able to look up whether an apple really came from a certified-organic farm, or whether a jar of honey is really local. And it means that in the case of contamination, everyone along the chain will know its source right away.
Is it trustworthy?
The nature of blockchain technology ensures its users that its information is correct. Every product that enters the supply chain is tagged with a piece of data, or "block," which is then entered into the greater network of information. When that happens, the entire network is notified. Once a block has been entered it's extremely difficult to modify, thereby making the history public and presumably fraud-proof.
It's helpful to know that blockchain originated as part of Bitcoin, whose security has long been heralded by tech experts. While the specifics of blockchain have changed in its transition to eGrocery, it still retains some of the same inner workings. Just as cryptocurrency is (said to be) unhackable because it relies on the consensus of an entire network of computers, so is blockchain.
Still, there are questions around how impeccable a ledger – even a highly sophisticated, end-to-end one – can be. There is no way to verify that the original blocks were entered correctly, so the system still relies on human reporting for its accuracy – which means it's not infallible.
What it looks like now
In 2017, the tech giant IBM launched IBM Food Trust, a software suite available to grocers for a monthly fee that enables them to integrate blockchain into their business.
IBM's first client, Walmart, unveiled its blockchain-enabled Walmart Food Traceability Initiative, which requires some of its produce suppliers to integrate the new technology. Kroger, Nestle, and Tyson Foods, and Starbucks have all implemented the software as well, in spring 2019, Alberton's (owner of Safeway, Vons, Jewel-Osco, Shaw’s, and Acme) joined that list.
How is it impacting consumers?
A 2018 survey by Orbs found, as one might expect, a serious knowledge gap between the tech world and the general public when it came to blockchain, and a corresponding lack of enthusiasm. Only 22% of consumers expect that the technology will impact them in the next five years; and only 22% say blockchain would influence them to purchase something new. 58%, when asked the latter question, responded that they "didn't care."
Naturally, new technology with an abstract name and little or no visibility (yet) is bound to remain under consumers' radar. Until blockchain becomes a clear working part of their shopping experience, it probably won't incite much enthusiasm.
Time will tell how consumers' attitude change toward the new technology. In the meantime, it's important for your grocery business to understand emerging trends and technology. Whether or not you plan to use blockchain in the near future, make sure you're providing customers with as accurate knowledge about your sourcing as possible. The more you demonstrate integrity in your practices and your advertising, the more your customers will value your business.
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