Grocery Retail Moving To Blockchain Technology
Gartner predicts that, by 2025, 20% of the top 10 global grocers by revenue will be using blockchain
We are witnessing a tectonic shift in consumer buying habits and expectations, and grocery retail chains are using their best of technologies to meet them. With more and more consumers finding it convenient to shop their groceries online, Gartner predicts that, by 2025, 20% of the top 10 global grocers by revenue will be using blockchain for food safety and traceability to create visibility to production, quality and freshness.
Blockchain is essentially blocks of data assembled into a long chain. It’s a spreadsheet that’s encrypted, shared, and synchronized among hundreds of computers. When a new transaction (a block) is made, it gets added to the spreadsheet (the chain) and becomes a permanent part of the chain.
Annual grocery sales are on the rise in all regions worldwide, with an emphasis of fast, fresh prepared foods. Additionally, customer understanding has increased for the source of the food, the provider’s sustainability initiative, and overall freshness. Grocery retailers who provide visibility and can certify their products according to certain standards will win the trust and loyalty of consumers.
“Blockchain can help deliver confidence to grocer’s customers, and build and retain trust and loyalty,” said Joanne Joliet, senior research director at Gartner. “Grocery retailers are trialing and looking to adopt blockchain technology to provide transparency for their products. Additionally, understanding and pinpointing the product source quickly may be used internally, for example to identify products included in a recall.”
Blockchain appears as an ideal technology to foster transparency and visibility along the food supply chain. Encryption capabilities on the food source, quality, transit temperature and freshness can be used to ensure that the data is accurate and will give confidence to both consumers and retailers.
Some grocers have already been experimenting with blockchain and are developing best practices. For example, Walmart is now requiring suppliers of leafy greens to implement a farm-to-store tracking system based on blockchain. Other grocers, such as Unilever and Nestlé, are also using blockchain to trace food contamination.
“As grocers are being held to higher standards of visibility and traceability they will lead the way with the development of blockchain, but we expect it will extend to all areas of retail,” Joliet said.
“Like financial services industry has used blockchain, grocers will evolve best practices as they apply blockchain capabilities to their ecosystem. Grocers also have the opportunity to be part of the advancement of blockchain as they develop new use cases for important causes for health, safety and sustainability,” she concluded.