The role of blockchain in food industry

One famous New York restaurant on the lower east side of the Manhattan neighborhood took up an advanced technology. They decided to issue their own NFT, Flyfish. Owning one served as a pass to this private dining club. VCR Group, the program developers and restaurateur business veterans, call their creation ‘the first NFT restaurant in the world’. The place was called Flyfish Club, and was created as a conceptual food club with a seafood-based menu. One of the first drops of 1151 membership tokens were sold out in a couple of hours, with another 350 ones sold via private sale.

The tokens granted access for as long as the restaurant itself existed, and were issued in two types: common membership tokens (presented in one design) and Omakase (presented in seven designs). Owners of common tokens (FF) are allowed to the main dining hall, cocktail and outdoor lounges and  can visit events and pop-ups, both physical and virtual. Omakase (FFO) owners can also visit a special Omakase hall, where a world-famous sushi chef’s dishes are served. Common ones are being sold currently at 2.5 ETH and Omakase at 4.25 ETH.

Curious, that tokens serve as an admission only and all dishes and drinks are extra. The tokens are supposed to be resold at a special marketplace Opensea.io. Tokens can be purchased directly on the restaurant website.

Blockchain use cases

Admissions to concert halls and stadiums are not something unusual anymore, while dining halls are somewhat new and interesting. Step by step the food industry is adopting blockchain technology. How has blockchain attracted the food business and what can it grant the business and its customers? Let’s do some ‘tasty’ investigation.

No doubt that the blockchain industry promotes renovation and modernization, and ‘COVID years’ became one of the most vivid proofs of this point. According to New Research study and forecasts, the amount of blockchain in agriculture and food logistics will grow steadily by not less than 46% annually till 2026. So what benefits does it bring?

• Transparency. It is one of the key requirements for any huge food brand on the market. Customers are growing more and more informed and, thus, concerned of what they are purchasing. Owing to blockchain technology, all production, storage and delivery processes can be monitored in real time by all platform participants. All participants get authorized access to the data, which encourages producers to care more about the food they offer; the process of food quality checking speeds up and the information can be reached in seconds, not in days. It becomes easier to pinpoint the stage where the food goes off, take it out of the chain, find those responsible and avoid the risk of sickness and monetary losses. 
• Efficiency. Direct connection without an abundance of intermediaries will help partners all round the world to make quick and secure transfers, make these transfers more cost-efficient (as there will be no third party to pay fees) and avoid certain problems with national banking regulations. In addition, the bureaucracy of business with lots of paperwork is reduced to almost zero, which makes the processes quicker and the possibility of error smaller.
• Security. The control over production and all business processes at all stages will help to avoid failures and counterfeiting. Bad quality food can be spotted at any stage and taken out of the process (no matter if it was production, delivery or storage stage) and would not reach the customer. Blockchain technology is more secure owing to its nature (the data once added on blockchain can not be altered) and will help to avoid any type of fraud (either with payments or production).
• Trust. Traditional sources of detecting security issues, scams, frauds and counterfeiting are lagging behind these days, and customers need something more transparent, direct and secure. Blockchain offers all of this. Customers and producers have access to real information about production, delivery and storage conditions and retail services. The benefits of blockchain technologies increase trust both among the partners and other participants of the chain and also to the blockchain itself. The participants of the chain can be sure they are dealing with real data and high quality food stuff.

However there are still some challenges to be taken into account. One of them is the current lack of different food networks communication and integration. It makes data exchange and payment transfers complicated and difficult. Additional data checking is also still needed as the participants can try to present incorrect information at the initial stage. Confidentiality and privacy can be also under threat, being participants’ responsibility. Hackers and scams should be also taken into account. However, these challenges are supposed to be resolved as the technology evolves.

Examples

There are many examples of using blockchain technology in the food industry, as its adoption is fast-growing. To list them will require a small book, so here are just some of the most famous.

• Food Trust. A project launched by IBM on Hyperledger Fabric protocol, focused on food logistics. One of its first clients was Carrefour. It is also involved in food waste management, using blockchain technology to monitor recycling and disposal. However, the platform is not free and the participants should pay a monthly fee ranging from 100 to 10,000 USD.
• Powered Provenance. A British project from a London nonprofit group, which uses blockchain technology to manage food quality and security. The project focuses on monitoring meat production from farm to table, and all participants, including end customers, can see where the food has come from and how fresh and healthy it is. Later the platform made a collaboration with American Soursemap, which improved the project efficiency and enlarged the coverage.
• Arc-Net. An Irish startup focusing on food logistics security and aiming at fighting counterfeiting and fraud. It created a special food Universally Unique IDentifier (UUID) for each product, which is placed on the package and the customer can read all the information about the product using a special Destilled ID app on their mobile phone. All the data is encrypted and run with a HSM, helping with controlling and auditing of master keys. The project entered into the Terra program, which united all progressive startups from Canada, Spain, Thailand, the UK and the US and took part in development and testing of new food production and agriculture standards.
• AgriDigital. A leader in grain crops delivery which uses blockchain technologies. It focuses on online monitoring of food logistics and shipment risk management. Owing to smart contracts use, the payments are made directly, quickly and on a real time basis, which ensures delivery on time and transparency for all participants. The platform has also signed a partnership with Rabobank, which made all transfers even quicker and easier.
• All Sesame. An interesting blockchain-based food delivery platform on Ethereum. It issues its own token (SST), purchasing of which grants owners a special reward (food delivery short videos) and an access to the Sesame Talk social network, where customers can exchange feedbacks, ideas and even recipes. It also provides real-time communication and feedback service which helps restaurants get real information about their customers. AI service also facilitates the timely completion of orders.
• Food delivery services. There are various delivery and takeaway services which have adopted blockchain technology successfully. The Dutch service Takeaway.com receives payments in crypto currencies, German food delivery service Lieferando allows customers to pay in Bitcoins (via Bitpay) and in Bitcoin cash. The Polish platform Pyszne.pl, which works in partnership with more than 5000 restaurants, offers the same. Shuttle Delivery, which operates in Seoul, offers customers to order food from more than 200 restaurants and pay in BCH.