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blockchain hospitality

How is blockchain changing the foodservice industry?

From the supplier shipping their products to the restaurant receiving produce to the customer ordering a meal, blockchain revolutionizes how transparency, quality and loyalty in the industry are delivered.

Blockchain enables to frictionlessly organize collaboration, commerce, and interaction in an efficient and peer-2-peer manner.

Overly controlling and astronomically exorbitant fees for eateries are two major issues with takeaway platforms

A variety of restaurants have adopted blockchain technology because it impacts almost every part of operations and provides a better experience for everyone involved in the entire experience. From the supplier shipping their products to the restaurant receiving produce to the customer ordering a meal, this technology revolutionizes how transparency, quality and loyalty in the industry are delivered.

The current food delivery & takeaway market has been monopolized by platforms that control and dictate all the major aspects of said chain, both on the supply and the demand side of the market. The current models rely completely on a centralized party that operates and controls every aspect of the business. Orders, Payments, Refunds, Logistics, Store Management, Promotions, Consumer data, Rankings, Ratings, and Reviews are all done and controlled by the intermediary party.

Blockchain is disrupting this model by providing a neutral and transparent commerce protocol that organizes all aspects of the merchant and customer relationship. A direct-to-consumer commerce protocol in which the digital infrastructure can decentralize all tasks and control to the sellers and incorporate contribution, loyalty, and interaction directly with their buyer community.

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Use Case: Sharing provenance of seafood products with diners

TAPS Fishhouse and Brewery is an award-winning small restaurant chain in California that offers a number of seafood specialties in its menu. In 2019 TAPS Fishhouse and Brewery started using blockchain to bring more transparency around seafood to restaurant diners.

The team placed QR codes on menus that enabled guests to scan the code with their phone and access information from the blockchain platform about the particular scallops they were going to have for dinner that night. Diners could see when and how the scallops were harvested and how they were handled as they moved down the supply chain from the boat to the plate, building confidence in the quality and freshness of the catch.

The results were impressive. In just the first 45 days of this initiative, TAPS Fishhouse and Brewery sold 38% more scallop entrees year-over-year.

Track and trace

Supplier relationships are the backbone of the foodservice industry, but managing these relationships can be costly and complicated with food suppliers ranging from small farms to multinational conglomerates.

Blockchain streamlines the vetting process, bringing food suppliers and food buyers into a single platform, reducing the time for data entry and automating risk assessment. With this technology, suppliers can get ratings and reviews from their buyers to establish their value. In addition, blockchain technology integrates with third-party verification systems and credibility scoring to eliminate fraud.

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Waste management

Even when food source vetting procedures are in place, food can quickly turn out to be damaged or spoiled. On-farm mishandling, storage issues and transportation mishaps all contribute to this massive loss. The UN’s Food and Agriculture Organization reports that about 14% of the world’s food is ruined before it makes its way through the supply chain.

Working collaboratively with Internet of Things (IoT) and cloud analytics, algorithms based on consumer data and agricultural technology predict the freshness of food from the farm to the kitchen by monitoring every product’s condition throughout the entire supply chain. Blockchain data is immutable and verified; it can eliminate the false claims of freshness.
Reducing the loss of food improves the bottom line for restaurants but can lessen the challenges in alleviating world hunger, reduce agriculture’s high carbon footprint and improve water usage.

The Internet of Things (IoT) describes the network of physical objects that are embedded with sensors, software, and other technologies for the purpose of connecting and exchanging data with other devices and systems over the internet.

Supplier ratings

Managing supplier relationships can be costly and complicated, with food suppliers ranging from small farms to multinational conglomerates. For big companies, the challenge can be working with 1,000 third-party suppliers and finding ways to manage that third-party risk to ensure quality results. Blockchain provides transparency on subjects like loyalty rewards, merchant rankings, reviews, ratings, and offerings through smart contract technology (e.g. restaurants can easily manage their store’s payments and product catalogue, orders, advertising and analytics).

Blockchain provides a way to verify transactions and compliance helpful to companies when developing internal ratings for suppliers. Which companies consistently use the best materials? Which ones are always on time? Companies may create a list of Tier 1, Tier 2 and Tier 3 suppliers, recording and assessing their historical performance for internal sharing and review. Blockchain could easily enable suppliers to share ratings and reviews when and if that makes sense.

Customer experience

Blockchain also enhances the customer experience regarding loyalty programs and innovative marketing strategies restaurants use. Blockchain-based utility tokens, somewhat like gift cards, use a specific currency in a particular restaurant (e.g. writing community valued reviews for meals and services is rewarded with tokens, highly valued reviews receive additional token rewards).

Utility tokens are primarily for restaurant fans and loyal customers who adore their favorite brands and enjoy having semi-exclusive access to a members-only payment method. Utility tokens are a loyalty promotion mechanism; they build the restaurant’s brand and are sometimes linked to additional restaurant benefits, such as digital rewards for frequent visitors (e.g. merchants can opt into through a transparant bid or stake model. This model allows merchants to target customers directly within the community that match with their target audience).

Non-fungible tokens (NFTs)

The appeal of owning a unique, one-of-a-kind digital token or recipe from a celebrity chef or world-renowned restaurant is a high-stakes win for food lovers and collectors alike.

Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met. They typically are used to automate the execution of an agreement so that all participants can be immediately certain of the outcome, without any intermediary’s involvement or time loss. They can also automate a workflow, triggering the next action when conditions are met.

Currently, in the majority of business environments, it’s necessary to have a middle-man in place to ensure terms and conditions are met before any of the reimbursements or payments will take place. By using the Blockchain, the need for a middle-man is lessened because the trust that is needed to execute such a transaction is generated through the shared data and the consensus-algorithm.

Smart contract technology enables the data on blockchain to be utilized in pre-configured conditional execution of transactions. By pre-configuring a dependent execution of transactions and enabling each participant to verify the data, the Blockchain is set to restore trust and increase transparency and efficiency in complex business environments.

Most of the current food-related blockchain projects focus on sourcing, tracking and traceability of products and goods, which therefore generate highly valued and transparent data for the consumer to assess and base decision making on.