Blockchain in Horeca

Blockchain in HORECA Part 2: Restaurants

Food. Food. Food… did I mention food?

The one thing without which it is impossible to imagine the existence of a creature with a beating heart and breathing lungs. To have a meetup with friends, to meet a business partner, or just to treat yourself-  we are usually going to restaurants because we want to feel special in the warm embrace of food; that someone made just for us, and just for the pleasure of our taste buds.

In this perfect food paradise, what can blockchain possibly change?

The truth is that trust is a fragile thing. I mean, break that perfect food paradise even once, and people will never forget. Blockchain is about trust and transparency. So how can we implement this glorious technology in restaurants?

Let’s find it out!

Elimination of food fraud cases

What some may not consider is that the fake goods market can be deadly, especially when it comes to the glut of fake food, drink, and formula being pushed across the globe. In 2017, Brazil — already in the throes of political scandal, a violent crime wave, and economic uncertainty — was struck with the “mother of all food fraud cases.” Several companies, including meatpacking titans JBS S.A. and BRF S.A., were at the center of an investigation dubbed “Operation Weak Flesh.” The companies were found to be issuing bribes to food inspectors, which allowed them to export rotten meat across countries, using acid to camouflage foul odors and disguising cheap imitations for higher-priced meat items.

Brazil isn’t alone in the world of food fraud. China’s “food safety” policies are notoriously lax — to the point of comedy if the stakes weren’t so high. Among 900 “meat fraud” arrests in China in 2013, one that stood out was the arrest of a gang of fraudsters allegedly using chemicals to transform rat meat to take on a more mutton-like appearance. 2016 was a particularly bad year, with headlines including “The Parmesan Cheese You Sprinkle On Your Penne Could Be Wood.”

The blockchain’s ability to oversee products’ movements along a supply chain allows for easier identification of the source of contamination or counterfeit. This allows suppliers and restaurants to state definitively to their customers what the issue was, and ensure that the unsatisfactory product has been excised from the inventory. Overall, this means fewer cases of contaminated foods, less inventory unnecessarily trashed, and more hard-earned reputations preserved.

Companies willing to make a change

  • Zego – Blockchain-based provenance solution used to identify harmful chemicals in Monsanto foods.
  • TE-Food – Farm to table food traceability.  
  • Connecting Food – Tracing food along the supply chain, from farm to the point of sale.

Reducing Food Waste

From a class of third graders to a lecture hall full of grown adults, lecturing a crowd about the perils of food waste is one sure-fire way to induce a collective eye-roll. Yet, it’s actually a very important topic. An astounding one-third of the food produced on the earth for human consumption goes to waste. That one-third is the equivalent of 1.3 billion tons each year! And it’s the food that’s best for us, fruits and vegetables, that tends to go down the drain or to the dump most often.

While grocers and even fast-food restaurants often get criticized for throwing away “perfectly good” food, statistics show us that consumers probably would have ended up throwing away excess or barely-expired food, anyway. According to the New York Times, around 40% of wasted food in developed countries is thrown out by the consumer, not the seller.  Food waste is sometimes unavoidable; that’s in part because our systems for planning, picking, shipment, and purchase are often not nearly strategic or data-driven enough.

Those who make their money in food sales know that over-ordering, spoilage, and contamination seriously hurt the bottom line, too. Monitoring products more closely by utilizing a blockchain record of customer buying patterns, a product’s life course before and after it is in a grocer or restaurateurs’ possession, and even more, insightful intel will help those in the foodservice industry make informed decisions to minimize food waste.

Companies willing to make a change

  • Goodr – Blockchain-based platform to reduce food waste/inefficiency.

Restaurant Management Processes

In 2018, San Francisco became the “first major city” to adopt a $15 minimum wage, but they are far from the first city to take such a step toward raising the wage floor for the lowest-paid employees.

Though there are plenty of studies touting the benefits of such a wage increase, the effect that a higher-paid workforce will have on industries that rely on low-skilled workers remains unclear. The rise of completely-automated restaurants such as Spyce Kitchen is, as they describe, an almost direct response to the likelihood that chefs, servers, bussers, and other restaurant employees are almost certain to account for greater shares of the operating budget going forward.  

Automation is set to fundamentally alter the foodservice sector. This is not a matter of if, but of when and how. The incorporation of smart contract technology could underpin transactions between humans and kiosks, and a network of sensors could provide data about customer purchase patterns and food quality standards — standardized information that could also be stored on the blockchain for analysis by decision-makers within a company regardless of their location. These are just two examples of how the blockchain may come to play a role in increasingly automated processes in the foodservice sphere.

Companies willing to make a change

  • Mobivity Blockchain-based loyalty programs for restaurants.

Food Supply Chain Provenance

Back in the day, there was a general trust among consumers and retailers across industry lines that goods being sold would be of a certain quality and safety standard. Perhaps that was naïve, but today there’s no doubt that how a product was made, how and where it was grown — was this Kobe beef educated in private or public school? — and virtually every other specification you can imagine is required for consumers to sleep soundly at night.

Admittedly, the pickiness doesn’t come without good reason. Perhaps you can recall one of the many outbreaks of mad cow disease; they occurred in 1986, 1988, 1989, the early 90s, 1993, the mid-90s, 1995, 1996…to be honest, basically every year. In each of these instances, it would have been a help and comfort to be able to trace the meat back to its source. In the recent past, high-profile chains, such as Chipotle, have suffered serious revenue and PR hits thanks to E. coli, while fraudulent products — see: the 2003 European horsemeat scandal — are also a concern to safety, our consciences, and palettes. Standards are only going to get more stringent for grocers and restaurateurs going forward; turns out, millennials want ethically sourced food, and they want it to go.

When outbreaks of foodborne illness occur, the restaurants or grocery stores that served the food are often left wringing their hands, promising to get to the bottom of it. But blockchain track-and-trace will help them immediately track affected items to their origins, locating the issue quickly so they can remove the contaminated products from menus, shelves, and supply chains. If participants on a chain log information pertaining to a food product’s growth method, harvest, and shipment, consumers will no longer be limited to the trust that comes with sell-by dates and the often misleading appearance of a product.  

They will have a verifiable record of how a steak was raised or a vegetable was grown when it was shipped, when it arrived in store, and how long it has been sitting on the shelf. This, in turn, will differentiate the grocers and restaurants with best practices from those hocking nearly-expired products to an unsuspecting consumer base.

Companies willing to make a change

Proving Marketing/Label Claims

Labeling a product as organic, cruelty-free, or sustainable is a popular marketing tactic. But have you ever wondered what those labels really mean? Who determines if something is organic, how do they do it, and can we trust it?

The food industry is notorious for espousing false, intentionally misleading claims about products for the sake of appealing to a healthier or trendier consumer base. The reality is that for those who don’t have a Ph.D. in reading the back of a product label, deciphering the fakers from the honest can be extremely difficult, if not impossible. In fact, 50% of Americans find food labels to be misleading.

It’s easy to see why consumers feel misled when a closer examination of specific claims is conducted. For instance, many probably don’t know that “non-GMO” is a completely different claim from “certified non-GMO,” or that “low calorie” generally means that any subtracted calories have been replaced with a chemical sweetener. Another common practice that the untrained consumer’s eye may gloss over is the reality that “multigrain” is not nearly as healthy as it sounds, or that darker breads and items aren’t always healthier — a common conception — because some are injected with caramel coloring to imitate healthier grains. It’s no wonder why trust in the food industry is so degraded.

Blockchain ledgers offer consumers the opportunity to trace a product back to its source, and the technology could provide a standard of provenance that food producers will conform to if they seek to remain competitive. This means not just claiming that a product is organic, but proving it, too. The same goes for products that claim to be GMO-free, etc. If consumers know a company’s labeling is backed by a traceable, immutable blockchain system, the trust will inevitably increase.

Once an honest producer puts their blockchain where their mouth is, the rest of the industry will have little room not to do the same, and a more accurate picture of labels’ and marketing campaigns’ respective honesty will emerge.

Companies willing to make a change

  • Deloitte Advising on the use of blockchain provenance for label verification.

Quality Reviews

False and misleading restaurant reviews are a problem for both restaurants and customers. Because reviews can be written without knowing the identity of the author, it’s difficult to know which comments are honest and which are fabricated to help or hurt an establishment.

When reviews are stored on a blockchain, they can’t be altered, and users and restaurants can’t delete or create new accounts to wipe away bad reviews. This keeps reviews, and the subsequent recommendations of machine-learning algorithms, above board and honest.

Companies willing to make a change

  • SynchroLife –the first social restaurant review platform that offers blockchain-based token rewards to users for high-quality restaurant review content.

With the technologies developing and current disruption in different industries, it is important to take out the best from both sides and collide it onto the newest and better alternative. Restaurants are always there to give us the rest and pleasure needed.

If blockchain has the potential to make it better, then we are willing to wait for it!

In the end don’t forget to check the “Blockchain in HORECA:  Part 1“. You will find our about the applications of blockchain in hospitality and tourism.







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