Wine & Food Industry

AB InBev Africa and BanQu have roped in blockchain technology to uplift smallholder farmers in the global brewing giant’s supply chain.

The companies say they are expanding financial inclusion and empowering more people across the continent, while also giving AB InBev better line of sight of its supply chain, helping it intervene to make sure that farmers also have the resources they need.It has rolled out a blockchain solution developed by US-based fintech company BanQu, which has developed a non-cryptocurrency blockchain platform designed to provide an economic identity for people around the world.

It is geared especially to those working at the tail end of supply chains and who are economically disconnected. This technology enables farmers in the AB InBev value chain to have line of sight of their barley, sorghum, and cassava sales, and receive cash through a mobile money solution.

Initially launched through a pilot project in Zambia in August 2018, a second implementation was unveiled earlier this year in Uganda, through Nile Breweries Limited. Since then, 1200 farmers have signed up on the BanQu blockchain platform.

The farmers have access to full accounting information, such as sales price, volume sold, and payment information, made available via SMS. They also have records that they can take to the bank, allowing them access to credit and form a verifiable economic identity.

This possibility is realised through an immutable digital record of their financial transactions, through BanQu’s Dignity Through Identity solution.Another benefit to AB InBev’s smallholder farmers, which has recently been made available by BanQu, is the integration of mobile money, which means that farmers do not have to walk around with cash that could be stolen.

Instead, they can store money, pay bills or send remittances online directly through the free, secure platform.

“Most people have a rudimentary understanding of blockchain because it is the platform that enables Bitcoin transactions,” says AB InBev’s Solutions Africa director of innovation and analytics, Sameer Jooma. He says that BanQu’s solution can be applied to almost any industry.

Says BanQu co-founder and CEO Ashish Gadnis, “BanQu connects people to global supply chains, enabling them to do business with brands, organisations, and governments. Almost 2.7 billion people across the globe don’t have access to credit or other banking services, because they don’t have what we call an economic identity – the data record of their financial position.

BanQu seeks to solve this dilemma by providing auditable financial records, which are bankable, allowing more people to participate in the global economy.

”The partnership also gives AB InBev Africa better visibility of farmers in their supply chain, and the Group can easily see how much, and when, a farmer was paid, as well as track produce from the farm to the brewery through geo-location tags.

Now that the farmer is connected, AB InBev Africa can also connect with farmers to ensure that they receive training and resources.

Successive roll outs in Uganda, India, and Brazil have since taken place, making Brazil the fourth market where BanQu will assist AB InBev in reaching the global brewer’s 2025 sustainability goals.

Jooma says: “Over the last year, through BanQu implementations, we have touched more than 4000 farmers in our supply chain in four markets across the world. Through this work, we are helping to create an economic identity for our famers, which enables them to access financial services.

This will ultimately allow farmers to grow their business and improve the livelihoods of their families and communities.

”AB InBev has also invested in BanQu, advancing an undisclosed amount to ZX Ventures, the company’s global growth and innovation group, in June this year.

“Our investment in BanQu is an investment in our future through empowering our farmers,” says Jooma.lockchain platform designed to provide an economic identity for people around the world. It is geared especially to those working at the tail end of supply chains and who are economically disconnected.

This technology enables farmers in the AB InBev value chain to have line of sight of their barley, sorghum, and cassava sales, and receive cash through a mobile money solution.Initially launched through a pilot project in Zambia in August 2018, a second implementation was unveiled earlier this year in Uganda, through Nile Breweries Limited.

Since then, 1200 farmers have signed up on the BanQu blockchain platform. The farmers have access to full accounting information, such as sales price, volume sold, and payment information, made available via SMS. They also have records that they can take to the bank, allowing them access to credit and form a verifiable economic identity.

This possibility is realised through an immutable digital record of their financial transactions, through BanQu’s Dignity Through Identity solution.Another benefit to AB InBev’s smallholder farmers, which has recently been made available by BanQu, is the integration of mobile money, which means that farmers do not have to walk around with cash that could be stolen.

Instead, they can store money, pay bills or send remittances online directly through the free, secure platform.“Most people have a rudimentary understanding of blockchain because it is the platform that enables Bitcoin transactions,” says AB InBev’s Solutions Africa director of innovation and analytics, Sameer Jooma.

He says that BanQu’s solution can be applied to almost any industry.Says BanQu co-founder and CEO Ashish Gadnis, “BanQu connects people to global supply chains, enabling them to do business with brands, organisations, and governments. 

Almost 2.7 billion people across the globe don’t have access to credit or other banking services, because they don’t have what we call an economic identity – the data record of their financial position. BanQu seeks to solve this dilemma by providing auditable financial records, which are bankable, allowing more people to participate in the global economy.

”The partnership also gives AB InBev Africa better visibility of farmers in their supply chain, and the Group can easily see how much, and when, a farmer was paid, as well as track produce from the farm to the brewery through geo-location tags.

Now that the farmer is connected, AB InBev Africa can also connect with farmers to ensure that they receive training and resources.

Successive roll-outs in Uganda, India, and Brazil have since taken place, making Brazil the fourth market where BanQu will assist AB InBev in reaching the global brewer’s 2025 sustainability goals.Jooma says: “Over the last year, through BanQu implementations, we have touched more than 4000 farmers in our supply chain in four markets across the world.

Through this work, we are helping to create an economic identity for our farmers, which enables them to access financial services. This will ultimately allow farmers to grow their business and improve the livelihoods of their families and communities.

”AB InBev has also invested in BanQu, advancing an undisclosed amount to ZX Ventures, the company’s global growth and innovation group, in June this year.“Our investment in BanQu is an investment in our future through empowering our farmers,” says Jooma.

A blockchain-based fine wine investment trading platform has selected Big Four auditing firm EY to provide technology services as its development continues.

WiV Technology enables clients to trade bottles and cases of premium wine, with the origin, quality and value of assets certified on a constantly updated blockchain.In a news release on Aug. 12, EY said that wine will be tokenized through the use of non-fungible ERC-721 tokens on the platform.

Saving cost and time

Smart contracts are used to track wine ownership and transaction history, and the properties of every wine case are stored as detailed metadata.The wine is secured in a bonded warehouse, and it is believed investors will be able to trade and sell these assets “at a fraction of the cost and time required previously.” Tommy Nordam Jensen, the CEO and founder of WiV Technology, said:

“Fine wine is a fully tradeable asset, and it is vitally important that provenance is protected, because provenance is the only way to prove a wine’s true value without actually opening the bottle. Currently, many wine trades often slow to a crawl because the extensive paper trails must be manually checked at every step of the process, massively reducing the potential size of the market.”

In May, EY also began providing its proprietary blockchain solution for a major new platform helping Asian consumers determine the quality, provenance and authenticity of imported European wines.

It seems like every day another major corporation is finding new use cases for blockchain technology. And investors, intrigued by the industry's tremendous growth potential, are pouring capital into blockchain start-ups.The following developments help to illuminate both of these global trends.

Nestle wants you to know where your food comes from

Food titan Nestle (NASDAQOTH: NSRGY) announced a partnership with blockchain platform OpenSC that could help it better track its supply chain. 

"Through this collaboration, Nestle becomes the first major food and beverage company to announce that it will pilot open blockchain technology in this way," the company said in a press release.

"This is part of Nestle's journey toward full transparency."OpenSC says its blockchain platform gives "anyone, anywhere access to independently verifiable sustainability and supply chain data.

"The initial pilot program will trace milk from farms in New Zealand to Nestle's facilities in the Middle East. Nestle will then extend the program to other products in order to test the scalability of the new tracking system.

Nestle first began testing blockchain technology in 2017, when it joined International Business Machines' (NYSE: IBM) food-safety blockchain project Food Trust as a founding member.

With ever more consumers demanding to know where their food is produced, it appears that Nestle is doubling down on its blockchain-based food-tracking efforts. And given its status as an industry leader, Nestle's foray into blockchain technology could spur industrywide adoption in the coming years.

"This open blockchain technology will allow anyone anywhere in the world to assess our responsible sourcing facts and figures," Nestle executive Benjamin Ware said. "We believe it is another important step toward the full disclosure of our supply chains ... raising the bar for transparency and responsible production globally."



A dollar sign and an arrow pointing to the right
Image source: Getty Images.

Capital continues to flow into the industry

Nestle isn't the only company investing in blockchain tech. Blockchain start-ups raised a combined $822 million in the first half of 2019, according to a report by Outlier Ventures.

The venture capital firm said that out of 279 projects that received funding during this time period, 159 were seed-stage deals, "indicating that new entrepreneurial talent is still flowing into the space.

" And while the total amount of capital invested to date has declined compared with 2018's levels, Outlier Ventures noted that "the ecosystem is more robust and becoming increasingly professionalized.

""Unlike the hubris of 2017, the nature of tokens that are seeing traction today have better-defined ecosystems associated with them, trading infrastructure has evolved substantially, and regulatory compliance has become easier for institutional giants," the company said.

As such, blockchain-based businesses are likely to remain a key area of focus for venture capital investors in the years ahead.More From The Motley Fool

• Crypto, Blockchain & Bitcoin Articles

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool is short shares of IBM. The Motley Fool recommends Nestle. The Motley Fool has a disclosure policy.

The widespread adopting of new data technologies such as blockchain may lead to fairer food prices for consumer and producers, according to new research.

Michaela Balzarova, an associate professor at the College of Business and Law at the University of Canterbury in New Zealand, is conducting theoretical research into eco-labelling schemes and voluntary environmental systems that businesses adopt to mitigate their environmental and social impacts.

She is also exploring alternative schemes and to what extent blockchain technology helps to address sustainability challenges that arise from problems of production and consumption of goods and services.

Using blockchain in future, she suggests, could be a way of ensuring transparency of transactions, gathering more accurate data and eliminating the need for intermediaries.

Balzarova believes that once present problems related to trust and a lack of experience with blockchain technology are addressed, using blockchain platform for future transactions could result in reduced prices for consumers and fairer returns for farmers.

For example, Fair Trade labels have been developed to improve the livelihoods of farmers in developing countries.In the case of coffee, the problem with this approach is that products may have gone through as many as 26 intermediaries that may have added no value to the product or service and consumers have no way of knowing if the price they have paid is fair.

The transactions are not transparent and are not direct.

Blockchain beats eco labelling?Eco-labels were created to address increased consumer demand for environmentally sound and ethical production processes and to provide the consumer with better information about the product, allowing them to make more environmentally friendly purchases.

However, literature is inconclusive about the social, economic and environmental effectiveness of eco-labels.In other words, it is not clear whether eco-labels deliver what they or if they are promoting unsustainable trends in the consumption of goods. Eco-labels are facing challenges in terms of measurability.

This is mostly due to a lack of data, inconsistent record-keeping and confidentiality issues, with the result that it is not possible to assess the entire programme’s economic, environmental and social impact.This is where blockchain technology promises improvements.

It provides a novel way of recording data and confidence in peer-to-peer trading transactions. It keeps records of digital asset transactions in a decentralised manner, based on mathematical algorithms and financial incentives.

“We need to focus models on how we can feed everyone on a fair basis, improving comfort and standard of living for everyone on this planet. It’s not just an issue of getting rid of intermediaries. We need to encourage users to take ownership of data stored on their behalf and blockchain enables this,” says Balzarova.

“Right now, I have been exploring benefits of blockchain technology in sustainable food production theoretically, by looking at what blockchain offers versus experiences with labelling schemes that try to mitigate adverse production impacts.”

“Big Four” professional services firm EY has built a blockchain platform for a firm that will help consumers determine wines’ quality, provenance and authenticity.

The TATTOO Wine Platform has been developed for Blockchain Wine Pte. Ltd. using EY’s OpsChain solution, EY announced on Thursday.

The platform is backed by Asian wine cellar The House of Roosevelt, which will use it to sell wines directly from vineyards to hotels, restaurants, cafes and customers, according to the announcement.

EY said:

“Each bottle of wine will be ‘tattooed’ with its own unique QR code. By scanning the QR code, participants can access information such as vineyards’ names and locations, details such as the types of fertilizers used to grow the crops, and how each batch is transported for processing and delivery.”

The platform will focus on markets in Asia where the consumption of European wines is expanding, EY said. Over 5,000 labels will be added to the system, including wines from France, Italy, Spain, Australia, New Zealand, South Africa, South America and California.

TATTOO has been built using the ethereum’s ERC-721 standard for non-fungible tokens, or crypto collectibles, according to the announcement. (Yes, basically, the wine tokens are like alcohol-based CryptoKitties.) The asset traceability module of EY OpsChain has been used to tokenize over 11 million bottles of wine for various clients, as well as toher consumables.

EY said.As well as providing data on wine provenance, TATTOO also allows consumers and distributors to buy and sell wine, schedule and track shipments, monitor warehousing and delivery, and arrange for and track insurance coverage of wine shipments, EY said.

Taking a slightly different tack, blockchain startup VinX is also developing a supply chain platform for trading wine futures, which allow connoisseurs and collectors to purchase a vintage while it’s still in the barrel, a year or two before it’s bottled and released on the market.

Wine bottles image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

A worker monitors a computer that assists in sorting Florida green skin avocados at the New Limeco LLC packaging facility in Princeton, Florida, U.S. CREDIT: Photographer: Mark Elias/Bloomberg

Blockchain is just a digital ledger, a digitized record of whatever data is added by its members, with no ability to verify the accuracy of the underlying data itself. 

Because the truth of that data isn’t actually evaluated, there’s no aspect of blockchain technology that can make sure that the cage-free egg is really cage-free or that the lettuce is actually free from contamination.

For Walmart, the technology will be used to tell stakeholders that a particular head of lettuce came from a particular harvest on a particular farm, so if a consumer gets sick, government investigators will have a head start on the investigation.

Rather than chasing a paper trail for days, they can get to the source of a tainted head of lettuce within seconds, and that should mean less wasted produce, fewer sick people and more confidence in the food system.

Though blockchain is being touted as the technology that could potentially solve all of agriculture’s challenges, it’s not necessarily clear why blockchain is better than something like a database or any other form of digital information storage.

Companies could simply build a database rather than build a blockchain, particularly as some of the original features of the Bitcoin version, like trustless verification, aren’t a feature.It’s not entirely clear why blockchain is the best technology for the job of transforming the food industry, and it may not be.

It may just be that it’s the one getting attention right now, particularly as technology experts look for ways to transfer their experience and make their mark in the burgeoning agritech sector.Where blockchain starts to reach its potential is when it’s used with other technologies and systems. 

At the same time that the blockchain is implemented for food traceability, for example, producers can also put into place systems like enhanced water testing mechanisms or increase buffer zones between leafy green growers and livestock operations.

When used with sensors and precision delivery systems for pesticide and water all connected to a network, as with the Internet of Things, blockchain can be used to gather a wealth of data and employ it in the field.

While blockchain can’t verify that an egg operation is truly cage-free or what that cage-free operation really looks like, it might offer a way for farmers to get more information to consumers.

Farmers, particularly the ones who don’t sell their food to a farmer’s market or get an opportunity to interact with consumers, often struggle with how to engage with the public, looking for ways to explain how and why they grow food the way they do.

Blockchain enables farmers to get data to consumers, but what if it could provide more context, too? That’s the thing consumers really need to make informed decisions about their food.

Blockchain could be used to tell consumers that the corn was grown with herbicide, for example, but maybe someday there could be a mechanism for explaining why that herbicide is used, or a comparison of that herbicide to other weed prevention systems or removal methods.

The complicated nature of agriculture doesn’t always translate so well to a smartphone app, but then again, that might be a challenge that’s too big for blockchain to solve anyway.

I’m a food, science and health writer whose work has appeared in The Washington Post, New York Magazine, Slate, Mental Floss, SELF and the Breakthrough Journal. Since 2015, I’ve been fascinated by the intersection of technology and food, from cutting edge cattle feedlots to ... MORE

According to a recent announcement, blockchain accelerator Medici Ventures, a subsidiary of Overstock.com Inc., has invested in Israel-based startup VinX, which is creating a token-based blockchain platform to reduce fraud in the wine futures market.

A future is essentially a reservation for a wine that will be bottled and released one to two years down the line. By buying futures, wine enthusiasts can secure bottles that may be incredibly expensive or nearly impossible to obtain when they hit the general market.

Like many blockchain-based supply chain startups, VinX aims to track provenance so that customers know exactly where their wine comes from.

Apparently, 20 percent of all wine in the world is counterfeited. Many individuals purchase wine futures through a fraudulent intermediary believing that the final product will come from a well-regarded region such as Bordeaux, but the wine they receive may not be authentic.

With VinX's blockchain platform, however, customers will reportedly have access to an immutable record of the wine supply chain without the need for a middleman. Patrick M. Byrne, founder and CEO of Overstock, expressed his enthusiasm for the project:

"VinX's steps in tokenizing wine futures while allowing wine enthusiasts to know without a doubt that the bottles they purchase are filled with authentic wines will position the entire industry as a model of a new global economy that replaces old boys' networks with frictionless trust through technology."

Further, Jacob Ner-David, co-founder and CEO of VinX, spoke to the benefits he sees with the platform and the partnership:

"[B]ecause we are registering all wine futures as tokens on a blockchain, we are bringing a powerful validating force that will go a long way toward reducing fraud. VinX looks forward to benefiting from the many years of e-commerce experience of Overstock and the blockchain leadership of Medici Ventures and the rest of the Medici Ventures portfolio."

Last year, Italian blockchain startup EZ Lab launched a similar system to track wine in the country, where counterfeiting is a major problem.

DANIEL PUTNEY

Daniel Putney is a full-time writer for ETHNews. He received his bachelor's degree in English writing from the University of Nevada, Reno, where he also studied journalism and queer theory. In his free time, he writes poetry, plays the piano, and fangirls over fictional characters. He lives with his partner, three dogs, and two cats in the middle of nowhere, Nevada.