FOODBYTES WHAT THE HECK IS EVERYONE EVEN TALKING ABOUT? - Datassential
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FOODBYTES
BLOCKCHAIN?
CRYPTOCURRENCY?
W H AT T H E H E C K I S E V E R Y O N E
E V E N TA L K I N G A B O U T ?
JUNE 2018
| ISSUE 54 |
YOUR FREE DATASSENTIAL
TREND REPORT
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62%
OF CONSUMERS SAY
THEY’VE NEVER HEARD
OF BLOCKCHAIN
TECHNOLOGY
ANOTHER 11% SAY
THEY’VE HEARD THE
TERM, BUT DON’T KNOW
WHAT IT MEANS
23%
OF CONSUMERS SAY
AND 22% SAY THEY’VE NEVER HEARD
OF CRYPTOCURRENCIES
THEY’VE HEARD THE
TERM, BUT DON’T
KNOW WHAT IT MEANS LIKE BITCOIN
Source: Datassential Research
DATASSENTIAL’S FOODBYTES: BLOCKCHAIN & CRYPTOCURRENCY 2
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UPGRADE YOUR TECH KNOWLEDGE
If you don’t understand words like “cryptocurrency” and “blockchain,” you aren’t alone. In fact, more consumers are
using these technologies than can even define them, according to our data. That’s why a basic understanding of a
technology like blockchain will put you ahead of the pack – and the stakes could be huge.
PC Magazine called blockchain the “invisible technology that’s changing the world.” Feedchain, a platform that uses
blockchain technology to allow people to “use their houses as restaurants,” says blockchain will “transform the food
industry.” Companies like Walmart and Nestlé are betting on it, launching their own blockchain initiatives and joining
together as part of IBM’s Food Trust, which uses blockchain to trace foods and goods (more on page 7). Meanwhile,
brands like Oscar Mayer and Burger King are implementing their own cryptocurrencies, while other operators are
using them as a new type of loyalty or rewards program.
Of course, not everyone agrees that cryptocurrencies and blockchains are the future. Nouriel Roubini, an economist
who predicted the 2008 global financial crisis, called bitcoin the “biggest bubble in history and destined for a
crash.” In a series of widely-circulated opinion pieces, Kai Stinchcombe, the founder and CEO of True Link Financial,
called blockchain a “crappy technology” and a “bad vision for the future,” while others have drawn attention to the
technology’s massive energy consumption.
Where do you fall in the debate? Before you form your opinion, dive into this issue of FoodBytes and learn the
basics behind these technologies and how they are already being leveraged by the food industry. If you want to
become even more tech literate and understand the fast-changing food technology landscape, ask about our issue
of Creative Concepts: Robots & Technology. Then join us at Foodscape, Datassential’s hands-on event where
you’ll experience the latest in technology, robotics, and so much more – functional foods, personalized nutrition,
plant-based eating, and food and beauty. It’s an experience you won’t forget.
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C RY P T O C U R R E N C Y
E X P LA I N E D
In 2008 a mysterious figure named marketplace was shut down in 2013,
14%
Satoshi Nakamoto posted a paper bitcoin’s value began to climb in fits and
online titled “Bitcoin: A Peer-to-Peer starts. By 2017 its price was
Electronic Cash System.” It aimed to skyrocketing, jumping in value from
solve the “double spending” problem about $1,000 a bitcoin in January to
related to digital currency – digital files, nearly $20,000 by December. Suddenly
OF CONSUMERS HAVE whether they are email attachments or people were talking about “bitcoin
online money, are easily duplicated. We millionaires” who were as young as 18
USED OR PURCHASED
do it all the time when we copy files on years old, setting off an online gold
CRYTOCURRENCIES our computers, so how do you stop rush. New cryptocurrencies based on
someone from doing the same thing the open-source bitcoin structure
BREAK IT DOWN with a digital “money” file? launched, from the serious
(Ethereum/ethers) to the silly (Coinye,
For most transactions, the answer is a abandoned after a lawsuit from Kayne
9%
GENDER centralized authority, like the West), to the silly-turned-serious –
government or a bank. One person Dogecoin, the “digital currency favored
sends the money, another receives it, by Shiba Inus worldwide,” hit a market
20% and the bank records the transaction in value of $2 billion this year.
a sort of “ledger,” which governs all
future transactions. You can’t copy and Now experts and investors are at odds
GENERATION resend the digital currency, because the over the future of cryptocurrencies.
27% GEN Z bank’s ledger says you spent it already. Multiple countries are considering more
But this system requires trust in that stringent regulations, while recent hacks
26% MILLENNIALS
central authority. have sent shockwaves in the market.
12% GEN X Even some crypto creators themselves
The Nakamoto paper proposed a predict the bubble will burst altogether
1% BOOMER+
decentralized system of trust, where – “I think it says a lot about the
everyone has their own up-to-date copy cryptocurrency space in general that a
INCOME of the ledger – no bank necessary. currency with a dog on it which hasn’t
Whenever someone wants to make a released a software update in over two
8% transaction, it can be checked against all years has a billion-dollar market cap,”
11% 13%
of the public, shared ledgers. If it’s the creator of Dogecoin told CoinDesk.
under $25,000- $50,000- verified, the transaction is added to
$25,000 $49,999 $74,999
these public ledgers and cannot be But others are bullish. Billionaire
altered (the “blockchain”). investors like Tim Draper predict a
26% 21% 18% single bitcoin could reach a valuation of
$75,000- $100,000- $200,000+ This system formed the basis for bitcoin, $250,000 by 2022, while International
$99,999 $199,999 which officially launched in 2009. After Monetary Fund head Christine Lagarde
an initial splash, which saw bitcoin ATMs has said cryptocurrencies could change
in c-stores and restaurants accepting the way people save and invest
bitcoin as payment, bitcoin hit a PR snag worldwide in the future. Some investors,
when it became known as the payment like Twitter CEO Jack Dorsey, even
of choice on the dark web, where it was believe a cryptocurrency like bitcoin
used to buy drugs and other illicit could become the dominant global
goods. It ambled along for a few years, currency in the years ahead.
but after the Silk Road dark web
DATASSENTIAL’S FOODBYTES: BLOCKCHAIN & CRYPTOCURRENCY 4
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W H AT I S B L O C K C H A I N A N D
HOW COULD IT TRANSFORM
T H E F O O D I N D U ST RY ?
10%
OF CONSUMERS HAVE
USED BLOCKCHAIN
The key to making bitcoin and other censorship, fraud, or third-party
TECHNOLOGY
cryptocurrencies work is the interference.” Now the blockchain is
blockchain – the ledger that records being used for everything from
every single transaction. Every valid contracts to cloud storage to social
BREAK IT DOWN
transaction is placed into a digital media, and there are plans to use it
block, which is then placed into the for everything from voting to stock
chain by “miners,” who fight for the exchanges in the future. 5%
right to place the block by solving GENDER
complex mathematical problems and The food industry is taking notice.
are rewarded with more digital Many believe that blockchain could 16%
currency for their trouble. Because transform the endlessly complex
every new block references the block global supply chain, allowing every
directly before it, which references single transaction in a product or GENERATION
the previous block and so on and so good’s journey to be tracked and
18% GEN Z
forth, it’s very difficult to alter the documented, which can in turn be
chain without breaking it – new accessed and verified by the entire 18% MILLENNIALS
blocks must be added to the end of network. “Thus, when an incident of
11% GEN X
the chain. food contamination occurs, for
example, rather than taking days or 0% BOOMER+
But the blockchain isn’t limited to weeks to track the source, it can now
recording digital currency take minutes through improved
transactions – it can securely record transparency,” Lance Koonce, the INCOME
and validate any type of transaction. head of Davis Wright Tremaine LLP’s
Ethereum was built for just this blockchain initiative told Food 4% 7% 13%
purpose; while the platform does Logistics. Blockchain could also be under $25,000- $50,000-
have its own cryptocurrency called used for billing and invoicing, $25,000 $49,999 $74,999
ether, anyone can use Ethereum to targeting food fraud and tracing
build apps that run on the blockchain products, verifying sustainability 20% 16% 9%
“without any possibility of downtime, claims, and so much more.
$75,000- $100,000- $200,000+
$99,999 $199,999
DATASSENTIAL’S FOODBYTES: BLOCKCHAIN & CRYPTOCURRENCY 5
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BLOCKCHAIN
IN PRETTY PICTURES
A transaction is The transaction is The network validates
requested. broadcasted to the the transaction using
network of “nodes.” known algorithms.
After it is validated, The new block is The transaction is
the transaction is added to the chain in complete.
packaged with other a transparent and
transactions into a unalterable way.
block of data.
THE ENERGY ISSUE
If blockchain is going to solve any of the world’s problems, it’s going to have to
solve one of its own first – its enormous energy consumption. The original
technology that bitcoin was built on requires the use of digital “miners,” who use
vast amounts of computer processing power to solve complex puzzles that allow
them to validate transactions, add blocks to the chain, and mine for more coins.
The amount of energy that this processing requires is staggering – the bitcoin
network alone could use as much energy as the country of Austria by the end of
the year, according to a study by analyst Alex de Vries of PwC. In China vast
bitcoin “mines” are crammed with tens of thousands of machines, all dedicated to
mining cryptocurrency 24/7. But engineers are working on the problem,
developing new ways to validate and mine that don’t require such vast amounts
of energy. Ethereum has already announced it’s looking to switch to more energy-
efficient models, perhaps as soon as this year.
DATASSENTIAL’S FOODBYTES: BLOCKCHAIN & CRYPTOCURRENCY 6
H O W F O O D C O M PA N I E S FB
A R E L E V E R AG I N G
B LO C KC H A I N + C RY P T O :
WALMART BURGER KING
In April Bloomberg reported that Walmart was ready to use blockchain Burger King launched its own cryptocurrency
technology for its live food business. Walmart’s VP of food safety and in Russia last year called WhopperCoin,
health, Frank Yiannas, said that in one test blockchain was able to trace a allowing customers who purchased a burger
mango at one of its stores back to the original farm in about 2 seconds, a to receive a virtual WhopperCoin in their
process that normally took a week. Yianna called blockchain “the digital wallet. Once customers collected
equivalent of FedEx tracking for food.” The company has also joined the enough, they could use them to purchase
Food Trust (see more below) and has patented other uses for blockchain more Whoppers. The coin was built on Wave,
related to medical record tracking and electricity exchange. a rival to networks like Ethereum.
OSCAR MAYER CHANTICLEER HOLDINGS
In April, Oscar Mayer unveiled Chanticleer Holdings, which owns a number of Hooters franchises and
Bacoin, a tongue-in-cheek pseudo- better-burger concepts, announced a blockchain-based rewards program
cryptocurrency backed by Oscar centered on a cryptocurrency called Merit. “Eating a burger is now a way to
Mayer bacon. At the time this issue mine for cryptocoins,” the company said, noting that the coins could be
was completed, one Bacoin was used across the brand’s concepts. “Use your Merit mined by eating at Little
worth the equivalent of four pieces Big Burger to get a buffalo chicken sandwich at American Burger Co., or
of Oscar Mayer bacon. trade them with your vegan friend so he can get a veggie burger at BGR.”
IBM & FOOD TRUST COCA-COLA
IBM has been at the forefront of blockchain adoption through initiatives like In March Coca-Cola announced it was
Food Trust, which the company says offers “new levels of transparency, teaming up with the U.S. State
quicker recalls, better standardized communication, and protection of brand Department to use blockchain to
value.” Ten companies initially signed on to the Food Trust: Walmart, Nestlé, combat forced labor around the world.
Unilever, Dole, Driscoll’s, Golden State Foods, McCormick, Kroger, McLane, The initiative would create a secure,
and Tyson. “We are competitors, yes, but working together to ensure the decentralized worker registry built on
trust of consumers,” said Chris Tyas, Nestlé’s global head of supply chain. blockchain technology.
WORLD FOOD PROGRAMME
The United Nation’s World Food Programme, which feeds 100 million people in 80 countries annually, announced it would expand its
blockchain payment system earlier this year. Because the blockchain by its very nature eliminates the need for a bank, the U.N. said switching
to Ethereum’s distributed ledger network would save it millions of dollars in bank transfer fees alone, according to Bloomberg. The
organization also said blockchain technology could allow assistance operations to be set up much faster after an emergency, while also
speeding up transactions overall and at the same time lowering the chance of fraud.
DATASSENTIAL’S FOODBYTES: BLOCKCHAIN & CRYPTOCURRENCY 7
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LAST MONTH’S
TRENDSPOTTING
DINE AROUND INTERNATIONAL
Last month we discovered CONCEPTS
the trendy farm-to-table Take a bar crawl around the
cuisine of Montana, diving world in last month’s
into regional ingredients like International Concepts,
elk, bison, and huckleberries. which covered overseas bar
We also found plenty of operators that leverage
convenient concepts geared eatertainment, experiential
towards hikers, skiers, elements, unique cocktails,
snowboarders, and more. and more.
IN JULY: Louisville IN JULY: China (Update)
ON THE MENU
In On the Menu, we focused FOODBYTES
on the overlap of health and Jump into a sneak peek of
beauty with collagen, our SNAP! Keynote Report:
cucumbers, and coconuts, Casual Dining and discover
plus we learned more about the fastest-growing breakfast
pig head, Hawaiian bread, dishes on casual dining
and on-trend rosé wine. menus, customer visitation
IN JULY: Pawpaws, Dutch drivers, and so much more.
baby pancakes, fried green IN JULY: Return of the Mall
tomatoes, grapes, and more.
CREATIVE CONCEPTS
We sought out the next For information about an issue or to
generation of food halls
subscribe to a title, contact
that have opened since we
last covered them in 2015, Datassential Business Development
featuring everything from
Manager Susan Cohen at
global themes to
eatertainment. 312-219-6428 or
IN JULY: Cruise Lines susan.cohen@datassential.com
DATASSENTIAL’S FOODBYTES: BLOCKCHAIN & CRYPTOCURRENCY 8
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eating & drinking behavior
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indexed findings
Consumers are changing. People are eating in new ways, craving new things, and engaging
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MILLENNIALS
eating & drinking behavior the largest generation representing 75 million
o the where, what, when, why, and with whom of consumers and 25% of the population is moving
dining out through different life stages their wants are no
o prep methods and culinary equipment used at home longer “one size fits all”
o a detailed look at the last away from home AVAILABLE NOW
experience and at-home meal
GEN Z
health & lifestyle motivators an ethnically diverse and health-conscious group,
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their diet and highly digitally engaged
o sources of food-related information and food apps AVAILABLE NOW
used
GEN X
retail habits & finances this frequently overlooked demographic has
o stores types used for groceries and why reached its highest income-earning years and are
o grocery list usage and store visitation by department looking for authentic but comfortable foods with
o online grocery ordering and delivery usage just a hint of adventure
o views on spending money on food and food budget MAY 2018
prevalence
BOOMERS
food & beverage preferences with the largest spending power of any
o highest rated flavors, dishes, desserts, descriptors, generation, don’t move past these consumers
brands, and more who are seeking a balance between tasty and
o successful menu introduction ratings for purchase healthful foods as they age
intent and uniqueness (QSR, fast casual, casual, JUNE 2018
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indexed findings
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