Future of food distribution is local: Foodshed.io creates transparent supply chain using blockchain

By Mary Ellen Shoup contact

- Last updated on GMT

Foodshed.io connects sustainable, independent producers to local wholesale markets, restaurants, and other purveyors of local food. ©GettyImages/Photohaiku
Foodshed.io connects sustainable, independent producers to local wholesale markets, restaurants, and other purveyors of local food. ©GettyImages/Photohaiku
Demand for local food is climbing, yet our modern food distribution system is ill-equipped to handle small supply from local independent farmers, according to the founder of Foodshed.io, a new app using blockchain technology to solve for inefficiencies in the local food supply chain.

Foodshed works by connecting sustainable, independent producers to local wholesale markets through their platform that streamlines ordering, payments, and delivery from independent farmers within a 250-mile radius under one app.

“Fresh food is the reason to go the grocery store now,”​ Dan Beckmann, CEO of Foodshed, told FoodNavigator-USA.

According to FMI’s Power of Produce 2017 report, over half (54%) of shoppers said they would like their produce department to offer more locally-grown options and 80% of consumers buy locally to support their community.

However, there are many barriers that make access to markets, even local markets, difficult for independent farmers of varying scale. On the one hand you have many retailers that need shipments in bulk on weekly or bi-weekly basis, and on the other side you have local farmers markets which either are not nearby the farmer and they need to drive hours to get to, Beckmann explained.

“Our system is basically set up to provide food to everybody at all times of the year for the lowest possible cost no matter where it comes from,”​ he said.

“There is so much waste and frankly middle people involved in our distribution right now that the farmer isn’t getting paid as much as they should. If we take out a lot of that, the farmer could potentially get paid more and the consumer could potentially pay less [for local food products] – that’s the opportunity that’s here.”

There is also an incentive for retailers to use blockchain technology like Foodshed because it cuts down on the amount of time spent forming contracts with different local farmers in order to diversify their product lines in the store.

“There is an incentive for them to build this out, but it’s really hard for them to make individual deals with individual farmers and bring in more diverse product lines to the store,”​ he said.

Transparency and how Foodshed works

The Foodshed platform uses blockchain technology so app users can track their produce from harvest to the moment it leaves the farm, through its delivery route all the way to its dropoff point.

Since launching its beta version of the app in January, Foodshed has amassed 150 independent farmers from Missouri, Illinois, Iowa, New York, Connecticut, New Jersey, and Vermont, who have downloaded the app and started listed their produce.

Restaurants, supermarkets, and institutional buyers can browse local products, place orders with multiple farms, and pay all on the platform. Throughout distribution, supply is constantly built up and broken down, according to food tech company.

According to Beckmann, Foodshed is scaling at a “nice, even pace”​ and the company is in talks with setting up a deal with a major grocery chain in Midwest with a 100-store footprint.

“That will be a situation that we hope where we have some demand that’s long term enough and consistent enough where we go out to farmers and start recruiting a lot more of them,” ​Beckmann added.

“We have farmers in theory that already have enough initial inventory to serve the first round of that to get it started.”

Solving for food waste, food prices, and other benefits

Using Foodshed’s blockchain capabilities also has the potential benefit of reducing food waste from massive product recalls – like the recent multi-state outbreak of E. coli linked to romaine lettuce grown in the Yuma region of Arizona –because the technology can better pinpoint where the contamination stemmed from and as well as the exact products affected, instead of forcing retailers have to throw away all their stocks as a precaution, Beckmann continued.

“We’re in the modern times and we had to throw out most of the romaine lettuce [a lot of which was probably still safe to eat].”

Widespread use of blockchain technology across the food supply system could also result in savings for the consumer and higher quality products, according to Beckmann, since the Foodshed app helps to cut out the middle men currently involved in the food distribution process, allowing for more frequent, lower-volume deliveries of fresh, local produce from small, independent farmers.

“We’re going around all of that, so it not only gives the consumer potentially a lower price but the farmer could make  more,”​ he said.

Like any other new technology startup in its early days, Foodshed will go through constant iterations to make the user experience as streamlined and transparent as possible.

“This is a big idea that we’re working on, we’re not going to solve all these issues at once,”​ Beckmann said.

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