Blockchain Offers Multiple Benefits to Restaurants

By business.com editorial staff,
business.com writer
| Updated
Jun 01, 2020
Image Credit: CherriesJD / Getty Images

Blockchain has several applications in the food industry, and for restaurants, in particular, that number is growing.

  • Blockchain can improve food quality and safety
  • Blockchain can provide transparency for restaurants and customers.
  • Blockchain can make food delivery potentially faster and more secure.

Terms like bitcoin and blockchain are dominating the news. For a restaurant owner, blockchain may seem like a technology that's only relevant to the financial world, but this isn't the case.

Blockchain has several applications in the food industry, and for restaurants, in particular, that number is growing. These applications can affect almost every part of a restaurant's business, from food sourcing to reviews and promotions.

So what can blockchain do for your restaurant soon? More importantly, how can restaurants leverage the technology today?

Restaurants and blockchain

Before we delve into the uses of blockchain in the food service world, let's take a quick look at what it is. Blockchain is basically a ledger, similar to what every business already uses. But it's not restricted to financial information, debits and credits. Instead, in this ledger, almost any kind of data can be recorded and stored.

What makes blockchain special as a ledger technology is that it's distributed, immutable, and it's verified. Or, to put it another way, it's stored on multiple computers, entries can't be changed once they are added, and all ledger participants agree on the data placed within it. If, for instance, somehow on one computer a ledger entry is changed, the changes won't be reflected in other copies – the consensus will be the valid entry.

Blockchain and food quality

One of blockchain's uses for restaurants speaks to both food quality and safety. Currently, large companies like Walmart are testing farm-to-store tracking of food using blockchain with the intent to increase food safety.

For instance, if chicken that comes from a specific farm is contaminated with salmonella, blockchain could trace the product throughout the distribution cycle. Notifications could then be sent to those restaurants that received the tainted product, which could then potentially save a restaurant's reputation.

Beyond the more serious issues of food safety, food quality can also be tracked. For a restaurant that is receiving consistently good – or poor – quality produce through a distributor, for instance, a restaurant owner could use the blockchain ledger to identify the source of the food in question. From there, the restaurateur would work with the distributor to increase orders from that source, if the produce is good quality, or eliminate that vendor if the product is poor quality.

Blockchain, smart contracts, and food assertions

Restaurants are in direct contact with the end consumer, and therefore have a better idea of what they want. If a restaurant markets itself a particular way – as a vegan establishment perhaps, or one that only sources from local farmers – they want the ability to back up their claims and ensure their suppliers do so as well.

If a vegan restaurant sources bread from a local bakery, they will want to validate that the ingredients used are free from dairy and eggs. But a bakery may not want to publicly share what ingredients they use, keeping their recipe a secret.

In this scenario, the restaurant could use blockchain with a smart contract – or a self-executing contract – that would place the order only when the bakery discloses its ingredients privately to the restaurant. These items would be kept in the chain to verify ingredients had been validated while maintaining the bakery's privacy for their proprietary recipe.

Similarly, blockchain could record the origination of food provided to a restaurant that boasts locally sourced ingredients. In this way, consumers can independently verify items against the immutable blockchain ledger, including where the food is sourced and whether the restaurant is living up to its claims.

Blockchain and 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.

The companies Munchee and SynchroLife are looking to change that. Both platforms reward reviewers with cryptocurrency tokens for contributing reviews on restaurants. Because the reviews are stored in 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 from SynchroLife's machine-learning algorithms, above board and honest.

Customer loyalty

Blockchain can allow companies, or even groups of companies, to create a loyalty program. National chains and small independent businesses can now create loyalty programs that go beyond their own doors. This can spark new customer interest.

Chanticleer Holdings owns several restaurant chains including Hooters and American Burger Co. They are implementing a loyalty program that will span their restaurants.

Food delivery

Third-party food delivery services may be improved significantly with blockchain. First, blockchain can help ensure that the food delivered is high quality. According to Spot n Eats, blockchain allows for quality checks from source to the restaurant itself. Customers may be more apt to order food when they can verify its quality without having to go inside the restaurant.

Blockchain also eliminates the middleman, which gives the restaurant and the food delivery service a greater profit. Security is maintained by checking the credentials for the restaurant and delivery company and keeping the customer's data safe.

Perhaps the greatest advantage of using blockchain for food delivery is faster and easier payments. The business to business payments are made using smart contracts, so they don’t have to be handled manually for each transaction. It also speeds up the payment process for the consumer.

Virtually hackproof

The data collected through blockchain isn’t susceptible to hacking, fraud, bugs, or inaccuracies. If a security event does occur, blockchain makes the culprit easily identifiable.

business.com editorial staff
business.com editorial staff
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