With consumers still limiting their trips outdoors due to the COVID-19 pandemic, the company said it would invest more to expand the pickup and delivery operation while aiming to reduce costs.

The move is part of a larger trend among Canadian retailers. Earlier this week, Walmart Canada said it plans to spend $3.5 billion over the next five years to strengthen its e-commerce business.

A 280 per cent surge in e-commerce sales lifted Loblaw’s revenue about 7.4 per cent to $11.96 billion in the second quarter ended June 13. That beat analysts’ estimates of $11.87 billion, according to IBES data from Refinitiv .

Adjusted net earnings fell nearly 29 per cent to $266 million, or 74 cents per share, due to employee bonuses. Analysts had expected a profit of 71 cents per share.

The company’s food retail same-stores sales rose 10 per cent in the quarter.

— Reporting for Reuters by Uday Sampath in Bangalore.

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“(The pandemic) has re-emphasized the need to get access to some of the technology that exists in other sectors and are not easily accessible in agri-food systems,” said Rozita Dara, an associate professor at the University of Guelph’s School of Computer Science.

Her comments came during a digital conference organized by the university’s Arrell Food Institute that asked various experts: What information will we need, and what will a post-lockdown life look like?

In the agri-food sector, Dara sees resulting growth in machine data, platforms to manage data, and automation.

“These technologies, what I expect to see post-COVID is a world with a lot more digital technology in agri-food systems for food production, distribution, safety, traceability,” she said.

A simple example she provided was in food processing plants: COVID-19 has driven the need for more “digital paperwork” to limit hand-to-hand contact, and expects measures such as this to continue to gain prominence.

She also predicts more e-commerce tools being made available to farmers, particularly as small-scale operations look for new ways of selling product locally.

Of these sorts of technologies, many already exist and are being piloted around the world.

“One of the culture changes that I will see in digital agriculture is employing these technologies in a real environment to test them at a large scale, and also engage the users who are using those tools and will be making decisions with these tools,” she said, adding later that the “opportunities are enormous.”

Changing behaviours

Dara was joined by Alfons Weersink, a professor in the university’s food, agriculture and resource economics (FARE) department.

He echoed colleagues who participated in a previous digital conference in saying the food system bent but did not break as a result of the pandemic.

“Initially, why did it bend? Because of the sudden change in the nature of demand, away from hospitality to the retail sector, and that meant that the whole system had to change,” he said. “In terms of what it might mean as we move forward, I think that this trend of digitization is going to be enhanced because of this.”

Farmers will look for new ways to save on labour, he added.

“They have for years, it’s not a new trend, but I think this is going to accelerate that trend, to robotic milkers, to automatic pickers of whatever crop or output it may be,” he said.

Calling the processing sector the “bottleneck” of the food system during the pandemic, Weersink suggested processors will also look to enhance technologies to reduce labour needs.

“If they have labour issues, in this case the health of the labour, then (the sector) shuts down and we have implications at the farm level in terms of lower prices and then potential shortages as we move forward.”

Weesink is also predicting some changes in consumer behaviour, saying food may skip the step of stopping at grocery stores and start moving directly from warehouses to household doorsteps. At the same time, people will demand more traceability and independence.

“I think there might be a trend to more local and more self-reliance, so that’s going to change the production system, there is going to be demand for that,” he said, adding there could be a rise in “ghost kitchens” — food establishments that don’t offer any dine-in services but are built to specialize in delivery or pick-up options.

Simon Somogyi, the Arrell Chair in the Business of Food, said the pandemic allowed the public to really see how the grocery system works, particularly the “just-in-time” supply chain, in which grocers use data about demand to ensure their supply stocks meet that demand.

“The just-in-time system was blamed by some commentators at the time, but I think that’s wrong. I think it’s far more efficient,” he said.

Amy Greer, an associate professor at the Ontario Veterinary College, said that while some businesses may have had a pandemic preparedness plan, as a whole, society may have underestimated the potential for emerging infectious diseases.

“What this has done to us is when we have an emerging infectious disease that is highly transmissible and no known vaccine, our only candidate for reducing transmission is changing our behaviour very quickly or very dramatically,” she said.

“Moving forward, how do we protect workers and people who are essential to the food we eat and require for our families and communities and be prepared to put that on the table to keep them safe as a way to protect the food chain?”

— D.C. Fraser reports for Glacier FarmMedia from Ottawa.

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Documents filed in Federal Court show Federated Co-operatives, Cargill, Winfield United Canada, Univar Canada, BASF Canada Inc., Corteva and Bayer CropScience (and, by extension, Monsanto Canada) are all under investigation.

Investigators with the Competition Bureau filed the court documents as part of an application to acquire more documentation from the companies.

Farmers Business Network Canada Inc. (FBN) operates a digital ag platform under a membership model, allowing growers to buy memberships and provide data to the company in exchange for data-related services such as agronomic advice and price comparison tools.

Membership also allows farmers to purchase crop inputs from FBN, which according to court documents, “may offer relatively low prices compared to other retailers enabled by efficiencies from FBN’s business model.”

The company confirmed it made a complaint to the Competition Bureau in the fourth quarter of 2018.

Founded in 2014, FBN has been selling crop inputs through its e-commerce platform in the United States since 2016 and entered Canada in November 2017 when it purchased a Saskatchewan-based retailer, Yorkton Distributors.

A senior officer on a team of competition law officers at the bureau provided an affidavit as part of the court application.

“Some of these parties may have engaged in communications that are suggestive of co-ordinated behaviour in relation to FBN,” the affidavit read.

Furthermore, it said, “FBN is effectively unable to sell all branded crop protection products and is limited to sale of generic products, which represent a small minority of overall sales in Western Canada.”

The officer suggests this may impede or delay FBN’s successful expansion in the Canadian market — or cause them to exit it altogether.

‘Higher costs, less choice’

“I am aware of information that suggests that FBN may increase price competition (through both the price transparency tool and its e-commerce platform), and/or bring new and innovative products or services to growers, thereby increasing choice for consumers.”

“Accordingly, such practices by the targets may deprive customers of the benefits of competition in one or more markets, resulting in higher costs for crop inputs, less choice and/or fewer innovative products or services.”

The court application seeks to find records, including from Monsanto, “relating to the creation and implementation of a task force specifically in relation to Farmer Business Network Inc.”

Already, according to the documents, targeted searches have shown “approximately 450 documents produced by Monsanto Company and 100 documents produced by Bayer AG that include discussion of the potential competitive significance of FBN/affiliates, and other topics of relevance to the inquiry.”

The Competition Bureau first engaged the companies involved in the investigation in February last year, and informed their legal counsels in October that an inquiry had begun.

Corteva said it was aware of the Competition Bureau’s investigation, was reviewing the inquiry and intends to fully co-operate with the regulator.

Bayer also said it was co-operating with the bureau.

“We believe the actions we took in this matter fully comply with Canada’s competition law,” Bayer said.

In a statement, Cargill said it was fully co-operating with the Competition Bureau’s investigation.

“Cargill conducts business in a legal, ethical and responsible manner in each country where we do business – and Canada is no exception,” the company said.

BASF said in a statement it believes the company “has not contravened the Competition Act and (is) confident that we can address any concerns that the Commissioner of Competition may have in connection with the inquiry.”

The court documents say the companies have engaged in practices reviewable under Part VIII of the Competition Act. Under that section, millions of dollars in fines for infractions can be ordered.

— D.C. Fraser reports for Glacier FarmMedia from Ottawa. Includes files from Reuters.

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Walmart said on Wednesday it would pay some US$16 billion for a roughly 77 per cent stake in the Indian e-commerce firm, stepping up competition with rival Amazon.com in a major growth market.

While Thursday’s protest was small and unlikely to affect the deal, such sentiments pose a challenge for Indian Prime Minister Narendra Modi and his Hindu nationalist Bharatiya Janata Party (BJP) as it prepares to fight an election next year.

For Modi, appeasing small traders and farmers, who are part of the BJP’s core constituency, is as important as upholding India’s image as a place that welcomes foreign investment.

Officials have been advised not to comment on the Walmart-Flipkart deal, a senior government official said. The ruling party has previously opposed foreign direct investment in the multi-brand retail sector.

“Politically, the government may find it difficult to digest the deal,” the official said.

The Communist Party of India (Marxist) also taunted the Modi government, noting the BJP had decried such investments when it was in the opposition and accusing it of betraying promises.

Officials in the Prime Minister’s office did not respond to calls by Reuters for comment.

According to the deal, Walmart’s investment is in Flipkart’s online marketplace platform, where foreign investment is allowed. The U.S. company cannot open physical stores in India, according to rules governing the multi-brand retail sector.

However, Walmart’s CEO Doug McMillon told media in New Delhi on Thursday that it was open to the idea of setting up stores via a franchise model in the future. It already operates wholesale stores in the country.

“We can be very flexible. I think as a company not just in India, but around the world, the concept of franchising isn’t out of bounds,” said McMillon, adding Walmart was not yet ready to make any such announcements.

That could fan fears of some trader and farmer groups, who contend the U.S. company is using the deal as a back-door entry into India’s bricks-and-mortar retail market, and that it could squeeze out small corner shops that dominate Indian retail.

Fringe protests

Some 80 people gathered outside a Delhi hotel holding placards reading “Walmart Go Back!” and shouting slogans asking people to ditch imported products for Indian-made goods. Inside the hotel, McMillon was talking to a dozen journalists about the deal.

“Whoever is protesting also has a story to tell. If you look at our history as a country, there was a history of colonialism. And there is always a fear that you start with trade and then it becomes control,” said Devangshu Dutta, head of retail consultancy firm Third Eyesight.

The protesters were from the Swadeshi Jagran Manch (SJM), a nationalist group linked to Rashtriya Swayamsevak Sangh (RSS), the ideological parent of Modi’s party. The group has said the deal is against “national interests” and will hurt Modi’s “Make in India” drive.

It has also written to Modi asking the government to intervene.

Separately, a traders’ union, the Confederation of All India Traders (CAIT) said that it may consider taking legal action against the two companies or lodging a complaint with the country’s competition watchdog, depending on how the deal was structured.

Traders say they are most concerned about predatory pricing and steep discounting by e-commerce firms with deep pockets thanks to foreign funding that could edge out smaller rivals.

“Already offline trade is deeply hurt by e-commerce as there is no policy or regulatory mechanism to govern those companies,” said Praveen Khandelwal, secretary general of CAIT.

“It is a free-for-all game and ultimately it is the offline trade which is feeling the pinch.”

— Reporting for Reuters by Aditi Shah and Manoj Kumar; additional reporting by Adnan Abidi and Euan Rocha in New Delhi and Sankalp Phartiyal in Mumbai.

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“People are seeing potential here. They are seeing how (blockchain) can transform business and really introduce lots of business efficiencies,” said Victoria Lemieux, cluster lead for blockchain at the University of British Columbia research and education cluster.

Double entry bookkeeping was invented in Italy in the 1400s and viewed as a revolution for the business world. Now blockchain is being heralded as the next step forward.

Blockchain technology has been around for close to 10 years and first rose to prominence as the transaction software for the cryptocurrency, Bitcoin. However in recent years people began to see blockchain’s business potential.

In the simplest of terms blockchain is a record keeper. It can be used to track transactions which are chained together with a public and private key paired together in an algorithm. These transactions are then distributed over a large network where there is a partial copy of every transaction kept at each location.

The blockchain is transparent as all those involved see the same information. Changes can only be made when all parties using the blockchain agree. For centuries, transactions in business have been tracked on paper, but blockchain is set to change that.

“The problem with paper is that it got lost, or it could be tampered with. There was a lot of fraud in supply chains, so things could get changed,” Lemieux said.

There are three layers needed to use blockchain. The first is the interface, such as a website or phone application. The next layer is the blockchain, known as the trust layer, which handles and records the business part of transactions. The third layer is the communications layer, aka the Internet.

Once you have a blockchain system in place it can be used in numerous ways. International Business Machines (IBM) has been using the technology to create more transparency in the food industry by constructing a centralized record keeping system to track food along the supply chain. AgriDigital, in Australia, has been using blockchain to market grain, as it allows for direct and secure interactions between buyers and sellers.

Creating transparency in the food supply chain

When IBM started developing blockchain technology it approached the business community for advice on where it could be used. From there IBM found there was an opportunity to use it to create transparency in the food industry.

“Even though the different players (in the food industry) all have a view to the network they don’t have complete information … what the blockchain system allows us to do is to procure information between these different participants securely,” said Manav Gupta, chief technology officer for Cloud, IBM Canada.

In 2017, IBM launched a set of trials with Walmart, including tracking mangoes from Mexico. Walmart started by having employees manually track the origins of a bag of mangoes off the shelf of a store. It took the group six days, 18 hours and 26 minutes to track the mangoes.

During a food safety scare in the time it took to track the fruit, Walmart would have already pulled all mangoes off of shelves across the country and other retailers would have followed suit. In the end it would cost retailers, processors and producers a lot of money.

Walmart then completed the same experiment with IBM using Hyperledger Fabric blockchain software.* It scanned a code on the mangoes and was able to track the origins of the mangoes, from farm to shipment to store shelf, in seconds.

Following the success of the Walmart trial other major companies (Dole, Driscoll’s, Nestlé and etcetera) have reached out to IBM about using blockchain technology.

To track food along the supply chain blockchain uses technology such as quick response (QR) codes, hash codes and radio-frequency identification (RFID) technology. These codes are in some cases printed off and stuck onto the food and scanned at each point in shipment process. In other cases with food products such as milk, blockchain is being used to track milk cartons back to the distribution center where it was collected from.

“What blockchain is going to allow (customers) to do is to have visibility into the absolute source of where that data came from and what type of transactions happened around that asset,” Gupta said.

The companies IBM has partnered with so far all already have their own supply chain networks in place which used technology such as QR codes before. The only change is those scans are now being collected into one central record keeping system, the blockchain.

IBM as well is working on using blockchain technology to track a number of different commodities including grain. The details are still being finalized, but IBM is working on a project to help producers in Canada use blockchain for tracking grain.

The future of grain marketing

In Australia one company saw the chance to change the way grain is marketed by using blockchain. In 2016, AgriDigital used blockchain to successfully sell grain – it was the first time a physical commodity was sold using the technology.

A load of wheat was delivered to a site in Dubbo, New South Wales. Information about the wheat, including quantity and quality, was entered into the AgriDigital system, including the blockchain layer. A digital token or cryptocurrency, called agricoin, was then created to digitally represent the wheat.

“That all happened instantly. The farmer was paid at the point of delivery and they essentially walked away from the site having already been paid,” said Bridie Ohlsson, external relations manager for AgriDigital.

The tokens are tied to Australian currency and each represent AUD$1, and must be converted using a bank following the transaction. AgriDigital is working with banking institutions to create their own cryptocurrency for transactions.

This was a first for the world but AgriDigital had been working up to the day since 2015. The company was founded by a group of Australian agribusiness professionals who wanted to help farmers get paid sooner, rather than later.

AgriDigital’s first piece of software was a cloud-based commodity management application. Rural Australia, like rural Canada, faces connectivity issues, to bypass that problem AgriDigital’s cloud-based system allows farmers to update information while not connected and then once connected update to the AgriDigital cloud system. Farmers and grain buyers subscribe to use it.

Once the platform was developed and in use across Australia, AgriDigital set out to solve the payment issue by using blockchain technology, completing the first successful pilot project in 2016.

AgriDigital then decided to get more technical for future transactions. The company wrote a seven-day escrow code into the agricoins.

“Provided some conditions were met and that the payment was executed in seven days’ time the title token would move to the buyer and the payment would come from the buyer to the grower,” Ohlsson said.

In August, AgriDigital completed its second successful blockchain transaction using the new coded agricoins with CBH Group, Australia’s largest grain exporter.

After completing two successful trials AgriDigital is planning to make the blockchain based service available for commercial use in Australia in 2018. As well the company is currently working on expanding the platform to North America, and hope to launch in Canada as soon as possible.

*UPDATE: A previous version of this story incorrectly stated IBM as the owner of the Hyperlogic Fabric blockchain software, when in fact, Hyperlogic Fabric is an open-source project. We apologize for any confusion this may have created.

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The job cuts, which began on Monday and make up 0.25 per cent of the Toronto-based company’s workforce, will apply to executive and management positions, but will not affect store-level employees, company spokesman Kevin Groh said.

Shares for Loblaw — whose retail banners include Loblaws, Superstore, Extra Foods and Shoppers Drug Mart among others — eased 0.4 per cent to end at $68.90, while the Toronto stock benchmark closed flat.

The job cuts add to the gloom gripping the Canadian retail sector, where more nimble online operators have clawed market share from traditional brick-and-mortar operators.

Sears Canada received court approval to start liquidation last week, resulting in the loss of 12,000 jobs.

Grocery operator Metro Inc. last week said it would cut 180 full-time and 100 part-time jobs as part of an effort to modernize and automate part of its distribution network following its decision to buy pharmacy chain Jean Coutu Group for $4.5 billion.

Metro said it will invest $400 million over six years beginning in 2018 to automate its distribution network.

“The future is digital and that’s not lost on us, the need to make significant investment in omni-channel and e-commerce,” Groh said, declining to reveal how much the company would save from the cuts.

— Nichola Saminather is a Reuters reporter covering the retail and real estate sectors from Toronto.

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