Possible Game-Changer for Food Safety
In our previous piece on the metaverse, we presented convincing evidence (and data) showing how blockchain technology made the stratospheric growth projections likely. But investors would be mistaken to dismiss blockchain as merely a way for gamers to (safely) fight each other and purchase silly hats in an alternate digital world. The technology is such a leap forward in transparent, efficient security and record-keeping that there’s no telling what industries won’t ultimately be disrupted. Today, we will examine how we believe blockchain technology will enhance safety in the $6 trillion U.S. food and food services industry.1
Blockchain could enhance safety in the $6 trillion U.S. food and food services industry.i
Food Safety Was Severely Compromised
Consider what happens when people fall ill from a particular food. The first action is informing supply chain partners that (for example) a specific batch of lettuce contains E. coli bacteria, then alerting the public so it can be isolated and removed. Under normal conditions, food from one farm can be distributed to hundreds of locations in just days. Without a robust “track and trace” infrastructure, many additional illnesses and deaths can result.
How Blockchain Technology is Enhancing the Food Supply Chain
In business, information silos always cause problems. With thousands of food growers and distributors using different systems to keep tabs on growing cycles, harvesting schedules, shipping, and delivery, getting accurate, timely data is impossible. This deficiency also fragments the ability of management to take action. Using blockchain technology will improve food supply chains by:
Food Companies Already Using Blockchain
Years ago, companies feared providing too much information to the public, but this transparency is increasingly seen as a competitive advantage today. Companies such as Nestle, Tyson Foods, Kraft Heinz, Bumble Bee, and Walmart are already using blockchain technology to:
In 2020, Walmart was involved in an outbreak of E. coli. It was eventually traced to lettuce products, but not before it spread to 19 states and put 20 people in the hospital. The industry spent millions of dollars notifying the public and removing the tainted greens from circulation. Walmart now requires all leafy greens suppliers to update a blockchain that traces the product’s path from farm to fork.
How Can Investors Participate in this Rapidly Developing Market?
The truth is, just like in the early 2000s, no one can predict just how embedded the metaverse will become in our daily lives. But for a glimpse of the future, take a look at how the internet has grown to become indispensable to nearly everything we do and touch. Experts predict the same (and more) for the metaverse. Investors can participate in the growth of the blockchain market through the Amplify Transformation Data Sharing ETF (BLOK), an actively managed ETF comprised of companies involved in blockchain technology
Read more from Built on Blockchain series:
1 Statista, U.S. food retail industry – statistics & facts, February 22, 2022
2 The Guardian, Covid exposed the cracks in the US food system, March 15, 2022
Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in Amplify Funds statutory and summary prospectus, which may be obtained above or by calling 855-267-3837, or by visiting AmplifyETFs.com. Read the prospectus carefully before investing.
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. The Fund is subject to management risk because it is actively managed. Narrowly focused investments typically exhibit higher volatility. A portfolio concentrated in a single industry, such as companies actively engaged in blockchain technology, makes it vulnerable to factors affecting the companies. The Fund may face more risks than if it were diversified broadly over numerous industries or sectors. Blockchain technology may never develop optimized transactional processes that lead to realized economic returns for any company in which the Fund invests.
The Fund will invest at least 80% of the Fund’s net assets in equity securities of companies actively involved in the development and utilization of blockchain technologies. Such investments may be subject to the following risks: the technology is new and many of its uses may be untested; theft, loss or destruction; competing platforms and technologies; cybersecurity incidents; developmental risk; lack of liquid markets; possible manipulation of blockchain based assets; lack of regulation; third party product defects or vulnerabilities; reliance on the Internet; and line of business risk. The investable universe may include companies that partner with or invest in other companies that are engaged in transformational data sharing or companies that participate in blockchain industry consortiums. The Fund will invest in the securities of foreign companies. Securities issued by foreign companies present risks beyond those of securities of U.S. issuers.
Amplify Investments LLC is the Investment Adviser to the Fund, and Toroso Investments, LLC serves as the Investment Sub- Adviser.
Amplify ETFs are distributed by Foreside Fund Services, LLC.
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