Walmart Inc. can imagine a grocery business aided by farm-related drones, which could be used to pollinate crops, monitor fields for pests and spray pesticides.
The Bentonville retailer offered a glimpse into potential uses for the technology in a series of patent applications published by the U.S. Patents and Trademark Office earlier this month. The country's largest grocer detailed "systems and methods" for unmanned vehicles to perform farm-related functions, most notably, beelike drones capable of collecting pollen and depositing it onto plants.
The applications have not been approved by the government office, but are signs of Walmart's desire to develop solutions to farming problems, according to experts. It also signals Walmart's ongoing efforts to find ways to get fresh food to its stores cheaper, faster and more environmentally friendly as it competes with Amazon.com, Kroger, Aldi, Lidl and others for grocery sales.
"Increasingly, you're seeing companies that interface with the consumer like Walmart and their competitors becoming more and more interested in how food is produced and what inputs are used to produce the food," said Bert Greenwalt, professor of agricultural economics at Arkansas State University. "That's relevant to them as they court the changing taste in preferences of consumers, their customers."
Grocery sales are vital to Walmart, accounting for roughly 56 percent of the company's revenue. So it's no surprise the retailer has focused its attention on ways to battle growing competition.
LOWER COSTS, SERVICES
Walmart has lowered prices, improved the selection and quality of its assortment and introduced convenience-based services for shoppers. The retailer has opened 1,100 online grocery pickup locations across the U.S. with plans to expand the program to more than 2,000 by the end of the year. Walmart has recently announced plans to expand its grocery delivery service to about 800 stores this year.
Brett Biggs, Walmart's chief financial officer, told investors earlier this month that the company had figured out ways to trim almost three days out of the supply chain, improving the freshness of items. Walmart has been working with IBM on blockchain technology to improve the transparency and traceability of food as it moves through the supply chain.
The company recently unveiled a technology called Eden, which was designed to curb food waste and improve the quality and flow of fresh food.
"Eden's suite of apps helps Walmart associates better monitor and care for fresh fruits and vegetables that are waiting to be shipped from distribution centers to stores," Parvez Musani, Walmart's vice president of supply chain technology, wrote in a blog post. "That could mean more efficiently ripening bananas, predicting the shelf life of tomatoes while they're still on the vine, or prioritizing the flow of green grocery items from the back of the store to the shelf."
Walmart will not reveal additional details about its plans to deploy drones on farms to further benefit its grocery business. But a company spokesman said in a statement that Walmart is "always thinking about new concepts and ways that will help us further enhance how we serve customers."
According to the patent applications, Walmart said monitoring and defending crops against crop-damaging pests is "paramount to farmers." The retailer wants to patent a system that would use drones to identify pests and then dispense an insecticide specific to the type of pest.
Walmart said in the application farmers typically have to use multiple chemical sprays to fight off pests, which can be expensive and "may not be looked upon favorably by consumers."
"This can reduce the use of the inputs or the pesticides in particular," Greenwalt said. "So you could make claims regarding sustainability, reduced impact on the environment, reduced cost -- several things there would have economic benefit from the production side. But [they] also might have value to the consumer with the assurance their food is being grown in a more environmentally friendly manner."
Meanwhile, Walmart also describes systems in which it could use smaller drones for pollination to help offset what has been a "steady decline" in pollinating insects like bees, which can lead to reduced crop production. The pollination drones would collect pollen on sticky material or bristles as it moved from plant to plant, then deposit the pollen on other plants.
Eric Wailes, distinguished professor in the Department of Agricultural Economics and Agribusiness at the University of Arkansas, said Walmart's farm-related patent applications are a "logical move" because it could improve productivity, reduce costs and shorten the food chain.
Wailes said Walmart's potential use of drones for agricultural reasons -- like improved pest control and pollination -- appear to be more about productivity improvements.
"If Walmart moves into contract farming with linkages to this drone technology, then that would give the company better access and probably a better cost structure to compete effectively with ... Amazon," Wailes said in an email.
There's no indication when, or if, these systems could be deployed by Walmart. The company files hundreds of patent applications each year, many of which do not materialize.
Annibal Sodero, assistant professor with the Walton College of Business at the University of Arkansas, Fayetteville, believes several questions must be addressed if Walmart intends to make its drone plans a reality: Where can they be used? Would Walmart suppliers be required to adopt the technology? Who would provide and monitor the drones? How would any data collected be used?
"It is something that, face value, makes a lot of sense," Sodero said about the use of drones. "The problem or the concerns that are raised are because of the surveillance. ... It's my farm, my land that is under surveillance. It raises concerns from the suppliers and even from a societal perspective."
The global agricultural drone market was valued at about $673.8 million in 2015 and is expected to reach about $2.9 billion by 2021, according to Zion Market Research. Greenwalt believes there will be a "tremendous application" of drones and unmanned vehicles in agriculture over time as producers increasingly use technology as a substitute for the "farmer's eyes" to help monitor crop growth.
While Walmart has filed patent applications that show its interest in increasing its involvement on farms, Greenwalt stressed that drone technology in agriculture remains "much bigger than Walmart."
"The farmer is going to be interested in this on its own," Greenwalt said. "To the extent that Walmart is looking at these technologies and wants to be a player in it ties back to their interest, and all large marketers' interest, in being a supply-chain manager and being able to tell the consumer how this product is being grown and what inputs are being used."
SundayMonday Business on 03/25/2018