Walmart is hinting that it will take over a key part of its supply chain — and it could threaten… [Video]

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Walmart Walmart has filed six patents for agricultural drones.The patents could signal that Walmart is looking to have more control over its food supply chain.A food retail analyst says that the technology could help Walmart compete with Amazon and others that offer groceries.Walmart is ramping...

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Walmart
  • Walmart has filed six patents for agricultural drones.
  • The patents could signal that Walmart is looking to have more control over its food supply chain.
  • A food retail analyst says that the technology could help Walmart compete with Amazon and others that offer groceries.

Walmart is ramping up its grocery business. On Wednesday, the company announced it will expand its grocery delivery this year to over 800 stores that reach 40% of US households. In some locations, the service will offer same-day delivery in as little as three hours.

And now the retailer is hinting that it’s developing technology that could make the grocery supply chain even more efficient. Walmart has filed six patents for drones that automate farming, including one that would identify pests, one that would pollinate plants, and another that would monitor crop health. Walmart did not immediately respond to Business Insider’s request for comment.

While Walmart’s exact goal for these patents is unclear, they may signal that the company hopes to gain more control over its food supply, according to Paula Savanti, a senior consumer analyst at Rabobank.

The drones “would give Walmart more predictability about what’s happening on the farm,” she told Business Insider. “I’m guessing that any tech that’s geared toward improving efficiency at the farm level would benefit them. It would allow them to anticipate supply problems and adjust accordingly.”

The patents don’t necessarily mean Walmart will delve into farming, which Savanti describes as a “whole other animal.” It’s more likely that the company plans to offer the technology to partnering farms, with the goal of making them more efficient.

For example, according to the filings, one drone can track pests and monitor crop damage using machine vision. To shoo off birds or beetles, the drones could fly by or shoot sprays of pesticide, serving as a next-generation of “scarecrows or shiny devices,” the patent reads.

The drones would also collect data on crop growth, which could assist farmers. That could make Walmart’s food inventory more predictable and help the retailer reduce food waste. (On average, American grocers throw out 13.3 billion pounds of spoiled or blemished produce every year.)

These efficiency gains would likely help Walmart compete with other corporations that offer groceries, especially Amazon, Savanti said. The e-commerce giant is dominating online food and beverage sales, accounting for about 18% of the market, according to Packaged Facts. Any technique that companies use to can differentiate themselves from competitors like Amazon— whether that’s faster delivery or fresher vegetables — will help their bottom lines, Savanti adds.

“Part of the ‘Amazon effect’ is making these [retail] companies start looking into investments in different areas beyond ecommerce,” she said. “It forces them to redirect investments to improving their technological capabilities in general — not just at the end of the supply chain, but in the beginning as well.”

Competition in the grocery space is heating up. In February, Amazon announced it will start offering Prime members free two-hour delivery from Whole Foods, which the company acquired last year for $13.7 billion. Target also announced earlier this year that it plans to offer same-day grocery delivery from half of its 1,800 stores using Shipt, a delivery startup it recently acquired. Meanwhile, brick-and-mortar stores like Kroger and Safeway still lead in grocery sales.

As Bloomberg’s Sarah Halzack notes, cconsumers are still warming up to online grocery shopping, signaling that there’s an opportunity for other retailers — like Walmart — to win food shoppers away from Amazon.

The market for fresh produce is also growing, making investments in ag-tech a potentially smart move. According to a recent report, cconsumption of fresh fruits and vegetables increased steadily between 2011 and 2016, and annual gains will continue through 2021.

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