Transparency. Traceability. Trust.
RYPE is building modern solutions for next generation craft alcohol industry growers and manufacturers.
The world’s first enterprise-grade marketplace targeting the intersection of agriculture and unique needs of a trillion-dollar alcohol market, RYPE has been created as the most efficient platform where the vertical’s buyers and sellers can exchange value.
Not only will RYPE empower farmers and alcohol manufacturers to connect in an unprecedented fashion, but also RYPE’s sensors and tracking components work in tandem with blockchain technology to ensure buyers receive top-quality ingredients from their suppliers. RYPE tracks in transit ingredient geolocation, shipping time, heat and humidity. This information is sent to the blockchain where it is secure and cannot be altered.
Searchable products will include hops, grape juices, cider apples and more. Once a match is confirmed between a purchaser and seller, the RYPE platform holds funds in escrow to protect both parties according to a mutually agreed delivery schedule. The escrow will release only when the responsibilities of the seller - all tracked by RYPE - are met.
From easy set-up posting and listing, ranking and reputations features, payments and invoicing, inventory management and “track and trace” for perishable goods, RYPE solves the pain of sourcing, purchasing, and managing essential ingredients so home enthusiasts and SME alcohol manufacturers can get back to focusing on what they truly love - their craft.
RYPE AT A GLANCE
Growers & Brokers
Sellers of agricultural products that are used to make alcohol
Makers & Manufacturers
Buyers of alcohol ingredients
Where growers list their products for sale to alcohol makers and buyers search for ingredients. AI / ML makes search & recommendation engines optimized as well as personalized.
ER20 token used for transactions on RYPE Marketplace. These are held in escrow and released based on our smart contract system.
RYPE Sensors / RFID
Shipments are tracked with RFID and sensors to ensure they are coming from the correct location, in an agreed timeframe, and are being stored in appropriate conditions.
A blockchain storing information about ingredient geolocation, time of shipment, and quality of storage. These data points act as triggers for the smart contracts.
The Alcohol Market
Explosive demand for SME alcohol product is driving historic demand for their natural ingredients and streamlined shipping solutions. In the bulk wine market alone, it’s estimated 20 - 40 billion liters of wine is traded annually. While we know grape must, juice and concentrates are traded in significant volumes, it’s noteworthy that without a comprehensive global exchange collecting and sharing trade data significant volume also goes largely unreported.
Projections suggest hyper growth across the wine, spirits, liqueurs, beer, and cider markets. Adding estimates together reveals a total market value just shy of $1 trillion by 2025:
The global wine market, valued at $304 billion now, is expected to reach $380 billion by 2022. (Mordor Intelligence)
The global craft beer market is projected to grow 19.9% by 2025 to $502.9 billion. (Grandview Research)
The global craft spirits market, valued at $6.13 billion in 2016, is expected to reach $80.43 billion by 2025. (Grandview Research)
The global market for cider is projected to reach $12.9 billion by 2020. (Global Industry Analysts, Inc.)
This outlook lays the path for significant business opportunity. By reducing friction inside the current supply chain, streamlining the transportation of ingredients from farmer to alcohol maker, and by leveraging modern technology like blockchain and AI, businesses stand to improve both margins and quality.
Small- to medium-sized brands (SMB/SME) will be empowered to compete for greater share of the supply the market conventionally places with a select few, the big, international brands. They can also greatly improve profit margins along the way.
While competition is driving ingredient demand to historic levels, inefficiencies are leading to waste. In a market relying on word of mouth, quality growers can go unfound and “untapped.” Both sides of the market lose opportunity from failure to either develop or secure needed products.
Buyers need access to volumes of high quality Sampling, On-the-Spot and Contract market ingredients from diverse sources.
The ability easily to locate pre-qualified alcohol ingredients, and to procure them, opens the door to unprecedented business opportunity. Investors can make money from a process that increases participation and visibility – and reduces friction – in a global supply chain.
The first to deliver an advanced natural ingredients marketplace
powered by blockchain technology will enjoy a controlling stake in
a global market expanding toward one trillion dollars
in less than 10 years’ time.
The laws of nature and physics limit the volume of hops that even the most entrepreneurial farmer can produce. Only so many grapes can grow per acre, and at limited times per season.
To thrive, alcohol makers of all kinds depend on discovering - and conducting trade with - new sources for their ingredients, at volume.
The solution to the production inventory problem is an expanded, globalized, technology-powered supply chain. Technology and logistics have brought opportunity to producers in far-flung reaches of the globe. Demand exists specialized variants of hops from Slovenia, grapes from Chile, and apples from the North Carolina mountains.
No supply and demand push-and-pull happens in a vacuum. Big industry players, such as InBev, aggressively shore up their supply chain. They implement production targets and require exclusivity agreements. Acquisitions have introduced friction to suppliers who supported craft brewery growth. For example, the farmer supplying a portion of their production to small-batch Wicked Weed Ale may now have to a sign revised, less profitable agreement with Wicked Weed’s new owner, InBev.
Competition for product is heating up. For example, craft beer’s popularity worldwide has kept hops prices high. Common varieties of premium hops can fetch $10-$12 per pound. Specialized varieties can cost more than $20 per pound and come with a one-year waitlist. In general, quality of hops and meeting brewers’ specifications are the top priorities for brewers. On the subject of varieties, brewers share “the big C’s” (Cascade, Centennial, Columbus and Chinook) as varieties of the most interest. [source]
Rudimentary exchanges are popping up to serve local markets, such as Hops Connect of Canada. Generally speaking they are not mobile friendly, they lack transparency around fees and mark-ups, and they offer no payment processing or shipping innovation.
The market remains massively under-served. The true opportunity lies in a powerful global marketplace that facilitates discovery, purchase, and transportation logistics all in one single secure, transparent marketplace for relevant products in the space.
Actors in the Ecosystem
Currently, farmers, craft alcohol makers, transporters, and a vast network of middlemen are parties to the craft alcohol ingredient market. Understanding their perspective will aid in understanding the value proposition of RYPE.
Farmers need a market long before they have a saleable product. And they need to predict which products will provide the greater opportunities given fixed production and environmental considerations. Some crops require more time to produce, or more resources. Geographic and environmental factors are important considerations. In addition, farming requires experience and experimentation. Planting and nurturing plant yields involves multi-factor equations that measure the variance of water, sun, wind, rain, and temperature. For many crops, there is only one chance to get it right in a year. If farming products such as grapes were an airplane, it would require a very long runway.
Knowing how to manage a crop yield takes fortitude. Doing it over time, and at volume, requires trust, a stable market, and reasonable profit margins. Since farmers are a critical asset in any sustainable economy, improving their support mechanisms is vital.
Farmers grow their crops indoor or outdoor. Picking and packing protocols can be cumbersome. The middlemen are the reason some of these requirements exist. For example, select crops require special packaging only because middlemen have them stored in conditioned warehouses prior to auction. In other cases, farmers must harvest crops before they have matured so the middleman can manage staged shipping schedules before end-user delivery.
Manufacturers frequently do not purchase ingredients directly from the producer or farmer, but rather, through brokers. In some cases, wineries, distilleries or brewers act as both growers and purchasers. For instance, Sierra Nevada, a craft beer manufacturer, grows its own specialized hops and purchases land for this purpose to feed its operation with hops.
Or consider Persephone Brewing on BC’s Sunshine Coast. Almost immediately their brand took off, bottles were flying off the shelves. Early in their development, the company sought more acreage by learning of the very real need to grow their own hops to keep up with demand for their HomeGrown ESB. At the same time, they have to manage the complexities of international procurement (from vast and heretofore unknown sources) for ingredients. Special hops are sourced from Amarillo, Cascade and Columbus for their Double IPA, and the classic Citra hops for their American Pale Ale.
Agricultural Products Grown by Farmers
Craft distillers focus on the use of different spices, fruits, herbs, and botanicals to produce innovative products. They procure raw materials from family-owned farming houses who have strong experience in producing grains and fruits.
The demand for grains such as barley, wheat, yeast, and hops is growing substantially due to the increase in production and new breweries in the craft beer segment.
The National Agricultural Statistics Service (NASS) of the US Department of Agriculture (USDA) reports the US has 1,049,600 grape bearing acres producing an average of 7.4 tons per acre, valued at $5.76 billion at the farm gate. Major grape uses are as follows, with wine production grabbing 62%.
Farmers produce core craft ingredients all over the Earth.
Ingredients that will be available on the exchange will include:
Grapes & Grape Juices
Craft liqueurs and fruit distillates are becoming increasingly complex (and popular). Ingredients include:
Dried sour cherries
In addition, there is exploding demand for herbs and spices. A partial list:
Brokers control wide swaths of the market. Their stronghold in the market, and their value proposition, is their network of contacts and broad insight into the larger industry and its unique trends.
Brokers have a wider perspective; buyers and growers see only their limited area of operation. Historically, brokers exercise notable control over the market’s pricing and transport. They hold much influence in – and have taken more money out of – the market.
A major challenge for brokers is seamless freight coordination. Managing the variables for bulk procurement of natural ingredients is a massive undertaking. Cumbersome transport and storage resources are often inflexible and slow to adapt to changing needs; unexpected product volume and weight can cause logistical problems. And transparency via mobile track and trace along the way is rare.
Correctly predicting and recording product weight at time of shipment is a major factor to the transportation process. Government regulations establish the limit trucking companies can transport; the limits can be by the roadway, or by rig, by driver, and even by season. Pricing is often sensitive to the amount of weight, not just the volume, shipped. Weight is determined by scales that must be routinely calibrated and certified as accurate. Sea, train, and air freight each have their own challenges.
Therefore, transportation and logistics will continue to play a key role in the effective distribution of ingredients. It will be increasingly critical for accurate information.
More than most, transport companies depend on efficiency to protect their profit margins. Predictable routes and volumes (both in terms of weight and number of trips) help keep needed resources available to both the growers and the brewers.
Middlemen have great flexibility in setting terms. Sometimes they finance procurement contracts for added revenue. Brokers are by and large unregulated. And it is deeply challenging to compare pricing between air freight, sea freight or various trucking options. The overall pricing models are dependent on factors inherent to the middle part of the market. Those factors are well outside the control of both the producers and purchasers.
Buyers of natural ingredients for craft cider, beer, wine, and spirits have impacted the market dramatically. Until recently, global brands bought the bulk of ingredients readily available, “generic” ingredients. Local economies served the regional needs of SME alcohol manufacturers.
A majority of “millennial” population has reached the Legal Drinking Age (LDA). The millennial population segment has fueled significant demand, owing to their preference for unconventional and experimental alcoholic beverages. [source]
In the UK, more than 300 craft brewers opened their doors in 2016 bringing the total over 2,000. Growth in sales of craft beer in both pubs and supermarkets has encouraged more people interested in homebrewing to raise money and open their own microbreweries. The number of new breweries rose by 18% in 2016 to 1,994, according to a report by the accountancy firm UHY Hacker Young, taking growth over the past five years to an impressive 64%. [source].
In the US, small and independent breweries accounted for 99% of the operating breweries in 2016. [source]. More than just a trend, Heineken thinks “Cider is growing like craft beer on steroids” in the US.
Younger generations are increasing wine consumption around the globe. Currently, there are about one million small and big wine makers. The world’s most famous brands are French. Wine consumption is declining in traditional markets, but those declines are more than offset by dramatic growth in the Asian markets, by some estimates growth is approaching 400%. Asia-Pacific now accounts for 16% of value of global wine imports.
Vintners are launching new and innovative crafted wine products and acquiring vineyards and winemaking operations in order to improve their positions with wholesalers and new markets. For example, E. & J. Gallo acquired small wineries in 2015 and 2016 to extend its market share in the wine market.
The more progressive brands and makers look for locations to expand. Typically, the availability of water and accessibility to robust infrastructure drive those decisions. SME alcohol manufacturers cannot take their farmers with them, so technology plays a large role in their expansion business models.
Payments and fiscal management: Paper record-keeping is common for inventory management, purchase orders and invoices, and provides little visibility into the market’s performance. Many in the industry rely on Excel® spreadsheets and phone calls, or faxed Purchase Orders to get deals done.
Outdated systems impose limits on the efficiency with which business can operate. They can result in cash flow problems when there are delays in payment, which was far too common a theme throughout our customer discovery interviews. In many instances there are burdensome financial terms of payment. One party must often chase the other for their product or payment. Without the use of a smart contract, both parties are at the others’ mercy for fair settlement with little to no recourse in the event either side fails to comply with previously agreed terms of sale.
Search and discovery: It is a serious pain point for alcohol makers to find quality growers of craft alcohol ingredients. Most aren’t well marketed. Grower’s websites are rudimentary (and not mobile-friendly), if they exist at all. Online brokerages are regional and there’s not one place to find multiple international growers or brokers in one central place. This lack of transparency is confusing and costly, and rankings and community reputation data is unavailable.
Logistics and transport: Generally, growers do not ship their own product. Middlemen arrange freight services for a steep price premium, and at the cost of efficiency. Carriers vary, including but not limited to deep sea freight, road haulage, or select air options with single or multiple load contracts. Lack of meticulous care and attention during transport can bring catastrophic results. Shipping bulk wine, for example, requires custom-fabricated stainless rigs for improved sanitation, better temperature control, individual compartments and satellite logistics. Regional offerings such as VinLux Transport in CA are serving local communities, while establishing the need for easy access to global solutions.
Technology: The current system of farming and procurement suffers in terms of speed, accuracy, and accountability. There is no single, reliable, international market platform that informs and facilitates a rapid economy for the parties described earlier. It certainly isn’t mobile, accessible to the majority of those who produce the needed ingredients and who have only a smartphone with which to operate technology.
Uncertainty: Weather, flooding, drought, and other unforeseen circumstances can ruin crops. Such issues can leave the purchaser scrambling to find replacements to meet their production schedule and leave growers taking critical losses to their bottom line.
RYPE will solve the market’s problems via an engaging and compelling platform. It will be powered by blockchain technology, with a UI/UX built specifically to serve farmers’ and craft alcohol makers’ unique needs while leaving room for future expansion or white labelling to other related verticals (e.g., coffee and tea).
Revamp payments and fiscal management: The platform will provide a cutting edge digital marketplace to smooth transactions, improve accuracy, and ensure accountability. RYPE will also tackle the issues of cash flow or burdensome payment terms. RYPE smart contracts on the Ethereum platform will hold payments in escrow until both parties’ terms are satisfied. Both parties can choose 30-, 60- or 90-day or other custom payment terms.
Enable powerful search and discovery: The dashboard will provide a secure, transparent, and efficient global exchange for craft alcohol ingredient producers and manufacturers. No longer will discovery be an issue, as RYPE incentivizes growers and manufacturers from all over the world to be in one Exchange with RYPE coins, or tokens, and a curated, peer-based rating system.
Optimize logistics and transport: RYPE already has begun to partner with leading logistics and transportation companies that fit our mission to maximize efficiency and minimize costs. It will also allow growers and alcohol makers to track shipments on the dashboard.
Universal access: Modern business, especially business in developing economies, happens on mobile. UX-focused mobile iOS and Android apps will complement RYPE’s web presence. Users will have the resources to plan and execute transactions far more effectively, using a tool they already possess.
Address uncertainty: Customers will not be beholden to limited suppliers for their ingredients. In the case of inclement weather or other unforeseen events, such as fires caused by humans, ruining one farmer’s ingredients or a region’s products, the supplier can easily source other growers that fit their need on a clear delivery timeline.
Blockchain technology will help to establish pricing based on market intelligence – by calculating inventory levels and market demand.
The RYPE Value Proposition
RYPE technology facilitates and encourages measurable economic growth by moving the focal point from features to benefits.
By reducing the middlemen with streamlined and effective technology, RYPE will reduce friction and increase revenue opportunity for the buyers and suppliers of a one trillion-dollar niche market of craft alcohol ingredients.
Farmers benefit from free and easy set-up access to an international base of precisely qualified customers. Securing a futures contract with a brewery, for example, decreases the risks farmers face in both the up-front costs to get started and the potential volatility of the market. Growers will be able to leverage the platform for insights into which crops are in demand in the future where, and how they should be priced. Their RYPE dashboard will help them increase profits, better manage their operational processes such as invoicing, shipping and collections - ultimately - invest back in their farming operation for more opportunity. Farmers will earn RYPE tokens by receiving positive reviews from the community.
Alcohol makers of all sizes benefit from access to an expanded base of qualified, vertical-specific suppliers and full transparency around product availabilities and pricing. They gain a trusted toolset to coordinate and manage past, current, and upcoming PO’s. They have traceability on shipments and visibility into grower ratings and recommendations. In addition, RYPE tokens will be used to reward order volume. The more orders placed via the platform, the more tokens received.
With RYPE, growers can be more secure in taking on new buyers, and buyers can be more comfortable taking on new suppliers.
The Role of Blockchain Technology
Vital Information Cannot be Edited: Booking delivery via RYPE ensures ingredients are treated properly during transport for top quality and freshness upon receipt. Not only will pricing and options between shippers and carriers be transparent - and by dint of this competitive - but also we can eliminate challenges that accompany independent or disparate parties self-reporting metrics by tracking data using reliable third party tech sources (RYPE sensors).
RYPE’s hardware components, consisting of sensors and RFID technology, track and share details including geolocation, time of delivery, heat and humidity. Data is stored on the blockchain and cannot be tampered with. The hardware solution guarantees quality transport and end-to-end traceability for marketplace users, as well as ease in determining cause in the case of any dispute resolution
RYPE Smart Contract: Blockchain technology allows for RYPE to employ its use of smart contracts. These smart contracts ensure money in escrow is be sent to the selling party only if all the responsibilities have been met by the selling party (e.g. ingredients kept in good condition).
RYPE Token: Tokens will be held in escrow by a Smart Contract. RYPE Tokens also allow for an easy rewards programs for RYPE Users.
Transparent Data: The blockchain will hold data both parties will be able to access, but not change. An immutable, unchangeable record of data, application of blockchain to the industry will increase trust and transparency.
RYPE technology will unobtrusively empower continued growth and development in a market already fueled by passion and ambition.
Exchange Fees: Membership, posting, and search will be free for marketplace users to encourage quick and easy user adoption (no barrier to entry), alongside educational content and collateral to best support a healthy business ecosystem. A fully-transparent, low-percentage fee on transaction amount will be one of RYPE’s revenue sources. Efficiently leveraging technology will allow RYPE to keep this fee much lower than those associated with the legacy middleman model. Low single-digit fees are projected.
Data: RYPE will assess the option of monetizing its relevant data assets in a transparent and fully compliant manner.
RYPE Premium Services: We anticipate buyer and seller demand for additional valuable, customized services or feature development within the scope of RYPE technology. We foresee this taking shape as a SaaS business model that offers a Freemium option as well as future custom enterprise solutions for additional monthly or annual fees, as relevant.
For example, as wineries grow, they may wish to extend the standard reporting to include formats suited to their ERP. M&A activity within the market will also provide opportunity for special, ad hoc consideration such as account consolidation, or hybrid deployments.
We plan to develop a specialized hardware sensor to track the metrics that are integral in keeping agricultural products fresh during their shipping and storing periods. The RYPE sensor would track elements such as temperature, humidity and other important elements. The sensors information would be transmitted and stored on our blockchain where it would be available for both parties to see. There will also be alerts enabled for when one metric is violated.
We plan to use RFID technology to track geolocation and time of shipment of ingredients.
Smart contracts ensure that the money in escrow will be sent to the selling party ONLY if all of the responsibilities have been met by the selling party (ingredients sent on time, kept in good condition, sent from certain location, etc.) Eventually we plan on increased functionality within these smart contracts where we can impact price based on variables such as time of delivery (20% more for shipping early, for example).
The RYPE Dashboard, delivered both as a website and mobile app (iOS and Android), will allow growers of alcohol related agricultural products to list their product for sale, and serve as the procurement facility for buyers. Items will be priced in RYPE, our ERC-20 token running on the main Ethereum blockchain. Consumers will purchase items directly using their RYPE tokens.
Ethereum is a distributed platform that runs smart contracts on a decentralized blockchain. One widely used form of smart contract is the ERC-20 token. These tokens are cryptographically secure and represent value on our platform.
The marketplace will facilitate simple processing by suggesting prices for similar items to help sellers list items at the best price. The market will also have options to allow for variable dynamic pricing to reflect market conditions. As demand goes up for an item, the market price will reflect this to ensure both buyer and seller receive a fair transaction. This technology will be developed off-chain on the RYPE market backend.
To aid in the discovery of new vendors and ingredients as well as in pricing recommendations for users, RYPE will build custom algorithms to feed the RYPE dashboard. Algorithms will pull data from RYPE’s growers and buyers, as well as existing data from the market and via partners, to produce optimal search results, recommendations, and education for users. Machine Learning empowers the platform to become continually “smarter” and more personalized over time.
The RYPE token will be an ERC-20 compliant token with functionality for exchange between Ethereum accounts and standard balance tracking. We will mint 1,000,000,000 tokens at the start of the pre-sale, and never create more tokens. 400,000,000 will be made available for purchase during the initial coin offering. Tokens not purchased during the initial coin offering will be burned. The smart contract will allow transfers at the end of our crowd sale. The symbol for this token will be “RYPE.” The token contract will be a standard ERC-20 implementation with totalSupply, balanceOf, allowance, transfer, approve, and transferFrom methods. The token will have 18 decimals of precision.How dashboard transactions will use the RYPE token
When initiating a purchase, a user must have enough RYPE tokens in their market account or Ethereum wallet to cover the transaction. The buyer sends these tokens to a smart contract which holds them for clearing. The seller receives notification of the purchase and ships the goods to the buyer. The buyer then confirms receipt of the item and the RYPE oracle checks the transaction validity, and if found valid, releases the tokens and marks the contract settled.
Buyers and sellers will build trust on the exchange over time and will be able to collect rewards for their positive contribution to our network. Top accounts will be allocated additional tokens and receive other planned perks. Additionally, our early adopters will receive a to be determined amount of tokens on clearing of their first purchase or product offering.
Expand to other Markets: RYPE plans on being the leading marketplace for alcohol related ingredients. Once this goal is met, we will assess other agricultural and/or food markets.
End-Product Quality Assurance: Using the methods of products similar to our quality assurance sensors and tracking tools, RYPE plans to eventually work with alcohol manufacturers to provide their customers the means to document their alcohol products. For example, a customer buying a certain winery’s wine that uses RYPE can see exactly where the grapes were made, where the barrels were shipped from, how long they were aged in the barrels, etc.
Expand Smart Contract Capabilities: Continuing to innovate on our smart contract capabilities is a priority for RYPE. Expanded smart contract capabilities such as incentives for % penalties for early shipping, % penalties for late shipping, or other additional resolutions to our escrow process will be researched and put on RYPE’s product roadmap.
We are happy to answer questions you might have about the RYPE project.
Rype Blockchain Technologies Ltd.
British Columbia, Canada