Popular articles
Recent discussions on forum
Blockchain Technology Powers Coffee Cocoa
The role of blockchain in empowering ethical consumerism, while prioritizing farmers, small businesses, and consumers.
Published December 20, 2021
Select language
Chandra Melo
Coffee experts@The Coffee Lab
The three keywords that tie blockchain tech and coffee together are trackability, ethical consumerism, and productive efficiency. When the initiatives started back in late 2019, the results were expected but there was uncertainty regarding how efficient the new technological changes would be in achieving the set goals.
About two years later, all reports indicate that early results are quite impressive. Initiatives from IBM and Microsoft have had a significant impact on the global coffee industry already. Considering the negative impact that Covid-19 has had during these two years, this success is nothing short of amazing and creates hope for coffee farmers across the planet. If anything, there has never been a better time than now for digitizing the coffee business at its core.
Emerging Tech and Coffee: Goals
The principal idea behind initiatives like Farmer Connect is to put the interests of coffee farmers first, as they seldom have any control over the business aspect of their trade. This has remained the unfortunate truth for a long time, despite the farmers being core manufacturers. Emerging tech such as unique digital identification systems, machine learning, and blockchain technology are the primary tools being used to remedy the situation by:
- Providing a platform through which farmers can directly get in touch with the industry’s supply chain.
- Creating a unique financial ID for each coffee farmer, which makes it easier, faster, and cheaper to get loans when needed.
- Connecting farmers, local retailers, export & import traders, wholesale traders, and other wings of the coffee industry with each other.
Why the Need for Empowering Ethical Consumerism within the Coffee Industry is Dire
Due to the worldwide awareness created by social media and the internet in general, consumers are now aware that coffee farmers do not always make the profits they should be making, even in the United States. Unfortunately, things are much worse outside the country, especially in some of the highest coffee manufacturing nations in the world.
Consider the fact that despite being part of a $102+ billion industry, the ones who cultivate and harvest the crops are starving with their families or committing murder-suicides in despair of their insurmountable debts and an everlasting fear of starvation in India, which is the world’s 7th largest coffee manufacturer. On the other hand, modern slaves are working in Bazil, the global leader in coffee production. Back in December 2019, 59 coffee bean pickers, including young children were “rescued” from two giant plantations in Minas Gerais, Brazil.
The state produces close to 2 million metric tons of coffee which amounts to more than half the nation’s annual coffee yield. Given that there are close to 250,000 workers and small farmers working in similar conditions within the state of Minas Gerais alone, such raids are completely useless. In fact, it was stated in the Reuters report itself that the 59 workers would go back to working in another plantation under similar conditions within a few days because they have no other options.
Despite not having rights as a modern-day plantation slave, no access to safety equipment, or even being paid the minimum wage, they have no other place or choice of work. No actions against the plantation owners were reported and no alternative solution was provided to the rescued workers either.
These harrowing but regular occurrences within the core business serve as a good reminder as to why the need for powering ethical consumerism with blockchain technology is so important. As governments are failing to provide a solution, the consumer should at least have a choice to support small farmers and companies who practice ethical practices at their own plantations, in spite of not being compelled to do so.
What is the Role of Blockchain Exactly?
Before discussing its role in digitizing the coffee business, it is imperative to first briefly go over how blockchain works. It’s a system that automatically creates and connects transactions (blocks) in traceable but unchangeable links within a shared digital ledger. These interconnections are each “links” of the “chain” in the blockchain.
The shared ledgers are only accessible to parties who were engaged in the transactions initially, but they can be shared with other parties a well, provided that the involved parties agree to do so. This ensures traceability, but not at the cost of unintentionally compromising anonymity or security.
Now that the core ideas have been properly discussed, it should be easier to explain how blockchain is helping to usher in a new era of ethical consumerism within the industry. Apps like Farmer ID and Thank Your Farmer by Farmer Connect are already making use of the blockchain system created and maintained by IBM. It’s this core technology that has made it possible to:
- Digitally store and share business data as required in the most secure way possible.
- Reach across international borders and connect coffee farmers with their supply chain.
- Create SSIs for each farmer, complete with their business transaction history and documents.
- Keep all transactions and financial IDs truly private, with only the concerned member having control over both personal & financial data.
- Provide each member with the independence and opportunity to analyze and share that data in the manner of their choosing.
- Raise awareness among consumers regarding where their coffee is originally coming from and who are the farmers growing the beans.
- Letting consumers choose farmers and sellers who maintain ethical practices and farm their coffee in an environmentally sustainable way.
While these are some of the more impressive benefits which blockchain tech has already brought into the industry, there is a lot more to come soon. The plan of empowering farmers by digitizing the coffee and cocoa industry is not solely based on the present state of blockchain technology, but also its expected future developments and adoption rate.
Major Coffee Brands in Support of the Movement
Although many believed that the tech and coffee movement would not be able to change much, that did not turn out to be the case at all, fortunately. Numerous small farmers, companies, and even large international corporations have joined this process of digitizing the coffee industry with blockchain technology. One of the early adopters is the Japanese coffee giant, Ueshima Coffee Company (UCC).
UCC’s Orang Utan Coffee
UCC has launched a unique brand of coffee, named after the endangered Orangutan. Indonesia is the world’s 4th largest manufacturer of coffee, and a large portion of their plantations have come at the cost of massive deforestation. Given that Sumatran rainforests are the only natural habitats of this gentle and intelligent ape, UCC aims to support local and international preservation efforts via the profits earned from Orangutan Coffee sales.
Aside from a major portion of all profits going towards saving Sumatran rainforests, the Japanese coffee company has committed to maintaining a transparent, sustainable, and ethical coffee business overall. It should be noted that Orangutan Coffee is not UCC’s only product, although it is the only one that can be traced back to its origins via blockchain. They launched and marketed the coffee via Farmer Connect in late 2020.
Nestlé Expands into Blockchain Traced Coffee Further
Nestlé was one of the first big international corporations to both adopt and encourage using of blockchain tech for digitizing the food business, way back in 2017. In April 2020, Nestlé launched its first blockchain coffee, called Zoégas Coffee. Certified by the independent organization Rainforest Alliance, the arabica beans in Zoégas are farmed from plantations across Brazil, Rwanda, and Colombia. Provided that the coffee manages to catch on, it holds great promise for the future of sustainable coffee production. The beans are being sustainably farmed despite the plantations being located in countries that are notorious for completely ignoring all environmental and human safety standards.
Smucker’s Folgers
The first US brand that brought blockchain tech and coffee together is Smucker’s from The Folger Coffee Company. In July 2020, The Folger Coffee Company joined Farmer Connect in its entirety. What it means is that unlike the others mentioned so far, the sustainability and traceability factor of Folger Coffee products are not limited to just one or two of their products. According to reports, all coffee (including 1850 Coffee) carrying the Folger brand name will remain traceable to their origin via IBM’s blockchain technology. So far, they have been completely on board with the movement with no signs that they plan to abandon it anytime soon.
Almost 3 years ago in May 2019, Starbucks joined Azure’s initiative to digitize their business with the blockchain platform and it was excellent news. However, not much has happened on Azure since then that’s related to the coffee industry. By the end of 2022, we are hoping to see Microsoft’s Azure add more impressive results to what we have already seen from it. Farmer Connect and IBM, on the other hand, are almost guaranteed to add more to that already impressive list of blockchain coffee brands and sub-brands.
About the author
Chandra Melo
Marketing as job, barista as passion. An authentic coffee lover, looking for the next fantastic cup of coffee that I will fall in love with. Coffee, for me, is more than a beverage. It's about community and connection - how can all the world consume the same fruit? And differently? How can we have so many different tastes? I also don't know. And because of this, I feel in love each day more for this world. Happy to share and make a change in the coffee community.
Show comment
More on the coffee lab
Sign up and contribute now