For the Love of Coffee!
How Blockchain is bringing the consumer and farming communities together
For years, our choice of coffee has been determined by the taste and boost we want from it. This was before we were hit by the enormous amount of information of what went into our coffee and how it is being produced, and suddenly our favorite coffee goes from being the most celebrated to the most unethical coffee chain (looking at you Starbucks!)¹.
There have been multiple tell-tale articles published about the coffee industry, revealing what really goes on behind the curtains.
In response, consumers, conscious of what they consume and endorse, are forcing brands to turn to technology to establish fairer and more sustainable trade practices.
To give you some perspective, we spend approximately $3 a day, and on average $1100 a year on coffee.² That’s a lot more than coffee farmers make in a year and effectively earn less than a cent for our $3 cup of coffee. There are also countries like Kenya, where farmers do not make any profit on their yield and are, in fact, losing about 8.16 USD/Kg of dried cherry³. Furthermore, most of these farmers have to wait up to 30 days or more for their payments.
So how can the coffee industry advance sustainability and ethical sourcing? Certainly not without transparency! As more companies move towards blockchain in their supply chain, consumers can now track the journey of their coffee beans through their mobile apps. Let’s look at one company that is driving this change within our beloved coffee industry, Bext360.
@Bext360, the Coffee Blockchain Startup
Daniel Jones started Bext360 in 2016 with the vision to improve lives and disrupt global supply chains. In November 2017, Bext360 along with Fairtrade Foundation and Moyee Coffee Ireland started the first Blockchain project in the coffee supply chain to provide traceability and guarantee not just real-time payments but also real price value to the Ethiopian farmers.⁴ Blockchain is a decentralised mesh network of computers that are linked to each other rather than a central server. Whenever a transaction occurs between two parties, it is recorded online as a block and sent to everyone in the peer network for verification. Once validated, it is then added to the previously created blocks in chronological order thus creating a Blockchain that is immutable and secure.
Bext360’s other pilot was with Coda Coffee, Denver and Great Lakes Coffee, Uganda to track inventory and real-time payments using its SaaS platform and the ‘bextmachine’. This machine, installed at the farm, uses IoT, Artificial Intelligence and Machine Vision to grade each batch of coffee beans based on the weight, size and ripeness recorded. The Bext360 platform collects this data, assigns a crypto token based on the grade and allows buyers to make instant bids in digital currencies.
As the batch of coffee beans moves along the supply chain, the platform records all transactions in real-time, collecting a small amount of money for every transaction for itself, and gives access to this data to all stakeholders in the supply chain. This visibility ensures fair prices!
Beyond Coffee
The application of Bext360 technology is not limited to the coffee industry. By assigning a token to the commodity value, this technology can be applied to the supply chains across other commodities and can help reduce the enormous inventory costs and transaction costs while ensuring accuracy.
Interestingly, after launching several programs with farmer coops and coffee chains, in August 2018 Bext360 moved to the fashion and retail industry focusing on the first to last mile traceability of the organic cotton supply chain. They were the lead technical partner for the Fashion for Good Scaling Programme to trace organic cotton, which even though it is environment-friendly and is the key fibre in sustainability strategies for fashion brands, makes up for less than 1% of the total textile fibre market.⁵
The organic cotton sector which relies on paper-based trails, transaction certificates, and isolated systems can now use Blockchain, Machine Vision and New Marker Technologies based on DNA or edible biomarkers to verify product integrity from farm-to-retail level.
Bext360 is now expanding into new verticals including timber, nuts, seafood, minerals, and palm oil. “Traceability is now taking center stage as a vital component of the supply chain process for all consumer good companies”, says Daniel Jones⁶, and the breadth of these companies’ demographics is the reason he is convinced that blockchain verification will one day become a mainstream marketing hook.
It’s amazing to see how for-profit companies such as Bext360 have understood consumer demand for information transparency and premiumization of commodities and are utilizing it to enable all those involved in the supply chain.
How do you advance sustainability through technology? Let’s learn from Bext360
References:
#BabsonCollege #BabsonMBA #BabsonMIS7535 #studentvoices #Bext360 #Blockchain #FoodandBeverage #DigitalTransformation
[1] https://www.scribd.com/doc/102666885/The-Truth-Behind-Starbucks
[2] https://www.usatoday.com/story/money/2019/05/07/americans-spend-thousands-on-nonessentials/39450207/
[4] https://medium.com/@MoyeeCoffeeIRL/worlds-first-blockchain-coffee-project-cd04fff9e510
[5] https://www.bext360.com/wp-content/uploads/2020/01/Bext360-Cotton-Trace-Pilot-Final-2020.pdf
Originally published at https://www.linkedin.com.
