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Coffee Beans

The Beauty of Blockchain

July 24, 2020
Blockchain technology provides the transparency manufacturers need to lessen the likelihood of supply chain failures.

As the digital economy has become the new reality, customers have far higher expectations. Customers are pushing for a world where customized experiences and mass customization are the norm. Understandably, some of the expectations are far more difficult (and expensive) for manufacturers to satisfy. However the continued evolution of technologies is paving the way to a true digital future.

Beyond curiosity, the highly publicized collapse of crucial supply chains immediately after the COVID-19 pandemic hit has prioritized the expectation of transparency not just for consumers but other manufacturers depending on supplier consistency. Fortunately, for manufacturers with complex supply chains, blockchain technology makes transparency feasible. 

Consider 1850 Coffee, a J. M. Smucker Co. brand, who in partnership with Farmer Connect, is pioneering a new era in coffee transparency through its 100% Colombian Coffee bagged offering. Leveraging IBM’s blockchain technology, consumers can now trace their coffee back to its region of origin on a platform designed to help increase traceability, efficiency and fairness in the coffee supply chain. 

Obviously, connecting all the components comes with its own set of challenges and requires cooperation along the way. “With coffee you're dealing with a particularly complex supply chain. Much of the world's coffee is grown on relatively small farms that are only a few acres. And in between the farmer and the end consumer, you have a number of different stops all over the world, from the coffee coops to the roasters to the distributors and more,” Paul Chang, global blockchain lead for distribution and industrial markets at IBM, tells IndustryWeek.

“To create this solution, we needed the expertise and the input of all these different parts of the industry and their buy-in toward creating a network that was truly transparent and equitable. With companies and organizations like J.M. Smucker, The Colombian Coffee Growers Federation, and many more, we were able to overcome these challenges and create a solution that not only adds transparency, but also creates tangible benefits for the farmer.”

How it works

By easily scanning a QR code on the bag of coffee, their device will route them to the Thank My Farmer website, which provides information about where the coffee was grown, processed and exported, and the location of its roast. They can also learn more about Farmer Connect projects underway to support coffee producers and their families in Colombia such as providing clean drinking water for schools; coffee seedlings for smallholder farms; school supplies for local schools; and sustainable water and agriculture initiatives. This comes at a time when more consumers are taking a purpose-driven approach to their shopping patterns and purchasing products that more closely align with their values. According to the IBM Institute for Business Value, for those who say sustainability is very important, 71% surveyed are willing to pay a premium for sustainable and environmentally responsible brands.

“We know that consumers are increasingly interested in transparency in the supply chains for the products they enjoy and we have been committed to helping promote this as part of our coffee sustainability strategy,” said Joe Stanziano, senior vice president and general manager of coffee at The J. M. Smucker Company. “Our work with Farmer Connect and IBM not only helps connect coffee lovers to the producers who provide their favorite morning drink, it also gives them the opportunity to support these hardworking smallholder farmers and their families.” 

The coffee supply chain is complex given that green coffee is produced by more than 25 million smallholder farmers, as opposed to the larger farms that are associated with delivering the majority of other commodities.  Through the blockchain platform, consumers can have access to unprecedented transparency and can participate in a global circular economy where consumers can be directly involved in the agricultural communities that produce their food and drink through donations made to farmers and communities.

This transparency is achieved by using blockchain to record data about supply chain events in the coffee’s journey; including which beans were used, when they were roasted, ports they were shipped to and beyond. Information about these events is recorded on an immutable ledger, creating increased accountability for coffee producers and their supply chain partners and helping ensure products are what they say they are. 

“Working with The J.M. Smucker Co. has been a remarkable opportunity to shine a brighter light on the work of the farmers who grow the beans,” said IBM Food Trust general manager Raj Rao. “By combining blockchain and other technologies, we can give coffee drinkers the tools they need to feel connected to the region where their coffee comes from and even support the farmers and local communities through donations that impact local organizations and schools.” 

While this particular solution caters to the coffee industry, blockchain solutions have the ability to help solve problems in a wide array of industries including international trade, finance, food traceability and freshness, mining and shipping. “Through our IBM Blockchain Platform, we also make the tools available to let companies and organizations quickly build and scale applications of their own,” says Chang. “In every case, IBM is committed to helping clients determine whether and precisely which blockchain offerings are suited to their needs and how they can best seize on the advantages of distributed ledger technology.”