Coffee Industry Taps Blockchain for Smart Sourcing Management

Consumers increasingly demand fair trade and sustainable products, and coffee is no exception as drinkers around the globe want greener beans. The Thank My Farmer app uses IBM’s blockchain technology for intelligent supply chain management, allowing growers, suppliers, distributors, and customers to track where their favorite morning beverage originated.

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Image credit: IBM

Over the past several years many consumers have begun to base purchase decisions less on price and more on personal beliefs. Consumers want to buy products that align with their values, and they often are willing to pay extra for it.

According to Nielsen research, 66 percent of global consumers are willing to pay a premium for sustainable goods, and that number climbs to 73 percent for millennials. Companies that recognize and support this trend can earn brand trust and loyalty from their consumers.

One of the most popular beverages is coffee. According to data collected by IBM, coffee drinkers today consume more than half a trillion cups per year. Baby boomers drink the most coffee, and nearly half of people aged 18-24 are coffee drinkers. Millennials, however, are more concerned with where their beans originate, so supporting the consumer demand for social responsibility can be key to creating brand trust.

Tracing from Crop to Cafe

IBM is helping some coffee drinkers ensure their java originates from sustainable farms. The J.M. Smucker Company, in partnership with Farmer Connect, is using IBM’s Food Trust blockchain technology to allow customers to trace the path of its 1850 Coffee from farm to table.

Using a mobile app, consumers can scan the QR code on a bag of 1850 Coffee, which redirects them to the Thank My Farmer website, operated by Farmer Connect. The Thank My Farmer site provides a brief description of the product and full transparency through the supply chain. Consumers can see where the coffee in that specific bag was grown, processed, and exported.

Unlike some commodities that are produced by a few large farms, green coffee is grown by more than 25 million smallholder farmers, making the supply chain difficult to track. IBM’s blockchain technology is used by all parties in the coffee supply chain, providing a way for them to exchange and track information and payments in a permanent digital record. It records each step through the supply chain, including which beans were used, when and where they were roasted, and what ports they were shipped to.

Building Trust

Because blockchain technology creates a permanent, unalterable record of activity, it ensures accountability from all parties involved—and customers can sip their coffee knowing it actually is fair trade or sustainable.  

Each party can access an exact copy of the data and new blockchain updates are shared based on the permission level of each participant. Not only does it allow farmers, wholesalers, traders, and retailers to interact with the real-time data, now consumers can trace the origins of their coffee.

The Thank My Farmer application displays the information on an interactive map the consumer can follow. The app also allows consumers to learn more about the coffee growers, traders, roasters, and brands. Information about other sustainable projects, many in the same communities as the coffee farms, is also available, and people can choose to donate to those causes directly through the app.

Farmer Connect hopes the Thank My Farmer app will not only allow consumers to follow the journey of their coffee beans, but also will connect coffee lovers to the smallholder farmers who grow them. In the era of the purpose-driven consumer, that connection can translate to brand loyalty.