We all love the nutty, chocolatey aroma of coffee. And nothing starts the day better than a cup of coffee made from finely roasted coffee beans. There is a lot of behind the scene process of how these beans end up in your cup and blockchain is the newest addition to it. Yes, you heard it right! Blockchain is bringing coffee to your table.
From a humble beginning at a farm in Brazil to being transported anywhere in the world, the supply chain of coffee is complex and opaque. As there are multiple intermediaries involved in the supply chain, it becomes extremely difficult for consumers to verify the quality of coffee w.r.t. to its retail price.
Blockchain, a technology that knows no limits, has once again proved its worth in one more industry. Now the coffee supply chain doesn’t need to rely on the centralized process, which poses a risk of node failure and is less transparent. Blockchain platform brings transparency and traceability into the entire supply chain. This, in turn, helps build trust, confidence, and fairness across the entire coffee industry and end-users.
Why Does the Coffee Industry Need a Blockchain Revolution?
Over 2 billion cups of coffee are consumed around the world every day and the industry generates around US$ 200 billion annually. Unfortunately, for those who toil and sweat on the farm to bring you a freshly brewed cup of coffee at your table, it has not been a stable and profitable source of income. This is mostly because coffee is a commodity crop, one that is sold via international futures markets. So, the sale or the revenue does not necessarily reflect the true production cost of individual farmers. This gives a clear picture: While the cost of a cup of cappuccino has grown 150% over the past two decades, the revenue earned by farmers for one pound of beans has not changed at all and in some regions has even gone down. Thus, the coffee supply chain needs a complete overall through transparent, efficient, and win-win economic transactions.
Using Traceability to Boost Quality Assurance
According to a 2021 study by a research institute in India, roasters and traders regarded the coffee’s sustainability as being 100% traceable, social, economic, and environment-friendly. Moreover, 2.4% of the survey respondents wanted to know about the sustainability, prices, and market access of coffee. The study highlighted the lack of knowledge among roasters and traders about the traceability of their coffee. This suggests that there is a dire need to improve the transparency and efficiency of the coffee supply chain.
The traceability features in blockchain technology can be employed to enhance the quality assurance of coffee. The supply chain has many stakeholders and is often plagued with a disconnect between them. This often leads to inefficiencies and waste. Blockchain can be used to track the movement of coffee beans and other products throughout the supply chain. It facilitates better coordination between various stakeholders to enhance the efficiency of the supply chain. Blockchain also increases communication and collaboration between stakeholders, which ensures that you get the best quality coffee in your cup.
A blockchain-based traceability solution integrates data obtained from various IoT devices used in the supply chain. Smart contracts execute and keep track of transactions. Traceability can also be used to record and maintain all product interactions in a ledger. This helps to trace the entire journey of coffee.
Delivering Full Transparency in Supply Chain
While traceability offers you a clear view of the journey of coffee, transparency about the quality and origin of the coffee helps build trust in the supply chain. Blockchain can be used to tackle the profit imbalance in the coffee supply chain. Transparency in the origin and quality of coffee not only benefits roasters and distributors but also makes consumers more loyal to a brand of their choice. In such a scenario, consumers may be willing to pay more for coffee that is sustainable, traceable, and fairly purchased.
Thus, full transparency in the supply chain ensures that farmers are compensated fairly. It also helps uncover any discrepancies or unsustainable practices in the coffee supply chain. With the rise in consumer awareness regarding sustainability, manufacturers and retailers are becoming more transparent about their sustainability efforts.
Meeting Certification Requirements with Blockchain
Blockchain streamlines data collection and sharing, quality assurance, and coffee processing to improve the value chain. It offers coffee farmers a secure and easily accessible way to store and receive certifications. Blockchain can be employed to record critical farming operations including birth, vaccinations, sale, and logistics, and track crop inputs and fertilizers. It can be integrated with AI and satellite imaging to offer data analytics.
Blockchain also aids in enhancing the financial capabilities of farmers. It can help farmers manage their loan and insurance documents. These features aid farmers to focus on the quality of their products and expand their presence, thereby increasing their profitability.
Conclusion
The coffee industry in many countries is not yet fully digitalized. Coffee certification is not widely used as a sign of sustainable production although it helps farmers boost their revenues. Such scenarios have adversely impacted producers and growers while other members of the coffee supply chain have escaped comparatively unscathed.
The use of blockchain can help streamline the coffee supply chain and facilitate greater transparency and efficiency. It will help lower operating costs and improve the financial conditions of coffee farmers by offering fair trade and price equality for all stakeholders. The adoption of blockchain in the coffee sector will offer a safe and impenetrable environment for the exchange of money and goods. Additionally, it will guarantee the legitimacy of transactions. This, in turn, will promote sustainable development in the overall coffee industry. With farmers and other stakeholders fairly compensated through the traceability and transparency features offered by blockchain, you and I can feel better about every sip of hot or cold coffee we drink!