Coffee with blockchain for fairer trade

Coffee with blockchain for fairer trade

Blockchain can guarantee not only the quality of the coffee we drink but also the conditions in which it has been produced. Credit: Jo Lanta.



Coffee is consumed in many forms: black, espresso, decaffeinated, cappuccino or with milk, and comes from many countries including Brazil, Colombia, Costa Rica and Ethiopia. Millions of people around the world enjoy different types of coffee every day and it only takes a few minutes to drink a cup. But from the time the beans are grown until they reach the final consumer, they travel a long way. Demonstrating to a customer that the coffee they are drinking is of good quality and has been grown in a given country under fair working conditions is a challenge. Blockchain technology can serve to guarantee that trust, both to the final consumer and to the rest of the participants in the process.

Coffee is the second most valuable asset exported from developing countries after oil. It has traditionally been grown in authorised and controlled territories. It is then harvested, carefully stored to maintain its qualities, processed, branded, packaged and distributed under the supervision of enforcement agencies.

"Currently, no technology is used to help certify unequivocally that any of these steps have taken place. Consumers have to have faith that the coffee they are consuming is, for example, 100% Colombian," says Roberto Díaz Bartolomé, leader of the Blockchain Center of Excellence at UST GLOBAL. This means that participants in the process cannot check the status of coffee in real time.

IBM has developed a demo to explain how a blockchain network would change this situation thanks to the greater traceability of the product, increasing the degree of confidence on the part of the final consumer. Blockchain is a database of which all users keep a copy. In other words, it is an immutable logbook that contains the complete history of all the transactions that have been executed on the network. In this way, we would have at our disposal all the information about coffee, from the moment it is planted until it reaches the cup we are drinking.

This demo developed by IBM allows through a map to track all operations in real time. Credit: IBM.

This map shows the different transactions that take place in the coffee market. The icons of the coffee plants represent the growers of the beans. The cups of coffee represent the buyers of the beans, who then get money from selling cups to customers. Each airplane represents a shipment of the merchandise from the place where it is grown to a specific destination. The drawings of a rolled-up document show certificates issued by organizations that analyse whether growers meet environmental or fair trade standards, and by gastronomic critics that the coffee tastes good.

All of these operations must follow prearranged rules between the parties through an intelligent contract that no organization can unilaterally change. Anyone who wants to buy coffee beans would do so by means of this intelligent contract. To do this, you would set the quality of the beans you want to buy and the quantity and price range you are willing to accept. Upon doing so and finding a producer who accepts your terms and conditions, the agreement would be recorded in your purchase history.

Reduce fraud

Ignacio López del Moral, in charge of regulating new digital business models at UST GLOBAL, explains that "the most important characteristic that blockchain provides is the integrity of the information, that is, eliminating the ability to alter or manipulate it." As the logbook is immutable, the participants in the process can trace the lineage of the shipment of coffee beans and have a guarantee of its quality.

"Blockchain would drastically reduce the probability of fraud," says Díaz. With this technology, it would be possible to certify "that the crops have their origin in the authorised lands of the coffee zone, that the quality tests have taken place which check, among other aspects, the humidity of the beans or the sensory qualities of the coffee, or that the conditions of temporary storage after threshing are the correct ones."

Knowing that the coffee we drink has been cultivated on authorised lands and under right working conditions would be possible thanks to the blockchain. Credit: Maren Barbee.

Another problem in coffee plantations is the lack of labour contracts, forced labour and low pay. The first step is to document the workers. Once each employee has an identification of trust represented in the block chain, plantation owners can create and register a contract that specifies, among other things, working hours, wages and working conditions.

The use of blockchain in the coffee supply chain is still in its experimental stages. "The psychological barriers to adoption are high, as there is a false perception that each entity loses its sovereignty," explains López. Despite this, there are already some initiatives underway with coffee and other foods. IBM is collaborating with the Brooklyn Roasting Company to track Ethiopian coffee beans and Starbucks has announced it will conduct a pilot program. In Spain, the Coren farm already uses this technology to track the movements of its free-range chickens from birth until they reach Carrefour supermarkets. Perhaps soon, when you enjoy a cup of coffee, all you will need to do is scan a QR code to see the route it has travelled since its origin.

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Tungsteno is a journalism laboratory to scan the essence of innovation. Devised by Materia Publicaciones Científicas for Sacyr’s blog.

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