At CES 2020, IBM and Farmer Connect announced a new app that uses blockchain to connect coffee drinkers with the farmers who grow the beans.
The app also allows consumers to support the farmer’s community and improve transparency from coffee sellers. The “Thank My Farmer” app is based on the IBM Food Trust platform.
Several organizations have established fair trade principles for growers, environmentally sensitive farming practices and fair wages for employees. However, the coffee supply chain has multiple steps, including harvesting, processing, packing, shipping, exporting/importing, blending, and roasting. Each participant tracks only their link in the chain and data from each step is siloed, making it difficult to track the source of the beans.
Blockchain simplifies the exchange and tracking of supply chain information and payments by creating a permanent digitized chain of transactions. Each network participant has an exact copy of the data, and additions to the blockchain are shared throughout the network based on each participant’s level of permission.
The “Thank My Farmer” app pulls information directly from the blockchain in a standardized way that can be used across the industry. It connects the coffee drinker to farmers, traders, roasters and brands. The app uses an interactive map to tell the bean’s origin story.
The new mobile application will launch in early 2020. Users in the U.S. and Canada will be able to scan QR codes on 1850 brand coffee. European consumers will be able to access the “Thank My Farmer” app through a new brand, Beyers 1769.
As the app expands in 2020, large and small companies will be invited to join, and coffee drinkers will be able to support the communities where their coffee is grown by funding local projects. Farmer Connect is currently incorporating self-sovereign identity, a form of digital identity built on distributed ledger technology, in collaboration with the Sovrin Foundation. This closes the loop on a circular economy that will support small-scale farmers and provide transparency to the consumer.
Dave Behrends, the head of trading at the coffee trading company Sucafina, founded the Farmer Connect platform in September 2019 with major coffee organizations, including the Colombian Coffee Growers Federation, Beyers Koffie, The J.M. Smucker Company, and Sucafina. IBM is the project’s tech partner.
“Consumers now can play an active role in sustainability governance by supporting coffee farmers in developing nations,” Behrends said in a press release.
Stanford researchers tested the willingness of consumers to pay more for fair trade coffee with a randomized control trial in 26 grocery stores. They found that sales of the two most popular coffees rose by almost 10% when they carried a Fair Trade label as compared to a generic label.
Blockchain in the supply chain
This is not the first time blockchain has been implemented to improve transparency in supply chains. Several industries are using blockchain to track food and raw materials through the supply chain. A major fast food retailer uses blockchain to track the temperature of meat as it moves from farm to restaurant. Minespider uses blockchain to track each step in the mineral supply chain which is similar in complexity to the coffee supply chain.
This news builds on the success of IBM Food Trust, the blockchain-based platform that allows greater traceability, transparency and efficiency for the food industry.
Wal-Mart, Wegmans, Nestlé, and four other major food providers worked with IBM to create the Food Trust network in 2016. Dozens of companies have joined since then.
With blockchain and the Food Trust, Wal-Mart can quickly trace any food products back to the exact farm. The CDC estimates that 48 million people get sick from a foodborne illness each year, 128,000 are hospitalized, and 3,000 die.
“Blockchain is more than aspirational business tech, it is used today to transform how people can build trust in the goods they consume,” said Raj Rao, general manager, IBM Food Trust in a press release.
For more, check out the CES 2020 Preview on CNET.