In the US alone, a survey conducted by the National Coffee Association shows that 64% of Americans above the age of 18 drink a cup of coffee a day. It is no surprise that Americans love coffee – count how many Starbucks you pass walking down the street if you need a reminder.
The coffee giant, founded in Seattle, has over 20,000 stores worldwide, with 65% of them being located in the US.
Blockchain to Bring Traceability to Coffee Supply Chain
The black energy-inducing beverage is even becoming increasingly popular in countries that in the past have preferred tea, such as China or India. Coffee continues to grow ever more popular, yet, many are unaware of the sustainability challenges coffee producers face.
As temperatures rise due to global warming, regions that once provided suitable conditions for coffee trees are proving harder to grow in. A lack of proper traceability practices has brought about harsh working conditions and unfair treatment. For this reason, relatively new technology is being looked toward to increase traceability throughout the sector – blockchain.
Why Is It Important to Trace Our Coffee?
Traceability is now a vital tool in coffee preparation and production as it ensures sustainability. In terms of coffee maintenance and production, sustainability can be applied not only to the methods of growing coffee but also to the farmers and their employees who produce it.
Around 120 million people rely on coffee as a means of living, many of whom reside in third-world countries such as Ethiopia. Farmers in these regions are often exploited by larger entities in order to purchase coffee beans for the lowest price possible. This exploitation is nothing new to these regions and occurred long before coffee came about.
In turn, this often causes farmers to expand coffee plantations ultimately leading to mass deforestation. It can also promote the use of low-quality pesticides and reliance on forced or cheap labor. To reduce these practices, the coffee sector requires greater transparency. And to increase transparency, there is no tool better than blockchain.
How Can Blockchain Boost Modern Coffee Traceability Practices?
Blockchain is already producing a much-needed change to supply chain management systems throughout various sectors. And the coffee industry would greatly benefit by implementing blockchain into their systems as well.
Traceability is becoming a popular issue in the coffee world. Businesses are beginning to realize that it is the first step to reducing unfair labor practices and ensuring that the origin of beans is legitimate.
Blockchain can help track coffee production from the moment a bean is harvested, up until it is ground and eventually poured into a cup. Currently, a major but hardly recognized problem that faces coffee production is forced or low-pay labor.
The main reason these types of working conditions exist is due to the fact that coffee plantation workers are often undocumented. Undocumented workers can be taken advantage of, as there is no record of their work schedule, history, or payments.
In order to rectify this problem, a blockchain can be built with the ability to upload and update coffee farm employee information. Once this type of system is coded into a blockchain, it can include information such as salary rate, scheduling, labor conditions, and contract length.
By integrating an employee management system into a blockchain, coffee farmers can use the recorded information to develop future-focused business models. Although this may seem like a viable method of reducing harsh or unfair labor conditions, its success relies upon adoption and standardization through the supply chain.
Blockchain: A Benefit for All
Blockchain adoption will benefit the workers on a coffee farms as well as coffee farms and large corporations. More and more businesses are only dealing with beans that are produced in a sustainable manner. It is an important decision being adopted by businesses such as McDonald’s and other large corporations that offer coffee beverages.
This means that in order to maintain profit margins, many coffee producers and retailers will need to increase their traceability. Blockchain technology gives both farmers and retailers the tools to track each and every aspect of coffee production. This increase in transparency and automated systems decreases human error which results in a cut to spending.
It also helps when mistakes have been made in a supply chain which may result in a mass recall. As blockchains are unalterable unless given permission by a majority of the chain, they provide retailers with a valuable tool to identify where problems may have arisen in a supply chain and which beans were affected.
This gives retailers the ability to remove only affected beans from their shelves. As seen by the US E. coli outbreak of 2018, massive amounts of products are often wasted due to a lack of transparency in the supply chain.
Bringing About Change with Blockchain Technology
There is no doubt that there is a lack of sufficient traceability in current coffee production systems. This long-outdated system has led to unfair wages, improper treatment, and deforestation in regions throughout the globe.
As coffee continues to grow more popular and if things continue as they are, the cheap beverage could eventually become more of a luxury than a necessity for that 64% of coffee-loving Americans.
By adding blockchain to the supply chain, the coffee sector will improve the traceability that it so desperately needs. Blockchain putting the end of unfair labor practices is a bit of a stretch, however, it has the ability to shine a light on the issue and weed out notorious coffee producers in the process.
Ultimately, blockchain can only achieve success through mass adoption, and some may be hesitant to change. Yet it is those who adopt the technology sooner than later that will receive the greatest benefits.
Blockchain potentially has the ability to drastically improve the livelihoods of more than 120 million that rely on the wonderous bean to survive. Traceability is an important aspect to prolonging the life of all points in the coffee industry, and as previously shown through various industries, blockchain is the perfect technology for implementing better traceability practices.