Field Guide to the Blockchains of Coffee

GeoCertify has been working with Starbucks for 6 years to develop traceability solutions for the coffee industry.

Recently we have seen an explosion of blockchain “solutions” across the supply chain management industry in general.  The coffee sector is seeing its fair share.  Many are proclaiming the first “farm-to-cup blockchain” solution.

How can we assess these claims in relation to the realities of the coffee industry?

The coffee industry represents the largest and most complex supply chains in the world.  Coffee is often said to be the second most highly-traded commodity in the global economy, and nearly half the countries in the world are signatories to the International Coffee Agreement.

In a series of posts, I’ll propose several metrics to help identify the species and understand the anatomy of a blockchain traceability solution for coffee.  First, a “Field Guide” to blockchain solutions we’re currently spotting in the coffee world:

 

Family Description Example
Coffee Crypto Over 1500 crypto-currencies have been launched, often addressed to a special purpose or market sector.  Several target coffee, purporting to “solve” the coffee supply chain issue by providing a special crypto-currency trading platform.

Characteristics:

  1. Cryptocurrency or “tokens”;
  2. “Takes out the middle-man;”
  3. “Takes out the bank.”
Crypto-N-Kafe
Textbook SCM Supply chain management (SCM) has emerged as a prime target for blockchain advocates, and “textbook demos” have emerged to show off the power of “smart contracts” and serve as a training exercise.  It’s no surprise these materials are being modified and advanced as “solutions.”

Characteristics:

  1. Emphasis on smart contracts;
  2. “Takes out the middle-man.”
IBM Coffee Demo
Commodity Blockchain Serious efforts have been mounted to apply blockchain technology to food supply chains.  These legitimate efforts are acknowledged to be in the very early phases of development.  They tend to focus on commodity markets with well-developed supply chains.

Characteristics:

  1. Emphasis on traceability–watch for aggregation and forward-traceability;
  2. Emphasizes risk management benefits;
  3. Applied across commodity sectors;
  4. Demo or early phase deployments.
IBM Food Trust
Traceability First Players in the commodity trading sector have recognized the value of traceability over the years and have developed or adopted solutions, viewing this as a competitive advantage.  We refer to these as “Traceability First” solutions since they were developed prior to blockchain.  Some are moving to add blockchain authentication to an existing solution; others prefer to start a fresh solution based on blockchain.  These applications tend to show much greater comprehension of the coffee industry, but are usually advanced as proprietary solutions aimed at gaining competitive advantage via internal efficiency and market differentiation. Louis Dreyfus

 

The difficulty of developing a blockchain traceability solution for coffee is not the blockchain; it’s everything else.

 

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