Starbucks announced on March 21st that it is planning to use the blockchain technology to increase the transparency of the supply chain from the place where the bean is farmed to the cup.
The pilot project called “bean to cup” aims to use the technology to enhance the traceability of the beans during the whole process. The Seattle-based coffee shop giant will partner with farmers from Costa Rica, Colombia and Rwanda to log and share real-time information between the farmers and the coffee drinkers. This will give a financial opportunity to the growers.
Kevin Johnson, chief executive officer at Starbucks mentioned on stage at the 2018 Annual Meeting of Shareholders in Seattle,
“Over the next two years, we will look to demonstrate how technology and innovative data platforms can give coffee farmers even more financial empowerment. […] We’ll leverage an open-source approach to share what we learn with the rest of the world.”
A blockchain is a secure and transparent decentralized ledger that records and verifies transactions in real-time. The transactions can’t be altered since the information on the blockchain is distributed across every node on the network, instead of being stored in one single location as the current centralized networks do.
The executive director of the Costa Rican Coffee Institute (ICAFE), Ronald Peters mentioned the importance of the technology in a statement.
“Many years ago, our controls and transactions were all done by paper, and today we are even talking about blockchain technology. This shows us that, more than being at the front of every technological advancement, having the information and being flexible and adaptable are important.”
Arthur Karuletwa, the director of traceability at Starbucks, said that traceability is important and that using the blockchain would be one of the first major innovations in the current coffee industry.
“This could be a seismic change in an industry that hasn’t had much innovation in the way coffee moves across borders and oceans. At the same time, I’ve met farmers who have very little by way of possessions, but they have a mobile phone. Digital has become the economic engine of this century, and traceability preserves the most valuable assets we have as human beings – our identity.”
The Colombian Ambassador of the U.S., Camilo Reyes believes that the traceability technology will bring major benefits both on a personal and on an economic level for farmers.
“Coffee has always stimulated economic growth and transformation in Colombia — and with the Starbucks coffee ‘bean-to-cup’ traceability pilot project, it can do even more for our country,” he reported. “By giving Colombian farmers and the Colombian Coffee Growers Federation (FNC) a face in the marketplace, this project will help empower farmers and their families and provide a boost to local communities and our economy. We always knew little coffee beans packed a big punch – and now we will have the ability to track their boldness, thanks to Starbucks.”