Blog

How Blockchain is Revolutionizing the Coffee Supply Chain

02 May 2019
not found

The utilization of Blockchain technology in today’s real-world business is something that every industry craves for. Blockchain technology has the potential to skyrocket the profitability and effectiveness of several businesses, and the coffee industry is no exception. While many consider it a new buzzword in the tech industry, coffee industries are already using it for revolutionizing the process of the coffee supply chain, i.e. the way of buying, selling, growing, packing, drying and outsourcing coffee.

The illustration of the coffee supply chain

Image Source: https://bit.ly/2DHql0q

The Coffee Supply Chain (CSC) comprises complex network relations between roasters, traders, processors, and farmers. The major challenges involved in the traditional coffee supply chain are traceability, visibility, transparency, and security of operations across the supply chain.  These challenges are raised from inaccuracy regarding manual processes and the involvements of several intermediaries throughout the overall CSC process. Considering these aspects, there is a need for an automated system which enables accurate, secure, and cost-effective supply chain which facilitates a fair CSC trade, and this is where Blockchain comes into the picture.

In this blog post, we will explain some crucial challenges involved in the coffee supply chain process, benefits of Blockchain in coffee supply chain management, and its future potential in the same. So, without further ado, let’s get started!

Coffee Supply Chain Challenges

With a market share of over $100 billion, coffee is considered the second largest traded commodity in the world. As the worldwide coffee demand keeps on increasing due to the increasing daily demands of purchasers, still its supply chain faces difficulties as follows:

  • Location issue: Farmers living in remote areas find it difficult to maintain production and sustainability of coffee.
  • Economic challenge: This includes low productivity, lack of market information, expensive resources, poor direct market access, and plant aging.
  • Social issue: Young farmers migration to the cities, poverty of harvesters, aging farmer communities, etc.
  • Environmental challenge: It includes changing climate conditions, degradation, and soil erosion among other factors.
  • Traceability challenge: Transaction of coffee can’t be traced back to suppliers which makes the defects difficult to eliminate.
  • Transparency challenge: It comprises several relationships such as suppliers, subcontractors, and customers. Additionally, it has an internal association function which uses its systems to track coffee products and maintain its services.
  • Market crises challenge: Most of the developing countries depend on agricultural commodities; therefore, they are exposed to any crisis in international markets. Currently, the coffee industry has more than 25 million farmers and families just depending on a single commodity.

Benefits of Blockchain in Coffee Supply Chain Management

Utilizing Blockchain technology for coffee trading means that a roaster will be able to purchase a coffee and access all data related to it – from production to delivery. Blockchain is basically used to store information about the coffee supply chain, for example from where the coffee has come, its price, who bought it, and how long it took to move it from the farm to cup. Apart from that, the following are some crucial benefits of using Blockchain in coffee supply chain management:

1. Based on coffee products, the supply chain could require many transfers of raw materials across different countries. Those transfers also require the circulation of invoices and other paperwork among intermediaries and there can be limited transparency for the end consumer. Blockchain can solve these problems by introducing greater efficiency and transparency to the modern coffee supply chain.

2. Blockchain technology can create ledgers to record the movements of every batch of coffee beans and to determine the exact point of origin. Many coffee companies are using Blockchain to support their inventory optimization software and to determine where each cut of pork will be sourced, processed, and stored on its journey to a store.

3. Another major benefit of Blockchain technology is data visibility throughout the coffee supply chain.  Due to this feature, it becomes easier for companies to share information and data with manufacturers, suppliers, and vendors. Transparency in Blockchain decreases disputes and delays while preventing goods from getting stuck in the supply chain. As each product can be tracked in real-time, the chances of misplacements are rare.

4. Blockchain stimulates real-time tracking of a product, which reduces the overall cost of moving items in the coffee supply chain process. It also offers scalability through which any large database is accessible from multiple locations from around the world. The elimination of the middlemen and intermediaries in the chain saves the risks of frauds, product duplicity and saves money too.

The Future of Blockchain in Coffee Industry

In this modern era, companies are trying to use the Blockchain technology due to its multitude of features. The supply chain management is one of the most obvious and useful applications of Blockchain technology, therefore, we can expect it to grow at a very fast pace in the near future.  The coffee supply chain is a detailed process that is difficult to encapsulate. Beyond transparency around pricing, Blockchain has the potential to revolutionize the entire coffee industry. By creating a more transparent and secure network, it could change the lives of producers. If the coffee industry embraces this technology, it could eventually lead to the decommodification of coffee and farmers would no longer depend on unstable international coffee prices.

To sum up, we can say that this invention has opened the door of success for not only the coffee industry but other sectors as well. Coffee has gone digital now and as we take the sip of freshly brewed coffee, we hope that with this platform our farmers get the right price for their produce.  If you are eagerly looking for a leading Blockchain Development company to improve your business productivity, then Debut Infotech is here to your rescue. We have a team of skilled Blockchain developers who can help you integrate Blockchain technology into your business to achieve a new height of success. For deeper insights on our Blockchain expertise, visit https://bit.ly/2GWS1k3 or give us a call at +1-703-537-5009

daljit1522818694.jpg

not found

Daljit Singh Director - Operations

At Debut, Daljit and his team of consultants are focused on working with regulators, startups and large financial services organizations to design and build Blockchain based business networks. 

Related Posts

Contact us for free app consultation

Project Inquiry

Send us your requirements and we will get back to you with a free quote!

How to Contact
https://github.com/bonecms/laravel-captcha