Perhaps now more than ever, people want to support the small businesses, organizations and brands they really love and respect, even when these goods are produced a world away.
One product that makes this particularly challenging is coffee. Though, Americans consume 400 million cups of coffee per day, the most in the world, it is generally impractical or impossible for these consumers to have any interaction with coffee producers, who are predominately located in small holder farms in tropical climates. Evidence suggests consumers are eager to change this: two-thirds of coffee drinkers between the ages of 18 and 24 say they want to drink coffee that is sustainably and ethically produced and sourced.
The distance from their end consumer also means that coffee farmers have traditionally had a difficult time getting credit for the work they do, and their livelihoods are highly predicated on fluctuating prices for beans. In a tough year when prices are low, they may not make much money at all: in 2018, for example, the average profit margin in coffee farming across the industry was -2 percent. The average household income for smallholder coffee farms, who produce a majority of the coffee beans, is less than USD 3,000 per year. Even when you spring for $5 cup of the good stuff at your local coffee shop, the farmer who grew the beans may see a nickel of the revenue from that transaction.
These reasons and more are why we have been so excited to work with Farmer Connect, a traceability platform built on IBM Blockchain and designed to increase the visibility and fairness of the coffee supply chain, particularly as it regards the fate of smallholder farms. In January, Farmer Connect, IBM, and a group of leading members of the coffee industry including J.M. Smucker unveiled Thank My Farmer, a consumer-facing capability that allows consumers to trace the origin of the coffee they use to its original source, learn about the beans and production process, and even support local initiatives aimed at improving coffee farmers’ livelihoods. Thank My Farmer can connect coffee drinkers to efforts to fund clean water infrastructure, seedlings, and agricultural equipment in the regions where their coffee has been grown. One of these projects has already been fully funded.
Tracing 1850® 100% Single Origin Colombian Coffee to the region
Today we are equally excited to announce a new initiative that will make blockchain-traced coffee significantly more accessible to American consumers. From the beginning, J.M. Smucker, the parent company of iconic coffee brands including Folgers and Dunkin Donuts, has been intimately involved in developing the Farmer Connect platform to ensure it meets its mission to help increase traceability, efficiency and fairness in the coffee supply chain. And starting today, detailed information about 1850® 100% Single Origin Colombian Coffee will be made available to consumers through QR codes affixed to its packaging.
The QR code will route coffee drinkers to the Thank My Farmer web-app where they can learn about where 1850® Coffee beans are sourced and the journey they took before reaching your cup. They can also easily access and help fund social entrepreneurship on the ground by contributing to projects helping coffee farmers in the local communities in Colombia where the coffee is grown.
This is only the beginning. By moving single-origin coffee onto a blockchain-based tracing platform, we can set the groundwork to begin tracing blends and multi-origin coffee, which makes up a large majority of the coffee we drink. And by involving coffee farmers and incorporating a secure, sovereign digital identity for them onto the platform, we can even make it possible to tip the very farmer who grew the beans in your cup. Taken together, we hope that this can create a true circular economy, one where people are directly connected to the farmers and makers who create the products they use, whether they’re around the corner, or housed in a rainforest.