Coffee’s latest roast: blockchain
Creating a transparent supply chain from producer to roaster
By Arzi Rachman | 4 minute read | May 7, 2019
Scott Tupper with Ivonne Herrera, a coffee farm manager from Guatemala
Time spent living in Central America didn’t leave Pacific Northwest-native Scott Tupper without a few self-discovered truths. One was that he loved coffee—a cortado being his choice coffee drink. Another? A discernible lack of transparency into the global coffee supply chain.
With those two things in mind, Scott and his brother Paul saw an opportunity to improve a system for an industry worth over $100 billion annually. What’s more, they saw a potential to create a new model of operations for commodities-based industries that would allow all involved parties to be rewarded for their work.
With Yave, a blockchain-based trading and tracing platform, he plans to do just that.
Transparency and traceability
To begin, Scott mapped out many of the disconnects experienced by producers once harvested beans make their ways into the hands of distributors, roasters, and ultimately, the consumer. In Guatemala, for example, coffee beans are sold at nearly thirty to forty cents below the cost of what it takes to produce them. Most farmers can’t cover these costs with the current model in place.
“We want to create a world where coffee can be de-commodified,” Scott said, while also “creating a transparent supply chain, bridging market access from producer to roaster.”
Piloted in Guatemala, the first proof of concept for Yave was built in Seattle in 2017 and currently runs on Hyperledger. Explaining the concept and benefits of blockchain to groups unfamiliar with the technology was one of the first hurdles that needed to be addressed for buy-in and support.
“I don’t even use the word blockchain when describing it,” Scott told Industrious. “It’s otherwise difficult for us to speak about what we’re doing.”
Scott often compares the coffee supply chain to a game of telephone, where a message starts and is passed on from person to person. The final message is often a far departure from what was initially said.
Scott uses that analogy when he explains the technology to farmers and producers. Blockchain, he tells them, is a cheat for the game of telephone to ensure that the message stays the same when moving from user to user.
By implementing a smart ledger to a coffee supply chain, Yave offers Guatemalan farmers and coffee consumers transparency and traceability into the origin of their beans. It also allows them to earn their fair share of revenue generated from sales.
Paul Tupper, Scott’s brother, is leading efforts to reward farmers even beyond the initial bean purchase. He does that by selling traced coffee through Onda Origins, their coffee company.
Using Yave’s blockchain platform to trace where goods have traveled, the pair have been able to connect growers to drinkers, while giving the growers a bonus for sales of their roast.
“We’re giving more money back to farmers—a 40 percent average increase,” Scott proudly said.
The pair often brings coffee farmers from Guatemala to Seattle to give them greater insight into the overall supply chain process. This gives them the chance to demonstrate how blockchain works, and even meet some of their coffee fans.
For the Tupper brothers, a driving force for building Yave was connectivity between the parties who grow and consume one of the world’s popular drinks. They want coffee drinkers to know the source of their beans, the farmers, and how purchases can impact them.
“This is who your dollar is going to,” Scott said.
The brothers’ work hasn’t gone unnoticed. Efforts to fairly compensate have earned Yave the trust of farmers in the country and even ANACAFÉ, the national association of coffee growers for Guatemala.
The upcoming annual Producer & Roaster Forum in Guatemala will host the world’s first coffee blockchain auction this May.
“As Paris Fashion Week is to designers, so are coffee auctions for high end coffee roasters visiting Central America,” Scott said.
Moving forward, Yave plans on tracking the transactional value of 25 of Guatemala’s best coffee lots, farm to cup. They’ll do so using a new platform built with IBM Blockchain.
It’s an ambitious undertaking. And for Scott, it’s a reminder of the different motives for a farmer to use blockchain, compared to roasters or distributors.
With all he and his brother have achieved, Scott believes that more can be done.
“Coffee is in a crisis,” he said as on his way into his office. “People love to talk about traceability, but we need to actively engage actors in trade.”
For the Tupper brothers, the development of new ideas for the value chain are sorely needed to transform the future of commodity-based industries, which often times have colonial underpinnings and are now faced with receding business practices.
“Let’s work to make farmers vendors in a global marketplace,” Scott said, “instead of just objects at the end of a value chain.”