Coffee passes through many hands on its journey from farm to cup, and every step adds on an extra layer that can make traceability a little bit harder. Alongside the growing movement within the coffee industry to increase transparency, consumers across industries are also beginning to ask for more. “Where does this come from, who makes this, and are they fairly compensated?” are common questions that consumers ask when looking to shop with more ethical businesses.
This growing demand for traceability and transparency is good for coffee growers, as it can help prevent them from being exploited. While Fair Trade certification has helped set a standard for safer working conditions and has helped increase the price farmers are paid per pound, certification can be costly and inaccessible to smallholder farmers. Fair Trade coffees can also have different levels of quality and be either commodity or specialty. Because specialty coffee is categorized and sold because of its distinctive flavor characteristics, it is of a higher quality and can command a better price. In general, people assume that specialty pays more. But what structures are in place to really demonstrate to consumers that Fair Trade, and Specialty Coffee specifically, do indeed pay a fair, liveable wage?
Blockchain is a relatively new technology that uses math and cryptology to create data records that make it incredibly difficult to tamper with. It’s a technology that can be used in many areas including the supply stream, and there are efforts being made to use blockchain within the coffee industry. Our green buying team started learning about blockchain and its potential use in coffee several years ago during a presentation. At the time, we found the information very interesting, but we had a hard time understanding how it could be used today and how we can be a part of it. And so, we’ve simply been keeping our ears open to any developments or updates.
Supporters of blockchain in coffee say that this technology can be used to ensure that farmers will earn a better wage. And while we don’t doubt it, we’re not quick to jump on the bandwagon if the conversation of its use is being led by companies on the consuming end. So, when Catracha Coffee—a coffee producing company that works directly with farmers in Santa Elena Honduras—told us they were participating in a Blockchain project and asked us if we wanted to join them, we said yes.
Sorting fresh picked cherries at Maria Adela’s micromill in 2019. From left to right: Adela, her cousin, Mayra, and Lowell from Catracha Coffee, and Xander, Andytown Lead Roaster.
Lowell Powell at Catracha Coffee wears many hats. He works with farmers all around Santa Elena who are a part of Catracha , visiting their farms directly, helping with moving cherry to farmers’ home processing stations, and organizes receiving green samples–just to name a few. We asked Lowell to share a little more about their involvement in this project.
Andytown: When were you introduced to the use of blockchain technology in coffee, and why did Catracha Coffee company decide to embark on this project with Bext360?
Lowell: Denver based NGO— iDE, and digital supply chain company—Bext360, won a grant to explore the use of blockchain technology on the coffee supply chain. Naturally they wanted to partner with a Denver based roaster and invited Queen City to participate. Queen City was working with Catracha Coffee for the second year, and thought we could all work together. Catracha Coffee values transparency. We do a pretty good job communicating one-on-one with our roaster partners, but the Blockchain project was an opportunity to take our collective transparency all the way to consumers, who don't have the same luxury of participating in our regular communication.
Andytown: Catracha has always advocated for coffee producers in Santa Elena and continues to work towards paying farmers more. Catracha makes two payments to producers: the first is when Catracha buys the coffee in Honduras, and the second is when the coffee is sold, in which Catracha shares their profits. With this Blockchain project, Catracha will also be able to implement a third payment that will be split three ways between producers, coffee pickers, and an emergency medical care response fund to help producers who are dealing with unexpected expenses from a medical emergency.
This third payment is essentially funded by consumers. Andytown is adding an extra dollar to the price of each bag of Adela’s coffee that is sold. Why is it important that this third payment is set up this way, as opposed to having this third payment set up as an optional payment (or tip) to Catracha?
Lowell: From the beginning, our Blockchain partners wanted the technology to improve earnings. With more verifiable information flowing to consumers with the Blockchain advances, we all saw an opportunity for consumers to directly participate. Catracha Coffee also recognized that we needed some help getting more money to the pickers and also covering medical emergencies in our community.
We intentionally avoided calling consumer participation a "tip" because the history of tipping is derived from a system of uneven bargaining power dating back to Pullman porters. To learn more listen to Umeko Motoyoshi's A Better Table podcast with Adam JacksonBey (June 23, 2020). The coffee supply chain has many inequities and we did not want to borrow terms that perpetuate the problem. Unlike tippers, we (the supply side) are specifically telling consumers the issues we want to address and the cost of participation, and not the other way around.
Andytown: You tested out this project for the first time last year with one farmer family and roasting company, and now there’s 12 farmer/roaster partners who have agreed to participate this year! What do you hope to see in having more partners involved in this project?
Lowell: We are still learning how Blockchain can support a more equitable supply chain. Having more voices in the process will make the technology better for all of us.
Andytown: Is there anything else you’d like to share?
We are grateful for the support from Anytown and the customers who take the time to enjoy Maria Adela's coffee. Stay tuned for more of the same change.
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We’re excited to be a part of this project and to learn how this technology will be useful. While we’re just in the beginning stages of this long term project, we encourage you to visit the landing page from time to time to see what updates are available. Down the road, when next year’s harvest begins, you’ll be able to see how third payment is being distributed! Click the QR-code below to visit the landing page!
