bext360 and the World of Blockchain Traceable Coffee

As a coffeehouse aficionado, I find myself constantly on the lookout for caffeine infused venues wherever my travels take me. Often you’ll find me in one of these places enjoying a dirty chai while cultivating a new article on Blockchain technology and the digital future on my laptop.

You can probably imagine my glee when news of a recently announced partnership appeared ushering in what is now affectionately known as the “Blockchain Traceable Coffee” movement. I just had to grab my favorite caffeinated beverage and write about it.

So here’s the scoop: On October 31, bext360, a company that builds technologies that streamline critical supply chains in emerging economies, announced two pilot programs with three partners in Africa, Europe and North America to produce the world’s first blockchain traceable coffee. I had the good pleasure of featuring bext360 in an article for Nasdaq earlier this year entitled “Innovation Percolates When Coffee Meets the Blockchain” .

Introducing the use of blockchain technology to trace payments made to coffee farmers, bext360 has partnered with Great Lakes Coffee, a Uganda-based coffee exporter and Denver, Colorado-based Coda Coffee, to launch a pilot program that traces coffee from Uganda to the U.S.

bext360 has also partnered with Moyee Coffee, the world’s first FairChain coffee brand based in Ethiopia and Amsterdam, to launch a pilot program utilizing its bext-to-brew platform to trace coffee from Ethiopia to Europe, as well as payments made to coffee farmers in the latter African country.

As you may know coffee, the second largest traded commodity in the world, is a $100 billion market worldwide. Most of the world’s coffee, however, is grown by small farmers, many of whom depend on family labor and unreliable income — often less than $2 a day, according to the World Bank. Through these ambitious partnerships, bext360 endeavors to bring more transparency to the coffee supply chain and more equity to these coffee farmers.

Building a Coffee Nexus from Eastern Uganda to Denver, Colorado

The first pilot program is currently sourcing coffee through Great Lakes Coffee in Eastern Uganda, exporting the product to Coda Coffee in Denver. During the pilot, a bextmachine, which features machine learning, artificial intelligence, and IoT is being utilized to evaluate coffee cherries and beans and grades cherry and bean quality. The machine employs blockchain technology from Stellar.org to track data about the coffee’s origin and quality while allowing for digital payments to farmers via a mobile app.

This bextmachine process is being employed in Uganda with Great Lakes Coffee farming partners depositing their coffee cherries for analysis at washing stations, where they will also be paid for their harvest. From this collection point, the product will be tracked and analyzed beginning at the washing station all the way to Coda Coffee in Denver, where the coffee will be roasted and available for purchase.

The bext360 platform enables all stakeholders — farmers, roasters, and consumers — to access data across the entire supply chain. This data enables a complete analysis to identify efficiencies in the logistics process, in addition to allowing more compensation to farmers who produce higher quality coffee cherries.

For consumers, bext360 provides unprecedented levels of transparency around origin and quality, allowing for the first time a coffee drinker in Denver to have access to data verifying that the single origin coffee the cafe sells to consumers is exactly that.

The revenue generating program with Moyee Coffee kicked off this month by sourcing coffee in Ethiopia and providing proof of living-wage payments made to the farmers, all traced and immutable within the blockchain. Moving forward, all of Moyee’s coffee will be fully blockchain-traceable from the washing station in Ethiopia to its retail and wholesale customers in Europe. The collaboration with bext360 makes Moyee the first European coffee brand to introduce fully blockchain-traceable coffee.

Moyee will be providing confirmation data from the producers and farmers at the different points of collection, which will be inputted into bext360’s bext-to-brew platform which is built on blockchain technology from Stellar.org. All of this coffee information — from origin, quality, to purchasers to payouts — are recorded on a blockchain in bext-to-brew platform.

The ledger is designed to help keep down overhead costs — replacing paper carbon copies and other inefficient record-keeping methods — while making the financials easier to audit. For consumers, bext360 provides unprecedented levels of transparency around origin and quality, allowing for the first time a coffee drinker in Europe to pull up this data and verify exactly where their coffee was sourced.

At the various points of collection, the bext360 platform instantaneously creates crypto tokens, which represents the value of the commodity. As the commodity flows through the entire supply chain, new tokens are automatically created to represent the commodity in its developed form.

By way of example, when a coffee cherry enters the supply chain, a token will be created to represent its quality at the first level. As it continues through its lifecycle in the supply chain and becomes green coffee, a new token will be created at each node of the supply chain and will be exchanged with the older token, in order to represent the commodity in its new form.

bext360’s tokenization technology, which is currently patent-pending, can be used to drastically reduce the transaction cost of global commodities.

For example, these tokens can be used for inventory valuation, and smart contracts can be created and utilized against these tokens.

Currently, the certification process in supply chains is extremely costly. Once a product arrives at each point of the supply chain, an inspector must physically examine the product and ensure that the product is what it says it is. For coffee, every batch needs certification papers to move along the supply chain, from one port to the next. The bext360 platform provides fully transparency and immutability, which can eliminate this costly part of the supply chain.

Moyee Coffee founder Guido van Staveren says that the Blockchain is the next big step in his company’s FairChain coffee revolution, proving that there is an enormous demand for radically more honest and transparent coffee. Says van Staveren: “The bext360 platform changes the game entirely. Its blockchain technology brings unprecedented transparency to our FairChain and its crypto-tokens enable us to pay our farmers immediately and directly. Smart technology used to benefit the men and women who produce our coffee. Finally!”

Says Daniel Jones bext360 founder and CEO:

“We’re beyond excited to be launching our pilot programs with our Moyee Coffee, Coda Coffee and the Great Lakes Coffee. It’s great on many levels for us — firstly, it’s our first production and revenue producing implementation of our platform, which will produce the world’s first blockchain traceable coffee supply chain

Secondly, this partnership signifies a significant step towards fulfilling our vision of using the most cutting edge technology to bring consumer and farming communities together to improve product quality, community livelihoods, as well as the consumer coffee experience.”

Jones Speaks

In an detailed interview conducted with Jones via email, he talks about the exciting new world of traceable coffee, industry trends impacting bext’s strategic approach, and what he sees on the horizon for his rapidly emerging company.

What exactly the phrase “The World’s First Fully Blockchain Traceable Coffee” mean?

It references the fact that our pilot programs are the first to track the entire coffee supply chain (from the farm, all the way to where the coffee will be roasted and sold to consumers) using blockchain technology. Starting with the collection process, the coffee will be tracked through all nodes of the supply chain. These nodes include warehousing, transportation, quality inspection, and processing. This data will be tracked in bex360’s bext-to-brew platform, which utilizes blockchain technology from Stellar.org. bext360 utilizes the Stellar network, a distributed, decentralized protocol for real-time transactions, to record timestamps, value or amount. In addition, this process will all parties involved in the transaction — companies, farmers and coops — to access the data transparently, with farmers eventually being paid in real time.

Why the choice of The Great Lakes Coffee, Moye Coffee and The Coda Coffee to partner with?

Great Lakes Coffee, Moye Coffee and Coda Coffee are all forward thinking coffee companies that care deeply about fair trade and helping producers in developing countries achieve better trading conditions, increasing their general welfare, and to promote sustainable farming practices. They are also interested in satisfying the demand of their customers for fully traceable ethical coffee.

Can you share in depth about the aforementioned bextMachine that has been described as the Coinstar for coffee?

The bextmachine is similar to Coinstar, but uses machine learning, artificial intelligence, and IoT to evaluate coffee cherries and beans and grades cherry and bean quality. Coffee farmers load their daily haul — usually about 30 kilograms — into this machine that is equipped with sensors and optical recognition tech that sifts and sorts coffee cherries. This automated appraiser assigns each a grade based on quality (bigger and riper is generally better). The machine then links this output to special crypto tokens tracking the produce across its lifespan.

What 2–3 emerging trends are currently informing bext360’s strategic decisions moving forward?

There are four macro trends that have influenced us to start bext360:

1. bext360 builds upon the fundamental shift in mobile access, microfinance, and mobile/digital payments in developing countries.
2. The technology, such as blockchain and AI/machine vision and IoT, that are necessary to create bext360’s digital first solution to improve supply chain efficiency and improve a farmer’s income and livelihood and increased visibility to consumers, is available and accessible.
3. Coffee demand is likely to rise almost 25% in the next five years. In the US, specialty or premium coffee accounts for 55% of the total market value of $48 billion USD. Globally 14,000 cups of coffee consumed per second. 14,500,000,000,000 (14.5 Quadrillion) coffee cherries harvested yearly.
4. According to US Foods authenticity is key for the millennial generation. Millennials are seeking sustainably sourced ingredients, and 65% enjoy foods that are natural or organic. 72% of Millennials in the UK are willing to pay more for products from companies committed to positive social and environmental impact.

Finally, what is your greatest hope and vision for bext in the next 12–18 months?

In the next 12 months, we hope to provide a solution that will satisfy all of the constituents in the coffee supply chain — the farmers, the intermediaries and the consumers. We hope to be up and running in three countries.