Solution Plan
Offer reasonable prices to producers
Coffee is grown by about 25 million producers worldwide and consumed by 500 million people. Producers are usually small farmers with less than 10 hectares of cultivated land. Only five companies (Nestle, Craft/Mondelize, Sally, Proctor & Gamble, and Chibo) dominate 45% of the total coffee roasting, while three companies (Numan Group, Ecom, and Volcafe) account for half of the coffee bean trading volume. These companies, which determine the global supply chain, increase profits to return to them and force farmers to cheaper and cheaper coffee beans. The price of coffee-related products bought by consumers on the other side of the supply chain is also rising. Almost the same phenomenon occurs in the production and distribution of many agricultural products traded worldwide, such as cacao, cotton, sugar cane, and bananas.
Therefore, coffee farmers, unions, and processing companies in the producing country gradually focus on producing high-quality coffee to overcome this reality. Roasters in consumer countries do not go through multiple intermediate sellers but reduce the cost of complex distribution stages while paying reasonable prices through direct transactions with them. Specialty coffee, which is not significantly affected by market prices on commercial product exchanges such as New York and Addis Ababa, can not only spread a new coffee culture to consumers but can also catalyze farmers in mountainous areas to focus on quality control.
In addition, the social responsibility of companies and consumers is gradually spreading to solve these serious social problems, and many companies are highlighting the creation of shared value (CSV) management and consumers' ethical consumption propensity to purchase.
Blockchain
The coffee bean supply chain is very complex and contains several interests. The supply of coffee beans generally consists of several stages, and the actual distribution process is expanded by several intermediaries, it is possible to check the type, quality, and origin of beans, but uniform standards are still insufficient and most of them are determined by one-sided choice by importers from each country. Therefore, it is difficult for consumers to be provided higher levels of coffee and various qualities, and it is difficult to offer reasonable prices to producers. Therefore, to develop into a form of business that maximizes transparency and increases versatility, which is the core of blockchain technology, through one-stop production and distribution processes, it is essential to combine with blockchain technology.
Based on information data on the production and distribution of beans, the blockchain platform can enable the production, quality, rate inquiry, shipment, notification service, and smart contracts of beans. Consumers will be able to track the distribution process of products throughout the supply chain in real-time and pay and deliver products between unfamiliar parties if digital identity, certificates, and smart contracts are provided. In addition, giving coffee bean producers unique identification values with NFT technology to protect producers' products can provide a fast and fast market entry environment for both coffee bean producers and consumers and create reasonable benefits and rewards.
The reason is that by generating information on all tracking processes in which coffee beans are delivered to consumers, the blockchain market can increase producer income by reducing transaction brokers, and the information formed in the blockchain provides transparency to quickly build trust between producers and consumers.
As explained earlier, the goal of "CTN" has a grand mission and goal to connect all industries that make up the coffee bean tracking ecosystem with blockchain technology so that fair trade can be realized between producers and consumers in a true sense.
Last updated
