By Kim Westerman
There’s much recent talk about the importance of traceability in the coffee supply chain. With the release of the new Starbucks traceability app, customers are able to track back each coffee’s journey to the farm on which it was grown. But this technology is not all that groundbreaking, and what it omits is actual transparency: the farmgate price.
Enter iFinca. In 2019, Alexander Barrett founded this coffee supply chain platform that uses blockchain technology to provide coffee farmers in Colombia direct access to the supply chain in order to ensure that a fair price is paid for their green coffees. We spoke with Barrett about what makes iFinca a revolutionary tool in improving the lives of coffee farmers.
STiR: What distinguishes iFinca from other coffee supply chain platforms?
Barrett: Our platform is focused on farmers and providing solutions to some of the challenges they have faced for decades. By connecting the farmer directly into the value chain, we can begin to see impactful change at the farm level. We focus on the price farmers receive for their coffee as a very important data point. This is critical when assessing living income, cost of production, and really understanding the challenges farmers are facing.
iFinca is a native app, so transactions can be done offline, and we are completely independent of the supply chain — we don’t buy or sell coffee. We simply disclose the all-important disclose the farm-gate price. The app connects farmers as equal stakeholders using S.S.I. and allows them to partake in the final farm-gate price.
STiR: How did the concept for iFinca occur to you, and how long did it take you to implement the vision? Can you describe the process?
Barrett: While in Jardin, Colombia, I visited a coffee farm – or finca – for the first time, and then joined the family for a home-cooked lunch. After eating a traditional bandeja paisa, with my Spanish teacher as an interpreter, I took the chance to ask the farmer some basic business questions about how he sold his dried and processed coffee (something I later discovered was called parchment). However, I wasn’t able to get the answers I was looking for. I left the finca a bit confused that the farmer had no influence over the pricing of his product and that there seemed to be a disconnect between the farmer and the coffee supply chain. Maybe this farmer’s story was an exception to the rule, I thought.
But the, I heard the same story at every farm I visited: producers were not connected to the supply chain as equal stakeholders and had no control over the selling price of their crop.
I had trained as an architect, not as a coffee professional or programmer. Yet, the situation reminded me of a case study about the fishing industry, in which the introduction of the mobile phone in 1997 allowed for a better exchange of market information, which, in turn made, markets more efficient. Everyone benefited: on average, fishers’ profits rose by 8%, while consumer prices fell by 4%.
So, this gringo asked himself: why not design a mobile app that connects producers to the coffee supply chain and thereby empowers farmers, roasters, traders, and consumers alike?
STiR: Can you explain how technology is at the heart of iFinca’s operational structure?
Barrett: We have built a native app and online platform that digitalizes the process in the coffee supply chain and records data in a blockchain ledger. Our platform acts as an ecosystem that other platforms can plug into in order to add data to an order, extract data on an order, or provide other services. These can include NGO’s, quality assessors, government entities, financial institutions and others. We also provide each farmer with a unique digital identity.
STiR: Why is traceability key to the wellbeing of coffee farmers?
Barrett: Through traceability and transparency, we can have accountability and work toward creating a more sustainable ecosystem for farmers. For example, if a customer is presented with a choice of two identical coffee products at a similar price range with one exception engagement and a verifiable impact on one of the products which product will the consumer gravitate towards? If we can help consumers understand which coffees were sustainably sourced, then we can increase the impact made on the farmers.
Traceability is not the best key to farmer wellbeing, but transparency – the sharing of the farm-gate price, allows buyers of coffee to decide if the coffee is ethical and aligns with their values.
STiR: How does this system work on the ground in Colombia? How do farmers find you, or vice versa?
Barrett: We have a great network of cooperatives, clusters, organizations, and exporters who are interested in seeing the farmers receive higher prices for their coffee. We have been using this network to share more about iFinca with farmers. Additionally, prior to Covid, we were invited to multiple events to speak directly with farmers about the platform.
STiR: Is there a quality-control procedure?
Barrett: Think about iFinca as an operating system. There are amazing coffees that have been sourced over the platform and coffees of lower quality. But the increased visibility in the supply chain allows buyers to track things like quality directly from the source. We encourage buyers to use their same supply chains and simply add the technology element. In these cases, quality-control procedures are already in place.
STiR: Can potential green buyers request samples?
Barrett: Yes, the platform allows for samples to be requested at multiple points in the supply chain.
STiR: On average, how much more are farmers who work with iFinca earn per pound of green coffee?
Barrett: In most cases farmers are receiving over 85% more than what they normally receive. They receive on average US$2.27/lb. – this farm-gate price, not FOB.
STiR: Do you work with roasters to promote the traceability component?
Barrett: Absolutely. Some of the roasters and coffee shops we are working with are very excited about sharing with their customers a new level of traceability and transparency.