Traceability Tools

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By Peter Keen

There’s a growing consensus that supply chain transparency is well on track to become the mainstream of the global tea industry. Traceability is the core set of tools that makes it practical.

“Transparency” is a term with often conflicting meanings. For tea, it is open information, shared communication, and provider accountability along the bush-to-cup journey. In the field of information security, it refers to the opposite: control mechanisms hidden from view and undetectable. So, the supply chain of tomorrow will be built on transparent information (open access) and transparent (protected and controlled) technology.

Traceability: From DNA fingerprinting to suppliers

Traceability must combine the open and controlled: protect and warranty the information and make it accessible to partners, intermediaries, and even competitors. A growing area of innovation here is authentication of a tea’s provenance, with DNA barcoding a new tool for capturing the unique genetic “fingerprint” of a tea. It can be accessed anywhere along the supply chain: auction buyers, customs agents, food safety inspectors, importer test labs, retailers, and even consumers.

This is immensely complex to integrate across the multiple parties involved. There are many impediments from lack of standardization of tea quality grades to reliability of claims of country of origin, counterfeiting, etc., where the “etc.” is a long, long list. Until recently consumers generally didn’t care where their tea came from or even what it contains. Now, the most discerning actively demand information on ingredients, health and safety issues – especially pesticides – and environmental impacts and sustainability and social responsibility.

One of the fastest growing concerns that is forcing attention to both traceability and transparency is “slave trafficking.” Working conditions and labor exploitation have long been notorious in too many of the tea fields. It took the abuses and disasters in garment manufacturing to bring this to consumers’ and governments’ attention. It was they who demanded accountability by large sellers and manufacturers. The California Transparency in Supply Chains Act, passed in 2010, is typical of the pressures pushing major tea brands towards transparency in worker safety and fair pay. An indicator of the challenges in implementation is that in 2016 less than a third of companies were in compliance.

Tea firms are catching up here. One of the major steps forward of the past year has been four of the major global brands publishing a full list of their suppliers. In the era of supply chain management, that was a proprietary competitive secret. Where Yorkshire, Twining and Tetley lead, the others will follow. They must. As supply chain transparency evolves, it becomes essential to brand reputation. Obviously, this demands open information used for traceability.

Win-Win relationships

Defining and collecting such information is costly; for smallholders, it can be close to impossible. In China, for example, the process for getting certified as an organic producer is so record-intensive, lengthy and expensive – and often corrupt – that many growers most meriting it don’t even apply. It’s a Win-Lose situation for them. The incentive and benefit are less than the cost. Consumers see a win from the quality certification and specialty sellers enjoy enhanced price opportunities at no cost.

Supply chain management has been dominated by Win-Lose. In the global tea market, exporters could force prices down even below grower production cost, for example. Supply chain transparency rests on a shift to Win-Win relationships. The many initiatives of the UTZRainforest Alliance, Fair Trade, Ethical Tea Partnership and other non-profit agencies to improve smallholder incomes and conditions are illustrative. 

Here are some of the major developments in traceability that are shaping transparency. They are all Win-Win.

Authentication

Given a database of samples that can be used to “train” it, an artificial intelligence (AI) neural network is able to identify the source of origin, group classification (clonal tea, varietal, processing method), and unique characteristics of any tea with at least a 95% accuracy rate. Gene profiling, DNA fingerprinting, genotyping, and sequencing are only gradually becoming part of supply chain information resources, but they are the base for addressing all the historical problems of authentication.

The Win-Win here is for the grower who can command price premiums and build provider relationships through being able to show their tea’s quality, purity, and heritage, Sellers obviously gain a win through reliability of supply and consumers by eliminating the fraud, misinformation and uncertainty that marks many online offers.

Consider questionable “imperial grade” China longjing green and dilute Darjeeling “region” black blends, and the pu’er market, where “Is this fake?” is a FAQ. Transparency offers major developments in global trade that provide Wins for growers. Ric Rhinehart highlights in this issue of STiR the price erosion that coffee growers face, with beans selling at $1 a pound but costing $2.50 to produce. Commodity tea faces these same threats. Transparency helps mitigate them.

Blockchain

Around 99% of all IT experts view blockchain as the coming foundation of digital commerce. The other 1% are contrarians by habit or under the influence of non-tea stimulants. A blockchain is a network where all the transactions among registered members are securely recorded and a ledger record permanently maintained. It’s been described as a digital birth certificate and resume for any product.

In the food industry, Walmart, Dole, Unilever, Nestle, Kroger, and other giants are partnering with IBM for a blockchain that includes smart contracting – incentive-based, with real-time payments and performance metrics. One reported benefit in the trials is the ability to track individual problem shipments (contamination, disease symptoms, etc.,) in an hour or less, versus weeks.

Unilever’s blockchain pilot links thousands of tea farmers to Sainsbury, the giant UK supermarket chain, three large financial institutions, and technology services. The integrated capability will track and verify contracts, automatically triggering payments. Buyers will be able to offer preferential pricing for growers whose teas meet blockchain-verified standards for sustainability. Banks automatically track the ones that are shown to be meeting performance metrics through the time-stamped, tamper-proof records.

FSMA: Food Safety Management Act

FSMA is one of the many comprehensive international regulatory and regulatory frameworks that make traceability a requirement not an option. It establishes the next likely cliché in traceability: one step back, one step forward. At any stage, a party involved in trade must be able to show and be accountable for where the tea last came from (back) and where it is going (forward.)

QR, DNA barcodes and RFID

Packaging, shipping, and scanning are all related in traceability. QR (Quick Response) and DNA barcodes and RFID (Radio Frequency ID) provide for front-end data capture: accessing and storing information at a point of event so that it provides a continued step-by-step, process status. Shippers are using RFID to access the information needed to streamline the paperwork involved in tracking items through customs, and the traceability to reduce safety risks, and verify origins and contracts. RFID is the short-range wireless (scanning) and microchip tags (data) that are core to FedEx, UPS, and transportation tracking and tracing. Retailers rely on them for inventory control. In Japan, a few retailers are using them for consumers to get customized conversational data about the farmer and the tea in the store – from the tag.

These tools provide the infrastructure for traceability. The overall goals are to cut out blind spots in supply chain coordination and create actionable insights. They provide for new forms of certification, especially in the area of worker rights.

They are surely the coming mainstream for tomorrow’s teas.