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Global blockchain solutions company and Cardano commercial arm EMURGO is building a blockchain traceability solution for coffee in Indonesia [INTERVIEW]

Global blockchain solutions company and Cardano commercial arm EMURGO is building a blockchain traceability solution for coffee in Indonesia [INTERVIEW]

Blue Korintji Coffee in Indonesia

EMURGO, the global blockchain solutions provider and a founding entity of Cardano, recently announced the launch of the “EMURGO Traceability Solution” – an enterprise solution leveraging blockchain technology to modernize existing supply chain traceability standards and bring added value to supply chain stakeholders and end consumers. EMURGO Traceability Solution is the first blockchain-based enterprise solution developed by EMURGO’s Enterprise unit. EMURGO partnered with Blue Korintji Coffee, an environmentally-conscious Indonesian coffee brand to be the first commercial enterprise to integrate EMURGO Traceability Solution in its coffee supply chain to benefit all stakeholders including farmers and consumers.

This custom solution will leverage the Cardano blockchain to increase the visibility of purchasing prices between stakeholders and assure the immutability of accumulated private information. Blue Korintji Coffee is also committed to giving back to farmers by pooling a portion of sales revenue that has utilized this solution and investing in production sustainability.

Coffee consumers will also be able to simply scan a QR code displayed in the coffee shop to access this information about the origin of their coffee.

CryptoSlate recently had the opportunity to chat with the CEO of EMURGO Indonesia, who is working on this solution. Murasaki leads EMURGO Group’s local Indonesian unit to drive the regional adoption of blockchain solutions in the public and private sectors. Having garnered mutual collaboration with some of Indonesia’s leading local universities, EMURGO Indonesia places a core emphasis on blockchain education and exploring real blockchain use cases to empower citizens to provide for greater economic opportunities.

Interview with Shunsuke Murasaki, EMURGO CEO of EMURGO Indonesia

Tell us how EMURGO decided on traceability as an important use case to address and why is the Cardano blockchain a good fit?

We gathered detailed opinions from different industry partners to see what blockchain-based solutions we could offer to help add value to their existing businesses. We found that enterprises offering premium consumer & B2B products such as Arabica coffee beans were seeking a simple and cost-effective way to verify the authenticity of their products from source to customer, as well as shed transparency on the entire supply chain process to increase customer trust and fair business practices. These needs were especially important in emerging markets and industries with several different stakeholders in its supply chain, where reliably demonstrating this traceability of premium products is harder to do.

Currently, the traditional existing traceability methods used in supply chains is opaque and inefficient primarily due to the globalized complexity of the supply chain which includes companies of different sizes from different locations spread throughout the world, geographic complexities, lack of a modern and safe administrative system, and so on.

There are several instances in many different industries of the need for traceability solutions. For instance, consumer & luxury goods are susceptible to counterfeiting; some white labeled products are inappropriately disguised under other brand names; mislabeled foods products are sold to consumers; and illegally sourced materials are sometimes present in common household goods, among other issues in today’s supply chain industries. These are due to a lack of efficient traceability solutions in the marketplace for enterprises and can be effectively addressed by blockchain’s inherent qualities. 

EMURGO Traceability Solution is tailored to address this issue and add value by authenticating the origin of a product, shed transparency on relevant data regarding supply chain practices, and track the entire path of a product or good from source to customer. This will bring trust to the consumer as well as add increased brand value to participating stakeholders choosing to use a blockchain-based traceability solution.

We believe that given Cardano’s research-driven approach along with its use by other global name brands such as New Balance for traceability purposes, it is a natural fit as a base layer for a blockchain-based traceability solution.

Why was Indonesia chosen as the first place to test this new technology?

To give some background, Indonesia is ranked 4th globally in total coffee production, and according to a World Bank report, around 10 million people in Indonesia are economically involved in the coffee industry as a stakeholder. The US Dept. of Agriculture states in its recent report about coffee production in Indonesia of “a booming coffee-drinking lifestyle” with soaring demand due to coffee shop expansion.

a Kerinci region coffee farmer
a Kerinci region coffee farmer

In fact, the next unicorn in Indonesia will come from the domestic coffee industry which shows the vastly increased consumer interest in coffee.

However, 96% (more than 2 million farmers) of the coffee produced in the country is by small farmers that lack technological resources and receive weak government support to properly benefit from this boom. At present in the local coffee industry, there is a complex web of farmers, roasters, processors, logistics companies, cafes, and other third-party stakeholders. They lack a  shared IT infrastructure to streamline data processing while also offering data immutability to all these different stakeholders. This is the issue leading to difficulties in verification and trust between one stakeholder and another, and between companies & consumers.

How does the traceability solution work from a technical perspective?

EMURGO Traceability Solution is a tailored enterprise solution built to meet the various needs of our clients and designed to run on top with Cardano as a base settlement layer. Each transaction in the supply chain gets recorded and validated on the spot via QR code.

a batch of coffee cherries
a batch of coffee cherries

For example, a consignment from a coffee bean roaster to a cafe gets validated by scanning a specific QR code on a package upon delivery. This information is all securely input, verified, and transparent to all stakeholders utilizing EMURGO Traceability Solution.

What are some of the challenges when building a blockchain traceability solution?

Each industry and enterprise has different needs according to their products, consumers, and other conditions. Thus, one of the main challenges is to assess the various needs of all stakeholders and come up with a tailored solution designed to meet all of their needs. This takes a lot of time to consult with the stakeholders and get a detailed understanding of their businesses to design the most ideal solution.

Korintji Coffee
Korintji Coffee

Another challenge is the relative lack of awareness of how blockchain can offer benefits to enterprises and consumers. Many believe there is a big learning curve to understand an abstract technology, but EMURGO designs tailored solutions with blockchain as a back-end solution with a simple & easy-to-use front end that doesn’t require any knowledge of how blockchain works. 

Thus, we first engage with potential clients, get an understanding of their business, identify issues, and then easily explain how blockchain can address these business issues before collaborating together on the specific needs of the solution.

What are some of the benefits to the consumer when utilizing blockchain-based traceability?

Right now, it is practically impossible for coffee consumers to know specific details about the coffee they have purchased. Consumers do not have access to precise information such as the number of days a bag of coffee beans has been in storage or know the exact sourcing of the coffee they are drinking, among other relevant information. 

But with EMURGO Traceability Solution, it is very easy to track this information and it cannot be manipulated. Customers will have more transparent information on the specific journey of their purchased coffee beans. Customers also benefit by contributing to more ethical sourcing practices for coffee sustainability by opting for coffee that has utilized this solution.

Especially for coffee drinkers that opt for premium brands or specialty coffees, this solution gives them a solution to verify the authenticity of their preferred coffee.

Other than coffee, what are some other industries that would benefit from blockchain traceability?

As a tailored enterprise solution, EMURGO Traceability Solution can be customized to meet the needs of clients in various industries that offer specialty or premium-grade products. As consumers in these industries value trust in the products they purchase, it is especially important for enterprises in these industries to supply that trust through the verified authenticity of their product offerings.

For more information on EMURGO Traceability Solution and how it can bring added value to your enterprise, please contact us at [email protected]

Connect with Shunsuke Murasaki

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