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Can Traceability Increase Profits in Coffee?
Traceability is set to become a mainstay of the coffee industry, how can it work for you?
Published May 27, 2024
Asharita D'Silva
Coffee experts@Era of We
In the complex and multifaceted coffee industry, traceability has emerged as a critical factor for ensuring sustainability, quality, and consumer trust. However, implementing robust traceability systems presents significant challenges.
Traceability provides a foundation to advance the Sustainable Development Goals and has potential throughout developed and developing markets. Food commodities, such as coffee, are said to be important contributors to global greenhouse gas (GHG) emissions, from production (and its inputs) through processing, distribution and consumption to the disposal of waste (FAO, 2010). Processing, trading, transporting, roasting, packaging, retailing, brewing, serving, etc., also have an important contribution to emissions, communities’ well-being and employment (FAO, 2010; ICO, 2017).
Despite these obstacles, the potential benefits of traceability—such as enhanced supply chain efficiency, validation of sustainability claims, and meeting consumer demand for transparency—make it a promising avenue for increasing profits and promoting sustainability in the coffee sector. This article explores the potential of traceability to transform the coffee industry, balancing the associated risks and opportunities.
A Clearer Definition of Traceability
According to the European Commission, traceability is “The ability to trace and follow a food, feed, food producing animal or substance intended to be, or expected to be incorporated into a food or feed, through all the stages of production, processing and distribution”. Simply put, traceability is the ability to follow the movement of a food through specified stage(s) of production, processing and distribution.
Traceability in the coffee supply chain refers to the ability to track the journey of coffee from farm to cup, providing detailed information about each stage of production, processing, and distribution. This includes data on farming practices, processing methods, and the various transactions coffee undergoes before reaching the consumer. A robust traceability system ensures transparency, allowing stakeholders to verify the origins and quality of the product.
Benefits of Traceability
1. Support supply-chain optimization
Traceability enables more effective identification of vulnerabilities in the supply chain which will make the coffee value chain more efficient and better equipped to meet growing demand. By identifying and addressing inefficiencies, companies can reduce waste, improve resource utilization, and enhance overall productivity. This not only reduces costs but also minimizes environmental impact, contributing to more sustainable production practices.
2. Validate and verify sourcing claims to support sustainability goals
Better traceability could make it easier to validate sustainability claims, hold companies and governments accountable to their commitments and more accurately measure the social and environmental footprint of production, in real-time and at a lower cost.
3. Meet consumer demand for coffee production transparency
Consumers are calling for greater food-system transparency to inform their purchase decisions and reduce the risk of buying illegal, unethical or counterfeit products. As consumers become more informed and concerned about the origins of their food, traceability provides them with the assurance that their coffee is produced responsibly. This transparency can drive consumer loyalty and preference for brands that prioritize ethical sourcing.
Traceability Systems: From Farm to Roastery to Consumer
Implementing traceability systems involves integrating technology and data management tools to monitor and record each step in the coffee supply chain. This can include the use of QR codes and mobile applications to provide real-time information about the coffee's journey. By making this information accessible to consumers, companies can enhance the customer experience and build a stronger connection between consumers and producers.
Traceability & Revenue Generation for Roasters & Growers
If traceability could not only provide cost-saving opportunities but also be a source of new revenue, the case for traceability would become particularly compelling. A number of studies indicate that consumers are willing to pay more for traceable products; in fact, consumer willingness to pay could even result in topline revenue growth of 0.8%–3.4%,79 while other figures are as high as 10% on average. This willingness to pay a premium for traceable coffee can significantly boost profits for both roasters and growers.
For roasters, offering traceable coffee can differentiate their products in a competitive market, allowing them to charge higher prices. For growers, traceability can open access to premium markets and foster relationships with buyers who value transparency and sustainability. Additionally, traceability can help secure financing and investment by providing clear evidence of responsible and sustainable practices.
Traceability in the coffee industry holds immense potential for enhancing sustainability, optimizing supply chains, and increasing profitability. By addressing consumer demand for transparency and leveraging technology to provide detailed insights into the coffee production process, stakeholders can build trust, drive sales, and contribute to a more sustainable and equitable global coffee market. However, it is crucial to ensure that small-scale producers are included in these advancements, necessitating collaborative efforts to create inclusive and innovative traceability solutions.
About the author
Asharita D'Silva
Join me in discovering the wonderful world of coffee! As a writer, coffee is my fuel and newfound passion. I love writing about new coffees, sustainability, and coffee culture around the world. I'm always discovering new things about coffee and the industry, which I share with the great community here at Era Of We.
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