Bonga Chiri and the Traceable Origin of Coffee

Traceability in supply chains was an unknown concept 15 years ago. Yet today it is a pressing topic for mid- and senior level managers in various sectors.

Why Traceability Even Matters

The reason for this is new regulation being introduced in the European Union in different sectors to force companies to take responsibility of the actions taken in their supply chains. This involves exact reports on working practices and conditions to prove the legality of the material but also the compliance to ethical practices of suppliers. For example, the Farm-to-Fork Strategy of the EU Green Deal that addresses sustainable food systems is central in the achievement of the United Nations Sustainable Development Goals (SDGs). Additionally, national governments are introducing regulations for responsible sourcing. A hotly discussed new supply chain law in Germany would require detailed reporting from companies with more than 500 employees.

In the area of food raw materials customers are driving the adoption of traceability. A food study from Label Insight found out that 94 percent of consumers consider it essential that the brands and manufacturers they buy from are transparent about what is in their food and how it is made.

One of these products is speciality coffee from artisanal producers. Many of these producers have established direct trade relations for high quality coffee.

Rainbow Coffee – Wild Beans

It has become essential for producers in the specialty segment to tell the story behind their coffee, including its origin and other environmental and social aspects.

Such a producer is Rainbow Coffee GmbH from the southern German town of Lorch in the metropolitan area of Stuttgart. The young company is importing green coffee beans from Bonga Chiri in a direct cooperation with local farmers and offering Ethiopian Wild Coffee.

The Cradle of Coffee

Bonga Chiri is a name scarcely encountered when traveling to Ethiopia, if at all. But it is said to be the very birthplace of Arabica coffee. This region, hidden away deep in southwestern Ethiopia, sits quietly in unspoiled subtropical cloud forests brimming with coffee trees, wild honey, natural wonders, and wildlife. The biodiversity and perfect climate are the foundation for high-quality organic coffee of incredible variety.

Due to the multibillion-dollar global coffee industry, one might think that the origin and cradle of coffee is thriving. But the opposite is the case. For better or worse, there is no tourism in the mountainous elevated area and hardly any industry.

In green: Bonga Chiri, Ethiopia

A Great Vision that has its Challenges

Rainbow Coffee had a great vision: Bringing the high-quality organic Ethiopian wild coffee beans to a premium market in Europe while protecting the precious environment and fostering local communities.

However, some significant challenges were faced: Being able to prove the claim that the coffee is really from the Ethiopian forest to consumers and retailers and answering the questions: How can we be sure, that the coffee beans are harvested outside protected areas, legal requirements are met, and donations really reach the local community? This also brought about the challenge of communication with farmers and, additionally, preventing possible documentation fraud along the value chain.

To have a unique value proposition for his customers, Rainbow Coffee had to give tamper-proof solutions to those challenges, mitigating risks such as uncertain origins, deforestation, and child labour.

Rainbow Coffee harvest in Bonga

Introducing Confidential Transparency

To solve these manifold problems, Rainbow Coffee started a pilot project with Xylene to bring transparency into the supply chain, introduce product flow traceability, and build trust in the information.

Targets set for the implementation of Xylene in the supply chain included enabling farmers with an easier way to communicate and report their work with the importer in Germany. Creating less need for travels for Rainbow Coffee and enhancing transparency and trust to base internal decisions on. Finally, communicating the story of the product to consumers and building a strong brand reputation and a competitive advantage that can boost profitability.

In a first step, Xylene maps the coffee supply chain to identify all relevant players in the value chain and improve communication. Through the Xylene Web-Dashboard Rainbow Coffee invites his suppliers to sign up. The farm manager creates a profile on the dashboard and gives access to his farmers. Once all the suppliers are onboarded, they start to exchange general documents related to the company like harvesting licenses, employee IDs, work permits and audit certifications.

As documentation fraud can be a likely risk with a high impact on the reputation of Rainbow Coffee, Xylene has added to the data collection a secure blockchain storage that mitigates the risk of documentation manipulation along the supply chain. With the blockchain the stored data is unchangeable and traceable to the time it was uploaded the first time.

By storing trusted data locally and encrypting this with a hash function which is then stored on the blockchain the system can ensure the immutability of data without having to share them, thus, securing confidentiality for all parties.

Web-Dashboard & Mobile App

Capture the Physical World, Digitally

An underlying factor for traceability is capturing critical data on the physical products at each processing step. To ensure this consistently, it requires a combined effort of all actors in the value chain. Xylene developed an easy to use mobile application which is game changer for suppliers. The user-friendly usability of the app guides the farmers though a simple process of capturing physical product data at each step of coffee production.

Combining product IDs, with harvesting and processing images, volume data, and essential documentation for compliance such as permits, grading, and delivery documents, the app helps to collect this data step by step.

After installing the mobile application on his phone, the farm manager logs on with his credentials. The first step in tracking physical products is the identification. The farmers harvest the wild coffee beans and brings them to a collection point. Here the farm manager starts the ‘create product’ step to initiate the process. Even when internet connection is not available in the forest Xylene performs all steps of product identification, georeferencing and timestamping, adding images, and uploading documents. Once a connection is available the data synchronises with the system and uploads all information.

For the farmers Xylene’s traceability solution creates accountability and trust in their effort and opens markets which would otherwise distrust the product origin.

Green Coffee Beans Ready for Shipment

Competitive Advantage with Consumer Engagement

The outcome is simple, a verified origin of the coffee that can be fully trusted. It would have been a shame to not share this transparency with the consumers. Xylene enables Rainbow Coffee to share selected, non-confidential, information with the consumers through a QR-code attached to the final product.

When this was released to supermarkets across Germany the impact was huge. Customers have been scanning the packages and learned about the coffee origin in stunning numbers. Out of all labelled coffee packages an outstanding 15 – 20% click-through rate, depending on the product was recorded. Xylene’s QR code gave customers a first chance to see where this product journey first-hand.

This proves the claim Rainbow Coffee makes and shows consumers how its coffee is sustainably sourced with the help of dedicated farmers in the Ethiopian rainforest.

This data also gave the importer the necessary business intelligence to replenish products earlier than usual on the shelves. Overall, the level of transparency helped Rainbow Coffee to communicate the effort spent on a responsible sourcing process with customers and gain oversight of supply chain operations.

Product history accessible through a QR-code

A Successful Collaboration with More to Come

Over the course of the pilot implementation Xylene has worked closely with Rainbow Coffee to establish a sustainable and authentic traceability of the coffee beans. From conceptual beginnings the project achieved real value for consumers and a competitive edge for Rainbow Coffee.

Christian Szabady, CEO and founder of Rainbow Coffee expresses it this way:

Xylene allows us to have full tracebility and transparency in our whole value chain. We are happy to be one of the first companies worldwide in the coffee sector, that can offer and garuantee full and real transparency to our customers.

This is just the beginning. Rainbow Coffee and Xylene have set their next target to keep the system operational and include new supply chains in Guatemala for a new product line. Adding to this will be introducing sustainability projects which customers can donate to and further incentivise the local communities.

How Can You Get Started?

Interested in getting transparency and validated traceability to your supply chain?

Get in touch with Xylene and start with a simple exchange on your goals on transparency and responsible supply chains.

The Founders of Xylene and Rainbow Coffee