For many Americans, there’s no better way to start the day than a good cup of coffee. In fact, recent statistics show that U.S. consumers drink an average of 1.64 cups of java per day. But young people often have discerning tastes when it comes to their caffeinated beverages. And while others may scoff, the push for higher-quality coffee has culminated in a concept that will allow consumers to get better beans while paying farmers a much fairer wage.
A new startup called Bext360 is trying to cut out the middle man by helping coffee buyers deal directly with fair-trade farmers. The venture will simultaneously allow buyers to track both the quality and the source of the beans while increasing and speeding up payments for the growers.
“We’re aiming to transform the coffee supply chain while bringing consumers and farming communities together to improve product quality, community livelihoods and the consumer coffee experience,” said Bext360 CEO Daniel Jones in a press release.
Bext360’s first venture is a kiosk with a look that’s similar to a Coinstar change machine. Using an existing blockchain network (which manages digital bitcoin transactions) and smart image recognition technology, farmers can submit their crops to be evaluated. After the beans are graded, they’re assigned a price, which the grower can either accept or reject. If the offer is accepted, the money is instantly delivered to the grower through a mobile app.
Although 70% to 80% of the world’s coffee supply are brought to market by small farmers from developing countries, these farmers are usually at a huge disadvantage. That’s because middlemen get to decide on the crop’s quality — and are often incentivized to not pay what it’s worth. They also decide how and when these farmers, many of them women, get paid. But with this type of kiosk, the feedback is objective and payment is immediate. Around 68% of Americans owned a smartphone in 2015, and while those numbers may not be quite as high in developing countries, the kiosk provides a much more reliable way to get paid. And for American consumers, it means total transparency — and ultimately, a more delicious (and sustainable) product.
“A lot of importers want the ability to trace and track their coffee. They have a picture of the community on their websites. But they don’t truly have that last-mile connection to the actual origin of where the coffee is,” says Jones.
Using a blockchain system, they’ll know exactly where their beans are coming from, without fear that the “chain of custody” will be interrupted or that poorer quality batches will end up fetching a higher price. Jones claims that this also inspires growers to produce better crops, as their efforts will literally pay off.
The company’s immediate plans are to place their kiosks in areas where they currently have trading partners. According to their business plan, the kiosks must be owned by local entrepreneurs, and commissions from these transactions are to be split between the financial service companies that manage the farmers’ digital “wallets,” the businesses that host the collection system, and Bext360. The startup has already tested their technology at Mexican coffee plantations and intends to operate a larger test in California within the coming months. They’re also exploring operations in Rwanda, Colombia, and Congo.
While these kiosks may not pop up in your neighborhood like Starbucks, for those who take their coffee seriously and want to help hardworking farmers, such technologies have a lot of promise.