The Precedence for Digitization
The current state of coffee’s supply chain is riddled with logistical inefficiencies, siloed information, a lack of transparency, and ultimately, economic inequity. The COVID-19 pandemic accelerated these preexisting issues in the supply chain and brought priorities such as digitization to the foreground. Now, more than ever, businesses want visibility into their multi-tiered supply chain networks. Fragmented supply chains pose the biggest risks to supply chain traceability, leaving important trade data trapped in silos. This along with logistics inefficiencies can inflate supply chain costs up to 40% of the product’s export value, wasting billions of dollars each year.
The industry is facing market pressures on both ends of the supply chain for a better solution, intensifying the need for agribusinesses to shift their focus online. McKinsey & Company reports that about 65% of business-to-business (B2B) companies across sectors are fully transacting online in 2022. Can the agriculture industry take advantage of this global transition towards digital commerce? We think so.
CropConex is a supply chain management software that streamlines the sales and exports of specialty crops. We offer a technology-driven marketplace that creates hundreds of data-driven connections across the supply chain to help suppliers, buyers, and logistics service providers efficiently transact.
In a sector dominated by smallholder farming, fragmented supply chains, and weak market linkages, we’re offering an end-to-end solution that digitizes operations across the entire ecosystem. We increase supply chain participation through easy-to-use mobile and web applications. Now, as coffee moves across the supply chain each party in the chain uploads their own layer of transactional data to the platform, important trade data is shared securely amongst trade partners, and end-to-end traceability is built collaboratively.
With the rise of technology in the modern era, we are only scratching the surface of how digitizing the coffee industry can increase efficiency and profits for all stakeholders. With the practice of using technology to harvest, process, sell, and deliver coffee we are helping build more sustainable agricultural supply chains worldwide.
Data Transparency For Supply Chain Equity
Much of the data throughout coffee’s supply cycle is collected and documented through pen-and-paper processes. Due to the manual nature of the data, little to none of this information is communicated to other parties responsible for a coffee crop’s activities further along in the supply chain.
This lack of transparency leads to a multitude of problems, most of which ultimately burden coffee’s weakest link in the supply chain—producers.
Without access to pertinent information such as the final sale of the coffee, producers endure economic disparity in the form of low or unfair wages for their crops. If coffee farmers and producers are unable to understand the pricing of their coffee at each stage of the supply chain, how are they to adequately price their coffee when selling to cooperatives, importers, or other buyers?
Access to pricing, distribution, and quality assessments provides data transparency for all involved in coffee’s value cycle. But most importantly, it gives producers the leverage and insight they need to improve profits for their business.
With access to innovations in technology, data across the supply chain can be easily documented and available to all those who need access to it. New technology can assist the coffee industry by creating an accurate and transparent supply chain through the documentation of digital transactions, shipment, and activity records.
This means no matter if a person is the first or tenth person to access a coffee’s record, all information is accurate and available for full transparency. CropConex’s platform provides users—including producers, importers, exporters, and roasters—access to these digitally-captured records. Meaning, users can actively trace a coffee’s path and transaction history from seed to cup.
Data transparency and traceability play a major role in transactions involving certified coffee products. Farms with organic, fair trade, Rainforest Alliance, and other third-party certifications must provide in-depth documentation about farming practices, equipment, chemicals, and more.
With digital records of transactions, crops, and farm labor, producers can actively manage all aspects of the certification process. Additionally, as many end-customers seek out certifications when purchasing coffee, producers have the opportunity to leverage their certification status and seek a higher price for the year’s harvest.