8/5/2018 Bringing Blockchain to the Coffee Cup - WSJ

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https://www.wsj.com/articles/bringing­blockchain­to­the­coffee­cup­1523797205

WSJ LOGISTICS REPORT

Bringing Blockchain to the Coffee Cup
Colorado shop tries to rewrite the java script by tracing high-end beans from a Ugandan farm to the retail
shelf

Companies in many industries are testing blockchain technology, best known as the ledger behind cryptocurrencies like bitcoin,
to improve data-sharing and conduct transactions more quickly. Above, a co ee plantation in Brazil. PHOTO: RODRIGO
CAPOTE BLOOMBERG NEWS

By Erica E. Phillips
April 15, 2018 9 00 a.m. ET

Do you take your coffee with cream, sugar or blockchain?

Denver’s Coda Coffee Co. this week is offering what it calls “the world’s first blockchain-traced
coffee,” giving customers access to a cloud-based ledger that tracks every stop along their
coffee’s supply chain. By scanning a QR code associated with the batch of coffee they bought,
customers can see the date and location of every transaction—from collection at the farm to
washing and drying, milling, export, roasting and retail.

“A lot of people put information on their bags that they haven’t personally verified,” said
Tommy Thwaites, co-founder of Coda Coffee. “This allows the customer, right there, on
demand, to trace their coffee back to the farmer.”

The new tool comes as tech-savvy consumers are seeking more information about the products
they consume and businesses are looking for more efficient ways to track their relationships
with suppliers.

Companies in many industries—from finance to food and real estate—are testing blockchain
technology, best known as the ledger behind cryptocurrencies like bitcoin, to improve data-
sharing and conduct transactions more quickly.

Agriculture conglomerate Cargill Inc. is testing an application of blockchain that would let
shoppers trace turkeys from the store to the farm that raised them. Real-estate technology firm
Knotel is using it to list office space for short-term lease in 45 buildings in New York, San
Francisco and London.

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8/5/2018 Bringing Blockchain to the Coffee Cup - WSJ
Coffee production, with far-flung suppliers around the world and complicated supply chains
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involving wholesale markets and regional distributors, is an ideal commodity for a system
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Starbucks Corp. last month said it was launching a two-year pilot program to develop
“traceability technology” for farms in Costa Rica, Colombia and Rwanda. “This could be a
seismic change in an industry that hasn’t had much innovation in the way coffee moves across
borders and oceans,” Starbucks Director of Traceability Arthur Karuletwa said in the
announcement.

Coda Coffee’s traceable beans—

ALSO IN LOGISTICS ... a bright, lemony coffee grown
in Eastern Uganda—were
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XPO Logistics Pares Acquisition List to ‘About a Dozen’ Targets August 2, 2018 the beans and assigns them a
Levi’s Plans to Slash Emissions in Global Supply Chain by 2025 July 31, 2018 lot number that customers can
trace. Designed by Denver-
based startup bext360, the
“bextmachine” can process about 50 kilograms of coffee a minute.

The bextmachine also furnishes better information to the businesses along the supply chain,
like Coda, by conducting a three-dimensional scan of the outer fruit of each bean. In providing
more detail on quality and characteristics of the coffee beans at the farm level, the machine
helps wholesalers and roasters learn which attributes produce certain tastes—helping them
adjust future sourcing decisions.

Bext360 charges coffee producers and roasters between 1% and 2% of the wholesale price of the
beans to use the machine and bext360’s blockchain program. The company says its service
ultimately reduces costs in the supply chain by eliminating paperwork and other routine
processes. Coda Coffee is charging $14.25 for 12 oz. of its blockchain-traceable Ugandan coffee
beans—roughly the same price tag as its other 12-oz. bags of bulk coffee.

Bext360 founder Daniel Jones said it also eliminates uncertainty for farmers in coffee-
producing regions, who often rely on middlemen to assess the coffee quality and give them a
fair price.

“We can pay them more for a higher-value crop,” Mr. Jones said. “And if you can get more
capital in hands of the people who produce the goods, you’ll have better supply chains.”

Corrections & Amplifications

The founder and chief executive of bext360 is Daniel Jones. A previous version of this article
referred to him incorrectly.

Write to Erica E. Phillips at erica.phillips@wsj.com

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