Where blockchain and slave free chocolate come together

By Frans Pannekoek | August 13, 2018

Our customer Tony's Chocolonely is known for their mission to make 100% slave free chocolate a reality. They recently implemented a pilot with blockchain technology for traceability in their cocoa supply chain. In this guest blog, you can read about their experiences and conclusions. A must read!

To create a slave free chocolate industry, we’re dependent on an important ingredient: a traceable cocoa bean. We’d like to think of our supply chain as a shared value chain, where each and every involved party is informed of the exchanged values. Hey, sounds a bit like that hype all tech-savy’s are talking about these days, doesn’t it? Blockchain! We were curious what blockchain could mean for mission and so we implemented a pilot. We tell you all about it. Ready?

tony bc flows

A need for information

The mission of Tony’s Chocolonely is to create a shared value chain from bean to bar, because: together we make chocolate 100% slave free. To create that shared value chain, you need a view of the following flows:

  1. The ‘traditional’ flow of goods: beans going from West Africa to Europe
  2. The flow of funds: the money being paid directly or indirectly from actor to actor to fund the chain
  3. The most important one: the flow of information; an exchange of relevant information by all actors across the value chain

The start of a new system: Beantracker

Therefore, in 2015 we started first working on a traceability and collaboration platform that allows us to build this flow of information and monitor the flow of beans from Africa to Europe. Sharing this information helps the different partners to work together and feel connected to Tony’s value chain and its purpose: to eradicate child labour and modern slavery. The platform provides transparency of incoming beans, beans traded between actors of the supply chain and beans arriving at the end of the chain, the processor.

To professionalize the platform Tony’s implemented the Beantracker: a digital platform based on software made by Chainpoint, our traceability IT partner. The Beantracker spans from cooperatives, via local traders and the international trader to processers. All actors have the responsibility to enter their information on the platform and share it with all others. In exchange they receive all other relevant information.

Since the birth of Beantracker we’ve been following technology developments that would be useful for the Beantracker. In 2017 blockchain technology really emerged as a tool for managing traceability.

In the meantime, at the other end of the city of Amsterdam, Accenture Technology was developing blockchain technology and looking for opportunities to pilot. Matthijs and Jogchum proposed to do a pilot with us. They interviewed Lean and submitted their idea of “slave free chocolate by blockchain” in an internal competition at Accenture. And they won!

What is blockchain?

“Simply put, a blockchain is a type of distributed ledger or decentralized database that keeps continuously updated digital records of who owns what. In our pilot; who has, how many cocoa beans in stock at each determined moment in time. Rather than having a central administrator like a traditional database, (think of banks, governments & accountants), a distributed ledger has a network of replicated databases, synchronized via the internet and visible to anyone within the network. Traditionally supply chains are managed and controlled by one of the parties downstream. In our pilot, Tony’s is not controlling but in control of the value chain supported by the actors’ exchange of information on the blockchain and by doing that creating real-time visibility and transparency for everybody, including Tony’s. Blockchain networks can be private with restricted membership similar to an intranet or the en blockchain pilot we did, or public, like the Internet and Bitcoin, accessible to any person in the world.

Collaboration with Accenture

Together with Accenture we designed the set-up for a Tony’s blockchain and selected the actors we asked to help. We chose to do the pilot in Cote d’Ivoire with two of our partners there: one cooperative (Socoopacdi) and one local trader (Ocean). For them this meant that they had to do ‘double work’ for 6 weeks: registering in Beantracker (as usual) and doing it again in the blockchain. The blockchain was built with four layers:

1: a web app to enter the data

2: integration services between the app and the blockchain

3: the multichain blockchain platform

4: the cloud infrastructure

During Tony’s FAIR in Amsterdam we had the opportunity to train all involved actors of the pilot: Augustin and Martin from our local trader Ocean and Oumar from our partner cooperative Socoopacdi. We worked directly together with Rachelle the blockchain developer of Accenture. This live training turned out to be a major contributor to the success of the pilot: data was entered timely and correct and direct feedback when the system was not operating as expected ensured technical issues were resolved quickly.

The set up was as follows. We registered 3 flows on the blockchain:

1. 1 cooperative (manager) collecting beans from the delegees and entering their data

2. 1 local trader buying cocoa beans from cooperatives and transporting them to port

3. International trader buying beans from local trader(s) and exporting to Europe

The pilot results

On January 4th the first cocoa bean transactions were logged on the blockchain. The pilot ran for 6 weeks and we closed the blockchain on Feb 15th. Data captured:

  • 900K kg beans registered
  • 400 transactions (registrations, movements & corrections)
  • 35 shipments between cooperation & exporter
  • 12 shipments from the local trader to the International trader

What now?

Blockchain use for traceability is still in its early stages, lots of ‘proof of concepts’ projects, not so much operational blockchain-run value chains. During the pilot we experienced some glitches and technical design challenges ourselves. The Gartner Hype Cycle estimates 5–10 years of development required for Blockchain to reach plateau, see below.

The big challenge for any traceability technology (blockchain or Beantracker) is getting the data from the physical world onto the digital platform. That is also the big advantage of blockchain-tech for Bitcoin, which is 100% virtual. A physical value chain, with bags of cocoa without scannable tokens, is a completely different thing. Getting the data virtual is the name of the game. That’s why Tony’s we use a user-friendly always-up Beantracker that is designed to support and enable correct and timely inputs.

Blockchain can be especially effective in a transactional environment with little trust and many anonymous actors. Tony’s value chain partners know each other very well. That’s why we designed a private blockchain (none other than the distinguished actors were allowed on the platform) with Tony’s as the supporter and coordinating third party. Tony’s drive is to have all chain partners stay connected and encourage everyone to invest in direct relations which in this case supports data integrity. Beantracker is designed with the possibility for it to become the industry standard with many other entities joining the platform to monitor and take responsibility for their cocoa value chains and when more people start to join the movement for slave free chocolate, and the number of users in the eco-system grows, blockchain might become increasingly interesting.

For now, Tony’s is proud of the Beantracker; it’s a fully operational robust digital platform that works including the development potential of the platform

Our conclusions based on the pilot

  • There is important potential in blockchain technology for traceability worth investigating.
  • We have a functional and operational traceability platform that performs the same service with a different technology.
  • Together with ChainPoint our partner for Beantracker we will follow blockchain developments closely as well as other relevant technological developments like Artificial Intelligence (AI) and Internet of Things (IoT). And when appropriate applications arise, or the eco-system readiness grows, we will integrate blockchain technology into Beantracker. We are open to other parties to further explore other technologies (AI) and the application for traceability.

In short, the pilot was a great ride, we learned a great deal and had some fun along the way.

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Posted in cocoa, blockchain

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