Why is Traceability Important to the Global Coffee Market?

There’s No Sustainability Without Traceability

By Juliette Caulkins

Strong consumer demand for sustainable products is driving the introduction and expansion of a fast growing market segment: sustainably and responsibly produced and sourced products. The attractiveness of sustainable products gives market players a competitive benefit and last but not least, it leads to better margins throughout the supply chain.

A variety of programs have been developed to meet the different product supply chains characteristics. Today, consumers are no longer accepting only marketing claims by manufacturers, but require certainty that their products are really sustainable. To meet this consumer demand, trusted third parties and industry groups are set up to provide regulation and guard traceability throughout the chain. Special labels on products indicate to consumers that the product has been certified by these internationally accepted organizations.UTZ CERTIFIED Good Inside is one such third party international organization and has a strong position in the worldwide trade of sustainable coffee. Its approach is to maximize technology and information in order to create the depth of accountability necessary to deliver an assurance to consumers. By introducing a Web-based track and tracing system for sustainable products, covering all the major stakeholders in the supply chain, standards can be enhanced with a guarantee that the certified products are produced according to sustainable production criteria. A traceability system also offers the assurance that the certified sustainable products sourced by end markets truly relate to certified sustainable producers (farmers) who implement this standard. Identifying sustainable products from non-sustainable, conventional products, and tracing this throughout the supply chain, allows producers to make credible claims on the sustainable origin of their product to their buyers and ultimately to end-consumers.

What Is the Objective of Traceability?

All players in the food chain want to demonstrate their commitment to food quality and safety, and assure the reliability of their suppliers. A food chain traceability standard helps map and document a product’s history, creating trust and confidence toward consumers.

The key is to combine a traceability system with Chain of Custody requirements. Chain of Custody requirements prevent or regulate the mixing of certified and non-certified product at every single supply-chain actor, ensuring that the certified product leaving the company is the same certified product that entered the company. It’s the rigor of that system that brings transparency to the market.

A traceability system not only creates transparency in the supply chain, but also allows for more effective program management by: creating availability (and thus enabling communication) of performance data; providing the basis for a volume based payment system; and preventing double claims by centralizing and automatically checking user information and market claims.

Without a central traceability system, it can be a struggle to measure how much certified product is sold and, therefore, it will compromise the credibility of the system. Various other systems resort to tracking certified hectares or other proxies of traded volume, but their real volumes (and therefore market penetration) remain elusive. This makes communication of progress more difficult, both to (prospective) users and to financial partners.

Going beyond traded volumes, a traceability system enables the aggregation and reporting of other important information, such as the premium paid for certified products, expected certified production volumes and impact information at both large estate and smallholder level, and the control against overselling and double claiming.

Today, the new generation is requesting more information about anything and everything in their food products. This means that the food industry is having to figure out the content consumers desire to know and how to provide it. What is clear is that this information can only be available with a traceability system that covers the entire supply chain.

Companies like Wal-mart are asking their suppliers to give them insights into their efforts towards environmental sustainability of their economic activity. This requires traceability systems frameworks to be designed in such a way that is easy, efficient for the entire supply chain and flexible in terms of the attributes it traces as well as safe and secure, so that participants can control well enough what information they want to share with whom.

Companies most often establish traceability in order to achieve one or more of the following objectives: to improve supply-side management; to differentiate and market foods with subtle or undetectable quality attributes; and to facilitate tracing back for food safety and quality.

UTZ CERTIFIED and Traceability

UTZ started implementing traceability in a period when many producers, trade and industry were convinced it could not be done. Since then, UTZ has developed state-of-the-art traceability systems for coffee and palm oil that have already been operational for years, and its in the process of developing a traceability system for cocoa and tea.

Today, UTZ CERTIFIED Good Inside is a recognized leader in this field and has an extensive knowledge and experience in the actual tracing of certified products in mainstream markets. UTZ has learned that traceability is more than just offering an IT platform, where companies can log in and upload their records. Traceability only works when it is an integral part of the certification process itself and when users have a real benefit of the use of the system. How else can we get thousands of farms and large estates to change their practices and start using a web-based traceability system in a correct and timely way?

Moreover, traceability can be a powerful tool for the inclusion and empowerment of small producers if the system provides them with relevant market information and opportunities.

Juliette Caulkins joined UTZ CERTIFIED Good Inside in 2007 as commerical director. With her experience as a business entrepreneur, she has contributed to the success of UTZ CERTIFIED’s coffee program and is now leading the organization forward as it expands its certification and traceability expertise into other commodities.