I have looked so much forward to this interview. Ever since I first read about bext360, and their use of blockchain, I have impatiently been waiting to see their work in action. So, if you are a coffee addict, and want to be sure that the coffee you drink everyday, in fact is the quality of what it is suppose to be, bext360 will have you covered. Lets get started!
Can you start with telling us a little about yourself and Bext360?
I’m (Daniel Jones) a US and Africa based entrepreneur with over 17 years of experience living and working in emerging and frontier markets including China, the Democratic Republic of Congo (DRC), and India. I have professional roots in technology, applied mathematics, electronic commerce, and emerging economies. In 1991, I was with the Defense Intelligence Agency, where I was a key architect and topology designer of the Joint Worldwide Intelligence Communications Systems (JWICS), the first and now largest TCP/IP system to transfer voice, video, and data across Top Secret networks.
After that, I spent the last five years living in Kinshasa, DRC, where I evaluated supply chains and structured/funded companies as CEO and founder of Pioneer Management. In the DRC, I founded RAMIKA, the first US-owned company to successfully export conflict-free minerals from the DRC to the US in compliance with supply chain and traceability requirements under the Dodd-Frank Act. In addition, I structured the first private port facility constructed in the DRC.
I launched bext360 in April 2017. bext360 is company that develops technologies to streamline critical supply chains in emerging economies. Although our technology can be used across industries for different commodities, we are focused on the coffee industry first. Our bext-to-brew” platform aims to revolutionize the coffee supply chain with IoT, blockchain, machine vision and artificial intelligence (more on this below), while bringing consumers and farming communities together to improve product quality, community livelihoods and the consumer coffee experience. A guiding principle of bext360 is to build community by enabling buyers and other organizations with direct paths to improve the quality of both the product and the communities that provide the coffee.
Great, but how did you first get involved with coffee supply chains?
I got involved with coffee supply chain after working for years in the Democratic Republic of Congo exporting conflict-free minerals, where security necessitated by large cash transactions represented a significant expense. I saw that most were entirely inefficient and lacked so much transparency. At around the same time, I started learning about blockchain technology and I became fascinated with the idea that it could potentially transform the supply chain for many industries. I landed on coffee because it is one of the most valued commodities in the world and its supply chain is completely antiquated.
Why is there a need for better traceability and transparency of coffee supply chains?
Although coffee is the second-largest traded commodity in the world (a $150 billion market worldwide), its supply chain remains antiquated and opaque. While global demand for coffee continues to grow, farming communities in developing countries must accept low prices and delayed payments for their harvested goods (women are responsible for 70 percent of growing and harvesting). However, millennials and coffee connoisseurs are now demanding transparency for sourcing and origin – indicating a shift in consumer preference and their willingness to pay for supply chain transparency.
And in relation to that, how do Bext360 technology tackle the problem?
bext360 is helping to eliminate many of the inefficiencies of the coffee supply chain while simultaneously providing transparency at each step of the process. Using machine vision, AI and IoT along with blockchain technology, we evaluate and sort coffee cherries and parchment (a phase of coffee been processing) based on quality. Farmers are then able to use a mobile app to view payments based on coffee quality, and may offer or reject the proposed payment. They are effectively increasing compensation for higher quality cherries. Powered by Stellar’s blockchain, the application immediately pays the farmer for her product upon acceptance of the offer. The application may also connect to the farmer’s other accounts for transactions such as loan repayments, local taxes and other financial commitments. Each evaluation and transaction relating to the coffee – including farmer identification, quality, purchasers and payouts – is recorded on the blockchain providing visibility to end consumers.
The certification process in supply chains is extremely costly. Currently, inspectors must physically examine each product at every point of the supply chain to verify that the product is what it purports to be. For coffee, every batch requires certification papers to move along the supply chain from one port to the next. bext360 is moving this data to the blockchain, providing transparency and immutability, which eliminates today’s costly and sometimes unreliable paper trail.
Using blockchain technology, the bext360 platform also creates crypto tokens based on the analyzed quality of the coffee to more accurately reflect the value of this commodity. As the commodity progresses through the supply chain, new tokens are automatically created to represent the increased value of the product until it becomes the roasted coffee we know and love.
For example, when a coffee cherry enters the supply chain, a token is created to represent its quality at the first level. As it continues through the supply chain and is processed to become “green coffee”, a new token will be created at this supply chain node and exchanged with the older token to represent the commodity in its new form. This tokenization technology can be used to represent other products, such as cocoa, nuts, spices, seafood products and pharmaceuticals.
The ability to create tokens representative of commodity value is groundbreaking in many ways. All stakeholders across the supply chain can own tokens, which hold real value for financial institutions. Banks, suppliers, business owners and the machines themselves can own, pay and collect from each other seamlessly. Commodity financing, plays a significant role in the portfolios of certain financial institutions. Rabobank has welcomed the use of tokens to reduce risk, while fundamentally changing how companies interface with the bank itself. Tokenization technology drastically reduces the transaction cost of global commodities and may also be applied to inventory valuation and the development of smart contracts.
Additionally, by providing the data recorded on the blockchain to banks and microfinancing institutions, it makes financials easier to audit and assess lending risk and therefore, reduces the risk to make individual loans. On the bext360 platform record includes: how much each farmer has sold, the quality of her cherries, and how many coffee cherry trees she owns. Based on this information and her unique history, the bank may borrow against the value reflected on her blockchain record. It is an innovative solution to address ongoing limitations for the under-banked – something other startups like Tala are trying to address with alternative credit scores.
Blockchain technology can also bring consumers and farming communities together. Using the bext360 platform, eventually, consumers may tip coffee farmers directly for coffee purchased at their neighborhood coffee shop. Payments to the farmer could be made instantaneously and tracked through the blockchain’s immutable ledger to assure consumers that tips were allocated appropriately.
If someone was interested in learning more about the work you do, where can the find more?
They can visit our website, or also read about us on Fast Company and Fortune. There is also a short documentary video about our company and technology that was created by Freethink Media for their Coded Series that was sponsored by Facebook.
I believe that this combination, blockchain and on-site quality control, will help ensure transparency from start to finish, and as Dan says, bring consumers and farmers closer together.
® 2018 MyFoodTrust