Source:Vietnam Trade Office in Sweden
Importing companies will have to prove the product is not linked to deforestation and must demonstrate accurate geographic information about the product’s country of origin. As a result, exporters must ensure that they do not source their coffee from a source with degraded or degraded forests. Only then can coffee be exported to the European Union (EU) in general as well as the Nordic countries in particular. The integration of digital technology is critical to meeting the upcoming no-deforestation product regulation.
What does regulation mean for coffee companies?
As of December 31, 2020, the sale of coffee derived from deforested or degraded land has been banned. The latest version of the EU regulation requires coffee companies in the EU to collect the location coordinates of the coffee producing farm. Companies can combine this data with satellite monitoring tools. These tools check whether companies are meeting regulatory requirements and identify potential areas at risk of land degradation and deforestation.
The proposal also requires labeling coffee-growing countries as low-risk or high-risk. Coffee from high-risk regions must meet more due diligence requirements than low-risk regions.
Increased demand for traceability
Increasing traceability is another important aspect of this regulation. For the coffee industry, traceability involves linking data to an individual or a group of producers. Traceability increases data collection requirements for all actors in the chain.
Data collection is necessary at every stage of the supply chain if coffee producers and exporters are to remain active in the EU market. To ensure traceability in the coffee supply chain, actors in the supply chain need to record data every time a coffee bean changes owner. Besides the geographical coordinates of the production area, other types of data should also be reported. Example: Number of manufacturers per lot; Quantity and quality of coffee beans; and Productivity Forecasting.
What technologies can coffee companies use?
Manufacturers may use various digital tools to collect geolocation data. These tools include:
Applications that use the device’s GPS to plot coordinates while walking;
Drones can map by taking pictures from above; and
More sophisticated platforms allow drawing these areas from existing maps or satellite images.
Each of these solutions presents specific challenges and opportunities. It is up to technology access, infrastructure, knowledge, and budget to decide on the right approach.
Enhance digital knowledge and capacity
All the above-mentioned data requirements increase the importance of digitization in the coffee value chain. Exporters who want to use digital solutions need to: Understand what digital tools can be used to collect location and traceability data; Understand whether you have the knowledge to use these tools. Cooperation may be required to use specific tools; and Identify key activities to execute on the digitization plan, track results, and prepare to scale.
