Improving traceability remains one of the thorniest challenges for many sustainability teams, even as consumers’ calls for more transparency into the makeup of products — and the labor practices associated with creating them — grow louder.
The social distancing requirements and travel restrictions in force since early 2020 aren’t making things any easier — in some cases, it’s impossible to perform the audits necessary for verifications of provenance. That’s prompting more companies to double down on alternatives that rely on information technology.
One project worth studying for inspiration is a vanilla traceability "pilot" in place at Aveda, the "plant-powered" hair care brand owned by The Estée Lauder Companies (ELC). The company uses the word pilot to describe the system — which uses mobile phones and QR codes to trace the journey from a cooperative of 450 smallholder farmers in Madagascar to LMR (Aveda’s fragrance partner in France) to Aveda’s manufacturing facility in Blaine, Minnesota. In reality, this is a massive undertaking that will affect more than 125 Aveda products by the spring (the company’s SKU count is close to 500). Almost 80 percent of the company’s vanilla supply comes from Madagascar.
"We are a brand that has had environmental sustainability in our DNA since our start. With this technology, we can make that extremely transparent," Barbara De Laere, global brand president for Aveda, told me. "We can also do this in a very objective way. It’s not just us saying this, and people have to take our word for it."
The technology behind the solution comes from Wholechain, a company that is also working with the likes of Mastercard. The system doesn’t require the farmers themselves to invest in technology: they are issued an identification card that includes their unique digital "Fitomboka," a stamp that is embedded on the bean and that is a well-known hallmark of the trade. That code is scanned with a mobile phone when the farmer brings the beans to coop for sale, kickstarting the traceability chain.
At this stage, the information is pretty generic: data points such as weight, the identity of the farmer and location. But in the future, the system could be used to capture other metrics, such as how much the farmers are being paid or labor conditions at the farm. "Traceability is like the tracks that the train can run on," said Jayson Berryhill, co-founder and partner with Wholechain.
While vanilla is the focus for now, the potential for tracing other ingredients is strong, De Laere said, an especially relevant detail when you consider that as of Jan. 1, Aveda declared that its entire product line is "100 percent vegan." That required assessing more than 900 ingredients, mainly on a manual basis.
We invested a lot of heart and soul and some money. We believe the return on the promises we made and values we kept will be well worth it.
"We wanted to make sure that along the supply chain nothing was used as a side product that could be animal-derived, that could have traces," she noted. Sugar, for example, might be refined using bone char.
Greg Polcer, executive vice president of global supply chain for ELC, said most of the company’s responsible sourcing audits are not conducted with technology but the pandemic has inspired ELC to rethink its processes. Augmented reality glasses, for example, are being used to help qualify manufacturing equipment virtually and Polcer foresees monitoring technology playing a larger role in traceability tasks across the personal care and beauty company’s supply chain after more is learned from the vanilla project.
And although the data is only being used internally right now, Aveda is working on ways to make it available to consumers seeking more verified information about ingredients. "We invested a lot of heart and soul and some money,” Polcer told me when I asked about the overall investment in this particular blockchain solution. "We believe the return on the promises we made and values we kept will be well worth it."
How meaningful is this particular project? After all, yours truly has reported on plenty of blockchain experiments meant to improve the traceability of supply chains — from food to diamonds.
Thibault Gravier, global supply chain director for nonprofit BSR, said the Aveda initiative offers a "strong demonstration" that these sorts of projects are feasible even in "one of the poorest countries in the world." The challenge for companies, he suggested, is to focus on supply chains where the value is clear. In the case of the Madagascar project, for example, the data might in the future be linked to recognizing certain agricultural practices. "It’s a means, not the end goal."
And success will take buy-in from every link in the chain. While Aveda stood up this project, it took involvement from LMR Naturals (a natural ingredients partner), Madagascar vanilla supplier Biovanilla, BSR, and Wholechain to orchestrate the process. "We don’t believe that one single player has responsibility," Gravier said. "The whole supply chain is responsible."