I’m sitting in the cafeteria of Building 25 on the sprawling Microsoft headquarters with an Oculus Rift headset strapped on my head. Swiveling from side to side, looking like a fool to anyone who doesn’t know what I’m up to, I virtually meet Enrique Navarro, a coffee grower based in Costa Rica. He shows me around his operation and describes the effort of turning his crops into cups of coffee in Seattle.
This virtual reality experience is just one example of how a Seattle startup called Onda Origins aims to transform the coffee business. The latest move is a foray into blockchain, the trendy technology that acts as distributed ledgers secured by powerful cryptography algorithms — it is the underpinning for Bitcoin — and could create new types of tech products and services.
While the world’s biggest coffee company, Starbucks, is eyeing blockchain, Onda Origins is already deep into it as a way to create a verifiable bean to cup experience for customers. Onda uses blockchain to create transparency for customers, who can see exactly where their coffee comes from, and for growers to get maximum revenue out of every bean they produce.
“We can revenue share back to those growers and reward them a second time for the environmental or social good they’re bringing to the world,” Paul Tupper, one of the co-founders of Onda Origins said. “Consumers are driven by that, and we can make a system that reflects the values people think they’re buying into. A backbone of experiential marketing makes it feel true and traceability proves that it is true.”
A Guatemalan grower named Ivonne Herrera is the first to have her business fully integrated on blockchain through a startup called yave.io, whose CEO is Scott Tupper, the other Onda co-founder. The coffee, which costs $20 per bag, is available for pre-order and it will arrive in May. Onda is working on another set of blockchain-powered coffee products from growers in the Philippines.
Using blockchain makes it easier to work across borders and languages barriers. Onda on a couple occasions had to find creative ways to make sure their first growers got paid, and that became more challenging as it looked to expand to larger growers and different locations.
“As we expanded our offerings into cooperative models or small holders in locales where we didn’t have linguistic capacity, we could never guarantee that the actual trail was leading back to the producer,” Scott Tupper said. “That led to a couple disappointing situations where we didn’t know how to reconnect with the growers. Blockchain offers an ability through auditing chain of custody on a ledger to make sure that we are following product all the way through and that we will always have access to the growers.”
Brothers and Pacific Northwest natives Paul and Scott Tupper worked abroad separately and saw how skilled farmers make the best of difficult circumstances, but still often get short-changed by global commerce. Nowhere is that more true, they said, than in coffee, where most growers have made the same for decades, even as the trend of high-priced premium coffee has taken off.
“Sustainability stories from origin, whether that’s environmentally sustainability or community sustainability, were being leveraged for really high price points on the consuming end but that price wasn’t shared back to the grower, even though they are bringing value,” Paul Tupper said.
In addition to the cafe on the Microsoft campus, Onda sells directly to restaurants and cafes as well as consumers via its website. Onda is working on creating a cafe and talking to more stores and cafes.
Onda, which works out of the University of Washington’s CoMotion Labs, makes money through a margin on its coffee. The startup is also raising a seed round of funding right now to help it grow as it looks to bring more growers onto its platform and find more partners.
Shannon Keith, director of impact and engagement, is the company’s third employee, with another coming onboard soon. She has a background in philanthropic consulting and played in an important role in the alliance with Microsoft.
Microsoft’s food services branch is pursuing a variety of sustainability initiatives, and the company put out a bid for a sustainable coffee provider for Cafe 25. After Microsoft officials got the same VR tour from Navarro that I saw, they brought him to close the deal with Mark Freeman, senior manager of Global Dining Services at Microsoft.
“We try to make it as much in the own words of the farmers,” Scott Tupper said. And this time it paid off.