The Estée Lauder Companies turns to blockchain to boost supply chain traceability

Data is captured using mobile phones and QR code IDs. Image: The Estée Lauder Companies / Aveda

The company is working with ingredient supplier LMR Naturals by IFF and one of its Madagascan vanilla suppliers Biovanilla, as well as blockchain scale-up Wholechain, to pilot the technology. Some 450 smallholder farms are involved in the pilot and Aveeda claims this is one of the biggest blockchain pilots in the beauty and cosmetics sector.

Blockchain works as a tamper-proof audit trail that can store and verify information about the source of raw materials, the processes used to produce them and the journey they take before ending up in products. Wholechain’s model uses QR codes to help communicate the information stored using blockchain with users, including workers across the value chain, and customers.

Vanilla sourced through this pilot scheme will be used to create skin and hair care products that will go on sale in Spring 2021. The Estée Lauder Companies hopes the process will help it to better predict and respond to supply chain issues like fluctuations in weather and price, and to ensure farmers receive the pay and training they need to adopt more sustainable practices.  

Previously, vanilla supplied to The Estee Lauder Companies has been traced using stamps embossed directly onto the bean. The digitisation of this process prevents the risks relating to tampering or missing information, while also making communication with the end-consumer simpler.

“Our products are built on natural ingredients, and the long-term viability of those ingredients and the people cultivating them is vitally important,” Aveda’s global brand president Barbara De Laere said.

“With blockchain, we now have a direct connection to our farmers in Madagascar, providing us, our salon partners and our customers more transparency into our supply chain. This transparency is of utmost importance to us as a brand, and we are proud to give our network visibility to the positive impact that, ultimately, they are having on this local community.”

The launch of the blockchain-traced vanilla comes shortly after Aveda published an ingredient glossary on its website, telling consumers where it sources all key ingredients from.

Blockchain boom

Non-profit BSR is helping to coordinate the pilot for the Estee Lauder Companies and to share learnings with other companies across North America, Asia and Europe. It works with more than 250 member businesses, so the scope for wider application is significant.

Agri-food supply chains are often multinational and multi-tiered, operating in regions which are most affected by climate change and poverty. As such, it is important for end-user businesses to achieve visibility, but often difficult.

Tech-based solutions have been posed as a key part of the solutions by many companies. Earlier this year, Princes introduced QR codes to its tanned tomatoes and tuna, which provide information from its blockchain and GPS mapping programmes when scanned. Blockchain is also being trialled by the likes of Ben & Jerrys, Sainsbury’s and Unilever-owned PG Tips.

Elsewhere, AI is helping companies to optimise water and fertiliser use and to minimise waste on farms and beyond. It is being trialled at grain farms across Kenya by Capgemini.

Sarah George

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