Can we take a bite out of poverty through the simple act of buying a chocolate bar?
UNDP (Country Office Ecuador, Istanbul Hub's innovation team) and FairChain Foundation tested this with The Other Bar- a chocolate bar that comes with a 'digital passport' (tracks cocoa from bean to a bar), and an impact token that acts as a supercharged brand marketing campaign and allows consumers to reinvest in farmers who brought them the bar.
The experiment tested the hypothesis that consumers will reward sustainable business practices and brands (over non-sustainable ones) and are likely to pay a premium price ona product that is:
- Based on a sustainably managed natural resource
- Clearly contributes to livelihoods of farmers/producers
- Traceable to respond to specific consumer needs of transparency (verification/proof of origin).
- Provides (gaming) options for reinvestment and customer engagement with the natural resource and a producer
With these in mind, the Other Bar was designed to have a blockchain-powered token that gives consumers a choice of reinvesting its value in:
● A discount on their next purchase of the chocolate bar, or
● A cocoa tree to be planted in the community where the resource for the chocolate bar came from (with the ability to track when and where the tree actually gets planted)
Launched on Oct.23rd, 2,350 bars (out of 20,000) are pre-sold and 170 tokens deployed - only 16 for a discount on the next purchase, and 154 for purchasing cocoa tree.It is still very early, but this in part validates the hunch that consumers prefer to reinvest the dollar value in local communities where the cocoa in their bar originated then to get a discounted bar at their next purchase.
What is next?
This initial experiment built a solution targeting a supply chain around a single product, but its principles and platform apply to other sectors- it is ready to be deployed for empower consumers and investors to rethink various business practices and sectors, from water efficiency and energy conservation to fair labor practices and reduction of carbon emissions.
Therefore, our new hunch is that this type of impact projects may provide an alternative opportunity for corporates to invest their marketing budgets thereby executing on their sustainability goals and reinforcing positive image and a buzz in the media. To grossly oversimplify - instead of expensive ad campaigns, companies channel this money back to communities, farmers or in the restoration of natural capital in areas where parts of their products have been produced.
Some of the global trends we're seeing, at a minimum, make us think that the idea isn't entirely outlandish.
The 2019 data shows that sustainability-as-one-of-the-core-drivers of corporate decision making is no longer a remit of early adopters but of a growing majority of corporates (and one that is increasingly using science-based targets).Companies also are turning to new technologies for obtaining greater control of their value chains by sustainability-testing business practices of various suppliers (who sit outside their operational control).
These trends are driving a different bottom line.From 2005-2018, Global 100 companies (a list that ranks top corporate performers on sustainability criteria including revenues generated from clear products, carbon emissions) made a net investment return of 130% relative to 118% from companies on All Country World Index (the control group in this case)- FORBES article (link on my phone)
But despite these trends, there is still little evidence that consumer preferences for more sustainable practices are having a sustained impact on the lives of those working in the first mile – from 47% of tea workers having no access to drinking water, and coffee growers earning 1c out of a $2.5 cup of coffee, to cobalt mine workers in DRC living in abysmal conditions (without cobalt, you wouldn't have a functioning mobile phone).
This is what we want to change.
Global brands spent over $600 billion in 2019 on marketing their products – which is an opportunity to empower consumers to reward purpose-driven brands. Our hunch is that consumers would prefer their brands to spend more on fighting poverty and positive impact (2018 was the year of Brand Activism) than on marketing their products to the masses.
Stronger still, we think consumers are more open than ever to exploring new types of producer-consumer relationships – relationships that, reinforced with a token-based economy, is likely to drive action toward a more equal distribution of value.Next time you buy cosmetics, imagine transfering $.50 value via QR Code to a fund that invests in the education of young children so they don't have work in mica mines making an average of $.30 cents a day so your lotion might have a light glow or your toothpaste be extra bright.Or during your next hotel stay, transferring $.50 to a virtual fund that invests in livelihood of farmers whose organic produce you'll have for breakfast?
The WEF named Advanced Food Tracking via Blockchain as one of the top 10 emerging technologies in 2019 - so admittedly, these are the early days of this work.Our hunch is that the reframing marketing budgets into impacting-projects investments will ride a wave of an already emerging consumer-loyalty model- one based on the delivery of an impact promise at the first mile of the value chain.
Whether it's making it easy for you to invest in education of that girl working in a mice mine through buying your favorite brand of toothpaste, or in access to clean water for tea pickers in Sri Lanka this is a call to action to corporates who want to explore #TheOtherWay – brand activism based on tech-powered radical transparency, investment in equality and quality of life for those who are the front line of that chocolate bar you're munching on!
Shameless bragging: The Other Bar got a lot of media traction from the biggest global media (New York Times, Euronews) butalso from UNDP Administrator Achim Steiner, who recognized the chocolate as the ground breaking initiative for UNDP.
Millie Begovic works as a.i. Global innovation Advisor, UNDP, Carlo Ruiz is Head of Inclusive economic development cluster, UNDP Ecuador, Marina Petrovic is Innovative finance and technology expert, and Ruchi Mohanty is Regional Private Sector Specialist, Bangkok Regional Hub