The story behind nutmeg: a fully transparent chain

Nutmeg in the supermarket seems like the most normal thing in the world. But did you know that behind every jar or bag lies a story? In collaboration with Fairfood and using smart blockchain technology, we at Verstegen have fully mapped out the journey of nutmeg for everyone. With a simple scan of the QR code on all the packaging, you can see which farmer grew the product you're holding and how it ultimately ended up on the shelf. And that's good news for nutmeg farmers and the rest of the supply chain. We explain why.

The challenges of nutmeg farmers
In Indonesia, home to 75% of the world's nutmeg production, the spice is primarily cultivated by small-scale farmers. Despite their dedication, these farmers often face challenges that hinder their share of the harvest. For example, limited access to market information and little bargaining power puts them in a weak position in the market. Another challenge is the lack of access to a banking system. Financial literacy is low in Indonesia, meaning farmers often lack bank accounts and are unable to secure credit for smart investments in their businesses.

Collaboration with Fairfood
In 2018, we launched a partnership with Fairfood to address these farmer challenges, initially with a pilot project for a single shipment of nutmeg. The primary goals: generating higher incomes for farmers, strengthening their position in the supply chain, and building strong long-term trade relationships. Since this pilot, we have been jointly leading the way in changing the dynamics of the entire nutmeg supply chain and amplifying the farmers' voice. We do this through Fairfood's "Trace" platform, which utilizes blockchain technology, among other technologies.

The role of technology: Trace and blockchain
The technologies we use make our nutmeg supply chain fully traceable. Trace records all transactions, from farm to fork, allowing us to precisely track the product's journey. The blockchain technology we use stores all data in blocks. This allows every player in the chain to securely enter information. For example, the farmer can confirm whether they received the agreed-upon price for a product. This information is visible to everyone in the chain. We are thus creating a kind of digital product passport, providing complete transparency about what has been done with the products and which agreements have been fulfilled. This is now being implemented for all of Verstegen's nutmeg. Farmers receive so-called "farmer cards" (a kind of reverse debit card) with NFC technology, allowing them to verify transactions, even without internet access. They also have access to their data via a web interface and SMS integration.

Fairfood acts as a data manager and intermediaries between farmers and exporters who collaborate with Verstegen. Farmers receive a premium for high-quality nutmeg and a premium for sharing the data needed to ensure the nutmeg is traceable. This way, they are paid for sharing valuable information.

A positive impact in the chain
Thanks to this digitization, all nutmeg transactions are approved by the farmers. This strengthens their position in the supply chain and increases the transparency and trust between partners. It benefits collaborations and ensures a fairer production process. Nearly 400 farmer cards have now been issued. Thanks to the aforementioned premiums, farmers' income has increased by approximately 4%. The fact that these farmers' voices are now being heard has led to greater trust within the supply chain and a stronger bond between Verstegen and the farmers. Furthermore, through a user-friendly interface, everyone can now follow the journey of nutmeg. Together, we are taking steps toward a fairer, more sustainable supply chain that is also traceable to everyone.

That's a taste of what's to come! Our goal is to eventually make all herb and spice chains completely transparent. Because honest food starts with a transparent supply chain.

Read more about this project on the Fairfood website: Verstegen: discover the journey of nutmeg