Empowering Fair Trade with YoY® ESG Cloud
Introduction to the retail and manufacturing sector's growing commitment to fair trade and living wages.
The Challenge.
In the evolving landscape of global trade, retailers and manufacturers are increasingly committed to ethical practices, particularly when sourcing from the Global South. A key initiative in this realm is the 'living wage strategy', which involves paying a premium above market prices to small owner producers (SOPs). This approach aims to ensure these producers receive a living income reference price for their products, fostering fair trade and sustainability.
However, this noble strategy faced significant hurdles. The foremost challenge was the lack of a reliable chain of custody. There was no concrete system to verify that the extra funds actually reached the SOPs. This gap in the supply chain raised concerns about the effectiveness of the living wage strategy, as there was no guarantee that the additional funds were not being diverted elsewhere.
Furthermore, there was a pressing issue of traceability. Retailers and manufacturers struggled to ascertain if the production lots they received were genuinely sourced from the specific SOPs they intended to support. This lack of traceability not only undermined the integrity of the living wage initiative but also posed risks of unintentionally supporting unsustainable practices.
These challenges highlighted a critical need for a robust, transparent solution that could uphold the principles of fair trade and ensure that every extra penny paid made a real difference in the lives of the SOPs.Lack of reliable chain of custody
Lack of traceability
The Solution.
At the core of this transformation was the empowerment of small producer organizations (SPOs). By integrating YoY's technology, SPOs could digitize their internal processes, reaping the benefits of the system alongside larger supply chain participants. This inclusive approach meant that every entity, regardless of size, could contribute crucial information to the system.
A key innovation was the synchronization of product flow with payment transactions. This integration ensured that funds reached their intended recipients, supporting the living wage strategy effectively. To bolster the reliability of the data, YoY implemented multiple methods to verify the authenticity of information. A user-friendly mobile application, capable of functioning offline, was introduced to capture data even in remote or challenging environments.
The YoY solution was not just about tracking; it was about creating a comprehensive narrative for each product. The system could record any event in the supply chain, attaching relevant metadata to these events. This capability extended to integrating quality assurance data, such as HACCP-related information, seamlessly into the system.
One of the most impactful aspects of YoY's approach was its universal benefit. Each participant in the supply chain, especially the SPOs, could utilize their own YoY tenant to digitize and streamline their operations. As products were tracked from the farm level to the shelf, the solution also served as a validation tool for various certifications like Fair Trade or Organic, ensuring compliance and authenticity.
Ultimately, YoY ESG Cloud didn’t just trace products; it guaranteed that the product paid for by retailers and manufacturers was indeed the product delivered, closing the loop in the living wage strategy and fortifying the integrity of the entire supply chain.
Life below the $2 per day poverty line
small-scale farmers in the Global South are living below a fair living wage.
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The Results.
A critical outcome of this transformation is the verification of additional funds intended for living wages. The system's robust traceability has effectively curtailed instances of fraud and malpractice, ensuring that the additional premiums reach the rightful recipients - the small owner producers (SOPs). This verification not only reinforces fair trade practices but also elevates the value of the end product. Products verified as fair trade now command higher market value and margins, benefiting all stakeholders in the supply chain.
Moreover, the wealth of information collected along the product’s genealogy opens up opportunities for unique marketing initiatives. Retailers and manufacturers can now engage consumers with compelling stories about the product’s origin, production, and ethical credentials, enhancing brand value and consumer trust.
For the farmers, YoY® ESG Cloud has been a game-changer. They now have the assurance of receiving fair compensation for their produce, directly impacting their livelihoods and communities. The SOPs have experienced a transformation in their operational efficiency and safety, thanks to the digitization of their administrative processes.
Furthermore, the integration of quality-related data into the tracking system, at no additional cost, has raised the bar for product safety and quality. This integration not only assures compliance with various health and safety standards but also adds another layer of value to the product, reinforcing the commitment to excellence that YoY® ESG Cloud embodies.
In essence, the solution has not only streamlined the supply chain but also infused it with a level of integrity and quality that resonates with all its participants, from the farmers to the end consumers.
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The Clients.
The solution's ability to digitize and track the supply chain from the farm to the retail shelf has been particularly valuable for these industries. Among our diverse clientele, we serve a significant number of brands known for their coffee or cocoa-based products. A key user of this particular solution is a leading global retailer, ranking within the top 20 worldwide. This client, like others, values the enhanced transparency and efficiency brought about by YoY® ESG Cloud in managing complex supply chains.
While specific names are withheld for privacy, these examples reflect the type of industries and scale of operations that benefit from the YoY® solution as demonstrated in this case study.
turnover of largest client using the solution based on this case study
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