In February 2019, to launch a pilot program to leverage blockchain technology in our Madagascan vanilla supply chain, Aveda partnered with natural ingredients supply chain partner LMR Naturals by IFF,* local Madagascar vanilla supplier Biovanilla, global sustainable business partner BSR,** and blockchain innovation partner Wholechain*** to launch a pilot program to leverage blockchain technology in its Madagascan vanilla supply chain. Blockchain technology provides further ingredient traceability by collating data from supply chain partners in real-time via a secure, digital system. We are proud to be among the first beauty players to launch a successful, commercial blockchain pilot at such scale, furthering our work in the area of responsible sourcing. This program will bring blockchain-enabled, traceable vanilla to more than 125 Aveda products in spring 2021.
Creating transparency in supply chain
Blockchain technology provides an immutable reference that can be used to verify claims of the source and quality of ingredients, such as the Madagascan vanilla we use in our products. 80% of the world’s vanilla comes from the island of Madagascar, and small farms are responsible for most of the production. Complexities in the vanilla supply chain are multilayered, ranging from price fluctuations to major climate challenges and intensive farming needs, which is why vanilla was selected for this pilot program.
Using mobile phones and QR codes, Wholechain, our blockchain innovation partner, creates a tamper-proof record using blockchain tracing of each vanilla bean’s journey throughout the supply chain. Beginning with a cooperative of 450 smallholder farmers in Madagascar, the technology traces the beans along the process from the sale to the local co-op; to LMR, Aveda’s fragrance house partner in Grasse, France; and finally, across the Atlantic to Aveda’s manufacturing facility in Blaine, MN. These products containing blockchain vanilla, including Aveda’s Invati franchise, will be on store shelves in the Spring of 2021.
Ultimately, this traceability is important because it will help to demonstrate sustainable, responsible sourcing, high quality ingredients, and more transparency for all stakeholders. Beyond these long-term benefits, this pilot provides a strong proof-of-concept for the use of blockchain to increase traceability in complex supply chains, benefitting the wider business community by establishing robust best practices for responsible sourcing in the beauty sector and beyond.
A commitment to sustainable sourcing
For Aveda, integrating social, ethical, and environmental performance metrics into the process of selecting and maintaining suppliers is key to sustainable sourcing practices. This includes establishing on-the-ground, meaningful environmental and social programs that will benefit the communities from where the brand sources ingredients. Blockchain technology will contribute to this by laying the groundwork to ensure transparency in Aveda’s supply chain, providing transparency from the bottle back to the farm.
Barbara De Laere, Aveda Global Brand President, said, “Aveda has prioritized sustainable sourcing for decades, and we now have the technology to demonstrate this to the consumer. Our products are built on natural ingredients, and the long-term viability of those ingredients and the people cultivating them is vitally important to Aveda. 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.”
A blueprint for the industry
Whereas many commercial blockchain pilots are theoretical (relying on sample data) or extremely small in scale, Aveda’s program is one of the largest scale pilots to be launched in the beauty industry. The implementation of digital tracing capabilities at the beginning of the supply chain process helps to facilitate positive impacts across the value chain including greater transparency for the end consumer. Additionally, digital traceability enables a level of visibility needed to facilitate the management and mitigation of complexities in supply chains arising from unforeseen events such as climate changes or global pandemics. Tracing and verifying the steps in the supply chain from 450 smallholder vanilla farmers all the way to Aveda’s manufacturing facility, the extensive pilot provides a true proof of concept that can be leveraged by others in the industry to improve transparency and raise sourcing standards.
12 years of giving back in Madagascar
Since 2008, Aveda and its partners Global Greengrants Fund and WaterAid, have provided community and institution-led sustainable and equitable access to water, sanitation and hygiene (WASH) through gravity-fed water supply systems for 60,000 people in marginalized communities throughout Madagascar including Ampasimanjeva, Ambodiranonambilona, Betampona, Taindambo and Vohimasina. Aveda is currently working on an additional water project in Madagascar with global partner charity: water to bring WASH to nearly 26,000 people the Miandrivazo and Antananarivo Avaradrano districts through large-scale piped systems. These systems will use solar power or electricity grid power to pump water from boreholes and springs into a reservoir tank, and then distribute the water by gravity to tap stands located throughout the communities.