Vanilla is one of the most ubiquitous ingredients in the world, yet 80% of the world’s vanilla comes from a single place: the island of Madagascar, where small farms are responsible for most of the production.
The livelihood of smallholder vanilla farmers depends on successful harvests, but crop production is a delicate task. Vanilla plants must be tended to for three to four years before bearing pods, and the country is vulnerable to extreme weather conditions such as drought and flooding.
In fiscal 2020, Estee Lauder’s Responsible Sourcing team and Aveda began a pilot program using blockchain technology to trace the beauty company’s Madagascan vanilla supply chain from harvest through production. Estee Lauder partnered with BSR, (En)Visible and IFF/LMR, one of its strategic suppliers, to bring the project to life.
A chain of custody
were provided a digital ID card that conveys their unique traceability code via a QR reader. Using mobile phones and QR code IDs, data is now captured directly from a farmer upon purchase of the vanilla. The product and producer information is recorded on a Blockchain, forming an immutable chain of custody. From the time the vanilla leaves the producers’ hands, it is tracked through the supply chain via the Blockchain to validate quality and authenticity.
Estee Lauder’s objectives with this project are to increase transparency and traceability within one of its more complicated and sensitive supply chains. The brand also seeks to promote fair and inclusive business practices to support those who help bring the beauty of vanilla to its customers around the world.
Mindi Deleary executive director, Responsible Sourcing, Estee Lauder Companies shares how the brand got involved with the vanilla Blockchain project, “This project stems from our Sensitive Supply Chain work. As we prioritise which ingredients to focus on, one of the areas we consider is increasing transparency. When this opportunity to explore Blockchain in the vanilla supply chain came our way, we knew it was worth pursuing. We wanted to test Blockchain with vanilla to see how it could bring value. Depending on the results and the feedback, there might be more opportunities to take Blockchain technology to additional suppliers for use with other commodities.”
As part of its continuous efforts to address issues that may exist within complex supply chains, by the end of calendar year 2025, Estee Lauder will have identified sensitive ingredient supply chains and developed robust biodiversity and social action plans for them.
Nothing succeeds like success
What has been the outcome of the vanilla Blockchain project? Mindi adds, “I am happy to say that so far it has been a success! The team in Madagascar went from using a system of logging weights and volume into a notebook to recording information digitally, and they did so seamlessly. This was our first proof point. The processor successfully used the technology again when they sold the beans to our supplier. And now that the vanilla has been delivered to us from our supplier, this is the last link in the chain. We have proved that the software works and that all partners were able to adapt and use the system. The feedback has been great, and we have found many reporting that the new system is much easier than the old methods.”
The company has reviewed its portfolio of more than 4,000 ingredients and prioritised those considered sensitive from a Responsible Sourcing perspective. The brand has identified a number of ingredients as priorities and has developed and are implementing biodiversity and social action plans for each.
Plans include increasing traceability, developing policies and procedures specific to each ingredient, monitoring suppliers for sustainability risks and identifying projects to generate positive impact on the ground and through industry collaboration.
Mindi outlines future plans, “We are talking to our partners about how to build on this work and where to go from here. We’ve gotten to know these partners on the ground and now our focus is on how do we now really make an impact? How do we bring others to the table? We are hopeful that Blockchain can play a role to help stabilise the vanilla industry through traceability of supply. None of us alone have all the answers. But if we put our heads together to make these things scalable and efficient, we can be incredibly powerful.”
