Cocoa pilot links physical proof to traceability

The Hashgraph Group and Merck are piloting a cocoa traceability system that connects physical product authentication with digital records, with PwC Germany supporting process design and implementation.

The project combines The Hashgraph Group’s TrackTrace Digital Product Passport platform with Merck’s M-Trust authentication technology. Information recorded through the system can cover cocoa origin, authenticity, quality, compliance, and product movements, creating a digital identity intended to remain associated with the physical material as it moves through the supply chain.

That physical connection addresses a persistent weakness in traceability projects. A database can contain detailed records of farms, batches, transfers, certificates, and processing events, but those records are useful only while there is confidence that the material being scanned or handled is the material described in the system.

Merck’s technology is intended to provide that additional authentication step. Physical identifiers can be checked at defined points in the chain and linked to the relevant digital record, while TrackTrace provides the broader data layer for recording and sharing supply-chain events.

The Hashgraph Group uses the Hedera distributed ledger as part of the platform. The objective is to create a record of selected transactions and verification events that can be reviewed by authorised participants without relying on one organisation maintaining the complete history independently.

Cocoa gives the system a demanding first application. Beans can pass through growers, collection points, cooperatives, traders, processors, logistics providers, chocolate manufacturers, and other intermediaries before reaching a finished product. Material may also be aggregated during those movements, making mass balance, batch identity, and chain-of-custody controls harder than they appear on a process diagram.

European regulatory requirements have increased the value of reliable origin data. Cocoa falls within the scope of the EU Deforestation Regulation, which places due-diligence obligations on businesses placing relevant commodities and derived products on the European market. Manufacturers and processors need sufficient evidence to support sourcing claims, including geographic information and supply-chain documentation.

The pilot does not make cocoa compliant merely by putting its records on a distributed ledger. Origin data still has to be accurate, physical goods have to remain correctly associated with the records, and organisations have to follow the required due-diligence procedures. A secure record of poor information is still poor information.

The more useful element is therefore the attempt to connect physical verification with the digital chain. If a batch can be authenticated when it changes hands, the system can reduce the risk that records and material drift apart unnoticed as cocoa passes through multiple organisations.

The partners also see applications in quality assurance and recalls. A processor investigating an affected batch needs to determine what material entered production, where it was used, which finished products contain it, and where those products were sent. Fragmented records can turn that exercise into a manual reconciliation task across procurement, production, warehouse, and customer systems.

A digital passport does not remove the need for conventional lot coding and factory traceability, but it can provide another structured layer around the information exchanged between companies. The value increases if upstream origin records and downstream production events can be interrogated without repeatedly rebuilding the chain from emails, certificates, spreadsheets, and isolated databases.

PwC Germany’s role reflects the fact that technology is only one part of that problem. Implementing a traceability architecture across several businesses requires agreement on governance, data ownership, responsibilities, access rights, partner onboarding, and the points at which authentication should occur.

Those questions become particularly important where commercially sensitive information is involved. Cocoa buyers may need evidence of origin and compliance without exposing every commercial relationship or purchasing detail to every participant in the chain. A useful system therefore has to provide transparency selectively rather than assume that all supply-chain data should be visible to everyone.

Factory integration presents another practical test. Scanning or authentication procedures have to fit around goods receiving, warehouse transfers, production consumption, and dispatch without creating delays that encourage operators to bypass the process. Identifiers must also survive the physical conditions encountered during storage, transport, and processing for as long as they remain relevant.

The Hashgraph Group says the project is intended to improve traceability, auditability, quality assurance, compliance readiness, and stakeholder transparency. Those are reasonable targets, but the pilot will be judged less by the sophistication of the underlying ledger than by whether users can establish the history of a real cocoa batch more quickly and reliably.

That is where food traceability systems tend to encounter their least glamorous problems. Different organisations use different product codes, batch structures, software, and terminology, while information can arrive late or incomplete. Interoperability and disciplined data capture usually matter more than the choice of database once products begin moving at commercial speed.

Physical authentication adds another control against substitution or misidentification, provided the identifiers themselves are secure and applied consistently. In combination with digital records, that could create stronger evidence of what material changed hands and when, rather than relying entirely on declarations made elsewhere in the supply chain.

Cocoa is an appropriate proving ground because regulation, provenance, food quality, and multi-stage processing collide in the same commodity chain. If the pilot can keep physical material and digital identity aligned through those handovers, the technology may offer manufacturers something more useful than another sustainability dashboard: evidence that the batch recorded in the system is actually the batch sitting in front of them.