Business

Starbucks and Microsoft Team Up in Groundbreaking Blockchain Coffee Platform

Predictive Drive-Thru Ordering and "Bean-to-Cup" Technology Among the Expected Initiatives

08.05.2019 | by Reve Fisher
Photo by rekre89 at flickr
Photo by rekre89 at flickr

Starbucks is teaming up with Microsoft’s Azure blockchain service to create several initiatives. Some of the other purported programs will include using machine learning to predict frequent customers’ drive-thru orders, track coffee production from the company’s farmers to its customers, and connect Internet-of-Things (IoT)-based coffee equipment throughout the company’s 30,000 locations.

In 2018, Starbucks CEO Kevin Johnson first announced the plans for a “bean-to-cup” program in which farmers from Colombia, Costa Rica, and Rwanda would be just a blockchain away from its customers around the world. Ultimately, the goal is to be able to track coffee production and offer financial opportunities to the very farmers behind the coffee conglomerate. Customers would be able to track this journey through the Starbucks mobile app.

“While high-quality, handcrafted beverages are so important, it’s the stories, the people, the connections, the humanity behind that coffee that inspires everything we do,” said Michelle Burns, Starbucks senior vice president of Global Coffee and Tea, in a statement from Microsoft. “This kind of transparency offers customers the chance to see that the coffee they enjoy from us is the result of many people caring deeply.”

“The promise of connecting coffee farmers to coffee drinkers is an extraordinary leap in transparency and accountability, and it speaks volumes about Starbucks commitment to creating a product that is good for people and for the planet,” said Dr. M. Sanjayan, chief executive officer of Conservation International, as reported by Geek Wire.

The predictive ordering system will essentially extend the recommendations that Starbucks Rewards members already receive through the company’s app. Machine learning technology used already makes order recommendations based on several factors, such as weather, time of day, community preferences, and previous orders. Although the exact details of the new initiative are unknown, Starbucks predicts that more 400 store-level criteria will be used to generate recommendations for drive-thru customers.

“We’re meeting our customers where they are — whether in-store, in their car or on the go through the app — using machine learning and artificial intelligence to understand and anticipate their personal preferences,” said Jon Francis, senior vice president of analytics and market research at Starbucks. “Machine learning also plays a role in how we think about store design, engage with our partners, optimize inventory and create barista schedules. This capability will eventually touch all facets of how we run our business.”

The predictive drive-thru technology is being tested at the Starbucks Tryer Center innovation hub in the company’s birthplace of Seattle.

Each Starbucks location has over a dozen pieces of equipment that must be functional around 16 hours a day. Therefore, the company is using Microsoft’s Azure Sphere to connect its equipment in the cloud to proactively detect problems and reduce service costs. The IoT technology will collect several pieces of data for every espresso shot pulled, reducing disruptions and malfunctions along the way. The platform will also allow Starbucks to send new recipes to its 30,000 locations at the touch of a button.

“Think about the complexity — we have to get to 30,000 stores in nearly 80 markets to update those recipes,” said Jeff Wile, senior vice president of retail and core technology services for Starbucks Technology. “That recipe push is a huge part of the cost savings and the justification for doing this.”

According to CoinTelegraph, Starbucks has also reported plans to accept Bitcoin-based payments, after an equity deal with the Bakkt cryptocurrency trading platform. As the cryptocurrency will be automatically transferred into fiat currency, no actual bitcoins will be processed by Starbucks.

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