Information and its management for differentiation of agricultural products: The example of specialty coffee

Prices of most of agricultural commodities show a long-term declining trend. Increasingly markets are signaling demand for differentiated products and in order to increase their incomes farmers and traders are looking to higher value options, including differentiated products. Product differentiation occurs when a product offering is perceived by the consumer to differ from its competition on any physical or non-physical characteristic including price. The differentiation can be based both on perceptual differences and also on actual product differences, based on measurable characteristics. The information requirements for supply chain management of differentiated high value products are much more stringent than for traditional agricultural commodities requiring a two-way information flow from the producer to the customer. The conceptual base for information systems to support supply chain management of differentiated products is described in this paper. An Internet-based coffee information system (CINFO), illustrates how these principles can be applied to the case of specialty coffee. CINFO provides farmers information on where and how to produce coffee with particular features, whilst at the same time providing traders with information on the availability of products with particular traits. Furthermore, CINFO traces individual product batches indicating where and how they were produced, processed and distributed to the end consumer so as to facilitate identity preservation, which is the key to obtaining added value from differentiation.