How Blockchain and AI Address The Fake Coffee Crisis

By George Pullen, Chief Economist, MilkyWayEconomy

There’s fake news. Fake friends. Fake luxury watches. And now, a growing crisis...fake coffee.

Food fraud isn’t new. In fact, it’s a multi-billion-dollar industry, spanning everything from fish to honey, olive oil, and even organic produce. According to research, fraudulent or mislabeled fish already account for anywhere from 1 in 5 to 3 out of 4 of the fish sold, depending on the species and region. But while fake food has always been a concern, the rise of fraudulent coffee represents something far more sinister: the slow, calculated corruption of one of the most consumed and beloved commodities in the world.

How Did We Get Here? The Perfect Storm of a Coffee Crisis

Let’s talk economics for a second. Coffee isn’t just a morning ritual; it’s a $100+ billion industry that touches nearly every country on Earth. It’s a commodity with markets fluctuating based on everything from climate change to global trade policy. And right now, that market is in chaos.

• Extreme Weather: Droughts, frosts, and unpredictable weather patterns have devastated crops in Brazil, Colombia, and Ethiopia—some of the world’s largest coffee producers. Climate variability means lower yields, which means higher prices.
• Supply Chain Disruptions: From labor shortages to shipping delays, coffee supply chains remain fragile post-pandemic, creating opportunities for fraudulent players to slip in counterfeit products.
• Record-Breaking Price Surges: In just three months, coffee prices have surged 50%, recently eclipsing $4 per pound, an astronomical price jump that makes fraudulent activity even more attractive to bad actors.

Whenever a commodity becomes more expensive and difficult to source, fraudsters step in to make a quick buck. And in the coffee world, that means one thing: fake, mislabeled, or adulterated coffee is flooding the market.

What’s in Fake Coffee?

A cup of coffee should contain just one thing…coffee. But when fraudsters get involved, that cup could contain any number of cheaper, mislabeled, or even harmful substances, including:

• Corn and soy fillers…used to bulk up coffee grounds and make them appear normal to the average consumer.
• Starches and sugar derivatives…which impact flavor and consistency but cut costs for manufacturers.
• Low-quality, old, or moldy beans…repackaged and resold as premium or specialty coffee.
• Artificial flavors and chemical enhancers…to mask the taste of lower-grade products.

And if you think this is only happening in cheap, mass-market coffee, think again. Even premium and specialty roasters are at risk. The more expensive coffee becomes, the more incentive there is to “up-label” cheaper varieties—passing off low-quality beans as rare, single-origin, or even organic.

The Fake Coffee Economy: Who Profits?

So, who wins in a world where fake coffee is running rampant?

1. Fraudulent Suppliers – Shadowy suppliers, often in parts of the world where regulation is lax, benefit from selling mislabeled or adulterated coffee to unsuspecting buyers.
2. Middlemen & Importers – As prices rise, some importers look the other way or even participate in blending lower-quality beans with higher-grade ones to maximize margins.
3. Mega-Retailers – Large coffee brands and supermarket chains often buy in bulk from wholesalers without fully verifying the authenticity of every bean. If a deal looks too good to be true, it probably is—but when billions of dollars are at stake, a little “willful ignorance” goes a long way.

The Consumer Loses Every Time

For everyday coffee drinkers, the consequences range from minor annoyances (bad taste, weak coffee) to serious health risks (contaminants, allergens, or even toxic mold from improperly stored beans). The same way fake milk, fake olive oil, and fake honey have diluted consumer trust in the food industry, fake coffee is quickly eroding confidence in what’s being sold on store shelves.

The question now is: how do we fix it?

The Future of Coffee: Trust, Transparency, and Technology

The coffee industry has two choices: let fraud run rampant and watch consumer trust collapse—or fight back with technology, transparency, and integrity.

Here’s what the future holds:

1. Blockchain and Supply Chain Verification – Coffee producers and ethical brands will increasingly turn to blockchain tracking to verify the journey of beans from farm to cup. Every step of the process—harvesting, shipping, roasting, and selling—will be recorded in a tamper-proof digital ledger.
2. AI and Chemical Testing – Advances in AI-powered spectrometry can detect adulterants in coffee at the molecular level. This means faster, cheaper, and more effective testing to ensure purity.
3. Direct-to-Consumer Ethical Brands – Companies that own their supply chains, like Dope Coffee Company, will thrive because they can guarantee authenticity, quality, and ethical sourcing.
4. Stronger Regulatory Oversight – Governments and industry watchdogs will likely impose stricter labeling laws, but consumers must remain vigilant—because enforcement will always lag behind innovation.

What Can You Do?

If you’re a coffee drinker, now is the time to be more discerning than ever.

• Know where your coffee comes from. Support roasters that source directly from farmers.
• Look for transparency. Does the brand tell you exactly where the beans were grown?
• Be wary of too-good-to-be-true deals. A high-end coffee at a budget price? Chances are, it's fake.
• Stick with trusted brands. Companies like Dope Coffee Company aren’t just selling coffee; they’re selling trust.

Final Thought: The Cost of Fake Coffee is More Than Just Money

Fake coffee isn’t just a ripoff—it’s an erosion of integrity in the food system. It undermines hardworking farmers, dilutes the authenticity of specialty coffee, and betrays the trust of consumers worldwide.

If the coffee industry doesn’t act, the market will soon be flooded with mislabeled, counterfeit, and adulterated coffee, just as we’ve seen happen with fish, milk, and olive oil. The good news? There’s still time to fight back. Ethical roasters, consumers, and technology are on the front lines of this battle.

So next time you take that first sip in the morning, ask yourself: Is this really coffee?

If you have to wonder, it’s time to find a brand you can trust.

Stay dope and drink real coffee.

George

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Disclaimer: Professor George S. Pullen is a Space Economist at the University of New Hampshire School of Law and an instructor at Columbia University. George is also a partner at MilkyWayEconomy, who is an investor and advisor to Dope Coffee Company, which seeks to leverage industry disruptions as opportunities for growth. owth.owth.