The Hashgraph Group, Merck and PwC Germany are piloting a cocoa traceability system that combines physical product authentication with blockchain-based records as companies prepare for tighter European supply-chain requirements.
The project brings together The Hashgraph Group’s TrackTrace Digital Product Passport platform, Merck’s M-Trust physical authentication technology and PwC Germany’s supply-chain and implementation expertise.
The companies aim to create an end-to-end record linking individual cocoa batches or products with information about their origin, authenticity, quality, chain of custody and regulatory compliance.
TrackTrace records supply-chain events and associated data using Hedera, while M-Trust provides a mechanism for verifying that the physical product or packaging being scanned corresponds with its digital identity.
PwC Germany is supporting the operating model, including business-process design, workflows, governance, partner onboarding and training required to move the system from a technology demonstration toward an enterprise deployment.
The cocoa pilot comes as companies importing or selling cocoa and cocoa-derived products in Europe prepare for the EU Deforestation Regulation.
From Dec. 30, 2026, large and medium-sized operators covered by the regulation will have to demonstrate that relevant commodities placed on the EU market or exported from it are deforestation-free and were produced legally in their country of origin. Most micro and small operators receive additional time until June 2027.
Cocoa is one of seven major commodities covered by the rules, alongside cattle, coffee, palm oil, rubber, soy and wood.
The requirements place particular pressure on cocoa supply chains because beans can pass through farmers, cooperatives, aggregators, exporters, processors and manufacturers before reaching the final consumer.
Much of global cocoa production also comes from smallholder farms, creating a difficult data-management problem when companies attempt to link finished chocolate or cocoa products back to individual production areas.
The new pilot attempts to solve part of that problem by assigning a digital identity to a batch or product and enriching that record as it moves through the supply chain.
At defined verification points, information can be captured through physical scans, existing company systems or operational processes.
The record can include the product’s identity, production origin, quality information, certificates, due-diligence documents and authentication events.
Hedera provides the distributed ledger layer used to timestamp and anchor those events, producing a record that can later be checked for changes or inconsistencies.
Merck’s M-Trust technology addresses a different weakness in digital traceability systems: proving that the physical object being examined is actually the object represented by the digital record.
The technology uses physical authentication markers and scanning devices to connect raw materials, products or packaging with their corresponding digital identity.
That physical connection is important because a blockchain can provide strong evidence that a record has not been changed after it was created, but it cannot independently prove that incorrect information was not entered at the beginning.
Combining physical verification with the digital audit trail is intended to reduce that gap.
The project also draws on the EU’s broader move toward Digital Product Passports under the Ecodesign for Sustainable Products Regulation.
The European Commission launched its central Digital Product Passport Registry in July, creating infrastructure through which unique product identifiers and related metadata can ultimately be registered as sector-specific DPP requirements are introduced.
Cocoa is not currently subject to a specific Digital Product Passport mandate under the ESPR merely because it falls within the EUDR. However, the two regulatory developments point in the same direction: companies are increasingly expected to maintain structured, verifiable information about where products came from and what happened to them before reaching the market.
The Hashgraph Group and Merck had already integrated M-Trust with TrackTrace earlier this year for regulated supply-chain applications. The cocoa pilot adds a specific agricultural use case and brings PwC Germany into the deployment and process-design side of the project.
The partners said the architecture is not limited to cocoa. Similar physical-to-digital verification could be applied to pharmaceuticals, luxury goods, electronics, food products and industrial components where provenance or authenticity is commercially or legally important.
For cocoa companies, however, the immediate attraction is regulatory preparation.
If the system works at scale, processors and brands could use the same record to support deforestation due diligence, quality assurance, supplier verification and more targeted recalls instead of maintaining separate sets of documentation for each purpose.
Blockchain Is Useful Here Only if the First Mile Can Be Trusted
Supply-chain blockchain projects have been around long enough that putting cocoa records on a distributed ledger is no longer particularly interesting by itself.
The difficult part has always been what happens before the information reaches the blockchain.
If somebody enters the wrong farm location, attaches a certificate to the wrong shipment or substitutes one batch for another, an immutable database can simply preserve inaccurate information forever.
That is why the Merck component may ultimately matter as much as Hedera.
M-Trust attempts to connect the digital record to something that can be physically authenticated. Instead of trusting that a QR code stuck to a bag represents the product inside it, the system tries to create additional proof that the physical material and its digital identity belong together.
That does not eliminate every weakness.
Cocoa is particularly difficult because traceability has to begin far upstream, often with thousands of small farms that do not operate sophisticated enterprise systems.
The technology is relatively straightforward once a shipment reaches a large processor with scanners, databases and trained employees. Capturing reliable farm-level information across fragmented rural supply chains is considerably harder.
And EUDR compliance will not be achieved simply because information is stored on Hedera.
Companies still need accurate geolocation data, documented due diligence, risk assessments and procedures for handling questionable suppliers. They must know who is responsible for entering information, who verifies it and what happens when two records conflict.
That is probably why PwC’s role is significant.
Most failed enterprise blockchain projects do not fail because the underlying ledger stops working. They fail because organizations cannot agree on processes, data ownership, responsibilities or incentives across the supply chain.
A cocoa processor may want complete farm-level visibility. A supplier may not want to expose commercially sensitive information. A smallholder may have neither the technology nor the incentive to continuously update digital records.
Those are operational problems rather than blockchain problems.
The timing nevertheless gives this pilot a stronger business case than many earlier traceability experiments.
Companies selling cocoa products into Europe now have a regulatory deadline rather than a vague sustainability objective. They need evidence about production areas and deforestation risk, and they need systems capable of retrieving that evidence when regulators ask for it.
That changes the economics.
Traceability technology previously had to justify itself through better branding, efficiency or consumer trust. Regulation can turn the same infrastructure into something businesses may need simply to continue placing products on the market.
There is also value beyond compliance.
If a contaminated batch is discovered, a reliable digital chain of custody could help a company identify exactly which shipments and finished products were affected rather than recalling a much larger volume.
The same infrastructure could verify premium or sustainably sourced cocoa, reduce duplicated audits and eventually give consumers access to selected provenance information by scanning a product.
But the real test will happen far from the blockchain.
If THG, Merck and PwC can reliably capture the first handover from farm to supply chain and maintain that connection through every subsequent transformation, Hedera becomes a useful audit layer.
If the first-mile data cannot be trusted, the technology will simply provide a very sophisticated record of information that may still be wrong.
That is the challenge this cocoa pilot now has to solve.