For companies selling cocoa into tightly regulated markets, knowing where a shipment came from is no longer enough. They increasingly need evidence that can connect a physical product to its origin, chain of custody, authenticity and compliance records. The Hashgraph Group, Merck and PwC Germany are testing a traceability system that combines blockchain-based digital product passports with physical authentication technology, offering a potential blueprint for how supply-chain data could become more verifiable from farm to finished product.

The Hashgraph Group (THG), Merck and PwC Germany are piloting a cocoa traceability solution designed to connect the physical identity of cocoa products with a digital record containing origin, quality, supply-chain and compliance information.

The initiative combines THG’s TrackTrace Digital Product Passport platform, Merck’s M-Trust physical authentication technology and PwC Germany’s consulting and implementation expertise.

The timing is significant. The European Union’s Deforestation Regulation (EUDR) is scheduled to begin applying to large and medium-sized operators on December 30, 2026, with cocoa among the commodities covered. Companies placing covered products on the EU market or exporting them from the bloc must demonstrate that they are deforestation-free and produced in accordance with the relevant laws of the country of production.

That makes traceability infrastructure more than a sustainability initiative. For food manufacturers, processors and brands, it is increasingly becoming part of market-access and compliance infrastructure.

The Problem With Digital Traceability

Cocoa is particularly difficult to trace because production is distributed across millions of farms and multiple layers of intermediaries.

The International Cocoa Organization says more than 90% of the world’s cocoa farmers operate plots of between two and five hectares, illustrating the fragmented nature of the production base.

The supply chain can involve farmers, cooperatives, local traders, exporters, processors, manufacturers and retailers before cocoa reaches consumers. Information collected at one stage may not automatically remain connected to the physical material as it moves through subsequent stages.

That creates a weakness in conventional digital traceability systems: a database can contain a record claiming that a particular batch originated at a particular location, but the system still needs a reliable way to establish that the physical product being scanned corresponds to that digital identity.

That is the gap the three companies are attempting to address.

Connecting the Physical Product to Its Digital Twin

The proposed system creates a digital twin or passport for a cocoa batch or individual product. TrackTrace records relevant supply-chain events on Hedera, while Merck’s M-Trust technology is designed to authenticate the physical product or packaging.

At defined verification points, information can be added through scans, system integrations or operational processes. The resulting record can include origin information, quality data, certificates, due-diligence documentation and authentication events.

The distinction matters.

Blockchain provides a distributed record of events, but it does not independently establish that an object is genuine. Physical authentication addresses that separate problem. In the proposed architecture, Merck’s technology provides evidence about the physical item while TrackTrace organizes that evidence into the product’s digital history.

PwC Germany’s role sits further upstream and downstream of the technology. The consultancy is supporting business-process design, governance, workflows, use-case definition and enterprise implementation.

That implementation layer may ultimately prove as important as the underlying ledger.

EUDR Raises the Stakes

The EUDR requires companies dealing with covered commodities such as cocoa to establish that products are deforestation-free and legally produced. The European Commission has also been developing the digital infrastructure through which businesses submit due-diligence statements.

For cocoa companies, the challenge is therefore not simply collecting more data. It is connecting that data to the correct products, suppliers, locations and transactions in a way that can withstand scrutiny.

A digital product passport can provide one mechanism for organizing that information.

The concept also aligns with the European Union’s broader move toward Digital Product Passports (DPPs) under the Ecodesign for Sustainable Products Regulation. The European Commission describes DPP infrastructure as a system for storing and accessing product information through a data carrier, with implementation extending across multiple product categories.

However, cocoa also demonstrates why traceability cannot be treated purely as a software problem. Data quality depends on what happens at the farm, collection and processing stages.

Beyond Compliance: Recalls and Quality Control

The commercial case for traceability extends beyond regulatory reporting.

If a quality problem or contamination event occurs, manufacturers need to determine which raw materials entered which production batches and where affected products were distributed.

A connected product history could allow companies to identify affected material more precisely rather than relying on broad manual reconciliation.

The same infrastructure could support authentication, supplier verification and more selective information sharing with customers.

For consumers, a QR code or other scan-based interface could expose selected information without making the entire underlying supply-chain record public.

For enterprises, the more valuable proposition may be the machine-readable record underneath that interface.

Blockchain Is the Infrastructure, Not the Product

The broader significance of the pilot is that it moves the blockchain discussion away from cryptocurrency and toward enterprise provenance infrastructure.

A distributed ledger can provide timestamping and an auditable history, but the effectiveness of the overall system depends on the quality of the information entering it.

That is why the combination of physical authentication, process controls and digital records is important. A tamper-resistant database does not automatically make inaccurate input trustworthy.

The model being tested by THG, Merck and PwC therefore combines three different layers: physical verification, digital traceability and business-process implementation.

If those layers work together, the architecture could extend beyond cocoa into pharmaceuticals, luxury goods, electronics, food and industrial components—markets where counterfeit risk, provenance and regulatory compliance intersect.

A Broader Supply-Chain Technology Shift

The cocoa market itself remains strategically important. The International Cocoa Organization estimated 2024/25 global cocoa production at 4.723 million tonnes, with grindings at 4.628 million tonnes in its May 2026 update.

As supply chains become more regulated and buyers demand stronger evidence about provenance, companies will need systems capable of connecting physical goods with reliable digital information.

The THG, Merck and PwC pilot is an example of that emerging architecture.

Its success will ultimately depend less on whether the system uses blockchain and more on whether it can reliably capture events at the weakest points of the supply chain, maintain data integrity across multiple organizations and produce evidence that businesses can actually use.

That is the real test for digital traceability: not whether a product has a digital passport, but whether the passport can credibly tell the story of the physical product it represents.

Market Landscape

Cocoa traceability is moving from a sustainability differentiator toward regulatory and operational infrastructure. The EUDR’s December 2026 application date creates a near-term incentive for processors, manufacturers and brands to improve origin and due-diligence data.

The technology market is consequently converging around several approaches:

• Blockchain traceability: creates an auditable record of supply-chain events.
• Digital Product Passports: organize product-level information into machine-readable digital identities.
• Physical authentication: establishes a stronger connection between an actual product and its digital record.
• IoT and scanning: capture events as products move through facilities and distribution networks.
• Supply-chain analytics: turn traceability records into risk, quality and compliance insights.

The key competitive issue is interoperability. Cocoa moves across companies and jurisdictions, so a traceability platform that works only inside one organization’s technology stack has limited value.

Top Insights

• THG, Merck and PwC Germany are combining blockchain, physical authentication and process consulting to create verifiable cocoa traceability infrastructure.
• The system connects physical cocoa products with digital passports containing origin, quality, chain-of-custody and compliance information for authorized stakeholders.
• EUDR implementation in December 2026 increases pressure on cocoa companies to establish auditable evidence around origin and deforestation due diligence.
• Physical authentication addresses a critical weakness in digital traceability: proving that the scanned product actually corresponds to its digital record.
• The architecture could extend beyond cocoa into pharmaceuticals, electronics, luxury goods and other sectors where provenance and authenticity are commercially important.

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