Q&A | TECHNOLOGY
The grapes of RAM: blockchain in wine traceability and beyond
Earlier this year, Avery Dennison announced it is collaborating with Everledger to develop a blockchain-based labelling solution, which would allow wine bottles to be tracked using near-field communication technology. Rosie Lintott asks Avery Dennison how the solution works and what the broader industry applications of blockchain are.
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Julie Vargas is director of Avery Dennison’s global market development for radio frequency identification (RFID) in the food and drink sector. RFID is building new capabilities for supply chain traceability, food inventory management and convenience retail. Adding to this capability is Avery Dennison’s development of a blockchain-based solution for their wine bottle labels. With the help of emerging technology enterprise Everledger, Avery Dennison is making use of the cryptographic ledger technology to bring new transparency to their supply chain. This solution could not only help growing consumer calls for product transparency but prove transformative to the way in which the industry manages product from start to finish.
Can you tell me about your collaboration with Everledger?
The Everledger collaboration essentially is sensor technology that we've combined with our core competencies around secure tamper resistance in labels and every single one of those bottles has a unique digital identity. When someone interacts with it and when they're created, that information is stored on the Everledger blockchain so that there is a trusted and mutable transparent source of data from creation, as it passes through the supply chain and every interaction with the consumer.
What can you tell us about the labelling solution?
In the past, across the wine industry, virtually each person inside that supply chain had their own set of data and they housed it inside their own four walls, everything from the growers, the harvester, profiteer, labeller etc. all the way through the retail environment. Essentially the blockchain is the foundation of [the solution]; it’s the sharing transparency of information to create trust, not just between trading partners but ultimately to the end consumer as well.
With Everledger in particular, the opportunity here is to show everything from the information the harvester might gather, like the price of grapes and the year of grapes and the farmer information, and as that passes through the supply chain continue to add information at the unique item level that can eventually be shared with the consumer that searched for that specific bottle of wine.
Now, all of that information lived before but it rarely lived digitally, it definitely did not live at the bottle level, and [now] it’s in what we called a completely transparent connected system. So what blockchain really does is provide trust among those players and to the end consumer because the information is stored centrally, shared openly, and acceptable across all parties for speed of information and trust of information.
Why do you think the traceability of wine has become more important?
The primary reason is really around safety, so counterfeit wine and spirits are a huge issue for public health. Fake products account for between 25% and 30% of alcohol consumed worldwide, so one in four could potentially be a counterfeit issue. Essentially that is the core piece of this, really making sure that people, one, understand the risk, and, two, have a way to verify that what they are getting is something that is real, authentic and guaranteed. The other side of that coin is what it actually costs the industry: €2.7bn is lost in potential fraud every year.
That’s a really big challenge but the other thing that's becoming increasingly complex is if you think about the way that you consume wine and spirits, it’s constantly evolving; just like everything else in our lives, we have new channels. We used to have one place to go to buy a bottle of wine, but now we may be buying at a local restaurant, even at different places, stores that are out there or even online for delivering at home. So across the new channels and across new brands it’s increasingly important to be able to convey not just branding information, but also the species of the product we are providing and provide that trust to the consumer directly from the brand.
Where else have you seen blockchain being used in the food and drink sector?
There is quite a bit of blockchain being used across food and beverage, a lot of it, as I mentioned before, is a great advancement. Not just for the ability to share information transparently between trading partners and consumers but it’s a really exciting time because sensor technologies like radio frequency or near-field communication are adding increasingly large data effects, so it’s possible to get information at the individual item level throughout the supply chain. Then, when you combine that with things like predictive analytics in AI, you can really see an increasing amount of information so, because of that, we're seeing this used for everything.
We're involved with something called beef-change, essentially it’s about showing the user in the restaurant half a world away exactly how the cattle was grown, where it was grown, and that it’s authentic.
We're also seeing it for authentication and safety across the food industry, but another really big impact for it in other parts of food and beverage is traceability in the advances of recall. So if there was a safety issue from a specific lot or a specific batch because something happened to it, it’s very hard. You have to find a way to figure out which consumers were impacted by these batches and a lot of times they threw all of them away from a certain date range because you can't pinpoint with accuracy exactly which products were impacted.
So we're seeing that across everything from fresh food through to alcohol, through food products if there is a recall or a spacing issue, this is a way to pinpoint specifically who's impacted with precision and in a very rapid manner.
Are more companies in the food and drink sectors going to start using blockchain?
I think the first step is really track and trace, so the ones that are leading in that space have this information and are keeping it digitally will be the first. But I do believe, long-term, it will be a standard way for them to communicate with each other. Now, I will say not everyone will go fully public on their blockchain, meaning that they'll share all of their information with everyone.
Some of them will choose to leverage the blockchain to share information with their trading partners about the size, or how much it costs, or how much they’re growing; things like that, that they consider priority information. They may use something like a private or a permission blockchain.
Ultimately, I do believe the world is moving away from the style of databases and information, into a centre of digital ledger that has information at a much larger data set than we've ever seen before.
Is blockchain more approachable for consumers?
I think the word blockchain is still not quite approachable, but I do think from a user experience, if I think about how they can actually see information, I think it's much more approachable. If you think about your wine today, if you wanted to find out if the wine sitting in your fridge or sitting on your wine rack was authentic, if you wanted to learn about the grower, it's not an easy task for you to figure out how to find that.
The idea of really being able to give every consumer access to the product directly, to me, is extremely approachable, and much easier than trying to figure out what do you search here, or Google there, or who do you ask. Giving digital information to a physical product is extremely approachable; I think that the methodology behind that, whatever type of blockchain it is or however it's delivered, it's probably less relevant than the actual user experience itself, but that has to exist for the user to be able to get the information they need.
Do you think using blockchain is going to boost efficiency?
Absolutely, so going back to the recall scenario, it depends on the region but on average it can take up to 30 days, sometimes even 60 or 70, to figure out which products are impacted from a safety issue. So a lot of that is trying to figure out which products are where and how they got there, so I think this will make the entire supply chain significantly more efficient.
In scenarios like that where you want to give your consumer on-demand information, you want to make sure you handle any safety issues quickly and with precision, and you want to really drive consistencies for counterfeit to grey markets that are impacting the public health.
What are the challenges of using this solution?
Believe it or not one of the biggest challenges is getting data; the blockchain actually makes the data trusted and transparent across the ledger but one of the biggest challenges is getting the information to begin with. Some people at the harvest level or the process level, they're not necessarily even capturing every item or storing information digitally, and that's where the advancements that we're making in physical labelling come in.
If you think about our roots, we’ve printed information on products for quite some time, so what this does is allows us to twin that information and simultaneously store it in a centre that can be read in an environment where you can pick up thousands of items at the same time instead of looking at them one by one. This means it will be possible to capture those data sets with ease, affordably across the supply chain, so it will be a major unlock for this technology.