Blockchain Adoption in the Winery Industry: The Case of Cantina Placido-Volpone

Introduction

The agri-food sector in Italy can no longer ignore new innovations such as blockchain-based traceability. In Italy, in the wine sector, companies are able to transmit the main values of their product (territory, method, and professionalism) to the end customers with great difficulty. These values are the main guarantors of the quality and authenticity of the products. There are companies abroad that cannot guarantee the quality of Italian products and tend to deceive consumers with the “Italian sounding”. The annual losses due to the phenomenon of counterfeiting in the wine sector are estimated at about 2 billion euros per year, a loss that can adversely affect the economy of this country.

Consumers are increasingly careful about the origin of the products, raw materials used, and the quality of the methods used to cultivate the food destined to reach their tables. Based on a survey, 71% of consumers are willing to pay a higher price if the information related to quality, transparency, and provenance is provided, 60% of consumers check the label for sustainability, 74% of consumers are influenced by transparency and traceability and 89% would like to know the criteria for a certification of origin (E&Y Report, 2019).

The current practice of traceability in the agriculture supply chain largely suffers from data fragmentation and centralized controls which proves vulnerable to both data modification and management. In the event of contamination, identifying the source and isolating the product swiftly from the supply chain requires close coordination among multiple stakeholders in the agricultural supply chain (Storoy et al., 2013). These technologies cannot guarantee with certainty to consumers that the information presented is true and has not been altered. Specifically, in the food sector, it is harder to know where the products came from and where they are as they make their way into a vast network of physical or digital distribution channels involving multiple actors. The solution to address the food safety and quality concerns is to improve traceability, transparency, security, durability, and integrity (Feng et al., 2019; Tsang et al., 2018; Helo and Hao, 2019; Banerjee et al., 2018; Li et al., 2017). Blockchain has been widely accepted as a solution to the underlying trust and security issues in information transparency and prevention of tampering with (Ølnes et al., 2017). The contribution that Blockchain could make is very large in traceability; in fact, Blockchain is an innovative application of distributed data storage, peer-to-peer transmission, consensus mechanism, encryption algorithm, and other information technologies.

Blockchain-based traceability is a technology that is presented as a solution that enables the tracking and tracing of finished goods and materials, providing users with a high level of trust that the data they view is correct and has not been altered by an unauthorized party. Blockchain-based traceability allows the creation of a form of identification and enhancement of products offered in the form of virtual KM-zero. The solution gives the possibility to increase a digital certified information relationship between the producer (wherever he is) and the final consumer (wherever he is).

In the wine sector, the bottle of wine is presented with an intelligent label that allows identifying the producer through the digital signature. Moreover, information about the entire cultivation process, the methodologies used for the production and transformation of the wine are provided by the producer and other operators in the supply chain. Consumers can obtain this information by scanning the QR Code on the label of the bottle. The Blockchain allows fixing an indelible and secure photograph of all those steps, creating and strengthening the relationship of trust between the producer and the final consumer.