Business

Blockchain Technology Coming to Olive Oil, Someday

As the bottle moves through the supply chain it can be tracked. When it changes hands from wholesaler to retailer to consumer, each step is noted with another transaction on the blockchain.

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Feb. 26, 2018
By Daniel Dawson
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The tech­nol­ogy behind the con­tro­ver­sial cryp­tocur­rency, Bitcoin, could be used to combat olive oil fraud, accord­ing to experts.

Blockchain is a secure dig­i­tal ledger that can be shared among com­puter net­works. The tech­nol­ogy records infor­ma­tion, such as trans­ac­tions, into blocks that are copied across com­puter net­works.

Anyone with access to the blockchain could see exactly what hands the prod­uct has been through, all the way from the olive farmer to the shelf in the super­mar­ket.- Kristoffer Just, Blockchain Consultant

“In a blockchain system, it will be reg­is­tered each time a prod­uct is han­dled in some way,” said Kristoffer Just, a con­sul­tant on the uses of blockchain in supply net­works. “For exam­ple, when the olive oil is bot­tled, cer­ti­fied and trans­ported.”

Each trans­ac­tion is encrypted and given a unique iden­ti­fi­ca­tion number. Any changes made to a trans­ac­tion appear as a new block on the chain with a dif­fer­ent iden­ti­fi­ca­tion number, mean­ing pre­vi­ously entered trans­ac­tions cannot easily be changed. The infor­ma­tion can also be con­stantly updated by mul­ti­ple par­ties with all the data appear­ing on a single blockchain.

“This infor­ma­tion is vis­i­ble to every­one in the supply chain, it is con­stantly updated and cannot be manip­u­lated,” Just said. “That way, anyone with access to the blockchain could see exactly what hands the prod­uct has been through, all the way from the olive farmer to the shelf in the super­mar­ket.”

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This tech­nol­ogy is cur­rently used by Everledger, a com­pany that uses blockchain to pre­vent wine and dia­mond fraud.

“I think that [the tech­nol­ogy is] absolutely applic­a­ble to olive oil,” Calogero Scibetta of Everledger said.

“What blockchain enables you to do is that once you’ve recorded the infor­ma­tion of pro­duc­tion you are able to pro­vide evi­dence about what it is,” he added. “The blockchain gives you this inde­pen­dent proof of saying yes, this has been ver­i­fied by other people, there­fore, there is an inde­pen­dent val­i­da­tion that is very impor­tant when you claim authen­tic­ity.”

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First, Everledger goes to the vendor and authen­ti­cates the wine that is being put into the bottle. Then the bottle is pho­tographed, given a unique iden­tity and issued a vir­tual cer­tifi­cate of authen­tic­ity. All of this is con­sid­ered its “dig­i­tal fin­ger­print” and added as the first block in the blockchain.

As the bottle moves through the supply chain it can be tracked. When it changes hands from whole­saler to retailer to con­sumer, each step is noted with another trans­ac­tion on the blockchain.

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According to Scibetta, the process could be applied to olive oil bot­tles in exactly the same way with­out a prob­lem.

Angel Versetti is the CEO at Ambrosus, a com­pany that uses tech­nol­ogy to improve global supply chains. He said that while the tech­nol­ogy is com­pli­cated, the results are easy to see. Using a mobile app, all par­ties involved can follow the jour­ney of the oil and know they are get­ting what they paid for.

“Consumers and any other stake­hold­ers of the olive oil supply chain will have access to this infor­ma­tion through mobile apps or inte­grated soft­ware with a user-friendly inter­face enabling them to have a quick and easy access to infor­ma­tion by scan­ning QR codes or NFC tags,” he said.

However, adding all of this tech­nol­ogy to the process is not cheap. It is esti­mated that the price of each bottle would increase by about 20 per­cent, but Versetti does not see the price increase as a big prob­lem and believes that the market will even­tu­ally re-adjust.

“The market is led by price com­pe­ti­tion and seller’s moti­va­tions are going toward low-qual­ity olive oils,” he said. “With access to safety, qual­ity and origin infor­ma­tion by the con­sumer, the infor­ma­tion asym­me­try [will] rapidly decrease in favor of good qual­ity prod­ucts at afford­able prices.”

While prices may be driven down in the future, the cost of imple­ment­ing the tech­nol­ogy is cur­rently a pro­hib­i­tive factor for most pro­duc­ers. Just said there is a lot of inter­est in the tech­nol­ogy, but he does not know of any olive oil pro­duc­ers using it yet.

“The pro­duc­ers I talked to were very pos­i­tive about apply­ing the tech­nol­ogy, but none of them are doing it right now,” he said. “There is a lot of talk about apply­ing blockchain, but many are wait­ing, as it is quite expen­sive to develop from scratch.”

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