Blockchain Technology Coming to Olive Oil, Someday

Summary

Experts sug­gest that the tech­nol­ogy behind Bitcoin, known as blockchain, could be used to com­bat olive oil fraud by track­ing the pro­duc­t’s jour­ney from the farmer to the store shelf. Companies like Everledger are already using blockchain to pre­vent wine and dia­mond fraud, and while the cost of imple­ment­ing this tech­nol­ogy may increase the price of olive oil by about 20 per­cent, it could ulti­mately lead to a mar­ket shift towards higher qual­ity prod­ucts at afford­able prices.

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.

“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.”

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.”

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.

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.”

• Ambrosus


• CNet