eProvenance, IBM launch VinAssure™ platform to optimize wine supply chain.
The complexities of the global wine supply chain mirror the variables and intricacies of wine itself. While both have aspects of predictability and controllable outcomes, there is also a lot of art and ambiguity at play, which is as charming as it is challenging at times.
For all the advancements in transportation and shipping, including cold chain management, along with innovations in bottling, packaging, material handling, and software and technology, the wine supply chain remains precariously vulnerable.
Wine often travels considerable distances on its journey from the vineyard where it originates to the end consumer, not only from one country to another, but from different continents or even hemispheres. Whether wine is imported, or produced in the U.S., there are numerous touch points that occur at the ports, during moves by multiple drayage and trucking/rail carriers, and during handling and distribution from various facilities, before it finally reaches the retailer. Increasingly, wine is also going direct-to-consumer from a DC or fulfillment center, or a winery, as e-commerce continues to surge.
At the same time, climate change is fueling more extreme weather and weather-related volatility that challenges not only the conditions necessary to keep wine in its optimum state throughout the supply chain, but makes it more difficult for transportation and logistics providers to maintain schedules, assure cargo care, and avoid service disruptions.
Wine is also a “living and breathing” commodity that is prone to damage when it’s forced beyond a narrow and unforgiving window. And, unlike other agricultural commodities, such as fruit and vegetables, damage to wine is often invisible to the naked eye. Of course, protruding corks and leaking bottles signal damage. However, it doesn’t take a dramatic temperature excursion or multiple days of abuse to compromise wine and make it slightly off, whether the consumer understands the reason for the change or not.
Perhaps most insidious, it’s the seemingly small supply chain failures, such as not precooling the refrigerated truck trailer or reefer container to the correct temperature before loading, that can start to diminish a wine’s quality, and therefore, the consumer’s response and perception about a particular wine and brand.
Improving Visibility, Analytics, Cold Chain Integrity
“No one wants to open a bottle of wine and discover it’s been cooked,” acknowledged Robin Grumman-Vogt, CEO of eProvenance, a leading provider of monitoring and analytics solutions for the wine industry and other high-value commodity sectors. “Yet, when the supply chain fails to maintain proper temperature conditions, that’s precisely what can happen.”
In December, eProvenance announced the launch of VinAssure™, a blockchain-powered platform built on IBM’s cloud-based, open source Blockchain Transparent Supply.
“VinAssure is designed to bring collaboration and clarity to a highly complex supply chain,” said Grumman-Vogt. “The sensitivity of the product, the number of actors, the various logistics challenges and the convoluted patchwork of regulations across the U.S. and from country to country, are all factors that play into the need for a wine industry ecosystem.”
The VinAssure blockchain is permissioned, meaning participants can control who has access to their encrypted blockchain data, and the data is immutable, so it can never be changed. In addition, eProvenance’s Online Monitoring System (OMS) provides primary data to VinAssure as an independent third-party validation step and helps enable participation by a range of stakeholders, including small- to mid-sized wine enterprises that lack robust technology capabilities. All that’s needed to access VinAssure is an Internet connection and browser.
“Having an immutable digital record of transactions and conditions simplifies process and represents the future of moving sensitive goods,” added Raj Rao, general manager, IBM Blockchain Platforms. “It also provides the end consumer with greater assurance that the wine they purchased tastes as the winemaker intended and reflects the immense care that went into producing that wine.”
De Maison Selections is a U.S. importer of wine, cider and spirits from independent producers in Spain and France, and a longtime customer of eProvenance.
“I respect the winemaker’s craft, so I take the craft of logistics equally seriously,” said André Tamers, owner of De Maison Selections. “Our level of integrity and passion is unmatched and we have the best logistics in the industry for protecting wine quality. VinAssure will help us make that work visible, and differentiate us in the market.”
Chris Pataky, director of operations at De Maison Selections, said, “There used to be a lot of gaps in data, due either to human error or lack of communication, but monitoring with eProvenance helped us locate and close those gaps. VinAssure will allow us to record that data, increase visibility and build trust. We can assure our customers of top conditions, and they can assure their customers of top quality.”
Tamers said the benefits of the VinAssure blockchain go beyond a single participant and will elevate and unify the entire wine supply chain ecosystem.
“We’ll measure our success with VinAssure when the wine industry follows our lead,” he said. “We respect the customer and want to deliver product with certified provenance. Everyone else should want to do the same. At De Maison Selections, we want to be part of raising quality standards throughout the industry. This has the potential to move the industry to become more quality-based.”
Clif Louis, owner of The Vineyard Wine Shop in Denver, Colo., explained that, “VinAssure will help me build better relationships with producers around the world.”
It will also go a long way in building trust with the shop’s customers.
“The more consumers understand about the importance of temperature conditions, the more concerned they are about assurance,” Louis said. “Retailers will benefit from VinAssure because they will be able to assure their customers that the wine they carry was handled properly during transport.”
Today’s consumers are also more invested in knowing about a wine’s origin, quality, and if it was produced in a sustainable manner.
A recent IBM study found 71 percent of consumers indicate traceability is important to them and they are willing to pay a premium for brands that provide it. Consumers are also more loyal to brands they trust.
In addition to making transportation and logistics information available during a wine’s journey, VinAssure maintains information about the harvest, varietal, assemblage, as well as critical documentation, such as organic certifications, which freight forwarders, carriers, and others can access via a mobile app.
Not surprisingly, insurers also realize the benefits that blockchain technology brings to the wine supply chain, particularly from the perspective of cargo insurance and substantiating claims, as well as mitigating counterfeit cases tied to mislabeling and other types of fraud.
Other wine industry leaders in the process of joining VinAssure™ include the export division of Ste. Michelle Wine Estates, the third-largest premium winery in the U.S., and Maison Sichel, a Bordeaux-based négociant and winemaker for seven generations.