- Bottles of fine wine often pass through a black hole when it comes to visibility of bottled wines that travel thousands of miles to small outlets and can be stored for a decade or longer.
- The dVin Labs solution being piloted by two European wine bonding companies uses technology from RedBite to provide an immutable record, accessible to all, of a bottle’s history and storage conditions.
Tracking a bottle of fine wine from the winery to the consumer—often across thousands of miles and tens of years—is one of the industry’s most persistent challenges. When a winery sells its bottle and a consumer enjoys a glass of that wine, neither party knows what happened in between.
While other industries are gaining visibility and efficiency in their supply chain, the wine industry by its nature has a very different model.
To help wineries understand where, when and how their products are shipped, purchased and consumed, dVin Labs is a tech startup doubling as a wine club to help those who make, sell and consume wine understand a bottle’s history as well as the conditions it was exposed to.
UHF RFID built into bottle labels, as well as NFC for consumers—to access the data with their phones—will be at the center of the blockchain based system.
According to company officials, a pilot is starting this winter at two prominent wine storage and logistics providers—one in Bordeaux and another in Madrid. The system is intended to automatically identify bottles as they arrive and leave as well as track the conditions under which they are stored.
Tracking a Bottle of Fine Wine
DVin Labs’ co-founder David Garrett pointed out just how challenging the supply chain is for the wine business. While many industries have been consolidating to a small number of companies competing in a product category, the wine business has not.
Wines come from as many as 30,000 independent wine makers around the world. And the investment grade, collectible and rare wines have an especially challenging supply chain because they often are sent to small wine boutique and stores or restaurants where they may sit in storage for years before being sold. There is little to no digital trail for such products.
By contrast, in the case of spirits, shoppers can go to a supermarket such as Walmart and buy a bottle of liquor that may have been received at the store a week ago and produced a month before that. The point of sale may link data back to the global liquor company, so that they can see when and where its product sold.
When it comes to a $100 bottle of wine, it’s more likely to be sold at a small specialty store or independently owned restaurant—and such companies, Garrett pointed out often “keep their inventory on clipboards or in Google Sheets rather than ERP systems. You have these little islands of information” about products that may be more than 10 years old and may not be consumed until years after they were purchased.
“That means the distance between purchase and consumption is enormous and … the wine makers are flying blind,” said Garrett.
Creating a Blockchain Record
dVin offers a solution in the form of an automated management system with blockchain data about each bottle as it is shipped, stored, purchased and consumed. The system would consist of an immutable ledger, available to the public, leveraging RFID data from software provided by technology company RedBite. “We’re focused on RFID and building a DePIN [decentralized physical infrastructure network],” Garrett said.
DePINs use the blockchain to operate decentralized networks of physical hardware, such as sensors, wireless infrastructure, energy grids and, in this case, RFID. With a digital ID for each bottle of wine on the blockchain, a record of its life story can be collected at different locations as well as the conditions around it, all the way to the consumer.
Wineries could offer the data to partners and ultimately to customers, in the form of a smart contract that serves as a deed of ownership, Garrett said. The data could be updated throughout the supply chain and offer authenticity, for the consumer.
The intention is to use RedBite’s umin.ai software platform to connect the decentralized RFID deployment, while RedBite also specifies the necessary hardware for that to happen.
“Our partnership focuses on providing a global RFID DePIN for wine tracking using unim.ai decentralized platform together with dVin’s,” said Alex Wong, RedBite’s CEO and co-founder.
Capturing Sensor Data
With the pilot, Bordeaux City Bond is installing RFID readers that will capture tag IDs as bottled products are received. Additionally, they are installing temperature and humidity sensors. The sensor data is then paired with the reader and these sensors track temperature and humidity, transmitting that data on regular intervals.
Those conditions are critical to the quality of the wine. Garrett points to industry estimates that one in 10 bottles that are opened have a problem—the product has spoiled, either from a bad cork or bad bottling, or most commonly, due to problems in the supply chain related to temperature or humidity. Those spoiled or damaged wine bottles are dumped out, and the greatest loss is experienced by restaurants that may struggle to be reimbursed for a bottle of wine that is 6 or 10 years old.
Garrett calls it a $10 billion problem in a $100 billion industry.
Providing Better Transparency
All the constituents in the wine industry are poised to benefit from the greater visibility provided by this blockchain-based solution.
Warehouses and even trucks and shipping containers could be equipped with RFID readers to provide a view into the quality of their own services. Each individual reader can be independently owned by the user, but with connectivity to the system to write to the same ledger.
Additionally, using Vin Labs as a currency, each independent interrogator is incentivized to update the ledger with a micropayment. “You can create an incentive layer,” Garrett said, because it enables companies to prove their own appropriate storage and transportation of wine products. “It provides the good actors— the people that have proper temperature and humidity conditions to advertise that to customers.”
That’s how this network can be built in a decentralized way, instead of one company owning the whole thing.
Plans Ahead
Following the results of the two pilots now in the works, RedBite and dVin intend to expand the system to other deployments in locations around the world.
In the meantime, pilot participants can track goods in and out of the warehouse first, and transportation companies will begin tracking in their own vehicles as they deliver wine to locations such as the port.
Because of the complexity of the wine supply chain, “it would be very difficult to do this if you were trying to do it as one centralized entity, so we’re doing it in a way where you’re creating the right economic incentives —we think—that that takes the risk and the reward and distributes it among the whole supply chain,” stated Garrett.
In the long term, the RFID system could be agnostic to technology vendors. Data captured by readers could be verified and updated on the blockchain immutable record timestamp in and out
For consumers, dVin already offers its wine club to provide a shared experience with other wine enthusiasts. Participants can scan in the wine they purchase or input the details and view content about the wine, where it came from, how and when it was harvested.