Wine ingredients traceability and nutritional transparency, required by EU

In 2017, the European Commission invited the alcohol beverages industry to respond to consumers’ expectations…

In the first chapter, I analyze the relationship between wine producers and consumers through traceability. It has been divided in six articles. Here is the first article of chapter 1. In the second chapter, I examine the effects that transparency could have on the wine supply chain. In the last chapter, I wonder if decentralization could be the future of the wine business industry.

I had the pleasure of interviewing 40 leading players in the wine and the tech industries. For this article, I have been discussing with (sorted by alphabetical order):

REPRESENTATIVES
• Paul Bounaud, Director Community Engagement France / Project Manager Europe Alcoholic Beverages at GS1
• Gilles Brianceau, Director at Inno’Vin
• Pierre Gernelle, Managing Director at Federation of the Négociants-Producers of Great Burgundy
• Eric Lamaille, Head of Business Unit at Champagne Growers Union (Syndicat des Vignerons de Champagne)
• Ignacio Sánchez Recarte, Secretary General at Comité Vins, CEEV (European Committee of Wine Enterprises)

TECH EXPERTS
• Franck Bourrières Sales & Marketing Director at Prooftag
• Sylvie Busca Associate Founder at Wine in Block
• Stefan Gendreau, Associate Founder at Augmented Reality Wine labels
• Gavin Ger, Joint-CEO and Commercial Director at Laava
• Damien Guille, Global Business Development Director at Scribos
• Maxime Le Coutaller Sales Manager at NutriLabel by ATT
• Alexandre Mongrenier, President & CEO at WID Group
• Nicolas Moulin, Founder & CEO at La Vie Du Vin
• Jémérie Pappo Innovation Manager at Hub One
• Jérôme Pichot, CEO at Advanced Track & Trace (ATT)
• Niko Polvinen, Co-Founder & CEO at Logmore
• Sebastian Schier Managing Director at VinID

Alcoholic beverages – traceability and transparency required by the EU

In 2017, the European Commission invited the alcohol beverages industry to respond to consumers’ expectations and to present, within a year, a proposal of self-regulation on ingredients and nutritional information covering the whole sector.

Therefore, on 12 March 2018, the European associations representing the alcoholic beverages (including CEEV — European Committee of Wine Entreprises — and other lobbyists), presented to European Health Commissioner – Vytenis Andriukaitis – a self-regulation proposal to provide consumers clear information about the ingredients and nutritional content of alcohol beverages. The part of the self-regulation common to all alcohol beverages included the use of e-labels for the communication of some of the information.

Although ingredient labeling for wine has been discussed for a decade, especially at the European level, the bibliography concerning consumer perceptions is limited. However, researchers* conducted a study aimed at investigating consumer reactions to the introduction of nutrition and ingredient labeling for wine. They recruited a representative sample of wine consumers from three countries — Australia, Italy, and Germany. According to the author, ingredient labeling will cause wine to lose its image as a natural product. Some consumers would prefer wines with a shorter ingredients list, impacting the winemakers’ selection of oenological practices, although most would not reject wine with a label mentioning nutritional values and ingredients.

On December 2021, the European Commission published Regulation (EU) No1169/2011 amending wine and aromatized wine products labeling rules by, among other things, making mandatory the communication of the list of ingredients and the nutrition declaration for these products.

After a transitional period of 2 years, these new rules will apply from December 2023 to all alcohol beverages present on the European market.

For December 2023: the regulation is not official. We are waiting to see.

Pierre Gernelle, Managing Director at Federation of the Négociants-Producers of Great Burgundy

For the first time ever in the area of food and drink labeling, this information could be given on-line by electronic means under certain conditions.

The list of ingredients may be indicated in a dematerialized manner. In addition, the nutritional declaration may be limited to the energy value on the label, provided that it is accessible in full, in a dematerialized manner. The industry seems to be moving towards the use of QR codes that will be printed on the bottles.
The labeling of wines “produced and labeled” before December 8, 2023 will not have to be modified and these wines can be marketed until stocks are exhausted.

Unlike the vast majority of foodstuffs (and other alcoholic beverages), the composition of wine can vary according to different elements. Depending on the vintage, the blends and the producers’ objectives, it may be necessary to add various ingredients and additives (sugar, acidifiers, stabilizers…). Moreover, wine is a “living” product, whose characteristics evolve with time. Depending on the length of the maturation and conservation periods, and the way the product is transported (export), certain additives may be added. This is the case, for example, of stabilizers or packaging gases used to prevent the wine from spoiling. The decision to add them or not can be taken at the last moment, before bottling, according to the orders and the characteristics of the product.

In order to provide consumers with reliable information, the industry will have to set up a precise traceability system, from the moment the grapes enter the winery to the moment they are bottled. This implies, for example for the trade, to gather data from upstream (suppliers of grapes, musts or wines) for the labeling of products.

The EU, on the e-label of wine, has given a few simple guidelines: no marketing, direct link from the bottle and no consumer tracking. Companies, therefore, can indicate everything on the label, create their own digital system or join a collective system.” says Ignacio Sánchez Recarte, Secretary General at Comité Vins, CEEV (European Committee of Wine Enterprises).

Change is coming! The wine industry has one year to prepare. It is therefore necessary to inform, to explain and that the trade associations help, advice for the implementation to the vintners. Considering consumers’ lack of knowledge on the subject, the construction and provision of a complete and objective argument on the origin of the ingredients and their usefulness during winemaking is a key point. This should primarily target wine technicians (oenologists and other professionals) to enable them to justify their winemaking processes and to explain the usefulness of the additives in winemaking to consumers.

France wanted the labeling obligation to be applicable only from the 2023 harvest. Indeed, a delay is necessary so that the sector sets up the necessary traceability (in particular with the upstream) and appropriates the new regulatory obligations, which are not yet decided. December 8, 2023 will come quickly, especially since the industry must anticipate orders for labels.

To date, the French positions have been taken into account by the Commission. Only the last two points are still under discussion. However, the text is not yet stabilized and the French delegation remains mobilized to defend the specificities of the sector. A new meeting of the wine committee is scheduled for September 27 at the Commission and the final text should not be published before the end of 2022.

Discussions on the same subject are also taking place at the international level, since a resolution of the International Organization of Vine and Wine (OIV) is currently discussed. The next round of negotiations should be held in spring 2023 in Dijon, which hosts the new headquarters of the OIV.
The French Department of Competition, Consumer Affairs and Fraud Control (DGCCF) will have to develop controls to avoid fraud consisting in omitting to declare certain entrants and thus deceiving the consumer but also distorting competition. It is a project on which many companies are already working, also because there will be no extension to the scheduled time.

For us it is still under discussion because Italy is blocking it. Will this legislation pass?

Jérôme Pichot, CEO at Advanced Track & Trace

eLabel — information created electronically and displayed on a screen

Excerpt from the digital trends report, published by the OIV:

“Electronic labeling (e-labeling) is an alternative and voluntary way for manufacturers to provide a greater amount of information. It has typically been displayed with a physical label that is stamped, attached, or etched on a product. E-labeling means this compliance information is created electronically and displayed on a screen.

E-labeling affects the last stage of the value chain of wine, namely distribution, providing benefits to manufacturers, regulators and final consumers.
For manufacturers and regulators, e-labeling offers a powerful alternative to the traditional methods of displaying compliance information. This is especially helpful as it enables product design innovation, benefits the environment and protects natural resources. It avoids unnecessary paper consumption and reduces the waste created in the process of producing and updating physical labels.

The use of electronic tags is now becoming widespread. These labels have QR codes that allow the product to be traced from its origin, verifying the product that is being purchased by using a specific type of ink and holograms to prevent counterfeiting and thus achieve greater reliability for the end consumer and avoid illicit trade.”

There are many start-ups in the tech world. They don’t really understand the spirit of the Fine Wines. I notice a difficulty to adapt to the reality, to the constraints of the wine market.

Gilles Brianceau, Director at Inno’Vin

Augmented Reality — Marketing to Consumers

Twenty years ago, AR applications would have seemed like a fantasy. Today these apps have made their way into many domains such as the gaming industry, entertainment, businesses and education. AR applications provide a blend of virtual and real world, where physical objects are complemented by computer generated synthetic information to enhance the perception of the physical environment.

Augmented reality (AR) is the technology that adds a virtual layer to a live camera stream of the physical world, creating a blend of both physical and virtual worlds in an ideal manner. It should be noted that AR apps are different from Virtual Reality (VR) apps, as virtual reality gives the impression of completely new virtual surroundings, which may not be connected to the physical environment of the user.

Using AR technology, wine companies are now enabling customers to point their smartphone at the wine bottle and in turn the app installed on their phone gives detailed information about the brand quality. The information comes in all sorts of flavors — from true stories, historical facts and poetry to various facts about the wine label. This is a gateway to Metaverse.

Some of the notable apps created by Living Wine Labels, Winerytale, Kaleida or French designers such as SmartBottle and Augmented Reality Wine Labels.

USE CASE 1 — Information for Consumers with Augmented Reality (AR)
Augmented Reality Wine Labels designs connected experiences on smartphones or tablets, either by flashing a QR code or by scanning the connected label via the ARGOplay application.
Augmented Reality Wine Labels offers the option to share with consumers the ingredients and additives of alcoholic beverages, added on the platform of its partner Dansmabouteille.

AR is the link between print and digital.

Stefan Gendreau, Associate Founder at Augmented Reality Wine Labels

Packaging is ubiquitous. It touches almost every person on the planet. It affects things that human beings need to survive: food, healthcare, personal care. All of that is packaged. Today, none of that has a lot of intelligence. But there are real concerns with a lot of those products. There are concerns of spoilage, there are concerns of authenticity (“Is this what I thought I was getting?”), and there are concerns of origin (“Where is this coming from?”). With different types of intelligence and sensing, those packages can be much more dynamic and can help in two ways. One way is, “Don’t throw this out, even though it’s past its expiry date.” Or, on the other side, “That yogurt container that you just bought that is supposed to last two weeks hit a temperature that caused it to spoil, and don’t consume it.” Those are the types of examples that I suspect we’ll see.The next move for wine brands could possibly be to incorporate interactive games powered by AR. These games would need to employ AI to react to various user moves. Another possibility for the future is to exploit GPS sensors in the mobile devices to employ location based data and generate synthetic content based upon the user’s local coordinates, the culture and environment of those locations.

STATIC QR CODES: Information to Consumers + Localization for Producers

Wine is one beverage that has history, culture, romance, art and poetry all entangled together. People gather to enjoy a glass of wine not just for its flavor but also to relish the stories that accompany it. More and more people like to know the historical perspective, the tradition and the stories connected with it.

We set up the Cloé cap to fight against counterfeiting and parallel markets, to protect the Champagne appellation.

Eric Lamaille, Head of Business Unit at Champagne Growers Union (SGV)

A QR code (Quick Response Code) is a type of barcode that can be read easily by a digital device and which stores information as a series of pixels in a square-shaped grid. QR codes are frequently used to track information about products in a supply chain and — because many smartphones have built-in QR readers — they are often used in marketing and advertising campaigns.

The first QR code system was invented in 1994 by a Toyota subsidiary. Initial uptake of the idea was slow; however, in 2002, the first mobile phones containing built-in QR readers were marketed in Japan. The use of smartphones led to an increase in the number of companies using QR codes.

A QR code is read in two directions — top to bottom and right to left. This allows it to house significantly data. The data stored in a QR code can include website URLs, phone numbers, or up to 4,000 characters of text. These QR codes can reveal information about the product, such as nutritional information or special offers.

You can’t put everything on a label, the QR Code is a plus.

Pierre Gernelle, Managing Director at Federation of the Négociants-Producers of Great Burgundy

Attackers can embed malicious URLs containing custom malware into a QR code which could then exfiltrate data from a mobile device when scanned. It is also possible to embed a malicious URL into a QR code that directs to a phishing site, where unsuspecting users could disclose personal or financial information.
While many people are aware that QR codes can open a URL, they can be less aware of the other actions that QR codes can initiate on a user’s device. Aside from opening a website, these actions can include adding contacts or composing emails. This element of surprise can make QR code security threats especially problematic.

The upgraded version of QR Code technology against grey markets and counterfeiting.

Out of 44 million physical champagne caps that we distributed, we reached 22 million Cloé caps, 50% in digital format.

Eric Lamaille, Head of Business Unit at Champagne Growers Union (SGV)

The Cloé digital cap has the same cost for the winemaker as a physical cap.

Eric Lamaille, Head of Business Unit at Champagne Growers Union (SGV)

USE CASE 2 — Proof of Authenticity for Consumers + Localization for Producers
The Syndicat General des Vignerons de Champagne (SGV) has had the idea. At first glance, nothing distinguishes it from an ordinary cap. This plastic-coated aluminum cap covers the stopper, which is held in place by a wicket. But if you look closely… you will discover a hologram with a QR code on the cap. This is Cloé, the intelligent cap, the result of six years of research in collaboration with Advanced Track and Trace.
Thanks to its forgery-proof hologram on the front of the cap, it provides a guarantee to the buyer that the bottle is not counterfeit, stolen or the result of fraud. The unique code allows the identification of each bottle.
In case of theft (of caps or bottles), the number is “blacklisted” which allows the identification of stolen bottles. In case of a flash of the QR code by the control agents or by a consumer of a stolen bottle, an alert is triggered to the winemaker or the syndicate. The database that links the cap manufacturer, the Syndicat Général des Vignerons de Champagne and the winegrower is jointly managed by the syndicate and Advanced Track and Trace, which together ensure the follow-up of the data. The collected information is kept for thirty years.
A letter of intent has just been signed with the French customs, in order to integrate the smart cap in their control system. The right representative cap (RRC) decorated with the seal of Marianne indicates to the control authorities that the circulation duties on wines and spirits due to the French State for sales in France and abroad have been paid to the General Directorate of Customs and Indirect Rights. But why not go beyond the tax framework? asks the General Union of Champagne Winegrowers. The SGV and the customs have decided to set up a digital cap “representative of right”, in order to provide the customs administrations with a more rigorous control system.
Winemakers can, in fact, purchase smart caps for their bottles since the end of 2017. Equipped with additional authentication codes hidden inside the cap, it allows for interactive communication with the customer with even more personalized information at the ready.

The customs authorities asked us to think of solutions to replace the physical caps by a digital solution. Dematerialize totally the CRD cap? Maybe it will be with Cloé

Eric Lamaille, Head of Business Unit at Champagne Growers Union (SGV)

The ‘CRD’ cap is related to French taxes, it authorises circulation and trade of alcohol on the French territory. As you know, European regulations actually don’t rule tax rates amongst member countries, therefore the tax rate for alcohol, for instance, is greater in Belgium than in France. Furthermore, those special taxes called “accises” are to be paid by the merchant in the country where the alcohol is consumed, not in the country where the alcohol is produced. As a result, the French implemented this tracing mecanism on bottles sold localy in order to differenciate them from bottles that are exported by the producer.

QR Codes are insecure. NFC is too expensive and complex at scale. We have developed a secure and scalable alternative.

Gavin Ger, Joint-CEO and Commercial Director at Laava

Laava’s secure product marking technology does not collect personally identifiable information. The data it does collect — and which is visible to the code’s creators — includes location, the number of times the code has been scanned and at what times, plus the operating system of the device which scanned the code (i.e. iPhone or Android).

USE CASE 3 — Next-generation upgrade to QR Codes — for brand protection and consumer engagement
Laava offers significant security and customer connection benefits. Consumers use their smartphone to scan the patented Smart Fingerprint, receiving a verification of the product’s authenticity and connecting them with the brand story. Laava provides the trusted gateway for brands to prove the claims they make, and to connect directly with consumers.
Tamburlaine (“Australia’s largest organic wine producers”) sought a secure on-product gateway to connect consumers with the Tamburlaine Organic Wines brand. The results screen designed between Laava showed proof of authenticity. However, Tamburlaine’s primary objective was to verify its environmental and sustainability values, by telling its brand story in an engaging way. The customer experience was tailored for each grape variety across the five product variants. Finally, it was mandatory that the share reward offer be redeemed only once per Fingerprint, requiring the business rule behind this mechanism to be switched off once the offer was redeemed.
The project:
- 1 million Laava Smart Fingerprints applied to Tamburlaine Organic Wine bottles — across their ranges for the 2021 vintage.
- Laava acted as the secure gateway to exclusive content from Tamburlaine, encouraging consumers to “dig deeper” into the story behind the wine. — On the True Earth Collective with Jamie Durie range, the on-product trust mark also connected consumers directly to Upstreet and an offer to redeem fractional sustainable ETF shares.
- Rules set in Upstreet via the Laava integration ensured that the reward offer could be redeemed only once for each Laava patented QR code.
Results:
Mid-way through the vintage, six months after launch, Tamburlaine reported:
- A scan rate of over 16%
- A conversion rate of over 80%.

Our solution scales from artisanal producers all the way up to high volume brands. We have worked hard to ensure that costs and ease of adoption scale equally at both ends of the market, without compromising security or effectiveness.

Gavin Ger, Joint-CEO and Commercial Director at Laava

The QR code is simple to use, and the costs for implementing it are significantly less than using RFID for data transmission. Any mobile phones can be used to transmit QR code data, unlike RFID tags which require specialized hardware and infrastructure to function. That's why cryptocurrencies jumped on using QR codes for their wallets. It’s a technology that can be used by literally anyone in the world and with almost any device.

We have partners in every industry, with different technology providers.

Gavin Ger, Joint-CEO and Commercial Director at Laava

This was the second article of Chapter 1— Traceability. In the next post, I explain what is IoT (Internet of Things). This technology is used by Domaine Ponsot (Burgundy), Selosse (Champagne). Devices can be used to track sensory (temperature, humidity, light, moves), to trace grey markets (re-export) and to fight counterfeiting.