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RFID technology helps wine industry product counterfeiting
The famous American writer Robert Louis Stevenson once compared wine to “bottled verses.” Today, as wine producers and sellers gradually turn their attention to radio frequency identification (RFID), this In addition to romance, this kind of magical liquid seems to add a bit of “wisdom”. In addition, wine manufacturers are constantly looking for new ways to promote their products. In the colorful packaging marketing, RFID will gradually become the new favorite. While achieving the tracking function, it will also help to improve the product safety of the consumer supply chain. RFID is also of great benefit to the product counterfeiting problem that entangles the wine industry.
Recently, Americans’ enthusiasm for wine has increased a lot. The number of people drinking at least one glass of wine a week has increased from 19.2 million in 2000 to 25.4 million in 2003. According to the “Entrepreneur” magazine, this growth trend will continue. In addition to the wealthier and older Baby Boomers, young people in the Thousands, who are in their 20s, have also shown great interest. Following this, the US wine industry has experienced rapid growth, with wine sales rising steadily, retail sales increased by 2.8%, and restaurant and bar sales increased by 8.1%. This year the wine market is expected to reach 21.6 billion US dollars. The latest data from the California Food and Wine Association show that California wine production will still dominate the US market. There are more than 3,000 wineries in the United States, and there are more than 800 in California alone.
RFID requirements for wine manufacturers and retailers
Although the wines in supermarkets and specialty stores come from many different factories, the trend in the U.S. market in recent years has been more and more centralized. Because of the skyrocketing cost of land and operations, competition has become more intense, and wineries are constantly merging to form economies of scale. There are also wineries acquired by other big brands, such as Constellation Brands, Diageo and Chalone Wine Group. EJ Gallo is a leading American wine producer and the world’s second largest wine group. With its huge sales volume, Gallo was also included in the second batch of Wal-Mart’s leading suppliers who must complete the ban. Before January 2006, RFID tags were affixed on pallets and boxes shipped to Wal-Mart.
According to a report by the AMR research company, consumer product companies will spend about $25 million to complete Wal-Mart’s requirements. However, the difficulties and complexity of the situation faced by wine manufacturers are greater than that of any other consumer product company. This is because American wine sellers must use local distributors in order to comply with national laws. In order to meet Wal-Mart’s requirements, wine manufacturers cannot just develop and use their own internal RFID systems. They must work with their distribution partners to complete the requirements. In fact, companies like Gallo have to rely on supply chain partners to ensure that manufacturers meet their requirements. On the other hand, if distributors use RFID tags, they can bring value-added services to major producers at least in the short term.
With the expansion of the scope required by retailers, more wine companies are required to use RFID tags on at least pallets and boxes. For the wine industry, it is necessary to consider from different perspectives not only to complete the requirements but also to evaluate the potential benefits that RFID brings to the enterprise, and to improve the tracking and monitoring of the production process and finished products. The winery not only wants to improve internal management operations by using RFID tags on the pallets and boxes of the finished products, but also wants to use RFID tags on the barrels in the production process. In the UK, Trenstar and Scottish Courage Brewing demonstrated how to use RFID tags to better track wine barrels. Their application shows that by using special materials to make tag antennas and choosing suitable locations to install RFID facilities on containers will greatly improve the read rate of liquid targets. Wine manufacturers can also use RFID tags with sensor technology to monitor changes in the temperature of the environment where wine barrels can affect the quality of wine.
The application of labels in wine products and aquatic products seems to be stronger than any other food and beverage market demand. Harvard Business School Jonathan Byrnes believes that the cost-benefit ratio of using RFID on low-value department stores is too high. However, for beverages, the return on investment of using RFID is much higher, because the price of the label is much higher than that of other department stores.
The market structure of the US wine industry also shows the importance of using RFID tags on wine bottles. If US$7 per bottle is used as the tipping point for high-priced and low-priced wines, then the sales of low-priced wines account for 70%, while 62% of the profits of winemakers come from the sales of high-priced wines. Therefore, wine manufacturers want to promote the use of labels in high-priced products in consideration of higher safety, better control, and market value.
The challenge of liquid to RFID technology
Although RFID has its own advantages in terms of economic and safety benefits, there are indeed obstacles to the application of RFID in liquid products in terms of physical properties. There are many reports about the influence of liquid and metal on the reading accuracy of RFID tags. Objects with high water content can absorb radio waves. Compared with solid objects, the reading accuracy is reduced by 20%. When reading the information of the cargo box on the pallet containing liquid items, only the cargo boxes around the pallet can be read. Due to the reflection or absorption of radio waves, the middle cargo box cannot be read correctly. Dan Bodnar, Director of Intermec’s Product Marketing, believes: “Different products have different characteristics when reading, for example, the liquid itself has less interference to radio waves, so if the label is placed on the top of the container, the effect will be better.” The pallet is still a single product. If the RFID tag is installed on the neck or top of the wine bottle instead of the bottom of the wine bottle, the reading rate of the label will be greatly enhanced. In any case, if the label is affixed to the bottom of the wine bottle, the reading rate will be greatly reduced because the radio wave signal has to pass through the most liquid part.
RFID and anti-counterfeiting
Wally Klatch, the author and management consultant of the forthcoming book “Liquid Commodity Supply Chain”, said: “Wine is deeply influenced by cultural factors. For example, appreciation of bottle packaging and labels, the characteristics of cork and other liquids. Factors that are not available. For other consumer drinks, especially those served in restaurants, consumers don’t care about its containers, let alone its “history.” Therefore, Klatch believes that in order to ensure that consumers buy the authentic products, Wine is the most suitable product on the wine market to use RFID tags.
Wine sales are divided into primary and secondary sales markets. Since the packaging cannot be opened on the spot to check its authenticity, this provides opportunities for counterfeiters. The following two compelling cases show how counterfeiters conduct wine Forgery, 12 people in Italy were arrested for deliberately forging Sassicaia wine. The police found 6 million bottles of Chianti and 20,000 bottles of Sassicaia forged by the criminals; Australia found a large number of fake Grunge for sale on the secondary market. It is hard to imagine that 5% of the wines sold on the secondary market are counterfeit.
Wineries that are not directly affected by the secondary market can still ensure that their products are not damaged for a long time. They can ensure the originality and reliability of their products and build their competitiveness in the market. Sassicaia’s manufacturer Marchese Nicolo Incisa della Roccheta, in addition to adding etching patterns to glass bottles, is also considering adding RFID chips to wine bottle labels. It is estimated that other brewers will follow suit.
We will find that the wine industry will become the most mature field for RFID applications.
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