More olive oil firms turn to IBM to tackle fraud with blockchain

More olive oil producers have signed up with IBM’s blockchain-driven Food Trust to protect their brands from counterfeiting and food fraud, and to provide traceability for their customers.

Conde de Benalua, a cooperative in Spain made up of more than 2,000 farmers, and Rolar de Cuyo, an olive oil supplier in Argentina, are the latest signups to the platform, which is also being used by CHO of Tunisia’s Terra Delyssa brand olive oil and Italy’s I Potti de Fratini.

IBM Food Trust is based on QR codes placed on the labels of products, linked to a blockchain back-end that operates on the cloud. Scanning the code allows consumers to trace production from the groves where the olives were grown and the mills where they were processed into oil, to the stores where it is sold.

Producers meanwhile can get the benefit of a permanent, unchangeable record of transactions as each bottle of oil travels through the supply chain that can be shared between partners and according to IBM can “help ensure the freshness of food, control storage times and reduce waste.”

Counterfeiting and fraud is a big problem for the $16bn-a-year olive oil industry, with some studies claiming that between 60 and 90 per cent of olive oils sold in the US are adulterated with cheaper pomace oil or oils from other plant species such as sunflower, canola and peanut.

Last year, a Europol-coordinated operation resulted in the seizure of 150,000 litres of low-quality oils that had been adulterated with colourants to make them appear like extra virgin olive oils, with 20 arrests made. The scam is estimated to have netted the network around $9m.

IBM says that consumers are increasingly interested in being able to check the origin of products, citing a study by its Institute for Business Value unit which found that 73 per cent of consumers will pay a premium for full transparency into the goods they buy.

Chris Fowler, sales manager at CHO America, says that its Terra Delyssa brand of premium olive oil has seen a spike in demand since bottles of traceable olive oil reached store shelves earlier this year.

“Consumers in the US and Canada can now buy Terra Delyssa…in more than 10,000 grocery stores and online platforms, with more retailers adding Terra Delyssa's premium, traceable olive oil to their shelves,” he added.

Rising demand in early January helped CHO anticipate a spike in sales due to its new consumer traceability app, according to the company.

That meant supply chains had ample products on store shelves throughout the pandemic, during which time demand rose 30 per cent due to an increase in consumers cooking at home.

CHO says it is now working on creating a separate enterprise application for distributors and retailers that will be able to provide processing information, such as whether a product is first cold-pressed, extra virgin or organic.