What’s Really in your Glass? Transparency, Accountability & Wine

stellaAre you the sort of person who looks at every new garment to see where it’s made (and of what material) and studies the nutritional information on the back labels of the groceries that you buy? Me, too, although I don’t claim to be consistent in these investigations and I am sure that I miss a lot.

FDA Meets TTB

Many people take an intense interest in the products they buy, especially food and drink since they go into our bodies.  Calories per serving, along with sodium, carbohydrates, and protein, are important to many people.

It is interesting – and maybe a problem – that wine and other alcoholic beverages are for the most part exempt from nutritional reporting. Wine labels must tell consumers alcohol by volume and warn them of health dangers, but not display ingredients, calories, or other factors that are required for juices, sodas, milk, and other beverages.

This label from a bottle of Stella Rosa wine is an exception to the current rule — calories, carbs, and so forth are clearly listed. Why? As I understand it the reason is that because  Stella’s alcohol is just 5% abv (below a 7% regulatory threshold) it is regulated by the FDA as food (nutritional facts) as well as by the TTB as alcohol (government health warning). (Note that the product is described as “partially fermented grape must!”)

Label of the Future?

I  am not sure that anyone buys Stella Rosa because of the nutrition information (it is one of the hottest wine brands today), but maybe the lack of such information is already affecting sales of wines in some market spaces.  Consumers purchase a lot of different products and they don’t really need to buy anything that doesn’t take responsibility and own its list of ingredients and nutritional profile.

I believe that wine, beer, and spirits will eventually be required to list their ingredients and nutritional data. I wonder what would happen if wine were to take a voluntary step and be more transparent now as a way to shape the narrative? I know there are some who think transparency would backfire – consumers would turn away if they knew what a bottle of wine really contains or how many calories are in a serving a Chardonnay.  But look at Stella’s sales …

White Claw, the ridiculously popular alcoholic seltzer product, has a nutrition label, too, and it is clear that it uses this to its advantage by exactly hitting the critical “100 calories per serving” number.

Limiting Label Clutter

There are several areas where wine could improve its transparency and I’ve been learning how technology can help. QR codes have the potential to lead consumers to sites where they can satisfy their thirst for more information, for example. I think everyone has a QR code reader on their smartphone, although I am not sure how many people use it.

The Treasury Wine brand 19 Crimes has had success with its special augmented reality app that consumers focus on the labels to animate the 19 criminals, so we know that consumers will use apps to get more content about wine in some cases. Perhaps this is a way to be more transparent and accountable without filling the back label with even more boilerplate.

Giving consumers access to useful information doesn’t have to be very intrusive. For example, Italian DOCG wines and South African Integrity & Sustainability Certified wines feature simple codes that allow individual bottles to be traced back to the producer.

Ferret Out the Fakes

Blockchain technology has the potential to improve transparency and accountability in ways that can be important to the wine industry in the long run. People always think of Bitcoin when I mention blockchain, but it is important to understand that Bitcoin is an application of blockchain, not the technology itself.

It is an oversimplification, but I like to compare blockchain to those tracking codes we use for package delivery. Everyone who touches the package scans in information, which is attached to the package record you view on line. You can see where the package is at any particular moment and — hopefully — track it down if there is a mistake.  Airlines use this technology now to track checked bags and I am always relieved to know that my suitcase full of wine is safely in the hold of my jet as we take off.

The difference with blockchain is that it isn’t just about location. All sorts of information can be attached to the record, which can be analyzed in many ways.

Thus a simple but very useful application of blockchain is to verify the authenticity and provenance of the sort of fine wines that are sold at auction — and to help ferret out the many fakes. A company called Everledger, for example, developed a system to use blockchain to verify the provenance and authenticity of diamonds and colored gem stones and is applying it to wine as the video above shows.

To Authenticity … and Beyond!

Everledger and others who are working in this space use blockchain and other sophisticated technologies to assure the authenticity of wine and other applications in wine are sure to be found because the blockchain blocks can record many types of information.

In response to the Porto Protocol and other initiatives, for example, many wine companies are working to reduce their environmental impact. Blockchain technology can collect this information all along the wine product chain, potentially allowing interested consumers to quickly assess the climate change impacts of their wine choices.

And that’s just the start. I have argued that wine companies need to own their supply chains when it comes to climate change and sustainability. Many companies focus on their own actions plus those of their grape suppliers. But wine’s product chains are pretty long in this day of efficient bulk wine shipments and Made-in-China glass.

This Changes Everything?

I can imagine a blockchain ledger that tracks useful information all along wine’s complex product chain and programs that would allow consumers and others to analyze and evaluate it. And, of course, wine is just one product where such a system would be welcome.

I’m not saying the blockchain and other technologies will change everything, but I will say this: transparency and accountability are only going to become more important in wine as consumer expectations evolve and wine is held to the same standard as other consumer goods.

We might think wine is special — and it is in many ways — but we shouldn’t assume that it is immune to the forces that are making transparency, accountability, and technology more important every day.

3 responses

  1. Once bottled, wine is a lot easier to authenticate. But, realistically, the number of Appellation Earth wines that are counterfeited is something like zero.

    The provenance issues you raise are what happens *before* it’s bottled… and driving back up the supply chains of wine, grapes, vines, additions, bottles, corks, etc. – and securing all of the product operations across all these entities will be measured in decades, not years.

    Ingredient labeling requirements could be put in place today without any technology. But do you really think that many people care? And if they did, you would imagine that industry initiatives would be forming around the market advantage of their virtuous wines, much the way that milk producers claimed to not use rBGH, even though there was no FDA requirement to include this on the label.

  2. What counts as an ingredient? When you use an egg to make bread, that egg is in the final loaf. If you use an egg to fine wine, there is no trace of that egg in the bottle. The same is true for many other fining agents and even yeast, if the wine has been filtered. Then there are barrels: they are containers, but they do contribute identifiable compounds to wine (and for California sales tax purposes, they are regarded as ingredients). So does one list anything that the wine may have come into contact with or only what is actually in the bottle? The former would be very misleading and the latter…well, what kind of analysis will be required to document these claims and how much detail can fit on a label? The comparison to other food products is facile, but because of this significant difference,not very useful.
    It’s also interesting to note how times have changed – when I entered the wine industry it was illegal to put caloric content on the label of an alcoholic beverage, because according to the BATF, that information would lead people to believe that the beverage was food. Those days are gone, fortunately, but this one-size-fits-all approach is also inappropriate.

  3. Hi Mike,
    I consider the label on this product nearly useless. It only tells the consumer about sugar. Which is indeed important on a product like this or on wines above 1% R.S.. I’m of the opinion the nutrition label is pointless on table wines below 1% R.S.
    It is ingredient labeled. Which I do consider consequential. We started ingredient labeling the month it became legal. We also list any use of pesticides starting in 2013 vintage.
    Paul Vandenberg
    Paradisos del Sol

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