Case-studies

Case Study: TrackMatriX® NFC for Wines, Wineries, Wine Collectors & Traders

  1. By Alfons Futterer
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Problem Overview

Wine connoisseurs are willing to spend thousands of dollars for a bottle of their favourite wine. A bottle of the highly sought-after Burgundy from Domaine de la Romanee-Conti, for example, had sold at Sotheby’s for more than $550,000. While that’s already an astronomical sum for a single bottle, the regular selling price of wines from other estates usually sell for tens of thousands of dollars.
All this demand makes for a massive industry that initial predictions said would be worth a whopping $326.6 billion in 2020 alone. However, instead of shrinking due to the economic meltdown caused by the global pandemic, people seem to have sought refuge in wine.
The wine marken has actually beaten its initial predictions. In 2020, the wine market was estimated to have already generated around $434 billion, i.e. $100 billion more than what was initially projected by industry experts.
Like most luxury markets, however, the wine industry has also become a target for unscrupulous individuals looking to make a quick profit by selling counterfeit goods. And it’s become such a massive problem that’s estimated to be worth around $3 billion per year. 

The problem with wine fraud is that it’s extremely difficult to distinguish counterfeit wines from authentic ones. Much like art, highly-skilled forgers can recreate rare and expensive wines down to the smallest detail – from the patina and signs of ageing on the labels, the markings on the cork and bottle, down to the taste of the wine itself.

Even seasoned connoisseurs fall victim to wine fraud. Bill Koch, once a member of the powerful Koch Industries, for example, had already unwittingly purchased around $4 million in rare wines before he found out they were fakes. 

Recorking is also a prevalent practice in the wine world. This means opening a bottle of a high-value wine, consuming or transferring some or all of its contents, and then refilling it with wines of lesser value.

It also doesn’t help that some vendors are either complicit or simply ill-equipped to prevent the sale of fake or recorked wines that may be in their cellar. According to professional wine consultant and advisor Maureen Downey, vendors will be most likely willing to buy back wines sold from their cellars that are later proven to be counterfeit as long as customers sign an NDA. 
While some vendors throw away returned wines if they’re proven fake, some are not as honest. After a couple of years, unprincipled vendors sell the same bottle of fake recorked wine to other less discerning customers for even more money as it has supposedly aged more. Because of this practice, bottles originating from tainted collections such as that of Rudy Kurniawan’s, a high-profile wine counterfeiter, still circulate in the marketplace. 

The proliferation of fake wines has caused a dent in people’s trust in wine collecting as a hobby especially for the uninitiated who aren’t as discerning as those with experience. The fear of buying fakes for tens or maybe even hundreds of thousands of dollars can be an embarrassing if not a depressing experience. In a way, the fake wine market has become somewhat of a barrier to entry to the hobby of wine collecting.

Our Client

Our client offers an extensive variety of premium wines to private, retail, trade and corporate customers. They have been doing this for decades but not without facing problems of wine counterfeiting and other issues.

The client is active in trading and collecting premium wine: from creating memorable experiences for wine lovers to making a global exchange / marketplace to enable movement of premium wine faster and hassle-free. The client has cut a niche for itself in the wine industry global landscape.

The company has created an exchange that allows private collectors, intermediaries, general wine lovers and institutional wine traders to buy, sell, ship and store their wines internationally through different global wine hubs. 

This minimizes market access asymmetry, reduces price inefficiency and accommodates changes in market behavior. The client is not a small player in the world of wine distribution. Sadly, it was faced with several dilemma:  
  • They had a problem of wine counterfeiting within the marketplace players (collectors, producers, etc.).
  • They had no method to guarantee the originality of a wine or validate its authenticity. 
  • Collectors and producers had no way to prove that the product has not been tampered with and has been kept in the optimal conditions throughout its lifetime.

The Solution

To help curb this counterfeiting crisis, TrackMatriX® has crafted a solution specifically designed for wine & spirit brands, wineries, and connoisseurs. With the use of proprietary NFC technology, the company offers a complete track and trace solution that can protect our client’s wine supply from fakes and counterfeits once and for all. 

TrackMatriX®NFC

With the use of TrackMatriX® NFC tags, clients can collect much-needed data. 

The NFC labels or smart tags contain secured information such as unchangeable unique identification numbers (UIDs), scan counter, customizable information and workflows such as landing page URL, dynamic cryptographic algorithms, and security protocols.

The NFC tag tracks where the bottle has been, the conditions of the storage facility it was kept in, and other wine-bottle specific data such as an immutable digital record of whether the tag has ever been removed or broken.

NFC Vicinity Tags

  • Operating frequency: 13.56 MHz
  • Operating distance: vicinity up to 1.2 meters
  • Scan multiple NFC Vicinity Tags simultaneously
  • Back-end database support
  • Flexible chip sizes for different areas of application

NFC Proximity Tags

  • Operating frequency: 13.56 MHz
  • Operating distance: proximity up to 10 cm
  • Tamper evidence: unauthorized access to the object is easily detected
  • Back-end database support
  • Flexible chip sizes for different areas of application

NFC Tamper Tags

  • New generation chip (2018) built for security and privacy
  • Tamper protection to securely detect if the tag seal remains intact
  • Furnishes status-aware, customized messages as soon as the tag’s
  • seal has been broken or removed.

TrackMatriX® NFC Tamper Tag

TrackMatriX®NFC Tamper Tags can have multiple pre-programmed security features. During the application, additional security features can also be programmed to the tag after the tags are applied to wine & spirits bottles.
To help curb this counterfeiting crisis, TrackMatriX® has crafted a solution specifically designed for wine & spirit brands, wineries, and connoisseurs. With the use of proprietary NFC technology, the company offers a complete track and trace solution that can protect our client’s wine supply from fakes and counterfeits once and for all. 

Anyone with an NFC-enabled device/smartphone will be able to view relevant information after tapping their device onto the NFC tag:

  • Wine storage conditions
  • NFC tag-related info / status
  • Traceability information: Map display with location markers to indicate where the bottles have been scanned before.
  • Product information: Brand Name, Vintage, etc.
At its very basic level, having the TrackMatriX® NFC on wine bottles let clients know important basic information such as the provenance which is quite important for some collectors. 

Clients can also choose to collect other data points such as temperature and humidity information to ensure that there was never a point in time when the wine’s integrity has been compromised. 

TrackMatriX® SaaS Platform (Web App)

The TrackMatriX® platform takes care of database management and security. It stores, processes, and aggregates data collected by the TrackMatriX® NFC. In essence, all wine bottles equipped with a TrackMatriX® NFC fall within the purview of the TrackMatriX®SaaS platform. From there, clients or individuals with the necessary permissions can view relevant reports on all the wines registered within the system.

The platform is responsible for collating data collected from the NFC tags. In essence, it’s a data repository that handles stock-keeping records, storage condition monitoring information, and even location data. It also stores product authentication data.

Once NFC tags are scanned, the TrackMatriX® SaaS platform then updates the data, verifies the wine’s authenticity, determines whether the tag has been tampered with, and even alerts clients when and where suspicious NFC scans have been made or attempted.

It even goes beyond simple authentication and data collation. It also gives wine buyers a way to access this data in a simple and easy-to-understand platform. With a simple tap on the NFC tag from any NFC-equipped smartphone, all the relevant data set by the administrators can already be viewed.

And once wine buyers tap on their wines for authentication and tamper verification, clients can even direct their customers’ smart devices to go to a customized landing page URL for both authentication and brand engagement campaigns. 

In a way, wine buyers who try to authenticate their bottles automatically become a captive audience for your content strategies. The platform also makes room for data-rich customer analytics so you know how your campaigns are performing.

TrackMatriX® Bolt (Mobile App)

To make things easier for people on the ground in the warehouses and for consumers to access relevant data, TrackMatriX® developed a couple of mobile tools for both programming and scanning NFC tags.
TrackMatriX® Bolt is a mobile application for warehouse staff. It lets workers read and program the various features of the TrackMatriX® NFC. Data collection for features such as location and storage conditions, for example, can be turned on or off via the app to protect the privacy of previous owners if they request it.
By using an authorized TrackMatriX® Bolt application, users can view all previous information attached to the unique NFC tag on each bottle. They can also upload new information including bottle location, storage conditions, and ownership records.
The TrackMatriX® Bolt app can also be customized specifically for buyers of fine wine. The application lets them scan for relevant information such as authenticity and whether the bottle has been tampered with.
TrackMatriX® Bolt : Programming and Monitoring App
  • Capture the unique Identification number (UID) in the NFC badge/tag
  • Read & write encrypted information into the NFC chip
  • Secure the tags by changing the tag status from read/write to read-only, to make it impossible for counterfeiters to manipulate the information
  • Transmit all the relevant information about a specific NFC tag and its content to the TrackMatriX® platform
  • Track the location of where the products are being scanned to ensure they are not leaving the authorized location
  • Manage account access for administrators versus users to further ensure product information is being handled accurately

Scope of Supply

The TrackMatriX® platform is capable of consolidating engagement and inspection results originating from various NFC tags in one reporting portal. TrackMatriX® is fully customizable according to your organization’s needs.

1. End-to-End Wine Traceability

The TrackMatriX® platform is capable of consolidating engagement and inspection results originating from various NFC tags in one reporting portal. TrackMatriX® is fully customizable according to your organization’s needs.

We supplied NFC tamper tags looped across the wine bottle mouth, application equipment (inline or offline), NFC readers, temperature & humidity sensors, backend database, and data verification services.

The NFC tamper tags also uncover illegal attempts of wine swapping. This is done by allowing consumers to get information about wine location and storage conditions at tag application and bottle departure points.

Authorized users can also upload new information on the tags. All these turn the wine bottle to a reservoir of information about its journey from point of departure to its final destination and what conditions it has passed through.

2. Consumer Engagement

Through the TrackMatriX® platform, the client was able to develop brand loyalty by engaging consumers and wine collectors using standard or secure (overt/covert) codes. 
  • Item-by-item authentication of wine bottles using NFC tags. 
  • Customizable landing page templates and engagement programs. 
  • Each scan will be recorded in the backend for further marketing or brand protection analysis.

3. White-label SaaS Platform

We provided the client with a white-label subscription platform with multiple subscription tiers. Wine collectors or wine traders can purchase original authentication devices (security labels or pre-programmed NFC tags) which can be applied to premium wines.

Once products are authenticated, information will be generated for each individual wine bottle. Information about the wine bottles can be made accessible to wine collectors or wine connoisseurs either for free or against a service fee (as part of a subscription plan).

4. Advanced Inventory Management

Stock keeping is also made easy with TrackMatriX®. The database can provide up-to-date information on location, storage conditions, and other relevant data at the last point of scanning. This allows warehouse operators to easily track and trace where and how a particular bottle of wine is being kept.

For Wineries / Wine Storage Facilities:

  • Permit clients to view and manage their private account. Wine collectors / clients can login to their private account and view the status of their inventory.
  • Easy check-in and out management
  • Real-time storage condition records
  • Develop track and trace system across multiple storage facilities / cellars
  • Consumers or collectors can view product, storage condition or securely transfer ownership

The Results

Our client got unparalleled protection from counterfeits and other challenges that have ravaged the wine industry over the years. We prevented bad actors from profiting off recorked or faked bottles of wines. In the process, it kept the winery’s brand integrity intact. 

Our innovative security features and protection strategies provided great benefits to all marketplace players in the global exchange by eliminating counterfeit products completely. 

The company received a high sense of authenticity and integrity for the wines sold to consumers. Consumers have an assurance that the wine they are taking for personal consumption or giving out as gifts has been transferred in the best conditions.

With the TrackMatriX® system deployed, it would be easier to track and possibly prosecute anyone who has tried to recork or circulate a fake bottle of wine. This should help in enhancing tax compliance from the wine industry in general.
  • Eliminated Counterfeit Wines
  • Eliminated loss from counterfeiters
  • High level of authenticity and integrity of products
  • Increased consumer engagement & behaviour analysis
  • Consumer confidence from knowing the originality of wines

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