A Century Old Process for Authentic Olive Oil

Traceability in supply chains was an unknown concept 15 years ago. Yet today it is a pressing topic for mid- and senior level managers in various sectors.

Why Traceability Even Matters

The reason for this is new regulation being introduced in the European Union in different sectors to force companies to take responsibility of the actions taken in their supply chains. This involves exact reports on working practices and conditions to prove the legality of the material but also the compliance to ethical practices of suppliers. For example, the Farm-to-Fork Strategy of the EU Green Deal that addresses sustainable food systems is central in the achievement of the United Nations Sustainable Development Goals (SDGs). Additionally, national governments are introducing regulations for responsible sourcing. A hotly discussed new supply chain law in Germany would require detailed reporting from companies with more than 500 employees.

In the area of food raw materials customers are driving the adoption of traceability. A food study from Label Insight found out that 94 percent of consumers consider it essential that the brands and manufacturers they buy from are transparent about what is in their food and how it is made.

One of these products is extra virgin olive oil which is a product that is growing significantly in demand by consumers.

Artisanal Producers

It has become essential for producers in the specialty segment to tell the story behind their virgin olive oil, including its origin and other environmental and social aspects. By educating the consumers on the production and authenticity as well as flavours, versatility, and health benefits helps traditional producers to stay in business and prevent process from falling.

An example for this is a small extra virgin olive oil producer located in the Valle del Belice in Giardinello, Sicily. The history of olive oil here is closely linked the history of the island.

In yellow: Giardinello, Sicily in the Valle del Belice

Gold of the Mediterranean

The rise of olive oil is deeply connected to its introduction to the Mediterranean from Asia Minor. In Italy and especially Sicily olive trees were introduced by the Greeks around 800 BE. With the rising of the Roman Empire olive oil production became a key trade.
Because of the highly fertile soil of Sicily from its volcanic heritage the oil is considered one of the best qualities in the world.

Sicilian Olive Trees

A Century Old Process Still Maintained

Yet, there is a significant difference in the way olive oil is produced throughout the Mediterranean. This is especially true for the Island of Sicily. Here handpicking has remained an integral part of olive oil production. This is due to the hilly terrain and nature of southern Italian olive trees which are grow twice as big and twice as broad compared to the Spanish counterpart. This makes not only the high quality but also increases the cost of production.

A Great Vision that has its Challenges

With the high degree of required labour and the limited amount of oil come also significant challenges.
One challenge is the reduced yield of olive oil in Italy. In 2019 the overall oil production in Italy fell by 59% from the year before. In Sicily, the impact was even higher with 66.2% reduction. This impact is caused by environmental changes which led to more frequent extreme weather that have a tremendous impact on yield.

This leads to a major issue in agribusiness in Italy. According to research 80% of the Italian virgin olive oil that is being sold on the world market is neither Italian, nor virgin.

The fraud is deeply rooted in the industry. Most Italian virgin oil is mixed with other vegetable oils of questionable origin, often not Italian, to achieve a higher volume at a much lower quality. There are even cases where there is no olive oil included at all and colouring and aroma used to cover the scam. Still the product is labelled as ‘Italian extra virgin olive oil’ and sold by well-known brands at a premium. This is also true for olive oil production areas which should be more closely monitored by the local governments. Olive oil labelled with the DOP (Denominazione di Origine Protetta) literally protected designation of origin, an indication for an agricultural quality of a special geographical region, are affected by the practice of dilution.

Responsible for the scam is the agro mafia that has taken control of most production and marketing activities in Italy. To support the undulation olive oil of lower quality from Spain, Morocco, Syria, Turkey, and Tunisia is imported. The result is that even in Italian supermarkets roughly 50% of virgin olive oil is fake.

The consequence is that unless directly bought from the producers premises a trustworthy form of ensuring authenticity is required to protect consumers from fraudulent extra virgin olive oil.

Handpicking of olives in Sicily

Introducing Confidential Transparency

Xylene tackles this problem and creates a verified proof of claim for Sicilian extra virgin olive oil. Selecting the olive oil from the Valle del Belice, we worked to bring transparency into the supply chain and build trust and authenticity in the product.

With the approach of Xylene, we enhance transparency and trust for oil producers to base internal decisions on, while providing the opportunity to communicate the story of the product to consumers and building a strong brand reputation and a competitive advantage that can boost profitability.

To achieve this the Xylene system works with a Web-Dashboard and a mobile application to collect supply chain information critical for the proof of origin and authenticity of data.

In order to create full visibility of the entities responsible for the production of the olive oil the producers map the olive oil supply chain and align quality expectations. This step is performed through the Web-Dashboard. With all the producers connected, general documents related to the company like harvesting licenses, certificates of origin, and audit certifications are shared.

To ensure the exchanged information is secure, Xylene has included a blockchain storage that ensures trust in the information.

Xylene has added to the data collection a secure blockchain storage that eliminates the risk of manipulation of documents. The blockchain ensures the stored data is unchangeable and traceable to the time it was initially uploaded. Xylene stores trusted data locally and encrypts this with a hash function which is then saved on the blockchain.

The production of extra virgin olive oil

Seeing What Goes In The Bottle

For olive oil producers to build trust in their product it is essential to monitor exactly what is going into the bottles. To help to achieve this Xylene has developed a user-friendly mobile application which makes it possible for olive farmers and producers to follow the product flows of the olives and the oil until it is filled into the bottles or barrels.
The app guides the producers through a process of collecting product data in all steps from harvesting over grinding and pressing and filling.

With an easy log on to the app the farmer is able to start collecting information in the harvesting process. By creating a new product, the farmer inputs the harvested volumes, takes pictures of the harvest, and uploads relevant documents. The app automatically captures the farmers geo-location and time stamps these for validation.

Once the olives arrive at the production site the operator identifies the delivery through the app and begins registering the griding and pressing process. Xylene automatically validates the quantities in and out with a mass-balance calculation.

From the final filling output, the system verifies the total amount of extra virgin olive oil the producer can produce. For the farmers Xylene’s traceability solution creates accountability and trust in their effort strengthens their competitive advantage on the market for high quality olive oil.

Web-Dashboard & Mobile App

Satellite Verification on a Trusted Blockchain

The unique approach of Xylene lies in the validation of the collected data. When the farmers perform transactions such as uploading an origin certificate Xylene geo-references and timestamps these with the European Galileo satellite system to ensure authenticity when used for reporting.

At the harvest, the operator logs the product flows until dispatching the olives to the production site. Xylene’s strength lies in the authenticity of the collected data which is referenced with a location and time that allows the producer to be certain about the processing locations and what in going into the grinding, pressing, and filling steps.

Additionally, earth observation images of the locations enable the access to these areas from a distance. The Earth Observation images from the European Copernicus satellite programme help gathering additional intelligence on operations, identify possible risks and validate locations.

Competitive Advantage with Consumer Engagement

Through the traceability of the olive oil production with Xylene the entire journey is available with verified proof of what went into the extra virgin olive oil. What can be done with this information? By working with Xylene producers can utilise this information and connect it to the final product with a simple to scan QR code. With this, consumers can gain access to the origin of the olive a have a proof that they are really holding a bottle of genuine Italian extra virgin olive oil in their hands.

By providing this information to consumers the producers can not only demonstrate a superior and trustworthy product but also significantly set themselves apart from competitors.

What is Coming from This?

As outlined in The European Green Deal, achieving a climate neutral and circular economy requires the transformation of an industrial sector and all the value chains. This target supported by the ‘Farm to Fork Strategy’ promotes new opportunities for the food value chain. To be able to meet the set European targets by 2050, the European industry must implement traceability solutions as soon as possible.

Targeting areas of transport storage, packaging, and food waste these goals drive the combat in food fraud and help consumers to be more informed about the food offered to them. Xylene’s traceability system supports this by ensuring that products are traced, and consumers receive detailed information on the provenance of the products and at the same time connect to these farmers and communities thereby greatly improving the position of the value chain.

Xylene can offer a new standard of transparency and credibility for the raw materials industries and thus further develop these. The implementation of blockchain technology in the food industry is driving an innovation that enables far-reaching changes in data collection.

How Can You Get Started?

Interested in getting transparency and validated traceability to your supply chain?
Get in touch with Xylene and start with a simple exchange on your goals for transparency and responsible supply chains.