Dive Brief:

• Various olive oil brands in Italy are reportedly using Near Field Communication (NFC) RFID tags to help customers verify their product's authenticity, RFID Journal reported recently.
• Buonamici, La Ranocchaia, SPO and Il Cavalino are among the companies uploading their information into the "iOlive" database, which stores product information and can be accessed when a consumer taps their NFC-enabled mobile device to the product label. 
• RFID Journal notes the olive oil industry was recently affected by a 60 minutes segment that alleged Italian brands sold an inferior product as "extra virgin." The NFC technology aims to revive consumer trust.

Dive Insight:

For companies that make such products as wine, cheese and olive oil and pride themselves on their origin, traceable technology could be a key differentiator. In a saturated market, companies often need to promote their competitive advantage to capture consumers. 

But implementing RFID or other similar traceable technology is not always cost effective, as it requires the packager or manufacturer to install tags individually within the label. Adding a part to the manufacturing process may not be technically difficult, but it also adds an operating expense and layer to the supply chain.

Despite the supposed benefits of visibility, these limitations have often held companies back from adopting the technology. 

But the olive oil case study shows that in some cases, such as when a product is sold or certified by the way they are sourced (think of wine labeling regulations), RFID tags are worth the cost. The consumer whose skepticism impacts their buying decision may take the extra step to verify sourcing.

Most importantly though, early adoption of this technology could help protect brands in case a competitor scandal breaks. The olive oil companies may have implemented the technology as a reaction to a sourcing scandal, but imagine the market share a brand may have gained (or not lost) if they had marketed an easy way to verify the source. 

Brand protection is not just important to high-end food products, as a recent scandal over the sourcing of Egyptian cotton caused Wal-Mart to cut Welspun from its supplier list demonstrated. If anything, being able to provide consumers a sourcing guarantee at moment's notice would provide a similar guarantee to buyers downstream.