Farm to bottle? How the blockchain is helping a whiskey and rum producer protect its brand

While it may seem odd to some to combine the ancient craft of distilling with such relatively nascent technology, Reynier, CEO and founder of Waterford Whiskey Distillery and Renegade Rum Distillery, is no stranger to unconventional ideas.

Well known in the industry for helping to revive the shuttered Bruichladdich distillery, located on the island of Islay in Scotland, Reynier helped coin the term terroir – or teireroir, the term company trademark that includes the Irish Gaelic word for Ireland – whisky.

Terroir has been used in winemaking for millennia, with winemakers obsessing over environmental factors such as microclimate, soil and topography that interact to create a wine’s flavor profile. But the practice had not typically been applied to whiskey or rum, which are mostly mass-produced by large companies such as Paris-based Pernod Ricard, which controls 80% of the global Irish whiskey market.

Courtesy of Waterford Whiskey Distillery

Using terroir to produce alcohol means “rejecting the homogenization of industrial distillation or industrial production, and highlighting the virtues of going au naturel,” Reynier said Fortune.

Through a proprietary blockchain-enabled system called ProTrace that validates their production record-keeping system, Waterford and Renegade Rum prove the effectiveness of terroir for spirits and present the details in digital form, tracking and compiling every step of the growth and distillation process.

“It’s not just marketing gibberish,” Reynier said. “It’s a validation, as well as a proof of concept.”

Screenshot courtesy of Renegade Rum Distillery

On the back of every bottle of whiskey or rum distilled by Reynier’s companies is a nine-digit code that customers can enter online to reveal countless details. While the company may use a different technology or system to achieve the same goal, Cian Dirrane, chief technology officer for both Waterford and Renegade, said blockchain ensures that the data cannot be altered after it is recorded.

For one such bottle of whiskey from Waterford Distillery, part of a bottling of 21,000, the company reported the names of the growers and when they harvested the grain, when the product was distilled and bottled, and how long the bottle’s contents had matured – down to the day.

Screenshot courtesy of Waterford Whiskey Distillery

To make the data more visual, along with the processing information collected by Waterford’s blockchain system, each bottle’s unique report includes a map showing the location of the farm where the barley was grown, a video of the field and farmers, and ambient sounds.

“It’s really a counter to the nonsense that’s being spread around the world by different sellers and brand owners or whatever,” Reynier said. “Our process is so specific. And because we are small guys in the world of multinationals, I have to be able to back up what I say.”

Courtesy of Waterford Whiskey Distillery

The blockchain verification involves more than 800 validation points that extend from when the grain is received by the distillery to the end of distillation when the spirit is put into barrels, according to Dirrane. These validation points include the amount of malt brought to the distillery by truck and the temperatures reached when the fermented liquid is heated to vapor and condensed back to a liquid.

Every data point is validated and logged on the digital ledger, which cannot be tampered with, Dirrane said.

“The entire production — from the raw product intake to the distillation process to casting and aging — and then the finished product is on the blockchain,” Dirrane said. “If someone wants to validate remotely, they can see all the processes that have happened.”

Courtesy of Waterford Whiskey Distillery

These processes increase production costs. A typical bottle of Waterford Distillery whiskey can cost $80 to $120, while a bottle of Jameson, a well-known Irish whiskey brand produced by Pernod Ricard, can sell for just $25. Renegade Rum’s first mature bottling will be released by the end of the month, and one of the first bottles is likely to cost around $55, compared with a $20 price tag for a bottle of Captain Morgan from London-based Diageo.

But Waterford Distillery and Renegade Rum may soon have some company. Rather than keep the technology to themselves, Dirrane and his team have written a white paper and plan to open source the code and ledger, publishing it online next year. Dirrane said that in addition to Reynier’s commitment to transparency, as a software engineer, he is eager to see the program peer-reviewed.

Public or not, the blockchain has been crucial for Reynier in an industry sometimes known for obfuscation.

“This is taking on a whole Wild West drinks sector,” Reynier said, “and trying to establish and verify my way of doing it so that everyone can see the traceability and the transparency.”