Whitepaper Chapter 2 – Target Market

2.1 Wine Market and counterfeit market Value

 

Followine’ reference market is the anticounterfeiting wine market, in all its meanings.

Over the last few years, there has been a strong growth trend for wine market: this situation represents a strong opportunity for wine producers but, at the same time, a growing threat due to the phenomenon of counterfeiting bottles, which has developed in Italy and abroad. This phenomenon causes damage to the image of manufacturers and brands, as well as significant potential lost in terms of turnover, in addition to damage to the consumer who, in fact, can not enjoy the true and authentic taste for which he paid.

The rate of growth of the counterfeit products market, which grows in step with that of authentic products, is of particular concern.

 

 

 

 

 

Chart 2.1

Just in 2018 the estimate of the world market value, related to wine products, is about 134 billion euro, while the estimate of the wine anti-counterfeiting market amounts to about 26 billion euro - with the equivalent of about 500 million euro of seizures carried out only in Europe each year, according to the latest EUIPO study.

Talking about this numbers, the phenomenon of counterfeiting presents itself as a difficult plague to eradicate, but Followine could represent an important step forward.                                                           

Chart 2.2

 

The anti-counterfeiting market in the agri-food sector is growing rapidly, with a CAGR of around 16% and with numbers that will exceed € 62 billion over the next few years. Worthy of attention are the data referring to anti-counterfeiting in the wine market, which are estimated to exceed 2 billion euros over the next five years.

 

 

 

The growth of the wine market, the consequent attention to the anti-counterfeiting of the bottles and the latest Community regulations in this regard determine a favorable environment for the development of the Followine project.

 


Chart 2.3

 

2.2 Flextrack

The QR codes, printed directly on the wine labels, are activated and recorded on the platform through a simple automated scan carried out by the winery employer.

So, so the authenticity of each bottle is guaranteed, thanks to our tracking system, Flextrack.

The system is not only able to allow the traceability for the consumer but it is also able to detect Where and When the counterfeiting occurred, as well as to provide the necessary data to trace back to those who carried out this illegal action.

2.3 Competitor analysis

In order to give a reference parameter to the reader, in relation to the market in which we are going to enter, we have conducted a careful analysis of our competitors. In this section, you will find a description and a comparison:

SICPA: founded in 1927 and based in Switzerland, it is a company that provides security solutions and services for authentication, identification, traceability. SICPA's mission is to develop products and systems to guarantee the authenticity of the transported goods. SICPA operates on 3 lines of business: solutions for security inks, solutions for the safety of governments and solutions for the protection of products and brands. SICPA strength is the multi-directionality of the services offered and a consolidated international presence. The Weak point is certainly the lack of focus and Know-How of the wine sector also indicated by the extreme speed of execution of the project and the lack of exclusive features for the specific sector.

 

Vivino: is an online community with a huge wine database and a mobile application by users can buy, rate and review wines. Their database contains millions of wines that can be accessed through a simple photo of the label of the chosen wine, all thanks to a simple app. In April 2017, Vivino began the transformation into a real e-commerce of wine. It is considered a possible competitor even if it is not their intention to combat counterfeiting: in fact, their database has no distinction between original and non-original wines. Vivino's strengths are a strong international presence, the provision of a database and an important community.

They do not offer anti-counterfeiting services, but they enter in the list of indirect competitors for their alternative solution. Point to disadvantage is the lack of control over the information on the database, often we have been noted the presence of doubtful products recognized by the app.

 

Inside Secure: founded in early 2000, is a French company that offers solutions to guide companies in the application and use of security systems. The company develops multi-directional protection systems through the provision of software and security mechanisms on connected mobile devices. The company's main commercial offerings and solutions are security systems relating to bank payment systems, content and entertainment protection systems, communication and protocols protection systems (eg certificates, cryptography, etc.); IoT protection systems and mobile security systems. The strengths of Inside Secure are the proprietary Software (Metaforic Core) that guarantees the protection of IT activities and the excellent knowledge of protection for NFC systems. Weakness is certainly the lack of a focus on the wine industry and non-competitive prices.

 

Aliante S.r.l.: founded in 2005, is an Italian company operating in the security sector with two product lines Autentico NFC, dedicated to anti-counterfeiting of products, and Autentico Chain, dedicated to logistics. Authentic NFC ‘s goal is to fight against counterfeiting of wines and other agri-food products, with the use of NFC tags. A strong point is the presence of a team focused exclusively on the NFC code system for product traceability.

 

Ernest & Young: EYz Italia is headed by a major multinational, one of the top four of the consultancy. The Italian team has worked on a project dedicated to the traceability of wine through blockchain, but at the time of writing it counts only a few members and few financial resources. EY Italia managed to start a pilot project with only one winery. The point in its favor is the use of blockchain technology, in which we of Followine strongly believe, but in addition to this, we have not found anything else from the technological or commercial point of view.

 

DNV GL: thanks to its international experience, it collaborates with many Italian wineries and with institutions to ensure safe and sustainable products. Strength is definitely the process of data control that starts from the vineyard. Although, at the moment, the speed of execution of the project, makes this hypothesis far from reality. But we are waiting for the prices of their solution, which could reveal some surprises.

Chart 2.4

                       Blockchain

Token

Community

Wine Focus

localize Fraud

 Data Check

Efficacy

Incidenza Tipi Contr

Followine

X

X

X

X

X

X

83

100%

EY BChain

X

 

 

 

 

 

11

3.5%

DNVGL

X

 

 

 

 

 

11

3.5%

Autentico

 

 

 

 

 

 

11

3.5%

Vivino

 

 

X

X

 

 

9

2.2%

Inside secure

 

 

 

 

 

 

9

2.2%

Sicpa

 

 

 

 

 

 

13

4.5%

 

 

 

2.4 What does More offer more?

What distinguishes Followine is our vertical focus, to fully understand the problems and dynamics, so as to create an effective solution. We have studied for years not only the wine market but also and above all the counterfeiting phenomenon, on all continents. Our strengths are:l’esistenza di un circuito basato su un Token circolante;

 

Chart 2.5                                                 GAP ANALYSIS