How the blockchain helps a whisky and rum producer protect his brand

Although combining the age-old craft of distilling with such comparatively nascent technology may seem odd to some, Reynier, the CEO and founder of Waterford Whisky Distillery and of Renegade Rum Distillery, is no stranger to unconventional ideas.

Well known in the industry for helping revive the shuttered Bruichladdich Distillery, located on the isle of Islay in Scotland, Reynier helped pioneer applying the concept of terroir—or teireoir, the term the company trademarked that includes the Irish Gaelic word for Ireland—to whisky. 

Terroir has been used in wine production for a millennia, with winemakers obsessing over environmental factors like microclimate, soil, and topography interacting together to create a wine’s flavor profile. But the practice typically hadn’t been applied to whiskey or rum, which are mostly mass produced by large corporations like Paris-based Pernod Ricard, which controls 80% of the global Irish whiskey market.

Courtesy of Waterford Whisky Distillery

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

Through a proprietary blockchain-enabled system called ProTrace that validates their record-keeping system for manufacturing, Waterford and Renegade Rum are proving the effectiveness of terroir for spirits and presenting the details in digital form, tracking and compiling every step of the growing and distilling process.

“It’s not just marketing bullshit,” 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 whisky or rum distilled by Reynier’s companies is a nine-digit code that customers can enter online to reveal myriad details. Although the company could use another technology or system to accomplish the same goal, Cian Dirrane, the group head of technology for both Waterford and Renegade, said the blockchain ensures the data can’t be changed after it’s recorded.

For one such bottle of whisky 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 Whisky 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 with the location of the farm where the barley was grown, a video of the field and the farmers, and ambient sounds.

“It’s really a counter to the nonsense that’s spouted around the world by different sales guys and brand owners or whatever,” Reynier said. “Our process is so specific. And because we’re small guys in a world of multinational companies, I have to be able to verify what I say.”

Courtesy of Waterford Whisky Distillery

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

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

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

Courtesy of Waterford Whisky Distillery

Those processes do add to production costs. A typical bottle of whisky from Waterford Distillery may cost $80 to $120, whereas a bottle of Jameson, a well-known Irish whisky brand produced by Pernod Ricard, may retail for just $25. Renegade Rum’s first mature bottling will be released by the end of the month, and one of the first bottles will likely cost about $55, compared with a $20 price tag on a bottle of Captain Morgan from London-based Diageo.

But Waterford Distillery and Renegade Rum could soon have some company. Dirrane and his team, instead of keeping the tech to themselves, have written a white paper and are planning to make the code and ledger open source, and publish it online next year. Dirrane said that in addition to Reynier’s commitment to transparency, as a software engineer, he’s eager to see the program reviewed by peers.

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

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