Traceability boosts branding and compliance, but farms left behind in digital shift

In an era where consumers demand to know not just what they eat but exactly where it came from, digital traceability promises a food revolution powered by transparency. Supermarkets are filled with bottles stamped with QR codes, and blockchain-ledger guarantees are becoming marketing tools as much as safety nets. But behind the polished labels, a more complex reality is unfolding - one where technology is advancing faster than the governance structures meant to support it.

A study titled “Food Supply Chain: A Framework for the Governance of Digital Traceability” delivers the first cross-sectoral blueprint for understanding why digital traceability works in some food chains but falters in others. Published in Foods, the research dives deep into five Italian supply chains, wine, olive oil, pasta, cheese, and dairy, revealing that traceability is as much a governance challenge as it is a technological one.

How do governance structures influence the purpose of traceability?

The study introduces a novel analytical framework linking four guiding questions, why, where, how, and who, to traceability performance, using semi-structured interviews across 28 companies and cooperatives. The findings show that governance types, ranging from captive to modular and relational systems, directly impact whether traceability serves compliance or innovation.

Captive governance structures, such as those seen in the wine sector, prioritize traceability for regulatory enforcement. These vertically integrated systems enable uniform data collection and ensure certification, but they restrict flexibility and limit the autonomy of smaller suppliers. In contrast, modular and relational models found in pasta and cheese sectors emphasize voluntary traceability to support product differentiation, interoperability, and decentralized coordination.

The complexity of transactions, supplier autonomy, role of intermediaries, and data codification capacity were all found to be essential dimensions determining traceability’s strategic value. The study warns that without aligned governance, digital traceability can become fragmented or performative, failing to generate meaningful transparency or trust across the supply chain.

Ultimately, governance models act as condition-setting mechanisms. In centralized systems, traceability supports brand reputation and regulatory obligations. In modular systems, it becomes a tool for market access and innovation. In relational networks, trust and mutual agreements govern how data is shared and utilized.

Where in the chain is traceability most effective and where does it fall short?

Despite advances in digital tools such as blockchain, IoT, and ERP platforms, the study finds that traceability is concentrated in the downstream segments, processing, packaging, labeling, and marketing, rather than in upstream agricultural stages. These downstream operations are where the value of traceability is most visible and where systems have been more successfully implemented.

In the wine and olive oil supply chains, traceability technologies are heavily used in bottling, certification, and marketing through QR-coded labels, which allow consumers to verify origin and quality credentials. However, data integration from vineyard or olive grove to bottle remains limited, largely due to fragmented systems and weak interoperability between digital platforms used at different stages.

In cheese and pasta sectors, traceability is applied to ensure origin certification and support premium branding. Cheese production has embraced blockchain for full-cycle traceability, from milk collection to final labeling. Meanwhile, pasta producers have started integrating data from agricultural inputs such as wheat sourcing and seed selection, though full integration remains partial.

The olive oil sector, while technically advanced, shows a clear disconnect between field-level operations and post-harvest systems. Data collection is often manual during agricultural stages and only digitized during bottling, slowing down traceability processes and reducing real-time quality control. In all cases, the study identifies that processing and marketing units tend to have stronger digital infrastructure, while farms lag due to limited technical capacity and high investment costs.

Interoperability remains a recurring challenge across all supply chains. Many systems lack standardized protocols, creating duplicate workflows and inconsistent data capture. Without cross-platform compatibility, traceability efforts risk losing their strategic advantage, particularly in efforts to link sustainability practices with verified product quality.

How do relationships and roles shape traceability success?

The effectiveness of digital traceability is not simply a matter of installing advanced technologies. According to the study, it depends on clearly defined roles, shared responsibilities, and the quality of collaboration between supply chain actors.

High-functioning traceability systems were found in cases with strong coordination, where data intermediaries such as ICT providers, certification bodies, and consortiums played integral roles in managing, validating, and standardizing data flows. For example, in the cheese sector, blockchain tools are employed not only for traceability but also to resolve disputes and strengthen third-party verification.

In contrast, systems relying heavily on manual data input or outsourcing digitization to third parties (as in some olive oil producers) suffered from reduced efficiency, increased error rates, and delayed data availability. The presence of multiple intermediaries without clear protocols often led to data silos and reduced stakeholder trust.

The study also revealed that consumers typically access traceability data through surface-level QR code information, while deeper insights remain encrypted and restricted to internal stakeholders. This data asymmetry raises concerns about the true transparency and democratic access to product information.

Trust is a recurring theme. Farmers are often reluctant to share detailed production data due to fears of reputational risk or competitive disadvantage. Without robust data governance mechanisms that define ownership, access rights, and usage conditions, traceability can become a source of friction rather than a tool for collaboration.

Despite these challenges, the benefits of digital traceability are substantial. All five supply chains reported increased capacity for research, knowledge sharing, and innovation. Improved market access, enhanced brand positioning, and support for certifications such as organic and sustainability labels were widely observed. However, cost savings were limited. Fixed costs remained high, and only the olive oil sector reported reductions in variable expenses.

The study recommends four policy actions:

• establishing shared digital infrastructure to reduce costs
• designing targeted training for SMEs
• offering public incentives for traceability adoption, and
• developing inclusive governance models that accommodate small and fragmented producers