Alibaba goes live with blockchain food tracking system

Alibaba’s blockchain system for food traceability has been launched after a successful pilot phase over the last year or so.

The blockchain food-tracing system has been road-tested in recent months by two New Zealand companies – dairy giant Fonterra and postal service New Zealand Post – as well as Australian nutritional products company Blackmores and Australia Post. It was formally introduced on April 27.

Blockchain is the technology that underpins the cryptocurrency bitcoin and is essentially a digital database of time-stamped records or transactions. It is now becoming increasingly popular as a track and trace and authentication tool to ensure the integrity of physical supply chains, particularly in the food sector.

Alibaba’s food-focused platform – dubbed the Food Trust Framework – can provide “end-to-end supply-chain traceability and transparency”, according to the partners, which serves to “enhance consumer confidence and build a trusted environment for cross-border trade.”

It ties into the Tmall Global marketplace, Alibaba’s online retail system that it says has adopted various technologies – including blockchain and product tagging with unique QR codes – to make it harder for falsified products to enter the supply chain and reach consumers, and make it easier to recall contaminated or otherwise substandard products.

It is claimed to be China’s first global product traceability programme using blockchain technology., although other systems are being pout through their paces. US retail giant Walmart has conducted a pilot of blockchain technology co-developed by tech firm IBM to trace pork products from a farm owned by a Chinese meat producer to a distribution centre in Beijing.

A unique identification (UID) is attached to each cross-border commodity, says the Chinese company, and can be used to check the provenance of the products whilst in transit and also by the end-user using a smartphone scan. By incorporating blockchain, each stage in the product’s journey from producer to end-user is immutably logged and open to scrutiny.

“We intend to provide a universal approach to providing visibility throughout the supply chain,” says Alibaba, which has been working with PricewaterhouseCoopers in Australia and New Zealand on the implementation of its blockchain-based framework.

It’s no accident that dairy has been at the heart of the project. Just 10 years ago, the milk industry in China was rocked by the scandal of melamine contamination in infant formula products that killed six babies, left thousands more seriously ill, and damaged the reputation of domestic milk producers.

The domestic dairy industry has been affected for years by the scandal as consumers turned to overseas producers, including Fonterra, although there has been a renaissance in recent years in the wake of stricter legislation and tighter supervision of producers that has driven poor performers out of business and prompted consolidation in the sector.

According to estimates from Michigan State University, fake food products drain $40bn from the global food industry each year. Meanwhile, PwC says that estimated 40 per cent of food companies find the traditional approach insufficient to counter fraudulent activities, and 39 per cent say their items are easy targets for counterfeiters.

“The technology not only helps curb counterfeit food, it also gives consumers greater assurance that what they are consuming is exactly what’s stated on the package,” said Alibaba on its Alizila news platform.