Alibaba and four Australian and New Zealand companies on Friday introduced a food-tracing system based on blockchain technology, looking to enhance consumer confidence in the provenance of the products they’re buying.
The consortium, which includes two New Zealand-based companies—Fonterra and New Zealand Post, as well as Australia’s Blackmores and Australia Post—is called Food Trust Framework. It will use an immutable central ledger to achieve “end-to-end supply-chain traceability and transparency to enhance consumer confidence and build a trusted environment for cross-border trade,” according to a joint statement.
To do so, Alibaba’s premier cross-border marketplace Tmall Global incorporates a slew of standards and controls to manage the supply-chain process, including blockchain technology and product tagging with unique QR codes. The technologies will authenticate, verify, record and provide an ongoing ledger that is made public to report on the transfer of ownership and provision of products and goods.
Watch: Alibaba uses blockchain to ensure food safety.
Blockchain is a public digital ledger shared among users, and information entered cannot be doctored or altered. In the context of food safety, the technology can ensure that each stage of the “farm-to-table” journey is recorded and open to scrutiny.
For food producers, the use of blockchain means that any offensive actions, such as using fake ingredients, will be detected much faster. In the event of food-contamination issues, such as the recent romaine lettuce scandal in the U.S., retailers can quickly retrace the supply chain and remove the specific batch instead of recalling the entire shipment. 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.
- Fonterra: The world’s leading dairy-product exporter, owned by 10,000 farmers and their families.
- New Zealand Post: A state-owned postal delivery service that has been serving the region for over 170 years.
- Blackmores: Founded in 1932, Blackmore is Australia’s leading natural-health company with a footprint in 17 markets.
- Australia Post: A government-run postal service that delivers locally and internationally to more than 190 countries.
The launch is a follow-up to Alibaba’s announcement last year what it would collaborate with PricewaterhouseCoopers in Australia and New Zealand to help implement a framework to ensure product authenticity and provide a trusted marketplace for consumers.
“Food fraud is a significant global challenge, particularly with the growing complexity of supply chains,” said Alvin Liu, general manager of Tmall Import & Export. “In response, we have created a coordinated, world-leading and robust framework that involves stakeholders from across the supply chain to improve visibility and enhance the confidence of both consumers and merchants.”
According to Michigan State University, fake food products drain $40 billion from the global food industry each year. Moreover, an estimated 40% of the food companies find the traditional approach insufficient to counter fraudulent activities, and 39% say their items are easy targets for counterfeiters, said PwC.
To combat bad actors, many companies are rolling out extra measures, including blockchain technology.
“Given the potential of emerging tech, including blockchain, we want to be at the forefront of developing food-quality and safety standards across the supply chain,” said Lukas Paravicini, the chief operating officer of global consumer and foodservices at Fonterra.
With this authenticated platform, New Zealand Post CEO David Walsh said, consumers can have higher confidence that they are getting authenticated and genuine products.
“Consumers will be able to track their purchase from paddock-to-plate, with full and complete knowledge of its origin and journey with us,” he said.