Alibaba Pilots Food Safety Blockchain Initiative

  • Alibaba generated $22 billion in revenue last year and handled $450 billion in transactions.
  • Food fraud costs the global food industry $40 billion each year.

Chinese e-commerce giant Alibaba has recently launched a pilot blockchain that it aims to use for supply chain tracking in order to prevent food fraud. The blockchain-based Food Trust framework will be used to verify that ingredients are from their stated location, in an effort to reduce a type of crime that costs the global food industry an estimated $40 billion each year.

“What we’re seeing today is an increasingly complex and fragmented food supply chain. Due to both its global nature and the fact that most food today no longer follows a straight line from source to fork, it is more like a supply ‘network,’ and tracing an ingredient back to its source has become challenging due to this increasing network of handlers, suppliers and middlemen globally.”

NSF International’s Global Food Safety Division Managing Director David Edwards.

Food fraud can come in many forms, from substituting high-end delicacies with low-quality counterfeits to tampering with the appearance of product to enhance its appearance. Common forms of food fraud include mis-identifying fish, claiming olive oil to be virgin olive oil of a higher quality, diluting "pure" fruit juice with cheaper alternatives, and cutting ground coffee with cheaper grains for higher profits.

Alibaba has an annual transaction volume of $450 billion, and acts as a search engine for businesses to find wholesale goods suppliers. The company deals in huge amounts of food and beverages with supply lines reaching across the planet, and the pilot blockchain will monitor the progress of dairy products on their way from Australia and New Zealand to China.

Alibaba says the blockchain will be extended globally if successful, which would make this one of the largest instances of blockchain adoption ever.

The retail giant will be able to help verify the status of food products at each leg of the journey, effectively monitoring the middlemen referred to by Director Edwards of the NSF International's Global Food Safety Division.

The modern food industry is a vast and complicated network of suppliers, creating an environment rife with crime carried out by opportunistic fraudsters. The blockchain will break the journey of an individual food product down into smaller steps and increase accountability of suppliers as well as the quality of international food products.