Australian supplementary medicine manufacturer Blackmores and New Zealand dairy brand Fonterra have teamed up with Jack Ma’s Alibaba to pilot the use of a blockchain platform to trace the supply chain from producer to consumer in a fight against counterfeit consumer goods.
Trio Trial Blockchain Platform to Eliminate Counterfeit Food Products
Blackmores is a $2 billion AUD manufacturer of vitamin and mineral supplements as well as natural beauty products. It has a substantial presence in Australia, New Zealand, and throughout Asia. Fonterra is a New Zealand-based multinational dairy company.
Both companies face counterfeit challenges, particularly in China, where decades of copyright infringement and counterfeiting norms remain difficult to shake off as it becomes a more consumption-driven economy, and the world’s second-largest consumer market.
Food fraud is a $40 billion USD industry. According to PwC, 40 percent of food companies are challenged by food fraud and almost as many regard their products as easy to counterfeit.
The companies have teamed up with Alibaba, China’s e-commerce giant valued at around half-a-trillion dollars, to trial a platform for the delivery of products that utilizes blockchain technology as well as unique QR codes.
“These technologies are designed to authenticate, verify, record and provide ongoing reporting of the transfer of ownership and provision of products and goods,” Alibaba said in a statement.
Protecting Revenue, Boosting Consumer Confidence
If successful, the companies hope the blockchain platform will create a supply chain model that guarantees consumers are presented with genuine products when shopping. The aim is to ensure consumer confidence, protect manufacturer revenues, and ease some of the burdens faced by logistics providers.
Blackmores CEO Richard Henfrey said:
“Blackmores goes to extraordinary lengths to have visibility over our supply chain and each of our products passes 30 tests and checks before it is released for sale. So we’re exploring ways to leverage the technology and data that can provide our consumers with assurance that their trust in our products is well-placed.”
Blockchain-backed supply chain networks are often cited as ideal use cases for the technology. All parties are able to access an authenticated ledger of a product’s movement along the supply chain from producer to consumer, helping speed up shipping and payment processing, and guaranteeing that the goods that hit the retail shelves are genuine.
Blockchain Platforms in Supply Chains – A Growing Trend
Distributed ledger technology is being deployed by IBM and a jewelry industry consortium to track the jewelry supply chain, ensuring genuine precious stones can safely get from the mine to the retailer, with customers able to verify their authenticity. Blockchain technology is also being integrated into cheque clearing integrity by Dubai’s largest lender Emirates NBD in a bid to eliminate cheque fraud.
With more and more players exploring the possibilities of blockchain’s ability to prove product source and integrity, the technology is becoming more likely to dominate the business landscapes of fintech, logistics, and countless other industries in the future.
Have your say. Is a blockchain platform the answer to the challenges faced by the food supply chain? What happens if the original product that starts its journey on the blockchain is mislabeled or not what the producer claims it is? How would distributed ledger technology deal with that?
Images via Pxhere, Pixabay
Subscribe to the Bitsonline YouTube channel for more great interviews featuring industry insiders & experts