Global Halal Market Turns to Blockchain for Supply Chain Integrity

February 20, 2019

The food industry is where trust is key to its operations. From farmers and producers to kitchens and end consumers, every step in the food industry can be improved by blockchain technology. A distributed ledger enables users to keep track of food origins, traceability, and quality control of food along the entire supply chain. As a system that can integrate data from all stakeholders into the ledger, blockchain technology can greatly benefit the food industry.

However, some supply chains require even more transparency and traceability, and one of the areas that can make use of blockchain technology is the global halal market. Halal — which refers to the way that food should be produced and prepared according to Islamic law — is the food standard to which Muslims worldwide adhere. With 1.5 billion Muslims around the world, halal food is a major industry for many countries.

Moreover, halal food is considered to be healthier and more sustainable for the food industry. In recent years, with the rise in popularity of halal food, many producers that do not meet halal standards and requirements have been attempting to pass their food products as halal.

A technology that can step in to alleviate this issue is blockchain, which can offer a transparent way to keep track of where food comes from, its producers, and relevant data which can vouch for the authenticity of halal food in the supply chain. Using this technology to guarantee halal standards, blockchain will open opportunities for new players in the market to offer their halal products to consumers all over the world. The food industry is set to undergo huge changes once the digital transformation to blockchain is implemented.

Blockchain technology is a decentralized and distributed network of computers where information is stored and verified by parties with access to the network. This information can also be seen by third-party observers, who are monitoring the system. Blockchain can offer a new way for many players to establish a mutual trust for their shared data by contributing to a publicly distributed ledger which is also immutable, meaning it may not be retroactively amended.

This new technology will change the halal food market in numerous ways, from ensuring that all information about halal food, from its origin, quality assurances, to supply chain journey may be gathered into a distributed ledger that is transparent to all stakeholders. Whether it is the name of the butcher, the logistics company, the supermarket or the restaurant, all data about halal food can be gathered in the blockchain, enabling a flow of communication and overall greater trust in the quality of halal food that reaches consumers. For end consumers, blockchain technology will allow them to check the information of halal food using an application or website that may be accessed from anyone’s smartphone.

Blockchain-based technologies, once implemented, are expected to be able to generate many more solutions for the $1.4 trillion global halal food industry. Halal food is unique compared to other types of food, as its religious laws state that halal food must be prepared and processed in certain ways, and must not ever contain any pork. Though globally-recognized labels such as  HACCP (Hazard Analysis and Critical Control Points), GMP (Good Manufacturing Practice), and GHP (Good Hygiene Practice) have all been used in the halal food system to ensure that food is appropriately handled, blockchain technology can integrate all relevant information and gather them in a distributed ledger that may be made available to all stakeholders.

There are numerous requirements for halal food that blockchain technology can be used to address. At the farm, the animal will receive an identification number, which can be stored in the ledger to monitor its food intake and living conditions. Then at the butcher, all documents relating to the animal’s health and various timestamps can be added to the blockchain, in order to determine the cut of meat from the animal, the manner in which the meat was processed, and to verify that the meat is halal, according to religious laws.

In the system, to ensure that halal meat is up to standards, the meat can also be tested with a DNA sensor after it is processed, then monitored with smart packaging that can track the logistics of the product from factory to supermarket or restaurant.

The sensors, as well as smart packaging in the supply chain, can also be developed to immediately send information to the blockchain to keep track of the halal product. Moreover, environmental data from locations to custom controls can also be stored in the blockchain system.

With all data stored in the distributed ledger, it is available to all stakeholders, including the consumer who can access the information through a website or mobile application. For governments, blockchain can offer solutions regarding import controls of halal products, which will raise the standards of regulatory compliance.  

Once information is sent to the blockchain from the different suppliers along the supply chain, it may be monitored for other purposes, such as legal and tax purposes. Businesses can also benefit from blockchain technology, as both B2B (Business to Business) and B2C (Business to Consumer) relations will be enhanced with greater transparency and assurance of authenticity.

With over a billion consumers worldwide, the global halal market is estimated to have a market value of $2.6 trillion in 2023. This trend is supported by the higher number of food products taking on the halal label every year. For those in the halal food industry, from restaurants, chefs, to food processing companies, a technology that can help to better source halal products will help boost their businesses. Within the food industry, and especially the halal food industry, quality assurance, transparency, and customer loyalty are the drivers of business growth, and blockchain-based solutions can help the food industry achieve these goals.

Consumers of halal food will be more confident that with just a QR code that can be scanned using mobile applications, they will be able to trace the origins and manner of production of the food product.

Ultimately, blockchain technology can offer a platform for all players in the halal food supply chain to demonstrate their transparency and responsibility for their products. With the halal market’s continuous growth, blockchain can offer a better solution that will ensure more high-quality halal products for all consumers.

Source: www.modernrestaurantmanagement.com

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