Blockchain in halal food traceability: Huge potential but limited uptake
Blockchain can a gamechanger for the traceability of halal food products, but misconceptions swirling around the technology, limited case studies and lack of regulatory endorsement remain a major hurdle
Halal food products need to fulfill stringent certification requirements is stating the obvious. However, deploying evolving solutions such as distributed ledger technology (DLT) not only helps streamline the entire value chain but enhances transparency, too.
Blockchain-based traceability streamlines processes and offers cost efficiencies. It also provides a much-needed layer of trust for Muslim consumers and importers. This is especially important considering that food fraud costs between $10 billion and $40 billion to the global industry each year, according to the US Food and Drug Administration.
The halal food supply chain is not immune to fraud challenges - seven halal meat outlets in the Canadian city of Calgary were forced to close in April as federal police investigated unlawful livestock dealing and illegal slaughter operations.
It’s no surprise then that food traceability is proving to be one of blockchain’s most powerful applications.
By providing a tamper-proof record of each movement within the supply chain, blockchain solutions can verify a product’s entire journey, from farm to fork. Such enhanced traceability can reduce the risk of halal certificate fraud whilst helping food manufacturers and retailers avoid expensive product recalls.
Promoting halal trade
One of the earliest examples of blockchain usage for halal food traceability came from Switzerland-Singapore-based OneAgrix in December 2022, when it demonstrated the journey of Hill Farm Finest beef from their farm in Bedfordshire, UK, all the way to the distributor Longino & Cardenal in the UAE, and later to the restaurant IL Borro in Dubai.
Since then, several tech firms have launched blockchain-powered solutions to strengthen halal food traceability. These include UK-based blockchain specialist iov42, which partnered with Cardiff-based Prime Certification in 2023 to create a data-sharing platform to address challenges around halal meat traceability.
The project - funded by the government of Wales through Blockchain Connected, a network for the blockchain community in Wales - contributed to the development of iov42’s traceability solution Interu. Launched in February 2024, the platform enables all traceability efforts, including certification, to be logged and shared with those who request to see due diligence.
“Through this partnership, we've engaged in promising discussions with Welsh Government officials, whose goals are to explore and support substantial trade and investment opportunities between Welsh industries and the Middle East and North Africa region,” Anna Roberts, head of market development at iov42 told Salaam Gateway.
For Wales, red meat production is a cornerstone of agricultural output, with lamb alone accounting for £170 million in exports annually. Government data reveals a 301% surge in UK lamb exports to the Middle East between 2018 and 2019. Promising volumes have ensured solutions that bolster trust in traded goods become increasingly mainstream.
Moreover, iov42 and Prime Certification’s halal traceability project has sparked unexpected interest from the banking sector, according to Roberts.
“Institutions such as Thai Islamic Bank and Lloyds Bank have shown curiosity about how third-party verification (provided by Prime Certification) combined with our DLT platform could support high-volume halal product transactions in the Middle East, marking a new dimension of engagement beyond our original scope.”
Norway-based Unisot has also seen a positive response to its new blockchain supply-chain solution. The enterprise blockchain service provider launched HalalOnChain last October at GITEX Global Dubai to boost transparency across different halal sectors.
“We’re currently engaged in discussions with several partners and stakeholders across various segments of the halal food industry. These partners recognize the importance of building consumer trust by providing verifiable information about the halal status of their products,” Stephan Nilsson, CEO and co-founder of Unisot told Salaam Gateway.
“The openness to collaboration signals a growing awareness of the value that the public enterprise blockchain can bring in ensuring that halal standards are met consistently throughout the supply chain. These ongoing discussions are promising and could lead to more concrete partnerships in the near future.”
Slow uptake
While the halal food industry has shown interest in the potential of blockchain technology for product traceability, implementation remains in its early stages.
“It is not as advanced as other supply chain industries – such as timber and coffee traceability - perhaps because halal traceability is more a consumer demand than it is business orientated, and you don't necessarily have the force of one or two big players in the market to create the change,” said Roberts.
Indeed, several factors are slowing down widespread adoption. One of the major hurdles is the misconception surrounding what blockchain technology truly entails.
According to Nilsson, several proof-of-concept (PoC) projects have been initiated in recent years to explore how blockchain can ensure traceability from farm to fork. However, a lot of these projects have used the term 'blockchain' loosely, and in some cases, the technology was disingenuous: not true blockchain, rather centralized systems marketed as such.
“Genuine blockchain adoption has been slower because many stakeholders have been misled by eager tech companies wanting to sell their own invented ‘blockchain’ technology and have faced challenges in complexity and costs,” said Nilsson.
He adds that many companies and stakeholders mistakenly equate centralized systems with blockchain, leading to failed PoCs that deliver underwhelming results.
“This confusion is compounded by the misperception that blockchain solutions are overly complicated, underperforming, and expensive, which has caused hesitation among stakeholders in fully embracing the technology.”
These hurdles have led to a lack of scalability, data integrity, and true transparency, as well as unnecessary complexity and high costs for participating companies, he added.
Accelerating adoption
Despite challenges, there are clear drivers for the adoption of blockchain across the halal food industry.
For example, credible producers who want to prove the authenticity and integrity of their halal products see blockchain as a valuable tool to establish greater trust with their consumers.
“Currently, those leading the way in adopting blockchain solutions for traceability tend to be the new generation of young, well-educated company leaders taking charge of their long-time family businesses - producers committed to offering verifiable quality products to their customers,” said Nilsson.
Additionally, consumers are becoming more conscious of the products they purchase, seeking greater assurance that the food they consume is genuinely halal, he says.
These two forces - producers eager to prove their claims and consumers demanding more transparency - are likely to fuel blockchain adoption in the future.
Other elements need to come into play, too, to encourage greater adoption of the technology. Education stands as the foremost task.
“Stakeholders across the halal food supply chain - from producers to certifiers to retailers - need a better understanding of how the public enterprise blockchain works, its benefits, and how it differs from centralized or pseudo-blockchain systems,” said Nilsson.
“Clarifying misconceptions surrounding blockchain will help more companies see the value in adopting solutions that can ensure transparency and trust throughout the supply chain.”
Roberts adds that resolving any misplaced fears around blockchain, mainly related to issues of privacy, would assure organizations how this technology could be used to support global trade whilst protecting commercially sensitive information.
Furthermore, successful case studies and demonstrations of blockchain’s effectiveness in other industries can also help alleviate concerns and showcase the potential for halal food traceability.
“When stakeholders see clear examples of the public enterprise blockchain improving transparency and efficiency, reducing fraud, and enhancing consumer trust in similar contexts, they will be more likely to explore adoption,” said Nilsson.
The involvement of regulatory bodies and halal certification authorities is also essential, he added.
These institutions play a key role in ensuring the integrity of halal products, and if they endorse or require blockchain-based traceability systems, it could significantly accelerate adoption.
Regulations in other industries, often relating to the EU Green Deal, have already brought about a shift in approach to traceability, according to Roberts. In doing so, they have created the need for technologies like blockchain to help handle the volume of data as well as introduce accountability, transparency, and integrity.
The European Green Deal, approved in 2020, is a set of policy initiatives to transform the EU into a resource-efficient and competitive economy as well as help achieve its 2050 climate neutrality goal.
On balance, increased awareness, implementation and regulatory support will ensure increased adoption of blockchain for product traceability. This will receive a further impetus by rising consumer demand for verifiable halal products, coercing stakeholders to adopt innovative solutions to remain relevant.
