Insights

Authentic Halal: Restore Trust from Traceability and Blockchain

By Carlos Rabadán Escudero, Head of Delivery Movilitas EU

Counterfeit food is rather prevalent in the global marketplace, especially in certain categories such as olive oil, honey and fish. They can contain substitute ingredients, undocumented allergens or non-certified items. Manufactures suffer the loss of the sale; however, there is also a risk to the brand image when customers purchase an inferior product. Money is not the only consequence as sometimes the food or ingredients can cause allergies, food poisoning or worse.

The media continues to highlight the fraud stories and they drive consumer awareness. After years of exposure and a turn towards healthier eating, the public is demanding more transparency about where their food came from before it hits their table. Technology and new processes connect all the stakeholders for greater traceability of these goods to reduce the risk of counterfeits reaching consumers.

Food Certifications

This ability to trace food from origin to destination is also important for religious reasons. You probably are aware of kosher and halal food items just from shopping at your local grocery store. For religious followers, it is important to eat these certified foods as there are often strict guidelines. Discovering that you’ve been eating non-certified food regularly because of fraud could be devastating.

Unfortunately, in the past few years, food falsely labeled as halal certified has been found around the world. Some of the product originated in the Asia Pacific region, such as Malaysia and South Korea. The risk is growing along with the increase in demand for these products.

“The halal industry is based on a belief that Muslims should eat food and use goods such as cosmetics that are “halalan toyibban”, which means permissible and wholesome. In fact, the halal market is non-exclusive to Muslims, and has gained increasing acceptance among non- Muslim consumers who associate halal with ethical consumerism.” (Orbis Research, 2019)

The same report also noted that the halal food market size was $1.14 million in 2017 and will continue to grow by almost five percent in 2025. As a result, countries are starting to implement regulations to ensure the authenticity of the certified products. For example, Indonesia initiated their mandatory halal certification in October, with a grace period of five years for full implementation. Most countries do not offer standard methods of traceability for food and beverages compared to the heavily regulated life sciences industry.

Trust from Traceability

Tracking methods, if done at all, are often manual and rarely available in real-time. This lack of accountability creates a lack of trust in the consumer market. Regulators and companies want to rebuild the confidence by demanding proven and innovative track and trace solutions. Extended supply chains create a neutral, multi-modal global network connecting logistics partners, systems and business processes to gain end-to-end visibility.

Blockchain is an increasingly popular method of traceability because it connects all the stakeholders’ digital records and events in a tamper-resistant format. The information can be accessed at any point from anywhere, yet it cannot be edited or deleted. This chain becomes permanent and public creating a single version of the truth.

When paired with a track & trace solution, companies can use the standardized data to collaborate with all the stakeholders for real-time monitoring of location and quality. The shared information enables the elimination of blind spots, proactive responses to deviations and the ability to discover new opportunities. For consumers, the data creates a level of trust that the product is authentic and safe to consume.

One example of this combination is the SAP Logistics Business Network (LBN) and SAP Cloud Platform Blockchain Service. SAP LBN is an open secure network that connects stakeholders and integrates with logistics processes. All involved gain access to real-time information and situational insights. The Blockchain Service aids this transparency and visibility through authorized networks.

Authentic Halal

How would these methods work in authenticating that the product is truly halal-certified? Track & trace solutions focus on capturing key events and conditions from origin to destination, such as routes, mode of transportation, temperature, etc. Whenever someone scans the shipment or product’s unique identifier, such as a serial number, the related event is written and stored into the blockchain. Anyone with the right permission level, including consumers using a public-facing app, can access the information to verify how it was created, handled and delivered.

This format results in trusted traceability. Halal certification organizations, farmers, manufacturers, distributers, etc. are verified through this system. Consumers then can access the information from certification to delivery that shows the products were handled in the appropriate manner. Therefore, trust is restored within the marketplace. Track and trace, serialization and blockchain technologies help us more easily verify the authenticity and certification of the food we consume.

To discover how SAP Logistics Business Network and Movilitas assist clients with their global track and trace initiatives, visit our overview page.