halal certified
The literal meaning of the Arabic word ‘Halal’ is permitted. It is used in reference to foods and drinks that are permissible for Muslims according to Islamic law, as defined in the Qur’an. It establishes instructions that specify what foods can be consumed, as well as the method of preparation, mainly addressing meat items and animal tissue. For example, the Islamic way of slaughtering animals is to kill them by cutting the trachea, carotid artery, and jugular vein.
Muslim consumers now contribute to a growing demand for a variety of high-quality Halal foods. Halal certification is a concern for the world’s Muslim population of 1.6 billion because many Muslims live in non-Muslim majority countries where it is sometimes difficult to find Halal certified food or where the authenticity of the certification may be questionable.
growth potential
What is driving the rapid growth in the Halal Food Market?
Increase in the Muslim population
According to research published in 2015, Muslims currently make up about a quarter (23.2 percent) of the world’s population. The study further states that the increase in the Muslim population is due to younger demographics (many Muslims live in countries with lower median ages such as Indonesia, India and Pakistan) and continued improvements in infant mortality rates. With the rise of the Muslim consumer, food service chains like KFC and Nando’s now have Halal outlets, while Pizza Express uses Halal chicken and supermarkets in Europe are stocking up on Halal frozen foods.
Higher disposable income
Rising income levels among the Muslim population is fueling the demand for new and differentiated Halal foods. A growing Muslim population, as well as economic development in countries with large Muslim populations, make this a lucrative segment to invest in. For example, the combined disposable income of a Muslim American in 2012 was $98 billion.
Growing awareness and demand
The awareness factor is at stake for both the Muslim and non-Muslim population. The former are increasingly aware of their religious obligations, while some experts believe the latter are expected to switch to Halal food due to growing concerns about unhygienic and unhealthy food. For example, Halal meat accounts for around 15 per cent of total meat sales in the UK (£2.6bn), which is much higher than the proportion of Muslims in Britain (which is around five per cent). hundred).
Non-Food Halal Market Opportunities
Not all Halal products are related to meat. The evolving lifestyle and increased purchasing power of Muslims means that there is a growing demand for products that conform to Islamic dietary laws. As the Halal industry continues to expand beyond the food sector, there are many industries that will benefit, including:
cosmetics and personal care
More consumers are aware that cosmetics may contain alcoholic substances or products derived from animals prohibited by Islam. According to 2013 data, the Halal cosmetics and personal care market is worth approximately USD 13 billion with an annual growth rate of 12%.
pharmaceutical and health
Halal pharmaceutical and health products are in demand not only among Muslims, but also among non-Muslims who value wellness products that do not harm the body in the long run. This is why industry players are willing to change ingredients and manufacturing methods to meet this demand. In 2013, the Halal pharmaceutical market was estimated at USD 34 billion, and it continues to grow.
Tourism
Recently gaining popularity, this type of tourism refers to hospitality services and products in accordance with Islamic practices. Traditionally, Halal tourism has been commonly associated with umrah, hajj and pilgrimage. Muslims’ changing preferences for travel destinations, the rise of affluent middle-class consumers, and the increased degree of interconnectivity make travel convenient. This puts the Halal tourism market at USD 137 billion in 2014.
wear
Fashion houses in Paris and Milan have noted the commercial potential of Muslim women’s clothing that respects religious sentiments but incorporates elements of good taste and style. According to a 2012 report, the Muslim fashion industry would be worth $96 billion if half of the world’s Muslims (1.6 billion) spent $120 a year on clothes.
Logistics
Halal logistics also has clear growth potential. This means paying close attention to the supply chain where product integrity is maintained from farm to consumer’s table. Therefore, an international Halal logistics standard is crucial. Based on 2014 data, this industry is forecast to grow at a compound annual growth rate (CAGR) of 12.6% to reach US$539 million.
Halal Primary Markets
As the Halal market emerges as a new growth sector, an ever-increasing consumer base and further growth in different regions will lead to increased competition. Key regions where growth potential is evident include:
Asia
With nearly one billion Muslims or close to two-thirds of the world’s Muslim population, Asia is at the forefront of Halal products. The Halal market in Asia has been mainly driven by India, Malaysia, Pakistan, Indonesia and China. With nearly a billion Muslims or about two-thirds of the world’s Muslim population, Asia’s Halal market has been driven primarily by India, Malaysia, Pakistan, Indonesia and China.
With nearly a billion Muslims or about two-thirds of the world’s Muslim population, Asia’s Halal market has been driven primarily by India, Malaysia, Pakistan, Indonesia and China. This market is worth approximately $420 billion (in 2013) and is expanding rapidly. Some of the key countries within the Asian region that have been setting the direction of the regional Halal market are:
Indonesia
The country with the largest Muslim population in the world is, unsurprisingly, a huge market for Halal products, estimated at USD 10 billion annually in 2013 and growing 7-10 percent annually.
Malaysia
The Malaysian Halal market was valued at US$1.9 billion in 2013. The Halal industry, which is a crucial contributor to the country’s economic growth, is expected to contribute up to 5.8% of Malaysia’s Gross Domestic Product (GDP). the nation by 2020, up from 2 percent in 2013.
Pakistan
Pakistan’s share of the global Halal food market in 2013 was a dismal 0.26 percent of the total USD440 billion. This is no doubt because Pakistan produces much of its food domestically, without a large amount of Halal food imports and exports. However, Pakistan has great potential to become a hub for Halal food. This is due to its large Muslim population, as well as its strategic geo-economic position, which gives it access to 40 million Muslim consumers in the Central Asian republics and Afghanistan.
thailand
Thailand has become the fifth largest Halal food producer in the world, holding a 5.6 percent share of the global Halal food market, valued at US$5 billion a year. The Thai government’s continued efforts to strengthen the Halal industry resulted in the establishment of the Thailand Halal Standards Institute in 2003 to ensure the proper development and certification of domestic Halal foods. These standards comply with Islamic law as well as international food quality standards. Thailand has become the fifth largest Halal food producer in the world.
middle East
The Halal food industry in the Middle East was worth approximately US$20 billion in 2013. The Middle East imports 80% of its food needs, making it an important segment for global Halal food. Annual food imports are projected to double from USD 25.8 billion in 2010 to USD 53 billion in 2020, with total Halal meat imports exceeding one million metric tons per year.
Europe
The booming European Halal food market has drawn the attention of many Western countries. Large UK grocery retailers such as Sainsbury’s, Morrisons and Tesco sell ranges of Halal foods in selected stores, covering categories from baby food to Halal meat.
challenges ahead
The global Halal food industry appears to present many business opportunities. What obstacles should investors be aware of?
Halal world standard
The lack of a single unified global Halal standard is a brake on the growth of the industry. Each country has different certification standards due to the presence of various Halal authorities. A global Halal standard and certification system would reassure consumers, reduce the need for multiple certifications, speed up product development and reduce supply chain cycle time.
new muslim consumers
In 2011, approximately 60% of the global Muslim population was under the age of 30. The median age in Muslim-majority countries is expected to reach 30 by 2030. This young generation will demand a wide range of Halal consumer products and services to meet their lifestyle aspirations in accordance with their faith. The tastes of these customers can also be expected to evolve over time, indicating a need for innovation.
Halal integrity from ‘farm to table’
Maintaining integrity throughout the Halal supply chain has become a major concern for Muslim consumers, with fraudulent Halal certification and physical contamination of food products on the rise. Therefore, the integrity of the supply chain must be protected from the moment the animal is slaughtered and includes the transportation, storage and handling of Halal products.
human capital
There is a shortage of skilled workers in the Halal industry. Additionally, many industry players have considerable room to grow with respect to production efficiency and innovation.
What awaits us?
As industry players vie for a piece of the US$700 billion global Halal food market, the competition will increase. This will prioritize efficiency, quality and diversity for years to come. Halal certification should be seen as just the beginning of the process of developing a competitive advantage.
The Halal food market will also be more diverse, both geographically and in terms of purchasing power and therefore consumer sophistication. For example, Halal food sales in the US have been on the rise, up 70 percent since 1995. In Russia, 2011 saw the production of 65,000 tons of Halal meat. China is also emerging as a Halal market, with more than 23 million Muslims living there.
Above all, the African continent is widely recognized as the Halal product market of the future, due to a large and growing African Muslim consumer base, as well as rapid economic growth on the continent. For example, Kenya has about 150 companies operating under Halal certification from the Kenya Halal Certification Bureau.
For Halal food exporters, there will continue to be more frontiers to explore.
