The Global Halal Food Market - Riding a Wave of Growth
Many Muslims live in countries with low median ages like Indonesia, India and Pakistan - and on-going improvements in infant mortality rates. With the rise of the Muslim consumer, food-service chains such as KFC and Nando's now have Halal outlets, while Pizza Express uses Halal chicken and supermarkets in Europe are stocking up on frozen Halal foods.
Higher disposable income
Increasing income levels among the Muslim population are fuelling demand for new and differentiated Halal food. A growing Muslim population as well as economic development in countries with large populations of Muslims makes this a lucrative segment to invest in. For example, the combined disposable income of an American Muslim in 2012 amounted to USD98 billion. restaurant halal
Growing awareness and demand
The awareness factor is at play for both the Muslim as well as non-Muslim population. The former is becoming increasingly aware of their religious obligations while some experts believe that the latter are expected to shift towards Halal food due to rising concerns about unhygienic and unhealthy food. For instance, Halal meat accounts for about 15 per cent of total meat sales in the United Kingdom (2.6 billion British pounds), which is far higher than the proportion of Muslims in Britain (which is approximately five per cent).
Non-food Halal market opportunities
Halal products are not all relating to meat. The evolving lifestyle and increase in purchasing powers of Muslims mean that there is 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 stand to benefit which include: gastronomie halal
Cosmetic and personal care
More consumers are aware that cosmetics might contain alcoholic substances or products derived from animals forbidden by Islam. According to 2013 data, the Halal cosmetics and personal care market is worth approximately USD13 billion with an annual growth rate of 12 percent.
Pharmaceutical and healthcare
Halal pharma and healthcare products are in demand not just from Muslims but also from non-Muslims who value wellness products that do not harm the body in the long-term. That is why industry players are willing to change ingredients and manufacturing methods to cater to this demand. As at 2013, the Halal pharmaceutical market was estimated at USD34 billion - and growing.
Primary Halal markets
As the Halal market emerges as a new growth sector, a growing consumer base and increased growth in different regions will give rise to more competition. The key regions where growth potential is evident include:
Asia
With nearly one billion Muslims or close to two thirds of the global Muslim population, Asia is at the forefront for Halal products. Asia's Halal market has been mainly driven by India, Malaysia, Pakistan, Indonesia and China. With nearly one billion Muslims or close to two thirds of the global Muslim population, Asia's Halal market has been mainly driven by India, Malaysia, Pakistan, Indonesia and China.
With nearly one billion Muslims or close to two thirds of the global Muslim population, Asia's Halal market has been mainly driven by India, Malaysia, Pakistan, Indonesia and China. This market is worth approximately USD420 billion (in 2013) and is expanding rapidly. Some of the key countries within the Asian region that have been setting the direction for the regional Halal market are:
Challenges ahead
The global Halal food industry seems to present many business opportunities. What road blocks should investors keep in mind?
Global Halal standard
The lack of a single unified global Halal standard is a dampener to industry growth. Each country has differing certification standards due to the presence of various Halal authorities. A global Halal standard and certification system would provide assurance to consumers, reduce the need for multiple certifications, expedite product development and reduce the supply chain cycle time.
New Muslim consumers
As at 2011, approximately 60 per cent of the global Muslim population was under 30 years of age. The median age in Muslim-majority countries is expected to reach 30 by 2030. This young generation will demand a diverse 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, pointing to the 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. Hence, supply chain integrity needs to be protected right from the point of animal slaughter and including the transportation, storage to the handling of Halal products.
Human capital
There is a shortage of skilled workers in the Halal industry. Moreover, many industry players have considerable room to grow in respect of production efficiency as well as innovation.
What lies ahead?
As industry players race to grab a share of the USD700 billion global Halal food market, competition will rise. This will place a premium on efficiency, quality and diversity in the years ahead. The Halal certification should be seen as just the beginning of the process of developing competitive advantage.
The Halal food market will also become more diverse, both geographically as well as in terms of purchasing power and hence consumer sophistication. For example, the sale of Halal food in the U.S. has been on the rise, seeing a 70 per cent increase since 1995. In Russia, 2011 saw the production of 65,000 tons of Halal meat. China is also emerging as a Halal market, with over 23 million Muslims living there.
Above all, the African continent is widely acknowledged to be the Halal product market of the future, due to a large and growing consumer base of African Muslims as well as brisk economic growth in the continent. For instance, Kenya has about 150 companies operating with Halal certification from the Kenya Bureau of Halal Certification.
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