Global demand for halal food is on the rise and the market is expected to grow at 20 per cent by 2025, according to Hamid Badawi, Deputy Chief Executive of UAE Al Islami Foods.
“Halal food is the least affected area of the market because people have to eat any way. And those who use halal, are always loyal to halal brands. So there is no serious impact of the downturn,” Badawi told Gulf News.
Valued at an estimated $634 billion in 2009 according to the International Halal Integrity Alliance (IHIA) in Malaysia, halal food is a rapidly growing market owing to demand from the 1.8 billion Muslims that make up 20 per cent of the world’s population.
“Muslims comprise one of the fastest growing consumer markets in the world and, hence, represent a major growth opportunity for businesses around the world,” according to a report by A.T. Kearney titled ‘Addressing the Muslim Market: Can you afford not to?’ released in May.
The sheer size and demographics of the Muslim population make it a significant customer base.
“Over the past 10 years, populations have surged. Asia’s one billion Muslims increased by 12 per cent and a quarter of them are in the high growth areas of India and China.
“The European Muslim population has grown 140 per cent in a decade and is continuing to outpace that of non-Muslims. Approximately 30 million Muslims make their homes in the Russian Federation,” the report said.
The rise in population is followed by an increase in purchasing power and Muslim preferences of products and services, the report noted.
Halal food accounts for 16 per cent of the world food trade which is just less than proportionate to the Muslim population, according to IHIA statistics.
The current levels of halal food consumption is worth $66.6 billion in Europe, $16.1 billion in North America, $20.8 billion in China and $23.6 billion in India.
Statistics compiled by Euromonitor International between 2004 and 2009 show that the fresh meat volume sales in the Middle East and Africa rose by 17 per cent — slightly higher than the global average of 15 per cent.
The UAE recorded the highest increase in fresh meat volume sales with 32 per cent, followed by Jordan at 27 per cent, Egypt with 22 per cent, and Saudi Arabia at 21 per cent, according to the report released in April.
Halal food is also making noteworthy inroads in Europe. Russia’s first logistics hub for halal products just opened in Kazan, in the province of Tartarstan. Rediscovering its Islamic roots after the suppression of religion under the Soviet Union, the Muslim province of Tartarstan is building close economic ties with Islamic countries.
Annual trade turnover between the republic and the Islamic world has increased from $93 million to $3 billion in 10 years — nearly a quarter of its annual trade, according to a BBC report aired in August.
France, home to Europe’s largest Muslim population of six million, has a halal market estimated to be worth 5.5 billion euros — twice the size of the organic food market, according to the BBC.
Middle East fast food outlets and restaurants that often sell halal food are becoming very popular in France, Germany, and the UK, according to Emily Woon, Head of Fresh Food Research at Euromonitor.
At the retail level, two of the UK’s largest supermarkets, Tesco and Asda, started selling meat labelled as halal in selected locations in 2001, the report noted.
It predicted that supermarkets providing halal meat through stands operated by trusted neighbourhood butchers is a format likely to “enjoy a degree of success” in appropriate locations.
Dubai Arab and GCC countries have failed to cash in on the production and marketing of halal food despite their predominantly Muslim population.
The GCC countries alone consumed $43.8 billion worth of halal products in 2009, according to the Halal Journal. But Brazil still has a 54 per cent share in the GCC halal food market while Australia claims a 9 per cent share, according to the International Halal Integrity Alliance (IHIA).
In 2009, the UAE imported $45.6 million worth of natural and processed beef, according to a country report by the Association of Brazilian Beef Exporters. Brazilian food products are supposed to be certified by Cibal Halal, the Brazilian Islamic Centre for Halal Food Stuff Association.
“Arab and GCC countries need to first realise that there is a halal industry in the first place,” said Darhim Hashim, Chief Executive of IHIA. “From my own experience in the Mena region, halal seems to be taken for granted and there seems to be a mindset barrier that any business can be made out of halal.
“Being resource-scarce, it would make sense for these countries to focus on value-added processing and re-exporting.”
But there are also logistical production problems.
“One of the main reasons Arab and GCC countries can’t meet their own demand is that feed and grain is fairly expensive for them to buy. Also, they lack the infrastructure for going into mass meat production. For example, their cold chains are very fragmented,” Emily Woon, Head of Fresh Food Research at Euromonitor, said.
Mass meat production is only economical when there is large amounts of cheap, subsidised grain available like in Europe or the US — an obstacle to Arab countries becoming major exporters of halal meat. “The demand is there, but they cannot supply and certainly not to the standards that are demanded by these markets.”
“Arab and GCC countries are not doing enough marketing,” Badawi said. “This is due to high expenses, less concentration of Muslims[compared to Asia], and strict regulations in European countries that do not comply with Al Islami’s Real Halal standard.”
Ironically, it is left up to non-Muslim countries to produce and export halal meat.
“Countries like Brazil and Australia have always been major meat exporters. For them to ‘convert’ to halal was a matter of adjusting the process and replacing the slaughterman with a Muslim. With the kind of volumes they produce they are able to price quality products competitively,” Hashim said. “Over time, they have been successful in convincing the import authorities of the halal integrity of the products due to the presence of Islamic associations who perform certification services.”
But there are other avenues for Arab countries to cash in.
“Arab producers would have a better chance if they could form strategic alliances with other local or even foreign producers to reap economies of scale, that is to buy feed in bulk needed for mass production, share the technical knowledge on improving the supply chain and distributing halal meat more efficiently,” said Woon.
Economic diversification away from oil-related products into the halal market is essential for Arab and Gulf food security and a much needed self-reliance for food, she said.
“In general, prices of foodstuff such as meat are expected to rise in the future, driven by the rise of middle-income households in emerging markets such as India and China and the westernisation of the local diet. Therefore, it would greatly boost the security of halal foods in these markets if local producers could meet local demand,” said Woon.
How Halal is Halal?
An unresolved issue continues to hinder the progress of this industry: namely an international global standard of certification that will unite a fragmented industry and allow customers to rest assured that what they are buying and consuming is indeed halal.
In France, Muslims raised concerns that halal-certified products were not in fact halal at all because some companies could get a halal stamp on any product for money, according to a BBC report in September.
“Mass produced non-halal meat will always undercut halal meat on price, which leaves the market wide open to fraud and profiteering,” Emily Woon, Head of Fresh Food Research at Euromonitor, said, pointing out that halal meat is not compatible with mass production because of the time and attention needed to kill each animal.
International halal organisations are calling for a single certification body that would unify standards and bring about awareness and training on proper halal methods.
So far, there has been some progress. The IHIA was mandated by the Islamic Chamber of Commerce & Industry to create a framework for an international halal standard.
Darhim Hashim, Chief Executive of IHIA, said this was an industry-led initiative promoted as a private standard. A public standard would require ratification and recognition from the governments involved, which would be time consuming if it happens at all.
The modules for the standard will be announced at the upcoming World Halal Forum, he said.
Other woes plaguing the industry, according to Euromonitor report, are “supply shortages and retailing bottlenecks” because of difficulties in mass producing halal meat and “ethical controversies” as bleeding out an animal is seen as inhumane by some western consumers,” it said.
What is halal?
The word “halal” refers to an object or action that is permissible according to Sharia. Halal meat is slaughtered according to the method animal slaughter prescribed by Sharia.
This method involves:
- Slaughtering with a swift, deep cut using a sharp knife on the neck
- Cutting the jugular veins but leaving the spinal cord intact
- The premises, machinery, and equipment is cleansed according to Sharia before any production takes place
- The animals are permitted for consumption
- The animal is of the permitted age, raised on halal feed ingredients
- Slaughtering is done by a Muslim and facing the Qibla or direction of the Ka’aba in Makkah, Saudi Arabia
- Reciting the takbeer: the words “Allahu Akbar”
- Pre-stunning an animal is prohibited
- After slaughtering, the body is hung upside down to drain the blood.
List of Halal Food Research and Development (R&D):