The existing size of Muslim population around the globe and its faster growth rate but more importantly superior quality standards of Halal food are responsible for enormous growth of Halal food market. Apart from Muslim countries many non-Muslim countries now share significant percentage of global trade of Halal food.
The factors driving global Halal food trade include: 1) growth in Muslim population, the primary market for Halal food, 2) rising incomes in primary markets for Halal food, 3) increasing demand for safe, high quality food in primary markets, 4) increasing demand for greater variety in primary markets and above all 5) incidents of food marketed as Halal but failing to meet Halal requirements has spurred demand for genuine Halal products.
According to certain estimates, the size of global Halal food market is estimated around half a trillion US dollars, many still consider it grossly understated. This enormous market size has created interest among the food producing companies around the globe to cater this ever increasing niche market. Various studies show that Malaysia enjoys an edge over other countries being a progressive Muslim country, where not only consumption but production of Halal food products is on the rise. To realize this potential, apart from the commitment and support by the government, the Halal food industries are focusing on production and export of Halal food products.
The increasing awareness of Muslim consumers on their religious obligations is creating greater demand for Halal food and other consumer goods. There are approximately two billion Muslims out of the 6.5 billion of the world population. Majority of the nations are in OIC (Organization of Islamic Cooperation) member countries. The global Halal food market is on the threshold of major developments that hold the promise of rapid and sustained growth
With the Halal food market currently accounting for as much as 12% of global trade in agri-food products, major growth is likely to come from growth opportunities throughout the agri-food industry. Many reports on the Halal market focus on meat, but products sold under the Halal label cover virtually every agri-food product plus non-food products such as cosmetics. For instance, a very wide range of products that labeling Halal in Malaysia is such as sauces, bottled water, tea, coffee and fruit drinks.
Currently, the global Halal market has gained its attention from the trade merchant around the world. Many Halal expos are held around the world, but prominent among these are Malaysia, Singapore, Turkey, Dubai-UAE and Iran. E-commerce and online business portal have proved to be one of the best e-business solutions to penetrate the emerging market. However, not much e-commerce portal either by government or private sector that focusing on the Halal market has being seen in the Halal trade market.
The well known largest Halal business portal in the world which is supported by the Malaysian government – DagangHalal.com aims at propagating Malaysia as the Global Halal Hub and integrating the manufacturers, importers, exporters, distributors and Halal service providers into the global Halal industry.
A significance of America and its states
Muslims in North America have increased in number since World War I and even faster after World War II. In 1992, their population was estimated between 6 to 8 million and they were spread all over the continent. The majority of Muslims are immigrants and their descendants. Americans and Canadians who have accepted Islam are about 25 to 30 percent of the current Muslim population. According to some reports in the US, the top ten major Halal food markets are (1) New York City, New Jersey, and Long Island metropolitan areas; (2) Los Angeles; (3) Chicago; (4) Detroit; (5) Houston; (6) Dallas/Forth Worth; (7) South Florida; (8) San Francisco; (9) Atlanta; and (10) Washington, D.C. The US market for Halal products is estimated at US$12 billion annually and domestic sales are growing. Estimates on sales growth are difficult to obtain, but US sales of Halal food have increased by more than 70% since 1995. US companies are significant exporters of Halal products.
According to one estimate, the buying power for food of Muslim consumers in North America was worth US$12 billion in 1999. It is estimated that amount of spending by Muslims on food now touches US$50 billion, taking into consideration the growth in Muslim population through birth and recent immigration. Sales of Halal foods are gaining popularity at grocery stores and restaurants. According to one estimate, sales of Halal products will continue to climb as the number of US Muslims grows. A Kansas company launched a line of Halal frozen pizzas.
According to a report an Ontario company offers an extensive range of frozen Halal meat, poultry, and other products. Most meat companies had been making Halal food products only for export; now small- to mid-size companies are producing Halal products exclusively for the domestic US and Canadian markets. For the first time in the history of the US military, certified Halal meals are available to Muslim soldiers.
In the US, there are a number of areas where providers of Halal products are becoming active. Among these are public and private schools, prison systems, the vending industry, and convenience foods such as frozen dinners and airline meals. The number of Muslim students in public schools is increasing annually. These children generally bring their own lunches to school or skip lunch. When vendor contracts are awarded, those who can supply Halal meals to the school system will have an advantage over those who cannot supply these special meals. Like others, Muslims also have a very busy life style. Increasingly, daily activities at work and home do not permit them to prepare meals at home. Therefore the importance and convenient availability of Halal foods has become more evident. Consequently, availability of Halal prepared foods will serve a very useful purpose.
Fast developing trend
Vending is another area where a tremendous opportunity exists for Halal food. Items such as sandwiches, hot meals (such as beef stew and soups), cookies, cakes and rolls, ice cream, and candy can be a very practical means of making Halal foods available in places where the concentration of Muslims might not justify other types of foods. Places such as hospitals, where many Muslim doctors practice and where Muslim visitors come to check on friends, benefit from this service. Halal food vending can also be considered for cafeterias in schools, colleges, and places of business with lower concentrations of Muslims. Reportedly, there are over 8,500 grocery items on the typical shelves of North American and European supermarkets, and many more are being added daily. Food item in grocery stores have Halal markings that facilitates Muslims in making their decisions based on the ingredient information on the labels. This helps Muslim consumers in selecting a product that has Halal markings.
Europe is also an important market for Halal products because of higher purchasing power rather than population size. In additions, preference of non-Muslims for Halal food adds to the attractiveness of the European market. In particular, one study has indicated that Dutch consumers in general are willing to purchase Halal products on the basis of the belief that such products are safe. Figures vary considerably with industry estimates for the global Halal food market ranging from euro 110 billion to euro 560 billion. Estimates on the size of the European Halal food market also vary, but in 2006 the USDA Foreign Agricultural Service suggested a conservative figure of euro 15 billion.
Key entry for European market
Europe is home to over 50 million Muslims and Europe’s Muslim population has grown by more than 140% in the last decade. Muslims across Europe have far higher consumer spending power than those in the Middle East and North Africa with 2nd and 3rd generation European Muslims seeking out convenience and looking for products such as Halal pizzas, lasagne and hot dogs. The port of Rotterdam is attempting to become recognized as the key Halal entry point for the European Market. The port intends to dedicate one warehouse solely for Halal products and towards ensuring that Halal products do not come into contact with non-Halal products. The Halal supply chain in the Netherlands, are the products of Malaysia which is the collaboration between Port Klang and the Port of Rotterdam and is expected to become a role model for other countries.
Largest market in Europe
France has the largest population of Muslims in Europe. It is reported that there are more than 4 million Muslims in France. France is the largest market for Halal products among non-Muslim countries. The value of the French market for Halal products has been estimated at over US$13 billion. Younger Muslims, under the age of 30, account for about 80% of France’s Halal purchases. Germany is also home to a considerable number of Muslims.
It is worth noting that, while the majority of Muslims in the UK come from Pakistan and Bangladesh, other European Muslims tend to come from different parts of the world. The majority of Muslims in France, Spain, Italy and Scandinavia are of North African origin, whereas Muslim population in Germany is of Turkish origin. The implications of these differences should be seriously considered in planning any Halal exports to mainland Europe. In some European countries, the size of Muslim households is declining and leading to a reduction in the importance of formal family meals. In addition, more homes are being equipped with extra freezing capacity and microwave ovens. Both trends are increasing the importance of convenience foods.
Two strong markets in the region
Middle East countries have higher per capita income as well as consumption. In addition, the region must import 80% of its food requirements. Saudi Arabia and the United Arab Emirates (UAE) are seen as the most important import markets in the region. Currently Brazil is the largest exporter to the two countries followed by the EU and the US. Saudi Arabian companies involved in the Halal industry include Al-Radwa Farms, Al- Watania, Supreme Foods, Nash Meat and Sunbullah. UAE companies involved in the Halal industry include Al-Islami Foods, Al-Babeer, Al-Areesh, Arctic Gold, Royal Meat and Emirates Meat.
Turkey is a growing Halal market and as a potential supplier of Halal products, particularly to the EU counties with large Muslim populations such France and Germany. Egypt was recently seen as the most important market for Halal food in North Africa. However, it has been noted that the “complex regulatory system” in Egypt has led a number of potential suppliers to serve the market through investment rather than exports.
Asia has the largest Muslim population of any given region, but the population has modest per capita incomes, and hence lower total food consumption than other areas. For example, high population countries like India and Pakistan have relatively low consumer incomes and consequently exhibit lower per capita protein consumption. Despite lower income levels, this region has been at the forefront of capitalizing on the growing Halal market.
Malaysia, Thailand, Singapore, the Philippines, Brunei, China and India have all taken steps to tap into the global Halal market. Malaysia, in particular, has designs on becoming an international Halal hub and its government has taken a number of measures to support that objective including the establishment of the Halal Development Corporation. The Singapore food industry has also taken a number of steps toward becoming a Halal hub, including an advertising campaign in the Middle East. Thailand has moved to become a recognized Halal centre of excellence in science and testing.
Brunei is currently cooperating with Australian companies in order to combine its role in the Muslim world with Australia’s track record in safe, high quality food production. The Chinese Halal industry is growing and is expected to expand its role in the global market. At the moment, the key advantage of the Chinese Halal industry is access to cheap labor. China recently signed a Memorandum of Understanding with the European Commission (EC) and already has several EC-approved companies ready to export Halal products to European markets. Indian exporters are attempting to gain recognition through the achievement of HACCP, ISO and Halal certification. Leading Indian exporters include Allanasons, Hind Agro, Al-Kabeer, Arabian Exports, M.K. Overseas and Amroon Foods.
Southeast Asia and the Middle East are the two strong markets for Halal products. All major US poultry processors export to these markets, whereas secondary suppliers provide beef. The primary sources of been in those markets are imports from Australia and New Zealand, whose governments are very supportive of Halal programs. Marketing efforts to supply certified Halal products throughout the world are gaining momentum.
Recently, Thailand, the Philippines, and other countries have realized the value of Halal-certified products and their governments are formulating regulations to promote both export and import of Halal-certified products. For export to many of the Association of South East Asian Nations (ASEAN), even the simplest of vegetable products must be certified. In this region, even non-Muslim consumers perceive Halal as a symbol of quality and wholesomeness.