Kenya : Why Halal label is critical for major exporters
Written by Dominique Patton, Business Daily, 31 July 2007
Take a stroll around any European supermarket and you’ll quickly come upon whole shelves dedicated to organic items, gluten-free foods or vegetarian-friendly products. But the newest label being promoted in stores is halal.
Despite the Islamophobia that has emerged in response to terrorist attacks, supermarkets are courting producers of halal-certified brands to increase sales to Muslim consumers.
Halal foods, or those deemed “permissible” by Islam, are not new, having been eaten for the last 1,400 years by devout Muslims. But for many years, major food producers and retailers ignored this group, considering it to have low purchasing power and complex demands.
Now, as the Middle East’s oil wealth spills over into consumer goods spending, and second and third generation Muslim immigrants rise up the ranks of the professional classes, these consumers are being better served, creating vast opportunities for producers of food and non-food products around the world.
“As companies realise it’s not just a food fad but a legal religious obligation on 25 per cent of the world’s population, they don’t want to ignore this opportunity,” says Abdalhamid Evans, a Malaysia-based consultant on halal issues.
Halal food sales are already thought to be in the region of US$580 billion, thanks mostly to markets with big Muslim populations like Indonesia and Middle Eastern countries.
But analysts say demand is growing rapidly as awareness of halal builds and halal products get greater visibility in the mass market.
Ironically, the first food producers to cotton on to the halal growth potential were those based in countries with few Muslim inhabitants.
Huge meat producing nations Brazil and Australia have become experts in Islamic practices, allowing them to ship hundreds of thousands of tonnes of halal meat to the Middle East.
Australia considers the market so important that it slaughters all its sheep according to halal standards – each animal must have a ritual slaughter carried out by a Muslim – even though not all is sold to Muslim consumers.
Brazil, too, has been very aggressive in halal exports, “although you would wonder how they find enough Muslims for such a high number of animals slaughtered,” says Darhim Hashim, director of the Halal Industry Development Corporation in Malaysia.
But exporters of many other products can tap the halal market too. Muslim scholars teach that Islam forbids consumption of pork and alcohol, or any traces of either of these ‘unlawful’ ingredients. Most other foods are halal yet the greater range of processed foods available today raises more possibilities for contamination with non-halal, or ‘haram’, ingredients.
For example, all permitted meat must come from animals slaughtered by a Muslim so animal-derived ingredients such as gelatine are not usually halal and even flavours or colourings obtained by an alcohol extraction process cannot be halal.
The complicated process required to make sure a finished food is halal, and then its verification by an independent certifying body, is increasingly appreciated by Muslim consumers around the world.
“In Malaysia, everything from coffee to mineral water to toothpaste is certified. It’s a default standard, or a safety standard if you like,” says Mr Hashim. Muslims in Europe are also becoming more aware of how their food is produced, adds Khalid Sharif, managing director of Ummah Foods, a London-based halal confectionery company, seeing fast-growing sales in the UK.
“The second and third generation started to ask more questions about packaged products. Jews were looking for Kosher foods and vegetarians are demanding meat-free products. So Muslims started to ask about their foods too. Many aren’t suitable.”
This rising awareness of halal processing can be a marketing opportunity, say Malaysian experts. Sold in bulk form, there is no need for certifying fresh fruits or fish but as soon as any processing is done, companies who get a guarantee that their products are halal should see stronger sales among Muslims, says Mr Hashim.
Packets of Kenyan pineapple juice, coffee, tea or processed fish could all carry a halal label to target a larger number of consumers, he believes.
“For fresh produce there’s no issue. But as soon as you put food into a packet, box or bottle, then there is a chance to add a halal label.”
Halal consumers buying canned tuna, for example, will want reassurance that the oil it is preserved in is vegetable-derived. Thailand, a leading tuna exporter, is exploiting this opportunity on both canned fish and its processed and packed fruit and vegetables.
“The purchasing power of the average Muslim in Africa is not very big but producers should use halal to promote production for export. In time, this will help them increase incomes and in turn create a domestic market for these products,” says Mr Hashim.
If African food makers are to export halal foods they will need to make sure their certification bodies are sufficiently respected, however. Ian Ross, in charge of Australia’s meat and livestock exports to the Middle East, says one of the reasons for the country’s strong sales growth to this region – between 20 and 30 per cent in the last couple of years – is Australia’s reputation for taking halal standards so seriously.
It is the first non-Muslim government to introduce a regulation on halal. “Industry and the government are so sensitive to the issue and believe so strongly in the market that our certification system is actually underpinned by government regulations,” says Ross from his Bahrain office.
“We’re seeing very refreshing growth (in exports to the Middle East) despite the strong appreciation of the Australian dollar. One of the reasons is the integrity of our halal programme.”
Another producer that has spent years positioning itself for the halal market opportunity is Nestle, the world’s biggest food company.
The group processes little meat yet is the world’s leading manufacturer of halal foods, with 75 factories designed specifically to make 300 different kinds of halal products including halal ice-cream, cereals and dietary supplements.
It now has the halal compliance process down to perfection, says Mr Evans, and has become a ‘model’ halal supplier, checking everything from the oil it uses to lubricate its conveyor belts to making sure it uses non-alcohol cleaning agents in its manufacturing plants.
Nestle is not only making sure it can supply the fast-growing Asian and Middle Eastern markets, where consumers now have more money to spend on global food brands, but it is also eyeing the European market.
With its rising Muslim population, a result of both ongoing immigration and the higher birth rate of Muslim families, Europe is set to become a major halal marketplace.
The second and third generation immigrants in this region include professionals with more disposable income than their parents.
They are looking for different kinds of halal food like ready meals, pizzas or processed foods that are not found in the small specialty shops that have long served this community. Moreover, they demand the same level of quality as all European consumers.
“The products coming in from India, Pakistan, Turkey may be halal but the quality is terrible,” says Mr Sharif.
Such has been the lack of good quality halal foods, that many immigrant populations in Europe and the US have become big consumers of Kosher products, foods produced for the Jewish community that also avoid pork.
“US Muslims are spending $16 billion a year on kosher products because halal variants are not available,” says Mr Evans. There are more than 80,000 certified Kosher products available in the US but only 1,000 halal products.
But major food producers and retailers have finally realised the potential of supplying more halal foods. Almost all of the UK’s two million Muslims shop in supermarkets but until recently they did not buy halal products there.
Getting them to spend more in supermarkets is now a major mission for retailers like Tesco. It sells halal meat in 64 stores and also offers whole ranges of tinned foods and halal sweets in some of its London stores.
It said last year it would spend around €200million on Malaysian-made halal food for its UK stores in the next five years. “Retailers have done very well out of ethnic foods. And halal is much bigger than other ethnic categories. Supermarkets see it from the bottom line perspective,” says Mr Evans.
With expansion to new markets like India and the Middle East, supermarkets are eyeing a growing consumer base.
There are already 1.6 billion Muslims globally and Islam is the world’s fastest growing religion, set to surpass Christianity as the biggest globally by 2023. But the most important growth may be coming from non-Muslims, says the industry. Many people like to buy a halal label because it guarantees an extra level of quality certification.
In Canada, sales of halal meat rose during the BSE crisis because consumers trusted farmers had fed only plant-based feed to their halal-destined cattle.
“About 75 per cent of people who try our products aren’t even Muslim,” adds Mr Sharif from Ummah Foods. “Many people are interested in learning more about halal products.
They are happy to know that the ingredient is checked right back to its source. Halal is more detailed in terms of its requirements.”
Growing interest in these requirements is also leading to development of a halal logistics sector, halal cosmetics and pharmaceuticals, and Islamic banking. A halal mark may one day be necessary for all major exporters.
Take a stroll around any European supermarket and you’ll quickly come upon whole shelves dedicated to organic items, gluten-free foods or vegetarian-friendly products. But the newest label being promoted in stores is halal.
Despite the Islamophobia that has emerged in response to terrorist attacks, supermarkets are courting producers of halal-certified brands to increase sales to Muslim consumers.
Halal foods, or those deemed “permissible” by Islam, are not new, having been eaten for the last 1,400 years by devout Muslims. But for many years, major food producers and retailers ignored this group, considering it to have low purchasing power and complex demands.
Now, as the Middle East’s oil wealth spills over into consumer goods spending, and second and third generation Muslim immigrants rise up the ranks of the professional classes, these consumers are being better served, creating vast opportunities for producers of food and non-food products around the world.
“As companies realise it’s not just a food fad but a legal religious obligation on 25 per cent of the world’s population, they don’t want to ignore this opportunity,” says Abdalhamid Evans, a Malaysia-based consultant on halal issues.
Halal food sales are already thought to be in the region of US$580 billion, thanks mostly to markets with big Muslim populations like Indonesia and Middle Eastern countries.
But analysts say demand is growing rapidly as awareness of halal builds and halal products get greater visibility in the mass market.
Ironically, the first food producers to cotton on to the halal growth potential were those based in countries with few Muslim inhabitants.
Huge meat producing nations Brazil and Australia have become experts in Islamic practices, allowing them to ship hundreds of thousands of tonnes of halal meat to the Middle East.
Australia considers the market so important that it slaughters all its sheep according to halal standards – each animal must have a ritual slaughter carried out by a Muslim – even though not all is sold to Muslim consumers.
Brazil, too, has been very aggressive in halal exports, “although you would wonder how they find enough Muslims for such a high number of animals slaughtered,” says Darhim Hashim, director of the Halal Industry Development Corporation in Malaysia.
But exporters of many other products can tap the halal market too. Muslim scholars teach that Islam forbids consumption of pork and alcohol, or any traces of either of these ‘unlawful’ ingredients. Most other foods are halal yet the greater range of processed foods available today raises more possibilities for contamination with non-halal, or ‘haram’, ingredients.
For example, all permitted meat must come from animals slaughtered by a Muslim so animal-derived ingredients such as gelatine are not usually halal and even flavours or colourings obtained by an alcohol extraction process cannot be halal.
The complicated process required to make sure a finished food is halal, and then its verification by an independent certifying body, is increasingly appreciated by Muslim consumers around the world.
“In Malaysia, everything from coffee to mineral water to toothpaste is certified. It’s a default standard, or a safety standard if you like,” says Mr Hashim. Muslims in Europe are also becoming more aware of how their food is produced, adds Khalid Sharif, managing director of Ummah Foods, a London-based halal confectionery company, seeing fast-growing sales in the UK.
“The second and third generation started to ask more questions about packaged products. Jews were looking for Kosher foods and vegetarians are demanding meat-free products. So Muslims started to ask about their foods too. Many aren’t suitable.”
This rising awareness of halal processing can be a marketing opportunity, say Malaysian experts. Sold in bulk form, there is no need for certifying fresh fruits or fish but as soon as any processing is done, companies who get a guarantee that their products are halal should see stronger sales among Muslims, says Mr Hashim.
Packets of Kenyan pineapple juice, coffee, tea or processed fish could all carry a halal label to target a larger number of consumers, he believes.
“For fresh produce there’s no issue. But as soon as you put food into a packet, box or bottle, then there is a chance to add a halal label.”
Halal consumers buying canned tuna, for example, will want reassurance that the oil it is preserved in is vegetable-derived. Thailand, a leading tuna exporter, is exploiting this opportunity on both canned fish and its processed and packed fruit and vegetables.
“The purchasing power of the average Muslim in Africa is not very big but producers should use halal to promote production for export. In time, this will help them increase incomes and in turn create a domestic market for these products,” says Mr Hashim.
If African food makers are to export halal foods they will need to make sure their certification bodies are sufficiently respected, however. Ian Ross, in charge of Australia’s meat and livestock exports to the Middle East, says one of the reasons for the country’s strong sales growth to this region – between 20 and 30 per cent in the last couple of years – is Australia’s reputation for taking halal standards so seriously. It is the first non-Muslim government to introduce a regulation on halal. “Industry and the government are so sensitive to the issue and believe so strongly in the market that our certification system is actually underpinned by government regulations,” says Ross from his Bahrain office.
“We’re seeing very refreshing growth (in exports to the Middle East) despite the strong appreciation of the Australian dollar. One of the reasons is the integrity of our halal programme.”
Another producer that has spent years positioning itself for the halal market opportunity is Nestle, the world’s biggest food company.
The group processes little meat yet is the world’s leading manufacturer of halal foods, with 75 factories designed specifically to make 300 different kinds of halal products including halal ice-cream, cereals and dietary supplements.
It now has the halal compliance process down to perfection, says Mr Evans, and has become a ‘model’ halal supplier, checking everything from the oil it uses to lubricate its conveyor belts to making sure it uses non-alcohol cleaning agents in its manufacturing plants.
Nestle is not only making sure it can supply the fast-growing Asian and Middle Eastern markets, where consumers now have more money to spend on global food brands, but it is also eyeing the European market.
With its rising Muslim population, a result of both ongoing immigration and the higher birth rate of Muslim families, Europe is set to become a major halal marketplace.
The second and third generation immigrants in this region include professionals with more disposable income than their parents.
They are looking for different kinds of halal food like ready meals, pizzas or processed foods that are not found in the small specialty shops that have long served this community. Moreover, they demand the same level of quality as all European consumers.
“The products coming in from India, Pakistan, Turkey may be halal but the quality is terrible,” says Mr Sharif.
Such has been the lack of good quality halal foods, that many immigrant populations in Europe and the US have become big consumers of Kosher products, foods produced for the Jewish community that also avoid pork.
“US Muslims are spending $16 billion a year on kosher products because halal variants are not available,” says Mr Evans. There are more than 80,000 certified Kosher products available in the US but only 1,000 halal products.
But major food producers and retailers have finally realised the potential of supplying more halal foods. Almost all of the UK’s two million Muslims shop in supermarkets but until recently they did not buy halal products there.
Getting them to spend more in supermarkets is now a major mission for retailers like Tesco. It sells halal meat in 64 stores and also offers whole ranges of tinned foods and halal sweets in some of its London stores.
It said last year it would spend around €200million on Malaysian-made halal food for its UK stores in the next five years. “Retailers have done very well out of ethnic foods. And halal is much bigger than other ethnic categories. Supermarkets see it from the bottom line perspective,” says Mr Evans.
With expansion to new markets like India and the Middle East, supermarkets are eyeing a growing consumer base.
There are already 1.6 billion Muslims globally and Islam is the world’s fastest growing religion, set to surpass Christianity as the biggest globally by 2023. But the most important growth may be coming from non-Muslims, says the industry. Many people like to buy a halal label because it guarantees an extra level of quality certification.
In Canada, sales of halal meat rose during the BSE crisis because consumers trusted farmers had fed only plant-based feed to their halal-destined cattle.
“About 75 per cent of people who try our products aren’t even Muslim,” adds Mr Sharif from Ummah Foods. “Many people are interested in learning more about halal products.
They are happy to know that the ingredient is checked right back to its source. Halal is more detailed in terms of its requirements.”
Growing interest in these requirements is also leading to development of a halal logistics sector, halal cosmetics and pharmaceuticals, and Islamic banking. A halal mark may one day be necessary for all major exporters.