Drivers Of The Dynamic Halal Market Featured

Drivers Of The Dynamic Halal Market Golo, Mexico City

The global halal food market has witnessed sustained growth in recent years, with increasing demand from the growing Muslim population, as well as other communities looking for healthy options. What are the key drivers for the market and what market opportunities would it bring? By Faisal Ghaus, VP, TechNavio Research


Having become one of the fastest-growing segments, the global halal food market was initially concentrated in regions that had a predominant Muslim population, but has been extended to non-Muslim economies in recent years, where halal food is now internationally recognised and accepted as a safe and hygienic form of food by many communities. 


In 2012, the global halal food market was valued at US$697.52 billion. It is expected to reach US$829.74 billion by 2016, growing at a CAGR of 4.44 percent. The sector represents over 17 percent of the entire global food market. Demand for halal food products in the Asia Pacific and Middle East regions is expected to continue to climb due to a projected growth in the Muslim population in these locations, as well as higher disposable incomes. Several major multinational companies, such as Tesco, McDonalds and Nestlé, have recognised this trend and are expanding their halal-approved product offerings in these regions. 


Growth Drivers

The growth of the halal market can be attributed to the following:

  • Increase In Population

A projected increase in Muslim population is one of the major drivers of the global halal food market. In 2012, the global Muslim population was approximately 1.8 billion, which is approximately 25 percent of the world’s population. It has been noted that the consumption of halal food is directly proportional to the size of the Muslim population. 

The majority of Muslims are based in the Asia Pacific region, and is one of the main reasons for this region witnessing the highest consumption of halal food. This is then followed by the Middle East region and Europe. Countries such as Indonesia (where the Muslim population exceeds 188 million), India (where the Muslim population exceeds 131 million) and Turkey (where the Muslim population is approximately 67 million) also have a higher demand for halal food. 


Europe and the US have more than 53 million and seven million Muslims respectively, which give an indication of the consumption rate in these regions. These numbers clearly depict the significance of the Muslim population as a driver of the global halal food market, which an increase of economic growth in Muslim countries is also contributing to.


  • Increase In Demand

The global food market is witnessing an increasing demand for safe and high-quality halal food products. Since their initial development in regions populated by Muslims, halal food has drawn a significant contribution from non-Muslim economies as well, by being recognised as safe and hygienic products 


Due the increased acceptance and demand for such offerings in developed countries, there is a relatively large untapped potential for halal products and services.


  • Increase In Awareness

An increased awareness about halal food is emerging as an important driver. Halal food is prepared in adherence to a set of Islamic dietary standards that determine what is permissible, lawful, clean, and can be consumed by Muslims. 


The increasing number of Muslim consumers and their awareness of religious obligations is also growing, creating a higher demand for halal food. 


  • Increase In Certification

Halal certification is another major factor driving sector growth. There have been incidents where food products were marketed as halal food, but were later found to have failed to meet halal requirements. There is therefore a need for halal certification by an authorised body, and this certification requirement has increased the demand for and consumption of genuine halal food products. 


Halal compliance of a product not only dictates the use of halal raw materials, but also the halal way of handling, storing, warehousing, and transporting raw materials and finished products.


Market Opportunities

Some of the major trends emerging are influenced by urbanisation and food safety.


  • Prospects In E-commerce

With the expansion of e-commerce businesses, there is a huge potential for vendors in the market to increase their profitability. Currently, more and more customers prefer to shop online and pay for their orders using credit cards, which help them avoid time-consuming journeys to shops and billing queues. 


This trend has encouraged numerous companies to focus on internet-savvy customers and venture into this new retail format. Moreover, these modes of business help vendors save on operating costs, which are much lower in the online retail format.

  • Emergence Of Accreditation Agencies

An emergence of accreditation agencies to help facilitate the supply of halal food products is expected as the global halal food market is highly unregulated, primarily in the Western world where the majority of halal foods are produced. 

Unregulated certification will come to an end when accreditation agencies come into play. With the help of these agencies, clear and verifiable standards will be introduced by various standard development bodies and will have to be followed by the vendors. Furthermore, there would be a much more systematic logistics and supply chain management system, with track and trace procedures put in place for the transportation of halal goods across the globe.

  • Fast & Takeaway Food

Halal producers can also exploit the opportunity presented by the booming fast food and takeaway food markets. The convenience and speed offered by these markets are appealing to most consumers these days. People at home are now more likely to takeaway rather than spend hours preparing a home-cooked meal. 


Vendors in the market can provide high-quality halal food products as fast food or takeaways, and thereby generate brand loyalty. For instance, McDonalds has established high-quality standards for its food products, and the company’s independent suppliers have to adhere strictly to these standards. The company’s strategy to provide high-quality food products to consumers has increased its brand image and gives it a competitive advantage-—a point that more can learn from. 


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  • Last modified on Tuesday, 03 June 2014 11:00
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