“Halal” means “permitted” or “lawful” in Arabic. Generally, halal includes anything and everything that is produced according to Islamic dietary guidelines and principles. Thus, halal covers a wide range of products and services, from cosmetics and medicines to finance and food and drink. But for the sake of brevity, we’ll only discuss the opportunities and challenges for the halal food market in this article.
What Foods Are Halal in Islam?
All foods and drinks are considered halal unless explicitly forbidden in the Quran. Forbidden items include Forbidden items include: alcohol and other intoxicants, any animal that has died (excluding fish and sea creatures) before being properly slaughtered, blood, pork, meat sacrificed to idols, carnivorous animals with teeth like lions and tigers, predators such as hawks and vultures, domesticated donkeys, and certain other animals including mice, scorpions, snakes, and frogs.
What Makes Certain Foods Or Drinks Halal?
For a certain food and drink to be halal, it must meet several specific conditions.
Firstly, it must not contain any substances that are considered non-halal (or “haram”) or unclean (or “najis”) under Shariah law. Additionally, it is also essential that the processes, facilities or equipment used for its processing, transportation, or storage are not contaminated by haram substances.
Moreover, halal products must always be safe for consumption — non-poisonous, non-intoxicating, and not hazardous to health. Lastly, the slaughter of meat must follow Islamic rites to qualify it as halal.
Opportunities in the Halal Food Market
Growing Interest in Halal Food in Non-Islamic Countries
The rising Muslim population in non-Islamic countries has led food and beverage businesses to start their halal product lines and gain the trust of Muslim consumers. For this reason, these countries are forging collaborations with member states of the Organization of Islamic Cooperation (OIC) that are knowledgeable in Halal protocols for capacity building. Partnerships between OIC countries like Malaysia and the UAE and non-OIC countries like South Africa, China, and South Korea are in the works to increase the availability of Halal-certified products.
Increasing Preference for Hormone-Free Beef
Globally, food legislative bodies globally have had a long-standing difference of opinion on the safety of hormone-treated beef. For instance, the import of meat containing artificial beef growth hormones, sanctioned and used in Canada and the United States, was banned by the European Union in 1989. That said, the fact that beef from hormone-treated cattle has higher estrogenic activity than beef from untreated cattle alone could alarm beef consumers.
Therefore, citing consumer preferences and meat safety, many food retailers prefer selling only hormone-free beef. Halal meat production follows Islamic dietary laws and avoids artificial hormones, as the focus is on raising the animals in natural and unaltered conditions. This adherence to purity and ethical standards is central to Halal practices.
High Return on Investment Potential in Halal Supply Chain Integration
The global halal food industry is estimated to be worth trillions of U.S. dollars. When manufacturers strictly follow the principles of Islam’s halal and tayyib laws, halal food has the potential to become the world’s standard for healthy, safe, and compassionate eating. However, despite receiving tax incentives for halal food production in Muslim world, the halal food industry suffers from fragmentation and operational silos.
For example, Muslim governments like Pakistan and the UAE grant tax exemptions to halal-certified meat producers. So, “for aspiring entrants to the halal meat export industry, investing in the vertical integration of the supply chain—from slaughterhouses to international distribution—should result in profitable returns and tax savings at home as well as a strong foothold abroad,” asserts Wahaj Siddiqui, Managing Director of Oblique Consult, a leading financial advisory firm in the UAE.
Challenges in the Halal Food Market
Ambiguity in Halal Certification
The rise of various Halal standard-setting bodies, including public and private sector entities, along with independent certification bodies, has led to widespread ambiguity in this domain. Relevant bodies also include national standards organizations, regional entities like ASEAN, GSO, and the EU, as well as international organizations such as the SMIIC/OIC initiative. As a result, exporters often require multiple certificates, and thus find it challenging to identify which standards truly open market access.
Strict Halal Certification Requirements
The process of obtaining Halal certification, which is subject to stringent criteria and regulations established by certifying agencies, may be both costly and time-consuming. Particularly when expanding into new areas with different certification requirements, entrepreneurs may have difficulty guaranteeing that their products are Halal-compliant.
Bottlenecks in Supply Chain Management
Business owners may face logistical hurdles when trying to source raw ingredients, manufacture, and distribute their products in a way that complies with Halal regulations. Paying close attention to detail and implementing strong quality control procedures are essential for ensuring that ingredients and production processes remain halal.
Wrapping Up
As the demand for organic and natural food increases, so does the competition amongst halal food retailers vying for customers’ attention. To successfully garner market share in this competitive industry, entrepreneurs need to find ways to distinguish their brands and products from their competitors.
Understanding the cultural subtleties and preferences of diverse Muslim populations is also crucial for effective market penetration. Entrepreneurs must also adapt their products, advertising, and branding strategies to fit in with local traditions and beliefs.
