Halal: Buying Muslim

| 15/05/2009 | Reply

by Carla Power

Khalfan Mohammed has long been buffeted by culture shock while
staying in five-star hotels. As a devout Muslim he has learned to ask
staff to remove the minibar’s alcohol. He loathes lobbies with loud
discos and drunken guests. When traveling with his parents, it is the
bikinis that rankle most. “It was quite shocking for my mother to sit
in a restaurant with undressed people,” the Abu Dhabi-based businessman
says. “My mom and dad are not used to seeing people in public wearing
their underwear.” To avoid such embarrassment, the Mohammeds took to
renting furnished apartments.

No longer. On a trip to Dubai last year, Mohammed stayed in the
Villa Rotana, one of a growing number of hotels catering to Muslim
travelers. In the lobby — all white leather, brick and glass, with a
small waterfall — quiet reigns. Men in dishdashas and veiled
women glide by Westerners who are sometimes discreetly reminded to
respect local customs. Minibars are stocked not with alcohol, but with
Red Bull, Pepsi and the malt drink Barbican.

Time was, buying Muslim meant avoiding pork and alcohol and getting
your meat from a halal butcher, who slaughtered in accordance with
Islamic principles. But the halal food market has exploded in the past
decade and is now worth an estimated $632 billion annually, according
to the Halal Journal, a Kuala Lumpur-based magazine. That’s
about 16% of the entire global food industry. Throw in the fast-growing
Islam-friendly finance sector and the myriad other products and
services — cosmetics, real estate, hotels, fashion, insurance — that
comply with Islamic law and the teachings of the Koran, and the sector
is worth well over $1 trillion a year.

One reason for the rise of the halal economy is that the world’s 1.6
billion Muslims are younger and, in some places at least, richer than
ever. Seeking to tap that huge market, non-Muslim multinationals like
Tesco, McDonald’s and Nestlé have expanded their Muslim-friendly
offerings and now control an estimated 90% of the global halal market.

At the same time, governments in Asia and the Middle East are
pouring millions into efforts to become regional “halal hubs,”
providing tailor-made manufacturing centers and “halal logistics” —
systems to maintain product purity during shipping and storage. The
increased competition is changing manufacturing and supply chains in
some unusual places. Most of Saudi Arabia’s chicken is raised in
Brazil, which means Brazilian suppliers have built elaborate halal
slaughtering facilities. Abattoirs in New Zealand, the world’s biggest
exporter of halal lamb, have hosted delegations from Iran and Malaysia.
And the Netherlands, keen to maximize Rotterdam’s role as Europe’s
biggest port, has built halal warehouses so that imported halal goods
aren’t stored next to pork or alcohol.

Such arrangements cost, of course, but since the industry’s anchor
is food, business is booming, even in the economic crisis. “What
downturn?” asks Nordin Abdullah, executive director of the Halal Journal. “You don’t need your Gucci handbag, but you do need your hamburger.”

Not just hamburgers. Drug companies such as the U.K.’s Principle
Healthcare and Canada’s Duchesnay now sell halal vitamins free of the
gelatins and other animal derivatives that some Islamic scholars say
make mainstream products haram, or unlawful. The
Malaysia-based company Granulab produces synthetic bone graft material
to avoid using animal bone, while Malaysian and Cuban scientists are
collaborating on a halal meningitis vaccine.

In the Gulf, the Burooj real estate company is carving out a niche,
not just because it deals exclusively with Islamic banks, but because
it designs spas and swimming pools that segregate the sexes. For Muslim
women concerned about skin-care products containing alcohol or
lipsticks that use animal fats, a few cosmetics firms are creating
halal makeup lines.

The burgeoning Islamic finance industry is using the global economic
crisis to win new non-Muslim customers. Investors are attracted by
Islamic banking’s more conservative approach: Islamic law forbids banks
from charging interest (though customers pay fees) and many scholars
discourage investment in excessively leveraged companies. Though it
currently accounts for just 1% of the global market, the Islamic
finance industry’s value is growing at around 15% a year, and could
reach $4 trillion in five years, up from $500 billion today, according
to a 2008 report from Moody’s Investors Service.

Those who define the halal market in the traditional sense — as a
matter of meat, and no more — see the industry stopping at Islamic food
standards. But the movement’s more bullish advocates envisage Muslim
cars and halal furniture built in accordance with Muslim finance, labor
and ethical principles. Citing the kosher and organic industries as
successful examples of doing well by doing good, some entrepreneurs
even see halal products moving into the mainstream and appealing to
consumers looking for high-quality, ethical products. A few firms that
comply with the Shari’a code — the religious laws that observant
Muslims follow — point out that already many of their customers are
non-Muslim. At the Jawhara Hotels, an alcohol-free Arabian Gulf chain
run by the Islam-compliant Al Lotah conglomerate, 60% of the clientele
are non-Muslims, drawn by the hotels’ serenity and family-friendly
atmosphere. Dutch-based company Marhaba, which sells cookies and
chocolate, says a quarter of its customers are non-Muslims, mostly
people concerned not about religious edicts but about food safety.
“People are always looking for the next purity thing,” says Mah
Hussain-Gambles, founder of Saaf Pure Skincare, which markets halal
makeup.

Going Mainstream

Today, though, the big business is in working out how to serve the
increasingly sophisticated Muslim consumer. “The question now for
companies is: What products and services are you going to provide to
help Muslims lead the lifestyle they want to lead?” asks the Halal Journal’s
Abdullah. It’s a code worth cracking. A 2007 report from the global ad
agency JWT describes the Muslim market thus: “It’s young, it’s big, and
it’s getting bigger.” Parts of it are well-educated and wealthy. The
buying power of American Muslims alone is estimated at a hefty $170
billion annually. But with few exceptions, American marketers ignore
them, says Ann Mack, JWT’s director of trendspotting. “Muslims don’t
feel that brands are speaking to them,” she says. “When we did the
study, it was very difficult to find mainstream companies that were
making significant programs geared toward the Muslim population.”

That’s less of a problem elsewhere. Indeed, the most innovative new
halal products and services often come out of Europe and Southeast
Asia, places where your average food supplier or bank may know little,
if anything, about halal. In Europe — the biggest growth region
according to the Halal Journal — young devout Muslims are
hungry for Islamic versions of mainstream pleasures such as fast food.
“The second- and third-generation Muslims are fed up with having rice
and lentils every day,” observes Darhim Hashim, CEO of the
Malaysia-based International Halal Integrity Alliance. “They’re saying,
‘We want pizzas, we want Big Macs.’ ” Domino’s now sources halal
pepperoni from a Malaysian company for the pizzas it sells from Kuala
Lumpur to Birmingham; KFC is testing halal-only stores in Muslim areas
of the U.K., and the Subway sandwich chain has halal franchises across
Britain and Ireland.

Swiss food giant Nestlé is a pioneer in the field. It set up its
halal committee way back in the 1980s, and has long had facilities to
keep its halal and non-halal products separated. Turnover in halal
products was $3.6 billion last year, and 75 of the company’s 456
factories are geared for halal production.

For non-food companies like South Korea’s LG and Finnish cell-phone
giant Nokia, targeting Muslims is also big business. LG offers an
application to help users find the direction of Mecca, while Nokia has
free downloadable recitations from the Koran and maps showing the
locations of major mosques in the Middle East. Such offerings increase
brand loyalty, according to market research by the Finland-based Muslim
lifestyle portal Muxlim.com. “There’s a lot of room out there for
mainstream brands to appeal to Muslims without making changes to their
products,” says Muxlim.com’s CEO Mohamed El-Fatatry. “It’s just about
their marketing messages, about showing that this brand is interested
in them as consumers.”

It’s also about understanding the nuances. The hypermarket run by
French supermarket giant Carrefour at the Mid Valley Megamall in Kuala
Lumpur is overwhelmingly halal, with an elaborate system to keep halal
foods separate from the haram ones. Goods that divide scholars on whether they’re halal or haram
because they could have trace elements of wine — Balsamic vinegar, say,
or Kikkoman Marinade — get slapped with little green stickers to alert
customers. More blatantly haram items are confined to La
Cave, a glassed-in room at the back of the store for goods containing
alcohol, pork or tobacco. Wearing special blue gloves, La Cave’s staff
handle haram goods and seal them in airtight pink plastic
wrapping after purchase, so as not to contaminate the main store. “I’m
so scared,” said Norini Razak, a 23-year-old regular Carrefour shopper
in a grey-and-white hijab. “It’s difficult for one to know what is
halal and what is not, so I’d prefer to go to a shop with labels [to
help me].”

It’s Not Just Business

The rising concerns of consumers like Razak herald not just a
global economic trend, but a cultural one. During the 1980s and ’90s,
many Muslims in Egypt, Jordan and other Middle Eastern countries
expressed their religious principles by voting Islamic. Today, a
growing number are doing so by buying Islamic, connecting to their
Muslim roots by what they eat, wear and play on their iPods. Rising
Muslim consumerism undermines the specious argument often heard after
9/11: that Muslims hate the Western way of life, with its emphasis on
choice and consumerism. The growing Muslim market is a sign of a newly
confident Islamic identity — one based not on politics but on personal
lifestyles. “Muslims will spend their money more readily on halal food
and products than on political causes,” says Zahed Amanullah, European
managing director of the California-based Zabihah.com, an online guide
to the global halal marketplace.

Like many Muslim Americans, Amanullah grew up eating Jewish kosher
food in order to conform to Muslim strictures on animal slaughter. But
increasingly, there’s no need for Muslims to go kosher. Zabihah offers
tens of thousands of reviews of halal restaurants, from fried chicken
joints in Dallas to pan-Asian restaurants in Singapore. Says Amanullah:
“We can’t keep up.”

The dazzling range of new products and services also reflects the
seismic social changes under way in the Muslim world. One of the
reasons why halal frozen food, lunch-box treats and quick-fix dinners
are growing in popularity is that many more Muslim women, from Egypt to
Malaysia, have full-time jobs.

Western Muslims, whose minority status sharpens their sense of
identity, are also helping refine the notion of a Muslim lifestyle. In
Britain, advertisers are increasingly embracing the power of the
“green” pound (that’s Islamic green, not environmental green), says
Sarah Joseph, editor of Emel, a glossy lifestyle monthly for British Muslims. When Emel
launched in 2003, the notion of a Muslim lifestyle barely existed.
“People were confused that we could present everything from food,
fashion, travel and gardening, all from a Muslim perspective,” says
Joseph. But Muslims are the fastest-growing segment of the middle class
in Britain; they have big families — an average of 3.4 children against
the national average of 1.9 — so they buy big cars; they spend money on
home decoration and twice-yearly vacations — “not just going back to
Pakistan or Bangladesh, like their [immigrant] parents did,” says
Joseph. Bucking the current publishing trend, Emel is hiring
extra staff and planning new magazines to cater to Muslim readers.
Advertisers include British Airways and banking giant HSBC.

To keep growing, halal firms know they can’t simply rely on
religion. “Ideology does not fit within a consumer mindset,” observes
Amanullah of Zabihah.com. “At the end of the day, people will not buy
halal simply because it’s halal. They’re going to buy quality food.
Ideology doesn’t make a better-tasting burger, a better car, or a
better computer.” But it sure makes a powerful marketing pitch.

With reporting by Shadiah Abdullah / Dubai

By the numbers …

16% — Halal’s share of global food industry

$632 billion— Annual halal food market

1.6 billion— Worldwide Muslim population

A Halal Shopping Cart

From fast food to fashion, the sector is thriving

Food

Non-Muslim multi-nationals such as KFC and Nestlé dominate the
halal food market. But Muslim-?owned manufacturers such as Dubai-based
Al Islami — which sells everything ? from chicken burgers to packaged
ingredients — are growing fast.

Lifestyle

Muslims — many of them young and increasingly middle-class — are buying more magazines, such as U.K.-based Emel, and halal cosmetics made, like these Saaf products, without alcohol or animal fats, which Islam considers haram, or forbidden.

Services

Hotels run along Islamic lines, such as Dubai’s Villa Rotana, offer
quieter and more family-friendly places to stay. Banks that operate
according to Shari’a law ? are doing well during ? the global downturn
because they tend to be ? more conservative.

Category: Asia, Europe, Middle East & Africa

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