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The Growing Halal and Kosher Markets

| 07/03/2009 | Reply

By KRISTEN WOLFE BIELER

ANYONE REMOTELY FAMILIAR WITH THE KOSHER DIET—the largest sacred food category in the country—would do a double-take at the pastrami pizza or chicken parmesan sold at Pomegranate, a kosher food megastore in Brooklyn, N.Y. Thanks to a non-dairy cheese, however, the 25,000-square-foot gourmet grocer is able to keep these dishes within the dietary guideline of never mixing dairy with meat. The pizza is just the beginning when it comes to modern-day kosher offerings, and an indicator of what is happening within the world of all sacred foods, says Mayer Gold, Pomegranate’s general manager: “The kosher consumer today wants to eat all the foods that are out there, but still requires them to be kosher.”

But it isn’t just kosher-observant Jews and halal-observant Muslims who are driving the sacred foods market. Many consumers who are concerned about food safety are turning to kosher- and halal-certified foods because of the perception that they are “cleaner” and more closely supervised during the manufacturing process. Vegans, vegetarians and consumers with food intolerances are drawn to the products as well because the certification labeling means that they can quickly see if a food contains, for example, dairy. Manufacturers are also pursuing certification because it can help open up new regional markets in cities where buyers are more likely to be accepting of certified products.


The Kosher Market

The category has come a long way since Rabbi Dov Behr Manischewitz began baking matzos in Cincinnati, Ohio, in 1888. According to market researcher Mintel International, the kosher food industry is a $12.5 billion business in the U.S. There are 110,000 certified-kosher products on American grocery shelves, with more than 2,000 added each year. Sales of kosher foods have increased by 10 to 15 percent annually for the last eight years—only organic foods have exceeded those growth numbers in some years.

The focus in the kosher market used to be on which of the multinational corporations such as Coca-Cola and Frito-Lay were going to become kosher certified. Now the spotlight is on the specialty food world where there is an explosion of new and exciting products aimed to broaden the traditional sacred-foods consumer’s culinary experience while enticing a wide range of other buyers. “There are so many choices today,” says Gold. “I am bombarded by salesmen with new specialty food products in every category—baked goods, imports, condiments and prepared foods—but this is a good problem.”

Perhaps more dramatic than the growth stats, however, is the qualitative way in which kosher food has changed. One major influence on the image makeover is Chef Jeff Nathan, chef/owner of the kosher restaurant, Abigael’s, in midtown Manhattan and cooking show host. While he concedes it’s an uphill battle—many still equate kosher with brisket and deli sandwiches—public perception has come a long way since he took over the restaurant 17 years ago.

“The traditional kosher consumer is becoming a foodie along with the rest of the country,” says Nathan. And he is able to satiate customers increasingly curious palates largely thanks to a plethora of new kosher specialty ingredients. “We have sushi, ginger, wasabi—things that were unheard of years ago,” he shares. “I think of our restaurant as a great American restaurant that just happens to be kosher.”

The rules haven’t changed: In addition to forbidding pork and certain types of fish (shellfish, swordfish and eel), the kosher dietary laws prohibit any cut of beef from the hindquarter of the cow (filet mignon, for example) and requires all the blood to be drained from the animal immediately after slaughter. “I can’t use any of the tender parts of the meat, but I can use the rib eye, which I find the most flavorful part anyway,” Nathan says. And he gets around the no-mixing-meat-and-dairy rule by looking to southern Italy, where the cuisine rarely uses cream or butter. “I incorporate a lot of ingredients that don’t need to be kosher like olive oil and fresh herbs,” he notes.


Halal Foods: A Category Ripe with Opportunity

One of the surprising statistics about kosher food sales is that, according to Mintel, about 16 percent of sales are to Muslims due to the lack of availability of halal-certified foods. (Many of the laws governing halal food production—particularly meat—are strikingly similar to kosher food.) “If Muslims don’t have access to halal products, they look to kosher because it is the closest option. But in the last ten years, halal foods have become much more readily available,” says Jalel Aossey, director at Midamar Corporation of Iowa. Midamar, founded by Aossey’s father in 1974, helped create the halal market in the U.S., and remains the leader in halal retail and food services.

The global halal market is a $580 billion industry and American manufacturers, importers, restaurateurs, caterers and retailers are starting to pay attention: The U.S. halal market grew more than 20 percent last year. “The eight million Muslims living in the U.S. today have created the single greatest demand for halal food in a Western society outside of France,” says Aossey. Islamic Services of America, a halal certification agency, estimates that halal foods will continue to grow at a rate of 25 to 30 percent over the next five to seven years.

Halal offerings are broadening far beyond traditional meats into a wider array of products, as well as into more mainstream retail outlets. Many McDonalds—including two in Michigan—sell halal burgers and chicken nuggets, Subway provides halal products in 62 restaurants worldwide including two in New Jersey and Nestlé sold $3.5 billion worth of halal products last year. The Islamic Food and Nutrition Council of America in Park Ridge, Ill., certified 1,000 companies last year, up from 330 companies in 2002. “I think of halal as the little brother to kosher, following many of the same growth trends,” says Aossey. “But if you look where it is headed in the next 20 years, it is on pace to surpass kosher.”

Who’s Buying? Understanding the Sacred Foods Consumer

It would be hard not to consume kosher products in our country, since so many everyday staples from Cheerios® to Häagen-Dazs® ice creams bear a kosher certification symbol. Just over 20 percent of American consumers, however, are actively seeking out the kosher label (according to Mintel) and considering there are only 6 million Jews in the U.S. (only 1.25 million of whom keep kosher year round), the market goes well beyond this religious group.

Over half of those buying kosher are doing so for health or safety reasons. Kosher suppliers have long been actively marketing these foods as cleaner and more regulated than non-kosher foods, creating a widespread perception that kosher guarantees quality and hygiene. “The very fact that government standards don’t work for us—our standards are higher—draws people,” says Gold of Pomegranate’s clientele. “I have customers coming from a 50-mile radius to shop here, many of whom are not Jewish.”

The growing distrust of government regulatory agencies by consumers has only fueled this surge, says David Levine, president of Pittsburgh, Pa.’s NuGo Nutrition, an all-kosher line of protein bars and snacks. “Because of the lack of oversight or competency today by many federal agencies, the kosher seal is becoming a seal of approval for the entire food industry. There is a strong connection in principal between the organic and kosher certification since both require sourcing, cleaning, auditing and reporting procedures to be followed and maintained,” Levine points out.

Halal is earning a similar reputation amongst some consumers. “People are more concerned with what is in the food they eat, and things like Mad Cow outbreaks have driven non-Muslims to purchase halal meats,” Aossey says. “Like kosher, halal benefits from this as people are willing to pay more for our meat, and perhaps just eat it less often.”

Food intolerance groups are also a key market, since ingredient verification in kosher-certified foods is strictly monitored. “Everything that is kosher is rigorously overseen, people can rely on it,” says Levana Kirschenbaum, a pioneer in gourmet kosher cuisine and a cookbook author.

Vegetarians and vegans have entered the kosher fold for this reason as well: Due to the central tenet of kosher dietary law that meat and dairy not be combined, when the label says dairy- or meat-free, it absolutely is.

Kosher.com <http://www.Kosher.com> , an online kosher retailer, reports that half of its customers are shopping for dietary reasons like lactose or gluten intolerance or other food allergies, particularly around Passover when additional ingredients such as corn and certain bread products are forbidden in the kosher diet. Even some Coca-Cola bottlers release a limited batch of the old-fashioned formulation during Passover—made with cane sugar, not corn syrup—and those with corn allergies (and those who simply prefer the taste) stock up.

Regardless of why they are seeking out kosher, what these consumers have in common is a willingness to spend. A Cannondale Associates study found that kosher consumers are not influenced by deep discounts and spend about 47 percent more on food per year than other consumers. The same is true of the halal buyer, says Aossey: “Mainstream retailers are realizing that the average halal consumer will also purchase additional groceries and supplies from stores carrying halal products. They may buy $30 of meat products and then spend $70 on other items.”


The Evolving Traditional Consumer

There is a changing Jewish consumer who is more demanding, more curious and on the hunt for new products. Results from a recent study from Cannondale Associates shows that the kosher consumer is looking for a broader selection of food categories. Pomegranate’s primarily Orthodox consumers are more traveled and watch cooking shows regularly, reports Gold: “They are more sophisticated and there have been a plethora of adventurous kosher cookbooks published in the last decade. They still want their traditional foods, but they want much more than that as well.” And while Abigael’s Nathan believes that some older kosher consumers might be hesitant—“Raw fish?!! Rare steaks?!!”—they are being led by the younger generations to try new flavors: “You couldn’t go to a bar mitzvah today without seeing sushi,” he notes.

The halal market is also being diversified to meet the demands of younger Muslims, says Aossey. “I eat traditional Middle Eastern food one day, but the next I eat Thai or Vietnamese, just like any other American. My generation wants this variety. Midamar’s new products are all non-traditional food offerings, such as spaghetti and meatballs, pizza and barbecue beef ribs.”

“I trace it to the growing number of Jews returning to the kosher lifestyle—a phenomenon known as ‘ba’al teshuva,’” says Kirschenbaum. “Many Jews abandoned the kosher diet after World War II. Now they want to keep a kosher home, but they are familiar with all things secular, and they crave all the same culinary pleasures they had grown accustomed to.”

There is a similar movement within the Muslim world, as many Muslims are returning to a more religious way of life, describes Aossey. Munir Darwish was certainly not the first halal store to set up shop in Syracuse when he opened Madina Halal Meat & Grocery two years ago to cater to the region’s significant Muslim population. “There has been a resurgence of Muslims wanting to keep a halal home,” he describes, which creates greater demand for more stores like his.


Trends and New Products

The categories that are fueling growth for both kosher and halal have come not from traditional foods, but from mainstream food segments—cookies, chocolate confectionery, snacks, sugar confectionery and crackers—and tend to fall in the premium sector.

“The strongest trends presented at Kosherfest 2008 were the presence of more products that are gourmet, exotic and/or healthy,” says Menachem Lubinsky, Kosherfest show founder. “There was a variety of exotic meats such as elk and bison, a growing selection of kosher wines and a great number of gluten-free foods.” In its 20th year, Kosherfest 2008 showcased products from 28 countries, including Israel, England, Argentina, Canada and Serbia. Packaging upgrades and innovations were another trend of note—down-playing their kosher-ness, products have taken a decidedly upscale turn, an indication that kosher suppliers intend to compete against all other specialty foods.

The move towards healthier offerings is a big growth driver as well, and sugar-free, gluten-free, low-fat and all-natural have become the buzzwords in the kosher market. Kirschenbaum recently debuted her line of all-natural dairy-free spelt products aimed at the general market, particularly those who are sensitive to gluten.

“There is a tremendous need in the kosher community for healthier snacks and there have been so few options so far,” says NuGo’s Levine. NuGo has a line of kosher parve (parve products contain no meat or dairy) and kosher dairy snacks, which

are all high protein and low fat products.

Marketing to the health conscious makes sense, says Nora Schultz, president of Naturally Nora, Inc., Princeton, N.J., a line of all-natural cake and frosting mixes. “Along with monikers like ‘organic,’ and ‘all-natural,’ kosher wears a ‘better-for-you’ halo in the consumer’s eye. The trend towards organic and natural in the kosher world is a natural progression.”

The list of companies going after the kosher certification is growing, too. Just how much of a leg-up does a kosher symbol give a product? A lot, says Jennifer Moore of Dancing Deer, the Boston-based maker of cookies, brownies and cakes. It took the company nine months to achieve kosher certification in 2002, but the effort was well worth it. “From a marketing perspective, it is extremely beneficial to us,” says Moore. “When we became kosher, there were not a lot of gourmet natural kosher options out there in our category, so we definitely received increased visibility.” The company recently moved into a new facility, which is entirely kosher as well.

In spite of the vast array of high-end and ethnic products Gold has to choose from when purchasing for Pomegranate, the newest kosher offering he is most excited about is Jelly Belly. “The Jelly Belly salesman told me that their numbers immediately went through the roof,” Gold says. “When I asked my contact there the most difficult thing about going kosher, he said it was getting rid of the old packaging.” |SFM|

Category: Halal Integrity, The Americas, USA

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