European Halal Market Outlook
There is a useful feature available on Google, whereby you can see the interest in a particular subject, based on search frequency, over a given period of time. Worldwide interest in Halal, based on Google searches, has doubled in the past five years, providing us with some statistical foundation for claims that the global Halal market is growing.
It is clear from the graph that the change over the past 18 months has been more dramatic than over the preceding four years, confirming the view that the Halal market is heating up, despite a general cooling in many other sectors.
These figures are more than re-enforced by the statistics from HalalFocus.com, where visits have increased five-fold over the past 18 months, with over 70% of new visitors adding the site to their favourite bookmarks list. Visitors from the USA, UK and Malaysia are consistently in the top two slots, but Germany and France are consistently in the top ten, confirming the growing importance of Halal in European markets.
Halal in Europe
Without going into the claims and counter-claims circulating on YouTube about the changing demographics in Europe, it seems to be apparent that the Muslim
population of Europe is not only increasing, but has an above average growth rate. Certainly the European Muslim consumer is becoming a target demographic
for retailers and manufacturers, especially in the food sector. As one up-market restaurateur in London commented, referring to his Ramadan
fast-breaking customers, “They’re all young, professional and moneyed and all quite trendy – they’ve got disposable incomes to go out and have really great food, and they know they can get Halal meat here.”
Ramadan-based promotions were more apparent this year throughout the western world, and none more so than the prime-time ads on French TV for a line of ready-made Halal
pasta meals. Halal food is increasingly available in mainstream retail outlets throughout Europe, including under the supermarkets ‘own label’ offerings.
It is important to recognise that what we are seeing now is in many cases the result of decisions made several years ago; such is the time-frame for big corporate decisions to become visible in the marketplace.
Similarly, it is significant that Halal is now being seen as a potential engine of growth in economies from all over the world, leading us to surmise that we are likely to see a continued increase in the Halal market, driven by growing consumer demand (and confidence) and the retailers’ willingness to supply it.
Furthermore, this new view of Halal as an engine of growth is going to be underpinned with policy decisions by governments keen to find ways to strengthen fragile economies.
Opening up potential fertile new areas, without alienating existing supporters is a balancing act in both politics and business. On the political front, the recognition that developing products and services for the Halal market can play a significant role in both domestic and export markets is becoming more common.
Political and economic climate also plays a role in determining the extent to which producers will openly target and supply Muslim consumers, and also the extent to which those consumers feel confident to demand the kind of products and services they want.
The change of administration in the USA generated an almost immediate sigh of relief among the 8-9 million US Muslims. This was accompanied by an economic turmoil that saw many of the largest players in the food sector looking around for new markets and strategies to maintain market share – or in some cases just to try and stay afloat – and finding the Halal sector a promising candidate.
This brought Muslim consumer power into the spotlight, and the realisation that US Muslims have a combined spending power of an estimated $170 billion is opening up a new market niche. Not only have WalMart and CostCo recognised the importance of this market, but some major food producers are also considering serving the Halal market as a means of breathing fresh life into a tired business plan.
The question is often how to do this without alienating existing customers. In the UK, Dominos Pizza and KFC have changed to a Halal menu in outlets with a high Muslim population, with signs in the windows and certificates on the wall…and not without some degree of backlash.
In Finland, McDonald’s is selling Halal chicken burgers without making any publicity at all, buying more than half of their chickens from Danish producer Danpol, who comply with Halal procedures, and saying that their decision is based on quality, rather than religion. Whether this will produce its own backlash remains to be seen, but the decision is an interesting one. For this is perhaps where the real opportunity lies, in the cross-over market.
Access All Areas
Halal meat and poultry, if the raw materials are high quality, and if the Halal guidelines are correctly followed, should be among the highest quality produce available anywhere. Correct Halal slaughter means less blood in the carcass, less toxin and bacteria content in the meat; it is safer, healthier and has a longer shelf-life, and despite the negative image of Halal slaughter, when done correctly, it is less traumatic for the animals.
Halal food has the potential to be the ultimate cross-over market product, and the companies that recognise this, and can build it into their strategic planning, will be the ones to put themselves into a strong market position – if they can get the puzzle right.
The Emerging European Market
There is no question that the European Halal market is a viable and untapped emerging market. The question of how best to access it is a more complex problem that might be the case in other minority markets, such as the in North America, where the Muslim populations are arguably more integrated and affluent, and most people are originally from somewhere else anyway.
The socio-political landscape in Europe is more complicated. It is made up of different countries, each with a Muslim population originating from a different continent, bringing their own differences of culture, taste and schools of thought that become merged, to a greater or lesser extent, with their new European Muslim identities. Not to mention their own ideas of what constitutes Halal!
Add to this the complexities of European politics, and the often difficult relationships with the wider Muslim world and their own Muslim minorities, as well as the influence of the right-wing and animal welfare groups, and it seems clear that developing the lucrative Halal markets in Europe may well be a long and interesting road.
Perhaps the weakest link in the value chain is the credibility of the domestic Halal certification bodies. The development of Halal as an industry is in turn forcing the evolution of the
certification process away from the image of the religious figure with limited understanding of the 21st century food industry, and toward the emerging picture of a new hybrid figure, as well-versed in the appropriate Shariah law as in the complexities of food science and market logistics.
It was a telling moment, in the spring of 2009 in Chicago, when the quality control expert from one of the world’s largest food and ingredient manufacturers outlined, in a formal presentation, what ‘big industry’ needs from the Halal certification providers: independence and transparency of a) Standards, b) Audit & c) Certification and the emergence of competent Accreditation Bodies to oversee the whole process.
It is highly likely that with the increasingly prominent presence of major retailers and manufacturers in the Halal sector, the levels of professionalism among the Halal specialists will
have to match up the expected norms of the food industry. The more the American and European stakeholders come into the picture, the faster this process is likely to be.
Senior Analyst, Imarat Consultants