The halal food industry is set for rapid growth. According to the recent 2019/20 State of the Global Islamic Economy report, the spend on halal food and beverages is forecast to reach US$1.9 trillion by 2023. At the same time, the value of the global halal food market is predicted to grow at a CAGR of 6.3 percent to reach US$1.97 trillion in 2024.
In Singapore, the rise of the halal food industry is evidenced by the growth of halal certification in the country. Statistics from the Islamic Religious Council of Singapore (Muis) show that about 4,500 premises and 55,000 products were certified halal in 2018—double the volume from a decade ago.
Many efforts by government agencies, industry bodies and businesses have been put in play to tap on this growth and further develop the halal food industry.
One example is the dedicated halal hub that aims to enable more local halal food producers to export to the flourishing international market. Scheduled to be completed in 2021, the hub will house halal food processing units, central kitchens, cold-rooms and logistics operations, and will offer halal F&B businesses a helping hand in the procurement, production, compliance and distribution of their products.
At the same time, Warees Halal is working alongside key international events such as FHA-Food & Beverage to organise the inaugural Halal Theatre which will provide key industry players in the halal food scene with a platform to deepen their knowledge on current trends, challenges and opportunities in the halal food market.
Harmonised Certification Standards Lacking
It is apparent that the halal food industry is booming, but despite that, the industry is still faced with a key stumbling block: the absence of a standardised regulatory framework in halal certification. Without a unified certification system, cross-border halal trade is impacted and hence, the further growth of the halal food industry is hampered.
What is classified permissible by a certifying body in one country may not necessarily be so in another; and making it more complicated is the different interpretations that many of these certifying bodies have on what constitutes halal.
For instance, while countries such as Malaysia, Brunei and Singapore allow the practice of stunning chicken before Halal slaughter, Saudi Arabia does not allow that. Another observed difference relates to wine vinegar. Malaysia regards the product as non-Halal if it is produced through human intervention. Indonesia, on the other hand, classifies wine vinegar as Halal regardless if it is produced naturally or through engineering. Such differences make the process of agreeing to a global, or even regional, halal certification standard challenging.
As a result, companies operating in the halal food space that are looking to export to different markets face the challenge of higher costs as they may need to maintain multiple production processes or halal certifications in order to comply to standards set in each importing market. This creates a bottleneck for many of these companies, which then leads to slower halal trade.
Collaboration & Alignment Much Needed
The lack of global harmonised certification standards is restricting the industry’s potential and opportunity to develop further, especially at a time when more big food companies and non-Muslim nations are upping their investments and know-how in the halal industry.
At the same time, with countries like Indonesia introducing new regulations and certification frameworks, and new technologies like blockchain increasingly being tried and tested in the halal food supply chain, the need for international alignment cannot be further emphasised.
The industry is moving in the right direction, with bodies such as the International Halal Authority Board (IHAB) and International Halal Accreditation Forum (IHAF) launched and in operation. Moving forward, these bodies need to work together and agree on basic parameters such as the acceptable limit of ethanol in flavourings, laboratory testing techniques and certification processes in order to reduce barriers to halal trade.
Identifying a ‘leader’—be it a bloc, nation or certification body—can also be helpful in propelling ongoing discussions on unifying halal certification standards worldwide and in setting an example for the rest of the industry to follow.
The act of harmonising halal certification standards is crucial in ensuring the prosperity of the global halal trade, and as we enter the New Year, we are optimistic for what lies ahead.
By Dewi Hartaty Suratty, Chief Executive Officer of Warees Halal Limited, Singapore