Halal refers to the permissibility of actions, products, and practices in Islam. Muslims follow a Halal lifestyle as a form of devotion and spirituality. This encompasses all aspects of life, such as food consumption and income sources. Muslims are guided by their religion to consume food that is wholesome. In addition, their sources of income must be free from unethical practices such as fraud, corruption, and exploitation.
The Halal industry is rapidly growing, with an estimated worth of $2T in 2021, according to the State of the Global Islamic Economy Report by DinarStandard. The report covers six core sectors including food, fashion, media & recreation, travel, pharmaceuticals, and cosmetics. The Halal industry is expected to reach $2.8T by 2025 with a projected 4-year cumulative annual growth rate of 7.5%. The Asia-Pacific region accounts for the largest share of the market, followed by the Middle East and North Africa, driven by the growing Muslim population, which currently makes up one quarter of the world’s total population, and increased regulations for Halal products.
Companies looking to tap into the Halal industry can benefit from the increasing demand for Halal products and services. The growth and expansion of the Halal industry present exciting opportunities for those who want to be part of the thriving global market. Before you jump onto the Halal bandwagon, here are 5 things you need to know:
1. Halal food goes beyond ‘No pork, No lard’
Halal encompasses all things permissible in Islam, with only a small selection of items prohibited by God. In comparison, the range of things considered Halal is vast, including foods such as vegetables, legumes, seafood and spices.
You may notice some food establishments displaying the signage “No pork, No lard”. This may lead you to wonder if the establishment is Halal. However, these signs do not necessarily indicate that the food served is Halal.
Halal food goes beyond ‘no pork, no lard’. It must be free from non-Halal ingredients, including their derivatives, such as:
- A – Amphibians
- B – Blood / Birds of prey
- C – Carnivores
- D – Dead meat
- I – Intoxicants
- S – Swine
To ensure compliance with Islamic laws, Halal food must also be prepared in a manner that is deemed acceptable in Islam. This includes strict standards for the preparation and processing of food items.
For example, the preparation area must be hygienic and safe. Slaughtering of animals for Halal meat must be performed by Muslims using a sharp blade to minimise the animal’s suffering. Where fermentation is involved in the preparation of food, the residual ethanol levels must be kept within permissible limits to avoid intoxication for the consumer.
2. The Muslim market is not homogeneous
The Muslim market is often perceived as a homogeneous entity, but this could not be further from the truth. In reality, the Muslim market is incredibly diverse, encompassing a range of cultures, languages, and economic backgrounds.
According to the Pew Research Centre, there are about 2 billion Muslims worldwide, representing 25% of the global population. This demographic is spread across numerous countries, each with its own unique culture and traditions. For example, the Muslim population in Indonesia is different from the Muslim population in Saudi Arabia, and the Muslim population in Nigeria is different from the Muslim population in India.
This diversity is reflected in the market, where there is a wide range of preferences and purchasing habits. For example, in Malaysia, there is a high demand for Islamic finance products, while in the United Arab Emirates, there is a high demand for luxury goods. In some countries, there is a preference for modest fashion, while in others, there is a preference for high-end designer labels.
It is important to note that the Muslim market is not a monolithic entity and that businesses should not make assumptions about their customers based on their religious affiliation alone. Companies need to understand the unique cultural, economic, and religious backgrounds of their target audience in order to tailor their products and services effectively.
3. There is no universal industry standard
One of the major challenges facing the Halal industry is the lack of a universally-recognised standard. With varying standards between countries and even within countries, companies may need to be certified by multiple organisations, resulting in confusion, decreased productivity, and increased costs. In extreme cases, products may be rejected or even recalled due to non-compliance with the proper standards.
Despite Halal being rooted in the same source, Islam, different standards exist due to various interpretations by religious scholars and differences between Islamic Schools of Thought. However, it is worth noting that there are more similarities than differences between the standards, especially when it comes to acts or items explicitly mentioned in the Quran. The differences tend to arise from more contemporary issues, such as stunning methods, fermented products, and lab-grown meat.
While the challenge of multiple standards can be daunting, industry practitioners can consider the following factors when producing and exporting Halal products:
- Conduct research: Conduct thorough research on the Halal requirements and regulations of the target market. This research should include a review of local laws, regulations, and certifying bodies.
- Seek certification: Obtain certification from a reputable Halal certifying body that is recognised in the target market. This will help to ensure that the products are in compliance with local regulations and that they are accepted by consumers.
- Work with local partners: Work with local partners, such as distributors and suppliers, who have a deep understanding of the local market and can help navigate the local regulatory landscape.
- Be flexible: Be flexible and adaptable to the requirements of each market. This may mean modifying the product or making changes to the manufacturing process to meet local requirements.
4. Not everything needs to be certified
Halal certification is a 3rd party assurance that a product or service is suitable for Muslims. Companies that wish to be certified must submit an application to a Halal certification body, typically an Islamic organisation, and undergo thorough assessments and audits.
Unless imposed by the local laws, Halal certification is generally optional worldwide. Only few countries mandate such certification as a trade requirement for selected or all products, and these include Brunei Darussalam, Indonesia, Malaysia, Pakistan and UAE.
By and large, you do not need Halal certification if your business:
- Exports to non-Muslim countries, where 1/5 of the Muslim population resides
- Exports non-food products (unless to Indonesia)
- Exports non-meat food products (unless to Brunei, Indonesia, Pakistan)
- Exports products without any Halal label claim
Despite the above, there are many companies that continue to apply for Halal certification to to gain recognition for providing Muslim-suitable products and services and differentiate themselves in the market. Whatever your decision, it is important to note that the certification is a serious commitment that you will have to maintain and defend at all times.
5. Halal is not just for Muslims
People often perceive Halal as a niche market that caters only to the needs of the Muslim community. However, this perception couldn’t be further from the truth. It is much more than just a religious requirement and has become a global phenomenon that appeals to consumers of all backgrounds.
Halal certification not only guarantees that products and services are in compliance with Islamic law, but it also ensures that they meet high standards of hygiene, quality, and ethical sourcing. Halal products are free from alcohol, pork, and other ingredients that are considered harmful or unethical. As a result, such products have become increasingly popular among consumers who are looking for healthier and ethically sourced options.
In addition, Halal certification has become a global benchmark for food safety and quality. Many countries, including Australia, the United States, and the United Kingdom, have embraced this certification as a means of ensuring the safety and quality of food products. The certification process is rigorous and requires strict compliance with international food safety standards, making Halal products some of the safest and most reliable options on the market.
As industry practitioners, it’s crucial to understand that Halal is not just for Muslims. This market represents a huge opportunity for businesses that cater to the needs of consumers who value health, ethics, and quality. By offering Halal products and services, businesses can tap into a rapidly growing market and differentiate themselves from their competitors.
