Halal packaged food sales tipped for strong global growth thanks to APAC and Middle East markets
According to Euromonitor International, the sector has a predicted compound annual growth rate (CAGR) of 5%.
The market research firm said this makes halal labelling the “most optimistic” in terms of the growth of ethical labelling for packaged food and drinks, outpacing others such as recycling, charity, ‘no added sugar’ and ‘no artificial’ claims.
Emil Fazira, analyst, Food and Nutrition, Euromonitor International, said the growth is driven by the UAE and Indonesia, although Asia Pacific remains the largest contributor with US$50bn in 2017.
Emil said the cultural and religious mix across Asia Pacific, and the presence of strong accreditation bodies, makes the region’s halal segment a relatively stable and lucrative market.
“It is interesting to note that China is among the highest-ranked in (halal) value sales despite having a Muslim minority population,” said Emil.
One feature of this phenomenon that Emil highlighted was that strong regulators from the likes of Malaysia, Singapore and Indonesia are key in setting a high standard for other markets to follow.
Across Asia Pacific, governments and religious bodies are working together to improve the domestic state of halal regulation, with visible efforts being seen in Thailand, the Philippines and other countries.
Despite demands in the market for a unified global standard to ease manufacturers’ challenges in getting certified, the emergence of one is unlikely in the foreseeable future. Therefore, guidelines will likely remain separate and vary across markets.
Dr Khairil Ismahafiz Muhadzir, group chief commercial officer (CCO) of DagangHalal — one of the world’s largest online halal marketplaces that works closely with Malaysian and international certification authorities — had affirmed this status quo while speaking on food safety and the supply chain at Food and Hotel Asia 2018 recently.
Alternative halal compliance strategies?
According to Emil, due to various reasons such as financial capability, uncertainty, and lack of awareness, other claims of halal compliance are gaining popularity to claim a slice of the growing halal pie.
She said Muslim-owned businesses which leverage on consumer trust and shared values between business-owner and consumers are common.
Hence, Muslim-owned businesses represent potential white spaces for halal-certified ingredients manufacturers to tap into. On the other hand, Muslim-owned businesses for packaged products may not be able to project these values visibly to consumers and to gain their trust, in which case certification provides more (or clearer) assurance.
She added that there are also businesses which choose to claim the exclusion of prohibited ingredients in Islamic law, which relies on the knowledge of consumers to exercise their own discretion when purchasing.
False logos and unaccredited logos further add to the confusion, with illegal syndicates found in less regulated regions or self-designed logos added to product packaging to ride on the trend.
“Pakistan, Indonesia, China and the Philippines are key Asian markets to learn from as they have varying challenges and government strategies, in addition to being in different stages of stability for halal regulation,” said Emil.
Holistic ethical labelling
Even though halal labelling is set to show the strongest growth, ethical positioning is also imperative, said Emil.
“Packaging labelling could be further supported by other ethical values such as animal welfare and environmental sustainability in order to achieve a holistic ethical positioning. This will also appeal to non-Muslim consumers for a longer-term impact,” she said.
Previously, Emil shared on how food firms can achieve halal sales success in light of burgeoning demand for halal products in Asia.
Meanwhile, Dr Khairil spoke on the growing need for complementary halal logistics but warned that firms need to rise up to the challenge.
