A Golden Halal Opportunity Beckons

02/20/2013 10:30 am EST


The halal industry is worth $2.1 trillion annually, but non-Muslim countries are the biggest producers. As the market grows even larger, the Middle East has more of a role to play, writes Gillian Duncan of The National.

Christien Meindertsma, an artist based in the Netherlands, once set about tracing all of the products made using the parts of one animal.

Three years later, in 2009, she published a book called Pig 05049 that proved pieces of one pig, the 05049 of the title, ended up in 185 separate products, from toothpaste to dough improver and desserts. The pig is an animal considered haram, or not to be consumed by Muslims.

Industry specialists say Meindertsma's book offers a lesson for everyone about how the processing of products has changed in the globalized world—and why it is important to know what is in the food we eat and items we use.

Halal, which means permissible, not only covers food and drink, but anything that can be used in daily life, including drugs and cosmetics. The size of the halal industry globally is enormous—worth an estimated $2.1 trillion annually and growing.

Initially, halal referred to meat that had been slaughtered according to Islamic law, by a Muslim saying a prayer. It then expanded to cover ready-to-eat food containing meat, and finally all other products.

However, awareness about what is halal is lacking in some parts, according to Asad Sajjad, the chief executive and secretary general of the Halal Development Council, and the founder and director of the International Halal Federation.

Mohammed Jinna, the chief executive of Halal India, says halal should cover everything. "Your toothpaste and your soap and your creams and your lipsticks—everything should be halal."

But even food one might expect to be halal by its nature is not necessarily permitted. Take sugar, for example, a plant-based product processed using bone char—charcoal made from animal bones, usually from cattle or pigs. If it is the latter, the end product will not be halal.

And even meat that is permitted, such as chicken, is sometimes not halal. In some big industrial chicken plants, the birds are fed proteins and injected with water to make them gain weight. "The protein is used so that water retains in the body. Otherwise it will just drain out. The protein is made of pig," says Sajjad.

In the Emirates, there are a handful of big halal food producers, such as Emirates Poultry and Al Islami. But the largest halal food producers are based in the West.

Take Nestlé (NSRGY), headquartered in Switzerland. It is not only the world's biggest food company—it is also the world's largest halal food maker.

In fact, 85% of the products in the $2.1 trillion halal market—which makes up 20% of the total global food industry—are produced in Brazil, the United States, Canada, Argentina, France, Australia, Holland, and New Zealand, says Sajjad.

"These are the countries in the West. In the East, the biggest halal producer is Thailand," which is not even a Muslim country, he points out. In fact, the only Muslim countries that produce halal food in any significant quantities are Indonesia and Malaysia.

"I have been to Asia and the Middle East, and I try to convince them to compete in the non-Muslim countries, and they say, 'we can't compete because the quality is not there,'" says Farhan Tufail, the chief executive of Halal Certification Services, based in Switzerland.

But, he adds, some foreign companies such as Nestlé are investing heavily in halal production in Muslim countries—and for a simple reason: the halal market is booming, and the companies want to be prepared. They can buy the ingredients to produce halal food cheaper in the Middle East than in the West.

But industry specialists say awareness about halal in the UAE and the region is not as widespread as some might expect. "Here, if you go to any store in the UAE and ask, 'Do you have halal biscuits? Do you have halal confectionery?' they don't know. The people selling food have no awareness. The buyers have no awareness," says Sajjad.

But that is changing. In December, Sharjah hosted the Halal Food Middle East exhibition, which featured 90 exhibitors and attracted almost 1,800 visitors. Saif Mohammed Al Midfa, the director general of the Expo Centre Sharjah, says the event demonstrated the region's potential to attract the global halal industry.

"Despite it being the inaugural edition, the show had a global impact, attracting exhibitors from 26 countries and visitors from across the OIC [Organisation of Islamic Cooperation] states and observer nations, countries that have a considerable Muslim population and major players in the supply of halal certified food items," he says.

The UAE has in recent months sought to boost its influence in the halal food industry, and was appointed late last year to chair the Halal Food Technical committee designed to set standards for the industry worldwide. The UAE's halal industry is tiny, at just $550 million, but it has a proportionally bigger share of halal trade, which was estimated to be $3.6 billion in 2010 and projected to grow to $8.4 billion in 2020.

The Emirates Authority for Standardization and Metrology is now working on guidelines to unify standards for halal food and cosmetics, which are expected to be applied in 57 Islamic countries in the next three years.

Despite the current furor over horse meat labeled as beef in Europe, a certification system is key to boosting consumer confidence in halal products, say the experts. "You can find a lot of sugar being certified in Singapore and Malaysia. There is a lot of awareness in these countries," says Jinna.

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