According to the 2015/16 State of the Global Islamic Economy report produced by Thompson Reuters, the global Halal market will make up 16.9% of the total food market by 2020, down from the 17.4% in 2018 it forecast in last year’s report. The market should see CAGR of around 5.8%.
“Driven by growing demand, the Halal food market continues to build its momentum across the global food supply chain. This report estimates that global Muslim spending on food and beverages has increased 4.3% to reach US$1,128 billion in 2014. This takes the potential core Halal food market to be 16.7% of global expenditure in 2014,” wrote the report’s authors.
Halal bigger than China or US
“Comparatively, the collective global Muslim F&B market is larger than the F&B consumption of the top geographical markets in 2014, such as China (US$797.8 billion), United States (US$741.2 billion), Japan (US$367.3 billion) and India (US$335.7 billion),” they added.
They also estimated Halal food consumption only in Organisation of Islamic Cooperation (OIC) countries at US$947bn last year, making up around 84% of all Halal consumption. But the report’s authors note this is not a precise figure, as OIC states lack consistent and transparent management of the whole Halal food supply chain.
The largest Middle Eastern markets for Halal food last year were Egypt (US$75.5bn), Iran (US$58.9bn) and Saudi Arabia (US$44.1bn). Indonesia was by far the largest Halal food market at US$157.6bn, with Turkey and Pakistan the only other countries to have Halal markets above US$100m.
UAE leads regional Halal rankings
In the report’s Halal Food Indicator (HFI) rankings, which aim to rate the relative health of countries’ Halal food ecosystems, UAE, Oman, Jordan, Egypt and Qatar were the only Middle Eastern states in the top 10, with scores ranging form 53 (UAE) to 41 (Qatar). Malaysia led the HFI table with a score of 78, with Pakistan in second place with 56 – and non-Muslim-majority countries including Australia and Brazil also among the leaders.
“[The UAE] ranks third on the HFI … by virtue of tremendous media and industry attention, as well as its regulatory and compliance processes. All other GCC countries also make the top 10 list mainly due to the social metric of food price index being low relative to the price of the generic consumption basket while having Halal food-related government controls in place. The majority of local governments in the GCC control food price to keep inflation low, such as UAE, Qatar and Kuwait,” the report’s authors wrote.
According to the report, one of the biggest challenges facing the global Halal food market is the ongoing confusion around Halal standards, which are now offered by a wide range of government organisations and private Halal certification bodies (HCBs). Manufacturers struggle to work out which standards they need to obtain to gain access to a particular market – and often end up obtaining several.
“The absence of any viable international schemes to accredit HCBs has long been a problem for the Halal industry. The majority of Halal food is being produced in Non-Muslim majority countries, and is certified by independent HCBs that operate with little regulatory oversight,” the authors wrote.
But they also sounded a more positive note: “Despite the uncertainties in the regulatory framework, the Halal food sector remains vibrant, and is fast becoming an arena of innovation. A new generation of entrepreneurs are driving change in all aspects, from product development to packaging, marketing and use of social media.”