Posted by: admin | Posted on: May 15th, 2009 | 0 Comments
By CARLA POWER
Time was, buying Muslim meant avoiding pork and alcohol and getting your meat from a halal butcher, who slaughtered in accordance with Islamic principles. But the halal food market has exploded in the past decade and is now worth an estimated $632 billion annually, according to the Halal Journal, a Kuala Lumpur-based magazine. That’s about 16% of the entire global food industry. Throw in the fast-growing Islam-friendly finance sector and the myriad other products and services cosmetics, real estate, hotels, fashion, insurance that comply with Islamic law and the teachings of the Koran, and the sector is worth well over $1 trillion a year.
One reason for the rise of the halal economy is that the world’s 1.6 billion Muslims are younger and, in some places at least, richer than ever. Seeking to tap that huge market, non-Muslim multinationals like Tesco, McDonald’s and Nestlé have expanded their Muslim-friendly offerings and now control an estimated 90% of the global halal market.
The burgeoning Islamic finance industry is using the global economic crisis to win new non-Muslim customers. Investors are attracted by Islamic banking’s more conservative approach: Islamic law forbids banks from charging interest (though customers pay fees) and many scholars discourage investment in excessively leveraged companies. Though it currently accounts for just 1% of the global market, the Islamic finance industry’s value is growing at around 15% a year, and could reach $4 trillion in five years, up from $500 billion today, according to a 2008 report from Moody’s Investors Service.
Those who define the halal market in the traditional sense as a matter of meat, and no more see the industry stopping at Islamic food standards. But the movement’s more bullish advocates envisage Muslim cars and halal furniture built in accordance with Muslim finance, labor and ethical principles. Citing the kosher and organic industries as successful examples of doing well by doing good, some entrepreneurs even see halal products moving into the mainstream and appealing to consumers looking for high-quality, ethical products. A few firms that comply with the Shari’a code the religious laws that observant Muslims follow point out that already many of their customers are non-Muslim. At the Jawhara Hotels, an alcohol-free Arabian Gulf chain run by the Islam-compliant Al Lotah conglomerate, 60% of the clientele are non-Muslims, drawn by the hotels’ serenity and family-friendly atmosphere. Dutch-based company Marhaba, which sells cookies and chocolate, says a quarter of its customers are non-Muslims, mostly people concerned not about religious edicts but about food safety. “People are always looking for the next purity thing,” says Mah Hussain-Gambles, founder of Saaf Pure Skincare, which markets halal makeup.
Today, though, the big business is in working out how to serve the increasingly sophisticated Muslim consumer. “The question now for companies is: What products and services are you going to provide to help Muslims lead the lifestyle they want to lead?” asks the Halal Journal’s Abdullah. It’s a code worth cracking. A 2007 report from the global ad agency JWT describes the Muslim market thus: “It’s young, it’s big, and it’s getting bigger.” Parts of it are well-educated and wealthy. The buying power of American Muslims alone is estimated at a hefty $170 billion annually. But with few exceptions, American marketers ignore them, says Ann Mack, JWT’s director of trendspotting. “Muslims don’t feel that brands are speaking to them,” she says. “When we did the study, it was very difficult to find mainstream companies that were making significant programs geared toward the Muslim population.”
That’s less of a problem elsewhere. Indeed, the most innovative new halal products and services often come out of Europe and Southeast Asia, places where your average food supplier or bank may know little, if anything, about halal. In Europe the biggest growth region according to the Halal Journal young devout Muslims are hungry for Islamic versions of mainstream pleasures such as fast food. “The second- and third-generation Muslims are fed up with having rice and lentils every day,” observes Darhim Hashim, CEO of the Malaysia-based International Halal Integrity Alliance. “They’re saying, ‘We want pizzas, we want Big Macs.’ ” Domino’s now sources halal pepperoni from a Malaysian company for the pizzas it sells from Kuala Lumpur to Birmingham; KFC is testing halal-only stores in Muslim areas of the U.K., and the Subway sandwich chain has halal franchises across Britain and Ireland. (See pictures: “The Hajj Goes High-Tech”.)
Swiss food giant Nestlé is a pioneer in the field. It set up its halal committee way back in the 1980s, and has long had facilities to keep its halal and non-halal products separated. Turnover in halal products was $3.6 billion last year, and 75 of the company’s 456 factories are geared for halal production.
For non-food companies like South Korea’s LG and Finnish cell-phone giant Nokia, targeting Muslims is also big business. LG offers an application to help users find the direction of Mecca, while Nokia has free downloadable recitations from the Koran and maps showing the locations of major mosques in the Middle East. Such offerings increase brand loyalty, according to market research by the Finland-based Muslim lifestyle portal Muxlim.com. “There’s a lot of room out there for mainstream brands to appeal to Muslims without making changes to their products,” says Muxlim.com’s CEO Mohamed El-Fatatry. “It’s just about their marketing messages, about showing that this brand is interested in them as consumers.”
It’s Not Just Business
The growing Muslim market is a sign of a newly confident Islamic identity one based not on politics but on personal lifestyles. “Muslims will spend their money more readily on halal food and products than on political causes,” says Zahed Amanullah, European managing director of the California-based Zabihah.com, an online guide to the global halal marketplace.
Like many Muslim Americans, Amanullah grew up eating Jewish kosher food in order to conform to Muslim strictures on animal slaughter. But increasingly, there’s no need for Muslims to go kosher. Zabihah offers tens of thousands of reviews of halal restaurants, from fried chicken joints in Dallas to pan-Asian restaurants in Singapore. Says Amanullah: “We can’t keep up.”
Western Muslims, whose minority status sharpens their sense of identity, are also helping refine the notion of a Muslim lifestyle. In Britain, advertisers are increasingly embracing the power of the “green” pound (that’s Islamic green, not environmental green), says Sarah Joseph, editor of Emel, a glossy lifestyle monthly for British Muslims. When Emel launched in 2003, the notion of a Muslim lifestyle barely existed. “People were confused that we could present everything from food, fashion, travel and gardening, all from a Muslim perspective,” says Joseph. But Muslims are the fastest-growing segment of the middle class in Britain; they have big families an average of 3.4 children against the national average of 1.9 so they buy big cars; they spend money on home decoration and twice-yearly vacations “not just going back to Pakistan or Bangladesh, like their [immigrant] parents did,” says Joseph. Bucking the current publishing trend, Emel is hiring extra staff and planning new magazines to cater to Muslim readers. Advertisers include British Airways and banking giant HSBC.
To keep growing, halal firms know they can’t simply rely on religion. “Ideology does not fit within a consumer mindset,” observes Amanullah of Zabihah.com. “At the end of the day, people will not buy halal simply because it’s halal. They’re going to buy quality food. Ideology doesn’t make a better-tasting burger, a better car, or a better computer.” But it sure makes a powerful marketing pitch.
By the numbers …
16% Halal’s share of global food industry
$632 billion Annual halal food market
1.6 billion Worldwide Muslim population