Tuesday, October 21, 2014
Halal Certification: A Gateway to Export Markets
The Halal food market is expected to be worth US$1.6 trillion globally by 2018. With an average growth rate of 6.9 percent a year, it’s a sector that cannot be ignored, especially by food manufacturers keen to make their mark internationally.
While many manufacturers may question the value of gaining certification in Australia, where the Muslim community represents a relatively small proportion of the nation’s population, those companies looking to broaden their horizon beyond Australia’s shores would be well versed in the importance of meeting Halal criteria.
What is Halal?
Derived from the Koran, Islam’s book of faith, the word ‘Halal’ literally means ‘lawful’ or ‘acceptable’.
Dr Muhammad Khan, chief executive officer at Halal Australia, a certification and accreditation company, told Food mag the best way to understand what Halal is, is to understand what Halal is not.
“As a general rule of thumb, everything is Halal except what has been described as not Halal.
“’Haram’ means ‘prohibited’ or ‘unlawful’, so products like swine or pork and its bi-products, and animals which are not properly slaughtered or they die before slaughtering, are not accepted as Halal. So the blood is prohibited. Obviously alcoholic drinks and intoxicants are also not Halal; carnivorous animals such as lions, tigers and monkeys are not Halal, and certain other animals like scorpions, snakes and things like that - they are not Halal.
“However, when it comes to processed foods, if it is contaminated with any of the products that I’ve mentioned, or their derivatives, including emulsifiers like 471 or 472, and also gelatin, they are not Halal,” Khan says.
Certification is about ensuring these ingredients aren't included in the manufacture of food products, and haven’t contaminated the manufacturing process in some way, for example, by being used on the same production line as non-Halal products or ingredients.
With Halal certification being more about what isn't included in the product than what is, a product could be deemed Halal without the manufacturer even realizing or intending it to be. However, if that product is – or one day could be – destined for an export market, certification is worth considering, if not essential.
Why gain certification?
Similar to organic and kosher certification, Halal certification guarantees Muslim consumers that the product has been grown/reared, processed and manufactured in a certain way.
Dalene Wray, general manager at OBE Organic, a certified organic and Halal producer and exporter of beef, says certification allows companies to access new markets around the world.
“From a manufacturing point of view, it gives the manufacturer or the producer of the product more opportunities for sales of their product globally, if its Halal certified.
“There are markets around the world that you can’t export to unless you have Halal certification. So those would include the Middle East, Indonesia, Malaysia and to some extent Singapore. However, what we’ve found is that our Halal certification is advantageous to all markets we export to around the world, even though to clear customs you don’t need it.
“For example the US. We don’t need Halal certification to clear the US government customs, however we’ve found that the end users of our product in retail in America are Muslim consumers and they want our product to be Halal certified,” Wray says.
She adds that certification allows OBE Organic to capitalize on the Australian government’s efforts to build relationships with certain export markets.
“We can take advantage of a lot of the activities that the federal and state government is doing to build relationships in those markets … and also we’ve got the Queensland government doing trade visits to the Middle East, so [we’re] really capitalizing on a huge growth trend in opportunities in the Middle East markets.”
According to a report commissioned by the Dubai Chamber of Commerce, the global Halal market is expected to be worth US$1.6 trillion by 2018, up from US$1.1 trillion in 2013. Halal food made up 16.6 percent of the total world food market in 2013, and by 2018 this is expected to rise to 17.4 percent.
The Muslim population represents roughly 23 percent of the global community – or 1.8 billion people - and is growing at a rate of about three percent per annum, says Halal Australia’s Mohammed Khan.
But certification isn't all about servicing Muslim consumers or benefiting export markets; Australians – regardless of their faith or background – can benefit from the growing Halal market too, he says.
“A lot of companies are happy to seek certification because they see it as adding value to the company, something that bring a lot of money and that also can increase the employability of Australians. Companies can sell a lot more products than they would normally sell [if they’re Halal] and that obviously increases the demand for employment.
“It’s a win/win situation for everybody. Even if one person is employed by a company, and that person is a bread winner and either he or she can support their family in the Halal way – Halal means in a lawful way – it’s good.”
Spreading the word
Gaining certification is only one half of the equation, says Lisa Mabe, founder of Hewar Social Communications, a PR consultancy specializing in the global speciality food market.
“If you make the effort and spend time and money to earn certification, why would you not target the very people who are looking for that certification?” she says.
Mabe told Food mag that manufacturers exporting to regions with Muslim populations tend to focus on their relationships with retailers rather than the end users. They’re relying on distributors in foreign markets to market the product’s certification on the manufacturer’s behalf, but the message often doesn't get through, she says.
“In terms of reaching consumers, I don’t see many products doing much at all … I really think there’s a lack of understanding of the potential of those markets,” she says.
OBE Organic is a client of Mabe’s, and is one of few Australian brands to actively promote its Halal certification both here and abroad. The company even has a separate Facebook page dedicated to targeting Muslim consumers.
“A lot of business that we do is private label, which means that the retailer puts their own label on the product, and they may or may not choose to identify the product as Halal certified. Our job then is a little more difficult, and we have to articulate that message through our marketing, which is mostly done through social media,” Wray says.
“So we have a dedicated Facebook page just for marketing to Muslim consumers. We don’t know of any other food or beef company in Australia that has two Facebook pages: one for marketing to the world and one specifically for communicating with and sharing content that’s relevant to Muslim consumers.”
Content includes recipes, conversations about the Islamic holy month, Ramadan, and discussions regarding festivals celebrated in Middle Eastern communities.
Wray agrees with Maybe that Australian manufactures which have gained certification aren't promoting it as effectively as they could, or should.
“OBE is one of the few companies in Australia that is leveraging and marketing the fact that our product is Halal. We make a big deal of it; it’s all over our homepage,” she says. “There are not many other companies around the world that can produce certified organic beef that’s also Halal certified.
“I don’t know if I could even count the number [of brands] on one hand that actively promote the fact that their product is Halal,” she says.
Mabe came to Australia from the US about 18 months ago, and was surprised by the number of brands that had certification, however very few of them were communicating it to consumers.
“It’s a missed opportunity,” she says, especially considering Australia already has a reputation overseas for being a clean, safe food manufacturer.
Put the trust that this ‘clean and green’ reputation creates together with the reassurance that certification provides to a growing, potentially lucrative demographic, and Australian manufacturers are in an enviable position.
“[Muslim consumers] trust that if it’s from Australia, it’s safe. With its reputation of producing clean and safe food, Australia is in a unique position to not only participate in, but also lead in the Halal food market,” Maybe says.