Interesting article from this week's TIME. Really shocking how much money is involved in the "halal" market and that 90+ % is controlled by non-Muslim global corporations!!!! -- J.
Khalfan Mohammed has long been buffeted by culture shock while staying in five-star hotels. As a devout Muslim he has learned to ask staff to remove the minibar's alcohol. He loathes lobbies with loud discos and drunken guests. When traveling with his parents, it is the bikinis that rankle most. "It was quite shocking for my mother to sit in a restaurant with undressed people," the Abu Dhabi-based businessman says. "My mom and dad are not used to seeing people in public wearing their underwear." To avoid such embarrassment, the Mohammeds took to renting furnished apartments.
No longer. On a trip to Dubai last year, Mohammed stayed in the Villa Rotana, one of a growing number of hotels catering to Muslim travelers. In the lobby — all white leather, brick and glass, with a small waterfall — quiet reigns. Men in dishdashas and veiled women glide by Westerners who are sometimes discreetly reminded to respect local customs. Minibars are stocked not with alcohol, but with Red Bull, Pepsi and the malt drink Barbican.
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.
At the same time, governments in Asia and the Middle East are pouring millions into efforts to become regional "halal hubs," providing tailor-made manufacturing centers and "halal logistics" — systems to maintain product purity during shipping and storage. The increased competition is changing manufacturing and supply chains in some unusual places. Most of Saudi Arabia's chicken is raised in Brazil, which means Brazilian suppliers have built elaborate halal slaughtering facilities. Abattoirs in New Zealand, the world's biggest exporter of halal lamb, have hosted delegations from Iran and Malaysia. And the Netherlands, keen to maximize Rotterdam's role as Europe's biggest port, has built halal warehouses so that imported halal goods aren't stored next to pork or alcohol.
Such arrangements cost, of course, but since the industry's anchor is food, business is booming, even in the economic crisis. "What downturn?" asks Nordin Abdullah, executive director of the Halal Journal. "You don't need your Gucci handbag, but you do need your hamburger."
Not just hamburgers. Drug companies such as the U.K.'s Principle Healthcare and Canada's Duchesnay now sell halal vitamins free of the gelatins and other animal derivatives that some Islamic scholars say make mainstream products haram, or unlawful. The Malaysia-based company Granulab produces synthetic bone graft material to avoid using animal bone, while Malaysian and Cuban scientists are collaborating on a halal meningitis vaccine.
In the Gulf, the Burooj real estate company is carving out a niche, not just because it deals exclusively with Islamic banks, but because it designs spas and swimming pools that segregate the sexes. For Muslim women concerned about skin-care products containing alcohol or lipsticks that use animal fats, a few cosmetics firms are creating halal makeup lines.
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.
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 also about understanding the nuances. The hypermarket run by French supermarket giant Carrefour at the Mid Valley Megamall in Kuala Lumpur is overwhelmingly halal, with an elaborate system to keep halal foods separate from the haram ones. Goods that divide scholars on whether they're halal or haram because they could have trace elements of wine — Balsamic vinegar, say, or Kikkoman Marinade — get slapped with little green stickers to alert customers. More blatantly haram items are confined to La Cave, a glassed-in room at the back of the store for goods containing alcohol, pork or tobacco. Wearing special blue gloves, La Cave's staff handle haram goods and seal them in airtight pink plastic wrapping after purchase, so as not to contaminate the main store. "I'm so scared," said Norini Razak, a 23-year-old regular Carrefour shopper in a grey-and-white hijab. "It's difficult for one to know what is halal and what is not, so I'd prefer to go to a shop with labels [to help me]."
It's Not Just Business
The rising concerns of consumers like Razak herald not just a global economic trend, but a cultural one. During the 1980s and '90s, many Muslims in Egypt, Jordan and other Middle Eastern countries expressed their religious principles by voting Islamic. Today, a growing number are doing so by buying Islamic, connecting to their Muslim roots by what they eat, wear and play on their iPods. Rising Muslim consumerism undermines the specious argument often heard after 9/11: that Muslims hate the Western way of life, with its emphasis on choice and consumerism. 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."
The dazzling range of new products and services also reflects the seismic social changes under way in the Muslim world. One of the reasons why halal frozen food, lunch-box treats and quick-fix dinners are growing in popularity is that many more Muslim women, from Egypt to Malaysia, have full-time jobs.
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.
With reporting by Shadiah Abdullah / Dubai
By the numbers ...
16% — Halal's share of global food industry
$632 billion— Annual halal food market
1.6 billion— Worldwide Muslim population
A Halal Shopping Cart
From fast food to fashion, the sector is thriving
Non-Muslim multi-nationals such as KFC and Nestlé dominate the halal food market. But Muslim-
owned manufacturers such as Dubai-based Al Islami — which sells everything
from chicken burgers to packaged ingredients — are growing fast.
Muslims — many of them young and increasingly middle-class — are buying more magazines, such as U.K.-based Emel, and halal cosmetics made, like these Saaf products, without alcohol or animal fats, which Islam considers haram, or forbidden.
Hotels run along Islamic lines, such as Dubai's Villa Rotana, offer quieter and more family-friendly places to stay. Banks that operate according to Shari'a law
are doing well during
the global downturn because they tend to be
Courtesy of TIME magazine