Global Halal Industry: Trends and Challenges Overview

 

Global Halal Brazil Forum 2021. Photo by:iccia |---

The global halal industry has become a significant economic force in recent years, with an increasing number of consumers seeking halal-certified products. The industry covers a wide range of sectors, including food, pharmaceuticals, cosmetics, and finance, among others. According to a report by Statista, the global halal market was valued at $2.3 trillion in 2020 and is projected to reach $3.2 trillion by 2024, with Asia accounting for the largest share of the market.

Despite its growth, the halal industry faces several challenges, including a lack of uniformity in halal certification standards across different countries and regions. This has led to confusion among consumers and businesses, with some products being certified as halal in one country but not in another. Additionally, there is a shortage of trained halal auditors and certifiers, which has resulted in a backlog of applications for halal certification.

To address these challenges, there have been efforts to establish a harmonized global halal certification system that would ensure consistency and transparency in the certification process. The International Halal Accreditation Forum (IHAF) was established in 2016 to promote the harmonization of halal standards and accreditation among member countries. The IHAF has since grown to include over 30 member countries and is working towards the development of a unified halal certification system.

 

The Concept of Halal in the Global Market

Halal is an Arabic word that means "permissible" or "lawful." In the context of food and beverages, halal refers to products that are prepared and consumed according to Islamic dietary laws. These laws dictate what foods are allowed and what foods are prohibited for Muslims to eat. The concept of halal is not limited to food and beverages, but it extends to other aspects of life, including personal care products, cosmetics, pharmaceuticals, and finance.

The global halal industry has gained significant attention in recent years due to the increasing Muslim population worldwide and the growing concern regarding food safety, hygiene, and reliability. The halal market is not limited to Muslim-majority countries but has expanded globally, with non-Muslim countries also producing and consuming halal products. The halal industry is estimated to be worth around USD 2.3 trillion, making it one of the fastest-growing consumer segments in the world.

The halal certification process involves a rigorous assessment of the entire supply chain, from raw materials to the final product. The certification process ensures that the product is free from any haram (prohibited) ingredients or substances and that it is prepared and handled according to Islamic principles. The halal certification process is not only limited to Muslim countries but is also gaining popularity in non-Muslim countries, as consumers are becoming more aware of the benefits of halal products.

In the global market, the demand for halal products is not limited to the Muslim population but extends to non-Muslim consumers as well. The halal industry has gained a reputation for producing high-quality, safe, and healthy products that meet the dietary needs of consumers. The halal market is not only limited to food and beverages but also includes personal care products, cosmetics, and pharmaceuticals.

In conclusion, the concept of halal has gained significant attention in the global market due to its association with safety, hygiene, and reliability. The halal industry has expanded globally, with non-Muslim countries also producing and consuming halal products. The halal certification process ensures that the product is free from any haram ingredients or substances and is prepared and handled according to Islamic principles. The demand for halal products is not limited to the Muslim population but extends to non-Muslim consumers as well due to the reputation of halal products for producing high-quality, safe, and healthy products.

 

What are the current Trends in the Halal Industry?

The global Halal industry has been witnessing an unprecedented growth in recent years. With the increasing demand for Halal products and services, many countries are now racing to gain a foothold in the Halal industry. Some of the current trends in the Halal industry are:

• Rise in Halal Tourism

Halal tourism is a rapidly growing sector in the travel industry. It refers to travel activities that comply with Islamic principles and values. The rise in Halal tourism is due to the increasing number of Muslim travelers who are looking for Halal-friendly destinations and activities. According to a report by Mastercard-CrescentRating, the global Muslim travel market is expected to reach $300 billion by 2026.

• Growth of Halal Cosmetics

The Halal cosmetics industry is also experiencing significant growth, as more consumers are becoming aware of the benefits of using Halal-certified products. Halal cosmetics are free from harmful ingredients such as alcohol, animal fat, and other substances that are not permissible in Islam. According to a report by Grand View Research, the global Halal cosmetics market is expected to reach $52.02 billion by 2025.

• Expansion of Halal Food Market

The Halal food market is one of the fastest-growing sectors in the global food industry. The demand for Halal food is not limited to Muslim consumers, as more non-Muslim consumers are also choosing Halal-certified products due to their perceived safety, hygiene, and ethical standards. According to a report by Research and Markets, the global Halal food market is expected to reach $2.55 trillion by 2024.

In conclusion, the Halal industry is expected to continue its growth trajectory in the coming years, driven by the increasing demand for Halal products and services. The rise in Halal tourism, growth of Halal cosmetics, and expansion of the Halal food market are some of the current trends in the Halal industry.

 

What challenges does the Halal Industry face?

The Halal industry faces several challenges that hinder its growth and development. This section will highlight some of the significant challenges that the Halal industry is currently facing.

• Lack of Standardization

One of the most significant challenges in the Halal industry is the lack of standardization. The absence of a single, universally accepted Halal standard has led to confusion and mistrust among consumers. The lack of standardization has also made it difficult for companies to know whether their products meet the requirements of the Halal market. This has resulted in a lack of transparency and accountability in the industry.

• Issues in Halal Certification

Another challenge facing the Halal industry is the issue of Halal certification. The process of Halal certification is complex and requires a thorough understanding of Islamic law. The lack of qualified certifiers and the absence of a single, universally accepted certification standard has led to confusion and mistrust among consumers. The certification process is also costly, which has made it difficult for small businesses to enter the Halal market.

• Consumer Awareness and Perception

Consumer awareness and perception are also significant challenges in the Halal industry. Many consumers are not aware of the Halal industry and its products. This lack of awareness has resulted in a lack of demand for Halal products. Additionally, some consumers have misconceptions about the Halal industry and its products, which has led to mistrust and reluctance to purchase Halal products.

In conclusion, the Halal industry faces significant challenges that hinder its growth and development. The lack of standardization, issues in Halal certification, and consumer awareness and perception are some of the significant challenges that the industry must overcome to reach its full potential.

How is the Halal Industry in Different Regions?

The global halal industry is a rapidly growing market with an estimated annual growth rate of 20% and is valued at about USD 560 billion a year [1]. The halal industry is not limited to the Middle East, but it extends to Southeast Asia, Europe, and North America. Each region has its unique characteristics, challenges, and opportunities.

1. Halal Industry in the Middle East

The Middle East is the birthplace of halal, and it is the region with the most significant market share in the halal industry. The Middle East has a rich Islamic heritage, and the majority of the population is Muslim, making it a natural hub for halal products and services. The halal industry in the Middle East is rapidly growing, and it is expected to reach USD 2.6 trillion by 2023 [1]. The halal industry in the Middle East includes food and beverages, cosmetics, pharmaceuticals, and tourism.

1. Halal Industry in Southeast Asia

Southeast Asia is a region with a large Muslim population, and it is one of the fastest-growing regions in the halal industry. The halal industry in Southeast Asia is expected to reach USD 300 billion by 2024 [3]. The halal industry in Southeast Asia includes food and beverages, cosmetics, pharmaceuticals, and Islamic finance. The halal industry in Southeast Asia faces challenges such as lack of standardization, lack of halal certification bodies, and lack of awareness among consumers.

1. Halal Industry in Europe

Europe has a growing Muslim population, and it is becoming an important market for halal products and services. The halal industry in Europe is expected to reach USD 70 billion by 2025 [1]. The halal industry in Europe includes food and beverages, cosmetics, pharmaceuticals, and tourism. The halal industry in Europe faces challenges such as lack of standardization, lack of halal certification bodies, and lack of awareness among consumers.

1. Halal Industry in North America

North America has a growing Muslim population, and it is becoming an important market for halal products and services. The halal industry in North America is expected to reach USD 24 billion by 2024 [3]. The halal industry in North America includes food and beverages, cosmetics, pharmaceuticals, and tourism. The halal industry in North America faces challenges such as lack of standardization, lack of halal certification bodies, and lack of awareness among consumers.

Overall, the halal industry is a rapidly growing market with immense potential. Each region has its unique challenges and opportunities, and it is essential to understand the local market dynamics to succeed in the halal industry.

Future Outlook of the Halal Industry

The global halal industry is expected to continue its growth trajectory in the coming years. According to the Global Halal Food Market Report 2021-24, the halal food trade is projected to grow at a compound annual growth rate (CAGR) of 1.7%, reaching a value of $140 billion by 2024. The report attributes this growth to an increase in consumer demand, followed by a rising Muslim population worldwide.

• Innovation and Technology in Halal Industry

Innovation and technology are expected to play a significant role in the future of the halal industry. As consumers become more health-conscious, halal food manufacturers are expected to focus on producing healthier and more nutritious products. The use of technology in the halal industry is also expected to increase, from blockchain technology to track the halal status of products to the use of artificial intelligence to improve halal certification processes.

• Potential Markets for Halal Products

The halal industry is not limited to Muslim-majority countries. In fact, non-Muslim countries are emerging as potential markets for halal products. For example, Japan has recently shown an interest in halal products, with the Japanese government promoting halal food to attract Muslim tourists. Similarly, the Chinese government has recognized the potential of the halal industry and has launched initiatives to promote halal products in the country.

In conclusion, the future outlook for the halal industry is positive, with continued growth expected in the coming years. Innovation and technology are expected to play a significant role in the industry's growth, and non-Muslim countries are emerging as potential markets for halal products.

 

Frequently Asked Questions

What are the challenges faced by the global halal industry?

The halal industry faces several challenges, including the standardization of halal, lack of data, animal rights, and halal not being compulsory in many Muslim countries. The lack of standardization in halal certification makes it difficult for consumers to identify halal products, leading to confusion in the market. Additionally, there is a lack of data on the halal industry, making it difficult for investors to identify potential opportunities.

How is the halal industry growing globally?

The halal industry is one of the fastest-growing consumer segments in the world, with an estimated annual growth rate of 20%. The global halal market of 1.8 billion Muslims is estimated to be worth around USD2.3 trillion (excluding Islamic finance). The increasing awareness about the benefits of consuming halal food products, rising health consciousness among individuals, and the growing Muslim population are some of the key drivers of the growth of the halal industry.

What is the potential of the halal market?

The halal market has tremendous potential, with an estimated global trade value of USD 129 billion in 2019. The market is expected to reach USD 140 billion by 2024, driven by an increase in consumer demand and a rising Muslim population globally. The halal market is not limited to food products but also includes cosmetics, pharmaceuticals, and other consumer goods.

What are the issues with halal implementation in the food industry?

The implementation of halal standards in the food industry faces several challenges, including the lack of standardization, the complexity of the halal certification process, and the high cost of certification. The lack of standardization in halal certification makes it difficult for companies to comply with halal standards, leading to confusion and inconsistency in the market. Additionally, the complexity of the halal certification process and the high cost of certification make it difficult for small and medium-sized enterprises to enter the halal market.

What is the overview of the halal industry?

The halal industry is a rapidly growing sector that includes food, cosmetics, pharmaceuticals, and other consumer goods. The industry is driven by the increasing awareness of the benefits of consuming halal products, rising health consciousness, and the growing Muslim population globally. However, the industry faces several challenges, including the lack of standardization, the complexity of the halal certification process, and the high cost of certification.

What are the latest trends in the global halal market?

The latest trends in the global halal market include the increasing demand for halal-certified products, the rise of e-commerce platforms for halal products, and the growing popularity of halal tourism. Additionally, there is a growing trend towards plant-based and vegan halal products, as consumers become more health-conscious and environmentally aware. The halal industry is also embracing technology, with the use of blockchain and artificial intelligence to improve the halal certification process and increase transparency in the market.

 

References:

1. Global halal market - Statistics & Facts | Statista. https://www.statista.com/topics/4428/global-halal-market/
2. The Global Halal Industry: An Overview - AFRIEF.ORG. https://www.afrief.org/wp-content/uploads/2019/06/GLOBAL-HALAL-ECONOMY-REPORT.pdf
3. Global Halal Food Market Report 2021-24 - Research and Markets. https://www.researchandmarkets.com/reports/5437876/global-halal-food-market-report-2021-24