High Rise! Halal ingredients market reach $245b

Kaula Lumpur: The economic market of halal ingredients across food, pharmaceutical and cosmetics industries is estimated to have reached $245 billion globally.

A report generated on the halal ingredients across the global food, pharmaceutical, and cosmetics industries, issued in partnership with Salaam Gateway and DinarStandard, Thomson Reuters identified more than 300 halal ingredients that are manufactured globally and consumed by high-growth halal/Muslim customer segment.

The report features ingredients that are most effected by halal compliance processes, such as gelatin, pepsin (used commonly in cheese), and carmine (food colouring).

According to Thomson Reuters, Organisation of Islamic Countries’ (OIC) imports of halal ingredients reached $33 billion in 2015.

Mustafa Adil, Head of Islamic Finance, Thomson Reuters, said the topic of halal ingredients is an important one given that sourcing these ingredients continues to be a key challenge for many food, cosmetics and pharmaceuticals companies that seek to address Muslim demand.

Importance of halal ingredients market, including companies, private equity investors, and e-commerce platforms were highlighted in the report.

“There will be an upwards growth trajectory in the size of the halal ingredients market – the status quo cannot continue. Muslim consumers will become more aware of what they are actually eating and eventually standards will become stringent and more widely applied,” said Haroon Latif, director of Strategic Insights at DinarStandard and Lead Analyst.

According to the Global Islamic Economy Report, worldwide spending on global halal food and lifestyle products is expected to rise to 10.8 per cent a year until 2019, to create an international industry worth $3.7 trillion.

The report, commissioned by the Government of Dubai and produced by Thomson Reuters in collaboration with strategy and research advisory firm Dinar Standard, says that the past year has seen major advancements in the global halal food and lifestyle sectors. These include investments by a Brazilian halal food provider in the UAE production plant, new halal testing technologies from France, Malaysia and the UAE, and international marketing of Dubai as a new Halal and Islamic Economy hub.

At the same time, the halal tourism sector, a huge driver of food, beverage and hospitality sales, has also advanced following product investments in the UAE, Maldives, Spain, Japan, Philippines and Russia, amongst others. The lucrative halal tourism market now represents 11.6 per cent of global tourism expenditure, excluding the busy Hajj and Umrah seasons, and is expected to be worth $238 billion by 2019.

According to the report, the halal food sector alone will grow to a valuation of $2.537 trillion by 2019, up from $795 billion in 2014, equating to 21.2 per cent of global food expenditure.

The top countries with Muslim consumer food consumption are Indonesia, with a market worth $190 billion; Turkey, where the market is valued at $168 billion; Pakistan at $108 billion and Iran, where the market equates to $97 billion based on 2013 data.

Malaysia, the UAE and Australia lead the report’s Halal Food Indicator, a gauge that focusses on the health of the country’s halal food ecosystem in relation to its size.