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Companies Seek Bonanza Targeting Tricky Halal Market

May 11, 2012: 12:00 AM EST
This year Ramadan runs from July 19 through August 18 and many companies are positioning to tap Muslim consumers during their holy month. Nestlé, which claims to be the world’s largest Halal food producer, is readying its range of Halal-certified products for a series of markets in Europe, promoted under the Flavours of Ramadan banner offered through its Taste of Home program. Nestlé has for three decades seen Halal as an important emerging market and since the 1980s it has offered halal versions of Milo, Nescafé, Maggi, Kit Kat and Nespray.
 
Today, Nestlé’s center of Halal excellence in Malaysia produces about 300 Halal food and beverage products that are exported to more than 50 countries worldwide; a total of 85 out of Nestlé’s 456 factories worldwide are currently halal certified. It sounds like a strong story but reality is more nuanced. Many of Nestlé’s food items require little or no effort to be Halal and some of its efforts with Halal consumers haven’t gone well; through conversations with stores in Europe that took part in last year’s Taste of Home campaign Business360 learnt that some were disappointed with results and would not take part again.
 
American Muslims 

In the US the Halal market looks especially underserved but that is changing.  One brand aggressively tapping the market is Saffron Road from the Connecticut-based American Halal Company Inc., which launched nationally in Whole Foods in July 2010. Saffron Road offers all-natural, Halal-certified, antibiotic free, and certified humane frozen entrees and is the main brand for American Halal. 
 
American Halal had retail sales of more than $4 million in 2011, driven largely by Whole Foods.  For this Ramadan the entire assortment of Saffron Road products will be on sale in over 5,000 stores during Ramadan including Whole Foods Market, Kroger, Publix, Fairway, H.E.B and Central Market, Gelson’s and Sprouts and many independent stores. American Halal CEO Adnan Durrani forecasts sales hitting $50 million within five years.
 
Durrani adds, “American Muslims have over $170 billion in annual consumer buying power. Major marketing research firms like Ogilvy and Gallop have now confirmed that American Muslims have over 70% brand loyalty, and retailers and consumers brands can easily boost that to 95% during Ramadan by even the smallest gesture of compassion to this un-served and disenfranchised consumer segment by offering Halal relevancy during their holiest month.”
 
Pitfalls and dangers
However, the Halal market can be controversial and difficult to navigate. Muslims have become outraged when food marked Halal is discovered to be contaminated with non-Halal products and non-Muslims express concern and anger at sometimes having to purchase halal foods. Halal was a hot-topic in the French Presidential election and the country’s fast food restaurant, Le Quick, has also faced controversy. And last August, Whole Foods was forced to do an about-face and apologize after the company sent an email to its stores instructing employees not to mention Ramadan in conjunction with the promotion of a Halal food line on its shelves (see also). 
 
Halal also faces threats from animal rights protesters. In 2003, the Farm Animal Welfare Council (FAWC) in the UK, an independent advisory group, concluded that the way Halal and Kosher meat is produced causes severe suffering to animals and should be banned immediately. A 2009 study discussed in the New Scientist found that “Brain signals have shown that calves do appear to feel pain when slaughtered according to Jewish and Muslim religious law, strengthening the case for adapting the practices to make them more humane.” and there are many videos online purporting to show the inhumane treatment of Halal slaughter (also)
 
Strong growth
Still, companies think the prize outweighs the risks. A 2011 report (Global Halal Food Market) from Agriculture and Agri-Food Canada that drew on many sources says the Halal food market is worth ~$632 billion annually, close to 17% of the entire global food industry and will rise to account for 20% of world food trade. 
Press Release, "Nestlé market that produces largest range of halal products celebrates 100 years", May 11, 2012, © Nestlé
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