Halal economy stymied by significant challenges: Datamonitor

Datamonitor has released Halal: Boom market held back by significant challenges, an October report about the rise of the halal economy.

A rapidly growing Muslim population, coupled with rising consumer affluence and increasing halal awareness is making consumers pay a premium for products that meet their ethical and religious beliefs, the research firm said. There is growth globally, but Asia and the Middle East are driving the halal market forward.

"The approach to explain and promote halal in much the same way as organic products, focusing on wholesomeness, safety for consumption and use, and higher quality of ingredients is attracting shoppers from more diverse ethnic backgrounds and religious beliefs," Datamonitor said in a description of the report.
According to Datamonitor, a combination of factors are driving demand, spelling good news for the large multinational players which control 90% of growing halal market globally. A rapidly growing Muslim population is expected to make up more than a quarter (26.4%) of the global headcount in 2030, and their rising disposable income is creating increased demand for halal products. At the same time halal is the new 'organic', attracting non-Muslim buyers.

Some figures shared include:

• The global halal market was worth US$1.7 trillion in 2012
• The halal food and beverage segment is worth over US$1 trillion today
• Halal cosmetics sales are growing 15% annually

However, there are significant challenges for the further development of the halal market, Datamonitor says, pointing to the lack of halal certification, lack of support for halal companies in financial and investment services, as well as a negative political climate associated with Muslims which has led to bans on halal products.

The company noted in particular that 'halal' is difficult to control and guarantee especially since there are limited possibilities in the sourcing and substitution of raw materials. Halal accreditation agencies are starting to appear, but the halal regulatory framework remains patchy. At the same time, halal-related companies are struggling to find support in financing and investment. 

Halal-consciousnessness remains low in non-food segments, even though pharma is an emerging growth sector of the halal market.

The product code for this report is ML00017-056.