Wanderlust…

The International Reporting (and Life) Adventures of Vivian Salama

Greater Need for Halal Marketing

Posted by vmsalama on May 5, 2008

 

by Vivian Salama

The National

ABU DHABI // A sign on display at the Burger King in the capital’s Al Wahda Mall answers a question more and more customers are asking. “We sell only halal products,” the sign reads. 

Catering to the world’s fastest growing religion of about 1.4 billion people, the rapidly growing halal industry, worth an estimated Dh7.7 trillion (US$2.1 trillion), has broadened in scope in recent years to include everything from food to Islamic fashion and textiles, as well as pharmaceuticals, cosmetics, and even Islamic finance.

Research conducted by Brand Union has found that 70 per cent of Muslims worldwide follow halal standards to some degree. It is therefore no surprise that the industry could easily account for 20 per cent of world trade in food products by 2025, according to the Canadian government’s Agri-Food Trade Service.

However, the implementation of halal standards have suffered a major setback rooted in the global dispute over what qualifies for the designation.

“There are 192 countries under the United Nations banner and there are that many variations of halal,” said Muhammed Munir Chaudry, the president of the Chicago-based Islamic Food and Nutrition Council of America (IFANCA). 

Pamela Pike, a spokeswoman with the Halal Exchange, an international e-commerce business that assists with the online halal trade, said many governments, including the UAE, Turkey, Malaysia and the GCC, as well as halal certification bodies, had attempted to set standards for the industry.

“For the consumers this diligence and structure will be beneficial as it will boost their ability to buy halal with confidence.” 

While most countries in the Middle East and North Africa regard almost all Sharia-compliant products as halal, countries in South and South East Asia limit this designation to food products, following the teachings of Malaysia, a global leader in halal food production.

The UAE has never required businesses to label halal products.

Thus, the push to adopt a global halal trademark is being received with mixed responses. 

“Some of the larger companies, feel like their business will suffer if they put a logo on because some other customers will not like it or they will think that before, your product was not halal,” said Dr Chaudry. “They are afraid of a backlash.”

Industry analysts say that businesses will capitalise far more from this growing industry if retailers and manufacturers put greater effort into branding and marketing their halal products.

“It boils down to gaining the confidence of consumers,” said Duncan James, the strategy director at Brand Union. 

Analysts say Islamic banking, which earns between Dh734 billion and Dh1.84 trillion annually, has been the most active of the non-food sectors in promoting its Sharia compliance, launching many programmes worldwide in line with Islamic guidelines. 

For example, in 1998, HSBC launched its Islamic “Amanah” programme – the Arabic word for safety – making up one of the largest Islamic banking teams of any international bank.

The programme does not just cater to those in the Muslim world, but rather, was marketed as a financial option for those in Europe and the Americas looking for a reputable sharia-compliant bank. Similarly, Barclays introduced “Sharia compliant accounts” in keeping with Islamic standards.

Another active sector looking to boost its portfolio with Sharia-compliant products is the cosmetics industry, worth an estimated Dh2.06bn worldwide. Brands such as ACTIValoe, Sunbreeze and Kandesn have already earned the approval of the IFANCA and various other halal certification boards.

According to Mr James, several industries in the region could do more to capitalise on the halal brand. For one, he suggested the launch of a halal airline, similar to that launched by the Vatican and Italy’s Mistral Air last year, to transport pilgrims to holy sites. “Such an airline could provide halal food, calls to prayer, copies of the Quran in seat pockets, religious programmes on the in-flight entertainment system and separate sections for male and female passengers,” he said.

A similarly ripe industry, according to Mr James, is halal hospitality, particularly women-only hotels, to permit Muslim women to book rooms without a male guarantor, as is required in Saudi Arabia. At this week’s Arabian Hotel Investment Conference, Abdulla Mohamed Almulla, the chairman of the Dubai-based Almulla Hospitality, is due to reveal the details of his $2bn scheme to develop an Islamic-compliant hotel brand portfolio.

“There may even be opportunities for malls to brand themselves as all-halal in the region,” speculated Mr James. “There are so many retail opportunities out there that no one has really taken advantage of.”

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