Halal harmonisation opens doors for food exporters14 Dec 2020
The food industry is benefitting from steps to harmonise halal standards globally, including recent guidance for halal food additives– but more progress is required, according to a report.
Published by business advisory firm DinarStandard with the support of the Dubai Islamic Economy Development Center, the report State of the Global Islamic Economy Report 2020/21: Thriving In Uncertainty, identifies the main challenges and opportunities across different industries including food, pharma, cosmetics, and finance.
Of these sectors, the halal food industry is significant; Muslim spend on food increased by 3.1% in 2019 to $1.17 trillion from $1.13 trillion in 2018, with only a 0.2% fall in food spending over 2020 due to the COVID-19 crisis. Long-term prospects are also positive, with a compound annual growth rate (CAGR) of 3.5% forecast for the 2019 to 2024 period, reaching $1.38 trillion by 2024.
Recent steps to harmonise halal standards have been beneficial to food operators, the report notes. In June this year, the Standards and Metrology Institute for Islamic Countries (SMIIC) published five new halal standards to guide food manufacturers, including one for food additives. This standard includes a detailed list of additives, including processing aids, that food manufacturers can consult to verify their status as halal, non-halal, or doubtful.
Last year and 2020 saw several countries introduce new halal regulations. Indonesia made halal certification mandatory for halal food products and established the Halal Products Certification Agency (BPJPH) – a “historic regulation”, according to DinarStandard – while Saudi Arabia approved the launch of the kingdom’s national system for halal products and clarified the roles of two related regulating bodies, SFDA and SASO. Egypt’s Council of Ministers introduced a ‘Halal in Egypt’ front-of-pack logo for Egyptian halal exports while the Philippines’ Department of Trade and Industry also developed an official national halal logo.
Although these steps are significant, progress towards unifying halal standards continues to be siloed, the report says, and the current variations in halal standards are “hurting governments, the industry, and consumers”. Many Brazilian meat processors prefer to export to China, for instance, because complying with the different halal standards across member countries of the Organisation of Islamic Cooperation (OIC) is a challenge.
“A harmonized halal standard [would] create more opportunities for all stakeholders,” write the report authors.
Positioning halal as ‘clean, pure and healthy’
In the wake of the global COVID-19 pandemic, whose probable zoonotic origins have increased concerns over safety and hygiene in the food supply chain, there is an opportunity for the halal food sector to position itself as being inherently rigorous in terms of traceability.
“With the demand for traceability – from farm to fork – on the rise, and more customers seeking out halal certified products, the halal food sector is set to continue being the driver of the Islamic economy.”
“There is potential for halal to expand its relevance as a more pure, healthier food type. Safe, hygienic, and healthy food is now a global concern. Halal food, which by its nature is subject to more compliance and traceability, can provide greater assurance to consumers of its safety and purity,” write the authors.
The COVID-19 pandemic severely disrupted the food industry in Muslim countries as elsewhere. Stay-at-home restrictions led to a more subdued Ramadan while foodservice revenues plummeted by as much as 85% at the height of the pandemic.
However, it also accelerated other trends, such as e-commerce and food delivery platforms, which both profited and expanded. In February, Emirati cloud kitchen platform Kitopi raised $60 million in series B funding and Saudi Arabian delivery startup Jahez raised $36 million. DeliverDXB launched a commission-free food ordering website in Dubai.
The report also notes a rise in investment in the ingredients sector, including the recent opening of an applications centre in Egypt by German flavour house Symrise and a $300-million-investment in Malaysia and ASEAN’s first halal gelatine plant by the local subsidiary of Japan’s Sanichi Technology. Ajinomoto announced an $85 million-investment in a halal production line in Malaysia, due to open in 2022.
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