Halal-Certified Food and Beverages Valued At $415 Bin In 2015

February 23, 2017 - Global Muslim consumer expenditure on food and beverages grew 3.4 percent to reach $1.17 trillion in 2015, according to the State of the Global Islamic Economy 2016/17 report released by Thomson Reuters, Dubai Islamic Economy Development Centre, and Dinar Standard.

For the first time, the report put an estimated value on revenues for halal-certified F&B $415 billion in 2015. This estimate includes expenditure by both Muslims and non-Muslims on halal F&B products and is based on interviews with a selection of certification bodies as well as a review of independent estimates.

On its Global Islamic Economy Indicator (GIEI), the report named the United Arab Emirates as the country with the best-developed ecosystem for halal F&B, followed by Australia and Pakistan.

UAE, according to the report, overtakes Malaysia as the leader on the GIEI halal F&B indicator this year due to a significant strengthening of its regulatory oversight, and a vast improvement in Its awareness score, driven by strong publicity.

The report projects global Muslim expenditure on F&B to reach $1.9 trillion by 2021, representing a 9 percent CAGR from 2015. It expects the industry to be driven by highgrowth segments halal organic and tayyeb foods, halal ingredients manufacturers seeking to address a core Organisation of Islamic Cooperation (OIC)-wide and global opportunity, halal 828, and premium restaurant chains emerging to address Muslim demand for farm-to-fork and fine dining.

The report highlights several notable private equity investments in halal F&B, which it says signals increasing investor appetite for halal food Investments. However, it notes that the level of equity investment in the halal food industry remains low, which limits the sector's growth. It also highlights notable developments in the use of Islamic financing on stock exchanges.

Key challenges for the industry remain the significant resistance to halal food among non-Muslim consumers and in non-Muslim-majority countries.

The report also highlights a prevalence of haram ingredients in food items, with a lack of awareness among Muslim consumers and importing OIC markets.

Within the Islamic tradition, a person's spirituality and the purity of one's soul are very much tied to the food and drink we consume.

In an age of increasing commercialization, the food we consume can be devoid of God's presence and the reverence for God's creation that Islam requires. It is this gap that much of the Halal Food sector seeks to fill.

With the Quran not only calling for food to be Halal but also Tayyib, or pure, this has led to segments of the Halal Food sector creating produce of the highest quality, as can be seen in the rise of Halal organic food. Consequently, non-Muslim demand for such quality food is also increasing. However established this sector becomes, there seems to always be further room for growth and opportunity.

For example, there has recently been a rise in Halal online meal takeout and delivery platforms, particularly in non-OIC countries. The UK-based HalalEat, Halalonclick in Singapore and the Russian HalaIEda.me, are Just a few examples that also highlight the transnational potential of the Halal Food sector.

Several notable private equity Investments have occurred in the past year, signaling increasing investor appetite for Halal Food investments. ESPCapital and Kingsley Capital Partners invested $30 million in Janan Meat, a leading UK-based Halal lamb and mutton supplier, while Abraaj Capital and TexasPacific Group invested $400 million In Saudi Arabia-based fast-food chain Kudu. Unfortunately, there still remains much misunderstanding around Halal meat within non-Muslim majority societies.

Some European countries have even moved to ban Halal and kosher methods of slaughter. Further financing and work is needed in the marketing and sales area in order to create a better understanding of the principles of Halal Food. Nevertheless, the Halal Food sector's growth shows no sign of slowing down as the report estimates Muslim food and beverage expenditure to grow to $1.9 trillion by2021.

Source: http://iccia.com/?q=mediacenter/news/17396/details