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Halal At The Crossroads

01/01/2013 0 Comments

A couple of years ago, at a large convention, the speaker was reflecting on the successes of the American Muslim community, with our many mosques, schools and centres. To build on this success, we were encouraged to build more mosques, schools and community centres. Now, while one cannot disagree with this noble aspiration, I could not help feeling that something was missing from that picture.

As Muslims living in America, we have successfully brought Islam into our homes and families, our mosques and community schools and centres. You could say that we are safe in these arenas, our Islam is safe. The two arenas where we have yet to have any significant impact and influence, and where we are consequently more at risk, are the realms of culture and commerce.

It has even been contended that commerce is a sub-set of culture; that culture, in its fullest sense, incorporates not just our creative or recreational endeavors, but the ways in which we earn our livelihood, do business, do our shopping, how we manage our affairs and govern ourselves, how we interact with technology, science, medicine. [i]

If we consider the Halal movement in this light, we can see that it represents much more than the kind of food we eat. Our food, and the ways in which we produce it, is a natural focal point in our lives as Muslims, highlighted by our presence in a non-Muslim western democracy.

Halal is a focal point that serves as a gathering place for many of the issues that we face, as a community striving for useful integration and participation in the broader American project. It is both spiritual and mundane, and it serves as a useful lens to explore the landscape of our lives as Muslims in America.

If we pause at the crossroads, we can reflect on where we find ourselves. Where have we come from? What dangers lie on the road to the left? What opportunities lie to the right? And what lies immediately in front of us? Let us consider the signs.

The Journey So Far

Perhaps more than anything, there have been changes in perception. From the early position that as immigrants in a Christian country, the food of the People of the Book is permissible to us, to a deeper recognition that the production of Halal food is not just a collective responsibility, but also a key element in strengthening our identities as Muslims in America.

Conversely, there has also been a shift away from the idea that, for example, the only Halal chicken is the one on the counter with the head, feet and feathers still attached. High quality Halal food in hygienic, vacuum packed trays has become the norm; we have moved from the backyard and into the factory and the supermarket. Halal has entered and is making itself at home in the technological age.

The past decade has seen Halal emerge as a global movement. Trade Ministers discuss whether Halal production can boost exports or stimulate foreign investment. Senior executives of major multinational corporations gather around the boardroom tables to decide what ‘position’ to take on Halal. Standards for Halal slaughter, manufacturing, food service, cosmetics, pharmaceuticals and logistics are being debated and drafted in many countries around the world.

The realizations about the size, preferences and spending power of the Muslims, both globally, and in minority markets such as the USA and Europe, have sparked the creation of Islamic marketing agencies, and studies by financial consulting companies to assess the potential and direction of this new market.

Major food producing countries such as Australia, New Zealand and Brazil have evolved sophisticated production and quality assurance models to facilitate multi-million dollar export trade in Halal food. Nestlé reported its global Halal product sales generated revenues in excess of $5billion back in 2008[ii], confirming the view that paying attention to this market makes good business sense.

In the USA, the picture is somewhat different. While the established pioneers of America’s Halal sector – Midamar, IFANCA, Crescent Foods – have continued to grow, the scale and strength of the Halal industry still has a long way to go to reach its full potential.

To achieve this, it will need to overcome several hurdles, each of which should really be viewed as an opportunity for expansion.

To the Left – room for improvement

At Home

The extent of the opportunity that the Halal sector represents for the American economy is still greatly under-rated. The American Muslim community has higher than average disposable income, and yet remains an under-served market demographic. Look at the figures[iii]…This is a community of 6.7 million with a spending power of $124billion; 88% buy Halal food; 81% want easier access to Halal foods; 80% feel mainstream companies could do more to serve their needs. Estimated annual expenditure on food and food services is $13billion. In other words, here is an opportunity.

Comparisons have been made between the emergence and growth of both the African American and Hispanic communities in the USA. At the American Muslim Consumer Conference in recent years, there has been a general consensus, including opinion from heavyweights such as Costco, Walmart, BestBuy and Ogilvy Mather, that the domestic Muslim demographic would follow a similar pattern of growth to become a recognized niche market in the USA.

The African American market saw 166% growth between 1990 and 2007, with buying power going from $318billion to $845billion. Over the same period, the domestic Hispanic market grew by 297%, from $212billion up to $828billion. Both are now in the trillion dollar range.[iv] With almost 40% of the US Muslim population between the ages of 18-40, their market impact over the coming decade is likely to follow a similar, and possible even more impressive growth curve.

Twenty years ago, many companies failed to see the potential in these markets. How many are now failing to see the same growth potential in this “large, undervalued but increasingly important market?” to quote Miles Young, the CEO of Ogilvy Mather.

Overseas

Looking beyond the shores of the USA, there is an emerging picture of a global Muslim middle class who are young, influential and engaged, who “consume Islam as much as practising it, demanding the same sorts of life-enhancing goods and services as middle classes everywhere. Their preference for goods that have an Islamic flavor makes Islam big business.”[v]

Looking at export potential in the Halal food sector, there is clearly massive scope to increase revenue…if some changes are made. The structured models used in Australia and New Zealand’s Halal industries serve up a valuable lesson, indicating why their beef and lamb has such a high profile in the Muslim world: they pay serious attention to Halal as an industry and in doing so have created a country brand. They have developed an integrated Halal supply-chain, and this brings a clear competitive advantage.

The key to their success lies in the collaborative relationship between the farmers and processors, the government agencies and the Islamic certification bodies. Through this collaboration over the last decade, Australia has developed a comprehensive programme that culminated in the Australian Government Authorized Halal Programme (AGAHP).

Rogue certifiers have been virtually eliminated and the farming community understands both the ethical and financial values of Halal. The government agencies have managed the health, safety and quality assurance components by producing clear standards and guidelines, in addition to pumping government funds into the export promotion of a world class Halal product.

So while the USA may enjoy meat and poultry exports to the GCC region, the region’s increasing awareness of Halal compliance, and focus on food safety, means that US Halal procedures are going to come under increasingly stringent scrutiny in the future. And in this respect, the USA falls far short of other competitors, and would do well to learn some lessons from the likes of Australia.

There are certain essentials for long-term success in the Halal export market:

  1. A well-defined and visible policy vis-à-vis the Halal market, both domestic and overseas
  2. Clear standards and guidelines for Halal food production, from farm to fork
  3. Effective mechanisms for working with the Islamic bodies that oversee Halal compliance

The key to bringing about these changes in the US hinges on a shift in perception. The recognition of the value of products and services aimed at the growing Muslim market will trigger change.

The danger is that the longer the Halal sector is not taken seriously within the US, the longer the catch-up period will be. Market competitors in the red meat, poultry, dairy, healthcare and travel industries have already been given a massive head start to develop their own Halal market strategies. Companies in the US have the opportunity to learn from the mistakes and successes of others, but it will need an integrated and collaborative effort to turn this into a competitive advantage of their own.

It has been demonstrated time and again that the development of standards and best practices act as catalysts to stimulate an industry. The longer the American Halal sector stays below the radar, the slower the progress will be. Until the specifics of Halal compliance are as detailed and transparent as the other quality and safety parameters of the food industry, it will remain slightly in the shadows.

To the right – opportunity for growth

Among US consumers, and among the small independent Halal producers and other industry insiders, there is a perennial sense of not just optimism, but also passion. There is a tangible notion that this is not just business, this is also a mission; and this is a quality of great value, especially in these turbulent times.

The sense of optimism would seem to be justified. We have noted in the past that Halal is capable of multi-directional expansion, i.e. going up-market and mainstream at the same time, and we can see that this is happening now in the US.

Walmart’s recognition of the growing importance of Halal food led them to Crescent Foods of Chicago in 2008, and they started to stock Crescent chicken products in five outlets in the Michigan area. Four years further on, and there are now 77 outlets across 11 states offering Crescent Halal chicken products. These are not cheap commodity chicken products, they are high-end premium quality, and are among the best and most expensive chickens in the country. And you cannot get more mainstream than Walmart.

Saffron Road opened a new dimension in the Halal market by supplying their frozen entrees to Whole Foods. Their Ramadan campaign in 2011 generated a 300% increase in sales, and went on to win the Advertising Research Foundation’s David Ogilvy Award in the Digital & Media category. Their campaign in 2012 for their entry into Costco stores in the Western United States involved photographer/film-maker Mustafa Davis and community activist Imam Dawud Yasin, joining their promotional Club Halal Tour to four cities, again breaking out of the mold of traditional Halal product promotions.

Iowa-based Midamar, one of the country’s most recognized Halal brands, continues to expand both its product ranges and its international presence with an office in Dubai. From humble beginnings over 35 years ago, Midamar now export products to the Middle East and Southeast Asia, as well as offering a range of export, franchise and consulting services.

IFANCA, the Islamic Food and Nutrition Council of North America has established a worldwide reputation as a certification agency, and their ‘crescent M’ logo is now recognized in most countries around the world. Major household brands such as Nestlé, Baskin Robbins, Tate & Lyle, McCain and Tom’s of Maine are among IFANCA’s clients, and their annual conference brings together representatives from some of the world’s largest corporations.

All of these individual achievements indicate the current strength of the US Halal industry, and there is undoubtedly potential to make the US a major player on the global Halal market stage.

That step will require a new level of collaboration.

And what lies ahead?

1. Standards and Accreditation.

Taking Halal to the next level will require the application of clear standards for all aspects of Halal food production. This means that standards will have to be drafted, discussed, agreed upon and recognized by representatives of all affected sectors, and then they will have to be applied in the workplace. Adherence to these standards will need to be overseen by certifying bodies that must also be accredited by some form of recognized authority.

Given that the US administration cannot undertake this task as a government organization, it will require an evolutionary step in leadership from among the Muslim community to coordinate this project.

There are clear examples of how to do this, so while this may seem like a huge task, examples from overseas, such as Australia and New Zealand, or closer to home with bodies like the Organic Trade Association actually offer a step-by-step roadmap that can be used for this journey.

2. Promotional campaign

There is a disconcerting degree of ignorance and misinformation on the subject of Halal in the Western world. There are obvious political sensibilities in the USA, and anything related to Islam inevitably gets seen in the shadow of 9/11 and US foreign policy. However, the issue of Halal has a distinct advantage in that it is already a multi-cultural and multi-religious phenomenon, with so many non-Muslims involved in the global Halal food supply-chain.

We have still not told the full story about Halal – in terms of safety, quality, concern for the environment, animal welfare and human health. This is not just about food for the Muslims, this is about food for mankind.

Halal produce should be the best there is available in terms of ethical businesses producing the highest quality nutrition for our minds, bodies and spirits.

A generic promotional campaign for Halal would go a long way to change public opinion about Halal, similar to the way the ‘Got Milk?’ campaign promoted milk to the benefit of an entire industry.

3. Investment

The convergence of Halal foods and Islamic finance is now being seen as inevitable, but it needs a push from both sides. There tends to be excess liquidity in the Islamic finance sector, and the stated aim of the thought leaders is that Islamic finance needs to have more impact in the ‘real economy.’ With the growing awareness among consumers, and the growing number of companies looking to expand into the Halal sector, there is an increasing range of investment opportunities for Shariah-compliant funds.

An initiative such as the SAMI Halal Index created by IdealRatings of California in collaboration with Thompson Reuters, is a good indication of things to come. There is still a gap between these two Shariah-compliant industries, but there are many signs that the gap is closing, and this convergence will no doubt give rise to a whole new spectrum of possibilities for both industries.

The US Halal food sector needs Shariah-compliant investment in order to develop, and to meet the growing demand. We need more dedicated Halal abattoirs, processing facilities, distribution networks, more trained personnel and better marketing campaigns.  The food market is non-cyclical; people eat everyday…at home, at work, and relaxing. What better way to engage with the real economy than with the business of meeting people’s everyday needs.

Within the landscape of American life, the Muslim community has so much to bring to the table….expertise, experience, knowledge and skills. It is a community on a straight path, calling to the good, preventing harm, an influential resource in the task of building a brighter future for America.

In all of this, the Halal sector has an important role to play; it is a middle ground that gathers together common beneficial interests. Today, the Halal sector is like a young adult, full of energy and eager for new opportunity, and now mature enough to take on the responsibilities that accompany the coming of age.

By Abdalhamid Evans

Senior Analyst, Imarat Consultants


[i] ~ See Islam and the Cultural Imperative by Dr Umaar Faruq Abdallah, a Nawawi Foundation paper, 2004

[ii] ~ Islamic Marketing and Branding, Paul Temporal, 2012

[iii] ~ American Muslim Market, Business Landscape and Consumer Needs, DinarStandard, 2012

[iv] ~ Multicultural Economy Report, Selig Centre, 2007

[v] ~ Meccanomics, Vali Nasr, Oneworld Publications, 2009

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