Why are Food Processing Businesses Increasingly Shifting Towards Halal Food Products?

Highlights:

• Introduction
• Reasons behind the shift towards halal-certified foods
• Innovative product launches in the sector

Halal is an Arabic word, which as per Islamic law, refers to things that are permissible in Islam. Thus, as per Islamic law, halal is the exact opposite of ‘haram’ which means something that is banned or not permissible in Islam. Halal food products are those products that do not contain ingredients or raw materials that are banned or not approved in Islam. Also, halal foods must be cooked, prepared, processed, and stored in utensils that have been cleaned according to the rules of Islamic law.

Why are restaurants and food processing companies increasingly shifting to halal products and menus?

In the last few decades or so, with the rise in globalization, numerous food processing companies like Nestle S.A., American Foods Group, LLC, Cargill, Incorporated, etc., have expanded their operations in various countries including those that adhere to Islamic law for their socio-cultural practices. The Islamic law in these countries mandates that such food corporations comply with the rules and regulations associated with food production and preparation.

For instance, pork is considered haram in Islam, which is why food processing companies operating in such countries cannot sell or distribute pork products in that country. Furthermore, food products prepared using alcohol are banned in these countries, as alcohol is considered haram. The authorization of slaughter, method of slaughter, animal well-being, etc., are important factors that the company must take into account while engaging in food processing activities.

Since these rules and regulations are pretty strict and Muslims are quite particular about the food they consume, food processing companies have introduced the concept of Halal certification. Under this methodology, credible organizations, after testing the ingredients in the food product and checking the food preparation and packaging processes, give formal recognition to that food product. Thus, this accreditation plays an important role in helping food processing companies sell their products in Islamic countries; at the same time, Halal certification helps Muslims to buy and consume processed foods without any fear of violating their religious laws.

Apart from food processing companies, many restaurants and fast-food chains have also started selling Halal food items and dishes. A primary reason behind this shift is that the proportion of the Muslim population has increased across the globe. As a result, the demand for halal products and food items has increased. At the same time, many companies have started manufacturing food ingredients and spices that are Halal-certified. Restaurants and fast-food chains can use these food ingredients to prepare different dishes and cuisines, thus helping them cater to the demands of Muslim customers.

How has the halal food industry evolved in the past few decades?

In the past few years, the halal food industry has witnessed huge growth across the globe, especially in the LAMEA and Asia-Pacific regions. The Mexico halal food industry is anticipated to rise at a CAGR of 13.65%, followed by 13.61% in India and the UAE. Apart from the reasons mentioned above, product launches by various food processing companies are anticipated to help the industry flourish. For instance, in November 2023, Deli Halal, a leading US-based manufacturer of Halal food products, announced the launch of new halal-certified sliced meats. Deli Halal released a statement saying that these newly launched halal-certified sliced meats will be available in all the major supermarkets and retail stores across the region.

Similarly, in March 2024, Al Safa Foods, a major halal-certified food products manufacturer, announced the launch of a new campaign, 'Taste the Blessings'. Through this campaign, Al Safa Foods is expected to increase its footprint in the halal food industry by promoting its halal-certified food products. The company specializes in halal frozen foods such as chicken nuggets, sausages, beef burger patties, charcoal kebabs, etc.

To sum it up, the rising proportion of the Muslim population across the globe is expected to increase the demand for halal food products. To satisfy this increasing demand, food processing companies, restaurants, and fast-food chains are shifting towards halal-certified foods. The launch of new halal food products from such food processing companies is predicted to help the industry grow in the coming period.

To get an in-depth analysis of the growth drivers and investment opportunities in the industry, feel free to contact us.

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