Halal Export

Exploring the Growth Drivers of the Global Halal Food Sector

The Halal food sector is experiencing exponential growth, driven by a multitude of factors that have propelled its expansion and significance in global markets. Given below are the main factors that have enabled the remarkable growth, of the Halal food industry supported by quantitative data:

1. Surge in Muslim Consumer Spending: Muslim consumers globally have increased their expenditure on food and beverages substantially. In 2022 alone, Muslim consumers spent a staggering US$1.4 trillion, marking a notable 9.6% increase from the previous year's US$1.28 trillion. Projections indicate that by 2027, Muslim consumer spending on food is expected to reach US$1.89 trillion, reflecting a compound annual growth rate (CAGR) of 6.1%.

2.Investment Inflows: The Halal food sector has attracted significant investments, particularly in food technology companies specializing in delivery services and Agri-tech. In 2022/23, there were 44 recorded deals related to halal food, amounting to US$2.2 billion. Although this figure represents a 44% decrease from the previous year's US$3.96 billion, it underscores the sustained interest and investment in the sector.

3. Global Brand Involvement: The halal economy sees engagement from top brands like Nestlé, Unilever, Kraft Heinz, Kerry, and H&M. Their involvement underscores the expanding consumer demand for halal products, driving innovation in economic sectors. As the industry grows, more multinational players are drawn to its opportunities, amplifying its global impact.

4. Global Trade Collaborations: Bilateral Trade Agreements, such as those within the ASEAN region, have opened up new opportunities for the Halal products trade sector. OIC imports of Halal food-related products increased by 1.77% from 2021 to 2022, reaching US$265.1 billion. Projections suggest that by 2027, this figure will rise to US$368.3 billion, with a CAGR of 6.8%.

5. Government Regulation: Governments of OIC member countries regulate imports to enforce halal certification standards. National bodies within the OIC accredit halal certification entities, like UAE's ESMA and EIAC, Saudi Arabia's SFDS, and Malaysia's JAKIM. These efforts enhance awareness and compliance among manufacturers, fostering growth in Islamic economy sectors. The collaboration ensures adherence to halal standards, bolstering consumer trust and expanding the halal market globally.

In conclusion, the growth of the Halal food sector is underpinned by substantial quantitative data reflecting increased Muslim consumer spending, significant investment inflows, expanding global trade collaborations, technological innovations, and government support initiatives. As the sector continues to evolve and expand, it presents lucrative opportunities for stakeholders to capitalize on the burgeoning demand for Halal-certified products worldwide.

Reference: State of the Global Islamic Economy Report 2023/24, Pages 21-22 and 92-108