Further growth is projected within the European halal foods market.
By analyst Jonathan Thomas
The influence of ethnic cuisine remains strong upon Western Europe’s food industry. This is especially apparent in market sectors such as ready meals, sauces and snack foods, where consumer demand for novel and exotic tastes and flavors continues to increase. Although the European market for ethnic foods is still dominated by traditional favorites such as Indian, Chinese, Mexican and dishes sourced from other parts of Asia (e.g. Thailand), the expansion of the category has led to the emergence of more foods based on cuisines such as Japanese, African, Caribbean and Latin American.
Europe’s largest markets for ethnic foods are the UK, France and Germany. Much of this is due to population size and spending power, as well as the sizeable presence of ethnic minorities within these countries – for example, the 2011 Census in the UK recorded the presence of over 3 million people of South Asian origin, a region defined as including India, Pakistan and Bangladesh. Demand for ethnic foods is also determined to a large extent by colonial heritage, with the UK home to approximately 9,000 Indian restaurants and takeaways. Other examples include the widespread popularity of Mexican and Indonesian cuisine amongst Spanish and Dutch consumers respectively.
In addition to the aforementioned cuisines, the European ethnic foods market is also widening to incorporate varieties such as halal and kosher. These sectors tend to emphasize the way food is prepared, rather than how it tastes. Although halal and kosher food preparation largely address religious standards or beliefs, demand for each has also been boosted by growing consumer concerns over food provenance and traceability – perhaps significantly, some halal meat products, for example, carry additional health claims such as organic.
Halal Foods
The halal foods sector is expected to experience continued growth over the coming years. Much of this has been driven by the expansion of the region’s Muslim population – for example, Muslims are forecast to account for 8% of the European population by 2030, up from around 6% at present. During this time, the number of European Muslims is expected to increase from 44 million to approximately 58 million.
France has Europe’s second largest Muslim population, trailing only Russia. There are currently 6.1 million Muslims in France, equivalent to just under 10% of the overall population. At more than 4.1 million Germany has Western Europe’s second largest Muslim population, with numbers projected to exceed 5.5 million by 2030. A similar trend can be observed in the UK, where the number of Muslims is forecast to more than double from 2.8 million in 2011 to 5.5 million by 2030, the latter of which will equate to over 8% of the overall population.
Demographic factors mean that the Muslim consumer base across much of Europe is considerable. In countries such as the UK, Muslim households tend to be larger than the average, and consumers tend to be younger – for example, one in three of the UK’s Muslims are aged 15 or under. From a geographical perspective, there is also evidence that Muslim populations tend to be concentrated in metropolitan and inner-city areas. In the UK, for example, over a third (36%) of the country’s Muslims are located in London, whilst Paris and its suburbs are home to a sizeable percentage of French-based Muslims.
Estimates regarding the size of the global market for halal foods vary according to source. In 2015, Leatherhead estimates that global sales of halal foods were worth in the region of USD600bn, up from approximately USD500bn five years previously. Although the Asian and African regions continue to account for over 85% of the global market, sales have increased in Europe, due primarily to the growth of the Muslim population and greater consumer interest in food provenance and traceability. In 2015, the European market was worth an estimated USD70bn, or 11.7% of the global industry.
France has Western Europe’s largest and most well-developed market for halal foods. Latest estimates suggest that the French market is approaching USD9bn in value terms, equivalent to nearly 13% of the total European sector. France is home to approximately 3,000 traditional halal butchers and ethnic convenience stores, which account for around 80% of halal food sales at the retail level. The market is dominated by meat and delicatessen products – for example, annual consumption of halal meat in France amounts to 400,000 tonnes. Although the meat and delicatessen sector accounts for approximately two-thirds of the market, recent growth has been especially high for convenience foods, such as frozen ready meals (e.g. lasagne) and pizza.
An expanding market for halal foods also exists in the UK, where annual sales are growing by 15%. Estimates of market size vary – for example, the Muslim Council of Britain claims the market is worth GBP1bn (USD1.55bn) per year, whereas other sources suggest annual UK sales of halal foods could be as high as GBP4.5bn (USD7bn). As is the case in France, meat products account for the bulk of the market – over half (51%) of the UK’s local authorities claim to require halal meat, whilst halal varieties account for around a quarter of the UK’s abattoirs. Future market growth may come from non-meat products, where an untapped demand is believed to exist.
Data remains fairly thin on the ground for the remainder of Western Europe. Demand for halal foods is thought to be considerable in Germany, where the purchasing power of the country’s sizeable population of Turkish descent is estimated at EUR20bn per year. Sales of halal foods in German-speaking countries (i.e. Germany, Austria and parts of Switzerland) are now estimated to be worth around EUR5bn (USD7bn) per annum. Traditionally, halal foods have had to be imported into Germany, owing to the country’s strict regulations concerning animal slaughter. Elsewhere, the Dutch market for halal foods was worth an estimated EUR2.15bn (USD3bn) and growing in 2015. Much of the recent growth in the Netherlands is thought to have come from non-Muslim consumers concerned over food safety and traceability.
New Product Development
It is worth noting, however, that there has been evidence of a mounting backlash against meat slaughtered according to halal principles in parts of Europe of late. During 2014, Denmark banned halal and kosher slaughter, citing concerns over animal rights – as a result, all animals slaughtered in Danish abattoirs must now be stunned prior to being killed. The same year saw concerns arise in the UK after it emerged that chicken served in Pizza Express restaurant chain was halal, a situation which is similar for other foodservice operators such as KFC and Nando’s. This led to numerous calls for clearer labelling.
New product data from Mintel’s GNPD database indicates that the number of halal foods launched within the global food industry has risen sharply in recent years. Between 2011 and 2015, a total of 39,398 food products were launched worldwide which either carried halal certification or were described as being suitable for people following a halal diet. The number of new product launches jumped from 4,833 in 2011 to 7,231 in 2013, representing an increase of 49.6%. Between 2013 and 2015, the number of new product launches rose by more than 75%, amounting to 12,679 within the last year.
A sizeable number of these products have been launched within the frozen foods category. Although products carrying halal certification are apparent in many areas of the food industry, some of the more significant frozen foods sectors include meat and poultry-based products, as well as convenience foods which feature meat (e.g. ready meals). Table 1 lists new product activity for some of these sectors between the years 2011 to 2015 inclusive. It should be noted that not all of these product launches occurred within the frozen foods market – for example, many meat-based halal foods appear in chilled format.
NPD activity has been especially high in the meat and poultry products sector, where 2,475 launches took place during the period under review. Between 2011 and 2015, the number of products launched rose by more than 163%, increasing from 331 to 871 – however, it is worth noting that a drop of 18.4% in new product activity occurred within this sector during 2012, possibly as a result of factors such as the economic downturn and its effect upon spending.
Recent NPD activity has been especially high within the fish products sector, where the number of global new product launches almost tripled during the period under review. Elsewhere, slightly lower rates of NPD activity were witnessed within the convenience foods market, a sector which is defined here as including ready meals, meal centers and side dishes. It seems likely that as the market develops, the focus of NPD activity may well shift towards value-added foods, as consumer demands become more varied and the range of eating occasions widens – for example, halal meats suitable for barbecuing have recently appeared.
Industry Supply
At present, there is relatively little evidence that Europe’s leading manufacturers of frozen ethnic and convenience foods are embracing the halal concept. Although exceptions do exist, one notable example being the French poultry giant LDC Groupe. Companies which supply frozen ethnic foods have preferred to focus upon health and other ethical credentials to date. It is worth noting, however, that the Findus brand (which now forms part of Nomad Foods, along with Birds Eye and Iglo) did achieve halal accreditation for some of its products in 2012, which suggests that leading suppliers may start looking towards this sector for future growth.
It should be remembered that the own-label sector also accounts for a sizeable share of sales of ethnic foods such as the ready meals market in many parts of Europe, whilst many meat products sold in the region are own-label. Within the last few years, major UK food retailers such as Tesco and Sainsbury have increased the quantity of halal foods stocked, although pressure upon these companies to improve their labelling is increasing. Meanwhile, the French chain Casino has recently set up a new website exclusively dedicated to promoting its selection of halal foods.
One of the leading suppliers of own-label ethnic ready meals to UK supermarkets is 2 Sisters Food Group, which competes in both the chilled and frozen sectors. Its Pennine Foods and Rogerstone facilities supply Chinese and Indian ready meals to customers such as M&S. The company is also present within the halal meat sector – during 2015, for example, it was announced that a poultry processing plant in Suffolk was to be converted to halal slaughter, following the previous closure of One Stop Halal in Scotland. The latter had been taken over by 2 Sisters back in 2007, and was closed following a strategic review of the company’s UK poultry processing operations.
Halal products are also supplied by the French-based poultry specialist LDC Group. The company owns the Reghalal brand (which includes poultry products and delicatessen lines such as sliced chicken meat and pate), and it increased its presence in the sector during 2011, when it acquired Corico, owner of the Medina Halal brand. Ethnic recipes also feature within LDC’s range of ready meals, whilst the company also owns the Asian Traditions range, which accounts for a leading 12% of the French market for chilled ethnic foods market.
A number of companies focus almost exclusively upon the supply of halal-certified meat products. Tahira Foods is one example – having been founded in the 1990s, it claims to be one of the EU’s leading suppliers. Although it is headquartered in the UK, it has operations in most parts of Europe, and supplies its products to a number of leading supermarket groups, as well as to convenience and specialist ethnic food stores. It supplies an extensive range of frozen halal foods – examples include burgers (e.g. beef, lamb and chicken), breaded products (e.g. escalopes and cordon bleu portions), kebabs, samosas, spring rolls and falafel.
One of the UK’s largest suppliers of halal meat products is KQF, which supplies frozen and chilled products to customers such as retailers, distributors, caterers and educational establishments. During 2015, the company appointed a specialist distributor through which it hopes to expand in the French halal meat market, having also signed a deal with the Le Clerc hypermarket chain the previous year. KQF is also broadening its presence elsewhere in Western Europe, having launched new halal recipe hot dogs in Germany during the summer of 2015.
These appeared in varieties such as Frankfurters and Bratwurst with Cheese. Many of KQF’s halal meat products appear under the Khan’s brand. Its frozen range includes burgers (e.g. chicken, beef and lamb), sausages, meat pies, samosas, kebabs and coated meat products (e.g. chicken nuggets, popcorn chicken and schnitzels). Early in 2015, its range was extended with Macon Rashers, described as chilled pork-free bacon substitutes made with chicken and beef. Most of its products are developed from Asian, African and the Middle Eastern recipes.
Another UK-based company is Shazans Foods, which is headquartered in Lancashire. It supplies both chilled and frozen halal meat products, including burgers, sausages, samosas, kebabs, wraps and coated lines such as Breaded Chicken Nuggets and Chicken Poppers. Its frozen range also features Indian specialities – examples include Cheese Paratha and Lamb Keema Paratha, filled ethnic flatbreads. During 2014, both Tesco and Sainsbury announced they were to stock Shazans’ chilled burgers and sausages, thereby widening their range of halal meat products.
During 2015, halal-certified chilled chicken products were launched in the UK by the Nordic-based meat producer HK Scan. The new products – which appeared under the Aafiyah brand – included pre-cooked varieties such as BBQ Drumsticks and Hot Wings, as well as raw chicken meats. It is possible that HK Scan (whose major markets include Scandinavia, Poland and the Baltic countries) may look towards halal meat products for future growth, as part of its current strategy of focusing upon the premium sector, as well as ensuring full traceability within its supply chain.
In France, Isla Delice claims leadership of the domestic market for halal-certified charcuterie meat products. The brand, which is also present in Belgium and Spain, includes both chilled and frozen meat products – the latter features nuggets and escalopes. Another French-based brand is Halaland, which is owned by Groupe Baker. The Halaland brand is exported to a number of overseas markets, examples of which include the UK, Germany, Italy, Spain and the Benelux and Scandinavian regions. Elsewhere, halal meat products are supplied by Mekkafood of the Netherlands, whose range includes products such as doner kebabs, beefburgers, meatballs, nuggets and schnitzels.
