The structure of Europe’s population is changing. In 2008 alone, around 3.8 million immigrants entered the European Union, according to Eurostat. Many immigrants follow dietary laws required by their religious beliefs. Muslims, in particular, are having an impact on the social, cultural and political landscape. This has become a topic of much discussion and has implications for the region’s food and drink markets.
Muslims will remain a minority group in Europe, but are expected to increase by nearly a third over the next 20 years from 44.1 million consumers in 2010 to 58.2 million in 2030. This growth will primarily be centered in Western and Northern Europe and many countries will see Muslim populations approaching 10%. In the UK, Muslims are forecast to account for 8.2% of the total population by 2030, up from 4.6% in 2010. Muslims are also projected to represent 9.3% of the Austrian population, 9.9% in Sweden and 10.3% in France.
Complex and contradictory
Halal is an Arabic term meaning permissible or lawful. For food to be approved for consumption it must conform to the dietary laws outlined in the Quran. Halal brands have to ensure that animals are slaughtered according to Halal requirements, contain no alcohol or intoxicants and are free-from pork and all swine by-products. Halal-certification is essential for products that actively target a Muslim audience. It provides credibility and dispels concerns about haram (unlawful) ingredients. It also allows brands to engage with their audience, recognizing their identity and differences. Halal products also appeal to non-Muslims in many markets, thanks to the strict requirements they are manufactured under. Similar sentiment has boosted kosher foods in the US, with non-Jewish consumers embracing kosher certification as product recalls and contamination scares increase concerns about food production.
Halal certification is, however, a complex and often contradictory practice. For example, there is no universally agreed and accepted standard for meat to be considered halal. Most consumers agree that animals must be slaughtered by a Muslim, be blessed before the process and that blood must drain out fully after a sharp cut across the throat. And yet, few agree on whether they can be stunned before being killed. The Halal Food Authority (HFA), a key certification body in the UK, has attracted controversy for allowing animals that are stunned to be certified as halal. This underlines the complexity of the market and the potential challenges that halal producers face.
European halal food market is growing
The value of the European halal food market was estimated at $69.3 billion in 2011 by the World Halal Forum. This is predicted to rise significantly in the coming years as Muslim household incomes grow. Halal products are common in processed meat, sauces and seasonings, breakfast cereals, snacks and sugar and gum confectionery, but demand for ready-to-eat halal meal solutions is expected to soar. This is because second and third generation Muslim immigrants have the same desire for convenience as other consumers. In fact, halal launches of meals and meal centers in Europe outstripped processed meat and fish launches for the first time in 2011. Convenience claims are also now the second most common claim on-pack, appearing on a quarter of halal food launches in 2011.
The growth of Muslims in Europe has not yet had a significant impact on the development of halal foods. Halal food innovation as a percentage of total food launches has risen only marginally in the last five years and remains extremely niche. The same is true of frozen halal food, which accounts for less than 1% of total frozen food launches. Frozen innovation has actually declined over the last four years, from 15% of total halal launches to 13% so far in 2012. The growth of the prepared meals segment, however, suggests frozen formats could enjoy a lucrative future. Muslims in the region have well-established relationships with halal butchers and are not accustomed to seeing prepared, manufactured meals with halal claims. They also traditionally prefer fresh meat and are suspicious about the age and quality of shop-bought meat. This is limiting the development of the segment, but attitudes are changing as a new generation of Muslim consumers comes to the fore.
Brands, retailers and specialists fight for halal share
The European halal market is being driven by three key players: multinational food companies, halal brands and retailers. Multinational food companies have been keen to target the growing Muslim demographic. Kellogg’s has invested significantly in this area and has launched the most halal-certified products of any company in Europe over the past two years. It received halal certification from the HFA for two of its UK plants in 2011 and has since printed the halal logo on more than 30 of its products, including its popular cereal brands Frosties, Rice Krispies and Corn Flakes. Nestlé has also identified the potential of the Islamic consumer and has offered halal versions of well-known products across its food and drink range since the 1980s.
It generates US$5 billion turnover from halal products annually and sees Europe as a target market for further expansion. Nestlé has an advantage over many of its rivals as it enjoys a long-standing reputation as a provider of halal food. A survey of consumers in Muslim-majority countries, carried out by Ogilvy Noor in 2010, discovered that Nestlé was considered the second most Muslim-friendly brand globally, ranking behind only Unilever’s Lipton brand. Mars has also been granted approval by the HFA for a number of its confectionery bars, including all varieties of Mars, Snickers, Milky Way and Bounty, as well as selected Galaxy-branded products. The company has, however, chosen not to include this information on-pack, instead advertising it solely on its website. The growth of Europe’s Muslim population has also led to the creation of a number of halal specialists. These companies only retail halal products and appeal to consumers as a more trustworthy source of certified food and drink. Among the most successful are The Zaphir Group and Tahira Foods.
The Zaphir Group has produced and sold precooked and frozen halal meat in France under its Isla Délice brand since 1989. It has been one of the leading innovators in the European halal food market over the last few years and has established a position as a halal specialist in France. Tahira Foods is also a leading producer and distributor of halal foods in Europe, offering a wide range of meat and poultry-based products in distinctive packaging. The company has managed to build a trusted brand image by working under the World Islamic Foundation, an independent auditor that approves Halal processes. Retailers have also begun to cater to the Muslim consumer. Multinational retailer Carrefour launched its first products under a new Carrefour Halal brand in France in December 2010. The range has been approved by the Great Mosque of Paris and includes more than 50 products. The supermarket chain Casino also launched its own range of halal products under the umbrella brand Wassila in France, while many retailers in the UK now offer halal butchers in selected stores.
The UK leads halal innovation
The UK has so far been at the forefront of halal innovation, welcoming close to a fifth of all European launches in both 2011 and 2012. The country is also the leading innovator of halal frozen foods, ahead of France, Germany and Italy. This is understandable: the UK is an increasingly ethnically and religious diverse country, with a growing Muslim population. The Office for National Statistics’ 2001 Census discovered that 3.2% of consumers in England identified themselves as Muslim, making Islam the second most popular religion after Christianity.
This figure is expected to rise considerably in the near future. The Pew Research Center has estimated that the UK will enjoy the largest projected increase in Muslims of any country in Europe between 2010 and 2030. Three-quarters of UK Muslims are from an Asian ethnic background, while 43% have a Pakistani heritage. The country’s Muslim population is not, however, one homogenous group and includes a range of different cultures. There are large Turkish, African, Middle Eastern and Asian Muslim communities in the UK. Halal brands will need to consider this when launching products, as tastes and preferences can differ by country of origin. For example, a recent study conducted by EBLEX, the organization for the English beef and sheep industry, revealed that beef consumption is generally limited to African, Turkish and Middle Eastern Muslims, while mutton is the domain of consumers from the Indian sub-continent.
The report also disclosed that Turkish men and women, as well as young Middle Eastern do eat non-halal meat occasionally. Muslims have traditionally been less well-off than the rest of the population, suggesting that value offerings will hold the most appeal. Department for Work and Pensions figures from 2001 revealed that 73% of Bangladeshi and Pakistani children live in households below the poverty line, significantly higher than the national average of 31%. The Oxford Center for Islamic Studies also disclosed that around a third of Muslim households had no adults in employment. However, this is beginning to change. Muslims are the fastest growing segment of the middle class in the UK, with an average of 3.4 children per household and a higher spending power. While these growth figures show huge potential for the halal meat market in the UK, prepared brands still have significant ground to make-up. Cultural preference for fresh, bulk meat from trusted local butchers will be hard to shift.
Young, wealthy French Muslims drive growth
France, by virtue of its large North African community, also has one of the largest Muslim populations in Western Europe, a position it will retain in the coming years. Multinational companies such as Nestlé, Unilever, Fleury Michon and Panzani have all introduced halal soups, sauces, cold cuts, baby foods and other processed foods in the French market.
These companies have experience with halal foods in the Middle East and Africa and are beginning to leverage that knowledge in Europe. Private label and specialist halal brands have also become common in France, with Carrefour, Casino, Isla Délice and Reghalal all retailing halal ranges. The strength of halal food in France, which has moved from the ethnic food aisle to the mass-market, is illustrated by sales figures. The market was estimated to have reached a value of €5.5 billion in 2010, according to the Paris Halal Trade show. This growth is being driven by second and third generation Arab and African migrants who want the same culinary diversity as their non-Muslim neighbors. Older French Muslims still hold strong associations to their country of origin and will have grown up with limited spending power. However, the social structure is changing and younger consumers now see themselves as both Muslim and French. They are also increasingly wealthy, with an affluent middle class of young Muslims behind the rapidly expanding market. France may be home to one of Europe’s largest halal food markets, but growing anti-Islamic sentiment in the country is a concern.
Young Muslim consumers are the future
Muslim countries are some of the youngest in the world. There are more than 780 million Muslims under the age of 25, representing just under half the total global Muslim population. These young consumers are the future of Muslim consumption and have come of age in a world that is hugely different to their parents. Core religious values remain the same, but this generation has new expectations and desires that halal brands must appeal to.
Convenience, in particular, is a huge selling point and mass-market producers are better-placed than traditional, local suppliers to supply it. Frozen brands will need to emphasize this very trait if they are to overcome the cultural preference for fresh meat. To be truly successful, halal brands will need to avoid alienating traditional Muslim consumers, who still account for the bulk of the market, while also proving relevant to the lives of young, modern Muslims. Multinationals entering this segment will also need to reassure these consumers that any Islamic branding is not merely a marketing ploy and that they understand and emphasize with the religion’s values.