Halal food can be described as food items and beverages that are strictly prepared according to the guidelines interpreted by Islamic dietary law. The growing concern regarding food safety, hygiene, and reliability, coupled with the increasing global population and the growing disposable income of the Muslim population, is anticipated to thrust the market growth of halal food during the upcoming years. According to the report published by Future Market Insights, a certified market research organization, the North American halal ingredients market is valued at USD 84.1 Bn in 2022 and it is expected to grow with a CAGR of 5.4% over the forecast period 2032. This placed the Halal market potentially very lucrative for manufacturers and exporters.
In preparation for this projected increase in demand, many manufacturers have expanded their product portfolio by introducing several value-added halal food items, including bakery and pastry items, pasta, vegetable, juice, milk, yogurt, cheese, and other related consumer products. The popularity and visibility of halal food among consumers are further supported by the production of halal-certified foods by key players in the market. Several international food corporations, including Nestlé, Cargill, and Unilever have already taken a keen interest in certified halal brands and ingredients. To strengthen their halal market position, major manufacturers are implementing aggressive marketing strategies, which include new product innovation, product line expansion, and acquisition.
The United States is also witnessing a growing demand trend for halal food. According to a Pew Research study, the Muslim population is growing at an accelerated rate, and will more than double from an estimated 3.45 million in 2017 to an estimated 8.1 million in 2050. In the next two decades, Muslims could become the second-largest religious group in the United States. This growth trend in the population is supported both by higher fertility rates among Muslim Americans as well as the continued migration of Muslims to the U.S. Even though currently the Muslim population in America constitutes a tiny fraction of the overall US population, they are the main contributing factor behind the growth of the halal food market segment in the U.S.
The demand for halal food is not solely confined to U.S. Muslim consumers but it also extended to non-Muslims. The Islamic Services of America (ISA), a leading Halal Certification body in the United States and North America, reported that there are now an estimated 8 million Halal consumers in the U.S. The growing consumer demand has catapulted the Halal industry to become a new economic sector, prompting more companies to offer more inclusive halal food options. According to the report by Technavio, a leading global technology research and advisory company, the Halal food market in the US is set to increase by $ 9.33 billion during 2022-2026, accelerating at a CAGR of 5.62% during the forecast period.
Consumer spending amongst Muslims and people of other faiths in North America on halal food has increased considerably over the past ten years. The Islamic Food and Nutrition Council of North America reported that in 2016, U.S. consumers spent $20 billion on halal food, up 33% from 2010. This demand trend indicates a healthy growth in the demand for halal food. Furthermore, as the American Muslim population grows and changes their eating habits, demand for halal food will surge.
The pandemic has also prompted U.S. consumers to re-examine their food preferences. According to research by Whole Foods, an American multinational supermarket chain popularly known for its organic and healthy food selections, consumers are buying healthier, greener foods, higher quality meat, and less alcohol. These changes in consumer trends may further support the surge of halal food in the U.S. In the long term, halal food options are expected to increasingly become to be part of a brand portfolio that caters to a wide range of consumers’ needs and preferences, much like organic, gluten-free, and vegan.
The U.S. is aggressively transforming into a highly competitive Halal food and beverage market, comprising multinationals, imports from around the globe, and smaller niche producers. The transformation is also facilitated by E-commerce and digital marketing. In the United States, the sales and distribution of halal products are taking place primarily through organized and modern retail channels which include supermarkets, hypermarkets, and convenience stores. Halal products are also being sold at bakeries and pastry shops all over the U.S. It is estimated there are more than 130 American food chains with halal offerings. Halal products can also be found in 41 market chains in the U.S., including Safeway, Costco, Publix, Whole Foods Market, Restaurant Depot, and ShopRite.
The U.S remained the largest export destination for Malaysian palm oil in the Americas region. Last year Malaysia exported 268,625 Mt of palm oil to the U.S. which constitutes 80 percent of the total exports to the Americas. RBD palm oil, RBD palm stearin, and RBD palm olein are the top three products exported to the U.S. comprising almost 90% of the overall MPO exports.
Malaysia’s Export to the USA by Type of Products
|Malaysian Palm Products Export to the USA (MT)|
|Jan – Dec
|Jan – Dec
|NBD PALM OLEIN||14,301||7,199||7,103||98.7|
There are huge opportunities for the palm oil industry to tap into the expanding and increasingly affluent U.S. Halal market, either in the retail or food service sector. The potential halal market segments include fast-food outlets, bakeries, and pastry shops.
Fast-food culture and the prevalence of diverse, convenient, and affordable dining options are among the many important landmarks of the U.S. According to the American Halal Foundation, over $200 billion are spent each year on fast food, making fast food an integral part of the F&B ecosystem in the U.S. It is estimated there are more than 130 American restaurants/fast-food chains with halal offerings in the U.S. Palm-based shortening and frying fat are among the product offerings that can meet the ingredient requirements of the fast-food outlets.
According to the American Bankers Association, the US bakery industry is a huge business, making up 2.1% of the gross domestic product. Many traditional U.S. bakery products including bread, pastries, cakes, cookies, and other subcategories of pastry products, already have Halal attributes. Before it can be officially promoted as a halal bakery, a bakery typically is required to go through a Halal certification process. The Islamic Food and Nutrition Council of America (IFANCA) reported that U.S. Halal consumers spend around $20 billion on food each year but few manufacturers are tapping into this affluent market segment. IFANCA added that ingredients manufacturers and exporters are soon expected to expand their offer of Halal-certified products in much the same way as they consider offering gluten-free, organic products as part of their product portfolio in catering to different dietary choices. The potential growth in the Halal baking industry may provide a great opportunity for potential palm oil exporters who want to set foot in the baking industry and the Halal market segment in the United States.
Prepared by Zainuddin Hassan
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