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Say Hello to Halal: U.S. Companies Respond to Growing Muslim Market

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In recent years, Americans have watched from afar as Europe has dealt with ideological battling over halal product sales at mainstream shops. France, as we've been told, has witnessed a huge boom in the halal meat market, with everyone from large fast food restaurants to "quintessentially French" food manufacturers and upscale Parisian restaurants adding halal options to their menus. In the UK, food makers have also tuned into the profit potential unlocked by the halal seal of approval. Last September, one British paper shouted the inflammatory headline: "Top Supermarkets Secretly Selling Halal Foods."

Well, shh, don't tell anyone, but some U.S. companies have also decided that they wouldn't mind getting a piece of the middle class Muslim market, too.

According to the Associated Press, the worldwide market for halal goods -- those that conform to Islamic rules about manufacturing and ingredients -- has grown to more than half a billion dollars annually, and in the U.S., more and more executives are looking for ways to cash in. Last year the American Muslim Consumer Conference -- a gathering aimed at promoting Muslims as an untapped market segment -- attracted 200 attendees. This year its organizer had to cap registration at 400 to avoid going over capacity.

A few major mainstream companies have already begun to experiment with halal goods. Whole Foods has added a line of ready-made halal meals -- frozen Indian dinner entrees -- to its product offerings; the Saffron Road brand is the first halal product to be offered national distribution by the mega-chain. McDonalds and Wal-Mart have also introduced halal goods at certain locations. (McDonald's has been selling halal foods in Europe for years, of course.) Wal-Mart is not selling halal meat nationally, but is responding to market demand in places like Dearborn, Michigan, where a number of Wal-Mart shoppers eat according to halal guidelines.

Some Muslims fear that the growing corporate interest in halal products will cause a backlash on this side of the Atlantic, just as it has in Europe. Will shoppers here may equate "going halal" with supporting a theology that contradicts Western ideals? In the UK, some have gone further still -- radical protestors have called KFC's halal menu products "terror chicken."

What would that look like?



Oh, sorry, that's a bald chicken. Terrifying.

It remains to be seen whether the majority of U.S. supermarkets will embrace halal in an obvious way. "Supermarkets aren't benevolent charities, they're in it for the money ... And they've discovered halal sells," said a Muslim woman interviewed last year for a Guardian story about the trend in France. The owner of a chic, all-halal restaurant in Paris offered: "Young Muslims have money and want to eat out like everyone else but according to their religion. The food doesn't taste any different; we have many French customers who don't even know we're totally halal. To us, that is what integration is about."

For a buy-the-numbers analysis of the issue, check out this interview, which appeared in Meat Trade News Daily. In it, Adnan Durrani, the “Chief Halal Officer” of American Halal, the company that makes Saffron Road, lays out his (albeit subjective) assessment of why his product is destined for knockout sales.

Durrani, who previously founded Crystal Rock Water and was a principal of Stonyfield Farms and Delicious Brands, told his interviewer the following:
  • The North American Muslim population is 8 million strong, growing at over 500,000 per year and will double by 2020.
  • Within this surging American Muslim demographic, there is also a meaningful percentage who are affluent, well educated consumers looking for and willing to pay up for 100% natural, anti-biotic free, 100% veggie-fed, and organic Halal foods. These are Whole Foods shoppers!
  • In EEC, Halal protein sales in 10 years have gone from less than $1 billion to $20 billion. Why? Primarily due to supermarkets – Tesco, Sainsbury, Metro, Carrefour, etc. – finally deciding in Europe to carry Halal products. France, with a smaller total Muslim population than the USA, generates over $2 billion in annual Halal protein sales due to French supermarkets. US retailers have woken up – now Walmart, Costco, Shoprite, SuperValue, Giant, and of course Whole Foods Markets started carrying Halal foods. The tide has started – now comes the tsunami!
  • In terms of ready-to-eat entrees, the way we looked at it is that the ethnic food sector in the US is around $70 billion. Frozen entrees represent over $15 billion. Indian has the largest growth in the category. There were no Halal Indian entrees in the supermarkets – let alone natural or organic.
Durrani added that he believes non-Muslims will also be interested in his product. He reports that in France and the UK, non-Muslim customers account for 50% of all Halal food sales.

"Whole Foods’ managers tell us that Saffron Road’s products are stellar – that our authentic gourmet quality, our wholesome and 100% natural ingredients, and our Certified Humane and gluten free designations appeal to a majority of Whole Foods’ consumers -- 90% of whom are probably non-Muslim."
POSITION:  No positions in stocks mentioned.

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