Germany is home to the EU’s second-largest Muslim population after France. An estimated five million Muslims live in the Federal Republic but consumers lack awareness of halal products available in the market, and these still face confined distribution channels.
In particular, the halal cosmetics and personal care segment remains underexploited in Germany, despite overall strong sectoral demand.
“Good looks, care and the expression of a very personal style cost consumers €14 billion in 2019,” Thomas Keiser, the managing director of IKW, declared at a December 2019 press conference.
IKW is the German cosmetic, toiletry, perfumery and detergent association representing more than 430 member companies with a total annual turnover of over €18.8 billion.
These are numbers Rachid Laarar, the Frankfurt-based founder of Beautylope Pure & Vegan Halal Cosmetics, can only dream about.
“At the start of Beautylope five years ago, we first had to sensitise many Muslims themselves about our product offering,” Laarar told Salaam Gateway about the start-up’s challenges.
“Revenues didn’t rise as much as expected as educational work required much investment.”
Laarar’s e-commerce company is exhibiting at the inaugural trade and consumer show Halal Hannover, to promote halal-certified cosmetics such as nail polish made in Germany and hand-made make-up in the UK.
He also hopes to connect with potential retail partners. “Our number of customers has increased by 600% since we started,” said Laarar.
Germans spent every ninth euro on beauty and household care products, according to market research firm Information Resources Inc. Within this mix, halal-certified cosmetics and personal care face stiff competition.
“Halal labeling on cosmetics is less understood and trusted compared to organic, sustainable, vegan, and natural, at less than 40% in the UK and France, under 30% in Germany, and under 20% in Italy,” writes DinarStandard in the State of the Global Islamic Economy 2019/20 report, citing a Euromonitor lifestyle survey.
Halal cosmetics and personal care, like halal food, could develop broader opportunities to cater to a bigger customer base demanding more ethical products. Beautylope’s vegan halal positioning appears to be on the right track.
“However, to grow further, Beautylope products need to be stocked in retail shops as well, especially as more and more customers ask for product tests before buying,” said Laarar.
Fellow German halal-certified brand VIE Halal, developed by Hanaa Ryari, has had success in this department. The brand broke into the shops when beauty retailer Douglas GmbH, managing a portfolio of 55,000 products in 2,400 stores across 26 countries, added it to its range.
“Since January 2020, we have been running VIE Halal Cosmetics both online and in 34 of our stores in Germany,” a Douglas press spokesperson told Salaam Gateway.
“It is currently the first halal-certified product in our range,” she added. “The topic of halal lifestyle remains exciting for us.”
Headquartered in Düsseldorf, Douglas generated a turnover of €3.5 billion in the fiscal year 2018-19.
HALAL CERTIFICATION AS INNOVATION DRIVER
A successful halal adaption case in Germany is Symrise AG, a global supplier of flavours and fragrances with revenues of €1.692 billion in the first six months of 2019. Its most recent full year earnings were €3.154 billion for 2018, up 5.3% from 2017.
“It all started 30 years ago with one particular aroma an Indonesian client insisted on buying from us,” Norbert Kahmann, Symrise’s Strategic Halal Officer, told Salaam Gateway.
“Today, we handle more than 5,000 halal-approved goods across all business areas.”
Managing over 30,000 products, the Holzminden-headquartered company created a framework to integrate halal-certified products into its development and production process.
“Alcohol is usually used in vanilla extraction, which is prohibited for Muslim consumers,” Kahmann reflected on product innovation. “Symrise thus developed an alternative manufacturing process that extracts the same rich vanilla taste, but does not require alcohol.”
Sharing his experience, Kahmann will give a lecture about how to find the right certification institute at the Halal Hannover conference on March 7.
According to DinarStandard, the global Muslim expenditure for cosmetics is projected to reach $95 billion by 2024 from $64 billion in 2018. Weak product development in Organisation of Islamic Cooperation (OIC) countries constitutes a promising export opportunity.
Germany already ranks as the third-largest cosmetics exporter to OIC countries with sales of $1.1 billion in 2018, according to the State of the Global Islamic Economy 2019/20 report.
However, at $11.58 billion, German exports of essential oils, perfumes, cosmetics, and toiletries were a mere 0.74% of the nation’s total export volume in 2018, revealed United Nations Comtrade statistics.
HALAL CERTIFICATION ‘RESOURCE-CONSUMING’
While the examples of Symrise, Beautylope and VIE Halal signal positive developments in Germany’s halal cosmetics and personal care sector, the market trending upwards is not entirely driven by halal demands.
Switzerland-headquartered Weleda AG, a world leader in holistic natural cosmetics, has a strong foothold in Germany. “In the markets in which we have been active so far, halal certification was not the focus for our customers,” Tobias Jakob, Communications Manager at Weleda, told Salaam Gateway.
“This can change with the opening of new markets,” he added.
Weleda boasted category sales of €327 million in 2019, recording double-digit growth in Eastern Europe and Asia.
For 2020, the company expects further sales progress through the continuation of its internationalisation strategy. While the company already exports to the UAE and Malaysia, it doesn’t supply the world’s largest Muslim population, Indonesia.
“A preliminary study showed that halal certification is extremely time- and resource-consuming,” Jakob said, adding that the company will have its products certified “if this is an important aspect for people and a market entry criteria”.
Europe’s Muslim population, which is likely to be at 7.4% by 2050, according to Pew Research Center, will further spur the demand for halal products.
Taking this development into account, Halal Hannover organised by Messe Deutschland AG from March 6 to 8 highlights halal market opportunities focusing on food and lifestyle products.
The three-day trade and consumer exhibition will present over 60 manufacturers, wholesalers, and service providers, both from the domestic and international markets.
A concurrent running conference will feature expert seminars on compliance and certification.
As part of the conference, the first Global Islamic Economy Summit (GIES) roundtable in German-speaking Europe will also take place on March 6.
(Reporting by Petra Loho; Editing by Emmy Abdul Alim [email protected])
*UPDATE: The organiser of Halal Hannover announced after the publication of this story, on March 3, that it was postponing the trade fair amid the COVID-19 outbreak.
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