Australia is a major halal food producer, exporting an estimated $13 billion in 2015. Considering the size of the country’s halal food sector, especially for meat and dairy, what opportunities are there for new players to enter and thrive in it?
YOUR PAIN POINTS ADDRESSED
You are a food products manufacturer seeking to launch a halal brand in Australia.
How attractive is Australia’s halal food industry?
|What is the size and growth profile of Australia’s halal food market?
|What are the major challenges facing Australia’s halal food industry?
|What are major growth opportunities?
Australia is one of the world's largest food exporters, especially in meat and grains. In 2014-2015, food and beverage exports grew by 28 percent to $19.6 billion, according to the Australian Food and Grocery Council’s (AFGC) State of the Industry 2015 report. Of that figure, a significant 66 percent, equivalent to an estimated $13 billion, is halal food.
“The MENA region is our biggest halal market, followed by Malaysia and Indonesia. Generally we are slaughtering, packing and labeling meat as halal for particular markets,” Nick Meara, Meat and Livestock Australia’s Business Development Manager, MENA and Europe, told SalaamGateway. MLA has approximately 50,000 livestock producer members, according to its website.
|AUSTRALIA'S HALAL INDUSTRY VITAL STATS AND KEY POINTS
123 halal-certified abattoirs around the country
21 halal certifying authorities, all private
Around half of all chicken meat is halal (Source: Australian Chicken Meat Federation)
Major halal cheese player, around 32 percent of all cheese value sales is halal (Source: Euromonitor International)
While there are no statistics on overall halal meat exports, sales abroad of halal lamb meat are estimated to be worth over $1.5 billion, with shipments to the Middle East and North Africa (MENA) reaching $348.4 million in 2015, and mutton $180.9 million (Source: Meat and Livestock Australia, a livestock producer-member organization)
Although the U.S. and Japan are Australia's top beef export markets, the MENA region is a major customer, buying 53,355 tons of beef in 2015, equivalent to $330 million (Source: MLA)
Major Australian brands and products such as Vegemite, Byron Bay ANZAC Cookies, Sanitarium and Kellogg’s are also halal-certified.
Australia has a small Muslim population. According to the 2011 national census just 2.2 percent, or 476,300, of the country's 21 million populace is Muslim. Hence, halal certification has been driven by export potential.
“The meat industry found it commercially profitable to be halal. That is why (Australia has been) very quietly exporting halal meat,” Syed Atiq ul Hassan, Founder and Organizer of Halal Expo Australia, told SalaamGateway.
Several years ago, Australians started taking note of how many products were labeled halal, for both export and local consumption. “It was surprising news for Australians that they export so much halal produce,” said Hassan.
Anti-halal social media campaigns started to gain in popularity, coming to a head in 2014. In one case, anti-halal protests and aggressive social media campaign against Fleurieu Milk and Yoghurt Company prompted the dairy producer to remove its halal certification, jeopardizing a $50,000 supply contract with Emirates Airlines as a result.
We have 88 Australia-based halal-related food companies in our database. View them >> HERE
Campaigners also alleged that Australian halal certification companies were funding terrorism.
In response to the campaigns and the potentially negative impact to the country's exports, the Australian government launched an investigation.
In a report released in December 2015, the Senate Economics References Committee found there was “no direct link between halal certification in Australia and terrorism funding”.
The report did however make nine recommendations for improving the certification process, including a single, national registered trademark for halal-certified products, clear labeling of products sourced from animals subject to religious slaughter, and for food manufacturers to “clearly label products which have received third party certification”.
‘Greater oversight’ recommended
The Senate committee also recommended greater government oversight of the certification process.
Such oversight of the country's 21 halal certifying authorities is welcome, said Hassan. “At the moment all the certifiers are private and that is a problem, as they have their own standards and charge their own fees, which are not transparent. My view is that there must be a regulatory body to streamline everything and make a system,” he said.
IMPORTANT SECTOR, BUT NO NATIONAL STRATEGY
The government’s refutation of the allegations against halal certifiers, and growing awareness of how important halal exports are to the country’s economy, has been a boon for the sector.
Notably, Fleurieu Milk and Yoghurt Company reinstated its certification in 2015, and won back the Emirates Airlines contract. However, there is no explicit government policy to bolster halal exports. “There is seemingly no government strategy to improve the industry, so it is organically growing. The political factor has been a hurdle to making a plan,” said Hassan.
At the domestic level, demand for halal products is growing, for both local and imported products, further bolstered by demand from Muslim tourists, especially from Southeast Asia.
Responding to this increasing demand, in 2016, the country's first halal exhibition was held, in Melbourne and Sydney, with over 100 stalls each, said Hassan. The organizers focused on domestically-produced halal products, but next year will include halal companies from abroad.
Australia has significant potential to further expand its halal food sector, particularly beyond meat.
“I think there's a great opportunity for Australia when you look at the (global) Muslim community. It doesn't matter if the food is processed in Australia or overseas, as long as the raw material is certified,” said Meara.
But for the foreseeable future, it will be meat that will be Australia’s biggest halal export. The sector is particularly well-placed to tap into growing consumer demand for traceability in food.
“Our beef industry can provide traceability on each animal. We are the only country that can do that, and we are progressing with that on our sheep flocks, which no other country has done either. That provides a certain safeguard for our customer markets on food safety issues, and over any questions of halal integrity, as we can do a full check all the way back to the farm,” said Meara.
Seek halal certification: Identify a certifier that has a strong international reputation and make sure you research and prepare for the process.
Establish distribution overseas: Determine which markets you seek to export to and drive focused business development activity to international expansion. Also consider establishing operations in highly attractive OIC markets.
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