OVERVIEW-The halal food market in Germany’s $188 billion F&B industry

Photo: October 8, 2006 -- Halal market in Aachen, Germany / Anirvan, Flickr / CC BY-NC 2.0

There are over 5 million Muslims in Germany, served by a strong ecosystem catering to their specific dietary needs. The halal industry in the country is underpinned by rapid domestic growth and is showing substantial potential for exports across Europe and to Organisation of Islamic Cooperation (OIC) markets.

Germany is the largest F&B-producing country in Europe and the world’s third largest overall exporter of food and drink products, behind the United States and the Netherlands. Its F&B industry is the country’s third largest economic sector, and a critical pillar of its export, reaching 55.3 billion euros ($61 billion) in 2015, an increase of 1.8 percent over the previous year.

HALAL MARKET OPPORTUNITY

Germany has a well-developed halal ecosystem to support a nearly 5-million-strong Muslim population.

Muslims made up 5.8 percent, or just under 4.8 million, of the total population in Germany in 2010. They are estimated to have spent $10.2 billion on food and beverages in 2015, up from $9.8 billion in 2014, and this spend is expected to reach $12.3 billion in 2021 based on a 3.2 percent CAGR.

An estimated 80 percent of Germany’s Muslim population follows a strict Islamic diet, according to Euromonitor International, and a robust halal ecosystem has developed to serve the community’s dietary needs.

Zabihah.com lists 238 halal food restaurants and retail outlets in Germany, and the Halal Expo in Stuttgart mentioned over 400 halal-related companies in the country. Germany’s domestic halal market is supported by notable halal certification organizations, including the European Institute of Halal Certification and the Islamic Centre Aachen.

Halal certifiers

The European Institute of Halal Certification (EHZ) was established by the Council of Islamic Scholars in 2000 and supported by the Islamic Council for the Federal Republic of Germany and the Alliance of the Islamic Communities in Northern Germany. It is a member of the International Halal Integrity Alliance and World Halal Food Council.

Companies certified by the EHZ include Alpavit, Bahlmann, and Brüninghoff. The organization’s website lists 21 halal-certified companies, as of this writing.

The Islamic Centre Aachen was founded in 1974 and is recognized by the World Halal Council, European Islamic Forum, World Health Organization, and Central Council of Muslims in Germany. The organization offers certificates for single products and companies and uses a modern analysis system by an independent laboratory to control certified products. It has certified products from international players including Nestlé, Bayer AG, Muller, and Dr.Oetker. The organization’s website lists 46 companies as references for certified halal products, as of this writing.

Germany is set up to export to OIC markets and serves as a key access route to the European market.

The federal republic exported $205 million in meat and live animals to OIC countries in 2015, with largest importers including Turkey and Uzbekistan, which bought $60 million and $20 million in meat and live animals, respectively, in 2015.

At $4 billion in 2015, Germany’s overall exports to OIC markets are small compared to Brazil’s, but the country has an important role to play in serving the broader needs of Muslims in the European Union, who comprised 3.8 percent of the bloc’s population in 2010, implying an estimated 19.3 million Muslims out of a total EU-wide population of 509 million in 2015.

CHALLENGES AND CONSIDERATIONS

The German halal food market is poised for growth, with a number of notable opportunities for food companies to enter the industry.

Germany will be a key access route to the European Union, especially after UK’s Brexit.

Players in the UK halal food market are considering Germany as a step toward international expansion. UK-based Halal Exotic Meats founder Ebrahim Adam told Salaam Gateway, “We get so many emails from Europe asking for us to ship our products; we will very likely start shipping to Germany as a next step.”

After Brexit, UK halal businesses may have to establish operations in Germany for access to the EU common market and to mitigate the consequences of adverse trade. Rizvan Khalid of Euro Quality Lambs hinted that the company’s plans to enter Ireland was a EU-based strategy, commenting that this step was key so that the company can access the broader market.

Though the influx of refugees has fueled tension, it necessitates a halal food ecosystem that goes beyond retail food.

Germany has welcomed over 1 million refugees, a large number of whom are Muslims displaced by the war with Syria. Recent acts of terrorism in Germany has led to a backlash among the local population, with a rise in negative sentiment against Muslims.

However, because of the substantial shifts in Germany’s demographics, the halal ecosystem needs to be robust to meet the needs of Muslims across various lifestyle touchpoints. These include education, healthcare, travel, cosmetics, and pharmaceuticals, and opportunities need to be provided for catering firms, ingredients manufacturers, and non-food-products manufacturers to participate and substantially benefit from the halal industry in Germany.

© SalaamGateway.com 2016 All Rights Reserved