Fragmented landscape dents Canada's promising halal food space

With a sizeable Muslim population that has doubled in the last two decades and continues to grow, interest in Canada’s halal food sector has intensified, driven by a mix of rising Muslim demographics and growing mainstream interest in ethically-sourced foods. 

The Canadian halal meat sector, is forecasted to hit an estimated $300 million by 2031, growing at an annual rate of 10 to 15%, according to Salima Jivraj, account director and multicultural lead at Nourish Food Marketing, a marketing agency specializing in the food sector. 

The epicenter of debate, however, is the country’s fragmented certification landscape. The lack or absence of a single regulatory body has led to confusion, inconsistent standards, and widespread frustration among consumers and businesses alike. While these challenges remain mostly confined to the certification and labeling domain for now, their potential economic and social effects could reverberate far beyond, shaping industry practices and consumer trust for years to come.

Canada presents a rapidly expanding halal food industry
The Canadian halal food sector is no small niche, tied as it is to the influx of immigrants. The country welcomes roughly half a million new immigrants each year, according to the Canadian government's stated goals, a sizeable percentage of whom reportedly spend over $1 billion on halal products annually.  

This is in line with global trends. According to Salaam Gateway's State of the Global Economy Report 2023/24, Muslim spending on food increased by 9.6% in 2022, reaching US$1.4 trillion, and is forecasted to reach US$1.89 trillion by 2027, growing at a CAGR of 6.1%.

While that is a significant increase in itself, what warrants attention is Canada’s position in the global meat trade, which forms the backbone of its domestic halal market. 

According to the United Nations COMTRADE Database, Canada imported approximately $2.58 billion worth of meat and edible meat offal in 2023 and exported $7.01 billion during the same period. 

Although these figures do not exclusively represent halal products, they highlight both the magnitude of the country’s meat sector and its capacity to supply and capitalize on international halal demand.

Regional dominance and emerging markets

Ontario and Quebec have traditionally led the halal food scene in Canada. Their significant Muslim communities underpin a robust ecosystem of halal-certified retailers, restaurants, and specialized grocers. However, provinces such as Alberta and British Columbia are fast catching up, propelled by higher immigration levels and rising consumer curiosity for speciality foods.

With the addition of e-commerce platforms and delivery services such as Uber Eats and Instacart, the reach and scale of halal items continues to grow. 

Industry giants and public sentiment

The potential of the halal food sector has led to big brands entering the market with mixed results. In May 2023, KFC Canada found itself at the center of social media backlash after reports suggested certain Ontario locations might switch to serving halal-only chicken. 

Other big brands such as Popeyes, Mary Brown, Boston Pizza, and Osmow’s have likewise introduced halal items at select outlets. Yet, they do not consistently disclose all measures taken to prevent cross-contamination, often prompting skepticism among observant consumers. 

On a consumer level, the push toward authentic halal offerings is manifesting in shifting brand perceptions, deeper skepticism of incomplete claims, and renewed calls for a more credible regulatory framework. 

While critics decry what they see as inadequate transparency, supporters point to this being a step in the right direction. While not all stages of the halal food process are certified, the moment still marks an inflection point for notable commercial brands entering the halal food market.  As Canada’s Muslim population climbs - reaching nearly 5% of the total population by 2021, as per Statistics Canada - producing and marketing halal options can be highly lucrative. 

Jivraj also pointed out that KFC’s halal offerings were part of a broader trend driven not just by population growth but also by increased interest among non-Muslim Canadians. 

"The criticism came mostly from a vocal minority amplified by social media," she explained, adding that poultry is a leading product in Canada’s halal sector, which she estimated to be worth about $1.5 billion. 

"Restaurants, fast food chains, grocers, and food manufacturers are increasingly exploring this space," Jivraj said. "This growth is being driven by both Muslim consumers and non-Muslims who recognize halal certification as a value-added quality marker."

However, integrating halal production into existing operations requires strategic planning and expertise. "Success depends on finding the right partners and understanding the nuances of the halal market," she explained. "Every business is different, and so the approach needs to be tailored."

Fragmented certification landscape
Despite reason for much optimism, Canada’s halal industry faces a critical dilemma: the absence of a unified, nationwide certification standard.

Currently, the Canadian Food Inspection Agency (CFIA) requires products labeled as halal to be certified but does not regulate the certifiers themselves. 

Current oversight relies on independent entities such as the Islamic Food and Nutrition Council of Canada (IFANCC), the Halal Monitoring Authority (HMA), and the Halal Advisory Group (HAG). 

“It’s a big challenge,” said HMA’s COO, Omar Subedar, emphasizing that without a comprehensive and uniform certification process, consumer trust can be compromised. 

To receive halal certification, products must undergo a thorough evaluation by an accredited halal-certifying organization. This involves a detailed review of the entire supply chain and manufacturing process to ensure that no elements or practices compromise the halal integrity through cross-contamination. 

The nuances extend beyond slaughtering protocols; cross-contamination, permissible feed for farmed seafood, and inclusion of non-halal ingredients like pork-based gelatin can all invalidate a product’s halal status if not carefully managed.

While the steps involved in certification are generally clear-cut, there is currently no universally accepted global authority governing halal certification. 

Critics argue that this fractured system 'dupes' consumers, who may believe that simply using halal meat is enough to ensure compliance. In reality, even minor contamination by non-halal substances - ranging from pork-based additives to cooking oils shared with non-halal items - can invalidate the halal status. 

Subedar and fellow members of the Canadian Council for Muslim Theologians corroborated this in 2004 by conducting a wide-ranging assessment of the halal meat sector. 

A parallel to broader regulatory realities
The closest example of a solution for Canada’s halal food labeling dilemma is the US, where the state of New Jersey has the Halal Food Consumer Protection Act. This act allows legal repercussions if companies mislabel or falsely advertise halal status. 

The lack or absence of a standard regulating body has repercussions that extend beyond the border and affect Canadian halal exports as well. Advocates for greater consistency point out that ongoing confusion can also stifle exports to Muslim-majority nations. Globally, there is no single, universally recognized halal certification authority. 

Countries such as Indonesia, Malaysia, Turkiye, and the United Arab Emirates require certifications from specific government-approved agencies. 

Canadian producers who wish to export often find themselves juggling multiple certifications, each with varying definitions of what constitutes halal. Failure to meet any of these sets of rules risks losing out on promising foreign markets that have a growing appetite for Canada’s high-quality products.

What's in store for halal food brands?
The future of Canada’s halal food industry hinges on its long-term halal food outlook with industry leaders remaining bullish. 

Driven by a younger generation of Muslims seeking convenient, read-to-eat halal foods that fit modern lifestyles, Agriculture and Agri-Food Canada projects the Canadian halal food sector primed for entrepreneurship and innovation. 

Analysts expect the Canadian halal food and beverage market - already pegged at $1 billion to $2.6 billion, depending on the forecast - to rise at a double-digit rate in the coming years.

According to Sayarun Nessa, director at Halal Commerce Canada Inc., investments in blockchain solutions and IoT (Internet of Things) can streamline the halal supply chain.

“Without a reliable system to trace a halal product from farm to fork, confusion will persist,” she states, underscoring the potential for technology-driven transparency to address fraud and unify protocols.

These developments highlight the promising potential of the halal food sector in Canada despite the need for transparency, oversight, and collaborative efforts among certifiers, government bodies, and industry stakeholders.