Look out, they're going halal

BRUNEI is among Southeast Asian countries that have been eyeing a big slice of the global halal market. But while the region has been noted to have held the leadership position in the halal industry for years now, food giants in the Middle East and the West have taken notice of how halal production can broaden their market reach and there are signs they can be a force to reckon with if the region takes its sweet time in walking the talk.

We sit down with Abdalhamid David Evans, a senior analyst at Imarat Consultants, for a lowdown on the goings-on in the halal industry. Abdalhamid works on a consultancy basis with the Ministry of Primary and Industry Resources on Brunei's halal initiative, as well as organiser of this year's International Halal Products Expo. Below are excerpts of our conversation.

BT: What is going on with the halal industry at the moment?

Abdalhamid: The real thing that one saw this year was that the whole industry is really about to enter another phase. There's been a lot of talking and planning over the last few years, and now we're starting to see several things: the leadership position which was taken by Southeast Asia and from these countries (Malaysia, Brunei, Singapore, Indonesia and Thailand), they were involved with really driving the halal initiative at government level, and are looking at halal as the engine of growth for their domestic economies.

So a lot of initiatives, talks and plans were done over the last few years, but with a very Southeast Asian focus. So the rest of the world has been listening, and also paying attention to the things that have happened in Southeast Asia. So we're now seeing developments happening in the Gulf Cooperation Council (GCC) region, and also from the Western world in Europe and the US.

I think part of what we're seeing is that a lot of the initiatives which have been talked about and followed on Southeast Asia, other parts of the world are now taking halal seriously. We're now seeing input, ideas and projects coming out of the Middle East, and also out of Europe and America. I think in a way these things are going to challenge Southeast Asia as the prime movers in the halal industry.

So you're saying that previously Southeast Asia has been taking the leadership position. Not the Middle East.

No. They import most of their food. I'd say there is a fairly superficial check about whether the food was halal. So once it was in the country they just think everything's halal, no need to worry about it. They didn't have that much of their own domestic industry. And in terms of their own domestic market, they didn't bother having halal certification. It was just you know, "Saudi food is Saudi food".

And now?

Now that they're going into the global market, they're looking at developing their own and following the lead in Southeast Asia. The GCC and the Arabian countries are now focusing much more on halal and are realising that they need to get engaged in halal certification in order to put their products on the export market.

How are the Western countries opening up to halal?

In terms of leading the world, it has been Southeast Asia in the driving seat for the past five years, but we now feel that this is changing. We've been involved in the Middle East, we have an office in the US and Canada, and we're working very closely with the initiatives that are being developed there and there's hot stuff coming out from that part of the world.

For example, Crescent Foods in Chicago recently started selling their products to Walmart. Walmart is the world's largest retailer. In order to sell to Walmart, all your production processes, your computer systems etc, all these things have to be at the same level of sophistication as Walmart's. Otherwise, they're not going to take your products. So, these kinds of smaller businesses in the US are gearing up to sell to the mainstream, and this has forced them to raise their production standards and getting compliance with the highest levels of health and safety.

This means that we know that businesses are now operating at a level of efficiency within the halal industry, coming out of North America and Canada. This is kind of a new development.

One of the other developments that we've seen, particularly with the recession and the downturn of the economy, is that some mainstream food producers are looking at halal as a way of accessing new markets, and as a way of easing the recession. Some of them are even looking at it as a way of avoiding bankruptcy. For some of the big corporations that are in trouble, their food producers are looking at halal as an avenue for rescuing their companies because what people have realised is that if you produce halal, you can sell it to everybody.

The message that's going out, is that halal is not just for the Muslims... You may package the same product in different ways ... but the bottom line the corporate management thinking is that "we go halal, we can sell it to everybody".

What's interesting is that now you see large American corporations kind of digesting that message and gearing their own production to make their products available to everybody.

Could you elaborate more on the rise of halal initiatives, ideas and projects coming out from the West, and how this will challenge Southeast Asia's leadership position?

The standards of production, product choice, marketing skills and market research if you look at it globally, Southeast Asia is somewhat behind in that respect. It's harder for a Southeast Asian company to go global than for a global western corporation to go halal. The challenge for Southeast Asia is, really, to be able to walk the talk. They really need to be able to cash in and implement the implications of the ideas they have been talking about because otherwise they are in danger of being squeezed out of their own market by some of the big corporate players.

It's very much to do with market research, product development, production efficiency and packaging. These are the core areas that producers in the region have to look at. And not to forget in Southeast Asia there are a lot of SMEs and micro-enterprises. They're not just small but they're very small, kind of cottage industries. So there is a big challenge for the governments to find ways to nurture and in that sense, this is very much a challenge in Brunei how to nurture the private sector and SMEs in order to be able to take advantage of the opportunities in the market. The Brunei Times