How much potential does the halal market have for growth in retail? It’s a question worth asking, considering there were 4.1m Muslims living in the UK in 2016, according to the Pew Research Center, and that figure continues to grow every year.
It’s also a sector that is relatively untapped, at least when it comes to meat, despite some estimates valuing sales in excess of £3bn in the UK. Traditionally, those seeking halal chicken, lamb and beef have turned to speciality butchers, rather than the big supermarkets, but a new generation of Muslims offers the opportunity to change that dynamic.
Noman Khawaja and Imran Kausar have examined the statistics and founded a business upon this new wave of halal eaters. Haloodies targets millennial Muslims, who are cash rich, time poor and in search of convenience.
The pair started with raw meat as the most commonly consumed halal segment in the UK. Launching on Ocado in 2014, Haloodies continues to be the online grocer’s exclusive fresh halal supplier.
A couple of years later, the company broke into bricks and mortar, supplying cooked chicken items to Tesco, after research by Kantar revealed that 17% of poultry sales were ready-to-eat chicken – but with little to no existing halal equivalents.
“Typically in cooked chicken, there was a lot of sliced cooked meats, pastramis, chicken slices, that were mechanically put together, very high salt content, low nutritional value, and they were not in keeping with what Muslims needs were,” explains Khawaja.
Jumping onto food-to-go growth, he and his partner dabbled with a pair of grab-and-go options last year. Most recently, they have turned their attention to premium frozen beef burgers. Created with meat manufacture Kepac, the patties debuted in Morrisons just a few weeks ago.
So having tested the waters in a whole bunch of categories, what does Khawaja see as the most promising area for halal expansion?
The answer, simply, is everywhere.
“We’re really only at the seed phase of the fresh halal meat in retail packs,” comments Khawaja. “And similarly for cooked chicken, the market’s only two years old.”
While he says the growth in sales of Haloodies’ cooked products is strong, the fact that it is such a young sector has been a challenge, as they are essentially carving out a new space. Fresh items, on the other hand, have been around for generations – it’s more a case of converting customers.
“Around 60% of Muslims still go to their halal butcher,” notes Khawaja, who believes that millennial consumers would rather opt for convenience and buy meat during their regular supermarket shop if they felt comfortable with the provenance of the goods.
Indeed, qualitative data from a report published by the Agriculture and Horticulture Development Board in 2010 found Muslim shoppers turned to major supermarkets for grocery staples, household goods, fresh fruit and veg, fish – in fact, almost everything excluding meat, spices and speciality items not widely available in the big retailers.
Haloodies new move into the frozen aisle with a premium beef burger is part of the brand’s plan to increase reach through longer shelf life and transportability.
“Frozen does add a certain level of efficiency to your supply chain,” remarks Khawaja.
“When we looked into the market there was no quality halal burger out there,” he adds, noting that his version contains a high percentage of meat.
The sales of Haloodies’ fresh beef burgers were already relatively high, while figures from Kantar indicating that burgers generally were a strong segment, encouraging the frozen NPD.
“We do have an opportunity to create burgers from other species, such as lamb and chicken, in the future,” adds Khawaja,“but the main gap at the moment is the beef burger.”
While British halal eaters are an exciting opportunity, there is much larger international potential awaiting UK companies. The global halal food market will be worth almost $2tn by 2022, according to a 2017 report produced by Thomson Reuters, up from $1.2tn in 2016.
Khawaja wants Haloodies to take a chunk of that. Headquartered in London, his initial focus is nearby France and Germany, though he has also had discussions about entering the Middle East, with longer-term dreams for Indonesia, Malaysia and Pakistan.
When asked how a British-based outfit like Haloodies can compete with businesses that are native, established halal manufacturers in Southeast Asia, Khawaja states that it’s about creating quality and confidence.
“There are hundreds of companies that will produce halal products, but that’s a massive different between having a brand and producing halal products,” he explains, pointing out that every nation might have its chip producers, but there’s a certain international reputation associated with a company like McCain, for example.
To foster trust with its customers, his company has a system of inspectors to ensure that the halal-certified goods they receive are properly handled, from the abattoir to the processing plant, before they end up stamped with the Haloodies brand.
Educating both Muslims and non-Muslims about what halal means would also benefit growth, according to Khawaja. There’s a certain assurance associated with terms like organic, for example, which imply that a quality control process has taken place. The same could be true for halal if more people were made aware of the regulations that govern its manufacture.
An article in the Guardian earlier this year suggested that purchases around Ramadan alone are worth at least £200m each year in the UK, with three-quarters of British Muslims saying that supermarket chains did not promote enough around the event. Considering those figures, it’s not surprising that Khawaja is confident in the future of his halal business.
“I only see the market growing,” he concludes.