Creating Global Competitiveness through Culture and Religion: An Insight into the Global Strategic Evolution and Marketing of the Halal Food Industry

Creating Global Competitiveness through Culture and Religion: An Insight into the Global Strategic Evolution and Marketing of the Halal Food Industry

Angelo A. Camillo (Woodbury University, USA), Svetlana Holt (Woodbury University, USA), Joan Marques (Woodbury University, USA) and Jianli Hu (California State Polytechnic University, Pomona, USA)
DOI: 10.4018/978-1-4666-6220-9.ch019
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Abstract

The Halal food industry is of fundamental significance to Muslims around the world as it assures safety and security in their dietary requirements and consumption, which must be Syariah compliant. In Muslim countries especially, the Halal industry is a vital contributor to societal development and national economic growth. Additionally, over the last decade marketers around the globe, too, have been strategically promoting and strengthening the Halal food industry by targeting primarily critical geographic clusters with large Muslim populations. Although the production, certification, and global coordination effort appears to be made largely by Malaysian and Indonesian authorities, the industry is still very fragmented, and scholars attempting to obtain reliable and valid data face serious challenges. Nevertheless, data gathered from non-academic sources indicate that the global Halal market (food and non-food) is estimated to be in excess of US $2.3 trillion, and the volume of the global Halal food sector alone is reaching US $700 billion annually. The portion of the non-food sector is estimated to be even greater, with chemical, healthcare, cosmetics, and pharmaceutical industries to name just a few. Furthermore, the Syariah compliant services, which include finance and banking, logistic, warehousing, and distribution, are rapidly gaining acceptance in the global Halal market. The Halal industry within the global context is an under researched field of study in scientific literature, in business, and in social science. This chapter investigates the strategies used by marketers to globalize the Halal food industry with the aim to gain and sustain international competitive advantage.
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Introduction

The Halal food industry is of fundamental significance to Muslims around the world as it assures safety and security in their dietary requirements and consumption which must be Syariah compliant (Mukhtar & Muhammad, 2012; Rarick et al, 2012). Particularly in Muslim countries, the Halal industry is a vital contributor to societal development and national economic growth. However, over the last decade marketers have been also strategically promoting and intensifying the Halal food industry around the globe by targeting primarily critical geographic clusters with large Muslim populations (Tournois & Aoun, 2012). The latest country in the European cluster to add this food to the supply chain was Italy when it announced it had approved the production and distribution of Halal foods due to the increasing demand by specific ethnic population which includes 1.2 million Muslims. Since May, 2011 this initiative has created competitive advantage over its rivals and gained substantial market share in the Italian economy (HIA, 2011). This industry is still very fragmented and scholars attempting to obtain reliable and valid data face serious challenges. According to non-academic literature, the production, certification and global coordination effort appears to be made largely by Malaysian and Indonesian authorities.

Data gathered from non-academic sources indicate the global Halal market (food and non-food) is estimated to be in excess of US$2.3 trillion and the volume of the global halal food sector alone is reaching US$700 billion annually (WHF, 2013). The portion of the non-food sector is even greater, and includes industries such as chemical, healthcare, cosmetics, personal care and pharmaceutical. In addition, there is evidence of an aggressive promotional effort by related industries which are gaining acceptance in the global Halal market: the Sharia compliant services which include banking and finance, logistics, warehousing and distribution (WHF, 2013).

Within the rapid expansion and evolution of Halal food markets in Europe and in the Americas, Malaysia especially is recognized as a dynamic International Halal Food Hub. It may have gained strategic advantage as the premier Halal food supply due to its strategic “first mover’s advantage” for the global certification center which makes it the ideal platform for the global food market. There is, however, increasing competition for market share between Indonesia, Pakistan, Malaysia, Singapore, New Zealand and Australia, among other small new entrants. To illustrate partially the size of the growing geographic clusters, the Malaysian Certification Authority “JAKIM” (Department of Islamic Development Malaysia), currently recognizes fifty-seven certification bodies in thirty-one countries (JAKIM, 2012).

Other certification authorities in Indonesia, South Africa, Pakistan, and Singapore certify the same agencies as Malaysia across the globe, thus giving these agencies a stronger assurance of quality, authenticity, and compliance with Halal standards. In order to benefit from multiple certifications, many authorities, such as the Italian Halal Authority, and producers must have the approval of four Global Halal authorities giving the Italian consumers the highest assurance of compliance with Halal law. Based on these observations, we investigate the applied strategies driving this industry’s dynamic growth. Published literature within the global context of Halal strategic marketing, although limited, shows the dominant factors for this rapidly expanding and evolutionary phenomenon have direct relationship to primary health-related factors, such as the need to reduce morbidity and mortality rates caused by food related fatal diseases.

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