Vietnam Poised to Lead Global Halal Food Market

Vietnam is emerging as a strong contender in the global halal food market, with its extensive agricultural resources and strategic location in Southeast Asia. As a leading exporter of rice, seafood, coffee, and tropical fruits, the country has untapped potential to meet the rising global demand for halal-certified products. While Vietnam has made strides in positioning itself in the halal market, a recent conference on promoting halal trade highlighted the challenges that still need to be addressed to unlock its full potential.

With the halal food market projected to grow to $15 trillion by 2050, Vietnam has the opportunity to establish itself as a key player. However, achieving this requires addressing certification gaps, logistical challenges, and market-specific preferences.

Dig deeper: Vietnamese Firms Vying For Halal Food Market Globally

The Expanding Global Halal Market

The global halal food market is one of the fastest-growing sectors in the food industry. Driven by a growing Muslim population, which currently exceeds 2 billion people worldwide, the demand for halal-certified products is at an all-time high. According to the Pew Research Center, the Muslim population is expected to grow to 2.76 billion by 2050, making up nearly 30% of the global population.

Key Growth Drivers

1. Muslim Consumer Spending: According to the State of the Global Islamic Economy Report, Muslim spending on halal food and beverages was approximately $1.27 trillion in 2021 and is forecasted to grow significantly in the coming decades.
2. Rising Non-Muslim Demand: Halal food is gaining popularity among non-Muslim consumers due to its reputation for quality, hygiene, and ethical sourcing.
3. Urbanization and Rising Incomes: Increasing incomes in Muslim-majority countries, particularly in the Middle East and Southeast Asia, are driving higher consumption of premium halal-certified products.
4. Government Initiatives: Countries like the UAE, Saudi Arabia, and Malaysia are developing robust halal ecosystems, increasing the demand for halal-certified imports.

These factors underline the significant opportunities for Vietnam to tap into a lucrative and expanding market.

Vietnam’s Position in the Global Halal Food Market

Despite being among the top 20 food exporters globally, Vietnam’s participation in the halal market is still modest. The country has yet to rank among the top 30 halal food suppliers worldwide, even though it possesses many of the necessary resources to succeed.

Key Strengths

• Agricultural Exports: Vietnam is a global leader in exporting rice, seafood, coffee, and cashews—all of which align well with halal dietary requirements.
• Strategic Location: Vietnam’s proximity to major Muslim markets such as Indonesia, Malaysia, and the Middle East positions it ideally for trade.
• Government Support: Recent policy initiatives signal a growing recognition of the halal market’s importance to Vietnam’s economy.

However, Vietnam must address challenges such as certification limitations, logistical hurdles, and cultural adaptation to succeed in the global halal food market.

Challenges to Overcome

Limited Halal Certification Infrastructure

Vietnam has only one internationally recognized halal certification body: the Halal Certification Agency (HCA) Vietnam. This limits the ability of Vietnamese businesses to meet the stringent requirements of global markets. In comparison, countries like Malaysia and Indonesia have multiple well-established and internationally respected certification agencies.

Market Understanding and Adaptation

Entering Muslim-majority markets requires more than halal certification. Vietnamese exporters must adapt to the distinct tastes, packaging preferences, and purchasing behaviors of these markets. For instance:

• Middle Eastern consumers prefer bold flavors and visually appealing packaging.
• African markets demand affordable, bulk packaging due to limited purchasing power in many regions.

Logistical Barriers

Shipping costs, long transport times, and uneven infrastructure in target markets pose logistical challenges. Maintaining the quality and freshness of halal-certified products during transportation is particularly critical.

High Costs of Compliance

Meeting halal certification standards involves significant investments in production infrastructure, raw materials, and training. For small and medium-sized enterprises (SMEs), these costs can be prohibitive.

Opportunities for Growth

Vietnam’s strengths, combined with favorable market conditions, provide several opportunities for growth in the global halal food market:

Vietnam is one of the world’s largest exporters of seafood, a product in high demand among Muslim consumers. By obtaining halal certification for its seafood products, Vietnam could dominate this niche.

Tropical fruits, coffee, and cashews are popular Vietnamese exports that, when halal-certified, could gain significant traction in Muslim-majority markets.

E-commerce platforms tailored for halal products, such as HalalStreet.co.uk and MuslimPro Market, offer Vietnamese businesses an efficient way to reach global consumers. Leveraging these platforms can help Vietnamese producers overcome geographical and logistical barriers.

Vietnam can draw inspiration from neighboring countries that have successfully established themselves in the halal market.

Malaysia’s Department of Islamic Development Malaysia (JAKIM) is considered a gold standard in halal certification. Its rigorous standards and strong branding have made Malaysia a trusted name in Muslim-majority markets.

With the world’s largest Muslim population, Indonesia has streamlined its halal certification processes through the Halal Product Assurance Organizing Agency (BPJPH). Subsidies and training programs support producers in meeting certification requirements.

Thailand has positioned itself as the “Kitchen of the World” by integrating halal-certified products into its global exports. The country’s marketing and trade promotion focus has significantly boosted its halal sector.

Vietnam’s National Strategy for the Halal Market

In February 2023, Vietnam’s government approved a comprehensive National Halal Development Strategy to strengthen the country’s position in the global halal food market by 2030. This strategy outlines key objectives to support businesses and promote international cooperation.

Key Components of the Strategy

1. Expanding Certification Capabilities

   • Establish additional halal certification bodies to meet rising demand.
   • Collaborate with internationally recognized agencies like JAKIM and BPJPH.

2. Enhancing Trade Promotion

   • Facilitate participation in international halal trade fairs and forums.
   • Encourage businesses to explore export opportunities in emerging markets.

3. Supporting SMEs

   • Provide financial assistance to small businesses to meet halal compliance costs.
   • Offer training programs to educate producers on halal standards and market-specific requirements.

4. Investing in Logistics

   • Develop cold chain infrastructure to preserve product quality.
   • Modernize port facilities to streamline shipping.

Actionable Recommendations

To fully unlock its potential in the global halal food market, Vietnam must adopt a multi-faceted approach:

• Increase the number of halal certification bodies recognized by international markets.
• Establish partnerships with global certification agencies for better credibility.
• Conduct consumer research to understand preferences in key markets.
• Tailor product flavors, packaging, and branding to meet market-specific needs.
• Build modern logistics systems to reduce transport times and maintain product quality.
• Expand cold chain networks to support perishable halal goods.
• Collaborate with private sector stakeholders to co-invest in halal infrastructure and innovation.

Technological Innovations in Halal Trade

Blockchain technology can enhance transparency by tracking halal compliance throughout the supply chain, ensuring consumer trust and confidence.

Artificial intelligence can analyze consumer trends and predict demand, helping businesses tailor their offerings to specific regions.

Social media platforms and e-commerce websites provide cost-effective channels for promoting Vietnamese halal products globally.

Several Vietnamese businesses have already achieved success in the halal market:

1. Halal-Certified Rice: Vietnamese rice producers have successfully entered markets in Indonesia and Malaysia with halal-certified products.
2. Seafood Exports: Halal-certified Vietnamese seafood is gaining popularity in the UAE and other Gulf Cooperation Council (GCC) countries.
3. Processed Beverages: Vietnamese companies exporting halal-certified beverages have seen growing demand in ASEAN markets.

Vietnam is at a critical juncture in its journey to becoming a key player in the global halal food market. With its abundant resources, strategic location, and government support, the country has the potential to establish itself as a leading supplier of halal-certified products. However, achieving this vision will require addressing certification challenges, investing in infrastructure, and building strong international partnerships.

By leveraging its strengths, embracing innovation, and adopting a targeted strategy, Vietnam can transform its halal exports into a major driver of economic growth. The global halal market offers immense opportunities, and Vietnam is well-positioned to seize them.