In the increasingly competitive market, CPG companies face an ever growing challenge of standing out to reach more customers and increase sales. One way to do that for CPG companies is to get halal certification for their products.
Halal CPG certification is a process that ensures that a company’s products comply with the Islamic dietary laws and are suitable for Muslim consumers.
In this blog, we will discuss halal CPG certification for companies, alongside potential opportunities it can bring for businesses operating in the sector.
- 1 What are CPG Products?
- 2 How Does Halal CPG Certification Work for Companies?
- 3 Opportunities of Halal CPG Certification for Companies
- 4 Successful Case Studies
- 5 Help Us Guide You
- 6 Get in Touch
- 7 Featured Insights
- 8 Get in Touch
What are CPG Products?
Consumer Packaged Goods (CPG) products are items that are consumed or used frequently and have a short shelf life. They include food, beverages, cosmetics, personal care products, household products, and more.
CPG products are usually sold in supermarkets, convenience stores, online platforms, and other retail outlets. CPG products are also known as fast-moving consumer goods (FMCG) or consumer packaged goods (CPG).
Examples of CPG products are:
- Food: Bread, Milk, eggs, fruits, vegetables
- Beverages: Water, coffee, tea
- Personal care products: Soap, shampoo, toothpaste
- Household products: Laundry detergent, dish soap, bleach
- Medication: Pain relievers, allergy medication
How Does Halal CPG Certification Work for Companies?
Halal CPG certification for companies is a process that verifies that all CPG products meet the requirements of the Islamic consumption laws. These laws prohibit the consumption of certain foods and ingredients, such as pork, alcohol, blood, and animals that are not slaughtered according to the Islamic method.
In addition to that, halal certification also ensures that your products are free from any contamination or cross-contamination with non-halal substances during the production and processing stages.
To get halal certification, CPG companies need to apply to a reputable halal certification providing body such as the American Halal Foundation (AHF). The halal certification provider will conduct an audit of facilities, processes, ingredients, and documents to verify that the products sold by the CPG companies comply with the halal standards.
If the company is able to pass the audit, they will receive a halal certificate and a halal logo that they can display on their product labels and packaging. However, it should be noted that CPG companies will need to renew their halal certificate periodically to maintain their halal status.
Opportunities of Halal CPG Certification for Companies
Halal CPG certification for companies can enable the companies to target their wide range of products to a large Muslim segment, subsequently opening the door to many opportunities. Here are some of them:
1. Penetrate a growing population:
Getting halal certification can allow CPG companies to access a large and growing population of Muslim consumers who are looking for halal products. According to a report by DinarStandard, the global Muslim population is expected to reach 2.2 billion by 2030, accounting for 26% of the world’s population.
Moreover, the global halal market spending is also estimated to reach $7.7 trillion in 2030, out of which a significant portion will come from the CPG segment alone. This highlights a significant opportunity for CPG companies to increase their market share by offering halal certified products.
2. Export to Muslim countries:
Countries with predominantly Muslim populations, including Saudi Arabia, Malaysia, and Indonesia are experiencing economic growth and a notable increase in purchasing power. The Muslim countries are increasing their contribution to the global economy, which was 8% in 2013, but is expected to almost double by 2030.
All of these Muslim countries have stringent consumption laws, only importing products that are halal certified. Halal certification will enable CPG companies to enter these markets, where halal products are in high demand and halal regulations are mandatory. Therefore, by getting halal certified, CPG companies will be able to export to these growing markets successfully.
This presents a massive opportunity for CPG companies to diversify their customer base. CPG companies can significantly increase their sales and profits by expanding their customer base and reaching new segments.
3. Enhance brand resonance:
Halal certification can help to enhance a CPG company’s brand image by positioning it as a company that is ethical and socially responsible. This can be particularly appealing to Muslim consumers, who are increasingly looking for brands that align with their values.
Furthermore, CPG companies will also be able to differentiate themselves from the competitors and gain a competitive edge in the market as halal certification will help them stand out from the crowd and attract more loyal customers who resonate with their products.
Successful Case Studies
Some of the major CPG companies have embraced halal certification, and have consequently been able to substantially dominate the lucrative Muslim markets.
Here are examples of two such global brands:
Nestlé: Nestlé, the world’s largest food and beverage company, has been halal-certified for over 50 years. This certification has helped Nestlé to gain access to new markets and build trust with Muslim consumers.
PepsiCo: PepsiCo, another major food and beverage company, has also been halal-certified for many years. This certification has helped PepsiCo to expand its reach into Muslim markets and compete with local halal brands.
Help Us Guide You
Halal certification is a valuable opportunity for CPG companies wanting to grow their business and reach more customers. By getting halal certification for their products, CPG companies will not only be able to target the growing Muslim population globally, but also satisfy regulations to export to the booming Muslim countries.
However, to exploit all these opportunities, CPG companies will first need to get halal certification.
Get in touch with our experts at the American Halal Foundation (AHF) to help us guide you through the halal CPG certification process.