Why is halal certification important? This is a stand out question among many businesses globally, particularly those with an audience among muslim-majority regions, but certainly not limited to.
“I consider manufacturers and brands with customers already requesting halal certification to be incredibly fortunate. Just think about the numerous sales opportunities that never even reach many companies, flowing instead to brands that are already halal-certified” – Mohammad Hussaini, Vice President, American Halal Foundation
Halal certification is crucial today because it’s the only certification that can open doors to a global market of 2 billion consumers, who also represent the fastest-growing consumer segment.
To put it into further context, in this article, we are diving into the opportunity costs of not being halal-certified for businesses.
1. Lost Market Share in Muslim-Majority Regions
Without halal certification, companies will struggle to enter or fully capitalize on Muslim-majority markets like Southeast Asia, Middle East, and Subcontinent, where halal certification is legally or culturally required.
For Muslim consumers, halal certification is a guarantee that a product aligns with their religious and ethical values. Without it, brands may appear less trustworthy and lose potential customers.
2. Missed Revenue Opportunities
Being halal-certified opens doors to a massive and rapidly growing segment covering food, cosmetics, pharmaceuticals, and packaging.
Certified products attract not only Muslim consumers but also non-Muslims who often view halal as a confirmation of cleanliness and in some cases, vegetarian friendly. Therefore, without halal certification, brands don’t only miss out on a very loyal Muslim consumer base, but also other diverse consumer groups.
Read More: 5 Ways Halal Certification Increases Revenues
3. Competitive Disadvantage
If your competitors are halal-certified, they have a clear advantage in markets sensitive to halal requirements. Not having certification can position your business as less competitive in the eyes of key buyers and distributors.
Many major retailers and distributors catering to Muslim consumers prioritize halal-certified products, which means non-certified products may struggle to secure shelf space in these stores.
4. Negative Brand Perception
Brands that skip halal certification might be perceived as less transparent, especially in regions where halal compliance is expected. This can lead to reduced loyalty and a harder time building brand equity in these markets.
Companies that claim to cater to Muslim consumers but lack halal certification risk backlash or boycotts, particularly if their products are found to contain questionable ingredients.
5. Inability to Access B2B Opportunities
Many B2B partners in the food, cosmetic, and pharmaceutical industries have strict halal requirements. Without certification, businesses may be overlooked for contracts with suppliers, distributors, and even government bodies.
Halal certification is often a prerequisite for public procurement in Muslim-majority countries and also in many non-Muslim countries (i.e: USA) now. Missing out on this can lead to lost government contracts and large-scale opportunities.
Check Out: Government Facilities & Programs Halal Certification
6. Lost Cost-Savings through Supply Chain Efficiency
Having a halal-certified supply chain ensures consistency and can reduce logistical costs related to managing separate inventories or processes for different markets.
Many certifications, such as halal and FSSC 22000, can be integrated for cost-effectiveness. By not certifying, companies miss the chance to streamline processes and reduce redundant audits, which can save money.
7. Missed Marketing and Branding Opportunities
Halal certification is increasingly recognized globally and carries positive connotations of quality, hygiene, and trustworthiness. Without this label, products lose out on a key marketing asset that resonates with a large audience.
With many consumers actively searching for halal products online, being halal-certified can boost online visibility, leading to increased traffic and conversions.
Read More: 7 Ways Halal Marketing is Helping Businesses Gain Competitive Edge
8. Impact on Long-Term Business Sustainability
With many countries (i.e: Indonesia) planning to implement stricter halal regulations, not getting certified now could mean more costly adjustments in the future, especially if legislation mandates halal compliance.
Early certification helps businesses establish robust systems and brand loyalty, paving the way for easier compliance with future standards and maintaining competitive positioning.
Wrapping Up
The opportunity cost of not being halal-certified is significant in both immediate and long-term impacts.
From revenue loss to reputational risks and limited market access, uncertified companies risk losing more than just potential profits; they lose relevance in a changing, halal-conscious global economy.
Here’s a table summarizing the opportunity cost of not being halal certified:
| Aspect | With Halal Certification | Without Halal Certification | Opportunity Cost |
| Market Access | Full entry to Muslim-majority markets | Limited or no entry | Lost sales & growth potential |
| Revenue Opportunities | Access to a $2 trillion global market | Missed revenue from halal markets | Decreased revenue |
| Competitiveness | Strong edge in sensitive markets | Weak positioning against competitors | Lower market share |
| Brand Perception | High trust and loyalty | Risk of mistrust and backlash | Reduced customer loyalty |
| B2B Partnerships | More contracts with distributors & suppliers | Fewer opportunities for partnerships | Lost contracts & partnerships |
| Supply Chain Efficiency | Integrated halal processes, cost savings | Separate processes, higher costs | Increased operational costs |
| Marketing Potential | Boosted brand visibility & trust | Less brand recognition | Lower online traffic & conversions |
| Long-Term Sustainability | Future-proofed for halal regulations | Higher future compliance costs | Expensive adjustments later |
If you’re interested in exploring halal certification for your brand, call one of our development executives at +1-(630)-759-4981.
Frequently Asked Questions (FAQs)
Q1. What are the main benefits of being halal-certified?
A: The primary benefits of halal certification include access to a growing global market, increased revenue potential, competitive advantage, and a stronger brand reputation.
Q2. What is the opportunity cost of not being halal-certified?
A: Companies without halal certification miss out on substantial business opportunities, including limited access to Muslim-majority markets, loss of consumer trust, and a competitive disadvantage against certified brands. This translates to lower revenue and brand reach.
Q3. Does halal certification only benefit food companies?
A: No, halal certification is valuable for various industries, including cosmetics, pharmaceuticals, and logistics. Consumers increasingly seek halal products beyond food, and certification assures compliance in these sectors as well, broadening market reach.
Q4. How much does it cost to get halal certified
A: The cost of halal certification varies depending on the product, company size, and certifying body. Obtain a quote here!
Q5. Is the AHF halal certification recognized worldwide?
A: Yes, the AHF halal certification is internationally recognized. It is highly recommended to partner with a globally accredited certifying body to ensure compliance across different markets and smooth entry into international regions.
Q6. How to start the halal certification process?
A: The first step is to complete the online halal application to qualify your products and facility. Within 8 to 36 working hours of completing the application, an Account Executive will get in touch with a customized proposal and agreement to initiate the halal certification process.
Mohammad Hussaini is the executive director of the American Halal Foundation and is dedicated to working with brands globally to achieve halal certification. With a dynamic background and experience in marketing, finance, compliance, and business development, he takes a multi-disciplinary approach to helping bridge the trust bridge between brands and halal consumers, thus driving growth for AHF’s clients.
