MarketTrend: Kosher- and Halal-Certified Foods in the U.S.

The report discusses the many similarities between kosher and halal foods:

• Both involve dietary laws derived from ancient sacred texts
• Ritual slaughter emphasizes respect for the animal
• Forbidden ingredients include those derived from human hair, bird feathers, and other unsavory sources that are acceptable to U.S. government agencies
• Standards for food production are far more rigorous than those required by the U.S.

Important differences are also addressed:

• The Jewish population in the United States is small - less than 2% - and is expected to decline, both in the U.S. and worldwide.
• A significant percentage of kosher consumers in America are not Jewish. They buy kosher because they believe it is safer, better, healthier.
• Muslims represent less than 1% of the U.S. population. Globally, on the other hand, one in five individuals practice the faith.
• "Halal" applies to all facets of Islamic life, from banking to toothpaste.
• Americans are largely unaware of the halal concept and its attractive attributes pertaining to food.

In MarketTrend: Kosher- and Halal-Certified Foods in the U.S., Packaged Facts maintains that the number of mainstream products that have obtained kosher certification has reached critical mass, and so has the share of consumers who deliberately seek out kosher foods. As for halal, few Americans have even heard of it. In order to grow these markets, companies must educate consumers about the benefits that define these foods and third-party certification thereof. Among the most promising prospects:

• The large number of consumers who are concerned about food safety and are skeptical about food labeling
• Those on gluten-free or meatless diets
• "Foodies"
• Asian Americans, who eat less dairy and drink less alcohol compared to the overall U.S. population
• Those who practice ethical consumerism

The kosher foods market has many facets and no definitive parameters, so accurate sales data are difficult to come by. Packaged Facts employs innovative methodologies to unravel the complexities of the market. By synthesizing information from government agencies, syndicated research services, and interviews with industry executives and consumers, Packaged Facts is able to provide sales data for the diverse segments of the market for certified kosher foods.

Specifically, Packaged Facts estimates that sales of certified kosher foods swelled from nearly $150 billion in 2003 to more than $200 billion in 2008, demonstrating a compound annual growth rate twice that of the overall food market. The increase is largely attributable to the rising number of certified products, as well as a growing number of consumers who deliberately seek out kosher foods. Packaged Facts does not see traditional or "ethnic" kosher foods contributing to market growth.

Packaged Facts forecasts the total market for certified kosher food will approach $260 billion, while sales of products that are purchased because they are kosher will fall between $14 billion (low estimate) and $17 billion (high estimate).

Because the concept of a market for certified halal foods is a fairly new phenomenon, Muslims compose a very small share of the U.S. population, and many of the countries that are home to large Muslim populations have just begun to monitor and quantify sales, hard data are virtually nonexistent. In MarketTrend: Kosher- and Halal-Certified Foods in the U.S., Packaged Facts examines all of the available data to draw a portrait of Muslims in the U.S, as followers of Islam, as Americans, and as consumers.

No other market research report provides the comprehensive analysis, extensive data, and unique insights on the similarities and differences in these two traditions of faith-based consumption. In particular, Packaged Facts analyzes opportunities for U.S. kosher and halal food producers to target mainstream Americans as well as promising niches like Asian Americans, ethical consumers, and "foodies."

About the Author

As a research analyst and business-to-business consultant since 1987, Lisa Schinhofen has written several dozen syndicated studies for Packaged Facts and for FIND/SVP (now Guideline), as well as monthly newsletters on several different topics, including credit cards, prepaid cards, and alternative payments.

Chapter 1: Executive Summary

The Basics

Scope of This Report

Methodology

Kosher Basics

Halal Basics

In both cases, ritual slaughter honors the animal

Certification

Figure 1-1: Sample Page of Application for Kosher Certification Vaad Hoeir of St. Louis

Figure 1-2: Selected Symbols Representing Kosher Certification, Halal Certification

Why certify?

A marketing claim with teeth

Table 1-1: Importance of Kosher Certification Symbol, by Type of Kosher Consumer (on a 1-10 scale), 2007

Certifiers provide publicity for their clients

Certification enhances export opportunities

Market Size and Growth

Kosher foods at $211 billion in 2008

Table 1-2: Total Food vs. Kosher Food Sales in U.S. Grocery Stores, 2003 and 2008 (in millions of dollars)

"Ethnic" brands don't seem to be driving growth

Sales of certified kosher foods forecast to surpass $260 billion by 2013

As a market, halal is in its infancy; growth is nurtured by nations with much to gain

Malaysian Ministry puts U.S. market at almost $12 billion

Canadian government urges businesses to enter halal food market

Market Factors and Trends

Muslim population in the U.S. is tiny; globally, it's huge

Table 1-3: Religious Affiliations, the United States and the World (percent)

Figure 1-3: Religious Affiliations, the United States and the World (percent)

"Kosher" connotes superior quality to consumers

Kosher and halal foods are more expensive

Product Trends

New kosher introductions jump by half in four years

Figure 1-4: Number of U.S. Food & Beverage Product Introductions: Kosher, 2004-2008

Halal is rarely used as a descriptor; new products difficult to quantify

The Consumer

Jewish consumers are educated and wealthy, but their numbers may be dwindling

Muslims in the U.S. are younger, households are larger

Demographics, Attitudes, and Preferences of U.S. Consumers of Selected Kosher Foods

Opportunities in Kosher and Halal Foods

Concerns About Food Safety and Integrity

Clearly labeled foods should appeal to gluten-free dieters

Meatless eating easier with kosher labeling

Kosher Consumers as Foodies

Table 1-4: Selected Psychographics: Kosher Consumers vs. Foodies, 2008 (index for U.S. adults who buy Hebrew National/Best's Kosher franks and index for foodie adults)

Figure 1-5: Agreement With Foodie Psychographic Statements, Kosher Consumers, 2008 (index for U.S. adults who buy Hebrew National/Best's Kosher franks and agree with selected psychographic statements Packaged Facts associates with foodies)

Asian Americans

Ethical Consumerism

Chapter 2: The Basics

Scope of This Report

Methodology

Kosher Basics

Meat must come from ruminants with cloven hooves

Figure 2-1: Kosher and Non-Kosher Cuts of Beef

Chicken is kosher, swans are not

Kosher fish have fins and scales

Ritual slaughter (shechita) honors the animal

Dietary practices isolate food groups

Kosherizing processed foods may be simple or arduous

Table 2-1: Selected Terminology Describing Kosher Dietary Laws

Halal Basics

Ritual slaughter (dhabihah) honors the animal

Table 2-2: Glossary of Selected Halal Terms

Table 2-3: Similarities and Distinctions Between Kosher and Halal

Certification

Kosher certification involves significant interaction between applicant and certifier

Figure 2-2: Sample Page of Application for Kosher Certification Vaad Hoeir of St. Louis

Halal certification resembles kosher in procedure and rigor

Figure 2-3: Selected Symbols Representing Kosher Certification, Halal Certification

Certification costs vary, but proponents say it pays for itself in increased sales

Why certify? A marketing claim with teeth

Table 2-4: Importance of Kosher Certification Symbol, by Type of Kosher Consumer (on a 1-10 scale), 2007

Certifiers provide publicity for their clients

Certification honors all consumers' dietary needs

Certification enhances export opportunities

Choosing a certifier is like choosing a lawyer: research, references, reputation

Chapter 3: Market Size and Growth

Kosher Foods

Sales figures are difficult to pin down

Sales of certified kosher products grow at twice the rate of the overall food industry

Table 3-1: Total Food vs. Kosher Food Sales in U.S. Grocery Stores, 2003 and 2008 (in millions of dollars)

"Ethnic" brands don't seem to be driving growth

Figure 3-1: "Ethnic" Kosher Brands as a Share of Total Food Sales through Food Stores, Selected Categories, 2007 (percent)

Sales of certified kosher foods forecast to surpass $258 billion by 2013

Table 3-2: Forecast: Total Food, Kosher Food, and "Ethnic" Kosher Food Sales in U.S. Grocery Stores, 2009-2013 (in billions of dollars)

Halal Foods

As a market, halal is in its infancy; growth is nurtured by nations with much to gain

Malaysian Ministry puts U.S. market at $548 billion

Canadian government urges businesses to enter halal food market

Sales of certified halal foods forecast to grow 4-6% CAGR in U.S.

Market Factors and Trends

Muslim population in the U.S. is tiny; globally, it's huge

Table 3-3: Religious Affiliations, the United States and the World (percent)

Figure 3-2: Religious Affiliations, the United States and the World (percent)

"Kosher" connotes superior quality to consumers

Halal meat is considered fresher, better

Kosher and halal foods are more expensive

Table 3-4: U.S. Retail Chicken Prices, boneless and skinless breasts, 2008 (price per pound)

Table 3-5: U.S. Retail Chicken Prices, whole, 2008 (price per pound)

Table 3-6: Average Base Price per Volume for Selected Foods, 52 weeks ending Oct. 5, 2008 (volume equivalency: pounds)

Industries are largely self-regulated

Certifiers and consumers serve as watchdogs

Product Trends

Scope and Methodology

Product Introductions

New kosher introductions jump by half in four years

Figure 3-3: Number of U.S. Food & Beverage Product Introductions: Kosher, 2004-2008

Figure 3-4: Share of U.S. Kosher Product Introductions: Total U.S. Food and Global Kosher, 2004-2008 (percent)

Halal is rarely used as a descriptor; new products difficult to quantify

Product Trends

Kosher foods lighten up on the schmaltz

Gourmet, upscale increasingly describe kosher foods

Product focus: kosher wine is subjected to a total makeover

Chapter 4: The Consumer

Scope and Methodology

Jewish consumers are educated and wealthy, but their numbers may be dwindling

Muslims in the U.S. are younger, households are larger

American Muslims are assimilated but devout

Demographics, Attitudes, and Preferences of U.S. Consumers of Selected Kosher Foods

56% of Jewish consumers buy kosher hot dogs, but just 5% of people who buy kosher hot dogs are Jewish

Age, region, income, and education are predictors of use

Table 4-1: Purchase of Hebrew National/Best's Kosher Hot Dogs, by Household Income, 2008 (index of U.S. adults)

Table 4-2: Purchase of Hebrew National/Best's Kosher Hot Dogs, by Education, 2008 (index of U.S. adults)

Chapter 5: Opportunities in Kosher and Halal Foods

Concerns About Food Safety and Integrity

U.S. consumers have lost confidence in the food supply…

...and stop buying products whose safety seems compromised

Consumers want more info about their foods

Safety and Labeling Controversies

GMOs could compromise integrity of kosher/halal foods

Is irradiation safe, or a cop-out?

Beefed-up cows

"Natural" is meaningless

"Organic" is less meaningful than you think

FDA okays meat and milk from cloned animals - no labeling required

Strict kosher/halal standards offer reassurance

Gluten-free

Meatless

Kosher Consumers as Foodies

Table 5-1: Selected Psychographics: Kosher Consumers vs. Foodies, 2008 (index for U.S. adults who buy Hebrew National/Best's Kosher franks and index for foodie adults)

Figure 5-1: Agreement With Foodie Psychographic Statements, Kosher Consumers, 2008 (index for U.S. adults who buy Hebrew National/Best's Kosher franks and agree with selected psychographic statements Packaged Facts associates with foodies)

Asian Americans

Ethical Consumerism

Ethical Eating

Chapter 6: Snapshots of Selected Industry Participants

Food Companies

Cabot Creamery Cooperative

Cargill Texturizing Solutions

Crescent Premium Foods

G. Willi-Food International

Hebrew National (ConAgra)

J&M Food Products Company

Kedem Food Products International

King Kold

Manischewitz Company

Midamar Corporation

Nestlé Quality Technical Coordination

Nutrilite

Osem USA

Sabinsa Corporation

Retailers

H-E-B

Kosher Vending Industries LLC

Pomegranate

ShopRite

Winn-Dixie

Certifying Agencies

Halal Monitoring Authority

Islamic Food and Nutrition Council of America

Islamic Society of North America

Kof-K

Muslim Consumer Group

OK Kosher

Orthodox Union

Star-K Kosher

Triangle K