World meat industry news

Historically, Russia is a multinational state. The multinational environment contributes to the popularization of national cuisine, in particular halal and kosher food. Recently, both markets have been showing significant dynamics. 

Today, Muslims make up more than 10% of the Russian Federation's population. Depending on the data source, that is between 14 and 20 million people who adhere to the canons of Islam. One of these religious prescriptions is the consumption of goods certified according to the so-called halal standard. In Arabic, “halal” means legal, or permissible.

Kosher foods are foods allowed to be eaten according to the ancient Jewish kashrut law. The word “kosher” stands for right, or appropriate. According to representatives of the Russian Jewish Congress, the approximate number of kosher food consumers in Russia is 50–60 thousand. Of these, about 10 thousand people are Russian Jews, and 40–50 thousand are Israeli citizens residing in Russia.

The segment of religious goods, in particular halal and kosher products, has been gaining popularity lately, as has been noted. The popularization of healthy eating globally has been encouraging consumers to search for all kinds of nutritional concepts, try various diets, choose organic foods and follow the fashion of healthy nutrition. This, in turn, has an influence the dynamics of halal and kosher product consumption. The average growth rate of the global market for halal products is 16%, whereas for kosher it is 12%. The largest market is the one for halal products.

Since halal and kosher products are thoroughly tested and therefore guarantee quality, they are starting to be in demand not only for religious reasons. They are positioned as environmentally friendly and are considered equivalent to organic products. The relevant production technology implies special production hygiene.

Thanks to large investments in halal, global leaders such as Nestlé and other companies have become the locomotives of the world market in this segment, ensuring its promotion around the globe.

The volume of the global market for halal products for 2020 is estimated at about 1.98 trillion USD. The annual growth rate is approximately 15%. By 2024, market volume may reach 3.5 trillion USD. Population increase in Muslim countries is going to serve as the key driver of market growth.

The world market for kosher goods is estimated at approximately 46–50 billion USD, with an annual growth rate of about 12–13%.

The market for halal and kosher products is growing rapidly in Russia. So far, this has only concerned meat products; however, individual samples of dairy products have been emerging, too. 

For instance, today the share of religious (halal and kosher) products in total retail trade turnover in foods is already at 5.8%, which corresponds to more than 900 billion rubles in monetary terms.

Russian companies see new lucrative niches, while the religious community sees an opportunity to spread traditional values.

During the Soviet times, halal production methods were used at the household level, typically in rural areas. In cities, halal foods were available at kiosks at mosques. The first store-sold halal products began to appear in the 1990s. They could be found in regions with Muslim populations: in Tatarstan, Bashkortostan and the republics of the North Caucasus. The Kazan Meat Processing Plant was a major manufacturer of these products. The 2000s marked the start of active growth in halal production. Certification centers began to be created at the spiritual administrations of the Muslims.

At the moment the market for halal products is still insufficiently and unevenly formed. Production is mainly concentrated in the center of Russia as well as in the Caucasus. There is virtually zero production in Siberia and the Far East; unrealized business opportunities remain in these regions. Export opportunities to Muslim countries are a good incentive for halal production.

While the market for halal products is widely represented by both Russian and foreign manufacturers, the market for kosher products in Russia is very small, as defined by representatives of the Russian Jewish Congress.

Sellers and manufacturers are currently unable to meet the demand for kosher products. The kosher market is in its infancy and requires an active advertising campaign. The market is quite promising due to the fact that potential buyers of kosher foods tend to spend 40–50% more on food than average citizens.

MARKET VOLUME AND ITS DYNAMICS

It is important to note that the volume dynamics of the Russian market for halal and kosher products stand out significantly against the main macroeconomic indicators. For example, the average growth rate of these categories is 10–11%, which is 5–6 percentage points greater than retail trade as a whole in the period 2016–2020. Dynamics are looking particularly attractive in the segment of halal products. 

PRICE ENVIRONMENT

The price of halal products is 5–7% higher than regular goods, which is associated with additional costs, such as:

• production certification;

• restructuring of the technological process, including switching to manual work;

• separation of streams and separate packaging;

• payment to halal inspectors;

• exclusion of cheap ingredients. As an example, halal sausages will have more meat in them than regular sausages.

The price difference compared to regular goods is small and does not impact demand. Halal foods are growing in demand even among the non-Muslim population.

Conversely, obtaining a certificate for kosher production affects the price of products greatly. When all the requirements of kashrut are fulfilled, the cost of dairy products increases by 10–15%, and that of meat goes up 40–50%.

DEVELOPMENT TRENDS AND PROSPECTS 

Russian rates of growth in consumption of religious products, by segment, are going to look as follows. Halal products will be the most demanded, with an average annual increase in volume projected at 11–12%. Consumption of kosher products is expected to grow 6–7%. Halal market growth is expected at the level of 11 to 12%, whereas growth in the volume of the kosher segment is forecasted at the level of 6 to 7%. All in all, it is expected that by 2024 the volume of the Russian market, both segments considered together, will increase to 1,378.5 billion rubles. The average annual rate of cumulative growth will be 9–12%.