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Vietnam has set its sights on becoming a significant player in the halal food industry, aiming to cater to the massive demand from major Muslim markets within the ASEAN region, such as Indonesia and Malaysia.
Despite the robust demand for halal products in the region, Vietnamese companies have faced challenges in breaking into this market. However, this does not mean that they cannot succeed. Several food producers in Vietnam have already obtained halal certification, and more are gradually entering the scene as the nation’s potential to be a key regional halal food supplier becomes evident.
The Halal Food Market in Numbers In 2022, the halal food market achieved a valuation of over $2 trillion, as reported by the IMARC Group. This represents a rapidly growing market, particularly as rising wages and increased consumer purchasing power sweep through Southeast Asia.
Moreover, around 70 percent of the world’s 1.9 billion Muslims reside in Asian countries, with a substantial 860 million Muslims located in the Southeast Asia–South Asia–South Pacific region. This zone also claims the title of the world’s largest consumer of halal food, with a market worth $470 billion in 2018.
The trend is set to continue, with the Pew Research Center predicting that the Asia-Pacific region will be home to 1.5 billion people, constituting 52.8 percent of the global Islamic population by 2050.
Interestingly, the majority of halal food production originates from non-Muslim-majority countries like Brazil, the United States, and Russia.
Vietnam’s Potential in Halal Food Exports Currently, domestic Vietnamese businesses only satisfy a fraction of the demand from OIC (Organization of Islamic Cooperation) members. According to the Vietnam Halal Center, Vietnam has the capacity to generate up to $34 billion worth of halal goods for OIC nations.
Presently, owing to stringent halal standards for animal-based food products, Vietnam’s halal exports primarily comprise agricultural produce and raw materials. Halal products from Vietnam constitute only a minor fraction of the country’s overall exports to Islamic markets.
Nevertheless, the number of enterprises acquiring halal certification has been on the rise in recent years. By 2021, approximately 60 percent of Vietnam’s provinces and cities were involved in producing halal-certified goods for export.
Certification Challenges for Vietnam’s Halal Food Producers To venture into Islamic markets, Vietnamese exporters must secure halal certification from a recognized authority.
Obtaining halal certification proves to be even more complex compared to other certifications due to disparities in the certification process. Unlike other certifications, there is no uniform international entity that issues halal certificates. Instead, individual countries have established their own certifying bodies. Moreover, the product must meet the regulatory standards of both the producing and recipient countries. This divergence in regulations for each market can pose difficulties for businesses seeking halal certification.
The Future Landscape of Halal Foods in Vietnam The halal food industry boasts a global market with steady growth, driven by emerging economies with substantial Muslim populations that are gaining increased spending power. Furthermore, the stringent standards associated with halal products can serve as a positive branding strategy across markets, transcending religious considerations. While Vietnam’s domestic halal consumer base is relatively small, its strategic proximity to the world’s largest halal goods markets presents a significant opportunity for producers and export-oriented businesses.
Vietnam’s numerous free trade agreements beyond the ASEAN region, such as the EVFTA and CPTPP, create favorable conditions for foreign investors to utilize Vietnam as a gateway to Southeast Asia’s lucrative halal food market.
