Emerging Pattern of Innovation in the Halal Food Industry

World Halal Research Summit

June 2010, Kuala Lumpur

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What Iʼm going to cover..

• Exigo Marketing credentials

• Why consumer insight is critical to developing new Halal food innovations

• The main types of FMCG research

• Who is the Muslim consumer?

• Singapore & UK Muslim consumer insights

• How to use consumer insight in a Halal innovation programme

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AsiaCoca Cola Asia PacificSingapore Food IndustriesPernod Ricard (Taiwan)Baring Private Equity (Hong Kong)IESingapore*Halal Development Corporation (Malaysian Government)*SSL Asia_pacific

JapanJapan Market Intelligence K.K.*Akashi Co. Ltd*M.K.Suematsu Inc.*Beverage Japan*

UK/EUOrangina Schweppes InternationalGourmetʼs Choice*Orkney Herring Company*Just-Food.comInterpetGenesis Strategic Management ConsultantsGE FabbriHIT EntertainmentBBC WorldwideEnterprise Ireland*Zenith International

Exigo Marketing is an International Management Consultancy specializing in FMCG

www.exigomarketing.com *SME or SME related

Together with clients, we develop and implement winning strategy

www.exigomarketing.com

Consumer and Shopper insight

Market & Competitor Intelligence

Brand Segmentation & Positioning

Commercial Planning & Structure

Technology & Innovation

Pricing & Profitability Optimization

Route to Market and Channel Management

Global Business Matching

Representations e g m e n t a t i o n

b u s i n e s s m a t c h i n g

p r o d u c t c u t t i n g

a n a l y s i s

F G I s

priority matrixNPD process

Tools and templates

I&R process

“Better understanding of the consumer through every type of market research is one of the keys to the new ways of doing

business for brands. Growth can only be sustained in the long-term by knowing and respecting the consumer better.”

The Walpole Group

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“Targeting the right customer is fundamental to value creation. Recent market research has shown that when the full costs of

supporting customers is taken into account, the majority of customers (usually around 70%) are not profitable at all.

The mistake is not being selective enough in seeking growth. It is invariably better to invest in developing long-term loyalty

from a smaller number of high-value accounts than seeking to net everybody and anybody.”

Peter Doyle, Value-based marketing, 2000

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The Two Main Types of FMCG Research

Problem Identification Problem Solving

•Market potential and size•Market dynamics & Trends•U&A•Consumer/shopper profile•Image•Forecasting•Business Trends...

•Product and Packaging research•Pricing•Segmentation & positioning•Promotion effectiveness•Advertising test...

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Why Consumer Insight is Critical to Developing New Halal Food Innovations

• Generally speaking the number of new FMCG products launched every year is increasing

• Whilst there are “pillar” brands in most categories that have stood the test of time, product life cycles on average are falling

• Worldwide the food industry is about “repeat” sales, without which brands and businesses die...

• Therefore, understanding the consumer: who they are, who should be targeted, what their lifestyles are, their values, and so on are so on is critical to building long term loyalty

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Arguably, the Majority of Consumer Goods Companies have Little

Understanding of the Muslim Consumer

• Many of the products sold by MNCs in the Islamic world are simply Halal versions of what is available elsewhere

• Halal Marketing strategies have tended to focus on certification & traceability

• In the UK for example there are many consultancies offering Halal certification advice, by contrast there are very few dispensing advice on how to target or understand the Muslim consumer

• In Exigoʼs view for most FMCGs targeting the Muslim consumer has not been a priority

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Therefore, for this seminar we will showcase some insights from a Muslim consumer lifestyle survey conducted by Exigo Marketing...

...we wondered what we would uncover

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Muslim Consumer Insight• Exigo conducted a survey amongst Muslim consumers in Singapore, the UK and on-

line for this seminar

• to provide a different perspective for discussion we deliberately tried to select consumers who are not resident in Malaysia

• The purpose of the survey is to share some initial insights into the Muslim consumer, their attitudes to food as well as their lifestyle and religious beliefs

• The total sample size was 61 people

• Respondents had to rate 48 statements covering attitudes to food, lifestyle and religious beliefs

• The questionnaire was designed by Exigo Marketing with all analysis done internally. All questions and answers were in English

• The results presented do not necessarily follow the flow of the questionnaire

• The results shown should be viewed as directional and designed to promote discussion

• Exigo Marketing will not take any responsibility for any decisions taken based on these insights

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70% of the sample are 18-24 age group

70%3%

12%

10%

3%

2%

18-24 25-34 35-4445-54 55-64 over 65

30%

69%

2%

Glasgow SingaporeKuala Lumpur

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The Key Questions Centered around 4 Themes

“I tend to stick to my favourite food and beverage brands”

“I tend to buy food at large modern retail outlets”

“I tend to watch a lot of cooking shows on TV”

“Foods from overseas are very tempting”

“Taste is the most important factor in choosing which foods I eat”

“The nutritional values of food are more important than taste”

“I often snack and eat between meals.”

“I prefer organic and natural food.”

“I always read the labels and ingredients lists of packaged foods very closely”

“I donʼt buy packaged foods unless they have a Halal logo on the packaging”

“I understand and can explain easily what Halal means”

“In my country I trust the process for deciding whether or not a product is Halal”

“I trust the opinion and advice given by doctors”

“Generally speaking I am happy with my body weight.”

“It doesnʼt matter whether or not the doctor I see is a Muslim”

“I wish there were more Halal pharmaceutical products”

“I would describe myself as a religious person.”

“There is a strong link between the food I eat and my religious beliefs”

“It is better to have a Sharia complaint bank account”

“I wear clothes that clearly show what my religious beliefs are”

Attitudes to Food Importance of Labelling

Health Religious Views

Lifestyle

0 6 12 18 24 30donʼt agree at alldonʼt agreeneither agree or disagreeagree to some extenttotally agree

“I like eating out as much as possible” “I surf the internet a lot”

“I watch a lot of TV” “I prefer watching soap operas rather than the news”

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0 6 12 18 24 30

0 6 12 18 24 30 0 6 12 18 24 30

Only 20% of British Muslims agreed, compared to over 35% Singaporean Muslims

80% of Singaporean Muslims agreed versus 33%

of British Muslims

Only 40% of people who said they prefer organic and

natural food agreed with this statement

Food Habits

0 8 16 24 32 40donʼt agree at alldonʼt agreeneither agree or disagreeagree to some extenttotally agree

“I tend to stick to my favourite food and beverage brands”

0 8 16 24 32 40

“I tend to buy food at large modern retail outlets”

0 8 16 24 32 40

“I tend to watch a lot of cooking shows on TV”

0 8 16 24 32 40

“Foods from overseas are very tempting”

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Surprisingly 60% of people who said they prefer organic

& natural food agreed

40% of Singaporean Muslims strongly agreed with

versus only 20% of British Muslims

Singaporean Muslims much more likely to agree than

British Muslims

Attitudes to Food...

0 8 16 24 32 40donʼt agree at alldonʼt agreeneither agree or disagreeagree to some extenttotally agree

“Taste is the most important factor in choosing which foods I eat”

0 8 16 24 32 40

“The nutritional values of food are more important than taste”

0 8 16 24 32 40

“I often snack and eat between meals.”

0 8 16 24 32 40

“I prefer organic and natural food.”

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65% of people who said they wear clothes which clearly show their religious beliefs

agreed

61% of British Muslims agreed compared to 30% of

Singaporeans

62% of people who preferred organic and natural food

agreed

Labelling and Halal

0 8 16 24 32 40donʼt agree at alldonʼt agreeneither agree or disagreeagree to some extenttotally agree

“I always read the labels and ingredients lists of packaged foods

very closely”

0 8 16 24 32 40

“I donʼt buy packaged foods unless they have a Halal logo

on the packaging”

0 10 20 30 40 50

“I understand and can explain easily what Halal means”

0 8 16 24 32 40

“In my country I trust the process for deciding whether

or not a product is Halal”

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45% of those preferring organic and natural food

strongly agreed

82% of Singaporeans agreed versus 46% of British

Muslims

Attitudes to Health and Doctors

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“I trust the opinion and advice given by doctors”

0 8 16 24 32 40donʼt agree at alldonʼt agreeneither agree or disagreeagree to some extenttotally agree

0 8 16 24 32 40

“Generally speaking I am happy with my body weight.”

“It doesnʼt matter whether or not the doctor I see is a Muslim”

0 8 16 24 32 40 0 8 16 24 32 40

“I wish there were more Halal pharmaceutical products”

There was some indication from the data that people who preferred organic and

natural food were more likely to be ambivalent

75% of people who said that the clothes they wear clearly show their religious beliefs

strongly agreed!

Religious Values

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“I would describe myself as a religious person.”

0 8 16 24 32 40

donʼt agree at alldonʼt agreeneither agree or disagreeagree to some extenttotally agree

0 8 16 24 32 40

“There is a strong link between the food I eat and my religious beliefs”

“It is better to have a Sharia complaint bank account”

0 8 16 24 32 40

“I wear clothes that clearly show what my religious beliefs are”

0 8 16 24 32 40

47% of British Muslims strongly agreed versus 5% of

Singaporean Muslims

75% of people who said that the clothes they wear clearly show their religious beliefs

strongly agreed!53% of 18-24 year olds were

undecided

Looking to the Future...

0 8 16 24 32 40

“I am eager to try new food and beverage products”

0 8 16 24 32 40

“I prefer to buy and cook fresh foods rather than packaged groceries.”

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donʼt agree at alldonʼt agreeneither agree or disagreeagree to some extenttotally agree

“Halal only retail shops is a good idea”

0 8 16 24 32 400 8 16 24 32 40

“Large food companies understand well what Muslim

consumers want”

67% of British Muslims strongly agreed compared to 28% of Singaporeans. Those

liking organic and natural food generally agreed with

this statement

65% of of people who said that the clothes they wear clearly show their religious

beliefs strongly agreed!

No British Muslims strongly agreed with this statement!

Opportunities to Develop more Nutritious and Convenient Halal food?

0 8 16 24 32 40donʼt agree at alldonʼt agreeneither agree or disagreeagree to some extenttotally agree

“I would like to see more nutritious Halal food on sale”

0 8 16 24 32 40

“I would like to see more convenient, easy to prepare Halal foods”

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75% of of people who said that the clothes they wear clearly show their religious

beliefs strongly agreed!

85% of 18-24 year olds agreed

What can we Conclude from this Initial Survey?

• Not all Muslims are the same!

• for example British Muslims less likely to be interested in overseas foods

• Reading of ingredients lists and looking for the Halal logo is not universal

• Is Halal certification and labelling as clear and meaningful to British Muslims as it is to Singaporeans?

• Whilst taste is clearly one of the most important factors in choosing food and beverage brands, there appears to be a desire for healthier, more nutritious and convenient Halal foods

• further work, for example in-depth interviews, needed to understand what “nutrition” and “convenience” mean to the Muslim consumer

• The food industry has more work to do to understand better the needs, motivations and values of the Muslim consumer.

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How to use Consumer Insight in a Halal Innovation Programme...

1. Decide which consumers you are going to target

• By country? Demographic? Lifestyle & values? Heavy users?

2. Understand deeply their functional (e.g. taste, flavour...) as well as emotional needs (reassurance, religious values..?)

• in depth research...FGIs, in home immersion

• quantitative product attribute benchmarking

3. Look at other markets, categories and beyond Halal for inspiration

4. Create prototypes and mock-ups and again ask for consumer input

5. After launch constantly seek feedback and insight

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