Some of the world’s biggest consumer groups are making halal face creams and shampoos for Indonesia ahead of a new labeling law, part of a broader push to cater to growing Muslim populations as sales in many Western markets slow.
Unilever, Beiersdorf and L’Oreal are among the multinationals converting their supply chains for the world's biggest Muslim-majority nation.
The law, the first of its kind, requires food to be labeled halal or not in 2017, followed by toiletries in 2018 and medicines in 2019.
The companies say demand for beauty products that are halal, or target specific issues like veiled hair, will grow as the Muslim middle class grows. They note that Indonesia could influence other countries such as Malaysia where halal products made locally or by small, niche companies are also popular.
Halal certification is official recognition that a product was manufactured in keeping with Islamic Sharia law. This means it must not contain traces of pork, alcohol or blood, and must be made on factory lines free of contamination risk, including from cleaning.
Makers of cosmetics and toiletries say the burden is more administrative than financial, and therefore see compliance as unlocking new revenue streams.
“It’s an enabler to do business in certain areas of the world,” said Dirk Mampe of German chemicals company BASF , which sells ingredients to toiletries manufacturers and now has 145 of them certified halal. The halal ingredients do not carry premium price tags, he said.
“There is a trend that these halal products are being requested more and more, and the importance of being able to supply them is increasing.”
More than 1.5 billion people around the world are Muslim, accounting for about a quarter of the global population.
Halal cosmetics were estimated to make up 11 percent of a global halal market worth more than $1 trillion in 2015, according to Deloitte Tohmatsu Consulting. Market research firm TechNavio sees halal personal care products' sales growing 14 percent per year until 2019, outpacing the broader market.
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