South American halal foods and beverages market to grow at a CAGR of more than 8% despite structural problems: Bonafide Research

South America has the smallest share in the Global Halal food and beverages market. Accounting for less than 0.5% of the global market share, South America however plays significant role in the international trade of halal foods and beverages products. As per data collated during the study and revealed in South America Halal Food and Beverage Market Outlook 2027 by Bonafide Research, the market grew by USD 1 Billion during the period of 2016 to 2021. During the period of 2021 to 2027, it has been further estimated that the market will be growing at a CAGR of more than 8% making it the fastest growing region in the world during the forecast period.

Brazil which happens to be South America’s biggest halal foods and beverages market is the world’s largest exporter of halal meat. Brazil exports almost double the halal meat exported by the 2nd largest halal meat exporter- Australia. Brazil has strong ties with the Arab world- OIC countries to fulfill their halal foods and beverages trade engagements.As Arab economies grow, one of the major beneficiaries is the countries in South America and especially Brazil for their export of halal food and beverages. Brazil has a robust halal certification system which was first established by the Arab migrants to South America about 50 years ago.  Even though the region has a very less Muslim population, the respective Governments see halal exports as one of the key strategic opportunities for growth of growth. Not just Brazil but Argentina is also one of the major halal meat exporters to the Middle East African and Asian nations. In 2019, the halal exports from Brazil plunged due to a security scandal followed by truckers’ strike which hampered the production and export of halal meat that year. This was an alarm for the gaps in the supply chain not specifically in Brazil but the world over. Despite the scandal, the exports from Brazil is still strong. However, it is also imperative to note that the most of the halal players in the South American region are small and medium scale enterprises and to some degree unorganized.

One of the reasons the domestic halal foods and beverages market in the region is small is because of a very small and concentrated Muslim population in the region. Less than 1% of the population living South America belong to the Muslim community. However, there is an increase in Muslim population due to migration. Most of the Muslims who earlier came to Brazil in hope for employability in the halal sector. However, their entry into Brazil was majorly due to trafficking. In 2017, the Brazilian Government changed laws to accommodate Muslims migrants legally. However, the market is also driven by the demand of halal foods and beverages products by Non-Muslims. As Halal foods and beverages are getting more popular worldwide, the Non-Muslims in the region are also exploring the halal foods and beverages products for taste and a more diverse culinary experience.

Recently Saudi Arabia has banned halal imports from 11 Brazilian poultry plants with no warning or explanation according to a joint statement from Brazil’s agriculture and foreign ministries. JBS SA which is world’s largest meat company, confirmed that it was affected by the ban. There has not been much diplomatic discussion with this regard but for some time, Arab countries have been trying to reduce imports while boosting domestic meat production.