A recipe for success

Al Islami Foods ­has ventured out of its domestic market and is hoping to tap into the US$600 billion global halal food industry. Diana Milne asks CEO Saleh Abdullah Lootah how it is faring on the international circuit.

“What we are trying to do here is change the perception of Islam in the eyes of the world”
-Saleh Abdullah Lootah, CEO, Al Islami

Halal food is no longer a niche market. With 1.8 billion Muslims living worldwide it is a US$600 billion industry that is thought to account for 12 percent of the global trade in food products. Top of the halal game in the Middle East is Al Islami, which since the 1970s has produced and sold halal meat and dairy products across the region and now the world.  In 2007 it reported an increase in sales of 40 percent and this year, despite tough economic conditions, it is opening a US$16 million state of the art 8000 square metre factory in Dubai’s Techno Park. This increased production capacity will help the company to achieve its aim of a US$1 billion surge in sales by 2011.

Spreading the word
While these figures speak volumes about the company, CEO Saleh Abdullah Lootah says he believes the real mark of Al Islami’s success is the impact it has had on public perceptions of halal food. Outlining what for him is a labour of love, Lootah says: “What we are trying to do here is change the perception of Islam in the eyes of the world. It’s a big challenge we’ve set ourselves. But we have to do it because governments, individuals and businesses all have a responsibility to change the perception of Islam, which it has not been perceived properly in the eyes of the world. When you mention Islam or a Muslim product people tend to perceive it as either backward or not up to the mark.” Part of the problem, says Lootah, is that the halal food that has been available for worldwide consumers has not been of a high enough quality. This is something Al Islami plans to change by selling its products across Europe, and has already established a presence in the UK. Lootah hopes to now target the French and German markets: “There is huge potential for halal food in Europe. But the consumers have never been served properly in terms of products. We provide halal that is the best in terms of variety, standards, quality and taste.” He goes on to say that Al Islami is in the “penetration phase” in Europe – and is currently in the process of placing its products with supermarket chains and setting up distribution networks.

Home base
Al Islami’s efforts to penetrate the European market go hand-in-hand with its continuing march across its primary market, the GCC, which it hopes will be the main driver behind its $1 billion increase in sales. Lootah says it is particularly keen to penetrate the Saudi market where it is currently also in the preliminary stages of selling its products through local supermarkets. He does not foresee, however, that the country will be an easy one in which to establish a business, despite the huge demand there for halal products: “There is huge potential in Saudi Arabia. It is one of the biggest markets, I see, in the GCC. The problem is that it’s not an easy market – it is a tough one to operate in. The competition is very tough and it is not like Dubai where you can come and do your business easily. There is a lot of paperwork and logistics involved in setting up there. But whoever manages it will take a major market share.” At present, however, he admits Al Islami has not yet cracked the market – or properly announced its presence there: “We are not excellent in Saudi. We have not seen the growth we want to see because we have not invested enough in terms of marketing. We need to make sure the product is in all the supermarkets and make sure the distribution is happening. Then we will do our big bang activities which start with a press conference then a trade convention to tell everyone we’re here and we mean business.”

The expansion of Al Islami’s business across different territories means that now is the time for the company to ensure that it has standardised systems and procedures in place across its operations. Lootah says it is currently engaged in setting up these processes, both on the technical and commercial sides of the business: “We want to make sure that we have solid standards, processes and procedures which can be followed and implemented in all of the countries where we operate. On the technical side this means logistics, warehousing and distribution and on the commercial side, it’s marketing, merchandising and point of sale materials. It will make our lives much easier if we don’t have to re-invent the wheel everyday.”

Branching out
Another reason why Al Islami must standardise its processes is that it is also diversifying its product range and setting up stand-alone outlets rather than relying on supermarket sales. In the GCC it is concentrating on a chain of fast food outlets it acquired two years ago called Al Arooj Fresh, which it hopes, says Lootah, will rival multi-national chains across the region. There are 16 currently in the UAE, two in Lebanon and Oman and Al Islami plans another 10 branches this year. “We want to bring something that can compete with the multi-national companies. I’m talking about companies like KFC and McDonald’s. I think that we provide something unique and different to what other people offer.  We are working very hard on a facelift of the brand, changing the management and setting up standardised systems. We will open branches wherever the company’s products are sold today.” In a separate project, Al Islami is also setting up hot dog stands across the UAE at schools, airports, and shopping centres.  As well as tackling the fast food market Al Islami’s next big area for expansion is stand-alone butcher shops. It is currently setting up shops within supermarkets, leasing the space there and exclusively selling its own products. “At the moment the concept is a shop within a shop,” says Lootah. “We’re hoping in the future to have standalone butcher shops.” The strategy now, says Lootah is to bring all its business into each market it enters: “Wherever we grow we’ll be growing with all the different businesses we have. The decision will not be if we should bring that business to the market, it will be when.”

Ironically, given Al Islami’s push into the fast food market, it is very involved in campaigns to reduce obesity in the GCC as part of its corporate responsibility strategy. Last year it launched the Good Food for Better Life marketing campaign, which included the setting up of an anti-obesity forum and advertising campaigns around nutrition and healthy eating and the promotion of Al Islami’s halal production methods. “Obesity has been increasing in the GCC and everybody has a responsibility to tackle the problem – producers, government regulators and stakeholders. We need to discuss the issue openly and come up with recommendations on how we can avoid these problems. We want to make sure we have given something back to society,” says Lootah.

This philosophy goes back to Al Islami’s aim not just to change people’s eating habits but to change hearts and minds. But as demand for halal food grows worldwide there’s not getting away from the fact that Al Islami is on the cusp of becoming a key player in a multi-billion dollar industry.