Halal S.O.S.

Negative publicity about a halal incident becomes a threat to both sales and corporate reputation. In a highly connected world, a halal issue can easily snowball into a halal crisis. Companies should expect a halal crisis every 10 years, which could result in lost sales in the range of USD 10-50 million for multinational companies, USD 5-10 million for large companies, and up to USD 5 million for SMEs. Moreover, corporate reputation accounts for approximately 20 per cent of the market cap of a company; in terms of corporate reputation damages, therefore, the lost value associated with a halal crisis could easily be triple that of lost sales.

Halal issues and crises are different from other business incidents. Muslims today are less prepared to tolerate risk, whether real or perceived, and demand a near zero-risk halal environment. Furthermore, Muslims are intrinsically motivated to actively boycott brands that are deemed to be in violation of Islamic teachings. As a result, as compared to other corporate incidents, there is a far higher chance that a halal issue can escalate into a global halal crisis. 

A halal crisis is a situation where a corporate halal reputation is under attack, endangering the sales and possibly even the existence of a company. This situation demands quick action and communication from the brand owner to re- affirm halal authenticity and Islamic values. Evidence from previous halal issues and crises show that a brand owner cannot fully rely on a quick response from halal authorities, but must occupy the main driving seat and address any halal issue or crisis themselves. 

One of the biggest challenges today for halal reputation management is the combination of artificial intelligence, content creation, and the ability to disseminate limitless amounts of news, whether genuine or fake. True or not true, perception becomes reality. Additionally, today brand owners have complex supply chain networks, where brands are produced in different geographical locations with the possibility of coupling and co-branding. The coupling of brands occurs when companies produce different brands of the same product at one location, using (partly) the same ingredients and the same production lines. In such circumstances, sourcing (ingredients), production, logistics, and supply chain-related halal issues could immediately affect multiple brands. Companies also practice co-branding between different brands at the levels of product (Vitamin D from DSM), outlet (Coca-Cola at McDonald’s), and service (delivered by DHL). This exposes brands to correlation, where a halal crisis effecting one brand can spread to others, despite there being no technical evidence of causality between them. 

LBB International provide brand owners a comprehensive Halal S.O.S. solution to make better decisions in handling a halal crisis. A halal crisis can result in massive losses in terms of sales and corporate reputation. We cannot stress enough, that time is hereby of the essence to get halal crisis management experts in to support your organisation! 

Halal S.O.S. assists the holding company and local operating companies in (1) halal issue management, (2) navigate during a halal crisis, and (3) aid in halal reputation repair for halal certified brands. For more information contact LBB International.