Economy

Food Industry in Pakistan

Pakistan has a rich and diverse food culture, influenced by its geography, history, religion and ethnic diversity. The food industry in Pakistan comprises various sectors, such as agriculture, processing, manufacturing, distribution and retailing. The dairy products segment is the largest segment of the food market in Pakistan, with an estimated market value of US$5 billion.

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This is because Pakistan is a large producer of milk and dairy products. The country has a large livestock population, and the dairy industry significantly contributes to the national economy. The dairy products market in Pakistan is expected to grow at a CAGR of 8% from 2023 to 2027.

Graana.com discusses some of the major food industries in Pakistan, their challenges and opportunities, along with their contribution to the economy and society.

 

Agriculture

 

 

Agriculture is the backbone of Pakistan’s economy, employing 44.7% of the workforce. Agriculture in Pakistan includes raising crops, livestock, and seafood; manufacturing agrochemicals; constructing farm machinery; supplying seeds, etc.

Some of the major crops grown in Pakistan are wheat, rice, cotton, sugarcane, and maize, whereas some of the major livestock products are milk, meat (beef, mutton, and poultry), eggs, and leather. Pakistan has a diverse climatic range makes it ideal for growing various types of fruits and vegetables throughout the year.

Some of the most popular fruits in Pakistan include mangoes (the national fruit), citrus fruits (oranges), bananas (the most consumed fruit), dates (the most exported fruit), apples (the most produced fruit), grapes (the most imported fruit), etc.

Some popular vegetables are potatoes (the most consumed vegetable), onions (the most produced vegetable), tomatoes (the most imported vegetable), etc.

Pakistan also has a long coastline that provides access to marine resources such as fish and shrimp. According to the Food and Agriculture Organization (FAO), Pakistan ranked 18th among fish-producing countries in 2018, with a total production of 1.9 million tonnes.

 

Processing

Processing is the transformation of raw agricultural products into value-added products that can be stored longer or consumed more conveniently. It includes activities such as milling grains into flour; pasteurising milk into dairy products; canned fruits and vegetables; freezing meat; dehydrating spices etc.

The processing industry in Pakistan has been dominated by two major international players: Nestle (in dairy products, juices, baby food, cereal, and noodles) and Unilever (tea, desserts, dressings, and sauces). Lately, a number of small and medium size companies have emerged, such as Euro Foods, Mon Salwa, Syma’s, and Dawn.

The processing industry faces several challenges, such as a lack of quality raw materials; high energy costs; inadequate infrastructure; low hygiene standards; weak regulatory framework; limited access to finances etc.

 

Manufacturing

 

 

Manufacturing is the production of finished food products that can be sold directly to consumers or other businesses. It includes activities like baking; making confectionery; producing snacks; brewing beverages etc.

The manufacturing industry in Pakistan has a large number of local players that cater to different segments of consumers based on their preferences.

Some of them are:

  • Tripple EM (Pvt) Limited Lahore: A leading snack food manufacturing company established in 1982
  • Fauji Cereals: A cereal producer started in 1954 with Fauji shares in collaboration with Quaker Oats England
  • Coronet Foods (Pvt.) Limited: A producer of frozen foods established in 1990
  • Supreme Flour Mills: A flour mill established in 1986
  • Sunny Flour Mills: A flour mill established in 1979
  • Shezan: Established in 1964, a producer of juices, pickles, ketchup, jams etc.
  • Mitchell’s Fruit Farm Limited: Established in 1933, a producer of jams, squashes, marmalades etc.
  • Gujranwala Food Industries (GFI) Pvt Ltd: A producer of biscuits, cakes, wafers

 

Challenges Faced by the Food Industry in Pakistan

Here are some key challenges in the food industry in Pakistan.

 

Lack of Infrastructure

The food industry in Pakistan faces significant challenges related to infrastructure. This includes inadequate transportation, storage, and processing facilities, which can lead to food spoilage and wastage.

Lack of proper infrastructure also affects the efficiency of the supply chain, resulting in delays and higher costs for producers and consumers.

 

Inefficient Supply Chain Management

Inefficient supply chain management includes issues such as inadequate storage facilities, transportation, and logistics. These can lead to a higher cost of production, which ultimately affects the prices paid by consumers. Additionally, it can also cause delays in delivery and lead to food wastage due to spoilage.

 

Limited Access to Financing

The food industry in Pakistan often faces a lack of access to financing. Many financial institutions perceive the food industry as a high-risk sector due to climate change, volatile commodity prices, and fluctuating demand. As a result, many food businesses are unable to obtain the necessary capital to start or expand their operations.

 

Quality Control Issues

Poor quality control refers to issues such as adulteration, contamination, and inadequate labelling – all of which can result in significant health risks for consumers and damage the reputation of the food industry.

 

Government Policies and Regulations

Issues such as import and export regulations, labelling requirements, taxation policies etc. can increase the cost of production. It also impacts the competitiveness of the food industry in Pakistan.

 

Opportunities in the Food Industry in Pakistan

Here are some key opportunities in the food industry in Pakistan.

 

Large and Growing Population

As the population in Pakistan continues to grow, there will be an increasing demand for food, including staples such as wheat, rice, maize, and processed and packaged foods.

 

Increasing Demand for Packaged and Processed Food

With changing lifestyles and increasing urbanisation, there is a growing demand for packaged and processed food in Pakistan. This presents an opportunity for food businesses to cater to this demand and develop new products to meet changing consumer preferences.

 

Rising Trend of Eating Out

Eating out has become increasingly popular in Pakistan, particularly in urban areas. This presents an opportunity for food businesses to expand their operations by setting up restaurants, cafes, and other food service establishments.

 

The Abundance of Natural Resources

Pakistan has abundant natural resources, including fertile land, water, and diverse agricultural produce. This provides a unique advantage to the food industry in Pakistan, as it can access high-quality raw materials at a relatively low cost.

 

Growing Awareness of Health and Wellness

There is a growing concern about health and wellness in Pakistan, which presents an opportunity for food businesses to develop and market healthier food products. This includes organic and natural food products and products with reduced salt, sugar, and fat content.

 

Frequently Asked Questions (FAQs)

 

What are the famous cuisines in Pakistan?

Pakistani cuisine is diverse and influenced by various regions and cultures. Some popular dishes include biryani, karahi, kebabs, haleem, nihari, and different street foods like samosas, pakoras, and chaat. Pakistani cuisine offers a mix of flavours, spices, and unique cooking techniques.

 

Which is the biggest food industry in Pakistan?

Pakistan’s food industry is primarily divided into three major categories: (1) frozen food, (2) value addition in major food crops, and (3) fruits, vegetables, and intermediate products. It is primarily located in Punjab, accounting for 60% of the total, followed by Sindh (30%), Khyber Pakhtunkhwa (6%), Balochistan (2%), and Islamabad Capital Territory (2%).

 

How big is the food industry in Pakistan?

According to market projections, the revenue generated by the food industry in Pakistan is estimated to reach US$121.30bn by 2023. The industry is expected to grow at an annual rate of 7.47% between 2023-2027. The largest segment of the market is the bread & cereal products segment, which is anticipated to have a market volume of US$21.25bn in 2023.

To read more about the chemical industry in Pakistan, follow Graana.com.

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How to Grow Potatoes at Home

Arslan Siddiqui

Arslan is a Content Writer at Graana.com. With a bachelor's in marketing, he writes research-based guides on real estate, lifestyle and tech.

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