Executive Summary

Aug 2018
Prospects
Increasing global influence is set to propel the growth of cheese

Cheese is becoming more popular as an ingredient in a variety of non-traditional recipes. This is due to awareness created through foreign and local cooking shows.

Changing consumer preferences will fuel growth

Increases in the urban population, household and per capita income, promotions, and the resulting importance of convenience, together with improvements in the standard of living and lifestyle changes, are expected to contribute to the growth of cheese over the forecast period. With increasing affordability, combined with awareness of the superior product quality of branded products, the shift from unpackaged products is also expected to continue.

Evolving consumption habits will maintain the dominance of spreadable cheese

Spreadable cheese on bread is increasingly gaining prominence and popularity as a convenient and quick breakfast for children in urban households. Cheese slices are also frequently used in home-made burgers and cheese sandwiches.

Competitive Landscape
Adam’s Milk Foods remains the leading player in cheese

Adam’s Milk Foods was the leading player in cheese in 2018, due to the preference for and success of its cheese brands amongst consumers, due to its high quality and versatile formats. Product type and product quality are the most important differentiation points, as consumers tend to be quality- and product-specific instead of brand-specific when buying cheese.

Owing to its strong distribution, Happy Cow retains a significant share

One of the most popular brands in cheese, Happy Cow is famous for its triangular shaped cheese, along with traditional cheese slices. The brand enjoys high consumer recall owing to its wide distribution network.

Independent small grocers remains the largest distribution channel

Independent small grocers remained the largest distribution channel for cheese in Pakistan in 2018, as most of the population has access to these outlets across the country. However, hypermarkets and supermarkets are popular in large cities such as Karachi, Lahore and Islamabad, as the trend for modern retailing is on the rise in urban areas of the country.

Prospects
Changing policies and tightening regulations challenge milk

Packaged milk saw phenomenal growth until 2012; however, it has since stalled. Growth over the review period remained modest due to changes in industry dynamics.

Growing regulation boosts flavoured milk drinks

Consumers in Pakistan are increasingly looking for healthier beverages. Consequently, the consumption of unhealthy drinks is decreasing, paving the way for flavoured milk drinks to grow strongly over the forecast period.

The prospects of a minimum pasteurisation law

Compared with several regional economies, the share of packaged milk in Pakistan is still very low. Leading manufacturers are promoting growth not only by educating consumers about the health and hygiene aspects of UHT milk, but also getting involved with the government to negotiate the introduction of a minimum pasteurisation law.

Competitive Landscape
Challenges for Engro Foods

Engro Foods faced marketing challenges for both Olper’s and Omung during the review period. Olper’s was involved in the government test of 16 allegedly adulterated UHT milk brands mentioned above, and even though it was found fit for consumption, the brand’s image was damaged.

Dayfresh enjoys strong growth in flavoured milk drinks

Pakola was one of the first entrants in flavoured milk drinks. Owing to massive consumer loyalty and the equity of the umbrella brand, the brand has maintained the leading position for several years.

Nestlé Pakistan continues to lead drinking milk products

Nestlé Pakistan has a strong lead in drinking milk products with a wide product range. The strong brand loyalty and legacy value of Nestlé Pakistan proved beneficial for MilkPak over the review period, with the brand maintaining its share and growth despite the changing dynamics that hit other brands.

Prospects
Potential for growth in packaged yoghurt

Rapid urbanisation, together with economic improvements in the country, has led to a surge in sales of packaged food. However, packaged yoghurt still accounts for only a fraction of the total yoghurt market, leaving strong potential for growth as consumer preferences develop in favour of packaged products.

Consistent marketing of packaged plain yoghurt keeps demand high

Plain yoghurt is used in Pakistan as a staple, with some households consuming it as a condiment, whilst others eat it with bread as part of a meal. Hence, brands strive to capture sales with consistent marketing aimed at switching consumers from unpackaged yoghurt.

Lack of a traditional taste and texture hamper the growth of sour milk products

Unpackaged sour milk products have a very traditional texture and taste that the average Pakistani consumer enjoys, especially the milk and yoghurt-based beverage lassi; packaged brands of lassi have failed to replicate this. Moreover, unpackaged lassi is topped with a thick layer of pure cream, which adds to the texture and taste of the beverage.

Competitive Landscape
Adam’s remains the only significant brand in sour milk products

Yoghurt and sour milk products is comprised of standard and economy brands, both of which compete based on convenience and variety. The competitive landscape comprises a handful of leading domestic manufacturers and various other retailer-imported international brands.

Nestlé Pakistan dominates yoghurt with various brand variations

Nestlé Pakistan led yoghurt and sour milk products in value terms in 2018. The company was one of the first entrants in packaged yoghurt with its Nestlé Yoghurt and Raita brands.

Independent small grocers remains the leading distribution channel

Yoghurt and sour milk products are mainly purchased in small pack sizes on frequent shopping trips, and not usually as part of monthly grocery shopping trips, due to their short shelf life. For this reason, the main retail channel in 2018 was independent small grocers.

Prospects
Tightening government policies put pressure on manufacturers

Pakistan’s dairy sector was under the protection of a zero-rating regime with allowable tax refunds until 2016, when the government discontinued this, whilst also imposing 25% regulatory duty on skimmed milk powder, with 20% customs duty already in place. The change in tax policy meant that the industry could no longer claim refunds on value-added tax paid on raw materials used for other dairy products such as coffee whiteners.

Rising awareness of other cuisines propels the growth of cream

The use of cream as a cooking ingredient in traditional and other cuisines is expected to promote the growth of packaged cream in the country. The trend of consuming packaged cream in desserts, pasta and other dishes has been on the rise, especially due to the rising popularity of cooking shows amongst higher-income urban women.

Coffee whiteners leads other dairy

Rapid urbanisation, rising awareness and increasing disposable incomes are expected to move consumers towards packaged coffee whiteners and cream. The shift to coffee whiteners is more widespread, with this product becoming increasingly popular in rural areas due to increased marketing and promotions by brands.

Competitive Landscape
Coffee whiteners is led by Nestlé’s Everyday

Everyday maintained its lead and saw growth in coffee whiteners in 2018, despite the strong competition. However, many smaller brands, such as Qudrat by Haleeb Foods and Chaika by Shakarganj Food Products, saw significant growth towards the end of the review period.

Tarang loses share

Coffee whiteners in Pakistan went through a major restructuring over the review period, as the leading brand from Engro Foods, Tarang, lost significant share, especially in 2017 and 2018. Dominated by Tarang for almost a decade, tea whiteners saw increased competition after two big brands, Dostea from Fauji Foods and Cup Shup from Dalda Foods, entered the market and Nestlé Pakistan also aggressively marketed Everyday.

Nestlé’s MilkPak leads cream

Packaged cream in Pakistan is dominated by three major brands: MilkPak, Haleeb and Olper’s Cream. Whilst the former two have been in the market for decades, Olper’s Cream is relatively new.

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Dairy in Pakistan

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Overview

Discover the latest market trends and uncover sources of future market growth for the Dairy industry in Pakistan with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Dairy industry in Pakistan, our research will save you time and money while empowering you to make informed, profitable decisions.

The Dairy in Pakistan market research report includes:

  • Analysis of key supply-side and demand trends
  • Detailed segmentation of international and local products
  • Historic volumes and values, company and brand market shares
  • Five year forecasts of market trends and market growth  
  • Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

  • What is the market size of Dairy in Pakistan?
  • What are the major brands in Pakistan?
  • How has the economic downturn impacted sales performance given its staple food status?
  • Given mounting obesity concerns, are consumers moving from full-fat to reduced fat/fat-free offerings?
  • How are volatile farmgate prices for milk impacting retail prices and sales performance?

Why buy this report?

  • Gain competitive intelligence about market leaders
  • Track key industry trends, opportunities and threats
  • Inform your marketing, brand, strategy and market development, sales and supply functions

This industry report originates from Passport, our Packaged Food market research database.

Dairy in Pakistan - Category analysis

Butter and Spreads

HEADLINES

PROSPECTS

Shifting consumer preferences will fuel the growth of butter and spreads
Owing to habitual consumption, cooking fats will continue to dominate
Increasing media awareness to propel the growth of margarine and spreads

COMPETITIVE LANDSCAPE

Butter in Pakistan remains dominated by a few key players
Blue Band enjoys dominance in margarine in Pakistan
Opportunities for new brands

CATEGORY DATA

Table 1 Sales of Butter and Spreads by Category: Volume 2013-2018
Table 2 Sales of Butter and Spreads by Category: Value 2013-2018
Table 3 Sales of Butter and Spreads by Category: % Volume Growth 2013-2018
Table 4 Sales of Butter and Spreads by Category: % Value Growth 2013-2018
Table 5 NBO Company Shares of Butter and Spreads: % Value 2014-2018
Table 6 LBN Brand Shares of Butter and Spreads: % Value 2015-2018
Table 7 Distribution of Butter and Spreads by Format: % Value 2013-2018
Table 8 Forecast Sales of Butter and Spreads by Category: Volume 2018-2023
Table 9 Forecast Sales of Butter and Spreads by Category: Value 2018-2023
Table 10 Forecast Sales of Butter and Spreads by Category: % Volume Growth 2018-2023
Table 11 Forecast Sales of Butter and Spreads by Category: % Value Growth 2018-2023

Cheese

HEADLINES

PROSPECTS

Increasing global influence is set to propel the growth of cheese
Changing consumer preferences will fuel growth
Evolving consumption habits will maintain the dominance of spreadable cheese

COMPETITIVE LANDSCAPE

Adam’s Milk Foods remains the leading player in cheese
Owing to its strong distribution, Happy Cow retains a significant share
Independent small grocers remains the largest distribution channel

CATEGORY DATA

Table 12 Sales of Cheese by Category: Volume 2013-2018
Table 13 Sales of Cheese by Category: Value 2013-2018
Table 14 Sales of Cheese by Category: % Volume Growth 2013-2018
Table 15 Sales of Cheese by Category: % Value Growth 2013-2018
Table 16 Sales of Spreadable Processed Cheese by Type: % Value 2013-2018
Table 17 NBO Company Shares of Cheese: % Value 2014-2018
Table 18 LBN Brand Shares of Cheese: % Value 2015-2018
Table 19 Distribution of Cheese by Format: % Value 2013-2018
Table 20 Forecast Sales of Cheese by Category: Volume 2018-2023
Table 21 Forecast Sales of Cheese by Category: Value 2018-2023
Table 22 Forecast Sales of Cheese by Category: % Volume Growth 2018-2023
Table 23 Forecast Sales of Cheese by Category: % Value Growth 2018-2023

Drinking Milk Products

HEADLINES

PROSPECTS

Changing policies and tightening regulations challenge milk
Growing regulation boosts flavoured milk drinks
The prospects of a minimum pasteurisation law

COMPETITIVE LANDSCAPE

Challenges for Engro Foods
Dayfresh enjoys strong growth in flavoured milk drinks
Nestlé Pakistan continues to lead drinking milk products

CATEGORY DATA

Table 24 Sales of Drinking Milk Products by Category: Volume 2013-2018
Table 25 Sales of Drinking Milk Products by Category: Value 2013-2018
Table 26 Sales of Drinking Milk Products by Category: % Volume Growth 2013-2018
Table 27 Sales of Drinking Milk Products by Category: % Value Growth 2013-2018
Table 28 NBO Company Shares of Drinking Milk Products: % Value 2014-2018
Table 29 LBN Brand Shares of Drinking Milk Products: % Value 2015-2018
Table 30 Distribution of Drinking Milk Products by Format: % Value 2013-2018
Table 31 Forecast Sales of Drinking Milk Products Products by Category: Volume 2018-2023
Table 32 Forecast Sales of Drinking Milk Products Products by Category: Value 2018-2023
Table 33 Forecast Sales of Drinking Milk Products Products by Category: % Volume Growth 2018-2023
Table 34 Forecast Sales of Drinking Milk Products Products by Category: % Value Growth 2018-2023

Other Dairy

HEADLINES

PROSPECTS

Tightening government policies put pressure on manufacturers
Rising awareness of other cuisines propels the growth of cream
Coffee whiteners leads other dairy

COMPETITIVE LANDSCAPE

Coffee whiteners is led by Nestlé’s Everyday
Tarang loses share
Nestlé’s MilkPak leads cream

CATEGORY DATA

Table 35 Sales of Other Dairy by Category: Volume 2013-2018
Table 36 Sales of Other Dairy by Category: Value 2013-2018
Table 37 Sales of Other Dairy by Category: % Volume Growth 2013-2018
Table 38 Sales of Other Dairy by Category: % Value Growth 2013-2018
Table 39 NBO Company Shares of Other Dairy: % Value 2014-2018
Table 40 LBN Brand Shares of Other Dairy: % Value 2015-2018
Table 41 Distribution of Other Dairy by Format: % Value 2013-2018
Table 42 Forecast Sales of Other Dairy by Category: Volume 2018-2023
Table 43 Forecast Sales of Other Dairy by Category: Value 2018-2023
Table 44 Forecast Sales of Other Dairy by Category: % Volume Growth 2018-2023
Table 45 Forecast Sales of Other Dairy by Category: % Value Growth 2018-2023

Yoghurt and Sour Milk Products

HEADLINES

PROSPECTS

Potential for growth in packaged yoghurt
Consistent marketing of packaged plain yoghurt keeps demand high
Lack of a traditional taste and texture hamper the growth of sour milk products

COMPETITIVE LANDSCAPE

Adam’s remains the only significant brand in sour milk products
Nestlé Pakistan dominates yoghurt with various brand variations
Independent small grocers remains the leading distribution channel

CATEGORY DATA

Table 46 Sales of Yoghurt and Sour Milk Products by Category: Volume 2013-2018
Table 47 Sales of Yoghurt and Sour Milk Products by Category: Value 2013-2018
Table 48 Sales of Yoghurt and Sour Milk Products by Category: % Volume Growth 2013-2018
Table 49 Sales of Yoghurt and Sour Milk Products by Category: % Value Growth 2013-2018
Table 50 NBO Company Shares of Yoghurt and Sour Milk Products: % Value 2014-2018
Table 51 LBN Brand Shares of Yoghurt and Sour Milk Products: % Value 2015-2018
Table 52 Distribution of Yoghurt and Sour Milk Products by Format: % Value 2013-2018
Table 53 Forecast Sales of Yoghurt and Sour Milk Products by Category: Volume 2018-2023
Table 54 Forecast Sales of Yoghurt and Sour Milk Products by Category: Value 2018-2023
Table 55 Forecast Sales of Yoghurt and Sour Milk Products by Category: % Volume Growth 2018-2023
Table 56 Forecast Sales of Yoghurt and Sour Milk Products by Category: % Value Growth 2018-2023

Packaged Food in Pakistan - Industry Overview

EXECUTIVE SUMMARY

Packaged food continues to record positive growth
Packaged food continues to benefit from urbanisation as high inflation returns
Local players continue to dominate the highly fragmented competitive environment
Traditional grocery retailers remains the dominant channel
Urbanisation and rising demand for convenience likely to be major growth drivers

FOODSERVICE

Sales to Foodservice
The leading categories for foodservice sales are all basic staples
Frozen processed potatoes and frozen processed vegetables register the strongest sales growth
Soy sauces, bouillon and stock cubes and powders slated for strong growth over the forecast period
Consumer Foodservice
Consumer foodservice industry continues to recored strong growth
Consumer foodservice remains centred on major urban areas
Increasing exposure to international media a crucial factor behind growth in consumer foodservice
Category Data
Table 57 Foodservice Sales of Packaged Food by Category: Volume 2013-2018
Table 58 Foodservice Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 59 Forecast Foodservice Sales of Packaged Food by Category: Volume 2018-2023
Table 60 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2018-2023

MARKET DATA

Table 61 Sales of Packaged Food by Category: Volume 2013-2018
Table 62 Sales of Packaged Food by Category: Value 2013-2018
Table 63 Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 64 Sales of Packaged Food by Category: % Value Growth 2013-2018
Table 65 GBO Company Shares of Packaged Food: % Value 2014-2018
Table 66 NBO Company Shares of Packaged Food: % Value 2014-2018
Table 67 LBN Brand Shares of Packaged Food: % Value 2015-2018
Table 68 Distribution of Packaged Food by Format: % Value 2013-2018
Table 69 Distribution of Packaged Food by Format and Category: % Value 2018
Table 70 Forecast Sales of Packaged Food by Category: Volume 2018-2023
Table 71 Forecast Sales of Packaged Food by Category: Value 2018-2023
Table 72 Forecast Sales of Packaged Food by Category: % Volume Growth 2018-2023
Table 73 Forecast Sales of Packaged Food by Category: % Value Growth 2018-2023

SOURCES

Summary 1 Research Sources