Food Industry Analysis

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Food and beverage industry is considered to be one of the largest industrial sectors in Pakistan. It accounts for around 19% of total production output in LSM. The processed food industry consists of dairy plants, sea food/fisheries, livestock & poultry, fruits & vegetables, beverages, confectionery and biscuits & breads. Rapidly growing items are dairy products, fish processed, bakery items, sugar, biscuits & confectioneries, fruit juices and other soft beverages. Currently, the production is not only meeting local demand but items are also being exported. Several major companies including well known multinationals have substantial investment commitments and there are also a large number of mid-sized domestic firms.

Without a developed tourism sector and without the presence of a formal food retailing sector to support demand for consumer goods, Pakistan's near-term growth in the consumer-facing sectors is arguably hinged on two factors, namely remittance inflows and food inflation. Although BMI expect remittance growth to moderate over the coming quarters due to external headwinds in developed markets such as the US and the UK, remittance inflows are likely to sustain healthy growth momentum in the near future. On another positive note, inflationary pressures have been losing steam in recent months, which should prompt more consumers to loosen their purse strings. These positives should keep domestic demand well-supported over the coming months. Despite these near-term positives, Pakistan remains beset by a destabilising insurgency, a chronic lack of electricity generation capacity and an unskilled labour force - all of which are likely to prove medium-term hurdles to sustained economic development. This will in turn affect the development of the consumer sector Headline Industry Data

2011 food consumption growth = +6.9%, CAGR forecast to 2015 = +12.8% •2011 soft drinks value sales growth = +6.3%, CAGR forecast to 2015 = +6.4% •2011 mass grocery...
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