Oils and Fats in Pakistan: Euromonitor International October 2015

OILS AND FATS IN PAKISTAN
Euromonitor International
October 2015
OILS AND FATS IN PAKISTAN Passport I
LIST OF CONTENTS AND TABLES

Headlines ..................................................................................................................................... 1
Trends .......................................................................................................................................... 1
Competitive Landscape ................................................................................................................ 1
Prospects ..................................................................................................................................... 2
Category Data .............................................................................................................................. 3
Table 1 Sales of Oils and Fats by Category: Volume 2010-2015 .............................. 3
Table 2 Sales of Oils and Fats by Category: Value 2010-2015 ................................. 3
Table 3 Sales of Oils and Fats by Category: % Volume Growth 2010-2015 ............. 3
Table 4 Sales of Oils and Fats by Category: % Value Growth 2010-2015 ................ 4
Table 5 NBO Company Shares of Oils and Fats: % Value 2011-2015 ..................... 4
Table 6 LBN Brand Shares of Oils and Fats: % Value 2012-2015 ............................ 5
Table 7 Distribution of Oils and Fats by Format: % Value 2010-2015 ....................... 5
Table 8 Forecast Sales of Oils and Fats by Category: Volume 2015-2020 ............... 6
Table 9 Forecast Sales of Oils and Fats by Category: Value 2015-2020 .................. 6
Table 10 Forecast Sales of Oils and Fats by Category: % Volume Growth
2015-2020 .................................................................................................... 7
Table 11 Forecast Sales of Oils and Fats by Category: % Value Growth 2015-
2020 ............................................................................................................. 7
© Euromonitor International
OILS AND FATS IN PAKISTAN Passport 1
OILS AND FATS IN PAKISTAN

HEADLINES
 Oils and fats current value sales increase by 13% to reach PKR140 billion in 2015
 Increasing health consciousness drives sales of healthier oils and fats
 Olive oil leads growth in 2015, with current value sales rising by 15%
 Average current unit prices within oils and fats increase by 10% in 2015
 Dalda Foods continues to lead sales in 2015, recording a value share of 24%
 Oils and fats has a projected forecast period constant 2015 price value CAGR of 2%
TRENDS
 Pakistani food is usually prepared with a generous quantity of oils and fats, which are high in
fat content and less healthy. However, due to rising awareness and increasing health
consciousness, there has been a trend towards increasing usage of healthier oils and fats.
This is evident from the fact that companies have started to market their products with claims
of added healthy nutrients.
 Oils and fats current value sales increased by 13% in 2015 to reach PKR140 billion. This
growth rate was slower than that observed during the review period, primarily due to
increasing prices and rising consumer health consciousness. Price increases resulted in
consumers reducing consumption or switching to low priced products. Increasing awareness
of healthy products encouraged consumers to cut down on consumption of oils and fats as
they perceive it to be less healthy.
 Olive oil led growth in 2015, with current value sales rising by 15%, although sales within the
area remain limited. Most traditional dishes do not require olive oil as an ingredient. However,
due to the westernisation trend, more consumers are trying out Western dishes that often
require olive oil as a main ingredient. This awareness has also been fuelled by cooking shows
on TV, which teach viewers about new dishes and encourage them to try out new ingredients.
 Average current unit prices within oils and fats increased by 9% in 2015, mainly due to
inflation. Rising raw material prices resulted in higher production costs. Moreover, the energy
crisis put an extra burden on manufacturers, with increased manufacturing costs leading to
higher prices of oils and fats.
 Unpackaged oils and fats accounts for a major portion of oils and fats sales in the country.
Unpackaged sales are very high in rural areas as unpackaged products are much cheaper
than branded products. However, with increasing awareness and product penetration, many
consumers are shifting from these unpackaged products to packaged ones.
 Oils and fats continue to be bought mainly from traditional retailers. Traditional grocery
retailers like independent small grocers are located in each neighbourhood and offer
convenience to consumers. However, due to increasing urbanisation, the share of modern
retailers continues to grow as the number of supermarkets and hypermarkets continues to
increase.
COMPETITIVE LANDSCAPE
 Dalda Foods continued to lead sales in 2015, recording a value share of 24%, followed by
Wazir Ali Industries (14%) and Habib Oil Mills (15%). These companies offer high quality
products and have wide distribution networks which allow them to fulfil the needs of
consumers. Moreover, high marketing investment ensures that they continue to reaffirm their
presence in the market.
 There was no significant increase or decrease in company value shares in 2015.
Manufacturers continue to focus on strengthening their distribution networks and making their
products available in all outlets.
 Domestic companies continue to completely dominate oils and fats due to the fact they have
been present in the market for a long time and consumers place great trust in their products.
In addition, such companies have strong product portfolios, continue to fulfil the needs of their
customers, have established strong distribution networks and continue to market their
products heavily.
 Dalda Foods recently launched Dalda Sunflower Oil with lo-absorb technology. The product
claims to have a low fat content which is ideal for those looking to consume healthy oil.
 Dalda recently launched its Dalda Sunflower Oil with lo-absorb technology with an extensive
promotional campaign. The tagline used was “Eat lighter, live brighter”, with the campaign
featuring TV, radio and printed media advertising.
 Premium brands rely on their strong brand image and high quality products and also offer
innovative packaging in order to provide convenience to consumers. Economy brands rely on
their low price points to drive sales. These brands have strong distribution networks in rural
areas, which account for the majority of their sales.
PROSPECTS
 Due to ongoing westernisation, consumers are expected to become more health conscious
and will look to cut down on consumption of high fat food and consume healthier diets. This
will lead them to look for products with nutritional benefits. Companies will look to exploit this
by providing added nutrients in their products.
 Oils and fats’ projected forecast period constant 2015 price value CAGR of 2% is lower than
the review period CAGR. Growth is expected to slow down as prices continue to rise. High
prices will lead consumers to look for alternative cheaper products – a development which will
negatively impact growth.
 Average unit prices within oils and fats are expected to increase during the forecast period.
The ongoing energy crisis will impact production costs of manufacturers. Moreover, rising raw
material prices will also impact costs. Companies will be under added pressure and will try to
maintain their margins by increasing prices.
 Traditional retailers will continue to be the dominant sales channel for oils and fats due to their
presence in all neighbourhoods in the country. However, due to urbanisation and the
increasing number of supermarkets and hypermarkets, the sales share of modern retailers in
oils and fats will increase.
 Companies are expected to focus on the health aspects of their products by offering them
with added nutrients. In addition, companies will look to capitalise on rising consumer health
consciousness and continue to invest heavily in mass marketing in order to differentiate their
products and gain a competitive advantage. With new product launches, marketing will play a
huge role in driving sales within oils and fats.
 New product launches such as Dalda Sunflower Oil are expected to perform well over the
forecast period, with the latter product expected to prove popular amongst consumers due to
its low fat content. Increasing health awareness among consumers has fuelled demand for
such products and more companies are expected to follow Dalda’s lead and launch their own
versions of products with healthy nutritional value.
CATEGORY DATA
Table 1 Sales of Oils and Fats by Category: Volume 2010-2015
'000 tonnes
2010 2011 2012 2013 2014 2015
Butter 1.0 1.0 1.0 1.0 1.0 1.0

Cooking Fats 66.3 67.6 68.8 69.9 70.9 71.8
Margarine - - - - - -
Olive Oil 1.9 2.0 2.2 2.4 2.6 2.8
Spreadable Oils and Fats 1.6 1.6 1.7 1.7 1.8 1.9
Vegetable and Seed Oil 89.1 97.7 102.0 105.4 110.6 115.1
- Corn Oil - - - - - -
- Palm Oil - - - - - -
- Rapeseed Oil - - - - - -
- Soy Oil - - - - - -
- Sunflower Oil - - - - - -
- Other Vegetable and 89.1 97.7 102.0 105.4 110.6 115.1
Seed Oil
Oils and Fats 159.8 170.0 175.6 180.4 186.8 192.5
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
Table 2 Sales of Oils and Fats by Category: Value 2010-2015
PKR billion
2010 2011 2012 2013 2014 2015
Butter 0.6 0.6 0.7 0.8 0.9 1.0

Cooking Fats 22.2 25.1 28.9 32.7 36.8 41.1
Olive Oil 1.2 1.5 1.8 2.1 2.4 2.8
- Corn Oil - - - - - -
- Palm Oil - - - - - -
- Soy Oil - - - - - -
Seed Oil
Oils and Fats 69.8 81.9 95.7 109.2 123.8 139.9
Table 3 Sales of Oils and Fats by Category: % Volume Growth 2010-2015
% volume growth
2014/15 2010-15 CAGR 2010/15 Total
Butter -1.0 -1.1 -5.2

Cooking Fats 1.3 1.6 8.4
Margarine - - -
Olive Oil 7.3 8.3 49.2
Spreadable Oils and Fats 5.0 3.7 19.6
Vegetable and Seed Oil 4.1 5.2 29.1
- Corn Oil - - -
- Palm Oil - - -
- Rapeseed Oil - - -
- Soy Oil - - -
- Sunflower Oil - - -
- Other Vegetable and Seed Oil 4.1 5.2 29.1
Oils and Fats 3.1 3.8 20.4
Table 4 Sales of Oils and Fats by Category: % Value Growth 2010-2015
% current value growth

2014/15 2010-15 CAGR 2010/15 Total
Butter 10.0 11.6 72.8

Margarine - - -
Olive Oil 14.8 17.5 124.1
- Corn Oil - - -
- Palm Oil - - -
- Soy Oil - - -
Oils and Fats 13.0 14.9 100.5
Table 5 NBO Company Shares of Oils and Fats: % Value 2011-2015
% retail value rsp

Company 2011 2012 2013 2014 2015
Dalda Foods (Pvt) Ltd 23.3 23.8 24.2 23.9 23.9

Wazir Ali Industries Ltd 17.4 18.5 19.6 19.9 20.4
Habib Oil Mills (Pvt) Ltd 14.8 14.5 14.7 14.9 15.3
Zahoor Industries (Pvt) 6.9 7.2 7.0 6.9 6.7
Ltd
Agro Processors & 6.2 5.9 5.6 5.4 5.3
Atmospheric Gases (Pvt)
Ltd
Wali Oil Mills (Pvt) Ltd 5.1 4.9 4.9 4.9 4.8
Agro Industries (Pvt) Ltd 2.9 2.7 2.7 2.7 2.7
Nestlé SA 2.8 2.6 2.5 2.4 2.3
Unilever Pakistan Ltd 2.4 2.3 2.3 2.3 2.2
Ahmed Vegetable Oil & 1.3 1.2 1.1 1.0 0.9
Ghee Mills Ltd
Noon Pakistan Ltd 0.8 0.8 0.9 0.9 0.8
Arla Foods Amba 0.2 0.1 0.1 0.1 0.1

Rafhan Bestfoods Ltd - - - - -
SOS Corp Alimentaria SA - - - - -
Others 15.9 15.4 14.6 14.8 14.6
Total 100.0 100.0 100.0 100.0 100.0
Table 6 LBN Brand Shares of Oils and Fats: % Value 2012-2015
% retail value rsp

Brand Company 2012 2013 2014 2015
Dalda Dalda Foods (Pvt) Ltd 23.8 24.2 23.9 23.9

Tullo Wazir Ali Industries Ltd 15.0 15.7 16.0 16.3
Habib's Habib Oil Mills (Pvt) Ltd 9.4 9.7 10.1 10.7
Pakwan Zahoor Industries (Pvt) 7.2 7.0 6.9 6.7
Ltd
Soya Supreme Agro Processors & 4.5 4.4 4.4 4.4
Ltd
Pride Wazir Ali Industries Ltd 3.6 3.8 4.0 4.1
Seasons Wali Oil Mills (Pvt) Ltd 2.8 2.8 2.7 2.7
Eva Agro Industries (Pvt) Ltd 2.7 2.7 2.7 2.7
Haleeb Habib Oil Mills (Pvt) Ltd 2.9 2.8 2.7 2.6
MilkPak Nestlé SA 2.6 2.5 2.4 2.3
Sundrop Wali Oil Mills (Pvt) Ltd 2.1 2.1 2.1 2.1
SoyBean Super Habib Oil Mills (Pvt) Ltd 2.3 2.2 2.1 2.0
Bertolli Unilever Pakistan Ltd 1.3 1.3 1.3 1.3
Blue Band Unilever Pakistan Ltd 1.0 1.0 1.0 0.9
Malta Agro Processors & 1.4 1.1 1.0 0.9
Ltd
Shahbaz Banaspati Ahmed Vegetable Oil & 1.2 1.1 1.0 0.9
Ghee Mills Ltd
NurPur Noon Pakistan Ltd 0.8 0.9 0.9 0.8
Lurpak Arla Foods Amba 0.1 0.1 0.1 0.1
Rafhan Rafhan Bestfoods Ltd - - - -
Sasso SOS Corp Alimentaria SA - - - -
Others 15.4 14.6 14.8 14.6
Total 100.0 100.0 100.0 100.0
Table 7 Distribution of Oils and Fats by Format: % Value 2010-2015
% retail value rsp

2010 2011 2012 2013 2014 2015
Store-Based Retailing 100.0 100.0 100.0 100.0 100.0 100.0

- Grocery Retailers 92.0 91.5 91.4 89.0 88.8 88.7
-- Modern Grocery 5.6 5.6 5.6 5.5 5.5 5.5
Retailers
--- Convenience Stores - - - - - -
--- Discounters - - - - - -
--- Forecourt Retailers - - - - - -
--- Hypermarkets 0.0 0.0 0.0 0.5 0.5 0.5
--- Supermarkets 5.6 5.6 5.6 5.0 5.0 5.0

-- Traditional Grocery 86.4 85.9 85.7 83.5 83.3 83.2
Retailers
--- Food/drink/tobacco - - - - - -
specialists
--- Independent Small 46.0 46.0 45.8 45.3 45.0 45.0
Grocers
--- Other Grocery 40.4 39.9 39.9 38.3 38.3 38.2
Retailers
- Non-Grocery Specialists 8.0 8.5 8.6 11.0 11.3 11.3
-- Health and Beauty 4.0 4.2 4.3 4.3 4.3 4.2
Specialist Retailers
-- Other Foods Non- 4.0 4.3 4.4 6.7 7.0 7.1
Grocery Specialists
- Mixed Retailers - - - - - -
Non-Store Retailing - - - - 0.0 0.0
- Vending - - - - - -
- Homeshopping - - - - - -
- Internet Retailing - - - - 0.0 0.0
- Direct Selling - - - - - -
Total 100.0 100.0 100.0 100.0 100.0 100.0
Table 8 Forecast Sales of Oils and Fats by Category: Volume 2015-2020
'000 tonnes
2015 2016 2017 2018 2019 2020
Butter 1.0 1.0 0.9 0.9 0.9 0.9

Cooking Fats 71.8 72.3 72.6 73.0 73.6 74.2
Olive Oil 2.8 3.0 3.2 3.4 3.6 3.8
- Corn Oil - - - - - -
- Palm Oil - - - - - -
- Soy Oil - - - - - -
Seed Oil
Oils and Fats 192.5 197.3 201.6 206.1 210.9 216.2
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Table 9 Forecast Sales of Oils and Fats by Category: Value 2015-2020
PKR billion
2015 2016 2017 2018 2019 2020
Butter 1.0 1.0 1.0 1.1 1.1 1.1

Cooking Fats 41.1 42.2 43.1 44.0 44.7 45.3
Olive Oil 2.8 3.0 3.2 3.4 3.5 3.7
- Corn Oil - - - - - -
- Palm Oil - - - - - -
- Soy Oil - - - - - -
Seed Oil
Oils and Fats 139.9 144.2 148.4 151.8 154.6 156.7
trade sources
Table 10 Forecast Sales of Oils and Fats by Category: % Volume Growth 2015-2020
% volume growth
2015/16 2015-20 CAGR 2015/20 Total
Butter -1.2 -0.7 -3.5

Margarine - - -
Olive Oil 7.3 6.6 37.7
- Corn Oil - - -
- Palm Oil - - -
- Soy Oil - - -
trade sources
Table 11 Forecast Sales of Oils and Fats by Category: % Value Growth 2015-2020
% constant value growth

2015/2016 2015-20 CAGR 2015/20 TOTAL
Butter 1.9 2.2 11.7

Margarine - - -
Olive Oil 7.0 5.6 31.1
- Corn Oil - - -
- Palm Oil - - -
- Soy Oil - - -
trade sources

Oils and Fats in Pakistan: Euromonitor International October 2015

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OILS AND FATS IN PAKISTAN

LIST OF CONTENTS AND TABLES

OILS AND FATS IN PAKISTAN

Butter 1.0 1.0 1.0 1.0 1.0 1.0

Table 2 Sales of Oils and Fats by Category: Value 2010-2015

Butter 0.6 0.6 0.7 0.8 0.9 1.0

Table 3 Sales of Oils and Fats by Category: % Volume Growth 2010-2015

Butter -1.0 -1.1 -5.2

Table 4 Sales of Oils and Fats by Category: % Value Growth 2010-2015

% current value growth

Butter 10.0 11.6 72.8

Table 5 NBO Company Shares of Oils and Fats: % Value 2011-2015

% retail value rsp

Dalda Foods (Pvt) Ltd 23.3 23.8 24.2 23.9 23.9

Arla Foods Amba 0.2 0.1 0.1 0.1 0.1

Table 6 LBN Brand Shares of Oils and Fats: % Value 2012-2015

% retail value rsp

Dalda Dalda Foods (Pvt) Ltd 23.8 24.2 23.9 23.9

Table 7 Distribution of Oils and Fats by Format: % Value 2010-2015

% retail value rsp

Store-Based Retailing 100.0 100.0 100.0 100.0 100.0 100.0

--- Supermarkets 5.6 5.6 5.6 5.0 5.0 5.0

Table 8 Forecast Sales of Oils and Fats by Category: Volume 2015-2020

Butter 1.0 1.0 0.9 0.9 0.9 0.9

Table 9 Forecast Sales of Oils and Fats by Category: Value 2015-2020

Butter 1.0 1.0 1.0 1.1 1.1 1.1

Butter -1.2 -0.7 -3.5

% constant value growth

Butter 1.9 2.2 11.7

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