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Powder Milk Industry in Pakistan

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This is a study on powdered milk industry in Pakistan. It contains an overview of Pakistani Market (specially urban areas), Milk food consumption patterns and competition analysis of major players in …

This is a study on powdered milk industry in Pakistan. It contains an overview of Pakistani Market (specially urban areas), Milk food consumption patterns and competition analysis of major players in FCMP, GUMP and other powdered milk categories.

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  • Very informative and a wonderful work done by your side, very impressive. Dear, could you please send this study to me on my email ID which is, haseebstile@yahoo.com i will really very thankful to you in this context. regards,
    Haseeb Azam.
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  • 1. Powdered Milk Industry in Pakistan MARKET ANALYSIS BY HASSAN KHAN
  • 2. PakistanUNDERSTANDING THE MARKET
  • 3. Pakistan Urban Population (Age) 50 - 64 65+ 0-4 8% 3% 11% 5-935 - 49 13% 15% 24% under 10 years 74% under 35 years 26% over 35 years 10 - 19 20 - 34 26% 24% Source: Pakistan Demographic Survey 2007
  • 4. Pakistan Urban Females (Age) 50 - 64 65+ 0-4 7% 3% 11%35 - 49 5-9 16% 13% 32% urban females are 30+ of age 10 - 19 20 - 34 25% 25% Source: Pakistan Demographic Survey 2007
  • 5. Socio Economic Classes Source: MEMRS (Consumer Multimedia Index) – CMI 2012 Wave
  • 6. Milk Production & Consumption Pakistan is the fifth largest milk producer in the world. Milk production is 28 million tons from 125 million heads. Milk is used for drinking, tea, desi ghee, yogurt and butter making With every passing day, dairy products are becoming costlier because live stock farming and milk collection has not scientifically grown with the increase in population and also it does not match with the pace of urbanization Usage of imported and branded packaged milk is increasing because of awareness about adulteration Source: Small and Medium Enterprise Development Authority, Pakistan
  • 7. Milk Production & Consumption In a short time of two years, milk prices have shown a 25 percent increase The average cost of fresh milk is Rs. 40 per litre The daily consumption of milk in Lahore is 2 to 3 million litres and that of Karachi is 4 million litres The demand for processed milk has increased its share in quality conscious consumers During the last two decades, processed milk share is growing at about 5 percent per annum Source: Small and Medium Enterprise Development Authority, Pakistan
  • 8. Types of Milk used in PakistanThe respondents in this survey are 2713 men and women of age 18 years and above spread across therural and urban areas of the four provinces of the country. They represent different age groups, educationstatus and socio economic profile.
  • 9. Factors in choosing a brandThe respondents in this survey are 2713 men and women of age 18 years and above spread across therural and urban areas of the four provinces of the country. They represent different age groups, educationstatus and socio economic profile.
  • 10. Average Milk consumption / householdThe respondents in this survey are 2713 men and women of age 18 years and above spread across therural and urban areas of the four provinces of the country. They represent different age groups, educationstatus and socio economic profile.
  • 11. Types of Milk – Urban vs. Rural Acceptance of packaged milk is 80% higher in urban areasThe respondents in this survey are 2713 men and women of age 18 years and above spread across therural and urban areas of the four provinces of the country. They represent different age groups, educationstatus and socio economic profile.
  • 12. Breastfeeding patterns 37 percent of infants are exclusively breastfed till six months Overall, more than half (56 percent) of breastfed children in the age bracket 6-23 months receive commercially produced infant formula or other milk. Source: Pakistan Demographic and Health Survey 2006-7
  • 13. Bone Health among females In Pakistan, one in three women over the age of 50 today has osteoporosis 90 percent women in urban areas and 30 percent women in rural areas are affected with weakness of bones Source: Pakistan Demographic and Health Survey 2006-7
  • 14. Summary Despite being the fifth largest milk producer, Pakistan is not producing milk as per its requirements. Hence, milk prices are increasing Metropolitan cities are the major markets for the sale of processed and packaged milk. Acceptance of packaged milk is 80% higher in urban cities SEC A&B constitutes 34% of the total population Females (Age 30+) are 32% of the urban population. Pakistan has a young population with median age of 22 years More than 80% of the households consume 0.5 to 3 litres of milk daily More than 50% of the consumers choose a milk brand based on Availability and Taste Women bone health is a major concern, however, the lack of awareness is a major threat. In urban cities, there is more awareness The dependency on infant formula milk is increasing Usage of imported and branded packaged milk is increasing because of awareness about adulteration
  • 15. CompetitionWHERE DO THEY STAND?
  • 16. Powder Milk Industry - Volume 5% 1%29% FCMP Tea Whiteners GUMP Others 65% Industry Volume: 34,954 tons
  • 17. Powder Milk Industry - Value 8% 1% FCMP29% Tea Whiteners GUMP Others 62% Industry Value: PKR 21.7 Billion
  • 18. Full Cream Milk Powder (FCMP)• Nido is the main competitor with 80% market share• Tea whiteners and food supplements are indirect competitors
  • 19. FCMP Industry 12%8% Nido Fortified Nido Buniyad 51% Imported Brands Others29%Industry Volume per annum: 22,757 tonsIndustry Value per annum: PKR 13.5 Billion
  • 20. Competition Pricing - FCMPBrand Quantity Packaging PriceNido Fortified (imported) 1.8 Kg Tin PKR 1,449Nido Fortified (imported) 2.5 Kg Tin PKR 1,889Nido Fortified 1 Kg Soft Pack PKR 625Nido Fortified 400 gm Soft Pack PKR 290Nido Fortified 650 gm Soft Pack PKR 410Nido Fortified 195 gm Soft Pack PKR 145Nido Fortified 910 gm Soft Pack PKR 600Nido Buniyad 260 gm Soft Pack PKR 140Nido Buniyad 130 gm Soft Pack PKR 70Nido Buniyad 26 gm Sachet PKR 14Millac (imported) 2.5 Kg Tin PKR 1,999
  • 21. Competition Pricing – Other ProductsBrand Quantity Packaging Price RangeEnsure 400 gm Tin PKR 788 – 825PediaSure 400 gm Tin PKR 655 – 695Glucerna 400 gm Tin PKR 994 – 1058
  • 22. Nido Fortified NIDO positions to provide a strong foundation for growth and development by giving children the very best in health and nutrition. It claims to be enriched with iron, 24 vitamins and minerals that are essential for child’s growth, which can be tracked by the 10 signs of good nutrition NIDO usually demands high prices as it targets school going children in cities However it also caters to the middle class by keeping different packs with different prices so the middle class sector can buy smaller packs as they cost less Also by being available in different sizes and packages (tins, soft packs and poly bags); it claims to cater to the convenience of its customers Nido also has a low priced FCMP brand called ‘Nido Buniyad’ which is also available in sachets and is positioned for children of age 1-15
  • 23. Millac positions itself on TASTE Millac is available in Tins and Poly Bags.
  • 24. PediaSure also associates itself with childs growth. However, it positions itself as a foodsupplement and not as a replacement of milk. It is available in three different flavors.
  • 25. Growing Up Milk Powder (GUMP) Currently there are many GUMP brands available in the markets (mostly imported) Most of the products are available in 400 gm packing only Some products like Cow & Gate and Nido are also available in soft packs
  • 26. GUMP Industry35% Nido Imported 65% Industry Volume per annum: 1,667 tons Industry Value per annum: PKR 1.8 Billion
  • 27. Competition Pricing - GUMPBrand Quantity Packaging Price RanceCow & Gate 1,2,3 400 gm Tin PKR 525 – 580BioMIL 400 gm Tin PKR 535 – 565EnfaGrow A+ 400 gm Tin PKR 612 – 635Meiji Big 400 gm Tin PKR 540 – 565Nido 1+, 3+ 400 gm Tin PKR 555 – 595Nido 1+, 3+ 400 gm Soft Pack PKR 360SMA 400 gm Tin PKR 899 – 995Progress Gold 400 gm Tin PKR 525 - 625
  • 28. Pregnant & Breastfeeding Women• Very few choices for Mother’s health products• The only packaging available in the market is 400gm tins (all imported)
  • 29. Competition Pricing – Pregnancy & BreastfeedingBrand Quantity Price RangeEnfamama 400 gm PKR 714 – 735LadyMil 400 gm PKR 655 – 695Similac Mom 400 gm PKR 660 – 700
  • 30. Bone health for Women• Nestle Nesvita is the only significant available option• This product is available both in powder (Soft pack) and Liquid (tetra pack) Variant Price 360 gm (Powder) PKR 245 250 ml (liquid) PKR 25 1000 ml (Liquid) PKR 109
  • 31. Bone Health Category7% 20% Liquid Nestle Powder Other 93% 80% Industry Volume per annum (Powder): 100 tons Industry Value per annum (Powder): PKR 68 Million
  • 32. Tea Whiteners The industry volume of Tea Whiteners (powder) is 10,000 tons per annum Nestle Everyday enjoys monopoly in this category Everyday’s composition includes around 28% sugar to give it a creamier and sweeter taste It has become a preferred choice in creaming tea specially in urban population There is an extra imposition of 16% GST due to its composition
  • 33. Tea Whiteners – Pricing comparison with FCMP Nido (FCMP) Consumer Nestle Consumer Price Everyday Price 1kg 625 1kg 560 400 gm 290 400 gm 250 650 gm 410 38 gm 18 195 gm 145 20 gm 12 910 gm 599 14 gm 8
  • 34. Cheese and Butter MarketCheese: Currently there is no significant and organized player in cheese market in Pakistan Individual businesses are importing brands from all over the world There is a significant potential in domestic usage for SEC A and commercial usage specially for international food chains Cold chain distribution is required for this category in which we have extensive experienceButter: Many local players including nestle are playing in this category A small imported market exists and can be explored/ tapped further
  • 35. Summary Nido / Nestle is the main competitor in all categories except pregnant and breastfeeding categories Nido has 80% share in FCMP and 65% in GUMP category Liquid is more popular (93% share) in overall bone health category 29% of the total milk powder industry is milk whiteners Imported brands are mostly available in tin packaging only, whereas local brands are also available in cheaper packaging Prices of most of products are not constant even in the same city This trend confirms that price discounts are offered to the retailers based on volumes which are transferred to the customers Retailers for these products include Super markets, Departmental Stores and Pharmacies
  • 36. Thank you!@hassank +92 344 9400 400hassankhanpk hassankh@gmail.comlinkedin.com/in/hassankh oooberhhasankh hassankhyoutube.com/hassankhanpk hassankhanpk.blogspot.com

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