Mixed 2025 for food giants amid economic strain

KARACHI: Amid rising concerns over consumers’ falling purchasing power and 44.7 per cent of people living below the national poverty line as per the World Bank threshold, the foreign and local manufacturers of food products enjoyed quite a stable 2025 in terms of sales.

However, manufacturers believe the business environment remains challenging despite macroeconomic stability, improving foreign exchange reserves, and ongoing IMF engagement. However, some eye stability in the business environment in 2026.

An increase in sales also suggest some improvement in employment, while some companies faced a drop in sales but witnessed increase in profit after tax (PAT).

As most companies do not disclose quantity of goods in their financial reports, they prefer reporting sales figures in rupees, which fluctuate depending on price changes of the goods.

Companies remain cautiously optimistic for 2026, focusing on brand investment, operational efficiency

Companies remain cautiously optimistic for 2026, focusing on brand investment, operational efficiency

Nestlé Pakistan posted revenue growth of 3 per cent to Rs199 billion in 2025 from Rs193bn in 2024, accompanied by an increase in PAT to Rs17.2bn from Rs15bn.

The growth was driven by a strong second half of the year, which saw a 14.3pc increase in top-line revenue. This recovery, supported by a favourable product mix, tighter overhead controls, and value chain optimisation initiatives, led to improvement in gross and operating profit margins.

Improved profitability coupled with effective working capital management helped generate free cash flows, which were used to settle third-party debt, resulting in lower finance costs and higher net profit compared to last year.

“The percentage of female leaders grew to 32pc in 2025 from 27.5pc in 2024,” Nestle said, projecting a stable business outlook for 2026, supported by continued investment in core brands to reinforce market leadership across key categories.

Unilever Pakistan Foods Limited reported a robust 20.4pc growth in net sales to Rs40.5bn in 2025, up from Rs34bn in 2024, mainly driven by strong volumetric performance across all product segments, with Knorr Noodles leading the growth. However, PAT fell to Rs5.9bn from Rs6.97bn in same period.

While Pakistan’s macroeconomic environment shows signs of stabilisation, underpinned by fiscal discipline, ongoing IMF engagement, and improved foreign exchange reserves, Unilever described the operating landscape as delicate.

Inflationary pressures remain a persistent challenge, posing a direct risk to currency stability and the broader economic outlook. The company remains focused on navigating this environment responsibly. It said it will continue to monitor cost dynamics closely and make timely prudent pricing adjustments.

Revenue from contracts with customers of Friesland Campina Engro Pakistan Limited marginally plunged to Rs104 billion in 2025 from Rs107bn in 2024, but PAT soared to Rs2.7bn from Rs2.2bn.

The combined impact of improved commercial execution and cost optimisation resulted in an expansion in gross margin of 70 basis points and growth in operating profit of 16pc compared to 2024, the company said.

Whilst the implementation of the 18pc sales tax on packaged milk in 2024 continues to be a challenge for the industry, FrieslandCampina remains resilient and continues to build on the strong foundations of its business by strengthening brands and reinforcing consumer trust in the safety and nutritional value of packaged dairy.

The turnover of Colgate Palmolive Pakistan Limited (CPPL) surged by 5.1pc to Rs82bn during July-December 2025 from Rs77.7bn in the same period of 2024 due to higher sales volume, while PAT fell by 10.2pc to Rs8.7bn from Rs9.7bn. The decline was attributed to increased trade investments and reduced interest income.

CPPL said that Pakistan’s economy shows early signs of improvement, though consumer spending remains subdued.

Fauji Foods Limited (FFL) delivered its highest-ever sales revenue of Rs29bn in 2025, representing a robust growth of 23.4pc over the previous year. Cost optimisation and a high-margin portfolio allowed the company to increase its gross margin by oveг 22pc. The company earned PAT of Rs1.15bn, showing a jump of 76pc over 2024.

While the national economy experienced a “calm after the storm,” marked by a sharp decline in inflation to 4pc and a historic current account surplus, the formal dairy sector faced its own headwinds.

Ismail Industries Limited (IIL) achieved gross sales of Rs61.5bn during July-December 2025, representing a 4.1pc increase over the corresponding period last year, supported by stable domestic demand across core Fast Moving Consumer Goods (FMCGs) categories and a continued focus on distribution and product availability.

Published in Dawn, March 1st, 2026

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