Unlocking Export Potential

Exports are a cornerstone of economic growth, enabling countries to boost foreign exchange reserves, create jobs, and drive industrial development. For Pakistan, exports have long been a vital economic driver, yet the potential within its food value chain remains underutilized. The global packaged food market, valued at $4.1 trillion, presents an immense opportunity for Pakistan to tap into, as rising demand for premium and sustainable food products shapes consumer trends. However, Pakistan’s export portfolio disproportionately relies on low-value, minimally processed goods like raw fruits, grains, and unbranded dairy products, which restricts its competitiveness on the global stage.

Neighboring countries such as India and Bangladesh have diversified their export portfolios with high-value, branded, and certified food products, capturing a more significant share of international markets. In contrast, Pakistan’s food export sector contributes a modest share to its economy, amounting to $500 million annually, and relies heavily on traditional markets like Afghanistan and the Middle East. By transitioning to high-value exports, Pakistan can unlock immense growth opportunities. Modernizing its food processing sector, valued at $1.4 billion and growing annually at 10%, is essential for the country to increase its share in the $150 billion halal food market and meet the evolving preferences of global consumers.

Driving High-Value Exports

Nestlé Pakistan exemplifies the transformative potential of investing in high-value food exports. At a recent event in Islamabad, Nestlé outlined its $50 million export vision for 2030, demonstrating how strategic planning can align with national economic goals. As the second-largest exporter in Pakistan’s packaged food industry, Nestlé leverages its robust local supply chain, sourcing over 90% of its raw materials domestically. This approach also supports local farmers and mitigates global supply chain disruption risks.

Currently, Nestlé exports to 26 countries, contributing $23 million to Pakistan’s export earnings as of 2024. Its export strategy emphasizes branded, high-value products tailored to international markets, making it a model for other local and multinational companies. Nestlé’s success highlights the importance of certifications and compliance with global standards, which allow access to premium markets in Europe, North America, and the Middle East. Head of Strategy & Exports Business, Nestlé Pakistan, Samra Maqbool says, “Since 2019, we have strategically focused on growing our export business, and the results have been outstanding.” The company’s achievements underline the broader potential of Pakistan’s food processing industry to contribute to the national economy.

Challenges and Pathways for Growth

Despite promising growth in the food processing sector, Pakistan faces significant challenges that limit its export potential. Infrastructural issues, such as fragmented supply chains, inadequate cold storage, and insufficient certification facilities, hinder the ability of exporters to compete globally. High post-harvest losses, especially in perishable items like dairy and fruits, further exacerbate the problem, reducing the quality and shelf life of products destined for international markets. Addressing these bottlenecks requires coordinated public-private efforts, such as investments in cold chain logistics and rural infrastructure.

Furthermore, meeting global standards for ethical sourcing and sustainability remains a significant hurdle. While markets like Europe and North America prioritize fair trade practices and sustainable production, the high certification and compliance costs make it difficult for smaller exporters to participate. Government support in the form of subsidies, training programs, and financial incentives could enable broader industry adoption of such practices, enhancing Pakistan’s appeal in premium markets.

Capturing High-Value Market Segments

Pakistan must diversify its export offerings beyond raw and minimally processed goods to compete with regional players. High-value segments like halal-certified foods, ready-to-eat meals, and premium-branded products represent untapped potential. By focusing on innovation, quality control, and international certifications, Pakistan can capture a more significant share of lucrative markets in the Middle East, Central Asia, and Europe. Additionally, establishing public-private partnerships (PPPs) to develop export-oriented innovation hubs and supply chain infrastructure can help bridge existing gaps.

With its potential for innovation and growth, the food value chain can become a cornerstone of Pakistan’s economic strategy. Companies like Nestlé demonstrate how aligning with global trends can transform local industries, setting an example for others. By addressing systemic challenges and investing in high-value exports, Pakistan can enhance its competitiveness and become a significant player in the global food industry.