THE way we eat is under constant evolution. Food is no longer the tedious, labour-intensive affair of yesteryear in urban households. Ready-to-cook, store-bought items are steadily making their way onto our plates.

The rising Pakistani urban middle-class and growing disposable incomes are accountable for this shift in dietary patterns.

The Household Integrated Survey for 2015-16, conducted by the Pakistan Bureau of Statistics, reveals that the average monthly income of urban households rose from Rs38,923 previously to Rs45,283. It also shows that an average urban family spends around Rs15,000 monthly on food, of which readymade food contributes nearly five per cent.

The lure of convenience when it comes to food is hard to resist for consumers as cityscapes in the country become increasingly peppered with supermarkets. “More and more middle-, upper-middle and upper-class consumers in urban areas are choosing to visit modern retailers, in particular for a new experience and for the bulk shopping of packaged food products,” according to Euromonitor International, a market research firm.

Unsurprisingly, middle-class consumers “tend to consume far more meat, fish and dairy products”, according to a Deloitte report on the food value chain. With the surge of the processed food industry, small- and medium-sized companies such as K&N’s, Dawn, Menu, PK Livestock, and Big Bird have now become household names.

But alongside this lifestyle shift came a growing segment of the population wary of media reports unveiling harmful additives, unsavoury breeding practices, and diseases prevalent in meat in the processed food industry. The anxiety is so potent that even big players such as K&N’s have been compelled to invest in huge billboards declaring that their chickens are raised on ‘100pc vegetarian feed’.

“I think the consumer is reverting back to traditional food because people have become health-conscious,” says Yousuf Jamshed, CEO of retail consultancy LXY Global.

Touching on the industries’ business aspect, he says: “If you look at the numbers, MonSalwa is not doing well at all. Menu is just okay. Big Bird is in complete loss — it decided last week there would be no extension in retail. Dawn Foods is mostly surviving due to their bread products. K&N’s is the only player in the market that is successful. There’s definitely a dent in the market.”

Tariq Mahmood Butt, CEO of PK Livestock Company, elaborates on his company’s success as both a top meat exporter to the Gulf region and a stable player in the domestic market. He also addresses concerns regarding hygiene: “Our company is Hazard Analysis and Critical Control Points (HACCP) certified. If you visit the facility yourself, you will be able to see how hygienic our whole process is… If you’re concerned about chemicals, please cast the thought out of your mind. There are absolutely no chemicals mixed, at all.”

A major drawback associated with value-added products is the price factor. Since meat forms the biggest component of a processed food item, with fluctuating market prices and a further rise of two- to threefold after value-addition, it becomes a challenge for companies to remain profitable. Furthermore, imported raw materials have duties of 6-25pc.

Lamenting the role of taxes in inevitably increasing the prices of processed food, Mr Butt added: “Such high taxes rarely exist anywhere in the world. If you go to buy raw meat, there are no taxes on it. But for value-added products, the taxes naturally make the price relatively higher. People will shift [to processed meat] if there is greater awareness regarding the hygienic conditions processed food is made in. Sadly, some people will always remain suspicious.”

Officials of the Ministry of National Food Security and Research and the Federal Board of Revenue could not be reached for comment.

Synonymous with processed food is the image of the broiler chicken. Commercial poultry farming took root in the country around the 1960s and the current turnover of the industry is estimated to be Rs750 billion.

“Every year there has been 10-15pc growth. Currently the growth is at 10pc per annum,” says Chairman of the Pakistan Poultry Association Dr Muhammad Aslam. “Our per capita consumption of chicken is around 9-10kg. Around 30 million chickens are slaughtered every week in Pakistan.”

He reassures that all parameters are met to ensure quality breeding of the chickens, from US-imported feed to temperature-controlled sheds.

“A vibrant food processing industry is important for a developing country for its strong backward and forward linkages,” the State Bank of Pakistan says in its first-quarterly report for the 2016-17 fiscal year.

Despite this, many companies in the food processing industry incur great losses in the local market. Big Bird, a licensed supplier of poultry meat to McDonald’s, KFC, Subway, Pakistan International Airlines, Shaheen Air, and Pearl Continental has suffered so greatly in the retail sector that is has now begun focusing on exports.

Saleem Mushtaq, business information manager at the Big Bird Group of Companies, provides some answers. “Big Bird does not compromise on quality so they incur more losses.”

The other reason Mr Mushtaq mentions is consumers’ mindset. “Customers will fixate on prices, disregarding the backward integration of the food chain. Thus, sales revenue declines and losses are augmented.”

Published in Dawn, The Business and Finance Weekly, February 19th, 2018