National Foods Limited: The margin squeeze dilemma
Abstract/Description
This case study examines the strategic response of National Foods Limited (NFL), a leading Pakistani FMCG company, to a major margin squeeze in 2023. Despite reporting net sales of PKR 64.3 billion, NFL’s Savory Condiments division, pickles segment, faced profitability pressure due to hyperinflation (37.97%), rising raw material costs (mangoes +30%, oil +50%), increased import duties, packaging cost hikes (+33%), and currency devaluation.
Led by the Brand Manager, NFL evaluated four strategic levers: direct price increases, local raw material sourcing, packaging optimization, and product reformulation. A multi-pronged approach was adopted, implementing tiered price hikes (up to 55% on premium SKUs), localizing inputs (saving 15–25%), optimizing packaging (8–12% savings), and adjusting formulations based on consumer testing.
Though this initially caused a 10–15% dip in sales and brand metrics, follow-up marketing efforts enabled a swift recovery. Sales rebounded by 15–20%, alongside improvements in Top-of-Mind Awareness and Brand Equity. This case provides actionable insights for FMCG firms in volatile markets, emphasizing how integrated cost strategies and consumer-centric execution can preserve profitability without compromising long-term brand value.
Keywords
Margin Squeeze, Cost Optimization, Pricing Strategy, FMCG, Pakistan, National Foods Limited
Track
Case
Session Number/Theme
Marketing - Session I
Session Chair
Dr. Jawaid A. Qureshi
Start Date/Time
14-6-2025 9:00 AM
End Date/Time
14-6-2025 10:40 AM
Location
FACULTY LOUNGE1st Floor, AMAN CED Building
Recommended Citation
Faiz, S., Aslam, A., Azam, A., & Zubair, M. (2025). National Foods Limited: The margin squeeze dilemma. IBA SBS 4th International Conference 2025. Retrieved from https://ir.iba.edu.pk/sbsic/2025/program/109
COinS
National Foods Limited: The margin squeeze dilemma
FACULTY LOUNGE1st Floor, AMAN CED Building
This case study examines the strategic response of National Foods Limited (NFL), a leading Pakistani FMCG company, to a major margin squeeze in 2023. Despite reporting net sales of PKR 64.3 billion, NFL’s Savory Condiments division, pickles segment, faced profitability pressure due to hyperinflation (37.97%), rising raw material costs (mangoes +30%, oil +50%), increased import duties, packaging cost hikes (+33%), and currency devaluation.
Led by the Brand Manager, NFL evaluated four strategic levers: direct price increases, local raw material sourcing, packaging optimization, and product reformulation. A multi-pronged approach was adopted, implementing tiered price hikes (up to 55% on premium SKUs), localizing inputs (saving 15–25%), optimizing packaging (8–12% savings), and adjusting formulations based on consumer testing.
Though this initially caused a 10–15% dip in sales and brand metrics, follow-up marketing efforts enabled a swift recovery. Sales rebounded by 15–20%, alongside improvements in Top-of-Mind Awareness and Brand Equity. This case provides actionable insights for FMCG firms in volatile markets, emphasizing how integrated cost strategies and consumer-centric execution can preserve profitability without compromising long-term brand value.
