Competition toughens in Nigeria’s vegetable oil market, as brands claim niches

Nigeria’s market

Nigeria is a very big market where investors are daily discovering opportunities. The country with right demography, abundant raw materials and one of the countries with highest return on investment in the world, has suddenly presented attractions to international investors.

In the recent time, in spite of infrastructure challenges, opportunities through research have opened in various sectors of the economy. The recent one is in vegetable oil market where giants and leading vegetable oil producers with mills and farms in various parts of the country operate. In addition to local oil producers, there are illegal importation, all competing for space in Nigeria’s market. But last week, Power Oil, a vegetable oil produced by De United Foods Industries Limited, entered the market with strong hope of finding space.

Vegetable oil consumption

Experts however believe that there are gaps in the vegetable oil market as the present production level in Nigeria cannot meet the demand of Nigerians. The ban placed on importation of vegetable oil into the country in order to encourage local investors to go into the product production, according to Olumakinde Oni, an Ibadan-based investment consultant in agriculture, processing and manufacturing, has made the business to be lucrative. He says vegetable oil, produced from raw material such as crude soya oil, palm kernel oil, red palm oil, sunflower oil and groundnut is one of the chief sources of vitamins needed for proper functioning of the body tissues. Provision of vegetable oil contributes to the improvement of consumers’ dietary pattern and healthcare delivery system.

Due to the existing huge market for vegetable oil, the market unfortunately has been flooded with adulterated and different types of vegetable oil, including health hazard products. To most Nigerians, there is no difference between vegetable oil products. Since they all almost look alike and can perform the same function, they believe all are good for consumption.

Abisola Olasumbo Adekoya, deputy director, food products and others, NAFDAC, affirms recently that there are some vegetable oils in the market that cause heart problems.

Entry of Power Oil

Recently, Dufil Prima Foods Plc, maker of Indomie Noodles, introduced Power Oil into the nation’s vegetable oil market. Deepak Singhal, managing director of Dufil, said the company’s decision to introduce the product was borne out of observation of the existence of substandard and adulterated oil in the market, and which was regularly consumed by unaware by consumers.

Some consumers are unaware of the side effects of the substandard oil in the market such as obesity, hypertension, heart diseases and cancer, he regretted, saying “with the rate of increasing health complications in the society, the need to come up with a non-fattening, yet hygienic cooking oil became highly necessary, thereby promoting healthier lifestyles among Nigerians.”

Consumers deserve the best, and that is what we offer them with Power Oil, he said, saying our brand of vegetable oil is guaranteed to add value to their cooking. He added that Power Oil had scaled a rigourous three-part process, and the result was that consumers could purchase the product in the market with all confidence. The oil is available in a 150ml sachet, 750ml and 3-litre bottles to suit the purchasing power of varying consumers, and will be available nationwide.

In her remarks, Adekoya endorsed the brand as cholesterol-free and therefore ideal for the body.

Examining the market, Olumakinde Oni, who regretted the availability of the unapproved vegetable oil products in the Nigerian market, welcomed the Power Oil as cholesterol-free and non-fattening product, advising the manufacturer to play up the unique niches.

It is expected that the entry of Power Oil, especially its niche of cholesterol-free and non-fattening characteristics, will spur competition in the vegetable oil market. Perhaps, others who have similar features will wake up to campaigns in order not to be swept under by the new entrant.

Increase in conscious eating habits

There is obvious increasing consciousness in the consumers’ eating and drinking habit. Some consumers are careful of excess sugar in beverages because of diabetes. They are also mindful of cholesterol, fattening foods, additives and preservatives in food. Cancer and heart disease have suddenly become preponderant without clear traceable causes.

The consumers are concerned on the increasing cases of cancer, diabetes, bad cholesterol in the body, which according to scientists, can stimulate extra cell growth in the lining of the arteries, reducing their diameter or clog the arteries, including the coronary arteries feeding the heart.

Though some of these diseases come with age, but the youth consumers whom brands target are equally mindful of their health in the long run, as they become cautious in their food intake. As they increasingly become choosy and change their consumption taste, analysts fear that this would depress some brands bottom-line.

Nkeiru Bartholomew, a nurse at Scan-Right Services, said “from my own perspective, I think sales are going down slowly because people are paying attention to what ingredients are in their food and also considering how their food is produced.”

As a result, health and wellness consideration must be affecting purchasing decisions of some organisations.

According to Akonte Ekine, CEO of Absolute PR, brands financials will be affected in the long run by the shift in consumers taste, except they rejig their products. He said brands need to regenerate in line with consumer interest. It is this understanding that spurred Dufil through consumer insight to fill the gap of producing Power Oil that meets consumer taste.