Demography fuels growth of Nigeria’s packaged foods industry
Nigeria’s strong population growth and composition are driving the growth of the packaged foods industry, despite economic slump experienced in 2016.
“Growth of the already large Nigerian population, particularly babies, children and young people, drove categories such as baby food, confectionery, noodles, biscuits and dairy products,” says a 2016 report by Euromonitor International, a UK-based research firm.
“A booming urban population – with cities such as Abuja and Lagos expanding remarkably through satellite town growth – fuels demand for convenient food and drink products such as drinking yoghurt, pastries and sweet and savoury snacks such as fruit snacks,” Euromonitor says.
Nigeria’s population is estimated at 183 million (2015), out of which 49.5 percent are women and 50.5 percent, men, according to the National Bureau of Statistic (NBS). The population is currently about 193 million, with the majority of under-30 population spending a large proportion of their income on snacks, ice cream, pastries, packaged rice and chickens, among others.
The country’s population growth is estimated at 2.28 percent per annum. Over 50 percent of the population are under 30 years, while the middle-class makes up 25 to 30 percent of the demography.
Work pressure in cities prevents the majority of working population from having early breakfasts, thereby pushing them into eateries, ‘fast food’ centres and retail stores, where they buy packaged foods.
“Truly, many of the packaged foods companies had their revenues and profits slashed in 2016, but it wasn’t as bad as those in other sectors. The reasons are simple: One, people must eat. Two, the population is made up young people who want to have quick or fast foods. Three, many working families have less time to cook in the cities. Four, the emergence of physical and online retail stores means you can place an order for packaged food or walk into a Shoprite to get it,” says Ikechukwu Ibeabuchi, CEO of MD Services Limited.
Packaged food makers in Nigeria include Dangote Industries, De-United Foods, PZ Cussons, FrieslandCampina WAMCO, Cadbury, Nestlé, Promasidor, Flour Mills, A &P Foods, Olam International, Ayoola Foods and Honeywell, among many others.
According to Euromonitor International, marketing activities implemented by producers through advertising and the shift in emphasis towards smaller packaging units also helped boost growth in the industry in 2016.
The research firm states that there has been a shift to cheaper and/or locally produced foods such as snacks as imported products like crisps lose sales, while some local products thrive.
The growth in food industry is also pushing up the packaging industry. The packaging industry has recorded over 40 percent expansion in the last seven years. The industry accounted for 12 percent of $4 billion recorded by Middle East and African markets between 2010 and 2014, says PCI Film Consulting. Premium cosmetics packaging revenue is estimated to appreciate to N48.6 billion by end of 2017, from N22.8 billion in 2010 and N32.4 billion in 2012, according to Euromonitor.
ODINAKA ANUDU