Demand for packaged foods spurs more importation of products

Nigeria has remained strong and steady in the growth of packaged food market with attributes to the sheer size of population, which equates to enormous and growing demand for packaged food products.

Market analysts have observed a growing sophistication of Nigerian consumers who are embracing packaged foods; the average income earners in the country patronise the modern grocery stores, which hitherto appeared to be exclusively for the high class.

According to a retail market analyst with Euromonitor, “the increasing sophistication of Nigerian consumers and improving product quality will be growth drivers. As a result, an average Nigerian will spend more on packaged food, especially on items previously regarded as luxuries. Food items that are fast and convenient, such as pasta and noodles, will continue to experience dynamic growth in Nigeria.”

The analyst said the Nigerian retail market would experience more growth due to several other factors that include political stability, economic recovery, higher disposable incomes and increasing company advertising.

To him, packaged food is one of the most dynamic markets in Nigeria, with many new entrants and products each year by both domestic and foreign companies, observing that the multinationals are dominating except where the local companies are protected by legislation.

Uche Nzeka, agricultural marketing specialist with the Global Agricultural Information Network, also noted that the increasing demand in the Nigerian market had spurred more importation of packaged products, which was estimated at $750 million in 2010 and increased above 20 percent in 2011.

“Changing demographics and lifestyles are resulting in increasing consumer demand and preference for packaged retail foods. Domestic food processing is underdeveloped and there is greater reliance on imports. The EU, Asia and South Africa suppliers are dominant,” Nzeka said.

Some of the outstanding players in the sector include Cadbury Nigeria plc, Nestle Nigeria plc, UAC Foods, De-United Foods Industries, Dangote Industries Limited, and others. While there are other international companies that formed alliances with Nigerian companies to repackage and/or market their products in the country.

Anne Agbaje