Shift in discerning taste of consumers

Nigerian consumers appear to increasingly demand products that combine nutrition with newer tastes, thus milk products that offer this combination are seeing strong growth. Interestingly, marketing activities by producers through advertising, discounts and promotional sales and the shift of emphasis to smaller packaging units by virtually all manufacturers also helped boost growth of drinking milk products in 2012, as poor and price-sensitive consumers who previously considered such products a luxury are forming a high percentage of the consumer base.

Competitive landscape

Market segmentation initiated by Promasidor Nigeria Limited, when it entered the milk market with sachet milk some years ago, has been able to reach a wider segment of the society, especially the indigent population with this class of individual easily purchasing a product for as small as N10 per sachet.

Players in the milk industry such as Peak Milk, Nido and Dano are repositioning their strategy to continue to play big with the likes of other milk brands like Nunu, Miksi, Loya, Coast and Three Crowns Milk seen as contenders in the milk industry.

BusinessDay findings show various milk brands shifting into the sachet market segment. Top of these brands include Peak, Nido, Dano, Jago, Nunu, Blue Boat, and others.

Over the years, brands like Peak and Nido were household names but now the likes of Nido have remained so silent.

Hence, the market difference in price connotes an alluring market survey that also shows that the milk market has been made lively by the performance of the brands that have upped their ante in grammes, taste and packaging, a bid directed at arresting consumers’ attention.

Up-to-date market study shows that brands like Dano sachet milk of 18 grammes is sold for N20, Loya in sachet of 20 grammes goes for N25, Cowbell of 17 grammes sells for N20, Miksi of 7 grammes goes for N10, Nunu of 8 grammes goes for N10, Jago sachet of 9 grammes goes for N10, and Nido of 26 grammes goes for N40.

Recent reports by Euromonitor show that the leading player in drinking milk products in 2011 was Promasidor Nigeria, and held a value share of 22 percent in 2012. The company leverages on its long-standing presence in the market and reputation for quality to extend its market lead. Advertising and school event sponsorship has helped deepen its consumer loyalty base, which translates to increased volume and value sales.

Besides the company’s wide brand range and presence in a broad range of categories of drinking milk products, which explains its leading position compared with that of the competitors, Cowbell Choco brand is the most popular milk drink among Nigerian children who constitute a good percentage of drinking milk consumers in Nigeria, with its marketing (such as the happy cow) and flavouring targeted at children.

Prospects

Drinking milk products is expected to grow at a constant value CAGR of 3 percent over the forecast period. The economy is expected to see strong growth over the forecast period with disposable income expected to increase, thereby boosting consumer confidence resulting in increased consumption of drinking milk products. Producers are also expected to spur growth with new product launches over the forecast period, pushed by strong marketing activities.

Over the forecast period, meal solutions is expected to record a constant value CAGR of 1 percent, as it continues to grow well in line with the desire for convenience among Nigerians, growth in modern retail channels, and increased westernisation.

Furthermore, nutrition/staples are expected to see a constant value CAGR of 3 percent. Continued growth in formal working culture, which limits available time for eating traditional foods, means demand would continue to be robust while the increase in the number of women in such formal employment would be a major factor in driving demand for baby food.

By: Anne Agbaje