Between 2015 and 2017, the depreciation of the local currency due to the recession had a severe impact on the prices of raw material inputs for baked goods, such as wheat and sugar, forcing manufacturers to increase prices. By 2018, in light of declining demand, manufacturers had to find ways to produce products more cheaply in order to maintain sales.
Population growth is spurring growth in baked goods in Nigeria, since bread is a staple in the country, and pastries are a major on-the-go snack choice amongst urban commuters. Furthermore, demand has also continued to increase due to the growing desire for convenience amongst consumers, who are leading increasingly busy lifestyles, as well as due to improvements in distribution via chained supermarkets and hypermarkets.
Sales of packaged products are expected to maintain a faster pace of growth than unpackaged/artisanal products in all major baked goods categories over the forecast period. The general migration to packaged baked goods will be sustained by the growing desire for convenience and variety amongst Nigerian consumers.
Artisanal producers continued to lead baked goods in Nigeria in value terms in 2018, as unpackaged/artisanal baked goods are traditionally considered fresher, usually served hot from the oven, and also thought of as filling. In addition, unpackaged products tend to be more widely distributed in rural areas, where a large number of Nigerians live.
UAC Foods was the top brand manufacturer in baked goods in Nigeria in 2018. Thanks to its early mover advantage, extensive distribution network and the reputation of its Gala and Funtime brands for high quality, the company was the clear leader in packaged cakes and pastries in 2018.
Some modern retail channels, such as Retail Supermarket Nigeria’s Shoprite, have introduced their own private label baked goods, which have proven popular due to the fact that they are often cheaper than competing foreign brands, and are also considered high quality. Shoprite’s Auntie’s brand of bread has proven to be the most popular, with long queues of consumers in Shoprite stores seeking the product, due to its perceived high quality but affordable price.
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This industry report originates from Passport, our Packaged Food market research database.