With consumers spending more time at home due to COVID-19 social measures, they had more time for sit-down home breakfasts. Thus, sales of breakfast cereals will remain positive in 2020, although they were somewhat impacted by economic uncertainty and weakening incomes due to job losses and high inflation.
Nestlé Nigeria will continue to lead breakfast cereals in value terms in 2020, after taking the top place from Kellogg Co in 2016 in the economic crash. This is partly due to the ongoing popularity of its Golden Morn brand, which drives other breakfast cereals, (though the launch of new brand Sunvita Choco Crunch by Promisador in 2019 has also helped to boost the range of affordable products in other breakfast cereals).
Breakfast cereals had already been exhibiting strong growth prior to the COVID-19 crisis, driven by the strong child population growth and children being major consumers of breakfast cereals. In 2020, with school closures and children spending an increased time at home, children’s breakfast cereals received further demand, with busy and stressed parents finding it preferable to provide breakfast cereals for their young children, as opposed to cooking meals each morning.
A more stable economy following the negative impact of the COVID-19 crisis on Nigeria’s revenue base is expected to lead to improved consumer disposable income which will help spur recovery in demand over the forecast period. It is not expected that work at home measures will last for a significant period beyond 2020 for the majority of professional working consumers as there is a lack of infrastructure supporting work from home in Nigeria (such as stable internet connections).
Strong competitive activity, including the provision of more affordable products in smaller pack sizes, is expected to continue over the forecast period, with greater affordability helping to expand the consumer base beyond upper- and middle-income consumers. With imports being negatively impacted by a depreciated local currency as well as by the closure of borders and international movements in 2020, local producers are stepping in to increase their share, with a focus on more affordable brands.
Over the review period, prior to the 2016 recession, breakfast cereals saw strong demand due to growth in urbanisation, increase in the child population, increase in professional employment, and adoption of Western eating habits. The economy experienced further set back in 2020 due to COVID-19 but is set to recover from 2022 onwards.
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This report originates from Passport, our Breakfast Cereals research and analysis database.
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