Concentrates in Nigeria

2021 DEVELOPMENTS

Suntory Beverage & Food Nigeria Ltd dominates concentrates

Suntory Beverage & Food Nigeria Ltd held a strong off-trade value share of concentrates in 2021. Its Ribena brand is very well known and is widely available in several retail outlets, benefiting from the company’s strong distribution network.

On-trade volume sales post a positive growth rate in 2021

Coming from the economic challenges faced by most on-trade businesses in 2020, many on-trade outlets quickly took advantage of the returning consumer confidence due to vaccine administration and easing of lockdown restrictions, and opened for business. Though economic recovery is slow, there has been an increase in outdoor activities with more consumers showing willingness to spend money outdoors.

Liquid concentrates grows faster in total volume terms in 2021

The existing ban on imported liquid concentrates, the popularity of the Ribena brand and the fact that liquid concentrates has a larger RTD (ready to drink) volume and value size than powder concentrates resulted in liquid concentrates posting a faster growth rate in total volume terms than powder concentrates in 2021. It also has a longer presence in Nigeria and therefore a larger consumer base.

PROSPECTS AND OPPORTUNITIES

High unit prices threaten growth over the forecast period

The average unit price of concentrates increased in 2021 as the cost of production continued to rise compelling producers to increase unit prices. The slow performance of the economy, growing cost of production and high inflation figure, which is in double digits, will continue to erode the disposable income of consumers as prices continue to rise.

Concentrates expected to perform well over the forecast period

Concentrates (both liquid and powder) has great potential for growth over the forecast period as the products are a cheap alternative to ready-to-drink juice and so are expected to see growing demand among low- to middle-income consumers, particularly among the children demographic. The expansion of modern retail outlets, increased visibility and products now served in smaller pack sizes have led to the segment posting good growth figures.

Growing population expected to drive overall concentrates growth

A growing population invariably sees growth of the young population. Given that products in concentrates are more affordable and appeal more to children, it is expected that parents will continue to add these drinks to their children’s lunch packs for school, being cheaper alternatives.