Concentrates in Nigeria

2020 IMPACT

On-trade sales decline due to COVID-19, but total volume sales maintain growth

After several years of strong growth, on-trade volume sales of concentrates have experienced a strong decline in 2020 due to the COVID-19 pandemic. A lockdown was implemented, which included the temporary closure of foodservice outlets, hampering growth in this channel.

Liquid concentrates are more popular despite higher prices

Concentrates remains a comparatively small category within soft drinks in Nigeria. However, given that a high percentage of the Nigerian population live below the poverty line, concentrates offer them the opportunity to consume cheap soft drinks, due to their low unit price.

Ribena maintains its dominance in concentrates but Tasty Time sees faster growth

In 2020, Suntory Beverage & Food Nigeria has maintained its dominance in concentrates in off-trade value terms. This is thanks to its Ribena brand, which has become a household name, and is widely available in most retail outlets.

RECOVERY AND OPPORTUNITIES

A return to on-trade growth, although at a lower level

On-trade volume sales of concentrates are expected to rebound to growth in 2021, as there is likely to be less disruption to the operation of foodservice outlets and consumers are likely to gradually return to activities outside of the home. However, the growth rates throughout the forecast period are set to be lower than those seen pre-COVID-19, as consumers are likely to remain price-conscious due to the negative economic impact of the pandemic.

Both categories set to post growth over the forecast period

Total volume and current value sales of concentrates are expected to grow over the forecast period, along with growth in the young adult and child populations. Liquid concentrates is set to face increasingly strong competition from cheap ready to drink juices, such as juice drinks and RTD tea, although is still expected to see higher growth than powder concentrates and remain the larger category.

Average unit prices expected to have to increase

In 2020, the average unit price of concentrates in the off-trade channel has remained stable even at 2020 constant prices, seeing a strong fall in current terms. This is partly due to the strong price increases seen in 2019, as the harsh depreciation of the local currency led to much higher import costs.