In 2019, chocolate confectionery in Nigeria witnessed a return to strong growth in both retail volume and current value terms following a sharp decline in sales both the previous year and in 2016, with 2017 proving more successful. This rebound can be largely attributed to the country’s recovering economy.
Chocolate confectionery in 2019 benefited from the presence of an increasing range of products and brands. Strong unit price growth in previous years led to new players entering the category and offering relatively lower-priced products, particularly from markets such as Turkey and the Middle East, in turn increasing affordability and enabling more consumers to enter the category.
Although not the best performer in percentage terms in 2019, countlines continued to record the strongest gains in actual terms thanks to being the largest and most popular category overall, with this set to continue over the forecast period. This position can be attributed to the fact that countlines are significantly cheaper than products in other categories and therefore enjoy stronger demand among new entrants.
Mars continued to lead chocolate confectionery in 2019, further strengthening its position as its retail value share rose steadily over the review period. Other multinationals such as Nestlé, Cadbury, Lindt & Sprüngli and Mondelez International remained some way behind.
Roxy Nougat from the Turkish company Simsek Biscuit & Food was the best performing brand in chocolate confectionery in 2019, followed by Nestlé’s Chocomilo. Only launched in 2017, Roxy Nougat has quickly grown in popularity thanks to its affordability, being cheaper than most other Western brands.
The country’s recovering economy over the forecast period is expected to lead to an increase in advertising for products such as chocolate confectionery. Up until 2018, chocolate confectionery was rarely advertised in the country, with this being largely down to products not being directly imported by brand manufacturers but rather by third-party importers.
Gum returned to strong positive growth in 2019 in both retail volume and current value terms following heavy declines over the previous three years as a result of the struggling economy in Nigeria. With the economy now in recovery and disposable incomes starting to rise, consumers returned to the category, enabling value sales to rise above pre-recession levels.
Chewing gum remained by far the biggest category in gum in 2019 in both retail volume and current value terms, while also continuing to outperform bubble gum. This can be largely attributed to many young adult consumers looking to freshen their breath and improve their dental hygiene, as well as the category’s much wider range of brands, products, flavours and different packaging formats, for example HDPE bottles, when compared to bubble gum.
While chewing gum performed well in both retail volume and current value terms in 2019, bubble gum only achieved positive results in value terms, registering a further decline in volume sales, albeit not as heavy as in previous years. Value growth can mainly be attributed to a rise in average unit price, while volume sales were adversely impacted by the category’s key target audience, children, increasingly opting for other kinds of sweet snacks, for example lollipops and chocolate confectionery, with there being an ever growing range of brands and products from which to choose.
Having overtaken the category’s traditional leader, William Wrigley Jr Co (Wrigley), in 2016, Perfetti Van Melle maintained its leading position in 2019. Indeed, the company continued to grow its retail value share by a further three percentage points, with this contributing to a huge share gain of 34 percentage points since the start of the review period.
Despite losing its leading position in 2016, Wrigley has sought to remain competitive through offering a range of high quality brands, which are widely available in retail outlets. However, strong competition from Perfetti Van Melle has continued to challenge the company, especially as its brands are generally higher in price and so suffered during the country’s economic struggles in 2016 and 2017.
Third-ranked Riclan remained the best performing gum manufacturer in Nigeria in 2019, posting a strong double-digit increase in retail value sales, albeit from a low base. The company offers the Freegells brand, which is affordably priced and benefits from strong distribution, while also being seen as a good quality product.
Following heavy declines in 2018, sugar confectionery posted strong growth in both retail volume and current value terms in 2019. This can be primarily attributed to the country’s economy recovering from a turbulent period over 2016-2018, which saw prices rise as a result of depreciation of the local currency.
As sugar confectionery has become more competitive, manufacturers have stepped up their marketing and promotional activities. They have rebranded their products in more attractive packaging, run aggressive advertising campaigns and offered discounted prices to attract more customers.
All sugar confectionery categories in Nigeria are expected to perform well over the forecast period as the economy is predicted to continue to grow, along with the country’s population, which has been estimated at increasing by more than 3% a year. The best performing category is forecast to be pastilles, gums, jellies and chews.
Sugar confectionery in Nigeria continued to be dominated in 2019 by Sweetco Foods. This position can be attributed particularly to the company’s strength in categories such as boiled sweets and lollipops, in which it offers a wide range of brands and products.
Compared with recent years, new product development in the category over 2018/2019 was relatively weak, mainly due to the difficult economic environment, with manufacturers instead focusing on improving the distribution of their brands. The forecast period is expected to see more activity in terms of innovation as companies focus on offering smaller pack sizes in order to make products more affordable to consumers as well as new flavour variants and new products in smaller categories such as pastilles, gums, jellies and chews and mints.
Manufacturers of sugar confectionery, both local and international, are expected to also focus on widening their distribution over the forecast period, particularly to take advantage of the rapid growth of modern retailing channels, in which consumers are more likely to purchase larger pack sizes at cheaper unit prices compared to traditional grocery channels such as kiosks where they tend to purchase single units. Modern grocery retailers will also help to boost visibility and demand for the more sophisticated products preferred by adult consumers, such as toffees, caramels, nougat and mints.
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This industry report originates from Passport, our Packaged Food market research database.