Executive Summary

Sep 2018
Prospects
Cheese expected to grow well over the forecast period

Cheese is expected to grow well over the forecast period, following on from poor growth over the review period caused by a weak economy between 2015 and 2017 and by a steep depreciation of the local currency in 2016 which caused sharp unit price increases. Growing disposable incomes as the economy returns to strong growth would help to drive demand for what is not considered an essential product in Nigeria.

Spread of modern grocery retail expected to boost visibility

Growth of cheese is also expected to be driven by an increased presence in retail outlets such as supermarkets, hypermarkets and independent small grocers (which increasingly stock Western-style products). Growth of modern retail helps increase the visibility of Western foods such as cheese, introducing them to new consumers.

Spreadable processed cheese is fastest growing

Spreadable processed cheese is expected to see the best performance in cheese over the forecast period. Brands in this category only began to be available in significant quantities from 2015 and so it is growing from a low base, with its greater novelty attractive to consumers.

Competitive Landscape
Lactalis International still dominates

Cheese in Nigeria is dominated by Lactalis International Snc through its Président brand, which is widely available at key modern retailers, such as Shoprite and Spar. It also benefits from its first-mover advantage through which it has gained brand recognition.

Spreadable processed cheese brands are best performing

The Laughing Cow and Happy Cow are the best performing brands in cheese, being spreadable processed cheese brands that were only launched in 2015 and so are growing well from a low base. Their unique wedges help make them more interesting to consumers than standard processed cheese brands such as Président.

Potential for local brands to develop

Standard-priced brands currently dominate cheese. On the one hand, it is important that brands have low import prices so that importers do not feel they are taking big risks to bring in products that may not see good sales.

Prospects
Drinking milk products expected to grow well

With strong population growth, particularly among children and young people, drinking milk products in Nigeria is expected to grow well over the forecast period. Milk, in particular, still sees low capita sales in Nigeria and so has scope for strong growth, particularly with manufacturers emphasising the need to prevent nutrient deficiencies such as calcium.

Powder milk is expected to perform best

Powder milk, which dominates drinking milk products, is expected to continue to drive sales of drinking milk products, recording the fastest growth despite being more mature than other categories. A growing population is increasingly demanding greater nutrition through milk and powder milk offers convenience as well as affordability.

Milk alternatives also expected to grow well

The consumption of non-dairy milk alternatives – consisting of soy milk – is expected to continue to grow well due to its novelty, the belief in its health benefits (such as high protein), a high increase in visibility and the marketing of brands such as Vitamilk, which is widely available. There is also increased demand for lactose-free milk, which soy milk provides.

Competitive Landscape
FrieslandCampina WAMCO Nigeria is the leading player

FrieslandCampina WAMCO Nigeria leads drinking milk products in Nigeria by virtue of its ownership of the strong Peak brand, which leads in powder milk. Peak has strong brand equity backed by widespread distribution.

Kneipe Nigeria’s Dano brand leads performance

Kneipe Nigeria Ltd was the best performer in drinking milk products in Nigeria in 2017 and 2018. The company’s powder milk brand, Dano has performed very well since 2010 when its distribution was taken over by Multipro Enterprise Ltd, the very successful distributor that has made the Indomie noodles brand a household name in Nigeria.

Companies adopting direct marketing strategies

Companies are increasingly looking for more direct forms of advertising, particularly as margins have been squeezed due to the impact of the economic stagnation of 2016/2017. Therefore, they are expected to utilise cheaper methods of marketing their products alongside orthodox advertising.

Prospects
Strong growth expected over the forecast period

Yoghurt and sour milk drinks is expected to perform well over the forecast period as it recovers from the negative impact of a slow economy in 2015-2017. The category also has much scope to expand from popular unbranded, cottage products to branded products.

Drinking yoghurt drives overall performance

Drinking yoghurt drives the overall category, and is expected to continue to grow well over the forecast period. This is the kind of product traditionally favoured in Nigeria through local products such as “Kunnu”, and in being branded and sold in both traditional and modern retail outlets, it is experiencing fast growth.

Flavoured yoghurt expected to be fastest growing

Spoonable yoghurt (consisting of flavoured yoghurt and plain yoghurt) is also benefiting from desire for novel tastes and westernisation, with modern retail channels of supermarkets and hypermarkets helping to make products more visible. The harsh depreciation of the local currency in 2016/2017 had made the category suffer a steep decline due to high import costs, but it is expected to recover over the forecast period as disposable incomes increase with a recovery of the economy and as the exchange rate stabilises.

Competitive Landscape
CHI Ltd leads

CHI Ltd led yoghurt and sour milk products in 2018. The company operates an effective distribution network nationwide, through which it leads many food and drink products such as fruit juice, and so has ensured strong popularity for its Hollandia brand.

Blue Boat Fresh Yo makes a return

Ranona Ltd, through its Blue Boat Fresh Yo brand, was the overall best performer in yoghurt and sour milk products in 2018 in terms of value share gain. This was due primarily to a recovery in production in its factory which had burned down in 2016 leading it to being largely absent from retail in 2017.

Greater competition expected as Dolait Yoghurt enters Nigeria

Over the forecast period, it is expected that competition will increase as more companies try to tap into the strong and growing demand for yoghurt in Nigeria. One such brand, Dolait Yoghurt, entered the category in February 2018 and aims to gain strong share over the next few years.

Prospects
Evaporated milk is most popular

In the absence of a liquid milk culture in Nigeria (largely due to the poor electricity supply), condensed milk serves as the major milk complement for a variety of beverages and foods, such as tea, flavoured powder drinks, coffee and cereals. It is therefore an important category in Nigeria, particularly as population growth ensures steady demand.

Good growth expected over the forecast period

Other dairy is expected to grow strongly over the forecast period, driven by condensed milk. Since condensed milk still provides a large amount of Nigerians’ milk needs, population growth will be the main driver, while the continued availability of smaller pack sizes will ensure low-income consumers can consume the product.

Shelf stable dairy desserts is a niche category

The only other category in other dairy is shelf stable dairy desserts, which is a niche category in Nigeria, only being introduced in 2010 and consisting of ready-to-eat custard. Since the Nigerian population tends to use custard as a dessert, the availability of ready-to-eat variants (which are made up of custard mixed with milk) appeals to busier consumers and so the category is expected to perform well over the forecast period.

Competitive Landscape
FrieslandCampina WAMCO Nigeria Plc leads

FrieslandCampina WAMCO Nigeria Plc dominated other dairy in Nigeria in 2018. Its Peak brand is the dominant brand in condensed milk in Nigeria, the largest category within other dairy.

Hollandia challenging Peak in condensed milk

CHI Ltd’s Hollandia brand has seen good success in challenging the dominance of Peak in condensed milk, cutting into its share over the last five years. The price of Hollandia was not increased during the height of the economic recession in 2016 and when it was finally increased it was at a lower rate than most of the competition.

Strong competition expected over forecast period

As Hollandia’s success has shown, pricing is expected to be a key determinant of share over the forecast period, and so companies would strive to maintain low-price alternatives, such as smaller pack sizes, for low-income earners. Competition is expected to become even more fierce as more companies react to the success of CHI Ltd in stealing share from Peak by introducing their own price-competitive variants.

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Overview

Discover the latest market trends and uncover sources of future market growth for the Dairy industry in Nigeria with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Dairy industry in Nigeria, our research will save you time and money while empowering you to make informed, profitable decisions.

The Dairy in Nigeria market research report includes:

  • Analysis of key supply-side and demand trends
  • Detailed segmentation of international and local products
  • Historic volumes and values, company and brand market shares
  • Five year forecasts of market trends and market growth  
  • Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

  • What is the market size of Dairy in Nigeria?
  • What are the major brands in Nigeria?
  • How has the economic downturn impacted sales performance given its staple food status?
  • Given mounting obesity concerns, are consumers moving from full-fat to reduced fat/fat-free offerings?
  • How are volatile farmgate prices for milk impacting retail prices and sales performance?

Why buy this report?

  • Gain competitive intelligence about market leaders
  • Track key industry trends, opportunities and threats
  • Inform your marketing, brand, strategy and market development, sales and supply functions

This industry report originates from Passport, our Packaged Food market research database.

Butter and Spreads

Cheese

Drinking Milk Products

Other Dairy

Yoghurt and Sour Milk Products

Packaged Food in Nigeria - Industry Overview

EXECUTIVE SUMMARY

Packaged food in Nigeria performing well
Fast growth of modern retail continues to boost packaged food
A competitive industry
Retail distribution moving from traditional to modern
Good prospects for packaged food over the forecast period

FOODSERVICE

Sales to Foodservice
Packaged food foodservice volume to see healthy increases as economy returns to growth over forecast period
Challenges to growth remain
Staple foods and cooking ingredients are categories driving growth
Consumer Foodservice
A return to economic growth will boost modern and high-priced consumer foodservice
Kiosks/stalls dominate
Fast food, full-service restaurants and cafés/bars expected to perform well

CATEGORY DATA

Table 1 Foodservice Sales of Packaged Food by Category: Volume 2013-2018
Table 2 Foodservice Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 3 Forecast Foodservice Sales of Packaged Food by Category: Volume 2018-2023
Table 4 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2018-2023

MARKET DATA

Table 5 Sales of Packaged Food by Category: Volume 2013-2018
Table 6 Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 7 Sales of Packaged Food by Category: % Value Growth 2013-2018
Table 8 GBO Company Shares of Packaged Food: % Value 2014-2018
Table 9 NBO Company Shares of Packaged Food: % Value 2014-2018
Table 10 LBN Brand Shares of Packaged Food: % Value 2015-2018
Table 11 Penetration of Private Label by Category: % Value 2013-2018
Table 12 Distribution of Packaged Food by Format: % Value 2013-2018
Table 13 Distribution of Packaged Food by Format and Category: % Value 2018
Table 14 Forecast Sales of Packaged Food by Category: Volume 2018-2023
Table 15 Forecast Sales of Packaged Food by Category: Value 2018-2023
Table 16 Forecast Sales of Packaged Food by Category: % Volume Growth 2018-2023
Table 17 Forecast Sales of Packaged Food by Category: % Value Growth 2018-2023

SOURCES

Summary 1 Research Sources

Packaged Food in Nigeria - Industry Overview

EXECUTIVE SUMMARY

Packaged food in Nigeria performing well
Fast growth of modern retail continues to boost packaged food
A competitive industry
Retail distribution moving from traditional to modern
Good prospects for packaged food over the forecast period

FOODSERVICE

Sales to Foodservice
Packaged food foodservice volume to see healthy increases as economy returns to growth over forecast period
Challenges to growth remain
Staple foods and cooking ingredients are categories driving growth
Consumer Foodservice
A return to economic growth will boost modern and high-priced consumer foodservice
Kiosks/stalls dominate
Fast food, full-service restaurants and cafés/bars expected to perform well
Category Data
Table 18 Foodservice Sales of Packaged Food by Category: Volume 2013-2018
Table 19 Foodservice Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 20 Forecast Foodservice Sales of Packaged Food by Category: Volume 2018-2023
Table 21 Forecast Foodservice Sales of Packaged Food by Category: % Volume Growth 2018-2023

MARKET DATA

Table 22 Sales of Packaged Food by Category: Volume 2013-2018
Table 23 Sales of Packaged Food by Category: % Volume Growth 2013-2018
Table 24 Sales of Packaged Food by Category: % Value Growth 2013-2018
Table 25 GBO Company Shares of Packaged Food: % Value 2014-2018
Table 26 NBO Company Shares of Packaged Food: % Value 2014-2018
Table 27 LBN Brand Shares of Packaged Food: % Value 2015-2018
Table 28 Penetration of Private Label by Category: % Value 2013-2018
Table 29 Distribution of Packaged Food by Format: % Value 2013-2018
Table 30 Distribution of Packaged Food by Format and Category: % Value 2018
Table 31 Forecast Sales of Packaged Food by Category: Volume 2018-2023
Table 32 Forecast Sales of Packaged Food by Category: Value 2018-2023
Table 33 Forecast Sales of Packaged Food by Category: % Volume Growth 2018-2023
Table 34 Forecast Sales of Packaged Food by Category: % Value Growth 2018-2023

SOURCES

Summary 2 Research Sources