COVID-19 is expected to have a dampening effect on drinking milk products in 2020, with volume and value growth lower than in 2019. However, value growth is still healthy, though part of this growth is driven by price rises.
After baby food, drinking milk products is the most popular dairy food in terms of retail value in Cameroon. Powder milk is by far the largest product area, as it is not reliant on refrigeration and refrigeration appliances are not affordable for many Cameroonians.
Distribution of drinking milk products is widespread in all channels, and as explained above, much more so than with other dairy foods, regional players have significant value share in different parts of the country. Competition is fierce and players compete on price but also try to appeal to different consumers through offering varying pack sizes, with larger pack sizes appealing to lower income consumers.
As long as the economy is not severely affected by COVID-19 and disposable incomes do not fall, then retail value and volume growth will return to pre-COVID-19 levels during the forecast period. However, if COVID-19 inflicts a long-term negative effect on the economy, with resulting declining disposable incomes, consumers may decide to buy smaller pack sizes and retail volume could fall.
A product area with growth potential during the forecast period is flavoured milk drinks. Candia’s Incolac is the largest brand on the market, accounting for about a third of value share but Africa Food Distribution enter the underdeveloped product area in 2019, where demand is still very far from mature and there remains strong potential for further sales growth.
The forecast period is set to see new product development a major trend in drinking milk products. With numerous new entrants having recently expanded the range of products on offer in the product area, numerous new players are offering competitively priced, high-quality products, including Dano Milk, Dolac, Loya and Broli Milk.
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This report originates from Passport, our Drinking Milk Products research and analysis database.
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