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Nigeria Food and Drink Report Q3 2012

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No. of Pages : 72
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Following a difficult 2011, Nigerian consumers have felt the squeeze in the early months of 2012 on the back of high fuel prices. Although we see tremendous growth potential across food and drink sector in industries such as food processing, soft drinks, beer and organised food retailing, the direct consequences of food price and fuel inflation have been clear to see over the past year or so. It seems that many Nigerians have been forced to trade down to lower brands or cut consumption levels in discretionary areas such as beer. Moreover, in 2012 there have been episodes of nationwide discontent at rising fuel prices.
In food and fast-moving consumer goods, firms such as Nestlé and Unilever are leading the way. With incomes going up and more people able to afford Nestlé’s and Unilever’s brands, there is a lot of room for growth; in reality, only the surface of this potential has been scratched. Indeed, Nestlé is planning to spend nearly US$1.5bn in capacity expansion to 2015 to grow its business in Africa. Right now, Africa is still peripheral in the grand scheme of Nestlé’s overall business, accounting for about 3% of global sales.
Headline Industry Data (local currency) 􀂃 2012 per capita food consumption = +9.8%; forecast compound annual growth to 2016 = +10.0%
􀂃 2012 beer volume sales = +7.4%; forecast compound annual growth to 2016 = +7.2% 􀂃 2012 mass grocery retail sales = +28.9%; forecast compound annual growth to 2016 = +33.6% Key Industry Trends & Developments Olam’s Acquisition Complements Diversification Push: Olam International, a major supply chain manager and processor of agricultural products and food ingredients in Asia, has reportedly acquired Nigerian biscuit and candy producer Titanium Holding for US$167mn. The opportunity to secure a strong platform in Nigeria, from which it could launch a deeper push into the regional African markets, is likely to have been one of the biggest motivations behind Olam’s acquisition. Olam plans to leverage on its manufacturing infrastructure in Nigeria to build a biscuit and candy export hub in other West African markets such as Ghana and Côte d’Ivoire as well as South Africa. Such a strategy would not only allow Olam to tap into the very attractive dynamics in these developing markets but also help to generate greater economies of scale across the region.
Spar To Collaborate Directly With Farmers To Serve Farm-Fresh Produce: Dutch retail group SPAR International’s Nigerian subsidiary, Spar Nigeria, is planning to develop direct business relationships with farmers in order to provide consumers with fresh farm produce at local market rates. The company is looking to launch about 200 outlets by 2015. The plans are part of the company’s strategy to ensure that its customers have access to farm-level freshness at local market prices.

MI Industry View . 5
SWOT Analysis 7
Nigeria Food Industry SWOT . 7
Nigeria Drink Industry SWOT 8
Nigeria Mass Grocery Retail Industry SWOT 9
Business Environment 10
BMI’s Core Global Industry Views 10
Table: Core Views 18
Sub-Saharan Africa Risk/Reward Ratings . 19
Table: Sub-Saharan Africa Food & Drink Risk/Reward Sub-Factor Ratings Q312 (scores out of 10) 20
Table: Sub-Saharan Africa Food & Drink Risk/Reward Ratings Q312 23
Macroeconomic Outlook 24
Table: Economic Activity . 26
Industry Forecast Scenario 27
Consumer Outlook 27
Food 29
Food Consumption 29
Table: Food Consumption – Historical Data & Forecasts 30
Table: Preserved Fish . 30
Table: Breads. 31
Drink . 32
Alcoholic Drinks . 32
Beer 32
Table: Beer . 33
Soft Drinks 34
Carbonates 34
Table: Carbonates 35
Bottled Water . 36
Table: Bottled Water 36
Mass Grocery Retail 37
Table: Mass Grocery Retail Sales By Format – Historical Data & Forecasts 38
Trade . 39
Table: Trade Of Food, Drink And Tobacco . 39
Food 41
Key Industry Trends And Developments 41
Olam Targeting Final Consumer In US$67mn Kayass Deal 41
KFC Owner Yum! Brands Targeting Africa Growth . 41
Lots Of Growth Room For Unilever In Africa 42
Olam Biscuit Acquisition Complements Its Diversification Push 43
Nestlé Nigeria Going Strong . 43
Market Overview . 44
Food Production . 44
Agriculture 44
Drink 46
Key Industry Trends And Developments 46
Diageo To Pump More Money Into Fast-Growing Guinness . 46
Heineken Looking To Grow Capacity 47
Market Overview . 47
Beer 47
Soft Drinks 48
Mass Grocery Retail 50
Key Industry Trends And Developments 50
Spar To Collaborate Directly With Farmers To Serve Farm-Fresh Produce 50
MGR Investment Finally Coming In 50
Market Overview . 51
Competitive Landscape 52
Consumer Share Price Analysis . 52
Key Players 54
Table: Key Players In Nigeria’s Food & Drink Sector 54
Table: Key Players In Nigeria’s Mass Grocery Retail Sector 55
Company Monitor 56
Food 56
Nestlé Nigeria 56
UAC Plc 58
Drink . 59
Guinness Nigeria 59
Nigerian Breweries 60
Mass Grocery Retail 61
Park ‘n’ Shop . 61
Risk/Reward Ratings Methodology 62
Table: Rewards 62
Table: Risks 63
Weighting 63
Table: Weighting. 63
Demographic Outlook 64
Table: Population By Age Group, 1990-2020 (‘000) 65
Table: Population By Age Group, 1990-2020 (% of total) 66
Table: Key Population Ratios, 1990-2020 67
Table: Rural And Urban Population, 1990-2020 . 67
BMI Food & Drink Industry Glossary . 68
Food & Drink 68
Mass Grocery Retail 68
BMI Food & Drink Forecasting & Sourcing 70
How We Generate Our Industry Forecasts 70
Sourcing 71Table: Core Views . 18


Table: Sub-Saharan Africa Food & Drink Risk/Reward Sub-Factor Ratings Q312 (scores out of 10) . 20


Table: Sub-Saharan Africa Food & Drink Risk/Reward Ratings Q312 . 23


Table: Economic Activity . 26


Table: Food Consumption – Historical Data & Forecasts . 30


Table: Preserved Fish . 30


Table: Breads. 31


Table: Beer . 33


Table: Carbonates . 35


Table: Bottled Water . 36


Table: Mass Grocery Retail Sales By Format – Historical Data & Forecasts . 38


Table: Trade Of Food, Drink And Tobacco . 39


Table: Key Players In Nigeria''s Food & Drink Sector . 54


Table: Key Players In Nigeria''s Mass Grocery Retail Sector . 55


Table: Rewards . 62


Table: Risks . 63


Table: Weighting. 63


Table: Population By Age Group, 1990-2020 (‘000) . 65


Table: Population By Age Group, 1990-2020 (% of total) . 66


Table: Key Population Ratios, 1990-2020 . 67


Table: Rural And Urban Population, 1990-2020 . 67

Nigeria Food and Drink Report Q3 2012

Published By: Business Monitor International
 

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