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Nigeria Food and Drink Report Q2 2012

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					Nigeria Food and Drink Report Q2 2012

Published: April 2012                   No. of Pages: 63                Price: US $ 1175




Growth in the consumer sector has consistently been a bright spot in Nigeria's economy, with many of the
fastest-growing industries focused on catering to the country's rapidly growing private consumer demand.
Thanks in large part to a very large population (more than 160mn in 2011 according to our estimates) and
a rising middle class, retail sales growth has remained in the double digits.

Despite a positive overall outlook, we expect consumption may be somewhat constrained towards the
beginning of 2012. Inflation is expected to rise significantly (we have pencilled in a rise of around 200-
300 basis points) on the back of the removal of fuel subsidies. The price of fuel for transport and power
(many Nigerians depend on standalone generators) has risen sharply, eroding the purchasing power of
many consumers. Knock-on effects have already started to increase prices in other areas. Apart from the
direct impact of the fuel subsidy removal on prices, it is not yet clear to what extent public demonstrations
and general strikes against the policy will affect production, wages and, ultimately, consumption. We
believe that these disruptions will subside with tim, and domestic demand in 2012 will continue its upward
trend.

Headline Industry Data
      2012 per capita food consumption, local currency = +14.4%; forecast compound annual growth to
          2016 = +10.4%
      2012 beer volume sales = +10.6%; forecast compound annual growth to 2016 = +7.3%
      2012 mass grocery retail sales = +28.9%; forecast compound annual growth to 2016 = +27.0%
     
Key Industry Trends & Developments
Olam's Acquisition Complements Nicely with Its 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 emerged as 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
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

Nigeria Food and Drink Report

Table of Contents

BMI Industry View
SWOT Analysis
Nigeria Food Industry SWOT
Nigeria Drink Industry SWOT
Nigeria Mass Grocery Retail Industry SWOT
Business Environment
BMI’s Core Global Industry Views
Sub-Saharan Africa: Region's F&D Reward And Risk Profile Poles Apart
Macroeconomic Outlook
Industry Forecast Scenario
Consumer Outlook
Food
Food Consumption
Drink
Alcoholic Drinks
Beer
Soft Drinks
Carbonates
Bottled Water
Mass Grocery Retail
Trade
Food
Olam's Acquisition Complements Its Diversification Push
Nestlé Nigeria Going Strong
Private Equity Fund Silk To Invest More Than US$200mn
Unilever Upping Its Direct-To-Consumer Distribution Game
Market Overview
Food Production
Agriculture
Drink
Diageo To Pump More Money Into Fast-Growing Guinness
Heineken Looking To Grow Capacity
Market Overview
Beer
Soft Drinks
Mass Grocery Retail
Spar To Collaborate Directly With Farmers To Serve Farm-Fresh Produce
MGR Investment Finally Coming In
Market Overview
Competitive Landscape
Consumer Share Price Analysis
Key Players
Company Monitor
Food
Nestlé Nigeria
UAC Plc
Drink
Guinness Nigeria
Nigerian Breweries
Mass Grocery Retail
Park ‘n’ Shop
Risk/Reward Ratings Methodology
Weighting
BMI Food & Drink Industry Glossary
Food & Drink
Mass Grocery Retail
BMI Food & Drink Forecasting & Sourcing
How We Generate Our Industry Forecasts
Sourcing

				
DOCUMENT INFO
Description: Growth in the consumer sector has consistently been a bright spot in Nigeria's economy, with many of the fastest-growing industries focused on catering to the country's rapidly growing private consumer demand. Thanks in large part to a very large population (more than 160mn in 2011 according to our estimates) and a rising middle class, retail sales growth has remained in the double digits.