The dairy product manufacturers in Nigeria receive milk supply largely from northern Nigeria. Favorable weather condition in the region has resulted in high presence of milk producing cows which is the major factor contributing towards high milk production in Northern Nigeria. Consequently, good quality feed and hygiene cattle management practices have also emerged in the northern region, which helps to build stronger local milk supply to the dairy product manufacturers in region. Nigeria’s dairy product manufacturers usually produce ice cream, chocolate milk, yoghurt, and long life milk locally. On the other hand, dairy products such as infant formula, cheese, butter, and ice cream are imported from the other nations to meet the rising demand during the period 2013 – 2015. Dairy processors in nation mostly rely on combining and reconstituting milk powder which is imported mostly
Which Product Is Generating Maximum Revenue For The Nigeria Dairy Product Market?
Milk powder is the highest revenue generating segment of dairy industry in Nigeria with revenue share of ~% in 2013, ~% in 2014 and ~% in 2015. However, the percentage contribution by this segment has declined during the period owing to reduction in import volume after the rise in the import duties during the period. This scenario deviated the attention of many milk powder manufacturers towards production of its major substitute products such as UHT milk, long life milk, and skimmed milk. Yoghurt is estimated as the fastest growing segment in the market with CAGR of ~% in its local currency in between 2013 and 2015 resulting which yoghurt market had grown to a high value of NGN ~ billion in 2015. Yoghurt consumption is traditionally high in Nigeria due to which its manufacturers in nation were motivated to continuously work on its taste, and quality. This made its manufacturers capable to offer variety of yoghurt products as a trendy refreshment dairy product.
Major non-compliance is currently observed in milk quality in Nigeria. It has been observed that raw milk supplied in the country has high total viable count (TVC) and high Coliform Count (CC). Similarly finished milk products have high TV, high CC and yeast and molds especially in some fermented products. To control the quality parameters, Government of Nigeria has imposed prohibition in a form that no milk or dairy products shall be manufactured, imported, exported, advertised, sold or distributed in Nigeria, unless it has been registered in accordance with the provisions of these regulations. Notwithstanding the provisions of sub-regulation 1(a), the manufacture, importation, exportation or advertisement of milk and dairy products shall be undertaken with the approval of the Agency.
How Innovative Product Launches By Manufacturers Are Impacting Nigeria Dairy Product Market?
Nigeria market had though showcased decline during the historical period, the market is expected to grow during the forecast period. Growing GDP coupled with the rising awareness are the factors which are expected to drive the market during the forecast. This fact has resulted in entrance of various global giants in the market with their innovative products. It has been observed that various novel dairy products have entered into Nigeria dairy market in previous years including long life milk, various types of cheese, and yoghurt and ice cream in different flavors as per the taste of the people living in Nigeria.
The major examples of such innovative products launched in Nigeria include Fan Milk launch of frozen yoghurt and Nutricima launch of Yo Classic yoghurt for health conscious consumers in Nigeria. The product was specially launched for health cautious people as product specifies the absence of artificial chemicals. Additionally, yoghurt being one of the growing segments in Nigeria dairy product market with the CAGR of ~% would also assist the company in increasing its consumer base in the country. The company could also strategize its promotional activities further for increasing its share in the market with the help of this innovative yoghurt brand. The companies innovate their product to attract broaden their product portfolio, which further helps them in increasing their market share in the respective market.
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Ankur Gupta, Head Marketing & Communications