New Food market report from Business Monitor International: "Nigeria Food & Drink Report Q3 2013"
Boston, MA -- (SBWIRE) -- 08/15/2013 -- We continue to maintain our positive long-term outlook on Nigeria's food and drink sector, despite some of the obstacles in the near term. Ongoing instability in the country's northern regions, and high rates of inflation, which increased 10% year-on-year in April 2013, according to the National Bureau of Statistics, is having a negative impact on consumer confidence. Nevertheless, there is no doubt of the tremendous untapped potential of this emerging market. A burgeoning middle class has accompanied economic growth, and this group's increasing spending power is being targeted by multinationals who are continuing in invest in the country's food and drink sector. While economic growth in 2013 will continue to be constrained by the headwinds that characterised much of 2012, including security concerns and the lingering effects of widespread flooding, the long-term outlook remains very bright. We are forecasting average annual real GDP growth of 7.1% over the next 10 years, and expect the Nigerian government to prioritise investment in vital infrastructure over our forecast period and beyond.
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Headline Industry Forecasts
- Per capita food consumption (local currency) 2013 = +8.51%; five-year compound annual growth rate to 2017 = +8.53%
- Beer volume sales 2013 = +7.69%; five-year compound annual growth rate to 2017 = +8.22%
- Mass grocery retail sales (local currency) 2013 = +31.20%; five-year compound annual growth to 2017 = +36.11%
Key Industry Trends And Developments
Carrefour To Expand In Africa: In May 2013 it was announced that French retail major Carrefour has formed a joint venture (JV) agreement with African distribution company CFAO to increase its presence across Africa. According to the agreement, the JV, in which Carrefour will hold a 45% stake, and CFAO the remaining 55%, will develop a range of store formats in eight West and Central African countries including Nigeria. Carrefour currently has an African presence with stores in Egypt, Tunisia and Morocco but has been divesting its operations in a number of emerging markets. The first outlet, a shopping centre, is expected to open in Abidjan, Cote d'Ivoire, in early 2015.
Security A Concern For Nestle: In May 2013, Nestle Nigeria reported that the Boko Haram crisis in the north east of the country has resulted in a slowdown in the company's sales and distribution growth in FY12. Nestle Nigeria reported that profit after tax reached US$134.2mn in the 12-month period ended December 31 2012, which represents a rise of 28.1% against US$104.7mn in FY11. Revenue increased 19.1% to US$740.9mn against US$621.5mn in FY11. Nestle Nigeria's cost of sales rose by 16% to US $422.2mn, from US$364.4mn in 2011, with basic earnings per share reaching US$0.16 in 2012, from US $0.13 in the previous year. Instability in northern states such as Borno and Yobe has resulted in Nestle having to temporarily remove some of its sales staff.
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