Nigeria’s biscuit demand drops as consumer purchasing power plummets
In a country where the minimum wage is ₦70,000 (approximately $50) per month, rising inflation has forced many Nigerians to prioritize their spending.
NIGERIA – Nigeria’s biscuit manufacturers are experiencing a significant decline in sales due to shrinking consumer purchasing power, inflationary pressures, and factory shutdowns.
Cash-strapped consumers are increasingly focusing their expenditures on essentials like food, clothing, and shelter. This trend is reflected in the Manufacturers Association of Nigeria (MAN) half-year review report.
“The demand for biscuit products is declining rapidly in the country. Our primary market consists of average and low-income earners, and many of them are no longer purchasing biscuits as they used to,” said Akin Akintayo, chairman of the Biscuit and Bakery Group at MAN.
He noted that some manufacturers have been compelled to shut down operations due to continuous sales declines. For example, in 2023, Mayor Biscuits Company Limited (MABISCO), a local manufacturer, closed its biscuit manufacturing division to focus on other business lines.
Akintayo attributed the decline in biscuit consumption to inflation, explaining that stagnant incomes, coupled with rising prices, have forced households to limit spending to essentials.
In 2017, the biscuit industry was led by Yale Foods (37%), OK Foods (20%), A&P Foods (14%), Deli Foods (9%), Nigeria Biscuit (5%), Beloxxi (4%), and others (9%).
However, today’s market landscape has shifted, with Beloxxi experiencing rapid growth while Deli Foods has reportedly shut down. The fragmented market is now largely dominated by artisanal producers, who account for 36% of the sector.
Operating margins in Nigeria’s biscuit manufacturing segment remain slim, considering that the business is driven by volume.
According to Volza, which compiles import data, Nigeria imported 8,984 shipments of biscuits between March 2023 and February 2024, primarily from India, China, and the United Kingdom.
Ninety-one foreign exporters supplied these imports to 155 Nigerian buyers, resulting in a growth rate of 205%.
In February 2024 alone, Nigeria imported 777 biscuit shipments, marking a 56% year-on-year increase compared to February 2023 and a 44% rise from January 2024, Volza reported.
Nigeria’s biscuit market, one of the largest in Africa, is driven by its vast population, growing middle class, and increasing demand for convenient snacks.
While local manufacturers dominate the market, they face competition from imported biscuits from China, India, the United States, and the UK. The industry supports thousands of jobs across various sectors, from farming to production, distribution, and retail.
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