FMCG firms driven by improvement in packaging industry

Nigeria is a good market for consumer goods, with many Fast-Moving Consumer Goods (FMCG) firms able to record positive sales.

Good and efficient packaging, especially the flexible type, has helped to boost a number of them. Many companies are able to record increased sales based on the attractiveness and designs of their products. Packaging represents a significant part of Nigeria’s FMCGs, which are products that are bought over the counter, including foods, drugs, shoes, plastics, phones, and electronics, among others.

Many consumers are attracted by packaging designs. The country’s packaging industry has seen 12 to 14 percent growth over the last decade, driven majorly by innovations in FMCG market that is valued at over $40 billion. Nigeria has a viable demography, comprising a growing middle-class and creative and vibrant youths which support the growth of packaging and FMCGs.

Urbanisation has continued to spike, as the majority of the population in the cities prefer packaged foods to traditional ones owing to increased work pressure, traffic gridlocks and social demands. One key segment of the packaging industry that has seen growth in recent times is food packaging, which has spiked on back of emergence of retail shops such as Shoprite, Spar and online shops like Konga, Jumia, etc.

According to Euromonitor International, Nigeria’s food packaging segment is one of the best-performing industries in the country, despite the economy and consumer spending power stagnating over 2014 and 2015. Euromonitor adds that most of the leading companies in the food packaging segment are local players, such as Promasidor Nigeria Ltd, Dufil Prima Foods Plc, and Yale Foods Nigeria Ltd, while long-standing Nigerian representatives of multinationals such as Cadbury Nigeria Plc and Nestlé Nigeria Plc also have a strong presence.

“Developing alongside the increased demand for newer types of products is the fast growth of the modern retail channels (supermarkets and hypermarkets),” Euromonitor International said in its 2018 report on Nigeria’s food packaging. A Purchasing Managers Index report released by the Central Bank of Nigeria (CBN) says that the manufacturing sector is influenced indirectly by improved packaging of products by manufacturing firms.

For instance, in an effort to continuously provide value to its consumers, Nestlé water rebranded its appearance and launched its new package in January 2019. Dauda Titilola, a staff member of Nestlé, explained that “the rebranding can be likened to a makeover, which makes it more attractive to our consumers.” Olawale Ojo, a sales expert said, “People will buy things based on what they see. An attractive package will encourage them to buy, and good quality will keep them coming back.” Consumers are of the belief that rebranding also means better quality and are encouraged to try it.

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