Nigeria’s biscuit industry is experiencing a steep downturn as inflation, shrinking consumer purchasing power, and factory shutdowns take their toll.
Once a fast-growing sector, biscuit manufacturers are now struggling to keep up with declining demand, forcing some to halt operations altogether.
According to BusinessDay, a 2017 KPMG report valued Nigeria’s biscuit industry at N121 billion, with an annual output of 152,490 tons and a compound annual growth rate (CAGR) of 16 percent over five years. At the time, biscuit demand was growing by 15-20 percent annually, reflecting a strong market.
However, industry experts now warn that demand has plummeted to below five percent, as cash-strapped Nigerians prioritize essentials such as food, clothing, and shelter over snacks and confectionery.
Declining Sales and Factory Shutdowns
“The demand for biscuit products is declining very fast in the country,” said Akin Akintayo, chairman of the Biscuit and Bakery Group of the Manufacturers Association of Nigeria (MAN).
According to him, average and low-income earners, who form the bulk of biscuit consumers, have cut back significantly on purchases. The combination of stagnant wages and soaring inflation has left many Nigerians struggling to afford even basic necessities, leading to a sharp drop in biscuit consumption.
As a result, some biscuit manufacturers have been forced to shut down operations, unable to sustain production amid dwindling sales.
The Nigerian baked goods sector has always been highly fragmented, with 72 percent of the market controlled by artisanal and small-to-medium regional players. However, the biscuit sector has been dominated by a few key manufacturers, including:
– Yale Foods (37%)
– OK Foods (20%)
– A&P Foods (14%)
– Deli Foods (9%)
– Nigeria Biscuit (5%)
– Beloxxi (4%)
– Others (9%)
While these brands once led the market, the situation has drastically changed. Beloxxi has expanded rapidly, increasing its market share, while Deli Foods has reportedly shut down, reflecting the industry’s challenges.
The continuous rise in inflation has left many Nigerians unable to afford non-essential goods, pushing biscuits down their list of priorities. Akintayo noted that unless the economic situation improves and incomes rise, biscuit consumption will continue to decline, putting even more manufacturers at risk.
What’s the Hope for Biscuits in Nigeria?
With declining sales, factory closures, and rising production costs, Nigeria’s biscuit industry is at a crossroads. To survive, manufacturers may need to innovate with cheaper alternatives, adjust product sizes, or explore export markets. However, without economic stability and increased consumer purchasing power, the industry’s recovery remains uncertain.
