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Business News

Nigeria’s cornflakes market: A case of two kings

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Cornflakes is one of the most popular breakfast cereals eaten in the world, and for many people across all ages, it has become an integral part of their morning routines. The home-made cereal, created by John Harvey Kellogg in 1894, was initially marketed as a “healthy, ready-to-eat anti-masturbatory morning meal.”

The growing demand for cereal breakfast

In Nigeria, the race for market share in the cereal breakfast category is gathering more intensity. Although the recent economic contraction in the country, which meant low purchasing power for consumers, impacted negatively on the bottom line of companies in the FMCG sector, with improved economic indices, the demand is on the increase again.

This has further been strengthened by the growing class of professionals who prefer daily breakfast cereals over more time-consuming traditional breakfast meals such as “pap” (a hot cornmeal).

Also, the ever-increasing child population in the country contributes to the surge in demand for cereal meals, as children are the major targets for the breakfast cereals.

How notable brands have fared

In 2017, breakfast cereals recorded 11% current value growth, as demand increased among the growing urban population that desires convenient breakfast. This is not surprising, especially considering that several cornflakes brands have made an entrance into the Nigerian space.

As expected, these brands are all trying their best to gain market supremacy in the face of fierce competition.

Currently, there are two leading brands in the Nigerian market namely NASCO and Kellogg’s; others are Supreme, Good Morning, Infinity Brands, just to mention a few.

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NASCO Cornflakes

The NASCO brand was launched in 1983 and introduced to the Nigerian market in 1985. It is the first indigenous cereal brand in the country. The company on its part has introduced a variety of cornflakes into the market such as the frosted flakes and the corn flakes vanilla brands.

A poll conducted by Nairametrics showed that the NASCO brand enjoys a lot of goodwill in the market, considering the fact that it has been around for some time and is “proudly Nigerian”.

However, feedback from consumers shows that more still needs to be done. Several consumers complained bitterly about the decline in value of NASCO cornflakes and reduction of contents in the various packs. Some also lamented that the NASCO flakes are usually burnt and tasteless, unlike the NASCO flakes of old

They queried the drop in value to its consumers who have remained loyal to the brand over the years.

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Kellogg’s Corn Flakes

Closely followed in the race for market share is Kellogg’s. The brand is an American brand which has been around since the 19th century. Apart from corn flakes, the company makes other cereal breakfast products such as Coco Pops, Frosties, and Crunchy nuts.

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Kellogg’s has continued to benefit from its strong brand name, wide product range, and store visibility. Less than 10 years after entering the Nigerian market, it has given NASCO, which used to be a dominant brand, a ‘fight’ for market share.

In 2015 the acquisition of a 50% stake in Nigerian-based Multipro Enterprise Ltd (Multipro), the highly successful food distribution company owned by Tolaram Group, further improved Kellogg Co’s accessibility in Nigeria’s market.

Currently, there are two varieties of the Kellogg’s corn flakes in the market: the imported and the locally made Kellogg’s Cornflakes. Many consumers have continued to question the rationale behind this move by the company.

According to the Nairametrics poll, many of the consumers complained of the taste of the locally made Kellogg’s, against the imported one. They complained that the taste is a big disappointment, as it is thick and stodgy, unlike the normal cornflakes which is light and crunchy. However, they expressed satisfaction with the attractive packaging pack.

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https://twitter.com/enkayllicious/status/1002035192649961472

 

The company also has different sizes and price regimes which makes it affordable for medium – high-income earners. The smallest price for the locally manufactured Kellogg’s comes at N50 price.

 

In a bid to further deepen its market penetration, Multipro entered into a partnership agreement with Arla Foods, makers of Dano powdered milk brand. This means that it will offer Kellogg’s breakfast cereals as a joint pack with Dano powdered milk.

Advice for the ‘Struggling kings’

No doubt, Nigeria has a large market for corn flakes with a population of over 165 million people and an estimated growth rate of 5.7% per annum, as well as an average economic growth rate of 3.5% per annum in the past 5 years.

Many consumers describe the two major players as “struggling kings” and advised the producers to focus more on delivering tasty products with high nutritional contents to their consumers.

They also advised producers to implement a backward integration plan that will see companies support local farmers in the country for the production of local maize/corn which is the major ingredient for making corn flakes. As for the other small players in the market, more still needs to be done by them to win the hearts of consumers in the country.

The Verdict

A Twitter poll conducted by Nairametrics shows that consumers prefer the NASCO cornflakes brands, with 50% of the voters choosing NASCO to other brands. Closely following is Kellogg’s with 42% of the votes, while others like the Good Morning brand got a meager 6% and the Infinity brand got 2%.

This result shows that NASCO is the leading brand in the country, however, there is the need for improvement as the position is currently threatened by the arrival of Kellogg’s brands into the Nigerian market.

Fikayo has a degree in computer science with economics from Obafemi Awolowo University. ITIL v3 in IT service management. An alumnus of Daystar Leadership Academy. Prior to joining Nairametrics had stinct in Project management, Telecommunications among others. Also training in Consulting and Investment banking from Edubridge Academy. He has very keen interest in Politics, Agri-business, private equity and global economics. He loves travelling and watching football. You can contact him via [email protected]

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    Business

    Burger King to open first outlet by Q4 2021- Franchisee

    Burger King is expected to employ about 6,000 people (direct and indirect) in Nigeria between 2021 and 2026.

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    Burger King

    Burger King, an American multinational hamburger fast food chain, is expected to start its operations in Nigeria by the fourth quarter (Q4) of 2021.

    The company is also expected to employ about 6,000 people (direct and indirect) in the country between 2021 and 2026, other things being equal.

    These were disclosed by Antoine Zammarieh, the Franchisee of Burger King in Nigeria and Managing Director, Allied Food & Confectionary Services Limited, in an interview with Nairametrics on Tuesday.

    He said, “Burger King will start operations by Autumn, i.e between September and November 2021. We have set up the Quality Control unit and have met some of our local suppliers to seal the deal. Also, we have sent some of the ingredients to America to test quality.

    As a company, we are delighted to enter this new market being the largest country in Africa and are looking forward to serving our future guests with our world-famous Burger King meals.

    Most importantly, our goal is to positively contribute to the economy by creating more jobs and employment opportunities. In five years, we hope to directly or indirectly employ between 5,000 and 6,000 people in Nigeria.”

    Zammarieh added that the hamburger maker, in a show of interest in the Nigerian market, had signed a development agreement for the Nigerian market.

    He explained that the development agreement of the chain in Nigeria, which was recently signed, would give more confidence to the Nigerian market and consumers in general, especially during these hard times.

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    What you should know

    Nairametrics had reported, three weeks back, when Zammarieh said, “I always believed in Nigeria and in its people. I am confident this venture will go a long way and prove successful for Burger King, Nigeria, and our company.”

    “I believe this will be a tremendous step towards giving more confidence to the Nigerian market and consumers in general.”

    What to expect

    The first outlet of the hamburger chain in Nigeria is expected to be launched in Lagos.

    The Florida-based restaurant chain is set to join the likes of Dominos Pizza, Krispy Kreme, KFC, and Chicken Republic (pieXpress) in a stiff competition for market share and dominance in a saturated market, with hundreds of other traditional restaurant chains.

    Burger King is expected to dig deep into its quiver of strategies to ensure an impressive performance and success in its first year of operation, as other players have been having it tough following their respective launches into the Nigerian market.

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    The COVID-19 pandemic however has affected the fast-food industry severely, as the disruption to the industry’s supply chain, especially the on-trade channel, which accounts for a significant percentage of restaurant sales, triggered declines in their profits in 2020.

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    Billionaire Watch

    Here is the exciting 2021 list of the richest football clubs in the world  

    Here’s Forbes 2021 list of the most valuable clubs in the world. 

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    Here Is The Exciting 2021 List Of The Richest Football Clubs In The World 

    Billionaires are fond of investing in sports franchises. This is because there is a lot of money in it and the income stream is pretty consistent. Authoritative wealth watch magazine, Forbes yesterday released its official list of the most valuable clubs in the world.

    It also gave a summary of the business side of the football world which we found quite interesting.

    Nairametrics did a thorough review of the list and highlighted the parts which we believe will resonate well with our readers. Let’s get to it!

    Top 10 richest clubs in 2021 by value 


    Tottenham (2.3bn)

    Tottenham hotspur comes in at the 10th position with a valuation of $2.3bn. The English club is owned by Joseph Lewis and Daniel Levy. They generated $494m last year.


    PSG (2.5bn)

    Paris St Germaine comes in at 9th position with a valuation of $2.5bn. The French league 1 giants generated more money than arsenal last year. They generated $599m. PSG is owned by an investment group, Qatar Sports Investments.


    Arsenal (2.8bn) 

    Arsenal football club, another London side club comes in at 8th position with a valuation of $2.8bn. The club is solely owned by Stan Kroenke, an American Businessman who invests in sports and media. Arsenal generated $430m in 2020 making it the 8th most valuable club.


    Chelsea (3.2bn)

    Chelsea football club comes in 7th on the list with a valuation of $3.2bn. The London side club has retained its longstanding owner Roman Abramovich, a Russian Oligarch. Chelsea generated $520m last year.


    Manchester City (4bn) 

    Manchester City, an English club with a long history of billionaire owners comes in at 6th position. The very successful English club generated total revenue of $609m last year. The club is valued at $4bn and is owned by Sheikh Mansour bin Zayed Al Nahyan.

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    Liverpool (4.1bn) 

    Liverpool comes in 5th at a $4.1bn valuation. The English club is the second wealthiest in England with a generated revenue of $619m. The club is owned by a joint partnership between Billionaire, John Henry and Tom Werner.


    Manchester United (4.2bn)

    Manchester United is the wealthiest English club on the list. The club is valued at $4.2bn, taking up the 4th position on the list. The club has been owned by a Jewish business family, the Glaziers for years. They are the largest shareholders and practically own the club. They generated $643m last year.


    Bayern Munchen (4.215bn)

    Bayern Munchen comes in at the third position with a value of $4.215bn. The German giants have bossed the German league for years. They generated $703m last year, coming in at the 3rd position.


    Real Madrid (4.75bn)

    Real Madrid Fc comes in at the second position. The football club which had previously dominated this list was edged out by bitter rivals, Barcelona. Real Madrid is valued at $4.75bn and the club is also owned by the club members. Real Madrid generated $729m, the same amount of revenue as Barcelona last year.


    FC Barcelona (4.76bn)

    Fc Barcelona is the most valuable football club in 2021 with a market value of $4.7bn. The club sits gallantly in the first position.

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    The Spanish giants generated a massive $792m in revenue last year and succeeded in holding on to their key player Lionel Messi. They also edged out Real Madrid and Man Utd who have dominated this list for 16 years. FC Barcelona is owned by the club supporters. It has no major shareholder or billionaire financier. The club has over 160,000 members forming its governing body.


     

    What you should know 

    • 6 of the 10 richest clubs in the world are owned by billionaires; the rest are owned by club members and an investment group.
    • In the last 16 years, the world’s richest football clubs list has been topped by only two clubs – Real Madrid and Manchester United.
    • Football clubs generate revenues through advertisements, sponsorship deals, jersey deals and ticket sales. These are the 4 major revenue streams of a football club.
    • The top 3 teams on the list – Fc Barcelona, Real Madrid and Bayern Munchen generated a combined revenue of $2.3bn in 2020.

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