Business News
These brands are fighting hard to topple Gala as Nigeria’s ‘Sausage king’
Sausage roll is a piece of sausage meat baked in a roll of spiced pastry or dough.
Sausage roll is a piece of sausage meat baked in a roll of spiced pastry or dough. It has become an on-the-go snack that most Nigerians have come to trust and rely on, especially when hungry and trapped in heavy traffic — a common experience in Lagos and other big cities.
Sausage roll made its entry into the Nigerian market with Gala, the first brand from the stables of UAC foods, in 1962. Since then, it has become the generic name for sausage roll in the country.
In the past, it was only available in Lagos and for those residents outside the state, it was a luxury and a must-buy whenever they went to Lagos. The love for Gala cut across all ages, and social classes, as adults and children relished the gift of Gala sausage roll from Lagos.
Market Outlook
Over the years, there have been several new entrants into the sausage roll market, hence, challenging the dominance of UAC’s Gala. Regardless, Gala still enjoys a lot of patronage and goodwill.
Currently, several multinational brands are engaged in a battle to gain market share — brands such as Leventis Foods Limited (makers of Meaty sausage roll), Chi Limited (owners of SuperBite beef sausage roll and Beefy beef roll), Food Concept (owners of Yum Yum beef roll), and Rite Foods Limited (makers of Rite and Bigi beef rolls).
Interestingly, the availability of various product retail sizes across brands has bridged the affordability gap between the affluent and the indigent consumers, making the battle for greater market share stiffer, while reducing the impact of price differences.
One of the major players in the market is Leventis Foods Limited, a subsidiary of A.G. Leventis (Nigeria) Plc, and owners of the largest bakeries in the country.
The company recently embarked on an expansion drive of its production capacity with the construction of other lines to produce quality snacks and beef rolls. These include the “Meaty” sausage rolls, “Hotty” and “Mini Hotty” spicy rolls.
Also, United Africa Company (UAC Foods), makers of the popular Gala sausage roll, introduced a bigger package of the product into the Nigerian market. The new roll is twice the size of the regular sausage roll and it sells for twice the price of the former.
Another major player in the sausage roll market is Rite Foods, makers of the Bigi beef sausage roll, Rite sausage roll and the Rite Spicy brand.
The value proposition of these brands
The intense battle for market share has paved the way for targeting consumers on price, taste, beefy content, attractive packaging and availability to drive sales.
Bigi, produced by Rite Foods, is actually big in size, and its value proposition is the satisfaction of the hungry man, while SuperBite, produced by Chi, is very tasty and spicy. Also, Meaty fills the gap for consumers who are missing the original size of the beef inside the sausage roll.
It is also interesting to note that all these brands are affordable and come at the same price of N50. However, Gala sausage roll comes in two packages: Gala Mini and Gala Mega which go for N50 and N100 respectively. Thus, the target of Gala Mega would be the consumers who are willing to spend more for better satisfaction.
What consumers say
A survey of consumers’ choice by Nairametrics shows that a large number of consumers of sausage rolls love to snack on them while stuck in traffic, buy them as gifts for their children when going home after work, or use them as in-between-work meals. Most times, they are accompanied with soft drinks. Some consumers lamented about the reduction in the size of sausage inside the rolls.
A hawker around Bonny camp in Lagos, who gave his name as Mohammed, noted that some customers are selective in the brands of sausage rolls they buy.
In his words:
“I have to run and attend to my customers and I sell very fast during peak periods after work, especially inside hold-ups. Yum Yum roll sells very fast, but when not available, they request for Rite sausage roll, Superbite, and Gala.”
He also revealed that hawkers usually have various brands on display.
Another hawker around Ikeja Along railway area in Ikeja noted that most consumers prefer to snack on the sausage rolls with cold soft drinks; in fact, some buyers will not patronise you if you do not have the soft drinks to accompany them.
In her words:
“I sell it with soft drinks to make my sales faster. My customers just want a snack that can fill their stomachs till they get home, so they look out for the biggest on my display.”
Asked if the introduction of the bigger Gala size, which goes for N100, has increased her sales, she said:
“My customers don’t like the N100 own o! They tell me it is too expensive and that they like the N50 own. Gala no be food na! It is just a snack.”
Owner of a retail outlet in Ogba, identified as Mrs. Chikaodi also noted that most customers refer to all the brands as Gala. She, however, noted that the products move very fast, although the commission is not much.
She further revealed that she normally buys a dozen of each brand which costs N500 and sells at N50 each. This gives her a profit of N100 on a dozen.
Asked why she goes for the dozen pack, she said that the snacks have short “lifespans” of just 10 days, after which they expire and get rejected by her customers. She further revealed that the more brands you have in your store, the more sales you make.
Regulators NAFDAC and CPC
Regulatory agencies such as the National Agency for Food Drug Administration and Control (NAFDAC) and the Consumer Protection Commission (CPC) need to tackle the high prevalence of expired sausage rolls in the market and ensure that makers of these products adhere to the best production standards. A visit to some retail outlets within Lagos showed large quantities of expired products on sale for unsuspecting members of the public.
The verdict
Nairametrics also conducted a poll on notable brands in the Nigerian market. 78% of the participants voted for Gala as their preferred brand, while others like SuperBite had 11%, Bigi had 7%, and Meaty had 4%.
Gala has become the generic name for all the sausage roll brands in the market and the goodwill enjoyed by Gala has also rubbed off on the acceptability of other brands in the market. No doubt the common language in the sausage roll market is Gala.
Columnists
PIB and the commercialisation of NNPC
A commercialized NNPC with more committed employees would mean better accountability and transparency in its operations.
The Nigerian government is seeking efficient ways of positioning the country on its path to recovery and the petroleum industry which contributes about 90% of its exchange earnings would undoubtedly be critical on this journey.
The long-awaited Petroleum Industry Bill (PIB) which seeks to regulate the entire Nigerian Petroleum Industry and repeal a host of existing legislation is paramount in transforming the industry and introducing more efficiency particularly in its government-owned parastatals. The PIB has gained more traction in the current administration and is now awaiting deliberations by legislators.
A key highlight of the PIB is commercializing the State-run behemoth, Nigerian National Petroleum Corporation (NNPC). This move would see the NNPC incorporated as a Limited Liability Company and be known as NNPC Limited. This company would conduct its affairs on a commercial basis without resorting to using government funds.
While this might seem like a bold move by the government, it still should not come off as a surprise…
Owing to the fall in crude oil prices from over $100/barrel to below $50/barrel levels in 2020, Nigeria’s exciting story with crude oil slowed down but has picked up in recent months. The country’s heavy dependence on the volatile crude oil market and its ineptitude in diversifying during its “oil-rich” days have now thrown its growth story in jeopardy. The once 3rd-fastest growing economy with foreign reserves in excess of $40bn now wallows in rising inflation complemented and a weakened currency.
Why do we need to commercialize NNPC?
A core theme with a number of government-owned parastatals is the plague of inefficiency and obscurity in the way they are run. To give an idea of the NNPC’s lack of transparency, the corporation only published the group’s audited financial statements for the first time in its 43 years of operation in 2020. It’ll be right to commend this administration is pushing for transparency but you can go on to imagine what went on during those opaque years of operation.
As expected, the results were not impressive. The corporation reported a recurring loss, albeit 70% lower in 2019. The significant reduction in losses may prove the government’s will in improving the operations of the NNPC, however, comments on the report noted that “material uncertainty exists that may cast significant doubt on the Group and Corporation’s ability to continue as a going concern.”
Moving down to the State-owned refineries with a combined capacity of 445,000 bpd, capacity utilization well below 20%, and recurring annual losses in excess of ₦150bn, we can agree that the condition of these refineries is utterly worrisome. Despite the government’s annual budget for Turn Around Maintenance of these refineries, they have now been shut down with plans to undergo a Build, Operate, and Transfer (BOT) model.
Chief among the NNPC’s problems is corruption. A number of investigative reports have explained how subsidy payments, domestic crude allocation, revenue retention practices, and oil-for-product swap agreements are smeared with corruption. The Senate has initiated countless probes and new management seeking transparency has been introduced by the President, however, it just seems like the rot has eaten too deep into the system.
What does commercializing NNPC mean for the country?
The government-managed NNPC has proved to be inefficient and riddled with corruption. A commercialized NNPC with more committed employees would mean better accountability and transparency in its operations. The possible introduction of more shareholders would strengthen the amount of funding available to the NNPC and further shift the burden of being the sole-financier away from the government.
Exploring an NNPC IPO
An Initial Public Offering (IPO) would see the NNPC’s shares traded on Stock Exchanges and position the corporation to raise much more funding, build trust and endear to the international community. While this might seem like a daunting task, Nigeria can perhaps take a cue from Saudi Arabia whose National Oil corporation; Saudi Aramco began raising capital for its IPO in December 2019.
The Saudi Crown Prince; Muhammad bin Salman (MBS) announced a valuation of $2trn enticing the world’s largest investment banks, appointed a new set of leaders on the board of the corporation, and executed a highly engaging local marketing strategy. Although the valuation figure was brought down to $1.5 – $1.7 trillion by financial advisors, Saudi Aramco successfully achieved its IPO raising nearly $26 billion for 1.5% of Aramco’s value.
NNPC’s fundamentals might not support an IPO currently as investors might be wary of the high level of risks involved but we can’t deny the immense opportunities an IPO would present not just for NNPC’s transparency and performance but Nigeria’s economic reform.
In Conclusion
The recurring performance of the corporation with several corruption allegations, inefficiency, and unclarity is indeed worrisome. It is time to have the NNPC turn over a new leaf and operate on a commercial basis. This would afford the government the ability to deploy funds into other segments of the economy and have the NNPC focus on being a commercially viable entity.
Tech News
How partnerships with telcos, fintechs and banks can support Nigeria’s cashless economy
Partnerships by stakeholders will accelerate financial inclusion and drive economic growth across multiple sectors.
The drive towards a cashless society has been a topic of debate in the global financial economy. Cashless societies have slowly gained recognition and application in most developing and underdeveloped countries in the world, largely due to their significant relevance in some advanced countries of the world.
COVID-19 brought a public health challenge to Nigeria, but it also resulted in an economic downturn on the back of a pandemic-induced recession.
The pandemic highlighted the need to diversify the economy to develop a wide range of growth industries and sectors in addition to the more traditional ones such as oil and gas.
The growth of the digital technology sector in Nigeria is an indication that the sector can serve as a catalyst for advancing the digital economy while enabling economic recovery and growth.
According to a report by NBS, the ICT sector played a major role as it was the leading driver in the non-oil sector that led to GDP growth and economic recovery in 2020.
The World Bank’s Nigeria Digital Economy Diagnostic Report highlights that Nigeria is uniquely positioned to reap the benefits of the digital economy as the country accounts for 47% of West Africa’s population, and half of the country’s 200 million people are under the age of 30.
This report goes on to acknowledge Nigeria as the largest mobile market in Sub-Saharan Africa, supported by a strong mobile broadband infrastructure.
At the same time, minimal fixed infrastructure and connectivity in rural areas can leave the most marginalized people behind.
Partnerships with government, fintech players, telecom companies, and other strategic partners to provide digital solutions and support the cashless economy, offer the greatest potential to overcome infrastructure barriers to accelerate financial inclusion and drive economic growth across multiple sectors.
Digital innovations are key to advancing financial inclusion. They are the big equalizers, enabling and spearheading financial inclusion for people and small businesses alike. The foundation to enable payment technologies for a robust digital economy is being laid one regulation at a time.
Recent frameworks issued by the Central Bank of Nigeria on Sandbox, QR, Open Banking and others, are expected to galvanize and accelerate the digital economy agenda by allowing more innovation. Creating certainty in other areas such as contactless payments can energize the industry even further.
Some companies have been providing digital payments to foster a cashless economy like Mastercard.
Mastercard, a leader in global payments is driving growth in digital financial services by making it easier for people to accept electronic payments, along with greater access to credit to grow and scale.
This will be achieved through digital partnerships, solutions, and technology, aimed at connecting 1 billion people to the digital economy by 2025, including 50 million micro and small businesses, with a direct focus on 25 million women entrepreneurs.
Mastercard has already started this process, an example of this is its recent partnership with MTN which enables millions of consumers in 16 countries across Africa to make global e-commerce payments safely and securely, with or without a bank account.
Last year, Mastercard launched a Pay-on-Demand mobile platform in Uganda with Samsung, Airtel, and Asante Financial Services Group which provides end consumers and MSMEs with asset financing to access smart handsets at a low upfront cost while making affordable payments over time.
In addition, Mastercard and Airtel’s digital partnership will enable access for over 100 million mobile phone users in 14 African countries to virtual card numbers (VCN) and QR Payment capability – even though they don’t have a bank account.
Mastercard also aims to onboard over 40K SMEs as merchants on QR. The partnership has made Airtel one of the largest offline-to-online digital payment networks in Africa.
Why this matters
- Mastercard solutions have assisted businesses and consumers to thrive in the digital economy by utilizing safe and secure digital payment channels, especially during the pandemic.
- They have also assisted countries and stakeholders to digitize economies and develop successful, interoperable payment ecosystems that can support sustainable growth and wider financial inclusion.
- Cashless policy will significantly improve the payment system in Nigeria by reducing the number of cash-based transactions in the economy
The growing reach of mobile technology creates a tremendous opportunity for the payments and technology industries to bring more people and businesses into the formal economy. Through partnerships, we can achieve a digital payments economy that includes everyone, mitigates the costs of cash, and achieves the sustainable economic growth and inclusive well-being that we want for Nigeria.
Attiogbe enoch
January 30, 2020 at 10:50 am
will love to have your email so i write to you about the market in GHANA for Gala sausage in Ghana,Accra were i reside.
Nairametrics
January 30, 2020 at 2:01 pm
Hello Enoch, send a mail to [email protected]