The Nigerian dairy industry is not new to rivalry and over the years, major players in that segment have made various value propositions for their brands, through campaigns and innovations in the bid to gain a market edge.
While some brands have survived this battle of the fittest, others, especially the reigning ones in the 70s have bitten the dust. Over time, the milk segment has witnessed an increase in the influx of different brands (foreign and local) jostling for a prime place in the consumer’s heart.
This week on consumer’s watch, we look at activities of brands in the dairy milk segment, and how major and upcoming brands are competing against one another to gain market share and profitability.
Peak Milk leading the pack
One brand that has stood the test of time and succeeded in fulfilling the role of market leader in the dairy segment of the market in Nigeria is Peak milk, a product from the stables of FrieslandCampina WAMCO, an affiliate of Royal FrieslandCampina of the Netherlands. Peak has been in the Nigerian market for over 65 years and despite the introduction of various brands, it remains the brand to beat.
Initially, branded milk was seen as a luxury, exclusive for the rich. The first to challenge Peak’s dominance was Promasidor’s Cowbell milk in 1993, which introduced powdered milk in smaller sachets. This gave average Nigerians access to branded milk. Promasidor’s effort also paid off significantly for a while, as Cowbell adopted “Our Milk” as a pay-off line.
In response to the threat from new brands led by Cowbell, Peak milk made a transition into packaging their products in smaller sachets, both in powdered form and evaporated. This response, in due time, allowed Peak to make in-roads into the homes of the lower class consumers in the country.
Gone are the days when some milk brands such as Peak, Nido, and Dano were positioned as elitist brands; today the manufacturers have come to realise that they cannot just play in the elite market and survive the onslaught posed by contending brands like Nunu, Miksi, Loya, Coast and Three Crowns brands.
Another brand that reigned in the milk market was Nido, a product of Nestle Nigeria Plc, the brand did so well that it earned the respect of pupils and students in higher institutions. Sadly, the brand has not been able to compete with its peers in the market. Interestingly, the smaller brands such as Jago, owned by Sosaco Nigeria, Nunu from PZ, and Blue Boat marketed by Ranona have upped the ante in grams, taste, and packaging, all directed towards arresting the attention of consumers.
Unique value propositions of brands
Milk is known for its immense benefits, as it contains minerals such as calcium, vitamin D, phosphorous, and other blends of nutrients proven to build bones, teeth, as well as promote healthy function of muscles and blood vessels, particularly in children. In the midst of all the new beverages (energy drinks, and other artificially contrived beverages) milk is seen as a natural healthy choice.
According to Promasidor Nigeria Limited, manufacturers of Loya and Cowbell, its milk contains 50 percent more calcium than any other in the dairy market.
In the last few months, the battle for market share in the milk segment has assumed a new dimension, with major milk brands in Nigeria making multi-billion Naira investments to aggressively shore up their production capacities and also radically energise their marketing communications strategies in preparation for improved market share.
Brands have adopted different advertisement strategies, both in the print and electronic media platforms to appeal to consumers. Some brands have also signed endorsement deals with celebrities and influencers to help put their brands right in the faces of consumers.
The recent frenzy in the segment has essentially been triggered by increasing demand for safe and affordable milk and dairy products in Nigeria, occasioned by improving living standards and growing enlightenment about the nutritional benefits of milk and dairy products to humans’ physical and mental wellbeing and growth, especially for adolescents.
A market survey by Nairametrics shows that consumers have their sentiments towards these brands. One of such is the general notion that the Peak brand is superior to other brands in the market, and all variants of Peak are fattening, in other words unskimmed. They are mostly recommended for the active population, people who desire to add weight and consumers who randomly buy what comes to hand in the market.
Taking a sit behind the chiefly position of Peak, is Three Crowns, which is widely sold in the open market and shopping malls. Though the Peak rack empties faster than that of Three Crowns, this does not undermine the market power that Three Crowns holds.
Three Crowns is skimmed and considered safe, particularly for convalescence, the aged population, people looking to shed weight, and consumers who don’t have any preferences.
What consumers are saying
In a consumer poll done by Nairametrics on our social media platform, one of the respondents, Oshoniyi Moradeyo noted that most middle and low-income earners will always go for Cowbell and Loya milk. Another respondent also revealed that most households no longer use Peak milk because of the price.
A respondent on Twitter noted that she uses Dano because it is creamy, rich and dissolves easily.
Nairametrics’ observation on the performance of the brands reveals that the Nunu brand is barely visible in the market; it is believed to be struggling in the midst of low financial support and market forces. Jago on its part is also struggling to gain market share. Despite several activities which the owners have tried to institute to improve its image and visibility, more still needs to be done.
"Preferred" is not consumption. Alot of people prefer peak milk but consume Dano. That's what it is.
— divine project (@welly98welly) August 8, 2018
Cowbell mostly, sometimes Loya
— So-Fire! (@TheSophiaBello) August 8, 2018
The verdict
Despite the exploits of Peak milk and other top brands, the manufacturers must look inwards and invest more into backward integration, as most of them still depend on imports for their raw materials. This has made them susceptible to foreign exchange shocks and increase in the cost of production.
In a poll conducted by Nairametrics, Peak milk scored 69%, Dano got 19%, Cowbell scored 7%, and Loya milk had 6%.
Going by the poll this week, Peak Milk is the winner. However, the manufacturers must continue to churn out variants that will be affordable to the Nigerian consumers. Whichever way the battle goes, the ultimate winners shall be the consumers and the Nigerian economy.
**Additional Information provided by Ibukunoluwa Samuel