Coffee sales are expected to increase in Nigeria. This will be largely due to growing urbanisation, through which Nigerian consumers are exposed to Western habits, such as coffee drinking that they are traditionally not used to.
Regular instant coffee mixes is expected to post the best performance over the next five years. This is the major entry level product for coffee in Nigeria, as consumers are already used to teas and other hot drinks that are generally mixed with milk.
The average unit price of coffee increased by only 2% in current value terms in 2017, which followed a 48% average unit price rise in 2016. The high unit price increase was caused by the strong depreciation of the local currency the Nigerian Naira which made imports of both raw materials and finished products much more expensive.
Nestlé Nigeria Plc dominates off-trade value coffee sales. This is due to the popularity of its Nescafé brand, which dominates the large instant coffee category. Between 2015 and 2017, Nestlé Nigeria Plc was also the company which posted the best performance in value share terms. With investment and support by its parent company, Nestlé SA, it has been able to offset the difficulties of importing products during the strong depreciation of the local currency.
FMCG Distributions Ltd’s launch of the Richmond coffee brand in 2017 has spurred more competition in instant coffee. The company supported the launch with a wet sampling campaign at major retail outlets, such as Shoprite.