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Food and Beverage Sector

MARKET OVERVIEW

Nigeria is the fastest growing economy in Africa, with a projected annual GDP growth rate of 4.2% in the period 2016-2050. This will push it up the GDP rankings to become the 14th largest economy in the world by 2050, according to IMF and PwC estimates.

The population, currently around 230 million, is expected to double over the next 30 years, at a population growth rate averaging around 2.3% a year. For what has been a young country, Nigeria is now entering a period of strong growth in the working age population.

Although the government has implemented a wide range of bills to increase local manufacturing, Nigeria still heavily relays on the importation of food and beverages. In Q1 2024, the import bill stood at N12.64 trillion, with food imports accounting for approximately 12.59% of this total.

SHOPPING HABITS

Food retailing in Nigeria has traditionally taken place in open markets, and these are still used by three quarters of the population. Kiosks are another popular food outlet, with over 60% of people using them perhaps as often as 20 times a month, accounting for 12% of spend.

Modern retailing methods have become increasingly popular, and more than half of consumers will shop in a supermarket or hypermarket. These outlets accounted for 28% of spend in 2022, according to Nielsen Nigeria Shopper Trends 2022.

Even so, Nigerians are not yet having a weekly main shop – only around a fifth of visits to food retail outlets is a regular restocking of the pantry. Supermarkets are popular for bulk buys which are considered cheaper in the long run.

RETAILING

Spending on food in Nigeria was estimated at almost US$60 billion in 2024. This accounted for 75% of grocery sales, which have had a CAGR of 9.2% between 2017 and 2024, according to Marketresearch.com. Modern grocery retailing is continuing to expand, as consumers seek comfort and convenience when shopping for food. Market reports note the move away from unpackaged to packaged goods and Nigeria’s nominal per capita spending on consumer-packaged goods (CPG) is one of the largest in Africa.

The growth of e-commerce in Nigeria is influencing food retailing significantly. More consumers are turning to online platforms to purchase groceries and other food items, driven by the convenience of home delivery and competitive pricing offered by online retailers.

The food retailing sector in Nigeria in 2024 is poised for significant growth, supported by urbanization, a growing middle class, and the expansion of both physical and digital retail channels. Retailers that can effectively navigate economic challenges and leverage technological advancements are likely to see substantial success in this vibrant market.

Online shopping is also available, through companies such as the online supermarkets Gloo.ng or Supermart.ng.

FOOD SUPPLY

Nigeria is the leading consumer of rice in Africa and the second largest globally, and while it is one of the largest producers of rice in Africa, it is also the largest importer of rice. Nigeria is also the largest producer of cassava, yam and cowpea in the world. Other significant crops include groundnut, palm oil and cocoa.

In 2024, the Central Bank of Nigeria (CBN) to lift foreign exchange restrictions on a number of food and beverage items including Rice, Meat, Poultry, Tomato Paste, Palm Oil, Table ware and much more. This therefore allows for a more attractive market for international imports.

Domestic production of livestock is considered far below the needs of the country meaning there is a significant import business for meat and animal products.

In 2024, it was reported that Nigeria spent $4.2bn importing just four ingredients: rice, wheat, sugar and fish.