…as declining economy toughens competition

By ADEBAYO OBAJEMU

The competition among Nigerian diary industry is getting keener, but it is not a new development. The industry is not a stranger to intense 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.

As keen as the battle is, some brands have survived, while others, especially the kings in the 70s have thrown in the towel. They have succumbed and buckled under the pressure brought on by the influx of differing brands – foreign and local – angling for the heartland of the consumer.

The brands in the dairy milk category are up for a serious fight for market share, and in this mould, established and upcoming brands are competing against one another to gain market share and profitability. But it has proven tough. According to BH’s findings, consumers normally have a set of factors that informs their milk preference. The choice made is normally a function of one’s need and the quality one desires.

Notwithstanding social class, milk has become a necessity for most Nigerian families. For a measure, snacks and meals often go along some dairy product before they can be taken particularly milk.

The main rivals always come up with different brands, all in a bid to outsmart the others. This enables customers to choose to be loyal to different brands, but they can also find at the end of the day that they are still patronising one company.

BusinessHallmark’s findings showed that there is a slight differentiation in the milk category. There’s full cream milk, filled milk, and skimmed milk. Full cream milk is also known as whole milk and is said to contain no added fat from non-dairy cow sources. Aside from the fact that none of the dairy fat content is removed.

Dr Jibril Amoda, a nutritionist told this newspaper that, “For full cream milk, its higher ‘dairy fat’ content is the reason it is creamier, tastier, and costlier and most preferable among rich consumers.

“On the other hand, filled milk is a kind of milk that has undergone modifications, as it has been reconstituted with fats from sources other than dairy cows. A good example of such derived fat sources is vegetable oils.”

Skimmed milk is different. It is this milk’s dairy fat has been removed so that it remains nutritious but without added fats and calories. It has added advantage of reducing the risk of cardiovascular problems.

One leading brand that has proved itself over times and succeeded in playing the role of the 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. It has succeeded in the Nigerian market for over 65 years and despite the introduction of various brands, it remains the brand to beat, a brand of choice.

It is seen as a luxury brand mostly for the rich. The first brand to throw salvo at the dominance of   Peak was Promasidor’s Cowbell milk which in 1993, introduced powdered milk in smaller sachets into the market. This development afforded 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.

As a counterpoint to challenge thrown by Cowbell, Peak milk morphed into packaging their products in smaller sachets, both in powdered form and evaporated. This afforded Peak to make in-roads into the homes of the lower class consumers in the country.

Unlike in the olden days when it was believed that some brands are for the high class such as Peak and Dano and Nido; 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.

Of interest, 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.

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. Amid all the new beverages (energy drinks, and other artificially contrived beverages) milk is seen as a natural healthy choice.

 Promasidor Nigeria Limited, manufacturers of Loya and Cowbell says its milk contains 50 per cent more calcium than any other in the dairy market. Of recent, many brands have opted for 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.

According to BusinessHallmark’s survey, most consumers are driven by perception sentiment.

The highpoint of this is the general notion that the Peak brand is superior to other brands in the market, and all variants of Peak are unskimmed.

 Coming behind Peak is Three Crowns, which is generally 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 hold.

Three Crowns is said to be skimmed and considered safe, particularly for convalescing people,   the aged, and those looking to shed their weight, and consumers who don’t have any preferences.

Survey findings

In a poll involving 100 people of diverse backgrounds, carried out by this newspaper, 60 per cent of them say most middle and low-income earners will always go for Cowbell and Loya milk.

While about 55 per cent say most households are no longer able to buy Peak milk because of the price and have opted for other brands.

At Agege market, Mrs Abiola Anjorin, a provision seller, told this newspaper that she sells more Dano and Cowbell than any other brands. “As for me, most people prefer Dano and Cowbells because of its low sugar content, but the category of people that ask for Peak are the rich ones, and they prefer the ones made in Holland.”

Another seller, Abiodun Osiboyejo at the same market said she sells more Hollandia than any other brands, but added that Peak, Dano and Cowbell are doing well.”Overall, it is as if Hollandia and Peak are neck and neck.”

At Alade market, of the ten provisions sellers polled about six agreed that they sell more Peak, but added that the category of buyers asking for Peak are the rich. Cowbells and Dano are other brands that are doing well. In all the markets visited by this newspaper from Agege to Ogba and Iyana Ipaja, the brand is next to Peak in terms of choice and demand.

While mostly the rich go for Peak, the ordinary people always prefer Cowbells, which go for N170, while Peak goes for N200, Dano for N180. Mama Segun, a big distributor at Sango market said: “I sell more Nido and Peak milk for the powdered segment, but evaporated, I sell Cowbells and Dano.”

The other brands are merely struggling. BH’s findings revealed that the Nunu brand is barely visible in the market; it is believed to be struggling amid 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.

Though the big brands such as Peak milk and other top brands are doing well, they are nevertheless, still faced with hurdles. They too must put on their thinking cap, as they need to invest more in backward integration, as most of them still depend on imports for their raw materials. This has made them susceptible to foreign exchange shocks and increases in the cost of production.

In the poll by this newspaper, conducted Peak milk scored 50%, Dano got 17%, Cowbell scored 16%, Hollandia 13%, and Loya milk had 4%. Based on the above, Peak is still the leader.