Nestle Nigeria taps into the growing coffee market as leading player

NIGERIA – Nestle Nigeria, producers of the Nescafe coffee brand, has continued to dominate the Nigeria’s coffee sector controlling a 75% market share, in a sector projected to hit 1000 tonnes by 2020.

According to a review by Nairametrics, the coffee sector in the country has over the years progressively recorded improved performance on the back of increased consumer spending and changing lifestyles, particularly in the urban centres.

Amidst the growing sector, Nestle Nigeria’s Nescafe has proven to be the ‘preferred‘ brand in the coffee market for almost three decades as local industries continue to struggle.

The company has been a dominant player in the country’s coffee market, dictating its pace and structure, Nescafe has innovatively positioned itself as a product for all levels of income earners supporting.

As a way of penetrating deeper, the company has gone a step further from being just an end-product manufacturer, to serving consumers caffeine-on-the-go with its mobile coffee carts.

Inside Nigeria’s coffee market

The growing consumption rate is creating an opportunity for small and medium-sized roasters to capture a larger market share and increase the revenue of the coffee market to the country’s Gross Domestic Product (GDP). 

A competitive coffee market will boost local production, as roasters will source for coffee beans within Nigeria.

However, the lack of rivals has reduced the production output of coffee farmers, coupled with the fact that Nigeria isn’t considered a force to be reckoned with among coffee exporters.

Benchmarked with other fast growing economies including Ethiopia and Kenya- which have significant investments in the coffee sector – Nigerian coffee farmers are also set to rip big from increased competition in the sector.

Notably, countries like Uganda and Ethiopia through coffee production alone earn US$714.61million and US$953.57 million respectively.

As Nigeria’s urbanisation hitting 51%, this is also viewed as a good time for new entrants to make their way into the market, or for existing players like Cafe Neo and Kaldi Africa to consolidate in order to strengthen their capabilities.

Consolidation among smaller coffee chains and partnerships with Quick Service Restaurants, as being applied in the high coffee consuming countries such as United States and France, could also bring more competition in the sector.

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