Improved food and beverage packaging drives N484bn manufacturing output

NIGERIA – Improvements in the packaging of food, beverage and tobacco products were largely responsible for the N483.53 billion manufacturing output obtained in the second half of 2013 (H2 2013).

NIGERIA – Improvements in the packaging of food, beverage and tobacco products were largely responsible for the N483.53 billion manufacturing output obtained in the second half of 2013 (H2 2013).

Innovation was identified as another key factor responsible for increased output from N353.20 billion in the first half of 2013 (H1 2013) to N483.53 billion in H2 2013.

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The two factors were likewise responsible for the 48 percent decline in inventory of finished goods obtained by the end of 2013 as better packaged products attracted more sales within 2013 and up to 2014. 

“Specifically, the improved level of sales was the result of innovation and improved packaging, particularly in the food and beverage sector (example beer group and food processors),” according to recent data from the Manufacturers Association of Nigeria (MAN).

There have been significant inventions in the packaging of food, beverage and tobacco products in recent times, resulting in higher level of acceptance in the local and international markets. Even local food products, which were previously unpackaged, are now packaged in an assortment of containers to enhance their value and meet the demands of the growing middle-class.

Some notable packaging materials in Nigeria include corrugated cartons, polybags, food packs, plastics, cellophane and glass (bottles). Others are cardboard, metal (aluminium cans) and brick cartons, among others.

Plastic is the most common packaging material and one of the most difficult to dispose of. The factors common to all plastics are that they are light, strong and cheap to manufacture.

Plastic containers are often used by cosmetics and pharmaceutical firms such as N.N Fems Industries Nigeria Limited, Emos Best Industries Limited, Imperio, among others. Drink makers like la Casera, 7-Up, Nigerian Bottling Company, are also in this.

Glass is ideal material for packaging foods, liquids and cosmetics. It is inalterable, strong easy to recycle. Most bottling companies such as Nigerian Breweries, International Breweries, 7-Up, among others, make use of  glass in packaging drinks.

Metals are appropriate for packaging canned foods and drinks such as soft drinks and beer. Firms such as Nigeria Bottling Company, Nigerian Breweries, Guinness Nigeria plc, among others, package drinks in cans.   

Thick paper is also used by pharmaceutical firms such as Orange Drugs, Fidson, May& Baker and Emzor, among others.

Palm oil is now packaged in neat cellophane containers and given a name ‘Mamador’ by Fabrique au Nigeria par, its packager. Similarly, raw food items such as the local ‘Ofada’ rice is also processed and packaged by Blossom Day Global Enterprises, among other firms.

Other packaging firms in the country include Salimonu Company Nigeria Limited, Flour Mills of Nigeria, Frigo Glass Industries Nigeria Limited, First Aluminium Nigeria plc, among others.

The packaging industry has witnessed 40 percent expansion in the last five years, according to Naomi Peterson, managing director, Nampet Ventures Nigeria Limited, producer of disposable plastic materials, based in Port Harcourt, Rivers State.

The industry has also accounted for 12 percent of the four billion dollars recorded by the Middle East and African markets in the last five years, says PCI Film Consulting.

Premium cosmetics packaging revenue is estimated to appreciate to N48.6 billion by 2017, from N22.8 billion in 2010 and N32.4 billion in 2012, according Kola Farayola, commercial manager, First Aluminium Nigeria plc, quoting Euromonitor International, a UK-based research firm.

Nigeria’s 170 million population, growing middle-class and population of young people are key drivers of the sector.

Euromonitor International further attributes growth in packaging in the food sub-sector to a shift by Nigerians away from unpackaged, unbranded food, towards branded packaged food, as well as general trends such as the rapid growth in the overall population of Nigeria, increasing urbanisation and changing consumer lifestyles.

“There remains creative innovation in various packaged food categories such as noodles, dairy and bakery, as well as strong below-the-line and above-the-line marketing activity, with direct distribution being key to companies winning over,” says Euromonitor International in its 2013 report.

Packaged food has continued to benefit from the spike in modern grocery retail channels such as supermarkets and hypermarkets, with chains such as Shoprite and Spar prominent.

The emergence of online outlets like Konga is also another key driver. The country’s modern grocery retailer chains are better equipped to offer products such as chocolate confectionery, which traditionally was very difficult to retail in Nigeria, due to the very hot weather and the inconsistent electricity supply.

In addition to this trend, there is rising demand for novel, Western-style products among Nigeria’s rapidly growing population, whose tastes are changing, particularly the young population, the research firm says.

In response to these trends, packaging firms are responding through better technology.

“I think firms are beginning to see the need for better packaging and are all willing to embrace new technology,” Tori Abiola, managing director of the Propak West Africa, a packaging exhibition, held recently in Lagos, told BusinessDay

October 16, 2014; http://businessdayonline.com/2014/10/improved-food-and-beverage-packaging-drives-n484bn-manufacturing-output/#.VD9MfxaE71U

 

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