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Operators in the Nigerian consumer goods space are adopting new strategies to cushion the effects of decreasing consumer spending, which is triggered by elevated headline inflation that is currently over 25 per cent.
Speaking during an interactive session with newsmen, Chief Executive Officer of FoodCo Nigeria, Ade Sun-Basorun, said the shifting market dynamics have motivated operators to think outside the box to stay in business.
He said that given its dependence on a buoyant consumer class, it should not come as a surprise that the consumer retail sector is one of the most severely impacted by the current economic headwinds.
However, he noted that many operators are exploring alternative solutions to meet the challenge. For instance, he said, rather than raising prices, some fast-moving consumer goods (FCMGs) opt for a slight reduction in product sizes so that they remain within affordable margins.
“Relatively, there is also the introduction of miniature brand variants, which also seek to meet consumers at a price point that they are comfortable with.
“Re-computation of recipes and reconfiguration of product designs is another option being explored. By re-visiting manufacturing and recipe formulation, companies aim to optimise costs while safeguarding product integrity. These innovations also extend to packaging where inventive designs are explored to streamline costs as operators continually explore avenues to reduce packaging expenses,” he added.
Sun-Basorun charged operators to double down on digitalisation to enhance their operations, deliver better customer experience as well as improved targeting.
“I believe technology holds the key to unlocking opportunities within the Nigeria consumer goods space. We are all familiar with the power of e-commerce and how big players like Jumia and Konga are driving innovation.”
However, social commerce also has a positive impact on the consumer goods space,” he noted.
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