Fast-moving consumer goods companies looking to grow in Africa shouldn’t assume that tastes and preferences are the same across the continent.
So said Michael Wood, co-founder and director of consulting firm Aperio, at a recent event in Cape Town organised by the University of Stellenbosch Business School. The company advises brands such as Danone and Kellogg’s.
Wood used the dairy industry as an example of how consumption habits differ between West, East and Southern Africa.
He noted that in Nigeria, the majority of dairy products are consumed in powder or concentrated form. There are two reasons for this. Firstly, Nigeria’s dairy industry is relatively under-developed due to the fact that in large parts of the country dairy cows suffer from disease. Secondly, due to Nigeria’s poor electricity supply, many consumers don’t have the means to refrigerate fresh dairy products.
In an earlier interview with How we made it in Africa, Paul Retzlaff, one of the Zimbabwean farmers invited to start with commercial agriculture in Nigeria in 2004, said they were also struggling to sell their fresh milk in the West African country.
“Powdered milk is firmly established in the marketplace in Nigeria and has satisfied the market. There are a lot of cows and milk around, but all in the informal sector. This is sold as a fermented product by the herdsmen to the villagers. There is no milk as such,” he explained.
Wood said that in East Africa on the other hand, many rural people have their own cow from which they source milk. In urban areas “there is a fledgling industry within the dairy [sector], but it is still very small”.
However, South Africa has the continent’s most developed and commercial dairy industry with a number of fresh and processed products – from yoghurt to custard – available. Some South African dairy producers are in fact growing their businesses into the rest of the continent. Earlier this month dairy producer Clover said it will develop facilities in Nigeria, Mozambique and Angola.
Wood added that consumer goods companies that try to implement a one-size-fits-all strategy in terms of their brands and products in Africa run a high risk of failure. “There are very distinct differences in the way consumers consume and their preferences.”