The Managing Directors of two beverage making companies operating in Nigeria have shared their experience at the ongoing Africa 2017, on how their efforts to reduce sugar content in their fruit drinks fell flat in the country.
According to one of the Managing Director of the companies, who does not want to be named, in response to the clamour in the media and civil society groups calling for a sharp reduction in the sugar content in beverage drinks due to health concerns raised by such high sugar content, they cut the sugar content in their drinks.
But to their surprise, the result they had was a sharp drop in sales as consumers immediately turned away from their drinks to those of competitors with higher sugar content. He said that their research found out that consumers felt that their drinks were no longer sweet.
Faced with the prospect of losing their business, the CEO said that the company had to scale up the sugar content in their drinks again in order to regain their market share. Another CEO of a different beverage company said that his company had the same experience, which also forced them to raise their sugar content after a reduction in the sugar level almost forced them out of the market.
Both CEOs shared their experience at a session that discussed consumer behaviour in Africa, at the ongoing Africa 2017 forum in Egypt. The panellists noted the fast growth in the African consumer market and its changing habits and taste. They noted that there is often the mistake made by companies to assume that the African consumer market is concentrated in only the urban centres but noted that there is also an active consumer market in the rural areas which is waiting to be tapped by companies that can create the right business model to access the latent consumer demand in rural communities across Africa.
Panellists noted that there is a significant level of trade that goes on between urban and rural communities across Africa which is often not accounted for in the estimation of the consumer power across the continent. Technology is seen as key in helping tap rural consumer demand with panelists noting that Kenya is doing well at this already.
Pricing of products was also raised as a critical factor as it was noted that businesses have to be more innovative in their pricing in order to access the African market and that the low income levels across Africa and infrastructure deficit means that goods made in the West cannot priced at the same levels in Africa.
