Nigeria’s biscuit demand drops as consumer wallets shrink

Nigeria’s biscuit makers say there is a sharp downturn in sales due to shrinking consumer wallets, inflationary pressure and factory shutdowns.

A 2017 KPMG report estimated the size of the nation’s biscuit industry at N121 billion, with an annual output of 152,490 tons and a compound annual growth rate (CCGR) of 16 percent over five years.

As of 2017, annual biscuit demand was estimated at 15-20 percent, but industry players say the number may have dropped to less than five percent as cash-strapped consumers now worry more about food, clothing and shelter.

“The demand for biscuit products is declining very fast in the country,” said Akin Akintayo, chairman of the Biscuit and Bakery Group of the Manufacturers Association of Nigeria (MAN), in response to questions.

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“Average and low-income earners are our major market but many of them are not consuming biscuits the way they used to,” he said.

He noted that some biscuit manufacturers have been forced to shut down operations owing to the continuous decline in sales.

Akintayo attributed the decline in biscuit consumption to inflation, noting that stagnant income amid surging prices makes households spend only on essentials.

Biscuit, bread market

The KPMG report estimated the size of the Nigerian biscuit and bread market at N243 billion in 2017.

The report put the size of the bread segment at N122.1 billion, representing 80 percent of the baked goods sector. The bread segment grew at a CAGR of 14 percent in five years, with annual production of 554,270 tons and a CAGR of 3 percent.

The report said the Nigerian bread and other baked goods segment was highly fragmented, with 72 percent of the market controlled by artisanal and other relatively small-to-medium regional players.

In 2017, the biscuit industry was dominated by Yale Foods (37 percent), OK Foods (20 percent), A&P Foods (14 percent), Deli Foods (9 percent), Nigeria Biscuit (5 percent) Beloxxi (4 percent) and others (9 percent).

The situation has changed today with Beloxxi’s rapid expansion and Deli Foods’ reported shutdown.

On the other hand, the break market is dominated by artisanal players (36 percent).

Inflation impact

In a country where the minimum wage rate is N70,000 (below $50) per month, accelerating inflation has forced many Nigerians to prioritise spending.

The drop in spending reflects on the MAN’s half-year review report.

Inventory of unsold products in the manufacturing sector rose by 12.9 percent to N1.4 trillion in the second half (H2) of 2024 from N1.24 trillion in the first half (H1) of the year.

Francis Meshioye, president of MAN, at the 2025 Presidential Media Luncheon in January 2025 attributed manufacturers’ increased inventory to the weakened purchasing power of consumers brought by diminishing real household income.

Operating margins in the Nigerian biscuit manufacturing segment remain thin, given the volume-driven nature of the business.

The price elasticity of demand is also high, owing to the wide availability of substitute products, especially from cheaper imported biscuits.

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Import data show contrast

Volza, which compiles import data, said Nigeria imported 8,984 shipments of biscuit between March 2023 and February 2024 – mostly from India, China and the United Kingdom.

These imports were supplied by 91 foreign exporters to 155 Nigeria buyers, marking a growth rate of 205 percent.

In Feb 2024 alone, Nigeria imported 777 Biscuit shipments, marking a year-on-year growth of 56 percent compared to Feb 2023, and a 44 percent rise from January 2024, Volza said.

Local producers squeezed

Nigeria’s biscuit market is one of the largest in Africa, driven by its vast population, growing middle class, and increasing demand for convenient snacks.

Local manufacturers dominate the market, competing with imported biscuits, particularly from China, India, the United States and the UK.

The industry supports thousands of jobs, from farming to production, distribution, and retail.

Fola Osibo, former chairman of the Biscuit and Bakery Group of MAN, during the group’s annual general meeting last year, said biscuit makers were going through challenging periods, some of which had threatened their continued existence.

Those challenges, he said, ranged from strangulating policies to uncontrolled raw material costs and availability, including unfair competition with mostly cheap foreign biscuits imported into the market.

He said the difficult operating environment had forced several biscuit manufacturers to shut down operations, with those in operation struggling to operate.

Muda Yusuf, director and CEO of the Centre for the Promotion of Private Enterprise (CPPE), said production performance in biscuit manufacturing has been low due to macroeconomic challenges.

“Their capacity is low, and many of them have been declaring losses as you can see.

“The problem of forex and all these issues have been very challenging for them, and on top of that, you have all these high interest rates,” Yusuf said.

In 2023, Mayor Biscuits Company Limited (MABISCO), an indigenous company, shut down its biscuit manufacturing arm to focus on another line of business.