Friday, February 26, 2021

Food Business Is The New Oil, As Pandemic-Induced Shift In Consumer Behaviour Is Making Food Vendors Smile To The Bank

The sustained nature of the COVID-19 pandemic, globally ( Nigeria inclusive) , may have been accompanied by many tales of woes, as well as a plethora of uncertainties for the future, but in the midst of all the chaos, there appears to be light at the end of the tunnel for those whose businesses revolve round the Fast Moving Consumer Goods sector.

This ”light” is premised  on widespread reports that increasing consumer preferences for ”home food delivery”  is shifting market forces in the positive direction for food business owners

As a matter of fact, substantial differences were noticed when current profit margins in the catering business in Nigeria was compared to pre-pandemic levels.

Putting it in clearer terms, the recent shift has translated to an increase in sales volume, revenue and profits for key players in the Fast Moving Consumer Goods (FMCG) sector, as they now experience substantial improvement in their operations at the back of changes and modification in how we live, economic reality and expectations, and most importantly consumer consumption patterns.

 

What Is At The Crux Of This Shift In Consumer Behaviour?

One thing  is glaring, since the beginning of the pandemic, the levels of social interactivity have reduced tremendously as people have become more cautious about the lifestyles they lead, and with the projection that the pandemic may not fully go away until about seven years, it is most certain that they(people) would maintain that cautious social approach, spending more time at home than in previous years we have seen.  As a result, spending on food and essential goods is likely to remain high, going forward.

Ordinarily,  consumers’ spending in the country, on food items, has always been relatively higher than spending on non-food items. The latest household expenditure pattern report(courtesy of Nairametrics) revealed that out of the total N40.20 trillion household consumption expenditure incurred by Nigerians in 2019, 56.65% was spent on food, while the balance of about 43.35 was spent on non-food items.

This figure is expected to be higher in 2021 given the dramatic shift in consumer behavior and demand for food items.

In a Consumer Expectations Survey (CES) conducted by the CBN in Q3 2020 (monitored on the same platform),  it was revealed that the overall buying intention index indicates that most consumers do not intend to buy big-ticket items in the next 12 months.

This paradigm is consumer in consumer preferences, as inferred from  reliable data, certainly means there’s enough room for average business-oriented Nigerian with the fast-moving consumer goods market. In line with this reports, venturing in the ”food business” terrain at this moment, may not just be financially rewarding in the interim, it could as well be a life-changing move for you. Take that leap today!

 

GNB News

 

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