Background Food seasoning is very key to cooking among many Nigerians. Before the introduction of food seasonings in cubes and powder, there had been other local seasonings the most popular of which is the locus beans known as Ogiri, Dawadawa, and Iru among the Igbos, Hausas, and Yorubas of Nigeria respectively. After thirty-five years of first introducing branded food seasoning in Nigeria, the potentials of the market has maintained a continuous growth such that it has attracted brands of seasonings produced in and outside of Nigeria.Today, there are several brands of food seasonings readily available in the open market, in-street shops, and supermarkets. Essentially, because of the early introduction of the Maggi brand into the Nigerian market thirtyfive years ago, the name Maggi has become a generic name for seasoning products in the market.
It is therefore not strange to hear most Nigerians asking for “Maggi” when the actual understanding is to buy a brand of food seasoning and not necessarily the Maggi brand. At this point however, further clarification is often needed to identify the particular brand that is wanted.Current Market Event Today, the numerous varieties of food seasonings have affected the expectations of food taste and this has resulted into a huge market creating room for new entrants. At present, some of the brands in the market include: Maggi, Knorr, Royco, Doyin, Jumbo, Suppy which are in cubes; Onga, Benny—the powered seasoning or the Monosodium Glutamates (MSGs): A-one, Vedan, Aji-no-moto, Sasa, and Tasty king majority of which are off the market. Consequently, the presence of numerous brands have instigated a big market competition such that brands largely depend on creation of variants of brand products (i. .
, chicken, fish, beef, goat meat flavor etc. ,) in cubes and powder forms, as well as dynamic brand communication (such as promotions, cooking TV shows and cooking competitions) to gain more market share. In this big brand war, findings showed that brands like Maggi cube produced by Nestle, Knorr and Royco cubes by Unilever, and Doyin cube by Doyin Group, have stood the test of time. Knorr cube, however, was a product formerly under the Cadbury brand name but now on the stable of Unilever since December 2005.The Structure, Gains, and Challenges Interesting, the seasoning market is divided into 3 major segments: the cube segment, the MSGs, and the powdered food seasoning.
The cube and MSGs have been around for a very long time but the powdered food seasoning was just recently introduced to the Nigerian market. Of the three segments, the MSGs are the least market drivers and the biggest players in this segment are Sasa, Vedan, and Aji-no-moto. Further, in the days when MSGs were prominent in the market, Aji-no-moto was the king of this segment.The powdered food seasoning, notwithstanding its new arrival in the market, has made a significant impression on the seasoning market. In this segment, Onga (produced by Promasidor) has been the leader since its introduction to the market. It is worthy of note however, that Onga was not the first powdered brand in the market but the first successful powder brand as against the poor market performance of Royco Chop Mix by Unilever.
Ever since the launch of this segment of the seasoning market, it has proven lucrative such that other producers have also introduced powered variants of their cubes or entirely new brand names of food seasoning to grab a share of the market. Other brands in this segment include Benny, Glory Kitchen and Maggi Mix’py.Market Share Substantially, investigation shows that the powered food seasoning is fiercely competing with the cube variants, and this competition is expected to continue and even get stronger. However, it is difficult at this time to predict whether or not the powered seasoning will replace the cube seasoning.
In spite of the great success recorded by this segment, it is still a long way behind the Cube segment which controls over 80% of the seasoning market. Regardless of the flooding of the market with plentiful brand products, in the Cube market nevertheless, only 2 products are significantly visible in that segment. However, this is not to say that other products do not hold a relatively significant share of the market. Products like Suppy, Market Share of Cube SeasoningRoyco and Doyin control their own areas of the market but it has been proven over the years that Knorr and Maggi are the supreme market leaders owning a huge 83% of the cube segment. Earlier research done showed that Maggi has 42% market while Knorr controls a close 41%, threatening to overthrow the product that has always been the traditional market leader.
The preliminary research carried out for this market report however tentatively showed that Knorr has finally taken over the market from Maggi whose brand name has become a generic name for all the products in the seasoning industry. findings show that Knorr is the most sold and the most preferred food seasoning brand followed by Maggi. Its new brand extension Knorr chicken is currently the ruling product in the market. Also, it is very interesting to note that the market leader in this segment is also the most expensive brand.In fact, Knorr chicken is about 5o% costlier than a lot of its other competitors.
Most cube brands come in packs of 100 cubes for single-cubed brands like Suppy, Royco etc and 50 cubes for double-cubed brands like Knorr and Maggi. In addition, all the brands are sold with the same profit margin (notwithstanding their individual prices), only the extended Knorr brand—Knorr Chicken –differs in this respect as the sellers sell it with a margin equalling 150% when compared to all the other brands including the parent Knorr.As regard supply, most sellers buy directly from the manufacturers while a hand full of them buy from distributors. But there is practically no difference in the prices when you buy from the manufacturers or their distributors. The survey also showed that MSGs are fast loosing relevance in the market as most sellers barely stock them.
The producer of Aji-no-moto brand (which was the leader in this market segment) has now diversified into the powdered food seasoning segment Findings showed that consumer preference for either cube or powered food seasoning varies from taste to shelf-life, and ease of use. As a result, rather than phase out the cube seasonings, producers—in response to first, market competition, and second, consumer preferences—are introducing flavours of powered seasoning to compliment the cubes. For example, Nestle which is popular with the Maggi cube varieties has recently introduced the Maggi Mix’py powered seasoning. Strategic Marketing Approaches Further research probing revealed that the seasoning market is very loyal to brand names. Essentially, once a brand establishes itself as a reliable brand, it becomes very hard for another brand to overrun it in the market.
For example, it took Knorr several years to attain joint market leadership with Maggi, and Aji-no-moto held sway in the white seasoning market before the gradual decline of that segment. The tools employed to buy a respectable share of the market (often done strategically and consistently), are advertisement, quality and reliable products, as well as a competitive price. Using the 2008 financial results of the major players in the cube segment of the food seasoning market as an illustration, Nestle Nigeria plc (producers of the Maggi brand) realized N51.
74 billion as turnover representing 18% over the previous year’s N44.027 billion while Unilever Plc (producers of Knorr and Royco) realized N37.377 billion representing a 9.96% increase over the previous year’s N33.99 billion.
Their growth in turnover (which is remarkable as it stands for a seemingly saturated market) is impressive when compared with the profit growth for these companies. Nestle’s Profit attributable to shareholders rose by 53% to reach N8.331 billion from the N5.44 billion profit realized the previous year while Unilever’s profit astoundingly soared by 141% to reach N2.6 billion in 2008.
These results, among other things, show that despite the many products in the food seasoning market, strategically planned entrants into the market can be very rewarding with regards to turnover, profit, and market while it could also be disappointing if such care is not observed.
