Flour, which is the major ingredient for production of various confectionaries such as biscuit, bread, cake and other snacks such as meat pie, doughnut, chin-chin, puff-puff, to name a few. has witnessed a tremendous and systematic surge in demand following the ban on importation of flour products into the country, a step that has drastically reduced the influx of imported flour products. Wheat Flour import has also been reduced by policy on cassava, which compelled all flour millers to use between 10 and 20 percent of cassava flour in the production of bread.
Home manufacturers control almost 85 percent of the flour market with the balance going to smuggled imports. The demand for flour is also said to be growing as a result of increasing urbanisation, along with growing popularity of flour products as a food substitute.
MARKET LEADERSHIP
Increase in population and confectionaries acceptability in Nigeria have made flour so relevant, therefore, flour manufacturers are doing everything possible to control leadership of the market by deploying different marketing tools such as direct delivery to distributors’ stores, and sale incentives, depending on the target given by the manufacturers. All these have helped to heighten competition in the market.
The sector, which is said to be driven by population growth, is estimated to be about 180-million-strong is further enhanced by the ban on imported flour, according to industry analysts. Analysts have also projected a rising growth for the market in the future, a segment of consumers will continue to patronise despite the economic hardship.
A look at the market shows that there are different types of flour for different purposes. There are the composite, a high quality cassava flour, for confectionery, finer than all- purpose flour, multi-purpose, for bread and cake recipe adaptable to most uses, durum for pasta, noodles, pudding etc.
MARKET REVELATION
A further research has shown that despite the attractiveness of the market, new investors, especially the multinationals, are seriously facing challenges in acquiring market shares, which control 75 percent of the market with strong brand loyalty.
Consequently,City People’s Brands and Products’ findings revealed that preference in the market is marked by product thickness when mixed with water, ability of the product to swell well in water and richness when used to bake.
Many distributors that gave their voices said Golden Penny Flour, produced by Golden Penny Flour Plc sells more, followed by Mama Gold, manufactured by Crown flour Mills Nigeria Limited, a subsidiary of Olam International Limited and Honeywell Flour produced by Honeywell Flours Mills Plc coming a distant third place in the market, going by consumers preferences.
Further findings showed that Dangote Flour, manufactured by Dangote Flour Mills Limited plays in the national market, while others like Nigeria Eagle Flour Mills, of the Chagoury Group, based in Oyo State, Standard Flour Mills Limited, Lagos, Life Flour Mills Limited, Sapele, Valleumbra Flour Mills Limited, Enugu State and Mercury Mills Limited, Ogun State, play in the regional market.
CONSUMERS’ TAKE
A number of sampled consumers declared their preference for Golden Penny flour, followed by Crown flour, Honeywell flour and Dangote flour. Their preferences for choices made were not limited to availability alone but finesse, and prices, which according to them, were key determinant factors.
A wholesaler at Obalende market in Lagos, Mr. Chukwuemeka Oke, said most buyers and bakers alike prefer Golden Penny flour than other brands. He commended Golden Penny thickness and said it absorbs much water, which is a proof of a good quality flour.
Mrs Odunlami Aina, who also sells flour in wholesale at Oshodi market also picked Golden Penny as the top shot, but equallymentioned that Mama Gold was also doing well in the market. She however, pointed out that Dangote is not selling as expected, explaining that the product is light and mostly used for chin-chin and doughnut.
A baker, Mr. Odewale Aluko, also gave his preference to Golden Penny flour because of its richness. He, however, commended Honeywell, saying, “it is soft and good for cake and puff-puff. He also noted thatthe inconsistency of some of the flour products has led some consumers to switch loyalty and has also affected some persons and has led to firm closure in some cases.
According to the product dealers, price difference is not significant in determining patronage, though there has been significant increases in the prices of all the competitors. In January 2017, Golden Penny flour, Mama Gold and Dangote sold for N10,700, but Golden Penny now sells for N11,200, while Mama Gold and Dangote sell for N11,000.
GOLDEN PENNY’S SECRET
The Managing Director of Flour Mills of Nigeria, owners of Golden Penny Flour, Paul Gbededo, said the Mills was trying to grow more of the grains locally as well as use other local alternatives such as sorghum in a bid to reduce the company’s dependence on imported wheat. The Flour Mills boss said the company planned to start production of sorghum next year, with a capacity to mill 75,000 tonnes of sorghum flour.
“Our goal is to depend less on import of food into the country,” he said. “I want imports to end today, but it will take time.’’
Gbedebo told Bloomberg that Golden Flour Mills was expanding its local cultivation and processing of “six key crops” including sugarcane, cassava and maize to sell locally and export to markets in Africa and Europe. “We are talking with technical partners for expansion in those crops,’’ he said, without disclosing the partners.
Founded in 1960, Golden Penny Flour Mills is the manufacturer of Golden Penny brand of products.
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