Nigerian Consumer Goods Catch Recession Fever, Shrink in Sizes

consumer goods
  • Nigerian Consumer Goods Catch Recession Fever, Shrink in Sizes

Tunmise Atanda has a special relationship with a brand of sausage roll famously called Gala; it is a connection that has lasted almost a decade and strengthened by the Lagos traffic.

Since Atanda works on the Lagos Island and lives on the Mainland, she is often caught up in the rush hour traffic which slowly winds its way out of the Island through the Third Mainland Bridge at the end of every working day.

Atanda enjoys having her favourite brand of sausage roll to accompany her on this murderous daily ritual in which she sometimes spends up to five hours. So basically, theirs is a relationship that has been renewed almost daily. Well, until recently that the bonding faced its first real test.

Shrinking products

Normally, Atanda takes two sausage rolls in traffic at the cost of N100 with a soft drink of her choice, but lately; things have not been the same. Since Nigeria entered a recession, Atanda’s favourite snack has grown leaner, meaning that instead of just two sausage rolls, Atanda now requires four to be satisfied.

“I was shocked to see that Gala (sausage roll) has now become so tiny, so I will need to take at least four rolls to be satisfied, which is ridiculous,” she said.

“I still take two (Gala sausage rolls), but they don’t satisfy me. Meanwhile, before, I only needed to take two sausage rolls to be filled and I would be fine till I get home late in the evening when I’m able to get a real meal to eat. Even the sausage in the roll looks very funny now that it looks really small. If products continue to shrink like this, I wonder if there is a limit to how small they can get and what will become of them if the situation continues.”

But the development goes beyond Atanda’s favourite sausage roll to include products such as candies, noodles, detergents, soaps, bread and biscuits.

‘Satisfaction is gone’

Like Atanda, Bukola Adeniyi, a schoolteacher, has a special love. However, hers is for bread and Beloxxi Cream crackers, both of which have been shrinking too much lately for her liking.

Before now, Adeniyi only required a N60 worth of bread to be satisfied but that seems like long ago. Now, according to Adeniyi, she needs at least a N100 worth of bread to get the feeling that she has eaten.

“It appears that all products have experienced famine now because they have reduced in size and I’m not happy with the development as every company now seems to be hiding under the excuse of recession,” she said with a note of displeasure.

“Bread, candies and every other thing have been reduced in size and there is no customer satisfaction any longer. Now, maybe I will be satisfied if I eat a N100 worth of bread which was not the case before.”

And as for her favourite Beloxxi biscuits, the recent price and quantity of the snack has severed the bonding Adeniyi had with it, a situation she described as unfortunate.

She said, “I was in love with Beloxxi biscuits before but the current price and quantity have driven me far away from it. Before, it was sold for N10, but the last time I wanted to buy it, I was told the price had changed to N15 for one pack and N25 for two packs.

“Meanwhile, there used to be three biscuits in one pack but it has been reduced to two. The size of the biscuits has also reduced in addition to the reduction in the number of biscuits in each pack. So that means bye-bye to Beloxxi biscuits for now.”

A market survey showed that most products have increased in price or reduced in size while some combined both.

For instance, other brands of sausage roll like Rite, Bigi, SuperBite have also reduced in size like the Gala brand, but they all retain their N50 price.

Other lovers of biscuits will have also found out that their favourite snacks have reduced in size.

A notable example is the Coasters biscuit, which has been reduced from six to four biscuits per pack. This brand of biscuit was sold for N5 until sometime back, when the price was increased to N10, a move that also made the manufacturers increase the number of biscuits in each pack to six.

However, with the recession, the quantity of a pack of Coasters biscuit returned to four biscuits but the N10 price remained.

Also, in the soap world, the situation is the same, with many soap manufacturers increasing the prices of their products on November 1.

Before the recession, a bar of Klin multipurpose soap that was 150g cost N60, but post recession, its size has been reduced to 120g, even as it is more expensive at N70. One of its competitors-Nittol multipurpose soap- that maintained its 150g weight moved from its former price of N50 to N70.

Similarly, a pack of Klin detergent powder that used to weigh 200g now weighs 190g.

A pack of Ariel detergent powder that used to be 30g at N20 has recently undergone a transformation that has reduced its weight to 25g at the same price.

In some cases where some manufacturers chose to retain the quantity of some of their products, they simply introduced smaller packs with lower prices into the market in an attempt to meet up the spending powers of the populace, which is fast depreciating.

“In other cases, some manufacturers produce new products of lower qualities and lesser prices,” a trader dealing in household goods, Nnanyelugo Izuagba, noted.

Findings also show that a loaf of bread that was formerly N70/N80 now goes for N100; one that was formerly N100 now goes for N120; and the one that was formerly N120 now goes for N150, and so on.

And for those who like to enjoy their bread with milk, they would have noticed that the dairy industry has adjusted to the post recession production trend sweeping across the manufacturing sector.

Bread crisis looms

Chairman, Lagos State Association of Master Bakers and Caterers of Nigeria, Prince Jacob Adejonrin, in a telephone conversation blamed the recession for the situation, while painting a gloomy picture of its effects on the bread making business.

“If the situation does not change, there is going to be a bread crisis in the country,” he said.

“Government should look into the plights of bakers and millers. The millers are finding it very difficult to get forex which is needed to bring in wheat. They get forex at a very high rate from the black market. A bag of flour is now about N12,000 while a bag of sugar is over N19,000, so we cannot afford to sell bread at affordable prices again.

“The government has talked about growing wheat in Nigeria but what has been cultivated is not ready to be harvested. But if government can empower bakers to be using locally made cassava flour to make bread, it will be okay. But that requires training and the right machinery for it. True, we have cassava in the country, but the equipment to produce flour for cassava bread is not there.”

A customer at Oba Ogunji market, Mrs. Bose Olamoyegun, who also expressed displeasure with the situation, said: “Now, I eat three packs of the smallest size of Indomie noodles, which is strange because I used to take only one and I would be satisfied.

“And I’m a woman; I don’t know the number of the same size of Indomie noodles a man will need to eat to be satisfied. Meanwhile, it is even more expensive now.”

Likewise, a Federal Government worker in Oyo State, Mr. Sogo Fasakin, who has been bothered about his increased spending on consumer goods, said despite that, his family are hardly ever satisfied these days.

The civil servant’s belief is that there is no consumer good in the market since Nigeria entered a recession that  its size has remained the same.

“From plantain chips to meat pies to akara (bean cakes) and Puff Puff, everything has shrunk now,” he said, shaking his head.

The brands of cereals I buy for my family have also been affected; they have all reduced in sizes.  Naturally, it would appear that my children now eat more, but I have realised that it is not the case. They are not getting the usual satisfaction because consumer goods have reduced in sizes.

“When you eat candy now, you only have to count from one to 50 and it is finished. Recently, when I wanted to buy meat pies for my family at a nearby restaurant, I realised that they were also smaller.”

However, the situation is also having effects on shopping modes and experience for many Nigerians.

Izuagba said unlike before, shoppers who visit his shop now make all kind of compromises before finally arriving on their picks.

He said, “For example, someone who comes in to buy Colgate toothpaste may realise that he cannot afford it again since its price has been increased from N230 t0 N250. So he may ask for Oral B toothpaste (that used to sell for N200 and now N230).

“He may also ask for Close Up toothpaste or Dabur, which used to be N180 and N170, respectively, and now N200. So eventually, he may forget about his plan to buy Colgate or Oral B and end up buying Close Up or Dabur.”

‘More factories may close shop’

President, Manufacturers Association of Nigeria, Dr. Frank Jacobs, who also blamed the recession for the business strategies being employed by the manufacturers, said the manufacturers have not done anything illegal if the right quantity is stated on the package of their product.

“As long as they are not misrepresenting the quantity on the label, they are not doing anything illegal,” Jacobs said.

“Maybe they feel that customers might consider the product as too expensive if they increase the price and retain the old quantity. So it is a strategy to reduce the quantity so that the price can still be affordable. But they must state the right quantity on the body of the product; that way, they have not done anything illegal.

“They are just reacting to the recession and finding a way to remain in business. So they decided to reduce the quantity so that the price can remain around what it was before. These are strategies the producers are adopting to remain in business. And we Nigerians are not concerned about the quantity, what we bother about most times is the price, so I think that is what they are taking advantage of.

“But it doesn’t mean that every company is reducing the size of their products, those who do so want to assuage the feelings of customers so that they won’t feel the prices have gone up, whereas indeed, they have gone up.”

Speaking further on the situation, Jacobs warned of dire consequences should the situation remain unchanged.

He said, “If the economy continues to go in the direction it is going, many manufacturers will go out of business; there is no doubt about that. And some of these things you have described are done to make sure the manufacturers remain in business. We are engaging the government but the people in government will tell you that their hands are tied. But if nothing is done about the situation soon, many businesses will collapse.

“Already, some are out of business; some have reduced their capacity down to 20 per cent or even less, just to maintain skeletal operation. With the issue of forex, power, and others, which make our products uncompetitive globally, there is no way we can continue like this for a long time.”

Lifestyle changes

Interestingly, the tendency described by Izuagba is not limited to the market environment with patrons of bars and club houses also feeling the heat.

For instance, the recession is gradually changing Lanre Adeyemo’s lifestyle. Adeyemo is a lover of all kinds of beer, with his favourite brands being Gulder, Star and 33.

However, lately, Adeyemo has had to reconsider his ‘stubborn’ stance on liquor after the cost of each of his favourite brands of beer increased by at least N50. Although, he does not really like liquor, he has given it a second thought.

“There is a brand of dry gin that I buy now for just N200 and it does the work of two bottles of beer. That way, I won’t need N500 or more to hang out with friends and get drink,” he said.

At the popular Rumours Club in Lagos owned by legendary singer, Tuface Idibia and Dotun Omotoye, recession seems to have hit some of its fun seekers considering how they now opt for cheaper drinks.

Confirming the situation, Omotoye said: “Before, a person could order for a bottle of Dom Perignon which goes for about N100,000, but now the same person would rather opt for a pack of Don Simon which sells for N5,000.

He said, “Generally, things are slow but that is stating the obvious. You cannot compare nightclub business today with what it was some months back. Before, if we had 20 customers, we were sure that 15 of them would buy drinks. But these days, if we have about 100 customers in the club, only 10 of them will buy drinks. The rest would live off the people that are buying.

“People still come out because they must find a way to unwind but they come out to listen to music and have fun. They do not spend as much as before, which is understandable.

“The way people buy expensive drinks like champagne has changed. The way they ‘pop bottles’ has reduced drastically. It is not happening at all again. Back then, when you saw people coming to the club, you would know that a specific area would be reserved for Dom Perignon, which costs about N100,000. Now, the people you ask to buy Dom Perignon would tell you that if it is about ‘don’ we should give them Don Simon and that drink costs about N5,000. They would say they all sound like ‘don.’”

At the popular Marina market in Lagos, a trader, Secondus Nnaji, said that as the Yuletide was approaching last year, business still boomed. However, the story has changed with many of their customers now opting for tailor-made clothes, where they find them cheaper than readymade ones.

Nnaji said, “Some boys would come to our shop, take pictures of our clothes and give them to their tailors to replicate them because they feel it is cheaper that way.”

To corroborate his story, a tailor, Sammy Tiamy, said that it was true that young men now prefer to give tailors the money to sew clothes for them.

He said, “Only a few people buy clothes from boutiques these days. They prefer to give money to tailors to buy the material and sew the clothes for them because they feel it is cheaper. However, we have also witnessed a decrease in patronage because of the recession.”

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

Be the first to comment on "Nigerian Consumer Goods Catch Recession Fever, Shrink in Sizes"

Leave a comment

Your email address will not be published.


*